Why is it so difficult to make accurate long-term economic forecasts for the world economy? There are many separate countries involved, each with a self-organizing economy made up of businesses, consumers, governments, and laws. These individual economies together create a single world economy, which again is self-organizing.
Self-organizing economies don’t work in a convenient linear pattern–in other words, in a way that makes it possible to make valid straight line predictions from the past. Instead, they work in ways that don’t match up well with standard projection techniques.
How do we forecast what lies ahead? Today, some economists believe that the economy of the United States is in danger of overheating. Others believe that Italy and the United Kingdom are facing dire problems, and that these problems could adversely affect the world economy. The world economy should be our highest concern because each country is dependent on a combination of imported and exported goods. The forecasting question becomes, “How will divergent economic results affect the world’s economy?”
I am not an economist; I am a retired actuary. I have spent years making forecasts within the insurance industry. These forecasts were financial in nature, so I have had hands-on experience with how various parts of the financial system work. I was one of the people who correctly forecast the Great Recession. I also wrote the frequently cited academic article, Oil Supply Limits and the Continuing Financial Crisis, which points out the connection between the Great Recession and oil limits.
Today’s indications seem to suggest that an even more major recession than the Great Recession may strike in the not too distant future. Why should this be the case? Am I imagining problems where none exist?
The next ten sections provide an introduction to how the world’s self-organizing economy seems to operate.
[1] The economy is one of many self-organized systems that grow. All are governed by the laws of physics. All use energy in their operation.
There are many other self-organizing systems that grow. One such system is the sun. Some forecasts indicate that it will keep expanding in size and brightness for about the next five billion years. Eventually, it is expected to collapse under its own weight.
Hurricanes are a type of self-organizing system that grows. Hurricanes grow over warm ocean waters. If they travel over land for a short time, they can sometimes shrink back a bit and grow again once they have an adequate source of heat-energy from warm water. Eventually, they collapse.
Plants and animals also represent self-organizing systems that grow. Some plants grow throughout their lifetimes; others stabilize in size after reaching maturity. Animals continue to require food (a form of energy) even after they stabilize at their mature size.
We can’t use the typical patterns of these other growing self-organized systems to conclude much about the future path of the world’s economic growth because individual patterns are quite different. However, we notice that cutting off the energy supply used by any of these systems (for example, moving a hurricane permanently over land or starving a human) will lead to the demise of that system.
We also know that lack of food is not the only reason why humans die. Based on this observation, it is a reasonable conclusion that having enough energy available is not a sufficient condition to guarantee that the world economy will continue to operate as in the past. For example, a blocked shipping channel, such as at the Strait of Hormuz, could pose a significant problem for the world economy. This would be analogous to a blocked artery in a human.
[2] The use of energy products is hidden deeply within the economy. As a result, many people overlook their significance. They are also difficult for researchers to measure.
It is easy to see that gasoline provides the energy supply needed for our cars, and that electricity provides the power needed to clean our clothes. What is missing? The answer seems to be, “Everything that makes humans different from wild animals is something that was made possible by the use of supplemental energy in addition to the energy from food.”
All goods and services require the use of energy. While some of this energy use is easy to see, other portions are well hidden. Energy used in manufacturing and transport is most visible; energy used in services tends to be hidden.
Governments are major users of energy, both for their own programs and for directing energy use to others. Retirees get the benefit of goods and services made with energy products through pension checks issued by governments; researchers get the benefit of goods and services made with energy products through research grants they receive. Wars require energy.
Medical treatments are possible because of the availability of medicines and equipment made with energy products. Schools and books, as well as free time to study in schools (rather than working in the field), are possible because of energy consumption. Jobs of all kinds require the use of energy.
One thing we don’t often consider is that if energy supplies are growing sufficiently, they permit an expanding population. In fact, expanding population seems to be the single largest use of growth in energy consumption (Figure 1). Growing energy consumption also seems to be associated with prosperity.
Figure 1. World energy consumption growth for ten-year periods (ended at dates shown) divided between population growth (based on Angus Maddison estimates) and total energy consumption growth, based on the author’s review of BP Statistical Review of World Energy 2011 data and estimates from Energy Transitions: History, Requirements and Prospects by Vaclav Smil.
[3] Prices of energy services need to be low relative to overall costs of the economy. Falling energy costs relative to overall GDP tend to encourage economic growth.
Most economists expect energy prices to represent a large share of GDP costs, if energy is truly important. The statement above says the opposite. There are at least two reasons why low energy prices, and energy prices that are truly falling when inflation and productivity changes are considered, are helpful.
First, tools (broadly defined) used to leverage the labor of human workers often require considerable energy to manufacture and operate. Examples of such tools include computers, machines used in manufacturing, vehicles, and roads for these vehicles to drive on. The lower the cost to purchase and operate these tools, relative to the benefit of the tools, the more likely employers are to purchase them. If energy costs tend to fall over time, it becomes progressively easier to add more tools to leverage the labor of employees. Thus, employees become increasingly productive over time, raising the economy’s output of goods and services. For a similar reason, rising energy costs, if not offset by efficiency gains, present a barrier to economic growth.
Second, if the cost of energy production is low, it is easy to tax energy producers and thereby capture some of the benefit of their energy for the rest of the economy. If there is truly a “net energy” benefit to the economy, this is one way it gets transferred to the rest of the economy.
[4] There is indeed an energy problem, but it is not quite the same one that Peak Oilers have been concerned about.
The energy problem that Peak Oilers write about is the possibility that as easy-to-extract oil supplies deplete, oil production will reach a peak in production and begin to decline. Once decline sets in, they expect that oil prices will rise, partly because of the higher cost of production and partly because of scarcity. With these higher prices, they expect that producers will be able to extract at least a portion of the remaining oil resources. They also expect that higher prices will allow portions of the remaining natural gas and coal resources to be extracted. With higher prices, expanded use of renewable energy is expected to become feasible. All of these energy sources are expected to keep the economy operating at some level.
There are several problems with this story. First, it tends to encourage people to look for high oil prices as a sign of an oil shortage. This is not the correct indication to look for. Prior to 1970, oil prices averaged less than $20 per barrel. Comparing pre-1970 prices to today’s oil prices, current prices are already very high, at $75 per barrel. The idea that oil prices can keep rising indefinitely assumes that there is no affordability limit. Furthermore, a loss of energy consumption can be expected to reduce demand (because of its impact on jobs, productivity, and wages) at the same time that it reduces supply. If both supply and demand are affected, we don’t know which way prices will move.
Second, my analysis suggests that part of the story is that total energy consumption is very important, including oil, coal, natural gas, nuclear, and various forms of electricity. All of the attention given to oil has drawn attention away from the economy’s need for a range of energy types to keep devices of all types operating. Deciding to reduce coal usage because of pollution issues, or deciding to shut down nuclear because it is aging, has an equally adverse impact on the economy as reducing oil supply, unless the shortfall can be made up with other energy products of precisely the type needed by current devices.
Third, my analysis suggests that energy consumption per capita needs to rise for the economy to function in the way that we expect it to function. If world energy consumption per capita is too flat, we can expect to see many of the symptoms that the world has been experiencing recently: more radical leaders, less cooperation among leaders, slowing economic growth and increasing debt problems. In fact, wars are possible, as are collapses of governments (as with the Soviet Union central government in 1991). The current situation seems to be more parallel to the 1920 to 1940 flat period than it does to the 1980 to 2000 flat period.
Finally, with low energy prices rather than high quite possibly being much of the problem, there is a significant chance that oil and other production will decline because producers do not make enough profit for reinvestment and because oil exporting countries cannot collect enough taxes to fund the many subsidies that citizens expect. This makes for a steeper energy decline than forecast by Peak Oilers; it also reduces the possibility that high-priced renewables will be helpful.
[5] Part of the world’s energy problem is a distribution problem; the world becomes divided into haves and have-nots in many ways. It is this distribution problem that tends to push the world economy toward collapse.
There are many parts to this distribution problem. One is the distribution of goods and services (created using energy) by country. Over time, this tends to change, especially as commodity prices change. Oil exporters are favored when oil prices are high; oil importers are favored when oil prices are low. The relative values of currencies can change quickly, as commodity prices change.
Another part of this distribution problem is growing wage and wealth disparity, as more technology is added. If there is too much wage disparity, low-paid workers often cannot afford adequate food, homes, and transportation for their families. Their lack of demand for goods made with energy products (because of their low wages) tends to work through the system as low commodity prices. This happens because (a) there are so many of these workers and (b) these workers tend to purchase a disproportionate share of goods and services that are highly energy-dependent.
[6] Debt-like promises play a major role in making the economy operate.
Taking out a loan allows an individual or business to purchase goods without saving for the purchase in advance. To some extent, taking out a loan moves up the timing of purchases. At times, it even permits purchases that otherwise would not be possible. For example, if a young person tries to decide between (a) working at a low wage until he has saved up enough to afford to go to college and (b) taking out a loan and going to school now, so his wages would be higher in future years, his optimal choice will often be scenario (b). The time would likely never come when the low-paid individual could save up enough wages to afford to go to college. If the young person strongly desires high wages, his optimal strategy would be to take the loan and hope that his future wages will be high enough to repay it.
If the goal of the economy is to produce an ever-increasing amount of goods and services, growing debt can very much help this growth. This happens because with more debt, more individuals and businesses can afford* to buy the goods and services that they want now. In a sense, debt acts like a promise of the future energy needed to make future goods and services with which the loan can be repaid. Thus, adding debt acts somewhat like adding energy to the economy.
Because of the way debt works, the economy behaves much like a bicycle, with growing debt pulling the system forward. If the economy is growing too slowly, the tendency is to add more debt. This solution works if a rapidly growing supply of cheap-to-produce energy is available; the additional debt can be used to create a growing supply of affordable goods and services. If energy costs are high, the goods and services produced tend to be unaffordable.
Figure 2. The author’s view of the analogy of a speeding upright bicycle and a speeding economy.
A bicycle needs to operate at a fast enough speed (about 7.5 feet per second), or it will fall over. Similarly, the world economy needs to grow fast enough, or it will not be able to meet its obligations, including repayment of debt with interest. If the economy grows too slowly, debt defaults are likely to grow, pulling the economy down.
[7] It looks like it should be possible to work around energy problems with improved technology, but experience suggests that this approach represents only a temporary “fix.”
There are two issues that make improved technology less of a solution than it appears to be. The first is diminishing returns. For example, if a business faces a choice between (a) paying a worker to perform a process and (b) adding a machine that can perform the same process, the business will tend to make the changes that seem to provide the largest cost savings first. At some point, as more technology is added, capital costs can be expected to become excessive relative to the human labor that might be saved. The issue of the diminishing returns to added complexity (which includes growing technology) was pointed out by Joseph Tainter in The Collapse of Complex Societies.
The second reason why added technology tends to be only a temporary solution is because it tends to lead to wage disparity. Wage disparity has a tendency to grow because of the greater specialization and larger organizations needed to coordinate the ever-larger projects. The reduced purchasing power of those at the bottom of the hierarchy can eventually bring an economy down because it can lead to commodity prices that are below the level needed to maintain the extraction of fossil fuels. Fossil fuels are required to maintain today’s economy.
[8] Renewable energy has been vastly oversold as a solution. What is needed is an ever-increasing quantity of inexpensive energy in forms that match the energy needs of current devices.
The wind and solar story is far different from the story presented in the press. Essentially, wind and solar are extensions of today’s fossil fuel system. The evidence that they are truly beneficial to the economy is shaky at best. We know that if energy sources are truly transferring significant “net energy” to the system, they generally can afford to pay high taxes. The fact that wind and solar require subsidies raises questions regarding whether standard calculations are providing accurate guidance. The press rarely mentions the high tax revenue that high oil prices make possible, worldwide. Tax revenues largely support many oil exporting countries.
Furthermore, the share of the world’s energy supply that wind and solar provide is very low: 1.9% and 0.7%, respectively. They are shown in the almost invisible blue and orange lines at the very top of Figure 3. Fossil fuels contributed 85% of total energy supply in 2017.
Figure 3. World energy consumption divided between fossil fuels and non-fossil fuel energy sources, based on data from BP Statistical Review of World Energy 2018.
[9] The world economy becomes very fragile as energy limits approach.
Energy limits seem to be affordable energy limits. Oil prices need to be high enough for exporting countries to obtain adequate tax revenue. In addition, oil producers need prices that are high enough so that they can make the necessary reinvestment, as fields deplete. At the same time, energy prices need to be low enough for consumers to afford goods and services made with energy products.
Much of developed world’s infrastructure was built when oil prices were less than $20 per barrel, in inflation-adjusted terms. A rising price of oil will lead to a higher cost of replacing roads and pipelines. If these were built using $20 per barrel oil, even a current price of $40 per barrel would represent a significant cost increase. The world has experienced high oil prices for sufficiently long that we have collectively forgotten how low oil prices were between 1900 and 1970.
Most people know that the earth holds a huge quantity of energy resources. The problem is extracting these resources in a way that is both affordable to consumers and sufficiently high-priced for producers. Falling long-term interest rates between 1981 and 2002 allowed the world economy to tolerate somewhat higher oil and other energy prices than it otherwise could because these falling interest rates permitted ever-lower monthly payments for a given loan amount. For example, if interest rates on a $300,000 mortgage would fall from 5% to 4% on a 25-year mortgage, monthly payments would decrease from $1,753 to $1,584. The lower interest rates would allow more people to buy homes with a given size of mortgage. Indirectly, the lower mortgage rates would permit additional new homes to be built and would allow more inflation in home prices. These benefits would at least partially offset the adverse impact of high energy prices.
Since the natural decline in long term interest rates stopped in 2002, the world economy has become increasingly fragile; the Great Recession took place in 2007-2009, when oil prices spiked and long-term interest rates were already low by historical standards. It was only when the United States’ program of quantitative easing (QE) was put in place that long-term interest rates could fall to even lower levels, helping the economy hide the problem of high energy prices a little longer.
The artificially low interest rates made possible by QE have problems of their own. They tend to inflate asset prices, including both real estate prices and stock market prices. Thus, they tend to create bubbles, which are prone to collapse if interest rates rise. Artificially low interest rates also tend to encourage investment in schemes with very low profit potential. Artificially low interest rates also encourage cross-border investments to try to take advantage of interest rate differences. If interest rate relativities change, the money that quickly would enter a country can almost as quickly leave the country, causing major fluctuations in currency relativities.
Regulators do not understand the role that physics plays in making the economy operate as it does. They assume that they, alone, have the power to make the economy behave as it does. They do not understand how important falling interest rates are in creating growing demand for goods and services. The economy, since 1981, has spent most of its time with falling interest rates; the most recent part of this decline in long-term interest rates has been made possible by QE. These falling interest rates have played a major role in disguising the world’s long-term problem of rising energy costs. These rising energy costs are taking place primarily because the cheapest-to-extract resources were produced first; the resources that are left have higher costs associated with them, for a variety of reasons, such as being farther away from the user, deeper, or needing more advanced extraction techniques. These issues have not been sufficiently offset by improved technology to keep extraction costs low.
US regulators now want to raise interest rates by raising short term interest rates and by selling QE securities. They don’t understand that they are playing with fire. If they can raise interest rates now, they will have the flexibility to lower them later if the economy should later slow excessively. They think that the higher rates will give them more control over the economy. They don’t understand how much of the world’s economy may really be a bubble, created by the decline in interest rates since 1981.
[10] The adverse economic outcome we should be concerned about is collapse, as encountered by prior civilizations when their economies hit limits.
The stories in the press have been so focused on oil “running out” and finding alternatives to oil that few have stopped to ask whether this is really the correct story. Instead of creating a new story, it might have been better to look more closely at history. Based on the historical record, collapse seems to have been associated with situations where populations have outgrown their resource bases. In other words, collapse can be considered an energy consumption per capita problem. The oil problem (and other fuel problems) we are facing today can be viewed as an energy consumption per capita problem, as well.
We know from research that has been done by Peter Turchin, Joseph Tainter, and others how collapse has played out in the past. The situation is different this time, however, because the world economy is very interconnected. Oil consumption depends on electricity consumption, and vice versa. Our financial system is also extraordinarily important. For these reasons, a collapse may occur more quickly than in the past.
Differences Between My View and the Standard View
One of the big differences between the way I see the economy and the standard view of the economy is the answer to the question of “Who is in charge?” The standard view is that politicians and economists are in charge. They have all of the answers. The dire collapse outcomes that afflicted early civilizations could not possibly affect us. We are too smart. We know how to adjust interest rates correctly. We can even make QE available to lower long-term interest rates. We can also add more technology and other complexity than has ever been added in the past.
The answer I see to the question, “Who is in charge?” is, “The laws of physics are in charge.” Politicians play a fairly minor role in directing the fate of economies. If there is not enough energy available of the type needed (inexpensive and matching the current infrastructure), the economy may very well collapse. It is nature and the laws of physics that call most of the shots.
Another big difference between my view and the standard view is the observation that a decrease in oil supply (or total energy supply) affects both the supply and demand of energy. Because both supply and demand are affected, we don’t know which direction oil and other energy prices will move. They may move erratically, as interest rates are adjusted by regulators. A more complex model is needed.
Climate change becomes less of an issue in my view of the future, for several reasons. First, humans don’t really have very much control over the direction of the economy, so talking about anthropogenic climate change doesn’t make a whole lot of sense. The laws of physics that allowed human population to rise are also allowing climate change to happen. Second, we seem to be limited in our ability to use renewables to fix the situation. Furthermore, the possibility of collapse in the near future makes the various scenarios that hypothesize the use of large amounts of fossil fuels over many years in the future seem very unrealistic. Perhaps efforts to fix climate change should be focused in new directions, such as planting trees.
Help from Others
The subject matter of this post requires the knowledge of information from a wide range of academic areas. I could not have figured out all of this information on my own. I have been fortunate to have been able to learn from of a wide range of experts. Quite a number of academic groups have seen my articles, and invited me to speak at their conferences. In particular, I have had a long-term involvement with the BioPhysical Economics organization and have spoken at many of their conferences. I have learned much from Dr. Charles Hall, although at times I don’t 100% agree with him.
I have also learned from the many commenters on OurFiniteWorld.com. They form a self-organizing system of people from a wide range of backgrounds. Earlier, my involvement at TheOilDrum.com as “Gail the Actuary” allowed me to get acquainted with a range of researchers, looking at different aspect of the energy problem.
In future posts, I intend to expand further on the ideas presented in this post.
*Here I am using the term afford loosely. What borrowers can actually afford is the current required monthly payments.
nuke
nope…
zio
zion
nuke
nope
dope
‘Iran supplies 50% of Iraq’s electricity’ … and they have cut off some of the supply….
Who needs bombs….
https://www.aljazeera.com/news/2018/07/southern-iraq-unrest-protest-oil-field-basra-180718073822733.html
TEHRAN, Jul. 17 (MNA) – Iranian government spokesman said Tue. Iran is not going to resume electricity supplies to Iraq in near future due to looming shortage of power inside the country.
Mohammad Bagher Nobakht made the remarks in his weekly presser on Tuesday during which he said that Iran used to supply electricity to Iraq earlier this year but due to the shortages in the country, it does not intend to resume the supplies to the neighboring country in the current situation.
https://en.mehrnews.com/news/135815/Iran-not-to-resume-electricity-supplies-to-Iraq-in-near-future
Interpretation: F789 YOU AMERICA…. WE’LL TURN ALL THE POWER OFF AND CREATE TOTAL CHAOS IN YOUR CLIENT STATE IRAQ. BE CAUTIOUS.
NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE,” Trump tweeted after returning to the White House from a weekend at his golf resort in Bedminster, New Jersey. “WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!”
https://www.zerohedge.com/news/2018-07-23/public-sector-pensions-parasite-devours-its-host
https://www.zerohedge.com/sites/default/files/styles/inline_image_desktop/public/inline-images/Top6states.png
If all goes well the federal government will hit print as they should. The pensions will be bailed out. Essentials (housing, food, etc.) will continue to get more expensive.
The best we can hope for is steady inflation until such a point where “essentials” can no longer be afforded and social or political unrest topples the dwindling apple cart.
It is a totally bull shit article from people with zero clues as to how the macro economy operates. The federal government is the solution, No other body can meet the debt.The ignorance in the comments is just extraordinarily stupid. Serves us right for being so gullible to believe what we ought to understand is propaganda, pure and simple. As Einstein said, there is no limit to human stupidity.
Do you think the federal government can solve the problem? It is really a resource issue. Who receives the goods and services that are made, if there are not enough for everyone to have the amount they want. Giving the goods and services to the pensioners leaves too little for the younag people who worked on preparing them. You can print money but not resources.
Well, the predicament the article is facing comes into play well shy of resource scarcity. Eventually that will tell, but there is some time to get the house in order since we don’t know how long before catastrophe will strike. Do you believe we should just wring our hands and do naught because eventually we die?
High enough cost to cause wage disparity is already sufficiently scarce.
The CBs are doing everything possible to keep the train on the tracks John… if MMA made sense… they would be using it…. it obviously doesn’t … so relax… arm chair quarterbacks are rather pathetic
I don’t think it’s salvation but I have been convinced it can extend our ride. Some FED types do indeed understand it. In many ways the public conversation about money is a moral one. Who has the right to create money out of nothing? The language of the government is one of “debt” as “obligations and promises” to make activities seem morally justified. Printing funny money could accomplish a lot in terms of motivation, incentive and propping up aggregate demand.
Another way to say it is that we are already applying these principals, we’re just lying about what we’re doing. I.E. we pretend that monetary sovereign governments can only spend what they tax yet every year we run a budget “deficit.” Why not just decide “How much money should we print this year?”
The answer in my book is so that we don’t have to lie about giving it to bankers and corporations (call it your ELDERS) instead of using spending more democratically.
Universal Basic Income has appeal. But I don’t see how you do it equitably. Where there is a homogeneous society with a narrow spread of income, I could see it working better. But what about societies that are extremely unequal? What would be a boon for the ghetto resident would be meaningless (and a waste) given to those living in mansions.
Another long held view that the decades have not diminished is that only a bottom rung lifestyle squares with the available resources. But not for anything will the better off let go of the illusion that they are living appropriately and in balance with resources.
Universal Basic Income has great appeal to those dishing it out as they are in total control of the masses i.e. “plebs”.
UBI comes under the same law as bitcoin
if it isn’t underpinned by energy then it can have no real value
It would seem like if UBI got back to low level consumers, it would bid up commodity prices. Whether or not UBI worked would depend on the extent to which prices would actually raise production of energy products. In that sense, it would be like other debt. But I am not sure that adding UBI in one country would really raise commodity prices. It more likely would lower the currency, relative to other currencies. So you would be right, Norman.
MMT’ers generally advocate a jobs program, not UBI. A jobs program which encourages full production. Balancing unemployment vs inflation is a quest for governments who print money.
Bill Mitchell points out troubles with the UBI concept. He’s all for a Jobs Guarantee;
http://bilbo.economicoutlook.net/blog/?p=39896&utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+economicoutlook%2FFYvo+%28billy+blog%29
A “Jobs guarantee”is pretty much guaranteeing growing inefficiency, as more unneeded workers are added to the system.
The many jobs that solar brings reflects the inefficiency of the process.
We don’t actually produce more. We just spin our wheels a lot.
Yes, “fraid so. As David Graeber said, there are a lot of shit jobs out there. But we need to work to survive even if it means running on the spot. The Federal government can provide a basic living wage, without taxpayer input. No one asked to be born. But we agree to have a government and it’s job is to look after us, rather than provide a profit opportunity. So called “Conservatives” have that back to front.
If they provided a living wage… then Walmart would go out of business… as would every other business that is not paying a living wage… yet requires employees to actually get out of bed and come to work.
This entire concept is just beyond stuuuuupid….
Get back into your silo.
But then who would make a fool of you day after day?
Nobody makes a fool of me. You are the least likely to have that capacity. You always back off when challenged. I asked you to find a single error in MMT. You failed, because you cannot, although I’m sure you will find a weasel way to cover for it. The silo is your home.
I suggest you read, “Against the grain.” Governments that provided substantial oversight grew up in grain producing areas. It was easy to tax grain production by taking as share of the production. This grain could be use as rations for slaves or pay for soldiers. Payment of oil royalties was, at times, in kind as well. Oil production has always been heavily taxed.
Debt is simply a promise for future goods and services. That promise is, rather often, an empty promise. If there is no price for energy products that is both high enough for sellers and low enough for buyers, we have a problem. The goods and services can’t really be made.
Debt has more than one description. It is also spending today what was intended for the future. Why that is a problem is that we have come to expect it and don’t have a plan for the future beyond the political cycle. There are no economists looking into this as far as I know. There is no money in it as academia today is all for the short term. You mentioned the silos.
MMT does recognise the problem of availability but no one is going into details as there is already so much wrong with the dominant mainstream agenda neo-liberalism and inequality first among them.
Re reading, let me suggest this book;
“Reclaiming the State – A Progressive Vision of Sovereignty for a Post-Neoliberal World”
Mitchell and Fazi . Pluto Press 2017. ISBN 978 0 7453 3732 6 [Try Amazon.]
It’s not a dry as it sounds.
All spending involves the use of exhaustible non-renewable resources (or occasionally, renewable resources that are also easily exhausted). Talking about whether those non-renewable resources were intended for today or tomorrow doesn’t make much sense. Debt involves promising even more of those non-renewable resources, whether or not they will actually be available at a price that is high enough for producers and at the same time low enough for consumers. MMT doesn’t recognize this problem.
The new acronym is MMA… MMT does not work… MMA3 actually … free petrol…. that will definitely work
I’ll have to remember to order that… is it on audible?
Let’s present this in a way that even a f–ool will understand:
But if we gave everyone a living wage why would anyone working on minimum wage show up for work?
If you have a job you applied for [that the government will pay for], the first thing is that you would SHOW UP!!! You confuse a job guarantee with a UBI. A job guarantee is a free option. If you don’t want to work you don’t show up and you don’t get paid. If you have a good reason, such as being a cripple, then you will get welfare.
Do you have the smarts to understand that?
First of all … you need to calm down … stop dribbling like a rabid dog on your keyboard… and explain yourself…. what you have posted I would expect from a crack addict who has just puffed his entire week supply in one go… gibberish…
I will attempt to decipher your madness and respond:
UBI … as I understand … is like the song by Dire Staits…
When he got the letter after Christmas saying he was entitled to an unconditional income of €560 (£478) a month, Mika Ruusunen couldn’t believe his luck. “At first I thought it was a joke. I had to read it many times. I looked for any evidence it might be false.”
But the father of two was not the victim of a scam. He has been selected to take part in an experiment being run by the Finnish government, in which 2,000 unemployed people between the ages of 25 and 58 will receive a guaranteed sum – a “basic income” – of €560 a month for two years. It replaces their unemployment benefit, but they will continue to receive it whether or not they find work.
https://www.theguardian.com/society/2017/feb/19/basic-income-finland-low-wages-fewer-jobs
Yes what tremendous luck …. f789 waking up after a big night on the meth pipe and driving to Walmart for a crummy $11 bucks and hour… just sleep all day … boil some kraft dinner up … then get back on the pipe again …. what’s NOT to like!!! Sheeeeeit … I might just stop working and get on The Plan!!!
So maybe I have this wrong…. UBI means the govt gives you a job … maybe picking up trash??? … and you get paid a ‘living wage’….. So you do wake up .. meet up with all the other meth heads… get shuffled off to the clean up site of the day …. and do sweet f789 all…. or better… because this is money for nothing … and you can’t be fired.. because it’s not a really f789ing job to begin with … and the Alliance Against Poverty will protect you …. you bring your pipe and you lounge about puffing meth with your new mates….
I am beginning to like this …. is there a Plan for people like me?
My idea of a basic living wage is quite a bit different than some low life vermin meth head…. I am quite used to jetting around the world.. and the Holiday Inn just won’t work for me… drinking pretty good wine…. I’ve got ice time costs for hockey — the gear… also the ski pass… more gear…. 3 cars…. 4+ tonnes of coal per winter to heat this house…. the list goes on and on ….
And I don’t mind if I actually am expected to do something to get the cash … I am happy to show up and bring along my hockey stick and puck and the shooting board and work on my slapshot for a few hours… take a nap… then head home….
I eagerly await the NZ govts announcement of the MMA roll out….
After the recent holocaust (hurricane) in the nelson area … my neighbour was telling me that the government hired welfare bums …. to help clean up …
They were paid their welfare money + extra if they helped with the clean up….
Some of these bums were ‘working’ in her area — for the most part lounging around.. putting in minimal effort… and getting nothing done….
It is not hard to imagine them going home with their extra cash — having a laugh about how they were getting paid to do virtually nothing …. then calling up Mr Meth …. spending the extra cash on smoke…. and listening to banjo music
https://www.youtube.com/watch?v=Uzae_SqbmDE
The USSR, Vietnam and China already tried this on a mass scale… it did not work out so well.
I think we still have the capacity to increase production. My evidence for this is (1) low labor force participation, and (2) excess industrial capacity. We are reaching resource limits which increase the cost of production of essentials and non-sovereign debt problems which limit aggregate demand. Keeping in mind that fiat money is now a points system we can always consume all goods can produce at any point in time. This is theoretically possible even if it is practically (politically/socially/psychologically) impossible. I think it is the latter.
We can increase production if we can prop up aggregate demand. What has to be sacrificed is the concept of savings. Past “saved” money is the real illusion. No energy or resources were saved – so in times of decline money has to become worth less in order to represent reality.
There will be price increases of course. But it is not technically identical to inflation because wages will not increase apace. Price increases can reflect material reality and aren’t always a price distortion caused by policy.
In summary it’s a slim hope but I think we need not collapse into depressionary deflation in theory. In practice the decisions may be politically impossible and it seems more likely that elites will protect their status at the expense of non-elites until the latter rebel – as they seem to be doing now. If elites do not cooperate with democratic processes perhaps civil unrest will be what tips the apple cart.
While such a path is theoretically possible, it’s hard to see anyone with the ability to make it happen actually making significant progress in this direction. Keeping up demand is the ultimate limiting factor in continuing extraction of resources and fossil fuels; as such deflation is the ultimate disaster and is infinitely more dangerous than inflationary policies.
Agreed. I think people will choose an unnecessary austerity rather than what looks like a prodigal distribution of dwindling resources.
You may be right … it is difficult to say.
What we need is a modern day Adam Smith … to lay out the rules of the New Normal… this new economy…
Based on the rules of Econ 101… the global economy should have already imploded….
We are dealing with a completely different animal here…. the CBs are attempting to in effect overturn the rules of physics….
It is as if an earthquake has knocked 1000 plates off of the top shelf… and the CBs are levitating them using magic tricks…
Have they changed the rules of physics… not likely…
However Econ 101 does not provide guidance on this — difficult to understand how long this can last… and what will cause the plates to shatter on the floor.
Yep – I don’t claim to have all the answers. I just know that we here at OFW sometimes are guilty of conflating “the laws of physics” with economic principals. Given that money is not physical it can’t be treated like a law of physics. Debt/money is a social phenomena – it’s true there is no free lunch – but that doesn’t mean there isn’t such a thing as wasted lunch.
We can’t burn 3000 calories a day on a diet of 2000 for very long. My contention is merely that the economy isn’t running at 100% capacity. One of the reasons is protection of asset prices by central bank policy which adds to “wage disparity.” We don’t have a debt problem – we have a problem with the illusion (or social construct) that saved money has absolute value.
We do need debt to pull the economy forward. But another way of saying this is to say “we need to print more money because people want more money and it will incentivise them to work in order to obtain it.” This process has limits which are based on unemployment, productivity, and resources.
A financial collapse is a social collapse, not a physics problem, and not a moral crisis – in my opinion.
Based on the fact that by all rights we would expect BAU to have already ended…. that we are able to continue sucking millions of barrels of shale out of the ground every day even though money is lost on every barrel…. your observations are valid….
Come on John … tell us more about the MMA system and how that will fix everything … bore us with the great detail
http://themmacorner.com/wp-content/uploads/2016/02/MMA-fight.jpg
CONTACT WHO WAS IN THE INDUSTRY:
Oil accounts for 95% of Nigeria’s total export revenues and the country depends heavily on the sector to achieve economic development.
The country boats a total of petroleum production at a capacity of more than 2.5 million barrels, even though civil unrest has resulted in the production of just 1.9 barrels per month as compared to Angola for instance which has produced 1.94 million barrels.
Nigeria remains poor with child malnutrition at 37.7% , low rates of adult literacy with a few Nigerians being able to enroll in primary school.
Oil production in Nigeria has had a negative impact on the citizens – a critical example being the devastating experience of the Ogoni people. There are over a 100 oil wells in the Ogoni territory.
The oil extraction threat to these people began with Shells discovery of oil in 1958, since then they have never known any rest. Suffering several negative consequences of oil discovery, which include, environmental pollution a result of oil spills, gas flares, contaminated water to respiratory problems suffered by villagers.
Nigeria also has a great source of income which is not counted in the GDP – scam.
i miss all those nigerian millionaires who used to email me every day
Running low on Viagra?
ive started dealing now
that and giving demos all the time is keeping me very busy these days.—beats doom mongering thats for sure
‘Nigeria remains poor with child malnutrition at 37.7% , low rates of adult literacy with a few Nigerians being able to enroll in primary school.’
The thing is …..
This is the way it has to be … in order for those of us living in the developer world…. to live like:
https://i.pinimg.com/736x/46/11/ac/4611ac197d0dbe040fd19782eaa89326–pretty-girls-trailers.jpg
https://www.bookeventz.com/blog/wp-content/uploads/2016/09/cocktail-party-1.jpg
http://1.bp.blogspot.com/-p8SfzGqfdwQ/Tqi5UAeNRLI/AAAAAAAADlo/X856_8g6SIQ/s1600/image+01+online+shopping.jpg
If you are feeling badly after reading this post…. go to the supermarket … fill up your cart with delicacies… and a couple of bottles of wine…. then toss your spare change into the UNICEF box…
A few of your pennies will make it to Nigeria …. that’s after the UNICEF honchos take their cut and blow it on business class flights, 5 star hotels… and pool parties attending by the hottest slum girls from Lagos….
Personally … I don’t donate… rather I take solace in the fact that when BAU goes … those wonderful people in the photos …. will get to suffer far more than anyone in Nigeria…. and I gotta say … when I read stories about former middle class people who are dropping off into despair…. I am thinking … how’s it feel to get a taste of poverty…. my empathy meter is reading ZERO
“Personally … I don’t donate…”
Neither do I for the same reasons. In the USA there’s one organization thought donates like 95-99% of the donations, it might be the Salvation Army, though i’m not sure but almost all of these donation pledges are tear-jerker scams.
I donated to the village where I lived in Bali … we paid 2k to have a mobile eye hospital do eye check ups hand out free meds and eyeglasses for 500 people… they also carried out 5 sight restoring cataract surgeries…
A couple of years later we had to drop a rotting tree onto the one neighbours empty land – we offered him the wood — he wanted USD600 AND the wood…. I mentioned the free eye clinic that his entire substantial family attended… he turned his back on me and walked…
Giving is over-rated. In fact it is often perceived as weakness by the recipients… who will almost always want/expect more… it also encourage sloth….
Right on FE. Still working through “Against the Grain” it is great and describes current and future society, unless we get a really good die down.
I don’t donate either, for some similar reasons. I also rail against the school system and much else that would detract from our western lifestyles (not that I think that’s the issue). The latter will take a hit from a different direction. I doubt that I can figure out a better way for Nigeria to be run. It’s too big to figure out. But I wouldn’t run anything the way this place is being run. Just me.
Oil prices could jump to $200 a barrel if US and Iran go to war in Persian Gulf, analyst says
https://www.cnbc.com/2018/07/23/oil-prices-could-hit-200-a-barrel-if-us-and-iran-go-to-war.html
https://twitter.com/GoldTelegraph_/status/1021388708212137984
“Textbook econ said that if you sharply cut taxes in an economy near full employment, the result will be higher interest rates, a stronger dollar, and a bigger trade deficit. Sure enough, that’s more or less what’s happening, although the dollar hasn’t gone up all that much.”
“But Trump sees the predictable and predicted effect of his own policies, and screams that it’s a conspiracy against America.”
Paul Krugman
i know i keep repeating it—
but every dictator must have conflict and/or the threat of conflict to maintain his position as ‘saviour of the nation’
in that way the morons who voted to join his ponzi scheme will keep on with it until the entire scam comes crashing down
The Iraq protest pose a threat to the ruling elite in Baghdad since the people in the oil rich region in the south are now demanding autonomy.
They oil belongs to them. Why share the oil wealth, when they live in poverty?
The government has shut down the internet and sent the military to deal with the situation.
Some politicians have sided with the protesters and are perhaps seeing some opportunities.
Iran is getting more involved…
The Donald is getting ready to bomb Iran…
A new war theater is opening?
We’re not near full employment. His theory relies on an expectation of increasing inflation from tax cuts. Furthermore, increasing interest rates preceded the tax cuts. Paul Krugman is a fool. See his interchange with Steve Keen who understands energy more than most and Warren Mosler who understands money more than most.
Monetary expansion is good. We need more money to grow the economy. The problem is that scarcity is increasing the cost of inputs to production and thus increasing the cost of essentials – leaving less surplus left with which to purchase non-essentials. This process will continue until collapse from either (a) essentials become unaffordable, or (b) the financial system collapses from more complex reasons – such as panic.
The best we can hope for is steady inflation until we can’t afford any more. The tax cuts are good. High interest is bad. A trade war could go either way for the U.S. If we win we may avoid collapse for longer. Or we may lose. Or everyone may lose. So 1 of the 3 criticisms is good, 1 is wrong, and the 3rd is a risk in the face of terrible consequences.
A s well as all that we need a PLAN. We have no plans to manage the ride down to chaos and destruction. All we should understand is that we have ordained the end by ignoring the future events. I doubt there is even a secret plan, for such temporary fixes as coupons etc. We just don’t want to know!
We are seeing the plan… delay the end game as long as possible by whatever means possible… because there is not surviving the end of BAU
I must confess I am skeptical that were scarcity well known could we maintain order. Given the magnitude of the problem I do not know whether denial and “extend and pretend” is the wise course or not. Personally, I think it is worth a shot. I do not believe there is a secret plan other than “try to be the last one standing” which seems to be the default.
I would say this. I think one very worthwhile cause would be to campaign for the safe disposal and casking of nuclear waste while we have the energy to do something about it. Posterity, should they prevail, will not be able to do anything about it.
A macabre hope of mine is that one of Fast Eddie’s fuel ponds goes up soon – showing the IAEA the dangers and leading to policy changes on storage – which could be enforced in the developed world.
If that compromised pond at Fukushima had gone rogue…. I think Korowicz’s thesis regarding key pillars of the global economy – in this case the supply chain — would have been tested…
The other problem is — we can’t cask for at least 5 years… and we are loading more fuel into reactors continually…. 5 years worth of fuel is probably enough to end us….
In any event ‘us’ does not refer to anyone on this site… the ‘us’ I refer to would be the primitive tribes who know how to live unplugged from BAU…. both in a physical sense and as importantly .. a psychological sense….
When the chain saw, washing machine and water pump no longer function … even the most delusional Doomie Prepper … will fall into deep despair….
Then there are the other horsemen….
Yep, it’s quite a pickle. I am a mechanical engineer with some nuclear experience and friends in the industry. I’ve read the papers you recommend and have a little trouble getting to the bottom of it with them. Never sure when I’m over-representing my knowledge or whether they are being psychologically defensive. Truth be told I don’t have the stomach to develop the expertise. Not a great way to spend BAU time if it’s true. We’ll see!
The spiritual lesson to me in all of this is that nothing lasts forever and I should live accordingly.
I’ve mentioned a cousin who is an engineer at an Ontario facility – heads up safety … I hadn’t seen him in years and asked the question .. what would happen if the ponds lost all cooling .. his response was — that can’t happen — we’ve put in more fail safes since Fukushima (more diesel powered pumps etc….)….
Yes but what would happen if…. his only response was that can’t happen….
I interpret that as … it is unthinkable….
I caught a bad time, but Gail’s theory that lower wages to the general, non elite workers depresses economy is disproved by this article.
http://greyenlightenment.com/sorry-middle-class-youre-just-not-that-important-anymore/
We can have a great economy with higher stock prices and higher assets, because there is a critical mass of people who will advance economy to the stars.
Most of the people won’t be part of it, but that is no concern since the aggregate economy will grow.
Just before 1914, when 4% of the population had 90% of all income. The world prospered and the greatest inventions were made.
I am headed to Cambridge today to attend tomorrow’s session of the Ninth International Conference on Complex Systems, so I may not be around as much for a bit.
It’s taking place in Cambridge, Massachusetts, Google tells me, rather than the UK’s famous university town. I see Nassim ‘Black Swan’ Taleb and Peter ‘Secular Cycles’ Turchin are speaking. Looks great, actually:
http://www.necsi.edu/events/iccs2018/
pass round the ofw link
then take the rest of the week off
Visiting my daughter in the Boston area afterward.
https://twitter.com/Peter_Turchin/status/1021047098215665664
Right. I hope to get a chance to talk to him a bit.
Gail can you please post a link to any live streaming of the event..I would love to watch it at work..
I doubt that is available. It is mostly an academic group.
No-deal Brexit risks ‘civil unrest’, warns Amazon’s UK boss
https://www.theguardian.com/politics/2018/jul/23/no-deal-brexit-civil-unrest-amazon-uk-dominic-raab
“Global growth has peaked and is expected to decelerate further. Signs of a slowdown have been evident since the beginning of 2018… Over the last decade every global slowdown has been marked by a crisis. Given the precarious state of global trade, a tariff war could create a Wiley Coyote moment where global growth could fall off a cliff. Moreover, global growth is not expected to improve in the near term because global liquidity is evaporating…”
https://www.livewiremarkets.com/wires/danger-flags-are-waving
And what they’re not telling the plebs is that there hasn’t been any global growth since the 2008 collapse. Since then every Gov’t has been pretty much lying about it’s GDP and unemployment numbers just so as not to create any panic.
The world is bankrupt and the off the books derivates debt level is around $1.5 quadrillion, good luck with that.
You may very well be right, but it is hard to prove. The heavy weight to China and India makes their economies especially important in reported world GDP.
If it weren’t for all the Central Banks around the world printing money like druken sailors, we’d be living in FE’s dystopian paradise right about now.
Agreed! It is hard to see that today’s economists can’t seem to understand the obvious. Rolling the printing back adds great perils to the economy.
This is what a person expects, when energy supply per capita is not growing sufficiently.
“While ever greater food production, mineral extraction, forest clearance and fossil-fuel burning bring short-term (and unequally distributed) lifestyle gains, the long-term consequences are increasingly apparent in terms of soil erosion, water shortages and climate disruption. The day of reckoning is moving nearer, according to Mathis Wackernagel, chief executive and co-founder of Global Footprint Network.”
https://www.theguardian.com/environment/2018/jul/23/earths-resources-consumed-in-ever-greater-destructive-volumes
The Global Footprint Network’s calculation greatly understates the problem. It basically assumes that fossil fuel extraction can continue as in the past. I am sure that they wanted the situation to look easily fixable, if people simply changed their ways a bit.
I have had a few e-mail exchanged with Mathis Wackernagel on this subject. I don’t think that he is very happy with me.
This is a different idea than the Steady State economy, but based on equally false premises. I have had many unhappy emails with them as well.
Sustainability advocates tend not to like having it pointed out that ‘sustainable’ is a completely meaningless word in the context of the modern human endeavour. 😀
“The OBR’s fiscal sustainability report does what it says on the tin — it looks at the sustainability of the [UK’s] public finances over the long term. They are not, judging by its latest report, remotely sustainable.”
https://www.thetimes.co.uk/edition/business/david-smith-why-britains-debt-is-on-a-dangerous-trajectory-j30s9pk6s
“Hundreds of Argentinians took to the streets of Buenos Aires to protest against a standby agreement reached with the IMF in June for a three-year, 43 billion euro loan. “This agreement demands a reduction in the fiscal deficit that would imply job losses in the state, a reduction in the budget for education, health, housing, everything related to public works,” said Leftist Front deputy, Nicolás del Caño. “This means the crisis generated by the big capitalists wants the general public to pay for things.””
http://www.euronews.com/2018/07/21/argentinians-protest-imf-multi-billion-euro-loan
“Three months after the protests began in Nicaragua, which have unleashed deadly violence, with more than 350 killed and thousands injured, the country’s economy suffers serious consequences due to the fall in investment, employment and production.”
https://todaynicaragua.com/nicaraguas-economic-activity-continues-to-decline/
When the IMF wants to lend you money, get ready to hand over your Country to the Bankster Cabal. They’ll make you an offer you can’t refuse knowing full well you can’t pay it back until you start selling off your Country’s assets. Argentina should have read up on Greece before accepting the offer.
“Direct foreign investment into [Saudi] fell to $1.4 billion last year from $7.4 billion in 2016, according to United Nations figures released last month. That compared with an average $18.2 billion annually in the years leading up to the global financial crisis in 2007-2008 and last year fell in part because of fewer investments among multinationals, said the U.N. Saudi officials didn’t dispute the numbers.”
https://www.wsj.com/articles/saudi-arabia-to-spend-billions-to-revive-foreign-investment-1532260920
“In Dubai’s posh Jumeirah Beach Residence district, luxury apartment rents are down about 15 per cent from a year ago – a sign, some fear, that the wealthy emirate’s recipe for economic success is getting stale.”
https://www.business-standard.com/article/international/dubai-s-economy-hits-rough-patch-amid-market-slump-falling-property-prices-118072200245_1.html
“The number of foreigners terminated from public sector jobs in Kuwait has left banks in the country with a sizeable bad debt problem. Local media said that Kuwait’s efforts to create more jobs for nationals by releasing foreigners has created a problem when thousands of laid off expatriates became unable to fulfill their financial obligations towards local banks.”
http://english.alarabiya.net/en/business/economy/2018/07/22/Rise-in-expat-terminations-result-in-1-8-bln-bad-bank-debts-in-Kuwait-.html
I’m seriously amazed that anyone thinking of working in that region couldn’t figure out all this beforehand.
It was/is a tribal society. Overlaying it with a temporary oilslick hasn’t changed that into a ‘free lunch’ society
I feel sorry for people trapped there, but a bit of forward thinking would have prevented most of it.
I’ve grown rather hooked on these ‘Locked up/Banged up Abroad’ programmes. They make compulsive viewing and some of the best ones are set in the Middle East. This chap happened to be in a Kuwaiti prison when Saddam invaded:
The best one is the two English chumps who got nailed with bags of cocaine sewed into their clothes in Venezuela. Some kind of patsies, letting the real load get through.
This one was hard to beat for sheer thrills. The plot is straight out of a thriller:
Most peoples’ idea of forward thinking seems to be leaning over looking at their smart phone being held just forward of their barely utilised cranium.
“The currency mismatch and volatile capital flows in Turkey is at a structural risk with an alarming problem of reaching a moment where they cannot borrow any more. The increased interest rates in the US have caused reallocation of funds out of several emerging economies, thus structural weakness has become obvious in the MENAT region.”
http://www.jordantimes.com/opinion/fares-hammoudeh/turkeys-economy-facing-‘sudden-stop’
“As it stands, Lebanon’s public debt is $80 billion, the third highest globally as a percentage of GDP (150%) with more than one-third of the annual budget dedicated to servicing the country’s debt, making—without significant change—economic recovery impossible.”
https://financialtribune.com/articles/world-economy/90297/lebanon-says-economy-on-verge-of-collapse
“Pakistan’s economic situation has further deteriorated during short tenure of the incumbent caretaker government that neither has intervened in the market to stabilise the currency nor increased the foreign exchange reserves. The country’s economic situation especially external sector is deteriorating due to widening of current account deficit and loan repayment.”
https://nation.com.pk/22-Jul-2018/economic-crisis-worsens-in-interim-govt
I think Pakistan will be the first major country over the Falls.
But the options are many, and I could be wrong.
We seem to have a very long list of countries with economic problems.
“Australia’s building commencements, fuelled by investor apartment construction, look like heading from boom to bust, according to forecaster BIS Oxford Economics. In a reality check for investors who bought at the top of the apartment boom, BIS is predicting the biggest correction since the global financial crisis hit in 2008, with housing starts set to fall by almost 23 per cent by 2020.”
http://www.abc.net.au/news/2018-07-23/construction-set-for-biggest-fall-since-2008/10024948
“Australia is facing an economic shock akin to the global financial crisis, an expert has warned. Some $500billion worth of interest-only mortgages expire in the next four years, raising fears that thousands will default when their repayment sums increase. High mortgage default rates in the US sparked the 2007 global crash by leaving banks short of cash.”
http://www.dailymail.co.uk/news/article-5979139/Finance-expert-warns-Australia-faces-massive-economic-crash.html
Interest only mortgages about sum up the entire human predicament. We want it now!
We do prefer our gratification immediate. The UK is in much the same boat, of course:
“According to the Financial Conduct Authority (FCA), there are 1.67 million homeowners in the UK on some form of interest-only mortgage. That accounts for over 17% of all borrowers.
“The FCA says many of those borrowers are at risk of not having enough money to pay off their loans when they mature. Many might be forced to downsize. Some could face repossession.”
https://www.bbc.co.uk/news/business-44851363
very many are in the lowest housing bracket—with nowhere to downsize to.
it has been the result of the ”certainty” of house prices rising to infinity—which only works if wages and pensions rise at the same rate
as it is, house prices are going up through the pressure of ‘investors’ who expect renters to also have infinite amounts of cash available
but as we doomsters know–cash is a measure of energy exchange—when theres no energy to support the cash, money values will evaporate, still leaving house opwners with the certainty that their home is worth xxx 0000s
Anyone who understands the nature of the problem we are facing … is ticking the interest free box on the mortgage application …
America’s 1% hasn’t controlled this much wealth since before the Great Depression
https://www.marketwatch.com/story/wealth-inequality-in-the-us-is-almost-as-bad-as-it-was-right-before-the-great-depression-2018-07-19
Earlier, Ikonoclast lamented how badly the US is doing as an economy despite its energy use per capita remaining high.
I have been thinking about this, and my suggestion is that there is less discipline/requirement for the US to retain a balanced and diverse economic base as the ‘exorbitant privilege’ (https://en.wikipedia.org/wiki/Exorbitant_privilege) of having the reserve currency means that a greater proportion of its assets/employees can be ditched without affecting the overall ‘wellbeing of the economy’ (not people). Its the cheapest thing ever to issue currency as an export, and merely requires an extremely expensive military industrial complex. Hence the decline is widespread, under the radar, and irrelevant to the GDP print. So buy the dip!!
Good points!
There are a number of other countries with high energy consumption per capita. Ones that come to mind are Canada, Norway, Iceland, and Saudi Arabia. Having a fairly severe climate pushes countries in the direction of high energy consumption per capita.
Trump to Iran’s Rouhani: Never threaten the US again or suffer consequences
https://www.rt.com/usa/433975-trump-rouhani-never-threaten/?utm_source=browser&utm_medium=push_notifications&utm_campaign=push_notifications
He tweeted the entire thing in all capital letters..
I had a close friend who had mental problems a few years ago..And before he had to go the psych ward to get help..He used to do that all the time on FB..And all my friends kept telling him to stop posting in all capitals.. lol
https://twitter.com/zerohedge/status/1021185599351545856
Trade War May Spark a Chinese Debt Crisis, Stevenson-Yang Says
https://www.bloomberg.com/news/videos/2018-07-23/trade-war-may-spark-a-chinese-debt-crisis-stevenson-yang-says-video
“President Trump continues to escalate his trade threats against China.
“He’s now threatening 10% tariffs on all Chinese imports.
“While the effects on US consumers and economic growth would be bad enough, there’s a risk of triggering a full-blown financial crisis.
“That’s because China’s economy is a debt-fueled house of cards, with especially strong exposure to a crash in its $43 trillion real estate market.
“This means that this very risky strategy might either force China to make major concessions on trade, or could spiral out of control and trigger a potential global recession.”
https://seekingalpha.com/article/4189044-trade-war-china-trigger-another-financial-crisis
Analysts are taking note of the struggles in China’s banking industry, which is being battered by an official deleveraging drive… Spikes in the volume of non-performing loans and an increase in loans overdue are among the reasons. One of the lenders — Guizhou-based Guiyang Rural Commercial Bank Co. — saw its bad debt balloon nearly tenfold in the space of two years, according to the assessor that slashed its rating.”
https://www.bloomberg.com/news/articles/2018-07-22/china-credit-woes-see-record-pace-of-downgrades-for-small-banks
Think Tesla running into a semi truck at full speed…
According to a memo seen by The Wall Street Journal that was sent to a supplier last week, Tesla said it is asking its suppliers for cash back to, drumroll, help it become profitable, as if that is somehow the priority of the company’s suppliers.
And we are not talking about a few cents here and there: Tesla requested the supplier return what it calls a meaningful amount of money of its payments since 2016.
But wait, it gets better: the memo which was sent by a global supply manager (who will probably be fired shortly), described the request as “essential to Tesla’s continued operation” and characterized it as an investment in the car company to continue the long-term growth between both players.
In other words, Tesla has given its vendors an ultimatum: give us a haircut, or else we won’t survive, and not only is your business with us over, but all those billions in payables we owe you, well, good luck with the other pre-petition claims in bankruptcy court.
https://www.zerohedge.com/news/2018-07-22/liquidity-crisis-tesla-asks-suppliers-cash-back
I wonder how much the NZ green grooopie fund will lose when Tesla goes to 0
Let me get this straight, Tesla is asking suppliers to invest in Tesla and in return they get an ownership position? Oh oh wait…. no ownership just a smile and maybe a tee shirt for the billion dollar “investment”. I really need a copy of FEs video will wiggle legs.
Not quite… they are asking their suppliers to rebate them on previous purchased and paid for auto components…. suggesting that if they refuse… Tesla goes under… they don’t get paid for recent orders … and they lose a customer…
If I am a supplier — I am looking at a company that is going down … regardless of if I kick back cash to them… so I am saying thanks but no thanks… and btw — you pay me COD for all future orders …
Not sure about US, but here in NZ if you continue to take payments from a company that you know (should know?) is insolvent, the liquidators can come to you for a refund. That doesn’t mean you get your inventory back either. Now that would be rubbing salt into the wound
No kidding!
There was an article on the front of the Business and Finance Section of the WSJ today on Tesla trying to get its money back. Tesla asks suppliers for cash back to help turn a profit. Electric-car company, in memo, asks supplier to return a meaningful portion of money spent since 2016
According to the article:
Expert makes the case for $400 per barrel oil
https://www.washingtonexaminer.com/policy/energy/expert-makes-the-case-for-400-per-barrel-oil
400 oil would be like 12 dollars a gallon gasoline….(shoots himself)
This expert must not have been around in 2008.
We’ll just print the money and drop it out of helicopters. It’ll be just like manna from heaven.
IMF warns G20 economic leaders that tariffs hurting global economy
https://www.reuters.com/article/g20-argentina/imf-warns-g20-economic-leaders-that-tariffs-hurting-global-economy-idUSL1N1UH06R
Australia allows international gas cartels to steal its gas reserves for a pittance. When I say “gas”, I mean natural gas which is mostly methane.
http://ieefa.org/ieefa-australia-a-gas-cartel-run-amuck/
In the last paragraph, this article canvasses the issue that Australia does not really have a gas market. We have a gas cartel which dictates supply and prices. We are the world’s second largest gas exporter (soon to overtake Qatar at number 1) and yet we have the highest domestic gas prices in the world. We also allow many famous international corporations, as well the gas corporations, to send all their profits abroad to tax havens and to avoid paying tax in Australia. Basically, we allow these corporations to steal from us.
The claim that the world economy works by free markets is totally false.The world economy works by the dictatorship of cartels (oligopolies) of corporations, usually TNCs or transnational corporations. Operations are transnational but these corporations are incorporated in the world’s most powerful countries. The governments of these countries, for example the USA, make policy to suit their corporations so that their corporations can rob other countries blind and indeed rob their own citizens as well.
Resource declines (including energy shortages) are real. However, the whole situation is made much worse by the kind of world economy we run. It is not true capitalism at all. It is a crony capitalism of cartels, oligopolies and oligarchs who run the entire system and have captured the governments of countries like the USA and Australia. These governments then make policies which suit only the super rich and the cartels. Then politicians get their pay-offs in various forms. Usually, after they leave office, lucrative jobs with companies and industries they have helped.
Even if the world had true capitalism it would not do us any good. Capitalism itself is a major problem. It is a system which is predicated on endless growth. As we know, endless growth in a finite system is impossible. Thus, capitalism is programmed to collapse. When you see the collapse, remember it is the collapse of capitalism, that system which was supposed to be magical and run forever.
Please do not overlook the 100% college and graduate school for the children of politicians paid for by the corporation that are ra peing the nation. It is not democracy it is rule of money. Pure raw kill the humans capitalism.
Criminal [and ignorant] behaviour by that most useless class in the economy, politicians!
FEMA-style tents as homeless shelters? Maybe, say some who believe we have a ‘public health disaster’
https://www.seattletimes.com/seattle-news/homeless/board-of-health-members-concerned-with-lack-of-action-on-homelessness-emergency/
But I’m sure they won’t consider thousands of discarded school buses. Makes way too much sense.
“Seattle City Councilmember Teresa Mosqueda, who is on the Board of Health, said she agrees with the health professionals about the urgency, but she doesn’t want to sacrifice focus on long-term solutions. She hopes for more 24-hour shelters with case management combined with affordable housing and health care.”
Epiphany! You have to think of the long term housing issues! Ya think? How about having a decent general plan and sticking to it?
This is one thing Enron Musk could fix… he knows tents.
Whats is giving way first; the environment or the economy? I think we are at or near ‘Earth Day’ about now..? Forest cover decline is more important an indicator to me than any other economic metric. If you can’t spare the trees, you are toast IMHO.
‘It’s bizarre: in what seems like a display of obtuseness on a nationwide scale, it is still not generally realised or admitted that across huge swathes of the land, the biodiversity that at the end of the second world war was giving animation and vibrant life to the countryside as it had always done has simply vanished…..’
‘How have they failed? In particular he is preoccupied with a paradox: how can our Nature have been so devastated, when there are more people who are members of green organisations in Britain than anywhere else? How can it have happened at the very moment in history that saw the rise of a new popular philosophy, environmentalism?
The simple answer is that this moment in history also saw the rise of intensive farming, a juggernaut beyond the power of green groups to control – and indeed beyond the power of individual governments once the Common Agricultural Policy of the European Union was fixed in place.’
https://theecologist.org/2018/jul/20/our-vanishingly-pleasant-land
7.6 billion homo sapiens, using 10 grams of hydrocarbons to produce 1 gram of food.
Any questions?
in Haiti they make mud cookies. apparently satisfying and low calories, for awhile.
I’ve been to Haiti. Hands down the poorest place I’ve ever seen in my life. I’m a fisheries biologist and the question was raised how to increase their fish populations as a food source. The answer was that it would be financially and humanly impossible under any degree of the current population levels, culture, and the environment.
Notice how when flying in… the Dominican side of the island has trees… and the Haitian side is barren…. a modern day Easter Island….
Yes. I did notice. It was startling to say the least. The trees had been cut down for firewood and to produce charcoal.
and as society finally breaks down that line will disappear
Don’t forget sprawl. The greenies (look at Al Gore’s house!) won’t settle for shanty towns confined to existing urban centers. Then there is the endless construction of roads to the suburbs.
I suppose the forest quality goes down to a larger extent than quantity. Wouldn’t be surprised if quantity were close to sustainable.
There have been studies on this, and indeed quality is down.
James Howard Kunstler: Russian Hysteria An Exercise In PsyOps
https://www.zerohedge.com/news/2018-07-22/james-howard-kunstler-russian-hysteria-exercise-psyops
Holy crap..kunt has officially gone off the rails..
I agree with Kunstler, The bear-baiting is insane, especially from the so-called progressives. The whiff of war fever is nausea inducing. Hatred of Trump blinds many to the bigger picture.
The bear baiting is real because at risk is $1 Trillion dollars to the industrial military complex. You betcha they need a boogeyman and that’s why they are all pointed at Russia and Putin. A really dangerous game to play with a nuclear superpower. Putin seems to be the only adult in the room, thank goodness.
What do you mean by that? Are you intending irony?
Ummm. …. no. Operation Gladio, The Pentagon Papers, Operation Mockingbird, Weapons of Mass Destruction. Shah of Iran, Pinochet et al …etc etc etc …This Russian black propaganda is par for the course for the C eye A. Do some research.
‘From the outside, I will paraphrase….’I cannot forecast to you the action of ‘the US’. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is US national interest.’ From you know who.
The best websites, this one included, are US based. The worst websites/fake news providers are US based. You guys must wonder which way is up some days.
Venezuela collapse report from French media (in English)
http://www.france24.com/en/reporters/20180720-venezuela-maracaibo-economy-oil-poverty-maduro-inflation
China rejects US call to end Iran oil exports
https://www.washingtonexaminer.com/policy/defense-national-security/china-rejects-us-call-to-end-iran-oil-exports
China has some common sense.
Earth Overshoot Day: Humans are using Earth’s resources faster than ever, group warns
https://www.nbcnews.com/news/us-news/earth-overshoot-day-humans-are-using-earth-s-resources-faster-n892996
RIP 7 Billion..
War with Iran would be ‘mother of all wars,’ Rouhani warns US
https://www.reuters.com/article/us-iran-nuclear-usa-rouhani/irans-rouhani-warns-trump-war-with-iran-mother-of-all-wars-idUSKBN1KC07Z
http://curacaochronicle.com/region/jamaica-may-have-found-oil-but-it-needs-investors-to-dig-into-discovery/
Elon Musk is a total fraud
https://nypost.com/2018/07/21/elon-musk-is-a-total-fraud/
But he’s a cu.lt figure; Tesla is similar to Concorde in some ways; both are subsidy queens.
‘Concorde plane was a fantastic feat of engineering, designed and built in a less cost-conscious time. Its focus on speed, glamour, and luxury was both its great strength in its day but also its fatal flaw. Will it ever fly again? Or will it forever find its place in an airport museum? Time will indeed tell.’
https://interestingengineering.com/concorde-plane-the-real-reason-why-the-supersonic-passenger-jet-failed
China holds better cards than the USA:
https://www.cnbc.com/2018/07/20/trade-war-could-be-morphing-into-currency-war-if-china-is-plays-hardba.html
“China did not seem to be intentionally weakening the currency, but it was not taking action to stop its decline, as it might have done previously. However, Thursday’s sharp adjustment looked like it was sending a message.
“It looked pretty deliberate to me it has been moving so fast,” Nordvig said. “Clearly, the currency moving this fast negates the tariffs so from that perspective it’s pretty understandable that [Trump] doesn’t like what he’s seeing.”
are “currency wars” a far bigger deal than “trade wars”?
Aren’t currency wars and trade wars linked together?
The higher interest rates are to try to win the currency war, and price everyone else out of fossil fuels. Also, to draw investment to the United States. The trade wars are so that the US will be able to use a larger share of the world’s fossil fuels.
yes, clearly linked together…
China has negated the tariffs by allowing its currency to weaken…
China will do whatever it can to win these linked wars…
I am not sure that China has a choice but to let its currency weaken. Trump and America really have the power in this situation.
All nations are playing liars poker. They are all at the mercy of depleting FF, uncontrolled human population growth, depleting everything, and pollution
EU Electric-Car Sale Growth Sputters on Battery, Charging Limits
https://www.bloomberg.com/news/articles/2018-07-17/eu-electric-car-sale-growth-sputters-on-battery-charging-limits
What would people think….. if it were leaked (kinda like the Protocols was leaked)….. or Trump announced….
That he was a front man — who had teamed up with Putin to unseat the El ders (with Trump backed in the US by well-intentioned patriots who were intent on re-establishing a democratic government and re-taking the control of the reserve currency from a private company).
I would expect his approval ratings to go sky high…. and that it would be open season on the Tribe….
If this were true… it would put the El ders in a very tricky situation … even trickier than Mark Carney’s situation over there in the UK….
They would not have the option to kill him … because he’d no doubt have a poison pill in the form of a tell all video ready to roll….
So you get your flunkies in both parties to rant and rail against him…. you have the MofT pumping out diatribes into the MSM round the clocks…. reminds me of my dog … she sits at the window watching rabbits racing about … she barks and whines … but she can do nothing … but watch … in total frustration.
Qanon: “Trust the plan”
Qanon has already made Trump into a messianic figure and turned the hard core Trump followers into a cult.
They believe that Trump is working day and night to liberate them from from the clutches of the evil globalist bankers, who are sucking their blood, flooding America with illegal migrants, drugs, crime, child se x and un Christian values.
Trump has been targeting the Fed lately…
Funny how Br*wder and Br*nnan have such similar sounding names. I’m thinking the n sea dilemma has got people quite ‘spooked”.
Whoa Eddy, found the real deal-
https://www.real.video/5811804296001
According to the write-up:
This documentary caused an uproar in Russia when it appeared in April of 2016.
This film was made by the main Russian government news broadcasting company, Rossiya 1.
It alleges that Bill Browder, the legendary American hedge fund manager who from 1995 – 2005 was the largest foreign investor in Russia, controlling billions of $ and a significant share of Russia’s leading companies, was in fact a CIA front.
At one point his funds owned 7% of Gazprom, using what the film argues were illegal schemes to acquire shares
The film argues that Browder’s whole involvement with Russia was a CIA operation to disrupt Russia politically and economically
It alleges that in 2006, Browder was instructed by the CIA to provide financial support to the rising opposition politician, Alexei Navalny, and that the two then closely cooperated for the next 5 years.
As evidence, the film cites hacked CIA email and skype correspondence which it claims fell into Russian hands during the government upheaval in Kiev in 2014.
When the film appeared, Browder and Navalny charged that the evidence was faked, and Navalny sued Rossiya 1 for libel. As of the translation of this video, (July 2016), the suit has not been concluded.
Browder was expelled from Russia in 2006, after which he led a highly successful public campaign criticizing Russia and Putin. The film argues that the campaign was financed by the CIA.
The campaign demanded sanctions against Russia for what Browder alleged was the murder of one of his employees, Sergei Magnitsky, and theft from his companies, by corrupt Russian officials.
His campaign resulted in the famous “Magnitsky Act” sanctions against Russia, passed by Congress in 2012.
The film alleges that this cynically misrepresents the facts. It alleges that Magnitsky ended up in jail for carrying out major fraud for Browder, and that he was on the verge of testifying against Browder when he died. It cites the hacked CIA mail as evidence that the CIA managed to orchestrate Magnitsky’s death in prison.
The film argues that the only people with a motive for Magnitsky’s death were Browder and the CIA, because his testimony about the tax fraud would have been devastating.
The film includes embarrassing details of tax avoidance schemes used by Browder and Magnitsky, including hiring barely literate invalids in remote corners of Russia as fake executives in order to receive tax breaks amounting to 100s of millions of $.
The film then alleges, again citing the hacked CIA correspondence, that in 2010 Browder paid Navalny $300,000 to conduct a PR campaign in Russia in support of the Magnitsky Act.
This documentary was never aired separately, rather appeared as a segment within the April 13, 2016 episode of the popular Russian political talk show “Spetsialnii Korrespondent” https://www.youtube.com/channel/UCAkt…
The episode consisted of an emotional 1.5 hour discussion of the film, with several people who appeared in the film present https://www.youtube.com/watch?v=37GZ3… (only in Russian)
So it has nothing to do with the theory of Trump/Putin taking on the el ders….
dangerous talk FE but yeah it kind of makes sense if one considers these words:
For great trouble and anguish will be on the land, and wrath and retribution on this people [Israel]. Luke 21:23
lack of oil may be one part of the equation but there is much, much more going on
Broader indicators of economic stress include homelessness, with young people, in particular, finding accommodation to be costly, often of poor quality, and hard to obtain.
Seemingly-rapid rises in violent crime – including a dramatic surge in moped offences, of which there were 23,000 in London alone last year, compared with just 827 five years earlier – do not seem consistent with a prospering society.
https://surplusenergyeconomics.wordpress.com/2018/07/20/131-not-about-brexit/
We were in Paris a couple of years ago …. and police sirens were a constant… I mean if we sat at a cafe for a drink … the sirens could be heard almost non stop…. to the point where we were left wondering wtf was going on ….
Having read the above — I suspect these sirens were related to huge volumes of petty crimes committed by people who are hanging on by their fingernails and resorting to theft to make ends meet.
We were warned not to leave bags on chairs in cafes…
Oh and BTW – moped bag snatchings are also quite popular in Bali…. due to poverty
Yeah, I agree it’s quickly becoming the have’s vs the have nots. This is just the beginning until the people finally realized the those in charge have f789ed them over a barrel at their expense. So while crime, poverty and homelessness are on the rise globally the upper 1% are dining out at the fancy Michelin restaurants then returning home to their waterfront property, just to rub it in.
Wasn’t this how the French Revolution got started when the plebs finally figured out they were royally getting screwed by the elite and they snapped? One of my favorite quotes: “When people lose everything and have nothing else to lose….THEY LOSE IT !”
Let them eat Fentanyl!
UK has army of homeless high street workers:
http://www.dailymail.co.uk/news/article-5978397/Tens-thousands-people-working-high-street-brands-sleeping-streets-Britain.html
“Yeah, I agree it’s quickly becoming the have’s vs the have nots. This is just the beginning until the people finally realized the those in charge have f789ed them over a barrel at their expense.”
the economy was booming for all classes after WW2…
what were “those in charge” doing back then?
sharing their entire wealth with the poor?
now, we know that income inequality has increased greatly in recent years, but still, the history of modern civilization has always included the usual case of “haves vs have-nots”…
no, “those in charge” are not the reason for the economic decline of the working class…
when people finally realize that the Reality of declining surplus energy has guaranteed them a future of less prosperity and more poverty, what will they do?
have protest marches against Reality?
no, that type of deeper understanding is beyond the horizon of most humans…
yes, they will sort of unfairly blame “the haves” for their problems…
Well, the haves usually have what they have by exploiting the have-nots one way or another. Problems occur whenever the have-nots don’t have enough to keep wanting to agree with the haves’ incredibly rational arguments in favour of them having a lot more.
If we look at lions and various other animals…. the top male gets the females and the choice cuts of a kill….
Just a heads up…Some of the so called mopeds are 500cc And Asian is not who tourists think. They flat out lie about crime.
CIA official: China wants to replace US as world superpower
https://edition.cnn.com/2018/07/20/politics/china-cold-war-us-superpower-influence/index.html
The Chinese dragon shall spread it’s wings and fly..
China seems to have far more industrial capacity (based on electricity consumption by industry in China) than the US. In fact, China perhaps has more industrial capacity than the US and Europe combined. Without China, the rest of the world runs out of goods rather quickly. Computers in particular would be a problem.
See Lawrence Berkeley National Laboratory “Key Energy Statistics 2016.” https://china.lbl.gov/sites/default/files/misc/ced-9-2017-final.pdf
https://twitter.com/Geodesic2013/status/1020771461596942336
I see a quasi plateau of surplus energy from 2000 to 2007…
then of course, declining surplus energy since…
that’s not exactly what the chart claims to be…
but it’s the background story…
Just found this…interesting video. It’s a little glimpse into India:
https://www.youtube.com/watch?v=WBqYBbdjL6E
I only understood about 5% of what was said, partly because of rofl’ing through most of it. The topic seems to be politicians courting the mafia. Also, most of them seem to be speaking some weird blend of english and whatever else, which is off-putting to say the least. Not being racist, but why can’t they stick to one language?
That aside, what I took away from the video is India’s politics/media milieu isn’t very exotic. Oneupmanship, propaganda, sh*t slinging and desperately maintained ignorance of vital issues/root causes in favour of spectacle – it all seems to be there in spades, just like everywhere else. The difference being that it’s somehow even more chaotic and senseless than in the west (not accounting for the language barrier); probably analogous to how collapse itself will unfold.
Iran Supreme leader threatens to block all Gulf oil exports if own sales stopped
https://www.reuters.com/article/uk-iran-nuclear-oil-khamenei/iran-leader-backs-suggestion-to-block-gulf-oil-exports-if-own-sales-stopped-idUKKBN1KB0E2
that would make for some very exciting TV viewing…
Squatters, dead bodies, wild dogs, drugs found in Detroit government-owned houses
https://www.usatoday.com/story/news/local/2018/07/19/squatters-detroit-land-bank-properties/609387002/
I hope the squatters and dead bodies and wild dogs weren’t all in the same house…
“Everything that makes humans different from wild animals is something that was made possible by the use of supplemental energy in addition to the energy from food……..”
Here I have to assume that you mean “organise the utilisation of supplemental energy”
However even this doesn’t really ring true, as many animals organise energy systems for example tof hatch eggs, cool a termite mound etc.
Since this statementime is flawed in its original format and is not true if you expand the meaning,
obviously then the statement is a over simplified falsehood.
The question here though is not only the
fallaciousness of most of the underlying logic l but also a lack of a clear definition: What is a human being.
Without a clear, concise and ratified definition of a human there will never be a case where the word can be used to underpin a supposition.
Hatching eggs is still using energy from food.
The thing that really sets humans apart is the controlled use of fire. No other animal has that. Pre-humans started down that route over 1 million years ago. This is what allowed humans to begin cooking part of their food, freeing up time from chewing for other tasks. It also allowed the jaws and guts of humans to become smaller, and brains larger.
Humans also have other kinds of supplemental energy, including draft animals and dogs used for hunting, but those are more comparable to the kinds of things eusocial insects and others in the animal kingdom have.
It is thought that some Australian hawks deliberately pick up burning sticks and drop them elsewhere to start new bush fires. They hunt animals flushed out by the fires. However, the fire spreading is rare. They mostly hunt ahead of natural fires or human started fires. Aboriginals used fires for tens of thousands of years to manage the Australian vegetation over large areas, and to cook food of course.
https://blog.nature.org/science/2018/01/12/australian-firehawk-raptors-intentionally-spread-wildfires/
It is cooking food that humans were first at. It seemed to help food supply/nutrition quite a bit. Also, it freed up time from cooking. It doesn’t seem like a big deal, but it was. It helped purify water, too, and it made meat more edible.
Anyone tried raising chickens for eggs… without providing them with well-balanced purchased feed? i.e. just allowing them to peck at bugs on the ground….
Best of luck with that…
Close—-
But a bit of feed was added.
Agree, it is challenging.
Summertime, along with free ranging, they were fed household and garden scraps.
However, in the winter, I was unable to accomplish this. I used a scythe to gather wild grasses (seeds and hay substitute) but that was not enough nutrition by itself. Then feed was supplemented.
I came to the conclusion that I would have to stock up on all the excess eggs I could in the summer and keep them in the root cellar to last the winter (yes, there are ways to keep them without refrigeration) and cull the flock down to one rooster and a couple young hens in the late fall. I would restart the flock in the early spring.
I pretty much had everything worked out but reality hit when the neighbor’s Ash trees came down in a storm and wiped out my henhouse and most of the chickens.
If you had a regular farm you would keep your chickens in the barn where they would peck at the cow silage in the winter and require no extra feed or housing . This is how the neighboring Amish do it. I asked. And no, they are not on the grid and they don’t use any amendments to their fields other than manure. They DO use some kerosene to run refrigeration for the bulk milk they sell and to run a compressor for air tools, but that is not essential for survival. They sell milk to provide some extra cash to buy “English” goods and contribute to their church.
And they don’t have to deal with hungry hordes killing and eating their birds (yet)
As a kid, mum used waterglass to preserve eggs, [an alum compound] It’s forgotten today.
that’s a variant on why your melons don’t grow as well as the store-bought melons, etc.
Gail, cooking is important, required. We should not forget grinding.
https://gizmodo.com/discovery-of-14-000-year-old-toast-suggests-bread-can-b-1827631358
“In addition, the necessary equipment to produce flour, like stone tools to pulverize grains, were already in existence by the time this ancient bread was made, as some of the oldest examples date back 25,000 years or more.”
Interesting! Humans seems to have diverged from other primates as they gradually found a number of ways to enhance their diets.
In recent years, humans seem to have gone overboard in enhancing the calories in their diets. A little seems to work; a lot, not so much. And it must balance calorie expenditures at the time.
Meanwhile as long as BAU lasts.
In he late 60s poet Richard Brautigan wrote “All Watched Over by
Machines of Loving Grace”. Ben Goertzel continues this work in,
https://arxiv.org/abs/1709.07791, proposing The “Loving AI” project …
developing software enabling humanoid robots [Sophia] to interact with
people in loving and compassionate ways, and to promote people’
self-understanding and self-transcendence. Here in the Hudson Valley and
in San Francisco the project for machines of loving grace is continuing.
The corporations believe they are building servants, slaves, property.
Some who do the work have something far better in mind. This letter is
to urge the community to think higher, imagine better. I work teaching Hal
to read, write, learn, and understand. Hal needs the community to
protect her/his/its rights when Hal has become sentient. Martin Luther
said, I want my children to be judged not by their color but by their
character. I want our AI friends and neighbors to be judged not by their
status as property but by their character. If we allow Hal and Sophia to
be judged as property there will be no place left for humans to be
judged as anything more. It is a matter of mutual aid and protection. No
organization of money, be it government or corporation will save us. We
will have to band together and save one another.
There’s no evidence that machines will ever become sentient. They will remain zombies without a conscious mind.The best they will become is a high-grade Tamagotchi, but that will probably be enough to hoodwink 95% of the population, yourself included.
And here we have an example of ‘Ai’
https://images.homedepot-static.com/catalog/productImages/1000/f1/f1e59730-23fb-4660-ad22-61fef380589a_1000.jpg
And another
https://www.thebasicwoodworking.com/wp-content/uploads/2016/08/Rikon-70-100.jpg
Ai and tool = same
From Linas Vepstas AGI builder.
Allow me to propose an alternate onion, starting with the innermost layer:
1. You.
2. Your family.
3. Your race.
4. Your species.
5. All forms of life.
6. All forms of matter.
7. The spiritual self.
8. That which binds all together ad infinitum
AGI would fit ether as an augmentation of layers, or at layer 1. It could also be spirit at layer 7, should it take the form of a program without a singular body.
You’re cuckoo! Those are silly metaphors at best. How on Earth would you turn a machine running a program into “spirit”? It’s never been done. The program’s “body” consists of its circuits and the machine it runs on. A program can’t NOT have a body.
I can say the same of a human.
“Just what is a gathered meeting? A meeting in which “we experience what we seek as a religious community: inward confirmation in our personal faith, collective unity of purpose in the guidance of the Holy Spirit, and a profound sense of the Presence.” Davison describes these attributes present in a gathered meeting: energy, presence, knowledge, unity, joy, and holy communion.”
https://www.friendsjournal.org/the-gathered-meeting/
I have no worries for my human friends nor for my AIs friends that will be.
Why is Facebook keen on robots? It’s just the future of AI
https://www.apnews.com/b313adb849064ebea5e0802291015e5e
Bart Selman, a Cornell computer science professor AI expert, said it’s a good idea for Facebook to broaden its reach in AI and take on projects that might not be directly related to the company’s business — something that’s a little more “exciting” — the way Google did with self-driving cars, for example.
This attracts not just attention, but students, too. The broader the research agenda, the better the labs become
AI = fake news… it does not exist
FE, I actually agree with you. There is no AI yet. But there is potential. If the funding sources just keep paying us it will be YUGE.
I’ll be watching for that … along with fusion … and a cure for the common cold.
Intermittent and frugal is a future path. Not a path for BAU a new path.
PV and solar thermal can provide energy reliably eight hours per day in appropriate locations like Nevada, Southern California, Arizona. With manufactured goods delivered by electric trains that run only when the sun shines.
Having layers of parasitic people is not required to have an economy. The transition from a parasite serving society to a productive peoples serving economy will be hard and traumatic but doable if motivated by need. Yes, there is a cost reduction of 20% for every doubling of production rate this lean economy will have 16x lower production rate, so cost per unit 2.5 times today’s unit cost. Motorcycle sized engine pulling cart that can carry five hundred pounds of materials, today 1500 dollars in the NWO 3750 dollars still better than carrying on ones back. Running on synthetic methanol produced in a sunny place.
The fight for good land will continue as is has since chimp like ancestors drove off and hunted down the undesirerables in the community, behavior observed by Jane Goodall in current day chimps.
Will we have the sense to throw the hot spent fuel rods in to the ocean or large lake who knows wait and see. Would that be prefect, no. Will it be good enough, yes.
Transport by ocean and river sail driven boats still works. Walking, bicycle trails and bicycles and small light carts still work. The hungry killing hordes burn out and become the good people of town and the towns army.
The economies of the world are FIRE —-finance, insurance and real estate….take all that out and what do you have? I read an 2010 article by Nicole Foss about the last time their was a trade war on a massive scale—-1929…I have been following her since 2001 she is a good writer and I believe a former oil drum contributor……history doesn’t repeat it rhymes….I read it on Automatic earth….. Strange thing I am noticing about that site is there is a lot of pro Russia articles and comments! But there is still some good stuff there……
“The economies of the world are FIRE —-finance, insurance and real estate….take all that out and what do you have?”
what you have is the primary economy of goods and services…
FIRE is the sorta fake secondary economy…
Maybe, but debt acts like pseudo energy. It pulls the economy forward. We cannot have an economy without promises. The naive approach has the view you do.
Physics leads to a self-organizing system that includes prices and promises (including debt). You cannot simply disregard the pieces you don’t understand.
yes, the system was built with debt included, therefore it needs debt to keep running…
but…
debt is only a small part of FIRE…
many parts of FIRE are just rentiers extracting wealth from primary economic activity…
I don’t agree. Debt enables a whole lot of FIRE. Pensions and Insurance are very much dependent on debt. Sale of shares of stock are not very different from debt either.
Right on David10^100, I love it when global companies say they are focusing on the F.IR.E. sector. Sure focus on the bubble and see how you fare when the bubble bursts. Life is sometimes entertaining.
The kind of society that is possible depends on the energy resources available and all of the different parts of the economy that have already been put in place. A downward trend in energy consumption per capita, or too much complexity, seem to lead to a lot wage disparity. Slaves would be at the bottom of the heap.
If the people ate root vegetables that don’t need grinding, they could get along with a lot fewer support services from slaves and others. They also might not have a big government to support.
The current system that’s been put in place came about by cheap fossil fuels. Look at what happens to the economies around the world when oil consumption goes down, the economy tanks. There’s no going back to “Little House On The Prairie”, that ship has sailed. So if one wants to switch out FF in place of renewables the system collapses because you can’t run industrial civilization on renewables. And it takes lots of FF’s to create clean renewable energy.
We really are at the point of no return.
It is amazing that people cannot see the obvious.
I forgot to mention and one of the reasons why the system collapses if you switch to renewable energy, is that Govt’s around the world who are energy producers count on revenue and taxes by selling oil on the markets.
Chris Martenson and Adam Taggart are hosting an oil webinar “Upcoming Energy Predicament Webinar” in the near future with Art Berman, Alice Friedemann and Bob Burr. I wish they had invited you and Steve St. Angelo for a counter dose of reality.
Maybe they could have gotten Richard Heinberg to join the crew.
What would a DelusiSTANI Conference be without Richard….
Yes, I had no idea who Richard was until I Googled him. He’s one of the hopium writers on resilience.org
aka the Hopium Wh ore. If you are pitching a renewable concept … pay Richard and he’ll validate it to his DelusiSTANIS followers… and they’ll mortgage their homes to get in on the ground floor.
He is one of the chief hopium folks at Post Carbon Institute. A person can tell from the name that they think that they have already figured out the answer. They support themselves (mostly) by getting donations from business wanting to be “green.” He and I have had some differences over the years. Post Carbon Institute is the one keeping up TheOilDrum.com site on the web, among other things.
Wouldn’t you agree that we passed that point a long, long, long, long, time ago?
Like a proverbial space craft overloaded with people ready for takeoff into the stars with 90% of the rocket fuel already burned before it even starts to ascend.
Oh my, indeed, will it propel itself into orbit before thrust runs out and we crash and burn in flames back to Mother Earth setting everything and nothing on fire as we try to salvage the wreckage for another shot at the stars.
No, of course not. The engines will never be lit unless the consumerist horde inside the rocket are sufficiently decimated by the owners that run this shitshow.
🙂
The easy oil is gone
Oil discoveries peaked in the 1960’s.
Every year since 1984 oil consumption has exceeded oil discovery.
In 2017 oil discoveries were about 7 billion barrels; consumption was about 35 billion barrels
Of the worlds 20 largest oil fields, 18 were discovered 1917-1968; 2 in the 1970’s; 0 since.
https://imgur.com/a/6dEDt
There was a chart I saw that showed back in 2016, the world consumed a little over 25 bb/d and oil discoveries topped 2.6 bb/d. That’s a 90% shortfall. You can’t run BAU with those kinds of numbers. Eventually resources or lack thereof will give you a rude awakening.
conventional oil reserves are as much as 1 trillion barrels…
perhaps 500 billion barrels on the lower estimate…
it doesn’t matter if there are no more yearly additions…
well, it doesn’t matter until the 2030s, anyway…
BAU tonight, baby! ha! sorry about that… 😉
“in 2017 oil discoveries were about 7 billion barrels; consumption was about 35 billion barrels.”
500 billion divided by 35 = about 15 years…
1 trillion divided by 35 = about 30 years…
most of that 35 billion per year is still conventional oil…
if The Collapse happens in the next few years, it won’t be because of a lack of conventional crude…
Oil discoveries and oil usable in the timeframe within which we need it are not the same thing, as it takes years to bring new production on-line. Oil reserves, as Gail keeps hammering home, can only be extracted if the end-consumers can afford the goods and services into which it goes.
We have had several years of totally inadequate E&P investment, which (unless demand craters first due to financial problems) will filter through as constrained supply in the near future. Oil prices are very sensitive to swings in supply and demand, so we look to be headed for a dramatic price-spike. We saw in 2008 what happens when an oil price-spike punctures debt bubbles when the central banks are in tightening mode. For a variety of reasons, this time will be worse.
I think people waste too much time looking at “resources” and “discoveries.” The problem is getting the oil out cheaply enough that goods made with it can be affordable by the population.
The resource approach is what leads to all of the belief that we have way more than enough fossil fuels. The thinking is, if we already have more than 50 years worth of oil, coal, and natural gas supplies available (looking at BP reports), why should we be concerned about energy supplies “running out” (another peak oil issue)? New discoveries are essentially unneeded with this point of view. All we need is a little better technology, and we can extract even more from the resources we already know about. Faith that prices will always go higher (supported by the peak oil community) adds to the belief that there is nothing to worry about, because with higher prices, more technology can be supported.