Energy Return on Energy Invested – Prof. Charles Hall’s Comments

In my most recent post, Why the Standard Model of Future Energy Supply Doesn’t Work, I made some comments about the calculation of Energy Returned on Energy Invested. Professor Charles Hall sent me the following response to what I said, which he wanted to have published. I have a few follow-up comments, but I will save them for the comments section.

Section of Why the Standard Model of Future Energy Supply Doesn’t Work Upon Which Comments Are Being Made

The Energy Return on Energy Invested (EROEI) Model of Prof. Charles Hall depended on the thinking of the day: it was the energy consumption that was easy to count that mattered. If a person could discover which energy products had the smallest amount of easily counted energy products as inputs, this would provide an estimate of the efficiency of an energy type, in some sense. Perhaps a transition could be made to more efficient types of energy, so that fossil fuels, which seemed to be in short supply, could be conserved.

The catch is that it is total energy consumption, that matters, not easily counted energy consumption. In a networked economy, there is a huge amount of energy consumption that cannot easily be counted: the energy consumption to build and operate schools, roads, health care systems, and governments; the energy consumption required to maintain a system that repays debt with interest; the energy consumption that allows governments to collect significant taxes on exported oil and other goods. The standard EROEI method assumes the energy cost of each of these is zero. Typically, wages of workers are not considered either.

There is also a problem in counting different types of energy inputs and outputs. Our economic system assigns different dollar values to different qualities of energy; the EROEI method basically assigns only ones and zeros. In the EROEI method, certain categories that are hard to count are zeroed out completely. The ones that can be counted are counted as equal, regardless of quality. For example, intermittent electricity is treated as equivalent to high quality, dispatchable electricity.

The EROEI model looked like it would be helpful at the time it was created. Clearly, if one oil well uses considerably more energy inputs than a nearby oil well, it would be a higher-cost well. So, the model seemed to distinguish energy types that were higher cost, because of resource usage, especially for very similar energy types.

Another benefit of the EROEI method was that if the problem were running out of fossil fuels, the model would allow the system to optimize the use of the limited fossil fuels that seemed to be available, based on the energy types with highest EROEIs. This would seem to make best use of the fossil fuel supply available.

Charlie Hall responds:

I have always been, remain and will probably always continue to be a huge fan of Gail Tverberg, her analyses and her blogs. I am also committed to try and make sure science, such as I understand it, remains committed to truth, such as that is possible, which includes an accurate representation of the scientific work of others. In that spirit I wish to correct a short piece (referenced above) that is attempting to represent my own work on Energy Return on Investment (EROI or EROEI) but does not do so in a way that is fully consistent with the published work of myself and my colleagues.

I define EROI as a simple ratio, not a model, but have no particular concern about Gail’s use of the word model other than that it may imply something more complicated than it is. EROI is an observational tool for analysis, not a model with an objective in mind. My perspective is summarized in my 2017 book “Energy Return on Investment: A unifying principle for Biology, Economics, and Sustainability” although my approach is consistent throughout my published work with occasional small additions as our understanding expands, changes in available data occur or new questions arise. For example my methods going as far back as Cleveland et al. 1984 and Hall, Cleveland and Kaufmann (1986) are available for anyone to see and virtually the same as those in Murphy et al. 2011 and Hall 2017. The field is rich and very active today, with an entire well-funded and attended four day meeting at the French Institute of Physics at Les Houches dedicated to EROI last year, a two day session on petroleum (including many papers on EROI) at the American Chemical Society in New Orleans a month ago, and many very interesting publications by, for example, Carey King, Marco Raugui, Adam Brandt, Mohammed Masnadi, Victor Court and Florian Fizaine among many others.

As others increasingly used EROI there became increasingly different approaches used, so, in order to generate a consistent nomenclature and basis for comparison (EROIstandard) while allowing flexibility and creativity in use we published a protocol for performing EROI analysis (Murphy et al. 2011; Carey King has also addressed making the nomenclature and methods more explicit). Sometimes EROI studies are not easily comparable due to limitations in data or philosophy (see point 3). This is not something that escapes EROI researchers and is widely discussed in the literature. Sometimes we have examined the reasons for different EROI’s in the literature (e.g. Hall, Dale and Pimentel). Another issue is that it is common for blogs and reporters to read more into the results of scientific publications on EROI than the authors sought to assess, and such false conclusions can move very quickly on the Internet.

I now address some of Gail Tverberg’s specific points (in bold):

1) “The catch is that it is total energy consumption that matters, not easily counted energy consumption”. To understand this one must begin with the definition of EROI, for example on page 66 of the above book:

As we define again and again we have used the direct (e.g. natural gas to pressurize an oil field) plus indirect (energy to make the capital equipment: see Fig. 6 legend of Cleveland et al.) energies that are used to exploit fuels from Nature. We have consistently defined EROI to mean energy at the wellhead, mine mouth, bussbar or farm gate unless explicitly stated otherwise. We consider the energy used subsequently to deliver or use that energy as efficiency (as in food chain efficiency) of the use system. These data are not easy to gain, requiring many months of research in many libraries and government archives (See Appendix 1 of Guilford et al.) and are becoming more difficult as much of our National data gathering erodes. Such difficulties and their consequences are usually referred to in peer-reviewed EROI research papers by the authors themselves.

2) “The standard EROEI method assumes the energy cost of each of these is zero.” This is most explicitly not true. As appropriate (and as we have become better at the analysis) we have included energy costs of taxes (e.g. Prieto and Hall), Roads (Hall, Balogh and Murphy; Prieto and Hall), labor (e.g. Hall et al 1986; Prieto and Hall) and so on. We have tended to avoid the contentious issue of whether or not to include labor as “input” or “consumption” but occasionally undertook it as sensitivity analysis.

Gail is correct in saying that there are many more costs associated with energy, and that these costs are extremely important to society. But we normally consider these as costs associated with use of energy, but not its extraction from Nature which is the point and definition of EROI analysis. We have considered these before as EROIpou, that is at the point of use, or more recently (and better in my opinion now) as the EROI (at the mine mouth) required to support various levels of societal well-being (e.g. education, health care, arts etc.; Lambert et al.). At the logical extreme we may wish to include all of civilization’s activities as supportive of the energy extractive process so that EROI would be (by definition) 1:1, but that does not seem useful to me. We need to know how much energy it takes to get each actual or potential energy resource. For example, with an EROI of close to 1:1 corn-based ethanol is not a net energy source to a modern complex society. The lower EROI of renewables after accounting for intermittency (see below) will make the transition to renewables, if that is possible, very difficult.

3) “The ones that can be counted are counted as equal, regardless of quality”. This is absolutely not true. We have considered quality exhaustively, and have even presented our results with and without quality corrections from our earliest publications (Cleveland et al., Hall et al.) through our most recent publications (Hall 2017 p. 133 etc.). Murphy et al. includes a sophisticated procedure called the Divisia index to correct qualities of input and output energy which we sometimes use in our results. The question of intermittency with wind and photovoltaic energy is a difficult issue repeatedly considered in EROI analysis although not fully resolved by the greater scientific community, but also clarified with the recent publications of Palmer (and Tverberg) for certain systems. Depending upon the penetration of renewables, including intermittency in the analysis greatly reduces the EROI of these technologies. Whether one corrects for the quality of energy output for these sources is best handled with sensitivity analysis.

EROI is not some flawed tool of the past, but a consistent yet evolving and improving tool becoming more and more important everyday as the depletion of our primary fuels continues and as replacement with renewables is increasingly considered. While EROI analysis is hardly precision science, mostly due to data limitations, nevertheless as I reviewed my older publications for this response I was impressed by the general consistency of our results (corrected for e.g. depletion over time) from 1979 and especially 1984 to present. A large problem is the erosion of the Federal support for, and hence quality of, the data of e.g. the U.S. Bureau of Census and the increasing use of EROI (and scientific analysis more generally) for advocacy rather than objective analysis and hypothesis testing. Essentially all credible analyses show a declining EROI of our principle fuels and a much lower EROI for those fuels we might have to replace them. The economic consequences are likely to be enormous. It continues to astonish me that there is essentially no Federal or other support for good, objective analysis of EROI and its implications. EROI is not only as important as when it was created it is critical now as we choose, or more likely will be forced into, making an energy transition. With appropriate support we have the conceptual and procedural tools to undertake needed analyses which can be an important tool in understanding and (with other tools) guiding our transition to renewable energy resources, if indeed that is possible.

Having said this I would like to point out where Gail does have a very good point. The amount of energy necessary to maintain the infrastructure within which our energy extraction industries can function (e.g. roads, schools, health care, perhaps civilization itself) is enormous and is not counted in my most of my studies as part of the investments to get the energy. OK good point. How to do this i.e. how to prorate this relative to e.g. all of the health care investments for all of the population? One might add up all of the labor in the appropriate energy industries, compare this to the total population and multiply the ratio by the total energy used in health care. Or one might assume that all of the energy required to support labor, including the energy associated with the depreciation of the worker (i.e. the energy used to support the family of the worker) is well represented by the worker’s salary. So if a worker makes $70,000 in a year one could multiply that by the mean energy intensity of the U.S. economy (about 6 MJ per dollar) to generate the energy used to support labor for year (420 GigaJoules, equal to about 70 barrels of oil). Again doing this for all energy workers would be a huge sum. When as part of sensitivity analysis we added in an estimate of the energy to support workers’ salaries for building solar facilities in Spain it doubled the energy cost of building and maintaining the PV structures and halved its EROI. The main point that I think Gail is making is that as our high quality fossil fuels are depleted and we contemplate shifting to renewable energies we will have a lower and lower net energy delivered to run the non-energy portion of society with very large consequences. I completely agree with this.

References (in chronological order – there are many more that could be added)

Hall, C.A.S., M. Lavine and J. Sloane. 1979. Efficiency of energy delivery systems: Part I. An economic and energy analysis. Environ. Mgment. 3 (6): 493-504.
`
Hall, C.A.S., C. Cleveland and M. Berger. 1981. Energy return on investment for United States Petroleum, Coal and Uranium, p. 715-724. in W. Mitsch (ed.), Energy and Ecological Modeling. Symp. Proc., Elsevier Publishing Co.

Cleveland, C.J., R. Costanza, C.A.S. Hall and R. Kaufmann. 1984. Energy and the United States economy: a biophysical perspective. Science 225: 890-897.

Murphy, David J., Hall, Charles A. S. 2010. Year in review—EROI or energy return on (energy) invested. Annals of the New York Academy of Sciences. Special Issue Ecological Economics Reviews: 1185, 102-118.

Murphy, D.J, Hall, C.A.S. 2011. Energy return on investment, peak oil, and the end of economic growth. Annals of the New York Academy of Sciences. Special Issue on Ecological economics. 1219: 52–72.

Hall, C.A.S., and Hanson, D. (Eds.) 2011. Sustainability: Special Issue on EROI

Murphy, D., Hall, C.A.S., Cleveland, C., P. O’Conner. 2011. Order from chaos: A Preliminary Protocol for Determining EROI for Fuels. Sustainability: Special Issue on EROI. 2011. Pages 1888-1907.

Guilford, M., C.A.S., Hall, P. O’Conner, and C.J., Cleveland. 2011. A new long term assessment of EROI for U.S. oil and gas: Sustainability: Special Issue on EROI. Pages 1866-1887.

Hall, C. A. S., Dale, B. and D. Pimentel. 2011. Seeking to understand the reasons for the different EROIs of biofuels. Sustainability 2011: 2433-2442.

Prieto, P., C.A.S. Hall. 2012 Spain’s Photovoltaic Revolution: The energy return on investment. Springer, N.Y.

Hall, Charles A.S., Jessica G. Lambert, Stephen B. Balogh. 2014. EROI of different fuels and the implications for society Energy Policy Energy Policy. 64,: 141–152.

Lambert, Jessica, Charles A.S. Hall, Stephen Balogh, Ajay Gupta, and Michelle Arnold. 2014. Energy, EROI and quality of life. Energy Policy Volume 64: 153-167

Hall, C.A.S. 2017. Energy Return on Investment: A unifying principle for Biology, Economics and sustainability. SpringerNature N.Y.

Palmer, G. 2017, A Framework for Incorporating EROI into Electrical Storage, BioPhysical Economics and Resource Quality, vol. 2, no. 2

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Guest post and tagged , , . Bookmark the permalink.

377 Responses to Energy Return on Energy Invested – Prof. Charles Hall’s Comments

  1. Ed says:

    Time for Russia to stop selling gas and oil to England and France.

    • No, the right time will come when their money is no longer deemed credible, necessary.
      And that lays in relatively distant future (decades) as “the rich” in each country (incl. Russia, China, Gulfies) today simply demand and cherish to swim in this rotten swamp..

    • Davidin100millionbilliontrillionzillionyears says:

      winter, peak season for gas demand(?), has now ended…

      but, Putin seems to have the necessary patience…

      next winter, perhaps Russian gas will be in lower supply and at a higher price…

  2. Fast Eddy says:

    I am in the Delhi airport … contemplating human nature after getting off a flight from Tashkent on the way to Hong Kong….

    I noticed that in general Uzbek people are polite… friendly…. however there are quite a few who will just push in front of a queue without a second thought …. we encountered that a number of times at the airport check in and immigration ….

    And as soon as the plane landed it was like the Mongol Hordes had been unleashed… the wheels had barely touched the tarmac and dozens of people were ignoring the flight attendants and hauling down bags from the overheads….

    As I observed this behaviour I was thinking …. humans are not any different than wild animals… or at least untrained animals…

    If we are not taught certain behaviours … then it’s basically a free for all – f789 everyone and any rules they try to impose….

    One may think these people rude… I do not. . I see them as no different than untrained dogs…. who are just doing what untrained dogs would do….

    To be honest … I feel like barging to the front of the line as well… and taking my bags down whenever it pleases me……but I am a well-trained dog… I know to heel….

    I have also noticed this sort of behaviour in China…. the behaviour changes dramatically when such people emigrate to a place with more established rules of etiquette….

    You can teach old dogs new tricks

    • Duncan Idaho says:

      As a tourist provider (Guam- diving/fishing) I have observed many cultures. Japanese are the most civilized, and easy to take.
      Chinese or Korean? Cattle probes are more needed than correct speech.

      • SomeoneInAsia says:

        There’s a reason why I’d prefer not to be associated with the mainland Chinese. (I’m a Singaporean of Chinese descent.)

        Not that any of this is going to matter anymore after SHTF, of course. ‘cos by then most of us will become very rabid dogs indeed.

        • Fast Eddy says:

          Yep… neighbours will be at each others throats — regardless of shared ethnicity/culture….

          Confucius say: When there are few bones… and many dogs… decorum gets tossed out the window… and your neighbour is chasing your children down the street with a meat cleaver and a salt shaker

        • Duncan Idaho says:

          Half my extended family is Chinese, with a grandchild living with us when we were in Marin.

      • Third World person says:

        japanese are civilzed ?

        i do not think so after see how they government have handle the FUKUSHIMA’S disaster
        especially throw nuclear fuel in Pacific ocean

        • i was thinking that too—along with a lot of other unpleasant thoughts

        • They are certainly taught to be very orderly. This is a photo I took of Japanese children at the Hiroshima Peace Park in Okinawa, Japan.

        • Duncan Idaho says:

          From some who was with them daily for years (took acid, slept with the women, etc) I haven’t a clue what is going on.
          But they are good tourists.
          You are always a outsider——-

        • tagio says:

          TWp, the Japanese don’t have any choice. It is impossible to contain the ground water seepage and run-off; at best they can mitigate it somewhat.

          The original sin is that people thought that they could operate NP “safely.” Concentrate the most lethal, toxic materials to life in the tens of thousands of metric tons along seacoasts and rivers, and handle it safely for the next 10,000 years. I.e., longer than civilization and recorded history thus far. Let the hubris of that sink in.

          More than 70,000 metric tons of spent uranium, thus far, and counting: https://www.eia.gov/todayinenergy/detail.php?id=24052.

          Of necessity, these plants are all built on or very near major water sources, because they need a never-ending supply of water as coolant and to make the steam for the turbines. All of this was foreseeable, entirely predictable.

        • MudGod says:

          ask the soldiers who were captured by them in previous wars how civilized they are.

        • Mike Roberts says:

          “Civilized” doesn’t feel like a much of a compliment when civilization destroys the environment. Perhaps another word is needed for these situations?

    • xabier says:

      FE, try taking a flight with Irish Gypsies if you want to see real anarchy – most amusing one I’ve ever been on. Complete with priest and two African nuns, going to Lourdes.

      We are overwhelmed with tourists here, and I have to say the Chinese (all year-round these days) are my favourites, as they never barge or jostle you on the narrow pavements, and very rarely stand arrogantly in the way to take a photo, etc. You think a collision is coming, and it somehow doesn’t happen. The same for the rare Japanese groups.

      The manners of young Europeans are, in general, simply appalling: Spanish, Italians, French. Uncouth pavement-hoggers, loud, conceited. Scandinavians, Dutch and Germans are -marginally – better.

      As for Arabs and other Levantine types, my God! But most of those kids look inbred and mentally subnormal, attending the language schools.

      Americans are also noticeably more polite than Europeans, sometimes very much so in an old-fashioned way. They are mostly well-off, here for the Summer School, and behave more modestly than the Euro Brats.

      Overall they (the Brats) give the impression of being a very spoiled and indulged generation.

      The English are these days rather surprised when they are treated politely by a stranger, life has become so stressful and crude here.

      Nothing like people-watching…… 🙂

      • now there just has to be a sitcom with a gang of irish gypsies, 2 african nuns and a priest going to lourdes

        • xabier says:

          It would be good, ‘Father Ted’ with a difference. We first became aware of the Gypsies due to the strong smell of spilt beer – it lay in pools around the men, with discarded bottles: they clearly had to do something while waiting to check-in to the Ryan Air flight to Bairritz.

          They refused to use seat belts when taking off and landing, and during turbulence, and passed their babies and small kids around over the seats with gay abandon.

          The priest and nuns seemed used to it. It actually looked like quite good fun to go through life like that, not giving a damn. They didn’t cause any trouble to anyone else.

      • Fast Eddy says:

        ‘kids ARE inbred and mentally subnormal’…

    • Artleads says:

      It’s still just rudeness in the long run. Not to be condoned in it’s formative stages, which is the only time you can change it. Too much energy to change it later.

      • Fast Eddy says:

        Nah… it’s just lack of training … one only needs to observe young children … they are essentially wild beasts until they are trained…. if they get no training then what I observed in some adults in Uzbekistan is what you get

        • xabier says:

          Like dogs, one has to train them to hand and voice signals very early indeed, then it’s plain sailing later on. I hate slapping puppies on the muzzle, but, if applied early and consistently, they learn fast.

          I don’t think I’d do very well at teaching training college…. 🙂

          • Artleads says:

            I spent years as a substitute teacher in a tough minority city that had once been the murder capital of the US. I suffered extremely and it was either I’d go down in flames or I’d learn to keep order. I learned to keep order. On the way to that, however, I got into a fight with a 14 year old who was 10 times stronger than I would have thought, and so I decided I’d stick to the younger ones–K-3–the ones I could lift. An experienced teacher early in my struggles implied the following: You start the year off like Dracula, and by year’s end you’re smiling and relaxed. I ran later summer camps that way, and I would want to club some effing snowflake who disagreed with my methods and suggested the kids should have “fun.” No bloody way! But my way they actually DID end up having fun. Odd.

            • you have my sincere admiration Artleads

              back in my day, the headmaster wielded a cane and wasn’t afraid to use it—-with the support of parents, (including mine)

              though having said that, I always had the feeling that he genuinely cared about the future of us young hooligans—I still remember him that way

    • podshosdu07865 says:

      Just be glad there was a Q (line). Quite honestly they probably expected you to bang to the front and thought you a punk because you didn’t. You have been around enough to know that ….surprised… The veneer is thin where resources are scarce.

      • Fast Eddy says:

        Those doing this were in the small minority …. most Uzbeks are fairly well trained… they have plenty of gas so that has been helpful.

  3. Harry Gibbs says:

    “Deep down, the IMF thinks the recovery from the 2008 financial crash is fragile and incomplete. It is fragile because a decade of cheap money has left the global economy wallowing in $164 trillion of private and public debt – an all-time high. It is incomplete because too many people have been left behind during the upswing that followed the deep recession of 2008-09.”

    https://www.theguardian.com/business/2018/apr/14/imf-senses-not-all-well-economic-upswing-christine-lagarde

    • Harry Gibbs says:

      And some countries never really recovered at all:

      “Italy’s long-term economic underperformance is so severe and deep-rooted that the current cyclical upswing barely makes a dent. Consider: Real per capita income last year was barely above the 1998 level. That means living standards are roughly the same as they were twenty years ago.”

      https://www.forbes.com/sites/marcoannunziata/2018/04/14/twenty-years-and-nothing-to-show-for-it-italys-broken-economic-model/#7383d5b011a3

      • Harry Gibbs says:

        “At the end of 2009, as Greek bondholders were beginning to worry about a possible debt crisis, Greece’s central government debt stood at about 300 billion euros, roughly 130 percent of gross domestic product. Its fiscal deficit for the same year had been over 15 percent of GDP. A few months later, Greece lost market access and entered an adjustment program, financed by the European Union and the International Monetary Fund (IMF), aimed at gradually eliminating its deficit and restoring the sustainability of Greece’s public debts.

        “By 2016, Greece had achieved a small fiscal surplus. But its central government debt continued to rise – by about 10 percent in nominal terms, and much more dramatically as a share of GDP, before stabilizing at around 180 percent of GDP. This happened despite three successive economic adjustment and reform programs and several rounds of debt relief – including a 2012 bond restructuring that cut the face value of Greece’s debt by 107 billion euros.”

        http://www.ekathimerini.com/227642/opinion/ekathimerini/comment/why-greeces-debt-continued-to-rise-since-2010

        • This is Greece’s per capita energy consumption.

          A person can see that it has been falling since a peak in 2007. There has been sort of a little uptick at the end, when oil prices fell to a lower level in 2015 and 2016.

          In fact, the low demand for oil from Italy and Greece (and of tourists flying to these countries) is likely part of the reason that oil and energy prices fell.

      • Too bad these people don’t think about energy consumption per capita.

        • have you ever tried discussing something like ”energy per capita” with anyone not specifically aware of or involved in the stuff that gets discussed here and elsewhere?

          • theblondbeast says:

            Yep – People think in terms of “technology” because it flatters our sense of vanity. Thinking of the economy and the future in terms of “let’s all try to consume more resources” leads to thinking of oneself in less flattering terms.

            Most people can’t really define the economy. I like this definition: “The economy is comprised of the production and exchange of goods and services through the application of energy and labor to resources and activities, as represented by money.” (C) theblondbeast

            • Mark says:

              This always cracks me up. (BTW, posts and comments have been great)

            • “The economy is comprised of the production and exchange of goods and services through the application of energy and labor to resources and activities, as represented by money.”

              That is a great definition.

          • A person would hope actuaries would get the idea.

        • Artleads says:

          It’s one of the least intuitive things to understand. Just checking if I’m anywhere close: More energy per capita means more demand? Really sorry. I know you’ve explained it a few million times.

          • Energy is what goes into creating jobs that pay well. Goods are made with a combination of (human labor + supplemental energy).

            If supplemental energy is rising relative to human labor, we are in good shape. Human labor can be leveraged with more and more tools of various types, such as computers and bigger trucks. If supplemental energy is falling relative to labor, we end up with an increasing proportion of low-paid service jobs. Lots of greeters at Walmart, but not much else available for jobs.

            We need jobs that pay well is what give rise to “demand.” A person with a job that pays well can afford new cars and often a larger home. Also, that person can afford to have children. A family that has only one child ultimately leads to a situation with less demand, because one person, on average uses less resources than two or more.

            • Artleads says:

              Thanks! I’ll cut and paste this somewhere where I hope I’ll remember to look in my inevitable lapse of understanding in the future.

              Trying to figure out why it doesn’t connect and stick is because the implied future with that cheap supplemental energy doesn’t work long term either. More cars and bigger houses (if not more kids–an issue I can’t wrap my mind around) mean more depletion of living systems, and I see all living systems as being already catastrophically depleted.

    • Italy and Greece are (unwittingly) fitting into my universal law of nations:

      View story at Medium.com

      They just the early one—all nations will follow suit in time

    • The debt is promises of future goods and services made with energy. If things were going downhill at a price that were reasonably close to what producers need in the 2011-2012 timeframe, how can they expect to ever expand, or repay debt with interest?

      • Artleads says:

        To the uninitiated, another level explanation might be needed. Who :”is promised future goods and services made with energy?”

        • the promise is to ourselves

          we all expect that.

          it’s important to mentally move away from ”goods” as cars and coffee makers—-goods means everything—your roads, healthcare, schools.

          nothing is exempt from the future energy dead end trap

  4. Third World person says:

    The Mafia And A Nigerian Gang Are Targeting Refugees In Sicily
    They’ve fled violence, poverty, and terrorism – and made the often perilous journey across the Mediterranean from Africa and the Middle East. But for the more than 100,000 migrants who’ve arrived in Italy so far this year, the life that awaits them can be almost as dangerous as the one they left behind.

    This is particularly true for economic migrants, who don’t have the same legal status as refugees, and aren’t given the same work permits or financial aid to help them survive. Barred from the legal workforce, and with few financial options, many are targeted by criminal gangs — supported by the Italian mafia — and thrust into a life of sex slavery and drug trafficking

    funny thing is i was talking with Italian person on internet
    he was saying that Italy mafia do not like Nigerian Gangs because
    they are cutting share of there business in almost everything so
    mafia want government to deported these Nigerian Gangs back to there country

    • xabier says:

      It seems they – the Nigerian gangs – also use threats of magical curses to control their slaves, and it seems to work. There was a Guardian article about that not so long ago.

      The Italian authorities are employing psychologists to persuade them that curses are not real and there is nothing to fear -not supernatural, anyway.

      Child sacrifice has also, it would appear, returned to London, courtesy of African migrants – the odd dismembered body of an African child turns up now and then.

      • Artleads says:

        Are these happenings evaluated in terms of different African cultures, or by gender?

        • xabier says:

          The people using curses and magic to control prostitutes and slave workers in agriculture were identified as Nigerians.

          Another example of the immense cruelty of human beings when there is money to be made.

          • Artleads says:

            Nigerians have a bad reputation that way, despite (I’m told) Nigeria being a rather sophisticated country on the whole. I suppose that very bothersome aspect has to do with inequality and resulting desperation? Other contributing aspects too, of course.

    • I put together a chart to illustrate part of the problem that is occurring. The chart shows per capita energy consumption of Italy versus Africa.

      Per capita energy consumption of Italy vs Africa

      From the point of view of Africans, Italy’s per capita energy consumption is very high. From the point of view of Italians, its people have been getting poorer, because of falling energy consumption per capita. The peak in Italy’s energy consumption per capita came in 2004. Getting poorer means that it is harder for young people to find jobs that pay well. If we believe UN population data, Italy’s population has been falling since 2011. I haven’t looked at population by age group, but I would expect that working age population has been dropping. There don’t seem to be enough jobs that pay well to encourage people to have big families.

      African population, on the other hand, has been exploding. African population has increased by 77% between 1995 and 2016. Resources per capita has stayed level, saying that relative to population, higher energy-use industries have not been added. Roads basically have remained in poor condition. Africans get some benefit of the goods and services from the West, but a lot of this relates to preventing deaths, so population has exploded. Africa’s population is now about 11 times than of Italy. If we look at Angus Maddison’s population estimates of population at the year 1 C.E., he believed that Africa’s population was then a little more than double that of Italy. (Africa 17 million; Italy 8 million in Year 1. China and India were far larger than either, back in Year 1 C. E.)

      The huge growth in population of Africa means that the land is much more densely populated than in the past. It needs a lot more than cast-offs from the rich world, if its huge population is to fit in with the rest of the world. The cute little solar light bulbs can make life a bit more pleasant for people, but it doesn’t come close to fixing its basic problems. It doesn’t allow these countries to have democratic governments. (More energy per capita is needed for that.)

      I referenced in another comment a quote I found saying, ” According to the same PBS article, in 1967, the controversy over the pill took on a new dimension when African-American activists charge that Planned Parenthood, by providing the pill in poor, minority neighborhoods, is committing genocide.” If handing our contraceptives was a problem in the US, a person can imagine the difficulty in Africa.

      By the way, there is sort of a peak in Africa’s per capita energy consumption. It comes in 2008. The slight downward trend in per capita consumption since 2008 puts pressure on people to migrate away from Africa to places with better opportunities. In fact, most of the drop in per capita energy consumption has come in 2015, 2016 (and, if we had data) in 2017, because of lower oil and other commodity prices.

      • which seems to follow on after the west’s crash of 2007.

        the ”arab spring” of 2010 also followed in the wake of that—sort of ripples spreading outwards

      • Harry Gibbs says:

        “From the point of view of Africans, Italy’s per capita energy consumption is very high. From the point of view of Italians, its people have been getting poorer, because of falling energy consumption per capita.”

        Which just goes to show that how wealthy one feels is at least partly a question of perspective. I think Venezuelans have found their economic predicament especially traumatising because they have known what is to be wealthy and then experienced a relatively sudden reversal in fortunes.

        • Duncan Idaho says:

          The Italians are the shortest people in Europe. The Dutch and the Swedish are the tallest.
          There is a reason:
          https://www.newyorker.com/magazine/2004/04/05/the-height-gap

          • The theory: US wage disparity seems to affect growth.

            • nutrition affects growth—and that depends on income

            • Duncan Idaho says:

              Yep—
              The US is getting shorter, while Europe is getting taller.
              Europe maxed out in 800 AD, and just recently has gained it back.
              The US is losing height, , and if you look at the data, intelligence –

            • Thinking about the situation, it is not just that poor people are priced out of buying better-quality food, it is that the model for good eating is just plain wrong.

              Everywhere a person goes, a person sees oversized cookies and muffins. If a person orders a sandwich, the default seems to be “with added chips,” with lots of calories, and limited nutritional value. Portion sizes in restaurants tend to be way too large. An awfully lot of food a person buys in the grocery store has a lot of added sugar and high-fructose corn syrup. There are so many overweight people that being a little overweight makes a person fit in better with everyone else.

            • Fast Eddy says:

              I remember primary school… there were maybe a handful of fat kids… they were teased…

              If BAU were not to collapse for say another 25 years… we would get to the point where there would only be a few fit kids in primary school… and they would be mocked

              It is a good thing that we are headed for extinction .. I can’t think of even one good reason to justify our continued existence.

              As a species… we are vile… disgusting… monsters

            • JMS says:

              ++++++++

          • xabier says:

            The greatest Casanova I’ve ever met was a tiny round Columbian named Ivan: for some reason women fell for him in droves, and his wife had an awful lot to put up with.

            Perhaps Italians and other Latins can console themselves with this.

        • Artleads says:

          +++++++++++

        • DJ says:

          How much infrastructure, administration, housing standard, location of work (if any…) in relation to homes makes it hard lowering living standard.

      • Sven Røgeberg says:

        «Africa’s population is now about 11 times than of Italy.» It would be nice if you were right. Unfortunately the factor is at least 20:
        http://www.worldometers.info/world-population/africa-population/
        http://www.worldometers.info/world-population/italy-population/

        • You are right. This is a revised chart. It looks very much like the previous one–almost flat.

          I accidentally picked up the wrong line on the UN population graph because it was so “wide,” it was hard to see which line was which. I should have taken time to adjust it so that I could read both axes at one. Usually, it is easy to see if something is quite wrong. This graph looks pretty similar. But I should have known Africa’s population was higher.

    • Fast Eddy says:

      Hungry extremely violent gangs post BAU… wonder where they will go looking for food?????

  5. Third World person says:

    Hookworm, a disease of extreme poverty, is thriving in the US south.

    in America, the world’s richest country, hookworm, a parasitic disease found in areas of extreme poverty, is rampant, the first study of its kind in modern times shows

    Children playing feet away from open pools of raw sewage; drinking water pumped beside cracked pipes of untreated waste; human faeces flushed back into kitchen sinks and bathtubs whenever the rains come; people testing positive for hookworm, an intestinal parasite that thrives on extreme poverty.

    These are the findings of a new study into endemic tropical diseases, not in places usually associated with them in the developing world of sub-Saharan Africa and Asia, but in a corner of the richest nation on earth: Alabama.

    Scientists in Houston, Texas, have lifted the lid on one of America’s darkest and deepest secrets: that hidden beneath fabulous wealth, the US tolerates poverty-related illness at levels comparable to the world’s poorest countries. More than one in three people sampled in a poor area of Alabama tested positive for traces of hookworm, a gastrointestinal parasite that was thought to have been eradicated from the US decades ago.

    The long-awaited findings, revealed by the Guardian for the first time, are a wake-up call for the world’s only superpower as it grapples with growing inequality. Donald Trump has promised to “Make America Great Again” and tackle the nation’s crumbling infrastructure, but he has said very little about enduring chronic poverty, particularly in the southern states.

    The study, the first of its kind in modern times, was carried out by the National School of Tropical Medicine at Baylor College of Medicine in conjunction with Alabama Center for Rural Enterprise (ACRE), a non-profit group seeking to address the root causes of poverty. In a survey of people living in Lowndes County, an area with a long history of racial discrimination and inequality, it found that 34% tested positive for genetic traces of Necator americanus
    https://www.theguardian.com/us-news/2017/sep/05/hookworm-lowndes-county-alabama-water-waste-treatment-poverty

    when bau will collapsed these diseases will be back in all over the world

    • which fits in with what i keeping banging on about

      a nation is held together by its energy input/availability—repairing sewage/water systems should be top priority, but those services are dissipated and so unseen

      as an example of what needs to be done read this
      http://pmj.bmj.com/content/77/914/802

      nothing will be done of course, until something really nasty breaks out—and by then it will be too late, because, just like sewage and water, healthcare is the product of energy input/availability.

      cut off surplus energy and medical care reverts to that of the tribal witch doctor./

    • Fast Eddy says:

      When BAU goes… we will be overwhelmed with diseases…. epidemics… this is going to make the plagues of history look benign….

      Oh but of course Mr Doomie Prepper living in la la land aka Little House on the Hobby Farm… will be immune…

      The hordes will respect the No Trespassing Sign —- as will the vile diseases that will spread like wildfire…

  6. Kurt says:

    Brent at 72.58. Just sayin…

    • Davidin100millionbilliontrillionzillionyears says:

      yup… still way below $100…

      now 71.70…

      lately, I’ve been moving towards the opinion that the direction of oil prices is mostly unpredictable…

      the world economy is just too complex…

      $59 or $80 are possibilities for later this year…

  7. Third World person says:

    How did Indus Valley civilisation end
    IIT-Kharagpur study points to 900-year-long drought

    Researchers at the Indian Institute of Technology (IIT), Kharagpur, have claimed that the Indus Valley civilisation, which saw its doom nearly 4,350 years ago, was a result of a 900-year-long monster drought. As per the report by the Times of India, the widely-accepted theory that a 200-year-long monster drought ended the Indus Valley civilisation may just change by at least seven centuries. Scientists have gathered evidence that proves this theory.

    This long drought, as per the report, forced people to abandon their settlements in search of greener pastures and drove them towards the east and south, where rain conditions were better. As per the report, these displaced people gradually migrated towards the Ganga-Yamuna valley towards eastern and central Uttar Pradesh, Bihar and Bengal in the east and Madhya Pradesh, south of Vindhyachal and south Gujarat in the south.

    After studying the monsoon’s variability for the past 5,000 years, the researchers from the geology and geophysics department are now certain that for 900 long years, the rains played truant in the North-West Himalayas. This eventually dried up the source of water which fed the rivers along which the civilisation thrived. Archaeologists and historians also found that the Indus Valley civilisation was not only limited to the banks of the Indus but had footprints along the rivers like Ravi, Chenab, Beas and Sutlej as well.
    http://www.financialexpress.com/india-news/how-did-indus-valley-civilisation-end-iit-kharagpur-study-points-to-900-year-long-drought/1134386/

    this thing also happen in Syria pushes people to urban cities
    when agriculture was collapse in the country

    • and the climate change deniers will point to this, jump up and down—and say—-”see—it’s all happened before”

      back then there might have been a few hundred thousand people dependent on those waters

      now there’s maybe 200 million

      that’s why there can be no real comparison

      • JesseJames says:

        No one denies natural … always occurring climate change. Only go oob. All Ww war. Mists deny natural change, only insisting that man is changing it now.

      • xabier says:

        We tend now to want to knuckle down in our mega-cities, an inflexible stance, but the secret of human survival so far has been the movement of tribes and clans -implying, incidentally, the movement only of the fittest and most adaptable (and ruthless?) – in a resource-rich planet, even if it was at an early date greatly modified by human activity and thereby reduced in bio-diversity.

        • problem is the city is now seen as the ”prosperous normal” but cities are a construct of finite energy

          they worked when they were constructed of trees and hand cut stone—now fossil fuels have added an unreal dimension that few recognise

        • Right. I think even in hunter-gatherer days, some horticulture was practiced. Seeds were purposely planted, so when a group came back later, plants of the desired type would be available. We were adjusting the planet to our needs very early.

          • xabier says:

            It would appear that ancient tribes, and great empires like Rome, also maintained substantial ‘no-man’s land’ border zones, which were not cultivated or settled.

            The military ability to preserve these zones indicated both power and also served as a buffer-zone in conflicts.

            It must also have helped to preserve bio-diversity to some extent.

            And yet today so many people just can’t see the impact industrial agriculture, road-building and over-population have had: when articles are published on the ‘need’ for more mass housing in Britain, invariably the ‘we’ve only built on 10% of the land, so lots more is available’ argument is deployed.

            • England had lots of common land until the 18th c….then the population started to grow and those in power realised that that land could be used to make money, so the enclosure acts were introduced

            • China has been selling off its commonly owned land in recent years, to fund some of its expansion. No need to collect tax revenue, if the state can sell off farmland instead.

            • Artleads says:

              Infinite growth on a finite planet. Hmmm, let’s see…Actually there is almost infinite built space to subdivide within urban areas. That’s where design and planning, also in short supply, come in.

      • doomphd says:

        the Triassic Period happened before too. we don’t want to return there.

      • Fast Eddy says:

        It does not matter if 200m or 20 are affected… it has all happened before… and it was and is not caused by man’s activities… it is caused by phenomenon that are totally out of our control — including the slight wobble of the earth over time … changes in the sun… one can easily imagine that a very slight change involving either of those two… would have dramatic implications for the earth’s kkkklimate.

        Gooobble Wooomming is a ho ax…

        Gail has explained the reason for it many times… as has Fast Eddy…. it is good that people believe in ggeebl weeeming…. it is all part of the Package of Hope… (EV’s solar Elon technology)

    • It is impossible to get along without water. Ecosystems end when climate changes, as well.

    • Fast Eddy says:

      They must have been burning coal… had to have…. we all know the kkkklimate does NOT change… it is totally stable … unless man gets involved

  8. Christopher says:

    Thank you Gail for your work with clarifying our predicament!

    I was somewhat prepared for these tragic conclusions by reading Oswald Spengler in my youth. He seems to have had a great intuition for the direction of society. I’ve been playing with the thought of writing an introduction to his thoughts about history and society. But I never really have the time. I’m also rather slow in english. Instead I wrote something more like a potpourri.

    Oswald Spengler (1880-1936) was a thinker and cultural pessimist.The only book I found easily available about him in english is “Prophet of decline”, published in 2001, by John Farrenkopf. I’ve just been reading it and it’s a quite decent summary although it is really just a “brief” introduction.

    Spengler doesn’t base his analysis on energy and resources. Although, he mentions those subjects briefly.

    From Farrenkopf:

    “The awesome struggle between man and nature forms a central theme of Spengler’s historical cosmos. With the industrial revolution, this struggle escalates into a veritable war. The machine is “the most cunning of all weapons against nature that is at all possible.” …
    For Spengler, world history becomes in his late work a record of man’s tragic and ultimately disastrous effort to gain the upper hand over the natural world.”

    “Inspired of the amor fati of Nietzsche, Spengler did not espouse flight into misty agrarian-romantic utopias. Nor did he harbour that which may ultimately prove to be an illusion, namely, the notion that the destructive ecological effects of modern production and consumption can be reduced to tolerable levels. Spengler attributes to this tremendous, violent transformation of the environment through the course of world history an apocalyptic character.”

    Spengler seems to end up at the same conclusion about civilization as Gail. Furthermore he seems to reach this conclusion by other reasons than energy and resources.

    Spengler describes the dynamics of culture (I believe Spengler mentions nine different cultures in his magnum opus “Decline of the West”) from rise to fall, he calls these “historical forces” destiny. A culture is like a super-organism, it’s born, it lives and it dies in a certain pattern. This cultural dynamic can probably be interpreted as a manifestation of the thermodynamical process underlying culture. I believe it is related to what Gail wrote about physics and the economy:

    https://ourfiniteworld.com/2016/02/08/the-physics-of-energy-and-the-economy/

    One phenomena or cause (depending on your perspective) that Spengler associates with the fall of civilisation is decadence. From Farrenkopf:

    “He [Spengler] argues that the leading intellects of future generations will turn to new life styles at odds with the futherance of industrial civilization. Youth reverts to “simpler life-styles that are closer to nature.” He pursues sport instead of scientific studies, hating the great cities and the cold atmosphere of technological organization. Youth interests himself in occultism and spiritualism and Christian and pagan metaphysical speculation. Sadly, one could add, since the sixties, he turns to alcohol, drugs and cacophonous music. “The flight of the born leaders from the machine begins.” ”

    My guess is that nowadays many born leaders also take their flight to the ivory towers of academia instead of making anything useful. Today, people with talent avoid becoming politicians or other positions that seems to burdened with responsibility. There is, or used to be, plenty of opportunity in the academia, so why choose something dirty and difficult. The academia is much larger today than 50 years ago and most of the production seems to be totally useless.

    Spengler didn’t predict the full decadence of attitude and thought constituted by political correctness. This is also a phenomenon that seems to increase the velocity of the decline.

    From Farrenkopf:
    “Key aspects of Spengler’s vision of decadence of the West include the exhaustion of its cultural traditions, the atrophy of the formative power of social traditions, the breakdown of the family unit, a downward sloping bith rate, quasi-pacifism, and hedonistic self-indulgence.”

    “The highly touted freedom of press is in reality nothing more than its cynical manipulation by plutocratic powers. The population of the West will participate less and less in elections, which from quasi-civil wars turn into comedies. The West’s more capable men will increasingly divorce themself from politics and devote themself to other pursuits. Democracy will degenerate into interest-group and money politics with an omnipresent press shaping public opinion.”

    “Moreover, Spengler’s compelling portrait of the spirit of the West illuminates its profound, subconscious, ultimately self-destructive, irrational qualities – qualities that are arguably ultimately of greater significance in determining the fate of the modern world than its rational qualities, which the Western high priests of the idea of progress have deified.”

    Some Spengler quotes:

    “The question of whether world peace will ever be possible can only be answered by someone familiar with world history. To be familiar with world history means, however, to know human beings as they have been and always will be. There is a vast difference, which most people will never comprehend, between viewing future history as it will be and viewing it as one might like it to be. Peace is a desire, war is a fact; and history has never paid heed to human desires and ideals …”

    ” Society is based on the inequality of men. This is a fact of nature.”

    ” Enthusiasm is a virtue for followers, a vice for leaders. Intelligence is more important than inspiration. ”

    “Happiness is unexpected, rare, unlikely, brief and blindly appreciated. The less men have brooded about the nature of happiness, or their right to it, the happier they have been.”

    “The common man wants nothing of life but health, longevity, amusement, comfort – “happiness.” He who does not despise this should turn his eyes from world history, for it contains nothing of the sort. The best that history has created is great suffering.”

    ” The great man lives in such a way that his existence is a sacrifice to his idea.”

    ” The secret of all victory lies in the organization of the non-obvious.”

    “What is truth? For the multitude, that which it continually reads and hears.”

    “You are caught in the current of unceasing change. Your life is a ripple in it. Every moment of your conscious life links the infinite past with the infinite future. Take part in both and you will not find the present empty.”

    “Optimis is cowardice.”

    “Formerly no one was allowed to think freely; now it is permitted, but no one is capable of it any more. Now people want to think only what they are supposed to think, and this they consider freedom.”

    “One day the last portrait of Rembrandt and the last bar of Mozart will have ceased to be – though possibly a colored canvas and a sheet of notes will remain – because the last eye and the last ear accessible to their message will have gone.

    • theblondbeast says:

      Thanks for the great quotes!

    • Interesting introduction to Spengler. I don’t think I remember hearing of him before.

      • Christopher says:

        He is not at all well known in the anglo-saxon world, probably somewhat more well-known in continental Europe. I wouldn’t expect that an eloquent predictor of gloom and tragedy would be very popular in times like these.

        I recommend reading “Decline of the west”, there’s a shorter abridged edition:

    • djerek says:

      I like the extended “optimism is cowardice” quote:

      “Time does not suffer itself to be halted; there is no question of prudent retreat or wise renunciation. Only dreamers believe that there is a way out. Optimism is cowardice. We are born into this time and must bravely follow the path to the destined end. There is no other way. Our duty is to hold on to the lost position, without hope, without rescue, like that Roman soldier whose bones were found in front of a door in Pompeii, who, during the eruption of Vesuvius, died at his post because they forgot to relieve him. That is greatness. That is what it means to be a thoroughbred. The honorable end is the one thing that can not be taken from a man.”

    • Spenglers take on Caeserism replacing democracy in times of trouble is also quite interesting and currently relevant. BTW John Michael Greer is a big Spengler fan. That helped him to predict a Trump presidency in times when almost everybody else thought of Trump as having zero chances and was hysterically loughing at the prospect of Trump as president.

      • djerek says:

        It’s hard to see Caesarism coming to fruition in the US though when the federal government has been aware of the possibility and purging anyone with the potential to become a caesar from the ranks of officers long before they get to 3 or 4 star generals since after WWII. Patton was basically the last potential caesar that was allowed to become a hotshot general.

      • Yorchichan says:

        Democracy is a sham. Always has been. If your vote could change anything, you wouldn’t be allowed to vote. Maintaining the sham requires a lot of energy. Once energy runs low, the sham cannot be maintained any longer so the illusion of democracy disappears.

        • yup

          as ive pointed out—democracy is a child of prosperity, without prosperity democracy becomes an orphan and starves to death.

          • djerek says:

            Representative democracy is just a sham that covers up plutocratic oligarchies anyway.

            • Yorchichan says:

              Even if true democracy were possible, it’s doubtful if it is desirable anyway. Most people are in no way qualified to decide policy and only vote for their own narrow interests. The best form of government is to have a benevolent dictator. I’m sure we can all think of many examples of such a leader from history. /sarc

            • D says:

              Funny that you mention that, just saw a video (made in 2012 but still relevant today) that shows through various statistics how the democracy in the USA is a sham.

      • Sven Røgeberg says:

        Sociologist Max Weber believed that every mass democracy went in a Caesarist direction. Professor of law Gerhard Casper writes “Weber employed the term to stress, inter alia, the plebiscitary character of elections, disdain for parliament, the non-toleration of autonomous powers within the government and a failure to attract or suffer independent political minds.”[4]
        https://en.m.wikipedia.org/wiki/Caesarism
        Those german thinkers …

  9. xabier says:

    I highly recommend ‘Pax Romana’ by Goldsworthy: an excellent thematic study of the way in which Rome functioned militarily and economically at the peak- offering many parallels with today, allowing of course for the greater complexity of our civilization.

    Concise, packed with information and easy to read. It stops before the collapse phase, but does consider it briefly.

    • Harry Gibbs says:

      Thanks for the recommendation, Xabier.

      I recently enjoyed Piers Brendon’s book, “The Dark Valley: A Panorama of the 1930s.” Again the parallels with our current predicament – protectionism, sabre-rattling, worsening political polarisation etc. in the aftermath of a financial shock – are all too apparent. He writes with wonderful attention to detail.

      • xabier says:

        Thanks, I’ll look into it. The 1920’s and 30’s are certainly rich in suggestive parallels for our times.

        Spain is particularly disturbing, as the Francoists are edging back to power in the shape of the glossy new party – ‘Citizens’, how droll. Election posters have appeared reading: ‘We Never Went Away’…..

        Old-style Latin fascism apart, the saturation with propaganda which we see in the media of the ‘free’ countries is more than reminiscent of Stalinist Russia and the fascist dictatorships.

        At least we don’t have to wear uniforms and sing silly songs, for the time being.

  10. Harry Gibbs says:

    “The economic outlook in Germany is deteriorating with alarming speed and any mistake by policy-makers could push the country into a full-blown slump, a leading economic institute has warned.

    ““The danger of recession has increased markedly. It is a notably more critical picture than a month ago,” said the Macroeconomic Policy Institute (IMK) in Düsseldorf.

    “The IMK’s early warning indicator said the recession risk over the next three months has jumped suddenly to 32.4pc as trade tensions mount and liquidity ebbs away in the international financial system.

    “This is higher than in March 2008 when the pre-Lehman storm clouds were gathering and the country was already sliding into a slump…

    “Germany is heavily reliant on world trade and is therefore a bellwether for the broader health of the global economy. Its industrial sector lurched abruptly from boom to bust early in the last downturn and proved to be a leading indicator for the Great Recession…

    “Crucially, the global money is slowing as quantitative easing goes into reverse, and as the Fed lifts global borrowing costs. Three-month Libor rates have jumped 60 basis points this year, hitting $9 trillion of floating contracts worldwide.

    “Simon Ward from Janus Henderson said the global economic slowdown was baked into the pie months ago when the money supply began to falter. His key indicator – six-month real M1 money – touched a nine-year low of 1pc in February…

    “The European Central Bank faces a treacherous task as it prepares to phase out QE altogether this year. It has already cut bond purchases from €80bn (£69bn) to €30bn a month. Nobody knows for sure how much damage is being caused by this reduction in the “flow” of stimulus, since few can agree intellectually on how QE actually works. The risk is that the ECB could tighten too hard and cause the current soft patch to metastasize into a full-blown downturn…”

    https://www.telegraph.co.uk/business/2018/04/16/german-recession-signal-soars-danger-level-global-woes-mount/

    • germany can be looked on as a shop selling high quality exclusive goods—the best

      but the other side of that coin is that if no one can afford to buy those goods, then the german shop might as well close—they can’t sell stuff to each other, that doesn’t work

    • ““The European Central Bank faces a treacherous task as it prepares to phase out QE altogether this year. It has already cut bond purchases from €80bn (£69bn) to €30bn a month.”

      This is no doubt at least part of the problem. World oil supply is tightening now too. Not a good combination.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s