The world economy can appear to be operating quite well but can be hiding a major problem that causes it to be fragile. My presentation The World’s Fragile Economic Condition (PDF) explains why we should expect financial problems if energy consumption stops growing sufficiently rapidly. In fact, a global sell off in the equity markets, such as we have started to see recently, is one of the kinds of energy-related impacts we would expect.
This is Part 2 of a two-part write up of the presentation. In Part 1 (The World’s Fragile Economic Condition – Part 1), I explained that a large portion of the story that we usually hear about how the world economy operates and the role energy plays is not really correct. I explained that the world economy is a self-organized system that depends upon energy growth to support its own growth. In fact, there seems to be a dose-response. The faster energy consumption grows, the faster the world economy seems to grow. The period with fastest growth occurred between 1940 and 1980. During this period, interest rates were rising and workers saw their wages increase as fast as, or faster than, inflation. After 1980, the rate of growth in energy consumption fell, and the world needed to tackle its growth problems with a different approach, namely growing debt.
In this post, I explain how debt (and its partner, the sale of shares of stock) help pull the economy forward. With these types of financing, investment in new production becomes almost effortless as long as the return on investment stays high enough to repay debt with interest and to repay shareholders adequately. At some point, however, diminishing returns sets in because the most productive investments are made first.
The way diminishing returns plays out in energy extraction is by raising the cost of producing energy products. In order for the sales prices of energy products to rise to match the rising cost of production, rising demand is needed to give an upward “tug” on sales prices. This rising demand is normally produced by adding increasing amounts of debt at ever-lower interest rates. At some point, the debt bubble created in this manner becomes overstretched. We seem to be reaching that point now, especially in vulnerable parts of the world economy.
Slide 34
Let’s first look at a slide from Part 1, explaining the way in which the economy works like a giant factory.
Slide 20
As long as energy products are very inexpensive, it is possible for the economy to expand very rapidly. When this happens, the Goods and Services produced in Box 4 are able to grow so rapidly that all of the Resource Providers in Box 1 can be well compensated, simply by using a quasi-barter arrangement, facilitated by the use of money. With this approach, Resource Providers can get adequately paid using the Goods and Services produced in close to the same time period. Something of this nature occurred prior to 1970, when inflation-adjusted oil prices were less than $20 per barrel (Part 1, Slide 26).
Slide 35
If the growth of the economy slows, so that not enough Goods and Services are being created by the economy to use this approach, it is possible to work around the problem by adding debt. Adding debt makes it possible to substitute promised future Goods and Services for already produced Goods and Services.
Slide 36
Added debt makes it seem like more goods and services are available to pay resource providers.
Selling shares of stock acts very much like debt, because the funds provided by these shares also provide access to goods and services that others have already produced. In the case of the sale of shares of stock, the promises are for future dividends, capital appreciation, and partial ownership of the company.
Slide 37
Growing debt looks like it can solve all problems! No wonder that Keynesian economists found it so useful. But the return must remain high enough to repay debt with interest.
Slide 38
Borrowing money generally comes with the requirement that the amount borrowed be repaid with interest. If the energy purchased using debt allows the economy to grow fast enough, there is no difficulty in repaying debt with interest. If energy is very inexpensive (equivalent to oil cost less than $20 per barrel in inflation-adjusted price), this payback system generally works because a large amount of energy can be purchased for a small quantity of debt.
If the price of the energy rises, much more debt is required for the same amount of energy produced. For example, if oil is $80 per barrel, the affordability is much lower. It takes four times as much debt to pay for a barrel of oil. Repayment of debt with interest becomes more difficult.
Slide 39
In Part 1, we observed that US long-term interest rates have been falling almost continuously since 1981. This situation of falling interest rates led to falling mortgage payments for a given amount borrowed. Because of the lower monthly payments, homes became more affordable; in other words, there tended to be more potential buyers for homes at a given price level. Indirectly, the increased affordability of home ownership tended to raise the resale value of homes. It also encouraged the building of additional homes.
Building homes indirectly requires the use of many different types of commodities. Metals are used in pipes and in wiring. Wood is used for framing. Concrete is often used for the basement. Oil is needed to haul these goods to the site where the home is to be built. Thus, indirectly, falling interest rates tend to raise commodity prices.
Slide 40
Many assets are purchased with debt. If interest rates are very low, purchasing these assets becomes more affordable. The sale of shares of stock provides another way of raising capital for a company. In the case of oil-producing companies, the purchasers of shares of stock often think, “If extraction costs are rising, surely oil prices and other energy prices will rise as well.” This belief allows the price of shares of stock to be bid up to a high level.
Slide 41
When asset prices rise, economists sometimes refer to the wealth effect. Homeowners feel richer if their homes are worth more, and they can borrow more against them. Owners of shares of stock feel richer if their shares of stock have higher values. Owners of pension plans are happy when stock prices are high, because it looks as if these shares can be sold, allowing the plans to meet their pension obligations.
If the debt bubble stops growing, then the commodity price bubble cannot continue to grow. In fact, it may abruptly pop. This is what happened in the second half of 2008, when oil prices dropped precipitously, from $147 per barrel to the low $30s.
Slide 42
Government pension plans such as Social Security are not treated as debt because they are not guaranteed, but they act in much the same way as debt.
Slide 43
The gray bars on Slide 43 indicate recessions. These recessions often seem to be intentionally caused. If a person looks closely, it is possible to see that in most cases, increases in US short-term interest rates preceded recessions. In fact, if a person looks at the minutes of the Federal Reserve Open Market Committee, it is sometimes clear that the Open Market Committee raised interest rates to intentionally pop asset bubbles in order to “reduce volatile food and energy prices.”
Slide 44
The huge interest rate spike to 18% in 1981 on Slide 43 corresponds with the big drop in oil prices on Slide 44. Interest rates were so high that buyers could no longer afford new homes or factories. Prices seem to have been brought down by falling demand.
Slide 45
If we look at recent oil prices, we can also see that they also depend very much on interest rates. In my paper, Oil Supply Limits and the Continuing Financial Crisis, I show that the US debt bubble popped precisely when oil prices hit a peak in July 2008. That is when US consumer credit and mortgage debt started falling.
On Slide 45, QE stands for Quantitative Easing. This was a program that allowed lower long-term interest rates in addition to lower short-term interest rates. Thus, it gave the Federal Reserve (and other central banks) the power to reduce interest rates to an even greater extent than was possible by reducing short-term interest rates alone.
Slide 46
The Federal Reserve seems to have been instrumental in causing the Great Recession, as well. Slide 46 shows a larger scale of the same information about oil prices and short-term interest rates shown on Slide 43. There can be several years between the time interest rates are raised and the resulting recession occurs, so most people miss the role that intentionally raising short-term interest rates plays.
Also, high oil prices also tend to have an adverse impact on the economy because energy prices rise, but wages do not rise at the same time (Part 1, Slide 28). Consumers are forced to cut back on discretionary goods when the cost of necessities (such as the cost of commuting and the cost of food) rise.
In fact, it seems to be the combination of rising energy prices and increased interest rates that leads to recessions.
Slide 47
On this chart, I show some of the comments heard about oil prices. In mid-2008, it was clear that high oil prices were becoming a problem, especially for those with subprime mortgages who were living in homes that were distant from their work. By early 2014, we started hearing that oil prices had been too low for oil producers in 2013. Because of the unprofitability of oil production, some oil producers were cutting back on investment in new production. See my post, Beginning of the End? Oil Companies Cut Back on Spending.
Now, it is fairly clear that no oil price will work for both producers and consumers. Today’s Brent oil price of about $80 per barrel is both too low for producers and too high for some consumers. Consumers who are particularly affected are those whose currencies are falling relative to the dollar, such as consumers in Turkey and Argentina. Even countries with more modest decreases, such as China and India, are cutting back on automobile purchases. This change will affect future oil demand.
If, by some chance, oil prices should spike to a high level such as $100 per barrel, the affordability problem pretty much guarantees that oil prices will fall back fairly quickly. This issue, by itself, makes it impossible to believe that oil prices will increase endlessly.
I should mention, too, that we are also at a point where no interest rate works for everyone. Those buying new homes and new cars need low interest rates, in order for these goods to be affordable. Pension plans, on the other hand, need high interest rates, in order to meet their pension promises. There is no one interest rate that works for every purpose.
Thus, we have a combination problem: no interest rate works for everyone, and no set of energy prices works for everyone.
Slide 48
The Federal Reserve is now in the process of raising short-term interest rates (see Slide 43). It is also selling the QE securities that it previously acquired to reduce long-term interest rates. If buying these QE securities lowered long-term interest rates, selling them should raise long-term interest rates. Raising both short- and long-term interest rates sounds like a formula for creating a huge number of debt defaults and lowering prices of shares of stock. It is likely that these actions will also start a major recession.
Slide 49
–
Slide 50
On Slide 50, “earlier” refers to Slide 16 in Part 1 of this presentation. From Part 1, we remember that the first small peak refers to the California gold rush; the second larger peak about 1910 refers to “Electrification and Early Farm Mechanization.” The third peak about 1970 refers to the “Postwar Boom.” The last small peak refers to the expansion made possible by China’s growth, and the growth of other Asian countries.
Slide 50 shows that the troughs refer to periods that were bubble collapses, or the collapse of the central government of the Soviet Union. Slide 51 (next) gives details with respect to these low periods. These were bad times for economies: depression, debt collapses, and periods with significant wage disparity. They were not periods with high energy prices.
Slide 51
Clearly, none of these low periods was a good period for the economy. While we can see that there was low energy consumption during the periods, the primary reason for this low energy consumption was the collapse of a debt bubble or of a government.
Slide 52
Peak coal occurred in the United Kingdom in 1913, and World War I began shortly thereafter, in 1914. When peak coal occurred, wages for workers were very low, because diminishing returns had made the operation of coal mines increasingly expensive, but those purchasing coal could not afford higher coal prices. Thus, mining companies could not afford to pay workers adequate wages. World War I gave an alternative employment opportunity for coal miners and others with low wages.
Entering World War I was a very successful strategy for the UK. The fact that the UK was on the winning side allowed the UK to retain its role as the holder of the reserve currency. In this position, it was fairly easy for the UK to borrow the funds needed to obtain coal and other energy imports.
Germany seems to have encountered peak coal about the time World War II began. Was this an attempt to cover up Peak Coal? We don’t know for certain, but the timing certainly looks suspicious.
In both of these cases, low energy supply seems to have led to fighting, rather than high prices.
Slide 53
The collapse of the central government of the Soviet Union seems to have been an indirect impact of the long term low oil prices in the 1981-1991 period. The high oil prices of the 1970s had encouraged the Soviet Union to ramp up oil production. Once the US raised interest rates and oil prices fell, there were no longer funds for investing in new oil production. The Soviet Union was dependent on oil exports. It was able to continue for quite a few years with low prices, but eventually its central government collapsed. Over the long term, consumption has continued to be much lower, reflecting the permanent loss of industry.
Slide 55
Slide 55 is a graph of the “peaks” on Slide 50. If we listen to mainstream economists (including Paul Romer and William Nordhaus, who recently received the Nobel Prize in economics), improved technology can allow the world economy to become increasingly efficient, and thus overcome the problem of diminishing returns. Slide 55 shows that over a period of nearly 200 years, this has never happened in the past. The troughs represent collapses of one kind or another. These low periods did not represent sustainable situations.
The problem is that diminishing returns leads to the need for very different techniques to work around new problems. For example, if there are diminishing returns with respect to extracting fresh water from wells, the first alternative is to dig deeper wells. Efficiency gains can somewhat help offset the cost of deeper wells. But once the problem advances to the point where desalination is needed, plus remineralizing the water with the correct minerals after desalination, the cost of fresh water becomes much higher. It becomes impossible for improved technology to work around the very large increase in costs that diminishing returns seems to cause.
We haven’t been able to work around diminishing returns with increased efficiency before; we are likely kidding ourselves if we think we can do so now.
Slide 56
–
Slide 57
–
Slide 58
The point that should be emphasized is that the reason why the United States economy now looks fairly good is because we are at the top of a debt bubble. This bubble is partly the result of world’s long running low interest rates, and partly because of the United States’ recent tax cuts. Thus, the situation today is a lot like 1929 before the debt bubble collapsed, or a lot like 2007 before the economy derailed. Things look good, but they won’t necessarily stay favorable for very long.
Slide 59
Separate Additional Conclusions for Various Audiences
At this writing, I have actually given variations on this talk three different times, to different audiences. The first audience (which is the one I mentioned at the beginning of Part 1) was a meeting of about 100 property-casualty actuaries. These actuaries help determine rates and financial statement amounts for lines of insurance such as automobile, homeowners, and medical malpractice. The specialized conclusions I added for that audience were the following:
Slide 61
–
Slide 62
The second version of my talk was given at the 2018 Bermuda International Life and Annuity Conference, to a group of 300+ insurance executives of various kinds. This talk was called Energy Economics: Is a Discontinuity Ahead? This audience was especially interested in my talk because interest rates are central to the operation of pension plans. If interest rates do not rise, this is a major concern for this group.
The conclusion slides to that presentation were the following:
Conclusions -Slide 1 of 2 – Life/Pension version
–
Conclusions for Life and Annuity Providers – Slide 2 of 2
The third version of the presentation I gave was to a group of followers of Peak Oil theory. This presentation was somewhat shorter and slightly rearranged. The title of this presentation was How the Energy System Really Works and What Seems to Be Going Wrong.
Its short conclusions’ sheet mentions the following dangers:
Conclusions of Shorter Version
Why Uber, etc do not give a crap about losing money
http://greyenlightenment.com/why-it-does-not-matter-that-tesla-is-losing-money/
(same logic for Uber, etc.)
Uber, etc have no overheads, no liability against wrongdoings (any mishap is the responsibility of the driver/houseowner), etc. All profit, no losses.
Plus, their cash flow enables them to lawyer up anyone, while people invest in them. The investors are not going to let their investment go to zero.
Fast’s financial experience is commendable but he does not seem to understand that the game has changed forever.
WW2 Germany wanted more land/resources..it wasn’t really a “world” war.
I think that Japan wanted oil, so it was interested in resources too.
great summary Gail of our current predicament and the keynesian solutions available the system can only continue with growth. Thank you for the article.
yes, growth or else…
by the way, October 29 (a Monday) looks like The End… 😉
https://www.msn.com/en-us/news/politics/mitch-mcconnell-calls-to-cut-social-security-medicare/ar-BBOtGyE?ocid=sf
Changes to these programs are very hard to implement because older people tend to vote. No one wants to see the programs they have been depending on reduced. It is almost necessary to have a dictatorship to reduce unsustainable programs.
I would be very interested in seeing an updated chart, if one is available, which would plot along the x axis the ages of retirees, and along the Y axis in a non-truncated bar graph display, the amount the average lifetime SS contribution by each age group cohort, assuming a blend of incomes and tax rates, the average rate of dividend and capital gains reinvestments/returns based on 2018 dollars , etc., and actuarial projections in a separate color on top of each bar, (I am assuming that the amounts paid out based on life expectancy actually exceed the amount of contributions), even accounting for investment “returns.”
I suspect that a vast number of Americans will ultimately collect far more from SS in real dollars than they ever contributed even accounting for opportunity costs of outside investment. Am I wrong?
If I am right, then an argument could be made for a reduction in benefits. Let’s face it. One could argue: Is it “more right” to take from pensioners and violate their social and/ or pension contracts or to steal from future workers? pensioners can argu that they have contributed and a contract is a contract. Future workers could argue ” We don’t even have the option of a contract. It is pure confiscation.”
Just an honest answer. Disclosure: I just turned 64, married with wife 22 years younger and a 14 yr old dependent daughter. In theory, I could soak SS for more money up front since I am supporting 14 year old dependent minor. Expecting to live to 80, makes my decision whether to collect SS now more problematic. I probably will start collecting next year at age 65.
ultimately the non productive retiree/child/ sick person has to be fed clothed housed etc through the support of others. In a primitive society this would be a matter of getting hold of enough surplus food.
the common mistake is seeing the problem in money terms, when it should be seen in energy terms.
the energy output of workers has to have sufficient surplus to sustain the above, or they starve to death.
when pensions started, in uk, there were 28 workers for every pensioner
now there’s maybe 4 or 6.
So what makes up the difference? The surplus energy still has to be found from somewhere.
Fossil fuels supply the surplus. When there’s no fossil fuel surplus, the ”less able” are going to be in trouble I think
Social Security and all of the other government funded pension schemes are on a “pay as you go” basis. Even when the schemes attempt to do a little pre-funding, as the US scheme did (because everyone could see the bulge of retiring baby boomers retiring), the money collected in advance gets spent on other thing (like wars!) because it acts like an extra “slush fund” for the government to spend. The overall US budget is on a pay-as-you go basis, so it becomes impossible for any piece of it to be pre-funded. What happens instead is that the government substitutes non-tradable debt in the Social Security Trust Fund for the funds that are used for other purposes. This is a major part of the reason for the two different US debt numbers. One includes money collected but already spent relating to retirement programs; the other does not. The “funded through” numbers assume that the government will pay benefits funded by this debt.
The difficulty with pre-funding is that the size of the program greatly dwarfs any kind of investments that could be made. Even the relatively much smaller private pension plans together soak up a surprisingly large share (50%+) of stocks and bonds that are available for sale in the marketplace. And we have all heard horror stories of how badly the private pensions are doing.
Thus, if we were to take the numbers you suggest, and impute huge earnings to them going back, we would (in total) come to far more earnings than, in fact, have been available. Also, quite a bit of the capital gains earnings (which are a big part of the returns that seem to have been available) represent “funny money” created by falling interest rates. If the interest rate is falling, more people can afford the monthly mortgage payment to buy your home, bidding up home and other real estate prices, such as farmland. Furthermore, added debt together with diminishing returns in energy extraction helps to keep inflation up. A lot of what seems to be earnings is just general inflation.
As a practical matter, retirees buy food grown in the year when it is eaten. Most of the clothes they buy are made in the year when they are purchased, as are vehicle. Only for some capital goods (like homes) does it make sense to talk about building inventory in advance. Thus, the way the system really works, the retirees share part of the food produced each year, and part of the clothes produced each year, and part of the automobiles produced each year. The only way funding really makes sense is on a year-by-year basis. The plan actuaries always had in mind was to cut back benefits, if not enough was available, in total. But even when people have been warned, this hasn’t happened.
I agree with you, though, that if we could believe the funny money investment results we see, and impute them back to accounts, it would look like there were a whole lot more retirement benefits available than there really are.
the don for dictator
it would be naive to think he hasn’t thought of that already
you think so i will add that date to the other two I have come up with 2nd of november and 18th of december but i don’t think it will be the The End just the final kick of the can down the road for our capitalist based system which will probably end shortly after sometime in the 2020’s
Not feeling it. Besides Adonis hasn’t declared it yet.
Fake “growth” is just as good as any. 🙂
Inflation is, in a sense, fake growth. It helped power the growth of debt, because lenders and borrowers alike thought it would continue. With inflation, the borrower is likely to earn more nominal dollars in the future; the lender is protected from defaults because of the growing nominal income of purchasers. No one considered the possibility that it might disappear.
You are welcome!
Funny! Very funny!
But of course the punchline would never occur to anyone in the west…. because people are f789ing stuuuupid. Stewpid MOre ons….
Even if you present that logic to them…. they will not get it….
Just like when I presented EXACTLY what John Bates said…. they will not get get… they will continue to believe … what the MSM TELLS THEM TO BELIEVE.
There is no cure for stuuuuupidity
The new BBC2 documentary, ‘A Dangerous Dynasty: House of Assad’, should be contrasted with the 2010 BBC4 series ‘Syrian School’, which eschewed neocon propaganda and allowed us to make our own minds up about Baathist Syria.
Whatever happened to objective film making? Why does everyone today feel that the film or program maker must take sides and not just show us things as they are?
These thoughts were uppermost in my mind when watching the first episode of the 72 Films production, ‘A Dangerous Dynasty’ last week.
You could say the title was a bit of a giveaway. If you were expecting to see a balanced, intellectual analysis of Baathist rule in Syria, providing historical perspective, and putting the ‘House of Assad’ in some kind of regional context, you’d have been very disappointed.
Shamefully, it’s “the Syrian regime” that ‘Dangerous Dynasty’ blames for the rise of hardcore jihadist terrorism. The neo-con endless war lobby, who set the Middle East on fire, gets a free pass.
The second episode of the hatchet job will be shown this Tuesday. I think I’ll take a bath (no pun intended), instead. Looking further ahead, I’ve an idea (which I’ll give them for just £10K), for the program makers for their next series.
How about doing one about another father and son, who both launch wars in successive decades against the same country?
The father, who was a millionaire, was director of his country’s intelligence services. The son sold his illegal war on a pack of false claims about a country possessing weapons it didn’t have, with the invasion leading to a million deaths and a refugee crisis of Biblical proportions.
‘Junior’ also invaded another country where conflict is still raging today, and under the pretext of fighting a ‘War on Terror’ introduced a surveillance state and established a detention camp where people were held indefinitely without trial. The title of the series: ‘Dangerous Dynasty: The House of Bush’.
https://www.rt.com/op-ed/441427-assad-bbc-propaganda-syria/
I take that back….
There IS a cure for stuuuuupidity!!!
https://youtu.be/tndNd4yhzvw
https://www.zerohedge.com/news/2018-10-16/wall-street-pitchmen-suggest-120-billion-valuation-uber-bigger-nike-eli-lilly
How many billion does this company lose every year???
Never mind that…
30 years ago, if I were to have raised some money …. hired some car owners… gave them stickers to put on their doors indicating Taxi for Hire…. did not obtain taxi licenses for them … did not take out commercial passenger insurance…
And used these advantages to undercut legitimate taxi services…
How long would I have been allowed to stay in business?
Yet now this is happening – just about everywhere….
Some men have issued an edict …. that it will be allowed….
The same applies to Airbnb…. landlords are violating various laws … and avoiding massive fees and in many instances taxes…. every time they rent their properties
Who worries about broke companies?
They might be broke but they are enticing to the investors. As long as their stocks continue to rise, and investors and big institutions flow money to them, a lot of people will worry about them.
FE, it doesn’t matter how much these companies lose.
http://greyenlightenment.com/?s=tesla
(same logic applies to Uber, airbnb, etc)
Uber, airbnb etc don’t have any overheads, no responsibilities, and all positive cash flow. They don’t give a crap about mishaps; that is the responsibility of the driver/houseowner/etc. A business model born in heaven.
The game has changed forever.
Reminds a person of subsidized wind and solar. Government guarantees, mandates, and subsidies mean that investments with negative returns suddenly “make sense” to investors.
Both kinds of investments indirectly make more debt, or more equity investment, possible.
If our real issue is lack of demand, it is more debt/equity (financialization) that is needed to keep the system afloat a bit longer. So these investments with negative return prop up the system for a while. Their negative true returns mean that the system cannot continue indefinitely, because at some point, governments cannot keep up their subsidies, or something else goes wrong..
They don’t have overheads?
U.S. Stocks Rally Most Since April as Tech Surges
https://www.bloomberg.com/news/articles/2018-10-15/asian-stocks-set-for-mixed-open-dollar-declines-markets-wrap?srnd=premium-asia
They broke … and they fixed it….
http://ecx.images-amazon.com/images/I/51zjoKh4mwL.jpg
Nice photo!
I’m sure that is Fast Eddy’s “good side”…
It’s a very ‘tribal’ nose…. more like a beak
look like fast eddy is reincarnation
of Joseph Goebbels
The 44-year-old from Phoenix, Arizona, who has lived with a rare, life-threatening genetic condition known as Hunter’s Syndrome since birth, last November became the first person in the world to undergo a new type of treatment that edits genes inside his body.
Minute “molecular scissors” were added to his bloodstream to snip the DNA in his liver cells and insert a gene to repair the defective one he has carried all his life.
“We are at the start of a new frontier of genomic medicine,” says Sandy Macrae, chief executive of Sangamo Therapeutics, the biotechnology firm developing the treatment. While it is still too soon to determine how successful the editing of Madeux’s genome has been, it marks a milestone in a new field of science that is widely predicted to revolutionise medicine.
As more treatments that rely on gene editing move from research laboratories into hospitals around the world, the demand for the skilled genetic engineers who make it possible is expected to soar. The UK government predicts there could be more than 18,000 new jobs created by gene and cell therapy in Britain alone by 2030, while the US Bureau of Labor Statistics estimates it will see a 7% increase in jobs for biomedical engineers and a 13% increase in medical scientists, together accounting for around 17,500 jobs.
http://www.bbc.com/capital/story/20181003-why-gene-therapy-will-create-so-many-jobs
It is possible to make lots and lots of projections of things that might happen, if a person doesn’t think about the economy as a whole, and also what doing this will do to medical costs and society’s ability to pay for the new procedures.
I agree, the costs will be exorbitant and likely recurring. it isn’t like mass production where these medical costs will be reduced as more people get these treatments. There will be relatively small numbers of people getting these specialized treatments. So the costs will almost certainly will be very high.
Will need a windy/sunny day to do any surgery on anyone?
Could be! Let’s hope the surgery doesn’t last too long!
“China could be facing a “debt iceberg with titanic credit risks” following a boom in infrastructure projects by local governments around the country, S&P Global has warned.
“Local governments may have accrued a debt pile hidden off their balance sheet as high as Rmb30tn to Rmb40tn ($4.3tn to $5.8tn) following “rampant” growth in borrowings, the rating agency estimated.”
https://www.ft.com/content/adabd0ae-d0f3-11e8-a9f2-7574db66bcd5
We will see how long this lasts. According to the article,
China is quite vulnerable.
We keep seeing stories about Chinese debt being higher than claimed. Part of the issue seems to be guaranteeing each others’ loans, but that may not be an issue in the particular part of the problem.
This looks like a worrying situation.
Easy come easy go. China rocketed onto the global stage. I suppose it isn’t too far fetched to say they may just as well fall off that stage. If they do, they won’t fall off the stage alone. China (like the US) will reach into the war chest to keep their facade of an economy going a little longer. Just build war munitions instead of ghost cities. WWIII seems mighty close.
A subset of a overpopulated area, with not a chance of survival.
I have relatives on the mainland.
And on the topic of “Our Finite World” we have an Idaho Wildlife Official who took a trip to Africa
to kill 4 baboons. He and his wife also killed a giraffe, a leopard, an impala, a sable antelope, a waterbuck, a kudu, a warthog, a gemsbok (oryx) and an eland. So, I guess they will have enough food to feed them until they die no? Or, were the animals just trophy kills? What a shame. Abject waste.
https://www.yahoo.com/news/idaho-wildlife-official-resigns-killing-baboon-family-134850377.html
He missed two baboons: himself, and his wife……
hey do not disrespect baboons
baboons are more intelligent than these retards
https://youtu.be/VD5xqHh8Hxc
Very true, TWP. Same for pigs, they outclass many humans…..
What was the point of killing the animals. I just don’t get it. What became of the animals they killed? Did they get processed into meat and leathers? Did they treat the native Namibian tribes to a massive BBQ?
wouldnt he have needed 2 boomerangs for that?
https://youtu.be/kHBcVlqpvZ8
1950: I bet there will be flying cars in the future
2018: …
Of Flying Cars and the Declining Rate of Profit
https://thebaffler.com/salvos/of-flying-cars-and-the-declining-rate-of-profit
Twerkbot 4000. That’s what I want for Christmas!
Now picture yourself starving and cold out in the wilderness. But, you have that robotic Eureka vacuum with legs to keep you company. Such a useful assistant it will be to help you survive.
https://en.wikipedia.org/wiki/Metalhead_(Black_Mirror)
Film version is great viewing; Black Mirror season 4 with robotic dogs guarding a warehouse.
1998 — Pinochet arrested. Next up, Milton Friedman & Henry Kissinger?
Kissinger arrested? LOL…that IS funny. Let me see if I can find a pompous figure laughing out loud to capture the elitist look of amusement at your suggestions:
https://ic.pics.livejournal.com/nalielron/45371123/21181/21181_original.gif
Al Gore and Leo … for perpetrating fraud
Thanks for the new post Gail. This chart is interesting:
https://gailtheactuary.files.wordpress.com/2018/10/52-peak-coal-in-uk-and-germany-led-to-world-wars.png
Are you familiar with William Engdahl’s work? Here is an excerpt from a 2007 article on his blog:
“The Sultan, Abdul Hamid II, on November 27, 1899, awarded Deutsche Bank, headed by Georg von Siemens, a concession for a railway from Konia to Baghdad and to the Persian Gulf. In 1888 and again in 1893, the Sultan had assured the Anatolian Railway Company that it should have priority in the construction of any railway to Baghdad. On the strength of that assurance, the Anatolian Company had conducted expensive surveys of the proposed line. As part of the railway concession, the shrewd negotiators of the Deutsche Bank, led by Karl Helfferich, negotiated subsurface mineral rights twenty kilometers to either side of the proposed Baghdad Railway line.[22] Deutsche Bank and the German government backing them made certain that included the sole rights to any petroleum which might be found. The Germans had scored a strategic coup over the British, or so it seemed. Mesopotamian oil secured through completion of the Berlin-Baghdad Railway was to be Germany’s secure source to enter the emerging era of oil-driven transport.
The German success was no minor event. The geographical position of the Ottoman Empire, dominating the Balkans, the Dardanelles straits, and territory to Shatt-al-Arab at the Persian Gulf, from Aleppo to Sinai bordering the strategic Suez Canal link to the British Empire India trade, down to Aden at the Strait of Bab el Mandeb. The German-Ottoman agreement assuring construction of the final section of the Berlin-Baghdad Railway meant the shattering of England’s hope of bringing Mesopotamia, with its strategic location and its oil, under her exclusive influence and it meant as well a major defeat for France.”
Highly recommend everyone read the whole thing:
http://www.oilgeopolitics.net/History/Oil_and_the_Origins_of_World_W/oil_and_the_origins_of_world_w.HTM
The “good wars” were indeed fundamentally driven by energy/oil.
Oh, and apparently he’s still alive! A recent interview:
On the other hand, he is too much into the “them vs Trump-Russia-China axis” doctrine for his other views to be of much interest (to me). However, his book “A century of oil” or something like that is well worth reading for students of collapse who want to back up their raw intuition about war and energy.
https://www.amazon.com/Century-War-Anglo-American-Politics-World/dp/1615774920
The LaRouche idiots never seem to leave us.
@ jupiviv
this guy Engdhal he is a frim believer in the abiotic theory of oil creation. He posits I believe that it was a Russian discovery and the world will never suffer scarcity.
Interesting! I don’t remember running into this before. I had run into the fact that the UK was interested in oil from Mesopotamia, but hadn’t realized that Germany had a connection there as well. Resources seem to play an important role in all wars.
British oil exploration in Iran was almost abandoned in the early 1900’s due to lack of interest from the Imperial government and the London directors of the company, who were also horrified by the expense – then they woke up! It took some time for the tremendous importance of oil to sink in, incredible as it may seem.
It does seem incredible, but if oil is only a substitute for whale oil in lamps, not too much is needed.
https://youtu.be/GIpm_8v80hw
Let me guess…greentopian.
Whena I look at the coal production of the Czechoslovakia, the peak was around 1980, when the nuclear power plants were going online:
http://artofspace.cz/wp-content/uploads/2018/07/t%C4%9B%C5%BEba-uhl%C3%AD-graf.png
The Czech Republic still has got substantial coal deposits that can be mined in comparison to its population, but the price…
You can’t get the price high enough to mine the coal. Same problem everywhere.
This is what people are unable to understand…. there is plenty of coal and oil …. but….
https://www.zerohedge.com/news/2018-10-15/worlds-worst-famine-100-years-will-hit-yemen-un-warns:
“We predict that we could be looking at 12 to 13 million innocent civilians who are at risk of dying from the lack of food.” – While All the news is so focused on lies, distortion and trivia, we have a real unfolding catastrophe in Yemen right now. Could Yemen be the first country to experience collapse?
Yemen encountered peak oil a few years ago. It has been amazing to me how the country has hung on as long as it has.
https://gailtheactuary.files.wordpress.com/2013/09/yemen-oil-production-and-consumption.png
The EIA has a report written in 2014 saying that Yemen produces a little natural gas as well.
https://www.eia.gov/beta/international/analysis.php?iso=YEM
So what it appears from this chart and confirming your thesis that indeed, even declining oil production, 150,000 bpd, is still worth fighting over? I am assuming that it is indeed the oil that Saudis, US, and US interests are after.
Perhaps there is more easy oil left in Yemen and the military is needed to protect the global oil corporations so they can extract it and make money. Can’t imagine what else is useful there. Yemen is mostly desert.
They have a fair bit of https://en.wikipedia.org/wiki/Khat
Red Bull wants access to it for their new drink … the Yemenis want it for themselves
Red Bull wants access to it for their new drink … the Yemenis want it for themselves
The is the classic
“Excuse us, but we need this more than you do.”
dynamic that globalization often presents.
This is often followed by a statement that sounds like
“Don’t be a selfish, I mean xenophobic, nationalist, anti-democratic regime that doesn’t know what it’s good for its own people.”
which is actually a threat that there will be political intervention to obtain desired policies in countries that have policies that are unfavored by globalists.
Or maybe Saudi Arabia needs employment for some of its vast population. Fighting a neighbor is as good an excuse for employment as any.
More fun to read about the Stormy and Donald feud!!!
Don’t bring me down with this famine stuff …..
Peg a cryptocurrency to the USD…. and each coin is worth a USD — always — Magic!!!
https://www.zerohedge.com/news/2018-10-15/tether-tumbles-below-critical-1-threshold-dollar-pegged-crypto-doubts-soar
I cannot take much more of this…..
I feel the need… to strangle …. a Green Groopie… to watch it’s head turn 50 shades of purple… to see the bubbly spittle (green of course) spew from its mouth…. then toss it in the ditch and let the rats eat it….
“To us, Tether seems like a counterintuitive idea in the sense that it is backed by Fiat, which is the main problem that Bitcoin initially seeked to solve. Forgive us if we are not surprised when the only digital currency that tries to be more like the dollar instead of less like it, winds up being one of the firsts to collapse.”
It’s time for … Fun & Games!!! With your host … Faaaast…. Ed…dy…..
So it’s like this …
I was in HK recently … and walking past the Tesla dealer… and I said to M Fast… I’m gonna go in there and ask them where the electricity comes from to charge one of their cars…. (knowing HK power comes from coal and nuclear)….
But of course M Fast vetoed that … berating me for wanting to make trouble…
So I let the dog sleep…. but it’s been in the back of my mind like a nagging itch….
So…. tonight I get onto skype and I call Tesla HK… M Fast says who are you calling at this hour???? I say — Tesla HK…. she shuffles off upstairs murmuring something about Fast being crazy…..
Anyway … see M Fast … sweet dreams….. press 2 for English… press 2 for sales….
Hello … hello
Yes hello …
I am thinking of buying a model s but I want to make sure it is green… where does the electricity come from ….
It comes from the charger….
Yes of course but how is it produced….
Oh you’d have to check your supplier…
I have … and it comes from coal and nuclear….
Pause…. well you can get other options
Oh? Like what?
Solar.
So I can hook some panels onto my roof and charge the car
Yes.
Actually I’d need a football field full of panels and batteries to do that — so you are wrong….
Silence…
Question – is a tesla green…
Yes
But it is powered by coal and nuclear – are those green
Silence….
Btw – did I mention I am a reporter and that I am doing a story on how Tesla in HK is powered by coal and nuclear
Pause … I need to get your number and have our charging team call you
Oh no … I have all I need — I was just looking for a good quote and you are a rep of Tesla have told me I can charge a Tesla with solar panels…. even though HK generates 0% of its power from solar…
Can I get your name? Thanks for that …. I’ll be sure to quote you in my article about how Tesla is far from green …and of course how I can charge one using solar panels on my apartment rooftop….
Thanks for helping… this is perfect.
Goodbye now.
Let’s take a peak in the window…. there they are …. see the manager screaming at the sales person … I can read lips (I can also understand dogs and some other animals)…
‘You told him WHAT!!!
I told him he could charge the car with solar panels on his roof….
‘Are you out of your mind – you know that is not true!!!!!’
‘And he’s a reporter?????’
That’s what he said…..
‘OMG Elon is going to be really angry’
https://insideevs.com/wp-content/uploads/2014/12/Screen-Shot-2014-10-19-at-3.51.45-PM.png
A little truth… goes a long way
Is that a billboard or is that an actual store? LOL. One car? White?
https://insideevs.com/tesla-model-3-attracts-many-first-time-buyers-in-hong-kong/
Tesla Model 3 attracts many first time buyers in Hong Kong
https://insideevs.com/wp-content/uploads/2016/04/AW-ShowroomQueue02-Model-3-line-queue-Tesla-Hong-Kong-dealer-store-new.jpg
I am betting that … those people … are being paid … to queue ….
If I can find time I will make some calls to other Tesla dealers asking them where the electricity to charge the cars comes from ….
It’s my new hobby.
Mammals cannot evolve fast enough to escape current extinction crisis
Humans are exterminating animal species so fast that evolution can’t keep up; Unless conservation efforts are improved, so many mammal species will die out during the next 50 years that nature will need 3-5 million years to recover, a new study shows
https://www.eurekalert.org/pub_releases/2018-10/au-mce101118.php
i always think which species will rule
after homo sapiens will gone from this planet
for me in ocean it will be jellyfish
in land it will be cockroach
A top United Nations official who monitors Yemen, Lise Grande, told the BBC: “We predict that we could be looking at 12 to 13 million innocent civilians who are at risk of dying from the lack of food.”
https://metro.co.uk/2018/10/15/yemen-on-verge-of-worst-famine-in-100-years-as-civil-war-rages-on-8038202/
7.8 billion … actually
Didn’t Obad.ma and Hislary start that one up (Yemen), along with Libya?
Not sure, but has D.Trump started his project yet; will it be Irun?
Let’s not forget that Madeline Albright once said that the death of 500,000 innocent children was for the greater good. That place is still a giant cluster f789 thanks to the USA.
Iraqi children
Perhaps she actually meant – but could not say it — that killing 500k children was worth it… because in the big picture we need that oil to make it to market at an affordable price in USD… otherwise BAU collapses and 7.8B die….
And Saddam was threatening that…. so he had to go … and along with him 500k children….
She obviously could not say that … because that would spook the sheep… she probably should have just shut the f789 up.
just 12 million
wake me up when its 1 billion people are about get starve because
lack of food
I think today 1B easily don’t have enuf food. Next 1B also hungry.
And then another B or three who have more than enough calories, but not nutrition.
What ruled earth before homo zappems?
same as now
bugs
It seems like it will take a lot more than 3-5 million years to recover, but what is the rush?
Prehumans gained control of fire over one million years ago. Humans and their predecessors began wiping out other species not long after they learned to burn down whole forests to get the prey they wanted. This pattern continues to this day.
Humans are perfect the way they are …. the last thing they want is to ‘evolve’ and breed out their competitive nature … because then they would be extinct immediately.
Imagine dropping this into the Masai Mara
https://tailandfur.com/wp-content/uploads/2015/04/The-10-Best-Lap-Dog-Breeds-Feature-Image.jpg
Ha! Looks like my dog. Yeah, if there’s a worthwhile human endevour left, if there ever was one to begin with, it would be to address the spent fuel pond issue. They’ll continue wreaking havoc long after our extinction. Maybe Musk could launch dry casked waste towards the Sun.
Gail – very nice presentation. I think the only bit I somewhat disagree with are the contention that coal peaks caused WW-I and WW-II, though I’ve seen the argument made elsewhere (Ugo’s book Extracted I think).
BTW, I think there is a typo just below slide 40:
“This belief allows the price of shares to stock to be bid up to a high level”
Maybe that first “to” should be “of” ?
The timing of the coal peaks is an amazing coincidence. And in the UK, it is clear that there was a problem with paying adequate wages to workers. I suspect that was also a problem in Germany.
Adding a new employer (the military), funded by debt, is a great way to get employment up, at least if your own country doesn’t get destroyed by the war.
I will fix the typo. Thanks!
War was a good distraction for discontented workers and a way to impose state authority on them: also, Germany in 1914 thought that Britain was weak, on the verge of civil war over Ireland, and would either crumble quickly or have to keep out of the war.
Beaker? Are you an el der?
Three Colliding Problems Leading to a New Economic Disaster
https://www.rollingstone.com/politics/politics-news/stock-market-slump-trump-737792/
Hey BD!
Oh wow!!!
Al Gore has come out and announced that giggle jaggle is a fraud!!!
Let’s check the disappointment monitor hooked up to the green groopies:
GROAN!!
Now lets go to the anger monitor:
GRRRR!!!!
http://www.scmp/com/algoreadmitsfraud
“This site can’t be reached.”
Hillary has gotten to it already.
A good mate of mine is visiting from Bali — he’s a prominent architect on the island — he was telling me he was interviewed by a architectural magazine and one of the questions was about green architecture…. specifically bamboo constructions…
He rattled on about how he could not answer because a well constructed house might last a hundred years… whereas a bamboo house will last a fraction of that… the water that goes into growing more bamboo and all the work rebuilding might actually result in the bamboo house being less green than the steel and wood house…. he could not be sure….
The magazine cut that part out of the interview 🙂
The key thing being “a well built house” — i.e an expensive house. With interest rates the way they are, getting an ROI in 20 years makes the point moot — cheap construction can and does get torn down because “it makes sense” financially. Personally, I find it ultimately wasteful. I rather like the idea of building things that will last 200+ years — like much of Europe. Or put another way: there is no such thing as a free lunch. Modern capitalism doesn’t have the answer alas.
My wooden house was originally an old mining cabin at least 100 years old. It was added to by the former owner and a bunch of amateur friends. I wouldn’t say it’s well built. The old cabin construction was not kept up and is very split and pitted. But I see no evidence that age alone can determine the house’s ability to stay intact. All I have to do is fill in every single micro crack, and the structure seems to hold up OK. I don’t have any indication that this couldn’t go on for hundreds of years.
I live in a 140 year old house. I suspect that it will last much longer than most houses being built now…
You don’t live in an area with termites. In Georgia (in the US), they say that there are two types of homes (1) Those with termites, and (2) Those that will have termites in the future. Other buildings that use wood in their construction, such as stores, churches, and small office buildings are prone to getting them as well. There are services that a person pays to try to keep termite damage down to a minimum.
Properly cared, wooden buildings can last a thousand years.
https://search.aol.com/aol/image?p=the+oldest+Norweigan+wood+building&s_it=img-ans&v_t=webmail-hawaii1-basicaol&fr=webmail-hawaii1-basicaol&imgurl=http%3A%2F%2F2.bp.blogspot.com%2F-joWQkelrxd8%2FT7qgfiJ9eaI%2FAAAAAAAABsk%2F0T8xrSqM79g%2Fs1600%2FIMG_1336.jpg#id=-1&iurl=http%3A%2F%2F2.bp.blogspot.com%2F-joWQkelrxd8%2FT7qgfiJ9eaI%2FAAAAAAAABsk%2F0T8xrSqM79g%2Fs1600%2FIMG_1336.jpg&action=click
Oldest Norweigan wooden building (1000 years old) is second from left in top row.
Apologies. It’s no longer easy to get clear and accurate information from the Internet. This must be the oldest Norweigan building, but I won’t swear. This one is said to be 800 years old.
https://theawesomedaily.com/stunning-800-year-old-stave-church-that-survived-the-test-of-time/
I think the key is keeping the whole system operating, so the houses can be repaired, and so people can afford to live in them.
If people are too poor, they will group together in only part of the homes (children in parents’ basements, grandparents in with their children, apartment mates for singles). The abandoned homes will go downhill quickly.
Also, the homes need to be near jobs, and there needs to be transportation to the jobs. Many perfectly good rural homes have been torn down because they get in the way of bigger fields. Fewer farmers are needed, so fewer homes for them are needed.
I can believe that the magazine cut the part of the interview saying that bamboo houses may not be all that green. It seems to be “renewable,” and that is all that is important to some people.
Meanwhile … The Green School in Bali … is churning out ‘Green Warriors’ to go forth into the world and berate anyone who uses a plastic bag….
Big bucks to attend — so what you get are wealthy Californians (mostly) flying back and forth (business class) to check on little Noah’s progress….
When we took on our two wards from the Peens… we met the GS people to see what it was all about … and the intake guy was proudly telling us how they put no pressure on the students… they can do what they want to do …. and I was thinking — this is a recipe for raising a sure-fire pizza delivery boy…. at some point the kids must leave DelusiSTAN … and then what?
I’ve heard the kids love the place…. as one parent who pulled his kids out said to me ‘of course they love it – it’s like year round summer camp’
What a f789ing joke
EU money creates things that no one wants to posess and maintain:
The various pedestrian upperbridges or underpasses that were built during the modernization of the Slovak railroads using EU funding have a problem now: no one wants them into posession (neither the railways company, nor the municipalities). Such structures are often closed subsequently because of this.
https://myzilina.sme.sk/c/20938397/nemame-peniaze-na-to-aby-sme-sa-o-takuto-megalomansku-stavbu-starali-reaguje-starosta-horneho-hricova-na-uzavretie-podchodu.html?ref=trz
I understand wind turbines are being abandoned after subsidies in Germany run out.
http://notrickszone.com/2018/04/24/germanys-wind-energy-mess-as-subsidies-expire-thousands-of-turbines-to-shut-down-environmental-nightmare/
Germany’s solar has some things in common with wind.
http://notrickszone.com/2018/04/21/green-failure-german-solar-industry-crashes-and-burns-solar-jobs-see-blood-bath/#sthash.FDQI1fXZ.dpbs
I have just driven past a windfarm … Raglan NZ…and not a single one is turning (about 20-30 up there). Its a reasonably windy day here. Is there a way of ‘locking down’ all the turbines at once; and if so why would you?
Seems strange.
One could easily argue that ALL infrastructure projects such as highways, bridges, and suburban/exurban sprawl represent unfunded liabilities — sure, the initial owners pay for everything but sooner or later the town/county/state/nation has to bare the burden of maintaining “it”. So we either have to stop ALL infrastructure projects and deprecate those that are not “profitable” (e.g. maintaining rural exurban streets) OR we have to find a way to fund long-term maintenance of existing and future projects as part of the initial project themselves. Having the latter institutionalized — forcing investors to foot the bill for floating a bond to cover future maintenance costs — would encourage “the market” to re-use existing infrastructure and abandon those (mostly rural projects) which can never be affordable. Tough choice politically, given the current rancor.
The problem you mention really reflects one of the limits we are reaching.
We need enough materials to maintain an increasing amount of infrastructure, including rarely used roads. Some of these low-use road are to visit oil extraction from shale sites, I expect, or old stripper oil wells. We also need to maintain all of the pipelines we are putting in place, even if the quantity of oil and gas shipped through them declines substantially. Alaska has been a state where the oil pipeline has become an issue, because the oil needs to stay warm enough so that it will flow properly. If only a small amount is in the bottom of the pipeline, this doesn’t’t work well.
All of these limits seem to interact!
“We may have electrical problems sooner than oil problems, in part becaus of the difficulty in maintaining transmission lines.”
Well, we may see a similar approach for temporary solution of this problem as in the case of the retail chains: the self-service when charging for the goods instead of the cashiers. I. e. the end parts of the transmission lines will be more and more dependent on the self-repair of the consumers. (I.e. here, in Slovakia, when the transmission lines underwent privatization etc., the end parts of the transmission lines leading to the homes were completely handed over into the care (and the self-repair) of the home owners).
I hope that not too many people are electrocuted while trying to do their own repairs. This sounds dangerous. Also, it seems likely to cause problems for the system, long term.
‘An electrician was rewiring our beach house. He exposed a couple of wires and shorted them out with his finger. That’s how we check the voltage, he explained. 110 goes as far as your wrist and 220 as far as your shoulder.’
http://euanmearns.com/tales-of-mexico/
A very funny article.
Lots of ways of doing things!
ah yes, Mexico—
Just moved back to the States.
Lucifer sang so beautifully that the angels started to worship him. As a punishment the envious god threw him down to earth. All we humans can do is to try to do better than Lucifer. And of course to try to master matter and energy…since it would make us like gods. At least that is how the story goes…but it’s our story.
The CEO of Goldman said: “We are doing gods work”.
https://m.youtube.com/watch?v=UO3OX82qKns
“World War I gave an alternative employment opportunity for coal miners and others with low wages.”
During the times of insufficient wages, the people try to get more money via lottery, games etc. The war is more and more a game about the survival, as the parties of the war fight about less and less affordable resources (i.e. the resources that require more and more energy, or more and more costly energy etc.).
Wars justify more debt. They create more demand for goods and services. They help get local employment up. If the warring country wins, so much the better! I never thought of the situation this way, until I started looking at some of the data. Of course, if your own country gets bombed heavily, it doesn’t work. This is why proxy wars are fought.
Coming to a town near you, not just the ‘Rust Belt’;
So, too, goes the U.S. economy. After nearly a decade of rapidly expanding its balance sheet, and pumping cheap credit and excess liquidity into financial markets, the Fed has produced a similar paradox. They must keep expanding the money base to keep the economy afloat… but in doing so they are ultimately killing it.
Of course, the Fed knows it cannot expand its balance sheet without periodic, and abrupt, reductions. These are needed to whipsaw overextended debtors and attain some semblance of connection between the economy and financial markets. What’s even more absurd about our present circumstances is that the Fed is reducing its balance sheet and increasing the federal funds rate so that it can later increase its balance sheet and cut the federal funds rate to combat the forthcoming recession that will be exacerbated by its own actions.
This, in short, is why it doesn’t matter if the Fed raises the federal funds rate or cuts the federal funds rate, or if Uncle Sam borrows more or borrows less. At this point, there is no way out. The present financial order, like the salty crop fields in the San Joaquin Valley, is doomed to choke on the salt of debt.
https://www.zerohedge.com/news/2018-10-15/choking-salt-debt
https://www.zerohedge.com/news/2018-10-15/us-spending-interest-hits-all-time-high-budget-deficit-trumps-first-year-soars-779
The plan is to cut social security and medicare.
America’s booming economy will create increased government revenues – an important step toward long-term fiscal sustainability,” Trump’s budget director, Mick Mulvaney, said in a statement accompanying the Treasury report. “But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”
To fund this deficit, the U.S. government borrowed $1.08 trillion from the public in Fiscal 2018, more than double the amount borrowed in 2017 ($498.3 billion) and the most borrowed from the public in a fiscal year since FY’12.
Stop please stop I can’t take all this winning it’s killing me – soooooo much bigly winning. The winning is so big and powerful.
These fools are crazy and at some point there will be hurt and pain.
https://www.youtube.com/watch?v=JfFCd3Ga4f4
.
Cutting corporate tax rates by 15% will create a booming economy … for awhile…
Well the point of my little video is that something is going to get cut and the burden always goes to the serfs.
That’s only fair…
I recall a book about the history of China… an influential philosopher was quoted as saying ‘we can feel sorry for ourselves over what the British did to us — or we can get over it and get strong so it does not happen again’
This applies on a sovereign level… but it also applies on a personal level.
If you are disadvantaged… you simply have to work harder and smarter … wallowing in misery is for the truly weak…. if you are are a more-on and unable to strengthen yourself… there are food banks in most countries…. and Fentanyl.
I do support initiatives that help the ambitious to move up the ladder.
I don’t know how much time if any you have spent in the USA but it is not a place that encourages hard work for wealth. It does encourage wealth, just not the working part. You see in the USA workers are taxed nearly half of what they make in wages.
The people who work (who actually f’ing work) to make the planes, trains, and buses run on time after being taxed by half of their income see no gain or payback via social services from the taxation. Not people in the USA compared to your quaint country of NZ.
I support initiatives that help people that are ambitious move up the ladder as well.
There are still success stories in the US…. it is harder each year … but still very possible.
If you are smart – and ambitious — you can still raise yourself up.
If you are a snowflake – and let’s face it – most people are snowflakes… if you expect a 100k salary without any experience or hard work….. you will deliver pizzas.
Excuse is a word that needs to be expunged from the dictionary … or change the definition to – these are what snowflakes give because they are too stoooopid/lazy to achieve.
wealth in physical terms depends on the amount of fungible energy available to any given population
eg—the inuit were sitting on the north slope oilfield for millennia but lacked the means to access it or use it, therefore remained nomadic hunters
we, on the other hand, had the industrial revolution, which enabled access to energy—without that, we would have remained a largely feudal slave owning society.
surplus energy became available to us, which transposed itself into the trappings of physical wealth.
It follows that in any society, some are clever, most are not. So the clever ones appropriate the best of what’s available, leaving the rest to pick up the crumbs. This will be true no matter how hard they work.
A garbage collector might work 40 years as a dedicated garbage collector—because he doesn’t possess the intellect to do anything else.
he does not amass vast wealth no matter how hard he works, But does that make him less important to society? or less entitled to respect?
A snowflake?–where would we be without garbage collectors?
we make use of the intellect we are born with, some genius some stupid, most at a median level. By those inevitable accidents of chance and opportunity a Rockefeller, Gates or Bezos is thrown up. Or a Hit ler or Stalin for that matter. Same process. They do not create wealth, but they have the skill to suck in what’s available in the wider world. The rest of us just sit and watch, by and large.
This is entirely due to our collective decision to parcel up the world, delude ourselves that we own it, and sell it to one another. (we call that commerce)
That is perhaps our greatest delusion of all.
The thing is…
Most people are not satisfied with their lot …. they want more (whatever that is) …. they are miserable…they hate their jobs… they hate their lives… they just ‘survive’ (why they don’t just drop Fentanyl is beyond me)
Yet they do nothing about it…
I call it the ‘fighter pilot syndrome’ — ever met someone who said I always wanted to be a fighter pilot… I could have been a ______ or ______ ….
But they were lazy … or stewpid… and they are now pizza delivery boys…. scrounging around on the floor picking up crumbs…
They want a piece of the pie… but they did nothing about it.
Life is about the pursuit of excellence… if you are only capable of picking up garbage and you are fine with that then take pride in what you do… and do it properly … passionately ….
If you are a pastry chef then be the best pastry chef you can be…
If you are an investment banker be the best banker you can be…
If you are a drug dealer be the best dealer you can be….
we are programmed to be dissatisfied with our lot—most don’t know why they are dissatisfied, unaware that genetic forces make them want more—not understanding that most fall by the wayside in one way or other, while select few get past all the hurdles of success
the salmon swims back to the river where it was spawned, but doesn’t know why—and most die in the attempt.
humans have the same driving forces and always have had.
the difference between us and salmon is they just want to reproduce, we want all the trappings of wealth which are available to only a few—hence stupified dissatisfaction—and politicians who promise all and deliver very little
“If you are disadvantaged… you simply have to work harder and smarter … wallowing in misery is for the truly weak…. if you are are a more-on and unable to strengthen yourself… there are food banks in most countries…. and Fentanyl.”
By definition, this will only make sense to people who aren’t truly weak at any given point of time. So it is in fact another kind of snowflakeism – applying the enigmatic notion of “working harder” to every problem and person except oneself. It never ends well.
Cutting corporate tax rates will keep energy producers and banks from collapsing for a little while. In will push off the date when the economy collapses, which is the goal of the tax reduction.
Social Security and Medicare benefits have been promised at much higher levels than the economy can really afford, unfortunately, I am sure that Europe has an equivalent problem.
On the positive side…. the Beaks can still goose the economy by taking the corporate tax down to 0….
They have not yet touched personal income tax…. plenty of tricks left up the wizard’s sleeze
“Cutting corporate tax rates will keep energy producers and banks from collapsing for a little while. In will push off the date when the economy collapses, which is the goal of the tax reduction.”
But it’s pointless if the cuts don’t translate into more consumption in the wider economy, or cheaper energy and resource extraction. In that situation it’s hard to tell if these gimmicks are actually delaying the inevitable in any meaningful way, or doing the opposite, or nothing at all. The concept seems logical on the surface, but deeper examination reveals a lack of appreciation for the details. A bit like EROEI. 🙂
That is an interesting article.
Debt + government subsidies make all kinds of things possible, including the blooming of the San Juan Valley. I imagine the popularity of organic food, at somewhat higher prices, has enabled the whole process as well. http://southcoastfarms.com
When plants grow in natural environments, pests can be a problem. But in a desert environment, there are fewer pests. So organic produce can be raised, at a higher price. We all live happily, at least for a short time, in a ridiculous situation we have created ourselves.
Of course, we do have the debt problem as well, which there seems to be no way out of.
San Juan Capistrano has a long and rich history of farming in the valley soils so close to the sea. The weather here on the south coast of Orange County and the alluvial soils of this unique valley combine to make a location perfectly suited to grow fruits and vegetables. For over 200 years these valley soils have been farmed.
They forgot to mention water…. how there is so much rain in the desert that they don’t even have to irrigate!
I’m a former resident.
The place doesn’t have a chance, even with a ag past.
I sort of enjoyed it.
Did you ever have a drink at the Swallows Inn bar in San Juan?
No doubt this is what has happened in the stock markets the past couple of weeks…. knock them down a little … then the PPTs step in to stabilize….
But at some point the soil becomes so salty nothing will grow….
One day the lightbulb will go off for the financial world and it will be like 100 people making a circle and they’ll look and stare at each other. Then suddenly they’ll realize it’s game over and they’ll all run for the same exit. By then it’ll be too late. It happened in 2008 but the system was temporarily saved. This time the world’s CB’s won’t have the means to save it again. The problem is now 10x worse.
I suspect they’ll head for the windows…. splat!!!
Intimate stories of one Rust Belt city’s struggle to recover in the post-recession economy. FRONTLINE and ProPublica report on the economic and social forces shaping Dayton, Ohio, a once-booming city where nearly 35 percent of people now live in poverty.
https://www.pbs.org/wgbh/frontline/film/left-behind-america/
omg is situation is really bad in dayton,?
I don’t know. But there certainly are a lot of rust belt cities doing poorly.
Pingback: The World’s Fragile Economic Condition – Part 2 – Olduvai.ca
Well, well, seems he’s BACK and will get a book out on the subject.
Saw this comment posted and liked it…this one’s for you FE…FASTER
Not too smart
Hi Onlooker: what makes the situation critical, is that to begin with, we are dealing with a fairly rare mineral. There was originally only 5.3 times as much petroleum in the earth’s crust as there was gold. 86.8 billion tonnes of gold to, at most, 466.7 billion tonnes of petroleum. It earns its name Black Gold. Compared to other minerals like copper it is extremely rare. There is 4,100 times as much copper buried in the earth’s crust as there is petroleum. To add to the insanity the world is extracting petroleum 1.6 million times faster than it is gold! We seem to be obsessed with getting rid of the stuff, and we don’t seem to be concerned in the least with pushing its available supply to the limit. We are presently extracting it at the rate of 4.94 billion tonnes a year, or at about 1% of all the liquid hydrocarbons originally deposited by nature into the planet’s crust. We have been on this frantic escapade for 159 years. Considering that only about 40% of what was originally deposited can be used with our present economic structure, and technology, and we have already extracted almost half of the original, this mad frenzy will soon be coming to an end.
Basing our entire civilization on one precious, very limited commodity was definitely not the brightest move that humans have ever made. It is not surprising that the world’s economy is folding up from Venezuela to South Africa. Once the $4 trillion a year in capital outflows from the emerging markets stops coming to the West, we will be seeing the Decline here as well. Keep and eye out for the book coming out in the spring. It will have suggestions on how one can mitigate the impact.
http://www.thehillsgroup.org/
gold is an inert element
oil is an active compound
The Spanish empire was underpinned by gold, because gold was universally accepted as a medium of exchange for the transaction of energy of one kind or another. Gold, of itself, has no value until it is exchanged for something usable. You can split a ton of gold into a million ‘coins’ and buy yourself an army.
But your army will use its coins to buy food/energy. Once that energy has been consumed, they will be back to ask for another ton of gold.
but you cannot destroy gold.
all the gold that has ever been mined is still around, somewhere. it doesn’t decay—which is why it has always been a store of value.
In the 16th c Spain wrecked its own economy by flooding the market with Inca gold in the belief that they had discovered infinite wealth through infinite gold.
not so.
oil, on the other hand, must be destroyed in order for its value to be released.
so we burn it to give ourselves infinite prosperity.
but to sustain that, we have to find more and burn more–indefinitely.
when we started, we did not know that it was a precious limited commodity
So does this mean Ann Margaret is not coming?
Lol $400 a barrel.
https://www.msn.com/en-us/money/markets/opinion-dont-rule-out-dollar400-oil-if-the-us-sanctions-saudi-arabia/ar-BBOoDzr?li=BBnbfcN
“The Kingdom affirms its total rejection of any threats and attempts to undermine it, whether by threatening to impose economic sanctions, using political pressures, or repeating false accusation,” a government source reportedly told the official Saudi Press Agency. “The Kingdom also affirms that if it receives any action, it will respond with greater action.”
If WWE cancels its ‘Crown Jewel’ event in Saudi Arabia, then we’ll have a better idea as to where things are going
But gold can be lost to landfills a little at a time in the form of electronic equipment. Just like the gold dust in the ocean it isn’t worth mining for it.
i accept that
but all the gold in landfills is still there and recoverable–even 000s of years hence
Don’t think he meant for it to be taken literally, but the foolishness in the fallacy of races for “riches”….Japenses proverb….”The Gods only laugh when men pray for riches”
I have a brother in law who goes out and buys tons of old keyboards (he has thousands of them) and he sits around like a little mouse tearing them apart and scraping the insides. I’ve watched him before and it is disturbing. I tried explaining to him that whatever amount of gold he was getting and the amount of time involved and the expenses of collecting, storing, and disposing of all those keyboards he’d make more as a cashier in a flea market.
EROEI – You can run but you can’t hide.
Energy returned on energy invested
In physics, energy economics, and ecological energetics, energy returned on energy invested (EROEI or ERoEI); or energy return on investment (EROI), is the ratio of the amount of usable energy delivered from a particular energy resource to the amount of energy used to obtain that energy resource.
EROEI is a calculation without considering the energy required to cover the huge amount of energy needed to cover overhead expenses and taxes. EROEI makes it look like you are making money, when you are not possibly making enough to cover overhead and taxes. Scraping gold off the inside of keyboards looks like it will save the world.
This is why there needs to be a minimum EROEI amount, and no one quite knows what it is. If we really need oil at $20 per barrel or less, the minimum EROEI for oil is likely 50:1.
We have been well past the minimum EROEI for oil since the late 1960s or 1970. The question is how high the debt bubble can be blown.
Nicely done. I’m ready for Part 3 now.
I can see several related topics. I don’t like titling things Part 3, 4, and 5, though, because I am afraid I will lose readers.
“What growing energy efficiency needs to offset” might be one of them. The issue is not just diminishing returns in many areas of the economy. It is also entropy, pollution, rising debt levels, and rising population per acre of arable land. This is why trying to fight it with efficiency is such a losing battle.
Another is why modeling goes so far wrong. All sectors of the economy are affected, but each model assumes that only its own sector is affected.
How about one where you publish the entire paper from John Bates on how he exposed his colleagues faking the data when they discovered the planet had no wormed in 19 years?
That would be fascinating reading!!!
https://youtu.be/XyX6dXjataE
But, oil is a drug.
Things will get difficult for certain people as BAU sinks below the surfact
Video https://www.rt.com/usa/441241-brooklyn-orthodox-j ew-beaten/
Thanks Gail.
These slides #50/55 are most revealing.. especially in the light of your hinted/suggested ~40yrs span cycle, i.e. ~1940-1981 and nowadays getting closer to culminating another ~40yrs threshold which would necessarily bring another version of the scheme adjusted for the peculiar circumstances of negative growth and penniless consumers, but lot of production capacity already outsourced to EMs..
In terms of the very next expected recession, depression very soon, the FED network is surely counting on the huge “repatriation wave” of money to be escaping the EM world in that situation and to be parked (and put to guarantee of the system) in the US and various assorted interconnected int tax heavens enclaves. As this move could serve as some sort of stabilizing anchor, however, sometimes the incoming storm might be way stronger than any of that..
I hadn’t thought about the possibility of another 40 year cycle. Interesting!
Rising interest rates will likely bring more money to the US economy than any repatriation wave. Keeping the whole system operating is, of course, the issue.
The trend this year has been that when the U.S 10 year treasury yield rises above 3 percent then there is stock market correction in the U.S.
The Fed has this yesr raised the interest rate to 2 percent and reduced it’s balance sheet by 250 billion USD. The global stock market has lost 20 trillion USD.
The U.S stock market has continued to rise after each correction as the treasury yield has fallen below 3 percent again, as new money is pouring into the U.S from the sell off around the world.
mmm … the rising $US won’t make trade easy…unless you take advantage of it and print heaps and who cares about the trade deficit!
The Fed doesn’t have to print dollars since dollars are pouring into the U.S at a rate of 4 trillion USD annually and the U.S current account deficit is only 0.5 trillion USD annually.
The Fed is “printing money” by raising rates.
I guess this is some kind of a end game.
Interesting observations! As long as the US can keep the “game” going in this direction, it can pull ahead of other players. Of course, in a networked world, it is hard for any one player to pull very far ahead of the others. We need raw materials from around the world to make goods and services.
More Dead Meat … how many thousands of jobs down the tubes with this
https://www.reuters.com/article/us-sears-bankruptcy/iconic-u-s-retailer-sears-files-for-chapter-11-bankruptcy-idUSKCN1MP0D7
so what does the lifetime guarantee mean on my Craftsman tools now?
https://money.cnn.com/2017/01/05/investing/sears-sells-craftsman-stanley-black-decker/index.html
I had a lifetime warranty on a water pump years ago and the water pump failed. So, I brought it back and the warranty claim was denied. The store manager said that “lifetime” doesn’t refer to my lifetime but the lifetime of the water pump. And the water pump, according to him, exceeded its life expectancy. I had the original receipt too. Didn’t do any good. I suspect other “lifetime” warranties are similar. So ever since then (probably 30 years ago or more) I never paid extra for extended warranties.
I’m still irritated at how an associate at Lowes talked me into an extended warranty on a fridge, and that was maybe 12 years ago
Bismallah another is gone
let have a party
by listing a song from one of greatest Indian
singer in peak bau industrial civilization
https://youtu.be/fJ9rUzIMcZQ
Sears Holdings had about 89,000 employees in the US as of February, down from 246,000 people five years ago. The employee count will go to zero not long from now.
https://wolfstreet.com/2018/10/15/sears-holdings-files-for-bankruptcy-will-be-liquidated/
Thank you for part 2!
RE: growing debt and especially high stock prices, you might be interested in checking out this article:
https://link.springer.com/article/10.1007%2Fs00191-017-0514-8
where Kovacic et al. find a “financialised decoupling” in EU14 countries. The CO2 emissions of these countries have fallen faster than GDPn growth, thus indicating decoupling of environmental impacts from economic growth. However, they find that the proportion of financial assets (out of total assest) has grown even faster, thus indirectly ballooning GDP, so that even if the material footprint of the economy has stayed stable, the GDP growth seems to have been “decoupled” from it. One could expect that such “financial decoupling” is an indicator of a debt bubble more generally.
I sent a request to the authors for a copy. At $39.95, I am too cheap to buy one.
One of the authors was kind enough to send me a copy, and said he was a reader of OFW.
These were the comments I sent back:
A few comments: Thanks for an interesting paper. It strongly suggests that that the decoupling pattern isn’t really repeatable. In fact, I think that there are other things too, not covered in the paper, that suggest the pattern is not repeatable. Some of these are touched upon in my recent post, which you may have read. https://ourfiniteworld.com/2018/10/14/the-worlds-fragile-economic-condition-part-2/
One of the things that your paper doesn’t mention (it can’t cover everything) is the fact that the increased financialization was enabled by falling interest rates. These lower rates started way back in 1982. The made borrowing more affordable, and indirectly raised asset prices. Once interest rates hit rock bottom, then the pattern observed in the 1995 to 2013 period cannot be expected to continue. Thus, based on interest rate patterns alone, it seems unlikely that a similar decoupling can take place in the future. The falling interest rates enabled it.
Second, the availability of cheap energy and low wage workers in the Far East enabled the transformation. So did the fact that European countries wanted to meet the conditions of the Kyoto Protocol. Moving production to other countries made sense, at least at that time. So there were particular conditions that affected the 1995-2013 study period, which enabled the pattern you are seeing.
Third, if we actually want energy consumption to fall in the future at the same time that world population continues to rise, we need a very, very strong form of decoupling. This seems unlikely, even if the type of decoupling available through the financialization of the 1995-2013 period should somehow happen again.
These are more thoughts for future papers than any criticism of this paper.
Trump Threatens Another Round of China Tariffs
https://www.bloomberg.com/news/articles/2018-10-14/trump-hints-at-more-china-tariffs-but-doesn-t-seek-depression?srnd=premium-asia
Is Trump a dictator? So he can just do what he wants?
Here’s the thing… the owners of the Fed make these decisions…. and the MSM wants the masses to think that Trump has power…. so they state that Trump did this…
In reality he has zero to do with the decision — he is reading the decision from teleprompter
we know this since Ronald Reagan times
https://youtu.be/QTcL6Xc_eMM
Sir Ronnie was not that bright, but could tell a good tale.
And the proletariat needed simple stories after the 1970’s.
“In The President’s Speech, a 1985 essay by the late neurologist and writer Oliver Sacks, he observes a group of people with aphasia, a language disorder, as they laugh uproariously at the television. The cause of their amusement is an unnamed actor-turned United States president, presumably Ronald Reagan, addressing his audience: “There he was, the old Charmer, the Actor, with his practised rhetoric, his histrionisms, his emotional appeal…The President was, as always, moving—but he was moving them, apparently, mainly to laughter. What could they be thinking? Were they failing to understand him? Or did they, perhaps, understand him all too well?”
http://nautil.us/blog/how-aphasic-patients-understood-the-presidential-debate
More ham acting.
Politics is such a joke. It is all an act, it is scripted and it is done in plain sight. I am not sure if the Secret Service is there to protect these dolts or to keep them quiet or to keep them inline or give them their orders. I just know it is a secret society, with secret oaths and secret proceedings. Hmmm I think I heard that somewhere before.
POTUS … most powerful man on earth!!!
https://nataliaantonova.files.wordpress.com/2013/12/cannot-handle-the-hysterical-laughter.gif
Talking to a wannabe seller who said her place has been on a ‘previously hot’ market for 3 months and not moving.
Her real estate agent said that over the weekend only 1 person visited the 17 open homes that the firm had on. Spooked by turmoil, minimum equity requirements, new rules favouring tenants…..? whatever…., things are a bit shaky in the shaky isles (NZ).
As far as high oil prices go, last time this happened around here (about 2014…?) many rushed to sell their perfectly good mid to larger sized cars for next to nothing and went and spent up on brand new small cars. Often there was a 20k difference. They would never had made the savings on fuel use to justify such a decision.
My 26 year old LPG ute is looking real good at the moment; $1.35 per lt versus $2.30 per lt for fp
91 octane petrol. Its a bit tired, but so am I so meh.
Funny how quickly paper profits can vapourize…. when a market turns
Lot of ‘very fine, very new european cars’ outside some of the local real estate agent office buildings….
Ooops wrong video…
The “only” problem with LPG conversion is that you can’t park it in garages, incl. your own. And that’s a major bummer as we know how fast carz or any mechanization ages in acceleration mode when standing there in the open against 24/365 temp fluctuation cycles, UV, hail storms, humidity, acid rains, dust, vandalism, ..
Basically a car or similar lasts at least 2.5x longer when parked in tempered garage.
It appears that China can manage this phenomenon.
Their growth has been predicted (and predictable) for 60 years, regardless of oil prices.
I once read that China is a similar size to Canada but has only around 1 to 2% of the amount of fresh water that Canada has. Water is used in massive quantities as part of industrial production. Apparently it takes around 20 000 gallons of fresh water to produce a ton of steel. How will China cope in the future?
China is smaller than Canada.
Canada/Area 9.985 million km²
China/Area 9.597 million km²
So which country would fill the difference, approximately?
I don’t think Canadians care.
They have the second largest country on the planet, but have a population smaller than California (and a GDP smaller than California- in fact CA has a larger GDP than the UK).
Only Russia is larger.
It also takes a whole lot of fresh water to wash and process coal. Raising more animals for meat raises water needs.
So it would make sense to process coal in water exporting nations? (But even if it would serve logic, anti-coal bias might not permit it?) But there are different types of coal too? What is the rational way to look at the varying processing for them?
I think coal is processed with water before it is exported, because the water use is very early in the processing. Thus, when India or China imports coal from Australia, it is also importing the use of some of its water. Correct me, it someone knows a different situation.
There are definitely different kinds of coal. Anthracite, Bituminous, Sub-bituminous, and Lignite is one standard breakdown. The world keeps moving toward lower quality coal, as the better quality coal depletes.
The peak in world coal consumption seems to have already occurred, in 2013. In fact, this peak in coal production seems have been “baked into the cake,” regardless of pollution concerns. The big problem with coal is the same one as with oil: the price doesn’t rise (enough) to justify extracting the more difficult to extract coal and that which has high transportation costs. Our inventory of coal resources gives a misleadingly high estimate of available coal in the world.
Processing has to be done before shipment, as far as I know.
Some countries have coal and drought together, I think. (Like SA?) If so, they’d need to import water anyway. It’s possible that some of that water could be divided into higher and lower quality water. Lower quality water could go for washing coal.
Water for coal mines is a big issue in cola addicted Australia
Adani plans to take 12.5b litres of water as farmer denied access in ‘double standard’
A farmer has been denied access to a river system Adani plans on drawing 12.5 billion litres of water from in what activists are calling a “double standard”, documents obtained under freedom of information laws show.
The mining giant plans to take 12.5 billion litres of water from the Suttor River every year, nearly as much as all local farmers combined.
Despite this amount, the documents show at least one irrigator had their application for a water licence rejected in 2011, leading activists to claim farmers were assessed more harshly than Adani.
The documents also show the modelling used by the company to predict the impacts of the water usage ignored the past 14 years of rainfall data and, despite planning to take water until 2077, it did not take into account the impacts of climate change.
https://www.abc.net.au/news/2018-09-25/adani-plans-to-take-12.5b-litres-of-water-as-farmer-denied/10298354
Adani coalmine: full environmental statement not required to expand dam 450%
The federal government has ruled the Indian mining company Adani does not have to complete a full environmental impact statement for its application to drastically expand a dam and build a pipeline for its Carmichael coalmine.
https://www.theguardian.com/business/2018/sep/18/adani-coalmine-full-environmental-statement-not-required-to-expand-dam-450
I have co-authored some academic papers with Chinese authors. I discovered in one of them, or perhaps the correspondence relating to it, that China has been running into water limits with respect to coal extraction. It is a very dry country, so using more water for coal leads to less for other uses.
I imagine that India has some of the same issues with its coal extraction.
I know that coal to liquids adds a whole lot more water usage. I have heard that water limits in the US West were one of the reason why this was not pursued. Also, oil price has to stay high, for it to make economic sense.
The Chinese may also be making up the numbers, or including things that real people cannot afford, such as overpriced new apartments.
Some past predictability can perhaps be expected because, with a large amount of coal to extract, and the Western world trying to contain CO2, they were basically being handed an opportunity for growth on a platter.
Now, the cheap to extract coal and oil are both depleting. China is suddenly in a position where it needs to import an increasing amount of fuel, if it is to maintain its growth rate. It is not even clear that this can be done.
and after centuries of medieval living standards they had a glimpse of an alternative
they are not going to be best pleased when it is suddenly snatched away again
http://static4.uk.businessinsider.com/image/59ad6c3253b507e4078b4fd3-1410/china%20debt%202.png
https://duckduckgo.com/?q=china+debt&t=hg&iax=images&ia=images&iai=http%3A%2F%2Fwww.zerohedge.com%2Fsites%2Fdefault%2Ffiles%2Fimages%2Fuser5%2Fimageroot%2F2016%2F10%2F16%2F20161026_chinaliab.jpg
I am a firm believer of walking in the other’s shoes before judging …
So here I am with my dun ce cap on …. trying to imagine what it would be like to be truly f789ing stewpid…. I don’t meant just a brain fart stuuupid … I mean like borderline re tar ded…. my tongue is hanging out of my mouth and I am slobbering … like a hound dog…
I am crossing my eyes… I am making pig grunting noise…. the mood is set…
Now I am going to try to read this https://judithcurry.com/2017/02/04/climate-scientists-versus-climate-data/
With my 75ish IQ I can kinda understand the gist of the paper…. what the guy – who is an expert in kkkklimate science … a gold medal winner …. is saying … is that the kkklimate has not wormed in 20 years…. that all his mates who also have gold medals know that….
But they have changed all the numbers … and are lying about kkklimate chhhhange….
I guess their jobs maybe depend on it???? What do I know … I am only a f789ing re t ard….
Any other re t ards care to help me — I am trying my best to walk in your shoes…. have I got it wrong????
This is priceless..
‘So, in every aspect of the preparation and release of the datasets leading into K15, we find Tom Karl’s thumb on the scale pushing for, and often insisting on, decisions that maximize warming and minimize documentation.’
Agenda, agenda, agenda…its like sugar; mixed into everything these days.
They are using bad thermometers.
What other explanation could there be?
(I’ll try not to laugh)
I can picture you … a liberal koombaya more on … laughing hysterically with drool running down your chin…. wild eyed and wild haird….. as you are confronted with a truth that by all rights should explode your brain because you are so wedded to the ooggle googgle myth….
But you are just so f789ing incredibly stoooopid that you just cannot get it…
If had was an empathetic type of person … I’d feel sorry for you …
But of course I am not … I feel only disdain…. disgust….
And yet… AND YET….
The more onics …. will continue to believe…
Not only that … they will continue to trot out these fake numbers… supporting their beliefs…
Which once again demonstrates that … there is no cure for stuuupidity.
A more-on goes to a doctor …. the doc says we’re run these tests and determined you have terminal cancer…. you will die soon…
The more-on goes home to lament his sad situation …. oh what can I do about this?? what can I do? he researches and researches… this type of cancer is always fatal…. he is doomed…
A couple of days later the more-on is watching the teevee and he sees that his doctor is not a doctor at all… he is being jailed for faking his medical degree — he is getting extra years because he was pulling fast ones on patients faking test results and telling them they were dying…. every single patient he ever treated was given ‘fake results’
The more-on continues to research looking for a cure for his fatal cancer… he tells everyone who will listen that he is dying…. if anyone says to the more-on ‘you look really healthy for someone who is dying’ — he gets very angry … very combative…. he is ready to fight … I AM DYING!!! Isn’t it obvious?????
Another canary ….
UPDATE 1-Li & Fung to spin off logistics business as group profit tumbles
3 MIN READ
* Revenue falls 9.6 pct, core operating profit down 18 pct
The company said the pace of store closures was accelerating this year as retailers move sales to online channels and reduce their retail footprints, destocking store inventory to lower levels.
https://www.reuters.com/article/li-fung-results/update-1-li-fung-to-spin-off-logistics-business-as-group-profit-tumbles-idUSL3N1VD3G3
If you have many canaries is it a flock? A gaggle? A herd?
Lyrically, it’s an opera of canaries. (Of course, I had to look it up!)
In response to Tim’s post… that seems to have disappeared:
As was stated earlier (but removed)…. reading this and still believing is like … being told you had c..ancer … were going to die … then 19 years later you still felt awesome … went to the do.ctor… he said you don’t have ca..ncer….
And instead of celebrating — you attack the doctor with a butcher knife
K,,,,KK….limate sci,,,entists versus k,,,,kkk..kl,,i,,,,ma…te data
by John B…ates
https://judithcurry.com/2017/02/04/c lima te-scientists-versus-c
lim ate-data/
Rejoice Green Groopies! Rejoice!!!!
Your scientists have LIED to you …. they FA.KED the numbers…. All is WELL!!!! You get to LIVE!!!
FE, you really must read the stories, the headlines from search belie the actual text!
“The federal climate scientist hailed by conservatives as a whistleblower for allegedly revealing manipulated global warming data said yesterday he was actually calling out a former colleague for not properly following agency standards for research.
In an interview with E&E News yesterday, former National Oceanic and Atmospheric Administration principal scientist John Bates had a significantly more nuanced take on the controversy that has swirled since a top House Republican hailed his blog post as proof that the agency “played fast and loose” with temperature data to disprove the theory of a global warming “pause.”
Bates accused former colleagues of rushing their research to publication, in defiance of agency protocol. He specified that he did not believe that they manipulated the data upon which the research relied in any way.
“The issue here is not an issue of tampering with data, but rather really of timing of a release of a paper that had not properly disclosed everything it was,” he said.
See https://www.eenews.net/stories/1060049630
FE – what is it about “he specified that he did not believe that they manipulated the data in any way”, that you seem not to understand?
Thanks to Gail for part2. I had a flashback filling the car at the fuel pumps when I realised the price per litre was once again at the highest I’d ever seen it, just before GFC I. I came home and comments were frozen at Our finite world.! No way to calm FE, say yes, we know GFC II comes before globular whimsing, but it wasn’ fake data. No way to say the Japanese moved those spent fuel rods at Fukushima, but, yes, all ponds remain a risk!
And reading part2 seems reassuring – this is happening now. Can I get my kitchen extension finished before the host of expensive parts gets stuck in a failing supplychain?
I tried to keep it all going, I started to believe in BAU, but is the tsunami of fake money finally breaking over us?
Why would I read that interpretation (that leaves out the key stuff) … when I have the EXACT document that is being quoted … right here?
This is what Bates wrote – he is the AUTHOR. This is what is being referenced… by all the other articles… go to the source no?
But nope — more-ons prefer to be told what to think … to reaffirm their stuuuupidity ….because they are stuuuupid.
This is all one needs to know about kkklll mate change — nothing else…. it is FRAUD on an epic scale:
https://judithcurry.com/2017/02/04/climate-scientists-versus-c limate-data/
Why would I read that interpretation (that leaves out the key stuff) … when I have the EXACT docu..ment that is being quo.ted … right here?
This is what B…ates wrote – he is the AUTHOR. This is what is being referenced… by all the other articles… go to the sou.rce no?
But nope — more-ons prefer to be told what to think … to reaffirm their s…t…uu..uupidity ….because they are s…tuuu…upid.
This is all one needs to know about cloppy clange — nothing else…. it is FRAUD on an epic scale:
https://jud
ithcurry.com/2017/02/04/c
limate-scientists-versus-c
limate-data/
“Violence, Public Anger Erupts In China As Home Prices Slide”
https://www.zerohedge.com/news/2018-10-13/violence-public-anger-erupts-china-home-prices-slide
Suddenly, there’s a tinge of fear among sellers in Hong Kong’s property market
A recent wave of price discounting for both residential and commercial properties indicates a softening in sentiment
Signs of a deepening slowdown are beginning to emerge in Hong Kong’s property market, with anecdotal evidence showing more homeowners and office space owners are slashing prices in a bid to exit the market, even as there’s few signs of a broad based downtrend.
A 282 square foot flat at Tak Bo Garden in Kowloon Bay sold on Tuesday for HK$4.33 million (US$552,496), or HK$15,355 per sq ft, 8.8 per cent cheaper than an equivalent sized flat in the same area that sold a week earlier. In comparison to a similar unit sold in May, the price was more than 16 per cent lower.
Another homeowner lost more than HK$2.6 million after holding a 1,725 sq ft unit at The Legend in Jardine’s Lookout for 11 years. The unit was bought in 2007 for HK$48.6 million and sold on October 9 for HK$46 million, nearly 12 per cent lower than the owner’s original asking price.
“It is the early stage of a bear market already as we see that more homeowners are cutting prices,” said professor Eddie Hui Chi-man from Polytechnic University’s department of building and real estate. “If the trade war and interest rate tightening continues, we may see a worse market in the first quarter of 2019.”
“Buyers who are worried about a further plunge of the market rushed to sell their units and continue to lower their asking prices,” said Derek Chan, head of research at Ricacorp Properties. “The gloomy economic outlook will put more pressure on transactions as well as prices in the fourth quarter.”
More https://www.scmp.com/business/article/2168190/suddenly-theres-tinge-fear-among-sellers-hong-kongs-property-market
Sales of newly completed flats flopped for a second consecutive weekend in Hong Kong, as a stock market rout, rising mortgages and the worsening US-China trade war deterred buyers from two newly completed apartment projects in the city.
Nan Fung managed to sell only 100 units, or 20 per cent of the 491 flats offered, at its LP6 project at Lohas Park in Tseung Kwan O as of 5:30pm on Saturday, even after discounting the offers by 19.5 per cent, for an average price of HK$16,006 per square foot. At the One East Coast project at Yau Tong in Kowloon, only 43 of the 130 condominium units on offer were sold, agents said,
https://www.scmp.com/property/hong-kong-china/article/2168445/hong-kongs-home-sales-flop-market-rout-higher-mortgages
https://youtu.be/kZoFYCDRMYM
Maybe…..
This seems to be part of China’s debt bubble starting to pop.
China doesn’t have (or historically hasn’t had) a real estate ownership tax, making ownership of extra homes a supposedly safe way of saving money. Citizens haven’t figured out that price levels depend on how high the debt level is. With the US raising interest rates, it puts pressure on China to raise interest rates.
Having only read the first section that comes up before clicking to find the rest of the post, this was a clear an explanation as I can recall.
I was hoping that even if readers didn’t get any farther than the first screen, they would have a chance to learn something.
With admirable success. I posted the entire section to my Facebook friends list. Listing the FW url at the end. Nice, new, big image of you, BTW. That, compared with music, would be like amplifying sound.
Australian sensitivity to petrol prices:
https://pbs.twimg.com/media/DpdreqqUUAAcBd9.jpg
There is definitely some flexibility in the amount of fuel people use. They don’t go on vacations out of town as much if fuel prices rise. They may eat at home a bit more. They combine trips. Young people live with their parents longer, so don’t need/use second cars.
“Even countries with more modest decreases, such as China and India, are cutting back on automobile purchases. This change will affect future oil demand.”
I don’t have the necessary info compartmentalized or may have missed it. Is there any data showing how the price of oil affects new or even used car sales? Will not people have to postpone new car purchases to maintain the ability to keep their current clunker gas tanks full? It seems that as gas prices go up, people will be less able to afford new or even used replacement cars. What percentage of oil do cars represent in the overall energy scheme?
Did I not read an article – maybe Zerohedge, about the big truck sales or hiring of CDL drivers also having peaked out? This is like a domestic version of the Baltic Dry Index, a statistic which seems to have vanished from the scoreboard in the past two years.
This is a continuation of the decline in iPhone sales as a harbinger of the consumer being tapped out that I was talking about last post.
In the meantime, enjoyed this post. I just wish some warhorses like Peter Schiff could get his blinders (and address the energy issue) off. When he and others miss such an important underpinning of the economy, it is very difficult to take them seriously.
I think that part of the issue with rising energy prices is the problem of the currencies of the big oil importers sinking at the same time. This makes any kind of imported raw material more expensive, so domestically made cars become more expensive. It also causes imported cars to become more expensive.
The issue isn’t so much that the price of the fuel that they buyer puts in the tank that rises, it is the price of the vehicle itself that rises. Actually, both rise at the same time. Also, the price of food rises, partly because of the falling currency causes imported food of any kind to rise, and partly because (imported) oil is used in growing food. It is this combination effect that leaves buyers with a car affordability problem.
Recently, there have been articles about car sales falling almost everywhere in the world in September 2018. Rising oil prices, and the follow-on disruption of currencies, have been given as the reason for the problem.
from the article:
“Thus, we have a combination problem: no interest rate works for everyone, and no set of energy prices works for everyone.”
and then the worst problem of all would be for countries who borrowed too many US dollars and also are not energy exporters…
You are probably right.
I tried to see if I could see any articles about borrowing in US$. I know that Emerging Market countries especially cannot find enough lending capacity in their own currency, so they tend to be ones who borrow in dollars. This map shows credit ratings of different emerging market countries.
https://amp.businessinsider.com/images/5afe08db1ae66219008b473e-960-473.jpg
The map is from the following May 2018 article about countries at risk of the surging dollar. https://www.businessinsider.com/countries-most-at-risk-from-the-surging-us-dollar-2018-5?r=UK&IR=T
It would be helpful to know more about particular situations. India, for example, is a big importer of energy. It also keeps ramping up its debt level, because every year it imports much more goods and services than it exports. Its debt rating seems to be not too bad on this map, but I am not so sure about the situation. There was a big default recently by IL&FS Group. This company is practically part of the government–it funds infrastructure projects.
I knew I should have bought whiskey instead of the zero turn mowing machine….
and now, back to the current article…
part of the conclusion:
“Thus, the situation today is a lot like 1929 before the debt bubble collapsed, or a lot like 2007 before the economy derailed. Things look good, but they won’t necessarily stay favorable for very long.”
yes, and there was vastly more cheap FF available in the decades following 1929…
thus, vastly more surplus energy to fix the problem…
in the decade following 2007/2008, there probably has been decreasing surplus energy…
thus, the problem could not be fixed, but only bandaged with debt so there could be a recovery…
in the future, along with decreasing surplus energy will be decreasing debt…
thus future recessions/depressions will have no way to recovery…
What we need, obviously, is to vitrify the debt, encase it in steel drums, and bury it so deep beneath Yucca Mountain that it will never come back to bite us in the rear end. I’m a bit hazy as to the specifics of how to accomplish this, but for a small contingency fee—say, 10 million bucks in government subsidies—I’m sure I could come up with something feasible.
I am ready willing and able to do it for 5 million bucks…
!!!!!!!!!!!!!!!
2007 … anticipating the crash of HK property … I had piled into gold … then the Fed stepped in and f789ed m….
10 years later… the HK property market is set to blow out… I have some of the gold on hand still… I suspect the CBs are running out of bullets…. that the HK market will implode….
I don’t think I will take the opportunity to buy in ….
And I won’t even be able to remind people of what I said when the market rocketed off in 2009… that it was all about QE ZIRP… that the ‘recovery’ was fake … that it was all going to implode — just from greater heights when the jet fuel was withdrawn… nope — you know how it is… nobody remembers that….
Denying C C is so 5 years ago. Now every thinking human knows that AG W is real. FE, drop the C C topic, because nobody will listen to you about this, and you will only make yourself (more) untrustworthy.
In the meantime listen to some good music: https://www.youtube.com/watch?v=Q7co9riPV8M&feature=youtu.be&t=128
OH it is real… of course it is real…. that’s why Greenland is no longer green… it’s why there are deserts where there were once fields of grain…
The kkklimate is always changing….
However for the past 20 years…. there has been no overall warming of the kkkklimate…. a very senior scientist has exposed the lie.
WTF don’t you get? Are you re tar ded?
Ok, you make my humor go up, but check the music. I love Progressive House 🙂 Especially after alkohol 🙂 If you’re above 35 you may not like it 🙁
the atmosphere was 3 parts C O 2 and 9,997 parts “other”…
now it is 4 parts to 9,996 “other”…
there is no denying this…
we must accept these facts…
I am a firm believer of walking in the other’s shoes before judging …
So here I am with my dun ce cap on …. trying to imagine what it would be like to be truly f789ing stewpid…. I don’t meant just a brain fart stuuupid … I mean like borderline re tar ded…. my tongue is hanging out of my mouth and I am slobbering … like a hound dog…
I am crossing my eyes… I am making pig grunting noise…. the mood is set…
Now I am going to try to read this https://judithcurry.com/2017/02/04/c lima te-scientists-versus-c
limate-data/
With my 75ish IQ I can kinda understand the gist of the paper…. what the guy – who is an expert in kkkklimate science … a gold medal winner …. is saying … is that the kkklimate has not wormed in 20 years…. that all his mates who also have gold medals know that….
But they have changed all the numbers … and are lying about kkklimate chhhhange….
I guess their jobs maybe depend on it???? What do I know … I am only a f789ing re t ard….
Any other re t ards care to help me — I am trying my best to walk in your shoes…. have I got it wrong????
Yes! It’s really happening, unfortunately. AGW, as in Al Gore Waffling. He’s at it again following the detestation caused by Hurricane Michael.
https://static.pjmedia.com/news-and-politics/user-
content/50/files/2018/10/AP_18271566165794.sized-770x415xc.jpg
Gore: Jet Stream ‘Getting Loopier and Wavier,’ So ‘We Have a Global Emergency’
Gore told PBS in an interview aired today that “the earmarks of this latest storm… are worth paying attention to.”
“Hurricane Michael intensified as it reached the coast. And that’s something relatively new,” he said. “And the reason for it is, the ocean waters are much warmer than normal, so it’s not getting cold waters churned up to weaken the storm. It just keeps on getting stronger.”
“Even without hurricanes, we get these so-called rain bombs that just devastate the places where it falls,” he said. “…Hurricane Florence and Hurricane Harvey just stayed in place for days and days and days. That’s something new too.”
“And it’s because we’re beginning to see the disruption of wind currents, along with ocean currents. And so the Northern Hemisphere jet stream that normally moves these storms out to the east is getting loopier and wavier and sometimes disorganized. So this is really serious stuff. We have a global emergency. And you use a phrase like that, and some people immediately say, OK, calm down, that it can’t be that bad. But it is.”
https://pjmedia.com/news-and-politics/gore-jet-stream-getting-loopier-and-wavier-so-we-have-a-global-emergency/
What irks me most is not the lying or the spinning or the decades of failed predictions or the tens of millions of dollars this scam artist has made. It’s that the communities hit by Hurricane Michael haven’t even counted or buried their dead yet and the hippo-critical old gasbag is at it again. How does that old saying go? Never let a good disaster go to waste.
As was stated earlier (but removed)…. reading this and still believing is like … being told you had cancer … were going to die … then 19 years later you still felt awesome … went to the doctor… he said you don’t have cancer….
And instead of celebrating — you attack the doctor with a butcher knife
K,,,,KKlimate sci,,,entists versus k,,,,kkkkl,,i,,,,mate data
by John Bates
A look behind the curtain at NOAA’s KK…KKKl…im…ate data center.
I read with great irony recently that scientists are “frantically copying U.S. KKKKli…..ate d..ata, fearing it might vanish under Trump” (e.g., Washington Post 13 December 2016). As a KKKKlim…ate scie….ntist formerly responsible for NO..AA’s ckkki…mate archive, the most critical issue in archival of k…kkkli…mate data is actually sc…ientists who are unwilling to formally archive and document their data.
I spent the last decade cajoling kkk..klim…ate scie…ntists to arch.ive their dat..a and fully document the datasets. I established a kkk..kklim…ate data records program that was awarded a U.S. Department of Commerce Gold Medal in 2014 for visionary work in the acquisition, production, and preservation of kkk…kli..mate data records (CDRs), which accurately describe the Earth’s changing envir..onment.
https://judithcurry.com/2017/02/04/c lima te-scientists-versus-c
limate-data/
so look on my works—o ye mighty
and despair
Now that I have that off my chest… I can read the article….