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
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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
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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
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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
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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
The wind is howling …. very dark sky here in the Queenstown area…. it would be an appropriate night to bring the curtain down.
I am sitting on the porch … on my rocking chair…. cradling my 12 gauge shotgun…. with a glass of whiskey….. come to me…. come to me … COME TO ME you wicked beast….
https://youtu.be/ewrBaGnaT1M
“A battery made using magnets might give us planes that don’t pollute
“Top battery scientists are developing a new battery specifically designed to electrify flight and slash airline emissions, one of the fastest-growing sources of greenhouse-gas pollution.
“How does it work? Rather than altering the composition of batteries, the research focuses on the alignment of compounds within them. By applying magnetic forces to straighten the tortuous path that lithium ions navigate through the electrodes, the rate at which the device discharges electricity could be boosted. It might be enough to meet the huge demands of a passenger aircraft at liftoff.
“Uses? Air travel accounts for around 2% of global carbon dioxide emissions, but that figure is growing rapidly. The battery would enable regional commuter flights on advanced hybrid planes that don’t burn fuel or produce direct climate emissions.
“However…Until the batteries are actually created and tested, it remains to be seen how well this approach will work. Even in the best-case scenario, we are still decades away from electrifying more than a fraction of total air miles.”
https://www.technologyreview.com/s/612351/top-battery-scientists-have-a-plan-to-electrify-flight-and-slash-airline-emissions/?utm_source=TR&utm_content=10-30&utm_source=MIT+Technology+Review&utm_campaign=44758e116f-EMAIL_CAMPAIGN_2018_10_30_01_06&utm_medium=email&utm_term=0_997ed6f472-44758e116f-153961373
Afraid it ain’t gonna happen soon enough.
Such articles have no basis…. they are put out there to give the masses hopium
The warning bell has rung in Hong Kong as prices of used homes in September dropped at a much faster speed than in the previous month, continuing a slide that is sparking worry through the property market, from agencies to homeowners to developers.
Centaline Property Agency has stopped expansion and will lay off agents who aren’t selling homes.
“At least a quarter of agents could lose their jobs,” Louis Chan, Asia-Pacific vice-chairman and chief executive of the residential division at Centaline, said on Tuesday.
Commission revenue at Centaline in October amounted to only about HK$150 million, leading to a loss of about HK$100 million, Chan said. The agency plans to issue warning letters to about 500 agents who made less than HK$100,000 in commissions in the first 10 months of this year.
He likened the downbeat sentiment of the current property market to what happened during the SARS epidemic in 2003, which led to a low turnover.
Chan also predicted that new launches by the end of the year will sell at discounts of 10 to 20 per cent.
https://www.scmp.com/property/hong-kong-china/article/2170978/warning-bell-has-rung-home-prices-dropped-much-faster-last
I was going to abandon any further look into Lewis Mumford till I saw this. Looks like he foresaw our time fairly accurately:
Manson describes the dystopian vision of the future that Mumford warned of:
“The beleaguered– even ‘obsolete’–individual would be entirely de-skilled, reduced to a passive, inert, ‘trivial accessory to the machine.’ Technical surveillance and limitless data-collection—’an all-seeing eye’ (Panopticon)—would monitor every ‘individual on the planet. Ultimately, the totalitarian technocracy, centralizing and augmenting its ‘power-complex,’ ignoring the real needs and values of human life, might produce a world ‘fit only for machines to live in'”
https://en.wikipedia.org/wiki/The_Myth_of_the_Machine
These are big stadiums… unlike most other sports they virtually all hold around 100k…
People simply do not have spare cash…
https://www.onenewsnow.com/sports/2018/10/15/week-6-still-thousands-of-empty-seats-in-nfl-stadiums
Or maybe it’s because of 12 minutes of effective gameplay for a 3 hour match? People don’t want to pay for such thing.
Actually both you and Fast Eddy are correct. It now costs an average family of 4 around $1,600 to watch an NFL game when you count tickets, parking, concessions. So FE is correct on that count and remember NFL teams play only 8 regular season games. If they make the playoffs then it’s a bonus.
I think you are being overly optimistic with 12 minutes. I’ve read actual game action is around 5-6 minutes for 3 hours. Typically each play on average is just a few seconds.
8 regular season home games, subsidizes billion dollar stadiums, plus player’s salaries.
1. The average cost of a ticket is $85. There are public transportation options. You don’t have to buy expensive stadium food and drink. Just eat before the game
2. I watched condensed games on nfl.com…. no commercials… no chatting … just the plays… it takes about 30 minutes to watch the game…. if you compare that with games like rugby its about the same if you factor in all the scrums and line outs… it’s the commercials that ruin the live broadcast game… if you want to watch constant action … watch ice hockey or basketball
3. Commercials are not new — this attendance issue started only recently. Also TV ratings are moving higher … so people are opting for the much cheaper option – they remain interested… they just have no MUNNY.
4. MLB Attendance Drops to Lowest Average in 15 Years. Major League Baseball has taken a big hit this year — in league-wide attendance that is. MLB attendance has dropped to its lowest average in 15 years, down 6.6% from this time last year and 8.6% overall, according to Stats LLC.Jun 15, 2018
5. You don’t need to look at the numbers–you can simply look at the games–to know that attendance in the NBA is dropping each and every year. SO WHY ARE WE SEEING SMALLER AND SMALLER NUMBERS AT THE GAME? The fact is, a decline in fan attendance is affecting college football, professional baseball, basketball, and football, even motorsports:
https://www.sonicsrising.com/2014/3/28/5533982/why-nba-attendance-numbers-are-dropping
As usual… FE is right. Because FE is the World Champion. And attendance at FE’s matches is on the rise… because watching the FE show … is Free.
And btw… while on the topic of being right….
KKKLIMATE DA.TA FA.KED
by John Bates (leading kkklimate scientist)
In the following sections, I provide the details of how Mr. Karl failed to disclose critical information to NOAA, Science Magazine, and Chairman Smith regarding the datasets used in K15. I have extensive documentation that provides independent verification of the story below. I also provide my suggestions for how we might keep such a flagrant manipulation of scientific integrity guidelines and scientific publication standards from happening in the future. Finally, I provide some links to examples of what well documented CDRs look like that readers might contrast and compare with what Mr. Karl has provided.
https://judithcurry.com/2017/02/04/c limate-scientists-versus-c limate-data/
It depends on the team. In 1994 I went to a Miami Dolphins game and bought the tickets on the cheap from an individual who paid $250 and those were really nice seats on the 50 yard line. Ticket prices today for an NFL game are really pricey.
A cup of beer at some stadiums can go for $20.
Despite the (slowly) crumbling economy, no evidence of falling attendances at the equally boring game of English football:
https://www.statista.com/statistics/268598/premier-league-total-aggregate-attendance/
This summer, the deck chairs at our village cricket ground were all full.
No concrete in sight,too. 🙂
See the table of ticket costs….
https://www.goal.com/en-au/news/premier-league-ticket-prices-in-2018-19-how-much-does-it-cost-to-/p3a46sx6u8kr14mmpp7kn5dwt
Yes, I see NFL tickets are much more expensive than Premier League prices. Little (less than 20%) of a Premier League club’s income comes from ticket sales, so I expect tickets are priced to ensure close to full capacity every week.
Football Is Life
By any measure, the NFL is the most successful sports league in history. For all the talk of North America’s “Big Three” sports (or to appease hockey fans, Big Four), the reality is that there’s pro football, and then there’s everything else. The most-watched television programs in history, without exception, are Super Bowls of various years. The NFL’s is not dominant on just a national level, either. Consider that the highest-grossing soccer league in the world, England’s Premier League, only generates roughly half the revenue of the NFL.
Ticket sales are little more than a rounding error on a typical NFL team’s balance sheet. It’s TV that drives the train.
https://www.investopedia.com/articles/personal-finance/062515/how-nfl-makes-money.asp
Ticket sales are little more than a rounding error on a typical NFL team’s balance sheet.
Then they really ought to be reducing ticket prices to keep up appearances and not hurt the players’ feelings.
Try the FIFA World Cup with a total audience of around 3.5 Billion for the 2018 tournament. Certainly the NFL has higher revenue, but interested participants/followers? Nup.
The World Cup is not a league….
They will be handy for executions, come the civil war. when Franco captured a town in the Spain of the 1930s, he typically lined up all the known and defeated lefties in the bull ring and machine-gunned them. A Times journalist who witnessed one such spectacle described how the blood from the executed gradually drenched the sand in the bull ring. He said he’d never seen so much blood.
Badajoz: tragic place – scene of a terrible massacre by the British common soldiers about 100 yrs earlier, who were ‘saving’ the town from Napoleon. They shot and threatened their officers, too.
Throw Trump and Melanie into the Rose Bowl … in a cage match against Hillary and Bill….
And that stadium will be full…. I guarantee it….
Or perhaps drag some of the Beak Noses from the Fed down there and throw in some lions…. the attendance and ratings would be Off The Charts.
I see an articles related to baseball on this subject. It claims a tax law change is making a big difference.
https://www.trentonian.com/sports/jay-dunn-empty-seats-an-eyesore-at-stadiums-around-the/article_28051702-abab-11e8-a10e-8b1e05c36918.html
JAY DUNN: Empty seats an eyesore at stadiums around the league
That appears to have changed and changed abruptly. Late last year Congress enacted a new tax law, which is now in effect. The law, itself, is very controversial. Proponents say it will stimulate the economy. Opponents say it benefits only the rich.
Abruptly is the wrong word…. attendance across the board at virtually all pro sports in the US has been in decline starting well before this new law…. but no doubt these new tax laws are having an impact as well…
Keeping fans in the stands is getting harder to do
Published 1:56 PM ET Tue, 16 July 2013 Updated 3:15 PM ET Tue, 16 July 2013
In fact, live attendance in other U.S. sports—pro basketball and football, motor sports and even college football—has declined or leveled off the last three to five years.
https://www.cnbc.com/id/100886843
So the drop started around the time of the GFC….
Anecdotally …
“I have not heard any of my clients say they’re not buying any tickets,” said Christensen. “A lot of the season-tickets for this year were purchased before the law came into effect on January 1, so it would be tough to tell how much, if at all, the law has impacted this year’s ticket sales.”
https://sports.cbslocal.com/2018/07/11/sports-attendance-tax-cuts-and-jobs-act/
Why would a smoke detector beep if it doesn’t have a battery?
If it is hardwired, it is probably still connected to AC and powered by AC.
If it is not, it is probably the “Beep capacitors” inside which is still storing electricity and still has enough power to emit a quiet beep.
This happened to me once. There was a smoke detector that was annoyingly chirping and I didn’t have any more 9V batteries. I took the battery out and unplugged the AC, and it was still chirping! It was probably the capacitors. After 5 minutes it stopped.
Does Elon Musk know about these beeb capacitors? With enough smoke detectors he could power a small house for at least 2-5 minutes. His stock would go to the moon.
This breakdown – triggered by polarizing circus politics, media-fed mass hysteria, racism, classism, xenophobia, militarization and militainment (the selling of war and violence as entertainment), a sense of hopelessness and powerlessness in the face of growing government corruption and brutality, and a growing economic divide that has much of the population struggling to get by—is manifesting itself in madness, mayhem and an utter disregard for the very principles and liberties that have kept us out of the clutches of totalitarianism for so long.
https://www.rutherford.org/publications_resources/john_whiteheads_commentary/can_the_fourth_reich_happen_here_america_is_on_the_brink_of_a_nervous_breakdown
(the selling of war and violence as entertainment)… this is modern day bread and circuses…
What the author neglects to mention … is the cause… as prosperity wanes due to the decline of affordable energy … the masses must be delivered a very strong message — we are watching you — if you get out of line — we will take you down.
The author fails to realize that this authoritarianism is needed — that it is logical — that it is good…. because it buys us a little more time before the serious suffering starts
Peak Shale: Is the US Fracking Industry Already in Decline?
https://www.desmogblog.com/2018/10/30/peak-shale-us-fracking-industry-permian-decline
Great read!
Oil discoveries in 2017 hit all-time low –Houston Chronicle
https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php
IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790
Saudi Aramco chief warns of looming oil shortage
https://www.ft.com/content/ed1e8102-212f-11e7-b7d3-163f5a7f229c
An oil crisis may be brewing — and it’s not because of decreasing demand
http://www.businessinsider.com/an-oil-crisis-may-be-brewing-and-not-because-of-decreasing-demand-2018-4
World Oil Shortages To Lead To Oil Price Spike By 2020s, warns Goldman Sachs
http://oilprice.com/Latest-Energy-News/World-News/Supply-Crunch-To-Lead-To-Oil-Price-Spike-By-2020s-Expert-Says.html
HSBC Global Bank: 81% of world liquids production already in decline and world oil shortages ahead
https://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
Citigroup CEO Ed Morse warns of oil shortages coming soon
https://www.bloomberg.com/news/articles/2017-09-25/citi-says-get-ready-for-an-oil-squeeze-than-an-opec-supply-surge
2020s To Be A Decade of Disorder For Oil -Former head of EIA
https://oilprice.com/Energy/Energy-General/2020s-To-Be-A-Decade-of-Disorder-For-Oil.html
https://www.godlikeproductions.com/sm/52d222e9.gif
American breakdown: Uncle Sam pays an overdue visit to the psychiatrist couch
https://www.rt.com/op-ed/442654-uncle-sam-american-breakdown/
“Violence is as American as cherry pie.”
― H. Rap Brown
Violence is as human as making pointy sticks, and having roast pig for dinner. 🙂
http://img.picturequotes.com/2/427/426803/kill-the-pig-cut-his-throat-kill-the-pig-bash-him-in-quote-1.jpg
The Americans did not invent cherry pie. Or apple pie. So there. They don’t even have their own language.
Ugo’s new post is very interesting:
https://cassandralegacy.blogspot.com/2018/10/how-could-europe-conquer-world-seneca.html
“Then, Forests are the basic resource needed to conquer the world and the Europeans exploited them effectively. Trees provide the wood for ships and the charcoal made from wood provides the material needed to make steel for weapons. Not for nothing, it was said that England had conquered an empire with ships of wood and men of iron.
But how was it that the Europeans were so much better than others at exploiting their forests? As always, success is a question of timing, opportunities, and luck. On the opposite side of the Mediterranean, the Arab civilization was socially and technologically as sophisticated as the European one – perhaps more – but their climate didn’t allow forests to grow fast enough to avoid rapid overexploitation (2). The American civilizations we call “pre-Columbian” had forests, but they hadn’t yet developed the technologies of steel and of oceanic ships — they also lacked horses for transportation and as a military weapon. The Chinese, instead, had the technologies and also the forests and, indeed, they embarked in a parallel phase of explorations.
During the 12th-13th centuries an outbreak of the same plague that had affected Europe caused a decline in the Chinese population, that was followed – possibly as a consequence – by the Mongol invasion which led to the fall of the Song dynasty. When the Chinese economy experienced its own Seneca Rebound, the age treasure voyages started in the early 1400s, during the Ming dynasty, in a period when the population had restarted growing.
But the Chinese stopped their exploration phase and retreated within their borders. So, the Europeans found no competition in their worldwide expansion and that was the origin of the history we know.
These considerations are qualitative, but I think there is something in the idea of the “Seneca Rebound” as an engine that propels civilizations forward in bursts. If this is the case, if the world’s civilization goes through a new Seneca Collapse, as it is likely to happen, will it restart expanding afterward? If we manage to avoid that the coming crash is so bad that we lose the knowledge we accumulated over several centuries and that climate change doesn’t erase humankind as a species, we may well restart expanding using renewable energy — this time into space. Why not?”
Ugo is obviously being sarcastically optimistic towards the end, but a post-collapse civilisation with at least some basic industrial tech is certainly feasible. Hybrid horse/electric carriages, online shaman portals, MMBCs (massively multiplayer butter churns) etc.
I think Ugo is just confused. You have to come out of a collapse with enough to rebound from a Seneca Cliff. Our economy is so focused on technology that we need a wide range of resources plus international trade to get these resources. Our problem now is that these resource are becoming too depleted to generate enough profit to work. This situation will not get better.
Ugo has his mind on some models that don’t really don’t work in the real world. He is not being sarcastically optimistic. He believes this stuff.
He is obviously … crazee
https://wallybazoomprescribes.files.wordpress.com/2015/01/cropped-crazy-old-man.jpg
Perhaps he does believe it to some extent, but that space colonisation with renewables line is most probably sarcasm. As a scientist he knows that is impossible. Ugo still has many genuinely insightful things to say (including in that article) so I’m willing to take the bad with the good.
Perhaps he takes copious amounts of hard drugs … and has spells of delusion?
Every previous ‘rebound’ has been built on the backs of peasant and animal labour.
Collapses, of civilizations which were not global, also allowed the ecosystem to regenerate in many instances and drastically cut the human and domesticated animal population.
This will not be possible for our global, industrial civilization which is squeezing the Earth dry like a lemon.
Florida Sen. Bill Nelson compares current US political climate to Rwanda before genocide
https://www.cnn.com/2018/10/29/politics/nelson-us-climate-rwanda/index.html?utm_content=2018-10-29T23:01:04&utm_medium=social&utm_source=twCNN&utm_term=image
Now that would be entertaining as hell!!!
Machete-up bros!
In the US that would be literally bringing a knife to a gun fight!!
https://cassandralegacy.blogspot.com/2018/10/how-could-europe-conquer-world-seneca.html?m=1
New post by Ugo Bardi where he tries to explain the european dominance of the word through «the Seneca Rebound Effect». He concludes with this over the top remark:
«These considerations are qualitative, but I think there is something in the idea of the “Seneca Rebound” as an engine that propels civilizations forward in bursts. If this is the case, if the world’s civilization goes through a new Seneca Collapse, as it is likely to happen, will it restart expanding afterward? If we manage to avoid that the coming crash is so bad that we lose the knowledge we accumulated over several centuries and that climate change doesn’t erase humankind as a species, we may well restart expanding using renewable energy — this time into space. Why not?»
Ugo has been a big believer in Sky Kites for generating renewable energy. https://cassandralegacy.blogspot.com/2016/10/an-awesome-energy-source-where-do-we.html
He also has not stopped to think how unrealistic the future scenarios that the IPCC puts together really are. Or how unrealistic the use of renewable energy really is.
Agree, he is more interesting when he looks back.
A new twist on Schumpeter’s “creative destruction”.
Here comes the fusion hopium train (again) choo choo!!!
https://www.bloomberg.com/news/articles/2018-10-30/nuclear-fusion-financed-by-billionaires-bill-gates-jeff-bezos?srnd=premium-asia
Recall how China announced they were going to throw billions at this a few years ago as well…
Yet fusion remains ‘decades away from a commercially viable solution’ – always decades
OK. If a fusion powered automobile that needs refueling every 1,000,000 years were invented I would consider that a breakthrough. Further, if that same technology was clean and the fuel abundant and it could also be used to power homes, warehouses, businesses, trucks and the like then, I might then have to rethink my conclusion that technology will not save us. Until then technology will not save us.
Opps, I forgot to add infinite resources as well. My bad!
Don’t forget the other mineral resources, plus resources for associated infrastructure. As well as the need to allow for the effects of exponential growth, not just “X years at current rates of consumption”, the need for everything to remain affordable, and the enormous quantities of resources we put into such basics as food and pharmaceuticals. Plus the additional resources to allow the general population to continue to hold the perception that everything just keeps getting better (new stadium on a regular basis, new techno gadgets and fashion accessories with almost every news bulletin, etc).
Looks like we’ve nearly run out of time then. Only the hopium remains.
“All girl engineer team invents solar-powered tent for the homeless” on Mashable.com
The girls will save us….everything is all right now.
Next up …a team of transgender superfreaks launches a solar space project under the guidance of their very freakish leader Keith Almighty….
They’re training them young now.
Next step is no clothes!
6,722,397 views
Thumbs Up: 328K
Thumbs down 2.4K
https://youtu.be/FQBq84IShAI
I am … here:
https://youtu.be/COZPAa817xY
It’s too late, FE. You can’t stop it.
https://www.bbc.com/news/world-europe-46029980
‘Danish PM hits back at White House living standards report’
“Writing on Facebook, Mr Rasmussen said Denmark “would win every time” in a competition with the US. “Our children can get an education – no matter who you are and where you come from,” he wrote. “We can get to the hospital and get help if we get sick… And if you become unemployed, run into problems or otherwise need a helping hand, then the community is ready to seize and help one back on the right track.”
“The only area where the US outperforms Denmark, Mr Rasmussen added, was in praising its own achievements: “Maybe we should just get better at bragging more about everything that we actually do really well?”
Laundering money?
ROFLMAO!
“Maybe we should just get better at bragging more about everything that we actually do really well?” – Or, how about printing money out of thin air and creating loans by leveraging that money 10:1 and charging interest on it? We are good at that. Too bad it isn’t sustainable.
Or how about how great it is that the Russians have not taken over the country and expropriated the oil…. because the American military would not allow that….
It is rather hilarious.
Why Denmark dominates the World Happiness Report rankings year after year
http://theconversation.com/why-denmark-dominates-the-world-happiness-report-rankings-year-after-year-93542
okay, so they have “hygge”…
what the article doesn’t make explicit is that their “hygge” seems to be entirely dependent on their country being essentially a mono-culture…
a small mono-cultural country leading in happiness?
no surprise, really…
yep–
happy as can be
I think of Denmark as “The four L’s”. Lager, Lego, Lurpak and the Little Mermaid. It doesn’t get much duller. Its greatest gift to world culture was the Barbie girl song, which is more mocked than adored. Ever been to Denmark? Don’t bother. It’s very flat, dull and boring.
Denmark is also known for trying to make a go of intermittent renewable energy, being next door to Norway where hydroelectric can be used for balancing. Euan Mearns has shown that its use of wind and solar, like that of Germany, is correlated with high electricity costs.
https://gailtheactuary.files.wordpress.com/2016/08/euan-mearns-europe-electric-price.png
Paul-Frederik Bach (a retired engineer in Denmark) has shown that its greenhouse gas emissions (including households) per capita are very high.
http://pfbach.dk/firma_pfb/references/pfb_green_competition_2018_05_05.pdf
https://gailtheactuary.files.wordpress.com/2018/10/p-f-bach-eu-greenhouse-gas-emissions-per-capita-incl-households.png
I believe that this has to do with the need for heating individual homes in a cold climate. Even at that, the numbers seem high to me. Germany and Norway end up very high as well.
Denmark has seen a steady increase in immigration over the past thirty years, with the majority of new immigrants originating from non-Western countries. As of 2014, more than 8% of the population of Denmark consists of immigrants. The population of immigrants is approximately 476,059, excluding Danish born descendants of immigrants to Denmark. This recent shift in demographics has posed challenges to the nation as it attempts to address religious and cultural difference, employment gaps, education of both immigrants and their descendants, spatial segregation, crime rates, and language abilities.
https://en.m.wikipedia.org/wiki/Immigration_to_Denmark
Danes may not be too happy in the near future
https://peakoil.com/consumption/denmark-becomes-net-oil-importer-for-first-time-in-25-years
Sorry, I could’t resist this.
https://3.bp.blogspot.com/-4QvAfBYp7Mk/WKSzOzINq3I/AAAAAAAAFNo/xlcgfXje3QYqcArWUoUu_v7agc-KJj-BQCLcB/s400/shakespeare-Quotes-5.jpg
Oops! That tends to put an end to frivolous activities.
Scandinavia may not be so welcoming to the riff raff ‘refugees’ being allowed to flood in … as prosperity wanes….
https://www.thedailybeast.com/humanity-has-destroyed-60-of-animal-populations-since-1970-report
‘Humanity Has Destroyed 60% of Animal Populations Since 1970: Report’
“Human beings have killed—or lead to the deaths of—60 percent of Earth’s mammals, fish, birds, and reptiles since 1970, according to an estimate published in a report by the World Wide Fund for Nature. The study was created by 59 different scientists from around the world, who say the rapid consumption of resources and food by humans has crippled the globe’s web of life, The Guardian reports. Together, those animals created a system that ultimately has kept humans thriving on food, clean air, and water. “This is far more than just being about losing the wonders of nature, desperately sad though that is,” Mike Barrett, executive director of science and conservation at the WWF, told the newspaper. “This is actually now jeopardizing the future of people. Nature is not a ‘nice to have’—it is our life-support system.” He added, “We are sleepwalking toward the edge of a cliff.”
This 6th extinction event is brought you to by Homo Collossus, with an economic need for expansion coupled with an instinct to procreate until something against our will forces us to slow down.
And for an ENCORE…. watch as the stuuupid humans extinct themselves!
http://straighttalkmd.com/wp-content/uploads/2016/08/SpentFuelPool1.jpg
nice photo. it’s so organized. what could possibly go wrong?
“Hey, who switched of the lights…?”
…
“Boy it’s getting hot in here…”
https://boardofwisdom.com/cachetogo/images/quotes/224500.png
Someone posted this on my FB wall recently..LOL
https://imgur.com/a/xxc5kIe
“[facebook-symbol]/Awaken the mind.”
LOL
You’re on Facebook?
Astounding….
https://oilprice.com/Energy/Crude-Oil/High-Oil-Prices-Are-Already-Destroying-Demand.html
‘High Oil Prices Are Already Destroying Demand’
“Crude oil prices have gone up high enough to begin hurting demand for the commodity, the chief of the International Energy Agency, Fatih Birol, said as quoted by Reuters on the sidelines of an industry event in Singapore.”
“Birol noted the adverse effect of higher oil prices on large emerging economies in particular, including India and Indonesia, saying, “Many countries’ current account deficits have been affected by high oil prices.”
As we can see, even if supply someday drops sharply due to depletion (along with a lack of new discoveries), demand will drop off as price rises because people can only afford so much.
Not true..When you add a billion new people to the world around every decade..Demand never stops, even with high prices..
https://imgur.com/a/5KoVQzC
What falls too low is the price that is paid to the producers. They go broke. Affordability falls too low for buyers. They may seem to be paying for it (at prices that cannot sustain producers for the long run), but oil producers are not getting enough goods and services in exchange for the oil that they are selling. It is not a sustainable situation. If demand were high enough, prices would rise, eventually to $300 + per barrel. Countries start shooting wars long before that.
surely demand stops if people realise there’s nothing there to demand
thats when demand turns to short term looting maybe
Or supply will drop off, as producers go broke from prices that don’t rise enough.
I see WTI is way up to $66.15 per barrel. Wow! Brent is $76.03.
Energy makes the economy go round
“They don’t realise most of the food that is produced for people on this planet comes from using fossil fuels. But the net energy from our oil and gas supply is declining, which is going to have implications for everyone.”
There is a “double whammy” of the current need to use fossil fuels continuing to expand globally, and the fact that the easily accessible fuel is gone and what is left requires much more effort and therefore energy and capital to extract and refine.
We need to find four Saudi Arabias in the next 20 years to keep up with consumption.
“Put another way, we need to find four Saudi Arabias in the next 20 years to keep up with consumption. The reality is that oil is the weak link in the production and delivery of virtually all other forms of energy, commodities, food, goods and services. Oil is, in many respects, the master resource,” Surendran said.
https://www.newsroom.co.nz/2018/10/29/297393/energy-makes-the-economy-go-round?fbclid=IwAR2sHTDsZPv-Vb49q35tz9mXjbO5lW0PIQF0PO5VJC1Y5NNOfbJLBIzdyqM
What we need a source of liquid fuel that is twice as energy dense as oil and half the price. Or at a minimum twice the current supply of oil at 1/2 the current price. If you look back at the good years of the 50’s and 60’s, oil consumption was growing at a rate of 15% every year. So, if we want to bring that kind of “prosperity” back we would have to essentially double our current oil consumption rate from 100 to 200 barrels per day over the course of the next 20 years.
yup definitely wat we need
get Eddy working on the problem right away
Team Transgender is working on it
“Current debt-related risks to the global financial system may be more severe than some want to acknowledge. With a half-trillion of foreign-denominated debt coming due next year, emerging markets may trigger the next financial crisis; economic collapse in Turkey/Argentina may be a sign of things to come. 2019 may ultimately prove to be the year when the excesses of debt in all sectors finally lay bare the fragility of the current system.
““…much of global debt can’t be paid so it will default” in which case central banks will try to “paper over” this debt by printing money. This, however, will risk the double-edged sword of currency devaluation and hyperinflation.”
“…With populism and protectionism taking root in all corners of the globe, it does not seem as if world leadership will be able to collaborate effectively as they did during the last financial crisis.”
https://seekingalpha.com/article/4215351-debt-destruction-disregard
This article includes a new version of the growing household equity bubble:
https://gailtheactuary.files.wordpress.com/2018/10/us-household-net-worth-divided-by-nominal-gdp-by-real-investment-advice.png
“Inflation in the United States rose steadily last month, leaving the Federal Reserve on track to raise interest rates again in December… The PCE index, published by the commerce department, measures the monthly change in the cost of a basket of goods and services, excluding food and energy, which are prone to sharp swings. It is watched closely because it has a strong influence on interest rate-setting decisions by the federal open market committee, which sets monetary policy…”
https://www.thetimes.co.uk/article/us-inflation-figures-keep-fed-on-course-to-raise-rates-kbwgd8hp8
“The Federal Reserve is expected this week to vote on standards that would change the way big banks are regulated, according to a Dow Jones report… The moves are expected to be voted on Wednesday and come as Congress looks to loosing the reins on banking regulation following the post-financial crisis reforms.”
https://www.cnbc.com/2018/10/29/fed-reportedly-ready-to-change-more-banking-regulations.html
“The federal government will issue $1.34 trillion in new debt during 2018, according to a new Treasury Department projection. The debt issuance represents a 146% jump from 2017 and the highest amount of new debt issued since 2010… The primary drivers of new debt issuance are the GOP tax law and the bipartisan budget agreement.”
http://uk.businessinsider.com/new-us-debt-in-2018-how-much-highest-recession-2018-10?r=US&IR=T
http://www.bregsforum.com/wp-content/uploads/2015/08/rock-and-a-hard-place.jpg
you are here.
“Last week Australia’s stock market could not avoid a worldwide panicked selloff of stocks that saw local shareholders endure huge losses for five days. The 169-year-old insurer AMP lost nearly 25% of its value in a single day. Bullock said the stability of Australia’s financial system could be upset in this environment, and roiling markets were not the only risk. Australia’s highly indebted households posed another risk, she said.”
https://www.theguardian.com/australia-news/2018/oct/30/australian-economy-at-risk-from-hit-to-bank-profits-and-global-downturn
“In the case of Canada, the risks come from a combination of falling house prices, rising interest rates and weaker credit growth… Morgan Stanley estimates that household debt in the 10 largest developed economies has surged to 160 per cent of income from 98 per cent over the past two decades.”
https://business.financialpost.com/news/economy/australian-household-debt-flashes-red-in-morgan-stanley-report
Wow!
“A key gauge of the UK money supply is flashing early warning signs of a sharp economic slowdown and a loan squeeze in 2019… A full-blown slump would play havoc with the borrowing and spending… The growth rate of the ‘broad’ monetary aggregate known as M4x has been slowing for over two years. It has suddenly dropped to stall speed over recent months. “This is a classic warning sign of trouble. M4x is a leading indicator for the real economy and asset prices some three to six months ahead…””
https://www.telegraph.co.uk/business/2018/10/29/recession-warning-uk-money-supply-threatens-budget-optimism/
“A fall in borrowing for car finance sparked a slowdown in consumer credit growth last month, Bank of England figures show… Explaining factors behind the slowdown, the Bank said: ‘New borrowing for car finance fell sharply, consistent with very weak car registration numbers in September.’ It comes after figures showed sales of new cars plunged by 20 per cent in September, a month that is traditionally a bumper one for cars with new number plates.”
https://www.metro.news/car-financing-deals-plunge-as-growth-in-lending-stalls/1289189/
“British retail sales growth slowed more than expected this month as consumers retrenched after a summer shopping spree driven by warm weather and the soccer World Cup, an industry survey showed on Tuesday…
“”The double whammy of the sluggish recovery in household incomes and digital disruption is making trading conditions tough, and prompting a deeper structural shift in business models.””
https://www.euronews.com/2018/10/30/uk-retail-sales-growth-slows-sharply-in-october-cbi
Digital disruption = Watching World Cup on television?
This seems like sort of a lame excuse.
The lamest of excuses.
I recall going into a department store on a Saturday which was like the Marie Celeste, and the pubs were certainly packed with people watching the football that day – but it was a only a few days and shouldn’t dent sales in a healthy economy.
Some sort of slow, steady but inexorable disintegration is taking place in the British economy. Tim Morgan is probably quite right. And this is without significant interest rate hikes….
We are … here:
https://youtu.be/f96p-IhcZhQ
“[The Korean] financial regulator had revealed a market stabilizing plan to inject some 500 billion won ($440 billion) into the stock market. Only hours after the policy announcement, however, the country’s bourse nose-dived… The fact that the government’s continued efforts for market revitalization had come to no avail triggered anxiety that the latest stock market plunge may hint at a prolonged economic downturn.”
http://www.koreaherald.com/view.php?ud=20181030000703
“The moves in mainland Chinese stocks came after the country’s securities regulator said it would improve market liquidity and guide more long-term capital into the market… “From the currency point of view, this simply means that fiscal policy is, you know, more expansionary. And of course, this raises a bit of concern… that China’s fiscal deficit will widen further. So, again, this adds one more line to the growing list of negatives for the currency,” said Koon How Heng, head of markets strategy at United Overseas Bank.”
https://www.cnbc.com/2018/10/30/asia-markets-us-china-trade-talks-currencies.html
“China guided the yuan to its weakest official level in a decade on Tuesday—a move that could fuel expectations of a further, self-reinforcing slide…
“The recent slide has reignited speculation about whether further weakness could spark capital flight…”
https://www.wsj.com/articles/china-sets-official-yuan-rate-at-weakest-since-2008-
“China is considering cutting the tax levied on car purchases by half to revive its flagging automotive market.
“The National Development and Reform Commission, China’s top economic-planning body, is proposing to cut the purchase tax to 5% from 10% on vehicles with engines no bigger than 1.6 liters, Bloomberg reported on Monday, citing people familiar with the matter.”
http://uk.businessinsider.com/china-auto-tax-cut-report-2018-10
Blow the debt bubble bigger?
“America’s global trade war has finally arrived at the WTO.
“Seven countries — including Mexico, Canada and the European Union — are disputing U.S. tariffs on foreign steel and aluminum at a meeting of the World Trade Organization in Geneva on Monday. China is asking the international trade body to review the tariffs on roughly half its exports to the United States. The U.S. is fighting back with complaints about Chinese counter-tariffs.
Rarely has the WTO faced so many disputes about a handful of actions, experts say. But President Donald Trump’s pursuit of protectionist trade policies has stoked nationalism around the globe. His disregard for international rules of the road has forced other countries to sidestep the system as well. And the WTO is struggling to keep up with the changing tides.
Seven countries — including Mexico, Canada and the European Union — are disputing U.S. tariffs on foreign steel and aluminum at a meeting of the World Trade Organization in Geneva on Monday. China is asking the international trade body to review the tariffs on roughly half its exports to the United States. The U.S. is fighting back with complaints about Chinese counter-tariffs….
President Donald Trump’s pursuit of protectionist trade policies has stoked nationalism around the globe. His disregard for international rules of the road has forced other countries to sidestep the system as well. And the WTO is struggling to keep up with the changing tides…
Monday’s closed-door meeting of the WTO’s dispute settlement body was the first time countries were collectively able to confront each other and air their grievances over the Trump tariffs. Statements released afterward suggested the discussion got heated…
“It’s getting kind of messy,” said Robert McDougall, a senior fellow at the Centre for International Governance Innovation and a former Canadian delegate to the trade body. The WTO “is under stress, and its relevance is challenged. It administers rules that are out of date.”
“…Some fear Monday’s meeting could end up backfiring, leading not to resolution but to inflamed tensions. The United States appears to have made little progress in direct negotiations over the steel and aluminum tariffs, for example. Canada and Mexico had hoped to reach an agreement before signing a new trilateral trade agreement next month. But so far, talks do not appear to have gotten off the ground.
““The worry is that after the meeting there may be a flood of new protectionist measures and it could trigger a reaction, depending on how the discussions go,” said Anahita Thoms, a partner at the law firm Baker & McKenzie who specializes in trade.”
https://www.cnbc.com/2018/10/29/americas-global-trade-war-arrives-at-wto-as-members-dispute-us-tariffs.html
I wonder how long the World Trade Organization will last. I would not be surprised if a few big countries pull out. This would reduce the funding for the organization, and make it more difficult for it to carry on as before. I doubt it has staff/funds to handle very many trade disputes.
https://www.iceagenow.com/List_of_Expanding_Glaciers.htm
Funny — how one would – if one trusted the MSM — believe that all glaciers are receding all the time…
Well, it’s not very up-to-date. Try harder. Good that I trolled FE upthread, tho, audience, without him realizing it – he’s not as bright as he thinks he is! This is keeping him occupied, tho, along with his pet penguins and cabbage patch dolls. As for me, I don’t believe in the skorchy tortchy any more than he does.
We’re on a roll here
Mont Blanc glacier almost doubles in size
in four years
https://www.iceagenow.com/Mont_Blanc_glacier_almost_doubles_in_size.htm
Brazil has been a train wreck of a country under a series of deeply corrupt administrations and on Sunday the voters delivered exactly what democracies promise as long as they allow the population the right to vote and that is blowback. The MSM has been wringing their hands all day long over the democratically elected President of Brazil, suggesting that his win is illegitimate despite what two thirds of the Brazilian voters think. This is the Bolsonaro Effect.
Here’s the thing. You can lie to people only so long before they tire of it. You can rob them and engage in every form of corruption and perfidy as long as you do not make them the butt of your joke, but once that trust between the people and the institutions that govern them are broken, they will walk away- at best- and at worst they will choose the most vocal opponent of their tormentors. What takes place in Brazil after today is a referendum not on what Bolsonaro has promised for the future, but on what his opponents have done to the people in the past.https://www.theburningplatform.com/2018/10/29/the-bolsonaro-effect/#more-185973
My explanation is much more simple: the status quo is fragile, and everyone’s grip on the crumbling cliff-edge of “prosperity” is precarious–and we all sense it. The security we all took for granted is turning to sand as the system breaks down. Job security–you’re joking, right? Pension security–you take us for chumps? Sure, your bank account is guaranteed by the FDIC, but nobody’s guaranteeing your income, your purchasing power or the security of your grasp on the good life.
Everyone knows the markets are as precarious as the rest of the status quo, and the rational response is to limit exposure to risk by selling at the first signs that the herd is nervous.
Switching metaphors, we all know the global economy scraped alongside an iceberg in 2008, and those who look beneath the reassuring rah-rah know that the hull of the global economy was sliced open just like the Titanic’s. Central banks have created the illusion that the damage was limited by printing money and using the freshly created currency to buy bonds and stocks to prop up the markets.
But even the passengers who accept the authorities’ reassurances sense something is wrong with the ship. The bow is slowly sinking, the engines are straining to power the pumps, the First Class passengers are either already in lifeboats or huddling nervously by the davits, and the ship’s officers are openly wielding pistols to control panic.
Nobody dares discuss it openly for fear of triggering a panic, but there aren’t enough lifeboats for everyone. A great many passengers are going to find themselves in the icy waters when the great global economic ship finally founders, and humanity’s finely tuned instinct is alerting us to the restless nervousness of the herd.
This particular near-stampede may well be calmed down, and naysayers punished by a monumental rip-your-face-off rally to new highs, just to settle any doubts that the great ship isn’t sinking. Rather, the party on the first class deck is just getting started, and a few bottles of champagne might make it down to the 2nd class deck or even to a lucky few in steerage.
But despite all the reassurances and rallies, we all sense the fragility and precariousness. No wonder the first hint of trouble triggers a stampede.
https://www.oftwominds.com/blog.html
Nice analogy. There aren’t enough lifeboats for everyone. But then again, even people who manage to get into the lifeboats are going to find that they are in shark-infested waters and have no hope of being rescued by another passing ship or of reaching anywhere bigger than the proverbial desert island with a single coconut tree.
https://youtu.be/Z2rPrEJAHPs
https://www.rt.com/news/442567-venice-under-water-live/
81% of Canadians polled think Fast Eddy left Canda because of this sort of thing:
https://www.theguardian.com/world/2018/oct/30/canada-glaciers-yukon-shrinking
96% of Canadians polled are glad Fast Eddy has emigrated. 96% think he’s a trait or and hyp oc rite for choosing New Zealand – first port of the greanie doomers.
I am wondering why you didn’t post that Yukon glaciers were expanding last year?
Oh right… sorry about that … you are re tar ded more on …. I should withdraw that question and just go to the facts:
CANADA
Helm Glacier
Place Glacier
Glaciers growing on Canada’s tallest mountain
17 Nov 08 – The ice-covered peak of Yukon’s soaring Mount Logan
may be due for an official re-measurement after readings that suggest
this country’s superlative summit has experienced a growth spurt.
See Glaciers growing on Canada’s tallest mountain
https://www.iceagenow.com/Glaciers_growing_on_Canada_tallest_mountain.htm
https://www.iceagenow.com/List_of_Expanding_Glaciers.htm
I can’t find anything in the Green Bible … the Guardian (otherwise known as the steaming heap of dung that has such duuumb as ssed readership that that ask they for donations on every article… and probably make a fortune)
Go f789iung figure
Yeh, ya still escaped to NZ like all the other rich doomer herds. Me, I’m staying put. I have no fear of the scorchy torchy.
And btw Canadians voted for this
http://www.canadiantimes.ca/ct2/images/Justin_Trudeau_crying044.jpg
That alone is good enough reason to burn that passport…. -30 is another
I think FE hates being Canadian.
No … but I do have great distaste for More ons, DelusiSTANIS and Green Groopies/liberals
Fox News’: Migrant caravan “is a invading force that may bash its way through our fence”
https://www.mediamatters.org/video/2018/10/29/fox-news-gregg-jarrett-migrant-caravan-threatened-invading-force-may-bash-its-way-through-our-fence/221914
https://imgur.com/a/hTGUz1m
Litmus Testing….
I have sent that Epoch Times story to tips@zerohedge.com….
If they do not publish that then well…. they aren’t at all what they claim to be….
https://www.youtube.com/watch?v=xyta74Mt9v4
The first part of the video linked above has shoreline wind turbines that also generate power from wave action. Then there is a different design for capturing wind energy during typhoons, which Japan has an average of 8 a year.
Check out the big brain on Chrome..Allow me FE..
Solar and Wind produced less than one percent of total world energy in 2016 – IEA WEO 2017
https://www.iea.org/publications/freepublications/publication/KeyWorld2017.pdf
UC Davis Peer Reviewed Study: It Will Take 131 Years to Replace Oil with Alternatives
(Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Peer Reviewed Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
Shortage of resources for renewable energy and food production (Rhodes 2011)
https://www.scribd.com/document/375501088/Shortage-of-resources-for-renewable-energy-and-food-production-Rhodes-2011
Top scientists show why powering US using 100 percent renewable energy is a delusional fantasy
http://energyskeptic.com/2017/big-fight-21-top-scientists-show-why-jacobson-and-delucchis-renewable-scheme-is-a-delusional-fantasy/
Why sustainable power is unsustainable
https://www.newscientist.com/article/dn16550-why-sustainable-power-is-unsustainable/
At this rate, it’s going to take nearly 400 years to transform the energy system
https://www.technologyreview.com/s/610457/at-this-rate-its-going-to-take-nearly-400-years-to-transform-the-energy-system/
Desert sun in Qatar too hot for solar panels to work
https://www.thetimes.co.uk/article/desert-sun-in-qatar-too-hot-for-solar-panels-to-work-h23kmktbp
Air Pollution Casts Shadow over Solar Energy Production
http://pratt.duke.edu/about/news/solar-pollution
Germany Runs Up Against the Limits of Renewables
https://www.technologyreview.com/s/601514/germany-runs-up-against-the-limits-of-renewables/
Bill Gates: We need global ‘energy miracles’
http://www.cnn.com/2010/TECH/02/12/bill.gates.clean.energy/index.html
Thank you.
Oh hang on … entire countries are planning to ban ICE vehicles in a decade or so!!!
I read that in the MSM… on a regular basis.
It MUST be so. The MSM is always right.
And when the MSM repeats something over and over and over…. it MUST be so!!!
(hey – I keep reading that temps broiling hot .. I saw a headline the other day that we have 12 years to act or ELSE!!! — even though temps have been stable for 19+ years)
https://imgur.com/a/C5stb3x
And in 12 years from now, we’ll still have 7 years to get our sh*t together…oh, wait…
http://images.slideplayer.com/16/5025385/slides/slide_7.jpg
Too little too late, maybe Bill Gates should have read the article on why it will take 400 yrs to transform out energy system. If we had started the transition 40 or 50 yrs ago we might not be at this point right now. Might as well keep things rolling until the whole system just stops.
Ahh yes, that peaceful ocean so tranquil;.never destroys anything in its path.
It is sort of humorous to talk about one typhoon producing enough electrical energy to power Japan for 50 years. How does the researcher plan to store the electricity for 50 years? We don’t have batteries to store electricity to store more than a tiny amount of electricity for a few minutes. In fact, we don’t have materials to make a battery that would store electricity for 50 years.
Japan is phasing out its feed in tariffs. It is hard to believe that new installations will stay at the same level as previous installations.
The Tesla battery in Australia — can hold enough electricity — to power a aluminum smelter… for 8 minutes…. (see the previous article I posted on this quoting the CEO of a smelter)
What I don’t understand is why does a smoke alarm keep beeping after you’ve removed its battery?
that one freaks me out too
How does the researcher plan to store the electricity for 50 years?
Giant elastic bands!
Once they are commercialized and installed in every city they will be the torque of the town.
But there is a twist.
To build enough really enormous elastic bands to store enough energy to power the world would require the entire world’s rubber output for 400 years and then some.
For this reason critics are calling the scheme a huge windup.
You should submit this to The Onion
rubber degrades over time, turning into brittle, cracked mess. how about compressed air?
also, i believe Acme has the international patent on canned tornadoes. see Roadrunner, Warner Bros. cartoons.
That’s all, folks.
Pure science fiction to capture even minuscule amounts of the energy from something on the scale of a typhoon. The volume of a cyclone is immense. Of course it is always possible to put that energy to use to tear apart homes that don’t belong on the beaches.
https://www.barrons.com/articles/tesla-stock-baillie-gifford-1540825986
‘Tesla Stock Kept Rising After a Big Investor Backed Elon Musk’
I was out driving in the SF Bay Area today and saw more Tesla’s than I ever have before. Starting to pop up all over the place. I wonder how many years it will be before the internal combustion auto is the exception.
Considering you can’t take an EV out of the city..They are pretty much worthless to most people..Try taking one up a hill during the winter where the majority of Americans live ie (Northeast)..
If someone gave me an EV… I would immediately sell it.
Useless.
Sell it before it depreciates!
It’s already probably worth well under have of what it cost new…. cuz most people do not want one of these Useless-mobiles
I wonder how many years it will be before the internal combustion auto is the exception = I am re tar ded…. where is my free bus pass?
Tesla’s coal-powered cars and trucks
Tesla’s mission is “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible,” wrote Elon Musk in The Secret Tesla Motors Master Plan. The large-scale shift from internal combustion engine powered automobiles to electric vehicles (EVs) is a crucial part of this ‘sustainability’ mission. Governments around the world have bought into electric cars as a way to lower their countries’ carbon emissions and have coughed up the generous subsidies electric car makers need to make themselves competitive (but note: the current versions of the U.S. Senate and House tax bills end these subsidies).
But in many countries, internal combustion engine-powered compact cars like the Mitsubishi Mirage have a smaller total carbon footprint than electric cars. How is this possible? There are two main sources of EVs’ hidden carbon footprint: first, carbon-intensive manufacturing processes including aluminum and copper extraction and refinement and second, the dirty electric grids charging the cars’ batteries.
Electric carmakers prefer lightweight aluminum over steel to maximize range: Tesla builds the body and chassis of its Model S almost entirely from about 410 lbs (190 kg) of aluminum. Average total aluminum content per car is expected to grow from roughly 397 lbs per car in 2015 to 565 lbs by 2028. The highly energy-intensive processes involved in aluminum production mean that a car’s worth of aluminum costs about 30% more in emitted CO2 than a car’s worth of steel. In China, the world’s leading manufacturer of EVs, 14 tons of CO2 is emitted for every ton of aluminum produced, three times more than the CO2 emitted by Alcoa, the U.S.’s largest aluminum producer. China now worries that their dirty smelting operations mean that switching to electric cars will actually make their smog problem worse.
“If the USA had 10% more petrol cars by 2020, air pollution would claim 870 more lives. A similar increase in electric ones would cause 1,617 more deaths a year, mostly because of the coal burned,” said Danish researcher Bjorn Lomborg.
EVs’ intensive copper use—an electric car uses about 6 km of copper wire weighing 45 kg, compared to a conventional auto’s 20 kg of copper—also poses a carbon emissions problem. In the mid-1800s, copper ore contained about 10% usable copper, but over the course of the twentieth century, that purity has decreased to less than 1%, making the mining and production of copper extremely energy- and carbon-intensive. The energy used to smelt copper increases exponentially as the ore grade falls below 1%. The new copper mines being constructed to meet increased demand have to be factored into the carbon footprint of electric vehicles—and in general, new copper ore stocks being developed are deeper and require more energy to exploit than currently productive reserves.
What about the power grids that charge EVs’ batteries? Energy sources vary wildly by country. Globally, in 2014, 66% of global energy came from coal (29%), oil (22%), and gas (5%). China, the country with the largest number of EVs on the road, got 72% of its energy from coal alone in 2014; the United States produced 68% of its energy from fossil fuels, including coal (38%) and gas (30%) in 2014. Coal use in the United States is trending downward as a proportion of overall energy use, partially due to the new shale gas deposits being exploited by fracking.
Shifting the energy burden of the American transportation industry from gasoline and diesel fuels to the power grid will result in enormous increases in electricity demand. In temperate places like San Francisco, plugging an electric car into a dedicated circuit like Tesla’s PowerWall is the equivalent of adding between 5 and 10 houses to the grid. The supercharging stations required to charge Tesla’s Semis will require surge capacities far beyond anything the American grid was designed to handle. Finally, to get EVs closer to being considered ‘carbon-neutral’—because of their raw materials they never truly will be—the American energy system will have to go green.
But it’s an open question as to whether solar and wind plants can generate enough power to not only replace fossil fuel plants but also match the increased demand for electricity as hundreds of millions of vehicles start plugging in. The largest, most powerful solar plant in the United States is the Ivanpah Solar Power Facility in the Mojave Desert, which generates 392 MW; the largest wind plant in the United States is the Alta Wind Energy Center in California’s Tehachapi Pass, which generates 1,547 MW; by comparison, the largest coal plant in the United States, Plant Scherer in Georgia, generates 3,389 MW.
Ironically, Tesla’s electric cars and trucks may end up prolonging America’s reliance on fossil fuels to generate electricity, because renewable sources cannot yet meet rising demand.
https://www.freightwaves.com/news/2017/11/28/teslas-coal-powered-cars-and-trucks
” I wonder how many years it will be before” – The bigger question to me (and probably more pressing) is when will automobiles in general become obsolete due to diminishing returns?
Keeping up road resurfacing will become a big problem, if nothing else. This uses a lot of energy.
Yes, I agree, it is a lot more to automotive transport than just the ICE vs EV. There are resource, parts, roads, bridges, taxes, oil, gas, grease and the jobs needed to support all that to make the auto practical.
Maybe in a week with two Tuesdays…
A twosla seems more sensible, like that indiegogo bike, and the zero motorcycle
1. More CO-2 emissions than ICE in most cases due to transmission losses, and charging losses etc.
2. 100% unaffordable today
3. Doesn’t replace the ICE for common use cases (Toyota CEO has talked about this)
4. Tesla on the verge of bankruptcy. (See their bond rating).
Ok, 7pm. Settling in with an after dinner drink. Maybe the collapse happened and I missed it? Adonis? Things seem ok. Lots of cars outside. Smell of burgers in the air. Really fat people walking by. Make that trundling by. God, I love America and BAU!!!!
get a grip, man!
FYI, I said 10/29, not adonis…
let’s put the blame where it belongs!
so…
rats… I gotta get up early to go to work in the morning…
just think… The Collapse might have some benefits…
my newest data now says 10/28/2019… a Monday!
I thought we’d all agreed, not a day before 2021, or was that 2022?
Amusing … it’s like urging an insolvent person who has not job to apply for more credit cards and run them up to the limit…
The carcass is being picked clean:
https://wolfstreet.com/2018/10/29/whiff-of-panic-after-mexico-votes-to-scrap-mega-airport-corruption-project/
The end of the article says:
A world with declining energy consumption doesn’t need massively larger airports. There is no way we can build them, much less operate them. The project was doomed to fail at some point. And Mexico, with its falling oil exports, is in no position to afford such a structure.
And I vote to change the name of Caracas…. to Carcass.
But a primitive mentality, which lives by superstitions, needs its totem structures: airports, huge sports facilities, ‘biggest-ever’ skyscrapers, etc, are the totems of our irrational and doomed system.
They also all promote belief that all is well, and the future will be ever brighter.
Treasury Expects to Issue Over $1 Trillion in Debt in 2018
Debt issuance this year could be highest since 2010, the Treasury said, as higher government spending and stagnant tax revenues have pushed the deficit higher
WASHINGTON—The U.S. Treasury Department estimates it will issue more than $1 trillion in debt this year as higher government spending and stagnant tax revenues push the deficit higher.
The Treasury said Monday it expects net marketable debt to total $425 billion in the fourth quarter, which would bring total debt issuance in 2018 to $1.338 trillion, compared with $546 billion in 2017. That would be the highest annual debt issuance since $1.586 trillion in 2010, when the U.S. economy was still crawling out of a recession.
The Treasury’s fourth-quarter borrowing estimate of $425 billion is $15 billion less than it estimated in July. That would be the most for any fourth quarter since 2008, at the height of the financial crisis, though the figures can be volatile from quarter to quarter. The Treasury also plans to borrow $356 billion in the first quarter of 2019, compared with $488 billion in the first quarter of 2018.
Rising federal budget deficits are boosting the Treasury’s borrowing and could restrain economic growth as the cost of credit also rises.
The Treasury said earlier this month the deficit grew 17% in the fiscal year that ended Sept. 30, amid higher spending and sluggish tax receipts, which a senior Treasury official attributed to changes from the tax overhaul enacted late last year.
The deficit is headed toward $1 trillion in the current fiscal year, the White House and Congressional Budget Office said. The Office of Management and Budget projects the government is likely to run trillion-dollar deficits for the next four years.
The rising supply of debt could push up the cost of borrowing as the government seeks to attract investors, though many factors affect rates, including Federal Reserve decisions, the inflation outlook and shifting investor appetite.
The Treasury said last month it would increase auctions of U.S. debt by an additional $30 billion through the end of this month. The Treasury gets cash to fund the government in exchange for selling the securities.
The Treasury will release new details on its financing plans Wednesday.
The higher debt issuance comes as the Federal Reserve has been raising short-term interest rates following an extended period of near-zero rates in the years since the financial crisis. Fed officials lifted their benchmark federal-funds rate to a range between 2% and 2.25% in September, and have penciled in one more rate increase this year, likely in December.
President Trump has criticized the central bank for raising rates, saying it is making it more costly to finance the debt and could slow down the economy.
“Every time we do something, he raises rates. Now, what does that do? That means we pay more on debt, right? That means we pay more on debt and we slow down the economy, both bad things,” Mr. Trump said in an interview with The Wall Street Journal.
Mr. Trump said he would rather keep rates low and “pay amortization,” meaning pay down debt. Treasury estimates show the government is very far from paying down debt, with the government issuing more than twice as much debt this year than it did last year.
https://www.wsj.com/articles/treasury-estimates-annual-net-marketable-debt-to-total-1-338-trillion-in-2018-1540839709
“with the government issuing more than twice as much debt this year than it did last year.”
Wow!
I am glad we heard about the debt recycling plan that seems to be available through new bank rules. https://www.theepochtimes.com/the-rules-of-the-bond-game_2600435.html Otherwise, there would be no possibility of unloading all of the debt.
Thanks for that link .. I couldn’t open the previous one.
That is absolutely astounding….
What I can’t understand is how I missed this …. I scan the headlines of various MSM financial sites on a regular basis….
Like a starving Yemeni child scavenging through the garbage looking for a scrap of rotten food….
This would be like finding a still warm roasted goat …. and yet I missed it.
Oh right … the MSM does not serve roast goat… and it seldom serves scraps of food.
The theme of regulators changing the rules, when things aren’t going according to plan is one seen often in the insurance and pension field. This is how pensions have been saved from defaulting. I have seen it in bailouts of property casualty insurance companies as well.
Hiding changes in accounting rules makes a change so obscure that few new media sources will ever mention it. It takes someone writing a zero hedge article get at least a few people’s attention.
Excellent point! When the rules don’t work they change the rules! I think we’ll see a lot more of this – mortgages, retirement plans, student loans.
No doubt we are only seeing the tip of the tip of the iceberg in terms of what the CBs are doing to delay the end of the world….
There would be ZERO upside in them informing us ….
And since when do we get informed of much of anything at all?
No problemo ….. there are unlimited takers for this risk free debt…. which does not get marked to market so it doesn’t matter if the rates rise…. and the takers get to collect interest!!! There appetite is UNLIMITED!!! They can chomp down on trillions upon trillions (and of course pay their management hefty bonuses)
Hot damn — we got us a god damn perpetual economic machine here….
Kiss my a.ss Herb Stein
http://image.slidesharecdn.com/alumapril6-150406121950-conversion-gate01/95/aei-alumni-8-638.jpg
Carl Jung went to Africa to join a spirit dance. During the nightly dance he experienced thst a spirit entered his body. He got so scared that he never returned to Africa again.
https://m.youtube.com/watch?v=ALJARgzHcLg
Save the plane ticket and snort a big line of Ketamine….
How close is the United States to a civil war?
https://www.bostonglobe.com/opinion/2018/10/29/how-close-united-states-civil-war/86OoePIx5NBa2jsGG4MivN/story.html
Before I read this article, I had already come to the conclusion that 1860 was very much like where we could be in a few years. The gold rush bubble had just collapsed in 1857, and wheat and land prices were collapsing. With the collapsing wheat and land prices, banks were collapsing. Wages were very low, and there were calls for higher tariffs. There were three years of deep recession, before the election which Abe Lincoln won.
Where we are now is like the situation before the Panic of 1957. The debt bubble had not yet collapsed. So the comparison the author is making is somewhat early, I think.
https://imgur.com/a/PpAeK4L
Income from the land: in the SE MN case with 45% of corn sales being for ethanol it is a concern. You and I have been doing meetings such as the ASPO for some years and the optimists have had a better time of it.
Could lack of debt be the inverse of debt? If everything goes down 50% and there is no debt, the owner of a productive asset is no worse off in the real world. BRK has real assets which make real wealth, maybe better than gold? Are there others? Someone is going to make it and the world will go on; money changers are still here and after the last crash of 2008 very few of them ended in jail.
Gardening is very hard and not all crops come in every year which makes living off the fat of the land something of a stretch.
In the panic of 1857 who did well? How did they do it?
Dennis L.
The ‘fat of the land’ has always been – in most climates with a single growing season – what the landlord/priest and a small number of cronies managed to take from the great mass of labouring peasants and, in some way, cream off from traders.
One could say that the thought of ‘fat’ was mesmerising, a symbol of prosperity and happiness as, for most people, it was always very rare indeed -an occasional, maybe even yearly feast.
Interesting evidence from recent excavations of groups travelling from all over Britain with pigs and sheep to sacrifice and feats at Stonehenge.
The lack of debt is the lack of buying power of those purchasing the end products the farmer is trying to sell. If debt goes down by 50%, I would expect banks to fail. If there are any transactions at all, I would expect food prices to be down 90%. Lack of debt is the end of the economic system. The economy depends hugely on promises for the future. Once debt starts to default, the whole system tends to collapse. Un-payable derivatives are in the same category. So are un-payable Social Security and Medicare payments.
This pattern has happened over and over again; in 1857, in 1929, and again in 2008, if it weren’t for the bailout. In 1957, the result was a short depression and the US Civil War. In 1929, the result was a longer depression. The problem wasn’t “solved” until after World War II.
yes but the ”problem solving” post ww2 was the great fuel burning until 1970—the year the USA ran out of gas
Hopefully it will be televised…. I will be rooting for the Trumptards…. every dead Libtard… is a good Libtard…. but if they kill some Trumptards… that’s ok too
Auto Stocks Surge On Report China Weighing 50% Cut To Car-Purchase Tax
https://www.zerohedge.com/news/2018-10-29/auto-stocks-surge-report-china-weighing-50-cut-car-purchase-tax
Oh… wow!!!
This would be right up there with the nearly having of corporate tax in the US…. and the building of Ghost Cities in terms of Desperation Stimulus.
As has been said before — there will be no 2008-like rescue when this rotting carcass of an economy collapses…. because the CBs are throwing everything at keeping this thing alive…. they will do absolutely ANYTHING to fend off the end game as long as possible. When it finally goes down for the count… there will be no ammo in the box… no trick untried…. everything is obviously going on the table.
One has to wonder if this will have much of an impact… endless rebates have already pulled a lot of future demand forward…. how many people who have already purchased a vehicle recently are going to be in the financial position – or have the desire — to say hey – I need a new car now because the taxes have been slashed….
Anything that props demand up will help. We aren’t seeing any physical barriers to production of any kind. There is plenty of room to extend and pretend. What has to die is the illusion that saved money has any value. Stock booms and busts disguise this fact. Booming and busting can cover up aggregate terminal decline.
How does one save today’s surplus?
Dennis L.
Build a cold cellar.
Okay, that is an idea. But, gardening in sufficient quantity requires labor and without a gas powered tiller a spade is nice which might be easier with some strong younger people to operate which may imply that children are useful. So if a person, be it male or female has no offspring, the advancing years might be a challenge, and as FE says, even a small amount of food may be cause for others to covet it, so having some for tomorrow may require someone to fight off the metaphorical dragons.
Conclusion: Our social structure in the West may be in for a change as per Maslow, the most basic instinct is physiological, ie eating. Oops, are the left possibly going the wrong way as when the hordes come for the cellar, who are they going to call? Ghostbusters?
Reading Jung as an amateur the unconscious appears instinctively shaped in our genes over thousands of years of adaptation, the conscious is more recent and morality is a constant debate between the two. Could the the current turmoil we see in our society be the result of such turmoil? If our instincts tell us we need a man and our entire life has been spent learning otherwise, that could be a juxtaposition of Hillary and the Donald, mother and father figure.
Is this point in society a congnitive dissonance between what we want and what is possible? Could the large section of society represented by the left be having a mental breakdown in their own minds between what they believe and what they see and anticipate in the real world?
So, how to fill the cellar when Sam’s is no longer open.?
Dennis L.
My point is that you are unlikely to be able to save much of anything. At best, you can save a little food. But you are right–growing more will be a problem.
Then you come to the conclusion that you really can’t save much of anything for very long. Maybe if you work very hard, and are very lucky. But if you have a broken part, and cannot replace it, suddenly you have a job problem.
many of us might do a bit of gardening, but the real skill lies in preserving produce between harvests
Where I live, sweet potatoes are the easiest things to grow that a person can save for a while. But even this takes some care.
I have been growing a few sweet potatoes each year, with quite variable results. Last year, rabbits ate most of the tops of the sweet potatoes and some sort of insects attacked the weakened roots of the remaining crop. So this year I put plastic mesh over the tops. Not a very cost effective approach, but it worked to keep the rabbits from the crop. Also not a very sustainable approach. I had to cut the mesh off, because so many leaves had grown through it. If I want to use the approach again next year, I need more “bird netting” (also used over my blueberry bushes).
Once the sweet potatoes are harvested, they need to be kept at a cool (but not cold) temperature. They must be kept in a dark place, or they will start sprouting leaves and roots very quickly. They need enough ventilation, or they will mold. (I have learned both of these things from experience.) Trying to meet all of these requirements without today’s modern heating/cooling systems would be a major challenge. Of course, I don’t have a cold cellar. Building one, when there are only a few inches of dirt over bed rock, would be a different major challenge.
And of course, quantity would be a major issue, if a person is trying to get enough calories to feed a family for much of the year. The quantity I produce is tiny in comparison.
i eat sweet potatoes all the time
i guess they are flown here from where you are
One can imagine how difficult it would be to grow anything without the assistance of BAU…
Of course there is the other problem of people stealing whatever you grow … if you have any success at all.
Realistically most things can’t be saved for the future, or aren’t. Exceptions include weapons stockpiles, strategic petroleum reserves, and small grain buffers or the like. One thing you can do is invest in productive infrastructure which expands future productive capacity. In the past this has helped ensure that future production would be greater than present production – the underlying condition for the possibility of money having value over time.
Are we being too individualistic? Is our own personal survival all that important in the scheme of things or is more the survival of a group, a tribe if you will of similar genes? DNA is by definition instinctual and cares only about making a new copy. There is a tribe with a particular facial feature referred to by FE that has been around since the first days of the Bible, historically very close knit and while in the middle of the twentieth century a serious attempt was made to eradicate this tribe it failed and brought down the whole world upon the group that tried it.
I am with FE in that trying to protect a refuge has some real problems; but if the hordes come, blending in with them and keeping one’s culture if you will has historically worked for thousands of years. One can be individually useful, but a group is much stronger and resilient based on historical observation.
More and more I am starting to believe that real wealth is between the ears, overtly trying to dominate everyone seems to make too many enemies(eg. the dominate single chimp who gets too big for is metaphorical britches and who is torn apart by two lesser males), having a useful skill that does not offend those around you and yet is necessary. Would banking fit this description? Do I recall a certain person who became very upset with the money changers? These money changers were thrown out of the temple and yet a certain city on the hill, a clerical city recently had some issues with the city bank two thousand years after said money changers were asked to leave a different temple by the God this city serves. It seems to be a career and business with staying power.
Dennis L.
Many people survived because they were forcibly incorporated into successful groups: for instance, the Irish women taken to Iceland by the Norse who had captured them in raiding expeditions.
Innumerable instances of this in the Ancient World – mass enslavements, forced population transfers, etc.
A practice as old as civilization, and no doubt practiced by tribal and nomad peoples, too.
One of my ancestors in the 13th century was given an estate on the East coast of Spain -now a tourist resort – and it came with hundreds of Arab and African slaves: I’m sure they were happy to be alive and their genes no doubt live on there.
It’s fun to sit in a town square in Spain and guess the racial origins of all the passing ‘Spaniards’…..
I took your question in a different way. And that’s a tough rub. At least some part of me does not want industrial civilization to survive – what is our culture now beyond consumerism?
Maybe I’m too pessimistic but I do not believe expecting a change in the level of human consciousness, or some other mass growing-up, is worth waiting for. I think we will be as generous as our level of production allows for. We’re neither good nor evil, but contingent on exigent circumstances.
I am strongly in line with Ernest Becker that one thing people do to cope with their death anxiety is identify with culture. This can of course involve submitting to culture, or submitting to another actual enemy of course.
The catch is that if the whole system is not operating well enough, demand (really “amount affordable”) will fall too low, and prices of finished goods and services will fall too low to make the productive infrastructure truly usable. Any goods made with the new infrastructure will sell at too low a price to cover their fair share of costs (much less make a profit). This seems to be about where we are now. Interest rates have recently been low, because available rate of return on investment has been very low.
The question in my mind is: what is worthy of investment now that has the potential to be productive in even the near term? And I don’t mean investing in gold, financials or Bitcoins. I mean a productive, growing, business model that hires people and produces something physical that folks want, can afford and is useful. I am drawing a blank.
I’m with you there – it is a system. But I think it’s worth highlighting that we can always afford to consume whatever we can afford to produce in physical terms. There of course may be barriers which are psychological or social – such as an unwillingness to work, or an inability to advance policies which change the value of saved currency vs the value of certain assets – which represent class interests and expectations for future levels of wealth.
It’s definitely the case that infrastructure will not pay for itself. But expansion of the money supply has always been necessary. The money supply must grow. As long as growing the money supply also increases production, inflation is not worth worrying about given the alternatives. Since all new money created is brought into existence with interest (by policy, not by any physical necessity) there will always mathematically be a problem with debt since in some ways bank debt creates a demand for currency (to service the same) – the “pulling forward” function of debt as a volitional force. That’s at least one theory of where money gets part of its value.
No! We cannot necessarily afford to consume what we produce! What we produce has to be divided among several different user groups:
1. Government (in taxes to support the promises they have made)
2. Capital Providers (in interest, dividends, and in making initial investments in factories, trucks, new oil wells and other needed investments)
3. High earning workers (who will never spend more than a small share of what they earn on homes, cars, and other goods that directly use commodities. Instead, they will pay for expensive private colleges, and for investment planning services, and buy shares of stock, getting even more income from them.)
4. Non-elite workers (who will spend most of what they earn on goods that use commodities in their manufacture and use).
The problem is that the non-elite workers tend to get a progressively smaller share of the overall take. When this happens, they cannot afford homes, cars, vacations, eating out, or much other than living in their parents’ basements. Affordability falls too low. The other groups do not make up for this shortfall. Elite workers cannot drive more than one car at a time.
In the Depression of the 1930s, gluts of food and oil were are problem. Recently, we have seen oil supply gluts. I read about coal gluts about the same time in India. Non-elite workers cannot afford to purchase the output of the system. The many low-wage workers in China, India, and Africa cannot afford to purchase much of anything, beyond pay for their homes and food.
Money doesn’t substitute for growth in the supply of goods and services, except in people’s minds. Once the total supply of goods and services starts shrinking, there is a huge problem. Even a shrinkage in the growth rate is a big problem. Paying more for oil or food leaves less for other things. Paying more in interest shrinks what is available for other things. The government giving a larger share of the total to retirees leaves less to divide among working-age workers.
https://gailtheactuary.files.wordpress.com/2013/02/growing-economy.png
https://gailtheactuary.files.wordpress.com/2013/02/declining-economy.png
https://gailtheactuary.files.wordpress.com/2012/06/18-our-debt-based-system-depends-on-growth.png
https://gailtheactuary.files.wordpress.com/2011/08/7-repaying-loans-in-a-declining-economy.png
My basic contention was that if we can produce something, such as food in the 30’s, we can indeed consume it – psychology or social contracts is (was) a barrier and the idea of whether government should be a charity vs a protector of existing class interests. Government need not finance with taxes – if they really actually do that now (most don’t). Capital providers aren’t really providing capital anymore – they are providing services on money which is loaned into existence, not which was saved from deposits.
Everything else I agree with. Non elite workers burdened by debt is a huge problem. The problem is created in part by declining surplus and exacerbated, in my view, by a host of policy decisions that have been different in the past and could be different in the future.
Overproduction has been as big of a problem as just about anything else in capitalism so far – and I agree we are demand constrained before we hit real limits. I just don’t think hyperinflation is the only alternative to sleepwalking into depression. Probably more mid-range high inflation – which is slim solace, to say I think we can postpone collapse by getting worse for longer.
New business model:
https://www.resilience.org/wp-content/uploads/2018/10/Bonus-Decade-Charts.002-768×432.jpeg
So, back from the Dr. I’m going to do the laundry at 3. Collapse? Collapse? Anyone? Buehler? Adonis? Adonis?
Isn’t it suppose to happen on a Tuesday?
No, only on days that end in “y”.
Adonis may be on to something, lets not count him wrong yet. Dow was 100+ pts earlier is now down 460 pts.
The explanation across the wires is that Trump will tariff all Chinese imports if talks fail at the G20. Guess folks are expecting for the talks to fail.
The economy is on the brink, the people are on the brink (some over the edge already shooting people). All this is the result of diminishing returns. Desperation is in the air and it ins’t even Nov 6th yet. Buckle up folks its gonna get crazy before Nov 6th is over.
Hi Gail, thanks for some interesting points. A couple of comments:
The lessons learned in 1929 are forgotten, perhaps partially relearned by a few in 2008. There is a bias towards a gaussian distribution for defaults. Then you find that the events of the day sould happen once in the age of the Universe. With a power law distribution there is a closer approximation, but really, really bad events are four times more likely to happen IMHO. (read (Mis)behaviour of Markets)
You worry about “maintaining trnsmission lines” Any evidence for this? Is this a 10 year, 20 year 100 year or 1000 year problem?
I forgot to add: when you (and others) misprice risk, securities get sold too cheaply, collateral is at greater risk, debt increases quicker than it should and stays longer than it should. But you cannot charge more for debt because everyone else is mispricing it.
I am a big fan of Benoit Mandelbrot’s. I read The (Mis)behavior of Markets back in 2004, when it was first published. The normal (Gaussian) distribution is numerically easy to work with, which I expect was the primary reason it was used. The distribution has skinny tails, making the chance of big deviations look remote. I can’t imagine that it is the correct model.
The Black-Scholes model for pricing derivatives is also based on the normal distribution. I am not close enough to the situation to know how much pricing has moved away from this model. It seems like using the model for derivative pricing a recipe for disaster, over the long term. Wikipedia says
I think researchers always over-estimate what we know. The saying goes, “All models are wrong, but some are useful.” Our problem is that scientists have not the slightest idea the extent to which the models they are making could be completely wrong. Instead, pronouncements are made every day, based on the result of some model. Underestimating variability is a favorite issue. Or assuming that one variable can be held constant, and the others allowed to vary.
Gail,
As an actuary with large data sets do you make your own discrete distributions from the data rather than rely on normal, etc. distributions? Often times the positive side is different in shape from the negative side assuming zero as a a mean. Modern computing power seems to have solved this issue and with good data sets eliminated the sampling issue.
Dennis L.
Actuaries look at their own claim data to make distributions of the amounts of claim payments. Log normal is (or historically has been) one standard model that often fits pretty well.
Frequency is a different issue. It can depend on a lot of outside influences. For example, lawyers advertising for clients. Or tort reforms, affecting the economics of filing a claim. Or economic conditions, affecting how many people are driving. It is now quite popular to use credit scores as a way of differentiating among auto and homeowners policyholders. People with poor credit scores tend to have more claims. In health insurance, the severity of the flu season makes a big difference on claims.
A third issue is trying to estimate how “immature” claims will settle out. Claims’ adjustors make estimates of how much they think a claim will settle for. They also make estimates of how much be paid out in legal fees. In the case of liability claims, claims can take years to settle. Many claims will be dropped, and the only cost will be legal fees. Also, inflation tends to have a big impart on how claims “develop.” So trying to make accurate estimates of slowly paid liability claims can be a problem.
I think that the use of modern computing power rapidly reaches diminishing returns in actuarial analyses. Actuaries were creating distributions of claim sizes back in the days of punched card inputs and outputs. There is a temptation to require coding of all kinds of stuff, without stopping to think that gathering all of this data has a cost as well as a (slight) benefit. Once premiums are developed by actuaries (and sometimes approved by state insurance departments), they must compete in the marketplace with other rates put together by other actuaries. If Company A’s rates are high for one kind of insured, those insureds will tend to move to Company B, C, or D. So ultimately it is the market that determines which rates are actually paid, by which insureds.
Ultimately, the question is the profitability of the company with respect to the policyholders who actually selected Company A. The fine differentiation only makes a difference, because of all of the fine differentiation other companies are doing. Otherwise, a very simple rate structure would probably work just as well, in terms of collecting enough premium to pay the claims. Outside influences are terribly important in the actual outcomes.
There is a temptation to put together models of the future and expect them to behave more like the real world than they really do. For example, the investment part of what is happening tends to get overlooked. Insurance companies take in funds they collect from selling policies, and invest them primarily in bonds until the time when claims are paid. If there are major defaults on bonds, this could have a huge influence on actual results. If interest rates rise or fall, this can make a big hidden difference. Falling interest rates on debt tend to raise the value of bonds; rising interest rates tend to decrease the amount this debt can be sold for. Whether or not changes in interest rates affect financial statements depends upon whether the carrying value is “marked to market.” All of this tends to get swept under the carpet in the models I have seen. Few understand how much favorable influence falling interest rates have had since 1981, for example.
“I can’t imagine that it is the correct model. ”
Models are valid only within their design limits. ISTR reading that a quant put together something similar to Black-Scholes as a “ready-reckoner” to price derivatives, one against another. He knew the limits. It went viral – his colleagues started to use it to buy and sell derivatives instead of doing the math properly and continued to use it despite his warnings, I suspect it made selling and getting a bonus easier.
The US recent problems date back to the Clinton Presidency when the US government had to sell off the Savings and Loans disaster. ISTR it was the politicians that pushed the Banks to misprice and sell the securities. And it went viral. Nobody wants to fix it.
Executive summary : AAA loans expect default after 10,000 gaussian years. Empires tend to have 250 year lifespan.
When I see him reform Frances relationship with francophone Africa, then I will believe he is sincere.
Not saying he is wrong here, but from what I have read, France plays a disproportionate role in keeping Africa poor.
France, as per independence treaty with former colonies, requires them to keep all of their foreign currency reserves in the Banque du France, and only able to with draw 35% a year, and having to pay higher rates to access more.
The CFA is pegged to the euro – former the French Franc – and no decisions can be made without French approval. This means that there is a continuous demand for euros to maintain that peg, and constituent nations can’t act independently to suit their own economy.
Also in former colonies, French companies have first right of refusal on natural resource discoveries. I read a report about a French company buying an African company in cocoa beans by force, as opposed to cash.
Also, and less clear is a high correlation of political assassinations of African leaders over the past century occur in former French colonies.
If even half true, I think these need to be addressed first before lecturing Africa on other issues.
1958 — Good Ol’ USofA: Atomic bomb named ‘Santa Fe’ exploded above ground; winds blow fallout over LA where thermal inversion holds it over the city for several days. Not that the residents can tell the difference — it’s a glow in the dark kinda place.
(I happened to be there)
i was also. you were told to stay inside and not drink the rainwater. liked the light show over the San Gabriel mountains, from up there in Nevada test site.
I’m sure you were just an egg in them days.
1929 — US: Pandemonium on Wall Street as stocks crash. American securities lose 26 billion dollars in value.
Well, 9am has come and gone. Still no collapse. Of to the doctors.
Shti , guess I have to shave this week also.
french President Macron Calls to Stop Africa’s Population Growth
Speaking at an event on the margins of the UN general assembly in New York, the French president Emmanuel Macron has said many African women would choose to have smaller families if they had greater access to education and family planning. Macron, who demanded ‘chosen fertility’ and revisited the controversy caused by his previous calls to slow African population growth, said the continent’s youth must be empowered to forge their own future, identifying health, education and gender equality as key
https://youtu.be/fA90CXAk1XU
btw why this french guy is talking about african countries fertility rate
who is stop french people to increase they fertility rate
The people with a high fertility rate in Europe are all immigrants, and mostly African – common to see Nigerians with 4-5 kids in London. I rather like them, as they are often very cheerful people.
It looks like this year we will only add about 81.7 million humans to the planet.
There are too many people in this world. END OF STORY. Stabilize population and then slowly decrease. NO OTHER ANSWER. Prioritize giving women around the world 100 percent equal rights (hopefully destroying the big three religions in the process). Free and easy access to contraception worldwide. There is no plan B.
Too late, and it’s now a bigoted act to tell somebody outside of your race what to do.
Wrong.
See Japan for what happens when your population does not grow. Eventually you get
http://profutures.com/newsltr/ft151124-fig1.png
And you end up scratching in the dirt with a stick
The Role of Population in Economic Growth
http://journals.sagepub.com/doi/full/10.1177/2158244017736094
And please please please… do NOT tell me that we don’t need economic growth…. because if you do that …. it would be the same as declaring you are mentally r e t arded….
And I will award you with a free lifetime bus pass…
Destroy most of what lives on this planet, or destroy most of us. I say let most of us be destroyed. It’s the moral thing to do.
yes Yes YES!!!!
I concur! The cancer must be eradicated. The virus must be exterminated.
Soon….. very soon….
And there are those who fret because their child cancers will starve.
I say to thee — think of the Big Picture…. the sooner we are starved and irradiated off this planet…. the better.
We are the destroyers… the torturers… the monsters.
All Humans Must Die.
(btw – if any Green Groopies are watching … that’s a free tag line courtesy of FE … print it out — in big bold letters…. glue it to a placard… and prance about at your next protest…. see how that goes over the Teslerati folks)
I am afraid this is too much for many readers, especially new readers.
They’ll just dismiss it as crazy ranting…. completely ignore it… as they drift along in their cognitive dissonance and delusion….
Without jobs at the other end of the education pipeline (other than the new teacher jobs), where does this get women? Economies need energy supplies for jobs that pay well. There is a limit to what selling handicrafts to the world market can bring.
Having 4 to 6 children is NOT the answer. Having 2, 1 or none is part of the answer.
But if a woman’s value only comes from her ability to have children, it is difficult to make this change. It also gives the woman (sort of ) a job, raising the children, and perhaps having a garden. The countries where population is growing rapidly tend to be ones where men can have multiple wives. Rich men take several wives. The wives are often quite young, so women often start having children quite early.
I don’t believe that is true. Many times you hear stories of refugee/migrant women (some pregnant) with multiple children. Something is wrong when women end up pregnant under these circumstances.
Women are pretty much property in many places. Their families arrange their marriages to men who appear able to support the young women. In some place, the rich would-be husbands pay a dowry.
The rest of the world doesn’t necessarily operate in the same way the rich countries do. Women often don’t have much choice about getting pregnant. If women cannot support themselves financially, they have no leverage in the situation.
Good old fashioned high fertility levels were fine in the good old days when people faced good old fashioned disease, war and food insecurity issues on a frequent basis. In that context, having lots of kids is just doing what comes naturally. It becomes problematic when interventions by do-gooders aimed at improving health and living standards for the masses result in mushrooming population growth that strains the capacity of local economies and ecosystems to cope with the numbers. This is one more piece of evidence that no good deed ever goes unpunished.
There is no choice at all regarding marriage or pregnancy for many women; a Kurdish friend of mine was forced into marriage at 18 to someone she loathed, and when she ran away her father beat her.
our current era of civilised grace is an anomaly
the unpleasantness you describe is I fear, normality
I completed agree with Tim Groves. We can’t have it both ways. Assistance to third-world countries should only be given with conditions that give all people (especially women) full rights and easy access to free contraception. If not, then let mass starvation occur. There is not other choice.
Giving women full rights and easy access to free contraception is amazingly expensive.
Also, if the total amount of goods and services doesn’t rise very much, by giving the women full rights, the inflation-adjusted pay of men is likely to fall. There are unintended consequences, no matter what you do.
It’s kinda like offering to pay to dispose of plastic in poor countries…. massively expensive…. and if you take cash out of rich economies to pay for things like trash collection and the pill…. that hurts GDP in the rich countries…
And that’s why we will never sponsor birth control …. and we will continue to be told that the plastic problem is a rich country thing….
While they are at it can they pay for rubbish collection so poor Africans stop tossing plastic bags into the rivers?
“Equities globally have lost almost $8 trillion of value this month, set for the biggest wipeout since the height of the financial crisis a decade ago on growing concerns over slowing economic and earnings growth, among others.”
https://www.fin24.com/Markets/markets-live-rand-on-back-foot-asian-shares-extend-rout-and-gold-flat-20181029
“Only during the 1970s stagflation period and the global financial crisis have so many asset classes had negative returns in a year… “The percentage of asset classes that has generated positive returns this year is only 20 per cent, a share that has never been so low outside of 1970s stagflation episodes and the global financial crisis,” the strategists wrote. “Every market but the Nasdaq, commodities and US leveraged loans has underperformed USD cash in 2018.””
https://www.businesstimes.com.sg/banking-finance/only-20-of-asset-classes-generate-positive-returns
“China’s economic growth continued to slow in October, a period in which the trade conflict with the US has intensified and policy makers have stepped up support for businesses. That’s the signal from a Bloomberg Economics gauge aggregating the earliest-available indicators on business conditions and market sentiment. The government effort to stabilise the mood among executives and investors hasn’t been effective yet.”
https://www.moneyweb.co.za/news-fast-news/early-indicators-show-chinas-slowdown-worsened-again-in-october/
“China’s yuan slid toward its weakest in a decade and close to a key support level of 7 per dollar, before paring its loss slightly as the central bank said it was confident it could keep the currency stable.
“On Friday he yuan declined as much as 0.22 percent to 6.9647 per dollar, the weakest intraday level since late 2016, when it hit 6.9666. That was the lowest since May 2008.”
https://macaudailytimes.com.mo/yuan-declines-toward-weakest-level-in-more-than-a-decade.html
It will be a few days before we start seeing data on actual results for October. For example, “Are auto sales still down?” But the preliminary look doesn’t sound good.