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.
How the Middle East is sowing seeds of a second Arab spring
https://www.ft.com/content/a6229844-1ad3-11e8-aaca-4574d7dabfb6
Use Google to find the article. It has a neat oversized graphic showing all of the problems of the Middle East. The region has
–the highest youth unemployment rate in the world,
–one of the largest public sector wage bills,
–spends heavily on subsidies for food and fuel,
–attracts less foreign direct investment, and
–faces pressure from a young population.
But, given all that, it is still light years ahead of living on Mars!!!!
Baby Doomer– And this is exactly the cyclic trend all along: The West cannot stop talking about Collapse since the 1970s (see it on this forum, too), but the 2nd-tier-world [often oil-exporting] nations are who get that collapse coming for real, ripping their lives, the fabric of their societies, cities, environment, means of production, resources, future potentials – very hard.
This far assuming the relationship is a plan rather than a random naturally-occurring collapse, becomes a wide belief in those badly impacted countries.
If Arab Spring comes next to Saudi then, Bingo! – we are officially in the Peak Oil Musical Chairs orchestrated plan which will ultimately end up the world split into two – a Two-Tier World future. One tier is abundantly FF energised the other is carrying on almost entirely energy-less.
Below is what claimed a leaked recent speech by Mubarak of Egypt saying, in effect :he knew very well the Americans were hard working on the 2011 Arab Spring in Egypt since 2005!
(sorry, no translation but a translatable transcript via google is here: http://www.alquds.co.uk/?p=890127)
The financial revolution has no solution for stagnant wages, income inequality and job insecurity
Three decades ago, a revolution occurred in the world economy. Today, we’re living through its extensive political consequences. This revolution consisted of financialization. Financial services, from banks and hedge funds to trading houses, became the largest industry in the U.S. Market speculation replaced industrial productivity as the motor of U.S. growth, while mobile capital was steadily liberated from tax and regulatory regimes around the world.
The impact of this revolution has been incalculable. Accompanied by the rapid enrichment of a few and stagnation and disappointment for many more, it’s destabilized political life on all continents, empowering, among others, volatile demagogues such as Donald Trump.
https://www.bloomberg.com/view/articles/2017-12-11/must-reads-of-2017-how-finance-ate-everything?utm_content=view&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-view
Our problem is a lack of growth in cheap supplies of energy. The financial revolution cannot fix this problem.
IMO what triggers it would be those charts showing a clear peak and decline. Like China total energy consumption, but also US, Gasoline; Rice, Everything… When there is: Downslope that’s visual you can extrapolate…
Things fall apart so badly without energy supplies that we will likely never have graphs like that. The downslope is too steep.
It is decline in energy per capita consumption that triggers the down trend. This can happen, even when total energy consumption is rising, because it is the denominator (population) that keeps rising.
Hmm, millennials,young students unhappy with parenting. Oops, what about the entitlements they are paying for? Assuming they vote, national debt would go down quickly given most of the budget is in entitlements for us boomers.
https://www.zerohedge.com/news/2018-03-04/hedge-fund-cio-heres-something-young-people-be-really-angry-about
the conclusion:
“Wanna hear a joke?” asked Charlie, my 3rd grader. I nodded. “Bernie Sanders, Hillary Clinton, and Donald Trump all get into a boat.” I smiled. “They row into the middle of the ocean.” Okay. “And it sinks.” Whoa, sounds awful. “So who survives?” asked my 8-year old. I shrugged, certain I hadn’t told a political joke until my mid-twenties. “America!” he howled, doing a little dance, shaking his booty. “Where’d you hear that one little man?” I asked, laughing, marveling at our ever-advancing children. “School.”
That is pretty good!
“Just wait until our kids finally force us to confront mass school shootings, and get a taste for their power. Then turn their attention onto our economic neglect.”
just wait until millennials turn their attention onto our economy, and find out that the FF basis of their parent’s wealth is doomed to permanent decline, and that they will be heading towards a future of mostly poverty…
wow, are they going to be really angry!
As long as Facebook is still online — I expect they will do nothing.
It will be fine as long as they have enough soy beverages and fluoride.
I have given up on them. Someone may take the time I am done.
I don’t think it is possible for governments to vote out benefits for the older generation. There are too many older voters. Governments are likely to collapse first.
If they could reduce benefits, they would have done it long ago.
The kids have nothing to lose and everything to gain, they have expensive educations in areas that are do not cover their educational investment, they have debt, the future is pretty tough. Additionally, not all oldsters are greedy, people do tend to do the right thing many times.
If the government knows it is going to collapse, what does it have to lose?
I have no opinions, it does seem as though things are going to change one way or another in the uncomfortably near future.
Reducing benefits also hurt purchase power and growth!
We have somewhat agreed future growth is impossible and it appears from this Gail’s latest post it has stopped or slowed to a crawl. We are going to deal with it whether we like it or not. I chose to adapt, but adapt in place and find a way. Sometimes knowing what is not likely to work is very helpful in avoiding blind alleys. When money cannot be borrowed or printed, the benefit/entitlement checks will stop coming or be greatly reduced. Time to plan accordingly.
Yep. Calling for a degree of seriousness. In the village where i live the more ons are thinking about games for kids and NOT about collecting roof water or trying, however inadequately, to plant some food in the back yard.
Yes Artleads, same here: skateboard ramps not prudent precautions which might help one get over the lesser bumps and jolts which are clearly coming.
How can you not recognize the futility of what you are suggesting?
Even though they are completely unaware of the situation … these people are doing the RIGHT things. They are enjoying BAU while it lasts….
Planting a veg garden and collecting rain water… what a joke!
BAU, interpreted the way I do, doesn’t have to end in the foreseeable future. There is oil in the ground. There are ways to grow food even now. There are people who know how drilling and refining works. That somebody has to make a profit to produce any oil at all seems like an insane conclusion (although that might be the current or even ultimate reality). BAU, meaning continuing to be insane…just because, is something different. Let those who enjoy the prospect of universal death enjoy that if they like. They just seem to me to missing a few bricks.
be missing
They will just disconnect pensions, for instance, from automatic rises in line with inflation, and so on. This is already being discussed in Britain.
Pensioners have a huge and increasing weight in voting. On the other hand, they are not going to riot.
Or just fake the inflation numbers
It does seem difficult to go backwards doesn’t it. Just zero out the debt, end entitlements, reduce military spending. It sounds great. But, it impossible to implement. Too many jobs and incomes rely on these things continuing.
The economy depends on promises of many kinds. In fact, it has since the first, “You hunt, and I will gather. We will get together and share the proceeds at the end of the day,” was spoken. The only way division of labor works is with promises.
The system falls apart when there is not enough actual energy products to honor all of the promises that have been made. The Middle East is probably closest to collapse right now. They cannot afford to keep their systems operating at today’s oil prices.
Japan, with all of its debts, will have a huge problem if interest rates rise. China’s declining energy production is an issue as well. And we know about Europe’s problems.
Canada is going after the low hanging fruit Means testing for some pensions and unemployment Insurance
Another reason for people who have “means” to spend some of it now.
Let’s check in on Canada’s national embarrassment – otherwise known as The Grade 3 Teacher:
http://www.cbc.ca/news/politics/atwal-sikh-trudeau-conservatives-1.4559830
https://i.cbc.ca/1.4560132.1520024546!/cpImage/httpImage/image.jpg_gen/derivatives/16x9_620/fedelxn-trudeau-20150802.jpg
cryptocurrency update:
Cryptocurrencies: 1536
Market Cap: $469,505,452,413
Bitcoin Dominance: 41.4%
so, their number is actually down from 1550…
cap was up to $700 – $800? billion, so way down…
Bitcoin up from 34% to 41% of total $…
so, Bitcoin is doing much better relative to the $ of all the others.
Economists warn Trump’s multi-trillion debt splurge could be the next big risk to the economy
https://www.telegraph.co.uk/business/2018/03/04/economists-warn-trumps-multi-trillion-debt-splurge-could-next/
the Don has been bankrupt 4 times—why should things be different this time?
Don is an expert at bankruptcy. No one better suited to handle this crisis than the Donald. LOL.
Thought of FE when I saw this one: https://www.zerohedge.com/news/2018-03-04/pendulum-part-three-seeking-balance.
Things are changing, when and how are somewhat up in the air right now.
I skimmed through … so he dumped the doomstead…
That’s a message to Jan and others on here — there is still time to dump Project Futility — and get on with living life…. to boot … you Doomies are from what I can see already old … you might die before doomsday arrives… and if you don’t that comes after would be a young brutes game… the only skill sets you guys have are those that would be conducive to slavery….
Comments:
‘This is so sad – in order to stay married, he had to abandon his best chance at survival’
Being trapped in some shack in the middle of nowhere living a grinding brutal existence (spent fuel ponds aside) doesn’t sound like survival — it sounds like hell on earth — as he and his wife found out.
This all relates back to the FE Challenge… this guy apparently gave it a bit of a go (although I am sure he was not unplugged from BAU… so this remains the Lite Challenge…)
If you completely unplug — you will find live a living hell — and you will sell out too.
I guarantee that. But we will never know — because none of the cowards dares try
Give it a rest.
but Kurt, I think FE has much more free time than we do.
True. Fast is as Fast does.
Doomstead Dummmmies.
I miss Jan…
and Keith… especially Keith.
I will miss the twitch weeds!
“Almost a year ago we moved into our new home. We managed to sell the homestead to some folks who wanted it for exactly the same reason we had, therefore they appreciated all we had (re)built and accomplished during our stay there.”
ha… some other folks want to give it a try…
“We now know, having learned from firsthand experience, we can’t ‘save’ the world or even ourselves, for no one lives forever.”
I guess the new owners don’t know that… yet…
DL “Things are changing, when and how are somewhat up in the air right now.”
what hasn’t changed is that life is usually way better when using lots of FF…
how long most people can continue to live that way is indeed up in the air.
In order to live with a lower level of resources, we really need a whole economy that has been built up around a lower level of resources. We need friends and neighbors nearby, that are going through what we are going through. We need relatives nearby whom we can get together with. If there is a problem, “a whole village” can raise a child. There really has to be a higher level of sharing than there is in today’s industrial society. There need to be businesses, geared to whatever level of economy exists–blacksmiths, and those making cloth, for example.
A single family cannot set up a system on their own. Most transition groups don’t seem to work out. There needs to be a great deal of group cohesiveness. This rarely exists.
It’s not tempting to go first because serving those communities is not profitable. They have very little money.
Good point. There is no way to build up the system, when it is not really sufficiently self-supporting to pay for the goods it needs.
Poor people are the worst and they are so selfish.
A large proportion of poor people in western countries… are lazy and/or stuuupid.
Poor folks are usually pretty desperate and desperate people are dangerous.
When the writing on the wall is up for everybody to see it will be the unraveling. Paul Ryan the speaker of the US House of representatives has already vowed to pay for Trump’s tax cuts to the wealthy and corporations by cutting social security and medicare. That coupled with declining resources per capita, unpayable debt, higher interest rates, and a currency backed by nothing spells desperation.
I’m almost envious of those that find a way to go through life oblivious. Sometimes thinking about these topics is too much.
The tax cuts are not a gift to the wealthy — they are meant to keep corporations from collapsing — resulting in a decimation of the people who work for those corporations — and setting off a deflationary death spiral.
Likewise when I hear complaints from middle class people about stimulus benefiting the rich — I then ask them what impact these policies have had on their pension plans…. that is when Cognitive Dissonance kicks in triggering the blank stare
” Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the Senate, the Congress, the state houses, the city halls. They got the judges in their back pockets and they own all the big media companies, so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying. Lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well-informed, well-educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. That’s against their interests…”
George Carlin
we are possessed by our own genetic forces
that transcends any other form of ownership—it always has
quote——–we really need a whole economy that has been built up around a lower level of resources. We need friends and neighbors nearby, that are going through what we are going through. We need relatives nearby whom we can get together with.////–end quote
that describes a pre-industrial society
it also describes a society where you were , on average, dead at 50. less than half your children survived and the life you did have was disease ridden
it also describes an autocratic society, because democracy grew in tandem with the availability of cheap fuels, diversified for the good of everyone
As to trades, we exist through usage of hard objects….metals, plastics, glass, ceramics and so on.
our future expectations are that these things will continue to be available, whatever crises we go through. Only the usual suspects in OFW know how idiotic that notion is
but none of these ‘things’ can be produced without heat, and i think we can be certain that a village blacksmith (using charcoal one assumes) will not be able to produce anything more complex than an axe head or a horse shoe.
Pre industrial societies had severe resource-limitations. That kept their numbers and their aspirations in check.
Our resources are going to be severely limited, but unfortunately our aspirations will not, and our numbers have already spiralled out of control
but on a brighter note—on UK radio yesterday there was a prog about religions adding to GDP by $1 trn, through all the commercial traffic generated by mosques, temples, churches and so on.
So we don’t need oil after all!!!
You raise some good points.
Religions are of course dissipative structures as well. They play important roles. People need to be bound together by common beliefs. Governments are perfectly willing to provide these common beliefs as well/instead. In fact, religion and governments have been bound together throughout the ages, because their roles are so closely related.
i wan’t disputing the role of religion in society
just that some idiot had somehow managed to equate all the cashpassing of religious activity to the overal gdp and growth of the nation itself
‘Cashpassing’: good word for it. Cashpassing is not wealth.
I see that politicians in Britain are also talking about the hugely inflated valuations – in some regions only – of property owned by Boomers as ‘enormous wealth’.
It’s just a property valuation on a steadily eroding asset, which requires lots of expenditure to stop it from falling down or rotting…..
A good instance of mistaking the smoke and mirrors of asset speculation for reality.
unfortunately our economic gurus have convinced themselves that cashpassing creates new money with each pass
Promises are not the same as energy products.
it also describes a society where you were , on average, dead at 50. less than half your children survived and the life you did have was disease ridden
Spent fuel ponds will save us from this outcome
How about those 70 year old doomie preppers… how ya’ll doin… keep on downloading those reruns on Little House on the Prairie… there are some great tips for surviving the end of BAU… and in the meantime don’t take the FE Challenge… just keep pretending you will be able to handle what is coming …
Yes, exactly,each viable old-style farmstead or craft workshop needs a whole society organised at that level behind it: customs, laws, etc.
I was looking at videos last night about an organisation in Britain which seeks to promote and sponsor ancient rural crafts: well-meaning but simply pathetic, just a handful of mostly ageing people in a population of 65 million.
The prize winners were very impressive indeed, doing beautiful work, but they can hardly constitute the seed from which a whole new low-energy society can grow,
For one thing, their pupils have to make a living in BAU here and now, or go on welfare.
Several years ago I told my greatly talented pupil to give up and get the best-paying normal job they could, not ruin their life for a dream. – keep the craft as a hobby. Actually, he became a house-husband dealing with child care, while his wife brought in money as an university lecturer: that’s reality.
These deluded people also insist on calling craft, ‘craeft – very funny: I’m sure they see ‘faeries’ at the bottom of their gardens too…….
I went to a little village in Dorset that had been evacuated in WW2, taken over by the Ministry of War. It used to have a Big House and a rich Lord. The village existed to manage the Lord’s land and forestry — he owned it all — cottages, a post office, church, school, shop and pub. The villagers lived in the thatched cottages, fished from the Estate port etc. There were local craftspeople – bakers, butchers, beer-makers. The Big House was demolished, the villagers dispersed, their employment gone.
The Lord lost the lot.
The system used to work. The whole sad saga has echoes of Feral by George Monbiot — if you kill off the biggest beast it dramatically changes (for the worst) the entire ecosystem. The thatched roofs are gone, the houses derelict. Only the church is intact, sort of.
Snowflakes
That is a good view of past vs present ways of doing things. All these ideas of surviving collapse revolve around a small number of (maybe even just one or two) people. That isn’t how things worked in the past! There was a community wide level of sharing and cooperation which we just don’t see anymore. I agree with FE if you gonna try to survive unplugged in small numbers it will be hell on Earth. But, if there is broader cooperation it may not be nearly as severe.
i always laugh at the line—-”back in the day–we didn’t even need to lock our doors”
nothing worth stealing thats why
folks with stuff worth stealing most certainly did lock their doors
Not too many concentrated sources of energy.
There was a day when some people used to leave their car running, with the key in it, and run into a store for a minute.
I found an article called, 44,000 Cars Were Stolen Last Year Because People Left Keys in Them. According to the article:
“I always laugh at the line—-”back in the day–we didn’t even need to lock our doors”.”
Here on Islay it is considered polite to leave your car unlocked and with keys in the ignition in case someone needs to move it. Crime is minimal.
“Robin Currie, a Liberal Democrat councillor for the island, which is 25 miles long and 20 miles wide, put it succinctly: “Crime is not something we are used to here.””
http://www.independent.co.uk/news/uk/crime/islays-tranquility-shattered-by-first-murder-in-30-years-396104.html
stealing a car on an island needs a pretty good getaway plan
Good point, Norman! 😀
I used to live in a 5th floor walk up in Hong Kong with 3 other flatmates… we had a swimming pool in the roof top (courtesy ToysRus) used for entertaining…. and we had wicker furniture ordered as cheap samples from China factories… we had nothing of any value….
We not only left the door unlocked — we left it wide open — daring someone to rob us…
Radiation aside… I simply do not see how even a community would survive…
There are bad people in this world — and good people who will turn into bad people when survival is at stake.
Many of them have weapons – many are military – ex-military – police etc… they know how to kill.
At best if someone has set up a Koombaya Oasis in a sea of misery — they are going to be overrun by bad people and enslaved.
I think the more likely outcome is — because military men will know it is impossible to defend a farm — that they will turn into marauders — they will attack these doomsteads —- rape and pillage and murder… then move on ….
See the Mongol Hordes…
Another issue is that there will be 7.8 B … fences do not matter to these people — it will be like trying to stop the tide from flowing in ….
Trying to survive is beyond futile… there is not even a word to describe the pointlessness of it… the best I can do is absurd….
It’s survivable. But I would imagine in pockets. Southern hemisphere probably much better. Not everyone will be rats. Youth and strength will do best.
However I admit cognitive dissidence when it comes to extinction. (that’s all the cognitive dissidence I have left)
The only human vermin that have a chance of surviving this … provided the spent fuel ponds don’t completely poison the planet… would – IMO – be those already living unplugged in very remote places…
Food production everywhere else is completely dependent on fossil fuels and BAU — the soils have been destroyed by industrial farming (actually they have been poisoned) — it takes years to repair them — and people cannot wait years to eat — anyone growing organically will be overrun by hungry hordes – neighbours will show up — family — and the guys with the guns….
It’s actually a bad idea to set up a doomstead organic farm… it will be like a beacon to the hungry…
If you have no food then you get to lie down and die of starvation …. no horror…
So, your saying we should plan on being the ‘marauders’
I may have to rethink my plans for the end of BAU
Thanks
If you believe we can thrive on radiation…. and are keen to survive … then I recommend you and some of your family members sign up for a course at a company like this
https://www.aztectrainingservices.com/about
Do NOT waste your time learning how to grow pumpkins…
Instead learn how to attack a pumpkin farm … killing any opposition you might encounter… this will allow you to consume the pumpkins free of charge… and have your way with any women who are not killed in the attack.
I found it very easy to read, very clear. It put me in a deeper funk. I couldn’t apply his solution to myself. I tend to see it as the end of the world. The future being a logical progression of the present. In other words, a case of being in a pot of slowly heating water that that will boil us as heat inevitably, predictably builds. My preferred action is to put out the freakin fire.
There is momentum. Unless you impose some interruption to it, it will continue in a fairly predictable way. Sitting back and enjoying my life is hard for me in the face of this predictable but “unrecognized” momentum. It violates my sense of logic and reason.
There are basic realities that pertain to this rather small planet. One is that there are 5 million narratives for what reality is, when there could be many fewer. You can measure many things and assess whether the momentum governing them is encouraging or not: the rate of deforestation, state of biodiversity, state of topsoil, and much much more. You can apply measurement to these things. And there is no excuse for noise and all manner of inconsistency about these things. “These are the facts as best we can surmise. Unless you’re suicidal, you have to do such and such about it.” It’s not a request. You either behave reasonably or you’re in for trouble. This isn’t about democracy.
Every piece of the earth’s surface falls under some government. These governments are misinformed and out of their league. And to replace them with something accountable is well nigh impossible. The logical response is to create a citizen government whose basic method is to bypass formal governments, doing the maximum to work where there is no opposition, under the radar, doing things that are indisputably helpful… It is likely when this global paradigm builds, locally, regionally, wherever, governments pitch in and claim responsibility. let them. What do I care? The governments must be led the way you lead small children.
The problem with this is that no one–not a one–is prepared to stop in their tracks and question why they are going around like lunatics, not examining the path they’re on or how to work systematically toward any outcome. An intelligent species ought to do better than this. So, no, I can’t really chill and let it go as it may. But I must admit to being totally stumped this morning as to where to go from here.
The el ders (board of directors) and their minion governments (senior management) are doing a fantastic job keeping BAU rolling along….
I have no idea what you are on about
Businesses closing down, kids moving back home, losing our SS, things costing more. And things that some of us have wired into our DNA and some of us don’t: species die off (F8765 to the farthest reach of hell the notion that it doesn’t matter), deforestation, loss of independence, loss of cultures, loss of beauty (F8765 into infinite space the notion that it is only human animal survival that matters, or that it’s what we ALL must settle for even if it’s one of many considerations).
Also, I’d like to add to the list of notions to be F9876ed, the notion that evolution has come to a halt, and that no further step is conceivable. The way governance is conducted throughout the world is (avoidably?) brain dead. Schools are brain dead. And why that shouldn’t be clear to more people is what has me stuck in my tracks.
I’m not at all faulting the job el ders do to keep things going. It’s just it won’t continue to do so for the foreseeable future. No doubt, they could use a little help for extending order somewhat further into the future. I don’t buy the idea that they are perfect or omnipotent, effective as they might be.
I don’t think anyone or anything is in control. Just a hell of a lot of us running around breaking and then fixing things as best as possible and ignoring the relentless effects of entropy. I hope this continues for a lot longer but have no clue what will trip us up first – oil, fish stock collapse, grain harvest failures……..?
If you embrace Nihilism…. you won’t get so worked up about this stuff…
I look at this situation as I would a jar of sugar into which yeast cells are added….
And then I sing the anthem of the NihiliSTAN… and I remain calm…
Fast Eddy: the world’s only Evangelical Nihilist.
If I ever get back to Yonge St in Toronto … I will take my message to the street and compete with the religious fanatics… wonder what they will make of my gospel…. 🙂
You should read Marcus Aurelius.
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. Marcus Aurelius
Read more at: https://www.brainyquote.com/authors/marcus_aurelius
Can anyone here provide some informative links about the FF picture in China and India? I’ve said this before, but I think the collapse will be signaled by either/both of two behemoths, since they were the major forces behind global growth this past decade (or so).
China Government Study: China’s Oil Production is About to Peak in 2018 & Coal in 2020 (Wang, 2017)
https://link.springer.com/article/10.1007/s12182-017-0187-9
China’s oil production peaked in 2015, as far as I can see. The price has not high enough for it to make any sense for China to extract its more expensive-to-extract oil.
I was involved in an earlier article that basically said the amount that can be extracted depends on how high the price can rise (not EROEI). This is the article that I was a co-author of:
https://gailtheactuary.files.wordpress.com/2016/09/ke-wang-an-oil-production-forecast-for-china-considering-economic-limits.pdf
The article I was involved with was published in the journal Energy.
China’s coal production actually peaked in 2013, as far as I can see.
https://gailtheactuary.files.wordpress.com/2017/11/china-energy-production-to-2016-bp.png
China is in bad shape, with respect to both coal and oil. It is not a big producer of natural gas either.
Wow. That’s a cool chart where you can see the peak! Still waiting for that to happen to global oil production. Although I know per Capita is done. Maybe even total energy content. Only barrels are growing still.
Still growing at 7% says the government. Any questions?
India is doing a little better than China, but its energy imports need to keep growing. The black line on this chart shows total energy consumption. Production of coal is still rising, but lagging behind the rise in its consumption. Oil production has been falling slowly for several years. Natural gas production is way down. Balance of payments and debt become issues.
https://gailtheactuary.files.wordpress.com/2018/01/india-energy-consumption-compared-to-energy-production.png
This is the corresponding China graph:
https://gailtheactuary.files.wordpress.com/2018/01/china-energy-consumption-compared-to-energy-production.png
The cutback in China’s fossil fuel production has had an adverse impact on the growth rate of its total energy consumption.
“… I think the collapse will be signaled by either/both of two behemoths…”
the black lines in the graphs show a big problem…
the growing consumption of their massive populations… moving up way beyond their production…
it’s simplistic, but still true…
there are not enough FF resources in the world to raise almost 3 billion people up from poverty in those 2 countries…
but, I agree with you half way…
it won’t be China (regulated commie central control)…
unregulated, out of control India, so soon after raising its economic level, will be falling right back down as it becomes ensnared by Creeping Collapse.
Declining conventional oil will be the final nail in the coffin.
Because they won’t able to do anything about it..
https://imgur.com/a/6dEDt
and China has way more coal than India…
and India’s population is growing much faster…
this will not end well.
How populist uprisings could bring down liberal democracy
https://www.theguardian.com/commentisfree/2018/mar/04/shock-system-liberal-democracy-populism?CMP=twt_gu
“Authoritarians are on the rise, and electorates are seduced by extremes. To fight back, mainstream politicians need to grasp the causes of popular discontent and rebuild democracy’s moral foundations.”
Actually, what they need to do is find a very cheap, very abundant type of energy that can be easily extracted and used in today’s devices. Then they need to start building goods and services much more quickly than today, so that the people attracted to extreme political views can get wages that allow them to buy the goods and services they need–get rid of the wide wage disparity.
The story is based on a misunderstanding of our problem.
Italy is one of the best examples that liberal democracy has no solutions:
The new government every few months, but nothing changes.
The north of the country attracts the population from the depopulating south regions.
Ths dysfunctional state is replaced by the groups/clans controlling the declining regions, i.e. mafia.
The authoritarians can function when there is still some energy that can hold the country together. As the energy decline continues, the country crumbles into smaller units ruled by groups/clans, not individuals, as groups have still some real power, in contrast to the individuals who are easily overthrowned.
The article is a pile of crap. Liberal democracy means hijacked governement.
Great quote to summarize Trump’s trade war.
https://imgur.com/a/QtVL4
But for now, it is a way of fighting a war, without sending out any soldiers.
«Regarding the first question, what we need are in which the interests of nature, future generations and the great majority of living humans are effectively represented. That is not the situation today. Hence we have massive market failure.
Regarding the second question, I agree with you that there’s no time for unplanned cultural evolution, which in any case wouldn’t take place at the necessary scale. We need to re-rig our economy as intelligent designers, using a complex systems perspective.» From a conversation between David Sloan Wilson and Peter Barnes.
«About twenty years ago, Nobel prize-winning economist Herbert Simon estimated that about 80 percent of the income we enjoy today comes not from the efforts of living individuals or corporations but from our shared inheritance — gifts of nature plus the knowledge, infrastructure and social institutions created collectively by our ancestors. Yet the financial value that comes from our shared inheritance isn’t broadly shared. It flows mostly to private property owners who are able to monetize and capture it in a variety of ways.
But imagine an economy in which common property is much more prevalent. This common property can take many forms, just as private property can. One form, for example, would be not-for-profit trusts that hold rights to use vital ecosystems. These trusts would have a legally binding duty to preserve their ecosystems for generations to come. They would fulfill this duty by limiting and charging for use of their ecosystems based on peer-reviewed science. In effect, they’d be guardians of their ecosystems with control over toll bridges into them.
Why would the public and politicians conceivably support such trusts? A key reason is that they would use a substantial portion of their income to pay equal dividends to all residents within their borders. The better the trusts protect ecosystems, the higher the dividends. There will then be a virtuous alignment between living and future generations, and between humans and nature. Humans won’t be any less selfish or short-sighted, but the economic framework in which we operate will push us and our businesses to act with nature’s and society’s interests in mind. That is the new Invisible Hand. At a large enough scale, it would create a kind of homeostasis between our economy, our society and our planet.
DSW: Exciting! This actually appears to be happening, with ecosystems being granted the rights of individuals around the world. What examples have come to your attention?
PB: The Alaska Permanent Fund uses royalties from North Slope oil to pay equal dividends to all Alaska residents. In Britain, the National Trust (a non-profit established in 1895) owns and preserves over 600,000 acres of landscape and historical buildings. Just north of San Francisco, where I live, the Marin Agricultural Land Trust owns permanent conservation easements on about half the farmland in the county. In the U.S. Congress, legislation recently introduced by Sen. Chris van Hollen (D-MD) would cap and auction rights to emit carbon dioxide into our atmosphere, steadily lowering the cap year by year, and returning 100 percent of the income in equal dividends to every American. There are also thousands of land trusts with many shapes and forms. There is no shortage of common property seedlings. What we need now are social entrepreneurs to help them multiply and evolve. It is hard work, but it can be done.
It’s worth remembering that, early in the 19th century, private corporations barely existed in America, yet by the end of the century they had become the dominant business form. It is possible that, in the 21st century,common property institutions could proliferate in a similar way.»
http://evonomics.com/new-invisible-hand-conversation-peter-barnes-david-sloan-wilson/
Incoming neofeudalism will again protect the wilderness and ecosystems as poor peasants and various remnants – former city dwellers won’t be allowed to the most pristine areas under the capital penalty. The landlords would value natural heritage above the life of their human subjects.
The above is the optimistic (not guaranteed) scenario though..
Interesting idea. However, in N. America we historically don’t have an affinity for feudalism. Perhaps neotribalism is more likely.
the ultimate energy resource is land
therefore those able to hold it and defend it can command to muscle of those who can’t, because they need food and other stuff that derives from the land
that was the basis of the feudal system throughout europe until the development of the heat engine that allowed millions of people to leave the land and move into mines and factories (they were still serfs btw)
Remove the heat engines, and the feudal system must re assert itself—there can be no other option.
name it something else by all means, but that’s what it will be,
“Remove the heat engines, and the feudal system must re assert itself—there can be no other option.”
Where the feudal system existed previously, that makes a lot of sense.
that’s not quite what i meant
the feudal system existed in the old world until the invention of the viable steam engine, which gradually removed the need for it
it supplied the muscle power that used to be provided by people and animals
the viable steam engine was patented in 1776–the same year the usa was ”invented”.—but the feudal system (slavery) continued in the usa until the 1860s—the same decade that the first oilwells were sunk. (different energy resource)
since then the usa has filled up with people entirely dependent on fossil fuels, with no need of any feudal system to produce their food.
When the FF energy system collapses, feudal states must arise in order to maintain some kind of order at a local level—which is exactly the system that developed in Eurape in the middle ages.
Agreed. Minus a FF energy system the “new world” would have to revert eventually to a previous system of order at a local level. All the way back to tribalism, probably.
yup
There are various back looking definitions about feudalism proper, some argue the definitive end was ~1850 when after the revolutionary wave, most cities within continental Europe gained much larger (almost complete) independence for doing trade, biz, and industrialization in many forms as they liked (incl. mass transit, permits for new construction development etc.)..
Obviously, some token “cabaret” artifacts of feudalism continued till WWI..
feudalism, in the absolute sense, is when the peasant is part of the property owned by the lord of the manor—as are cattle, sheep etc.
if the property is sold, they are sold with it.
feudalism didn’t end in russia till the 1860s
maybe a shade above slavery, but not much
I come from a coalmining line. They weren’t serfs, but their wages were barely sufficient to live on, and they lived out their lives under the shadow of the coalmine. They could change jobs, but mining paid the best of bad wages as long as you were young and fit.
Their energy output went to support the coal owners–effectively no different to the feudal lords of the middle ages–and the out thrust of the british empire, coal makes steel for ships and guns etc
the reason i wasnt dragged down the mines was that the infrastructure demanded reasonably bright kids to perform newly created jobs of all kinds—i got lucky and got out. as did my siblings.
whether my g g grandkids will have the same luck I’m not so sure.
Some parts of Europe escaped feudalisme – Switzerland and Norway beeing to examples, both with a topography not suited for the crushing of peasant rebellion by knight armies.
Also inside feudal societies you found monastery cells, which maintained an egalitarian way to live and work, of course in part dependent on the feudal force for protection. If the end of cheap FF means the end of more for everyone, it could be that religion would play a role in establishing communities in which sharing of less equally were organized. Or perhaps religion in combination with «tribal» ingroup feelings
BTW Elinor Ostrom studied how humans can cooperate to avoid the tragedy of the commons:
«Her later, and more famous, work focused on how humans interact with ecosystems to maintain long-term sustainable resource yields. Common pool resources include many forests, fisheries, oil fields, grazing lands, and irrigation systems. She conducted her field studies on the management of pasture by locals in Africa and irrigation systems management in villages of western Nepal (e.g., Dang Deukhuri). Her work has considered how societies have developed diverse institutional arrangements for managing natural resources and avoiding ecosystem collapse in many cases, even though some arrangements have failed to prevent resource exhaustion.
Ostrom identified eight “design principles” of stable local common pool resource management:[36]
Clearly defined (clear definition of the contents of the common pool resource and effective exclusion of external un-entitled parties);
The appropriation and provision of common resources that are adapted to local conditions;
Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process;
Effective monitoring by monitors who are part of or accountable to the appropriators;
A scale of graduated sanctions for resource appropriators who violate community rules;
Mechanisms of conflict resolution that are cheap and of easy access;
Self-determination of the community recognized by higher-level authorities; and
In the case of larger common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level. https://en.m.wikipedia.org/wiki/Elinor_Ostrom
The tragedy of the commons is a pathology of communities that no longer have tribal bonds.
A major part of the problem is keeping population down. Resources per capita tends to fall because the population rises. The overgrazing or whatever takes place because there are too many people, and the view is that everyone must be saved. Otherwise, some of the people must be marginalized (wages too low to support themselves), so they do not get the food generated by the cattle. This is the major problem that arises, but people tend to overlook it.
Ricardo actually came to a similar conclusion quite a while ago.
to me it’s just simple logical progression—or regression to be accurate.
Yes, that is exactly how intelligent feudalism worked. Those who expected to own land for centuries were often very capable of managing it well. The structure takes precedence over individual lives.
As in ‘We harvest this part of the wood every 12 years, no more, and that is that – if you want timber before then, just forget it!’
The problem is not so much private property, but the time-scale on which the owners focus. Short-term rapacious feudalism is of course quite as destructive as anything else: that is one of the reasons why the Ottoman Empire failed.
The absence of life-prolonging drugs, high mortality rate among women and children, etc, will supply the other part of the picture – population suppression.
Add in some regular wars, plagues, and you have a workable system, with booms and busts like any other animal population.
Life would, however, once again be more of a ‘Vale of Tears’ than the semi-infantile wish-fulfillment playground we seem to expect now, and which the masters of our glowing screens promise us whenever we switch on.
Most importantly, industrialism and mega-city civilisation must vanish as they are both inherently short-term and eco-destructive: China and Communist Russia illustrate this as much as the earlier capitalist economies.
There is one hard truth: that the fewer human beings there are, the less irrecoverable and irreparable harm they can do to the eco-system of which they are a part.
Humans in the mass will never learn to be wise, they have to constrained by their environment, laws and customs – above all, by their environment.
Any hopes for the future based on a radical improvement in human nature are just nonsense – such as the current fashion of ‘Capitalism is dead, let’s have Socialism which is so nice and ungreedy’: the people who say this just think they will be getting a nice big slice of the industrial prosperity cake, which they imagine that wicked Capitalism has denied them.
They are in for a shock!
You might want to read up on the writing of Henry George. He suggests that instead of ~70-80% of taxation as income tax, that this be replaced by a land value tax. In effect this takes all land into government ownership, which is then rented bact to incumbents.
I have read that all og China’s land is owned by their government, rented out on 70-year leases. Japan may have something similar.
The point here is that government, not speculators, benefits from improvements to the land and to infrastructure.
Thanks. No doubt true: but how has China treated its land?
The approach seems to be : mess it up anyhow, and clean up later when ‘wealthy’. They will regret that.
This is inherent in industrial civilization, and even goat-based civilization, as one can see from the ruination created by the earliest great cities of Central Asia and Mesopotamia, which became piles of crumbling mud bricks, surrounded by goat-chewed desert.
For instance, Balkh.
In many ways, little is more destructive than the poor peasant and his goat. One pays dearly for those goat pilaus…..
Agriculture based on goats, grapes and Olive trees are a sure sign of failure to look after the environment properly. So what happened to that Topsoil huh?
There are known ways how to repair or more properly said allow topsoil buildup on nature’s terms, yet with the little help of human involvement. The problem is you need “tze stabilitee” long term to let it go through it paces..
And for that -long term- you have to have an order and people under thumb not to spoil it, hence again the only optimistic future is feudalism. However, the more realistic option seems wave of destructive wars about the scraps of this civilization and BAU trinkets, sadly.
I have goats. I guess I have collapsed!
I had two, but both we killed by a mountain lion.
One of the downsides of living in a intact environment (well, sort of).
True, Lastcall. But the women are often beautiful in such places……
I think Japan is now discovering that it is being left with a lot of unwanted homes in the countryside. Quite a few elderly still live in the countryside; the vast majority of young people live in the cities. The Japanese government is left with the problem of what to do with the unwanted real estate. Estate taxes are quite high. I have heard that heirs often refuse to accept rural residences left to them.
All economies have finite lifetime. They are dissipative structures.
This sounds like academic nonsense. We don’t have control over today, mush less over tomorrow. Our energy needs are too high to make this kind of thing work. The economy collapses fairly without putting some aside for the future. Who is going to be convinced to collapse it more quickly.
https://imgur.com/a/rC9dN
https://www.bloomberg.com/energy
Oil price has stagnated in the low 60’s for a few weeks now and doesn’t seem to have caused a slow down in consumption, but who knows how much higher it could get before initiating economic contraction. 70’s, 80’s?
I am not sure that we know whether the recent plateau in prices represents a rise in supply or a cutback in demand, or both.
China is one area that may be experiencing a cutback in growth. Raising interest rates will also tend to cut back demand. The problem may be that parts of the world are already hitting economic contraction (or a slowdown in growth), at the current oil price.
I imagine most of these companies have pension plans that are heavily underfunded, but no matter bonus payments are allowed. How bizarre.
Yes that is why i always work union they could steal half my pension and it would be sweet. money is better also I have 3 wage class 60 90 and 120 dollars an hour that is before benefits.
Large pdf
http://energize625.ca/wp-content/uploads/2018/01/Collective-Agreement-2015.pdf
If you ad the last 2 numbers on page 19 of the doc that is me.
Good chance for people to read a contract also
Two problems:
1. Even if your union sets aside funds properly, the whole financial system may not stick together. Having your union set aside funds is comforting, but it really doesn’t give as much assurance as you might think it would.
2. Quite a bit of the world does not have unions. In the US and Canada, they seem to be strongest on jobs that cannot easily by “offshored.” Yours seems to be an electrical union in Canada. IN the US South, unions are not strong, and wages tend to be loser. I really doubt that China and India have unions.
All true Gail but something is better than nothing. I feel bad for them…Some Family members of mine are getting nothing because they trusted the company. I fear this will be the fate of GE workers soon.
We have seen what happens to a self organizing system when you try to subvert it… the system has responded to unions by offshoring the jobs to low cost jurisdictions.
If that had not happened – and the unions had somehow continued to hold businesses and hostage… it would have resulted in some sort of economy implosion…. the pressure would have had to release
I am afraid it will be the fate of all workers soon. Promises that cannot be kept, ultimately won’t be kept.
Pure logic is hard to argue with.
A Major Earthquake Is Overdue To Strike California, Say Seismologists
http://www.ibtimes.com/major-earthquake-overdue-strike-california-say-seismologists-2649194
Just think what a huge opportunity for rebuilding that a major earthquake will give! Borrowing will soar, as will GDP!
If you believe that then set off a hand grenade in your house and see how that works out for you.
Unfortunately, this is how things work. The more that fashion retailers can convince people that their clothing is not up to date, or that their cell phone needs to be updated with a new model with one more bell and whistle, the more new goods that can be created, and the more jobs that there are. Having more babies, or bringing immigrants into the country, “sort of” creates demand in the same way.
Of course, there has to be available cheap energy and other resources for all of this to work. At some point, this whole way of doing things falls apart. Debts for rebuilding can’t be repaid. Wage disparity becomes more of an issue. Even new projects to extract fossil fuel energy or to build electricity generating units don’t give a good enough return to repay debt with interest. Renewable energy projects require tax subsidies to make a profit.
in other words, propects for efforts to maintain BAU long-term are bleak.
Right!
It’s really bizarre how people complain about all this stuff .. then jump in their cars and drive to the Mall to buy more stuff — because the stuff they buy is stuff that they really do need… and whatever anyone else buys is frivolous consumption …
It makes me crazeeee just to think about it!
http://resources.phrasemix.com/img/full/crazy.jpg
BTW – did anyone notice how google screwed up the image search? Can’t copy anymore… BING is my new friend
I’d prefer to fire a missile into someone else’s house….
Trump escalates trade war, threatens European car makers with stiff tariffs
https://www.mercurynews.com/2018/03/03/trump-escalates-trade-war-threatens-european-carmakers-with-stiff-tariffs/?utm_term=Autofeed&utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#link_time=1520132966
iHeart Radio heading for bankruptcy as execs get millions in bonuses
http://www.syracuse.com/business-news/index.ssf/2018/03/iheartradio_bankruptcy_execs_bonuses.html
Workers Are Getting Basically Nothing From The Corporate Tax Windfall
https://www.fastcompany.com/40537732/workers-are-getting-basically-nothing-from-the-corporate-tax-windfall
It was only lip service, propaganda to gain public appeal for the tax code change that they claimed workers would benefit and more jobs would be generated. It’s amazing how gullible the public are. It was a return on investment in their party (contributions to their campaigns) they gave back to their base on the backs of the middle class in the form of tax cuts. Every now and then they must show how appreciative they are for the $10,000 bucks a plate people plop down to get them elected/re-elected to give them yet more money. See how that works – follow the money.
Foot Locker is closing 110 stores as the retail apocalypse rages on
http://www.businessinsider.com/foot-locker-is-closing-stores-2018-3
Well—
https://4.bp.blogspot.com/-103dWguEw7Y/WpmHN9urkcI/AAAAAAAA5C4/RWlgp49UtYo9ia4fZGTf-VPC4fmD3R6cwCLcBGAs/s640/rats.jpg
Around 2005, global economic activity and energy consumption levelled off. The current astrologers are unable to provide an explanation, hence they have ignored it in the hope it will go away. Twelve years on, the data should be providing sleepless nights to somebody, but if you have been reading OFW, much of the implication should be unsurprising :
https://www.zerohedge.com/news/2018-03-03/david-stockman-two-janets-and-perfect-storm-ahead
“We are referring here to the privately published Cass Freight Index, which is based on hundreds of large US shippers from a broad array of industries—including consumer packaged goods, food, automotive, chemical, OEM, retail and heavy equipment–which use all modes of transportation including trucking, rails, barge and intermodal. Unlike much of the government GDP data which is distributed for for free and is probably worth about what users pay for it, the Cass Index is paid for by business customers who demand accuracy and transparency. The stunning thing about this key metric of real main street activity, which is measured on an honest-to-goodness volume basis, is that there has been no recovery at all. As of January 2018, the index was still 14% below its pre-crisis peak, and has actually been trending slightly lower for the past three years.”
“Indeed, you can peruse a whole heap of Fed meeting statements, minutes and speeches by the Two Janets and you will find no mention of the multiplicity of flat-lining and non-recovering indicators that abound on the main street economy. The chart below merely provides a few more examples–including gas and electric utility production, wholesale trade employment and manufacturing output. All of them have flat-lined after the initial rebound from the Great Recession, and all of them are still below or at their 10-year ago pre-crisis level. Yet an economy surely is not in the pink of health or in any way healed when its use of gas and electric power is flat or when the output of goods or activity levels at wholesale have stalled out at decade ago levels.”
the article concludes:
“Instead, it’s the silent, escalating pace of QT that will eventually do the job.”
Quantitative Tightening will undo the economy, so it will have to be reversed back to QE…
“… the output of goods or activity levels at wholesale have stalled out at decade ago levels.”
from another angle, if that stall continues for another decade or two, it sounds good to me!
A person would hope Powell and other decision makers would catch on quickly and change Quantitative Tightening to Quantitative Easing. Given how strangely things have gone so far, I wouldn’t count on it.
we are being prepared for a planned collapse that will bring in global bail-ins followed by negative interest rates and the announcement of world cryptocurrency this should kick the can down the road for a few more years until the end can not be stopped get your silver or gold while you still can i cant believe how stubbornly you all believe that the can cannot be kicked down the road for a few more years it can be with negative interest rates and a cashless society we may still get another twenty years but with hyper-inflation.
hyper-inflation is a relatively short-term phenomenon, unless i’m mistaken. it probably seems like a long time to those who suffer within it. Weimar Germany comes to mind. Somalia, Venezuela are more recent examples.
Planned collapse? It looks to me more like world leaders and central bankers are flailing about looking for a solution to a problem which they cannot comprehend.
This description fits my observations as well. I think most of these leaders genuinely believe in a “renewable energy future” and see their task as making sure the current system lasts long enough to serve as a bridge. Instead it’s more like a long pier we’re slowing marching towards the end of….
Obviously the senior leaders and el ders are very much aware of this … and they are doing whatever it takes — as in absolutely anything including pumping out tens of trillions of dollars of stimulus — to try to keep the Titanic afloat.
The CB’s are rather like ducks: calm above water, paddling like crazy below the surface…..
We should be grateful that they are succeeding so far,as there is now other viable game in town.
If the rich are, as ever, lining their pockets, at least the rest of us are still getting stuff from China, the oil and gas still flow, and the industrial food system is retaining its credit lines and keeping us all alive.
I suspect the Fed chairperson …. loads up on Xanax …. (perhaps even half a tab of Oxycontin) … before making each speech….
Notice how they show zero emotion …
Either that or we are ruled by robots….
I highly question this “Around 2005, global economic activity and energy consumption levelled off” statement.
Since then, India has become a growing ‘black hole’ in FF consumption, China was increasing its car and truck fleets by the millions a year, millions of air raids where exercised over the Middle East, armadas of new weaponry have been manufactured, shipped and used in the ME, world population has increased by millions, SpaceX has completed its heavy lifting long experiment, Amazon has opened doors in new countries, Boeing and Airbus have introduced many new aircraft models, air travel for the masses has become huge reality, significant wind turbines and solar panels have been produced, Lithium became an industry, Egypt became net oil and gas importer, Japan has replaced nuclear power supply with gas-driven electricity, Bitcoin mining became and industry, drones became an industry, and the list goes on and on… And all that is Energy.
And, since then, Iraq has increased its oil exporting capacity from slightly below 2 m/b/d to more than 5 m/b/d today (not to mention smuggled supplies in the 100Ks a day), Syrian and Libyan’s smuggled supplies are not quantified but domestically, the population hardly enjoying them, shale oil and gas are reported to be doing significant drilling and then production, and so on… And all that is added supplies.
What “Around 2005, global economic activity and energy consumption levelled off”?
It is very normal to see on one ZH page one article says, something has risen sharply in price, the next article says the price of the same item has fallen dramatically!
Many people consider the historic ‘Fake News’ speech of president Trump the beginning of an era where nothing is real, even presidents cannot tell which is which!
Real energy data will never be made available for other than a very few in the world. Others will get multiple realities daily feeds they can safely reference in comments over the web, freely.
I agree. China and India’s coal consumption helped keep energy consumption per capita rising until 2013. There is definitely not a leveling at 2005.
Thanks! I didn’t realize that a person could get the Cass Freight Index going back quite a few years through “FRED.” I subscribe to their monthly newsletter, but it only shows the last few years information.
I expect that the turndown in new housing starts plays a big role. The drop in coal consumption may also play a role. The US hit peak coal about 2008. The numbers should really be on a per capita basis. They would be more alarming that way.
I looked back to figure out what could have given rise to the statement, “Around 2005, global economic activity and energy consumption leveled off” — a statement that is clearly not true. This seems to be based on a misunderstanding of what the Cass Freight Index shows.
The Cass Freight Index, “which is based on hundreds of large US shippers from a broad array of industries” started flatlining then. This is a US Index. The fact that it flatlined has to do with when globalization really hit badly. China’s and India’s coal was driving the growth in the world economy, but this is not something measured by this index. If the growth is in the “developing” countries, it would not show up at all in this chart, except to the extent that the US is manufacturing and exporting goods to send to these countries..
We seem to at the point where you can either have Hope or Truth. There does not seem to be any overlap anymore.
The point is that the human reality is imploding: the reality created thanks to the availability of the cheap external energy. The non-human world is going to prevail, which is very difficult to accept, as the humans feel that what was created is so great. But, to be frank, we are not able to sustain it. The things are falling apart, no risky behaviour will save the world as there is nothing to risk about. We can just somewhat postpone something, but we have no energy to stop it…
“… Hope or Truth.”
I think that most of us OFW readers are reasonably close to Truth…
but I still have what I would call a reasonable Hope that this mess will hold together for another decade or two…
call that optimism if you want to…
both optimists and pessimists don’t know when this will unravel.
https://imgur.com/a/cUoQD
Thinking about the years my mother spent in a nursing home, losing these would not be all bad.
https://imgur.com/a/XcLZF
Where is this list from?
that 250 year span is fascinating
Pertinent list, but I hate to correct it. The Ottoman Empire lasted until WW1.
Quite a bit longer than 250 yrs, though it was as corrupt and inefficient as it could be near the end.
The Ottomans certainly had a very long run: perhaps at their most terrifying – fleets and armies able to do serious damage – 1450 to 1800, with the great sieges of Vienna in the 16th and 17th centuries.
That’s what Erdogan seems to dream of! Rather pathetic at the end, as you rightly say.
Entertaining list though, Tick tock goes the clock of Destiny……
all dictators, by their very nature must dream of empires
erdogan looks south to what used to be, and rubs his hands in anticip[ation
Another good example is Mussolini, and his comic-opera (if only it hadn’t cost so many lives) ’empire’ in Africa, his dreams of the Balkans, etc.
Hitler’s empire, the Third Reich, was one of the shortest-lived ever, and also one of the most blatantly extractive – a fine illustration of the true nature of empires in a short time-frame. .
Erdogan needs to offer a distraction from falling living standards in Turkey, and Turks still generally suffer from ‘We were great once’ syndrome.
Curiously, the Soviet empire brought higher living standards to the periphery than to the Russian core, as far as one can tell.
Certainly, Russians today believe that, and they are very disillusioned with the imperial concept, apart from a few nutters.
all empires are essentially ponzi schemes where the masses must feed in ever growing resources at the bottom, in order that the lucky few at the top can cream off the surplus before the inevitable collapse
1933/45 germany was the perfect example of this
You are right Alexa told me the Ottoman empire lasted 622 years. Obviously they were the one exception to the rule.
One slightly strained time line for Britain is 1497 (Newfoundland) to 1997 (Hong Kong).
I noticed some overlap in those empire timelines, so it would seem China’s most recent empire began when, in the 50’s, 60’s, 70’s? In other words they are probably the follow up empire after the US falters, which is very likely at this point because of the civil war between Fox News and MSNBC viewers, who along with DC cannot get on the same page to agree or work together on most topics, with the debt ballooning to dangerous levels with who knows how much gold/silver remaining, while China fills warehouses with precious metals and is working towards being the world reserve currency. To that end near the end of this month, March, China’s oil exchange will begin making transactions providing a threat to the petro dollar.
Up to a point it is not relevant want aspiring-rising China does or wants on the stage but rather what the dominant transnational elite of which already includes minority of Chinese wants to accomplish. And so far, for them keeping BAU as it stands now is the primary goal, specifically over-consuming West (+mil. fist) and over-producing East.
Is there enough time and resources to shift this paradigm on its head, I don’t now for sure, but from historical accounts such realignments take decades, do we have that much window before us, doubtful..
so how much time is remain of usa empire ?
until the 2030s.
though…
since there is now global trade, is it possible to still characterize the USA as an empire?
is it reasonable to say that the US empire ended with globalization?
Not with half the worlds army active not winning wars for 20 years.
?
so, the USA no longer wins wars?
isn’t that another example of its lost empire status?
the usa empire ended in 1969 when indigenous oil supplies peaked
after that it was downhill all the way, as the fight started to get it from elsewhere
empires don’t end like wile coyote going over his cliff—there is a long period of decline/denial, as conditions gradually change over succeeding generations and people become accustomed to a new ”normality”, while hankering after ”what used to be”
That’s how idiots get elected, on promises of a return to ”greatness”, not realising that the forces of decline are far stronger than empires or the wishes of its people
no empire can sustain itself beyond the availability of surplus energy
The sustainability of Empires depends not only on the sustainability of energy production, but also on the terms of trade, and external pressures. The chart provides a selective look at history. The Byzantine empire lasted for ~1000 years, Rome, from the conquest of Egypt to Diocletian, was ~350 years. In some ways, Rome had luck on its side to last that long.
I’d place the start of the US Empire at 1945, with the US Dollar as the worlds reserve currency. Prior to that, gold, and gold coins were the reserve currency. Gold coinage was as much about the political message stamped thereon as the value of the gold in the exchange.
trade and external pressures are just alternative terms for energy exchange
no nation can escape the universal law:
if a nation doesn’t produce enough indigenous surplus energy to support the demands of its people, they must beg, buy, borrow or steal it from somewhere else, or face eventual collapse and starvation until their numbers reach a sustainable level.
https://medium.com/@End_of_More/universal-law-16d41003fe2
it may be protracted, it may be obscure—but it will eventually take effect
The US empire started in 1945 when Roosevelt, realising the fate of the world hinged on access to cheap oil, made the deal with the saudis to protect the global flow, realising that if the russians took it, it would be game over for the USA
Norm, I wonder how good FDR’s intel was at that time. he may have gambled about SA, and go it right re: Ghawar (supposedly not discovered or at least proven as a giant field until the 1960s), or maybe they knew even then that SA was sitting on the oil pool of pools.
Norman Pagett – Honestly, I loved your book. Thank you for pricing it affordably.
I expect the new Edition to pay attention to Entropy, i.e. energy required for repairs to sustain a running system.
This is now reasonably-well quantified, at the end of Hubert’s curve we wouldn’t be running out of FFs but most of our ‘energy-devices’ are in ruin, too.
Hubert himself, a Technocracy advocate who was expected to breath knowledge on energy, hasn’t been able then to realise that to generate energy, a greater amount of that energy is required <font size="+1"to be expanded upfront, when he was proposing PV solar panels are the long-term solution for energy supplies on Earth. (Only trees are).
In our case, the Sun has stored millions of years worth of energy in FF. Crude oil is so energy dense and portable it profoundly distorted humans senses on what it takes to generate useful energy.
The total energy put through slavery in growing, harvesting, transporting and utilising palm oils from Nigeria and others to lubricate Britain’s steam engines, prior to crude oil liquids era, were in excess of all the useful energy generated by those coal-powered steam engines!
A steam engine of those would have degraded, failed and ultimately ceased without the lubricant, an indication on how little of the total energy put earlier into constructing it has been possibly translated into a real capacity to generate useful energy.
When ceased, 99% of the engine’s mass and parts count are still the same when it left the production line, yet the device became entirely useless (i.e. junkyards found full of useless ‘heat-engines’ all around the world and growing by the minute).
Cannot wait for the next Edition of The End Of More.
One-way entanglement between isolated energies.
Thank you for your kind words Energy2, good to know my ramblings are making sense somewhere.
Seems a difficult subject to put over, because most don’t want to know. I’d prefer not to either, to be honest. Not a pleasant subject
“trade and external pressures are just alternative terms for energy exchange”
Maybe in the very long run. I suggest that Trajan had to invade Dacia because the Treasury was running out of silver to pay its troops. Augustus had warned his succesor 100 years earlier to avoid expanding the borders.
You can debase coinage all you want internally, but to buy silk from China, you need real money.
timespans are irrelevant
Trajan invading Dacia to grab their silver fits precisely into my universal law of nations—expand by whatever means, or go into collapse
when the romans were paid with dacia silver, it was only any use if it could be exchanged for food or other goods that were useful to sustain themselves—carrying ponds of silver around was ultimately a drain on energy.
“The US empire started in 1945 when Roosevelt, realising the fate of the world hinged on access to cheap oil, made the deal with the saudis to protect the global flow, realising that if the russians took it, it would be game over for the USA.”
IMHO – In 1945 it was about denying the Soviets a warmwater port with access to the Indian Ocean. There was oil in Persia, and US geologists were scoping out Saudi Arabia and others. IIRC, Gahawar began in 1947.
oil was first discovered in saudi in 1938
https://www.nationalgeographic.org/thisday/mar3/oil-discovered-saudi-arabia/
but your point about denying the russkis a warm water port is equally tenable
I’m glad someone mentioned Byzantium. Other civilisations and empires that lasted longer than 250 years include Egypt, Sumeria, China, India, and Babylon.
It strikes me as being something of a travesty that Sumeria is mostly forgotten now. Our world would be a very different place indeed without all of the advancements they made. In the end, though, despite their best efforts, simple salt was their kryptonite.
Thanks for mentioning Sumeria. Too many people think civilisation began with the Industrial Revolution, or the Motor Car, or the first computer, or the first satellite.
Sumeria was, I think, in many ways, the first civilisation.
I think if we look at these more closely, we will find that there were “pieces” that collapsed. Either that, or particular ones many have been able to conquer/start using neighboring areas in such a way as to give more resources. Clearly Europe was able to offload some of its problems, by the availability of the Americas and Australia to settle. Even before that, it had set up colonies.
I know that even today, India and China have large numbers of local languages/dialects. Even Norway had a large number of local dialects that were so different that people could not understand them. I understand that in India, some of the local languages even use a different alphabet. In many ways, they have not been a single over the years; we just think of them that way today.
No nation can, that’s your maxim, but I’d characterize empires by default as already sucking up the resources of periphery territories which is sort of their modus operandi. Their growth is limited by how much they can shift to the core – which is one reason to think that collapse will proceed in the periphery for some time longer if at all possible.
good ideas here… thanks…
this makes me think that the USA is certainly no longer an empire…
the core for decades has been America and Europe and Japan… maybe the G20 makes sense…
in this scenario, Europe (mostly western Europe) and America are the power centers trying to suck in as much resources as possible from the periphery…
in past empires, the resources would come from subjugated countries…
now, with global trade, all countries are trying to manipulate their currencies and trade agreements to their own benefit…
no surprise that the bigger stronger economies usually “win” with these arrangements…
the “periphery” then has become the weaker smaller countries scattered throughout the world…
though, “core” countries with small FF resources could be heading for the periphery…
I think the UK heads up the list.
empires must thrust outwards and consume in order to sustain themselves
america was slightly different–in that it was the last empire, and consumed itself—ie–it ”grew” by consuming stuff that was contained within its own boundaries.
all other empires grew by invading other countries
the fact that it already belonged to the first nations was ignored—in that respect the usa was like all other empires.
unfortunately the usa has arrived at the inevitable,—– having eaten itself, it needs resources from elsewhere to keep going, but so do the other empires, russia and china.
so conflict is inevitable because survival is at stake, none of them realise they live on a spherical world, not a flat one
A class mate’s father was a senior figure at SUMO (Iraq’s oil export department). I remember very well the mate saying, “America fears the world ( which is primarily Asia and Europe) may treat it irrelevant and soon it will be forgotten if it relinquishes its role a world-police force”.
That was said very early in the primary school years decades ago – a reflection on how even high Iraqi officials understood very early in the ‘process’ the deepest in America’s psychology.
Globalisation, countless military bases everywhere, a war in the ME every ten years or ongoing, and many others – wouldn’t have been necessary if this element has not been rooted very deeply in the consciousness of America.
Managing FF energy resources worldwide might have been done so differently, too.
Ian Morris, the renowned Stanford University Historian, proposed a thesis in his title, Why the West Rules—For Now: Geography comes in importance before History. And that might be, actually, correct.
America will remain in America, every other geography will remain where it is. The sad fact we are losing finite resources so precious a price for humans trying changing Geography, fruitlessly.
Interesting. Thanks.
Some empires are bigger than others. The portuguese one was, at least since brazilian independence, a small empire, but hey it lasted much more than 250 years. It began in 1415 with the conquest of Ceuta and ended in 1975 with the independence of Angola, Mozambique, etc. (But I suppose we shouldn’t call empire to a thing that ruins the metropole, as it was the case with the portuguese colonies in Africa and Asia…)
Might want to read SPQR.
It will add a bit of depth and complexity to your chart.
The are parliamentary elections going on in Italy over this weekend.
Interested if Tim Morgan’s general prediction would spillover there as well? The top contenders are populist-oligarch, populist-leftists, populist-right, old traditional “democratic-kleptocracy” parties somewhere down scrapping the proverbial bottom of popularity barrel..
The party which calls not only for shooting down incoming boats of migrants but moreover calls for expelling already settled migrants/minorities from Italian communities is posed to get +20% nationally and win regionally.
Immigration boosts a countries economy (GDP) substantially and creates jobs.
http://budgetmodel.wharton.upenn.edu/issues/2017/8/8/the-raise-act-effect-on-economic-growth-and-jobs
https://www.nbcnews.com/business/economy/slash-immigration-gdp-victim-research-finds-n792821
What is reported in the articles hardly sounds like research. It sounds like their model of how the economy works. At best, the conclusion of the analysis is, “When there are plenty of resources, immigration boosts a country’s GDP and creates jobs.”
No one has done any study regarding when there are not plenty of cheap-to-extract resources. Spreading what resources there are more thinly would be expected to increase wage disparity. Living next door to Venezuela or another country coming apart (Syria, for example) would not necessarily be an ideal experience.
wherever an immigrant takes up residence, he/she must accumulate sufficient energy from the surroundings to provide food shelter etc etc
if the immigrant has employment, then that employment must provide the above
in addition it must provide a ”surplus” that adds to the actual benefit of the host nation
The Romanian guys who wash my car do a great job–better than I can, but it is just a cash deal between us, there is no ”surplus”— they earn a living but add nothing to the productivity of the UK as a whole
If the immigrant produces goods in a factory, then UK productivity is increased but energy must be consumed to sustain that employment
I’m looking forward (well, I’ll be dead) to going back to our normal (if you look at the last 200,000 years) 1-10 million.
Of course we had many more resources then.
The Romanian guys who wash my car do a great job–better than I can, but it is just a cash deal between us, there is no ”surplus”— they earn a living but add nothing to the productivity of the UK as a whole
Of course there is a “surplus”, Norman. Their work helps you perform better at all the value creation tasks you excel in, because they’ve freed you from the task of having to wash the car yourself or from the shame of driving a dirty car, thereby supporting you in your efforts to make Britain Great again! Innit?
never thought of it that way
now if the don would let them set up carwashes in the usa—maybe they could solve his problem too?
The Romanian guy goes to the grocery store and buys food with the money you gave him. This money goes ultimately to workers who helped produce the food, and to the government for taxes, because everyone along the way pays taxes–value added taxes (sales taxes in the US), if nothing else.
The question is, “What would you have done with the money if you hadn’t given the money to a Romanian guy?” If you had given it to a different car wash, the results would have been similar (except that the government might have been able to take a cut sooner, and the process would have used more high-tech equipment and less water). The owner of the other car wash would have taken a cut too, and probably not spent its share.
To the extent that the Romanian guy really needed the job, and the pay went to wages rather than paying for high tech equipment (backed by debt that needed to be repaid with interest), it was in a sense, a plus for the economy. The owner of the commercial car wash needed sufficient volume to obtain the revenue needed to pay back the debt with interest on his car wash. If too many people do what you do, the owner is likely to default on his debt.
but Most Italians Are Too Depressed to Care.about this bullshit elections
Like millions of young Italians, Elio Vagali confronts career options that range from minimal to nonexistent. At 29, he has cleaned homes, picked tangerines and lifted rocks — nearly always off the books, without the protections of a full-time contract.
In a measure of his desperation, his dream employer is the dilapidated steel mill that dominates life in this fading city on the Ionian Sea. The complex has been blamed for a cancer cluster in the surrounding community. Yet to Mr. Vagali, it beckons like a portal to another life, one that means moving out of his parents’ apartment.
Except the plant isn’t hiring. “You either know somebody, or you don’t get in,” he said bitterly. “There’s nothing here for me
All of which helps explain why Mr. Vagali and much of the Italian electorate is either indifferent or contemptuous of the national election campaign that, on March 4, will determine who runs Europe’s fourth-largest economy.
The country’s bleak prospects have improved in recent years, but not enough to meaningfully lift its citizens’ fortunes. Many companies are growing without hiring. What jobs have been created are largely temporary and part time
Nearly 30 percent of voters are undecided, according to polls. The unpredictability of the outcome amid economic unhappiness has enhanced the chances that the result could generate financial tumult in Italy and threaten a fresh shock for Europe
https://www.nytimes.com/2018/02/27/business/italy-economy-election.html?smid=tw-nytimes&smtyp=cur
I’m afraid you are not up to speed what’s going on here, Morgan correctly called this trend years ago, basically gradual impoverishment resulted voting for Brexit, Donald etc., now I simply add-speculate it might again materialize as same trend in Italy..
And by the way even those young not fully employed Italians are currently living like kings in comparison to EU’s post enlargement colonies, where 1/4th of wage for same productivity and almost under the same living expenses structure..
The awakening in the west to real poverty conditions is going to be pretty shocking, we are still at early prelude sequence to this though..
i understand what are you say but people in Italy are pretty much hopeless
about they future because whether they choose fascist or communist or socialist or capitalist party it won’t make difference in they lives
I have just learned that my UK daughter-in-law has been informed that she will be changed from salaried to hourly, and the hrs will be cut by 8 hrs less per week. She is one of this chains top managers. The working class will gradually but relentlessly hollowed out and forced into near destitution. But I doubt that immigrant benefits will be reduced.
Unless we get a fat Eddy crash quite soon europe will have to stop “humanitarian” immigration. This doesn’t necessarily has to be a physical stop, removing incentives would probably go far.
sorry…
I don’t ordinarily read Chris Martenson but this time he has some interesting points. Part one is currently on ZeroHedge and yes, I sprung $30 to read part II and actually purchased both books he referenced.
The emotional aspect seems to be coming from different sources, Gail with religion, Dmitry with small groups often religious and now Chris with what appear to be quasi self help books.
Dance has some of this stress from what I can see especially among those doing Argentine Tango which as gone through several economic cycles and has music which reflects these periods. To a rhythm/smooth or international dancer, it is a different world in technique and emotional performance.
We are looking, most of us are optimists who subscribe to the idea “God never closes a door and doesn’t open a window.” My life is a metaphor of flying at the wall, looking for the window and just making it. Wings are getting a bit short.
I think it’s, ‘never closes a door before opening a window’.
My hobby is crushing DelusiSTANIS…. and to kill time while waiting for the implosion I have upgraded to regular 100km+ bike rides
They all need a escape.
Reality is a bit much for humans to embrace.
I think it’s “one door closes, another one opens.” I used to have a Ford Escort that did that.
thus… it’s highly unlikely that you are Fat Eddy…
Some of these sayings don’t make sense to the Irish. The old saying, “When one door closes another one opens.” What this means to the Irish is you have a drafty house.
— Dave Allen
”wages” is just another word for energy exchange
if energy exchange is declining, then wages will decline—it is a brutal inevitability
looked at in the short term, the hammer of poverty falls on the lowest paid–(it always has)
but looked at in the long term, as energy depletes, then money-value depletes and will cut support from under almost everyone, rich and poor alike
It is only possible to ”produce” with automation for just so long before robots are the only ones left working—and they buy nothing
If people are not buying through her chain, then less energy is being exchanged so less money is available.
Maybe it’s amazon that’s sucking in the business, but even Amazon can’t sustain itself in a commercial environment where employment is in steep decline and nobody can afford ”stuff”. We can’t all shop online and sit at home.—But that seems to be Bezos’ aim., ultimately a dead end, but why should he care? To him its a cornucopia—just bigger than everybody else’s.
So yes, the working class is being hollowed out, and when the hollow shell finally cracks—not all Bezos horses or all his men will put it together again.
For goodness sakes, look at how much paint has peeled off of that building. Set up some scaffolds, wash it down to get rid of the loose paint, prime it and give it a new paint job! The exterior of a building can begin to disintegrate quickly without paint to protect it. I don’t care how depressed they are, get to work! Besides it will increase GDP.
‘The party which calls not only for shooting down incoming boats of migrants’
Oh wow!!! This would be my dream come true. This would be a step up from bread and circuses.
I so hope they win the election
Would they be allowed to use fighter jets — or are they restricted to large bow mounted machine guns?
here another trailer of what after bau collapse will look like
liDL TALLAGHT LOOTED & BURNED TO THE GROUND in ireland
https://youtu.be/QhsVfkzRWaE
U.S. energy industry slams Trump’s ‘job-killing’ steel tariffs
https://www.reuters.com/article/us-usa-trade-energy/u-s-energy-industry-slams-trumps-job-killing-steel-tariffs-idUSKCN1GD652
One problem highlighted in the article–there are some specialized types of steel products (thick-walled interstate natural gas pipeline, for example) that are not even made domestically, at this time. Costs will rise.
The tariffs are definitely inflationary. Add to the problems brought on by higher interest rates.
Ban.dits…gets through? …testing moderation here!
Actually Ed, you better be careful if you ski ‘The Remarkables’, because its not fair on the other mountains around Queenstown that they get such a special name; the thought police will have to bring them down to size, and maybe call them the ‘The Reasonables?’!
Anybody else gone back to tea-leaves? I have found that I need 2 T bags where b4 one was enuf. The t-bags just full of powdered sweepings now! Planting some Camelia’s this year…gotta keep the future bandits happy!
notice that rolls of toilet paper are now narrower?
on the spindle, there’s lots of room on both sides of the roll…
so, for example, the 1,000 tissues per roll may be the same, but there’s a lot less paper…
in the stores, it can show the same price per 100 on the shelf tags…
so, no apparent inflation…
by the way, economists can’t measure this kind of business practice…
and likely, they are oblivious to it.
In terms of planting… the property we are shifting to does have some two year old fruit and nut trees… I will be adding nothing …. I will be buying everything in the Countdown… I will be purchasing a ride on mower… and I will be sitting in the sun next summer (if that happens) drinking ladies drinks with tiny umbrellas and straws….
And I will go down… without so much as a whimper!!!
https://youtu.be/Ac6Yx3OOJ5o
These pronouns are accompanied by a conjugation chart listing how they might be used as a subject, object, possessive, possessive pronoun, and reflexive. For example, to refer to a student who identifies as “ne,” one could say “Ne laughed” or “That is nirs.”
To refer to a student who identifies as “ve,” the pamphlet explains that one would say “Vis eyes gleam” or “I called ver.”
The pamphlet – which lists seven different types of gender neutral pronouns – encourages students to ask their friends, classmates, and coworkers how they identify before making any assumptions.
https://www.zerohedge.com/news/2018-03-02/college-adds-ne-ve-ey-gender-neutral-pronouns
The end cannot come soon enough
Kennesaw State University is where my husband teaches. I have met one gay woman at a high level of the organization, who likely is involved with this.
And they won’t even see it coming….no matter they usually take-it!
Omg, I thought you were referencing monkey talk from that video BD posted.
They will have to rename ‘The Remarkables’ …not fair on them other hills…how about ‘The Reasonables’?
(my original comment in moderation ..yikes!)
!!!…
The snowflakes will refuse to fall (and ski) on the Remarkables and then where would we be….
Hat’s off to FE – xe’s found a good article there. 😀
Discussing how many angels can stand on a pinhead comes to mind…..
This is the reason why we do not hire people under 40 unless the union sends them. The contract reads 2 hour notice no reason needed.
I have a buddy in Hong Kong … he’s a barrister… he has two kids about to be shipped off to uni… he is fearful of what the finished product is going to look like….
I told him to send them to trade school 🙂
To be expected. They’re living in a vacuum of ideas.
I saw this in a theater… fascinating…
evolution didn’t bring a whole lot of separation between chimps and humans.
I recall hearing that evolution doesn’t erase what was there before, but instead adds on other layers. So there is talk about the lizard brain in humans that is the earlies and still remains. Then two increasing complex brains on top of that. And they all work at some level, with different functions. I can see us needing yet another brain addition: one which understands that “out there,” “not us” no longer exists. We’re all in this one boat, the rocking of which isn’t recommended. Nuclear hazard alone should convince us of that.
Federal Reserve chairman: Mounting student debt could hold back economic growth
http://www.washingtonexaminer.com/federal-reserve-chairman-mounting-student-debt-could-hold-back-economic-growth/article/2650400
These poor young adults are permanently damaged by the decision to borrow money for higher education. It is really sad. They don’t want to marry or start families, with the burdens they have been given.
They are young, they are a majority, they vote, laws can and will be changed; if it has been done, it can be done.
You can’t vote or legislate out the end of BAU
It is tragic: foisting enormous debt on kids who simply haven’t a clue as to what the consequences will be, while university higher administrators live high on the hog and indulge in grandiose building projects.
At the same time, employment conditions for mere lecturers and graduate assistants seem to be in steep decline.
Although prospective students do have a responsibility to inform themselves fully, the moral focus must be on those running and benefiting from this grand scam, who know very well what they are about.
Nice gigs:
1. Michael Crow, President, Arizona State University $1,554,058
2. William McRaven, Chancellor, University of Texas system $1,500,000
3. John Sharp, Chancellor, Texas A&M University system office, $1,280,438
4. W. Kent Fuchs, President, University of Florida, $1,102,862
5. Michael A. McRobbie, President Indiana University system $1,067,074
6. Eric J. Barron, President, Pennsylvania State University at University Park, $1,039,717
7. Michael V. Drake, President, Ohio State University, $1,034,574
8. Michael K. Young, President, Texas A&M at College Station, $1,000,000
9. Jean E. Robillard, Interim President, University of Iowa, $929,045
10. Raymond Watts, President, University of Alabama at Birmingham, $890,000
https://www.forbes.com/sites/laurensonnenberg/2017/07/17/the-top-paid-public-university-presidents/#638c21fb114c
US natural gas production has been surging since the fracking boom took off in 2007. The chart below shows the monthly (not annual) production in billion cubic feet. Note the impact of the oil-and-gas bust in 2015 and 2016, when some natural gas drillers filed for bankruptcy. But since then, Wall Street opened its wallet again, and new money has flowed into the sector and production has spiked, not only from wells primarily producing natural gas but also from the renewed oil boom as many oil wells also produce natural gas — this used to be flared, but the installation of processing equipment and pipelines allows it to reach the market
https://wolfstreet.com/2018/03/02/u-s-natural-gas-lng-imports-exports-global-impact/
Natural gas trades in the US for $2.70 per million Btu (mmBtu) at the moment. In other parts of the world, LNG fetches are massive premium. For example Japan acquired LNG in January for an average price of $11.00/mmBtu, according to the Ministry of Economy, Trade and Industry. And this is down from the range of $16-$17/mmBtu in 2013 and 2014.
Granted, liquefying natural gas and shipping it by tanker from Louisiana to Japan comes with costs, but the price differential is still alluring for US LNG exporters who’re praying that the collapsed price of natural gas in the US remains collapsed forever – even if it bankrupts producers and eats up tens of billions of Wall Street equity and debt investments on an annual basis.
This is Tesla on steroids… all part of the plan
Of course, US producers would like a lot more than $2.70 per million Btu, and the cost of shipping is outrageous. I think it was $4.50 per million Btu to Europe; it must be double that to cross the pacific. It is hard to make money with this cost structure. Japan and China cannot afford to buy LNG at $16-$17 per million Btu. Keeping the price up at $11 per million Btu may be a challenge.
It is quite possible that US Natural Gas will sell for less than 10% of it’s 2005 spike high ($15.51) this year.
Prices for natural gas are terribly unstable because storage is so difficult/expensive to keep available. Even when storage is available, it doesn’t necessarily bring the “flow rate” up to what is needed, when direct use for heating, direct use for industrial purposes, and burning to produce electricity are combined. If natural gas is used for transportation, and also exported, this adds more variables. The sellers hope that a shortage will send the price up, but it doesn’t seem to work for very long.
Kunstler is always wrong. He is the Gartman of politics. Excellent writer though.
he’s an extremely gifted writer of prose…
and often hilarious… I find his 2x weekly posts to be well worth reading…
(hi, Jim, how’s it going?)…
but it must have been at least a few years ago when I realized that the things he claims are coming soon just never seem to get here…
so his posts can be enjoyed if this is assumed…
but, some year his time will come…
and he’ll be right about something big.
“but it must have been at least a few years ago when I realized that the things he claims are coming soon just never seem to get here…”
Exactly. JHK acted as seer of future events and wrote about what he saw coming probably seeing himself as a prophet and possibly future leader of a localized scene after collapse, but the clock just keeps ticking waiting for his vision to come to fruition, so he’s turned his attention away from peak oil/the Seneca cliff/Jevons paradox to politics. It’s unfortunate too, because when he remained on topic it was much more interesting and I use to look forward to his Monday AM posts.
I enjoy Kunstler’s American English: when he really lets rip he amuses in way just impossible this side of the Atlantic.
In today’s edition of Fake News we have what is clearly blatant fakeness:
Europe severe weather: Death toll rises amid freeze
The death toll from severe weather has risen across Europe, with at least 23 casualties in Poland alone amid sub-zero temperatures, officials say.
Shelters have been opened as the plight of rough sleepers is a major concern. Some 59 people have died across the continent, AFP news agency reports.
Meanwhile most transport and flights have been suspended in Ireland where thousands were left without power.
Several countries continued to face disruption caused by snow and ice.
The unusually cold spell brought by a Siberian weather system was being felt as far south as the Mediterranean.
http://www.bbc.com/news/world-europe-43247205
Now imagine what would happen if Putin shut off the gas supplies…. it is very expensive to ship LPG…. so the EU either needs to stop winter…. or be friends with Putin … If I were the EU I would tell the US to piss off and I would be best friends with my LPG dealer… LPG is the giver of life… Worship the LPG.
No doubt Putin is behind this … he has a snow and cold making machine…. he wants to punish the UK…. AND … he wants to increase demand and prices for his LPG….
This is actually what the Syrian war is all about… the EU/US is aware that Putin has this machine…. and he must be stopped.
Flights and trains have been cancelled and thousands of schools shut as sub-zero conditions continue across the UK.
Rail networks including Southeastern, South Western and ScotRail have advised people not to travel on their routes.
More than 13,000 customers are without power in the south west of England, south Wales and the Midlands.
The Met Office’s red warning has been lifted but flood warnings remain in place in the south-west and north-east of England.
http://www.bbc.com/news/uk-43251824
https://ichef-1.bbci.co.uk/news/624/cpsprodpb/F2DF/production/_100257126_tobydavies.jpg
Actually, Gazprom just closed down the natgas link to Ukraine today as a result of lost arbitrage in Swedish court. Most of the EU bound export gas links are already rerouted through different countries since ~mid 2000s because of Ukraine’s several attempts at theft and delayed/non payment..
Hmmmm… well seeing as Europe is experiencing intense COLD weather — very unusual COLD weather… hopefully the pipe to the EU remains open….
Otherwise millions will freeze to death — in that very very COLD weather…. because most people threw their blankets in the garbage expecting a balmy winter.
This article says, EU Ready To Mediate In Latest Russia-Ukraine Gas Dispute. The article quotes an EU spokeswoman as saying,
Also, Poroshenko boasted that Ukraine doesn’t need Russian gas anymore, since countries like Hungary, Slovakia and Poland are sending the stuff now. This brainiac did not mention though that most of that is just resold (stored) former Russian gas anyway lolz.. as these countries are taking only fraction from the western natgas pipe system.
And note to FE, the -20C days temperatures are over in most of Europe by now.., so the situation is somewhat less tricky even though several countries are still on low storage (~20-30%) which is obviously not good during late winter for precautionary reasons anyhow..
Details!
The ice age cometh!
How can it be????
Funny thing this Russia stuff… Syria Ukraine etc…
Putin even threatens nukes ….
Why doesn’t Russia simply turn the f789ing gas off to the EU for a week — and ask the world how it likes that.
Then dictate their terms of turning the knob back to the on position.
http://2.bp.blogspot.com/_Nx-0gLWOl3o/TQTbgmyzoUI/AAAAAAAABic/oTWCtbj8YVM/s1600/whats+wrong+with+this+picture.jpg
http://i.huffpost.com/gen/4393678/images/o-THE-MATRIX-facebook.jpg
If Europe and Russia realise their future is in partnership, then the US will return to irrelevancy.
Europe Russia and America and the rest miss the point
all conflict is over resources
resources WILL diminish, conflict therefore IS inevitable
Canada is in good hands …. you always want a mean son of a bi tch when you get into a resource fight…
https://cdn.images.express.co.uk/img/dynamic/130/590x/secondary/Justin-Trudeau-crying-1100875.jpg
Canada, you don’t know how good you have it. Things could be much worse.
Well said.
When it gets really dicey, the last men standing will be Canada and Russia, and possibly some South American areas.
more than any other country, Canada exports the largest % of its resources every year…
this will not end well…
it’s all about food and FF…
isolated, quasi-BAU Russia will be the last man standing.
Maybe in the European theatre it could be delayed, and US could be left to eat its own tail; but it would take a fairly serious ‘family-group-conference ‘ (Five eyes alliance) to get any sense or honesty out of the US regime.
Yes, even if it is just domestic conflict as states lose the ability (energy)to project power abroad.
no nation can afford multi million-man armies any more
Tariffs seem cheap compared to hiring an army. In theory, they can even add tax revenue.
Could you make an even broader statement and say that states can’t afford any huge energy product anymore? Would you agree that no state can afford building development or forest products anymore? So, driving through the landscape, anything new you see is unaffordable? And if it’s affordable, it won’t be visible from that viewpoint?
affordability is relative to scale
i can afford to run a car–but not a fleet of trucks, though if i knew what i was doing a fleet of trucks would return a profit
armies on the other hand, do not return a profit unless they loot the nations they invade—eg ww2—which was a resource war.
germany and japan intended to loot the nations they invaded, and they ”invested” energy to do it—ie armies of millions of men plus materiel.
unfortunately the usa invested even more fuel, and so they lost their investment. It was a throw of the energy-dice.
That covers past affordability
Effectively nations cannot afford any large scale ”investment” now, because the energy input necessary is looted from our own future (it is not possible to construct anything without fossil fuel input)
To those who propose ”renewables” I always suggest building the Hoover dam with the output of wind turbines and solar panels. (or even fusion power)
cities are now unaffordable because the energy necessary to sustain them is no longer available. Our infrastructure was a construct of cheap surplus energy. That’s why it falling apart. Sure–it can be fixed maybe, but that only delays the inevitable
I hope this answers your question
It goes some way toward answering my question, and that is appreciated.
“Effectively nations cannot afford any large scale ”investment” now, because the energy input necessary is looted from our own future (it is not possible to construct anything without fossil fuel input)”
But the next challenge is to define what a “large scale ‘investment'” is. Is there a way to group “large scale investment” under some (albeit imperfect) rubric? You are good at making such things crystal clear for the average person. But this is an important matter, which needs a home run of simplification. 🙂
i can’t see how one can define ”large scale investment” because it should really be “large scale energy investment”.
Take a rather skewed example. Right now Ethiopia is about to close off the upper Nile with a colossal dam, built with borrowed money (someone else’s energy tokens). They have to repay it, the only way they can do that is to use the dammed water to produce electricity (which doesnt consume water) and grow food, (which does)
The Ethiopians promise the downstream Egyptians that their water flow will not be impeded–but it will because the Ethiopian population will grow to consume even more food + water. Their leaders promise ”infinite prosperity’ once the dam is built. Their population is 106m, growth rat 2.5%–thus doubling in 28 years.
So the Ethiopians will be looting the Egyptians future, who right now are not best pleased.
Hard to see what the Egyptians can do about it, short of bombing it.
However Egypt’s population itself is set to double in the next 35 years, and the country is already a basket case, and water supplies are already a problem, so water looting could tip them over the edge (well before then). Egypt is a pivotal country, and if they go down, the shambles that is already the middle east will be made infinitetly worse.
On a seemingly far smaller scale American farmers ”invest” in boreholes to tap the Ogalla aquifer to offset drought
and also vote for cornucopian promises, because the Ogalla is finite and depleting rapdly, they too are looting the future (their own)
Both represent ”energy investment” on vastly different scales; both are ultimately unaffordable in human terms. Both drain our future.
Both investments are locked into some kind of blinkered certainty of an imagined future, and all this without regard to climate change unknowns.
You can tag those examples to pretty much any ”investment project’
one can only hope the future everyone desires turns up.
There is likely to be some correspondence between aesthetic effect and energy effect. After all, our sense of what is beautiful is arguably geared to what is useful, and what works. And let us say there are some weird people (who I conditionally label “receptor types”) that can pick up the energy signal early. They wouldn’t necessarily know about energy flow, not having been trained to do that and having been trained instead to pick up aesthetic clues of “wrongness.” .These could be sounds or movements or scenes denoting stress of some sort. How animals can predict earthquakes or tsunamis might not be too dissimilar to this sort of sensing. Long story short is that my lens for understanding energy flow is seeing red flags for anything involving “noticeable ” physical change. So you would never demolish a building, no matter how vile it might be. You would be hard pressed to scrape off blistered paint and repaint them from scratch. You would pretty much be limited to a formula of “arrested decay” and lifelong incremental repairs. Paying the workers involved might well pencil out better economically. That’s the sort of thing I need to know.
societies have been producing works of art since surplus energy came on stream
when the first humans learned how to preserve food, that led to liesure time, and painting on cave walls, or bone carving and suchlike—the aesthetic effect derived from surplus energy.–though they had no concept of surplus energy, they were doing something that gave pleasure or reinforced faith maybe
nobody wastes time painting if they have to spend all their time sourcing food
my thinking is always based on standing wayyyyyy back to take the long view rather than stand up close and try to make sense of the here and now—that is ultimately impossible i think—
some of the things you touch on are unknowable i think
Thanks Norm,
OFW with its energy analysis has strengthened the position I’d take anyway. It’s planners and developers who are squandering what little we have to work with. I don’t think Xabier’s position is too different, although his conclusion about what or what not to do about it might be quite different from mine. Mine is more lonely a project than I care for, but c’est ca.
No, I don’t understand the following clearly, but common sense tells me there is unlikely to be a thing called the human species that isn’t involved with art making. Art would at no time be an “extra” that was done only due to “surplus energy.” Humans have never at any time functioned separately from the sorts of symbolizing activity of which art is a part. To treat the human as independent of some meaning system is a mistake.
“There is good evidence for a neurological relationship between visual creativity and language. Stout et al. (2008) studied the brain activity of subjects who had become expert in Early Stone Age tool-making. The tools were of the Oldowan and Acheulian types, representing a period of some 2 million years during which time the brain of our hominin ancestors expanded and tools became more advanced. The brain activation detected by positron emission tomography during tool-making included both visuomotor and language circuits, suggesting that tool-making and language share a basis in the human capacity for complex goal-directed manual activity. As this includes artistic creativity, evidence of the increasing sophistication of tool technology, as well as evidence from crania of increasing brain size, suggests that our ancestors had the ability to create art or proto-art much earlier in evolution than is suggested by current knowledge of art-related artefacts.”
Forgot to post this:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2815939/
There is a potential shift from force based power to a culture based one. Thinking about Marcus Garvey’s visionary “African Empire” could be turned on its head to become the opposite of the force based conquest we’re used to associating with empire. “Africa,” an entity that is yet largely undefined beyond the unsatisfactory association with the geographic continent, doesn’t have to lift a finger to create empire. It was created through the transplantation of Africans to the New World, and the unintended African cultural dominance of the hemisphere (and beyond) which resulted. Energy availability might have much to do with thought and imagination..and culture.
Da Vinci might be said to have been at the pinnacle of culture for his time, certainly he had many mechanical principles figured out, but he lacked energy availability—-it wasnt possible to drive his machines using wood as an energy source, or to manufacture practical engines
it took another 400 years for sufficient energy to come on stream to allow machines to function as they do in our own time
given time, the peoples of the americas will meld into a single racial type—as i guess we all will eventually, but there will be a massive resistance to it before we accept its inevitability.
A serious break on art as revolution is not understanding energy dependence (as it is uniquely taught here on OFW). We do , however, have to guard against viewing energy in a one sided manner–as physical to the exclusion of behavioral.
Something I wrote elsewhere might apply her;
“While in Mexico in the late 60’s, I met a historian researching slavery there, and he assured me that there were more slaves in Mexico than in the US during the 18th century (or some period therein anyway). With the enormous Hispanic population in the US, as well as the large number of southerners “passing,” DNA tests ought to demonstrate that people who qualify as black under America’s “one drop” culture would qualify the the USA as a majority black country.”
http://media.miamiherald.com/multimedia/news/afrolatin/index.html
Since we’ve been discussing raw physical energy as a means of colonizing, how about considering it from the opposite end AS WELL and as a process of cultural dominance? It’s not as though we’ll all blend in and be the same one day. That “one day” is looking mightily as though it could miss the bus. The issues are about now. Right at this very moment, America is arguably a black majority country, and numbers are a major driver of energy impacts. What we do with this knowledge makes a big difference in how we see energy.
“A serious BRAKE…”
The UK seems to be doing OK for gas supplies. They didn’t even have to ask any industrial producers to cut back on production, although some seem to have cut back voluntarily, given the high prices. https://finance.yahoo.com/news/gas-market-responds-national-grid-225246156.html
Another article says, Russia to Rescue as Europe Draws More Gas in Siberian Chill
When the Klimate freezes… it’s time to call Putin…
Uber and Lyft drivers’ median hourly wage is just $3.37, MIT study finds
https://www.theguardian.com/technology/2018/mar/01/uber-lyft-driver-wages-median-report
and at those wages, aren’t those companies still losing money?
“In the fourth quarter of 2017, Uber paid about $8 billion to drivers in earnings and bonuses, or about 72% of its gross revenue for the quarter. As a result, Uber lost $4.5 billion last year on $7.5BN in net revenue ($37BN gross revenue)””
So they had “other costs” of $12B for the year?
Maybe they want profit, say $3B.
But a large part of the $29B the drivers got has to be cars and fuels.
I can’t understand how cabs should become so cheap next year when self-driving cabs are rolled out around the globe.
This is what I have heard from people who drive for them:
“Uber and Lyft drivers’ median hourly wage is just $3.37, MIT study finds”
An Uber driver illegally picking up in York just lost a month or two’s profit then:
http://www.yorkpress.co.uk/news/16052898.Uber_driver_snared_in__sting__by_rival_York_taxi_drivers/
LOL.
I suspect a good percentage of Uber fares are, like this one, off the books. Nobody in the West would work for $3.37 per hour.
$3.37?! Good luck with that.
The US cannot compete in the global economy and the only growth has been in selling expensive services to each other. It’s a fake economy.
https://imgur.com/a/jQy4N
The top chart is from this article by Tim Morgan in Surplus Energy Economics blog. https://surplusenergyeconomics.wordpress.com/2018/01/17/117-candyfloss-economics/
The text that went with the chart is as follows:
“… selling expensive services to each other.”
if this is what we are doing, it’s made possible by the large amount of energy slaves which the average American has…
“we” are producing 10+ million barrels per day of oil… and isn’t the USA near the top in production of coal and natural gas?
“… in Britain, where manufacturing output is barely 9% of output, compared with 12% in the United States, and almost 18% in the Euro area.”
I definitely like the short term prospects of the USA over those of the UK and continental Europe which have minimal FF resources.
““we” are producing 10+ million barrels per day of oil”
Much of that comes from expensive fracking, so it is irrelevant without dollar preference (–Steve Ludlum) or the oil that is imported. It’s laughable to think that the USA will somehow retain the present level/state of BAU despite it failing in countries like Germany or France.
Germany and France are in much better positions to trade directly with Russia for energy products. The US has been so hollowed out of industry and natural resources that once dollar hegemony cracks it’s all she wrote.
“… and isn’t the USA near the top in production of coal and natural gas?”
“I definitely like the short term prospects of the USA over those of the UK and continental Europe which have minimal FF resources.”
notice, I did write “short term”…
I’m guessing that FF resources are the key to holding off Creeping Collapse…
it’s just a guess, and I won’t mind being wrong, since I’m sure that within the next 20 years I’ll be dead…
but its relevant that you mentioned Russia…
like the USA, another huge country with vast natural resources…
Germany and France and the USA may decline into poverty, while Russia will isolate themselves with quasi-BAU…
in the short term… and just a guess.
Germany and Japan has done fine with buying/borrowing for a long time.
US has been in the stealing-stage for quite a while.
There will be no oil, coal, or gas without full BAU worldwide. So it doesn’t matter that the US extracts these resources in large quantities now.
Exactly. At most, someone with a shovel left over from BAU might find a little left over “brown coal” in an area that has been bypassed for development, because the cost of building roads and transportation to extract it is too high. But this won’t amount to much at all. This coal will only be able to be used locally.
well—theres a seam of coal 60ft below my house—diggers welcome
—i’d put up a pic of it if i knew how to put photos on here
hmmm…
where’s the easy lesson about adding photos?
can never figure it out–but on the other hand i dont want a lot of ofw claim jumpers around here
We’ve got a lot of peat out here on Islay, which is in effect compressed organic matter halfway to being coal. I fear my future will involve a lot of digging.
a peat fire, malt whisky and all that scenery to look at—what more could you want
apart from fewer midgies?
I put this comment in the wrong place before.
The Congressional Majority Staff Report (in other words, a Republican analysis) Is Interesting to look at. Russian Attempts to Influence Domestic Energy Markets by Exploiting Social Media.
The report investigates the actions of the Russian “Internet Research Agency” (IRA)
Its main bullet points are as follows:
Within the report, the first section was “Fracking threatens the Kremlin’s agenda.” The writeup explains that Russia wants to export oil and gas to Europe. Too much oil and gas from the US will interfere (bring down prices, IMO).
The second section is about Democrats seeing a problem as well as Republicans. It quotes Hillary Clinton as saying (in a speech): “We were even up against phony environmental groups, and I’m a big environmentalist, but these were funded by the Russians to stand against any effort, ‘Oh that pipeline, that fracking, that whatever will be a problem for you,’ and a lot of the money supporting that message was coming from Russia.”
The third section is on fossil fuels. It framed America as a nation fixated on oil to the detriment of our political and social institutions. They highlighted oil companies profits and energy related subsidies, and apparent lack of subsidies for schools.
The fourth section is “Further Disruption” – A major point it makes here is that climate change posts were made on both side of ideological spectrum, trying to make viewpoints as far apart a possible. The idea was not to further one idea or another, but to feed into Republicans disagreeing with Democrats in general.
it seems odd that only Russian hackers are a problem, when Asian countries have been at this for years. i suspect everyone is doing it to each other. can be done = will be done.
“The idea was not to further one idea or another, but to feed into Republicans disagreeing with Democrats in general.”
The Russians benefit if there is disharmony amongst us, assisting in pitting one side against the other. That is their goal. We need both parties to be unified against Russian interference. We need those sanctions against Russia. If we don’t fight back it’s just going to get worse. At some point we’ll be engaged in full on cyber-warfare, shutting down each others infrastructure.
You are quite the patriot
Actually, I think JH Wyoming is right. Unity is what is needed in any group. Unity is provided by a common way of thinking–often a religion, or belief that what the government says is right, or “he who dies with the most toys wins.” We shouldn’t discount this. Transition groups generally fail because of lack of sufficient common purpose and willingness to stand behind a leader, even when things go badly. We are dealing with dissipative structures. Having two strong competing dissipative structures (democrat and republican) is ideal for someone trying to compete with the United States.
Could it be that the focus on the Russians is to deflect our attention from the domestic interests who are the biggest recipients of the benefits of the hacking. It’s probably just another Hollywood script to “divide and conquer”…….. from Wall Street not Russia.
The overlords know there is always the chance that some code nurd is going to show how they have been hacking the voting machines so it is already set up….. the Russians did it.
Substitute overlords for Russia in JHW’s post above and it makes more sense.
A piano looks beautiful from a $5000,- seat in the front with a puppet master in the spotlights. Moving a piano however takes quite other skills.
https://m.youtube.com/watch?v=b3nEqD6fgCg
The Russians do it, and the end times are here, while the Israelis have been doing it on a much larger scale for decades. There is a major lobbying company based in London with the same strategy and credentials as the Russian “IRA”. There are 2 reasons that anyone is upset with the Russians right now:
1. They have not been paying attention.
2. They (i.e. the mainstream media) want the military industrial complex to gain even more power.
https://www.youtube.com/watch?v=n8ccn2oE3v4
Kunstler very doomish today. Says a few weeks until crisis.
http://kunstler.com
Two issues: He thinks that Donald Trump will be impeached/thrown out in the next few weeks, probably on money laundering charges. Republicans will be blamed for letting him get into office.
Powell is awful as the Federal Reserve Chairman. Economy will tank quickly with rising interest rates.
Kunstler may be right. I know one of my sons has been saying for a long time that Trump’s real estate business is being used for money laundering. And clearly raising interest rates, selling QE assets, and allowing a budget to pass that greatly increases debt needs, all pretty much simultaneously, is crazy. Don’t any of these folks have any common sense?
If they had common sense they never would’ve gotten into the political game in the first place.
LOL, Instead of common sense it seems politicians have common greed.. They get into politics for personal gain. It seems like occupations are attracting the wrong kinds of persons at an increasing rate.
peak common sense passed years ag
I talked to a reporter from Bloomberg today. She was trying to figure out what impact higher interest rates would have on oil prices. She was at least trying–she had found my article and decided to look me up.
I can imagine that an acting school background would make it very difficult to understand somewhat complex financial issues…. I am surprised she even tried …
Don’t any of these folks have any common sense?” – Pehaps you mean: “Don’t these government agencies communicate with each other?”
I would not hold my breath—–
Maybe this Fall, if the Dims take back congress.
“Don’t any of these folks have any common sense?”
Great question, Gail.
Always struck me as a strange expression, given how sense appears to be uncommon.
Those of us who have been fortunate enough to have spent our entire lives in a developed nation have only known a long term trend of progress and growth. As have our parents and grandparents. This has been going on for so long now that it has been possible for us to rely upon the assumption that it is natural and normal. Not only that, but we are further encouraged to believe this is so by what we tell each other in our efforts at keeping our jobs. “Accentuate the positive, eliminate the negative.”
That positive bias for the sake of selling goods and services to each other has programmed the population into believing that we should only think positive. If anybody mentions that things are not so peachy after all, or that the good times cannot continue, they must be shut down as being too negative. Negative thoughts lead to negative actions and outcomes. We only want the positive. This is further encouraged by the fact that even with all the positive thoughts and words, a lot of people are finding it increasingly difficult to make ends meet. This makes no sense. Given that we have learned to assume that growth and progress are natural and seemingly eternal, any hardship must be caused by human action. It is only a matter of who to blame.
Politicians and central bankers are just as human as everybody else. Just as accustomed to the eternal and natural growth as everybody else. Just as much in need of believing in positivity as everybody else. Just as much in need of keeping their jobs as everybody else. Keeping a job is about more than keeping the income associated with the job. Keeping a job is also about others feeling that we are competent enough to be permitted to keep that position.
A politician promises growth, enacts policies which have worked in the past and have done so quickly enough to instill within the general public the belief that the politician is responsible for the growth, and so keeps his or her job. The same is the case with central bankers.
The final grand collapse that we now see starting around the world is outside the realm of possibility for most people because we have all convinced ourselves that it runs against the natural grain and because we have all convinced ourselves and each other that nothing good ever comes out of negative thinking.
It really is unthinkable to almost everyone….
I agree. The corollary to all this positive thought is a lot of young people especially who feel like they are failures because the choices they made didn’t turn out right. The college major they chose seemed to have jobs, but now they have been laid off. Getting a new job looks to be difficult, when a person is in a field with few openings. Worse yet, many have debt. Starting over in a new field doesn’t seem like an option.
“The final grand collapse that we now see starting around the world is outside the realm of possibility for most people because we have all convinced ourselves…”
isn’t this confirmation bias? often, we see only what we want to see…
many people want, and probably even expect, setbacks to be temporary…
in time, many people will see that the decline of IC is permanent…
on the other hand, like JHK above, many people will fall into confirmation bias and “see” IC declining faster than is actually happening…
there can be a balance…
my opinion is that JHK lacks this balance.
JHK ends with this:
“Enjoy the last few weeks of relative normality.”
this seems to refer to politics more than economics… ?
but, recently, JHK has admitted to being surprised that DJT is still POTUS…
in other words, his forecasting is wrong…
again!
eventually, he will be correct about a lot of things…
but for now, keep in mind that his track record is to be way too early on his predictions.
Thanks! It is good to hear that.
I’d expect the Donald to leave office in 2021. Do you disagree?
I would be surprised if he gets to a second term…
3 years and one election to go…
but then again, his 2016 win was a surprise.
the stupidity of prosperity-voters and ponzi believers should never be underestimated
Yes. I suspect we will all be gone before 2021
JHK’s predictions are generally made in a spirit of playfulness and he readily acknowledges that most have/will fall wide of the mark.
Peter Schiff: End of Artificially Low Rates Spells Stock Collapse, Recession
https://www.newsmax.com/finance/investinganalysis/peter-schiff-rates-stock-collapse/2018/02/28/id/845993/
There seems to be a lot of flashing red lights ever since the rate hike began. Powell seems to be content on raising rates even more.
I highly recommend reading the whole of Putin’s address to the nation: much more in it than nuclear weapon upgrades, and relevant to the themes of this blog.
What he says about the globally destabilising US foreign policy should be taken to heart.
Nice idea, it will be printed, placed next to my chair with the mountain of other reading; but it is good to have friends recommend interesting papers.
Do you have a link?
Here is link I found of it..Thanks for looking out X
https://www.rt.com/news/420103-putin-federal-assembly-address/
This is a link to the text of the address:
http://www.mcclatchydc.com/news/nation-world/world/article36860463.html
The speech is about 3,000 words. Long, but not terribly so. About like one of my posts.
He mentions a lot of issues related to “not enough energy to go around.”
The increasing divisiveness of trading partners.
A need for more stable governmental organizations in the Middle East and North Africa, especially Libya.
The rise of extremist groups.
The huge number of would-be migrants.
Growing economic selfishness
Putin says, “I would like to address Muslim spiritual leaders, your authority and your guidance are of great importance right now. It is essential to prevent people recruited by militants from making hasty decisions. And those who have already been deceived and who, due to various circumstances, found themselves among terrorists need help in finding a path to normal life, laying down arms and putting an end to fratricide.”
Many more things
Attention: this was Putins speech to the UN in 2015!
Sorry. I need to look more closely. A lot of things he said are still relevant.
Putin may be reading OFW 🙂
“An increase in U.S. mortgage interest rates is… choking off business for lenders. Refinancings as a share of home loan applications fell to 41.8 percent last week. With a couple of exceptions, that’s the lowest level since the financial crisis in 2008, according to data from the Mortgage Bankers Association.”
https://www.bloomberg.com/news/articles/2018-03-01/mortgage-refinancing-sinks-near-a-one-decade-low-on-rising-rates
“Auto sales fell sharply in February as tightening credit conditions, higher interest rates and stingy discounts drove up monthly payments and slowed the U.S. car business.”
https://www.marketwatch.com/story/us-car-sales-fall-sharply-in-february-2018-03-01
Higher interest rates will by themselves make cars more expensive to own. Add more mandated fuel efficiency equipment and more audio visual equipment, and the costs will be very high indeed. The tax cuts later may help a bit, but they will tend to run up interest rates even more.
This is easy to believe. Also, the new tax law makes refinancing a less favorable option. It used to be that if the value of a home had risen, a person could get a “home equity” loan based on the increased value of the home. The funds a person was able to “take out” could be used for any purpose at all–to pay down credit card loans, to afford to send a child to college, to buy a new or used car, or to start a new business. This changed. Now the combined amount of the first, second, and higher mortgages cannot exceed the amount originally borrowed, and the amount borrowed can only be used to fix up the home.
Furthermore, going forward, the amount of interest that is that is deductible is capped in such a way that a person can only deduct interest on a mortgage of up to $750,000. (Existing mortgages are grandfathered in, up to $1,000,000, until 2025. Read more in this Forbes article.
https://www.forbes.com/sites/kellyphillipserb/2018/02/22/irs-issues-guidance-for-deducting-home-equity-loan-interest-under-the-new-tax-law/#3ea1f4b86453
“…we can look at how much additional GDP is added for each newly-borrowed dollar. This is called marginal productivity of debt. This shows a clear picture, a secular decline over many decades.”
http://www.valuewalk.com/2018/03/falling-marginal-productivity-debt/
As I think about the situation, everything we have is the result of energy flows. The world is full of atoms of various types. These can be rearranged by energy flows from the sun, or by energy flows from humans, or by energy flows from fossil fuel energy, or from a combination of the three. (There are probably some details I am leaving out. Gravity is also important, as a sort of negative energy holding everything in place. Nuclear energy can provide energy flows as well.) Even what we think of as solids are in some sense the result of energy flows, because of wave-particle duality. https://en.wikipedia.org/wiki/Wave–particle_duality This duality has been shown to hold not only for elementary particles, but also for compound particles like atoms and even molecules.
Energy can be divided into two types:
(1) Energy that has been previously dissipated, and thus used to produce goods and services. Some of this dissipated energy has been used to fight pollution. Some of this dissipated energy has been used to create governments. Some of this dissipated energy has been used provide the equipment and training so that not all people must work in fields producing crops. Some of this dissipated energy is used to provide information in books, and to allow teachers available time to teach, and students available time to learn. Howard T. Odum was one who used “transformities” to try to quantify this type on energy use.
(2) Future energy that we expect to dissipate, because of rearrangements of atoms that we have made. Some of this is promised by debt. This debt may be backed by some “asset” such as a car or a home or a factory. Some of this is promised by shares of stock, which are expected to appreciate over time and provide dividends. Some of this is promised by government programs, such as Social Security, Medicare, and unemployment benefits. It does not show up as “debt” or “shares of stock,” but in many ways it is very similar.
We end up with a situation where we have to promise more and more future energy, in order to dissipate a given quantity of fossil fuels, hydroelectric, and other energy in a given year. We end up with more promises than can ever be repaid.
The EROEI calculation that we see a great deal of doesn’t really match energy flows correctly, for many reasons. I won’t try to discuss the issue here at this time, except to say that the calculation doesn’t distinguish between past and future energy, and it doesn’t include a whole lot of what really is energy in the “Energy In” part of the calculation. Human energy is valuable, and becomes more valuable with greater education. This needs to be recognized. The value of government services, education and healthcare need to be included as well. So do interest payments (which are really promises of future energy transfers).
The issue is how long can we keep a system operating that demands hugely rising energy debt, in order to provide enough energy to dissipate each year (or day or week) to keep up with rising population and rising complexity?
Misinformation, leading to poor decision making would seem to be in the same category as gravity, in reducing energy availability. Perhaps over-whelming ‘info-noise’ causing analysis paralysis is part of this.
Right. More and more, the social media is falling into the info-noise category.
nevertheless—you will not shift the certainty of the majority—that we are where we are because of ”technology” and to solve problems all we have to do is wait for someone to ”invent” something to fix whatever it is needs fixing
i’ve seen that time and time again, both in person and online. It permeates our entire ”living system” ==effectively we live in the certainty that infinite prosperity is a matter of casting the right vote
Was it Art Berman who says “People have more faith in technology that hasn’t been invented than they ever did in God?” Seems to fit.
I agree Norm. I think a lot of that type of thinking is the result of almost everyone alive today being born into a world where technology has always increased. So, the assumption in their minds is – it will always increase. I was born into a world with electricity and automobiles. It is hard to imagine a life without them. However, my grandmother had neither until she was almost 50 years of age. How crazy is that. How short of a time ago that was. And, how quickly it is forgotten.
Comment deleted and moved to new thread.
THE RUSSIANS ARE COMING. There does seem to be a relentless US drumbeat against Russia. An endless repeating of anti-Russian propaganda over and over and over on every major MSM outlet. People start to believe it no matter how outrageous it seems.
What people don’t seem to understand or, refuse to accept or, don’t want to believe is that the energy problem is global. If the USA really had all this shale oil bonanza that is claimed there would be no need to target Russia.
If one reads the Putin UN speech… one might wonder who the real villain is…
The Golden Rule:
If the MSM repeats something endlessly —- then they are trying to turn a lie into truth.
ALWAYS. And I do mean ALWAYS. As in without exception.
t is billed as the ultimate in luxury, complete with a games room, 12-seater cinema and wine cellar. But the NZ$33m mountain lodge perched on the edge of Lake Wakatipu also boasts a reinforced concrete and steel structure and can function “off grid” for peace of mind.
Twin Peaks View is being marketed to the global super-rich, who have flocked to New Zealand’s Queenstown in search of spectacular scenery and a bolt-hole in case of global catastrophe. But a pending national law restricting foreigners from buying homes threatens to halt the region’s luxury economy boom and stem the influx of overseas billionaires.
“This law would dry up the secondary housing market,” says Peter Campbell, founder of Triple Star, the construction company that built Twin Peaks View.
“This won’t just affect builders and real estate agents, this will hit the entire local economy — housekeepers, landscapers, insurance brokers, car concierge services and boutique wine shops.”
Mr Campbell says one foreign client, who has invested NZ$60m ($43m) in the region, has already cancelled a building project because of the proposed change.
The bill’s supporters, however, point to an escalating housing crisis in the Queenstown region, with many families struggling to find homes.
Triple Star is among dozens of companies and local officials urging the government of Jacinda Ardern to backtrack and allow rich foreigners to continue buying luxury housing to support the economy. At parliamentary hearings this week, critics, including many local multimillionaires, argued that the proposed law was: “xenophobic”; would damage New Zealand’s global reputation for openness; and would not solve the housing problem.
More https://www.ft.com/content/0dcabab4-1c44-11e8-aaca-4574d7dabfb6
Twin Peak View is an architectural masterpiece designed by Mason and Wales Architects, the oldest architectural practice in New Zealand. Using their vast experience and understanding of the area they have combined the latest technologies with the highest level of design. Engineered to the highest levels of specification for structure the project was skilfully delivered by one of the countries most respected construction companies, Triple Star Management.
Comprising of two lots totalling over 5.7 hectares with the impressive home set on the north block there is an approved platform for a ‘future build’ if required by the new owners.
https://www.realestate.co.nz/3192069
http://www.luxuryrealestate.co.nz/live_feed/wp-content/uploads/1-213.jpg
This article just goes to show you that even billionaires are MORE ons…
When BAU goes — there are NO bolt holes… there are expensive coffins though
a nice venue for your end of the world party.
If it doesn’t get sold … and BAU ends…. I may haul the supplies up there and squat!
Ha been to Queenstown a few times; a spectacular and ‘new’ landscape. Nothing grows there but ponzi schemes. One day The Remarkables will shake and rattle and the ‘end of world homesteads’ will be part of the moonscape. Queenstown is the ultimate peak of absurdity, with everything piped/trucked or flown in. The more more-ons that go there the better. Off piste gets a whole new meaning out there.
I’m for letting Billionaires bolt hole down in Antarctica. Right on the Ross ice shelf. When it calves, just call in the US Navy for torpedo practice until they surrender the booty.
It really is hilarious that these brilliant very wealthy people have bolt holes in a place like Queenstown ….
Queenstown itself is a semi-Dystopian place…. few Kiwis actually work in the city because it is so expensive — you mainly get short term back-packer types who cram themselves into share accommodation … the place is overrun with tourists… petrol is 15% more expensive than already expensive petrol outside of Otago….
There are however some nice areas to set up a coffinstead just outside of the town…. and the skiing is decent….
A person can no more “own” that place than they can own land on the moon. The whole idea “ownership” depends on BAU continuing. After BAU collapses all you can do is try to defend your place and squat there. But, as soon as a group with bigger guns and better aim comes along you will relinquish it. There will always be some group more powerful than your group to kick you out. Always! Aging is inevitable. And the young predators will take your stuff. Count on it. That place won’t last long after inputs from industrial civilization cease. It certainly wouldn’t be a luxury home without electricity, food, running water or sewage removal. We really have to rethink what really has value.
The good thing about that place post BAU…. is that there is nowhere to grow any food….
So the very wealthy person who buys it…. won’t have to worry about the hungry hordes!
it was the concept of ”ownership” that trashed the planet
Did you read Fossil Capital? Good recent book which makes this case. A review is here: https://collapseofindustrialcivilization.com/2017/05/02/sic-transit-imperium/
no i havent read that book—thanks for the reference
it seems to go along with much of my own writing, except that it wasnt steam power that kicked off the industrial revolution, it was access to cheap iron
linking captal ownership to unlimted power put the death hand on humankind
And until not long ago, NZ was a nice, old-fashioned kind of place, with the biggest excitement being a back-packing trip to see the world, and maybe a stint working in London or the US, before heading home to sanity….
And the Fly Fishing——-
The food is marginal, people cool, no cops to hassle you.
But it is about the fishing for me—-
And no negros, and the natives are relatively benign.
NZ is almost as white.. as Japan is Japanese….at least outside of Auckland
https://wolfstreet.com/2018/03/01/the-brick-mortar-retail-meltdown-in-february/
The second important figure is the cash flow from operations of $2.9 billion was less than the $4.3 billion in capital expenditures. PEMEX spent $1.4 billion more money in producing their oil and gas than they received from operating cash.
https://srsroccoreport.com/mexicos-oil-industry-continues-disintegrate-pemex-suffers-18-billion-loss/
Waaaaahhhhhh…..
I am worried a lot about Mexico since I live in a section of the US not far from the Mexican border. As Mexico continues down this path of declining energy supplies – violence and illegal immigration will only increase. The only other export Mexico has is illegal drugs. Not good.
”declining energy supplies” is the killer factor that no one admits to—and i mean killer in the literal sense
been screaming that for years
When Mexico unravels…. I would imagine the US will set up a DMZ…. free fire zones… and post soldiers along the border… anything that moves will be shot dead.
Not good!
Trump Trade Policy Will Turn the US into Brazil
Asia Times 3-2-18
Shielding raw materials exporters while ignoring the decline of America’s high-tech capacity, defensive trade action stands no chance of rejuvenating the US industrial base
Raw materials prices have little to do with the erosion of America’s industrial base. Chronic underinvestment in capital-intensive manufacturing is the underlying problem, and American manufacturers avoid big capital commitments because they can’t compete with Asian subsidies for industrial plant and equipment. Asian economies view a $10 billion semiconductor fabrication plant the way Americans view a bridge, stadium or airport, as a public good that merits taxpayer support. China’s economy is so big that its subsidies distort capital investment around the world.
By protecting raw materials exporters while ignoring the decline of American high-tech capacity, the Trump trade policy nudges the US economy towards the economic profile of a Brazil: a producer and exporter of agricultural goods and raw or semi-finished materials with an atrophied industrial base.
As the equity market plunge suggests, Trump’s announcement is anything but smart. America’s greatest commercial challenge comes from China, which dominates many categories of high-tech manufacturing and has committed tens of billions of dollars to a campaign for supremacy in semiconductors. But China’s steel and aluminum exports to the US amount to less than 1% of the total; America’s main suppliers are Canada, Brazil, South Korea, Mexico, Russia, Turkey and Japan, in order of importance. China has been accused of depressing world prices of industrial metals, although aluminum prices have risen by 60% and steel prices have doubled since the Nov. 2015 low. US Steel’s stock price has jumped from $7 a share in early 2016 to $43 before Trump’s announcement.
http://www.atimes.com/article/trump-trade-policy-will-turn-us-brazil/
To simplify things more than I really should, the USA’s trade deficit, or conversely the export of USA money, prevents inflation taking its expected path within the USA. Stable prices, or more jobs? Your choice USA?
The USA no longer has all the links of the production chain. We have some energy products but, not enough. We have some raw materials, but, not enough. We have some manufacturing capacity but, not enough. We have some consumers with high enough wages but, not enough. Just setting tariffs is not going to work like it did 75+ years ago.
This part is strange:
The real trade issues are on big pharma, intellectual property, and agriculture. As one commenter said, you do not need treaties for free trade. The USA has always been protectionist toward the politics of its industries, and trade barriers are only one of many tools.
The US dollar has to be exported via a trade deficit to support the reserve currency needs of other countries. If the US trade deficit collapses, and the USA is unable to export the dollars it is currently creating, this will create inflation. It is probable that trade barriers will be blamed for creating US inflation.
I hadn’t thought about it that way. Thanks! That is especially the case if the dollars it is creating get back to consumers. Amounts that are just asset price inflation don’t result in inflation.
No thanks needed, I’m just repeating something I read, though it seems logical that is what will happen. They also mentioned that external dollars tend to return via asset purchases, causing asset price inflation. What happens next depends on whether you believe in “trickle down”. If the dollars were used to build a factory, and increase employment and wages, then the dollars get into the hands of consumers.
I also had a look a Kalecki’s “General Case” Profit Equation, and an Export Surplus increases Profits. It follows that the converse is true.
Why would Putin want to nuke Florida? -BBC
http://www.bbc.com/news/world-us-canada-43248794
https://imgur.com/a/9u2WD
US presidents are mostly a joke and have been for many decades.
We live in the world where the economy is more and more about winning something based on the risky behaviour: the income from you job is not enough, so the offer of more risky jobs is rising, like being a sportsman, get more attention as a youtuber, borrow from the bank and try to pay it back although no one guarantees you your income into the future, fighting about the customers using more aggresive marketing etc.
The risky behaviour becomes a standard way of living and the people do not realize that they live lives that are based on the fighting about the declining energy, as they do not produce anymore, machines produce instead of them, with the help of some technical specialists, servicemen and other declining cheap workforce. Thus, we gradually live more and more in the world full of useless stuff that symbolizes past cheap energy abundance, not realizing that the reality is more and more dead, as the billboards, advertisments, the manipulated people around us “shout” that the situation is different. No, the human world is on the decline, the creeping depopulation accelerates.
MG: the exact truth! To which we can add: companies producing increasingly inferior goods but charging more for them, and also simply robbing their customers – ‘penalty charges’, ‘cancellation fees’, ‘arrangement fees’, etc.
Right – and insurers, internet providers and the like slyly inflating their charges after you’ve been with them a year in the hope that you either won’t notice or will stomach the increase in preference to spending days on the phone to call-centres finding a substitute. Most aggravating!
I hope in the long run they’ll come to see these trends as counterproductive to their own ability to last. They may well be unaware that this is the endgame.
Fees! Lots of them. Restockinig fee, over the limit fee, handling fee, baggage fee, account balance fee, credit card convenience fee, overdraft fee, early cancellation fee, atm fee and on and on they go.
Too many leeches, and the patient dies…….
I am affraid that the fees are the only ways how the companies can continue to be profitable. It is a well-known fact that without the various fees, the banks have a problem to be profitable.
Hey FE, what went wrong with financial market? Aren’t they supposed to be in control?
Seems under control for now …. however at some point they will lose control… push on a string …
The question is – what will cause them to lose control?
Will it be a bottleneck on oil supply – driving prices through the roof — and crashing BAU?
Or will it be another trigger — perhaps they are forced to raise interest rates — or they pump out more stimulus and it doesn’t stimulate…
The income level between useless eaters and lower paid workers shrinks so more give up working and join the ranks of useless eaters.
At last the whole economy reaches riot level?
Increase the flow of Oxycontin to the masses… sedate them….
“Useless eater” is a very relative term unless one is doing a job that wouldn’t have resulted in death at the stake during the middle ages. So basically ~80% of people working in marketing, law, medicine, finance, fashion/entertainment, web design etc are useless eaters.
Ah, FE, could you give them a call, have them pull one more rabbit out of the hat, final preparations are not yet complete here and some more BAU would be most welcome. Personally, I am suffering from over stimulation, but for the good of humanity would tolerate a bit more.
Thanks.
“No social program can substitute for a full-employment economy,” said Isabel Sawhill, a senior fellow at the Brookings Institution who studies issues around poverty and inequality. “If a job is the best anti-poverty strategy and we’re not producing enough jobs because of a misunderstanding of the macroeconomy and a failure to manage it in the best way, we are missing a huge opportunity.”
Read the last sentence twice. Can someone please help her!;)
https://mobile.nytimes.com/2018/02/28/upshot/how-low-can-unemployment-really-go-economists-have-no-idea.html
I think it is also important to look at how much these jobs pay. If they are temporary jobs that pay very little per hour ($10 or less) people cannot afford to take them. Transportation and clothing costs are just too high, relative to what the jobs pay. Also, these jobs will not provide health coverage.
Gail,
Driving north and south on 52 between Rochester, MN and the Twin Cites there are billboards advertising for HVAC technicians, electricians, carpenters and welders in a large steel manufacturing plant . They advertise benefits, etc. A pizza place down the street is advertising for drivers up to $19 per hour, managers $30,000 to $50,000 per year.
Yes, you are going to work like a professional, 50 hours per week is a normal work week. Skills are needed, a good HVAC technician needs electronic skills as well as a knowledge of thermodynamics(I was bored, took the HVAC series in tech school after retirement) . Menard’s hires in at $13-$15 per hour more or less, become a manager and make well into six figures. You are going to pay your dues no matter what, the idea that a freshly minted BA is going to make six figures is a non starter.
Ordinary jobs, paying good money, a one or two year degree from a community college starts one up the path. Then and before, one needs values, rules. Discovering everything by trial and error is a very expensive process; our culture seems to be gong that route with not all the success one might like.
You make a good point. In many places, jobs of these types are available, although I doubt that they are paying as well in many places as Minnesota.
Minnesota is a state that is doing pretty well in terms of median household income. https://www.kff.org/other/state-indicator/median-annual-income/?activeTab=map¤tTimeframe=0&selectedDistributions=median-annual-household-income&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
In fact, its median income is high relative to all of the states around it. The places that are most depressed are the light blue states on the map. I am sure you would not find as good wages there. Even in the next lower tier states, would likely not have as good wages.
We have lots of jobs that pay well in Halifax first year carpenter UNION pays 20 after 4 yesrs 50 dollars overtime is 100 no takers…first year is all the crap work they quit.
The average pay in Halifax is 50k a year so it well above that.
PS not only is school free you also get paid to go.
Thank god for the downturn in the oil patch…They are more than happy to move for work.
Things are cheep also A newly renovated 2 bed including heat hot water and fiber net and TV in a down town location can be found for under 1k
The shipyard alone has 20b of work on the books…Sorry no smart phone allowed
The US South is basically a non-union area. It tends to have a lot of minorities (black, hispanics). Wages for many jobs that do not require much training are lower. Also, West Virginia has had a lot of job loss related to coal. Its wages tend to be very low as well.
The other issue is the large number of people who have specialized training in an area, and find that there are not jobs in that area. They find that they need to start over in another field, but often have lots of loans outstanding. Creative writing is one. Another is art history. There are lots of others. Universities string along people majoring in these areas. When they apply for “lower” jobs, for example as a secretary, they are turned down as being overqualified.
A low hanging fruit that the disaster mistakenly known as planning never picks is “mixed use” zoning, that ensures the combining of work and residence in building developments. I suppose there is quicker profit from single use, but then that sets us up for the single occupancy car and long, expensive commutes. The resulting suburban developments also bring more children. Vicious cycles all over. I gather it’s too late to create better developments. Good. Never cared for them in the first place. They never listened. They must listen now.
The end of the article is
In the 1970s, energy supplies were rising rapidly, even with rising debt. Many more women were being added to the labor force. The unemployment rate would never fall, because jobs that pay well were being added, with the growing energy supplies.
In the 1990s, we were still adding women to the labor force, so overall labor force participation rate was rising still. Globalization was not the force that it is today.
It’s not the 1970s or the 1990s. It is more like the 1930s. Wage disparity is the big problem. There are an awfully lot of able-bodied people who would like to work, if jobs that pay sufficiently well were actually available. We have leaders who are assuming that the past is a good guide to the future.
Looking in the rear vision mirror while driving is only really feasible when the roads are relatively straight and even. Hit a few unexpected twists and turns and you can easily be thrown into a ditch. Add in some blinkers and well, prospects are not good.