Our Latest Oil Predicament

It is impossible to tell the whole oil story, but perhaps I can offer a few insights regarding where we are today.

[1] We already seem to be back to the falling oil prices and refilling storage tanks scenario.

US crude oil stocks hit their low point on January 19, 2018 and have started to rise again. The amount of crude oil fill has averaged about 365,000 barrels per day since then. At the same time, prices of both Brent and WTI oil have fallen from their high points.

Figure 1. Average weekly spot Brent oil prices from EIA website, with circle pointing to recent downtick in prices.

Many people believe that the oil problem, when it hits, will be running out of oil. People with such a belief interpret a glut of oil to mean that we are still very far from any limit.

[2] An alternative story to running out of oil is that the economy is a self-organized system, operating under the laws of physics. With this story, too little demand for oil is as likely an outcome as a shortage of oil.

Oil and energy products are used to create everything, even jobs. If all humans have is energy from the sun, plus the energy that all animals have, then humans would be much more like chimpanzees. All humans would be able to do is gather plant food and catch a few easy-to-catch animals (earthworms and crickets, for example). They certainly could not extract oil or find uses for it.

It takes a self-organized economy to support the extraction and sale of energy products. We need a complex web that includes:

  • Equipment to extract the oil
  • Training for engineers and other workers
  • Devices that use oil, such as vehicles, farm equipment, road paving equipment
  • A financial system to enable transactions to purchase oil
  • Buyers with jobs that pay well enough that they can afford to buy goods made with oil

The things that go wrong with this economy can be on the buyers’ end of the economy. Buyers can have jobs, but these jobs may not pay well enough for the buyers to afford the output of the economy. A falling share of the population may be able to afford cars, for example.

[3] It is possible that a recent rapid increase in oil supply is contributing to the current mismatch between supply and demand. 

Data of the US Energy Information Administration indicates that US oil supply has recently begun to surge. It is not just crude oil production that is higher. Natural gas liquid production is higher as well. As a result, Total Liquids production is reported to have been more than 16 million barrels per day in November 2017.

Figure 2. US Liquids Production, based on International Energy Data provided by the US EIA.

Oil production of the rest of the world has been relatively flat, as planned.

Figure 3. World excluding the US oil production by type, based on EIA International Energy data through November 2017.

Total world production, combining the amounts on Figures 2 and 3, set a new record of 99.1 million barrels of oil per day for November 2017, based on EIA data. This level is above the November 2016 level, which was the previous record at 98.9 million barrels per day.

At this high level of production, it is not surprising that the economy cannot absorb the full amount of extra supply.

There are also a number of issues that affect buyers’ demand for oil.

[4] The percentage of US residents who can afford to buy a new automobile or light truck seems to be falling over time. 

If we look at the number of autos and trucks sold in the US, per 1000 population, we see a pattern of falling humps, as a smaller and smaller share of the population can afford a new car or light truck, each year. The big drops occur during the gray recessionary periods marked on the chart.

Figure 4. Figure showing US Passenger Cars and Light Trucks Purchased per Year per 1000 Population. Original graph by FRED (Federal Reserve of St. Louis). Retitled by author, because units were confusing on original chart.

The first peak came in 1978, at 67.3 units. The second, slightly lower peak came in 1986, at 66.7. The third peak came in 2000 at 61.5 units. The fourth peak came in 2015, at 51.6 units. Early 2018 amounts suggest that the trend in units sold per 1000 population will continue its downward trend.

Part of what is happening is that vehicles are becoming longer-lasting, so that there is not as much need to buy new cars frequently. But having a short-lived, cheap car has an advantage, if it makes cars available to a larger percentage of the total population. With a vehicle, a person has a much better ability to participate in the US workforce. US Labor Force Participation Rates peaked in about the year 2000, which is about the time of the third peak in affordability.

Figure 5. US Labor Force Participation Rate. Chart by FRED (Federal Reserve of St. Louis).

[5] There was a steep rise in the cost of auto ownership in the 1995- 2008 period. This has since fallen back, but the cost is still high relative to the wages of many workers.

One estimate of the cost of auto ownership is the reimbursement rate that the US government allows businesses to pay workers who use their own cars for company business.

Figure 6. Auto reimbursement rates as compiled on this list. Amounts shown on “As Stated” basis, and also at the 2017 cost level, based on CPI Urban.

These costs peaked about 2008 and were reflected in high reimbursement rates for 2009 as well. More recently, buyers of cars have been helped by longer term loans and ultra-low interest rates. If interest rates rise at all, the share of people buying or leasing new vehicles can be expected to fall further from the level shown on Figure 4.

[6] Building homes also requires oil. There has been a sharp drop in US home building, both on an absolute basis, and on a per capita basis, since 2008.

Figure 7. US Housing Units Completed, related to US population. Population from Census Bureau; population from UN 2017 population summary.

Building homes is part of oil demand. It takes oil to transport all of the materials used (lumber, siding, wiring, pipes, appliances) to the place where the house will be built. Furthermore, many of the materials used in building a home are produced using petroleum products.

The number of homes built depends on the number of new households that can afford a separate place to live. The low level of building makes it look as if the economy is still seeing a pattern of young adults living with their parents much longer than in the past. If buildings are to be replaced every 75 years, my calculation suggests that about 6 housing units per 1000 residents need to be built each year. About 2.5 units per thousand are needed, just to keep up with rising population, if upgrading and remodeling can be done almost indefinitely.

The fact that there is little home building reduces the number of jobs available in the building industry. The lack of jobs in this industry helps hold down the demand for oil, because these workers would use their wages to buy goods for themselves, such as food and vehicles. Food is grown and transported using vehicles powered by oil.

The lack of home building also contributes to the nation’s homelessness problem. If there were plenty of inexpensive apartments, there would be fewer homeless people.

[7] There is no longer an oil price at which both oil exporters and oil importers are satisfied. Oil prices today are too low for oil exporters.

I started writing about oil producers complaining that oil prices were too low in early 2014. At that time, oil companies were looking back at prices of over $100 per barrel in 2013. They were saying that $100+ prices were too low to provide adequate funds for reinvestment in new fields. Now prices are in the $65 range, which is even farther below the desired level.

Oil exporters are especially unhappy about today’s low prices, because they need high prices in order to collect needed tax revenue. This is why OPEC members and Russia have been holding back production. The plan is to deplete the glut of oil in storage, and thus get prices up.

It is not at all clear, however, that consumers in oil importing countries can really withstand higher prices. The fact that Brent oil prices could only stay above $70 per barrel for one week on Figure 2 (in the red circle), suggests that consumers in major oil importing countries cannot really withstand oil prices at this high level. I have observed previously that a sustainable price, without adding a huge amount of debt each year, is only about $20 per barrel.

[8] If we analyze vehicle purchases by country, we can see that low oil prices since 2014 seem to be helping major oil importers but are hurting Tier 2 countries that are commodity-dependent.

Figure 8. New vehicles (private passenger and commercial combined) purchased per capita for selected groupings of countries. Amounts shown are from OICA estimates by country.

In this chart, the grouping of Advanced Economies includes:

  • USA
  • Europe
  • Japan
  • Canada
  • Australia

For this grouping, growth in auto sales is again rising, but has not regained its prior level. This is somewhat similar to the indications in Figure 4, for the US only, looking at cars and light trucks. The main difference is in the last two years. Changes in currency relativities may be helping recent vehicle sales for the other countries in the grouping.

On this chart, the Tier 2 grouping includes:

  • Brazil
  • Russia
  • South Africa
  • South Korea
  • Malaysia
  • Mexico

This group includes several oil and other resource dependent countries. South Korea is perhaps more like the industrial countries in the first grouping. This grouping shows a downturn in the purchasing of vehicles in the last three years, when commodity prices have been depressed. If oil prices were higher, this group would probably be buying more vehicles.

Figure 8 shows that China’s auto sales have been growing rapidly. In fact, China has surpassed the Tier 2 average in per capita sales. In the past year, China’s growth in auto sales has flattened. But with China’s huge population, the absolute number of vehicles sold is still very high: 29.1 million vehicles, compared to 17.6 million for the United States, and compared to 20.9 million for Europe.

India and the Rest of the World account for surprisingly few vehicles sold. On Figure 8, their lines overlap at the bottom of the chart.

[9] The push toward raising interest rates and selling QE securities will tend to reduce oil prices and add to the oil glut.

I wrote about some of the issues involved in Raising Interest Rates Is Like Starting a Fission Chain Reaction. When interest rates are higher, economies are pushed in the direction of recession. All kinds of discretionary spending are reduced. Use of oil will almost certainly be reduced. This could lower oil prices significantly, as it did in 2008 (Figure 1).

[10] To a significant extent, China has been helping hold up world oil consumption, with its rapidly growing economy. It is hitting headwinds now, however.

The International Monetary Fund recently showed an exhibit indicating how China’s debt is growing very rapidly, but its growth in output is slowing. The combination could very easily lead to a credit crisis.

Figure 9. Exhibit from IMF Working Paper called Credit Booms: Is China Different?

Now, the rest of the world depends on China for many imported goods. If China should have problems, it would indirectly affect oil demand elsewhere as well.

Even China’s recent ban on importing certain types of materials for recycling can be expected to have an adverse impact on oil demand. Very often, if a container is sent from China to the US or to Europe, there will be no exported goods to send back to China, except for material for recycling. If China refuses to take recycling, containers will need to be returned empty.

Recycling generally needs to be subsidized. Part of what this subsidy is used for is to pay the cost of shipping material to be recycled to China. If China does not take the recycling, this payment for shipping materials in the otherwise-empty containers will not be made. The shipping company will need to charge exporters more for the one-way trip, if the shipping company is to be profitable. This higher cost, by itself, is a deterrent to trade. In many ways, the higher shipping cost is like a tariff.

[11] Conclusion.

My expectation is that the general direction of oil prices is likely downward, especially if interest rates rise. A major financial disruption of any kind would have a similar effect. Gluts of oil can be expected with lower prices.

Many groups, including the IEA, have been warning about oil shortages because of inadequate investment in new production. Oil shortages, and energy shortages in general, have a multitude of adverse impacts on economies. One of them is loss of jobs, because jobs require the use of energy, for example, to deliver goods in a truck. If many more people are unemployed, there is less demand for oil.

Thus, it is not at all clear that a shortage of oil leads to high prices; it may very well lead to lower prices. Many people are confused about this issue, because the word demand gives a misleading impression of the mechanism involved. Lack of demand comes from part of the population not being able to afford cars and homes. It also comes from cutbacks in government spending and from failing businesses. In an interconnected system, even failing banks tend to reduce oil demand.

Another adverse impact of oil and energy shortages tends to be fighting and wars. The fact that the US seems to be raising its energy production, in apparent disregard for countries that have been trying to cut back, is likely to make some oil exporting countries quite angry. It could sow the seeds for another war.

Economists do not seem to understand that GDP growth rates don’t tell very much about the well-being of individual citizens in an economy. A major issue is wage disparity. If there are many very low wage people, there is likely to be downward pressure on the sale of automobiles, and on the purchase of petroleum products. Economists are likely to think everything is fine, up until a major crisis occurs.

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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788 Responses to Our Latest Oil Predicament

  1. Doug W. says:

    When you see car loans for 60 or 72 month that seems to speak fo the affordability issue you mentioned. I also wonder about the role of electric vehicles. Do they have a future or are they a dead end and a distraction? While lithium for batteries is reusable there is only so much of it. Also, there cost make them affordable to a limited number of people. Maybe we just need to transition to less mobility and more public tranportation.

    • It is hard to see a good solution. Electric vehicles are not a solution for a lot of reasons:

      1. Electricity and the electric grid are very hard to maintain. We are already having difficulty with providing proper grid electricity. Europe was in the news recently because clocks powered by grid electricity now run slow. South Australia is trying to figure out how to provide adequate supply at a reasonable price. Some natuaral gas that was originally intended for export will need to be shipped by boat to the opposite side of Australia, to provide adequate fuel for power plants.

      2. Prices of vehicles are very important for affordability. Currently, big subsidies are available, but in the US, these are limited to the first 250,000 vehicles an electric car manufacturer makes. Thus, costs are headed up. Governments cannot afford to pay large subsidies if huge numbers of cars are sold.

      3. International trade is very important in making electric vehicles, because of all the imported materials used. Keeping international trade up will be a major challenge. For example, cobalt is used in making batteries. Congo needs higher prices on its exports, if it is to collect adequate taxes to support its economy. Since it is the world‘s largest supplier, it can pretty much set the prices it wants. Countries that collapse from lack of tax revenue are impossible to do trade with.

      4. Many other challenges, including possible materials shortages, if electric vehicle manufacturing is to be ramped up to a level where it makes a difference.

    • Davidin100millionbilliontrillionzillionyears says:

      “Maybe we just need to transition to less mobility and more public transportation.”


      people definitely will be transitioning to less mobility…

      in other words, people will be transitioning to more poverty.

      • HD UK says:

        How about horses? They also provide excellent fertility for the veg garden and go a long way towards feeding the soil critters and mycorrhizal fungi vital for soil fertility and health. Problem is we might need to get rid of a lot of people first as we will need the land to keep them on, especially here in the UK (we seem to be embarking on a house building boom, it’s the only industry we have left, apart from funny money in ‘The City’. No doubt FE will point out they will be culled by the hungry hordes for food. FE can I recommend a book ‘The little Ice Age’ by Brian Fagan it’s right up your street. Read it along with John L Casey’s ‘Dark Winter’. Excellent article Gail, many thanks.

        • Horses are fine, if you can find afford the land where you keep them and the food to feed them. Also, the time to take care of them and train them

        • Fast Eddy says:

          You are correct – the hungry will kill and eat them

          Did I tell you my neighbour has a few large cows as pets on their property?

          I have a high powered rifle…. and a lot of bullets…. and many sharp knives…

          And lots of red wine….

      • As long as we don’t need roads or tracks for the public transportation, we are OK. It is keeping up the infrastructure that sits in place that is impossible.

        • theblondbeast says:

          Infrastructure/capital is an incredible liability for future energy (and of course money). I own an engineering consulting company. I have never once seen a client – private or public- no matter how wealthy – who has budgeted for adequate capital maintenance. Even most homeowners don’t realize that to keep your house from collapsing into garbage ultimately takes up to 4% of the value of the home per year to avoid reliance on refinancing for major events. At nearly $400k for a new amount that is as much as $16,000 per year, on top of a probable current mortgage of $20k or more per year it is no wonder that people have trouble – and tend to hop around a lot. This “hopping around” allows house “flippers” to use new debt to tackle differed maintenance and prop up the value of homes.

          • That is a good way of describing the situation. I know that we made the mistake of finishing our basement, even though it wasn’t 100% dry. This has been a headache. We sort of have the problem fixed now, but it depends on pumps and electricity.

            If the problem isn’t the basement, it is the exterior. The roof and paint need to be updated fairly often. Our part of the country is subject to termites, so we need to take action to prevent termites, and have the termite inspector make annual inspections.

            There are all kinds of things that seem to break regularly. Sump pumps need to be replaced fairly often, for example.

            Without replacement parts, the expected lives of our homes are pretty low, especially in the South, with termites.

        • xabier says:

          As the Romans found: first they built lots of new infrastructure to deal with insecurity, and then later in many places they had to shrink their fortresses, so by the end of Empire the soldiers were living in just a corner of the old walls.

          The barbarians who came along then lived in that little part themselves until it fell down.

          Static and expensive infrastructure imposed on the environment is one of the reasons why complex civilizations must fail,…..

  2. Another great analysis and commentary, Gail. What continues to amaze me is the number of people who look at the exact same ‘facts’ and have an almost diametrically-opposed interpretation, especially those who dismiss resource limits completely and argue that human ingenuity and technology will eliminate the dilemmas we seem to face.

    • One thing that is not obvious is that increased technology leads to wage disparity, because some workers are needed with advanced education. Providing everyone with advanced education does not fix this problem, because the economy only needs a limited number with advanced training.

      • Harry Gibbs says:

        “…especially those who dismiss resource limits completely and argue that human ingenuity and technology will eliminate the dilemmas we seem to face.”

        It is indeed amazing how many people believe that man’s vaunting ambition and technological prowess will always overcome physical limitations. The ancient Greeks knew better, of course:

  3. Pingback: Our Latest Oil Predicament – Olduvai.ca

  4. My guess is that unsaleable US extra light tight oil may again be filling US inventories as export markets have only limited use of tight oil (as blending component). Art Berman has just calculated that 88% of US crude exports are rather heavy ie. less than 35 API.

    “Will US shale give the refining industry indigestion?

    Low wages growth and other economic weaknesses are the result of debt incurred during the high oil price period following the first crude oil peak in 2005.

    I have been busy analyzing Australia’s power supply system as many believe we’ll soon have many electric cars. But where will the primary power come from? Moreover, the government has run out of ideas how to develop the economy after the end of the mining investment boom. It thinks high immigration can do the trick but traffic jams and unaffordable housing have created public anger which is now finally discussed

    How much energy is needed for all these immigrants is not (yet) on the radar. But I started to analyze the present power supply system. Here is part 1:

    Australia’s east coast solar generation is replacing coal by only 2% in late summer

    • Thanks!

      On your solar analysis, your hypothetical without solar uses a whole lot more hydro. Is this hydro really available, but not being used? It seems like hydro would remain pretty much the same. It would be coal and gas that would be reduced.

  5. Shawn says:

    Hello Gail

    Art Berman has been twittering some tweets regarding the mismatch between the light (High API) nature of U.S. tight oil, and U.S. refining capacity built for oil in the API range of (from memory) ~32-33. He has tweeted up several charts over the last week showing API ranges for oils from the various tight oil formations, and just referenced this article as a must read on the tight oil/U.S. refinery mismatch. https://www.ft.com/content/2e7f9964-21f8-11e8-add1-0e8958b189ea

    Anyway, my question is, or suggestion, that in addition to the larger economic picture diminishing demand for fuels (in the U.S.) that you picture, this tight oil/refinery mismatch is at least partly responsible for inventory builds? As I understand it, we are importing heavier oils to blend with lighter tight oil, before it goes to the refineries. What price are the refiners paying for this (less useful?) tight oil? Below WTI?

    If this mismatch story is correct, it makes me wonder how much of the tight oil production in the U.S. can be refined in the U.S., without imported heavier oil. In general, the effort to blend light and heavier oils from different geographic locations feels like an example of the ever growing complexity and cost to delivery refined fuels.

    • We have an awfully lot of refinery space worldwide. The decline of the North Sea has left a lot of underutilized refineries in Europe. China and India have been building refineries. Saudi Arabia has been building refineries for its oil.

      I know that at least some “simple” refinery space in the US was closed, because refiners couldn’t make an adequate profit refining light oil. Part of the problem was the Brent-WTI differential. (WTI, even now, sells for a little over $3 per barrel less than Brent.) These were East Coast refineries that were buying African oil at prices based on Brent. They couldn’t compete with refineries buying oil priced based on WTI. Also, heavier oil gave a better product mix, and the possibility of profits for cracking long molecules into shorter ones.

      I really don’t know whether the light oil mismatch is responsible for the inventory build. My impression is that it is not. There is usually a demand for oil of various grades, at some price. (For shorter chains, such as ethane, some does get burned as if it were natural gas, if there is too much.) Refineries are always looking for ways that they can operate their refinery in the most cost efficient manner possible. In some cases, this means blending a heavy oil with a light oil. I think that that is what some of the tight oil is being exported for, right now.

      • Already in December 2014 there were problems:

        “Some rail projects aim to bring in heavy sour Canadian crudes, but most focus on light sweet shale crudes, especially from the Bakken. Potential crude supply exceeding actual refinery capacity strongly suggests in 2015 PADD 1 will become saturated and can no longer absorb additional domestic light sweet crude production growth.”

        This was one of the reasons for oil prices going down and the push to lift the crude export ban

        • Thanks! I know that the reason why those doing the extraction wanted to ship oil overseas was to get better prices from refineries. The WTI/Brent differential has been going on for a long time–it looks like since about 2011. Oil producers in this country did not like getting a lower price for their oil than they would if they sold it to overseas refiners.

          US refinery space tend to be close to fully utilized. It does not pay very high prices for the oil it buys, because it already has plenty of oil coming its direction. Refinery space elsewhere tends to be less fully utilized, and pays higher prices.

          I don’t know the details of what is being sold where now. But the changes do seem to be getting rid of the big differential.

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  7. Fred (Mining Engineer) says:

    “Thus, it is not at all clear that a shortage of oil leads to high prices; it may very well lead to lower prices. Many people are confused about this issue, because the world demand gives a misleading impression of the mechanism involved. Lack of demand comes from part of the population not being able to afford cars and homes. It also comes from cutbacks in government spending and from failing businesses. In an interconnected system, even failing banks tend to reduce oil demand.”

    I think the key thing that most people do not understand (you excluded Ms Tverberg, I’m sure you do) is the extent of speculation in our economy. Speculation being narrowly defined here as the purchase of something with the hope that someone will purchase it from you at a higher price some time in the future.

    While cars and light trucks are not bought on that basis (barring collectibles), houses, much of real estate, and common stocks generally are, and they provide for much of the “growth” in our economy. This “growth” is the foundation for much of the remaining economic activity, not only in the West, but in the export economies of Asia.

    Vast amounts on the balance sheets of America and the world are supported by this speculation. Take this speculative aspect out of our economies and they collapse under the weight of these overvalued balance sheets.

    • A big part of the reason why this speculation can take place is falling interest rates. At ever-lower interest rates, the monthly payment necessary to buy a home at a given price keeps falling. So does the monthly payment to buy a car at a given price, or a piece of land. We have lived with falling interest rates almost the entire time since 1981. Low interest rates together with loose underwriting created the subprime bubble of the early 2000s. But falling interest rates by themselves are enough to send asset prices up. (Of course, rising interest rates do the opposite.)

  8. Harry Gibbs says:

    Great stuff as ever, Gail.

    “The plain and simple fact is that home ownership is getting further out of reach for the average consumer as mortgage rates rise. This is especially true for the first-time home buyer. The 30-year fixed rate mortgage is now the highest level since January 2014, 4.64%.”


    “Auto loan interest rates are now at levels not seen since 2010 – an average of 5.2% in February, compared with 4.4% in February 2013, according to Edmunds.com. That means higher monthly payments regardless of whether one is buying or leasing.”


    • Right! Higher interest rates make things less affordable.

      CPI data does not take into account interest rate changes. Economists have generally ignored interest rates, considering interest simply payment from one entity to another. Our data doesn’t really give us a good idea of what is happening.

  9. Kanghi says:

    Great piece like always! I am around median earner, but have kids and unemployed wife and I cannot afford a car. Before high rents were taking taking half of the income after taxes. Now we own a share in goverment supported housing and pay lower payment, but need still to pay away the loan we took to pay the share. I see how other median earners are in need to squeeze the penny to be able to afford a car, and without goverment schemes, like that you can reduce the gasoline costs in taxes, what go over a special limit was it 700€ a year many would struggle even more. In order to boost transfer to less emission cars(people have older cars, due high taxes and affortability issues) you can at the moment get scrabbing money from your old car (1000€). Just heard how high earning co-worker had bought an used car from Germany, and that for a guy who is a car enthustiastic, got no kids and has well earning woman to share the costs.

    • There is little public transport in places where the population is very spread out, simply because it is difficult to find an economic way to get people to where they want to go, when there is little population density. We have this difficulty in much of the US and Canada. The Atlanta area was most set up after cars became common, so businesses were placed in many areas around the city, rather than around the city.

      Public transport is limited. I had an administrative assistant who lived in Atlanta and took a bus to work. Whenever she needed to work late, she needed someone to drive her home, because bus services was not available then. For her, Sundays were a problem for doing anything at all, because no bus service operates on Sunday.

      My son takes a bus to his job in downtown Atlanta on weekdays. We need to drive him three miles to the bus stop. The other option would be for him to walk back and forth to the bus stop (besides walking from the bus stop to his office downtown). He can’t work late, and he can’t work on Saturdays, given the bus schedule. This limits the jobs he can take. (He doesn’t drive.) Another option would be for him to get an apartment near the Express Bus stop, but that adds a different set of complexities.

      • robert wilson says:

        A few have solved this problem in Los Angeles by living downtown.

        • When I was single, I lived near downtown. It is not as easy for an autistic adult, like my son, who is not 100% up to living on his own.

        • Duncan Idaho says:

          As someone born in LA in the 1940’s, one can live in LA without a auto.
          I’m currently in Bend Oregon, and it is a suburban nightmare. You need a car just to keep a bit of sanity.

      • Kanghi says:

        I so know the situation. Public transport connections (location) to my work place
        and foodshops were one of the main decision factors in our situation and for contigency we choose a place what has train and bus connections to capital area. My older childrens live with their mother in a place where there is little connections so they are most of the year stuck in their small village area. Definetly our situation will lead to re-emergency of a local human.

    • Davidin100millionbilliontrillionzillionyears says:

      thanks, Kanghi…

      I value hearing about life “on the other side of the pond”…

      so you’re using euros…

      are you willing to tell us where you live?

    • Davidin100millionbilliontrillionzillionyears says:

      I love that second graph!

      showing how Japan and Europe have tanking GDP…

      so they must also be “fake economies”…

      because they have very little FF resources…

      only their QE is keeping them afloat.

    • Greg Machala says:

      To me any economy that uses debt is a fake economy. The only real economy is hunter-gatherer lifestyles.

      • Even hunter-gatherer lifestyles had promises to support economies of scale. They weren’t debt, per se, but they were promises that allowed specialization (hunting, gathering, tool making, gathering of flints). There were social rules that guaranteed that people who specialized would still come out well in the sharing process.

      • Davidin100millionbilliontrillionzillionyears says:

        that’s a very good summary for why I like living in this “fake economy”…

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