Many people expect energy shortages to lead to high prices. This is based on their view of what “running out” of oil might do to the economy.
In this post, I look at historical data surrounding inadequate energy supply. I also consider some of the physics associated with the situation. I see a strange coincidence between when coal production peaked (hit its maximum production before declining) in the United Kingdom and when World War I broke out. There was an equally strange coincidence between when the highest quality coal peaked in Germany and when World War II broke out. A good case can be made that inadequate energy supply is associated with conflict and fighting because leaders recognize how important an adequate energy supply is.
Some of my previous analysis has shown that if we view energy in terms of average energy supply per person, the world as a whole may be again entering into a period of inadequate energy supply. If my view is correct that inadequate energy supply leads to increased conflict, the recent discord that we have been seeing among world leaders may be related to today’s low supply of energy. (My energy analysis considers the combined energy supply available per person from fossil fuels, nuclear, and renewables. It is not simply an oil-based analysis.)
The physics of the low energy situation may be trying to “freeze out” the less efficient portions of the economy. If successful, the outcome might be analogous to the collapse of the central government of the Soviet Union in 1991, after oil prices had been low for several years. Total energy consumption of countries involved in the collapse dropped by close to 40%, on average. The rest of the world benefitted from lower oil prices (resulting from lower total demand). It also benefitted from the oil that remained in the ground and consequently was available for extraction in recent years, when we really needed it.
The idea that oil prices can rise very high seems to be based on the oil price increases of the 1970s and of the early 2000s. While oil prices can temporarily rise very high, it is hard to make a case that they can remain high for an extended period. For one thing, high oil prices tend to cause recessions and lower employment. In such an environment, affordability of energy products is lower, and oil prices tend to fall. For another, it is easy for the Federal Reserve to get oil prices back down by raising interest rates. In fact, the Federal Reserve is raising interest rates right now.
In my opinion, we should be more concerned about low oil prices than high because we live in a world economy with huge debt bubbles. Debt bubbles are part of what enable today’s high employment. Debt bubbles support employers that are close to the edge financially; they also support buyers who would not be able afford automobiles or college educations, if loans were to become more expensive because of higher interest rates. Employment in the affected industries would be cut back, leading to recession.
Because of these issues, pricking the debt bubble is likely to lead to a major recession and, indirectly, lower energy prices, as in late 2008 (Figure 12). These lower prices are not good news because energy providers of all kinds need fairly high energy prices to survive–probably equivalent to oil at $80 per barrel or higher. If energy prices stay persistently low, the world is likely to see much lower oil supply, in part because oil exporters need the tax revenue that they obtain from high-priced oil to fund their programs.
A Self-Organizing Economy Needs Energy to Fulfill Its Promises
The problem that has arisen many times in the past is that energy supply becomes inadequate, relative to what the economy needs to operate. This energy shortfall is virtually never explained to the public. It is only apparent to the occasional researcher who realizes that this might be the issue.
The amount of energy that a networked economy needs to operate depends on:
- The number of people alive at the time,
- The industry that has been put in place, and
- The promises, such as retirement promises, that have been made to citizens.
Adequate energy supply is important for jobs and their pay levels. A rising supply of energy per capita tends to add jobs. The Asian countries shown in Figure 1 are some examples of countries where rising energy supply has given rise to more non-agricultural jobs.
Figure 1. Energy consumption per capita based on BP Statistical Review of World Energy 2018 total energy consumption data and UN 2017 Population Estimates of three selected countries. Energy consumption includes oil, natural gas, coal, and many smaller types of energy consumption, including wind and solar.
The jobs added rarely pay high salaries compared to those in the developed world, but they have helped raise the standard of living of those who have obtained them.
A falling supply of energy consumption per capita tends to make jobs that are high-paying more difficult to obtain. If energy per capita falls, there may still be a reasonable number of jobs, but many of them won’t pay well. High energy jobs such as building new schools and resurfacing roads tend to disappear, while jobs requiring little energy consumption, such as waitress and bartender, are added. Figure 2 gives some examples of European countries that have seen declines in energy consumption per capita in recent years.
Figure 2. Energy consumption per capita based on BP Statistical Review of World Energy 2018 total energy consumption data and UN 2017 Population Estimates of three selected countries. Energy consumption includes oil, natural gas, coal, and many smaller types of energy consumption, including wind and solar.
When jobs that pay well become more difficult to find, a significant share of the population starts believing that there is no room for additional immigrants, regardless of how needy they may be. This seems to be part of the dynamic many countries have been encountering recently.
If growth in energy supply is inadequate, other physics-related issues also arise:
- Inadequate economic growth, because it takes energy to create goods and services
- A tendency toward debt defaults, and the resulting deflation of asset bubbles
- Downward pressure on wages, in situations where machines or lower-paid workers can be substituted for somewhat routine work
- Difficulty collecting adequate tax revenue
- A tendency toward aggressive behavior between countries and actual wars
Physicist François Roddier has examined how economies allocate resources when there is a problem with scarcity. He finds that when there is inadequate total energy supply, this shortage is reflected in growing wage and wealth disparity. Thus, the goods and services made possible by energy supplies are disproportionately allocated to a small proportion of individuals at the top of the economic hierarchy, while those at the bottom receive a falling share.
He likens the increasing share of wages/wealth going to the top to steam rising. At the same time, he sees the falling share of energy consumption going to those at the bottom of the hierarchy as freezing out those who are contributing the least to the economy. Using this approach, some portion of the economy can be maintained in a period of temporary energy scarcity, even if the most vulnerable parts are lost.
How a Few Past Low-Energy Problems Resolved
First Low-Energy Consumption Period: Following Peak Coal in the United Kingdom, 1913
Figure 3. United Kingdom coal production since 1855, in a figure by David Strahan. First published in New Scientist, 17 January 2008.
The UK problem in the 1914 time-period was a coal problem. The coal whose delivered cost was lowest had been produced first. It was near the surface and geographically close to where it was ultimately to be used. Many types of costs rose as the easy-to-extract and deliver coal was exhausted. For example, more worker-hours were needed per ton of coal extracted.
If the costs of extracting and delivering coal rose, a person might think that these higher costs would be passed on to consumers as higher prices. (This is the hypothesis behind the ever-rising oil price theory.) Thus, a person might expect that coal prices would rise because coal companies needed more revenue to handle what was becoming an increasingly inefficient mining and delivery process.
This wasn’t the way it really worked, though, because customers couldn’t afford the higher costs. The wages of most citizens didn’t rise because the amount of goods and services the economy could produce depended upon the quantity of coal that was produced and delivered. If the economy were to take workers from outside the coal industry to compensate for the industry’s higher need for labor, it would further act to reduce the economy’s total output, because the new coal workers would no longer be performing their previous jobs.
Mining companies (sort of) solved their wage problem by paying miners an increasingly inadequate wage. Strikes by workers and lockouts by employers became an increasing problem in the 1910 to 1914 period. Probably not coincidentally, World War I started in 1914, just after UK coal production hit its peak in 1913. The war provided jobs for miners and others who could not otherwise find jobs that paid a living wage. Workers leaving for the war effort left fewer for mining.
Ultimately, World War I worked out well for the UK. The fact that it was on the winning side allowed the UK to remain the dominant world power until 1945, despite its declining coal production. Being dominant, the British pound sterling remained as the world reserve currency. This status made it easier for the UK to borrow, allowing it to import coal, even when it otherwise lacked funds to pay for it.
Second Low-Energy Consumption Period: 1920 to World War II, in the United States
The situation here seems to be more complex. The low energy problem that underlay World War I hadn’t really been resolved; it had mostly been moved elsewhere. Also, Germany, which was the other major European coal producer besides the UK, was reaching a peak in its predominant type of coal production, hard coal (Figure 4). Because of the these issues, European demand for imported goods from the US dropped dramatically. In particular, the US had been a big supplier of food to Europe during World War I, but this source of demand disappeared after 1918, when soldiers returned to their fields.
Figure 4. Hard coal production in Germany 1792 to 2002. Chart by BGR.
With respect to US demand for coal, the big issue besides low demand from Europe was internal US demand. Mechanization was starting to replace unskilled workers, both on farms and in factories. Mechanization of farming created a double problem: it added more food than was really needed, and it created a combination of winners and losers. The winners were those with the new mechanization who could produce food cheaply; the losers were those who still used processes that required much more manual labor. Available food prices fell far below the non-mechanized cost of food production. City dwellers were also winners thanks to the lower food prices.
Wage disparity became an increasingly serious problem in the 1920s (Figure 5). Workers with low wages could not afford to buy many goods and services. The laws of physics requires energy consumption (“dissipation”) whenever heat or motion are produced. Thus, physics requires that energy products be used in the manufacturing and delivery of goods and services. Following this logic through, the low wages of workers displaced by mechanization further acted to reduce demand for US energy supplies, over and above European coal problems.
Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.
Debt levels grew in the Roaring 20s, partly driven by the apparent advantages of the new mechanization. In 1929, the debt bubble began to collapse, showing the underlying weakness of the economy.
The problems of the late 1920s to 1930 bore a striking resemblance to those of today. Wage disparity had become a major issue because of displacement of many workers mechanization and immigration. In response, tariffs were added: the Fordney-McCumber Tariff of 1922 and the Smoot-Hawley Tariff of 1930. Limits were also set on the number of immigrants, in the hope that reduced competition from immigration would help raise the wages of unskilled workers.
Eventually, the low-demand-for-energy problem was solved with World War II. The extra demand of World War II added many women to the work force for the first time. US energy consumption grew thanks to the war effort. The large wage increase about this time (Figure 6) primarily reflects the addition of many more workers to the labor force.
Figure 6. Three-year average growth in wages and in average personal income, based on data of the Bureau of Economic Analysis. Disposable personal income includes transfer payments such as Social Security and Unemployment Insurance. It also is net of taxes. The denominator in this calculation is total US population, so the changes reflect the effect of adding a larger share of the population to the workforce.
World War II was a winning strategy economically for the United States. Wages rose rapidly during the early 1940s, as did “Disposable Personal Income,” which is closely related. In addition, the US dollar took over as the reserve currency from the British pound in 1945. This gave the United States the power to import more goods and services (including oil) than it would have been able to if it had been more limited in its ability to borrow.
If we analyze US coal production, we see the interplay between geological limits and demand (really, what is affordable by consumers). With respect to geological limits, US anthracite coal hit an apparently geologically limited production peak in 1918. It hit when there was a fall-off in demand for imported food from Europe, so coal prices were almost certainly falling (Figure 7).
Figure 7. US coal production by type, in Wikipedia exhibit by contributor Plazak.
The US production of the second-highest quality coal, bituminous coal, rose rapidly between 1870 and 1918, when its production path suddenly changed to a jagged plateau, which lasted until about 1930. Coal production then dropped precipitously, as the economy sank, and did not rise again until the time of World War II. This pattern very much follows the “demand” pattern expected based on the earlier discussion. The wage disparity of the 1920s seems to have led to flattening production, with a steep drop with the problems of the 1930s. Looking out at 1990 on Figure 7, bituminous coal may have hit a geological production peak. Energy prices are this time were low (Figure 10), again pointing to low prices being associated with peaks in the production of a type of energy supply, not high prices.
Production of the two lowest qualities of coal (sub-bituminous and lignite) coal did not begin until 1970. The rapid ramp-up of coal supplies helped cushion the peak in oil production in the United States, which occurred (coincidentally or not) the same year, 1970. We see a shift toward ever-lower quality of energy resources, but we do not see a pattern of spiking of prices associated with peak demand. Instead, low prices seem to be associated with peaks in production.
Third Low Energy Consumption Period: Dip from 1980 – 1984, Related to High Interest Rates
A person might expect the peaking of US oil production in 1970 to have had a major impact on US energy consumption, but a much larger drop in energy consumption occurred in the 1980 to 1983 period, when the US raised interest rates to a high level, causing recession.
Figure 8. Chart produced by the Federal Reserve of St. Louis (FRED) showing a comparison of 10-year Treasury interest rates and the annual change in GDP rates (where GDP growth includes inflation).
The resulting dip in oil consumption sent oil prices from an average inflation-adjusted price of $110 per barrel in 1980, down to $32 per barrel in 1986. At such low energy prices, energy exporters have difficulty collecting enough tax revenue and obtaining enough funds for new wells. Only the sturdier exporting nations could survive.
The energy exporter that did not survive was the Soviet Union. It took until 1991 for the financial strains of low oil prices to collapse the central government of the Soviet Union. With its collapse, much of the industry of the Soviet Union permanently was destroyed, reducing energy consumption by close to 40%. Even thirty years later, the per capita energy consumption of the former Soviet nations remains far below its mid-1980s plateau level (Figure 9).
Figure 9. Per Capita Energy Consumption by Part of the World, based on data of BP Statistical Review of World Energy 2018 and 2017 UN Medium Population Estimates. The Russia+ grouping is the Commonwealth of Independent States, shown in BP Statistical Review of World Energy 2018. It is slightly smaller than the former Soviet Union.
Analysis
Looking at these situations, there is little evidence with respect to UK and German coal production that geological peaks in production are associated with high prices. Instead, they seem to be associated with conflict among nations.
Apart from conflict, the other issue associated with peaks in coal production seems to be falling demand, and thus falling prices. The reason for geological peaks is likely to be inadequate profitability. Inadequate profitability occurs because rising costs of production and transport can no longer be recouped with higher prices. A person might say that the limit on rising coal production is the affordable price. It is reasonable to expect that the same is true for oil.
There is also little evidence that energy scarcity causes high prices, if energy scarcity is defined as low energy consumption per capita for all types of energy products combined. Instead, energy scarcity tends to cause wage disparity. Energy scarcity is also a concern for government leaders because they can see the need for an adequate supply of inexpensive energy, if they are to be able to compete in the world marketplace. Goods made with an expensive energy mix tend to be high-priced, and thus they tend to be noncompetitive in the world market.
Local customers are also unlikely to be able to afford goods made with expensive energy products, because the additional wages are being used to support what is essentially a less efficient type of production. There are many ways that energy costs can rise, including:
- Need for more human labor
- Higher wages for labor, perhaps because of more education or location
- Need for the use of more energy products in the making of new energy products
- Need for more debt financing
- Higher interest rates
- More machinery, including pollution-control equipment
- Need to lease land at higher cost
- Higher taxes
Regardless of where the extra costs come from, they don’t actually produce more of the energy products that are essential to making the economy operate as it should. The higher costs are simply a drag on the economy, which must be hidden in some way. Approaches for hiding the problem include reducing interest rates, outsourcing manufacturing to low-wage countries, and replacing some unskilled workers with computers or robots.
Prices seem to be tied more to what customers can afford than to the cost of production. Note that when energy supplies were low in the 1920 to 1930 period, oil prices declined. This pattern occurred because growing wage disparity led to more people who could not afford very many goods and services made with oil products.
Figure 10. Historical inflation-adjusted oil prices, based on inflation adjusted Brent-equivalent oil prices shown in BP Statistical Review of World Energy 2018.
Looking at Figure 11 below, we see a situation where US average wages seem to rise only if oil prices are low. If oil prices are high, it becomes more economic to send manufacturing to countries using cheaper energy products and offering lower wages. Such substitution leads to fewer US jobs and recession.
Figure 11. Average wages in 2017$ compared to Brent oil price, also in 2017$. Oil prices in 2017$ are from BP Statistical Review of World Energy 2018. Average wages are total wages based on BEA data adjusted by the GDP price deflator, divided by total population. Thus, they reflect changes in the proportion of population employed as well as changes in wage levels.
The Federal Reserve is very much aware of the fact that high oil prices lead to high food prices, and thus are a problem for the economy. It may also be aware of other issues related to high oil prices, such as loss of competitiveness in the world market.
The Federal Reserve has a powerful tool for fixing the problem of high oil prices–its Open Market Committee can raise short-term interest rates, and thereby make loans more expensive. For example, if interest rates can be changed so that auto loan interest rates rise from 5% to 6%, this makes automobile monthly payments more expensive, and thus reduces demand for cars. Indirectly, this reduces demand for oil, both for manufacturing them and for operating them.
In fact, the Federal Reserve seems to have been a major contributor to the Great Recession of 2007-2009. It first lowered interest rates in the early 2000s and helped create a debt bubble, particularly in sub-prime housing. It later raised interest rates. The higher interest rates plus high oil prices popped the debt bubble.
Quantitative Easing (QE) is a program that was added in recent years to adjust interest rates, over and above the impacts available from changes to short-term interest rates. Figure 12 shows that these interest rate changes seem to have had a close correspondence to turning points in oil prices. QE was added in late 2008 to reduce interest rates, and thus raise oil prices. Removing QE seems to have had the opposite impact.
Figure 12. Monthly average spot Brent oil prices based on US Energy Information Agency data, together with dates when the US began and ended Quantitative Easing.
What we are facing going forward is a debt bubble made possible by a long period of very low interest rates. The Federal Reserve now seems to be intent on popping this bubble by raising short-term interest rates and selling Quantitative Easing securities at the same time. If the Federal Reserve does succeed in popping the debt bubble, oil prices (as well as other energy prices) could fall very low again. If I am right, we can expect another major recession. It will be characterized by low demand, low commodity prices and layoffs in many industries.
Conclusion
The more a person looks at the story of how rising oil prices might allow oil extraction indefinitely, the less reasonable it seems. If the story about oil prices rising endlessly were true, we would have seen coal prices rise endlessly in Europe a century ago, when it was the dominant form of supplemental energy available. It didn’t happen.
Instead, what we need to be concerned about is the possibility of rising conflict. The energy situation may become increasingly like a game of musical chairs, if the amount available from sellers at an affordable price falls too low. The winners will attempt to obtain an adequate supply for themselves. It is not clear that this strategy can have winners, but perhaps I have not considered all of the possible outcomes.
One of the issues with inadequate energy supplies is the difficulty in obtaining adequate tax revenue. If tax revenue is an issue, there is likely to be a push to reduce donations to organizations that act to bring countries together, such as the European Union and the United Nations. Subsidies of all types are likely to be on the chopping block. Government services of all types are also likely to be reduced or eliminated, from bridge repairs to retirement programs for the elderly.
Most of us have never been taught about resource wars. The wide availability of fossil fuels eliminated the need to even think about a possible lack of energy resources, or other limited resources such as fresh water. Unfortunately, resource conflict may be back in some new 21st century version in the not too distant future.
Needless to say, I am not advocating conflict and cutting programs. It is just that energy problems and financial problems are very closely linked. This is the way that things seem to work out.
And how robust is the US economic model really?
“I find the cognitive dissonance and normalcy bias regarding what has actually happened over the last ten years to be at astounding levels. As someone who views the world based upon a factual assessment of financial, economic and global data, I’m flabbergasted at the willful ignorance of the populace and the ease with which the ruling class has used their propaganda machine to convince people our current situation is normal, improving, and eternally sustainable…
“With stagnant real wages since the Wall Street created financial crisis, a critical thinking person might wonder how an economy whose GDP is 70% dependent on consumer spending could grow for the last nine years, with corporate profits at all-time highs, consumer confidence at record highs, and the stock market at record highs…
“You would think after being burned with 50% losses twice in the space of eight years, the average American would have learned their lesson. Debt kills. Consumer debt, which collapsed under an avalanche of Wall Street write-offs (paid for by you the taxpayer) in 2009/2010, has regained all-time high levels and is accelerating as we enter this final phase of blow-off top euphoria. When the next inevitable financial collapse occurs these heavily indebted suckers will be blind-sided with a baseball bat to the skull again. It seems Americans never learn.”
http://www.marketoracle.co.uk/Article63047.html
Stagnant inflation-adjusted wages and rising debt not really compatible.
More evidence of a slowdown in China:
“Recent data prints out of China continue to point to a slowdown in growth for the world’s second-largest economy, despite efforts by policy makers to kick-start growth… “Signs of stagnation emerged as upward pressure on prices remained even though demand weakened at a faster rate.””
https://www.businessinsider.com.au/china-economy-services-trade-war-2018-9
Slower rate of growth, not actual slowdown yet. But weakening demand is not a good sign.
“South Africa’s economic growth slowed unexpectedly in the second quarter, pushing the country into a recession for the first time since 2009. Gross domestic product in Africa’s most developed economy fell by 0.7% from April to June, the national statistics agency said in a report Tuesday, compared with expectations for 0.6% growth. That followed a 2.6% contraction in the previous quarter.”
http://uk.businessinsider.com/south-africa-stumbles-into-a-recession-2018-9?r=US&IR=T
“Turkey, in the midst of a currency crisis which is quickly becoming a private sector debt crisis, appears headed toward stagflation — high inflation coupled with a contracting economy. The country’s inflation as measured by the Consumer Price Index (CPI) rose 2.05 points in August to nearly 18% — the highest level seen since 2003 according to central bank figures released on Monday.”
http://www.atimes.com/article/turkeys-economy-heads-blindly-towards-stagflation/
“Philippine central bank Governor Nestor Espenilla said he will consider the need for more policy action after a report showed inflation exceeded 6 percent for the first time in nine years in August. Consumer prices rose 6.4 percent from a year ago, the Philippine Statistics Authority said in an emailed statement on Wednesday. That exceeded the forecasts of all 15 economists in a Bloomberg survey.”
https://www.bloomberg.com/news/articles/2018-09-05/philippine-inflation-exceeds-6-for-first-time-since-2009
“Indonesia rupiah hit an all-time low of 14,933 against the US dollar. The emerging market crisis has sent the currency of the country with the largest population in the region to a level that is even lower than the 1998 Asian currency crisis. The ringgit weakened against the US dollar 4.1440 at noon while the Thailand’s baht was quoted at 32.79 against the greenback.”
https://www.thestar.com.my/business/business-news/2018/09/05/indonesia-rupiah-hits-all-time-low-since-asian-financial-crisis/
However the IDR fell from the fixed rate of around 3000IDR to a dollar … to around 16,000…..
“Argentina’s economic outlook deteriorated significantly in August amid a renewed currency crisis, with economists surveyed by the central bank forecasting a deepening recession, weaker currency and higher inflation.”
https://www.bloomberg.com/news/articles/2018-09-04/argentina-to-go-deeper-into-recession-central-bank-survey-says
“The rumbling tensions reflect anger over the destruction on Sunday of the much-loved yet dilapidated museum, which suffered from declining federal funding. It stirred emotions in Brazil, whose angry electorate is reeling from a frail economy, widespread graft and rising violence ahead of an unpredictable presidential election in October.”
https://www.telegraphindia.com/world/anger-smoulders-in-brazil-after-fire-257000
“As the economy collapses, the Venezuelan exodus “is building to a crisis moment”, the UN has warned. Drawing comparisons with the desperate journeys of Syrians and Africans through the Mediterranean in recent years, it says 2.3m people — 7 per cent of the population — have left Venezuela since 2015.”
https://www.ft.com/content/55bd21a8-b02e-11e8-8d14-6f049d06439c
And you may recall from last week that Mexico’s economy is also contracting:
“Mexico’s economic activity in the second quarter contracted more than previously estimated as declines in industrial output and agricultural production offset gains in services. Gross domestic product, a measure of output in goods and services, was down 0.2% seasonally adjusted from the previous quarter, the National Statistics Institute said Friday.”
https://www.wsj.com/articles/mexican-economy-contracted-in-second-quarter-1535117487
“Emerging markets are in a bad way. The MSCI EM Index of stocks fell Tuesday to bring its decline to 18.4 percent since peaking in January. MSCI’s index of EM currencies is down 8.51 percent since April. If that isn’t depressing enough, Morgan Stanley predicted in a research report Monday that it will only get worse for investors…
“The rising dollar has been blamed for much of the ills in emerging markets of late. The thinking goes that EM borrowers who took out dollar-denominated debt will have a much harder time paying back those obligations as the greenback rises. But dollar strength is also wreaking havoc with commodities, especially base metals.”
https://www.bloomberg.com/view/articles/2018-09-04/emerging-market-contagion-concerns-are-becoming-contagious
“Emerging markets are heavily indebted, and a stronger dollar makes it tougher for them to pay that money back. The main issue is that corporate debt in emerging and developing economies is significantly more than it was before the 2008 global financial crisis. As the volume of debt is much larger, the fall could be more detrimental.”
https://www.nasdaq.com/article/the-emerging-markets-currency-crisis-what-investors-should-know-cm1017558
“US equities are outperforming non-US risk assets to a degree that hasn’t been seen since the financial crisis, according to Bank of America Merrill Lynch. The key question investors need to answer is whether this is a buying opportunity, implying that global growth would continue and help emerging markets rebound.”
http://uk.businessinsider.com/stock-market-divergence-between-us-and-em-msnt-2018-9
Hope springs eternal! And oil prices will rise as well.
Indeed, and the dollar increase will make the oil even more expensive in real terms.
Global Spring … coming soon!
How is this EM crisis worse than the Asian Financial Crisis of 1998?
It is far more widespread — and far greater amounts of debt are involved…USD denominated debt… that needs to be repaid using depreciating local currencies…
Exporters are payed in dollars while their costs are in local currencies. A rising dollar and falling local currencies should be good for exporters.
So what if governments with dollar denominated debt collapse and people start kiIIing each other…as long as the exporters can maintain some semblance of order to maintain their business?
could be more interesting on the daily commute to work.
You exhibit a total misunderstanding of the significance of a currency collapse across the EMs
When you can’t pay back debt — you default – if defaults are wide ranging and large enough — financial institutions and the global financial system is threatened with collapse.
Remember Lehman? This is potentially far bigger.
BTW – a friend of mine was a major exporter of gems – based in Thailand — he had USD debt — the Baht crashed…. he lost everything.
Shall I pass him your comments and ask him if perhaps there was some mistake?
>Rupert says:
September 4, 2018 at 1:31 pm
First of all, it is logically fallacious, in citing historical examples to bolster predictions of the future, to concentrate on what makes the past similar to the present conditions that you are projecting from at the expense of what makes the present different from the historical examples that you cite, and the present is indeed very different from “what happened in Constantinople” etc. As for the Manhattan’s Fifth Avenue thing…so what? There was a functioning state in place to protect the interests of the wealthy at that time. The thing about a catastrophic economic collapse is that the police and military will no longer be able to enforce laws that ensure the rich have physical possession of their “wealth” and that the fiat money in their bank accounts is actually worth anything.
Again “ownership” is contingent upon physical force or the threat thereof. Without a military to do their bidding the wealthy elites (who make up a minuscule percent of the general population and the military) will have a much, much more difficult time holding on to their land and possessions.
–
I answer
Human condition does not really change that much overnight. There is going to be cascade of collapse, during which order will be kept surprisingly well.
The “State” will continue to function in the major centers of Civilization because things are stockpiled and a lot of people still continue to have faith on older systems.
The military will obey the wealthy elites because the latter control means of production, of food and basically everything. Also, they would rather keep the status quo than become warlords and having to watch their back all the time.
Even after a catastrophic collapse, the land, jewelry, artwork, etc will be worth something. How much is that something, no one knows. But it would be better than nothing, which will be what most people will have.
Most people worth their salt tend to have enough retainers to be loyal to them when things get sour. These underlings belong to someone when the big man is around. Without the Big Man, they would be lost, having to seek their fortune among thousands of strangers. They will stay loyal.
Exactly, imagine FE as in:
focused enough not taking “the pills” just on the immediate TV braking news as they screamingly announce closing of markets, “immediate world chaos” etc.
Fast forward decade or two (no pun intended), FE sits in a posh living room hall of his old biz partner, the drink is served cold apparently archival stuff, the fireplace offers nice comforts for this chilling time of the year. However, FE still feels somewhat uncomfortable, no it’s not the occasional blurps by the security guards coming out of the several beaten walkie talkies resting on arguably very vintage piece of furniture in the distant corner. No the source of his discomfort is located behind him, it’s the occasional chilling stream of cold air rushing through leak in badly warped window frame, despite the partly coverage of heavy french curtain. FE’s host and friend noticing the situation proclaims: as you recall in 202x when we have taken the regional gov palace I let my guys strip some of those nice triple plane windows from there and reuse it here for the garden view, well unfortunately this very nice set was custom made and very odd dimensions, so I can’t replace the damaged one behind you, and I’m not going to ruin it here by exchanging for ordinary one from some junk yard, abandoned housing or such, I’ll probably put a wall in this section anyway in the spring.. as the conversation continued on more important topics into the night..
“Human condition does not really change that much overnight. There is going to be cascade of collapse, during which order will be kept surprisingly well.
The “State” will continue to function in the major centers of Civilization because things are stockpiled and a lot of people still continue to have faith on older systems.
The military will obey the wealthy elites because the latter control means of production, of food and basically everything. Also, they would rather keep the status quo than become warlords and having to watch their back all the time.”
The convention of “ownership of the means of production” is, again, dependent upon the ability of governments to enforce property laws. If the economy crashes due to an energy crisis, the military will no longer be fed, sheltered and provided with their basic needs. If this happens, the military and police will no longer have any incentive to follow commands should there be anybody left to command them, . Mass chaos and anarchy will result.
“Even after a catastrophic collapse, the land, jewelry, artwork, etc will be worth something. How much is that something, no one knows. But it would be better than nothing, which will be what most people will have.
Most people worth their salt tend to have enough retainers to be loyal to them when things get sour. These underlings belong to someone when the big man is around. Without the Big Man, they would be lost, having to seek their fortune among thousands of strangers. They will stay loyal.”
Since you are so interested in history, maybe you should research the numerous instances of mutinies, insurrections and revolutions that have occurred throughout history, lest you think the military will inevitably stay loyal to an “elite” that will not be able to pay them.
most species adjust to a new ”normal” quite quickly
the only norman that can’t be adjusted to is absence of food and water
oops
normal
Why resort to such dogmatism.. this fetish of insta doom is really weird..
Kulm and I wrote: most people.., ..likely…, …guards intermingle with old oligarchy… etc.
Completely in sync with most of historical record.
There is no dogmatism. It was explained to you and kulm that the next crisis is likely to be unprecedented in the historical record so there is very little that history can tell us about what will happen. You also ignore historical examples that contradict your storyline. Numerous political revolutions have occurred throughout history that have completely upended the old aristocracy, one recent example being the Russian Revolution of 1917.
Don’t you worry, it will eventually all come crashing down. But first for the third world, then for average Joe, a little later for you and I and all of the other posters at OFW then finally the triage reaches the upper echelons in a wave motion with the ripple effects spreading in the fabric of our industrialized civilization with [real] inequality increasing in frequency and magnitude.
https://steemitimages.com/0x0/http://fs1.directupload.net/images/180407/g4ibc7nj.jpg
Well always have Paris! Or at least the remembrance of Paris past.
http://thequotes.in/wp-content/uploads/2016/04/Marcel-Proust-Quotes-5-768×432.jpg
SPX is soaring to new highs, not just climbing a wall of worry but leaping over it. So the engine of global growth–China–is exhibiting signs of serious disorder, and the world’s consumerist paradise–the U.S.– is on a euphoric high (Ibogaine in the water supply?)
This divergence is worth pondering. How can the two economies that have powered a 28-year Bull Market in just about everything (setting aside that spot of bother in 2008-09) be responding so differently to the global economy and global financial system’s woes?
There’s a rule of thumb that’s also worth pondering. While the stock market attracts all the media attention–every news cast reports the daily closing the the Dow Jones Industrial Average, the SPX and the Nasdaq stock index–the bond market is larger and more consequential. And larger still is the currency market–foreign exchange (FX).
As the chart below illustrates, a great many currencies around the world are in complete meltdown. This is not normal. Nations that over-borrow, over-spend and print too much of their currency to generate an illusion of solvency eventually experience a currency crisis as investors and traders lose faith in the currency as a store of value, i.e. the faith that it will have the same (or more) purchasing power in a month that it has today.
Here’s the key takeaway: a currency crisis is a symptom of a deeper disease–it is not the illness. The same is true of stock market declines like the Shanghai Index that break long-term support levels: a crashing stock market is a symptom of a deeper disease, it’s not the illness.
http://charleshughsmith.blogspot.com/2018/09/the-global-financial-system-is.html
uh oh….
It does make you wonder….
The CBs know that rising interest rates create the mother of all snowballs…
We are seeing formation of the mother of all snowballs in the EMs …. caused specifically by rising interest rates in the US which is killing EM currencies…
So what is at play here?
Are we very close to the end game — and is what the US doing aimed at buying them slightly more time than everyone else?
Do they allow peripherals to crash and burn now – perhaps the debts of countries like Turkey and Argentina – if defaulted on … do not bring BAU down…. they are not big enough?
Hard to believe that if one EM goes… contagion strikes and they all go….
Perhaps we are now seeing the desperate senseless sort of flailing — that one would expect if one were to put a rat in a barrel of water and wait for it to exhaust itself…. expect this is civilization in its death throes….
well, Gail predicted a global EM to occur at about 2015 ± 3 years, so 2018 is within the error bars. we still have a few months left, and fall is the usual time for these events to unfold.
my impression is it is all smoke and mirrors at this point. i hope to be wrong.
sorry, FE’s EM = emerging markets, i was thinking EM = economic meltdown. almost the same thing, these days.
I am hoping the problems wait until 2019, even if that moves the problems beyond the time-frame I talked about. 2019 is when the effect of Trump tax cuts take effect.
Also, it takes a while for China to go from slowly expanding to contraction.
There are a lot of smaller problems, but the debt defaults have not really started to kick in, and failures of big banks have not yet started. The government of Saudi Arabia is still sort of standing.
Oil is flowing out from Iraq, Libya and Venezuela despite the state of near collapse of these nations.
The Fed has perhaps decided to add more nations to that list?
that’s a long list and includes some large economies, like India and Russia.
At first I thought that the Fed might go easy on nuclear powers. But then again, Russia didn’t launch their nukes when Russia was in a state of ruin in the 90’s.
The elites in India and Pakistan might prefer to let their poor die. What’s the point of risking your own life in a nuclear exchange?
1/ Donnie-boy most likely can’t affect anything substantial about the FED, however he could wobble some tangential gov and int stuff as tariffs, budgets, some cadre nominations etc., perhaps create unforeseen detours brewing into ricocheting problems coming up ahead later.
2/ As shown above the EUR has ended its role as any whatsoever aspiring reserve vehicle of int importance this year. The German deepers after bitter months of quarrels barely put together the government, and new parliament consists of rising powers openly refusing to pledge any past (and or further) guarantees for the EUR, besides wanting to get rid of it anyway, even at the cost of hinting tax revolt.
In summary, imagine for instance you are one of the Gulfies Emir, are you going to increasingly re-balance towards self destructing EUR, what else, or move it to OPEC+ viable but not deep enough (RUB) or prospectively deep enough, but not yet fully open Yuan at the moment?
Eh, now you are going to again park large chunk of everything within the USD universe, .. again. Bye, bye emerging ones, we hardly knew ya..
=> Hence USD most likely flows through the next recession and GFCv_xy with relatively flying colors.. and the hell continues in another chamber as predicted, lolz ..
As long as Europe provides interesting products to the world market, the euro (or any currency on such productive territory) has got its value. The Japanese yen works the same way: when you have something valuable to sell, then your currency has got value.
The currencies have little in common with the amount of the issued debt by the given country, as long as there is a GDP growth which allows for the increasing amounts of the debt. It is the real productive capacity (i.e. surpluses delivered to the world market) that matters.
Does anybody think that muslim religion is a product that is in line with the end of the world? The story of Jesus Christ is the story about the population and energy, about the last childless man… which is the true story of the human species. The muslims seated in the depopulating Western countries face the same problems as the rest of the population like divorce and family desintegration…
Mark 15:34
At the ninth hour, Jesus cried out in a loud voice, “Eloi, Eloi, lema sabachthani?” which means, “My God, My God, why have You forsaken Me?”
Europe has been sliding, currently ~15% of world’s trade.
Yes, sheikhs will continue to buy German stuff, that was not the point, but certainly not prop up the EUR in their accumulated reserves. And as pointed out elsewhere the FX market is bigger than trade or the stock market, and EUR is finished there because of the apparent inner instability.
That’s nice of you predicting family problems for migrants in the future as well; when they are now running wild and filleting out former inhabitants on the streets..
Sorry not interested, Sweden already fallen, France and Germany on similar track..
And what? So anti-immigrant political parties win the elections and there will be no more immigrants. The Europe will become closed to immigrants like Japan. This shift toward rejecting immigrants is everywhere.
The population boom of Africa is caused by the surpluses of the depopulating countries being sent to its populations. The systems of social welfare of Sweden, Germany or France providing its surpluses to immigrants is the same story.
Do not mistaken the results of the depopulation (i.e. various subsidies provided as incentives to the immigrants) as the sign that the states are collapsing. The states are not collapsing yet, but their populations are collapsing.
Slovakia was also fighting the problem of its skyrocketing Roma population caused by the generous social welfare system. Now, it is clear, that also the Roma population boom is over:
https://romovia.sme.sk/c/6947495/na-slovensku-zije-viac-ako-400-tisic-romov-populacny-boom-sa-nepotvrdil.html
In my village, the Roma population practically mixed with the majority population and is dying out.
” anti-immigrant political parties win the elections and there will be no more immigrants. ”
Inflow into Sweden larger than ever, antiimm might get up to 25-30% in this weekends election, won’t change anything.
The immigrants themselves, when they get the right to vote, will vote for shutting the borders…
True, many immigrants vote for antiimm, but mostly white males.
For many people the act of grand – historical – realignment in politics and social arena was usually a puzzling subject, sort of consisting of ether substance, always asking how it could be, even tough the historical data are known. It seems today it indeed rhymes within the 1920/30s narrative again.
You can watch it now unfolding in Germany, where formerly docile ordinary citizens, voters of centrist christian and social democrats, or even reds for gods sake, are now out of sheer desperation moving under the tent of AfD, which is sort of hard core capitalist conservative grouping with not very altruistic people at the top to say the least, but hey they are at least somewhat open about it. If you are not paying attention, the tide is surprisingly elevating, some of the scenes from DE parliament would be considered utmost scifi in just recent past. Yes, the EUR might really lead the crash momentum and go down first.
This is an illustrative off scene from (main rally) recent uprising, where older lady and msm crew incl. two female “trendies” are clinched together. The argument is about the sudden and senseless destruction of their formerly orderly and safe lives, when nowadays they had to send kids into schools with imported non documented, bearded adults of who knows what past, dangerous public space etc.. And on top of that be broadly mis-labeled as far right elements for voicing disgust at the govs, plus many related arguments against various msm gate keeping tactics and shunning of perceived establishment villains.
The msm “trendies” landing there on the periphery from some metro area pretend token level of interest and empathy, but are obviously too spoiled (damaged goods) already, so to no avail.. it escalates again.. and again ..
The short intro from start and continues at ~17min:
https://www.youtube.com/watch?v=cOZqYJIHOxw
“Oh gosh (I’m) so trendeee” :
Quality ENG subtitled clips from DE parliament, most notably MPs Weidel, Curio, ..
https://www.youtube.com/channel/UCugBxjk93tr6rW9bKXJSeQg/videos?disable_polymer=1
haha alex jones and its supporters
remind me of that funny scene in Django Unchained
https://youtu.be/mHzQis2fO0U
where white group instead of lynching black guy
they fight between each other
Thanks for spoiling my nice uberclean bioDeutsche/European whitey thread.. 🙂
PS no explicit fans of Alex, but certainly digging these masterful remixes, besides here Alex nailed it, if watched that Saxon video till at least ~1min mark, that’s typical disrespectful little piece of msm trendie – multiculti weasel, hands in pockets talking to people, pretending empathy, and as good sociopath actor finally switching into all smiles again..
Late Stage Capitalism is always a little twisted.
Omg, grrrr, hahaha, they just pulled that video, giga lolz..
Fortunately there are many other copies still flying around..
It’s amazing how quickly YouTube can disappear stuff their Deep State masters really don’t like.
Alex named one of his channels Info Wars, and he at least got that bit right. We are in the midst of a World Wide Website-Zapping Shadow-Banning and Deplatforming Info War these days.
While I prefer to keep my distance from Jonestown and its dubious protein supplements, I salute Alex for his efforts to oppose the globalists and their propaganda matrix all these years. He’s a true independent media pioneer who’s paved the way for hundreds of other alternative voices. Without him and others like him, we’d all still be confined to watching ABCNBCCBSCNNPBSBBCITV and taking it half-seriously.
… but mostly BS.
Not true dJ
ABCNBCCBSCNNPBSBBCITV not mostly BS?
Hm, I underestimated them apparently..
That pulled video (of rising viewership) is no longer to be found, only tiny snippets without the best parts survived on the YTs elsewhere, that featured msm lesbian feminist “Hayali” is probably highly guarded asset for some future indoctrination purposes..
Moreover, today if you search for “Chemnitz” you will get perhaps 3-4pages of msm syndicated snippets before offering you any alt / trully diy videos.. that was not the case few hours ago.. The most factual “investigative” piece from msm realm, by aha RT, reporters going places of killings, marching protest route, asking people; surprisingly direct attacks on Merkel afterwards in the anchor’s commentary conclusion..
Welcome to the future folks, this is real doorway into fully totalitarian existence..
Well actually we are well past that residing inside a corral already.
So, if you want news in Europe, watch RT online, self compensate for their still ~limited bias, and when they get eventually “deplatformed” as well, watch them on sat link as the latest rural Siberian dead drop drunked outcast, lolz.
Sorry for all the grammar and spelling errors. Not easy to do it on a phone !
Shall we check oil today?
OIL (BRENT) PRICE COMMODITY
78.84 USD +0.83 (1.06%)
https://www.bloomberg.com/energy
Sure, let’s check. Brent $77.71 down .44
Brent now to $76.53.
Might be a good time to buy a few barrels for Xmas presents.
Let me share with you what might happen. The Feds, BoJ, ECB and BOE can only do their part if the cisis happens in their country.
1. The world’s debt is very horrible
2. Leverae is high.
3. If it is like 5:1, a drop of 20% is enough to trigger a margin call
4. Margin call has a cascading and domino effect. It can propagate quickly across the globe. 40 years ago, it is slow because there is no internet, now, it is instantaneous
5. Margin call is self feeding. It will cause a chain reaction.
6. Some countries might not be able to staop it quickly (See 1997 Asian crisis)
7. Central Banks can come in and try to stop it. If it fails, then it will be made worse.
8. The Feds, BoJ, ECB and BOE can print more money (that is all they can do) but with high debts, it can cause a loss of confidence.
9. People began pulling out money from the bank (especially EM) but if they cannot pull out money (where do banks have so much money?), panic starts
10. Trade financing is in jeopardy. Trade in serious trouble. Cashflow problems at importer/exporter, goods cannot be cleared (See 2007 GFC) or paid, bankrupcy happens due to cash flow. Wages nnnot paid, etc. Critical supplies not delivered
You think it is far fetched? All that happened in 2007. It was the Feds who came in with tons of printed money and stopped it from getting worse. People say, the Feds can do it now but it cannot because the debt is too high and the interest rates are too low. If they continue to print money, the inflation will go sky high and the interlinked banking system will crash.
You have $400 in your bank account. You go to the bank and you cannot withdraw money. Do you have any other options? What if there are those who lived paycheck to paycheck? How are they able to feed their 5 kids?
When suppliers demand upfront payment and your customer cannot pay you, you are gone. That is what happened to me in 2007.
CTG, I agree. A financial panic overwhelming the central banks and causing catastrophic JIT supply-chain failures seems to me one of the more likely outcomes we are facing.
David Korowicz’s ‘Trade Off’ paper made a huge impression on me in 2012 and I have still yet to encounter a really detailed and plausible rebuttal, although there are of course plenty of other geopolitical and ecological vulnerabilities that could ‘get us’ first.
Harry, many people can read TRADE OFF. They know what they are reading but only a small fraction of them are really ware how grave the situation is.
They read it – but don’t think it can happen. ‘They’ will not let something like that happen.
Korowicz recommends -after one lecture – getting a nice dog as the most sensible course of preparatory action – to take one’s mind off it all!
A doomer-therapy-dog – what a lovely idea. I must say, I am a huge fan of David K – a very sympathetic fellow, which contrasts nicely with his frankly terrifying insights into our systemic vulnerabilities.
It worked for Mad Max. And when times get tough you can share the dog food.
Trade Off is on the very short list of papers that people need to read to get a complete understanding of what we are facing
9/ Correct, even that Dr. Krall “Draghi Crash” fin insider guy confirmed only few percent of money are non digital form, and large part of that paper is not circulating wildly anyway, hence charted out the sequences, implications for hyper/inflationary, deflationary outcomes.
10/ That’s what was hinted in the thread above earlier.
At that event big guys will most likely start for the interim bridging period talk “barter” mostly about energy – goods/produce. *Little people will be royally ##%$%^ and left to hang dry, if you get lucky (location), some stuff from national strategic depot and other “help” might eventually get to you..
*survivors would eventually regroup start anew on scraps
“The hammer falls when geology says it should. Not when economics says it should.”
survivors would eventually regroup start anew on scraps
I would certainly hope you but I know I will be cheating myself if I were to believe that. In 1960s, it is possible but not now. I don’t want to argue because if you cannot get it, you will never get it.
In the Hollywood version that is what would happen…. but there will be no Hollywood post BAU…
If anyone is disagreeing with that CTG has posted here…. you should take that as a sign that you are a du nce….
https://myheadcoverings.files.wordpress.com/2012/07/duncecap.jpg
There are people who will refuse to accept that this is how BAU ends… the slow descent is so much more calming…. it also implies that we can service the spent fuel ponds… because the electricity will not go off for many years… and we know … everyone fears those ponds… they are the fifth horseman
Perhaps you just happened to arrive on different forum or not reading the posts.
There has been no debate about “slow descent” so far..
I am sure I have read about gentle descents and stair-case like descent … on FW….
Unless that was the Twilight Zone
To the 20 people and a city question see Earth Abides by George Stewart. It is a long slow process moving to new live ways.
The story was set in 1940s where we have far far less environmental destruction, less pollution, population and toxic stuff. Knowledge on traditional farming still exists. Modern chemical farming was not invented yet.
I can tell you know no one in my community or even within 20 miles radius knows how to farm for continuous sustenance (not gardening mind you) . There are no clean rivers that we can drink.
No one including doctors know how to deliver a child without modern equipment. So many people are on medication that they will kust die off quickly. I know nothing about metal work. If everyone dies, no one will operate the powerplants. How could there be electricity? Even hydroplants need people to monitor and control the switches. Too much water, too high/low RPM, etc
Now even if there is a deadly disease, the hospitals and shops will be desteoyed by people looking for food and medicine.
No electricity no water (pumps not working), no fuel, no elevators, chaos will start immediately.
ctg you forget one thing
that people to farm without industrial civilization
need younger median age which does not exist in any developed countries
Yes, CTG, the widely-dispersed vital skills of former times have simply gone, and the environmental degradation would seem incredible to someone of the 1940’s.
Ox carts, etc, were still used in our part of Spain then, and up to the 1960’s: society where you can eat your transport and make shoes from the covering is quite resilient…..
And the few with any of those skills…. e.g. organic farmer — becomes an immediate target.
Think of walking through inner city Detroit at night — with a prominent shiny gold chain weighing 1kg pulling a transparent trolley filled with $100 bills…..
Ed lost the plot long ago…. he spends his days prancing about in flower gardens dressed in loose fitting linen outfits… singing koombaya… sometimes talking to himself… sometimes chasing butterflies…
He is mostly harmless…. not to be taken seriously
I do like linen. I bought a linen and cotton scarf from Radic the weaver in Prague.
Linen bed sheets are acceptable… scarf is ok as well….
Linen pants …. remind me of the utter f789ing wankkker Trustafarians in Ubud who play yoga, believe in healers, refuse to use deodorant eat only raw organic vegetables – then pull out chemical laden cigarettes….
Just a sec….
Ok back… I had to spit out the vomit….
Linen is a very difficult culture. You can plant it only every 7 years. In the last century in Europe we had “Leinenmüdigkeit”, which forced humankind to invest in cotton.
I remember that novel well. An above-average sci-fi potboiler IMO.Set in California. Most of the world’s population was wiped out and the few survivors turned into hunter gatherers and used the copious supply copper coins as arrow heads.
https://www.dustjackets.com/pictures/4127.jpg
“Euro-area manufacturers saw order growth decelerate to the weakest pace in two years after renewed concerns over trade prospects hit confidence… “The business mood has become more unsettled during the summer,” said Chris Williamson, chief business economist at IHS Markit. Risks of new tariffs are hurting sentiment, and “the expansion is looking increasingly uneven.””
https://businessmirror.com.ph/trade-war-fears-hit-european-factories-as-global-trust-wanes/
“Italy’s economy has stalled abruptly over the summer and the industrial sector is on the cusp of outright recession, threatening to drive the country’s knife-edge debt dynamics into dangerous territory. The sudden slowdown comes as mounting political alarm pushes risk spreads on 10-year Italian debt to a five-year high of 290, a sign that capital outflows are picking up again.”
https://www.telegraph.co.uk/business/2018/09/03/recession-risk-pushes-italy-closer-financial-political-earthquake/
“Britain’s manufacturers face a difficult autumn as the Brexit deadline looms and Donald Trump’s trade sanctions hit exports, according to figures for the sector in August. A survey of manufacturers has found that growth slowed last month to its lowest level since July 2016, dragged down by a shock fall in exports. The figures indicate that the sector, which suffered a fall in output during the first two quarters of the year, could remain in recession for the rest of 2018.”
https://www.theguardian.com/business/2018/sep/03/uk-manufacturing-growth-hits-25-month-low-amid-brexit-fears
Ouch!
Italy needs economic growth if the debt is to be repaid!
if you want a debt worry
try this one
https://www.alaraby.co.uk/english/comment/2018/9/3/egypt-the-debt-crisis-no-one-is-talking-about#collapsedComments
“IMF Chief Economist Maurice Obstfeld warned that “the risk that current trade tensions escalate further… is the greatest near-term threat to global growth.” And the most powerful central bank in the world, the US Federal Reserve, echoed that warning almost word for word: “an escalation in international trade disputes was a potentially consequential downside risk for real activity.” …[Trump’s aggressive campaign against Beijing could enter a new phase this week, with another $200 billion in Chinese goods in the crosshairs.”
http://business.inquirer.net/256627/10-years-2008-financial-crisis-trade-wars-strain-global-economy
“Factories in China’s largest regional economy didn’t do well last month, raising questions about the resilience of the nation as it digs in for a prolonged trade battle with the U.S. The manufacturing purchasing managers index for the southern Guangdong province dropped to 49.3 in August, according to the local government’s Economic & Information Commission… Guangdong, boasts an economy as large as Australia’s, is a major manufacturing hub and accounts for almost a third of China’s exports. It’s also home to some of the nation’s largest corporations including Tencent Holdings Ltd and Huawei Technologies Co.”
https://www.bloomberg.com/news/articles/2018-09-04/china-s-factory-heartland-is-in-contraction-local-gauge-shows
“By the end of last year China’s share of global debt had tripled since the 2009 global recession, a period in which the country unleashed a credit boom to sustain rapid growth, according to estimates by Standard Chartered Plc… “China remains our biggest concern in terms of leverage,” Mann and his colleagues wrote.”
https://www.bloomberg.com/news/articles/2018-09-03/china-share-of-global-debt-tripled-since-09-standard-chartered
49.3 = Contraction!
My opinion is this massive trade war is the elephant in the room few are focusing on, maybe because it’s too dire to look in the eye. I don’t think either one, Trump or China are going to budge no matter what happens. China has become dependent on a trade surplus with the US and don’t have a plan B to do anything else. As this situation progresses, I expect global recession to initiate this winter, probably in the first qtr. of 2019. If Trump is ousted via Mueller findings/impeachment, Pence will likely back down on tariffs, but if Trump remains in place this situation will get extremely difficult into 2019. If the tariff situation is unchanged late into 2019 that could be a trigger for economic calamity, with millions of people including Americans becoming homeless.
“Argentine President Mauricio Macri announced steep spending cuts and new taxes on exports Monday in an effort to restore investor confidence, following a disastrous week that saw the peso lose 20% of its value against the dollar.. The Argentine government is taking drastic steps, including raising interest rates to 60%…”
https://www.axios.com/argentina-emergency-spending-cuts-currency-crisis–0634b190-15a0-4e9b-a217-5f4bfcedc755.html
“[Brazil’s] currency is one of the weakest against the dollar this year. And its second-quarter GDP grew a paltry 0.2%. With unemployment still over 12%, economic stagnation does not bode well for a turnaround story in Brazil… Brazilians go to the polls in October. There is no clear front-runner. The leader in the polls, Jair Bolsonaro, has yet to crack his baseline 20% support level. Political risk and a lackluster economy will continue pressuring the Brazilian real and the stock market.”
https://www.forbes.com/sites/kenrapoza/2018/09/03/brazils-economy-nearly-recessionary-as-growth-sours/#3365fd44faa8
“With GDP figures for the second quarter of 2018 set for release on Tuesday, there have been some whispers that another recession is on the horizon for South Africa. Another R-word – “Ramaphoria” – has completely disappeared over the last few months, as the harsh realities of liberating the South African economy has tempered all early hopes of a quick turnaround post-Zuma.”
https://www.thesouthafrican.com/gdp-recession-predictions-south-africa-why/
“The Turkish financial crisis has received extensive media attention as the Lira has plunged and harsh words exchanged between Presidents Erdogan and Trump… In reality, Egypt’s debt crisis is substantially worse than Turkey’s… Egypt’s crushing debt burden is reflected by the high cost of servicing it. In 2017 interest payments absorbed some 31 percent of the budget. They are on track in 2018 to consume over 35 percent, at which time debt servicing will be eating up “almost 55 percent of all government revenues.”
https://www.alaraby.co.uk/english/comment/2018/9/3/egypt-the-debt-crisis-no-one-is-talking-about
“Rise in global oil prices and contagion risks from emerging markets pushed the Indian rupee to a fresh all time low that ended 71.21 against the dollar, as compared to the previous close of 70.00 on Friday. The currency depreciated 21 paise or 30% on Monday as compared to it’s previous close. The yield on 10-year benchmark bond also closed above 8%, for the first time in almost four years.”
https://www.thehindu.com/business/markets/rupee-hits-yet-another-low-sensex-drops-over-330/article24855189.ece
“Indonesia’s central bank is intensifying its fight to protect the nation’s currency and bonds with a slew of measures that includes more hedging tools… The rupiah has been hit by continued selling of Indonesian assets by foreign investors spurred by rising US interest rates and fears of contagion from market turmoil in Turkey and Argentina.”
https://www.businesstimes.com.sg/government-economy/bank-indonesia-to-beef-up-tools-in-battle-to-shield-rupiah-after-currency-hits-20
India not doing well + China hitting a slowdown is not a good combination!
India is not remotely survivable, if one has even a minimal knowledge of ecology.
“Ten years after the worst financial panic since the 1930s, growing debt burdens in key developing economies are fueling fears of a new financial crisis that could spread far beyond the disruption sweeping Turkey.
“The loss of investor confidence in the Turkish lira, which has surrendered more than 40 per cent of its value this year, is only a preview of debt problems that could engulf countries such as Brazil, South Africa, Russia and Indonesia…
“…the danger of a financial contagion that could hit Americans by crushing US exports and sending the stock market plunging should be taken more seriously in light of a massive increase in global debt since the 2008 downturn…
“Total debt is a whopping $US169 trillion ($234 trillion), up from $US97 trillion on the eve of the Great Recession, according to the McKinsey Global Institute…
“While previous debt crises involved US households and, later, profligate European governments such as Greece, this time the concern centers on companies in emerging markets that borrowed heavily in dollars and euros.
“In Turkey, for example, companies and banks borrowed in recent years to finance bridges, hospitals, power plants and even a mammoth port development for cruise ships.
“Foreign investors, particularly European banks, lent freely in search of the higher returns these markets offered at a time when the US Federal Reserve and European Central Bank were keeping interest rates low.
“”We were supposed to correct a debt bubble,” said David Rosenberg, chief economist at Gluskin Sheff, a wealth-management firm. “What we did instead was create more debt…”
https://www.brisbanetimes.com.au/business/the-economy/free-money-is-going-away-global-debt-soars-along-with-fears-of-crisis-ahead-20180904-p501ju.html
“What is scary about this impending new currency crisis is that it could also precipitate a debt crisis, especially in Asian and other emerging markets and particularly in the corporate sector. Dollar or other foreign currency-denominated debt becomes harder to service in terms of local currency earnings once those currencies start to slide.
“What is happening now in corporate debt markets, mainly in emerging economies, should be worrying people much more than it is. Why? For one, corporate debt in emerging and developing economies now significantly exceeds levels before the 2008 global financial crisis.”
https://www.scmp.com/comment/insight-opinion/united-states/article/2162553/emerging-markets-currency-crisis-product
Gail Tverberg says:
September 3, 2018 at 7:36 pm
The catch is that the rentiers and the stockholders can’t live without those actually producing food and water, and keeping roads somewhat repaired.
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What will happen is like Constantinople, or the Kyoto of the Tale of the Genji, the rentiers, etc will concentrate in some fairly defensible areas. After all, Manhattan’s Fifth Avenue was full of millionaire’s houses 100 years ago, and the riff-raff were well kept away.
That’s where feudalism comes to play. Since the rentiers, etc would own a large amount of real estate, they would make deals with people who would produce food, water, etc for the leaders of society. Xabier is kind of an expert on such medieval arrangements.
I know such system worked well. The landowners of Korea before 1950 lived in what we now call Seoul, and they hired a local person, called “mareum”, to manage the land. The mareum had to send the landowner a certain amount of rent every year, and was free to extort from the tenants as he saw fit. And Korea did not have roads until the Japanese began to build them in 1905.
And now there are drones so roads are no longer really needed.
How would the rentiers pay for protection? If the collapse is going to be as bad as most of us think it will, the only things of value will be essentials like food, sex, water, clothing, guns, bullets and alcohol. If all the rentiers have is money, then how will they pay for protection since money and stocks will be valueless. And what happens when those physically strong enough to protect the rentiers discover that they would be better off without the rentiers?
Maybe they can buy up thousands of these life-like blow up s e x dolls… and offer sessions with them to the bad guys in exchange for diplomatic immunity and protection
kulmthestatusquo says:
September 3, 2018 at 11:15 pm
“What will happen is like Constantinople, or the Kyoto of the Tale of the Genji, the rentiers, etc will concentrate in some fairly defensible areas. After all, Manhattan’s Fifth Avenue was full of millionaire’s houses 100 years ago, and the riff-raff were well kept away.”
First of all, it is logically fallacious, in citing historical examples to bolster predictions of the future, to concentrate on what makes the past similar to the present conditions that you are projecting from at the expense of what makes the present different from the historical examples that you cite, and the present is indeed very different from “what happened in Constantinople” etc. As for the Manhattan’s Fifth Avenue thing…so what? There was a functioning state in place to protect the interests of the wealthy at that time. The thing about a catastrophic economic collapse is that the police and military will no longer be able to enforce laws that ensure the rich have physical possession of their “wealth” and that the fiat money in their bank accounts is actually worth anything.
“That’s where feudalism comes to play. Since the rentiers, etc would own a large amount of real estate, they would make deals with people who would produce food, water, etc for the leaders of society. Xabier is kind of an expert on such medieval arrangements.”
Again “ownership” is contingent upon physical force or the threat thereof. Without a military to do their bidding the wealthy elites (who make up a minuscule percent of the general population and the military) will have a much, much more difficult time holding on to their land and possessions.
“I know such system worked well. The landowners of Korea before 1950 lived in what we now call Seoul, and they hired a local person, called “mareum”, to manage the land. The mareum had to send the landowner a certain amount of rent every year, and was free to extort from the tenants as he saw fit. And Korea did not have roads until the Japanese began to build them in 1905.”
Another completely irrelevant historical example.
“And now there are drones so roads are no longer really needed.”
Possession of “drones” do not make the elite the omnipotent masters of the universe that you seem to think they are.
Why such fast and furious rejection of demonstrable, repeatable, examples throughout history (we know of hard crashes and renewals going back to ~5000BC).
To simplify and trivialize, the gun people go self employed from certain stage (of hard collapse), and intermingle with some of the highly skilled sociopaths of the old oligarchy (aka the sheople harvesting know-how), creating new gov nexus. Will they magically restart the whole JITs complexities with axes and stones as is often here insinuated? Not likely, but something is salvageable and ready to reassemble.
Do I fancy myself anywhere these circles, no.
Happened all the time.
all previous civilisations collapsed then regenerated because there were always more energy resources to tap into
the critical factor seemed to be that the population didn’t increase very much
our time seems different, there are no new lands to steal or resources to burn
this is why it looks like the end of the line
Agree, I see – estimate future “renewals” more of a temporary echo spike, bumps on the scrap heap.. Again a blink from the macro history, yet sequences of hell like waiting rooms for single lifespan or bit longer..
Great minds think alike, Norman. And in 1965, my favorite astrophysicist Fred Hoyle wrote:
It has often been said that, if the human species fails to make a go of it here on Earth, some other species will take over the running. In the sense of developing high intelligence this is not correct. We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance, and one chance only.
https://www.amazon.com/men-galaxies-Fred-HOYLE/dp/B0000CMPEM/ref=as_li_ss_tl?ie=UTF8&qid=1495894793&sr=8-3&keywords=Of+Men+and+Galaxies+fred+hoyle&linkCode=sl1&tag=johnfjacobi-20&linkId=c92be1c08a6cd10309d09e2672dddaa7
yup
the industrial revolution started in 1709—by geological time that’s just the blink of an eye
in just 300 years we’ve burned everything we could lay our hands on. including each other.
it has been that ”brief flash of light and heat” that seems to be getting rid of us.
It is highly doubtful that the process is finite as in a one-shot possibility.
Mankind simply knows too little about stellar and solar system dynamics to assume that this is the only likely outcome even though our current understanding stipulates it.
The same can be said about climate change, which apparently was a settled science regarding global warming and its effects.
Klllimate chhhhange…. has been occurring …. since the Earth was formed….
Why are you bringing this up?
Hard crashes and renewals do not always occur in the same way and the elite do not always survive a given crash as kulmthestatusquo’s thesis about the indestructibility of the wealthy depends upon. As for “learning from history” in general, It’s easy to pick out examples of events from history that seem to confirm one’s preconceptions and ignore those that do not as well as to oversimplify history in order to support an agenda.
The country, the largest economy in Southeast Asia, has around 41 percent of government debt denominated in foreign currencies, according to Moody’s. If the rupiah depreciates further, then those debts would be more expensive to repay.
Varathan warned: “If credit spreads rise further on (emerging market) risks and oil remains elevated ahead of Iran sanctions (set to bite in November), the risks of breaching 15,000 is a clear and present danger.” When oil prices go up, it contributes to an increase in the country’s import bill.
https://www.cnbc.com/2018/09/03/indonesia-rupiah-falls-to-weakest-level-in-more-than-20-years.html
Too bad Indonesia is no longer exporting oil……
The camel’s back is bending …. will one of these emerging markets trigger then end game?
For those r e tard s who think this is going to be a gentle or stair case decline….
Watch what happens if these emerging markets let go and the CBs are unable to stop the tide.
I recall the 1998 Asian crisis — I was in right in the middle of it — I recall the sheer desperation in Hong Kong — the HK govt was only able to fend off disaster by stepping into to buy up the market in a massive way…
All of this played out in a relatively short time frame….
This crisis is a different animal — more widespread — and far more dangerous….
Oh and btw — I recall business seizing up in 1998… I had nothing to do most days…. I worked with an investment group at the time and we ended up turning to distressed assets buying some property in Macau and dirt cheap prices… we also bought one of the biggest art galleries in Hong Kong out of bankruptcy and flogged the inventory to various dealers and individuals at maybe 20 cents on the dollar….
That is what near collapse looks like.
One day you are solvent … and the next you are desperately unloading inventory trying to get cash flow through the door and stay alive.
And Fast Eddy Vulture Asset Strippers is floating high above…. waiting to feast… on the carcasses….
This time around… the Vultures will starve too… there will be nothing to strip… it will all be skin and bone…. with no buyers … at any price
Indonesian rupiah 14,292.00
USD/IDR ext rally to 14900
Indeed it’s a different animal, the 1998 vs 2008 crisis were on very much different scale, in the latter case globally coordinated CBs/govs action pumper many $T out there.. and in the former actual people/states lost %some money in $B..
However, you present a case that this time around (incoming next cycle of recession or crash) must be the final stop/event. And that’s unknowable speculation at least from our vantage point.
True, the mounting desperation and in-fights of the upper echelons of power/govs is plain to see, which is usually sign of deeper crisis / crash on the horizon. That however doesn’t necessarily means it must be the final one.. it could be a phase shift one into different political-economic realm, granted with horrible ricochet effects like impoverishing few Bs of people and or make inoperable large segments of the legacy JITs, but still this is not necessarily overnight universal insta doom predicament.
In short the end of an era.
worldofhanumanotg, I love your optimism about “the end of the era”. I don’t think you have the awareness, knowledge and experience of what is happening to know that it is not the end of the era but the end of the world.
Dunning Kruger effects states that it is just not possible for you to know about it and I do not wish to go into a long discussion with you on this matter because you are just not receptive.
https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect
p.s. you think your EUR, AUD, USD, IDR still exist if the financial system collapse? You still think you can get your food from the supermarket if we have a global financial meltdown.
I certainly wish you are right and I am wrong but I take no pride at all to be right
If you are aware of domino effects, then you will know why a small fire may cause a large fire. I ma talking about aware and understand the domino effects. You know but you may not understand.
You are very correct in the sense of describing the envelope, the legacy system which is ripe for the end, and or rather phase shift taking place into something else, leaving some of the infrastructure and other resources “intact” for reusing it on the other end of the tunnel.. that means even incl. the human potential..
However, as suggested above this is just an envelope a subset of bigger world. The fixed idea that indeed shocking and very disruptive fin-credit meltdown now seemignly around the corner also stops operate in simultaneous fashion all the industrialized, semi-industrialized and also the non developed countries in all their capacities is simply preposterous.
I don’t know the precise timing and sequencing of what’s to happen next, but world simply has never ever worked like that way in terms of such portrayed schematics of universal collapse.
I guess it also tend to stem largely from the “anglo world” view bias, where with the ~brief and not deep enough exception of the UK case, by now several “4th turnings” are dividing the current generation with those previous ones with some actual hands on experience of (near)hard crash experience.
worldofhanumanotg, I give you an entire city, totally intact but no people in it. You and your band of people (say 20 people) have the whole city to yourself. There will be no invaders and you can have your own sweet time there (the most ideal but impossible case)
1. Do you know what you need to do to “utilize” existing infrastructure? Are you going to build axe or what?
2. How are you going to plant food? Do you even have the land, skills, seeds or knowledge to do it? Is the land good enough for you to plant.
3. How do you intend to “utilize existing infrastructures”? Use a blow torch to cut the cars, glass? What if you run out of gas? How do you intend to process “existing infrastructures”? If you pick up knives or guns, what if they are blunt or you run out of bullets?
“However, as suggested above this is just an envelope a subset of bigger world. The fixed idea that indeed shocking and very disruptive fin-credit meltdown now seemignly around the corner also stops operate in simultaneous fashion all the industrialized, semi-industrialized and also the non developed countries in all their capacities is simply preposterous.”
— you do not work in the supply-chain management and financial sectors, thus you don’t know. I have first hand experience.
Uhm, wrong, search me up here at O/FW, I speak about JITs disruptions (often irreversible) almost in every other post here..
Will some metro areas in many parts of the world get quickly hammered beyond bad in the chaos stage, as bordering on “horror level” impact? Very probable indeed. And so what.. This is a relative world in the end, some societies will manage to circle the wagons better early one and limit the losses to a degree, and even some of the “burned down” would eventually restabilize on (way) different footprint.
Define your terms.
If you mean by instant collapse, that for example “movie” like European holidays individually travelling and sightseeing across ~20countries in few days, won’t be possible (ever) by ~2025, I’d agree. Does it equal the end of the civilization proper, not sure, the end of status quo or an era is more fitting description.
I follow posts im OFW. I don’t seem to recall yoou mentioning JIT. Ever heard of contagion? You think if Singapore collapse, it will not impact other countries? Did you consider human psychology? Tomorrow someone from NASA leaked that on 1st October, a big asteroid will crash into earth with 100% certaintt and wipe out all life, do you, as a truck driver, pilot, surgeon or nurse want to work anymore? The collapse would be instantaneous because food will not be delivered.
This is exactly the same thinking of “when the situation gets serious or bad, some good guys will go into the nuclear reactor and casks all the used fuel rods and transport it to a safe place”. Why don’t you be the good guys?
Again, sorry but wrong evidently on your part, it’s easily demonstrable almost all of my post on collapse (not necessarily on geopolitics or tangential topics) include discussion on JITs disruptions.
Moreover, just few day/s ago I specifically wrote about the agricultural surpluses plaguing the industrial world and the major food producers: EU, RU, US, .. as there are (today) both in their harbor and hinterland areas scattered gigantic warehouses full of excess food.
If you claim having some insight into JITs/supply chain, you ought to know better, that beyond that surplus, there are also different warehouses, strategic supplies, at least in the realm of industrialized countries, some countries indeed might got lazy/flunkie/corrupt lately about it like notably within the US, others are perhaps more diligent in this area RU/China/NK/..
If you combined that perennial excess food warehoused mostly on commercial grounds with the national strategic reserves you got such amount of food, that it should not be problem to survive another high priority risk such as in nature haphazardly occurring “YEAR with out the sunshine” not mentioning the likely looming fin-credit-settlement system reset crash resulting from reaching O/FW threshold (out of possible many), which might be sorted out in months at least for the very basic new architecture of nation to nation state relations.
Now, from the above it’s clear it doesn’t solve fully the 8B peoplez question, which is not my aim anyway, I deal with the ~1.5B core formula. Also, it means some regions/countries would perform way differently in (not) managing the task of crises, chaos, rebuilding..
If you happen to be confined into an area/country scoring relatively poorly on the above metrics, though love, expect the impact and or relocate etc., take the subjective out of objective analysis. Lastly, am I smug about it, no, I’m just tired of repeating these very old basics on the doomero forums, now for decades.
One of the issues is that big stockpiles are often a sign of an affordability problem. Some people would call them gluts (of food, oil or whatever else). If citizens could afford more meat in their diet (and didn’t stop to think that eating a lot of meat in a person’s diet is not good for that person), the demand for meat would quickly draw down the grain stores.
When there have been famines in the past, there often have been big stores of grain. The issue was that the poor people could not afford them.
Also, governments tend to be badly hit by the types of problems we are encountering. They cannot afford all of the people/organization/transportation that it would take to actually get the surplus grain to the people. So the fact that the grain is there, doesn’t really mean it is usable by the most vulnerable.
Correct, and that’s part of what I tried to wrote about.
There could be even countries with enough stockpiles on one hand but very unstable governance culture and crisis management preparedness, and or overall resiliency.
Typically, this could be parts of the EU, perhaps Italy (Greece demonstrated earlier) or even Germany, where msm and riot police is indeed staffed and equipped good enough to smash down citizens in smallish .25M peripheral city not liking migrants. But army in such disarray perhaps not able to cope with orderly food distribution for ~80M during some future crisis..
worldofhanumanotg, supply chain is far more than what the eyes meet. It is the transport, trade financing, information exchange, management of perishables, the demand and supply of goods, storage, final delivery, tracking, costing, etc. In the name of efficiency, routes are shortened to increase profits. Forget about the extra warehouses, etc.
If you are not in this line, please don’t talk too much.
Isn’t it frustrating dealing with More ons….
Are you for real? Don’t evade the thread, we have been clearly discussing serious JIT disruptions and post fact mitigation via gov/mil assistance, and I amply demonstrated yours very shallow (bordering non existent) knowledge at least in the food angle of it..
I have an idea!!!
Why don’t you change your handle to Dunce Kruger.
Indeed are these thread derailments bothersome where the derailee state their opinion as an absolute truth in subject which they are painfully obviously uneducated and unknowing about.
The riot police in EU seems unable to handle a dozen teens today, post-collapse…
That’s the point, it’s in the thread.
Un/fortunately there are also other countries/regions..
Based on what I have observed over the past 10 years — the CBs have iron-willed intent to do whatever it takes to prevent the global economy from stumbling and crashing…
Anything goes – gargantuan stock buy backs fueled by CB cheap and easy money — guns to the heads of short sellers in China — subprime everything …. plunge protection (on an epic yet undisclosed scale) — all hands are already on deck — all guns are firing red hot….
At some point it won’t work… the economy will stumble… they will hose it and blast it… but it will stay on its knees … then it will fall to the ground – dead.
Another analogy that I like to use — you ride a horse till it’s exhausted —but you cannot stop – so you ring lance armstrong and get instructions as to how to keep your beat horse racing along… if he falters… you iimmediately shoot him with steroids hgh speed erythropoietin… you shove cocaine up his nose… then you whip him some more….
And he will no doubt continue to race along….
But at some point … no matter what you shove into your steed…. he will bray ‘no mas no mas’ — and he will fall to the ground… stone cold dead.
It’s all about the energy.
As long as oil, gas and coal continue to be available at prices that are just high enough not to sink the producers and just low enough not to blow the consumer to pieces, the CBs and the global elite will be able to continue to kick the can. It’s an impressive balancing act, walking the tight rope across Niagara Falls as the winds continue to pick up speed – but fear not, these are professional daredevils who are masters of their craft.
A noticeable disturbance in the periphery appears to be surfacing itself as a currency crisis in some of the emerging markets. Things will continue to get worse for these poorer nations as the established powers do what’s necessary to ensure they retain their piece of the pie. The daredevils are also trained assassins, with all the artillery necessary to take out anyone who threatens their ability to remain on the rope.
At some point though, the storm will be too strong – with rain, hail and wind hitting from all directions, the daredevil assassins will lose their grip and tumble to their death – and that will be the end for all of us.
Taxes on exports of some grains and other products will rise and “about half” of the nation’s government ministries will be abolished.
The government has not said which ministries will be closed or merged.
https://www.bbc.com/news/business-45392362
Now that’s a novel approach….
Too many politicians, making too many promises.
The US needs to export its politicians to places like Venezuela and Argentina so they can fix their problems.
Think those nations are already suffering enough. 😀
The Next Financial Crisis Lurks Underground
Fueled by debt and years of easy credit, America’s energy boom is on shaky footing.
About 20 years ago, an entrepreneur named George Mitchell proved that it was possible to get lots of oil and gas out of parts of the earth long thought to be sucked dry, by injecting liquid at high pressure into a horizontal well below the surface. About 10 years ago, fracking — the common term for this process — began in earnest.
In that short amount of time, fracking in America has turned the energy world upside down. A decade and a half ago, Congress was hand-wringing about impending shortages of oil and natural gas. By the end of 2015, President Barack Obama lifted the ban against oil exports. Today, America is the world’s largest producer of natural gas and is an oil powerhouse, ready to eclipse both Saudi Arabia and Russia.
This has led to muscular claims about American energy wealth. Erik Norland, executive director of CME Group, a derivatives marketplace, calls fracking “one of the top five things reshaping geopolitics.”
Some of fracking’s biggest skeptics are on Wall Street. They argue that the industry’s financial foundation is unstable: Frackers haven’t proven that they can make money. “The industry has a very bad history of money going into it and never coming out,” says the hedge fund manager Jim Chanos, who founded one of the world’s largest short-selling hedge funds.
The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.
These companies have survived because, despite the skeptics, plenty of people on Wall Street are willing to keep feeding them capital and taking their fees. From 2001 to 2012, Chesapeake Energy, a pioneering fracking firm, sold $16.4 billion of stock and $15.5 billion of debt, and paid Wall Street more than $1.1 billion in fees, according to Thomson Reuters Deals Intelligence.
That’s what was public. In less obvious ways, Chesapeake raised at least another $30 billion by selling assets and doing Enron-esque deals in which the company got what were, in effect, loans repaid with future sales of natural gas.
But Chesapeake bled cash. From 2002 to the end of 2012, Chesapeake never managed to report positive free cash flow, before asset sales.
In early 2015, another famous hedge fund manager, David Einhorn, went public with his skepticism at an investment conference. He had looked at the financial statements of 16 publicly traded exploration and production companies and found that from 2006 to 2014, they had spent $80 billion more than they received from selling oil.
A key reason for the terrible financial results is that fracked oil wells show a steep decline rate: The amount of oil they produce in the second year is drastically smaller than the amount produced in the first year.
According to an economist at the Kansas City Federal Reserve, production in the average well in the Bakken — a key area for fracking shale in North Dakota — declines 69 percent in its first year and more than 85 percent in its first three years. A conventional well might decline by 10 percent a year. For fracking operations to keep growing, they need huge investments each year to offset the decline from the previous years’ wells.
More https://www.nytimes.com/2018/09/01/opinion/the-next-financial-crisis-lurks-underground.html
Thanks! Somewhere later in the article there is a discussion that life insurance companies are big funders of this bubble, because they are reaching for the highest yield possible. They often buy hedge fund products, for example.
Funds lined up to buy 100 year Argentine bonds… knowing that country defaults regularly (and well before 100 yrs)….
This to me looks like they are accepting the total implosion of the financial system as fait accompli…
They would be betting that the financial system implodes before Argentina defaults…
I suspect (hope) they are going to lose their bet
We seem to be building up a serious head of steam….
Although a lot of money has been printed, there has been no inflation in USA, because
1. US Bonds are in demand around the world, because it is more stable than anything in the world
2. Most importantly, no more investments are being made. The decline of investment is a good thing because it saves resources.
Most economic growth is claimed by a few major companies, and investors of these companies will do great, although individual entrepreneurs will do badly.
http://greyenlightenment.com/why-isnt-inflation-higher/
Also there is no deflation because the cost of intangibles, like rent, insurance, registration fees and tuition are rising fast.
Today’s economy will help the rentiers and the stockholders, and hurt the rest. Redshift/aa is correct; the world is for those who have the capital and means of production, and the rest will be simply .. cast out.
The catch is that the rentiers and the stockholders can’t live without those actually producing food and water, and keeping roads somewhat repaired.
Perennial no real growth situation with severe ~stagnation, depression, deflation like effects means less of frivolous junk to be wheeled over from point A-B, incl. “daily office” commuters. Hence less highway lanes must be kept operational. But isn’t it just desperate sign of triage years to hang by choppy finger nails into the bits of legacy trinkets of civilization, yes it is indeed..
So, should not the above present itself as the likely nature of the postponing the final total crash a bit, yes indeed .., .. and we are evidently not there yet, at least inside the ~1.5B pop industrial civ (semi-) core.
How, and who is going to re-organize and safeguard this mess to freewheel a while longer is beyond my pay-grade, but it will be at least attempted by whatever means (human/civ nature dictates that), which in span of human lifespan means at least years of duration (decades as the outlier boundary), hence again no likely insta events before this phase is reached and processed running its path properly and completely.
This only works with a expanding system.
That is about over, I’m afraid.
All those useless truck drivers can bring the economy to a standstill within days if they strike. If things get bad the supply chain system may not be golden plated for the capitalist class.
Housing Bubble Pops in Sydney & Melbourne, Australia
In Sydney, breeding ground for one of the world’s biggest housing bubbles, prices of single-family houses dropped 7.3% in August, compared to a year earlier. Prices of “units” — condos in US lingo — fell 2.2% year-over-year. Price declines were the sharpest at the high end, with prices down 8.1% in the most expensive quarter of home sales. Prices of all types of homes combined fell 5.6%, according to CoreLogic’s Daily Home Value Index. The index is down 5.8% from its peak last September:
https://wolfstreet.com/2018/09/03/house-price-condo-bubble-sydney-melbourne-australia-new-construction-supply/
This has to start happening in some places, as interest rates go up, and oil prices go up. Budgets don’t stretch far enough.
Charles C Mann talks about his new book:
http://radiowest.kuer.org/post/wizard-and-prophet
While Borlaug was not someone to discount, his actions were disastrous.
Less then Haber– but a disaster.
Vogt, on the other hand—–
Ya but borlaug kicked the can … if not for him we’d not be here….
On the other hand if he does not kick start the green revolution — we don’t destroy the planet’s soil – we don’t hit 7.8B…. and we don’t build out nuclear power….
So primitive human societies survive…
But then who gives a f789 about that — because let’s be frank — those societies are not considered ‘human’ by civilized humans… they are little more than another feral species … mostly ridiculed and wiped out by we civilized humans….
So what does it matter if they survive or not — animal species are going extinct all the time — what’s one more?
The Verdict:
Celebrate Borlaug – he is our ‘father’ … and ‘mother’…. he allowed us to live like kings!!!
Hint: I was here before Borlaug was doing his thing.
(less than 1/3 our current population)
The population would be less than half of what it is without him.
He set a trap with corporate sponsorship.
But, this would be a moot point without Haber.
http://people.idsia.ch/~juergen/haberbosch.html
Both men are up there with Ben Bernanke in terms of hero status
All are kings of can kicking
Actually just a economic view, diminished.
You need real time experience.
China’s Waste Ban Is Causing A Trash Crisis In The U.S
China imports more recyclable goods than any other country in the world. But earlier this year, China stopped accepting a long list of imported plastic and paper waste, and implemented much stricter guidelines for what it’s willing to take in.
The dramatic policy change is part of a national campaign to reduce the country’s carbon footprint, but China’s decision to no longer be the trash collector for the rest of the world is causing major problems for U.S. waste processing operations.
Across the U.S., recyclers had been accustomed to sending major portions of their paper and plastic to China, but now they’re scrambling to find other takers.
Already, more than a dozen states have started to giving companies waivers to throw out recyclables, including Massachusetts, where more than 4,000 tons of single-stream recyclables and more than 10,000 tons of glass have been sent to landfills.
well Trump could use this to build his wall
I can believe those problems.
very informative video on China’s waste problems. thanks for posting.
My local weather website includes a PM 2.5 map because a lot of people with allergies like to take precautions when the pollution is high. Today’s a normal summer day, so here in the islands we are breathing clean air from the Pacific. However, when e look at our large neighbor to the east it’s a very different story.
https://static.tenki.jp/static-images/pm25/21/japan-detail/large.jpg
I know that Europe does a fair amount of trash burning. I expect that that may be a “solution” to part of our problem. But I expect it produces its own problems. It may even produce a bit of electricity as well.
All firm plastic trash can be used in building. This is by no means to be taken too seriously. We all know better than this. But let’s be strategic. Earthships are getting popular. Another corporate piece of cr.p. For that reason, it might be getting easier to promote plastic containers as material extenders in new earthshippy developments. My approach wouldn’t involve open land outside of cities, and would probably not involve this sterile and limited use of beverage containers. But we can choose to begin somewhere.
http://off-grid.info/blog/tutorial-earthships-101/
Silly….
It’s cheaper and less burdensome to use the trash in buildings. What the earthship people are doing is silly (or dangerous) for other reasons.
Why not just move to Mars? and start over?
Unfortunately, that doesn’t extend industrial civilization on earth.
FE, Mars great just a few issues air, food, water, energy. Elon’s solution, I get you there the rest is up to you.
Not only a bit. It is not allowed to burn waste without using the heat or generating electricity. Usually both is done (Wärme-Kraft-Kopplung, Fernwärme)
There’s no rebuttal to his argument, so they just say thanks for your time and end it there. Such a disconnect between those working on TV like that anchor making millions and the people watching looking for a decent paying job. What we end up with no real assessment at the federal government level or by those working the TV stations of how America is really doing. It’s just put on a happy smile and move on (if you have the money to do so).
is it the word “argument”?
nope
TV-news anchor? You meant that guy usually with degree, curiosity, and only bit of a self suppressed bias. I’m afraid this “golden era” existed for only few years half a century go with handful of hold outs inside an oasis throughout till the 1970-80s. However, in general this scene has changed to 24/7 full scale B-C grade actors, propagandists, decades ago..
I agree there was never any TV “news”. Even Mark Twain made similar comments regarding the content of newspapers. Something to the effect that if you do not read the paper you are uninformed. If you read the newspaper you are misinformed. This has been going on for a long time. If you want to learn about current or historical events you must do your own research. Even then, be wary of your sources. TV today is 100% pure propaganda all the time.
I suspect MSNBC allowed that to air because Trump is POTUS and most viewers will think that is where the blame lies…
unlikely that would have been on in the Obama years…
still…
that’s a shocking dose of Reality for anyone watching and paying attention and not too deep into denial where perhaps they might actually consider his message…
Nailed it.
Btw. had to chuckle hard from the intro, as MSNBC is funded and controlled by whom?
What’s also funny-creepy is that Russia, arguably a state of mixed capitalist oligarch – national pedigree is keeping Hedges, soft marxist at their RT channel; well to be fair they also have got Stacy and Keiser and others to the other end of the spectrum..
His soundbites about Chemnitz (EGermany) or Orban (Hungary) were just straight from the commie playbook and official msm propaganda all over Europe. When in fact dozens of thousand normal, usually older gen people “uprised” there and calmly demonstrated against migrant influx, while few radicals duked it out on the frontline as always. Which paints Hedges’s “professionalism and non-bias” in peculiar light.
“His soundbites about Chemnitz (EGermany) or Orban (Hungary) were just straight from the commie playbook and official msm propaganda all over Europe.”
Well at least we know which playbook you’re following. BTW, I agree calling the protests far-right is way off, but ultimately the whole migrant issue is just another useless cause to rally behind. Any person with 1/4th of a brain can understand it is nowhere near as serious as the “sort-of-right-but-sort-of-progressive-also” wing claim it is. The next instar in the metamorphic collapse will deal with migrants in Europe soundly enough.
At the instance ~(re?)known critic of the imperial establishment is suddenly blinking and re-broadcasting the most outrages official propaganda word for word, when it suits him (biases), aka multiculturalism good, I just call it noteworthy and interesting.. btw. that’s also to some extent official RU gov position, since they are multi ethnic / culture state but they don’t walk about it as stupidly as the German govs..
I get it, we are not saints or 100% solid pure philosophers, so everybody does that to a degree, but in that instance Mr. Hedges outed himself rather spectacularly and cheaply..
I’ve never followed him for evident biases and limited scope of inquiries, but I concede he might just serve as opening/intro window for some people looking for answers.
Thanks for this. The anchor’s face at the end, coupled with Hedges’ dead-eyed stare, was fracking beautiful. So much meaning, captured within the span of a second or two.
Well, this all sounds very green and sustainable, lol. Drivers of Tesla cars, take note:
“A global boom in demand for lithium has set off a scramble in Chile, which is home to nearly 50 percent of the world’s reserves of the metal…
“Local indigenous groups, SQM and Albemarle, regional copper miners and newcomers to the region are all competing for water.
““What we have is a water war in the salt pan. There’s a huge crush on water and nowhere to get it from,” said Alonso Barros, an attorney with the Atacama Desert Foundation, an NGO that works with indigenous groups in the region.
“The cumulative impact of water rights granted over the years to copper and lithium miners in the world’s most arid desert has never been considered, according to Ingrid Garces, a professor who studies salt flats at Chile’s University of Antofagasta.
““We’re managing lithium as though it were a type of hard-rock mining,” said Garces. “But we’re mining water, not rock. This is a watershed.””
https://www.reuters.com/article/us-chile-lithium-water/in-chilean-desert-global-thirst-for-lithium-is-fueling-a-water-war-idUSKCN1LE16T
Lithium is the stopper in the system.
Lets see if they can get around it.
Greed or survival–
Take your pick.
Inside the ant colony
Ants have one of the most complex social organizations in the animal kingdom; they live in structured colonies that contain different types of members who perform specific roles. Sound familiar? Deborah M. Gordon explains the way these incredible creatures mate, communicate and source food, shedding light on how their actions can mimic and inform our own behavior.
https://youtu.be/vG-QZOTc5_Q
this video show that ants are better communists than humans
Ants aren’t Communists at all. Ant colonies are very hierarchical.
Communists are very good at cutting layers from hierarchy.
China doing some Trump research:
https://www.smh.com.au/world/asia/china-studies-white-trash-to-understand-trump-20180827-p5004u.html
Shall we check oil today?
OIL (BRENT) PRICE COMMODITY
78.26 USD +0.81 (1.05%)
So there you go comrades—-
wow!
it MIGHT just get back over $80…
this is so exciting!
“”It’s as if the financial crisis never happened and the lessons from it are ancient history,” says Jonathan Rochford, portfolio manager at credit manager Narrow Road Capital.
“Amid fervent demand from lenders… below investment grade loans have been stripped of their basic investor protections, like covenants, in recent years. Investors have piled into these risky but lucrative high-yield loans to obtain higher returns… cov-lite loans now make up around 80 per cent of new issuance in the booming leveraged loan market…
“Taxi ride service Uber tapped the market in March, French telecoms giant Altice has built an eye-watering mountain of debt from junk bonds and loans, while Blackstone will reportedly market the US$8bn in risky loans it needs to fund its acquisition of a 55 per cent stake in Reuters’s financial and risk division next week.
“American Airlines, Four Seasons and Dell are other household brands to rely on leveraged loans. Doumar is far from being alone in fearing the explosive growth of this market. The credit ratings agencies, accused of being asleep at the wheel in the run-up to the crisis, are now among the first to sound the alarm.”
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12118209
Harry, thanks for your efforts to keep us informed. I don’t have much to say about the financial news, but I appreciate you posting these summaries and links because it gives me a “Headline News” view of stories I would probably be missing otherwise.
You are very welcome, Tim! I worry that they get a bit monotonous but at the same time I do feel that we are getting quite close to GFC 2.0 and hate the thought of missing out on some facet of the unfolding story.
Don’t worry – if GFC 2.0 ever arrives, you might miss some of it, but it won’t miss any of you.
A comforting thought, aaaa. 😀
I suppose that for many of those emerging market nations with rapidly depreciating currencies, GFC 2.0 has in effect already arrived. If the Fed does push on with two further interest rate hikes this year, the crisis will worsen and spread.
It’s every man for themselves. When it gets really bad, the US and Russia probably have enough natural resources to batten down the hatches and stave off collapse. Everyone else is going down.
Yep, isn’t it interesting, as each individual case of significant volatility/depth of crisis (Turkey, Venezuela, Argentina, ..) would just few years ago fuel the frenzy and panic on msm for 24hrs. Yet nowadays while still reported but sort of as old news of supposedly little or delayed impact..
The trillion/s level massage after 2008 surely worked some wonders, now is the magic act waning, slowly, yet steadily..
Leveraged loans create a worrisome problem.
This bubble makes subprime look like a tiny bubble … in the wine…
https://youtu.be/mlCiDEXuxxA
Good point!
“After just a brief respite, the turmoil in emerging market currencies has resumed. What began in Argentina and Turkey has snowballed into broader collapse in confidence that has policy makers in Indonesia, India, South Africa, and Brazil scrambling to protect their economies.
“Left unchecked, more nations could get wrapped up in the declines, threatening their country’s and the world’s economic growth.
“The Turkish lira, which has been relentlessly setting new all-time lows, proved to be the “canary in the coal mine” for troubles across emerging markets, according to strategists at BNY Mellon. Traders worry about countries with large current account deficits and a large stock of dollar-denominated debt in a world with rising interest rates and a stronger dollar, according to the bank.”
https://qz.com/1375648/the-crisis-in-emerging-market-currencies-isnt-going-away/
“One of the bond market’s biggest investors has seen its flagship funds battered by the turmoil in emerging markets unleashed by Argentina’s spiralling financial crisis. Losses at Franklin Templeton, the US investment group, have underlined how the crisis has wrongfooted many of the market’s best-known names…”
https://www.ft.com/content/72cfe34c-aecc-11e8-99ca-68cf89602132
“Turkey raised natural gas prices on Saturday by as much as 14% , two sources said, while the energy regulator announced a similar increase in electricity costs as a deepening currency crisis stokes inflation. The lira has fallen 42% against the dollar this year…”
https://www.livemint.com/Politics/cMpw9Dos0CvFdZ6e193BzH/Turkey-hikes-gas-power-prices-by-14-as-lira-crisis-deepens.html
“Indonesia’s currency continued its weakening trend on Monday, hitting its lowest against the dollar in two decades and prompting the country’s central bank to intervene in the market. The Indonesian rupiah weakened 0.4 per cent to 14,777 per dollar, its lowest since the Asian financial crisis in 1998, according to Reuters data.”
https://www.ft.com/content/23361c1e-af28-11e8-8d14-6f049d06439c
IMF has just told Argentina to stop using its foreign reserves to defend the peso. IMF the central bank of central banks is losing control.
The Argentinean government declared that the nation is in crisis and that prices will rise…but there will be food for the poor.
Why food for the poor? Does that strengthen the nation of Argentina? I think not.
Otherwise they start eating the rich?
Which nation will be the first to show the world what a good 50% die off can do for the economy of a nation?
Starving, %% die off first to show?
The agricultural surplus still rules the day (productivity-hi tech + subsidy schemes), it can be knocked down only when change in national subsidy program of these producing/rich states takes place. And this change won’t come easily within EU, US, Russia (the biggest food exporters)..
Hence it will take a while for the proper version of GFC v2-3-4? to trigger it, and then there are the overflowing seaport warehouses full of powder milk and other stuff, which would be another buffer and delay..
Again no rush and when it comes, count weeks and months before the worst.
Once that stage of the collapse triage process is in full swing, there will be no takers for the drama of a die-off. The free world will be too busy with our own trials and tribulations.
A low-intensity civil war could be used as a means to pull the curtains from the rest of the world. If Syria/Venezuela has taught us anything is that war can masquerade a lot of the triage by cutting the credit line and supporting “rebels”/opposition to destabilize the region in the near term for a more brutal selection process in the long term.
“A communication disruption could mean only one thing: Invasion”
– Governor Sio Bibble
“Manufacturing activity in major Asian economies took a hit from weak export orders in August, a sign firms are starting to feel the pinch from intensifying trade friction between the United States and China that many fear could derail global growth. Surveys of purchasing managers released on Monday showed persistent pressure on key exporting destinations China, Japan and South Korea.”
http://www.euronews.com/2018/09/03/asian-factories-feel-pinch-from-escalating-trade-conflict
“The 32 branches of the Bank of Japan, the country’s central bank, have embarked on an emergency survey of companies in each district to grasp the impact of the intensifying trade war on exports and supply chains. The memories of the 2008 financial crisis remain vivid among Japan’s central bankers. Japanese companies are especially vulnerable to a slump in trade, with many shipping materials and industrial equipment throughout the world.”
https://asia.nikkei.com/Economy/Trade-War/Bank-of-Japan-braces-for-trade-war-s-collateral-damage
“Trade across the G20 nations fell in the second quarter of 2018 for the first time since mid-2016.”
https://www.livemint.com/Politics/2VBzSY9rTfevf66u35jGmI/How-policy-uncertainty-harms-global-trade.html
“The financial results of Chinese developers this earnings season have been roundly impressive, but there is one metric that should give investors pause: Firms’ ability to service their debt is the weakest in three years. Cash-to-short-term debt levels at more than 80 publicly traded real estate companies tracked by Bloomberg were 133 per cent on average in the first half, the worst since the first six months of 2015.”
https://www.businesstimes.com.sg/real-estate/china-developers-ability-to-service-debt-weakest-in-3-years
“Growth in output at Chinese factories slumped last month to its lowest level in more than a year, according to data published Monday. The latest evidence of weakness in the world’s second largest economy comes in the midst of China’s trade war with the United States. [China] it has begun to slow down this year, and signs of further weakness are spreading.”
https://money.cnn.com/2018/09/03/news/economy/china-manufacturing-pmi/index.html
“The Chinese stock market is in the crosshairs of concern over the clash on trade between Beijing and Washington, as well as signs the Chinese consumer is slowing. The CSI 300 index, a gauge of the biggest companies on the Shanghai and Shenzhen exchanges, dropped as much as 1.3 per cent and is now down 18 per cent this year.”
https://www.ft.com/content/2235bc30-af18-11e8-99ca-68cf89602132
50.2 reading is barely over “flat.” Terrible for a supposedly rapidly growing economy.
Reading the article, Beijing is trying to cap home prices. My input: This adds to the financial pressure on developers, especially if energy costs are rising.
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I just discovered the infatuation that many urban planners or urban enthusiasts have for light rail.
I’ve been on a train line that partially uses light rail–the light rail is used in areas with light traffic and or well-placed traffic lights . Trolleys are useless with snow on the ground. Trollies are a relic from an era where cities were smaller , slower paced, and many people could walk to work. I don’t understand why some people would think light rail trolleys would work for today’s more densely populated cities that need to move goods, services, and people much quicker than in the past.
Why do some people think we can move towards something less efficient, without negative social repercussions–is it because they’ think we’re so wealthy and comfortable that we can afford some inconvenience?
I came across a driver of a soft drink company’s delivery trick who was , according to the words on the soft drink company’s delivery truck, driving an electric car. Turned out the truck was just a hybrid and was running on good ol’ FFs.
I was fooled there for a second. They tucked in the exhaust on that hybrid truck real good.
Refer to “trolleys” working just fine for century(ies) in winter affected countries such as Finland, Russia etc. Firstly, in heavy snowfall conditions, there is a dedicated maintenance/plow tram cleaning the route, secondly modern trams/light rail have got several powerful AC motors per vehicle set, therefore the torque is just brutal at low speeds, usually no prob cleaning any new snow from the rail track..
Above and beyond that, obviously, difficult weather calamities strike from time to time, so what, that’s life..
Until the track is cleared of snow and ice, the trolleys are usually not running. I know from first hand experience. Trolleys were in bad shape before they were phased out. Price controls, in the United States, prevented them from raising enough capital to keep the trolleys in good condition.
https://www.vox.com/2015/5/7/8562007/streetcar-history-demisetory-demise&usg=AOvVaw1tFq3fto1v2z8z48HUiqxM
A revival in trolley is coming from the usual suspect of elites who look down on buses and have the luxury of advocating for an aesthetically pleasing ride over one that is affordable, and reliable.
http://blogs.creighton.edu/iei/2017/11/07/urban-policy-research-group-public-transportation/
“The streetcar is not meant to be a more efficient or effective form of public transportation. Rather, it makes Omaha’s business district more attractive for a certain segment of the population. ”
I wonder what that certain segment of the population is that would appreciate a less efficient form of public transportation….
https://www.chronicle.com//img/photos/biz/photo_76570_landscape_650x433.jpg
I bet it would be these people.
They’re clearly not in a rush and can afford to take things a bit slower.
“7 million annual passengers”
https://en.wikipedia.org/wiki/Trolleybuses_in_San_Francisco
Doesn’t San Francisco also have one of the highest percentages of inhabitants that are wealthy in the world?
Surely, all those high-income earners can afford to subsidize an antique form of transportation.
On the other hand, maybe San Francisco is not as enlightened as I thought and the streetcars are being paid for with all those taxes undocumented workers supposedly pay.
Lived in Boston Metro area for two decades, Medford Mass to be exact. Did not need or own a car the whole time and used a bike as a supplement means to travel.
The trolley, train system works just fine in the winter. As far as snow and ice, that could be said for other means of getting about…even walking.
Needless to say, Boston has a traffic problem with the cars and trucks on the road.
The Big Dig, comically called the Big Pig project because
The
Central Artery/Tunnel Project
Logo of the Big Dig
Metropolitan Highway System
Overview
Other name(s)
The Big Dig
Location
Boston
Coordinates
42.36197°N 71.05562°W
Route
I‑90 / I‑93
Operation
Work begun
1982
Constructed
1991–2007[1]
Opened
2002
Traffic
Automotive
Boston’s highway system before and after the Central Artery/Tunnel Project
The Big Dig was the most expensive highway project in the US, and was plagued by cost overruns, delays, leaks, design flaws, charges of poor execution and use of substandard materials, criminal arrests,[2][3] and one death.[4] The project was originally scheduled to be completed in 1998[5] at an estimated cost of $2.8 billion (in 1982 dollars, US$6.0 billion adjusted for inflation as of 2006).[6] However, the project was completed in December 2007 at a cost of over $14.6 billion ($8.08 billion in 1982 dollars, meaning a cost overrun of about 190%)[6] as of 2006.[7] The Boston Globe estimated that the project will ultimately cost $22 billion, including interest, and that it would not be paid off until 2038.[8] As a result of a death, leaks, and other design flaws, Bechtel and Parsons Brinckerhoff—the consortium that oversaw the project—agreed to pay $407 million in restitution and several smaller companies agreed to pay a combined sum of approximately $51 million.[
Not surprising other cities wanted to do a similar project like Seattle
One of the first things to go is government funding for big projects like mass transit. How long would the Boston system last without government funding?
He thinks the system is the same as it was when he lived in Boston for those two decades.
The transportation system has gotten worse.
They did not have any plows to clear the trolley rail parts for one (2015) winter and we offering to pay people to physically shovel off the snow on the track.
The fare increases haven’t been enough to cover running operations.
Even with state and federal subsidies, the MBTA in debt.
This is happening in a “wealthy” state. I can’t imagine in what state transportation systems in poorer states in the United States.
Think too about the bullet trains. In most parts of the world, they cannot find enough riders to justify the high cost, even in good times. If times get bad, they will be even worse off.
Without subsidies how much does private auto ownership costs?
What hasn’t been acknowledged is that the automobile is supported by a government subsidy that dwarfs anything provided to mass transit. How big is the subsidy? By my (admittedly extremely crude) calculations, it could total nearly $100 billion per year *.
Americans can drive so much because there is an extremely extensive system of (largely free) roads for us to use. Despite some private-sector efforts, maintaining and building the nation’s roads remains almost exclusively the preserve of government. Data from the Census Bureau on construction spending shows that this year, public spending on highways and streets is running at an annual rate of about $75 billion. *
But that’s not all. Tax credits and breaks for particular types of economic activity constitute a public subsidy of that activity. Taxpayers effectively subsidize home ownership through the mortgage interest deduction. They subsidize the use of mass transit through programs that permit people to purchase mass-transit tickets with pretax money. And taxpayers subsidize the purchase and operation of gas-powered automobiles in at least two big ways.
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First, just as they can with other types of equipment, businesses and self-employed individuals can write down the cost of cars and trucks they own against their taxable income. This decade, the relevant portion of the tax code dealing with the issue, Section 179, was changed to provide extra taxpayer support for the purchase of very large cars. In 2003, as part of an effort to stimulate business investment, the law was changed to significantly increase the amount of deductions businesses could take on equipment, including vehicles that weighed more than 3 tons. (In the past, that category would have been limited to commercial vehicles, such as pickup trucks and moving vans. But in SUV-crazy America, that also means Hummers and Escalades.) So if a Realtor bought a $75,000 Hummer and used it mostly for business, she could take a $25,000 deduction from her taxable income in the first year of ownership. The stimulus package passed earlier this year included provisions that boosted the amount of total deductions businesses could take on equipment. But taxpayers aren’t just subsidizing the purchase of gas-guzzlers by businesses. Thanks to tax credits for hybrids, they’re also subsidizing the purchase of gas-sippers by individuals.
Self-employed individuals and businesses can also deduct the costs of operating a car for business purposes from their taxable income. In light of higher gas prices, the Internal Revenue Service this year boosted the mileage allowance to 58.5 cents per mile. A self-employed salesperson who drives 5,000 miles a year and is in the 33 percent tax bracket can thus save about $1,000 in tax payments. (The language of the allowance suggests that it applies only to cars—not to bicycles, scooters, or motorcycles.)
There are doubtless many other examples of taxpayers subsidizing the automobile and its related industries
http://www.slate.com/articles/business/moneybox/2008/07/highways_paved_with_gold.html
I remember reading while in Boston the subway would be more economical to run if it was available for no charge fee ridership! The cost of hiring and collecting fares was that costly!
Also the yearly cost of private car ownership continues to escalate upwards approaching ,$9,000 annual!
But that’s far from the true cost to own a car. For vehicles driven 15,000 miles a year, average car ownership costs were $8,469 a year, or about $706 a month, in 2017, according to AAA.Jul 25, 2018
The Big Dig central artery project had minimal time savings for drivers
There’s a funny thing about road systems – they generate their own traffic, thanks to a phenomenon called. The idea wasn’t well-understood when the interstate highway system got started, but by the time we get around to the Big Dig, traffic engineers had a pretty good idea what would happen.
So the project didn’t really reduce overall traffic
Remember, our problem is low demand! We need business owners to by buying Hummers and running up a lot of miles on them.
Where would we be without the subsidies? The subsidies are proportionately a whole lot more on wind and solar.
“I remember reading while in Boston the subway would be more economical to run if it was available for no charge fee ridership! The cost of hiring and collecting fares was that costly!”
That was most likely due to fare evasion, which was surprisingly easy to do before they introduced computerized fare collectors.
The roads are not free, They are paid for. Places where the roads aren’t paid for have lots of potholes.
I’m not sure what your point is. Any alternative to the current system would require people to live much closer to cities and there is already a problem with providing adequate housing at an affordable cost to most workers. As messed up as the housing market is, it is preferable for many people to live in an area outside an urban hub and commute to work.
I suppose it’s be against cars (gas guzzlers and gas sippers) when you live in a nice part of the city where you receive regular transportation, and are waited on hand and foot b and don’t have to pay most of your income to share an apartment with 15 other people…which is the alternative to suburban sprawl.
By giving poor people money you boost demand. Not all demand strategies are equal. We would increase demand too by throwing oil in the sea and hiring people to clean it up. There are better ideas.
Sad to say one death is good for a project of that size. I am willing to bet hundreds were ruined for life.
As a former resident, auto’s are a liability for most of the city.
Its all about SF and NYC.
What do you mean by that? These cities may be anti-car
for practical and political/aesthetic reasons (green cities are more attractive to productive and wealthy people)
still need to be pro-truck.
so the imported goods they consume can continue to flow into these cities.
Looking over long history, farm areas have tended to see population growth; cities have tended to have problems with depopulation. I expect that this will also be true after collapse. The big issue with cities was disease transmission. I am sure that food and water would be issues, even apart from the “clean water” issue.
And now because most people in the cities have cars … and most will have at least half a tank of petrol when collapse hits…
The transition from city to rural areas (which will happen when people realize the shops are not going to be re-stocked with food) will be much more rapid.
OK kids – let’s all pile into the car — we’re going to crazy Uncle Jan’s farm….
Good point….these wealthy, enlightened, green cities are anti car…..but very much pro truck!
The real laugher is NYC Cali,in to be so green. They couldn’t even function without exporting their waste….using FF of course.
This works well…As a passenger not sure if it works for the rate payer.
http://calgary.foundlocally.com/transportation/trans-transit.htm
Must admit that I am unsure what Trolleys are. English is not my first….If it is a bus then they just need snow plows.
Looks like Russia and Ukraine are on the verge of a full blown war.
Ukraine is a near failed state with soviet era nuclear plants on the verge of a war with Russia. Just the kind of cocktail I’m looking for before I go to bed.
Not good at all!
Yoshua, what makes you say this? I am not arguing I am just not up to date on the situation.
Ukraine has declared that they will reintegrate Donbas into Ukraine by military force.
The “rebel” leader of Donetsk was assassinated last weak.
Lavrov said the Normandy format is dead.
Russia has been moving heavy arms to the Ukrainian border.
Russian state media has made statements that they are on the verge of a massive war in Donbas.
A this moment it’s only words and threats from the Russian side…
All over Russian media now:US and Canadian servicemen arrive in Ukraine’s Donbas to plan and carry out Ukraine’s offensive operation- IFX
That’s one of the very last and most dangerous (for everybody) cards that can be played against Russia today. And that’s why the worry was with that -her- appointed satanic witch it would likely get to it in just few weeks/months after the inauguration, Donnie-boy perhaps somewhat resisted for a bit longer and or set aside completely..
Hopefully it won’t come to it, I’m not watching the developments closely/daily, albeit the tensions are rising there for sure.. The Ukraine state is so hollowed out and impoverished that it might be surprisingly quick operation after-all (for most of the concerned area), the volatile actors are the *few hard core nazis and their Western instructors.. (possible revenge attacks on public infrastructure). In essence it’s just another rehashed support for local “jihad” operation from the imperial manual.. The average public although massaged in msm heavily, won’t exactly welcome Russians taking over at one hand, but won’t be eager building barricades in the streets *everywhere either.
Should Russians to be provoked to take over even fraction of Ukraine, the immediate/mid term economic burden costs for them would be immense, the int political side of things is already damaged enough, sinking a bit deeper afterwards.
Yes, it’s an impossible situation for Russia. They don’t have the energy/money to support or control Ukraine. That is why they lost control of Ukraine in the first place.
Ukraine is better of living on Western aid. Russia is better of when Ukraine lives on Western aid.
The problem is that Western influence brings Nato to the Russian border…which is totally unacceptable and dangerous for Russia.
Well…collapse is not supposed to be easy.
They sort of have it for a while on distant orbit during the Yanukovich years (in comparison to Belarus which is in closer trade union). But he was color couped down by the West, and besides perhaps not exactly the best guy the rule over such nest either..
Seeing that “Ukrainian Soviet Socialist Republic” was created by the Soviet Union, that would be interesting.
Crimea has been part of Russia for as long as the US has been a country, and 90% of the population speaks Russian.
I guess we could give the country to the 10%– of course we need to give back the US to its original inhabitants.
It would be only fair on everyones part.
The Russian State originated in the Ukraine:
https://en.wikipedia.org/wiki/Rurik_dynasty
The Scythians originated from todays Ukraine. They once controlled the Soviet Union space and the silk road.
They just had this one small problem: They could never unite and were in constant war with each other.
Ukraine will be fine.
Tim’s Law states that no country with it’s own national edition of VOGUE can be a total basket case.
https://thestylewatcher.files.wordpress.com/2014/03/vogue-ukraine-april-2014-cover.jpg
They are just close to the edge of collapse…maybe forever.
I’m glad to see that the $20B in IMF aid this year is used to literature to educate the population.
LOL! There are a few elite who are prospering.
this is why usa is arming Ukraine army to fight Russia
https://www.theguardian.com/world/2018/aug/31/ukraine-kurt-volker-us-arms-supplies
I’m not trying to be holier than thou, but I never click on the Guardian as a matter of principle.
Whatever chance Ukraine had of hanging onto the eastern territories evaporated some years ago. From where I sit, it looks like the US is trying to set up Ukraine as a contemporary South Vietnam or Afghanistan to allow it to harass it’s Russian adversaries by proxy. It’s a Great Game!
Russia may be “a gas station masquerading as a country”, to quote the late John McCain, but the Ukraine is a failed state that can’t even pay its gas bills. Besides, it’s too late in the year to try to reenact Operation Barbarossa.
There seems to be a “new guy” appearing on the “collapse circuit” doing lectures, interviews, bestsellers, book by Dr Markus Krall “Der Draghi Crash”
Now, this is more or less the run of the mill economic and in particular austrian school critique of the past ~50yrs at FED and ~20yrs at ECB, i.e. that old tale of market wisdom good vs zero rate bankster policy bad.. Only sub token mention of O/FW issues, focus on the gutted middle class purchasing-saving ability at best.
However, and why I bring him up is that he offers something a bit different to the table in contrast to most of his colleagues (FED / US collapse leading). It’s mostly ECB / DE / European oriented critique, and he does sequencing and timing.
Now, he predicts that by ~2020 the EUR structure finally blows up, it drives the world into the biggest recession so far. In terms of sequencing, refer to his 37min slides on the presentation, policy options cascading into deflationary, inflationary shock options. The prediction includes of some countries in response taking the authoritarian – socialist approach etc.
Overall, in case we are into series of several GFCs throughout next decade or two his analysis might be somewhat valuable, however if we are about insta – single event collapse trajectory it’s relatively useless.
Auf deutsche!
Gail,
Some interesting bit of history here on something called the oil depletion allowance a topic that I don’t think has ever been brought up on http://www.ourfiniteworld.com
I was researching the oil depletion allowance on-line and encountered this information.
It would appear the elimination of the oil depletion allowance may have had unintended consequences.
DISCUSSION:
>2. No new refinery has been built in the US in 17 years.
It’s worse than that. Between 1977 and 2002, the number of refineries operating
in the US fell from 282 to 153. There are 129 refineries sitting idle. They can
be purchased for 20% of the cost of building new, so why would anyone want to
build a new one?
To understand why that’s so, you have to understand the Oil Depletion Allowance
and how it influenced oil company accounting. Big oil companies have four major
business units — Exploration and Production, called Upstream, and Refining,
Transportation and Marketing, called collectively Downstream. (I’m ignoring
Chemicals here.) The Oil Depletion Allowance used to allow them to deduct 15% of
upstream *gross profit* from corporate income tax, which is based on *net
profit*. The four divisions ‘sell’ product to each other for intracompany prices
that are easily manipulated to move profit from one division to another. The Oil
Depletion Allowance gave them a strong incentive to move as much as possible
upstream. To see this, look at any oil company’s P&L. For instance, Exxon Mobil
in the first quarter of 2004 reported (in millions)::
US upstream *net* income $ 1,154 75%
US downsteam *net* income 392 25% (up from 174 same quarter 2003)
Total US income 1,546
Prices are artifically set so that refineries and transportation lose money,
retail operations make a little, most profit is in production and exploration.
On $1,154 *net* profit, the *gross* profit is at least double. Thus corporate
income tax would be (1546 * .35) – (2500 * .15) = 166 or 11%.
If refineries lose money, why build new ones? Better to shut them down (129
above) or sell them to Valero for 20% of new (they’re fully depreciated).
In 1975, the Depletion Allowance was limited to small producers who do not
operate a refinery (I used to be one). That was intended to stop the ‘tax break
for the rich.’ In its place, Big Oil got the ‘intangible drilling cost
deduction’, which produced an even bigger deduction by letting them deduct 70%
of the cost of drilling a well in the first year, and the rest over five years.
They also got the ‘enhanced oil recovery credit’, which pays them for operating
stripper wells (marginal, almost played out) and for pumping out-of-spec oil
(high sulphur, high viscosity). Something for everyone — new wells and old.
Profits were still moved upstream; refineries still lose money.
Worth considering. Of course, the controversy over the oil depletion allowance had nothing to do with the assassination of JFK, unless he was the first political leader ever murdered over a provision in the tax laws!
http://educationforum.ipbhost.com/topic/3704-the-oil-depletion-allowance/
John Simkin has some important historical info that follows the above on the history of the 1930’s and Texas oilmen?
I am not sure that there is a problem. Smaller, less efficient refineries close; other existing refineries are made larger in size. It is easier to do this than go through the permitting process for adding entirely separate new refining space.
US refineries are today running very close to capacity. I think that that is partly because we have cheap natural gas prices, so we can “crack” and refine heavy oil cheaply. Also, our own production has been rising.
With North Sea production declining, the Europe has more refineries than it needs. It makes sense to send oil to Europe to refine, rather than build new refineries.
If we look around the world, a lot of refining capacity has been taken off line, or is very level. China has taken a lot of its smaller, less efficient refinery space off line. According to BP, China’s refining capacity has stayed close to level from 2014 to 2017. It has closed “teapot refineries,” in the process. Australia has reduced its refining capacity, presumably because its oil production is down. Saudi Arabia’s capacity is reported to be level from 2014. Europe’s refining capacity peaked way back in 2006.
He is from the right wing. The market will do everything right! He thinks, if we are doing things like in the beginning of the 80ties, everything will be right.
Clearly, the answer is
https://img00.deviantart.net/7e82/i/2005/118/0/4/che_guevara_by_joenixon.jpg
Redistribution of wealth from the rich
I’m sorry,
I mean white men, to socially marginalized groups
and Green Groupies
will fix all our problems.
Is that better?
Much better!
Taken with a 2/4 Roloflex in Havana.
There cannot be another GFC/recession … without BAU collapsing…
Because all the tools that we would use to escape a recession such as lower interest rates and stimulus packages…. will have already been used … trying to prevent the next recession/GFC.
Therefore it will be a single event that brings down BAU.
When growth stops … the lights will go off soon after
If I stick Dr. in front of my moniker…. would that convince you that I am correct?
depends what you are a Dr of
Love…
self-love is a sin
Giver of Love….
they haven’t tried UBI or helicoptor money yet as a last resort. It may prolong things a bit longer. Fingers crossed.
Yep, the hyper/inflationary scenario is on the video slides just in the middle of the three columns – policy options to unraveling banking system, around ~37-38min mark..
If I recall it correctly, he states this particular one could be (hoped for) performed by shifting the zombie loans under different box, special set aside fund, left for gradually inflationary self wipe out, however to realize this overall maneuver you need strong state entity to oversight it, i.e. single finmin guy and budget for the union, which currently there is not, however some eurofederalist factions are pressing very hard for it as seen in manic rush for some reason or what, lolz..
He did not understand that money created by dept is a Ponzi.
We have only ONE dept-interation until the game is over, because we live in a finite world with indepteness-possobilitiesl imited by diminishing energy flows for the dissipative struktures of BAU.
Good point!
iteration
My last doctor said to me “I’m a good doctor, ask any of my patients.”
I said, “Well, we can’t dig them up just for that.”
🙂
Is that from the transcript of Dr. Shipman’s trial?
There will be another recession.
There will be another series of bailouts.
The bailouts won’t work.
Collapse is what will happen after the bailouts don’t work.
Why can’t the economy run on green energy??
Why can’t low quality petroleum and coal power our economy?”
Well, that’s yours analysis and say one group’s thought on the subject.
On the other hand, we can’t dismiss another possibility, where some sequencing of events can still take place. From now I’d coin the term as the Krall-factor, simply as the shorthand reference to the theory of EUR grouping going down first and the follow up consequences..
As I tried point out in the brief hashed out summary, his ideas seem from multidisciplinary O/FW viewpoint comparatively as shallow, however the point he makes of EUR being ripe for self implosion in swift order is not zero. Just for the one thing, the institutions and the players (several national players under on disintegrating umbrella) are perhaps way messier and less coherent vs. US/FED or China instabilities, swings of 1-2% interest rates deemed fatal to the weaker system. A deep recession in which DM is reinstalled, Southern Europe is thrown under the bus along South America, and other EMs to provide breathing space for US-China is not out of the picture.
He seems to be preoccupied (more in other videos and the book) by that ~ EUR 2-3T of credit which are tied into the zombie loans within the Eurolands. But since we are living inside a ~300T (or who knows) world now, that’s almost pennies.. if the institutions are bold enough again to paper it over.. that’s good point for your side, that it will be can kicked again.
https://www.nytimes.com/2018/09/01/opinion/the-next-financial-crisis-lurks-underground.html
As the author puts it, the shale bubble is reminiscent of the dot-com bubble of the 1990s. The yield starved life insurance companies are investing in this stuff. This underlies pensions as well as life insurance policies, I expect.
saarneki it would be wonderful if the ‘puppetmasters’ exist and it is not paranoia thanks to our deluded conditioning and wishful thinking praying for a miracle/ but knowing when the SHTF is an approximation for all of us on OUR FINITE WORLD . I personally think 5 to 10 years but i have been wrong before . Regardless if their is a PLan B how could it work is world communism the plan with a smaller population perhaps everybody on this planet has been secretly given a virus that will take effect at the nominated time, or will the ponzi system grow indefiniteley. No i believe the most logical outcome is the house of cards will fall
No, communism guarantees dystopia, suffering and horrors. No, it must be rejected at every stage of decline.
Then I would rather advocate a rather generous UBI with its takers signing off on lesser rights. Such as the right to vote and bear children.
One child policy as China successfully demonstrated as a workable population growth control method.
I’m for mega projects such as laying down high speed rail everywhere to curb the kerosene burning and instead propel the people transportation by electricity from more coal and natgas burning. Such as the Chinese and Japanese successfully demonstrates with their competent train operations.
sounds like utopia getting a ubi thats whats missing in our society equality if we can get equality regardless of race gender or age then there would be no fear of becoming homeless or hungry unfortunateley the governments of the world have missed their opportunity as all the cheap easy oil is nearly gone and a universal basic income at this stage of the game can never happen.There may only be 200 billion or less easy barrels left according to oil geologists that is why the financial system is currently in an induced coma after dying in 2008. According to noted Banking insider Jacob Rothschild the financial system is now in ‘uncharted waters’
The governments are the ones resisting UBI because it undermines their function.
As in the case of Sweden, they resort to building potemkin facades for the workers in the private sector.
Unfurtunately, UBI doesn’t really create goods and services, the way energy does.
Also, we have seen that approaches that just look like handouts aren’t very efficient. I expect that is part of the reason the Soviet Union collapsed. There needs to be some motivation to work.
That’s a valid argument, I think it played a lesser role in Russia-USSR proper, however it was almost the *deciding factor within their CEE satellites, where the “withdrawal syndrome” for contemporary consumer goods was real, as they were always the (semi-) core industrialized countries, accustomed to these trinkets and lifestyle for generations. In striking contrast Russia as USSR was from early 1920s on sort of increasingly command style industrialization planned effort with very low priority (initially for decades) for consumer goods, especially those on the frivolous side of the spectrum..
*as we now know tightly focused weakness attacked-exploited by the West in propaganda and other venues..
In the Soviet Union everybody had a ‘job’ it was the ultimate Potemkin facade for the state and its inhabitants.
UBI is basic housing, junk food and amusements for the nonproductive instead of requiring a huge government providing overwatch and ‘jobs’ for the unemployable.
Big difference.
The USSR is an excellent case study for Stein’s Law.
Two IFS
1) If the human person is sovereign, and not put on earth to make some system work, and
2) If the human person deserves the dignity to be regarded as inherently noble, high minded and self directing,
Then coercing, forcing, manipulating the person to forego self direction and to get a job to make the system work (wage slavery) might bespeak insufficient trust in innate godliness of the human. But to believe to the contrary means you trust and intend for people to be motivated and contribute despite receiving UBI. People will usually rise or descend to expectation.
I know that Cuba had a lot of problems with absenteeism and lateness when they paid everyone the same. I am not as optimistic as you are about people rising to expectations.
I understand. It is called realism. I have problems with Cuba too. Top down and controlled. I prefer chaos along with spontaneous, organic order. It’s more of a religious model. I don’t see anything else working anyway. 🙂 And, of course, nothing at all is guaranteed to work. Some kind of new understanding has to click on with human society/a self organizing system. As insane as it seems seen through a realistic lens, one simply has to believe, and do the right thing. We either evolve civilization to be human, or we’re garbage not worth saving.
What about holding two opposing views at the same time? At this fortunate moment, I don’t have to look for a 9-45 job. (Same with some people posting here.) I would not find it acceptable to be told I had to take some crap job to make the system work. That is contradictory to the fact that if the system didn’t work, depending on the workers it employs, I wouldn’t be experiencing this sense of independence. But just accepting, and condoning other people’s sacrifice doesn’t seem human either. BTW, I do things that I consider helpful to my community, although it’s not paid cog-in-the-wheel things.
Yes, yes, yes!!!
With the ageing populations, the trains are not very flexible transport option, as the rising use of cars around the world confirms.
I read that the U.S intelligence community has infiltrated all the neo-nazi and antifa groups.
The hardest groups to infiltrate are the hard core communists. These groups are led by university professors and students. They are the most fanatic groups. They promote violence to overthrow the government. These groups are also the most dangerous to infiltrate. The paranoia runs deep in these groups.
The Russian intelligence has also infiltrated these groups. They are promoting violence between the groups to create social unrest, division and hatred in the U.S society.
All it takes is a real economic down turn and a financial crash to create panic and then there will be blood.
My source agrees that this indeed the case.
I don’t think infiltration is required to create hate, unrest and divisiveness in America…
Amen, everyone hates everyone in the US. It is a sick twitchy slave plantation. I really like Czechia.
WATER WAR BREWS AS MALAYSIA’S WANTS SINGAPORE TO COUGH UP MORE
All is well with our friendship with Malaysia, Singapore’s establishment cooed this week as they hosted a top lieutenant of Mahathir Mohamad, the second-time prime minister of their closest neighbour, who made the Lion City his chief whipping boy during his first stint in power.
After all, there was good reason for Singaporean Prime Minister Lee Hsien Loong to believe his 93-year-old counterpart would not return to the hawkish approach towards the city state that marked the “Mahathir 1.0” era from 1981 to 2003.
In a closed-door speech delivered at the Pyramid Club – the invite-only establishment comprising members from Singapore’s political elite – Malaysian economic affairs minister Azmin Ali strongly reiterated that his boss wanted to strengthen ties of kinship with the city state.
Mahathir was now training his guns on a prickly historical issue the Singaporeans had hoped would not be raised again – the price the city state pays its northern neighbour for fresh water under a 1962 agreement.
https://www.scmp.com/week-asia/politics/article/2162301/water-war-brews-malaysias-mahathir-wants-singapore-cough-more
look iike even more countries will fight for water
I miss BD…
and that Keith guy…
Mexico will be a basket case soon.
In 2006, the leftist and populist politician Manuel Obrador (which the Mexicans call Amlo) probably won the Presidential Election, but Bush and his friends made sure their man Felipe Calderon to take the power. Calderon remained a good ally of US.
Now, there is nothing to look for in Mexico, so Amlo was allowed to become President. Amlo made a lot of deals with gangs and other unsavory people to win power, but it seems he is set up to be the scapegoat during the Mexican collapse which will be imminent.
I think that eventually, to prevent the massive mess of Mexico collapsing into USA, the Wall will be built and a buffer state of “Aztlan”, consisting of the Mexican states bordering USA where the US dollar would be the official currency, will probably be established.
Why will Mexico be a basketcase soon?
because right now they are economically troubled even while being a (small) oil exporter…
but their oil production is plunging…
once they no longer have enough to export, they are toast…
that day is coming soon…
“Amlo made a lot of deals with gangs and other unsavory people to win power,”
Please, I lived in Mexico last year.
He easily won. Mexico is a much more politically literate country than the US.
Things are going to get interesting, Mexico has the 15 largest GDP on the planet.
It is a oil exporter. The US imports 5 million+ barrels a day.
For now. Mexico is now eating its seed corn, or maize, and it will probably be over during Amlo’s term. Mexico might be politically literate, but the millions of mexicans in USA need to have a govt which will not steal their remittance back home. It was the votes from Mexicans in USA which saved Calderon back in 2006.
I remember the Mexican Revolution. A lot of interesting people. But in the end, it was Alvaro O’Brien (Obregon is the Spanish form of O’Brien) who defeated and killed Pancho Villa, etc, since O’Brien was willing to talk to USA while Villa, etc were not and put Mexicans first.
USA would rather break Mexico into ten countries before it lets the Mexicans run things.
They are running things—
Have you ever lived there?
what can stop the teeming hordes of Americans trying to cross illegally into Mexico?
perhaps Mexico can build a big wall…
There are already too many ‘Merikins in Mexico.
Canadians also.
Good for extracting a bit of cash, but boring and sloppy.
I guess, no more rides from the Russians?
“The Us cannot even get to the space station after April next year (2019). It seems that the US cannot build a shuttle of their own that is reliable. No surprise. Look at the F35 for an example of corruption, greed and lack of expertise.
All the WW2 German rocket scientists are dead. They were the ones who gave the Us the space capability in the first place when they were brought to the Us after WW2.”
Not sure about that, perhaps it is tight with old ambitious promises of Saint Elon of the GreenMoneyMountainMonastery, he will definitely deliver by ~2019 reliable crew and docking module for his rockets to the ISS. Not a space buff, but this could be easily verified in the concerned tech-space msm..
And if not, Russians seem to be enough sports to prolong the contract if needed, it’s about money and their workers busy afterall (providing that service for many other nations)..
Lets hope it is better than those cars.
Private enterprise is great at toasters and autos—-
But I would keep Russias phone number available for space travel.
For anybody that knew him, does anybody know what happened to Andrew McKillop? He disappeared from web publishing around 2015, last I remember. I think he was rather old, so maybe he passed away.
https://www.financialsense.com/contributors/andrew-mckillop/endgame-for-global-mercantilism
This is a short biography I found. https://us.macmillan.com/author/andrewmckillop/
Andrew McKillop has worked for thirty years as an energy economist and consultant. . . . McKillop currently runs an energy consultancy and lives in Vannes, France.
This at least puts him in a geographical location.
I notice the link you gave gives this information about him: xtran9 @ gmail.com
If he is retired, he might like to hear from you (without the extra spaces). Or he may have died, as you said.
Ahh yes, thanks I will consider emailing him.
There was a post on 20,000(?) giga tons of north sea coal. I want to hear more. As coal is already mined remotely by humans sitting in air conditioned control rooms spaced around the global so they always work first shift awake and alert, there should be no problem mining this resource. I can see the MSM from UK: “Allah gives bounty of energy to true believers along with bounty of 5.4 children per women of thee true faith”.
Can we send in Quran equipped jihadists down the freezing depths of the North Sea in search of Coal, and if that fails, at least there will be some bikini equipped virgins waiting for our heroes on the other side of the Islamic pearly gates.
Allahu Akbarrrrrr.
https://youtu.be/ctirIlbRpTw
You meant old 1960-70s USSR jet in service of the presumably Syrian govs?
You can’t film such maneuvers of contemporary jets, too fast, besides the video clearly show some very old sky hardware.
Plenty of old Russian military gear in the Syrian war. Yes, even old jets and tanks are lethal for the right opponent. Overkill is just dumb.
“There was a post on 20,000(?) giga tons of north sea coal. I want to hear more. As coal is already mined remotely by humans sitting in air conditioned control rooms spaced around the global so they always work first shift awake and alert, there should be no problem mining this resource.”
should be easy:
build a few million AI controlled robots and have them bring up the coal…
of course, the cost of the robots will be greater than the value of the coal…
but so what?
as long as this is in the speculation/planning stages, reality doesn’t matter…
also, there’s enough gold in the crust of the Earth and in the oceans so that every human can be a millionaire…
how?
AI and robots, of course…
and we should be able to keep all humans well fed from now on…
because humans should be able to sit in AC offices and control food production from their comfy chairs…
why don’t we just run the entire world economy that way?
we all can go to nice offices and remotely control the production of everything from coal to food to cars to personal jets etc…
with this plan, soon all 7 billion of us will have our own personal jet…
let’s do this!
If you’re promising us good times, Duncan. That’s nice, but you’ll need a slogan.
How about “Make Humanity Great Again”?
http://www.eco-business.com/media/_versions/ebmedia/fileuploads/gore-spurns-trump-800x400_news_featured.jpg
I checked with the AIs about digging North Sea coal and apparently their union refuses to let them work under such dangerous conditions. They demand air conditioning and regular battery charging as fundamental artificial intelligentsian rights. So it’s back to black-faced minors with hard hats, pickaxes and wheelbarrows, I’m afraid.
It is interesting that robots seem to be mostly deployed in ultra clean factories. The fact that they are not mining the coal seems to indicate they are not as ubiquitous as some on this blog would make them out to be.
“From Rooftops to Algae Pools: Orlando’s Vision for Carbon-Free Energy
” … `It gets more challenging as you get closer and closer to 100 percent,” said Ed Smeloff, director of grid integration for Vote Solar, a nonprofit organization in Oakland, Calif., that promotes carbon-free energy. `The future to get to 100 percent is probably more diverse than we’re seeing right now.'”
https://www.nytimes.com/2018/08/30/business/energy-environment/orlando-carbon-climate.html
“The $3 Billion Plan to Turn Hoover Dam Into a Giant Battery
” … `Any idea like this has to pass much more than engineering feasibility,’ Peter Gleick, a co-founder of the Pacific Institute, a think tank in Oakland, Calif., and a member of the National Academy of Sciences, internationally known for his work on climate issues. `It has to be environmentally, politically and economically vetted, and that’s likely to prove to be the real problem.'”
https://www.nytimes.com/interactive/2018/07/24/business/energy-environment/hoover-dam-renewable-energy.html
Things like this seem to only make the news when they’re in the planning-attempting stage — is there a story about how/why no AC power grid gets even nearly half its energy from IRE (intermittent renewable energy)? Maybe such a story just wouldn’t sell (heresy!)
At least, Gail doesn’t make much from OFW.
It is rare that anyone writes a story about how badly things really turn out, which gets published in MSM. Perhaps that will change with time.
i do not know that there was helicopter crash on Chernobyl Disaster
https://youtu.be/Cc-vvhWXL9Q
here is funny footage from tepco
the owner of Fukushima nuclear power plant
tell the world all is good at fukushima
https://youtu.be/HMrQJoN-Ks4
this video remind me of 1984
Fission nuclear power will always be a disaster waiting to happen, wherever it is located.
Interesting video. I noticed that at various places in the video, the story would report that with the changes, something is “safer.” I think a fairer description might be “less unsafe.”
Also, I couldn’t help wonder how much all of this remediation is costing, and how far it has to be from being complete.
Gail, yes, “less unsafe”. We live in a world of continuous spin such as “more safe” when the truth is “less unsafe”.
Or more precise by taking probability into account:
Will eventually fail spectacularly.
Good point!
Well, U235 has a half life of 24,000 years.
Love the music….
I didn’t watch much of it … but do they mention that the reactor cores remain uncontained… and that they continue to desperately hose down the areas where they are believed to be with sea water?
Lipstick applied to a highly radioactive pig.
I was only thinking this do they even know where the cores are ?
they have a vague idea where they are and in what shape (lenticular blobs). now, what to do with them is another matter. right now, the plan is to continuously pump seawater onto them to keep them cool enough so as not to cause a steam explosion and perhaps a highly radioactive “volcano”. that works as along as there is power and a team in place to replace the worn parts of the pumps.
like it or not, those Fukushima cores have placed Tepco into a very long-term vigual at the site. if abandoned what whatever reason, the volcanic-like eruptions there could spew corium all over the site, making it unihabitable and a source of long-term pollution, probably reaching the ocean.
And let’s not forget… that a reactor core meltdown is a minor event….
This is the Big League :
Pick your poison. Fresh fuel is hotter and more radioactive, but is only one fuel assembly. A pool of spent fuel will have dozens of assemblies. One report from Sankei News said that there are over 700 fuel assemblies stored in one pool at Fukushima. If they all caught fire, radioactive particles—including those lasting for as long as a decade—would be released into the air and eventually contaminate the land or, worse, be inhaled by people. “To me, the spent fuel is scarier. All those spent fuel assemblies are still extremely radioactive,” Dalnoki-Veress says.
Also, I couldn’t help wonder how much all of this remediation is costing, and how far it has to be from being complete.
The beauty of this mess is how good it is for the economy in the context of Frédéric Bastiat’s “Parable of the broken window”. Whether it is a net plus or minus for the economy overall is a vexed question, particularly as much of the economic activity funded by the Government in Japan these days produces little or nothing of value beyond the initial stimulus provided by the funding. Undoubtedly, cleaning up Fukushima is creating lots and lots of fruitful and useful work for a lot of companies and workers who might otherwise be employed building yet more roads, bridges, tunnels and community centers that nobody really needs.
For instance, one of my friends in Fukushima is a well-educated single mother bringing up two kids. Previously she supported herself and her kids by working in a series of poorly paid NGO jobs and with freelance work. But since the nuclear incident in 2011, she’s been employed full time at Fukushima University and is engaged in the radiation monitoring effort, which is going to go on for decades. Another of my acquaintances is in PR, working to educate the misinformed public who are afraid that Fukushima agriculture is FUBAR that it’s actually quite safe to eat the prefecture’s delicious rice, apples, peaches and beef.
And indeed it is. Fukushima’s beef produce, for instance, is on the whole “less unsafe” than the American beef that President Trump is trying to convince Prime Minister Abe to import more of.
It is probably even possible to borrow money for this undertaking. I noticed that they built a nice building for all of the workers at the site. As you say, it is part what makes the economy grow. We are short of “demand,” and this is one example of demand. If we all go out and break some windows, we will have more demand (assuming that people can afford to pay for the new windows, or that they have insurance that would pay for the damage).
i find funny that people here on ofw
think that robots and ai are gonna save the economy and world
btw will ai and robots will stop india and pakistan from nuke
each other for water ?
It sounds like no one cares, besides Indians and Pakistanis.
i think we should cares
Nuclear war between India and Pakistan could blot out the sun, starving much of the human race
http://climate.envsci.rutgers.edu/pdf/RobockToonSciAmJan2010.pdf
Sounds like a good plan. When do you guys start?
right now
https://media.giphy.com/media/nv6HcRbIv6IZa/giphy.gif
boom
I’m beginning to like you.
Both India and Pakistan are amateurs when it comes to producing the big firecrackers.
https://youtu.be/aMYYEsKvHvk
https://media.giphy.com/media/UxNCd08uBaFBC/giphy.gif
Back when Bush Junior was prez, there were heated arguments between India & Pakistan, and Bush came out and said something to the effect of, these two countries are about to have a nuclear exchange! A day or so passed and both countries came out and said, No, we’re not. So some stuff is theoretical, possible, but highly unlikely because of mutually assured destruction (MAD).
The thing is this; sudden collapse is easy and in a sense, merciful. It’s obvious and quick. What’s hard and what we’re going to have to go through in my opinion is a slow degradation akin to slow torture. That’s what’s difficult because it just keeps lingering and slowly ratcheting up to more intense, harsh levels. By the time it’s over for most, we’ll have been through the proverbial ringer.
Imagine the most pain and suffering that any one human can feel. That’s the most pain and suffering that he whole humanity can feel. Pain and suffering are not cumulative. They are attributes of the individual. A million people or a billion people losing their homes and livelihoods, starving, lying on their death beds with plague or dysentery, or being beaten to death by the invading hordes entails no greater pain and suffering than one person experiencing these things. It is only in our imagination that we habitually add up the pain and suffering of others and view it as a huge mountain of pain and suffering, and end up sounding like Lisa Simpson in the process.
Consider the deer in the forest. When there are insufficient predators around, their numbers get too large for their environment to support, this goes on to the point when they wreck the vegetation and then they starve or die off in huge numbers from the winter cold or the cumulative effects of lack of nutrition. At such times, if they had human-like consciousness, they would be lamenting about all the cervine suffering going on all around them. But being dumb beasts, they simply persevere as long as they can and nibble some tree bark with neither hope nor despair. If they could articulate their thoughts in a language we could understand, at such times they might be heard to repeat: “hungry, hungry, hungry, tired, tired, tired, pain, pain pain, hungry, hungry hungry…” Eventually, the vast majority in these circumstances die and the population crashes, giving the vegetation a break and allowing it to regenerate, leaving the survivors to begin the next cycle.
Humans have been observed to go through similar population boom and bust cycles, usually over a much longer timeframe than deer do. But because we are as smart as the giraffes’ necks are long, thanks to our big brains, we have managed to progressively tweak the environment into expanding our food supply and found ways to treat and cure many diseases, even as our changing lifestyles produce new ones for us to experience. But essentially, we are no different from the deer in the forest in that when our numbers get to large for our environment to support, we will experience a die-off. And when next this happens, the spent fuel ponds will be an added bonus.
Except for one important thing Tim. Watching your family and offspring starve is the tragedy of mankind.
Not only are you suffering, but you have to watch and with empathy understand what your kin must be going through.
It is why we go to war. Better them than us.
People tend to die of illnesses (some water borne), long before they starve. People expect starvation, but I expect what they get is earlier deaths through illness, if things play out as expected.
We are already losing the ability to control infections. And use of antibiotics on animals is reducing their effectiveness on humans.
last week, on BBC radio 4 there was an excellent series of radio plays on that very subject (1episode every afternoon)
well worth a listen
https://www.bbc.co.uk/programmes/b08h0g4b
They will probably be first over the Falls anyway.
(of major countries)
Third, not save the world just save a few rich thugs.