Raising Interest Rates Is Like Starting a Fission Chain Reaction

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Figure 9. World per capita energy consumption, with 1950-1980 period of rapid growth highlighted. World Energy Consumption by Source, based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent, divided by population estimates by Angus Maddison.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Figure 15. World energy per capita and world oil price in 2016 US$. Energy amounts from BP Statistical Review of World Energy, 2017. Population estimates from UN 2017 Population data and Medium Estimates.

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

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

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

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

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

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

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

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

Figure 18. Dome constructed using Leonardo Sticks

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

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

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

[8] Conclusion

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

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

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

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

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,489 Responses to Raising Interest Rates Is Like Starting a Fission Chain Reaction

  1. Baby Doomer says:

    ‘On a hot day, it’s horrific’: Alabama kicks up a stink over shipments of New York poo

    https://www.theguardian.com/us-news/2018/mar/11/alabama-new-york-poo-sewage-environment?CMP=Share_AndroidApp_Facebook

    • Greg Machala says:

      Dumber than yeast. We are drowning in our own pollution yet people still think growth is good.

  2. Fast Eddy says:

    Am I dreaming or did I just read this … or maybe my entire life is a dream…

    To remedy this — and this is pretty out there — Amazon recently patented what it calls an “airborne fulfillment center.” This basically amounts to a warehouse that doubles as a drone airport, one that would hang suspended from a blimp. Another issue Amazon has to deal with is where to put these drones when they’re not in use. For this one, the company has suggested using street lights, cell towers, and other high-lofted objects as potential “docking stations.” And how about getting the package to you? Does the drone land on your front porch? Maybe not — it might deliver the package via parachute.

    https://www.digitaltrends.com/cool-tech/amazon-prime-air-delivery-drones-history-progress/

    • Davidin100millionbilliontrillionzillionyears says:

      ” As for a timeline, it looks like we will have to wait until as late as 2020, if not later, for large-scale availability.”

      this is so very disappointing…

      I was looking forward to drone delivery this year…

      oh, well…

      gotta go…

      have to order my flight tickets to Mars…

      round trip, of course.

      • Curt Kurschus says:

        Has Elon Musk specified that the flights to Mars will be round trips? That may be counterproductive if he wants people to slave away in the mines there to supply the minerals he needs to build Tesla flying cars for people back on Earth.

        Anyway, he will probably be bankrupt, homeless, begging for bread and broth before he has the opportunity to fly to Mars.

    • doomphd says:

      they’re planning on low aviation fuel availability and high prices. blimps and drones are slow but high efficiency air transport. they assume they’ll still have customers to buy their products.

      • Fast Eddy says:

        Maybe the hovering Stuff Blimps… can also house factories… the factories churn out stuff using 3D printers… and immediately delivered by drones! Vertical integration

        BTW – weren’t we told by the MSM that everything would be 3D printed by now — and that China factories would be made obsolete?

        Funny how we keep getting fed this techno fantasies that are more absurd by the day… that NEVER happen….

        I wonder if there is a purpose to all of this….. well I don;t actually wonder… I know

    • Dennis L says:

      FE, I can go on line and specify that packages be left on my front porch now, using a drone for many of the things I get would seem reasonable. This might be in part a solution to HIrsch’s liquid fuel issue and as inside joke well understood here, it would be fossil fuel free. Or,maybe they are cheap enough to be charged with dedicated solar panels mounted on the top of telephone poles alongside the drone.Think of a catchy slogan, “We charge by day and deliver by night while you sleep, all with zero emissions. ” Bezos is a pretty smart cookie and the business landscape is becoming littered with firms that didn’t adapt to the environment he created.

      If you are bored intellectually, read about strange entanglement particles communicating across the universe instantaneously, weird stuff. LED’s operate on quantum mechanics engineering if I recall correctly. We do not solve tomorrows problems with today’s ideas or something similar.

      • Lastcall says:

        ‘Fortunately, solutions to these global challenges are all around us. Biomimicry is an approach to innovation that seeks sustainable solutions to human challenges by emulating nature’s time- tested patterns …’

        https://www.saharaforestproject.com/wp-content/uploads/2015/03/Tabell2.jpg

        But, we are too ego-centric to believe we are a subset of nature, therefore there are no solutions for our predicament. History proves this point time and again.

        Therefore we continue to create problems, today, tomorrow and for how ever long our DNA remains viable. Dissipative entities indeed.

        • JH Wyoming says:

          biological systems: zero waste

          It does produce waste, such as dead animals, but has a complete system in which to process the waste so that other biological entities are nourished by its consumption. Recycling of plastic, glass and metal are examples of human made systems emulating nature.

          Human made systems: Simple

          What about a super computer? Or an EV? Or a TV? Wouldn’t those constitute complex systems?

          Human made systems:

          Engineered to maximize one goal

          Yes, but the spectrum of engineered items can be brought together to optimize a whole system. That’s what businesses do – they bring many different engineered items together to make their business model work.

          All of these categories can be argued pro and con, but my point is it’s not as black and white as that list would suggest.

          • Lastcall says:

            To take one example of yours, computers. They are realising only now what an incredible amount of complexity and computing power it will take to have self driving cars; a relatively simple human function. Don’t confuse the mechanics/construction of the device with its performance.
            We spend over a $100 mill a year in NZ trying to get a decent handle on the weather; heres to the butterfly effect in all its annoying COMPLEXITY!
            I stand by the chart…just saying, don’t be too ego-centric dude.

            • There are limits in directions that people don’t consider. How much traffic the Internet can handle, and its electricity consumption are things we don’t think about.

              Also the learning curve associated with increasingly complex programs. I tried briefly this week to use the version of Excel included with Office 365 (used on a Macintosh). I gave up and went back to Excel 2011 for Macintosh. With the Office 365 program, a person can do practically anything. The problem is that it now takes a large number of different steps (plus calls to tech support to figure out what these steps might be) to get to plain, ordinary-looking graphs.

        • That is a really nice chart. Too bad that there is no possible way that we can use only biological systems to support human life on earth. Unfortunately, the use of human-made systems is a major part of what we are. We started mining flints as hunter-gatherers. We started burning down trees to make wild game more accessible as hunter gatherers. We started cooking food, over one million years ago.

      • Fast Eddy says:

        The obstacles to drown delivery are at least as big as those that will ensure self driving cars never happen.

        The list is endless….

  3. Fast Eddy says:

    See the interview https://www.bloomberg.com/news/articles/2018-03-11/china-at-risk-of-banking-crisis-in-bis-s-early-warning-signal

    Further evidence that the what normally would have taken down the global economy … will not be allowed to happen….

    The focus remains on the oil supply story.

    • Davidin100millionbilliontrillionzillionyears says:

      and Canada, not just China…

      “The focus remains on the oil supply…” of the core countries…

      you’re right… CBs know and will do anything to keep The Core well supplied with oil, and monetary digits.

    • Baby Doomer says:

      Declining conventional oil will be the final nail in the coffin. Because they can’t do anything about it..

      • Peak oilers have been saying this, but why not something else, such as declining coal usage, because of pollution issues and depletion? The peak oil view is a widely expressed view, not a fact.

        Rising average cost of energy production could be expected to push the system down as well. This could be caused by requirements that “renewable” energy be used, rather than fossil fuels.

        Rising population may also be the final straw, because it brings down the energy per capita ratio.

        Modeling of the real system is essentially impossible for a complex self-organized system. The temptation is to take the output of one partial model, and put it forth as the “final answer.”

  4. Dennis L says:

    Maybe it is not all so black after all and maybe we don’t know everything.
    https://www.zerohedge.com/news/2018-03-11/what-f-thing-fast-moving-ufo-stuns-us-navy-pilots

    We have billionaires building rockets/planes etc. to go into space. Taking the opposite side of the trade from these guys might be worth a second thought.

  5. Artleads says:

    On a FB page someone brings up need for planning and preservation to a man who is desperate and bitter by officials’ yers log stalling on allowing him to develop his undev eloped land.

    My reponse:

    Planning and preservation indeed! If you fail to plan you plan to fail. And we ARE tying to figure how to save colonial heritage, which is a basis for tourism and having a sense of identity. A lot of people are passionate about putting up new buildings, while I’ve spent my life opposing new buildings. All over Jamaica, they have erased history through demolition of the old. The cement to build them comes at the cost of environment and scenic value. I wonder if a better way to provide jobs can’rt be found.

    We must consider fossil fuel for all the modern conveniences–electricty, cooling, refrigeration, transportation–that come with new buildings.

    There is C crisis. The percentage of g house gases in the atmosphere is higher than in all of human history.

    We have a topsoil crisis, vegetation is being scraped away uncritically, wildlife has halved in the past 40 years, the oceans are almost dead.

    We have a population crisis. Population has doubled in the last 40 years alone, based on the the exponential growth factor. This crisis in growth troubles the heck out of me, even if it doesn’t disturb others at all. Half the Amazon Rainforest, the lungs of the planet, has gone since I was born.

    I don’t put individual rights over the ability of planetary life to exist into the future.

    If there was planning, people with land wouldn’t be left hanging. There would be transfer of development rights, like we sort of have in some places here. The land holder gets money from the sale of their development quota to a buyer in a “receiver” site that is allowed to build more densely than would be normal for that zoning. But while that is more thoughtful and fair, we’re still up against absolute limits of a finite world. So I don’t know what is a fair way out of the hell we’ve backed into. One suggestion might be to wrest deserted buildings away in some deal and compensate open-land owners by letting them restore it and use it profitably.

    It’s not that I have any power over planning, or the destruction of the planet. It’s not that my side is winning. It’s just that as long as I live, I will oppose new buildings with my puny ability to affect anything. I can give assurance that I’m not into win/lose outcomes. I believe you have to plan like crazy to avoid that and see that everyone comes out with something. You can turn lemons into lemonade. Every dark cloud has a silver lining. Open land can be used for camping and retreats..,.producing some income rather than none. All of these thorny issues require intense planning.

    • Davidin100millionbilliontrillionzillionyears says:

      so then China shouldn’t impose any tariffs of their own.

  6. jupiviv says:

    https://www.reuters.com/article/us-iea-oil/surge-in-global-oil-supply-may-overtake-demand-in-2018-iea-idUSKBN1FX0VQ

    “Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth,” the IEA said.

    “In just three months to November, (U.S.) crude output increased by a colossal 846,000 bpd and will soon overtake that of Saudi Arabia. By the end of this year, it might also overtake Russia to become the global leader.”

    Whether this production boom can be sustained till next year or the one after will determine whether us doomers are crazy pessimists or actually have something important to say.

    • name says:

      US oil output actually dropped in December (the last month we have data).

      • But total liquids oil production for the month of November 2017, for the world as a whole, set a new record, looking at EIA’s International Oil Production data. Average daily production is shown as 99,227,237. This is quite a bit higher than IEA is showing for November 2017.

    • doomphd says:

      my guess as to why shale oil and tar sands have become profitable is the economic game as been changed to allow previously expensive oil resources to come to market on the back of some previous portion of society that was economically supported, but is no longer so. perhaps that missing support is reflected in the growing number of working and non-working poor. it would be intersing to plot the number of homeless and unemployed versus the rise in oil shale and tar sands production.

      • Fast Eddy says:

        Or perhaps bankrupt shale plays have been picked up for pennies on the dollar….

    • Davidin100millionbilliontrillionzillionyears says:

      “Whether this production boom can be sustained till next year or the one after will determine whether us doomers are crazy pessimists or actually have something important to say.”

      why do you think this 2 or 3 year window is so important?

      do you think some Doomers are (borderline) crazy pessimists?

      even if true, don’t you think Doomers have important things to say “in the long run”?

      • Kurt says:

        Remember, Doomer spelled backwards is Remood.

        There have always been Doomers.

        • Davidin100millionbilliontrillionzillionyears says:

          all true!

          yet, there has now emerged in the world a special type of Doomer…

          the kind that knows about the inevitable decline of FF to nearly zero…

          whereas the meteor-zombie-apocalypse-Doomers are short of facts to support their doom…

          “we” know that the decline of FF energy sources guarantees a similar decline in prosperity…

          whether it’s 10 days or 10 decades, the decline is coming, where (almost) all humans will be living in poverty…

          what an exciting time to be alive!

        • Baby Doomer says:

          And remember a Doomer only has to be right once…

          • Davidin100millionbilliontrillionzillionyears says:

            yes…

            my memory is still fair to good…

            in the meantime, Doomers may very well have 12+ years to plan their celebration…

            if The Collapse happens before 2030, I will admit I was wrong…

            and I will sincerely apologize for misleading so many folks here at OFW…

            https://www.youtube.com/watch?v=xvX_5ym_ajI

            Celebrate good times, come on!

      • jupiviv says:

        “why do you think this 2 or 3 year window is so important?”

        Various estimates say conventional crude production in many countries will start declining ca 2020.

  7. Sven Røgeberg says:

    «Don’t cry for the rentier class. For the past forty years (ever since Federal Reserve Chairman Paul Volcker manufactured a brutal recession in order to eliminate 1970s inflation) economic policymakers have concentrated on ensuring the profitability of the bond market more than just about anything else. They focused their attention on financial stability and low inflation rather than the traditional goal of promoting full employment.

    Consequently, the financial sector has quadrupled in size relative to the rest of the economy, the rich absorb most of the benefits of growth, and workers’ real wages have stagnated or even declined. Financialization has made wealthholders richer than ever, but it hasn’t done much for the rest of us. What is good for the bankers has not been good for the economy as a whole.»
    http://evonomics.com/three-cheers-for-financial-repression/

  8. Fast Eddy says:

    Waitrose has been joined by other retailers, including Scribbler, whose Mother’s Day offerings include a “Two mums are better than one” card for same-sex couples and a “Dad, thanks for being the most amazing mum” card.

    The changes come after calls by some trans activists to rename Mother’s Day. Suggestions include Guardian’s Day and Carer’s Day. -The Sunday Times

    https://www.zerohedge.com/news/2018-03-11/happy-you-day-introducing-gender-neutral-mothers-day-cards

    I have my own thoughts for cars:

    Dad – you are a tranny freeek but I still love you!

    Mom – even though you cut your dongle off and little kids stare and say ‘look at the man with titttties’ you are still my mom and I am proud of you!

    • xabier says:

      I can raise you on that FE.

      My radical feminist little sister was most disappointed by the placards at the recent Feminist Strike day in Spain reading: ‘End Patriarchal Oppression of Women!’

      As she correctly pointed out they should have read: ‘End Patriarchal Oppression of Persons Self-Identifying as Women!’

      I do not think it would be greatly to be regretted were a meteorite fall on us now. 🙂

  9. Baby Doomer says:

    Central banks are printing money as though the global economy is in freefall

    https://qz.com/754103/central-banks-are-printing-money-as-though-the-global-economy-is-in-freefall/

  10. Baby Doomer says:

    If the case against Russia is proved, charge Putin with the attempted murder of Sergei Skripal

    https://www.theguardian.com/uk-news/2018/mar/10/sergei-skripal-case-proved-charge-putin-attempted-murder?CMP=twt_gu

    Lock Him Up! Lock Him Up!

  11. Baby Doomer says:

    Oil Basics and The Limits to Economic Growth

    U.S GDP increases when oil prices are low and is flat when oil prices are high. 1986-2004 was a time of great expansion of the American economy. The average real price of oil since 2005 is 2.5 times higher than in the period 1986-2004. Even at today’s depressed oil prices, the real price of oil–$58 per barrel—is 45% higher than the in 1986-2004 of $34 per barrel.

    Economists and politicians cannot understand why the economy won’t grow but never consider the underlying cost of energy.

    Energy is the economy and oil is the master energy resource. The global economy developed when oil prices averaged $34 per barrel. When oil prices increased to more than $85 per barrel after 2005, economic growth could not continue. No business can withstand a 2.5-fold increase in underlying cost and make a profit. Although oil prices are lower since the price collapse in 2014, they are still 45% higher than in the1990s.

    Economic growth is unlikely at these underlying energy costs.

    Source: Art Berman Geologist
    http://www.artberman.com/oil-basics-the-limits-to-economic-growth/

    Source: Hamilton (2009)
    https://www.brookings.edu/bpea-articles/causes-and-consequences-of-the-oil-shock-of-2007-08/

    https://imgur.com/a/HIg8b

    • True for the US; not so much for the world. Coal is just as important. It is average price of all energy supplies that is important to consumers.

      For sellers of energy products, it is important that the oil (and natural gas and coal) prices are high enough (relative to costs). Otherwise, they soon go broke, and their governments cannot collect enough taxes. Our problem is, for the most part, prices that cannot rise high enough for producers.

    • Fast Eddy says:

      Economists don’t know about this relationship… gimme a break

      Oil price increases are generally thought to increase inflation and reduce economic growth. … Oil price increases can also stifle the growth of the economy through their effect on the supply and demand for goods other than oil.

      https://www.frbsf.org/education/publications/doctor-econ/2007/november/oil-prices-impact-economy/

      Effect of Higher Oil Prices

      https://www.economicshelp.org/wp-content/uploads/2014/10/effect-higher-oil-prices.png

      https://www.economicshelp.org/blog/1919/oil/effect-of-higher-oil-prices/

      • Fast Eddy says:

        The Impact of Higher Oil Prices on the Global Economy

        Introduction

        Recent Developments and Outlook in Oil Markets
        Current Market Conditions and Near Term Outlook
        Energy Intensity of Consumption and Production

        The Impact on the Global Economy
        The Impact on Industrial Countries
        The Impact on Developing and Transition Economies
        Major Emerging Market Economies
        Oil Importing HIPC and CIS Countries
        OPEC Countries
        Financial Markets

        Conclusions and Policy Implications
        Annex: Lessons from previous oil price hikes

        Tables

        Impact of an Oil Price Increase of $5 per barrel on Oil Exporting and Oil Importing Countries

        Permanent $5 per Barrel Increase in the Price of Oil: Baseline Scenario
        Comparison of the Baseline Scenario with Outside Simulations
        Permanent $5 per Barrel Increase in the Price of Oil: Alternative Scenario
        Emerging Markets-Estimated Effects After 1 Year of a $5 Oil Price Hike
        Selected HIPC and CIS Countries-Preliminary Estimates of First Round Effects of an Oil Price Increase and IMF Quotas
        OPEC – Preliminary Estimates of First Round Effects of an Oil Price Increase and Global Slowdown Effect
        Selected Oil-Exporting Developing and Transition Countries: First-Year Impact of a 20 Percent Increase in Oil Prices on Public Sector Revenues
        Figures

        Consumption, Production and Price of Oil, 1990 – 2001
        Crude Petroleum, Heating Oil, and Gasoline: Commercial Stocks and Prices
        World Primary Consumption of Energy, Selected Years, 1973 – 1998, and Real Price of Oil, 1970 – 2000
        Primary Consumption of Energy by Region, Selected Years, 1973 – 1998
        Prices of Crude Oil, Natural Gas and Coal
        Impact of a $5 per Barrel Oil Price Increase on Current Account Balances
        a) Oil Prices and Equity Markets: Industrial Countries
        b) Oil Prices and Equity Markets: Emerging Markets
        Yield Differential Between Nominal and Index-Linked Government Bonds
        a) Oil Prices and 10-year Government Bond Yields
        b) Oil Prices and Emerging Market Spread

        https://www.imf.org/external/pubs/ft/oil/2000/

        It amuses me these posts that paint the CBs as bumbling f789ing idiots…

        • Thanks! I don’t remember reading this one before. They were concerned about the higher prices in the year 2000, relative to 1998 and 19.99.

          This is from the conclusion section:

          The low level of oil prices in 1998 and 1999 helped reduce core inflation and support growth by allowing monetary policy in the major advanced economies to be less restrictive than otherwise. The boost to real domestic demand in the advanced economies also helped to raise real GDP in the developing world, although real demand fell there due to terms-of-trade effects. This overall result has to be tempered by the recognition that most of the crisis economies in Asia are oil importers that would have benefited from lower oil prices.

          In 2000, the increase in oil prices is estimated to have reduced growth and raised inflation, causing monetary policy in advanced economies to be tighter than in the counterfactual. These simulations also suggest that if oil prices remain close to the path currently envisioned in futures markets for a sustained period of time, the impact on growth in 2001-02 will be greater than the benefits to activity over 1998-99. It should be noted that the impact on industrial countries in this scenario is larger than in the baseline scenario, as the assumed oil price of U.S. $20 per barrel is significantly below that assumed in the latest World Economic Outlook and hence in the baseline scenario.

          Overall, these results suggest that oil price fluctuations provided some support for activity during the 1998-99 slowdown, moderated global growth in 2000 when it moved above its long-term trend, and are estimated to have a continued dampening effect on world output in 2001 and 2002.

      • That is a nice compact chart

  12. Third World person says:

    here is how sunset look from mars

    https://i.redd.it/7znlj3h971h01.jpg
    basically amazing that you can direct see how mars look like from your computer

  13. kulmthestatusquo says:

    The FIRE (Financial, Insurance, Real Estate) ‘industry’ will own everything. The rest will be just peons . People like Gates,Bezos or even Musk will be just another landowner.

    Society returns to where it was about 1800. As if the Enlightenment never took place. Simplifies things and keeps energy use to a reasonable level. The landowners can be bailed out to the umpteenth time, and it will be the hoi polloi who will be paying the debt.

    Society will reorganize into caste systems, which will make India’s current system look like a model of great social mobility.

    • jupiviv says:

      That is basically what is in place right now, except with little to no need for violence and coercion. All progress comes at the price of someone else.

      As for the “shocking” scifi Elysium nonsense you keep peddling to an empty audience here – shove it. The only landowners after the collapse will be those who can work the land and/or force others to do so.

    • djerek says:

      The FIRE industry already does own everything. The Enlightenment changed nothing except WHO was the elite class; instead of a hereditary aristocracy it’s a semi-heriditary plutocracy. Big improvement, clearly.

      After BAU ends, there will not be enough surplus production for any serious stratification, at most you will see feudal-style land-based economy.

  14. Baby Doomer says:

    Vladimir Putin: Maybe ‘Jews With Russian Citizenship’ Meddled in U.S. Elections

    https://www.haaretz.com/us-news/putin-maybe-jews-with-russian-citizenship-meddled-in-u-s-elections-1.5888887

    • Fast Eddy says:

      My my my … what have we here…..

      A direct challenge …. to the el ders…… subtle mockery…..

    • JH Wyoming says:

      Or much more likely, Russian citizens working for the KGB under Putin’s direction carried out meddling in US elections and continue to do so. In any case, Russia has never done anything to prosecute them, but if anybody in Russia does anything to challenge Putin’s rule they are either poisoned and suffer or die, or they are caught, tortured and left in prison to die or just outright killed and vanish.

      • djerek says:

        Imagine being this credulous towards US media’s fake news. Wow.

        • JH Wyoming says:

          Imagine rejecting intelligence from the FBI in favor of a President compromised by Russia. Astounding.

          • JesseJames says:

            Imagine being one of the thousands of soldiers killed in Iraq in a war based on a clearly fabricated lie! Astounding
            I gather that you were not one of them.

            • Fast Eddy says:

              Funny … I know a guy … who was frothing at the mouth of the WMD lies….

              He recently was telling me that Putin was owned by the reds…

              I asked him what evidence he had for that….

              The CIA FBI etc…. said so (and of course CNN)

              My response was — so the same organizations that lied to you about WMD

              You really cant make this sh it up…. humans are good at building ant hills and hives.. but they are very very st uuu pid…

          • djerek says:

            Imagine being so invested in partisan politics that you assume the person who calls out your stupid partisan propaganda believes the other side.

            • JH Wyoming says:

              Imagine not being able to discern right from wrong in the news you hear about because you’ve deluded yourself into all sorts of idiotic beliefs because you watch Faux news.

            • Fast Eddy says:

              I suppose you believe CNN is more credible than Fox?

  15. Mark says:

    Satire becomes reality once again.
    https://www.rt.com/news/420925-australia-qantas-words-rules/

  16. Fast Eddy says:

    I just received this from Cathay Pacific …

    Our Journey Through Time

    Every journey you took with us in the last 20 years was memorable.
    Which is why we want to share some special milestones with you.

    You’ve flown 834,889 miles since you have been with us as a member.
    Can you believe that the miles we have covered together could take us around the globe 34 times?

    I am so proud to have supported BAU by Burning All That Jet Fuel!!!

  17. Baby Doomer says:

    5 charts from the secret Brexit impact study which show the damage threatened by leaving the EU

    https://finance.yahoo.com/news/5-charts-secret-brexit-impact-011246302.html

    • Only problem–model is based on a situation where total energy supplies are much higher, so wage disparity is not a problem.

      It is based on how things were, not how things are.

      Models put together by economists cannot possibly tell the right story, because they do not understand how the world has change.

  18. JH Wyoming says:

    http://www.bbc.com/news/world-africa-43211086

    ‘Lassa fever: The killer disease with no vaccine’

    “Lassa fever is not a new disease, but the current outbreak is unprecedented, spreading faster and further than ever before. Health workers are overstretched, and a number have themselves become infected and died. The potentially fatal disease is a so-called “viral haemorrhagic fever”, which can affect many organs, and damage the body’s blood vessels. About 90 people are thought to have died so far, but the true number may be much higher, because Lassa is so hard to diagnose. Lassa fever outbreak in Nigeria 22% fatality rate.”

    • Slow Paul says:

      So much for FE’s post collapse rat stew… Mortality rate just 1 % though, I’ll take my chances.

    • Aubrey Enoch says:

      90 deaths is pitiful. We got to do better than that if we want to make any headway on this longage of people. And they keep bragging about the 50,000 drug ODs. In a year?? When we needs to trim down by six or seven billion?? 50,000 a day will take over 300 years. These techie “solutions” are exponentially deficient. I’ve already written my Congressman that they need to forget the Ebola and Lassa and “flu” and Zika nonsense and get out the tried and true method of population reduction…….. fire and steel.
      We got no shortage of resources we have a longage of people.

  19. Third World person says:

    when ever i watch this image still blowing my mind
    https://upload.wikimedia.org/wikipedia/commons/c/cb/The_Day_The_Earth_Smiled_-_Preview.jpg
    just stop for one second and think how small our earth look from Jupiter

    • Third World person says:

      and for elon musk who want to go mars
      here the video that show there is nothing in mars so why go there
      https://youtu.be/ME_T4B1rxCg

        • Fast Eddy says:

          1+1=3….. sort of….

          Decline rate slowed…. hurrah!!!

          Um…. only because they delayed maintenance…

          I am reading this as total desperation … do absolutely anything to get this oil out of the ground .. run the gear on the red line and hope for the best… because shale is also running on the red line… and there is nothing else to offset should the conventional declines not be slowed….

          The Paris-based IEA highlighted two regions for their “remarkable” improvement: The North Sea and Russia. In Norway, decline rates slowed to 9.3 percent last year, compared with 18 percent in the early 2000s. Even at deep-water projects worldwide that traditionally show a faster decline, there was improvement.

          Divided industry

          Often, the key is simply to make sure the fields pump every day of the year, reducing downtime, executives said. Producers can, for instance, postpone maintenance to keep fields running.

          “The large companies have concentrated capital spending in existing fields and that has slowed down overall decline rates,” said Roger Diwan, an analyst at consultant IHS Markit Ltd.

          The industry is divided, though, about the sudden improvement in decline rates, with Dudley and other executives admitting they can’t guarantee another good year in 2018. Some even question the veracity of the data. Others, however, agree with Shell’s Sawan that the industry now has the incentive it didn’t have when crude was at $100-plus a barrel to work harder on mature fields.

          • JesseJames says:

            Agreed, they have only temporarily delayed greater decreases. This will amplify the decrease in a short time.

            • Davidin100millionbilliontrillionzillionyears says:

              yes, the trend cannot continue…

              “According to the International Energy Agency, production from mature oil fields dropped last year by about 5.7 percent, the least in data going back one decade.”

              this is the result of billions of dollars of spending…

              yes, the least drop in a decade!

              let the good times roll…

          • name says:

            For me, decline rate is the rate at which oil extraction rate would drop, without new capital expenditure.

            • All of the information we have is with respect to decline rate, with infill drilling and with other changes to allow ongoing production. If management “quite and went home,” there would be broken equipment that never got repaired and many other obstacles to extraction. We have no idea what the decline rate would be.

      • Fast Eddy says:

        You have to wonder… if this is even real… perhaps it is CGI hopium … to enthrall the masses with dreams of colonizing Mars….

        • The Apollo landings original footage has been lost, they have got only some generation copies for TV audience left, supposedly the highest achievement of mankind, hah, go figure. When Chinese and Russians finally drop the silence (past agreements) about it, you definitely know it’s the end of BAU..

          • JesseJames says:

            Take a look at the huge Saturn booster on display at NASA Houston and Huntsville, ALabama. NASA says the design plans for the booster have been lost.
            So it could not be recreated even if we wanted to. Sounds like an excuse to spend more money doing it all over again just to generate GDP.
            I don’t believe for a minute the plans were lost. They are liars.

            • doomphd says:

              at one time, the Saturn V plans (blueprints) were stored in shipping containers at JSC. this was before digital storage. who knows, maybe they were discarded or burnt in a fire. they should have been photographed and digitized.

            • doomphd says:

              also, if you have solid models, like old parts, you can reverse engineer the boosters.

          • Fast Eddy says:

            Perhaps it never happened….

    • Yorchichan says:

      If you want to get an idea of just how insignificant you are in the scale of things, watching this video Dave Cohen once posted in DeclineOfTheEmpire.com should do the trick:

      • xabier says:

        Beautiful beyond words…..

      • JMS says:

        It was worth developing industrial civilization just to have these images, for which Galileo would certainly have given an eye, or at least his beard.
        IC will end in tears, but some of these would be for sure tears of joy before so much beauty.

        • Davidin100millionbilliontrillionzillionyears says:

          and Van Gogh probably would have given an ear…

          starry starry night, indeed…

      • Slow Paul says:

        This is a source of relief when I feel anxious about something. We are so small, we barely exist in a cosmological sense. Thus, nothing really matters.

        • JH Wyoming says:

          “This is a source of relief when I feel anxious about something. We are so small, we barely exist in a cosmological sense. Thus, nothing really matters.”

          Actually size really doesn’t matter because there is the microcosm and the macrocosm, with both offering the same; experience.

          • Davidin100millionbilliontrillionzillionyears says:

            temporary experience until the nothingness of eternal death…

            thus, Wise Paul asserts “… nothing really matters”…

            but hey, everybody, have a nice weekend!

            • jupiviv says:

              “thus, Wise Paul asserts “… nothing really matters”…”

              Except asserting that as true. Because if it weren’t, the unfulfilled unrealistic expectations which led you to assert it in the first place would matter…

              Anyway, I am having a nice weekend, and hope you are too!

            • Davidin100millionbilliontrillionzillionyears says:

              you’re still trying too hard…

              my posts don’t really matter…

              I can post true assertions…

              I can post false assertions…

              I can post multiple contradictions…

              I can post a mix of wisdom and nonsense…

              in the long run, none of them matter.

    • JH Wyoming says:

      And how small Jupiter is from Earth.

    • psile says:

      Beautiful shot. This is what I’ll miss after collapse shutters IC for good.

  20. psile says:

    All over, bar the shouting…

    A fifth of the UK population is now in poverty, a major report has revealed

    https://static.independent.co.uk/s3fs-public/styles/story_large/public/thumbnails/image/2016/04/05/18/web-child-poverty-getty.jpg

    Britain’s record on tackling poverty has reached a turning point and is at risk of unravelling, following the first sustained rises in child and pensioner poverty for two decades, a major report has warned.

    Nearly 400,000 more children and 300,000 more pensioners are now living in poverty than five years ago, during which time there have been continued increases in poverty across both age groups – prompting experts to warn that hard-fought progress towards tackling destitution is “in peril”.

    The report, by the independent Joseph Rowntree Foundation (JRF), shows that a total of 14 million people in the UK currently live in poverty – more than one in five of the population. While poverty levels fell in the years to 2011-12, changes to welfare policy – especially since the 2015 Budget – have seen the numbers creep up again.

    • Third World person says:

      still thousand times better than India poor peoples

      • xabier says:

        Yes, just relative poverty, and relative to India it is nothing.

        Where do the clothes of the ‘poor’ in the West come from? India, Bangladesh, China.

      • zenny says:

        So true It is getting better or am I just buying the MSM spin

      • psile says:

        It’s all relative, people in the west need a greater income to support themselves, as these places are expensive to live in.

    • DJ says:

      ”poverty levels – which researchers measured by the proportion of people in households with an income lower than 60 per cent of the median household income”.

      Relative poverty is a measure of relative poverty, not of poverty.

      • psile says:

        Semantics. In western countries a certain level of income is necessary to maintain social and economic presence. The numbers of people in the west who are falling below this threshold are increasing every day as the pressures we constantly refer to on OFW continue to mount. And we haven’t even seen the next stage in collapse, which is likely to be the one that lands industrial civilisation in the hospice.

        • DJ says:

          No, relative poverty is flawed.

          If real wealth doubled and was distributed proportionally relative poverty wouldnt change.

          If real wealth would half but disparity would decrease somewhat, relative poverty would decrease.

          • psile says:

            The scenario of increased Koombaya sharing in an entrenched period of decline is about as likely as a week with two Tuesdays. Those who already have more will just take more of the shrinking pie to sustain their doomed lifestyles. We are already witnessing this as a policy response amongst western nations, which will inevitably lead to collapse or revolution, perhaps both.

    • Artleads says:

      Poverty may have a fair amount to do with education, status, cultural expectation. My experience suggests that, in each case of (perceived) poverty, small improvements go a long way. I also think government expenditure need not be based on equality but more on strategic management of expectation, power to disrupt, and other issues having to do with stability and order. In First World countries, and perhaps counterintuitively, the community to address first is that of poor white men.

      • Davidin100millionbilliontrillionzillionyears says:

        “Poverty may have a fair amount to do with education, status, cultural expectation.”

        yes, in particular cases in a population supported by large amounts of FF…

        but in the situation of the UK, their energy resources are swiftly vanishing…

        “Relative poverty is a measure of relative poverty, not of poverty.”

        the UK is headed for more “relative poverty” AND more out ‘n out downright absolute India-like poverty.

        • xabier says:

          The coal miners of China die in their thousands to produce the power which makes it possible to manufacture the cheap products that maintain the illusion of prosperity in Britain, and all of the West….

      • psile says:

        Don’t you know? White men are privileged according to social “progressives” who dominate the cultural discourse in most western countries. 😉

      • zenny says:

        I Go with IQ and enough food…In all my travels I have found smart people with a full belly are happy…Exceptions exist but do not want to dox

    • There is currently a controversy that I haven’t been able to look up online, so I may not have the details correct. The percentage of students of different races included in various special education programs varies greatly by race. There has been some recent pressure/program/legislation to try to change this situation.

      There was an editorial in the WSJ by a black man, protesting this proposed (?) change. His view was that these students are receiving special help. It is not right to take black students out of this program, just because they are over-represented. I suppose it would save money for school systems, however.

      • JH Wyoming says:

        Statistically there is a high probability that one race or another will be either under or over represented, and therefore it should be based on qualifications as an individual only.

  21. Davidin100millionbilliontrillionzillionyears says:

    https://www.cnbc.com/2018/03/09/california-bullet-train-costs-soar-to-77-billion-opening-delayed.html

    “The projected cost of California’s bullet train from San Francisco to Los Angeles has jumped to $77 billion and the opening date has been pushed back four years to 2033, according to a business plan released Friday…

    How to pay for the entire project remains “uncertain,” Kelly said.”

    I bet this “project” is not finished by 2033…

    since I doubt it will ever be finished…

    something’s gone wrong!

    (tonight’s theme)…

    • Kurt says:

      Elon will finish it. That project needs him. He’s a visionary. Who is he dating these days?

    • If the world economy is not running well in 2033, where would all of the replacement parts come from? How long would it last?

    • zenny says:

      Meh 77 Lets call it 144 billion is just chicken feed for the LA crew. Anyone notice the streets of San Francisco smell like poop.

    • JH Wyoming says:

      It’s disconcerting how short a memory the state govt. of CA is. Not long ago it was deep in debt, then raised taxes and is still having trouble balancing the budget, yet it runs off on an endeavor that will cost an estimated 77 billion?! When the SF bay area was building BART (bay area rapid transit) their estimates continually kept increasing over the years. It’s the oldest game in the book to underestimate jobs to get approval then act surprised later when they increase by massive amounts. I wouldn’t be surprised if the bullet train eventually cost 350 billion.

  22. Davidin100millionbilliontrillionzillionyears says:

    50 years ago:

    https://www.wsj.com/articles/how-kubricks-2001-a-space-odyssey-saw-into-the-future-1520609361

    “Although the film’s vision of humanity expanding throughout the solar system proved overoptimistic, its portrait of a screen-based, technology-mediated future now seems almost uncannily accurate…”

    overoptimistic?

    so like, where are those vacations to a moon colony?

    and human travel way beyond the orbit of Mars?

    something’s gone wrong!

    • Baby Doomer says:

      You can’t live on Mars because the cosmic rays will fry your brain and cause chronic dementia and paranoia. And the technology and logistics haven’t advanced far enough either. (Limoli, 2016) (Do, 2016)

      https://news.uci.edu/2016/10/10/mars-bound-astronauts-face-chronic-dementia-risk-from-galactic-cosmic-ray-exposure/
      http://www.sciencedirect.com/science/article/pii/S0094576515004294

      • the symptoms you give make it sound much like living on earth

        but on a more serious note—space travel/colonisation is ”illogical” because it can only be created and supported by an industrial ‘earth system’ to begin with.

        thus you have 2 limiting factors

        1—-earth industry, ie what we have right now can exist only so long as fossil fuels remain available

        2—– the means of long distance space travel do not exist, have not been designed, or the basic concepts been concieved—ie motive power, suspended animation, shielding, destinations etc

        then there’s the third biggie—supposing a planet existed that could support human life independently, ie breathable atmosphere, has it not occurred to anyone that such a place would already have existing life forms who might not be overjoyed to see us?

  23. Baby Doomer says:

    The latest jobs data suggest wage gains aren’t any bigger than they otherwise would be

    https://www.bloomberg.com/view/articles/2018-03-09/are-tax-cuts-driving-raises-it-s-hard-to-see-in-the-jobs-report

  24. Fast Eddy says:

    Collapse almost arrived prematurely….

    I was riding on a quiet back road today – one ear bud in listening to Peterson’s book (sadly it is sh.tty…. the good thing about Audible is if you don’t like a book you can exchange so long as you don’t finishit)….

    And….. an SUV is coming in the opposite lane… and I can hear a big truck coming up behind me… the SUV suddenly stops — the truck roars through 10cm from my elbow… the slightest move to the right and I am done…

    I jumped off the bike after the truck passed put up the universal signal for f789 you …. hoping he would see me in his mirror and stop and we could have a friendly chat … but of course he was a f789ing coward… no doubt some fat f789ing pc of lowlife sh it …

    I will say a prayer tonight hoping that this pr ick contracts a very painful form of lingering cancer… or that one of his children gets run down by a drunk….

    • Dennis L says:

      FE, that is because you are riding on the wrong side of the road. It doesn’t happen that way when you do it right.
      Rest well, all is well that ends well.

    • xabier says:

      There would be considerable irony in travelling so far only to get squished on a New Zealand back road by a motorised moron…….

    • Mark says:

      Were you wearing a helmet?

    • Kanghi says:

      Oh my, you barely avoided the embraze of Mictecacihuatl. Fast, have you added to your e-testament some last mock to out delusistanis, in case she manages to have premature last dance with you?

  25. CTG says:

    Gail, just out of curiosity, any comments?

    http://dailycaller.com/2018/03/08/kennesaw-georgia-gun-ownership-cnn/

    • The gun law is well known around here. My address is Kennesaw, but I don’t live in the city limits of Kennesaw, so even in theory it doesn’t apply to me.

      According to Wikipedia,

      Kennesaw is noted for its unique firearms legislation in response to Morton Grove, Illinois’ law mandating gun prohibition. In 1982 the city passed an ordinance [Sec 34-21]:[21]

      (a) In order to provide for the emergency management of the city, and further in order to provide for and protect the safety, security and general welfare of the city and its inhabitants, every head of household residing in the city limits is required to maintain a firearm, together with ammunition therefore.

      (b) Exempt from the effect of this section are those heads of households who suffer a physical or mental disability which would prohibit them from using such a firearm. Further exempt from the effect of this section are those heads of households who are paupers or who conscientiously oppose maintaining firearms as a result of beliefs or religious doctrine, or persons convicted of a felony.

      To some extent, I think the gun law was a joke. If Morton Grove hadn’t outlawed them, Kennesaw wouldn’t have required them. As you can see, there are enough loopholes that no one is really required to own a gun. There is no enforcement of this strange law.

      Guns are very prevalent in Georgia, however. I checked to see if I could find a map of gun ownership rates by state. The closest thing I could find was gun death rates by state (mostly suicides). Georgia is 17th out of 50 states in death rates at 14.9 per 100,000. The highest state is Alaska, at 23.0 per 100,000. The lowest rate is in Massachusetts, with 3.4 deaths per 100,000.

      In general, very urban states have low rates of gun deaths (and, I would guess, gun ownership). People who live in areas where they feel like they are likely to be attacked by wild animals have high gun ownership rates. We have wild bears in Georgia.

      • CTG says:

        Thanks…… Just out of curiosity only…. Guns have divided America and actually split the country into many pieces…

        • djerek says:

          The difference in opinions and sharp divide on guns is a symptom of the cultural divide in America, not the cause of it.

      • i understand the Swiss follow a similar gun ownership requirement

        very many years ago, an acqaintance of mine married a swiss man much older than herself, who had a son of her age

        when he found them in bed together—he shot her

        so it’s not just a USA problem

        • xabier says:

          I had no idea that the Swiss could rise to such heights of passion.

          At least the lady died doing what she liked best, like a mountaineer falling off a cliff face.

          • she was a bit notorious in that respect

            she was my ex boss’s wife—he killed himself too before that happened—they were both bonkers
            a year working for him convinced me to go self employed

      • grayfox says:

        There are legitimate threats to one’s health which might be warded off with a gun in Georgia, but most are of the 2-legged variety. There are no recorded attacks or fatalities caused by wild bears in Georgia. They are timid animals and want no part of human encounters.

        https://www.myajc.com/lifestyles/environment/myths-cause-undue-fear-black-bears/X3v1QMRSQ5LNztuY6PUChL/

        We have cases every spring here in upstate NY where bears enter villages and towns desperately seeking food after awakening from hibernation. They raid garbage cans and bird feeders…then sometimes seek refuge in a tree and are reported. It often ends badly for the bear.

        • I agree. We aren’t gun owners.

          There seem to be a lot of people who feel guns will solve problems of all sorts. Churches here need to have signs up, “No guns permitted.” Otherwise, people are allowed to bring guns to church with them. Sort of bizarre.

          • JesseJames says:

            My pastor open carry’s his pistol while preaching. Not bizarre at all. I feel much safer knowing a criminal cannot easily come in and create mayhem.

            • My father was a psychiatrist in his later years; my only brother is one now. There are too many nuts running around in the world to have all of these guns available. Too many get into the hands of children or are used for suicides.

            • Fast Eddy says:

              I suspect that these school shootings are generally motivated by bullying… is it wrong for a bullied adolescent to open fire on the bullies?

              Especially when the shooter is not deserving of bullying i.e. he is just not in the ‘in’ crowd and therefore is mocked relentless by Chelsea and Maddox and their friends?

            • Fast Eddy says:

              Catholic priests probably should carry guns at all times… young boys grow up … and they often have guns

    • Kurt says:

      Stupidity… back to the storage container or at least get better links.

      • Davidin100millionbilliontrillionzillionyears says:

        • Kurt says:

          Awesome. Maybe FE is living the good life in his container and we just never knew it. One man’s container is another man’s luxury home. Just ask Keith. I miss him, so much…

        • JH Wyoming says:

          Some of those are very expensive homes. The interior on one just in that one container would be $30,000 easy. If it has wall to wall shelving that is high end wood finish it’s not cheap. I’d love to see the final costs of those. One was built with 14 containers. How much was it just for the containers? That type of construction is some cases is high end architecture, which adds a lot to the cost.

          There really isn’t anything cheaper to build than a 3 bdrm, 2 bath out of wood. It doesn’t even take that long and the benefits include lots of insulation. The trusses are delivered on a truck with a crane and set in one day.

        • JesseJames says:

          I hear east Austin has some “container” bars. They are considered very “ chic”. It must be the green aspect. They are steel being recycled into a place to drink.
          BTW on my recent airline flight, the flight attendants announced the airline supports recycling. Anyone who wanted to get rid of magazines or plastic bottles was encouraged to give it to them since it would be recycled.
          That was said while we are burning through thousands of gallons of fuel for the flight.
          I felt much better knowing a couple of plastic bottles would be recycled.

          • Fast Eddy says:

            I can just imagine my next flight on CX … welcome back sir — nice to see that you are adding to your 34 trips around the world with us — can we help you with recycling that newspaper?

      • Fast Eddy says:

        Context… the scenarios depicting in that clip … will seem like Utopia … when BAU ends….

    • zenny says:

      As bad as that is Compare it to places like Detroit and Chicago or Ferguson

  26. Energy^2 says:

    James Watt took 50 years to double the parts-count of Newcommons earlier steam engine (to date, the best of brains are still researching why the Javons Paradox, overlooking all the energy saved by efficiency was actually expended upfront when making the engine).

    It took Newcommons hundred of years to utilise earlier inventions that have seeded for the steam engine (the link below)

    Designs are ENERGY and TIME. Because living plants are older than humans, brought to perfection by nature at quantum level and that is at <=2% efficiency, people still unable to grasp the point, and far from understanding why FF reserves are disappearing so fast, mostly building more James Watt's engines and throwing them in junkyards by the minute.

    http://www.1001inventions.com/devices

    • Kurt says:

      Um, what are you talking about? I honestly have no idea. On the other hand, I think I would like some of whatever it is that you are smoking. If you have some type of coherent point, please make it or just stop posting. Good grief.

    • Davidin100millionbilliontrillionzillionyears says:

      “… people still unable to grasp the point, and far from understanding why FF reserves are disappearing so fast…”

      I suppose that most people know why they are going so fast…

      because we’re burning oil at about 90 million barrels per day…

      that’s about 3.5 billion gallons per day…

      about half a gallon per capita…

      it powers IC… it’s great!

      burn, baby, burn.

  27. Energy^2 says:

    While many companies filled Powerpoint slides with the competitive advantages of lower costs, their business sank due to the impossibility of generating returns above the cost of capital and the evidence of death by building working capital.

    This is classic but never explained at the root cause. It was better saying, ‘green’ energy devices generate way too less energy than the total energy put into building them. Given sunshine and wind are free of charge, ‘green’ companies should been seen no less than money-printers, not applying for bankruptcies whenever their debt raises to the level of a GDP of many nations!

    Green energy is a financial operation, never about saving energy.

    Who has also unintentionally benefited from the operation, though?

    Browse the Internet and you’ll find an impressively growing groups in the 2nd-tier-world starting installing and running solar water pumps and many others. These groups and individuals are not responsible for the energy-deficit solar panels based on. They simply find [the hugely subsidised-at-origin] solar panels on the market and they use it.

    Keep hoarding good-quality solar panels in your basement. They are much better investment than any other, owing to the colossal energy involved building them yet their prices today forcefully depressed by FF ‘price-fixing’ schemes, seriously.

    “The End of Cheap Debt Will Bring a Wave of Bankruptcies”
    https://mises.org/wire/end-cheap-debt-will-bring-wave-bankruptcies

    • HideAway says:

      I have 5Kw of solar panels on the roof of my house. They have been there for 7 years and generated over 32Mwh of electricity. There are 27 x 190w panels. The total weight of them is 432kg @16kg each. Including racks, about 1/2 tonne overall.

      We still sometimes get over 5Kw of production out of these panels despite the degradation in output over time.
      From figures obtained around the web, it takes about 4200Kwh to make a tonne of flat glass. Glass makes up about 50% of the total weight, so that is only around 1Mwh for the glass on our panels.
      Overall….
      “For a typical 2 kWp rooftop system, the energy payback time is 2 to 3 years using multi‐crystalline modules and more than 7.5 times the energy used in its manufacture is generated over a 20 year life.”

      I’m not able to find ANY figures that dispute the energy payback of solar panels is positive. I do however see many statements that say the reverse, but are never backed up numerically.

      BTW, I also agree that solar nor wind can power the future, as the sheer size needed to counter FF is truely massive, plus there is simply not enough copper available, before we even get into intermittancy.

      • greg machala says:

        Just having the solar panels is pretty useless without something to power. A light bulb? A water pump? Certainly not an EV. Solar panels are add-ons to our current fossil fuel based infrastructure. They are not a replacement for anything. I’d rather have a propane cannister and a coleman stove than a solar panel or wind turbine. Much simpler and more reliable.

        • Fast Eddy says:

          100%!!!!!!!!!!!!!!!!!

        • MG says:

          When you are poor, you do not mind about the high-tech. You care just about the basic needs. Some wooden sticks for fire have greater value for you than the newest smartphone.

      • NikoB says:

        Add to that the taxes paid by the company, the infrastructure used to mine, manufacture and deliver etc, the education of all involved, the eventual replacement of all equipment to mine, refine, manufacture and deliver. Add in batteries or grid connection infrastructure. The panels have to pay all that back and then give you energy to use.
        I wonder whether it is close to really doing so. one huge storm and the installation is wiped out = bad investment.

      • DJ says:

        32 Mwh electricity is what? About $5 000 heavily taxed no-effort.

  28. Baby Doomer says:

    JP Morgan warns of ‘deep correction’ for stocks totaling as much as 40% over next few years

    https://www.cnbc.com/2018/03/08/jp-morgan-co-president-warns-of-deep-correction-for-stocks-totaling-as-much-as-40-percent.html

    • Davidin100millionbilliontrillionzillionyears says:

      I have been warning of a deep correction also…

      where stock values drop 100% by the year 2050.

  29. Baby Doomer says:

    The Latest Victim of the Retail Apocalypse May Take Your Teenage Memories With It

    http://fortune.com/2018/03/09/claires-bankruptcy/

  30. Baby Doomer says:

    I added a few more charts to this collection

    https://imgur.com/a/OB1w6

    • There actually are graphs, if you click on the image. Just too many for it to pick one.

      • Davidin100millionbilliontrillionzillionyears says:

        the second or third graph shows that the GDP of Japan and Europe have also tanked along with the USA…

        they are also “fake economies” along with the USA…

        being a “fake economy” is a great trick…

        most of the workers can be in services and not have to do the hard labor of farming and factory work etc…

        as many have said in the past, this is because FFs are such great energy sources and add many “energy slaves” to the productivity of blue collar workers…

        without FFs and the resultant energy slaves, almost all workers would be hard-laboring blue collar workers…

        I am very thankful that I live in this “fake economy” here in the USA.

        • Third graph is right. Allows leaders to talk about how little fossil fuels they now use, per $ of GDP.

        • Baby Doomer says:

          Don’t worry David when we run out fossil fuels we will all just go back to riding horses again. And there will be a great new job opening up for you “Shoveling Shit” out of the street all day…So get ready to work from sunrise to sunset to earn your daily government food rations…Only two rules…”NO COMPLAINING” and “NO DRUGS”….. /s

  31. Baby Doomer says:

    The Global Economy’s Wile E. Coyote Moment
    Economies and markets may already be plunging off a cliff.
    https://www.bloomberg.com/view/articles/2018-03-09/the-global-economy-s-wile-e-coyote-moment

    https://imgur.com/a/mG6qf

    • JH Wyoming says:

      https://www.thebalance.com/what-is-the-gdp-growth-rate-3306016

      “The GDP growth rate measures how fast the economy is growing. It does this by comparing one quarter of the country’s gross domestic product to the previous quarter. GDP measures the economic output of a nation.

      If it’s contracting, then businesses will hold off investing in new purchases. They’ll delay hiring new employees until they are confident the economy will improve. Those delays further depress the economy. Without jobs, consumers have less money to spend. If the GDP growth rate turns negative, then the country’s economy is in a recession. With negative growth, GDP is less than the quarter or year before.

      Contraction happened most recently in late 2008 and early 2009. U.S. GDP growth was negative for four quarters in a row. The last time this happened was during the Great Depression.”

  32. Third World person says:

    sent liberal and alt right and they will get out less than in 24 hours

    • Fast Eddy says:

      Liberia is where some former slaves were sent — who immediately enslaved the indigenous people…

      Kinda like how the beaten J ews .. beat the Palestinians….

      There is no Koombaya.

  33. jupiviv says:

    Saw this article in the ponziworld blog:

    https://oilprice.com/Energy/Energy-General/IEA-Predicts-Nightmare-Scenario-For-OPEC.html

    “Over the next three years, the U.S. will cover 80 percent of the world’s demand growth, the IEA says in its newly-released Oil 2018 annual report. Canada, Brazil and Norway will cover the remainder, leaving no room for more OPEC supply.”

    The irony is that the substantial gains in output from shale will only be possible because of the OPEC cuts, which has tightened the market and boosted prices”

  34. MG says:

    The popularity of angels: I can percieve that in the Catholic Church, the popularity of the angels is on the rise (e.g. the new priest we have now, introduced a prayer to Michael Archangel after the end of the Mass, another priest that I know, who serves in the area that undergoes the advanced stages of the depopulation, has got some big wooden statues of angels around his church which where made during the term of office of his predecessor and look more like pagan symbols). Are angels not the representants of both the energy and the declining population?

    https://vladimircuvala.files.wordpress.com/2018/01/d17_06596.jpg

    Source: https://vladimircuvala.com/2018/01/07/o-troch-anjeloch-stozok/

    I would say so: if the system and the population are imploding, you need some human-like help…

    • xabier says:

      Christian totem poles….

    • Perhaps we need a few angels to help. You are right.

    • Kanghi says:

      MG, not only in Catholic world, seems like angels are in demand in Lutheran world too, I think smaller benevolent beings are easier and more personal to believe in, than distant God.

      • MG says:

        The current president of Slovakia, who got rich providing consumer loans, founded the charity named “Good Angel”. The talk-show named Guardian Angels, broadcasted by the Slovak state television, has been for many years one of the stable parts of its programme… The people really need and want some human-like helpers in the imploding world…

  35. Harry Gibbs says:

    ““A FOOL’S bargain.” That is how Idriss Déby, Chad’s president, now describes the state oil company’s decision to borrow $1.4bn from Glencore, an Anglo-Swiss commodities trader, in 2014. The loan was to be repaid with future sales of crude, then trading above $100 a barrel. But two years later, as the price dived, debt payments were swallowing 85% of Chad’s dwindling oil revenue.”

    https://www.economist.com/news/middle-east-and-africa/21738410-unfortunately-keenest-borrowers-are-also-feckless-spenders-increasing-debt

  36. Trousers says:

    Scientists claim they are close to producing energy from nuclear fusion.

    https://www.theguardian.com/environment/2018/mar/09/nuclear-fusion-on-brink-of-being-realised-say-mit-scientists

    • DJ says:

      Help a non-native english speaker. On the brink is closer in time than just around the corner, right?

      • xabier says:

        Yes, it’s when one is just about to plunge in with the smallest movement or change of position. But not inevitable, as one can pull back form the brink.

        ‘Round the corner’ is foreseeable, and most probably quite soon.

        • DJ says:

          So if fusion has been just around the corner for 50 years we are now somewhat closer?

          • Trousers says:

            If the article is to be believed, we’re progressing around the corner but I don’t think it’s right to say, with 15years development remaining, that we’re near the brink yet.

          • Duncan Idaho says:

            Like the speed of light, it is a constant, always 20 years away.
            1950 or 2018, it will be 20 years away.

      • you understand english idiom very well

        you even get irony—which makes you an honorary native—congratulations

      • though you walk round corners but get pushed off brinks—nitpicking

    • Greg Machala says:

      Sounds good. Can the financial system hold together 15 more years? Will energy producers remain solvent 15 more years? Will the electric grid hold together another 15 years? Let’s assume there is a working commercial example of this fusion technology in 15 years – how exactly does this “save us”? Does it instantly replace the current electricity generation? Or, do we need more fossil fuel energies to build out a new infrastructure to run on electricity? How much longer will that take? Do we them “promise” to kick the fossil fuel habit when the last reactor is built?

      I just don’t think there is a replacement for fossil fuels. We can supplement them but replace them…I don’t think so.

    • JesseJames says:

      The $30B ITER fusion reactor currently being built in France will run for 30yrs and never generate a single kw of electrical power. It is a fusion test bed. Any talk that we are close on fusion power is hopium.

  37. Fast Eddy says:

    I’ve just watched this … for the second time … US involved in covert ops in 70 countries!!!

    Anyway…. I like Jeremy Scahill… but he really does not get it… he is out of his depth…. he does not understand how the world works… he does not recognize that these ‘vile’ actions taken by the US… are what allows him to live as he does — and not like the Somalians depicted in this documentary…

    He is – like most people — deeply in cognitive dissonance…

    If I had it all to do over again … and I had the knowledge and wisdom that I know have… I think I would like to be a JSOC operative… that sounds like FUN!

  38. milan says:

    It is imperative for all to get and read Catherine Austin Fitts free report on pensions found here.
    https://pension.solari.com/2018/02/22/pension-funds/

    • Catherine Austin Fitts thinks that in theory our pension problem is fixable. I don’t. It is basically an energy problem. Most of these funds were started when growth in energy consumption was very much higher–1960s and 1970s. Actuaries looked at past history, and assumed growth would happen forever. When growth hasn’t happened, regulators have given pension plans many years to “catch up.” The problem, of course, is that all securities are promises of future energy supplies and the goods that they can make. Those future energy supplies won’t really be available. But actuaries didn’t know that at the time. They looked to economists, and they didn’t know better either.

      • it would seem impossible, even when dealing with otherwise smart people, that future money represents future energy—and that without that future energy, future money will effectively be worth nothing

        • I was trying to think about how to write a post to explain the issue, but it is hard to explain the problem simply enough to prevent readers from getting to a “my eyes glaze over” stage.

          It is becoming clearer to me that everything is energy. At the smallest level there is a wave-particle duality. https://en.wikipedia.org/wiki/Wave–particle_duality

          We have energy coming from the sun, and we have stored up energy from the sun in the form of fossil fuels, plus a few other kinds of energy. Food is one of the kinds of stored energy from the sun; so is biomass that is burned for its heat energy. Food and burned biomass represent short-term stores fo energy.

          We then have large number of dissipative structures that use this energy and stored energy. Wind turbines are such dissipative structures. So are coal fired power plants. Houses are dissipative structures, as are vehicles. Humans are too. Plants and wild animals are as well. Humans who are well educated in some sense embody a great deal more of this stored energy, compared to those with little education. Odum with his Transformities wrote about the energy embedded in higher levels of education. Charles Hall lost this with his EROEI.

          We use these dissipative structures to operate our economy. One problem is getting enough energy operate all of these dissipative structures, and to replace old ones that are wearing out. Another problem is the entropy that dissipating all of this energy creates. The economy must constantly put forward promises of future goods and services (made by future energy output) in order to pay today’s workers for their labor in making goods and services that have greater value than the value of the raw material put into them. A third problem is the pollution problems that dissipating all of this energy produces. A fourth problem is the wage disparity that occurs, when there is not enough energy to go around/

          One of the issues is the “cost” of producing energy products must be keep sufficiently low for the whole system to operate. If too much of the output of the system is put into creating energy products, there will not be amounts for producing other goods and services. It is hard to easily separate these costs out.

          Those looking at EROEI have said we can look at Energy Out/Energy In, where Energy In is basically only fossil fuel energy, measured in a very simple way that only distinguishes quantity, not quality. I don’t think that this gets us where we need to be. It is a lot like looking at tops of icebergs, where much of the energy “cost” is hidden and ignored. Different energy products have more hidden costs than others.

          Instead, we need to look at a much broader view of Energy In, that includes the cost of government (for roads, schools, some healthcare, etc), wages of humans with different levels of education, cost of interest expense, and many other costs (lease costs, for example).

          The best measure we would seem to have is the unsubsidized cost of making energy products. But this is hard to even figure out.

          Price is an approximation to cost, but it can fall below the level of profitability.

          EROEI can be just plain misleading, especially when it is used to compare intermittent renewables to fossil fuels. It leaves out way too much. It stops at the level of the solar panel or the wind turbine, without considering the batteries needed to back up the system.

          • Artleads says:

            How does a building dissipate energy?

            • doomphd says:

              A/C, lights, ventilation, elevators, escalators, pumped water, waste elimination via plumbing, solid waste removal, minor repairs to major renovations.

            • the same way you dissipate energy

              by taking in energy in the form of food, then working your body in various ways to assimilate that food, to make your body systems function, and radiate heat out, then disposing of what you dont need as waste

              oh—and keeping the trillion or so bacteria alive who depend on you for their food supply—they gotta eat too remember

            • Artleads says:

              I was thinking of the building itself and not the uses it was meant for. Two slightly different things. Many buildings have power links shut off and just sit vacant. Dust and microorganisms will dissipate such buildings’ energy, I suppose. Paint and adhesives break down, whether or not that is called dissipation.

          • Sven Røgeberg says:

            I was thinking of ordering the book from Charles Hall https://www.amazon.com/Energy-Wealth-Nations-Understanding-Biophysical/dp/1441993975
            Or is one of H.T Odums books a better choice? For example 2007, Environment, Power and Society for the Twenty-First Century: The Hierarchy of Energy, with Mark T. Brown, Columbia University Press?

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