The World’s Fragile Economic Condition – Part 2

The world economy can appear to be operating quite well but can be hiding a major problem that causes it to be fragile. My presentation The World’s Fragile Economic Condition (PDF) explains why we should expect financial problems if energy consumption stops growing sufficiently rapidly. In fact, a global sell off in the equity markets, such as we have started to see recently, is one of the kinds of energy-related impacts we would expect.

This is Part 2 of a two-part write up of the presentation. In Part 1 (The World’s Fragile Economic Condition – Part 1), I explained that a large portion of the story that we usually hear about how the world economy operates and the role energy plays is not really correct. I explained that the world economy is a self-organized system that depends upon energy growth to support its own growth. In fact, there seems to be a dose-response. The faster energy consumption grows, the faster the world economy seems to grow. The period with fastest growth occurred between 1940 and 1980. During this period, interest rates were rising and workers saw their wages increase as fast as, or faster than, inflation. After 1980, the rate of growth in energy consumption fell, and the world needed to tackle its growth problems with a different approach, namely growing debt.

In this post, I explain how debt (and its partner, the sale of shares of stock) help pull the economy forward. With these types of financing, investment in new production becomes almost effortless as long as the return on investment stays high enough to repay debt with interest and to repay shareholders adequately. At some point, however, diminishing returns sets in because the most productive investments are made first.

The way diminishing returns plays out in energy extraction is by raising the cost of producing energy products. In order for the sales prices of energy products to rise to match the rising cost of production, rising demand is needed to give an upward “tug” on sales prices. This rising demand is normally produced by adding increasing amounts of debt at ever-lower interest rates. At some point, the debt bubble created in this manner becomes overstretched. We seem to be reaching that point now, especially in vulnerable parts of the world economy.

Slide 34

Let’s first look at a slide from Part 1, explaining the way in which the economy works like a giant factory.

Slide 20

As long as energy products are very inexpensive, it is possible for the economy to expand very rapidly. When this happens, the Goods and Services produced in Box 4 are able to grow so rapidly that all of the Resource Providers in Box 1 can be well compensated, simply by using a quasi-barter arrangement, facilitated by the use of money. With this approach, Resource Providers can get adequately paid using the Goods and Services produced in close to the same time period. Something of this nature occurred prior to 1970, when inflation-adjusted oil prices were less than $20 per barrel (Part 1, Slide 26).

Slide 35

If the growth of the economy slows, so that not enough Goods and Services are being created by the economy to use this approach, it is possible to work around the problem by adding debt. Adding debt makes it possible to substitute promised future Goods and Services for already produced Goods and Services.

Slide 36

Added debt makes it seem like more goods and services are available to pay resource providers.

Selling shares of stock acts very much like debt, because the funds provided by these shares also provide access to goods and services that others have already produced. In the case of the sale of shares of stock, the promises are for future dividends, capital appreciation, and partial ownership of the company.

Slide 37

Growing debt looks like it can solve all problems! No wonder that Keynesian economists found it so useful. But the return must remain high enough to repay debt with interest.

Slide 38

Borrowing money generally comes with the requirement that the amount borrowed be repaid with interest. If the energy purchased using debt allows the economy to grow fast enough, there is no difficulty in repaying debt with interest. If energy is very inexpensive (equivalent to oil cost less than $20 per barrel in inflation-adjusted price), this payback system generally works because a large amount of energy can be purchased for a small quantity of debt.

If the price of the energy rises, much more debt is required for the same amount of energy produced. For example, if oil is $80 per barrel, the affordability is much lower. It takes four times as much debt to pay for a barrel of oil. Repayment of debt with interest becomes more difficult.

Slide 39

In Part 1, we observed that US long-term interest rates have been falling almost continuously since 1981. This situation of falling interest rates led to falling mortgage payments for a given amount borrowed. Because of the lower monthly payments, homes became more affordable; in other words, there tended to be more potential buyers for homes at a given price level. Indirectly, the increased affordability of home ownership tended to raise the resale value of homes. It also encouraged the building of additional homes.

Building homes indirectly requires the use of many different types of commodities. Metals are used in pipes and in wiring. Wood is used for framing. Concrete is often used for the basement. Oil is needed to haul these goods to the site where the home is to be built. Thus, indirectly, falling interest rates tend to raise commodity prices.

Slide 40

Many assets are purchased with debt. If interest rates are very low, purchasing these assets becomes more affordable. The sale of shares of stock provides another way of raising capital for a company. In the case of oil-producing companies, the purchasers of shares of stock often think, “If extraction costs are rising, surely oil prices and other energy prices will rise as well.” This belief allows the price of shares of stock to be bid up to a high level.

Slide 41

When asset prices rise, economists sometimes refer to the wealth effect. Homeowners feel richer if their homes are worth more, and they can borrow more against them. Owners of shares of stock feel richer if their shares of stock have higher values. Owners of pension plans are happy when stock prices are high, because it looks as if these shares can be sold, allowing the plans to meet their pension obligations.

If the debt bubble stops growing, then the commodity price bubble cannot continue to grow. In fact, it may abruptly pop. This is what happened in the second half of 2008, when oil prices dropped precipitously, from $147 per barrel to the low $30s.

Slide 42

Government pension plans such as Social Security are not treated as debt because they are not guaranteed, but they act in much the same way as debt.

Slide 43

The gray bars on Slide 43 indicate recessions. These recessions often seem to be intentionally caused. If a person looks closely, it is possible to see that in most cases, increases in US short-term interest rates preceded recessions. In fact, if a person looks at the minutes of the Federal Reserve Open Market Committee, it is sometimes clear that the Open Market Committee raised interest rates to intentionally pop asset bubbles in order to “reduce volatile food and energy prices.”

Slide 44

The huge interest rate spike to 18% in 1981 on Slide 43 corresponds with the big drop in oil prices on Slide 44. Interest rates were so high that buyers could no longer afford new homes or factories. Prices seem to have been brought down by falling demand.

Slide 45

If we look at recent oil prices, we can also see that they also depend very much on interest rates. In my paper, Oil Supply Limits and the Continuing Financial Crisis, I show that the US debt bubble popped precisely when oil prices hit a peak in July 2008. That is when US consumer credit and mortgage debt started falling.

On Slide 45, QE stands for Quantitative Easing. This was a program that allowed lower long-term interest rates in addition to lower short-term interest rates. Thus, it gave the Federal Reserve (and other central banks) the power to reduce interest rates to an even greater extent than was possible by reducing short-term interest rates alone.

Slide 46

The Federal Reserve seems to have been instrumental in causing the Great Recession, as well. Slide 46 shows a larger scale of the same information about oil prices and short-term interest rates shown on Slide 43. There can be several years between the time interest rates are raised and the resulting recession occurs, so most people miss the role that intentionally raising short-term interest rates plays.

Also, high oil prices also tend to have an adverse impact on the economy because energy prices rise, but wages do not rise at the same time (Part 1, Slide 28). Consumers are forced to cut back on discretionary goods when the cost of necessities (such as the cost of commuting and the cost of food) rise.

In fact, it seems to be the combination of rising energy prices and increased interest rates that leads to recessions.

Slide 47

On this chart, I show some of the comments heard about oil prices. In mid-2008, it was clear that high oil prices were becoming a problem, especially for those with subprime mortgages who were living in homes that were distant from their work. By early 2014, we started hearing that oil prices had been too low for oil producers in 2013. Because of the unprofitability of oil production, some oil producers were cutting back on investment in new production. See my post, Beginning of the End? Oil Companies Cut Back on Spending.

Now, it is fairly clear that no oil price will work for both producers and consumers. Today’s Brent oil price of about $80 per barrel is both too low for producers and too high for some consumers. Consumers who are particularly affected are those whose currencies are falling relative to the dollar, such as consumers in Turkey and Argentina. Even countries with more modest decreases, such as China and India, are cutting back on automobile purchases. This change will affect future oil demand.

If, by some chance, oil prices should spike to a high level such as $100 per barrel, the affordability problem pretty much guarantees that oil prices will fall back fairly quickly. This issue, by itself, makes it impossible to believe that oil prices will increase endlessly.

I should mention, too, that we are also at a point where no interest rate works for everyone. Those buying new homes and new cars need low interest rates, in order for these goods to be affordable. Pension plans, on the other hand, need high interest rates, in order to meet their pension promises. There is no one interest rate that works for every purpose.

Thus, we have a combination problem: no interest rate works for everyone, and no set of energy prices works for everyone.

Slide 48

The Federal Reserve is now in the process of raising short-term interest rates (see Slide 43). It is also selling the QE securities that it previously acquired to reduce long-term interest rates. If buying these QE securities lowered long-term interest rates, selling them should raise long-term interest rates. Raising both short- and long-term interest rates sounds like a formula for creating a huge number of debt defaults and lowering prices of shares of stock. It is likely that these actions will also start a major recession.

Slide 49

Slide 50

On Slide 50, “earlier” refers to Slide 16 in Part 1 of this presentation. From Part 1, we remember that the first small peak refers to the California gold rush; the second larger peak about 1910 refers to “Electrification and Early Farm Mechanization.” The third peak about 1970 refers to the “Postwar Boom.” The last small peak refers to the expansion made possible by China’s growth, and the growth of other Asian countries.

Slide 50 shows that the troughs refer to periods that were bubble collapses, or the collapse of the central government of the Soviet Union. Slide 51 (next) gives details with respect to these low periods. These were bad times for economies: depression, debt collapses, and periods with significant wage disparity. They were not periods with high energy prices.

Slide 51

Clearly, none of these low periods was a good period for the economy. While we can see that there was low energy consumption during the periods, the primary reason for this low energy consumption was the collapse of a debt bubble or of a government.

Slide 52

Peak coal occurred in the United Kingdom in 1913, and World War I began shortly thereafter, in 1914. When peak coal occurred, wages for workers were very low, because diminishing returns had made the operation of coal mines increasingly expensive, but those purchasing coal could not afford higher coal prices. Thus, mining companies could not afford to pay workers adequate wages. World War I gave an alternative employment opportunity for coal miners and others with low wages.

Entering World War I was a very successful strategy for the UK. The fact that the UK was on the winning side allowed the UK to retain its role as the holder of the reserve currency. In this position, it was fairly easy for the UK to borrow the funds needed to obtain coal and other energy imports.

Germany seems to have encountered peak coal about the time World War II began. Was this an attempt to cover up Peak Coal? We don’t know for certain, but the timing certainly looks suspicious.

In both of these cases, low energy supply seems to have led to fighting, rather than high prices.

Slide 53

The collapse of the central government of the Soviet Union seems to have been an indirect impact of the long term low oil prices in the 1981-1991 period. The high oil prices of the 1970s had encouraged the Soviet Union to ramp up oil production. Once the US raised interest rates and oil prices fell, there were no longer funds for investing in new oil production. The Soviet Union was dependent on oil exports. It was able to continue for quite a few years with low prices, but eventually its central government collapsed. Over the long term, consumption has continued to be much lower, reflecting the permanent loss of industry.

Slide 55

Slide 55 is a graph of the “peaks” on Slide 50. If we listen to mainstream economists (including Paul Romer and William Nordhaus, who recently received the Nobel Prize in economics), improved technology can allow the world economy to become increasingly efficient, and thus overcome the problem of diminishing returns. Slide 55 shows that over a period of nearly 200 years, this has never happened in the past. The troughs represent collapses of one kind or another. These low periods did not represent sustainable situations.

The problem is that diminishing returns leads to the need for very different techniques to work around new problems. For example, if there are diminishing returns with respect to extracting fresh water from wells, the first alternative is to dig deeper wells. Efficiency gains can somewhat help offset the cost of deeper wells. But once the problem advances to the point where desalination is needed, plus remineralizing the water with the correct minerals after desalination, the cost of fresh water becomes much higher. It becomes impossible for improved technology to work around the very large increase in costs that diminishing returns seems to cause.

We haven’t been able to work around diminishing returns with increased efficiency before; we are likely kidding ourselves if we think we can do so now.

Slide 56

Slide 57

Slide 58

The point that should be emphasized is that the reason why the United States economy now looks fairly good is because we are at the top of a debt bubble. This bubble is partly the result of world’s long running low interest rates, and partly because of the United States’ recent tax cuts. Thus, the situation today is a lot like 1929 before the debt bubble collapsed, or a lot like 2007 before the economy derailed. Things look good, but they won’t necessarily stay favorable for very long.

Slide 59 Conclusions Continued v2

Slide 59

Separate Additional Conclusions for Various Audiences 

At this writing, I have actually given variations on this talk three different times, to different audiences. The first audience (which is the one I mentioned at the beginning of Part 1) was a meeting of about 100 property-casualty actuaries. These actuaries help determine rates and financial statement amounts for lines of insurance such as automobile, homeowners, and medical malpractice. The specialized conclusions I added for that audience were the following:

Slide 61

Slide 62

The second version of my talk was given at the 2018 Bermuda International Life and Annuity Conference, to a group of 300+ insurance executives of various kinds. This talk was called Energy Economics: Is a Discontinuity Ahead? This audience was especially interested in my talk because interest rates are central to the operation of pension plans. If interest rates do not rise, this is a major concern for this group.

The conclusion slides to that presentation were the following:

Conclusions -Slide 1 of 2 – Life/Pension version

Conclusions for Life and Annuity Providers – Slide 2 of 2

The third version of the presentation I gave was to a group of followers of Peak Oil theory. This presentation was somewhat shorter and slightly rearranged. The title of this presentation was How the Energy System Really Works and What Seems to Be Going Wrong.

Its short conclusions’ sheet mentions the following dangers:

Conclusions of Shorter Version

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,106 Responses to The World’s Fragile Economic Condition – Part 2

  1. Hubbs says:

    The drip-drip of de-dollarization continues.
    I wonder if Russia and China are accumulating gold reserves, not to back their currencies on the world stage, to seek global “reserve currency” status, or even a “fair share” of the SDR basket of currencies, but rather as a means to back their respective currencies against any exchange rate fluctuations between transactions involving the Ruble or Yuan. It’s a first step.

    https://www.zerohedge.com/news/2018-10-18/russia-and-china-prepare-ditch-dollar-bilateral-trade

    • The timelines are telling, this publicly announced ditching USD for the most important (not all) bilateral trade (China, India, ..) within next ~10yrs, and overall re-calibration with other partners (notably EU/R) even longer time horizon. Hence no challenge to USD for the next ~ 1 1/2 decade, given the EMs out flow to the core countries and so on..

      So, the next GFC_verXY won’t be necessarily about currency collapse.., that’s for the next one..

    • I noticed this chart in the article.

      China’s imports from Russia have been soaring (more oil, coal and natural gas, at higher prices ?), while its exports to Russia have been pretty flat. This doesn’t make for a good long-term relationship, regardless of the currency.

  2. Baby Doomer says:

    Repsol boss warns of oil supply crunch after spending squeeze

    Long-term investment still ‘illogical’ despite rising prices, says Antonio Brufau

    The chairman of Spanish energy group Repsol has warned of an oil supply crunch driven by under-investment, even as he said heavy spending on long-term production was “illogical”.

    Antonio Brufau told the Financial Times that oil prices were rising “high”, above $85 a barrel, before the effects of a reduction in spending by oil and gas majors were being felt.

    “We still haven’t seen the impact of the lack of investment when all of us energy companies stopped investing during the downturn,” said Mr Brufau, the former chief executive.

    When oil prices spiralled down after 2014, the world’s biggest oil and gas companies tightened their purse strings and cut costs as their balance sheets and share prices suffered.

    They then diverted funds into short-cycle output, such as in US shale oil and gas, aiming to yield production faster and more cheaply.

    “The life of our investments is now six to seven years,” said Mr Brufau. It is among the shortest in the sector.

    Some industry executives and energy watchdogs have said this type of production alone will not be enough to meet rising crude demand. Insufficient investment into large-scale, long-term projects will lead to a supply shortfall in the early 2020s, the International Energy Agency has said, just as US shale production plateaus.

    But companies have been under pressure to show financial discipline, with many returning money to investors through dividends and share buybacks. “You need to be able to prove your money [spent on projects] is worth it, very quickly,” said Mr Brufau.

    He said Repsol’s strategy comes amid a fundamental shift in thinking across the energy industry about future demand for fossil fuels.

    “In the past, 10 years ago, the best oil and gas companies were the ones with the most life in their reserves,” said Mr Brufau. “It has become less important.”

    As long as reserves were replaced and production was stable, this provided enough flexibility for energy majors, he said, without increasing oil and gas output hugely. “To [keep putting] money in the ground is an illogical decision,” he said.

    It also comes as electric cars and alternative fuels threaten oil’s dominance as a transport fuel and carbon-intensive industries are forced to reduce emissions.

    Repsol plans to invest €15bn by 2020, with 53 per cent dedicated to exploration and production and the rest to refining, chemicals, gas, power and low emissions assets.

    Although Mr Brufau said the core business of oil and gas production was still the main focus, Repsol was allocating €2.5bn into cleaner energies.

    Repsol’s business has been adjusted in favour of gas over oil, which Mr Brufau said would play a major role in power generation together with renewables.

    But as oil prices hit four-year highs, Mr Brufau said crude risked rising higher amid uncertainty about extra production capabilities.

    Iran’s oil exports were already falling ahead of new US sanctions, and there were questions about how much other big producer nations would be able to compensate.

    “It depends how much spare capacity Opec producers have, and we don’t think they have too much,” said Mr Brufau, who said additional barrels would only drop prices to $70 a barrel at the most.

    While there were several million barrels a day of a buffer, “in two years this will be exhausted”, he said.

    https://www.ft.com/content/9f14cf00-ca36-11e8-9fe5-24ad351828ab

  3. jupiviv says:

    Recently came across this article:

    https://thebaffler.com/salvos/oculus-grift-shivani

    It’s “interesting”, in the sense of being an unusually creative example of pop techno-disney-topian insanity. The thesis is that “capital” itself has become AI and overlord of humanity. Because computers. Based on that logic, pretty much anything capable of digitisation can be said to be an AI. P_orno? AI. Cat pictures? AI, baby, AI.

    • Capital seems to have taken on almost magical meaning to some people, because with more technology (working on more physical things), we seem to be able to become more efficient. We seem to be able to do almost anything.

      Furthermore, capital has come to mean the promises of future goods and services that can be used to support current investment. These promises can come in the form of shares of stock, debt, or derivatives. I suppose AI could help tailor these things. Or stacks of promises on tops of stacks of promises.

      The catch is that for the system to work, there has to be growth. In particular, there needs to be growth in energy consumption. Once this ceases, the whole system doesn’t work.

      In fact, we know that return on capital has been falling for a long time.

      This return is all returns, including returns that would normally be consider for wages. Source: The historical transience of capital: The downward trend in the rate of profit since XIX century by Esteban Ezequiel Maito https://mpra.ub.uni-muenchen.de/55894/1/

      AI seems unlikely to fix this issue.

      • jupiviv says:

        Thanks for that link Gail. On glancing through the paper, the author seems to take the Marxist perspective into account, which is interesting.

  4. I already spoke about Bau-Lite being viable in some locales. Not everywhere, but in selected areas where hydropower is available.

    19th century tech can do wonders in a world short of fossil fuels. ‘They” will continue to live as great as, at least, Fitzwilliam Darcy. (Despite of being a male, I read every single work of Jane Austen. Her most famous book “Emma” actually tells England post Napoleonic War; while Emma herself is not affected by the poverty, the supporting characters do suffer from the huge economic depression following the end of war, and a lot of them do a bunch of things to just survive.)

    Property Rights w ill be defended like this


    The Cartwright family in Bonanza were the feudal lords of that region of Nevada (surprisingly fertile – not too many tourists know that part of Nevada, and the locals prefer it that way.) They owned 1,000 sq miles, with lots of land, cattle and horses.

    BAU lite will exist like that.

    • jupiviv says:

      “I already spoke about Bau-Lite being viable in some locales. Not everywhere, but in selected areas where hydropower is available.”

      BAU-lite is just a subset of BAU. Whatever exists after global BAU is gone will not resemble BAU in any meaningful way. Settlements around hydro PPs are possible if enough food can be grown there and flooding isn’t an issue. The electricity itself won’t affect the decision to stay there, or obedience to whoever claims authority.

  5. Fast Eddy says:

    https://www.zerohedge.com/news/2018-10-18/henry-kissinger-heckled-nyu-told-rot-hell

    ‘Then said Henry, El Ders, forgive them; for they know not what they say.’

    Because of what men like Henry and Rummy and Cheney do…. these f789ing i di ots get iphones…. and live large….

    Fools

  6. Fast Eddy says:

    At this point, some of you might be wondering about all the so-called evidence for dangerous climate change. What about the disappearing Arctic ice, the rising sea level, the weather extremes, starving polar bears, the Syrian Civil War, and all the rest of it? The vast variety of the claims makes it impossible to point to any particular fault that applies to all of them. Of course, citing the existence of changes – even if these observations are correct (although surprisingly often they are not) – would not implicate greenhouse warming per se. Nor would it point to danger. Note that most of the so-called evidence refers to matters of which you have no personal experience. Some of the claims, such as those relating to weather extremes, contradict what both physical theory and empirical data show. The purpose of these claims is obviously to frighten and befuddle the public, and to make it seem like there is evidence where, in fact, there is none. If there is evidence of anything, it is of the correctness of C.P. Snow’s observation.

    Some examples will show what I mean.

    First, for something to be evidence, it must have been unambiguously predicted. (This is a necessary, but far from sufficient condition.) Figure 1 shows the IPCC model forecasts for the summer minimum in Arctic sea ice in the year 2100 relative to the period 1980–2000. As you can see, there is a model for any outcome. It is a little like the formula for being an expert marksman: shoot first and declare whatever you hit to be the target.

    Turning to the issue of temperature extremes, is there any data to even support concern?

    As to these extremes, the data shows no trend and the IPCC agrees. Even Gavin Schmidt, Jim Hansen’s successor at NASA’s New York shop, GISS, has remarked that ‘general statements about extremes are almost nowhere to be found in the literature but seem to abound in the popular media’. He went on to say that it takes only a few seconds’ thought to realise that the popular perceptions that ‘global warming means all extremes have to increase all the time‘ is ‘nonsense’.

    https://www.thegwpf.org/content/uploads/2018/10/Lindzen-2018-GWPF-Lecture.pdf

    • Uncle Bill says:

      Lindzen!? Hmmmm
      he Cato Institute, a conservative think tank where Lindzen has also published numerous articles and studies, has received at least $125,000 from ExxonMobil since 1998. In his 1995 article, “The Heat Is On,” Ross Gelbspan reported Lindzen charged oil and coal organizations $2,500 per day for his consulting services. [4], [5]

      Lindzen has described ExxonMobil as “the only principled oil and gas company I know in the U.S.” [6]

      In addition to his position at Cato, Lindzen is listed as an “Expert” with the Heartland Institute, a member of the “Academic Advisory Council” of the Global Warming Policy Foundation (GWPF), and an advisor to the CO2 Coalition, a group promoting the benefits of atmospheric carbon dioxide. [58], [59], [62]

      Fossil Fuel Funding
      As part of a March 2018 legal case between the cities of San Francisco and Oakland and fossil fuel companies, Lindzen was asked by the judge to disclose any connections he had to connected parties. [94]

      In response, Lindzen reported that he had received $25,000 per year for his position at the Cato Institute since 2013. He also disclosed $1,500 from the Texas Public Policy Foundation for a “climate science lecture” in 2017, and approximately $30,000 from Peabody Coal in connection to testimony Lindzen gave at a proceeding of the Minnesota Public Utilities Commissions in September 2015. [98]

      • Think about all of the other researchers who have been paid directly by governments to prove their point. Anyone who want to make money, or keep their position in academia, supports the “global warming” cause.

        • Uncle Bill says:

          Yes, Gail, I have thought about that also….and I imagine they also would have the opportunity to position themselves as Richard Lindzen has.
          As a matter of fact, so called global warming skeptics have been awarded government support in their research. How about that!

          • Fast Eddy says:

            The government funds skeptics? I was not aware of that….

            BTW

            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/

        • Uncle Bill says:

          As a matter of fact, Roy Spencer and John Christy, two well know skeptics, are solely funded by NOAA, NASA, and DOE. Spencer was awarded $3,000,000 in NSF grants to prove the largely discredited theory proposed by Lindzen.

          • Fast Eddy says:

            Well that means that you should be more willing to accept their findings – because they are less likely to be faked… because clearly the narrative the govt wants is one where the ‘research’ supports man made G w.

            Much ado about nothing.

            This is all you need to know – your boys – are FAKING THE NUMBERS:

            A look behind the curtain at NOAA’s KK…KKKl…im…ate data center.

            I read with great irony recently that scientists are “frantically copying U.S. KKKKli…..ate d..ata, fearing it might vanish under Trump” (e.g., Washington Post 13 December 2016).

            As a KKKKlim…ate scie….ntist formerly responsible for NO..AA’s ckkki…mate archive, the most critical issue in archival of k…kkkli…mate data is actually sc…ientists who are unwilling to formally archive and document their data.

            I spent the last decade cajoling kkk..klim…ate scie…ntists to arch.ive their dat..a and fully document the datasets. I established a kkk..kklim…ate data records program that was awarded a U.S. Department of Commerce Gold Medal in 2014 for visionary work in the acquisition, production, and preservation of kkk…kli..mate data records (CDRs), which accurately describe the Earth’s changing envir..onment.

            https://judithcurry.com/2017/02/04/c limate-scientists-versus-c limate-data/

            • Uncle Bill says:

              What it means is there is equal access to funding and the body of research and evidence has produce findings that support the theory of AGW. This is based on the laws of science,
              such as, physics and chemistry, which are not manipulated . Gravity, FE, is also a theory.
              Suppose you’ll have equal success in disputing the body of results from the scientific community at large.
              BTW, Richard Lindzen also disputes cigarettes is a contributing factor to lung cancer.
              On Tobacco
              In a 2001 profile in Newsweek, journalist Fred Guterl wrote that Lindzen “clearly relishes the role of naysayer. He’ll even expound on how weakly lung cancer is linked to cigarette smoking.”[13] James Hansen recalls meeting Lindzen whilst testifying before the Vice President’s Climate Task Force: “I considered asking Lindzen if he still believed there was no connection between smoking and lung cancer. He had been a witness for tobacco companies decades earlier, questioning the reliability of statistical connections between smoking and health problems. But I decided that would be too confrontational. When I met him at a later conference, I did ask that question, and was surprised by his response: He began rattling off all the problems with the data relating smoking to health problems, which was closely analogous to his views of climate data.” [14]

              Hmmm,

            • The climate change future scenarios are completely made up. There is no way that the combinations that these scientists (who know nothing about limits to growth) make up are possible–GDP growth, energy consumption etc.

              The climate is changing, but the energy forecasts used by the climate folk are much farther off than the forecasts that the oil companies are making about future supplies. At least the oil companies have something like engineers backing them up.

            • Fast Eddy says:

              Ignoring this does not make it go away….

              Faked Numbers — Destroyed Data…..

              This will NEVER go away. I will rub your face in this sh it day after day after day.

              Then I will kick you in the teeth with it.

              How do you like that … Uncle Bill?

              K,,,,KKlimate sci,,,entists versus k,,,,kkkkl,,i,,,,mate data

              by John Bates

              A look behind the curtain at NOAA’s KK…KKKl…im…ate data center.

              I read with great irony recently that scientists are “frantically copying U.S. KKKKli…..ate d..ata, fearing it might vanish under Trump” (e.g., Washington Post 13 December 2016). As a KKKKlim…ate scie….ntist formerly responsible for NO..AA’s ckkki…mate archive, the most critical issue in archival of k…kkkli…mate data is actually sc…ientists who are unwilling to formally archive and document their data.

              I spent the last decade cajoling kkk..klim…ate scie…ntists to arch.ive their dat..a and fully document the datasets. I established a kkk..kklim…ate data records program that was awarded a U.S. Department of Commerce Gold Medal in 2014 for visionary work in the acquisition, production, and preservation of kkk…kli..mate data records (CDRs), which accurately describe the Earth’s changing envir..onment.

              https://judithcurry.com/2017/02/04/c limate-scientists-versus-c limate-data/

            • Uncle Bill says:

              Hmmm, projections unfolding as we debate

              5 years ago three papers, including one by Judith Curry (yes, that Judith Curry), drew the conclusion that loss of Arctic sea ice was affecting the jet stream resulting in in Arctic breakouts.

              https://www.wunderground.co

            • Fast Eddy says:

              Why do the scientists have to FAKE and DESTROY the data — if the planet is worming?

              K,,,,KKlimate sci,,,entists versus k,,,,kkkkl,,i,,,,mate data

              by John Bates

              A look behind the curtain at NOAA’s KK…KKKl…im…ate data center.

              I read with great irony recently that scientists are “frantically copying U.S. KKKKli…..ate d..ata, fearing it might vanish under Trump” (e.g., Washington Post 13 December 2016). As a KKKKlim…ate scie….ntist formerly responsible for NO..AA’s ckkki…mate archive, the most critical issue in archival of k…kkkli…mate data is actually sc…ientists who are unwilling to formally archive and document their data.

              I spent the last decade cajoling kkk..klim…ate scie…ntists to arch.ive their dat..a and fully document the datasets. I established a kkk..kklim…ate data records program that was awarded a U.S. Department of Commerce Gold Medal in 2014 for visionary work in the acquisition, production, and preservation of kkk…kli..mate data records (CDRs), which accurately describe the Earth’s changing envir..onment.

              https://judithcurry.com/2017/02/04/c limate-scientists-versus-c limate-data/

          • Fast Eddy says:

            So, in every aspect of the preparation and release of the datasets leading into K15, we find Tom Karl’s thumb on the scale pushing for, and often insisting on, decisions that maximize w…arming and minimize documentation.

            I finally decided to document what I had found using the kkkklimate data record maturity matrix approach. I did this and sent my concerns to the NCEI Science Council in early February 2016 and asked to be added to the agenda of an upcoming meeting.

            I was asked to turn my concerns into a more general presentation on requirements for publishing and archiving. Some on the Science Council, particularly the younger scie.ntists, indicated they had not known of the S.cience requirement to archive data and were not aware of the open data movement.

            They promised to begin an archive request for the K15 datasets that were not archived; however I have not been able to confirm they have been archived.

            I later learned that the computer used to process the software had suffered a complete failure, leading to a tongue-in-cheek joke by some who had worked on it that the failure was deliberate to ensure the result could never be replicated.

            Richard Nixon would be proud!

    • Third World person says:

      ok fast eddy you do not believe in climate change

      do not worry climate change activist won’t treated
      you like Giordano Bruno who was hanged by Roman Inquisition

      when He proposed that the stars were distant suns surrounded by their own exoplanets and raised the possibility that these planets could foster life of their own, a philosophical position known as cosmic pluralism. He also insisted that the universe is infinite and could have no celestial body at its “center

      https://en.wikipedia.org/wiki/Giordano_Bruno

      • Fast Eddy says:

        Believe? That smacks of religion … should I have faith in g w?

        I don’t do faith and religion … I do facts.

        And I have posted the FACTS.

        The scientists have been caught lying – faking the numbers — because there has been on worming for 20 years…. caught out by one of their own… exposed by one of their own….

        Those are the FACTS.

        Credibility shot. Ho ax exposed.

        The End.

  7. Fast Eddy says:

    The only thing I disagree with is the motive… this has nothing to do with destroying industrial civilization …

    It is all about creating hopium while avoiding the discussion of the end of oil…

    G W is the proxy for the end of oil … if we transition to EVs and renewables … we solve the G W problem which means we solve the end of oil problem….

    Of course this holy trinity is totally ridiculous … unless of course you believe Elon Musk is a god.

    What I don’t get is how most people on FW reject EVs and renewable energy — yet they believe in the third leg of the 3 legged chair.

    That’s like denying God and Jesus — but believing in the holy spirit.

    Very f789ed up sh it.

  8. i1 says:

    I guess everyone feels like a dummy sometimes.

  9. Baby Doomer says:

    Vladimir Putin uses speech to herald end of US hegemony

    Russian leader shrugs off poor western relations and stresses growing eastern ties.

    Russian president Vladimir Putin shrugged off worsening relations with the west and talked up Moscow’s burgeoning diplomatic friendships in Asia and the Middle East, as he hailed the end of a US-dominated unipolar world.

    Giving his annual foreign policy address on Thursday, Mr Putin stressed Russia’s military clout and offered a range of handouts to Moscow’s allies. He said his country was always ready to talk despite a mounting list of accusations of impropriety against his regime from western countries.

    “Building up tension and hysteria is not our way . . . We are not creating problems for anyone,” Mr Putin said. “I hope we can build dialogue.”

    Russia’s annexation of Crimea in 2014 was the start of western sanctions against Moscow that have been broadened since in response to its military actions in Syria, its alleged meddling in the US presidential election, and its alleged use of a chemical weapon to attack a former spy in the UK.

    In a wide-ranging exposition at the annual Valdai forum, Mr Putin continually returned to the idea that US hegemony was the cause of many global ills — but that its twilight offered opportunities for Russia and its friends.

    “Empires often think they can make some little mistakes . . . because they’re so powerful,” he said. “But when the number of these mistakes keeps growing, it reaches a level they cannot sustain.”

    “A country can get the sense from impunity that you can do anything,” he told an audience at a ski resort close to the southern city of Sochi. “This is the result of the monopoly from a unipolar world . . . Luckily this monopoly is disappearing. It’s almost done.”

    Mr Putin said president Donald Trump had listened to his arguments and was not impervious to advice as suggested by some US media, adding that he still thought the US leader was working to restore a good US-Russian relationship.

    “It’s better to talk, to have a conversation, than to be like cats and dogs that keep fighting each other,” he said.

    More than four years of souring relations with the west has seen Moscow pivot east, strengthening diplomatic and trade ties with China and building influence with Middle Eastern countries such as Turkey and Saudi Arabia.

    In his first comments on the disappearance and suspected murder of Saudi dissident Jamal Khashoggi in the country’s Istanbul consulate earlier this month, Mr Putin gave a show of support to the kingdom, saying he currently saw no reason to worsen his warm relations with Riyadh, and suggesting that the US bore some responsibility for his fate.

    “He did not live in Russia, but in the US. In this sense, the US bears some responsibility for what happened to him,” Mr Putin said. “In truth, we do not know what happened. So why should we take any steps that could harm our relations with Saudi Arabia?”

    The Russian president also announced Moscow would provide Egypt with a $45bn loan to pay for a Russian-built nuclear power project, and outlined plans to supply military technology to Beijing and allow Chinese agriculture companies to invest in Russia’s Far East.

    In an extensive section dedicated to outlining why Russia’s nuclear weapons programme was the world’s best, Mr Putin said a new hypersonic missile would be delivered to the Russian army within “a few months”, but that Russia would only use nuclear arms to retaliate after an enemy strike.

    https://www.ft.com/content/66657d48-d2f2-11e8-a9f2-7574db66bcd5

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