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.
And here’s the reason Tesla is crashing.
http://www.businessinsider.com/tesla-robots-are-killing-it-2018-3
The problem is Musk suffers from the delusional thinking that has infected the world. Technology will come to the rescue.
Lesson ?? Humans are smarter and more capable than Robots. AI happens to be a good choice to describe what has been developed because it truly is artificial.
Great article!
There are diminishing returns to complexity.
https://amp.businessinsider.com/images/5abbd9ada54f32292d8b45e2-480-540.jpg
This is Bernstein’s analysis:
That graphic is spectacular and exactly what I would expect with respect to the penetration of automation. Everyone should study that graph. I bet the same basic graph would apply to solar and wind penetration too. Too bad that oil price no longer has an “optimum” point.
Tesla has a problem. Maybe a big problem.
http://money.cnn.com/2018/03/28/news/companies/tesla-model-3-cash-crunch/index.html
World war 3 is coming…
Although there has been no major combat between the great powers since the Second World War, there are three key fronts emerging that make the prospect of a third global conflict alarmingly conceivable
https://www.independent.co.uk/news/long_reads/world-war-3-is-coming-a7622296.html
yes, it is conceivable…
and what is the actual meaning of “conceivable”?
“I do not think it means what you think it means.”
If a Nuclear Bomb Explodes Nearby, Here’s What You Should Do
https://www.sciencealert.com/if-a-nuclear-bomb-explodes-nearby-what-you-should-do-science-do-not-drive
Yeah all great advice unless it’s a Russian salted nuke then you will have to stay indoors for 60 years for the cobalt to decay. What a wonderful world.
attention, everyone!
if this happens near you, please post on OFW and keep us updated with personal experiences…
thank you…
Saudi Arabia must face U.S. lawsuits over Sept. 11 attacks
https://www.reuters.com/article/us-usa-saudi-sept11/saudi-arabia-must-face-u-s-lawsuits-over-sept-11-attacks-idUSKBN1H43A1
NATO Moves Toward Readying More Troops to Confront Russian Threat
U.S. heads push for European allies to get many more troops to potential trouble spots within 30 days
https://www.wsj.com/articles/nato-moves-toward-readying-more-troops-to-confront-russian-threat-1522290156
anything to create more jobs…
A man in the UK has caught the world’s “worst-ever” case of super-gonorrhoea.
He had a regular partner in the UK, but picked up the superbug after a sexual encounter with a woman in south-east Asia.
Public Health England says it is the first time the infection cannot be cured with first choice antibiotics.
Health officials are now tracing any other sexual partners of the man, who has not been identified, in an attempt to contain the infection’s spread.
He picked up the infection earlier in the year.
The main antibiotic treatment – a combination of azithromycin and ceftriaxone – has failed to treat the disease.
Dr Gwenda Hughes, from Public Health England, said: “This is the first time a case has displayed such high-level resistance to both of these drugs and to most other commonly used antibiotics.”
Discussions with the World Health Organization and the European Centres for Disease Control agree this is a world first.
http://www.bbc.com/news/health-43571120
All infections will be super infections post BAU… as there will be NO treatments…. and they will spread like wildfire…
Die with Dignity… off yourself … do not die in the gutter like a diseased dog
http://c8.alamy.com/comp/A00K51/stray-dog-badly-diseased-and-missing-its-fur-near-ubud-bali-indonesia-A00K51.jpg
uh…
“He had a regular partner in the UK, but picked up the superbug after a sexual encounter with a woman in south-east Asia.”
hate to break the news to these UK doctors, but this means that the woman had it prior to him…
“Discussions with the World Health Organization and the European Centres for Disease Control agree this is a world first.”
hey, do I have to yell? the woman had it first…
“Health officials are now tracing any other sexual partners of the man, who has not been identified, in an attempt to contain the infection’s spread.”
but no one should be tracing the activity of that Asian woman…
that wouldn’t be very helpful to anyone…
right?
isn’t that the message here?
Here is a piece of advice, “Make a little space in your mind for the idea that things
could go sideways. The people that think things can’t go wrong will be flipping out,
you’ll have an advantage…”
So this is your stick now. Join the FE death cult. FE you have lost it. Best you just top yourself now, that way the rest of will know you went in peace. Then over the next 20 years we can discuss whether it was too soon or that you had made the right choice.
Best be filling that fuel tank and finding that empty quarry Louise.
Why would I top myself when I am having so much fun celebrating the imminent end of the world?
I’m having a rip-roaring time here in Hong Kong catching up with old friends… off to Macau on Sunday for a big drunken lunch at Fernando’s… then it’s off to Uzbekistan … and then we shift down to Otago just in time for the winter sports season …
I’ve never had so much fun! When the fun ends…and the suffering starts… then it will be time to seriously think about ending things
Is this a personal thing for you FE as you due frequent Hong Kong?
Bringing back a little too much luggage to NZ?
sorry that should be do not due
H&M Leaves $4.3 Billion In Unsold Inventory On The Racks
Clothing retailer H&M said Tuesday it has $4.3 billion in unsold inventory.
https://www.npr.org/player/embed/597750721/597750722
From the link:
Sweden is burning some of the excess inventory to generate electricity.
😂😂😂😂😂😂😂
I found another article about H&M, from Forbes.
https://www.forbes.com/sites/pamdanziger/2018/02/04/why-fast-fashion-hm-is-losing-favor-with-american-fashionistas-its-a-mess/#5465a0f310ca
It explains some of the chain’s problems:
The article talks about messy dressing rooms and lack of available clerks. Then it explains its unique sizing:
Strangely enough, this article (from February 4, 2018) says:
I thought when I listened to the interview that you linked that the chain must have financial problems and be headed for bankruptcy. Their plans are certainly strange, given the circumstances.
Poland signs $4.75 billion deal for U.S. Patriot missile system facing Russia
https://www.reuters.com/article/us-raytheon-poland-patriot/poland-signs-4-75-billion-deal-for-u-s-patriot-missile-system-facing-russia-idUSKBN1H417S?il=0
I think that Poland will never use it…
good investment!
but it is a 4.75 billion dollar jobs program for the USA…
I’m quite suspicious whether Poland is actually paying for this…
is there some side deal going on here?
I just hope they don’t station them too close to me. Instant target on the map. Maybe we can pay for it with all the extra apples we can’t sell to Russia anymore because of the imposed trade restrictions.
Even if America wins concessions, worry
https://www.economist.com/news/leaders/21739654-donald-trumps-trade-policy-economically-muddled-and-politically-toxic-even-if-america-wins
https://imgur.com/a/7E49J
Trump is not always off target, but The Economist is!
++++++
Gag – Can we leave the Trump worship elsewhere please.
http://www.politifact.com/truth-o-meter/article/2018/jan/08/how-trump-obama-compare-stock-market/
http://www.politifact.com/truth-o-meter/statements/2017/oct/12/donald-trump/donald-trumps-misleading-linkage-between-stock-gai/
But the Economist isn’t right either. We have a choice of wrong stories.
https://www.forbes.com/sites/chuckjones/2018/02/09/trumps-federal-budget-deficit-1-trillion-and-beyond/#e6bacd4544f2
Trump understands US economics just fine
Poll: Majority of Americans say they are not seeing change in paychecks due to tax cuts
http://thehill.com/policy/finance/380598-poll-majority-of-americans-not-seeing-change-in-paychecks-due-to-tax-cuts
Slow to implement new withholding?
More than three-quarters of the $1.1 trillion in individual tax cuts will go to people who earn more than $200,000 a year in taxable income, who constitute only about 5% of all taxpayers, said Karnovitz.
https://www.marketwatch.com/story/tax-overhaul-will-have-a-limited-effect-on-us-economy-moodys-says-2018-01-25
http://blogs.edweek.org/edweek/campaign-k-12/2018/02/paul_ryan_school_secretary_salary_tax_code.html
‘Paul Ryan Said $1.50 More Per Week Is a Big Deal for School Secretaries.’
“The extra salary means $78 more a year for her, although that’s based on getting $1.50 more over 52 weeks.”
The tax code changes were mainly for corporations & people in the top income percentiles.
Permian Drillers Prepare For Double-Digit Cost Jump
https://oilprice.com/Energy/Crude-Oil/Permian-Drillers-Prepare-For-Double-Digit-Cost-Jump.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+oilpricecom+(Oil+Price.com+Daily+News+Update)
A new Cold War with Russia? No, some experts say — it’s worse than that
http://www.post-gazette.com/news/world/2018/03/28/A-new-Cold-War-with-Russia-No-some-experts-say-it-s-worse-than-that/stories/201803260208?utm_term=Autofeed&utm_campaign=Echobox&utm_medium=Social&utm_source=Twitter#link_time=1522241361
“Comments Disabled For This Story”. Sure sign that this story is a load of ridiculous BS. Which it is. Waste of time.
Unfortunately the herd is being rounded up and readied for more….I get this BS regurgitated at me all the time.
Of course it’s worse than Cold War. At no time during Cold War was one side surrounded by anti-ballistic missiles ie Russia..There is no comparison. The old game could only end in a draw. The new game can played to win by the USA….If was Putin I would be packing my golden parachute about right now….
There will never be a winner in this game. Some psychopaths may believe it. But when they live in London, New York, Washington, Los Angeles … they will have a few seconds to discover their mistake.
Tesla is just months from a total collapse, says hedge-fund manager
https://www.marketwatch.com/story/tesla-is-just-months-away-from-a-total-collapse-says-hedge-fund-manager-2018-03-27
The WSJ has a new article called The Clock is Ticking Faster at Tesla.
The stock price is down again this morning–at $259, compared to a high of $380. According to the article:
Also:
They are just looking at financials — as we know from shale production, they have been eliminated.
https://robertscribbler.com/
Baby Doomer, that link I posted has an article that rebuts the linked story you posted. I’m frankly confused as to which one is more accurate.
https://www.engadget.com/2018/03/28/softbank-and-saudi-arabia-to-build-worlds-biggest-solar-farm/
Not good news for desert creatures. I think I prefer the beauty of the desert sand to solar panel arrays.
I’m with you grayfox—-
Homo sapiens just struggling to put off their extinction for a few years– and actually is probably increasing the slope.
“All the data we’ve seen over the last few weeks has basically been that the consumer is maxed out, we’ve seen that in credit card loans as well, so I think the consumer is done spending the money,” said Jakobsen.
https://www.rt.com/business/422540-stock-market-correction-consumers/
Also from article.
U.S. fourth-quarter growth revised up to 2.9 percent; consumer spending surges
U.S. economic growth slowed less than previously estimated in the fourth quarter as the biggest gain in consumer spending in three years partially offset the drag from a jump in imports.
There are signs that economic activity slowed further in the first quarter, with retail sales falling in February for a third straight month. Housing data have been generally weak and the trade deficit hit a more than nine-year high in January.
The Atlanta Federal Reserve is currently forecasting the economy growing at a 1.8 percent rate in the January-March period. First-quarter GDP growth tends to be weak because of a seasonal quirk.
https://www.reuters.com/article/us-usa-economy-gdp/u-s-fourth-quarter-growth-revised-up-to-2-9-percent-consumer-spending-surges-idUSKBN1H41VY
Hi Fast Eddy.
Is this a sub committee of the Elders?…see below
In terms of ECB independence – the EU’s ombudsman Emily O’Reilly recently called for Draghi to leave the Group of 30, stating that membership was not compatible with independence. Here is a list of some of the members :
Ben Bernanke (former Chairman of the Federal Reserve)
William Dudley (New York Fed, Goldman Sachs)
Timothy Geithner (Warburg Pincus, former US Treasury Secretary, New York Fed)
Mark Carney (Bank of England, Bank of Canada, Goldman Sachs)
Axel Weber (UBS, ECB, Bundesbank)
Haruhiko Kuroda (Bank of Japan)
Christian Noyer (Bank for International Settlements, Bank of France)
Jaime Caruana (Bank for International Settlements)
Agustín Carstens (Bank foGail Kelly (UBS)
Tidjane Thiam (Crédit Suisse)
E. Gerald Corrigan (Goldman Sachs)
Jacob Frenkel (JP Morgan Chase, Bank of Israel)
Philipp Hildebrand (BlackRock, Former Chairman of the Governing Board, SNB)r International Settlements, former Chairman of Bank of Mexico)
Lawrence Summers
Kenneth Rogoff
Paul Krugman
Our civilization is likely to collapse in the next decade in one of three possible ways.
1. The global economy crashes and collapses on its own.
2. There is a world wide oil shortage and price spike that causes the global economy to crash and collapse.
3. There is some major war or conflict between powerful countries that causes the global economy to crash and collapse.
I give a very low probability to (2). Perhaps a world wide oil glut, and price of $20 per barrel.
I give a very low probability to (3)…
no country wants IC to end…
they will try to manipulate each other to gain resource advantages…
but destroying IC along the way would take away any advantages that any countries might have gained…
it doesn’t add up…
Half of All U.S. Coal Plants Would Lose Money Without Regulation
It’s long been clear that U.S. coal plants are struggling. A study released Monday shows how much — concluding that barely half earned enough revenue last year to cover their operating expenses.
Power grids may face “massive” upheaval as more uneconomic plants close, according to the report by Bloomberg New Energy Finance. The problem is particularly bad in Florida, Georgia and elsewhere in the Southeast, where the distance from major coal mines drives up prices. The study examined the monthly economic performance of every U.S. coal plant in operation since 2012.
Still, many coal plants manage to shield themselves from economics. About 95 percent of those with operating expenses exceeding revenue operate in regions where regulators set rates, the study found. Instead of allowing market forces to determine their fate, regulators and utilities often keep struggling plants open to ensure stability on their grids.
https://www.bloomberg.com/news/articles/2018-03-26/half-of-all-u-s-coal-plants-would-lose-money-without-regulation
I thought coal was the cheapest after hydro.
Thank goodness renewables will save us, otherwise one might be concerned. /s
Key take away running coal at a loss to maintain grid stability.
The pricing mechanism for wind and solar is faulty. They essentially are getting a big subsidy, in the form of needing other types of energy providers to provide back-up power for wind and solar. This subsidy is huge, and is not being included in the pricing system. This is why coal power plants are failing, as are nuclear power plants. Natural gas rates are somewhat depressed as well.
We end up with electricity prices that are artificially low. This is a parallel situation to oil prices being lower than the cost of production.
The catch for both oil and electricity is that fact the the world economy cannot really operate if the selling price of energy services (combination of energy combined with efficiency gains) is rising. It needs to be falling. The system makes it fall, one way or another.
Recently, countries have figured out that the huge prices they pay for wind and solar are unsustainable. They have gone to a bid system, which significantly lowers the revenue to wind and solar manufacturers. This may drive the manufacturers out of business. Bloomberg has an article today, We All Love Wind Power, Unless You Want to Make Money. https://www.bloomberg.com/gadfly/articles/2018-03-28/we-all-love-wind-power-unless-you-want-to-make-money
Reflecting these issue, stock market prices are off by 20% to 40% from recent highs.
And that’s how the cookie crumbles slowly at first then all of a sudden.
Half of All U.S. Coal Plants Would Lose Money Without Regulation…
so, keep regulating!
we must Burn More Coal…
coal subsidies should be increased…
for IC to continue longer, there must be a return to less expensive energy…
this is much more important than the pollution issue…
call your senators and representatives!
Breath smog … or die.
Choose smog! (TINA)
Nearly 1 million people out of workforce due to opioid addiction: study
http://thehill.com/policy/healthcare/380508-nearly-1-million-people-out-of-workforce-due-to-opioids-study
They’re planning to go back to work after coming down off of cloud 9, lol. Apparently that stuff is so addictive that just one dose can hook a person permanently. What we have to wonder is are these the early years of this drug’s expansion into larger segments of society and what would be the knock on effects on GDP? Will this drug become a harbinger of greater widespread addiction around the world to come? Could there some day be 1 billion people out of the workforce hooked on opioids?
Right on. Turn off, tune out, drop out.
I don’t foresee a billion people hooked on opiods. I believe however the rise in both deaths and addiction rates can be directly attributed to increasing wage disparity and declining opportunities. The “war on drugs” is a failure because like all modern U.S. wars it is designed to 1) never end 2) lacks objectives, and 3) is an all or nothing deal. Why are marijuana dealers, traffickers, suppliers gone after as forcefully as other harder drug dealers. Why is alcohol legal whereas more benign drugs targeted in this war. Why is the go to solution state violence, confiscation, and incarceration rather than treatment? Why doesn’t Canada have the death and addiction rates that the US has? Why is Trump wanting to replicate the actions of a 2nd world authoritarian (Philippines) and begin extrajudicial killings of drug traffickers.
https://www.nytimes.com/interactive/2017/03/18/us/forced-entry-warrant-drug-raid.html
Why? What is the cost benefit analysis showing this is good policing and the correct way to reducing drug use and violence. Obviously this doesn’t work.
https://www.theglobeandmail.com/news/national/opioid-related-overdose-figures-show-grim-reality-of-canadian-epidemic/article36257932/
Fentanyl is very dangerous I hear.
“Apparently that stuff is so addictive that just one dose can hook a person permanently.”
yes, then sooner or later, so many of them overdose and kick the bucket…
in a way, this is self limiting…
and…
there is a way to make this less widespread…
just ban Narcan, and get the word out that any person who gets addicted will not have that lifesaver available…
guaranteed to reduce the number of addicts…
nothing will reduce addiction. The cause is energy poverty.
I ran across this article, Opioid Epidemic Ravages Europe.
They don’t seem to be a huge problem though.
Regarding Japan, I find, Japan Is Discovering the Power of Painkillers
The article shows this chart:
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/idVdZMmy2EqI/v1/800x-1.png
Perhaps the other countries are slow in “catching up” to the United States. Except Canada and Germany are already high.
All unemployed people should be entitled to unlimited Oxycontin. Subsidized by the CBs
The Vera Institute of Justice released a study in 2012 that found the aggregate cost of prisons in 2010 in the 40 states that participated was $39 billion. The annual average taxpayer cost in these states was $31,286 per inmate. New York State was the most expensive, with an average cost of $60,000 per prison inmate.Aug 23, 2013
https://www.quora.com/How-much-does-the-U-S-government-spend-annually-on-roa…
That puts total police expenses by governments at all levels at $266.8 billion. To make the number a bit more manageable, that’s roughly $850 spent on police and law enforcement per person in the United States.
Be sure to thank a “hero”.
I’m the hero who wakes up every morning and grinds away at a job to pay for the heroes. I could buy a lot of coffee and donuts and not have to worry about not getting a hero discount at venues for $850. Given that I pay more in taxes than I get back I’m sure my contribution is substantially more. For some reason this is a discussion that seems off limits and I want to know why.
http://www.chicagotribune.com/news/nationworld/ct-daniel-shaver-police-video-20171208-story.html
The economy needs to find lots of “services” to provide to its people.
I am not sure I could find the reference now, but I had one earlier regarding the number of police Japan has. The number is absurdly high, but it does provide jobs to people to keep the unemployment rate low.
Hello Doomsday Preppers. This is a public service message from Fast Eddy.
YOU ARE WASTING YOUR TIME. YOU ARE DEAD MEAT (
Like flies to sh it… the hordes will overwhelm you…. when the grocery store shelves are empty (which will happen with hours of the power going off….) —- they will immediately head to where the food is grown… they will find you … they will pillage your pathetic plots…. and if you resist… they will hack you into pieces/put a bullet in your head…. (and then they will eat you)
While many politicians and civilians in the United States focus on making the country a socialist regime, Venezuela’s children are forming gangs and using machetes to fight each other for “quality garbage” so they have something to eat.
http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article206950449.html
And once again, Cowardly Eddy announces his cowardice to the world.
We all send our support.
Think of Fast Eddy when the brute has you by the scruff of your neck… just prior to slashing your throat…. while you whimper and bawl and beg … and pi ss and sh it yourself…..
Like the tough guy that you clearly are.
There is clearly going to be a lot of interpersonal violence as described by Fast Eddy after the collapse of IC. What I don’t understand is (absent the spent fuel ponds) why we should expect human extinction and/or continued violence once the population density of a given area drops significantly low enough. At some point, without fueled transport, the “bad” people won’t be able to reach you. Or cover sufficient ground to even know of your existence.
If one was prepared (in whatever manner) to weather the die off, why wouldn’t a sufficiently remote homestead be viable? I understand any one particular persons chances are slim. I just don’t buy the leap from “slim” chance to “no” chance.
Further, I would wager that most people on this site (at least those who have been aware of our problems for a while), have been surprised by the ability of BAU to hang together as well as it has. I know I made myself look like a fool by impressing the importance of peak oil on my family and friends back in 2010/2011. Definitely have eaten some crow. I subsequently have kept my beliefs to myself in my daily life. I appreciate all of the deep thinking Gail and everyone else have done on the resource question, but to be honest, I will not be astounded if BAU is limping along in 2030. Civilization appears to be more freighter than speedboat, with changes in direction taking quite a while.
Karl, I agree with you. FE is right about the big cities, they are not the place you want to be when collapse comes. If you are remote enough, have the basic equipment and skills to grow and preserve food and part of a like minded group your chances of making it through the bottleneck are certainly better than someone living in the eastern seaboard in a mega city. Obviously Eddy doesn’t enjoy the homesteading prepping thing but some of us find it good therapy . If nothing else I want to hang around long enough to see how it all ends.
It’s not about enjoying or not enjoying — it is about understanding that it is futile.
As I have posted previously:
1. Do you have enough food to feed all the people who live near you? As well as the family members who will surely arrive post BAU. And then there are the hordes – are you in a location with no road access — totally remote — totally isolated?
2. Cholera and other diseases were prevalent in rural areas pre industrialization.
3. Have you actually tried to run fully unplugged for say a month? I would highly recommend this – it would give you an idea of any weak points in your preparation — however be careful — it might also expose just how brutal living unplugged will be.
3. Spent fuel ponds. You can pretend they will not a problem … which would make you delusional and not worth even entering into a discussion with …
It would be like seeing someone buy picking up coins on the street — and seeing that a full loaded semi truck was approaching at 100km per hour — trying to tell the buy picking up the coins that he is about to be flattened — and he looks at you as if you are crazy…. and continues to pick up his coins…. then WHAM….
“What I don’t understand is (absent the spent fuel ponds) why we should expect human extinction and/or continued violence once the population density of a given area drops significantly low enough. ”
Wouldn’t a smaller population reduce consumption and precipitate system collapse? If so, wouldn’t that shut down computers, close banks and hospitals, cause pandemic and bats.h.t violence and confusion? And why would you discount fuel ponds?
BAU / industrial civilization is toast at some point. No doubt. I don’t have a crystal ball, but I do know that people have subsisted under pretty horrible conditions, without going extinct (holocaust, holodomor, trail of tears, Great Chinese famine, battle of stalingrad). I’m unconvinced that martial law, summary execution for crime, and indentured servitude couldn’t keep some semblance of society or continuity of government limping along for a while. Even if Global trade collapsed, nationalization of our legacy oil wells could enable that oil to be directed to government forces and agriculture. Theoretically, a command economy with martial law could impoverish the masses, but keep food production going. Ultimately, We are screwed, but instant doom and extinction in a month or three isn’t the only possible scenario. I think the older age of the average commentator here leads some to impose fears of their own mortality onto the entire human race.
And, yes, if the spent fuel ponds all cook off, we very well may kill all animal life on the globe. I don’t understand how, on one hand, you all subscribe great power to the “Elders” or leaders of the world, and on the other think they will take no efforts to mitigate the risk of contamination from radioactivity.
‘At some point, without fueled transport, the “bad” people won’t be able to reach you’
So bad people could not reach the good people prior to the industrial revolution?
I can’t speak for every circumstance, but they generally needed horses or sailing ships to do so. Not sure where they are going to immediately acquire those what with all of the raping, pillaging, arson, and starvation you predict. Land transport was so difficult prior to fossil fuels that we located most of our settlements on waterways. If someone lives in a landlocked area, travel by foot for more than 15 or 20 miles is going to be difficult for even nourished, fit people.
Professor Hall’s EROI won’t allow an animal to expend more calories “hunting” than it takes in without starving to death. In a post collapse world, marching off to raid is going to have to have a positive EROI with respect to food to be a viable activity. You’ll raid those close to you, but you won’t be able to raid people 50 miles away unless you know of their existence, and have reason to believe they have sufficient calories to make the trip and fighting worthwhile. Plus, the journey to the raiding spot is going to be fraught with danger from the incredible amount of small arms in this country. Marching straight down the street in the open is a good way to get bushwacked by someone hungrier than you with a scoped hunting rifle.
Look, stuff is going to be horrible. But human extinction is just YOUR favored prediction. You don’t know, none of us do. There remain other slightly less horrible outcomes where we don’t all die horribly, immediately.
Oh?
I live fairly remotely. There are thousands of people within an hour’s walk…. hundreds of thousands within a half tank of petrol… who needs a horse when you can walk — or load the family into the car and drive to where the doomies are….
Its an easy question really: Will you live and die as a decent, honorable, courageous human being, or will you live and certainly die sooner as a whipped dog, or a sheep?
There are those in the world so pathetic to argue that they don’t see a difference, and there are those that are so sleazy that they would argue that they see the difference and it doesn’t matter. I am not one of those.
I think that the right way to live is as a decent and honorable human being…
but it is not important…
there is a difference between living decently and honorably and living the opposite…
but it is a difference that will quickly end…
when we all enter the nothingness of eternal death…
I would call that a fact…
and I don’t think facts can be considered sleazy…
ps: that’s called Reality, and I will state the obvious and say that I didn’t create this Reality, so of course, “don’t shoot the messenger”…
“when we all enter the nothingness of eternal death…”
This isn’t a fact. Whatever is eternal cannot be nothing, and nothing cannot be contrasted with or related to something.
Well said, Pintada.
Who are you kidding???? Nobody will be dying with any dignity when the plug is pulled.
Rather you’ll be wallowing in your own sh it and p iss …. diseased… brutalized… raped… starved…. enslaved… rotting with radiation poisoning….
Then you will die.
If you believe otherwise — you are seriously delusional.
I am in Hong Kong and had the good fortune to have someone explain to me that collapse will be a good thing… that there will be plenty of oil and other resources when the population is culled by 7 billion +…. that everyone will then begin living in a sustainable manner … no plastic bags… no buying stuff that nobody needs… etc etc etc… and that fusion will step in long before we use up the huge oil resources that remain….. very comprehensive Koombaya….
I was left with a yearning for BAU to collapse into a smoking heap of rubble — the sooner the better — because that is the only way to explain to such people that they are living in a state of total delusion….
A question that can’t be answered by any of us. How will you react when the boot is pressed against the back of your neck or worse your children’s. Hard to imagine from behind a computer screen. When the sh*t comes as it will, you will meet it as you will and no one will care or remember. It is that simple.
There are no socialist countries existing today. Socialism is not when the government does stuff. Socialism is the process of putting the means of production into the hands of the workers and social ownership of that property. The reason it doesn’t work in modern
countries is because the US doesn’t want it to work. Why? Who knows. Could be fear of
revolution. The point is; socialism is very often misinterpreted as something it isn’t.
Canada isn’t socialist, Norway isn’t socialist, Venezuela isn’t socialist, the USSR wasn’t
socialist (it was state capitalism). The only example of Socialism was France immediately
after the revolution…
There historically have been a lot of employee-owned companies, especially ones providing professional services. In fact, I worked for one.
The problem with employee-owned companies is difficulty in raising capital–either debt or equity. Equity needs to come from “principals” of the firm. Debt needs to come from outside sources. My former employer is now Willis Towers Watson. It is a regular company, domiciled in Ireland to keep taxes as low as possible.
There have also been insurance companies (and other companies) owned by the group of people to whom services are provided. For example, people in a city would put together a fire insurance company, to insure against one or more buildings in the city burning down. State Farm Mutual Insurance Company is one of these. These companies now have non-mutual affiliates, to solve problems caused by mutual ownership.
I formerly bought products from a high tech company in the northeast. They were communist owned….meaning they were equal in pay more or less to all employees. I could not figure out why someone who had worked for a degree in engineering would want to work for the same pay as someone sweeping the floors.
I visited Cuba. They had a terrible time with absenteeism and lateness, when everyone got paid the same as everyone else, regardless of what they got paid. Over time, they found it less and less possible to afford to pay everyone (and distributed goods to everyone) in an amount that would allow everyone to live in an adequate manner.
How Cubans Live as Long as Americans at a Tenth of the Cost
https://2.bp.blogspot.com/-_f8lnjAksaE/Wrqa4TSKYEI/AAAAAAAA5-o/6Mr6whXSEr8r9NbXGjbTgPb2p-wQUx-DwCLcBGAs/s640/kEKPgottPLOt.png
https://www.theatlantic.com/health/archive/2016/11/cuba-health/508859/
Finally!
“We live like poor people, but we die like rich people.”
A very important concept. Even so, I don’t think Cubans embrace living like poor people enough. And it’s misguided to depend on a centralized government system that runs from the top down. Still more, Cuba;s built environment is beautifully funky by default, but buildings are crumbling that could be salvaged by funkier means than they have considered. Maybe that phrase should be: “We live like primitive people, but we die like rich people.”
I knew a Mexican who went to Cuba and he said it was terrible even by Mexican standards of living.
I have friends who go to Cuba regularly—
They love it!
I lived in Mexico last year– it is actually more comfortable than the US in many ways.
Today’s lower prices for oil are greatly helping Cuba. They could never be where they are, with $110 per barrel oil.
I bought a T-shirt when I was in Cuba that said “Cuba” across the front. It was made in Mexico.
Exactly: capitalist, industrialised economies, with socialist-inspired systems of progressive taxation and redistribution is the fairest description.
“Socialism is the process of putting the means of production into the hands of the workers and social ownership of that property.”
In the type of industrial society we live in, the production process is just too massive, varied and globalised to be compatible with this. It can only work when everyone is producing things of more or less equal value for local/regional use, and there isn’t much room economic growth (=greed). After collapse, such societies may crop up somewhere.
The only way socialism can be implemented in our type of society is if human nature is collectively transformed in both rich and poor. Things like greed, laziness, lust, selfishness, attachment to deluded ideas etc. (basically all forms of irrationality) have to disappear and be replaced by a single-minded devotion to (genuine) truth and virtue. People have to be suddenly willing to make any sacrifice for the greater good, including letting their children starve or die, and relinquishing all they own without hesitation.
« The only example of Socialism was France immediately
after the revolution…»
1789? Can’t be, there had been no industrial revolution, and no working class had emerged
1830?
1848?
Probably 1871, but the Commune was restricted to the capital, Paris.
Socialism defies the laws of the universe and human nature… therefore it any attempt to implement such a system — would result in catastrophe… see China and Russia’s failed attempts at this idi ocy. Collapses in food production etc…. Tens of millions dead.
Art Berman’s website has an updated Comparative Inventory chart that is very interesting. I would post a pic, but am not sure how. It is the 4th chart at the following blog post: http://www.artberman.com/oil-price-crossroad/
interesting…
“This does not mean that prices will not exceed $65 per barrel. It means that $65 is the approximately correct price at the 5-year average. If C.I. becomes increasingly negative, prices should rise.”
the CI (5 year average) went positive in 2014 as prices plunged…
now, CI has headed way down and is almost negative again…
if the trend continues (though trends often change), then “prices should rise”?
maybe…
but we live in a “new normal”, so some other factor(s) could push prices down.
This is a copy of the chart. I think his methodology may say that we have hit the crossroad, a little before we really do, because the 5 year average that he compares to is increasingly influenced by the glut in the average. But the general idea seems to be right.
https://gailtheactuary.files.wordpress.com/2018/03/art-berman_-current-inventory-as-indicator-of-oil-over-undersupply.png
My view on the climate change issue is that it is irrelevant. Once we are in a full blown oil/energy crisis, with people unable to drive to work, school buses unable to run, farm tractors running out of fuel to grow our food, we’ll be existing in such a state of chaos and confusion that we won’t give a damn about the weather/climate – we’ll instead be focused on one thing and one thing only – where’s my food! If we are sitting in a freezing home with the heat unavailable and water turned off because the pipes are busting, we’ll be out and about in our immediate vicinity’s foraging for firewood. We won’t be worried anymore in the least about theoretical climate change..
https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#3dd6e74344cf
https://www.scientificamerican.com/article/peak-oil-may-keep-catastrophic-climate-change-in-check/
your view is very reasonable…
so, before we get to your scenario, there will be a major increase in the burning of coal…
or else we will get to your scenario that much sooner.
Irrelevant to whom or what? To other wildlife on the planet how this plays out will be very relevant. To the question of whether our species will continue on, what happens is also relevant.
You come across as someone who regards two minutes of thought as valuable. Most people here have been reading and thinking on these topics for over a decade. You, obviously not.
Imagine that … people thinking about something for decades…
And still they have not worked out that YYY YYYYYing is a ho ax.
They have plenty of company … billions believe that EVs are awesome.. and that solar power will save the day (any day now)
Humans love their delusions
The Great Leveler: Violence and the History of Inequality -London School of Economics
Actually, even a cursory survey of history shows that he is wrong.
The assumption that inequality is a Bad Thing is also highly questionable.
Talking about inequality and revolution is the new academic bandwagon, journalists love it for copy, too.
Haven’t yet listened to the video, which is rather long. Yes, I would agree that concepts of inequality are waay over simplified. But there is inequality that is acceptable and works for stability, and inequality that is so dysfunctional that it breeds violence. As maybe it should.
It’s probably the Pareto Principle level where things function optimally: 20% of the population owning 80% of the wealth. Contrast that to the modern situation where it’s something like 5% owning 95%.
The US needs to borrow almost $300 billion this week
http://money.cnn.com/2018/03/27/investing/us-debt-sale-record-treasury/index.html
This is not the time of year there should a shortfall of revenue to cover govt. expenses, because taxes are being received. So it must be a gawd awful shortfall amount because of the new taxes, particularly for corporations (35 to 21%). Just wait until we get months away from when tax is received and the deficits will really balloon. This will become an unfolding catastrophe on a monetary scale never before ever witnessed unless those in power admit it was a huge mistake and change the tax system back to the way it was and fast!
You may be right. If there is a tax big shortfall, I expect it must be on the personal side as well. Personal taxes are much larger share of the total than corporate taxes.
This is a tax cut for virtually everyone, not just corporations.
But the tax cut for corporations was the bulk of the reduction. Personal taxes only went down small percentages.
We will see what happens in practice. The personal reduction in taxes was very much “front-ended,” with supposed plans to raise taxes in the future.
The impact of taxes on corporations is fairly complex, with some changes being phased in, in a strange manner.
Cash collections and payments are what really make a difference, for the purpose of determining future debt needs.
“Cash collections and payments are what really make a difference…”
Cash collection in taxes?
Isn’t there any books to learn about economics,companies and investing?
I want to understand the money world
Assume everyone read said book and also wanted to come out ahead of everyone else.
Ponziworld.blogspot.com comes to mind!
(Has little to do with our energy discussion but some may find it interesting anyway)
A Greenlandic/Danish professor of geology, Minik Rosing, has studied the so called ‘Glacial Rock Flour’ which contains most of the minerals that the ‘depleted’ soil in tropical areas needs. He let some gardeners mix 3 liters of the rock flour with 100 liters of meager sandy heathland soil. It turned out that the harvest with mixed soil was much better than the reference plants with no added rock flour. You can find this rock flour in enormous quantities in the coastal areas of Greenland. We are talking about thousands of cubic kilometers. Transport is the problem. Is there anyone of you that can make an approx assessment of the transport costs of one ship load (bulk vessel – load capacity 200,000 tons rock flour – density approx 1,5) from Nuuk (Greenland) via Suez to a port in Indonesia?
Of course, adding these minerals is only a temporary band-aid. As plants grow, the necessary minerals quickly deplete. Unless the waste of the people eating the food that is produced is put back in the soil, these elements will again be disbursed widely, and thus be effectively lost.
for the same reasons, volcanic ash is rich in nutrients that plants need. then it depletes. so far, transport of mined, processed NPK fertilizer is far cheaper than bulky rock flour or ash. of course, volcanoes distribute for free.
Guano was the big idea once………
yes, there was a finite amount from birds and bats, and now it is mostly gone.
https://www.standard.co.uk/news/world/elon-musks-spacex-falcon-rocket-launch-ripped-a-559mile-hole-in-the-atmosphere-a3799091.html
wUt ? i thought he was going to save the planet/universe and beyond….
According to the article,
Drug overdoses killed more Americans last year than the Vietnam War
https://www.cbsnews.com/news/opioids-drug-overdose-killed-more-americans-last-year-than-the-vietnam-war/
This article is talking about deaths from 2016..And last year in 2017 they increased by 30 percent higher!
https://www.cdc.gov/media/releases/2018/p0306-vs-opioids-overdoses.html
Right. If death certificates were better at counting drug overdoses, the percentage increase would be lower (but the absolute numbers would be higher).
There definitely is a problem. The direction should be downward, not upward.
Who is dying in the opiod crisis? I would love to see a breakdown by race, education, income.
Forbes reports, “Death Rates for Almost All Americans Aged 25 to 45 Are Increasing Sharply.”
The article later says:
This article doesn’t address later ages. I know the death rate has been rising there as well, especially for men without college degrees.
It seems like we are entering an age of two things; 1) Irrationality – which manifests itself in all sorts of radical & conspiratorial viewpoints with no proof or foundation of rational thought & 2) Self destructive behavior.
1) is probably because when the information people have isn’t what they want it to be, establishing an irrational set of ideas helps counter the actual reality of the situation.
2) is occurring because irrational thoughts lead to conflict within the individual between those thoughts and reality, then once the person finally and suddenly realizes their position has no basis, it nullifies their sense of self worth and destructive behavior follows.
The underlying cause is our world is deteriorating right under our feet. Infrastructure is going into disrepair, many political viewpoints are irrational, wages are not keeping up with rising expenses with debt ballooning, and as a species we realize we’ve initiated the 6th extinction event with flying insects and birds disappearing at an alarming rate along with most other fauna, with wea ther changes we know are getting more severe due to our activity, along with people all staring at their phones instead of interacting with one another, society is becoming disoriented, disconnected and irrational.
When there are not enough resources to go around, wage disparity is a problem. The people hit with the rising level of deaths are those who lost out on the wage disparity race.
Those people are faced with a world that makes no sense. No matter what they do, they cannot succeed, in the sense of doing as well as their parents did. They want to tear the current system down, or escape from it all together.
Very well put Comrade!
In that study I posted by the CDC. They said drug deaths increased the most in the Midwest last year of a rate around 70 percent. So I assume that would be mostly rural whites, with low income, low education…
https://www.theautomaticearth.com/2018/03/the-science-of-a-vanishing-planet/
“The common white throat, the ortolan bunting, the Eurasian skylark and other once-ubiquitous species have all fallen off by at least a third, according a detailed, annual census initiated at the start of the century. A migratory song bird, the meadow pipit, has declined by nearly 70%. The museum described the pace and extent of the wipe-out as “a level approaching an ecological catastrophe”. The primary culprit, researchers speculate, is the intensive use of pesticides on vast tracts of monoculture crops, especially wheat and corn. The problem is not that birds are being poisoned, but that the insects on which they depend for food have disappeared.
“There are hardly any insects left, that’s the number one problem,” said Vincent Bretagnolle, a CNRS ecologist at the Centre for Biological Studies in Chize. Recent research, he noted, has uncovered similar trends across Europe, estimating that flying insects have declined by 80%, and bird populations has dropped by more than 400m in 30 years.”
This 6th extinction event initiated by homo-colossus is taking place at an ever quickening pace.
Fortunately things are picking up for radiotrophic fungus:
https://en.wikipedia.org/wiki/Radiotrophic_fungus
Maybe destroying the bottom zone of the trophic pyramid isn’t such a good idea for those at the top.
Maybe its all those wind turbines wot dun it, innit?
And maybe, as I’ve previously suggested, there was a lot less insect and bird biomass flying around in North America and Europe during the last glacial, which peaked a mere 26,500 years ago—literally the blink of an eye in terms of geological time.
The Earth is a middle-aged planet around 4.6 billion years old, and in order to wrap our heads around that immense span of time, we can consider it to be middle-aged planetary person of around 46 years old. Under this view, the Carboniferous Period, when the bulk of the coal we love and loathe to burn was laid down in swamps frequented by giant dragonflies 360 to 300 million years ago when the planet was around 4.2 billion years old, took place when our middle-aged earth back to the age of 42 years old. If coal were money, as some argue it is, on the basis that sound money is backed by energy supplies. then we can imagine the 42-year-old earth spending about half a year piling up its savings in the Bank of Coal, and then one day at the age of 46, being robbed of a large portion of its savings in the space of minutes to fuel H. sapiens’ collective consumption binge.
Mid-life Crisis………..
GM says South Korean unit will file for bankruptcy if no union concessions by April 20
https://www.reuters.com/article/us-gm-southkorea-unions/gm-says-south-korean-unit-will-file-for-bankruptcy-if-no-union-concessions-by-april-20-union-idUSKBN1H2321
According to the article
The low-cost hub is the area likely to be hit most quickly by costs too high for consumers. These costs may partly be added by governments with more stringent fuel standards. Also, desire to stay with the newest and best technology (audio systems etc) adds costs. I doubt that there are many cars made today that are manual transmission, no radio, roll up and roll down windows, no air conditioning. At one point, those were the inexpensive cars.
Yep, this category still available in Europe for less than ~9k USD, essentially global brands but usually assembled in NAfrica, Russia, Turkey etc..
a massive wave of homeless people in CA will be moving:
https://www.yahoo.com/finance/news/cisco-commits-50-million-end-200506854.html
I hope this area is prepared for the surge.
Electricity generated by existing hydroelectric power, which has a long staying power (stations built in as early as 1897 are still in operation) will be enough to sustain Civilization for far longer than most people think.
The Supung/Suifeng dam, in the Yalu River (between China and North Korea), was built in 1937 and is still operational, providing electricity to the people surrounding the area. Given North Korea is not exactly overflowing with resources, it shows that infrastructure in even the worst countries last longer than many people think.
As long as they generate enough electricity to run computers (and there are solar-powered servers), Progress will continue.
and what happens after the local warlord sends his army in and takes over the electric generation for his own benefit?
Who run Barter Town?
This is off of 99.9% of investor radar screens. The supply of uninterrupted electrical power is in fact counter party risk, and one of the primary reasons why block chain technology is not a savior.
https://youtu.be/-DPQ15EgyTY
My old axe is a family heirloom, lasted many years. Just needed 4 new handles and 2 new heads. These power stations require constant maintenance using materials sourced from far far away.
That solar powered server requires a battery…that typically lasts about 3 yrs.
Batteries are a huge weak link!!!
Which could be stockpiled in advance. Batteries can last well for quite a long time before it actually gets used.
Gail said, When electricity goes out, most of the high tech will be gone.
The problem is, there will be some electricity at some places, especially where hydropower is available.
The old dam of Mechanicsville, NY state, built in 1897 and older than any human alive now, still works.
http://www.edisontechcenter.org/Mechanicville.html
Built by Charles Steinmetz, this dam produces electricity in 40 Hz, enough to power the research center dedicated to maintain old tech ‘just in case’.
It will be at least a few decades before all dams begin to fail. Some will fail before others but some will stay alive for quite a while, like the above example.
As long as there are enough energy to run computers (there are solar-powered servers available because modern computers do not use a lot of power),
https://www.youtube.com/watch?v=pfJiAQpoD4Y
the march to Singularity, Type I Civilization and Artificial General Intelligence will go on.
Civilization in Western Europe survived in the fringes, like Ireland, during the Middle Ages. Some lesser-known state college in the Mountain state, far from the marauders and near enough for a river to build a hydroelectric station, might become the new center of civilization in the future. After all, Oxford was where the Royal family was escaping to avoid the Plague, and because the younger people had nothing to do a University was set up.
China set up the United University of Southwest in Yunnan Province
https://en.wikipedia.org/wiki/National_Southwestern_Associated_University
When Peking and Tientsin were overrun by the Japanese and the three most prestigious universities (Peking, Tsinghua and Nankai[in Tientsin]) were quickly fused into one and they held class in some high school in Kunming, Yunnan, safe from the Japanese bombing.
Similar thing happened in Korea; North Koreans overran Seoul, where all major universities were located, and porfs who were able to run from the commies quickly set shop at Pusan where all the universities simply merged as one and continued their business there.
If the push comes to shove, there will be a Unified Ivy League University of Idaho or something like that set up, to continue the research for the tech smite is describing.
“… the march to Singularity, Type I Civilization and Artificial General Intelligence will go on.”
yes!
we will colonize the moon!
we will colonize Mars with 1 million+ humans!
we will free ourselves from the shackles of Earth!
we will populate many inhabitable planets throughout the Milky Way galaxy!
we will go beyond this to intergalactic travel, and soon!
we will rule the universe!
our march is unstoppable!
we will continue Progress forever!
we are humans!
Indomitable techno-optimism! Or quasi-techno-optimism at any rate.
All the very old dams you referenced require maintenance, replacement and upgrades, all of which are made possible by BAU. The electricity produced by them cannot do those things.
Electricity and computing power, as commenter Norman Pagett said in a previous post, cannot create energy or resources out of thin air. At best they can modify energy usage in such a way that energy is conserved–efficiency. But even efficiency has hard limits, and those limits don’t allow efficient energy usage to create or maintain the infrastructure and supply chain which supports it.
None of this is to say that there won’t be at least some electrically-powered tech after BAU-collapse, but if there is it will be extremely limited – compared to now – in terms of usage intensity and benefit to users. My personal post-BAU wet dream for example is being able to power my pair of Klipschorns and 6 TB worth of ripped classical music CDs via a jury-rigged PV + Tesla battery setup. Musk, be thou Mozart! Of course, the fact that they are Klipshorns and not your average 20 watt embarrassments, may be a problem.
Kulm. I’m all for wide-ranging historical thinking.
However, the Irish example is a poor one: what survived in Dark Age Ireland was literacy and the production of books (no small thing, of course).
It wasn’t a remnant of the vast Roman civilisation, but merely an outer fringe of literate Christianity (without the Bible there is, after all, no Christian religion) which did not participate in the collapse of towns and complex civilisation in the rest of the West.
Why did it survive? Because it was simply never a part of the structures which collapsed as Roman centralised power decayed. It did not collapse, because it had not reached the stage of high, urbanised, complexity, but had merely acquired literacy from Rome.
From the energy point of view, they carried on burning peat for fuel, building in stone and turf, and lit their hovels with rushlights – just as before Rome, more or less. This way of life was common in Ireland until very recently.
Whether hyper-complex civilisations like ours can survive in isolated pockets, with a very complex local civilisation, on the whole using only local resources, is a moot point.
I suspect not, but may be completely wrong. The infrastructure seems to be the big problem: inevitable decay,and most materials are not local.
If we were constructing today from either indestructible (impossible) or solely local materials, then survival might be feasible.
But nowhere is this the case.
Just a few days ago, shareholders of Tesla approved an almost comical pay package for their cult leader CEO Elon Musk that could potentially put $50 BILLION in his pocket over the next decade.
Let’s put this figure in perspective: at $5 billion per year, Musk would make more than every single CEO in the S&P 500. COMBINED.
In other words, if you add up the salaries of all the CEOs of the 500 largest companies in America, it would still be less than the $5 billion per year that Mr. Musk stands to earn.
That’s pretty astounding given that Tesla’s own 2017 4th quarter financial report (page 24) states that Elon “does not devote his full time and attention to Tesla”.
Or more importantly, that under Musk’s leadership, Tesla’s chronic financial incontinence has racked up more than $4.97 billion in operating losses for its shareholders.
Or that the company has been under SEC investigation (without bothering to disclose this fact to shareholders).
Yet they saw fit to reward him with the largest CEO pay package in the history of the world.
This is precisely the type of behavior that is only seen during periods of extreme irrationality when financial markets are at their peak… and poised for a serious correction.
I’ll close this brief letter today quoting John Thompson, Chicago-based value investor and Chief Investment Officer of Vilas Capital Management.
Thompson is one of the few hedge fund managers who has consistently outperformed the market, and his fund is betting big against Tesla. What follows are some passages about Tesla from Thompson’s recent investor updates:
I think Tesla is going to crash in the next 3-6 months. . .
. . . partially due to their incompetence in making and delivering the Model 3, partially due to falling demand for the Model S and X, partially due to the extreme valuation, partially due to their horrendous finances that will imminently require a huge capital raise, partially due to a likely downgrade of their credit rating by Moody’s from B- to CCC (default likely) which should scare their parts suppliers into requiring cash on delivery (a death knell), partially due to the market’s recent falling appetite for risk, and partially due to our suspicions of fraudulent accounting activities, evidenced by 85 SEC letters/investigations and two top finance people leaving in the last month. . .
Tesla, without any doubt, is on the verge of bankruptcy.
The company cannot survive the next twelve months without access to capital from Wall Street Banks or private investors.
We estimate that Tesla will need roughly $8 billion in the next 18 months to fund operating losses, capital expenditures, debts coming due, and working capital needs.
However, it appears that due to past SEC investigations and current investigations (which terrifyingly have not been disclosed by the company), it will likely be difficult for Tesla to access public markets.
According to a recent analyst report, there have been 85 SEC requests for additional information and disclosures in the last 5 years.
This compares to Ford Motor Company’s total of zero over the same time frame. This means that Tesla is pushing many, many boundaries.
When a company is under formal investigation, it is difficult, if not impossible, to raise capital from public markets as these investigations must be made public, which generally craters the equity and debt values.
Therefore, Tesla investors better hope there are a number of Greater Fools in China or elsewhere to keep the company solvent.
At some point, the music stops and there aren’t any open chairs.
No matter how good a social investment makes you feel as it is going up, extreme anger will result if most or all of your money is permanently lost, especially when it is due to false and misleading statements by senior company officers.
This is when the [Department of Justice] steps in and escorts untruthful managements to their new living quarters.
. . . As a reality check, Tesla is worth twice as much as Ford* yet Ford made 6 million cars last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss.
Further, Ford has $12 billion in cash held for “a rainy day” while Tesla will likely run out of money in the next 3 months.
. . . I have never seen anything so absurd in my career.
https://www.sovereignman.com/trends/tesla-without-any-doubt-is-on-the-verge-of-bankruptcy-23219/
Tesla is a psy op. Just like Herr Trumpenfuhrer.
Get shorting, people. Yee ha!
Here we go with the Elon bashing again. You finite world folks just don’t get it. Let’s review (again) why Elon is so awesome.
1. He makes cool cars.
2. He dated Amber Heard,
3. He makes rockets and bigger rockets.
4. He digs tunnels,
5. He’s a visionary.
6. He dated Amber Heard.
7. People give him crazy amounts of money for no good reason.
8. He wants to go to mars.
9. Did I mention he dated Amber Heard?
All right, Kurt. Good list including Amber Heard! People should admire Elon even if they don’t think what he’s doing will succeed because of one reason or another, because any guy who can pull off the multi-billion dollar enterprises he does with other people’s money is a person to hold in very high regard. He’s got a space program that can land parts of the missile backwards safely on a landing pad! Now that’s sticking the landing.
He’s not the messiah.
He’s a very naughty boy.
Tesla’s Plummeting Share Price Shows That Musk Is Running Out Of Time
https://www.forbes.com/sites/jimcollins/2018/03/26/teslas-plummeting-share-price-shows-that-musk-is-running-out-of-time/#ee72031578a9
Try talking Tesla down to the true believers….what an eyeopener!!
‘He went on to say: “Steve Jobs delivered and Elon… hasn’t delivered a thing, except increasingly negative cash flow, and an increasing lack of profitability; more and more capital spending.” ‘.
https://www.express.co.uk/news/science/725872/Elon-Musk-Tesla-RELIGIOUS-CULT-Steve-Jobs-Bob-Lutz-apple
Fake news. Steve Jobs – dead loser. Elon, alive and winning.
Ha, Tesla; new definition of space junk!
Apple profit making, …Tesla ‘zombie money loser’…de.ad man walking!
Huh? Where’d he go…?
This is another Tesla article being passed around:
https://www.sovereignman.com/trends/tesla-without-any-doubt-is-on-the-verge-of-bankruptcy-23219/
As a reality check, Tesla is worth twice as much as Ford* yet Ford made 6 million cars
last year at a $7.6 billion profit while Tesla made 100,000 cars at a $2 billion loss.
Further, Ford has $12 billion in cash held for “a rainy day” while Tesla will likely run
out of money in the next 3 months.
I saw a Tesla S on a highway today and it looked quite nice. With all the money invested in Tesla’s giga factory, it’s unlikely investors will give up the ship that easily. New auto manuf. is a very expensive endeavor and EV’s like Tesla’s make it even a bigger leap.
Never judge a car by the cover….
Yes Tesla make snazzy looking cars. Last Xmas day a guest showed his new $170,000 car off to the party. It performed a song and dance routine by itself which was quite extraordinary. The back gull wing doors opened and closed in tune. The lights etc all were in tune etc Quite a showoff machine!
Yes nice looking. I would like to buy one if subsidised closer to 100%.
‘PetroYuan’ Futures Launch With A Bang, Volume Dominates Brent As Big Traders Step In
3-26-2018
As we detailed previously, China’s yuan-denominated crude oil futures launched overnight in Shanghai with 62,500 contracts traded in aggregate, meaning over 62 million barrels of oil changed hands for a notional volume around 27 billion yuan (over $4 billion).
Many awaited the launch eagerly, seeking to tap China’s bustling commodity markets, although doubts remain whether the Shanghai futures contract will be able to become another international oil benchmark. These doubts center on the fact that China is not a market economy, and the government is quick to interfere in the workings of the local commodity markets on any suspicion of a bubble coming.
As we most recently noted, after numerous “false starts” over the last decade, the “petroyuan” is now real and China will set out to challenge the “petrodollar” for dominance. Adam Levinson, managing partner and chief investment officer at hedge fund manager Graticule Asset Management Asia (GAMA), already warned last year that China launching a yuan-denominated oil futures contract will shock those investors who have not been paying attention.
The Slippery Slope to the Petroyuan Begins Here
The petrodollar is backed by Treasuries, so it can help fuel U.S. deficit spending. Take that away, and the U.S. is in trouble.
It looks like that time has come…
A death blow that began in 2015 hit again in 2017 when China became the world’s largest consumer of imported crude…
Now that China is the world’s leading consumer of oil, Beijing can exert some real leverage over Saudi Arabia to pay for crude in yuan. It’s suspected that this is what’s motivating Chinese officials to make a full-fledged effort to renegotiate their trade deal.
So fast-forward to now, and the final blow to the petrodollar could happen starting today. We hinted at this possibility back in September 2017…
With major oil exporters finally having a viable way to circumvent the petrodollar system, the U.S. economy could soon encounter severely troubled waters.
First of all, the dollar’s value depends massively on its use as an oil trade vehicle. When that goes away, we will likely see a strong and steady decline in the dollar’s value.
Once the oil markets are upended, the yuan has an opportunity to become the dominant world currency overall. This will further weaken the dollar.”
https://www.zerohedge.com/news/2018-03-26/petroyuan-futures-volume-dominates-brent-big-traders-step
okay, now it’s here…
so…
is there any logic that would counter this and claim that this is no big deal to the USA?
Now that the market is established, there is a very simple way for the Chinese to get the mid-east nations, not just Saudi’s to trade in petroyuan. You just make it worth MORE than petrodollars.
It seems to me this is a green light from the Chinese Govt to traders to push up the price of oil in Yuan compared to other futures contracts, making delivery to Chinese ports more worthwhile for exporters (assuming a deliverable contract).
In one fell swoop the Chinese have made sure the US is in a lot of trouble when the tight oil boom ends, and the establishment in the US appears to understand what is going on by the recent tariff ructions.
What does any/every falling empire do in 2,3 or 5 years time when their civilization starts cratering and they have the biggest military??
This is a very interesting and pertinent read.
The First World War for Oil 1914-1918: Similarities with the 2014 Oil Wars 100 Years Later
By https://iakal.wordpress.com/2014/10/10/the-first-world-war-for-oil-1914-1918-similarities-with-the-2014-oil-wars-100-years-later/
It very clearly shows the threat that the Growing German power was to England, France and Russia and that control of oil lay at the root of WW1. And how China is the equivalent of WW1 Germany today and is challenging US power. Expect a war.
Thanks very much for pointing this article out. I had always thought that coal was an important consideration in WWI, but oil could have been even more important. Coal was clearly becoming a problem in the UK, by the time of WWI.
China is clearly in desperate straights today, with its falling coal production. The production is higher in 2017, but it is not clear that the growth can be kept up.
We are in a situation again where resources are in short supply. The question I would have is, “What resources might the Chinese want?” It seems like energy resources need to cheap resources, to be helpful. Perhaps Mideast oil, if they could get rid of the extra Mid-east population, so that they could have the oil, without most of its cost going for taxes. US shale oil and coal might be helpful as well. Natural gas is basically to expensive to ship very far.
I would be more worried, if China weren’t in such bad shape energy-wise itself. Its coal production is off through 2016. It is up somewhat in 2017, I understand.
https://gailtheactuary.files.wordpress.com/2017/11/china-energy-production-to-2016-bp.png
Hi Gail, while that graph of energy production looks worrying for China, the corresponding graph of consumption paints a different picture..
https://media.springernature.com/original/springer-static/image/art%3A10.1007%2Fs12182-016-0136-z/MediaObjects/12182_2016_136_Fig3_HTML.gif
Increasing consumption of energy seems to be made up of oil imports, coal imports, gas imports and gains in energy efficiency, plus increased renewables and nuclear.
Sorry, forgot link, from here…
https://link.springer.com/article/10.1007/s12182-016-0136-z
Look how much wider the renewables green is getting and how fast!
A lot of that increase in ‘renewables’ is from the 3 Gorges Dam hydro that has a capacity of 22.5Gw. Not too many projects of that magnitude can come online quickly, err none actually. It took until 2012 to install the last generator bringing the capacity up to 100Twh/yr.
The project was started in 1994.
What does the renewables consist of? Burnt trash imported from europe?
“As we detailed previously, China’s yuan-denominated crude oil futures launched overnight in Shanghai with 62,500 contracts traded in aggregate, meaning over 62 million barrels of oil changed hands for a notional volume around 27 billion yuan (over $4 billion).”
That’s a massive haul! China’s making all the right moves while the US just keeps finding more ways to exert trickle down force on the rest of the indebted masses while building a national defense unparalleled in history. ‘The People’ don’t even have enough power when marching in the streets to make one change to gun laws. People should realize from the way they are ignored their voices mean nothing in a country based solely on money and power.
Peak Oil Economic Growth And Wildlife Conservation -Free Academic EBook (PDF) 2017
http://bookslibland.com/peak-oil-economic-growth-and-wildlife-conservation-pdf/
Steady State Economy? These folks must never have heard of diminishing returns. Or of human’s use of supplemental energy, and a resulting population rise that takes a lot of energy to try to stop.
Steady State Economy just looks like the latest craze in Utopianism after Adam Smith’s free market global republic and Marx’s global communism.
My Australian friend just came back from USA. He told me that the polarization of the citizens over the two parties were so great that even the factions don’t talk much in the company, people occasionally walked out of meals over this political topic and at his conference, they say at different sides of the aisle. This is much worse that I have expected.
There are so many issues around the world and in every country that it has become more apparent to many that this is so “unreal”. Just the fact that people of the two factions don’t really talk to each other in the same company is bad enough for me to imagine that how a company would move forward or even grow.
I don’t see any form of solutions that can take place other than a great reset. Be it Europe, USA, Canada, Asia, Australia, etc, I do think that we are way past the “Wile-E-Coyote” moment where he realized that he ran out of road and it is a put below. I think the coyote is closer to the bottom of the pit than what people realized.
Every single country has its own issues and some of them are just too big to be solved like debts, the bubbles are just too big to be popped, the stock markets are just too unreal to be “adjusted down”, the resources are stretched so thin, the war drums are just getting louder, the surreal Russophobia, then pension timebomb is so gigantic, the inflation is creeping higher , FB is facing some serious issues, etc
Unless you take no steps to get to know what is happening around, it is hard pressed to tell people that you know nothing. Yes, there are plenty still dreaming but the number of those who are aware are getting bigger.
I just have no idea what will trigger but over time, it does seem that potentially the trigger points are getting more and more and I am hard pressed to see how we far we can go. We have gone far enough on this and each step that we take subsequently is getting harder and harder and requires more and more energy but the results seems to be less and less effective.
Feel free to dispute what I have said as this is a discussion (to me)
I certainly have run into a lot of the,”People not talking to each other, because of political issues,” problem.
I think this started quite a few years ago, with speakers like Rush Limbaugh (a Republican) getting people all excited about political issues. I know that my father (whose metal capabilities were less than 100% after he fell and had a serious concussion in his later years–he spent a long time relearning people’s names etc.) became one of his devoted followers. When my father was at a family gathering in the late 1990s, he got so upset when he heard that his sister had voted for the candidate who was a Democrat that he had to leave the family gathering and go home, 80 miles away.
Now perfectly normal people seem to have such polarized opinions. I have run into families whose members are not speaking to each other, because of political differences. Facebook seems to magnify these differences. People can broadcast why they feel terribly strongly for one candidate or the other, and pass around political commentary supporting one side or the other. They write commentary on their pages that is much stronger than what they likely would say to someone in person. I think my daughter (a staunch Democrat) was surprised when one of her cousins who had been writing pro-Republican material on Facebook, did, in fact, make the long drive to come to my daughter’s wedding.
We have a similar situation in our extended family. The hard-right GOP members have basically declared war on the so-called “liberals” and have tried to re-program the family with FoxNews and conservative Catholic propaganda. This FoxNews group does not read any type of material- book, magazine, web, etc and only listens to right-wing and Catholic Church media.
The extremism of this bunch is so bad that they will have a red-faced hissy fit at even the mention of the word “environment”.
My conservative brother-in-law starts to cry tears of loyalty at just the mention of the name “Bill O’Reilly” or “Glenn Beck”.
The so-called family “liberals” that are being attacked by the conservative family members are people who are not even remotely “liberal” and not involved in politics of any kind.
Similar situation here, too, Sungr.
http://news.gallup.com/poll/210956/belief-creationist-view-humans-new-low.aspx
Its hard to find common philosophical ground when one’s siblings believe Man was created in the last 10,000 years.
CTG:
“Unless you take no steps to get to know what is happening around, it is hard pressed to tell people that you know nothing. Yes, there are plenty still dreaming but the number of those who are aware are getting bigger.”
yes, it’s much more than just politics…
I very rarely ever mention to anyone that the inevitable decline in FFs will impoverish the entire world…
it’s just too overwhelming for an “unaware” person to grasp in one conversation…
yes, more people are “aware” that something is seriously wrong…
but I think that even most of those “aware” people don’t have the broad knowledge of the FF basis of prosperity to be able to connect the dots…
Or better yet when they have a tiny bit of awareness but think that more technology will fix things.
”more people are “aware” that something is seriously wrong…”
Yes, they believe it is the capitalists fault, or the socialists, or the immigrants, or …
A must read, especially for you americans
https://www.amazon.com/Righteous-Mind-Divided-Politics-Religion/dp/0307455777#productDescription_secondary_view_div_1522163995143
Are youi implying that division is bad? Evil? Is there some state of human nature where division is not present? Or made obsolete? Is division an American phonema?
No, I’m not implying that moral division is bad, what, according to Haidt, is bad though is demonizing people who base their moral on another foundation than you. In his book Haidt lays out his theory about the evolutionary origins of our moral instincts or social feelings, and his main point is that our moral senses are much broader than liberals concern about care and fairness. In fact Haidt claims conservatives have an advantage, because they appeal to a broader set of social intuitions and concerns about loyalty, authority and sanctity. In this way Haidt can explain the great puzzles that has obsessed Democrats in recent years: Why do rural and working class Americans generally wote Republican when it is the D party that wants to redistribute money more evenly?
Nobel Prize-winning economist Robert Shiller warns of an ‘economic crisis’ from trade war threats
https://www.cnbc.com/2018/03/25/trade-war-risks-may-cause-economic-crisis-robert-shiller-at-china-development-forum.html
“Ten years on from the financial crisis, many U.S. state and local public pension systems are still the worse for wear.
“Investment returns have been uneven and funding levels have yet to recover. Many pension funds have meanwhile attempted to boost returns by loading up on alternative investments to levels unheard of a decade earlier.
““Some just cannot grow their way out of it. We have had several years of stellar (stock market) returns and it barely improved the underfunding situation,” said Mikhail Foux, municipal credit analyst at Barclays in New York…”
https://www.reuters.com/article/us-financial-crisis2008-municipals-pensi/battered-by-great-recession-underfunded-public-pensions-to-persist-idUSKBN1H20EG
Perhaps this is the reason why some actuaries are willing to listen to me.
They have been involved with pension funding, and are wondering what has been going wrong, and why the situation doesn’t get better.
Perhaps the notion of wealth for older folks will be getting adjusted? Clean air to breathe and water to drink, a healthy ecosystem, some young people around to help you find some food to eat and to give assistance, some shelter, good personal health and fitness…isn’t that real wealth?
“Ten years on from the financial crisis, many U.S. state and local public pension systems are still the worse for wear.”
The pension system is deep underwater while the economy is holding itself together at the moment. So what happens to the pension system that is chock full of junk like shale fracking debt and overvalued stocks?
John Hussman says
“I continue to expect the S&P 500 to lose about two-thirds of its value over the completion of the current market cycle. With market internals now unfavorable, following the most offensive “overvalued, overbought, overbullish” combination of market conditions on record, our market outlook has shifted to hard-negative.”
all pensions are dependent on forward growth/input of raw energy (ie stuff you burn) into the economic system.
there is a strange belief that pensions will continue to be paid in a ‘renewable’ economic system
I read an article last week about the FED bailing out the pension system. Apparently the bailout will be printing money to hold over the system until 2025.
You would have heard that option here from me first. It’s a no brainer. And already at least all military pensions, for 21 million personnel are not included in the budget deficit. In Australia no pensions are in the budget deficit figures.
People are following MMT by stealth, since as one can see from the flak on OFW it’s a hard sell when we’ve been brainwashed all our lives to not see it.
Another example of this is the sale by NSW of its share of the Snowy Mountains Hydro Scheme for $A6billion to the commonwealth. The Commonwealth will simply mark up the NSW account with that sum and take the sale paperwork in exchange. Convenient.
Governments operate on a cash basis. Pensions and other promises are not reflected as debt. You will have a hard time finding any government anywhere that considers pension a liability. The only exception is to accrue for premiums that have been collected in advance and spent for another purpose.
John Hussman says
“I continue to expect the S&P 500 to lose about two-thirds of its value over the completion of the current market cycle.”
perhaps…
or maybe Mr. Hussman hasn’t heard of the “new normal” where stock markets will never be allowed to go down (much)…
S&P up 2.72% today…
Remington, the 200-year-old maker of rifles, handguns and bullets, has filed for bankruptcy
https://www.bloomberg.com/news/articles/2018-03-26/cerberus-s-remington-gunmaker-seeks-bankruptcy-shield-from-debts
Although I’m not into guns and can’t tell you what’s happening on the inside, my suspicion is that many of the large buyers stopped buying after Trump came in, because they no longer feared that Obama would confiscate their guns. Interestingly, the opposite might be the case, since there is now a growing gun control movement.
Nevertheless this should show that no industry is collapse proof.
That is what the CEO blamed it on…But that is nonsense a 200 year old gun company doesn’t stay in business that long because of one president and go bankrupt in one year because of another. ..That is as laughable as the CEO of Applebees basically saying Millennials don’t like beer and hamburgers.
Actually, they have not kept up with the competition.
Their 700 has really taken a hit.
https://www.americanrifleman.org/articles/2017/7/18/top-selling-rifles-for-june-2017/
ToysrUs files for bankruptcy.
Doesn’t mean anything beyond mismanagement.
Too much debt used in leveraged buyout, earlier, I am sure contributed as well. Buyers drained any profits of the company.
They have had a lot of quality control problems years. Several new pistols were rolled out with serious flaws (necessitating recalls), and the fit and finish of the Marlin rifles declined substantially after they purchased that company. I don’t think sales have ever really recovered.
The Oil Market Problem No One Is Talking About — Yet
https://www.fool.com/investing/2018/03/25/the-oil-market-problem-no-one-is-talking-aboutyet.aspx
RE: the Bolton appointment, hardly a fan but worth a look at his resume, wikipedia
Born 48, draft elligable 1970, served in Maryland NG and Army reserves. Son of fireman and housewife in Baltimore, scholarship to prep school in MY never heard of. Goldwater organizer in HS in 64. On to Yale, summa cum laude. Yale Law. Covington and Burlington, not clear if became partner. Sounds like intelligent. Over the years spread around to think tanks, JINSA, working in administrations and w/James Baker. I’m just digesting a few of the highlights.
Yes clearly a bright fellow … bright enough to understand that this is the way the world works… and willing to do whatever it takes to ensure America does not get Somalia-ized
The Way The World Works
– The luckiest, fittest, smartest, with the capability for ruthlessness survive – always have – always will
– Resources are finite and therefore ownership is a zero sum game
– The strong always take from the weak – if they do not then that is a sign of weakness and a competitor will take from the weak and will usurp the formerly strong dropping them into weakling status
– Humans tend to group by clan or on a broader basis by nationality (strength in numbers bonded by culture) and they compete with others for resources
– Competition always exists (I want it all!) but it becomes fiercer when resources are not sufficient to support competing clans or nations
– Tribal societies understand these dynamics because they cannot go to the grocery store for their food – so they are intimately aware of the daily battle to feed themselves and the competition for scare land and resources
– Modern affluent societies do not recognize this dynamic because for them resources are not scarce – they have more than enough.
– One of the main reasons that resources are not scarce in affluent societies is because they won the battle of the fittest (I would argue that luck is the precursor to all other advantages – affluent societies did not get that way because they started out smarter — rather they were lucky – and they parlayed that luck into advances in technology… including better war machines)
– As we have observed throughout history the strong always trample the weak. Always. History has always been a battle to take more in the zero sum game. The goal is to take all if possible (if you end up in the gutter eating grass the response has been – better you than me – because I know you’d do the same to me)
– And history demonstrates that the weak – given the opportunity – would turn the tables on the strong in a heartbeat. If they could they would beat the strong into submission and leave them bleeding in the streets and starving. As we see empire after empire after empire gets overthrown and a new power takes over. Was the US happy to share with Russia and vice versa? What about France and England? Nope. They wanted it all.
– Many of us (including me) in the cushy western world appear not to understand what a villager in Somalia does – that our cushy lives are only possible because our leaders have recognized that the world is not a fair place — Koobaya Syndrome has no place in this world — Koombaya will get you a bullet in the back — or a one way trip to the slum.
– Religious movements have attempted to change the course of human nature — telling us to share and get along — they have failed 100% – as expected. By rights we should be living in communes — Jesus was a communist was he not? We all know that this would never work. Because we want more. We want it all.
– But in spite of our hypocrisy, we still have this mythical belief that mankind is capable of good – that we make mistakes along the way (a few genocides here, a few there… in order to steal the resources of an entire content so we can live the lives we live) — ultimately we believe we are flawed but decent. We are not. Absolutely not.
– But our leaders — who see through this matrix of bullshit — realize that our cushy lives are based on us getting as much of the zero sum game as possible. That if they gave in to this wishy washy Koombaya BS we would all be living like Somalians.
– Of course they cannot tell us what I am explaining here — that we must act ruthlessly because if we don’t someone else will — and that will be the end of our cushy lives. Because we are ‘moral’ — we believe we are decent – that if we could all get along and share and sing Koombaya the world would be wonderful. We do not accept their evil premises.
– So they must lie to us. They must use propaganda to get us onside when they commit their acts of ruthlessness.
– They cannot say: we are going to invade Iraq to ensure their oil is available so as to keep BAU operating (BAU which is our platform for global domination). The masses would rise against that making things difficult for the PTB who are only trying their best to ensure the hypocrites have their cushy lives and 3 buck gas (and of course so that the PTB continue to be able to afford their caviar and champagne) …. Because they know if the hypocrites had to pay more or took at lifestyle hit – they’d be seriously pissed off (and nobody wants to be a Somalian)
– Which raises the question — are we fools for attacking the PTB when they attempt to throw out Putin and put in a stooge who will be willing to screw the Russian people so that we can continue to live large? When we know full well that Putin would do the same to us — and if not him someone more ruthless would come along and we’d be Somalians.
– Should we be protesting and making it more difficult for our leaders to make sure we get to continue to lead our cushy lives? Or should we be following the example of the Spartans https://www.youtube.com/watch?v=eZeYVIWz99I
– In a nutshell are our interests as part of the western culture not completely in line with those of our leaders – i.e. if they fail we fail – if they succeed we succeed.
– Lee Kuan Yew is famous for saying ‘yes I will eat very well but if I do so will you’ Why bite the hand that whips the weak to make sure you eat well…. If you bite it too hard it cannot whip the weak — making you the weak — meaning you get to feel the whip….
– Nation… clan … individual…. The zero sum game plays out amongst nations first … but as resources become more scarce the battle comes closer to home with clans battling for what remains…. Eventually it is brother against brother ….
– As the PTB run out of outsiders to whip and rob…. They turn on their own…. As we are seeing they have no problem with destroying the middle class because it means more for them… and when the weak rise against them they have no problem at all deploying the violent tactics that they have used against the weak across the world who have attempted to resist them
– Eventually of course they will turn against each other…. Henry Kissinger and Maddy Albright bashing each other over the head with hammers fighting over a can of spam – how precious!
Actually, the current economy is a self-organizing system that works pretty well most of the time.
We know that in prior collapses, the biggest cause of death was epidemics. If we are facing a new collapse, we really don’t know how things will work out. I would guess lack of clean water would be high on the list of problems. This, by itself, tends to lead to the spread of disease.
I expect that major parts of countries will lose electricity supplies even before they lose oil supplies, simply because electricity is today very much subject to outages. Fixing outages may be one of the first abilities to disappear, as in Puerto Rico. One the other hand, the first problem may be government collapse, or financial system collapse at least in some parts of the world. If this happens, electricity, oil and natural gas supplies may disappear simultaneously. Or the problem may simply be rising homelessness, and with this, lack of access to basic energy supplies.
However lack of energy supplies arises, citizens are likely to take matters into their own hands. This may lead to a deforestation problem, rather quickly. I remember reading stories about Greeks cutting down publicly owned forests for firewood, simply because they were too poor to afford to buy other fuel supplies.
I don’t think that it makes sense to focus on the worst possible outcomes. We can focus with wonder and awe at how well adapted the current system has made a wide range of plants and animals and humans. We were never guaranteed long life, even though we have come to believe that it is now a right. Maybe we need to focus more on making today as good as possible. We have come to believe we humans have control over the future, but this is not really the case.
Wise words, Gail. And to FE i recommend this book: https://www.basicbooks.com/titles/christopher-boehm/moral-origins/9780465020485/
The hunter-gatherers practised a reverce dominance against bullies and thieves, which set the first humans apart from the law of the jungle to be found under primates.
This book is highly rated on Amazon. This is one of the reviews I found:
It seems to me that the situation that led to the egalitarian behavior was better energy supplies, when humans began to control fire. This had happened some time earlier, since the first control of fire began more than 1 million years ago. The addition of more energy supplies can be reflected in many ways, including more “organization.” I think simple sharing would be along these lines. (Of course, going from hunter-gathering to farming was a major example of using energy supplies for organization.)
In recent years, energy supplies per capita have start getting scarce/into short supply. When this happens, the system tends to go back the other direction. This is the “freezing out” phenomenon. I am not optimistic that we can fix the problem. Maybe we can understand the problem better, by reading a different book recommended today, “The Righteous Mind: Why Good People Are Divided by Politics and Religion,” by Jonathan Haidt.”
Altruism is easy when there is enough to eat….
When there are 7.8 billion people — and virtually no food — the concept of altruism will not exist.
It will be a vicious chaotic free for all over a few bones and scraps…
And I have no doubt whatsoever… humans will be torn to pieces… roasted/boiled… and eaten on an epic scale.
I am trying to get as scrawny and gnarly as possible so that when they hungry hordes come … they leave me alone and look for more tender options
thats why Mrs Fast keeps surreptitiously feeding you
The Unhappy States of America . Gallup Study Shows Well-Being in Decline Across America
Despite some gains in specific categories, the overall results show a nation where well-being is in sharp decline. From 2016 to 2017, America saw its largest year-over-year drop in well-being in the 10 years that Gallup has tracked these data.
https://www.citylab.com/life/2018/03/the-unhappy-states-of-america/555800/?utm_source=atlfb
“And more than half of respondents say they are “thriving”—more than ever before. What we could be seeing is a growing inequality of well-being that mirrors the country’s rising economic and spatial inequality.”
this puts things in a clearer perspective…
I would say I’m thriving… but I don’t see any guarantees that it will continue…
the general direction will certainly be down…
oh well… at least winter is over…
According to fx traders and their macro trends the dollar price is about to spike any moment now. If the dollar spikes, then the oil price collapses.
After this spike the dollar will start its death decline though…or we die.
https://pbs.twimg.com/media/DX6lht2XkAA9yFI?format=jpg
US dollar weakens on trade war tensions:
https://www.cnbc.com/2018/03/22/forex-markets-trade-concerns-and-safe-haven-yen-in-focus.html
This is what is making the current price of oil higher.
Thanks! That sort of puts the direction of oil prices in the direction that I have been expecting: down. There are so many pieces of this story, it is hard to know which piece changes first.
There are, of course, all of the derivatives that need to keep behaving properly, as well. Rapid swings in currencies make a person worry about how well the derivative market will hold up.
I had an article in the leading norwegian newspaper, Aftenposten, this week. The article is an extract of an essay in the journal Samtiden, where I repeatedly refer to the work of Gail Tverberg. The title in english would have been something like: Democracy crumbles, when energy resources deplete.
If someone wants to translate it in english, we could send it to NYT or WP;)
https://www.aftenposten.no/meninger/kronikk/i/VRemG6/Tommes-energikildene-vare_-kan-demokratiet-forvitre–Sven-Rogeberg
that’s why i wrote the same thing here:
https://extranewsfeed.com/from-oilslick-to-tyranny-e35d04b31fc3
It would be interesting to know if your observations reach the same conclusions as mine
Yes, we agree on the main points: our, modern, human values are fossil fuel values; renewables are a subsidised technocult dependend on a ff infrastructure; the money illusion. BTW I couldn’t have written the essay without Gails blog and the comment section!
Gail focuses on per capita which is an average. The elites appear to be using the per capita of the non elites. Modern military with guided munitions with an error of 30 feet or so compared to 1200 feet during WWII require less fuel per hit as well or less per capita.
How many people work in the oil industry? Looking at the graphs in “Limits to Growth” how does the per capita energy work? I am too lazy to do the math.
This revolution in AI is comparable to that of electricity 100 years ago. Things got better not worse.
If the system is self organizing, won’t it reorganize to adapt as it has always done?
Modern industry requires far fewer workers than before, a degree in any of the humanities might be of less value in an industry with heavy reliance on AI. What does one say to a computer colleague upon arriving at work? Who makes the coffee run?
i think i understand your thinking—if i’m mistaken—apologies.
electricity (or coal oil or gas for that matter) used as motive power cannot be compared to AI use and its exponential growth.
Motive power, with whatever driving force behind it, moves stuff from A to B.
That might be a hammer against an anvil, or rocket dropped on the moon, carrying men. Those two extremes are merely a matter of technical development of reactive forces over time, based on incremental inputs of energy and human intelligence
Not Artificial Intelligence..
No matter how powerful your AI is, it can never do those things—you cannot ‘think’ something into physical action or existence
It is not possible to ‘think’ wheat into bread
or ‘think’ bread into giving you a full stomach
Developments in AI just lead you to think they do, and that AI will deliver a utopia of infinite plenty as AI improves. It can’t.
imagining AI as a step comparable with electricity is wrong. AI just shifts electrons around.
electricity allowed us to have AI (which is a sophisticated form of technology)
AI cannot provide the means of its own functional base (electricity)
The exponential growth of ‘technology’ means nothing without a corresponding availability of energy to back it up——it is in effect a one way ride
The reason modern industry requires far fewer workers than it used to, is because those non-workers are being supported by the input of energy and material success of those who are working.
The ultimate failure of this can be seen in the 44m US non-workers currently on food aid, or living in tent cities. It is not possible to ‘think’ those people into secure prosperity, no matter how much you might desire it.
There just isn’t enough surplus energy in our economic system to do that. They are not shirkers, just people unsupported by the current ‘work system’….there are no economic jobs for them to do.
AI isn’t going to change that
Suppose AIs can run the system with zero humans. Suppose the system aims to support only 10 million humans. Yes we lose economies of scale but that just means the AIs will need to work harder. What would be the total required energy (really power)? How does it compare with hydroelectric production? Nuclear?
None of this high technology is possible without the economy of scale, including the chips and such for the AI itself. The loss of economy of scale means that the ENERGY COST per unit goes up in a time of increased energy scarcity.
‘working harder’ cannot happen without energy input
with only 10m humans–there can be no ‘system’ —it would have no purpose. Machines running around would have no ‘purpose’ or reason to exist. With only 10m people, the planet would reforest itself in 25 years. (probably a good thing anyway)
Machines would simply stop, and there would be no one or nothing to make them move again. Why would they?
A machine cannot exist to serve itself. Humans could not laze around all day watching them and being fed by them—that is pure fantasy. Humans need food, clothing and housing (energy).
Machines cannot do that, because no machine can output more energy than is put in no matter how smart they are.—AI cannot change the basic laws of physics.
AI cannot create its own energy resource—that’s “Terminator” technology—which is science fiction.
We are in danger of thinking sci-fi into an alternative reality.
there isn’t one, no matter how much we would like it to be.
Good replies, Norman
Yes, the per unit energy cost will increase with smaller scale. Since we are driving a system that 1000 less output even at 10x lower efficiency that is 100x less energy needed.
You took the words out of my mouth Norm. That is a great summary of our situation!
If only aiming for keeping 10M alive hunt/gather would do.
In fact, pretending your 10M became true, a couple 100M people could live outside THAT civilisation as long as they didn’t get in the way.
Did someone say deflationary death spiral?
https://socialecologies.files.wordpress.com/2015/08/ia-deflation-cycle.gif
The big D as in a deflationary death spiral is only relevant for the unproductive plebs and will be carefully managed by the computers that run this shitshow.
Say goodbye to instadoom drama and hello to the slow churn until the twilight of humankind.
You can “carefully manage” it as much as you want, we still live in a networked economy that also depends on economies of scale to keep down per unit production costs on everything including computer parts strangely enough.
Computers can’t magic up spare parts once the economy starts irreversibly shrinking and critical parts of infrastructure stop functioning which in turn makes other parts nonfunctional that depend on them which then makes other parts nonfunctional and so on.
never mind
dominoes are a good low energy lesson in world economics
Well, repeating the memes – JIT, networked, etc., will do nothing to change the fact that plebs will be sacrificed for BAU to prevail. Yes, it’s time to say goodbye to the useless consumerists.
The obvious and simple fact is that less people put smaller stress and strain on the finite resources of planet earth.
I don’t doubt that the plebs will be thrown to the wolves first, however “BAU Lite” is still impossible to maintain.
No industrial civilization is also good for the finite resources of this world 😉
The millions of ‘useless’, drunk, drugged and despairing of today would, at an earlier stage of civilisation, have been labourers, servants and craftspeople, and happy enough, functioning and integrated (unless slaves in a Roman death-mine or some such thing).
Have you seen the stuff that James Burke is putting out about this topic these days – ‘motes’, etc?
i hadnt heard about that, but checked it out
every object—however ”nano” must have an origin
so it must have an ”originator”—ie producer/factories etc.
nothing is ‘produced” without ‘purpose”—ie ultimate profit for someone, somewhere for some reason
if the entire planet is covered with nano bots so small we cant see them, and they have some kind of free unhindered movement, it follows that our bodies will become infested and thus overwhelmed by them, because whoever makes them will have made mistakes that allow this to happen
other that that—the biggest load of codswallop ive read in years—and i’ve read a lot
Just what I thought Norman.
I heard James Burke on BBC radio at Xmas talking about this, and it was so over the top I thought that he was simply satirising the whole Nano Future thing.
Then I read his articles, and came to the sad conclusion – because I admire his early programmes – that he might really believe it all and is in earnest.
Oh well, here’s looking forward to riding to Mars in uploaded form, in a nano spaceship guided by a laser beam…… 🙂
Actually rather amusing to think of us infested with nano-lice, as our ancestors were with real fleas and lice!
I think that in Norway, you have a “teachable moment” — a moment in which people will listen to you. I don’t think that we do yet in the US. I think that this is the major problem we would have getting the article published in a US newspaper.
The focus of your article is on resource depletion. The people of Norway are no doubt quite aware that Norway’s oil supplies have been declining since 2001. The rising prices hid the problem of falling oil exports for a while, but once prices dropped in 2014, the awful reality hit. Even with natural gas exports, which are still rising, Norway is in a much worse situation. The people of Norway are concerned about this, and willing to listen to the story.
In the US, we still have oil and gas production rising. We also have the US Energy Information Agency providing information suggesting that this situation will last for a long time.
It seems like a translated version of my article might be more welcome in other countries that are worried about resource depletion. The UK is a possibility because of its declining North Sea Oil–but I don’t think that the people of the UK really understand the problem well though yet.
What we need is a teachable moment–otherwise, it is frustrating to get newspaper to try to listen.
teachable moment?
Great Depression 2.0 should fit the bill…
maybe even Great Recession 2.0…
people will want answers… maybe even “the truth”…
until then, (almost) no one will listen…
I think the illusions that the London FIRE sector provide over the declining UK economy would prevent them from being receptive.
You are probably right.
I have two different life and pension actuarial groups that want me to give talks in the not-too-distant future. (I am preparing one of the talks now.) They are concerned about interest rates and perhaps stock prices. I am not sure how much else, related to our current problems, they are concerned about. Of course, they would like to hear that interest rates will rise, and that asset prices will continue to rise.
Do you think we are teachable? Bernay’s probably understood things better, we are emotional and perhaps wired that way in an archetypal fashion. Were someone to go out and tell a populace that most of them were going to perish from the lack of oil, their jobs were done, it was hopeless what good would it do? Do perhaps the millions on anti depressants already know that?
As for interest rates and stock prices, put me in the camp for increases in both. Go team!
I would say that there is almost zero appreciation of the energy predicament among the mass of people in the UK, of whatever educational and financial level. Between the Windy-Solar cultists, Brexit fantasists, EU-worshippers, and those who think that everything can be put right for the masses through a massive house-building programme, higher progressive taxation of the rich and government controls on energy prices and travel costs (the poor old train-using commuters) there is little room to tell the real, rather gloomy story. And those are the people actually paying some attention to current affairs…..
Actually the article is not concerned with Norways situation in particular, but the status of the world economy, where migration, increased inequality in countries like the USA and increased debt are symptoms of our predicament, which roots are that energy per capita is not increasing (sufficiently). It makes your point that when the economy is reaching limits, there is no marked price that can satisfy all three stakeholders: non-elite workers, producers and tax collectors. The only way I (indirectly) adress the situation in Norway is in the critic of solar and windpower. In the abscence of cheap, non-polluting energy we are standing standing on the brink of ressource wars between the global players.
I agree. The article is general. The problem is getting people elsewhere to think sufficiently in these terms that newspapers would be willing to run the articles. I have no objection to trying to place such an article. The problem I see is that virtually no major paper would accept the article, because they would not feel like it fits in with the general message they are delivering.
It was possible in Norway;) Aftenposten is THE liberal MSM in our country. So if someone hier on OFW has the skills to translate it into english, please raise your voice;) Since my article is leaning heavily on the thoughts of Gail Tverberg, it would be reasonable that we co published in english.
Let me see what I can do, after I finish the things I am up to my ears in right now.
http://www.bbc.com/news/world-europe-43533804
Orange snow in several countries. Sahara desert sand mixed in apparently.
A depopulation will not hurt Civilization in the long run.
The University of Cambridge, with a few thousand permanent staff (not all of them in science), publishes more scientific papers than all of Russia.
The number of people actually needed to run Civilization is surprisingly small.
I think that even if a 99.5% reduction occurs, like what Stephen King wrote in “the Stand”, the survivors are likely to be the top 0.5% of society so no real hurt to the Civillization/BAU/Deep State/whatever you name it.
The republic of China lost 99.5% of its pop when it fled to Taiwan, not counting the native Taiwanese, but it did bring 50% of its entire congress of 1948 (the only time in China’s history when a general election was held) and a large portion of China’s elites. It functioned till 1991 when the talents it brought to Taiwan died off and the native Taiwanese took over.
The cold truth is, Civilization can be maintained with much fewer numbers than you think.
Who do you think are going to mine the needed minerals? Fix the needed roads? Grow the needed food? Repair and maintain the electricity transmission system? Make all of the necessary replacement parts to keep all of these things operable? Do you think that the 0.5% (however you define it) has the skills to fix and maintain all of these systems?
If the big group is having trouble maintaining necessary systems, don’t you think the 0.5% will as well. We can’t run the world with a bunch of bankers and doctors.
In a Google search regarding WWII fighter pilots, 1% were responsible for 40% of the kills. In my readings, this sort of thing show up all the time and in finance, the 1% or less have more than half the world’s wealth.
Do the .5% have the skills? Not yet, but look at a modern factory, wired with IOT, machines adjusting for tool wear, etc. Compare the drafting rooms of WWII airplane factories with today’s CAD/CAM and integrated fluid dynamic fluid analysis which used to require wind tunnels.
https://www.zerohedge.com/news/2018-03-25/everybody-was-quantum-fighting-those-computers-were-fast-lightning
We are having a major paradigm change; even here on OFW there is a reluctance to accept driverless, autonomous cars/trucks when in excess of 40K people die in auto accidents each year. The effect of a snow storm has been mentioned when during one of the Iraq wars a drone with synthetic aperture radar flew over tanks during a sand storm and a bomber dropped GPS guided bombs based on real time information hitting them one after another. The technology is there, computing power is increasing, understanding of how to use it is increasing. It is tough to stay in the game.
If “Limits to Growth” correct, there will be a reduction in population, someone will be left and we will not solve tomorrow’s problems with today’s tools. The trick is getting into the correct boat just before it sails.
Yes, or stay at the forefront of tech and watch in horror as the lesser plebs get booted off the BAU train one after the other.
It must be blatantly obvious at this stage that Tech runs every aspect of this shitshow.
This clunker will be kept operational as long as it takes by whatever is deemed necessary. If a few nukes has to fly to prove a few points – then so be it.
“It must be blatantly obvious at this stage that Tech runs every aspect…”
yes!
it is obvious…
but, what is not obvious to most, outside of the OFW types, is that FF is the one ring that rules them all…
the high tech world is a complex integrated system that exists as a whole and will fail as a whole when there are no longer enough energy resources available…
When electricity goes out, most of the high tech will be gone.
We seem to lose part of our electricity with every storm that comes through. (Even construction in the area seems to be enough, sometimes.) It takes workers driving fossil-fuel powered trucks to fix the problems. It also workers and fossil fuel supplies to keep the roads in passable condition, and to maintain the oil and gas pipelines. It is one big interdependent system. If is possible that only Puerto Rico or only Texas, or only some other area will have a problem for a while, but as we lose our ability to repair using fossil fuels after storms, everything fails pretty quickly.
You pays your money and you takes your chances…as the saying goes.
This is a predicament, not a problem.
One needs to eventually understand this.
Or not—-
”1% were responsible for 40% of the kills. In my readings, this sort of thing show up all the time”
The problem is identifying the 1%.
“In a Google search regarding WWII fighter pilots, 1% were responsible for 40% of the kills.”
They would be responsible for ~0% if the other 99% weren’t deployed. That’s the problem with this stupid idea of 1% technocracy – it only focusses on the actual/possible ability of machines to do very specific tasks under very specific conditions. The environment which allows them to perform in this manner, i.e. BAU as we know it, is ignored. The tech cannot create that environment by itself. At most, it can exploit it more efficiently, usually at the cost of more energy consumption elsewhere. CNC cannot give you more steel, but it might give you a profit by mass-producing more cheaply certain goods which are made of steel, as long as you can afford more steel.
The environment itself, and not technology, determines the degree to which technology can exploit it.
well put jup
second that. well done.
Bankers are declining, they are not the wealthiest, Gates, Bezos, etc. are. If you are a multi billionaire with a sense of humor, take $10B and open a savings account at your local bank. Jamie Dimon’s salary was approx $27M last year, 1% of a $3B exceeds that nicely. Zuckerberg is not a banker and only did 2 years at Harvard.
Medicine is being robotized, my understanding is a general anesthesia machine exists that is more consistent and effective than an anesthesiologist which is typically a $400K/year job with a significant occupational health risk of drug addiction.
” The Washington Post reported last year that in hospitals using the Sedasys machine, patients were able to leave sooner, and that not needing an anesthesiologist present saved considerable costs. It’s not clear how much impact the history of animosity with some anesthesiologists had on the disappointing sales, but it probably didn’t help.”
Nope, AMA is a good union; but costs are rising.
An interesting time to be alive as it is a beautiful world. Be blessed.
The gas pipelines are being replaced in this village: it’s a FF bonanza – vehicles, drills, diggers, workers’ cars, protective clothing, etc. Even the safety barriers and signs. Oil rules. Very instructive as to reality.
Kulm thinks that the University of Cambridge is essential to maintaining our society. At this point they could not be less essential.
The University of Cambridge currently believes that property speculation and pouring concrete for miles around is the key to its survival!
eyerolling seems to be the only relevant response here
A favorite artist, that I have seen perform many times.
Thanks Dave, that was cool.
For this to happen the system needs to not collapse, and die-off needs to come from starvation or war.
I agree that with current arrangements those who now best navigate the system will continue to do so.
If we go full Mad Max, not so much.
Sure, if one ignores the interdependent nature of the economy and the necessity of economies of scale one can pretend that neatly shrinking the economy (I believe Fast Eddy refers to it as “BAU Lite”) is possible.
«I had faith that evolution could say something importmat about the regulatory systems that economists preside over, even if I did not yet know the details. After all, financial markets and other regulatory systems are products of cultural evolution, based on psychological processes that evolved by genetic evolution. That’s my area of expertise. If I can’t connect the dots between my area of expertise and economic theory, then something’s wrong—and it might be on their end, not mine. I therefore took up the challenge of answering our benefactor’s question, although I must admit that I felt like the gentle hobbit Frodo making his way toward Mordor.»
A personal history of science regarding economics from David Sloan Wilson, part 1 and 2.
http://evonomics.com/failed-economics-tyranny-of-mathematics-enslaved-wrong-theory/
Economics was (and still is) terribly far off. It did not understand that energy consumption related to land, labor, and capital. It did not understand that supply and demand didn’t necessarily work in the direction assumed, because of feedback loops and lack of substitutes.
https://www.forbes.com/sites/johntharvey/2016/10/31/five-reasons-you-should-blame-economics/#7d084603cccd
I agree. Current economics is dreadful, and has no interest in fixing itself.
MMT is no better, however.
John Harvey doesn’t agree with you. He’s a fan. A big thing about MMT is that it works for us, and unlike mainstream neo-liberal stuff which makes economics into some sort of deity that we have to sacrifice for the good of the 0.1%. What would you choose?
http://www.forbes.com/sites/johntharvey/2015/03/01/balancing-the-budget-economic-catastrophe/
http://www.forbes.com/sites/johntharvey/2015/11/06/yes-there-is-a-free-lunch/?utm_source=followingweekly&utm_medium=email&utm_campaign=20151109
There’s a ‘million’ sites out there that support MMT, written by people a lot smarter than I on the topic.
A person can 100% agree that it makes no sense to balance the US budget, without agreeing with MMT.
You are right that the economic growth depends on productivity growth; productivity growth in turn depends on growing energy supply.
In some cases, more debt can be used to allow increased energy consumption, because the additional debt allows wages for workers to rise, and thus it increases demand. The increased debt indirectly also increases price, creating an incentive for companies to extract energy resources that are more expensive to extract.
Without including this in the story, your story is false.
That energy business doesn’t falsify the story. It’s an add on over and above the theoretical building blocks. You cannot falsify MMT because it is a descriptor not a hypothesis. It’s not like the mainstream with its endless selection of economic models which are theoretical and 100% proven to be false. Any economic system has to work with the energy equations. MMT is not above that and neither is the mainstream. What you have to do, and it is a going concern, is use MMT to regulate the relationship with the energy equations. You are not doing that, yet you are better informed than many about what the relationship would be.
You need, if you want progress, to adopt MMT as a guide to solutions regarding energy. You are going to get a lot of false results if you don’t base your work on economic reality, represented by MMT. It’s a big motivator for my perseverence with OFW.
I do agree that debt plays a huge role. Debt is, in fact, a promise of future energy (really goods and services that energy products will produce). The economy gets “pulled along” with these promises. Very few people have figured out that these promises cannot really be kept. As long as they can be kept, the system has worked pretty well.
MMT is perhaps like the ravings of a very sick patient: there’s often some little bit of truth in them, but not much. What one would expect in the dying phase of a civilisation.
More Oxycontin!!! More Oxycontin!!!
This is one way of explaining its use.
Ah – ha!
US friendly suggestion to China: Buy more American gas if you don’t want more tariffs
“China needs to import very, very large amounts of LNG and, from their point, it would be very logical to import more of it from us, if for no reason other than to diversify their sources of supply,” said US Secretary of Commerce Wilbur Ross in an interview with Bloomberg. “It would also have the side effect of reducing the deficit.”
https://www.rt.com/business/422146-china-us-trade-deficit-gas/
sounds like a win-win to me… 😉
but why don’t they just build a pipeline from Pennsylvania to China? 😉
Cuz it’s cheaper to built a pipeline from Russia….
Good point! Sending LNG by ship is very expensive.
The Shale Gas Revolution Is A Media Myth
https://oilprice.com/Energy/Natural-Gas/The-Shale-Gas-Revolution-Is-A-Media-Myth.html
Shell forecasts global Natural Gas supply shortage in mid-2020s
https://www.cnbc.com/2018/02/26/shell-warns-of-lng-shortage-as-demand-for-liquefied-natural-gas-booms.html
Chevron expects global Natural Gas supply shortage by 2025
https://www.reuters.com/article/us-chevron-lng/chevron-expects-lng-supply-shortage-by-2025-idUSKCN1GI2EH
smooth sailing until mid 2020s!
then, the key question becomes: where will natural gas still be abundant and where will there be shortages?
the USA seems to have enough into the 2030s…
Russia is loaded…
Japan and Europe have almost zero, even now…
Thanks, finally we are getting somewhere..
In similar vein, if I recall it correctly it was on the news the incoming US vs. China trade sanctions are ~60B vs 3B Chinese retaliation, hence it is evident who is still the boss here..
It’s not much more than a bluff, though. The goods have to come from somewhere, and if China calls it then presumably the policy makers are certain that someone else will provide them. But who – India? SK? Brazil? All of the above?
The core of the problem resides elsewhere.
Have seen recently many Chinese Yuppies, basically offspring of the current politburo and major bizpeople, they are educated, focused, logical. But that’s not how you compete with the dominant empire on the way out, where instead far edge of psychopathy, rulez the game.
It’s quite similar to the situation how ancient Rome slowed it’s decline, the sheer lunacy and cruelty had no match among their adversaries..
Hence the looming tariff war, the Chinese response will be very tame, they are not ready, not willing to act boldly..
My thoughts exactly. I was being facetious when I said the policy makers are certain about a plan B if China calls the bluff. Rather, they are certain China will fold, but I’m less certain than you about how justified such certainty might be.
one thing that I’m feeling is that China does not fear the USA at all…
why should they?
the USA is still the top dog, but that’s very shaky, given the many problems we have…
from the top down, from the 1% and the Fed going to huge extremes to keep “the economy” running, down to the poorest young adults and opioids, there is a lot of information which China can see as clearly as anyone else…
fear the USA?
perhaps a little bit… like fearing a psycho…
but China will call that bluff if it’s in their best interests…
It depends on how you count things, which country is top dog. In terms of energy consumption, China is way ahead of the United States. These are all of the energy consuming nations/areas with energy consumption over 200 MTOE in 2016, based on BP’s data.
China – 3,053
United States – 2,273
European Union – 1,642
Nations that formerly made up the Soviet Union – 957
India – 724
Russia – 674
Japan – 445
Canada – 330
Germany – 323
Brazil – 298
South Korea – 286
Iran – 271
Saudi Arabia -267
France – 236
It is the energy “have-not” countries of the EU that keep taking about substitutes for fossil fuels. Their big problem is lack of energy supplies. Japan is also in tough shape.
China has been pulling the world economy forward since 2001. One of our problems now is that they put out false numbers regarding how much their economy is growing. China’s growth is also distorted by rising debt, which helps keep commodity prices higher than they other wise would be.
Quite possibly worldof.
A friend of mine who spent many years in banking in both China and the US assures me that the American industrialist/financier class are the most cynically ruthless and ammoral of the two, to a degree that he sometimes found shocking. (His old boss and then business partner is certainly a psychopath.)
A loss of ascendency will not be greeted with enthusiasm and rationality by such people, to say the least.
From what I have seen, China was considered a developing country when these trade arrangements were made. so they had certain concessions which advantaged them and now it’s seen to not be suitable as it’s no longer a developing nation. Negotiations will have to address these loopholes.
Exxon Mobil: The Time Has Come
Summary
Exxon Mobil will not focus on buybacks going forward. The market with its short-term view did not like this approach.
Long-term focused investors will benefit from rising investments and production growth over the coming years.
Exxon Mobil’s dividend yield is at a twenty-year high and the dividend will likely be raised again soon.
Article Thesis
Exxon Mobil (XOM) is trading at a low valuation despite oil prices being well above the lows formed over the last couple of years. The company offers a juicy dividend yield and the growth outlook for the oil giant is positive.
Investors are poised to see compelling returns going forward, as production growth, rising cash flows, and dividend increases will lead to ample total returns.
Exxon Mobil’s share price has been battered over the last couple of months, despite the fact that the fundamental picture for oil & gas companies remains positive:
Shares of Exxon Mobil trade at $74 right now, down double digits year to date. WTI and Brent, however, trade at more than twice the price they traded for at the nadir of the oil price decline.
The most recent share price decline was largely driven by the fact that the market wasn’t happy with Exxon Mobil’s growth strategy. The company announced a plan to more than double its earnings and cash flows through 2025. This requires heavy investments into new projects, Exxon Mobil will, therefore, increase its capex spending to $30 billion in the 2020s from $24 billion this year.
These growth investments make it less likely that Exxon Mobil will pursue a meaningful reduction of its share count via buybacks in the near future. The market had hoped for such an announcement, the lack thereof made the share price decline.
Aggressive Growth Plan Is A Win In The Long Run
Exxon Mobil will likely not shrink the share count aggressively going forward, a strategy the company has pursued in the past:
Since 2000, Exxon Mobil’s share count has dropped by ~40%, this alone has increased each individual share’s portion of the company’s earnings and cash flows by 67%.
In that time frame, Exxon Mobil has diverted a huge amount of its cash flows towards buybacks, but production did not grow very much as capital expenditures were not at a very high level. Exxon Mobil has now chosen to pursue another strategy going forward. The growth investments will take years to impact Exxon Mobil’s cash flow and earnings statements, due to the long time for new projects to ramp up production.
The market with its short-term view didn’t appreciate this strategic shift, despite the fact that long-term oriented investors will benefit a lot if everything works as planned: CEO Woods has stated that production is poised to grow to five million barrels of oil equivalent per day in 2025, which will result in earnings of $31 billion with oil prices remaining at the current level.
In 2017, Exxon Mobil has reported adjusted earnings of $15 billion, thus profits are forecasted to double over the coming seven years. Even if Exxon Mobil does not repurchase any shares during that time period, its EPS would more than double as well. Compared to an approach where Exxon Mobil focuses on buybacks and keeps its profits flat, that looks like a good move: The buyback strategy has made Exxon Mobil’s EPS grow by 67% in 17 years since 2000 (all else equal).
More than doubling the company’s EPS through 2025 thanks to heavy investments into shale projects, refining, and deepwater projects looks like a compelling growth plan. Higher profitability will also lead to rising cash flows for Exxon Mobil:
https://seekingalpha.com/article/4158474-exxon-mobil-time-come
This is a huge relief!!!!
Bottom Line
Exxon Mobil is investing heavily into the future and has stopped focusing on buybacks for now. The market misses the immediate gratification of share repurchases and did not like the fact that it will take a while for the investments to play out. For long-term focused investors, this isn’t bad news at all, though, as Exxon Mobil’s investments are poised to increase profits and cash flows immensely.
Shares of Exxon Mobil offer a high dividend yield, and the last time the yield has been this high, Exxon Mobil’s shares were a great investment. Shares of the oil major have also gotten significantly cheaper over the last couple of years, both on an absolute basis as well as relative to the peer group.
Overall, it looks like Exxon Mobil will be a solid investment over the coming years, providing strong income generation and production growth at an inexpensive valuation.
Rex had to sell his shares. What timing. Just a coincidence. I’m sure.
Bottom line: FFs were a Faustian deal with the devil. I’m sure it seemed like a good deal at the time.
bottom line: FFs are great…
the many positives far outweigh the few negatives…
it was a good deal, and still is a good deal…
in the next century, there will be legends told around campfires…
of the awesome things that were done using FFs…
“More than doubling the company’s EPS through 2025 thanks to heavy investments into shale projects, refining, and deepwater projects looks like a compelling growth plan.”
because (and sorry for posting something so obvious here on OFW), we all know how highly profitable are shale and deepwater projects…
We assume that prices will go up, and fix the profitability problems.