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.
Hi first time posting here but I’ve been reading articles from 2015. Personally I think that the current “trade wars” nonsense is supposed to serve as an excuse for global trade barely growing at all (symptomatic of real world economic growth slowing down).
Look at global trade volume growth (non-seasonally adjusted) after 2008, it is far slower and this is with the emergency stimulus measures in place:
https://www.wto.org/english/res_e/statis_e/short_term_stats_e.htm
The growth rate has had a slight boost in recent years but on the same token the QE rate from major banks for 2016 & 2017 is at its highest two-year rate in history:
https://www.yardeni.com/pub/peacockfedecbassets.pdf
Even with all that money printing and interest rates still around historical lows (in many cases below real inflation) real global growth is anemic and the banks are having to print at faster and faster rates to get even that level of growth.
It’s incredibly difficult to get data for both recent and older volumes in one graph for orders of new worldwide shipping by CGT (compensated gross tonnage). From memory, orders for new shipping by CGT for 2016 were about 10mil and slightly higher for 2017. Both these amounts are still lower than the GFC low of 18mil in 2009 despite money printing for those two years being at record heights. So far for 2018 a couple of mil CGT have been ordered which is still around the rate we were getting during the GFC and the 90s while money printing continues at an elevated rate for this year.
http://img.nauticexpo.com/images_ne/projects/images-om/20818-10496765.jpg
Container ship fleet growth by TEU also followed a similar trend recently:
https://www.bimco.org/news/market_analysis/2018/20180221_containersmoo_2018_01
It seems to me that the major central banks are printing like mad and getting less bang for buck as time goes on. On top of QE the banks are also engaged in things like POMO (Permanent Open Market Operations) and most likely other stimulus measures that are off the books as well and this is what they’ve got to show for it.
The “trade wars” narrative that is being peddled at the moment is a politicization of the lack of real growth and an attempt to place the blame on other countries for “flooding” the world markets with their goods and services.
I know there’s some deal of speculation in this post but there are some certainties we can gleam from the data itself:
-world economic and trade growth was significantly and permanently reduced after the GFC, long before any mention of a “trade war”
-Given the anemic growth (and declining energy per capita since about 2013 as shown by a previous graph on Gail’s site) it’s obvious that there isn’t a “flood” of goods and services on a worldwide basis as it takes energy to do anything and that has been going down per capita and growing very slowly overall as well
-Given the above it really is a lack of affordability that is causing the current “glut” of energy/material resources and products/services rather than there being so much to go around per capita
Thanks for commenting! I have the setting set so that the first post of any new commenter needs to be approved. This helps greatly in keeping spam down.
This is really good “stuff.” When I wrote my earlier comment, I hadn’t had a chance to look at the links. Trade in goods right now seems to be growing about 1% per year, according to the data in one of the links. World population is also growing at about 1% or a little over that. So there is no real growth in trade, on a quantity basis, per person.
I will look at the data some more. Also, I hadn’t realized ow much QE securities are being bought around the world.
I know that there have been news stories about China no longer taking certain types of imported trash as of January 1, 2018.
https://www.reuters.com/article/us-china-environment-waste-insight/china-trash-towns-cleanup-bolstered-by-import-ban-idUSKBN1FD043
https://www.npr.org/2017/12/09/568797388/recycling-chaos-in-u-s-as-china-bans-foreign-waste
I imagine this is what has been filling up the containers on the way back. If containers are now going back empty instead, this means that those operating the ships need to charge higher rates for the one-way journeys, or they lose money.
Thanks, it’s good to remember that there are other central banks doing their part in other countries 😉
I think the rationale behind China cutting down their trash imports was because of the pollution issues with dumping/recycling it. Looks like western countries will have to find other ways to be “green”.
D “-Given the anemic growth (and declining energy per capita since about 2013 as shown by a previous graph on Gail’s site) it’s obvious that there isn’t a “flood” of goods and services on a worldwide basis as it takes energy to do anything and that has been going down per capita and growing very slowly overall as well”
This statement is based on poor or misleading data;
Similar to imminent natural resources-depletion theory, ‘wear and tear’ are applicable to all real heat-engines – they DO need Repairs!
Even if growth (in population and others) is zero or negative, to keep the ‘heat-engine’ of the world just running, a growing amount of Energy needs to be consumed for repairing and sustaining all what has been massively built earlier, not just fueling it.
Every 10k kilometers or so traveled by a car built last year in China, India, a 4-80 liter of fresh engine oil is required to be produced and applied, not to mention other geographies. For every solar PV panel installed last year, replacements for faulty panels, converters, wiring, battery, mounts and chargers is now due, and so on.
“..energy going down per capita…” is a ‘fake news’ and you can verify that when you start the engine of your car tomorrow and it still runs, all ships, tanks, airplanes, traffic lights, servers, urban pumps, light streets, hospital equipments, trains, shale oil pumps, power stations, military bases – and you name it.
Hubert’s curve should be drawn from now on running negatively at the bottom right-side, not gradual and any positive – owning to Repairs being now introduced into the original big theory.
If FFs are not finite resources but self-generating, one needs to see the world increasing FF consumption continuously despite zero growth. If finite and critically depleting, we need to see from now on nations forcefully pushed off of FF domestic consumption, progressively, like what happened in Iraq, Syria, Libya, Yemen and Venezuela since 2003, one after another – at least one among Saudi, Kuwait, Russia, China, Mexico, or part of the US – by 2022.
You are right, in that we have an awfully lot of things we have made that need to be constantly repaired. These would be an increasing problem, even if there were no increase in population.
In my mind, there still is a connection to population. If population is growing, we constantly need more of everything, so there is a need to repair what we built before, plus build new. If population is decreasing, we can all some things simply to fall into disuse, rather than repairing them. We have much less need to build new. So population has a definite bearing on how much energy we need to keep the system going. We run into a problem before Hubbert’s curve ever enters the decline phase, because resources per capita starts falling (assuming population is rising) even before the curve hits the flat part. Hubbert’s curve lets us think we have more time than we really have.
Declining energy per capita doesn’t mean that everything stops working at once as you’ve described. It means that there’s less to go around per capita.
At some point cooperation breaks down … and it’s every country for itself…
We may be reaching that point
RIP George… a true genius
https://www.youtube.com/watch?v=tVlkxrNlp10
I bet he would have been open to adding DelusiSTANIS to his list
Just to add, he clearly could see what we are experiencing now 20 years ago, even specifically to the falling wages.
Search: comedian mocks environmentalists…
One result…
https://www.youtube.com/watch?v=EjmtSkl53h4
And this is Carlin-lite… he does not touch renewable energy… or YYY YYYY … taboos
The purpose of life? According to George.. the planet needed us to make plastic…
Carlin is a very unique person. Uses comedy to make people understand what they would reject in normal conversation. Carlin wanted to shed light on truth. Quite unlike the Kimmel, Colbert and Fallon types we have today who just want to spread propaganda.
Was at his last performance in Santa Rosa.
A gifted comedian.
‘Kimmel, Colbert and Fallon’ Jon Stewart etc…
Add them to Carlin’s list.
However they do serve a useful purpose — they deflect people from the real issues — they also make light of serious problems … they poke fun at the major political players which helps the masses blow off steam without pulling out pitch forks… they assume the major political players are making the major decisions…
Epiphany: I recall the anniversary of 911 — and seeing a clip of Jon Stewart literally bawling on air … which was bad enough (considering 911 was orchestrated by his masters in cahoots with the ‘terrorists’) … but then he said ‘WHY! why would they do this to us’
Why Jon? You have to ask why???? Could it be that they are slightly upset by the fact that we regular bomb innocent people back to the stone age in their countries… or maybe they are just a bit peeved with the Israeli’s who are Holocausting the Palestinians (using weapons supplied by America)…. etc etc etc…
All you have to do Jon … is click here https://en.wikipedia.org/wiki/Motives_for_the_September_11_attacks
Alas Jon would not do that — because Jon was paid $5M per year to not do that… notice how he would never have a guest on his show who would expose the Holocaust in Palestine… that is because he is part of the MSM… and the MSM’s job is to tell people what to think…. and this topic is taboo…
George Carlin died in 2008, according to Wikipedia. We need to recruit new comedians to tell it like it is.
Chevron expects global Natural Gas supply shortage by 2025
https://www.reuters.com/article/us-chevron-lng/chevron-expects-lng-supply-shortage-by-2025-idUSKCN1GI2EH
Emergency department visits for opioid overdoses rise by 30 percent in a year
https://www.pbs.org/newshour/health/emergency-department-visits-for-opioid-overdoses-rise-by-30-percent-in-a-year
Here’s how the racketeering leaders are helping with the problem in my town. (white bread suburbia, Sigh)
http://www.townofcary.org/projects-initiatives/project-updates/wastewater-projects/opioid-wastewater-monitoring
NC locked down on getting painkillers some time ago. They are very hard to get legally, addicts turned to heroin a while ago.
There must be billions of better ways to spend $100,000
U.S. Gasoline Consumption Falls For The First Time In Five Years
https://oilprice.com/Energy/Energy-General/US-Gasoline-Consumption-Falls-For-The-First-Time-In-Five-Years.html
To me, it makes sense to look at gasoline consumption per capita. Also, miles driven per capita. If gasoline consumption is down, clearly gasoline consumption per capita is down as well. Vehicle miles does not seem to be down in 2017, but that might be because the vehicle miles traveled reports include trucking and the like. Trucking has been up. It uses diesel. It also could reflect increasingly energy efficient vehicles.
I bet if I were to hunt and peck… I could find an MSM article that attributes this to EVs…..
Emergency rooms slammed with opioid overdoses in Missouri and Illinois
http://www.stltoday.com/news/local/metro/emergency-rooms-slammed-with-opioid-overdoses-in-missouri-and-illinois/article_360348c1-17ab-5ebd-bd46-62d85cba095b.html
I suggest the ER doctors give them more opiates… enough to off them… clearly for these people live is no longer worth living … so why force them to live?
Trump’s massive new tariffs could end up costing America 146,000 jobs
http://www.businessinsider.com/trump-tariffs-on-aluminum-steel-could-cost-jobs-study-2018-3
146,000 they say Is that more or less than the number of dreamers
what is our future a technological decline with a resulting die-off
and eventually complete human extinction…
and later, the sun will expand into a red giant and consume the Earth…
yes…
the future is looking good!
it is highly likely that the elders have their underground cities in place if the currency reset fails
they don’t need underground cities…
they can travel to Mars and live there…
forever!
Let’s hope we can support the 1-10 million we have had for most of our existence.
Of course, they had a robust ecology, we have a devastated mass extinction.
US sanctions on Russia coming soon: Treasury secretary
https://www.yahoo.com/news/us-sanctions-russia-coming-soon-treasury-secretary-165001518.html
These swamp monsters are going to get us all Nuked
Russia has been planning and has been building their economy to be as self sufficient as possible…
with massive natural resources and a relatively low population, they surely are succeeding…
they very well may become the last quasi-BAU country…
I bet they are almost totally unfazed by “sanctions”…
how do you say “b w a h a h a h a h a” in Russian?
It is clear, that distance makes you have superficial touch of things. Russia and russians are not doing good at all. Sure, they have managed to prop up some production, but it is often low quality. Here we see how they smuggle and get all the time busted in various ways to import food from our country. Also ordinary russians been getting poorer and there is more than ever russian women trying to immigrate and find an husband from other countries.
“These swamp monsters are going to get us all Nuked”
You can’t be afraid of your own shadow, BD. You have to fight back. Don’t let propaganda video of nukes with supposed special capabilities scare people into doing nothing. They risk the same outcome if it comes to a nuclear exchange, which it won’t. It’s just an attempt to intimidate us. If we don’t respond now then we allow them to do as they please from here on out. Either we are a super power and can back that up or we aren’t. Time to belly up to the bar and make sure they understand we aren’t just going to take it.
Donald Trump’s Trade War Will Cause ‘Deep’ Global Recession, Says WTO Director
http://www.newsweek.com/trade-war-donald-trump-recession-tariffs-steel-831499
like I said above, global recession is in no one’s self interest…
so TPTB will work it out…
unless they are losing control…
then there might be a “deep global recession”…
and then The Collapse…
or not…
we shall see.
The parasite guild will make just as much, if not more money shorting this pig.
yes, good point…
the “tariff short” will make them richer…
if the global economy crashes because of this…
isn’t that just an externality?
no big deal… there’s money to be made.
Peak energy is about loosing control. Still amazing number of vehicles and planes moving each day. Really incredible to think that most of this will stop.
I was watching a news show playing back footage from when Trump spit out those tariff percentages, 25 steel & 10 aluminum. What was interesting was he didn’t say how much they were until a reporter asked and then he seemed to just pick numbers out of his head. There wasn’t any script he was following for the event and nobody else in the White House or in Congress knew about this until the announcement was made. And then his economic advisor, Cohn quit because of the tariffs.
But here’s the kicker, a good friend of Trump’s, Carl Icahn sold all of his steel holdings worth 31.3 million THE DAY BEFORE THE ANNOUNCEMENT, before steel stock went way down. He avoided a huge loss by selling when he did. I think Trump made a deal with Icahn, and Trump is going to get a payback from Icahn for the insider information.
Trump is a grifter, taking what he can when he can, especially with the writing is on the wall he might not be prez much longer.
FE – I just drank a while gallon of Kool-Aid. I need some time to execute my grand business plans for me to get more money and riches! I cannot afford anyone rocking the boat.. have a great day everyone…
Let us discuss this…it looks like it is certain now and it is big…
https://www.zerohedge.com/news/2018-03-06/trade-wars-set-go-nuclear-us-considering-broad-curbs-chinese-imports
FE – what happened to your El.Ders? I thought they are all in this together and not rock the boat?
“However, when the announcement is made, sometime in April, we doubt it will be nothing. In fact, we are quite confident that when the dust settles, Beijing will be quite furious at Washington.”
first, it could be nearly nothing… the tariffs by the USA could be minimal…
otherwise, China will respond in its best interests…
and other countries also will respond likewise…
then the entire global economy could collapse…
but that would be in no one’s self interest…
so this will be worked out, with or without “furious” countries.
Remember Brexit? When did that vote happen – 2 years ago? … longer perhaps… it’s such a distant memory….
Has the UK cut ties? If nothing happens… did it happen in the first place????
If something is done that is deemed important by the el ders… without the consent of the el ders… one of two things happen:
1. nothing. (see Brexit)
2. War … and if China or Russia are involved… proxy war (see Syria, Ukraine)
Trump tariffs may really be a backdoor way to get out of the WTO
https://www.marketwatch.com/story/trump-tariffs-may-really-be-a-backdoor-way-to-get-out-of-the-wto-2018-03-06?link=sfmw_tw
Emerging markets under pressure as debt mounts
https://www.ft.com/content/c6df7af2-1c9f-11e8-956a-43db76e69936
Goldman cuts Q1 GDP to 2.0% from 2.1% .Weak GDP and higher rates. Record stock market.
Hmm wonder what will happen next?
they will cut it further to 1.9%?
Top Trump economic adviser Gary Cohn leaving White House after dispute over trade
https://www.washingtonpost.com/business/top-trump-economic-adviser-gary-cohn-leaving-white-house-after-dispute-over-trade/2018/03/06/eaecce74-218e-11e8-946c-9420060cb7bd_story.html?utm_term=.2d31ab0a1403
They waited till after the Stock Market was closed to announce this…Markets aren’t going to like this
The American people will like it. Cohn is a globalist…an insider. Hooray for Trump!
Will our investors love this Jesse?
Credit-Card Losses Surge at Small Banks
Charge-offs linger near eight-year high, which some say is a sign of the financial fragility of middle-and-lower-income consumers
https://www.wsj.com/articles/credit-card-losses-surge-at-small-banks-1520198436
If you have Chrome click file and “New Incognito window” ..And then search google for the tile of this article. And you can read it behind the paywall. Works for NYT as well.
Trump’s Global Trade War Could Lead to Financial Armageddon
https://sputniknews.com/columnists/201803061062271374-trump-trade-war-china-armageddon/
Trying to simultaneously take on China, the European Union and Canada in an all-out trade war will go down in history as either the boldest move of the Trump presidency or the move that ruined his political career and the US economy.
i thought we all had to have name tags—unless you’re the sort of really bad person who switches tags to escape the grim reaper
?
actually, I could be Keith “in disguise”…
Soon, the cars will be so sophisticated, you won’t even need to ride them!
Self driving cars are as likely to become reality as this
https://nyobetabeat.files.wordpress.com/2012/11/star-trek-beam-me-up.jpg
Setting up a ‘Fast’ E post with a ‘Slow’ P post 4 minutes earlier? Can a person pull off bank jobs with multiple personas?
“Watch the door while I get the loot.”
“Wait a minute, I said stay here and watch the door.”
“Ok, then you get the loot.”
Why does it work on OFW but not in a bank?
Self-driving cars can be created. Trouble is, why? What is gained? And at what expense? If have no job why do you need a car? It solves nothing. Technological diarrhea is all it is.
The only “benefit” it offers is increasing wage disparity, which may help prolong BAU by disguising the fact that there is less of everything.
Bitcoin is virtual but is having real impacts on energy consumption:
https://www.zerohedge.com/news/2018-03-06/ny-city-weighs-18-month-moratorium-bitcoin-mining
This is the part of the country where ISO New England is warning about the possibility of rolling blackouts, in the not too distant future, if they don’t get their power situation figured out better. https://www.iso-ne.com/static-assets/documents/2018/01/20180117_pr_fuel-security_report_release.pdf Renewable requirements are part of the problem.
Yes, looks like electricity generation is in poor shape too. It isn’t just a liquid fuels problem like you say.
that’s why I wrote this back in December
https://extranewsfeed.com/bitcoin-24b3efd58ec
Yes, I remember that Norm. I recalled that very article when I saw that Bitcoin mining was sucking up all the electric power in New England.
sometimes i find it impossible to believe that bitcoin insanity is believed
buying bitcoin is insane…
but mining bitcoin?
“mine” one and sell it for $10K?
if it’s profitable, it’s profitable…
though totally insane in the long run.
It’s hard to believe a lot of things are believed…. renewable energy, yyy yyying, EVs … self driving cars… prepping… heaven…. stewpid humans can be made to believe anything …
Is there anyone who I have not offended with that list?
Step forward.
your offending technique is like buddhist prayer wheel—everybody who passes by gets a free spin
“It’s hard to believe a lot of things are believed….”
Like every spent fuel pond will overheat at the same time and collapse will be instant worldwide. (sarc)
Like when the financial system collapses… that within a very short period of time… the planet will be engulfed in darkness… and the complex machinery that regulates the temperature in the 4000 spent fuel ponds around the world will not function.. causing the ponds to overheat .. boil off their cooling waters.. and release gargantuan amounts of radioactivity into the oceans, air and food chain.
Ya that is hard to believe….if one lives in DelusiSTAN
Lol, Norman! In boxing parlance, FE is a swarming, high-volume pressure-fighter. Some may find that suffocating but personally I find the comments section zestier with him in it.
Gail very wisely avoids drama and hyperbole in her posts but her work has some quite shocking and macabre ramifications. It is helpful to have a regular ‘Finite Worlder’ unafraid to address those head on.
I am just wondering if my lengthy essay from yesterday morning made it to the live comments…
The one where I explained that Fast Eddy – the character — is greater than god? Because he is willing to change his mind if the facts dictate … and that even someone with an IQ of 1000… is inferior to Fast Eddy — if they are unwilling to change their mind…
Did that make it?
What a nice, concise, clear, conscious and responsible Norman Pagett has written on extranewsfeeed on Bitcoin. Well done.
“The Entropy Law and the Economic Process” thesis in which Nicholas Georgescu-Roegen (1906–1994) has argued almost 50 years ago, though largely ignored, that all natural resources are irreversibly degraded when put to use in economic activity — is resurfacing now in a new thesis in Thermodynamics which argues that repairs against wear and tear in energy systems are more energy-intensive than the useful energies produced by the systems.
Bitcoin is the best example on how critically-destructive Entropy is in Economic Processes.
If one peddles an electricity-generating stationary bicycle to run a Bitcoin mining computer, it is likely all his lower joints will be replaced with artificial ones before he manages to extract one single Bitcoin.
It is strongly felt that Bitcoin is a system that was designed for purposes other than serving individuals in the commons, the way the media is speaking about — understanding from Norman and others how energy-intensive it is, in a time when the world is on the brink of a severe and irreversible fossil fuel reserves depletion.
I think of it in terms of phases. We have more information now to understand this, and how things will work going foward
2000 to 2020: stasis, peak phase: central banks and world system acts to preserve the status quo at all costs
2020 to 2040: breakdown phase: present global arrangements begin their unraveling, not to come back; we might very well live to see this
2040 to 2050 or 2060, roughly: collapse phase: this is what everyone here is waiting for with baited breath, but even then I don’t think it will look like you think, and besides, everyone reading this will either be old or dead
2050 to 2100 or slightly beyond that: descent into dark age phase: massive die off, everything reorganizes around very small tribal communities; beyond that, humanity will live in the ruins, forever
the 2000 to 2020 one is about right, but after that your falloff is far slower than a complex system will actually allow.
Dolph cannot be made to understand what is obvious to those who are not feeble of mind… as obvious as the fact that an apple will fall — if dropped from a height.
I expect the Internet and “cloud memory” will disappear rather quickly. Bank accounts will as well. International trade will greatly slow down, shortly thereafter.
Not to mention that a lot of younger people today have virtually ZERO practical skills. And youtube & online tutorials may not be around forever.
Case in point. While helping a younger relative fix a problem, I asked for an extension cord 120AC. The relative said that they did not have an extension cord. After looking in their garage, I found a bright yellow one hanging on a wall in plain site. Apparently, she did recognize that this was an extension cord because the 2 ends were plugged together.
Yes we are at that point.
I think this is a good a guess as any. But we really have no idea how different global players will react to their deteriorating situation. Wars and civil wars, both being able to slow down or speed up the inevitable.
I think of it in terms of phases. We have more information now to understand this, and how things will work going foward
2000 to 2020: stasis, peak phase: central banks and world system acts to preserve the status quo at all costs
2020 to 2024: breakdown phase: present global arrangements begin their unraveling, not to come back; we might very well live to see this
2024 to 2025 or 2026, roughly: collapse phase: this is what everyone here is waiting for with baited breath, but even then I don’t think it will look like you think, and besides, everyone reading this will either be OLDER or dead
2025 to 2030 or slightly beyond that: descent into dark age phase: massive die off, everything reorganizes around very small tribal communities; beyond that, humanity will live in the ruins, forever
okay… done…
I fixed it for you.
The alternative – to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes.
to reader of ofw i present to you next Afghanistan of us army
Niger
ISIS releases shocking video which appears to show the desperate final moments and deaths of four US soldiers as ISIS fighters ambush them in Niger
http://www.dailymail.co.uk/news/article-5462437/ISIS-releases-shocking-video-Niger-ambush-killed-4-troops.html
btw here fun fact of Niger it has highest fertility rate of the entire world
Why’d they cut out the entertaining parts? This just shows some guys running and shooting….
I demand MORE!
Great sound track though….. I can’t help but get up and dance to that…. it will be stuck in my head all day….. I hate that!
with you dancing and mrs Fast singing—has the makings of a class act
have you thought of going on a world tour?—maybe a cruise ship would give you a booking
Fred and Ginger live again!!!!!
Seriously … I have offered to back up Madame Fast at the seniors home…. I’ve got the moves like Jagger….
She just laughs and says that I am mentally ill….
Just wait till I get the tight spandex suit embossed with stars… and the feather… must have a feather…. I’ll brink those brain dead f789ers back to life… the old bags of bones and rancid guts (stinking of p.s ss and sh it) will be all over me!!!
the Daily Mail is notorious here for making stuff up
all i saw was guys running and shooting to music
about average for the daily mail I’d say
What does Niger have that the US would want? Iraq has oil. Afghanistan has lithium and the drug trade to fund black ops programs. What does Niger have?
here theres fighting you need wartoys
wartoys make big profits and make sure the nation stays war-aware
Niger has two significant uranium mines providing about 7% of world mining output from Africa’s highest-grade uranium ores.
From World Nuclear Associatin website.
A friend of mine is on a waiting list…All joking aside let china have it…They are even bigger suckers for punishment than us.
I am assuming that they left the killing part out … because those soldiers are definitely dead.. I tried googling names to try to get a complete video….
Peak oil demand, a theory with many doubters
https://www.chron.com/business/energy/article/Peak-oil-demand-a-theory-with-many-doubters-12729734.php
Peak oil demand comes from rising wage disparity. Those with low wages cannot afford goods and services made with (and using) energy products stop using as much. Young people live with their parents longer, for example. Oil prices fall below the cost of production, as they have since 2014.
I am a big fan of “peak oil demand.” Peak oil supply, not so much.
This story is about, “Will electric cars reduce oil demand enough that supply can drop?” This is a silly idea, as far as I can see.
Why is it a silly idea, Gail? Please explain. It’s not about Tesla. Are not the big automobil companies pushing the EV concept? I know, a lot of the metal and stuff going into making the batteries are subject to ressource depletion…
Also, i have favor to ask you. In one of your posts you compared the economy to dissapative systems like hurricanes, plants …all with a limited time range due to the energyflows. I think you posted it not so far ago, but now I can’ find it? Maybee some of the readers can help
It’s a silly idea because over its life an EV uses more, not less total fossil fuels.
https://rorytrotter.files.wordpress.com/2013/03/red-circle.jpg
=
https://www.math.nmsu.edu/~breakingaway/Lessons/CST/CST_files/image004.gif
I think i have seen studies which hold a different view … but please let me know of other studies ( and not that one of EVs running in Hong Kong..)
the bottom line is that an ev cannot be manufactured or function outside a fossil fuel environment
Any study that shows otherwise is just shoving many FF usages into the category of “externalities”. And in the long run, EVs have a lower energy efficiency from all of the losses in generation, transmission, transformers, charging, battery loss, and then the e-motor efficiency. People like to selectively look at the latter and declare EVs more efficient. Add in the fact that they are burning excess energy lugging around hundreds of pounds of battery and you have a lose-lose situation.
What if we could apply Hindu levitation to EVs so that the batteries just floated in the air … that way the cars would not have to haul these heavy monsters around .. dramatically increasing the range of the cars.
Give me one good reason why this would not work
EVS are a joke.
If you cannot see that … then you do not belong on FW.
For one thing, we are very close to limits because we cannot keep raising per capita energy consumption enough. We don’t have ten or twenty years to try to transition to something else.
For another, oil isn’t really our problem. Total energy consumption is. We are especially in trouble with coal. It is a myth that electricity is in better shape than oil. As we take down aging nuclear plants, electricity becomes a problem. The regulator of the US Northeast electrical grid recently warned of the possibility of rolling blackouts, if the area doesn’t fix up their problems. Requirements that a particular percentage of electricity come from “renewables” makes the likelihood of inadequate electricity supply and rolling blackouts greater.
I agree 100%.
UC Davis Peer Reviewed Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Peer Reviewed Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
Solar and Wind produced less than one percent of total world energy in 2016 – IEA WEO 2017
https://www.iea.org/publications/freepublications/publication/KeyWorld2017.pdf
Fossil Fuel Share of Global Energy since 1990 – BP 2017
https://imgur.com/k7VecMq
Renewable energy ‘simply won’t work’: Top Google engineers
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
Top scientists show why powering US using 100 percent renewable energy is a delusional fantasy
http://energyskeptic.com/2017/big-fight-21-top-scientists-show-why-jacobson-and-delucchis-renewable-scheme-is-a-delusional-fantasy/
IEA Sees No Peak Oil Demand ‘Any Time Soon’
https://www.wsj.com/articles/iea-sees-no-peak-oil-demand-any-time-soon-1488816002
btw can gail and readers of ofw can tell me that how many nuclear power plants
are in construction right now ?
i know one that is getting constructed in gorakhpur [city in india]
https://en.wikipedia.org/wiki/Gorakhpur_Nuclear_Power_Plant
I think that 70 are under construction or planned.
This is what the World Nuclear Association says (updated in January 2018)
http://www.world-nuclear.org/information-library/current-and-future-generation/plans-for-new-reactors-worldwide.aspx
A table shows individual units under construction and the date when they are expected to come into service. I was surprised to see that Japan has one under construction, as does Bangladesh.
Containing radiation equivalent to 14,000 times the amount released in the atomic bomb attack on Hiroshima 68 years ago, more than 1,300 used fuel rod assemblies packed tightly together need to be removed from a building that is vulnerable to collapse, should another large earthquake hit the area.
http://www.reuters.com/article/2013/08/14/us-japan-fukushima-insight-idUSBRE97D00M20130814
4000 ponds x 14,000 = 56,000,000 Hiroshima bombs.
We are well past the point of no return … so what’s 50 more reactors and associated fuel ponds…
The nails are poised above our coffin….
Just grab it with the crane like that carnival game with the toys man! Look on the bright side – if they bugger it up maybe we will learn to store our nuclear waste while we still have the energy to do so and give the post collapse warlords a chance.
Unlikely…
Dying robots and failing hope: Fukushima clean-up falters six years after tsunami
https://www.theguardian.com/world/2017/mar/09/fukushima-nuclear-cleanup-falters-six-years-after-tsunami
that is a collapsed reactor not a spent fuel pond.
Your scenario is only likely if there is a world wide grid collapse in a matter of weeks.
A catabolic collapse is more likely, just as we are seeing now.
A spent fuel pond — without water — is thousands of times more dangerous than a reactor.
If any of the spent fuel rods in the pools do indeed catch fire, nuclear experts say, the high heat would loft the radiation in clouds that would spread the radioactivity.
“It’s worse than a meltdown,” said David A. Lochbaum, a nuclear engineer at the Union of Concerned Scientists who worked as an instructor on the kinds of General Electric reactors used in Japan. “The reactor is inside thick walls, and the spent fuel of Reactors 1 and 3 is out in the open.”
http://www.nytimes.com/2011/03/16/world/asia/16fuel.html
Once the fuel is uncovered, it could become hot enough to cause the metal cladding encasing the uranium fuel to rupture and catch fire, which in turn could further heat up the fuel until it suffers damage. Such an event could release large amounts of radioactive substances, such as cesium-137, into the environment.
This would start in more recently discharged spent fuel, which is hotter than fuel that has been in the pool for a longer time. A typical spent fuel pool in the United States holds several hundred tons of fuel, so if a fire were to propagate from the hotter to the colder fuel a radioactive release could be very large.
http://www.ucsusa.org/nuclear_power/making-nuclear-power-safer/handling-nuclear-waste/safer-storage-of-spent-fuel.html#.VUp3n5Om2J8
IF they catch fire, which i am saying is unlikely because it requires an instant collapse world wide. Catabolic collapse is far more likely.
Well at least I have my Geiger counters I bought in an auction. I can measure it while it kills me.
The sad truth is that they only measure a small part of the deadly spectrum.
Some people must be profoundly disappointed by these record cold temps….
I remember back in the day … when I would read about something like this … I used to get a bit upset… that was of course Mr Cognitive Dissonance who was upset… because he hates when the facts bust up his narrative
Thank goodness you keep popping up to point out that there has been anomalous cold of late, FE – it just blows this evil h-o-a-x and all related ‘scientific’ study completely out of the water. Now, ssshh – here comes the nurse with her nice, big syringe full of soothing Thorazine. Leonardo Dicaprio can’t hurt you anymore…
Logic. Try it. It tastes better than kool aid
Did you hear the joke…
So the weatherman says – it’s a scorcher today!
And the anchorstooge says… yep – and some people say there’s no XXX XXXING!
har har har har…. I’ve heard that a million times now… and har har har… I still laugh every time!
Then there’s the one where the weatherman says – we’ve got record cold temperatures today!
And the anchorstooge says… nothing
Riiight – those nasty old elders must be paying that anchorstooge a pretty penny. Nurse! Nurse!
Your posts about G W, are so ridiculous, that I’m wondering if you support anthropogenic G W now, and you just make fun of your previous ignorance.
Think about this …
Less than a year ago … I would have agreed with the XXX XXXers 100%… in fact I can recall having very intense arguments with a few people about this issue…
When they disagreed… I would usually leave them with this thought — OK — so you don’t believe it — but wouldn’t you prefer not to have to be breathing smog (in reference to the brutal smog that smothered Hong Kong … and continues to smother Hong Kong due mainly to the burning of coal in South China)…
So I know where you are coming from
However — Fast Eddy’s thinking is always in flux…. always evolving …
The first epiphany came when I met TINA — I realized that this bluster was all much ado about nothing…. THERE IS NO ALTERNATIVE. Arguing against burning more coal is like arguing that we need to collectively hold our breathes — forever. Even a slight reduction in burning fossil fuels = collapse ,… = death for all of us.
So even though I still believed that it was likely we were burning up the planet —I stopped arguing … because there was nothing to argue about… it is pointless.. stooooopid….
The next step in the evolution of Fast Eddy was when the facts and logic — primarily presented by Tim — began to assail my position …. the wheels began to turn ….
I then recalled the Golden Rule – if the MSM repeats something endlessly — IT IS A LIE….
And I began to notice that every couple of weeks there was a large font headline on Bloomberg — one of the pillars of the MSM.. and a font of lies….
And rather than dig in on my position — Fast Eddy tossed Mr Cognitive Dissonance out on his pimply a.ss…
And the Great Game began…. instead of allowing the MSM to tell me what to think .. instead of following the herd of donkeys …
Fast Eddy set to work researching this issue… thinking deeply about this issue…..
And after much investigation .. Fast Eddy did what is unthinkable for 99.99999999999999999999999% of all humans (it hurts me to admit Fast Eddy is a member of this species.. but alas…)
HE CHANGED HIS MIND.
X XXX is ho ax. Gail has explained the purpose of the ho ax.
So you see — this is what makes Fast Eddy truly a great character… he is not a genius… he is not a super hero … he is no role model…
But … he is willing to admit when he is wrong…
That is why Fast Eddy is Fast Eddy … and you (and many others) are pretenders. You will never be … because you have a fatal flaw…. you might have an IQ of 1000 ….. but you will NEVER touch Fast Eddy…. (don’t feel so bad… very few attain this level of consciousness… there are a handful of others on FW..and the world …. only a handful…)
Because you are unable to see. You do not even want to see. I can show you the way but you will forever be lost. Because you are trapped in the matrix.
https://i.pinimg.com/736x/a6/2e/df/a62edf0f39de560a219b7262163b0d45.jpg
Think about this …
Less than a year ago … I would have agreed with the YYY YYYYY ers 100%… in fact I can recall having very intense arguments with a few people about this issue…
When they disagreed… I would usually leave them with this thought — OK — so you don’t believe it — but wouldn’t you prefer not to have to be breathing sm.og (in reference to the brutal smog that smothered Hong Kong … and continues to smother Hong Kong due mainly to the burning of coal in South China)…
So I know where you are coming from
However — Fast Eddy’s thinking is always in flux…. always evolving …
The first epiphany came when I met TINA — I realized that this bluster was all much ado about nothing…. THERE IS NO ALTERNATIVE. Arguing against bur.ning more co.al is like arguing that we need to collectively hold our breathes — forever. Even a slight reduction in burning fossil fuels = collapse ,… = death for all of us.
So even though I still believed that it was likely we were burning up the planet —I stopped arguing … because there was nothing to argue about… it is pointless.. stooooopid….
The next step in the evolution of Fast Eddy was when the facts and logic — primarily presented by Tim — began to assail my position …. the wheels began to turn ….
I then recalled the Golden Rule – if the MSM repeats something endlessly — IT IS A LIE….
And I began to notice that every couple of weeks there was a large font headline on Bloomberg — one of the pillars of the MSM.. and a font of lies….
And rather than dig in on my position — Fast Eddy tossed Mr Cognitive Dissonance out on his pimply a.ss…
And the Great Game began…. instead of allowing the MSM to tell me what to think .. instead of following the herd of donkeys …
Fast Eddy set to work researching this issue… thinking deeply about this issue…..
And after much investigation .. Fast Eddy did what is unthinkable for 99.99999999999999999999999% of all humans (it hurts me to admit Fast Eddy is a member of this species.. but alas…)
HE CHANGED HIS MIND.
YYYYYY is ho ax. Gail has explained the purpose of the ho ax.
So you see — this is what makes Fast Eddy truly a great character… he is not a genius… he is not a super hero … he is no role model…
But … he is willing to admit when he is wrong…
That is why Fast Eddy is Fast Eddy … and you (and many others) are pretenders. You will never be … because you have a fatal flaw…. you might have an IQ of 1000 ….. but you will NEVER touch Fast Eddy…. (don’t feel so bad… very few attain this level of consciousness… there are a handful of others on FW..and the world …. only a handful…)
Because you are unable to see. You do not even want to see. I can show you the way but you will forever be lost. Because you are trapped in the matrix.
https://i.pinimg.com/736x/a6/2e/df/a62edf0f39de560a219b7262163b0d45.jpg
Think about this …
Less than a year ago … I would have agreed with the YYY YYYYY ers 100%… in fact I can recall having very intense arguments with a few people about this issue…
When they disagreed… I would usually leave them with this thought — OK — so you don’t believe it — but wouldn’t you prefer not to have to be breathing sm.og (in reference to the brutal smog that smothered Hong Kong … and continues to smother Hong Kong due mainly to the burning of coal in South China)…
So I know where you are coming from
However — Fast Eddy’s thinking is always in flux…. always evolving …
The first epiphany came when I met TINA — I realized that this bluster was all much ado about nothing…. THERE IS NO ALTERNATIVE. Arguing against bur.ning more co.al is like arguing that we need to collectively hold our breathes — forever. Even a slight reduction in burning fossil fuels = collapse ,… = death for all of us.
So even though I still believed that it was likely we were burning up the planet —I stopped arguing … because there was nothing to argue about… it is pointless.. stooooopid….
The next step in the evolution of Fast Eddy was when the facts and logic — primarily presented by Tim — began to assail my position …. the wheels began to turn ….
I then recalled the Golden Rule – if the MSM repeats something endlessly — IT IS A LIE….
And I began to notice that every couple of weeks there was a large font headline on Bloomberg — one of the pillars of the MSM.. and a font of lies….
And rather than dig in on my position — Fast Eddy tossed Mr Cognitive Dissonance out on his pimply a.ss…
It seems my lengthy response to this has been held… hopefully it will be released soon … actually no…. not just release…. it needs to be hung from the rafters of the FW Hall of Fame…
Putin could destroy UK and America without using new ‘invulnerable’ hypersonic nuclear weapons, military analyst warns
http://metro.co.uk/2018/03/05/putin-destroy-uk-america-without-using-new-hypersonic-nukes-invulnerable-missile-defences-military-expert-warns-7363417/?ito=twitter?ito=cbshare
Orlov did a post about this.
http://cluborlov.blogspot.com/2018/03/better-nukes-for-safer-planet.html
Or Putin could just
http://thepublicansguide.com/wp-content/uploads/2013/11/IMG_6735.jpg
https://www.zerohedge.com/news/2018-03-05/signs-peak-10-charts-reveal-auto-bubble-brink
https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/Auto%20saar%20march%202018.jpg
Saved by the hurricanes! Opps maybe not, the decline is back again. That didn’t take long. If rates keep going up home and car sales will tank. Car sales were already slowing down due to over-saturation of the market. Now, there will be a double whammy, rising interest rates and over-supply.
I am wondering if interest rates were already having somewhat of an impact in 2017. Autos use shorter term loans than mortgages, so they are more affected by short term rates. It seems like auto leasing would be affected by short term interest rates, as would sales of automobiles to car rental agencies. Short term interest rates were already rising in 2017.
I think the issue is more one of fully exploiting the market demand even after inflating it with low interest rates and 84 month terms. Someone who signs an 84 month car loan isn’t going to be back in the market for a long time. Add in the number of leases, which turn over into barely used cars that compete with new cars in 2-3 years and you have a ticking time bomb.
I am sure that that those issues add to the problem, as well. When barely used new cars compete with new cars, but at much lower prices, that drives down the sale of new cars.
TO is experiencing a hurricane….
The average price for the Greater Toronto Area (GTA) plunged 12.4% overall to C$767,818. This represents a drop of about C$110,000 in the average home price over the 12-month period.
https://wolfstreet.com/2018/03/06/home-prices-sink-sales-plunge-in-toronto/
America’s Digital Infrastructure Is Crumbling, Too
https://www.bloomberg.com/view/articles/2018-02-01/america-s-digital-infrastructure-is-crumbling-too?utm_content=view&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social&cmpid%3D=socialflow-twitter-view
I think that this is a major issue. Government is not known for paying competitive wages. Applying for jobs tends to be cumbersome as well. Now taxes are being cut, so it is hard to see how funding will be maintained.
One thing I didn’t notice mentioned is all of the things being added to make the electric grid “smart.” One issue is that “smart” can be equivalent to easy-to-hack. I understand that the smart grids in different parts of the country aren’t necessarily similar to each other. Their main benefit seems to be that they allow electric companies to get rid of meter readers. Some of them can allow time of day pricing, instead of a single price 24/7/365. As soon as much solar is added, the top price for electricity seems to become early evening. Solar owners become very unhappy, if they were going to be compensated based on the high prices solar electricity was supposed to provide.
Another issue is that adding large amounts of wind and solar makes grid stability harder to control.
Ford Focus I purchased in 2016 was flimsy, cramped, transmission issues. Better to be safer in an SUV than sorry.
Well, Focus sales are THAT bad. They sold 12,000 of them last month. They probably don’t make much on them though. Ford sold about 68,000 F-Series trucks last month. So, yeah, people want trucks more than cars right now. If gas prices sky rocket then things could change again like they did 10 years ago.
stunning new self-driving EV:
https://www.yahoo.com/news/volkswagen-apos-latest-d-concept-194555845.html
er… well, maybe by 2030 or so.
Madness!
So many photos… and not one with scantily clad bimbos… what is the world coming to!
Oh right….
I wanted to bring this post forward for comments:
“Energy^2 says:
March 5, 2018 at 5:35 pm…
… 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.”
isn’t this another version of Creeping Collapse?
and isn’t it here already?
countries in permanent decline of FF production are collapsing (Yemen, Venezuela) or will collapse soon (Mexico, UK)…
or should I say “sooner”?
since eventually all countries will be in FF decline…
the Two-Tier World can’t have a very long future; right or wrong?
UK can’t be allowed to collapse prior reallocation its City financial district on the Euro continent and or globally dispersed alike.
And albeit it’s important part of the post Brexit negotiations with the EU, evidently not happening on the ground yet. Hence with 99% probability the UK will be kept propped up in the first tier of countries for some additional time.
Disclaimer:
or there is some other scheme in place and or chaos theory takes full swing..
Davidin10^1000years – The danger of The Two-Tier World is vicious in that ‘London’ might remain an energy heaven but Bradford or even Reading might become energy-less, for example (i.e. the model of Baghdad’s Green Zone vs the rest of the country living in an energy-less big ‘refugee camp’, similar to those conspiracy-theory videos on youtube promote what are called FEMA camps) – god forbid.
Will ‘collapse’ be also the suitable expression to describe that novel potential reality where 1984 and BNW will both be settled together side by side very nicely in an energy-deprived world?
Extrapolate this insane scenario and that is The Two-Tier World covering Russia, Saudi and the US, and then the rest – god forbid.
The Two-Tier World is imminent if all energy-intensive AI, big data, EVs & Trucks, autonomous, cryptos, dark side of the moon landing, quantum satellites, endless useless digital clouds, web platforms & portals and mountains of useless gadgets every minute, 10+ million new car/truck in China and India a year, a sensor in every training shoes and fridge, 5G, armadas of new weaponry – and many others – are all pushed and forced on the world the way we see today but not telling us where all the energy required will be coming from?
Or, FFs are really a self-generating phenomenon and we need to accept that!
It cannot be both ways.
The statement “Countries in permanent decline of FF production are collapsing (Yemen, Venezuela)…” is strongly felt false. Local news from Yemen report daily on significant national oil supplies being smuggled by sea outside the country. Yet alone Venezuela- probably the largest oil reserve in the world, being short of crude oil!
The irony in the mainstream ‘standard’ thesis is that depleting FF Energy supplies will ultimately cause a wider Collapse (i.e. the main theme on this forum, too). However, expecting the Middle East/Venezuela/Nigeria to collapse despite they sink in FF Energy reserves is somehow counter-intuitive: Why all world’s geographies only require FF Energy to avoid collapse but just the Middle East/Venezuela/Nigeria, where significant portion of the World’s Energy comes from, require magic to stay afloat? How these nations made it to the 21st century since the antiquity? Have not they knew since then how to plant wheat and bake bread?
Actually, the ME is kept collapsing year after year since the oil came gushing in Iraq in 1927 – What “…Countries in permanent decline FF production.. and taxes being not collected in nations, where taxes are traditionally and historically non-primary revenue generators, – are collapsing..” etc, etc?
The situation requires other than, probably, trivial reasoning to be really understood, or all main-stream explanations, such as this, can safely be considered by many ‘fake news’.
Oh! and how long TTW will last for? As long as there are some easy FF left in the ground, I guess?
96 days to go stock up while you still can on lanything long life as our purchasing power will be severely impacted after june the 1st
but will the internet still be working?
I want my, I want my OFW…
Sorry to be the bearer of bad news, but there are rather less than 96 days before 1 June. Hope your miscalculation still leaves you sufficient time to complete your preparations.
Ok, I’m game, what happens on June 1st and why?
The elites are taking down the financial system (according to adonis). He (adonis) is a little vague about the evidence.
The second-largest U.S. nursing home operator ManorCare files for bankruptcy with $7.1 billion in debt
https://www.reuters.com/article/us-hcrmanorcare-bankruptcy-quality-care/hcr-manorcare-files-for-bankruptcy-with-7-1-billion-in-debt-idUSKBN1GH2BU
How can nursing homes be loosing money? I personally know of two cases where the nursing home has taken ownership of a persons property (100 acres or land and a home with mineral rights) because the persons retirement benefits ran out of funds. Medicare also funnels millions into nursing home care. Retirement plans are emptied by it too. The care is awful in many cases. How do you loose money?
Embezzlement I would think. My thinking is in line with this.
Have you ever heard of fraud?
These US nursing homes can be a real scam.
My Dad was in a rest home for a few years in Massachussetts in 2006-2009.
Costs were $100,000/year per bed – the same price all over Mass. This was for a small room w 2 other roomates. So they were charging $300,000/year for one room and they put 3 elderly patients in it.
ALL patients were medicated up with 12-13+ different prescriptions.
If a patient is a problem, they ship them off to a major hospital for “evaluation”. Oh, the patients do not return to the same home they left.
And… no matter how well-managed one of these places are …. they inevitably stink of p.ss and sh.it….
It seems like we keep people alive so long that they have multiple things wrong with them. Our bad diet and lack of exercise don’t help either.
At least some of the nursing homes (in Minnesota, I know) provide quite a bit of activities to residents who are up to them–crafts, exercises done while sitting in a chair, local singing groups coming in to entertain, church services and bible studies by different area clergy. There is someone on the staff coordinating these activities, but they get a lot of help from local volunteers.
By the way, I got an email a few years ago from a former math professor saying that her assisted living center (a step above nursing home) was studying one or more of my Our Finite World posts. My mother was in the same facility at the time.
If a person cannot stand up without help, nursing homes have a mechanical device that will help pick them up out of bed, so that they can sit in a wheel chair. But very often, a staff member is needed to push the wheel chair around. The ratio of staff to patients seems to be quite high.
Madame Fast volunteers to sing at a public nursing home every month …. most of the patients have varying degrees of dementia … they are constantly interrupting with inane questions such as ‘is it time for coffee’ — and Madame Fast has to remind them that they just had coffee…. most of them are in another world (although music apparently is the one thing that can reach them…)
Madame is forever learning new songs for her performances (who is this Dolly Parton???) … it takes up a fair bit of her time… and I am forever urging not to bother — just learn a single song I say … play it … then wait 30 seconds… and play it again .. over and over…. they won’t have a clue….
Or better still (I don’t suggest this to her … but it’s fair game to raise this on FW)….. when they ask for coffee… slip a heavy dose of Fenatyl into the coffee pot…. so that we can stop wasting money on the living dead….
Going Big Picture…. I will get in touch with all the publicly funded nursing homes in NZ…. book Madame Fast to tour all of them…. and she can bring along a large sack of Fenatyl….
Seldom in life is one presented with a win win opportunity…. this is one of those moments.
no doubt Madame Fast’s vocal skills will be put to the ultimate test when you reach that stage
The silver lining due to our unfortunate ‘situation’ is….
I will never live to reach that stage…
https://upload.wikimedia.org/wikipedia/commons/thumb/a/a5/Canada%27s_fireworks_at_the_2013_Celebration_of_Light_in_Vancouver%2C_BC.jpg/1280px-Canada%27s_fireworks_at_the_2013_Celebration_of_Light_in_Vancouver%2C_BC.jpg
well—care of the aged is draining the national economy anyway
so things aren’t all bad
Yes my late father in law spent the last 3 months of his life in a nursing home.I came away from there thinking how is it that we don’t allow people to die with there dignity intact.
I would prefer the blue pill myself as the level of care I witnessed was atrocious and this was supposedly a half decent facility.
Ford to Temporarily Layoff About 2,000 Hourly Employees at Michigan
https://www.usnews.com/news/top-news/articles/2018-03-05/ford-to-temporarily-layoff-about-2-000-hourly-employees-at-michigan
Can’t sell enough of the compact Ford Focus. Retooling to build Ranger pickup trucks and Bronco sport utility vehicles. Workers having one year seniority will receive 75% of their pay during the layoff.
Focus production is moving to China as well.
I had not noticed that.
http://www.foxnews.com/auto/2017/06/20/ford-to-import-focus-small-car-from-china-in-2019.html
more evidence of the elites plan to bring in a new system which will kick the can further down the road http://www.newdawnmagazine.com/Article/A_Global_Central_Bank_Global_Currency_World_Government.html
June 1st?
“… the dollar will become “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”
by 2025? what is that, about 2,000 days from now?
by the way, a long piece of writing is not “evidence”.
I don’t buy the idea of a global currency. How is that pegged? Would whatever this denomination be worth the same in Lagos, Nigeria as it is in Paris, France?
I would imagine that if this was the plan — it would be beyond secret… yet this website has inside info…
Don’t be ridiculous…
There is already a world currency, the US dollar. If that makes you sick, there’s always the Euro.
https://en.wikipedia.org/wiki/International_use_of_the_U.S._dollar
The US is going to peak soon. Rig count says its all
https://www.investing.com/economic-calendar/baker-hughes-u.s.-rig-count-1652
rig count has been rising since May 2016…
sounds good to me!
More and more rigs to maintain the same level of production. Some wells are actually somewhat profitable, but they need all the new ones to keep producing, since without them the investments would dry up.
Consider the rig count just like population overshoot. It will grow as long as the resources are there to feed it. Then it will collapse as the shale oil drys up.
Cheer up everyone! What’s the saying ‘Comes the hour, comes the man’?
I think we have the man: the President of Spain, Rajoy, has just made this promise:
‘I will do the possible. I will also do the impossible – if, in fact, the impossible proves to be possible!’
So, don’t worry anymore, Rajoy has it all in hand. He is undaunted by anything, and a man of action. 🙂
Well, hallelujah! He sounds almost as dynamic as our own Theresa May…
he sounds like a refugee from dubya’s governmement
like if Elon Musk was a politician…
Dr. Charles Hall: The Laws Of Nature Trump Economics
https://www.peakprosperity.com/podcast/113808/dr-charles-hall-laws-nature-trump-economics?utm_source=dlvr.it&utm_medium=facebook
Economics is pseudoscience used to justify our preexisting social hierarchies. If the earliest economists had told the truth (mutual aid is the key to any flourishing society and allowing individuals to amass endless wealth is detrimental), the rulers who paid them would have just killed them and paid someone else to say differently.
To an economist the world is seen as all things financial. The forests are lumber, the oceans fish factories, the land either farmland or cities. And the future is just an opportunity to increase profits. They know the cost of everything and the value of nothing….
we all saw the world as capital with a cash value
and i do mean all—with the exception of a few indigenous tribes scattered here and there.
as i’ve said ad nauseam—if rockefeller had put a global health warning on every barrel of oil and we had been told daily what would happen with oil use—we all would still have burned it as fast as possible
Health warnings are mostly ignored. Look at cars: first lead poisoning, now diesel particulates (even more insidious) – does the volume of traffic ever go down? Of course not!
Of course, because life with it is so incredibly good and life without it is so incredibly hard.
As mentioned… I put the fire on the other day …
My dog spends most of her day laying about in my office….unless I allow her out to chase but never catch rabbits….. but that chilly day she was not on the carpet near my desk….
Because she was of course… warming herself… in front of the fire….
I agree with everything that Prof. Hall says in the part quoted. Except that I would add “coal” when he says, “oil and gas.” It is easy to lose site of the fact that our problem is a total energy problem, and not an oil or gas problem.
Guys, there isn’t going to be a fast collapse, just a steady deterioration. The mistake you make is to assume that the system is either all or nothing. It’s not.
Ask anybody who has been through emergency or triage situations and they will tell you it’s about salvaging what you can and moving on. That’s all it is going forward.
99.9% of you have already “collapsed” in a sense, as you have absolutely no political or other power to change any of this. You are spectators.
What would you salvage? Population numbers? Cars? Houses? Everything we have is mostly garbage that breaks rather quickly or depends on too many other systems to keep operating. This isn’t like one human body, it is about the entire ecosystem.
Just salvage whatever you can. None of it really matters in the end anyway. You people were fooled, I’m trying to cure you.
Regardless of how much the system produces or doesn’t produce, you were not important. You were never important. Nobody reading this site was.
But that’s also liberating! It means we have very little responsibility to the system, we don’t have to worry what happens.
“None of it really matters in the end anyway.” – correct!
“You people were fooled, I’m trying to cure you.” – I don’t think I’ve been fooled at all, and I’m certainly not in need of a “cure” (see your sentence above!)
“… you were not important. You were never important. Nobody reading this site was.” – correct! And nobody else in all of history was or is (see your first sentence above!)
“But that’s also liberating! … we don’t have to worry what happens.” – correct!
but you have no certainty about the future that there will be “steady deterioration” and there will not be “fast collapse”…
you might want to get off of that high horse you’re riding…
anyway…
either scenario could turn out to be the reality…
I would guess a slow decline through the 2020s and a possible collapse in the 2030s…
but in my opinion, it’s unreasonable to assert one definite near-future…
and that is liberating!
and fun!
let’s see what the next decade brings…
and along the way, debate what we are seeing.
The BAU, quasi BAU and virtual near collapse BAU have all some legs..
Young people own less, drive less, regrouped on a/social networking, apolitical-sheepness prevails etc., and with some “clever” triage by TPTB this can be placated over few more years even decades. Yet some periphery countries might be jettisoned earlier, but mostly their collapse not being identified properly as OFW issues but instead as general/political chaos, misfortune and so on..
I’m in doom for ~20yrs already, and it has been a very slow burn..
In retrospect it would be wiser getting obscenely rich on those recent bubbles and just float on the last waves of frivolous activities..
Shale Trailblazer Turns Skeptic on Soaring U.S. Oil Production -Wall Street Journal
We’ve been on a peak oil production plateau since 2005. All the talk about energy independence, a century of fracked oil and natural gas, and that U.S. production will long swamp global supplies, perpetuating lower prices is BS, according to Mark Papa, the former chief executive of industry bellwether EOG Resources Inc.
“… in an interview he told the assemblage of oil chieftains that a widely held view that shale oil producers can quickly ramp up production, and sustain those levels if needed, is wrong.
Mr. Papa told executives and investors that most of the best drilling locations in North Dakota and South Texas have already been tapped. He has lately called out rivals for being too optimistic about their prospects. And he points to recent operational challenges such as sand shortages that companies have disclosed in the Permian Basin in West Texas and New Mexico, the hottest U.S. drilling region, as a harbinger.
Such constraints, coupled with mounting investor demands for returns, will equate to much slower U.S. oil production growth than what most forecasts expect, he said.
https://www.wsj.com/articles/shale-trailblazer-turns-skeptic-on-soaring-u-s-oil-production-1520257595
Can you please stay on topic — what will be the impact of record cold on global LPG prices?
And as we seem to be entering a new ice age…. what does this mean for BAU in general?
Will this new ice age act as stimulus to drive energy prices higher — which of course would destroy the economy.
Could this new ice age be the ‘trigger’ that rips down BAU?
I think the moderation filter will soon be banning ‘ice age’ ….. 🙂
That would very CNN-esque….
IEA: Russia’s oil output to reach its peak in 2020
http://vestnikkavkaza.net/news/IEA-Russia%E2%80%99s-oil-output-to-reach-its-peak-in-2020.html
IEA warns of oil supply crunch after 2020 -Financial Times
https://www.ft.com/content/e424c4b0-204a-11e8-a895-1ba1f72c2c11
Build your own limits to growth models!
http://bit-player.org/extras/limits/ltg.html
The only catch is that this is not how a dissipative structure behaves. It gives a very misleading view of what happens after total resources per capita plateaus. The actual collapse is likely to be steeper than the model suggests.
The actual economy depends on promises of future energy (resource) payments. These overwhelm the system, but the model is too simple to include them.
Good point Gail. It seems like chaos theory might be more applicable what happens to industrial economies as they pass peak-resources-per-capita. All of our economic models were created in a time when resources per capita were increasing. Now we have a lot of outstanding promises with no resources to fulfill them.
This is so much more appealing than a Seneca Cliff… but it ain’t what we will get
http://www.truthmove.org/workspace/photos-content/JS-Peak-Oil.gif
I love that “Alternative Energy Spike”. LOL. They got it wrong though. It is a negative, not a positive. So, redraw that with a sharp leg down where the “Alternative Energy Spike” is at. Then, I think you have the answer.
looks good until about 2025…
I’ll take it!
now I notice the question mark after Alternative Energy Spike…
the upward red line seems to be a secondary path…
most likely, there will be no such spike…
and the appropriate red line might be the lower one…
or not… time will tell.
Its just contemporary fiction.
We all can write it–
Now, if you start believing it————–
Not only our economic models, but all of our infrastructure: only appropriate to a growth phase, and simply impossible to maintain once that is over.
True Xabier. Unfortunately.
The actual collapse is likely to be steeper than the model suggests.
https://imgur.com/a/8ZLHU
BD, that model definitely has collapse after 2030…
I’ll take it!
In resources per capita you have two numbers. You have the number of resources and you have the number of capita. If you don’t like the ratio and you can’t raise the amount of resources then that leaves only one option. You have to reduce the number of capita.
Surely the overlord owners wouldn’t do anything to eliminate some of those extra capita just to get a more favorable ratio?
“…Kuroda “has already used up almost all of his ammunition. His second term will be much tougher than the first one because he still needs to keep fighting,” said Takahide Kiuchi, a former member of the BOJ Policy Board who is now an executive economist at Nomura Research Institute.
“With the aim of finally beating deflation, the BOJ began buying massive amounts of Japanese government bonds in 2013, when Kuroda announced that the central bank would keep buying government bonds so that the amount it held of outstanding JGB would increase by as much as ¥50 trillion each year. Kuroda would later double down on the policy, shocking markets in 2014 by raising the annual goal to ¥80 trillion.
“After almost five years of this policy, market observers like Kiuchi have grown particularly concerned about its sustainability as there are a shrinking number of bonds available.
“According to figures from the BOJ and the Finance Ministry, the central bank now holds almost 46 percent of all outstanding JGBs.
““If the BOJ keeps buying JGBs to the utmost limit, liquidity will become low and the interest rates for government bonds would become very unstable,” said Kiuchi, who served as a board member from July 2012 to last July.”
“If only small amounts of JGBs are left on the market, even a small shock could easily trigger a spike in long-term interest rates. Such shocks may come from market participants’ concerns over the fiscal sustainability of the debt-ridden Japanese government, Kiuchi explained.”
https://www.japantimes.co.jp/news/2018/03/05/business/economy-business/boj-chief-faces-tougher-second-term-reality-easing-program-sinks/#.Wp0xzejFLIV
This article explains why a country can’t keep adding to QE, even if the country “needs” it.
I understand that Japan has been buying more than Japanese corporate debt. According to this January 2018 article by Wolf Richter,
https://gailtheactuary.files.wordpress.com/2018/03/japan-boj-assets-monthly-change-yen_2017-12-worlfstreet.png
https://gailtheactuary.files.wordpress.com/2018/03/japan-boj-assets-2017-12_wolfstreet.png
Very clearly, BOJ ramped up its QE buying back in 2013 when the US discontinued its program. Now it seems to be reversing the whole thing.
Japan with its high debt level cannot afford to pay high interest rates. This doesn’t look likely to end well.
Okay, I get it. Going forward, where does one put financial assets? It seems as though the financial industry is trading with itself and running out of new money coming in which is confirmed, but not proved, by the fall in trading profits at major money center banks and the concern of JPM on the decline of retail investors(new money). CB’s perhaps own so much of it there is nothing left to buy and no one to whom to sell it.
I know you are macro, I live micro. How far down does all this go? It is perhaps just faith, but I can’t believe in total collapse. Many of you are a heck of a lot smarter than I am, any ideas?
Take heart. Some of us are way behind Dennis L, who at least knows something about money!!!!!
Artleads: visualise ‘money’ as flows and patterns…..
++++++++++
So good to have someone who understands the issue! 🙂
Just like when you flush the toilet. (sorry)
Put your assets in building relationships with other people. Or in doing the things you want to do now. Or in improving your health though better food and exercise.
About all you can do with all of the promises you have for future energy supply you have left is diversify somewhat. Then if one kind tends to have value longer than another, you are somewhat protected. I know some people have recommended stocking up on tradable items–razor blades, for example, or bottles of alcohol, or bottles of aspirin. Gold coins are not very tradable.
Utility knives, band aid, duct tape, Betadyne, toilet paper, paper towels…
And some Fish Mox and Fish Flex can come in might handy when the fin rot gets bad.
You got the gold coin thing right … I am trying to dump some of these soon to be worthless barbaric relics… and I would have to fly to Auckland to do so….
Stockpiling anything is futile… although I would make an exception for booze and party favours…. and of course Oxycontin and Fenatyl…. the problem with stockpiling those though… is that you might end up spending the end of BAU festivities.. in a prison cell.
Agreed. So it’s more a case of not running low on certain simple items. being a week or two ahead. A little more of the health related (sophisticated) items perhaps.
I think one razor blade will do.
!!!!!
I invest in ‘experiences’ — i.e. I piss cash away that I would normally have invested .. because I am expecting there to be no ROI on that cash if I were to invest it
I play a dangerous game….
US Mint silver eagle coins. No sales tax, and no 1099 nor k1 required upon redemption. Not dependent upon the grid, and a 20% average annual return since the the millennium. Eagles won’t make you rich, they’ll just keep you from going broke. Unfortunately, the disinfo campaign waged against them by the purveyors of fiat currency has soured their appeal for all but the most independent of savers. However, I consider their slanders as a gift.
Sorry to inform you
http://www.ebullionguide.com/images/charts/price/silver/last-10-years.jpg
If you adjust for inflation … you have lost money on this
Is that a template? I’ve been reading the same stuff about Japan for nearly 20 years now….
Ambrose Pritchard-Evans keeping a nervous eye on events in Hong Kong:
“Hong Kong’s currency regime is coming under serious strain as the US Federal Reserve steps up the pace of monetary tightening, threatening to set off an unpredictable chain of events in the world’s most over-stretched financial system.
“The enclave’s US dollar peg – usually rock solid – has suddenly become the focus of global markets after the currency fell last week to its lowest level since the current trading band was established in 2005. Analysts say the authorities may soon be compelled to defend the exchange rate, with escalating complications.
“A policy shift to force up Hibor lending rates – and drain excess liquidity – risks causing a host of latent problems to crystallise, threatening the territory’s hyper-valued property market and exposing hidden leverage in the Hong Kong dollar “carry trade”.
“Rob Subbaraman, chief Asia strategist for Nomura, said the offshore hub is flashing 54 separate early warning signals under the bank’s predictive model of future financial blow-ups.
“This is higher than during the peak of the Asian crisis [1997-1998],” he said…”
https://www.smh.com.au/business/the-economy/warnings-of-financial-blow-up-in-hong-kong-20180305-p4z2ts.html
There are quite a number of currencies pegged to the dollar. Hong Kong is particularly at risk, but others are as well. Saudi Arabia comes to mind. It can’t afford higher interest rates, either.
Why didn’t people in charge think of these details?
The usual foolish, apparently innate, optimism, I would guess. Of course our blindness to, and ability to rationalise away, unpalatable truths has an upside in that it is keeping everyone investing and lending when really it would be wise not to. Humans gonna human…
From THE great man:
‘ Want of foresight, unwillingness to act, lack of clear thinking, confusion of counsel until the emergency comes,….these are the features which constitute the endless repetition of history.’
And now let’s all have a decent cigar and a whisky and soda…….
‘
because they navigate through the rear view mirror of history—like everybody else.
The peg has served HK well…. and when it no longer does… the Hong Kong Monetary Authority will no doubt consider de-pegging….
That said – having done business in HK for over 20 years — I have heard predictions from the media that the peg would go many many times …
If the peg goes there will be zero warning. The authorities will make the decision — and announce it unexpectedly…. one thing is for certain – they will not de-peg without thoroughly examining the consequences… and weighing the pros and cons….
As the HKMA is a franchise of the Fed (as are all central banks) — the Fed will also be involved in this decision
Here’s the thing… even if HK depegged… that would not matter…
Because if rates in the US continue to rise… the US blows up … and takes HK and the rest of the world along for the ride — to hell.
“Investors dumped Italy’s government bonds on Monday and rushed to buy high-grade equivalents such as German Bunds after the weekend Italian election saw a surge in support for anti-establishment parties, led by the 5-Star Movement.
“Italy faces a prolonged period of political instability after voters delivered a hung parliament in Sunday’s election, spurning traditional parties and flocking to anti-establishment and far-right groups in record numbers.”
https://www.reuters.com/article/us-eurozone-bonds-italy/italian-bond-yields-jump-as-euroskeptic-parties-surge-in-election-idUSKBN1GH0T5
Amusing about the Italian 5-star Movement being ‘anti-establishment’: the founder Bepe Grillo is a multi-millionaire, and has a butler at his villa. Don’t you just love bourgeois revolutionaries? The question is: who – it being Italy – is behind him……?
We are heading in Europe to a situation of deadlock and growing chaos in the democratic process , as all the old parties are discredited and yet no consensus emerges as to how to go forward. Rather like the 1920’s and 30’s……
In many european countries no party achieves more than 50 percent. Very often you have 5 parties with 20% each, or at least 3 parties with 33% each. So nothing can be decided.
In the US, it just “looks like” there are two political parties. In fact, there are factions within both parties. Donald Trump is a Republican, and the Republicans control both the House and the Senate, so it looks like the any kind of legislation can pass, but in reality, it cannot because of all of the factions involved. Also, on spending bills, the Senate needs to have 60 or more votes in favor (out of 98 or 99). Even if every Republican is present and votes for a bill, it is not possible to get enough votes without some Democrat support.
The constitution makes it difficult for the President and congress to “get things done”…as it should be. The Federal government does far too much already.
Yes, most parties come in at the 20% level in Spain nationally, with regional dominance possible for some.
That is not a good situation. But it is more or less what we expect, when there is not enough cheap-to-produce energy to go around.
Matteo Salvini, leader of the Lega party, making some somewhat worrying noises about the Euro now:
“The head of Italy’s anti-migrant, eurosceptic League party says the shared European euro currency is “wrong” and is ultimately destined to end.”
https://www.independent.ie/world-news/italys-antimigrant-party-leader-says-euro-is-the-wrong-currency-36670606.html