The world economy seems to be seriously ill. The problem is not overly high oil prices, but that does not rule out energy as being a major underlying problem.
Two of the symptoms of the economy’s malaise are slow wage growth and increasing wage disparity. Tariffs are being used as solutions to these issues. Radical leaders are increasingly being elected. The Bank for International Settlements and the International Monetary Fund have raised concerns about the world’s aggregate debt levels. The IMF has even suggested that a second Great Depression might be ahead if major banks should fail in the manner that Lehman Brothers did in 2008.
Figure 1. Ratio of Core Debt Growth (non-financial debt including governmental debt) to GDP, based on data of the Bank of International Settlements.
If the economy were a human being, we would send it to a physician for a diagnosis regarding what is wrong. What really is needed is a physician who has a wide overview, and thus can understand the many symptoms. Hopefully, the physician can also provide a reasonable prognosis of what lies ahead.
Individual specialists studying the world’s economic and energy problems tend to look at these problems from narrow points of view. Some examples include:
- Curve fitting and cycle analysis using economic data by country since World War II, as is often performed by economists
- Analysis of oil supply based on technically recoverable reserves or resources
- Analysis of fresh water supply problems
- Analysis of population problems, including rising population relative to arable land, and rising retiree population relative to working population
- Analysis of ocean problems, including rising acidity and depleting fish stocks
- Analysis of the expected impact of CO2 production from fossil fuels on climate
- Analysis of rising debt levels
In fact, we are facing a combined problem, but most analysts/economists are looking at only their own piece of the problem. They assume that the other aspects have little or no influence on their particular result. What we really need is an analysis of the overall economic malady from a broader perspective.
In some ways, the situation is analogous to having no physician with a sufficient overview of where the world economy is headed. Instead, we have a number of specialists (perhaps analogous to a psychiatrist, a urologist, a podiatrist, and a dermatologist), none of whom really understands the underlying problem the patient is facing.
One point of confusion regarding whether today’s oil prices should be of concern is the fact that the maximum affordable oil price seems to decline over time. This happens because workers around the world increasingly cannot afford to buy the goods and services that the world economy produces. Inadequate wage growth within countries, growing globalization and rising interest rates all contribute to this growing affordability problem. To make matters confusing, this growing affordability problem corresponds to “falling demand” in the way economists frame the issues we are facing.
If we believe the technical analysis shown in Figure 2, the maximum affordable West Texas Intermediate oil price has declined from $147 per barrel in July 2008 to $76 per barrel recently. The current price is about $62 per barrel. The chart suggests that downward price resistance might be reached at $55 per barrel, assuming no major event occurs to change the current trend line. Any upward price bounce would appear to leave the price still much lower than oil producers need in order to reinvest sufficiently to allow future oil production to be maintained at current levels.
Figure 2. Down sloping diagonal line at the top of chart gives an estimate of the trend in maximum affordable West Texas Intermediate (WTI) oil prices. The downward trend line starts in July 2008, when oil prices hit a maximum. This high point occurred when the US real estate debt bubble started unwinding. Later maximum points correspond to points when oil prices stopped rising and crude oil reservoirs started refilling. Chart prepared by Amit Noam Tal.
Thus, our concern about adequate future oil supplies should perhaps be focused on keeping oil prices high enough. It takes a growing debt bubble to keep oil demand high; perhaps our concern should be keeping this debt bubble high enough to allow extraction of commodities of all kinds, including oil. Figure 1 seems to show a recent downward trend in Debt to GDP ratios for the Eurozone, the United States and China. This may be part of today’s low price problem for commodities of all types.
Needless to say, climate analyses do not consider the severity of our energy problems, nor do they consider the extent to which there is a connection between energy supply and the ability of the economy to operate as usual. If the real issue is a near-term financial crash that will radically affect future fossil fuel consumption, the climate analysis will certainly miss this event.
The Real Nature of the Limits to Growth Problem
To truly understand the headwinds that the economy is facing, we should be looking at the combined effect of all of the limits that the individual specialists have been studying. We might also include other issues not listed. The 1972 book The Limits to Growth presents an early computer model of how at least some of the limits of a finite world might be expected to play out.
Figure 3. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil” http://www.esf.edu/efb/hall/2009-05Hall0327.pdf
This early approach reflected an engineering view of the problem, considering expected diminishing returns with respect to resources of all types. Other considerations included likely resource needs based on prior economic and population growth trends and efficiency gains. The Base Scenario shown in the 1972 book (Figure 3) showed collapse taking place about now–in other words, in the early part of the 21st century.
In the time since the 1972 Limits to Growth analysis was prepared, there has been a major discovery relating the importance of energy to the economy. Ilya Prigogine tackled the problem of the physics of thermodynamically dynamic open systems, earning a Nobel Prize for his efforts in 1977. When energy flows are available, many structures, called dissipative structures, can grow and change over time. Examples include plants and animals, hurricanes, stars (they expand in size, then collapse at the end of their lives), ecosystems, and economies. These structures are utterly dependent on energy flows. The economy needs energy in almost the same way that humans need food. Without sufficient energy flows, the world economy will collapse.
It is because of the laws of physics and energy flows that markets are able to set price levels. Indirectly, physics sets the maximum affordable price for energy products based upon the total quantity of goods and services individual workers can afford. These maximum affordable prices may be invisible, but they are very real. Economists may talk about “demand” for energy products, but the real issue is affordability: “Will the laws of physics allow prices to stay high enough to provide the commodities the world economy needs?”
It is because of the laws of physics that debt can play a major role in the economy. Debt can provide time-shifting services if an economy does not have sufficient energy supplies to permit the equivalent of bartering of finished goods and services for new capital goods. Debt can allow future goods and services (manufactured with energy products) to serve as payment for capital goods and other goods purchased using debt. Thus, debt acts as a promise of future energy supplies. These future energy supplies may not, in fact, actually be available at prices that consumers can afford. This is why debt bubbles so often collapse and have a devastating impact on economies.
In theory, the new physics discoveries might also be added to the Limits to Growth model. If this were done, I would expect the downslopes in Figure 3 to be much steeper. Also, the date when the population decline starts would likely move forward, relative to other declines. The actual dates of the declines would of course be expected to change as well, because of updated knowledge regarding resources, population, and other factors.
Including the physics aspect of the economy would lead to many periods when sharp changes take place. When these sharp changes take place, there might be wars, collapsing governments, and epidemics, all causing large numbers of deaths. Debt bubbles might pop, causing deflation and widespread banking problems. These types of events are similar to those that economies have experienced in the past. There is no reason to expect that today’s world economy will have unusual lasting power.
Of course, modeling one piece of the economy at a time, as described at the beginning of this post, leaves out such troublesome implications. Economists tell us all we need to worry about is price fluctuations as the economy substitutes one product for another. If a person has blinders on, perhaps this a good description of the world we live in. Otherwise, the model leaves a lot to be desired.
Implication of the Laws of Physics Being in Charge of How the Economy Operates
Politicians would very much like us to believe that they are in charge. They would like us to believe that adding more technology can solve all of our problems. They would like us to believe that citizens can make a significant difference by voluntarily cutting back on their own energy consumption. They would also like us to believe that countries can cut back on their debt levels without the whole Ponzi Scheme unraveling.
Anyone who has watched bread rise in a bowl can see the implications of growth within a finite structure. It doesn’t take very long for the volume growth of bread dough to exceed the space available. Even if the bread maker pushes the dough back down again, the effect is only temporary. The bread dough quickly rises again to overfill the bowl it is in.
One possible implication of the 2008 financial (and oil price) crash is that we are very close to limits, right now. Regulators can try to fine tune how the economy operates by raising and lowering interest rates (sometimes using Quantitative Easing (QE) in the process), but they are, in some sense, playing with fire. Figure 4 shows the dramatic impact that popping the real estate debt bubble seems to have had in 2008. It also shows the impact that adding and removing QE has had.
Figure 4. Figure showing collapsing debt bubble at the time US oil prices peaked. Figure also shows the use of Quantitative Easing (QE) to stimulate the economy, and thus bring oil prices back up again. Ending US QE seems to have had the reverse effect.
By raising interest rates, regulators could easily send part, or all, of the world’s economy to a financial crash that is worse than 2008’s. Or the economy could again reach limits, by itself, with just a little economic growth. In some sense, the world economy is very close to filling the bread bowl, as it was before the 2008 crash pushed it back down.
The World Economy Is Reaching Limits in Many Areas Simultaneously
Many people believe that we are reaching limits in at most a few areas of the economy, such as “running out of oil.” The evidence suggests that because of the networked nature of the economy, we are really reaching limits in many places, simultaneously. The following represent some problem areas:
(1) Too Low a Return on Labor for Workers Whose Jobs Are Easily Exportable. With globalization, workers are indirectly competing with workers around the world regarding who can produce goods and services most cheaply. They are also competing with computers and robots that can easily replicate their functions. The net impact is a world where a large share of the citizens find themselves living at a level not much above the subsistence level. In more developed countries, young people may live with their parents longer and may delay having children almost indefinitely, because wages are not keeping up with living costs. Many studies have shown rising wage disparity. In some ways, the wage disparity now seems to be as bad as in the 1930s.
Figure 5. U. S. Income Shares of Top 1% and Top 0.1%, Wikipedia exhibit by Piketty and Saez.
(2) Interest Rates. Interest rates are the lever that economists like to adjust upward or downward to try to stimulate the economy or push the economy downward. Short term interest rates, up until about the end of 2015, were at the level they were at during the Depression of the 1930s.
Figure 6. Monthly average 3-month term treasury bill rates in chart prepared by FRED. Amounts shown through October 2018. Grey bars indicate recessions.
Raising interest rates is like adding a little more dough to the already over-full bread bowl. With these higher interest rates, borrowers need to pay more for monthly payments, making the strain on their finances even worse than it was previously. Figure 6 shows that raising interest rates very often creates a recession. In fact, the Great Recession of 2008-2009 seems to be the result of an increase in short term interest rates. This time we are being told that the increase will be gentle, but if the bread bowl is already overly full (in the sense that affordability of the output of the economy is already way too low, for many workers), what difference does “gentle” make?
(3) Return on Capital Investment/Added Debt. Falling long-term interest rates between 1981 and 2016 seem to be an indirect reflection of falling long-term return on capital investment. If capital returns had been higher, there would be more demand for debt, forcing interest rates up to levels closer to where they had been when the economy was growing more quickly.
Figure 7. Monthly average 10-year US Treasury interest rates in chart prepared by FRED. Amounts shown through October 2018. Grey bars indicate recessions.
Another way we can look at how productive the addition of debt has been is by comparing the debt increase each year with the GDP increase (including inflation) each year. We use current year GDP as the denominator in both calculations. Figure 8 shows the indications for what the Bank for International Settlements calls “Core Debt” (that is, Total Non-Financial Debt, Including Government Debt).
Figure 8. Dollar Increase in US Core Debt as % of GDP, shown beside GDP dollar increase, as percentage of ending GDP. Amounts based on FRED data.
Comparing the red and blue lines on Figure 8, GDP rose fairly reliably in the pre-1981 period, as the amount of core debt rose. The core debt increases tended to be higher than the GDP increases, but not a great deal higher. Thus, the US ratios on Figure 1 could be close to 1.0 in early years.
Once interest rates started falling after 1981 (see Figures 6 and 7), core debt growth and GDP growth greatly diverged. I expect that quite a bit of this change was related to asset price inflation as interest rates fell. With lower interest rates, assets of all types started becoming more affordable. Thus, a greater number of buyers could be expected, driving up prices of assets of all kinds, including homes, stores, and factories. Owners of these assets could “take the equity out” as prices rose and could use the equity to purchase other goods and services. In theory, these activities might somewhat stimulate the economy. Figure 8 suggests that the benefits of these activities with respect to the “goods and services” portion of the economy (red line) were slight at best, however.
Figure 9. Dollar Increase in US Financial Debt as % of GDP, shown beside GDP dollar increase % of ending GDP. Amounts based on FRED data.
Figure 9 shows Financial Debt amounts corresponding to the Core Debt amounts shown in Figure 8. At first glance, it appears that Financial Debt (blue line ) has provided no benefit whatsoever for the Goods and Services part of the economy (red line). But clearly the bankers who created these financial products benefitted from the income they received from them. So did the low-income home buyers who bought homes that they could not really afford in the early 2000s. Home building was stimulated, and inflation in home prices was stimulated. Banks benefitted by being able to transfer their problem home loans to unsuspecting buyers. Whether this whole arrangement had any net benefit to the economy, other than to create pseudo-solutions for people who could not really afford the homes they were purchasing, is doubtful. But when the economy is near limits, strange solutions to stimulating the economy are attempted.
(4) Commodity Prices. If we have a supply problem with one kind of commodity, we likely have a supply problem with many kinds of commodities at the same time. The reason why this happens is because the prices of many types of commodities tend to move together, in response to general market conditions. This is why the US government talks about inflation in oil and food prices as a separate category of Consumer Price Inflation.
If prices for commodities are generally low, as they have been since 2014, this means that commodity investors have received low rates of return for several years. With low rates of return, producers of many commodities have cut back on reinvestment. With inadequate reinvestment, supply crunches are likely to occur across a broad spectrum of commodities simultaneously. A recent Wall Street Journal article says, Supply Crunch Looms in Commodities Markets. The article mentions copper, zinc, aluminum and nickel. Other articles talk about oil in a similar fashion.
The question becomes, “Can consumers bid up the prices of all of these minerals sufficiently, to encourage enough reinvestment to solve the world’s commodity supply problem?” Food prices would likely need to be bid up as well, because oil is used heavily in the production and transport of food.
It was possible to bid up commodity prices in the 1970s, because the economies of the United States, Europe, Japan, and the Soviet Union were all growing rapidly. Also, women were joining the labor force in large numbers. It was possible to bid up commodity prices in the 2002 to 2008 era, because China and other Asian nations were rapidly ramping up their demand for goods and services of all kinds.
Figure 10. China energy production by fuel plus its total energy consumption, based on BP Statistical Review of World Energy 2018 data. The difference between the production figures shown and the black line consumption total is imports.
Now we are facing a much different situation. China is in much worse shape than most people recognize because its coal supply seems to have passed peak production. This has happened because the cheap-to-extract coal is mostly depleted, making it unprofitable to increase coal production without significantly higher prices. Imported coal and natural gas are expensive options. China also has a serious debt problem.
Because of China’s problems, the country will necessarily need to cut back on manufacturing, road building and home building in the years ahead. (This would happen, with or without Trump’s tariffs!) For some minerals, China currently represents over 50% of the world’s demand. China is the largest oil importer in the world. It is doubtful that China can make major cutbacks in its use of commodities without lowering prices for many commodities worldwide.
Persistence of Outdated Models
We are dealing with a situation where a large number of people suspect, at least vaguely, that the world economy is like bread dough about to outgrow its bowl, but this is not an issue anyone really wants to quantify. Everyone wants solutions; they don’t want a better delineation of the problem. Repeated publication of climate change forecasts is, in a sense, a denial of the possibility that we may be facing resource limits that are close at hand. Such publication is saying, in effect, that the closest limit that citizens need to worry about is the climate limit.
Also, the reliance of researchers on the past work by others in the same field tends to reinforce what are essentially incorrect models. Cross-pollination across fields is difficult, given the technical nature of today’s academic research. Furthermore, it becomes increasingly difficult to properly model a situation that is very complex and depends upon non-linear interactions.
Putting All of These Issues Together
The focuses of today’s narrow research can give a surprisingly distorted overview of where the economy is. A few areas in particular stand out:
(a) The choice of the word “Demand” instead of “Affordable Quantity” makes it sound like the buyer has more control over purchases than he really does. Growing demand seems to depend on continually increasing debt. This is the reason for the debt bubble problem.
(b) Framing the energy problem as “running out of oil” makes it sound like searching for substitutes will be a fruitful area for solution. Because of the affordability issue, this search is futile unless the substitutes are truly cheaper, when all costs are considered. Declining availability of many minerals because of persistently low commodity prices could be an issue as well.
(c) If limits are being reached in many areas simultaneously, incentives for countries to co-operate seem likely to go downhill quickly. Bullies who claim to be able to obtain a bigger share of the shrinking total supply will tend to be elected.
(d) The physics tie between energy and the economy makes major energy consumption cutbacks virtually impossible, without risking economic collapse.
(e) Adding technology isn’t really a solution to the debt problem, because it tends to make the affordability problem worse. The problem is that while adding technology seems to lead to more employment for a few elite workers, it tends to displace lower-wage workers at the same time. The spending of lower-wage workers is really needed if adequate demand for commodities is to be maintained. Additionally, the ownership of the technology-related capital goods tends to be concentrated among the elite; this further shifts wealth from the non-elite to the elite.
The long term prognosis for the world economy seems pretty grim, when all of these issues are put together. Defaulting debt and a resulting collapse in asset prices of all kinds is of particular concern. The default of subprime housing debt was an issue in the US at the time of the Great Recession; the next round of defaults is likely to start elsewhere. Debt defaults could start fairly soon, perhaps in the next 6 to 12 months. The more hostile political situation we have been seeing recently seems to be evidence that limits are close at hand.
It may seem like pushing a boulder up a hill, but good must eventually come from calling attention to the delusive patterns of thought and behavior that turned climate change into one of the least effectual causes that environmentalists ever attached themselves to.
These days a pundit need only wait for Brownian motion to drop a case study into his hand. Usually it comes from Bloomberg News, whose proselytizing for electric cars has escaped all bounds of factual and logical gravity.
A report this week begins by claiming “the good news is the death of the internal combustion engine is nearing and electric-vehicle sales are on a tear.” As the next sentence goes on to point out, this “tear” is mostly prospective and doesn’t come from consumers opting freely for electric cars; instead it relies on promises by politicians in several countries that their successors some decades down the road will ban the sale of gasoline-powered cars.
Coke can readily anticipate a sales “tear” if Pepsi is banned. Any product can be said to be ready to go on a “tear” if you posit a deus ex machina that will give customers little choice but to buy it.
Unfortunately Bloomberg has been a key offender in this regard for a while. Last year it claimed that electric cars would overtake gasoline cars in affordability by 2025. Only the fine print revealed that this forecast depended on politicians piling up enough taxes to render gasoline cars unaffordable.
A more phlegmatic Bloomberg News story last month took the novel tack of reporting on the real world rather than conjuring an imaginary one. The story was entitled “The Dirt on Clean Electric Cars: New research shows some drivers might spew out less CO2 with a diesel engine.”
Personal vehicles sit idle most of the time so were never much of a solution to a CO2 problem, especially when the electric versions would run on electricity mostly made from fossil fuels. Even less are they a solution, it turns out, when their batteries are made in places like China where huge amounts of fossil energy are consumed in their production.
Everybody from Barack Obama to Paul Krugman makes excuses for Democrats and greens spending political capital on false priorities rather than on promoting, say, a carbon tax, a policy that might actually be effective in the long run and sellable on cost-benefit grounds. Voters don’t like taxes, they say, especially energy taxes. But the truth remains, governments do tax things; taxes may be unpopular with those who pay them but our democracy sustains them. And just about every 15 minutes, the subject comes up in Congress how to pay for the government we want.
The real problem is a green unwillingness to forgo shiny, meretricious plaudits for fake gestures in place of patiently laying the groundwork for something that might actually have some value. Their fake gestures have no effect on an alleged climate problem. Worse, they teach the public that meaningful climate action is unaffordable and to be satisfied with phony exercises in international virtue signaling.
Bloomberg reporters are not stupid (presumably). An answer to the mystery is found both in folklore (the emperor’s new clothes) and in the pioneering work of Daniel Kahneman, Amos Tversky and others in behavioral economics, which points to the economic basis of much characteristic human unreason.
Thinking consumes time and energy, which humans have an incentive to conserve. Thinking can also have a negative payoff when it leads to conclusions at odds with your milieu. For instance, there can’t be a more obvious signal in the Bloomberg culture than “get on board with electric vehicles.”
Yet the most interesting study along these lines lately may be the work of Berkeley’s Charlan Nemeth, who investigates the incentive that causes some people nevertheless to persist in voicing unwelcome opinions. She finds they are still reviled as nonconformists, and suffer socially as a result. But their efforts nonetheless move the needle slightly. Others see their willingness to bear opprobrium and unconsciously calculate there may be some virtue in their opinion simply because the speaker is prepared to pay a price to promote it.
So we started out talking about electric cars and end up with a comprehensive theory of media. “Fake news” obviously was never an adequate explanation of press herding behavior. Neither is the claim, voiced lately by Donald Trump and Elon Musk, that reporters are “terrible, terrible people.”
Incentives for conformity and reason turn out often to be in tension; thinking is costly and sometimes negatively rewarded. But there is hope. If we could just inject into the nation’s journalism curriculum enough copies of Mr. Kahneman’s “Thinking, Fast and Slow,” news culture might be revolutionized in a single generation.
https://www.wsj.com/articles/electric-cars-and-media-explained-1541548571
Hi Gail, I think this article is among your best.
The chart showing the decline of oil’s maximum affordability was really eye-opening.
Thanks.
Commenter Yoshua posted the chart in the comments to my previous post. I emailed him and asked him where he had found it. Because of this, I was able to reference the author.
Steve Ludlum of Economic Undertow wrote about this declining affordability of oil for years (depicted in such graphs as “Triangle of Death”)..
You are right. This isn’t an original idea.
it is all madness pursuing growth the world’s governments should be preparing for collapse
I think they are, we just are not invited.
https://www.newyorker.com/magazine/2017/01/30/doomsday-prep-for-the-super-rich
https://www.cnn.com/style/article/doomsday-luxury-bunkers/index.html
https://www.forbes.com/sites/ralphbenko/2013/03/11/1-6-billion-rounds-of-ammo-for-homeland-security-its-time-for-a-national-conversation/#a19cf31624bb
LOL!
Another great recent paper. This one deals with the Fermi Paradox, Implication of our technological species
being first and early
Abstract: According to the Principle of Mediocrity, a cornerstone of modern cosmology, in the absence of any evidence to the contrary, we should believe that we are a typical member of an appropriately chosen reference class. If we assume that this principle applies to the reference class of all extant technological species, then it follows that other technological species will, like us, typically find that they are both the first such species to evolve on their planet and also that they are early in their potential technological evolution. Here we argue that this suggests that the typical technological species becomes extinct soon after attaining a modern technology and that this event results in the extinction of the planet’s global biosphere.
Here is a great quote I thought readers here might appreciate..Especially FE..
https://imgur.com/a/Zwl9ShU
FE is currently alteregoing as TM at Dr Tim’s Surplus comment section..
Spoiling every good doom site for a time, lolz..
Funny how a dose of reality …. brings down a curtain of silence (and despair)
Something new from Ugo Bardi, Toward a General Theory of Societal Collapse. A Biophysical Examination of Tainter’s Model of the Diminishing Returns of Complexity.
Abstract. The collapse of large social systems, often referred to as “civilizations” or “empires,” is a well-known historical phenomenon, but its origins are the object of an unresolved debate. In this paper, we present a simple biophysical model which we link to the concept that societies collapse because of the “diminishing returns of complexity” proposed by Joseph Tainter.
Our model is based on the description of a socio-economic system as a trophic chain of energy stocks which dissipate the energy potential of the available resources. The model produces various trajectories of decline, in some cases rapid enough that they can be defined as “collapses.” At the same time, we observe that the exploitation of the resource stock (“production”) has a strongly nonlinear relationship with the complexity of the system, assumed to be proportional to the size of the stock termed “bureaucracy.” These results provide support for Tainter’s hypothesis.
It is amazing how many of the images in the article are repeats of ones I have seen in other of Ugo’s work, or in Tainter’s book. If you have a reasonable idea, keep recycling it in every venue.
Bombardier to Sell Assets, Cut 5,000 Jobs in Restructuring
https://www.wsj.com/articles/bombardier-to-sell-assets-cut-5-000-jobs-in-restructuring-1541676837
Limits to growth had 12 models. One of those models, the “standard run” or, alternatively, the “business as usual” model was the one that 40 years of historical data tracked/followed. And according to that model the global economy will collapse by 2030.
https://www.scientificamerican.com/article/apocalypse-soon-has-civilization-passed-the-environmental-point-of-no-return/
https://www.smithsonianmag.com/science-nature/looking-back-on-the-limits-of-growth-125269840/
https://www.scribd.com/document/379418787/Is-Global-Collapse-Imminent-An-Updated-Comparison-of-The-Limits-to-Growth-with-Historical-Data-Turner-2014
https://imgur.com/a/ZUUkN4c
The Double Resources run is a real doozy too. The LTG’s W3 Model calculated that even if we were to have double the natural resources necessary at our disposal to keep growing, collapse would only be averted by a mere 20 years. That exponential function sure is a real bitch.
http://www.ecoglobe.org/scenarios/e/dkimble-images/limits.double.gif
Psile,
Here is an awesome limits to growth simulator..
http://bit-player.org/extras/limits/ltg.html
You can run the models yourself..And you can adjust the inputs as well..
Enjoy!
It always ends in collapse…
Nice program, thanks BD. What is interesting is that “output consumed” (=efficiency/techno-disney-topia?) if increased from .43 to .50 makes everything all right! That right there is the premise for criticising LTG.
Good point! A person can see from these early graphics (and the lack of a scale on the x-axis) how difficult these early charts were to read. But the point is clear. The result came out pretty similar, no matter how you ran it.
The cost of full adoption is astronomical. An estimated $6 trillion is theoretically needed to build the infrastructure that electric cars need such as charging stations and power networks, according to Goldman Sachs Group Inc. That’s about 7.5 percent to 8 percent of the world’s gross domestic product. Add to that the amount companies spend on making the cars and batteries, and the number could be even higher.
https://www.bloomberg.com/opinion/articles/2018-11-04/electric-cars-face-a-6-trillion-barrier-to-widespread-adoption?srnd=opinion
https://nataliaantonova.files.wordpress.com/2013/12/cannot-handle-the-hysterical-laughter.gif
If you thought that was funny, check this out:
“Even if costs are made far lower than they are today, the impact of carbon capture will be limited by the sheer scale of infrastructure needed to store carbon dioxide… Vaclav Smil, a professor at University of Manitoba and master of sobering energy-related numbers, calculates that if we were to bury just one-fifth of the global carbon dioxide emissions, we would need to build an industry capable of handling twice the volume of stuff as the entire oil industry, an industry that took 100 years to develop, driven by a large and mostly expanding market.”
Excerpt from an article at Damn the Matrix blog aptly entitled, The Hopium Of The People
Good stuff, Psile. We take our humour black, no sugar, here on OFW.
Black indeed, but with room for just a snifter of old Spanish brandy, or maybe a slug of whisky – Winter Is Here, after all……
Meanwhile… we can’t get rid of winter down here… looking at 3 degrees overnight … I may have to do another run down to Invercargill to pick up more coal….
I don’t get it… is this another ice age forming?
“The president debased the US public accounts with a Peronist fiscal policy of staggering irresponsibility in order to keep control of Congress – or rather to buy Congress with $US1.5 trillion ($2.1 trillion) of future public debt, might be a better description…
“The sugar rush of stimulus so late in the economic cycle is already starting to fade. Over the course of 2019 the Faustian pact will progressively close in on Mr Trump, and on the credit-rating of the US Treasury. Morgan Stanley said it will turn ineluctably into “fiscal drag” as the months pass without more handouts to feed the monster.”
https://www.smh.com.au/business/the-economy/trump-s-2-1-trillion-deal-with-the-devil-has-failed-20181108-p50eom.html
“Investors are starting to worry about the massive increase in debt issued by the U.S. Treasury Department. The latest being BlackRock CEO Larry Fink.
“Fink said the U.S. was heading towards a “supply problem” as the widening budget deficit, expected to top $1 trillion each year starting in 2019, requires more borrowing.”
https://finance.yahoo.com/news/ballooning-us-debt-like-boiling-frog-211753177.html
“The Federal Reserve opened its two-day policy meeting on Wednesday, with central bankers widely expected to hold their fire but likely to signal a December rate hike… a decade of job creation and falling unemployment are at last pushing up pay and raising the odds of faster inflation. That puts the Fed on pace to continue raising rates, with a fourth increase expected this year and three more in 2019.”
https://www.businesstimes.com.sg/government-economy/federal-reserve-meets-as-us-midterms-election-dust-settles
to rephrase Mr Micawber very loosely:
Income 10 million barrels of oil per day
Expenditure 18 million barrels of oil per day
result? misery
Feed the Beast more Sugar… whatever it takes
But it did “kick the can down the road” a bit, and make it so the Republicans could gain extra seats in the Senate. For a mid-term result, the results were pretty favorable for the party in power, I thought. The ones that really came out badly were the ones backed by Elizabeth Warren and the Progrogressive movement, according to one article I read. Ballot initiatives generally came out in favor of more drilling/fracking. Whatever might keep costs down.
“The UK property market is at its weakest for six years, with prices flat or falling across half the country according to Britain’s official surveyors body, with reports that sales are “in limbo” until a Brexit deal emerges. The Royal Institution of Chartered Surveyors (Rics) said its monthly survey of members found “the weakest reading since September 2012” in October, with prices falling in London, the south-east, south-west and East Anglia.”
https://www.theguardian.com/business/2018/nov/08/uk-property-market-at-its-weakest-for-six-years-says-rics
“Figures released today by the Society of Motor Manufacturers and Traders (SMMT) show new vehicle registrations fell to 153,599 in October [in the UK].
“Overall, the new car sector remains down by 7.2 per cent for the year to date, compared to the same period last year.”
http://www.cityam.com/268259/uk-car-sales-slump-again-october-despite-growth-hybrid-car
“The annual guide reports that 117 independent restaurants closed in [London] over the past 12 months, the highest figure since the guide’s first publication in 1991.”
https://www.bighospitality.co.uk/Article/2018/11/07/London-restaurant-closures-are-highest-for-28-years
Perhaps the people not buying cars are buying bikes instead? Turns out not:
“Retailer Halfords has become the latest retailer to warn over consumer confidence as it revealed half-year profits dropped by 23%.
“The car parts-to-bicycles chain said shoppers were holding back on spending on discretionary items, which was hurting bike sales in particular.
“This follows similarly cautious comments on sales from Marks & Spencer on Wednesday.
https://www.eveningexpress.co.uk/news/business/halfords-cautious-on-consumer-spending-as-profits-tumble-23/
Steady and inexorable deterioration in the British economy……
since leaving india /s
the UK definitely has a problem!
“The worldwide tablet market declined 8.6% during the third quarter of 2018, as demand for slate and detachable devices slumped. According to preliminary data from IDC, global shipments fell to 36.4 million during the quarter, with slate tablets accounting for the majority of the market with 31.6 million units, down 7.9% from the previous year. Detachable tablets also declined, down 13.1% from the previous year…”
https://www.techcentral.ie/tablet-sales-slump-as-slate-and-detachable-markets-struggle/
“Debt defaults could start fairly soon, perhaps in the next 6 to 12 months.”
Gail, John Mauldin agrees with you:
“There’s a very real possibility the global economy breaks down in the next six months.”
https://www.forbes.com/sites/johnmauldin/2018/11/06/3-triggers-that-could-push-this-sell-off-into-a-crisis/#673efdc59027
And in a subsequent article, he says:
“Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used.
“That’s how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them. That makes sense. A country with a larger GDP can carry more debt. But that is increasingly not what is happening…
“…centuries of history show that every prior debt run-up eventually took its toll on the economy. There is always a Day of Reckoning.
“In the last year, the world’s largest economies are generating debt 10X faster than economic growth.
“I am trying to imagine a scenario where this ends in something less than chaos and crisis. The best I can conceive is a decade-long (and possibly more) stagnation while the debt gets liquidated.
“But realistically, that won’t happen because debtors won’t let it. The rational course would be to delay the inevitable as long as possible. Yet in the U.S. we’re rushing it.”
https://www.forbes.com/sites/johnmauldin/2018/11/07/a-worldwide-debt-default-is-a-real-possibility/#269dfab353aa
It is hard not to see the pattern. GDP is a measure of goods and service produced. Most likely they were sold on credit. That is why credit is so closely tied to GDP. But credit is used at every stage, and to leverage debt that is already outstanding. So it is possible to get a whole lot of debt, relative to GDP.
“A bank run at a small local institution in the southwestern Chinese city of Zigong could be a sign of an impending financial crisis.
“Shareholders of Bank of Zigong in Sichuan Province absconded with 40 billion yuan ($5.78 billion), through loans issued to shell companies that they had created, according to a Nov. 2 post in a Chinese social-media account, and a report by Da Zhong, a state-run news website. The loans were long overdue, resulting in huge losses for the bank.
“The news spread quickly, even though the post was deleted within 20 minutes by internet censors. Scores of bank customers rushed to dozens of bank branches in Zigong City to retrieve their deposits, while long lines of people could be seen from photos of the scene and uploaded by netizens…”
“…the Bank of Zigong exemplifies a common situation in many regions acrross China.
“Like many economic hubs in China, municipal authorities in Zigong have borrowed large sums from the Bank of Zigong to finance local infrastructure projects. The bank explicitly explains on its website that the institution supports initiatives by the city’s Communist Party committee and government authorities such as building projects, city redevelopment, state-owned enterprises reform, and more.
“Zigong City, as with many other municipal governments, has set up local investment firms as a popular option to borrow money. But that has led to enormous debt that governments couldn’t repay.”
https://www.theepochtimes.com/bank-run-in-southwestern-chinese-city-could-signal-a-greater-financial-crisis_2709550.html
“When China finally has its inevitable growth recession – which will almost surely be amplified by a financial crisis, given the economy’s massive leverage – how will the rest of world be affected? With US President Donald Trump’s trade war hitting China just as growth was already slowing, this is no idle question.
“Typical estimates, for example those embodied in the International Monetary Fund’s assessments of country risk, suggest an economic slowdown in China will hurt everyone. But the acute pain, according to the IMF, will be more regionally concentrated and confined than would be the case for a deep recession in the United States. Unfortunately, this might be wishful thinking…”
https://www.theguardian.com/business/2018/nov/07/a-chinese-recession-is-inevitable-dont-think-it-wont-affect-you#img-1
“Investors are bracing for more debt defaults among China’s cash-squeezed real estate developers as funding costs surge and refinancing pressure intensifies. Borrowing costs in dollars for China’s high-yield issuers, most of whom are property developers, almost doubled this year to 11.2pc, the highest in about four years, ICE BofAML indexes show. To make things worse, the sector faces a record $18bn bond maturities in both onshore and offshore markets in the first quarter of 2019.
“That number is expected to double if investors demand early repayment on some of these notes, according to Bloomberg-compiled data.”
https://www.independent.ie/business/commercial-property/default-risks-rise-in-chinas-355bn-builder-bond-market-37503542.html
An interest rate of 11.2% certainly sounds like a problem, especially if it was a little more than half that price a year ago. It would be difficult to pass on the higher cost to borrowers.
It always comes down to how much energy is flowing through the system (to borrow Gail’s phrasing from the article) and whether that will continue or increase or decrease and so on. Modern finance is essentially just a language for describing that process, or at any rate how individuals, firms, countries, cultures etc. perceive it. A certain biblical myth comes to mind!
Anyway, keep the news bulletins coming. Much appreciated as always.
You are very welcome, Jupiviv.
Food UN Food & Agriculture Organization says global water consumption has gone from 500 sq km per year to a whopping 4,500 sq km per year in the last century. Cities like São Paulo, Beijing, Moscow, Mexico City, London, Tokyo, Miami, and Los Angeles are likely to run out of drinkable
water by 2040
https://poly.rpi.edu/2018/11/07/the-implications-of-global-drought/
The result is,
“Companies like Goldman Sachs and a myriad of hedge funds have seen this trend and are looking to capitalize: buying up land, water utilities, and companies which are working to find out how to exploit this valuable commodity.”
Where does this leave the poorer citizens?
The middle class will pay higher taxes that goes to GS&co so the poor get water.
Toshiba to shed troubled assets, cut 7,000 jobs as part of new five-year strategy
TOKYO (Reuters) – Toshiba Corp (6502.T) is liquidating its British nuclear power unit and selling its U.S. liquefied natural gas (LNG) business, as the once-mighty industrial conglomerate seeks to unload troubled assets and regain investors’ confidence.
The plans are part of a new five-year business strategy Toshiba announced on Thursday, which also included 7,000 job cuts, or 5 percent of its workforce, over five years.
https://www.reuters.com/article/us-toshiba-outlook/toshiba-to-shed-troubled-assets-cut-7000-jobs-as-part-of-new-five-year-strategy-idUSKCN1ND0BK
U.S. Democratic Party wins House majority in midterm elections
– The U.S. Democratic Party on Tuesday has secured the House majority from the Republicans in the midterm elections, according to projections of multiple news outlets.
Having flipped at least 23 seats from Republican hands, the Democrats are set to retake control of the House after eight years in the minority, successfully splitting control of Congress with the Republicans, who have retained control of the Senate in earlier races.
With swaths of congressional districts still waiting for voting results, it is unclear how many seats the Democrats will eventually end up with in the next Congress.
http://www.xinhuanet.com/english/2018-11/07/c_137589165.htm
with this trump wall dream is over
Even with Republicans in both houses, he hadn’t gotten funding for the wall so far, so I think it was likely over, without the Democrats taking over the House.
Further on this … https://www.reuters.com/article/us-japan-economy-orders/japan-machinery-orders-hit-by-worst-ever-slump-in-sept-raise-capex-doubts-idUSKCN1ND037
“When it becomes serious..you have to lie.” – Jean-Claude Juncker
‘When it becomes really really … REALLY serious – you have to ignore it’ Fast Eddy
Looking at the sharp and steady surge of student loan balances, you’d think that student enrollment is booming, as millions more Americans must be enrolling in college to lean what it takes to be successful in this economy. But no.
Turns out, the opposite is the case. Higher-education enrollment peaked in 2010 at 18.1 million and then declined 6.6% to 16.9 million by 2016, according to the latest data available from the National Center for Education Statistics. And yet, even while enrollment declined since 2010, student loan balances nearly doubled, from $800 billion to $1.56 billion.
So the cause of the fiasco isn’t that there are too many Americans getting an education – I wish that were the problem. Instead a mix of factors stick out:
Colleges are charging too damn much;
Entire industries, such as consumer electronics and the student housing sector – a thriving subcategory of commercial real estate – are relentlessly sucking on those student loans;
And occasionally, just a wee bit, the students themselves need to do some navel-gazing; These kids get this borrowed money, and it’s easy money to spend (iPhones, concert tickets, video games, nice housing rather than a dump, clothes…);
later, it turns into hard money to pay back, and they’re left wondering how not to buckle under the debt.
And what do these factors of the student loan fiasco have in common? Ha, this is what makes the American economy tick: They all add to debt-fueled GDP!
https://wolfstreet.com/2018/11/07/the-state-of-the-american-debt-slaves-q3-2018/
Entire industries, such as consumer electronics and the student housing sector – a thriving subcategory of commercial real estate – are relentlessly sucking on those student loans
https://wolfstreet.com/wp-content/uploads/2018/11/US-consumer-credit-student-loans-2018-Q3.png
Now that’s one he.ll of a lot of stimulus!
Who knew that intellectuals–secular preists– were just as greedy as Gordon Gekko. The students whom they have taught “Critical Thinking” repeat the intellectuals’ explanations without a second thought.
The intellectuals’ explanations for rising costs is
1. Declining support from state and federal governments.
2. This is the one that is closest to the truth but many will not admit it.
The high tuition is to protect the “value” of their degree. High cost is meant to
deter anyone but the best and most determined sutdents, thus limiting the number of degree holders
so that degrees and the wages of degree holders don’t become devalued by a growing number of degree holders.
No matter who is given money or resources, they are never satisfied and think they deserve more.
At least on Wall Street, analysts can blame the exponential function for why money and resources keep flowing in their direction.
What explanation do people who aren’t suppose to care about money suppose to have for wanting more
money or resources and then consuming more ?
Without “world class” (all American colleges are considered world class according to some folks)colleges and hospitals, many major metropolitan areas would be Detroits…Developed world s***holes. Finance and I.T. employ too few people.
“(e) Adding technology isn’t really a solution to the debt problem, because it tends to make the affordability problem worse. The problem is that while adding technology seems to lead to more employment for a few elite workers, it tends to displace lower-wage workers at the same time. The spending of lower-wage workers is really needed if adequate demand for commodities is to be maintained. Additionally, the ownership of the technology-related capital goods tends to be concentrated among the elite; this further shifts wealth from the non-elite to the elite.”
I find this most central. Development is geared to displacing the lower income and making them have to travel longer distance in new, far off places. (The supply of housing in these far-off places drives out inefficient but low-impact agriculture. Then it is always misunderstood how much energy supply goes into equipping and maintaining such places.) On the contrary, housing geared to the lowest income exclusively, close to work, obviates these problems, but is forbidden by the culture and most certainly by political leaders. Development is the decisive problem.
And we now forget that lower-level workers originally slept on the premises: in an attic, or even (when very young) under the work-bench or shop-counter of their master.
Farm-hands also lived in, and ate at the same table as the farmer and his family, until farmers grew richer and booted them out to live in their own little hovels.
Certainly in the 19th and early 20th centuries it was not uncommon for British farm labourers to travel 2 hrs each way to work.
When I visited India six years ago and saw some workplaces in Mumbai on a “Visit the real India tour,” I was told that some workers still slept on under their workbenches. These workers had come from poor places in India, and had left their families there, IIRC. These places did not have reasonable toilet facilities. Workers used a field nearby for that purpose. No one wore safety gear.
“Visit the real India tour,”
haha the tourist guides definite had showed dharavi
https://en.wikipedia.org/wiki/Dharavi
You are probably right. The next day, I took another tour with the same group to an area outside Mumbai. There I saw things such as this:
https://gailtheactuary.files.wordpress.com/2013/03/workers-harvesting-rice-v2.jpg
https://gailtheactuary.files.wordpress.com/2013/02/auto-rickshaw.jpeg
https://gailtheactuary.files.wordpress.com/2016/11/woman-carrying-two-pots-of-water-on-her-head.jpg
And it flashes on and off on my radar that businesses could be creating demand by housing workers (very inexpensively) on the business property, But the owners or top tier people would probably have to live there too to get past the connotations of gross inequality. Not easy to see that happening.
A 2017 survey of the homeless population in San Francisco found 13 percent of respondents reporting part or full-time employment. That’s in a city with an estimated 7,499 people experiencing homelessness.
Sponsored By
This year, an estimated 10 percent of the 4,990 people living unsheltered in San Diego said they were currently working.
Los Angeles County has more than 50,000 residents who are homeless. Eight percent of adults surveyed in 2017 said they were working to some degree, mostly in part-time, seasonal or temporary work. Among homeless adults with children, 27 percent said they were working either part or full time.
https://www.kqed.org/news/11690325/thousands-of-californians-are-working-while-homeless-and-many-dont-want-their-boss-to-know
The ‘full employment’ theme… is bull sh it.
And here is how the consumer is dealing with higher oil prices and the inflation it brings….
Consumer debt – or euphemistically, consumer “credit” – jumped 4.9% in the third quarter compared to the third quarter last year, or by $182 billion, to almost, but no cigar, $4 trillion, or more precisely $3.93 trillion (not seasonally adjusted), according to the Federal Reserve this afternoon. As befits the stalwart American consumers, it was the highest ever.
Consumer debt includes credit-card debt, auto loans, and student loans, but does not include mortgage-related debt:
https://wolfstreet.com/wp-content/uploads/2018/11/US-consumer-credit-total-2018-Q3.png
The nearly $4 trillion in consumer debt is up 49% from the prior peak at the cusp of the Financial Crisis in Q2 2008 (not adjusted for inflation).
Over the same period, nominal GDP (not adjusted for inflation) is up 39% — thus continuing the time-honored trend of debt rising faster than nominal GDP.
But a hot economy is helping out: While over the past 12 months, consumer debt jumped by 4.9%, nominal GDP jumped by 5.5%. A similar phenomenon also occurred in Q2. This is rather rare. The last time nominal GDP outgrew consumer credit, and the only time since the Great Recession, was in the three quarters from Q1 through Q3 2015.
More https://wolfstreet.com/2018/11/07/the-state-of-the-american-debt-slaves-q3-2018/
You can see very clearly how consumer debt (other than mortgages) peaked right at the time of the oil price collapse. Mortgage debt did as well. I didn’t tell about both in the article.
With purchase applications tumbling alongside the collapse in refinancings, the headline mortgage application data slumped to its lowest level since September 2000 last week.
This should not be a total surprise as Wells Fargo’s latest results shows the pipeline is collapsing – a forward-looking indicator on the state of the broader housing market and how it is impacted by rising rates, that was even more dire, slumping from $67BN in Q2 to $57BN in Q3, down 22% Y/Y and the the lowest since the financial crisis.
https://www.zerohedge.com/news/2018-11-07/mortgage-applications-plummet-18-year-lows-rates-hit-2010-highs
Wow! I am sure refinancing is down, but if new sales apps are down, we will see new closings down shortly.
Wendy’s CEO: ‘It’s still tough out there’
https://finance.yahoo.com/news/wendys-ceo-still-tough-180107106.html?ncid=twitter_yfsocialtw_l1gbd0noiom
Do you reckon this is because Americans are eschewing fast food in favour of carrots?
If I visit Reuters… where that article was found on a google search… I am unable to locate the article…. so the only way anyone reads that is if they knew what to search for on google…
So that means that not a single MSM outlet is covering this….
HEADLINE-GRABBING G——-LOB——-AL W——–AR———-MING STUDY SUFFERS FROM A MAJOR MATH ERROR
https://dailycaller.com/2018/11/07/gl obal-w ar ming-study-oceans-error/
https://nataliaantonova.files.wordpress.com/2013/12/cannot-handle-the-hysterical-laughter.gif
So Science is working at least. People put out papers and ideas that get criticized by others.
It doesn’t mean that G W doesn’t exist. Or at least that’s he way I interpreted it.
kkk ccchange DOES exist… it’s just that burning coal has very little impact on the overall kkkk li ate
I am betting the math was faked… the difference is that there is no whistleblower to confirm it this time
KKKLIMATE DATA FAKED
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/
Here’s the study published in the journal Nature:
https://www.nature.com/articles/s41586-018-0651-8.epdf
It’s a bit heavy on scientific lingo, but does describe the more accurate method now being used to measure latent heat storage in the oceans. This could be described as an error in the previous measuring methods, that’s a bit disingenuous.
Here’s an article referring to the “error” in measuring.
https://www.sciencedaily.com/releases/2018/10/181031141515.htm
There’s another comment with the link to the original study published in Nature, it’s being held for moderator review.
The error caused an under measurement of the latent heat being stored in the oceans. The opposite of what you state in your post.
The biggest take away for me from Gail’s latest post is: the economy is utterly dependent on energy flows. Note the word flows! It isn’t how much is available that matters. What matters is how much flows through the economy. And each year more must flow or things become unstable.
Another issue occurred to me reading Gails post. If we experience a financial or energy shock that halts the global economy, even for a few days, I fear that each day the economy stops moving, the “coefficient of static friction” (for lack of a better term) will become higher and higher.
Meaning, we may well not access to the flows of energy needed to overcome the static friction of getting the economy moving again. Like Gail indicated, this may also create much steeper drop-off than the Limits To Growth model predicts.
Outstanding work Gail. Thought provoking.
‘Megacancer’ James has been writing about energy flows on his website, too.
You are welcome!
US oil record 11.6 million barrels per day:
https://www.cnbc.com/2018/11/07/oil-markets-iran-sanctions-oversupply-concerns-in-focus.html
BAU tonight, baby!
You are right. Only two weeks ago crude oil production was reported as 10.9 million barrels per day. Crude oil stocks are way up as well.
Glad I am not writing about how high oil prices are likely to go.
Just two days ago we exposed the abject failure of Abenomics as even allowing for distortions from the natural disasters which hit Japan, the machinery orders data will only embolden the BOJ to stay the course.
September Japanese Core Machine Orders crashed 18.3% MoM (more than double the 9% drop expected and considerably worse than the impact of the tsunami). That is the greatest monthly collapse in orders ever and led to machine orders collapsing 7% YoY (when expectations were for a 7.7% rise YoY)…
Worse still, historically, core machine orders are an early indicator of future capital spending, and exclude volatile orders for ships and orders from electrical power companies’
It comes on the back of the negative print for real cash earnings and the slide in household spending earlier this week. And all this before the sales-tax hike planned for next year.
The utterly dismal data adds to signs that gross domestic product may have contracted slightly in the third quarter…
https://www.zerohedge.com/news/2018-11-07/japanese-machine-orders-crash-most-record-boj-member-admits-cant-solve-structural
https://www.reuters.com/article/us-japan-economy-orders/japan-machinery-orders-hit-by-worst-ever-slump-in-september-raise-capex-doubts-idUSKCN1ND037
Try a google search: Japan Machinery Orders….. next to nothing in the result… only Reuters is covering this …. I tried Japan Machinery Orders Bloomberg and Japan Machinery Orders CNBC and Japan Machinery Orders Financial Times – nothing.
This is a rather big financial news story…. except that it’s like that proverbial (3000 year old sequoia) tree falling in the woods… and nobody being around to hear the crash …
Throw this together with the abysmal auto numbers…. and we are like deer caught in the headlights… we are not sure what it is we are seeing …. but it has us stunned… is it a tractor trailer — or just a man with a flashlight?
Is this beginning of the end… or another false alarm….
Businesses quickly resumed operations after these natural disasters, but a 12.5 percent decline in machinery orders from overseas suggests weakening export demand.
Orders from manufacturers fell 17.3 in September after a 6.6 percent in August, due to declining orders from makers of chemicals, electronics, and autos, the data showed.
Service-sector orders fell 17.1 percent, versus a 6.0 percent increase in the previous month, due to a decline in orders for railway cars, heavy machinery, and computers.
https://www.reuters.com/article/us-japan-economy-orders/japan-machinery-orders-hit-by-worst-ever-slump-in-september-raise-capex-doubts-idUSKCN1ND037
One would have thought that the stock markets – particularly the Nikkei – would have tanked on this news…
But nope…. barely any ripples….
I’ll say it again — when BAU ends — the numbers on the digital boards will be at all time highs… then the boards will lose power… and go dark… forever
Nikkei is UP by 1.87%…
is this the new normal?
Failure is success!!!
Traders need to recalibrate their brains…. 1-7 = 12 now….. – = good – = + ….
There is no market — there is only the CBs
Perhaps everyone is interested in the US election result instead. The article does indeed sound worrying.
Apparently this is not one of the ‘Five Things You Need to Know to Start Your Day’
https://www.bloomberg.com/news/articles/2018-11-07/five-things-you-need-to-know-to-start-your-day-jo7ps3fs?srnd=premium-asia
It’s a record breaker! The poorest year-on-year performance of any quarter in the 30-year record.
https://tradingeconomics.com/japan/machinery-orders
Hurrah! Bad news = good news!!!!
Seriously bad news = no news.
Try a google search: Japan Machinery Orders….. next to nothing in the result… only Reuters is covering this …. I tried Japan Machinery Orders Bloomberg and Japan Machinery Orders CNBC and Japan Machinery Orders Financial Times – nothing.
Story is everywhere now. Not everyone is as fast as Fast Eddy.
I am not seeing it everywhere… the only MSM source I see remains Reuters (a few of the Japanese financial sites were and are also covering)… and I challenge anyone to locate that article on the Reuters site without the help of a google search… keeping in mind nobody would know to search Japan Machine Orders on Google
https://www.google.co.nz/search?q=japan+machinery+orders&rlz=1C1CHBF_enNZ809NZ809&source=lnms&tbm=nws&sa=X&ved=0ahUKEwji8pHTwsXeAhUYeysKHfpvANYQ_AUIDigB&biw=1264&bih=561
Adding CNBC brings up nothing still…
And when I search japan machinery orders bloomberg… the first result is:
What Global Slowdown? Japan Inc. Is Roaring Ahead
Bloomberg-9/10/2018
In recent months, Japanese companies have been posting a wave of positive data. Machinery orders — a key indicator of companies’ capital …
Japan: Solid core machinery orders in August – Nomura
Forex Crunch-10/10/2018
A Google search on “Japan Machinery Orders CNBC” returns
“UPDATE 2-Japan machinery orders hit by worst-ever … – CNBC.com”
from 18 hours ago as top result.
A Google search on “Japan Machinery Orders Financial Times” returns
“Decline in Japan machinery orders worse than … – Financial Times”
from yesterday, though as 4th result down.
A Google search on “Japan Machinery Orders Bloomberg” returns absolutely nothing recent (from Bloomberg).
A Google search on “Japan Machinery Orders” restricted to past 24 hours returns a lot of sources for the story.
So ok, maybe I exaggerated a little when I wrote “everywhere”, but the story is out there. Are Google results tailored to the country you are searching from? Perhaps if you searched for the latest developments in sheep farming you’d get a lot more results than me?
Google delivers different results depending on location …
Anyway — I look at quite a few finance sites every day …. and I did not see this story anywhere … clearly it should have been on the home pages…. not buried 20 pages deep….
Oh right — the home pages are reserved for Trump stories …. and __ ___ing propaganda… along with bits about Tesla and Elon
If I did not see that reprint on ZH…. I would not have known about this….
Simple really….when the World Economy Collapses everything shuts down…the end… We’re talking about grids down all over the world and 7.5B people dropping like f*** flies in short order. The collapse will be absolutely horrible..There is no collapse or horror movie ever produced that has even come close to imagining what the collapse of BAU might look like. I’m talking about every corporation and every social program going bankrupt at once. I’m talking about people eating people. I’m talking about the Worst Catastrophe to ever happen in the history of mankind. Nothing has ever, or will ever come close…(Meadows, 1972) (Motesharrei, 2014) (Turchin, 2010) (Ehrlich, 2013) (Turner, 2014) (Korowicz, 2012)
https://www.scientificamerican.com/article/apocalypse-soon-has-civilization-passed-the-environmental-point-of-no-return/
https://www.nature.com/articles/463608a
http://www.sciencedirect.com/science/article/pii/S0921800914000615
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3574335/
https://www.scribd.com/document/379418787/Is-Global-Collapse-Imminent-An-Updated-Comparison-of-The-Limits-to-Growth-with-Historical-Data-Turner-2014
http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf
https://imgur.com/a/flYQjSA
And the coup de grace…. which these fellows had not thought of…. the spent fuel ponds…
BTW – I tried to call a nuclear power plant earlier …. I got bumped up to a ‘the sergeant of safety and security’ …. friendly chap… told him I was a freelancer doing a story on Fukushima spent fuel ponds and just wanted to get some first hand info on this issue — can’t speak Japanese so here we are….
Sure he said how can I help….
So I am seeing that Japan feared ‘The Devil’s Scenario’ and had a plan to evacuate Tokyo … my research also indicates one pond at Fukushima could result in the release of radiation = to 14,000 Hiroshima bombs….
Pause on the other end.
So let’s say a spent fuel pond was completely compromised… let’s say we had World War 3 and a barrage of bunker busting missiles smashed into your spent fuel ponds….
What would this look like in terms of radiation spread?
Pause on the other end….
Ah … sorry but I am not authorized to deal with the press… so I can’t answer that question … let me give you the number of the correct person …. he’s on duty from 8-4 each day….
Bit of a difficult time difference for me but I’ll try and get on that (when I am not busy calling Tesla dealers and mocking them about their coal burning cars…)…
I suspect I am not going to get a straight answer on this — because it is unthinkable … and because this would be classified info….
https://imgur.com/a/9EAF1me
Mr. Fast: Haven’t you think that radiation from spent fuel ponds can be the redemption of our sins? It will help biological diversity by enhancing mutations in millennia to come after our extinction. 😉 LOL
some people on OFW have already mutated far enough thanks
I for one. Used to be a naive, idealistic young man full of dreams in his head, but now…
I used to become more cynical by the day…. but now I am supersaturated with cynicism….
You may be onto something! Survival of the fittest meets it’s biggest challenge yet
How the Japs dodged that bullet after Fukushima, I’ll never know…
They already have fried spent fuel pools in Japan
The spent fuel ponds at Fukushima are just fine… the reactor cores remain exposed and doused with tonnes of sea water 24/7.
Think how many jobs this provides. I suppose this provides GDP.
Which goes to show the madness and perversity of the whole modern economic system. Massively life-threatening situations actually help provide jobs and GDP! So shall we deliberately create more such nightmare situations to boost GDP and create more jobs? (Won’t surprise me one bit if any said yes.)
LA celebs cough up $60 million for Israel Defense Forces at gala event
https://www.rt.com/usa/443374-idf-fundraiser-hollywood-actors/
Whatever happened to We are the World and all that tripe???
Now celebs band together to help Israel buy more white phosphorous bombs to drop on children….
Who needs Harvey — just make an appearance and you get more movie roles….
Outstanding stuff!!!
Pingback: Why we get bad diagnoses for the world’s energy-economy problems – Olduvai.ca
China also has a serious debt problem? According the Bank for International Settlements, China’s debt-to-GDP ratio in 4Q 2017 was about the same as the US and the EU (with much lower shadow banking exposure), but
1. China’s economy is growing three times faster than theirs and growth eats debt.
2. China’s debt is 98% domestic.
3. China’s asset to debt ratio is 3.8:1
4. China’s debt is productive, and of very high quality.
5. China can turn on a dime: everyone cooperates.
6. 95% of Chinese trust their government.
We will see how this turns out. The mortgages of people in Beijing and Shanghai are very high in relationship to their income, for example. Falling asset prices would be a problem there, just as they were in the US. I know that equity amounts tend to be higher, however.
I hear this rubbish all the time when I am in Hong Kong … China can’t implode because it’s too big — the leaders can do whatever they want blah blah blah blah….
China’s debt-to-GDP has ballooned to more than 300 percent from 160 percent a decade ago.
https://www.cnbc.com/2018/04/24/trade-war-with-us-may-be-tipping-point-for-chinas-debt-ridden-economy.html
Soaring debt levels and increasing complexity of the financial system have been a source of heightened concern among China watchers in recent months. A number of global bodies, like the International Monetary Fund (IMF), have warned the problems could lead to “financial distress” in the world’s second-biggest economy if the government doesn’t put in place remedial measures.
The IMF estimates China’s overall debt figure to be about 234 percent of gross domestic product (GDP) and predicts it to rise to 300 percent by 2022. Corporate debt currently stands at around 165 percent of GDP, and household debt is also spiraling upward at a rapid pace.
https://www.dw.com/en/will-chinas-high-debt-levels-spark-a-financial-crisis/a-42976238
The rapidity and size of China’s debt boom in the past decade has been almost entirely without precedent. The few precedents that do exist — Japan in the 1980s, the US in the 1920s — are not encouraging.
Most coverage has rightly focused on China’s corporate sector, particularly the debts that state-owned enterprises owe to the big four state-owned banks. After all, these liabilities constitute the biggest bulk of the total debt outstanding, and also explain most of the total growth in Chinese debt since the mid-2000s.
Chinese households, however, are quickly catching up. This is bad news.
The simple story of China’s debt boom is that government-backed companies borrow from government-controlled banks to pay for wasteful investments to support jobs and other political objectives. This creates lots of problems for China today and in the future, but it does have one virtue: the losses from centralised credit allocation can be distributed over a broad population over a long period of time. While liquidating everything in one go and starting fresh may be the ideal approach, the likeliest outcome of China’s corporate debt binge still looks a lot better than the chaotic wrangling between debtors and creditors that happens in most other places at most other times.
Household debt is different. Borrowers are widely dispersed and lack political power. The lenders are often newer finance companies or loan sharks. Worst of all, there is essentially zero chance that additional household borrowing pays for productive investment. Some of China’s additional infrastructure and manufacturing capacity may prove valuable one day. Household debt probably won’t. Atif Mian and Amir Sufi have ably shown that increases in household borrowing tend to predict slower income growth and higher joblessness.
https://ftalphaville.ft.com/2018/03/06/2199125/chinas-household-debt-problem/
China is a bug waiting for a windshield…
And if it makes you feel better — so are the US and the EU….
Apologies for mixing my metaphors, but as I see it, China and America will have to duke it out mano a mano in the sumo ring, in the woodshed, or at Thunderdome, with the winner being the side that achieves two falls, two kowtows, or a knockout, because this finite world ain’t big enough for the both of ’em to be lording it over us lesser mortals as Top Dog and lecturing us that they’re an empire now, they make their own reality, blah, blah, blah.
I agree with Hank Paulson:
“”As Treasury Secretary, I presided over the US response to the 2008 financial crisis, so I know a little something about systemic risk. And I simply cannot see how the international system can endure when the two countries that comprise some 40% of global GDP and over 50% of global growth are working at cross-purposes, attempting to de-integrate their two economies, and contesting the foundations of a rules-based order at every turn,” Paulson said.”
http://uk.businessinsider.com/former-treasury-secretary-hank-paulson-warns-us-china-trade-war-2018-11?r=US&IR=T
They realize that there is no longer enough resources available at the prices we can afford to go around. That is a problem. If we could afford higher prices, that would be much less of a problem.
How many of Godfree’s points ring true to my fellow Finite Worlders?
1. China’s economy is growing three times faster than theirs and growth eats debt.
2. China’s debt is 98% domestic.
3. China’s asset to debt ratio is 3.8:1
4. China’s debt is productive, and of very high quality.
5. China can turn on a dime: everyone cooperates.
6. 95% of Chinese trust their government.
1. Growth may eat debt but certainly debt drives growth. And the growth in China’s debt is far outpacing the growth in its economy. According to a recent Bloomberg article:
In 2008, China’s total debt was about 141 percent of its gross domestic product. By mid-2017 that number had risen to 256 percent. Countries that take on such a large amount of debt in such a short period typically face a hard landing. That’s why everyone—academics, private banks, the International Monetary Fund, the Organization of Economic Cooperation and Development, the Bank for International Settlements, and People’s Bank of China Governor Zhou Xiaochuan—is sounding the alarm.
2. China’s debt may well be 98% domestic. Given China’s enormous borrowings, that tells me that nobody else wants to lend money to China.
3. Is that a fact?
4. What about all those productive high-quality empty cities China has been building?
5. I’d cooperate to if the alternative was a Naughty Mark on my social score.
6. And how would Godfree know? Has he talked personally to all 1.4 billion of these trusting souls and confirmed the veracity of their responses? In fact, do Chinese people under Communism have souls—what with the country’s ruling ideology being based on dialectical materialism? And is having a 95% trusting population necessarily a good thing for a government?
The minute things go south in China… the masses will tear all ‘communist’ party members to shreds… and make soup from them
Great insight: “2. China’s debt may well be 98% domestic. Given China’s enormous borrowings, that tells me that nobody else wants to lend money to China.”
Regarding (3), who values the assets? Aren’t they worth what workers can afford?
Dear Gail Thank you for this wonderful article. What would be the best investment to continue to receive a pension after 2025 2030 ?
Cultivate very good relationships with your children. Move in with them. I don’t think you can get any guarantees that really work.
The other idea is diversify your investments. Maybe something will work, so that you will have something.
Otherwise, enjoy the time you have now. We never have any guarantees regarding the future.
Learn how to produce your own food. And then take in a bunch of young people and train them.
The only viable “pension” I can see is to make yourself invaluable to young people. Make sure they know that their muscles need your mind.
Hmm, it’s a comforting plan, but it ignores the fact that in many peasant cultures the inheriting son usually can’t wait to knock dad on the head and push him off the farm.
Even in Europe there were traditional ways of getting rid of the elderly through ‘accidents’: in Spain, feeding them something that causes lung congestion and makes them choke to death, in all areas having ‘domestic accidents’ – ‘How tragic! Dad was behind the door when I opened it suddenly…..’
In India, sons were able to bribe officials to register their fathers as dead, so that they could inherit. Try to get yourself declared alive again when your son has all your assets!
As for knowledge: once one has been in an area for a certain period, and know the ropes, there is little that an older head can add that would be of much use.
There must come a time when you not only are but also feel useless, and there are always traditional ways in which old peasants kill themselves -usually hanging or jumping down a well.
Anyway, planning to live off the young is a bit vampiric, isn’t it?
The aim should perhaps be the pleasure ad duty of passing on useful knowledge, and then moving on to what awaits us all.
No one stays grateful to the old forever….
Stay strong and useful as long as possible. Then die quickly.
I would agree with that!
I would also point out, “Take care of your health.” This is both food and exercise, as far as I can tell. If you are in good health, you can help others. You may even be able to hold down a job at an advanced age. If you don’t take care of your health, it doesn’t matter how much wealth you seem to have.
Or…. eat pizza, potato chips, and cheez wiz for breakfast lunch and dinner… drink wine and beer and whiskey by the truck load…. and sit in front of the teevee and watch drivel…. in anticipation of no future.
From “Life 3.0 – Being Human in the Age of Artificial Intelligence” by Max Tegmark.
——————————————————————————————————-
Although there’s broad agreement among economists that inequality is rising,
there’s an interesting controversy about why and whether the trend will continue.
Debaters on the left side of the political spectrum often argue that the main cause
is globalization and/or economic policies such as tax cuts for the rich. But Erik
Brynjolfsson and his MIT collaborator Andrew McAfee argue that the main
cause is something else: technology. Specifically, they argue that digital
technology drives inequality in three different ways.
First, by replacing old jobs with ones requiring more skills, technology has
rewarded the educated: since the mid-1970s, salaries rose about 25% for those
with graduate degrees while the average high school dropout took a 30% pay
cut.
Second, they claim that since the year 2000, an ever-larger share of corporate
income has gone to those who own the companies as opposed to those who work
there—and that as long as automation continues, we should expect those who
own the machines to take a growing fraction of the pie. This edge of capital over
labor may be particularly important for the growing digital economy, which tech
visionary Nicholas Negroponte defines as moving bits, not atoms. Now that
everything from books to movies and tax preparation tools has gone digital,
additional copies can be sold worldwide at essentially zero cost, without hiring
additional employees. This allows most of the revenue to go to investors rather
than workers, and helps explain why, even though the combined revenues of
Detroit’s “Big 3” (GM, Ford and Chrysler) in 1990 were almost identical to
those of Silicon Valley’s “Big 3” (Google, Apple, Facebook) in 2014, the latter
had nine times fewer employees and were worth thirty times more on the stock
market.
Third, Erik and collaborators argue that the digital economy often benefits
superstars over everyone else. Harry Potter author J. K. Rowling became the first
writer to join the billionaire club, and she got much richer than Shakespeare
because her stories could be transmitted in the form of text, movies and games to
billions of people at very low cost. Similarly, Scott Cook made a billion on the
TurboTax tax preparation software, which, unlike human tax preparers, can be
sold as a download. Since most people are willing to pay little or nothing for the
tenth-best tax-preparation software, there’s room in the marketplace for only a
modest number of superstars. This means that if all the world’s parents advise
their kids to become the next J. K. Rowling, Gisele Bündchen, Matt Damon,
Cristiano Ronaldo, Oprah Winfrey or Elon Musk, almost none of their kids will
find this a viable career strategy.
Thanks for the information. It very much ties in with what I was writing about. This is a link to the book on Amazon. https://www.amazon.com/Life-3-0-Being-Artificial-Intelligence/dp/1101946598
Growing technology use clearly is linked to growing wage disparity. I think it is also linked to growing debt, because of all of the capital goods it requires. I don’t think technology or AI is sustainable.
@Gail thanks for the article – succinct bird’s eye summing up of the current situation. By the way, what is the source for the China energy prod graph?
China’s production and the consumption data come from different sheets in 2018 BP Statistical Review of World Energy.
Thank you for a most illuminating analysis, as I find you always do, Gail. The crux of the climate issue is using the atmosphere and oceansphere as dumping grounds for fossil and biomass emissions. This is another form of debt accumulation that has exceeded humanity’s ability to “pay off” given that even a shift over the next several decades completely off fossil combustion and on to ultra-efficient electrification services delivered through affordable efficiency gains, solar PV, and wind power, still leaves a carbon debt that will drive the global temperature past 2 degrees C.
Negative Emission Technologies (NETs) have yet to be commercialized at affordable costs, except perhaps, large-scale prevention of deforestation, large-scale ecological restoration, and increasing the heat-reflecting albedo of urban areas (this last option could prevent/reduce global CO2e emissions by 50 billion tons according to LBNL analyses, while accruing several trillion dollars in savings and avoided damage costs). Most other NET options, especially BECCS (biomass energy with carbon capture and storage), require vast amounts of land, water and agrichemical inputs. Both fossil and biomass CCS pose long-term risks of leakage. And sucking CO2 out of the atmosphere combined with CCS is prohibitively expensive.
More positively, the combustion-to-electrification shift noted above has been assessed by several independent groups, one estimating annual global benefits by 2050 at $50 trillion per year in direct savings and avoided damage costs (Jacobson, Delucchi et al Stanford-UC Berkeley assessment, 2018).
Another global energy assessment (Breyer et al 2018) estimate “the switch will bring the total levelized cost of electricity on a global average down to €52 ($61) per megawatt-hour (including curtailment, storage and some grid costs) compared to €70 (82) megawatt-hour in 2015. A full decarbonization of the electricity system by 2050 is possible for lower system cost than today based on available technology.”
Paul Hawken et al (Drawdown, 2017) analyzing both energy and non-energy global GHG emission reductions towards zero, concluded total cost of implementation (“first cost”) at $129 trillion over the 30 years. This is roughly $27 trillion of additional investment (“net cost”) above and beyond the $102 trillion required for business as usual (BAU). However, the “drawdown” investments would reap $74 trillion in net operating savings over 30 years, resulting in global accrued gains of $47 trillion. This is very positive news: on average, the global economy would accumulate one dollar of savings for every 34 tons of CO2 reductions!”
Given these optimistic assessments, which essentially eliminate continued carbon debt accumulation and on to “current account” with solar and wind, at negative costs relative to business-as-usual, while continuing to deliver expanding affordable energy services (as well as food and other commodities), I’m wondering how all of this figures in your financial debt assessment? thanks so much! Michael P Totten
Are you on drugs????
Do NOT assume we are.
Let me give you the antidote to your poisonous line of thought:
Renewable energy ‘simply won’t work’: Top Google engineers
Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible.
Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren’t guys who fiddle about with websites or data analytics or “technology” of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company.
Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear.
All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.
In reality, well before any such stage was reached, energy would become horrifyingly expensive – which means that everything would become horrifyingly expensive (even the present well-under-one-per-cent renewables level in the UK has pushed up utility bills very considerably).
http://www.theregister.co.uk/2014/11/21/renewable_energy_simply_wont_work_google_renewables_engineers/
Oh and btf789ing way — you seem to have missed the message ….. we are going extinct very very soon!!!
And all environmental problems … will disappear when that happens …(except for the spent fuel ponds)…
thanks eddy… my 35 year career with “renewable” solar pv yielded a similar realization… but the techno-cornucopian faithful enjoy their “stage #3” bargaining.
regardless, thanks for explaining reality to the folks who don’t see it yet.
trouble is—when you set out the step by step logic in simple easy to understand terms, that renewables can’t work—–
the realisation dawns that whoever you’re explaining it to is suddenly blaming it all on YOU
What little high-quality long-term data there is suggests cooling from now until 2030-40, although no doubt the Scribes of the Church of Clim-ate-scien-tology will adjust any cooling away through the Holy Sacrament of Data Tampering.
https://youtu.be/r0l3tymEagc
^ do not feed the troll
“Major Math Error Puts Widely-Cited Global Warming Study On IcE”
On zerohedge.
An widely-circulated study which concluded that global warming is far worse than previously thought has been called into question by a math error, reports the Daily Caller’s Michael Bastasch.
Princeton scientist Laure Resplandy and researchers at the Scripps Institution of Oceanography concluded in October that the Earth’s oceans have retained 60% more heat than previously thought over the last 25 years, suggesting global warming was much worse than previously believed.
Unfortunately for the Princeton-Scripps team, it appears that their report has been proven inaccurate.
Independent scientist Nic Lewis found the study had “apparently serious (but surely inadvertent) errors in the underlying calculations.” Lewis’ findings were quickly corroborated by another researcher. -Daily Caller
After correcting the math error, Lewis found that the paper’s rate of oceanic warming “is about average compared with the other estimates they showed, and below the average for 1993–2016.”
I find it this amusing that the errors in calculations, in models , etc ALWAYS indicate Gggg Www is going to kill us.
But…..the sky is falling pronouncements are all fake.
(but surely inadvertent) … yes surely…. as in surely faked… with the expectation that surely nobody was going to check…
This really is ridiculous….
As I have stated – if Al Gore were to state that the whole ____ ______ thing was a ho ax… the groopies would be on the attack …. accusing him of selling out to big oil and coal…. there would be two minutes of hate every day for Al ….
This is proof that the MSM is capable of making 1+1=4. A circle becomes a square… up is down … really.. it is…..
First we had g..llllllloooooobbbbballlll w…aaaaarrrrrrmmmmiiiinggggg
Then when that was not happening we got kkkkk…llll…ma…te ….c hhhhan…ge
And when the earth tilts and we get abnormally cold temps… Don Draper will give us … g…lllo…bal coooooling…..
And he will tell us that it’s all so difficult to predict however the science is settled once and for all… burning coal will not burn up the planet rather — scientists now concur … that the final stage will now be freezing temperatures as our coal burning turns the earth into another Neptune
https://www.universetoday.com/65353/what-is-the-coldest-planet-of-our-solar-system/
And …. drum roll…. we’ll get another Kyoto Conference where dozens of countries sign up … and then continue to burn more coal…. because they all know this is an outrageous hoa x… that gets more outrageous by the day … but if they keep having these conferences and the MSM continues to publish this rubbish …
The Stoooopid Humans will believe whatever they are TOLD TO BELIEVE
tottenmichael….rubbish….who gave you your talking points?
Kill the Troll!
Cut his Throat!
Kill the Troll!
Bash Him In!
Kill the Troll!
Cut his Throat!
Kill the Troll!
Bash Him In!
Kill the Troll!
Cut his Throat!
Kill the Troll!
Bash Him In!
Kill the Troll!
Cut his Throat!
Kill the Troll!
Bash Him In!
https://userscontent2.emaze.com/images/c13bc318-4c73-42ad-8483-ab8b242bbf89/cbc5fe12-897c-42a1-8f97-d7a21c86ed14.jpg
Jacobson and Delucchi are completely clueless in their models. Politicians are so interested in happy ever after endings that practically anything gets published. Their work has been subject to many rebuttals and, for a while, Jacobson and Delucchi were trying to sue those who pointed out (some of the ) flaws in their analysis. https://en.wikipedia.org/wiki/Mark_Z._Jacobson
These papers are basically untrue. We will all be dead, if GHG emissions go to zero. There are so many assumptions in the papers that it becomes difficult for reviewer to see the flaws. Also, virtually no-one understands the extent to which the economy requires energy consumption.
This just arrived in my mail box…… I am posting it in advance … so that when drought hits NZ…. and you read about how burning coal caused it….. you might… you just might …. think that you are being toyed with ….. being played… being suckered….
Being treated as if you are an unthinking, MORE onic…. Re f789ing tard ed …. im be cile….
And stand up for yourself and say
http://files.abovetopsecret.com/files/img/px534f9556.jpg
El Nino Predicted This Summer
With the El Nino weather pattern predicted this summer, it could be’ one of the driest summers on record. An un-mulched garden lets the sun beat on the soil and hot soils evaporate water fast.
Right from the beginning, under trees in nature, there was a very unique layer of leaves, branches and sticks that allowed many nutritious ingredients to embed into the precious rich soils.
This cover stopped exotic weed growth allowing young trees to spawn, helped the soil increase its humus level to deep rich soil and helped store the rain in the soil over dry months.
A 10cm layer of organic mulch can cut water needs in half. Mulch keeps water from evaporating quickly from the soil. Organic mulches hold water and increase the humidity.
The modern version of this product is available today in Forest Floor mulch.
Forest Floor can be used for an excellent substitute for pea straw, as it is easier to spread (and looks great too!)
Be proactive and order Forest Floor mulch bark today for your garden. By placing this bark on now, it will preserve the plants for this coming summer.
It’s now you need to act, waiting until the heat of summer will hurt your plants more as there won’t be the rainfall needed for the mulch to conserve the water around the plants.
i put some bark mulch in the front of our house, under the city shade trees. it was very costly, bought by the bagful at the local hardware store/garden shop. looked nice, for awhile. then, we had a heavy rainfall, and the expensive bark mulch floated away, down the street.
next stop, ugly gray gravel cover over black plastic. worked.
Gail, you seemed to be setting up an introduction for David Korowicz’s “Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse” (2012) http://www.feasta.org/wp-content/uploads/2012/10/Trade_Off_Korowicz.pdf , but then he didn’t appear.
An open source model of the situation by Josh Floyd is given at http://beyondthisbriefanomaly.org (you will have to start at the very beginning). The software is easy compared to describing the assumptions made over the values and the relationships between the inputs. If anyone can explain it properly, you can.
Frackers in the US have NEVER made a profit. They have collectively rung up a debt of $280 billion, but banks and investors seem happy enough, so long as the energy keeps flowing. I suppose they have been given the backing of the Fed.
Meanwhile China has to buy its increasing imports from abroad and ship them through the South China Sea. Australia is being squeezed by US pressure to take part in “Freedom of Navigation” exercises, and China’s willingness to buy our coal, iron ore, aluminium, copper, lead, etc and sell us solar panels and mobile phones. The Australian ABC continues to toe the Government line of “neutrality and US ally”, but now has to advertise itself as “Australia’s most trusted news source”. Propaganda still works.
Thanks for reminding me of this article. I like the work of David Korowicz. I have been able to meet him as well. The overview says,
In the not too distant future, we may get to see how the breakup of the Euro really works. Actually, we may get some insights just from the UK trying to leave the European Union even sooner.
I am afraid I wasn’t able to figure the link you were talking about.
If I had to speculate, I would say that soon after global oil production begins to decline, economic collapse will follow, as less energy available for transportation forces the global economy to contract. That is physics which we can’t change.
With the record amount of debt everywhere, a permanently shrinking economy will cause so many bankruptcies that the financial system will collapse, like it very nearly did in 2008 from subprime housing debt that went into default. Imagine how much worse a global transportation shortage will be.
We can create money. But we can’t put more oil in the ground. So watch out for peak global oil output. And it doesn’t matter what caused the peak. Oil could get so expensive as to become unaffordable, which will result in the same economic contraction. You’ve got to figure that since oil is so critical in transportation, people will try to pay whatever it takes to get some. That has to eventually raise the price a lot, which itself could cause economic problems by reducing demand for everything else.
So the economy won’t last too many years after total oil output begins to decline for any reason.
When will it happen? Probably before 2030.
Everything is so tightly networked that the outcome doesn’t need to look like that. Collapsing debt causes prices to drop very early, because buyers are not able to afford goods and services. Look at oil prices in the second half of 2008. Oil prices rise, when the economy is doing very well. For example, before the debt bubble pops, in the years leading up to 2008.
I think it is really the average price of all energy products that matters. Coal is very much needed to help “average-down” the overall price. Its proportion of the total has been falling. This, by itself, could be a major problem.
Most oil use is hidden. Will trucking companies be able to pay double their current price, if they can’t pass it on to customers? Will farmers be willing to raise the cost of the crops they grow, by paying a high price for diesel, if they cannot pass on those higher costs to customers? Perhaps in the US they can, because food is truly a necessity, and incomes are high enough in the US to accommodate somewhat higher food prices. But not in India, for example.
The amount you use in your car is a surprisingly small share of the total petroleum consumption. The US is likely an outlier on the high side in this regard. Most commuters, worldwide, do not use cars.
Dear Gail,
Reading your posts is like listening to Bach: you know that It is the same basic melody but you enjoy every variation. Sad melody for us humans. I hope you are right about the Great Intelligence but I’m sure you’re right about loving our friends and family as much as we can while it’s possible. Thank you for your effort.
You are welcome!
With all due respect to everyone here, I find this comparison of Gail’s posts to Bach’s music somewhat… jarring. Bach’s music bespeaks a universe of order and beauty (and I don’t think it’s that repetitive either), whereas Gail’s posts are dire predictions of imminent chaos.
It will be magnificent chaos though…. The Crescendo of Hell in D(oom) major
Would you mind if I compared Gail’s posts to The Kinks (my favorite band)?
This one’s a classic doomer anthem.
Wall of Fire
Standing at the end of the horizon
Looking at another setting sun
Nature gave us all these toys to play with
But we’ve abused them, each and every one
They stretched the chord, snapped the wire
Lit the fuse but can’t retire
We’re going to the wall of fire
Tip-toeing on the great high wire
Let’s have a real fire….
https://youtu.be/-NxNVmUvnrw
How Tesla Made a Record Profit
The biggest boost to profits came from the sale of government credits, which Tesla earns by producing clean energy products like electric cars and can be sold to other companies to satisfy regulatory requirements. Tesla booked $189.5 million in credit revenue in the quarter, an unusually high result. Tesla had booked a total of about $135 million in the first two quarters of the year. These credits are almost pure profit for Tesla.
https://www.wsj.com/articles/how-tesla-made-a-record-profit-1541436774?mod=e2tw
Never trust the WSJ is telling the truth If you go with the opposite of what they say you will be in the pink.
Not long ago they were pimping GE nothing but BS
Hi Gail and fellow tverbergians!
Great article! Question: for figure 2, how does applying a trend line to oil prices become a maximum affordable? How do you know the maximum affordable price, especially in a dynamic system? The max affordable may be a different plot than price history.
Thanks!
Back in 2008, the maximum affordable was marked by the popping of the debt bubble. See my article https://ourfiniteworld.com/oil-supply-limits-and-the-continuing-financial-crisis/
More recently, when prices stop rising, crude oil reservoirs seem to start filling. They reverse, when the price drops low enough so that supply rises and keeps supply in line with demand.
At least over short periods, if there are not funny things going on with interest rates, the relationship seems to be linear. At least that is what technical analysis says. If is sort of like there is a price shock, and afterward prices bounce up and down like they might for aftershocks of an earthquake. The amount of bounce falls with time.
Meanwhile in Norway: Almost 50 years since the discovery of our Ekofisk North Sea oil field. Not much discovered theses days and quite a few layoffs in recent years but unemployed rate is at a historic low level so according to the mainstream the future is bright.
careful about your government unemployment figures. per D. Orlov, in the US about 100 million (ca. 30% of population) potential workers are no longer seeking employment, being discouraged by the jobs outlook, and are thus not counted as “unemployed” by our BLS.
Thanks for the new post, Gail!
I think that might be the case in Norway as well, there’s no way all those former oil workers could get new jobs …
Excellent article!
‘Anyone who has watched bread rise in a bowl can see the implications of growth within a finite structure.’
Bravo bravo!!!
I suspect that if physicians looked at this patient… they’d be calling the morgue to reserve a space….
We’re in hospice – crank up the hopium.
I agree FE, that is a excellent article. Here is another excellent quote from it you can marvel at and enjoy:
“Neither climate change nor any of the other source-and-sink catastrophes facing civilization have been laid at the feet of bad economic theory. One reason: Neoclassical economists succeed in treating environmental costs as âexternalities.â How could environmental degradation be the result of economic activity if itâs external to the economy?”
Gailâ
Below and linked Hereâs my short take on why we get bad diagnoses for the worldâs energy-economy problems. Please do feel free to refer to it if you think it has merit. Capsule summary: oilâs incredibly high EROEI insulates economic theory from reality.
Eric Zencey
Fellow, Center for Research on Vermont and Center for Rural Studies
Coordinator, Vermont Genuine Progress Indicator Project
Adjunct Associate Research Professor, Political Science, retired
University of Vermont
Burlington, Vermont
Research Fellow
College of Architecture
Graduate School of Architecture and Urban Design
Washington University in St. Louis
St. Louis, Missouri
Typos, misspellings, odd capitalizations are courtesy of my dictation program
The Daly news June 3, 2015
The future history of political economy, part one: Economics Ignores Thermodynamics
by Eric Zencey
Editorâs Note: An earlier version of this essay appeared as a comment in the Great Transition Network Forum, which will appear on the Great Transition Initiative website next week along with a new essay by Herman Daly, âEconomics for a Full World.â
[Eric Zencey]Ecological Economics and its corollary, Steady State Economic thinking, represent a step forward for the discipline of economics and also a return to how it was practiced in the past. In the nineteenth century, economics was a part of a larger enterprise: political economy, the integrated treatment of morals and economics, ultimate ends and efficient means. Late in that century economics calved off from political economy, leaving behind political science and political philosophy as the residuum. It did this in service to the ideal of becoming rigorously scientific.
Itâs odd, then, that alone among disciplines with any pretense to analytic rigor, economics has steadfastly resisted the thermodynamic revolution that swept physical and life sciences in the nineteenth and early twentieth centuries. Physics, biology, chemistry, geology, even the study of history were transformed, but not economics.
I think we can blame this on bad timing, willful ignorance, and oil.
Bad timing
In the late nineteenth century the archetypal science was physics and physics was Newtonian mechanism. Ignorant of what a young thermodynamic theorist named Albert Einstein would soon do to the Newtonian paradigm they emulated, Stanley Jevons and other economic âscientistsâ set about mathematically modeling the economy as sets and subsets of self-contained, equal-and-opposite actions and reactions, happily (and explicitly) assuming that all economic activity consists of ahistorical, which is to say completely reversible, processes. No one who has a nodding acquaintance with the law of entropy could have countenanced this. Entropy is Timeâs Arrow, the law of irreversibility; it describes the one-way flow of energy use. A purely mechanical process can be run forward or backwards, but weâll never invent a machine that can suck in exhaust gases, heat and motion and transform them into gasoline. The entropy law can tell you why. Newton couldnât.
Just as a consumer might choose to keep a recently purchased appliance even though a newer, better model has been brought onto the market, neoclassical economists werenât about to re-tool their brand-new thinking to reflect changes in the underlying metaphysics they had been so keen to adopt. It didnât seem to them that there was any reason to.
âSeemâ is the operative word here. Because the entropy process is timeâs arrow, and because Ecological Economics places the entropy process at the center of its analysis, itâs entirely appropriate for Ecological Economics to understand its subject matter and itself as a discipline in historical terms. Like other paradigm-defining insights, this one seems obvious once it has been stated: elements of the neoclassical model that could pass for true on a large and forgiving planet a hundred years ago are obviously not true today, when the planetâs source-and-sink services are severely taxed, when natural capital is the limiting factor in production, when there are seven billion of us and our economic wants, capacities and expectations have been amplified by our access to the ancient sunshine of fossil fuels.
Willful ignorance
By modeling the economy as a closed and circular system, neoclassical economists have encouraged themselves to operate in a methodologically enforced state of denial about the physical roots and ecological consequences of our wealth-creating activities. And yet economics has experienced no paradigm-shaking crisis as a result. Neither climate change nor any of the other source-and-sink catastrophes facing civilization have been laid at the feet of bad economic theory. One reason: Neoclassical economists succeed in treating environmental costs as âexternalities.â How could environmental degradation be the result of economic activity if itâs external to the economy?
[Midas.Giovanni Caselli from the Age of Fable]
The power to create wealth gave Midas an unsustainable life as a complete solipsist. Oilâs power to create wealth has had a similar effect on Neoclassical economics. Illustration by Giovanni Caselli from The Age of Fable.
In its self-confirming isolation of the economy from nature and theory from reality, neoclassical economics amounts to a highly principled practice of solipsism. When this pathology is manifest in an individual it produces unpleasant consequences that might eventually prompt some reflection and personal growth. Not so with the collective delusion of mainstream economists. Evidence of our ongoing ecological catastrophe falls far from their purviewânot just disciplinarily but geographically, as the wealthier nations (wherein the vast majority of economists reside) export their ecological footprint to the impoverished nations of the world. And for several generations (at least since Reagan defeated Carter, removed Carterâs solar panels from the White House and ushered in an era of GDP growth through de-regulation of the social and ecological consequences of economic activity), there has been a strong self-selection among students of economics. Undergraduates with any kind of deep personal connection to natural systems tend to find the study of standard economics unattractive, displeasing, even soul-deadening. This leaves the field to those most willing to bracket off as irrelevant to their professional purpose any question about the moral and ethical consequences of economic activity, any question about the health and maintenance of nature, any question about the economyâs relation to the larger social and natural systems within which it operates.
Oil
Even so, you might expect that a discipline with such a demonstrably deficient view of its subject matter would fail of its objectâwould fail to offer wise counsel about the collective project of augmenting the stock of wealth that humans can enjoy. But economics has had much apparent success. Despite regular downturns and financial crises, the wealth produced by our economies has grown and grown and grown. I think thereâs a ready explanation that becomes visible through the conceptual lens of Ecological Economics, which tells us that energy isnât a commodity like any other but a fundamental factor of production (part of a trio: matter, energy and human design intelligence). When your economy operates on an energy source that cranks out wealth-making value in a ratio of 100 to 1 or betterâthe estimated Energy Return on Energy Invested that petroleum offered us in the early 20th Centuryâyou can believe any damn thing you want about how economies operate and your economy will still generate a great deal of wealth.
Which is to say, high-EROI oil granted the new science of economics immunity from being proven false by events. But falsifiability of principles and propositions is one solid measure of a science. (Non-falsifiable beliefs are called faiths.)
In effect the discipline of economics has a free rider problemâitâs been given a free pass by the enormous power of oil to misunderstand itself and its subject matter. You could also call it a Midas Problem, after the legendary king whose touch turned everything he touched into gold, including his dinner and his daughter. The power of wealth-generation that oil granted to our economy made it impossible for the discipline of economics to connect in any fundamental way with otherness, including the otherness of the planet and its role in the very processes that economics presumes to model.
Thanks for a very fine article explaining how neoclassical economists managed to go so far astray in their thinking, and then stay in this deluded state. These economists effectively assumed that all human activity consists of reversible processes, even though entropy makes this impossible. They completely missed the important role that oil and energy do. Their work is of course, completely non-reversible. As long as the economy was far from limits, false beliefs could go undetected. Once limits hit, this becomes clear.
I apologize for Fast Eddy’s earlier remark. He clearly didn’t take time to read very much of the article. The dictation machine replaces some of the vowel-s combinations with â, (especially if there is an h before the vowel) making the article a big confusing if a person doesn’t take time to sit down to figure this out.
I think the part that Fast Eddy objected to is the opening sentence:
The statement, as you make it, is literally true. It did represent a step forward from where things were. The problem we face is that all improvements in academic thinking are incremental. I don’t think either Ecological Economics or Steady State Economics went far enough. Steady State Economics is particularly objectionable, because it seems to deny diminishing returns.
In my article, I talk about a bread dough bowl that is already full, and we keep adding more. This is a point that gets missed. There is no way we can add even a little bit, but population keeps rising. A steady state doesn’t work, because it keeps using non-renewable resources. We are greatly overusing renewable resources right now. We don’t have a way of going forward, except perhaps at a very low level, such as hunter-gatherer, or subsistence level farmer. Even these would be available for a small share of the population. The idea that wind and solar can save us is a myth.
We all know full well that:
1. EVs are charged mostly fossil fuels – particularly coal. So they are NOT green.
2. EVs are manufactured using huge amounts of fossil fuels…. and they all carry toxic batteries.
3. It is impossible to convert even a small fraction of the ICE fleet to electric – there are not enough rare earth materials
4. Without subsidies EVs would be ridiculously expensive and nobody would buy them.
Yet…. we have these pronouncements at the very highest levels of government ….and most people believe them…. which demonstrates how easy it is — if there is a will and a reason — that a massive lie .. can be turned into a truth…
Try arguing with an EV-believer explaining how this is NOT possible…. good luck!
Feel free to jump in on the comments … and be run out of town very quickly…
And notice from the comments how this quickly gets tied in with the kkkk ccchhhh narrative…
Because that is the point…. the MSM has done an excellent job convincing the masses…..
In 2017 a rash of targets to constrain fossil fuels for cars led Forbes to declare it to be “The Year Europe Got Serious about Killing the Internal Combustion Engine.” In 2018, even more European countries have joined the list, stating their intent to end the sale of new petroleum vehicles at some point between 2030 to 2040. Also this year, the trend has expanded out of Europe to Israel, Costa Rica, and Taiwan, with targets as early as 2021. Over the same three years, 2016 to present, 20 metropolitan areas from these and other countries announced their own plans to end the use (not just sale) of gasoline and/or diesel vehicles, and mostly before or by 2030.
What is more remarkable, China and India, the titans of demand growth, both declared similar intentions in 2017. China announced its study of a plan to end sales and production of oil-burning cars by 2040, and India asserted it wants to end new sales by 2030. The plans are not enforceable as law (yet), either in Asia or in Europe, and electric vehicles currently constitute only a trivial portion (1 to 1.5%) of vehicles in China and India. The discrepancy between target and current reality, though, points less to the improbability of perfection as it does to the political will for progress. And progress alone, not perfection, is sufficient to trigger peak demand and the tectonic shifts that go with it.
https://wolfstreet.com/2018/11/05/the-acceleration-towards-peak-oil-demand/
I have been percolating this one for a few days now…
Think about the following statement…. think about the art of propaganda…. think about how people trust the BBC….. think about what happens inside their brains when they read this…. think about the power of that statement….. the influence it has on readers….
As I have posted this is NOT settled.. not even close…. there are loads of eminent dissenters.. there is a whistleblower who has written a lengthy dissertation explaining how the scientists faked the data….
But nope – the BBC will NEVER publish that dissertation …. NEVER. Nor will any other MSM outlet.
What we get is instead… is this:
‘It’s settled science that kkklimate cccchange is real’
http://www.bbc.com/future/story/20181102-what-can-i-do-about-c
limate-change
Surely that should set the alarm bells ringing…. this is Propaganda 101….
The BBC is a comedy show: I unfortunately heard a radio report recently on ‘smart homes’, which will apparently save the world – ‘zero-emissions’, etc, etc.
The ‘journalist’ ended with ‘Well, I’d just love one of those smart homes, wouldn’t you? I can’t wait!’
After listening to that tripe, all one has to do is walk out of the door and look at what is actually being built now, all very un-‘smart’.
PS Thank you, Gail!
The mind is a fascinating thing…. one can see the obvious signs of environmental and economic collapse… yet if the MSM says the future is one of smart homes EVs and clean energy…. we grasp onto that …. as desperately as…
https://thumbs.dreamstime.com/z/perseverence-rock-climber-holding-to-edge-cliff-determination-her-face-persevering-50929277.jpg
I like tripe and I use BS in my garden. The new homes in my market are Huge and also built like junk.
My experience in western property markets …. people want BIG poorly constructed rubbish vs medium or small well put together homes….
Never build a well-constructed home of any sort — nobody wants small houses like that…. and few can afford large houses built like that.
“The Clock Is Ticking For China’s Oil Independence”
https://oilprice.com/Energy/Crude-Oil/The-Clock-Is-Ticking-For-Chinas-Oil-Independence.html
“The way out going forward for China is to diversify its oil and gas supply mix as much as possible and continue to reach global joint development agreements with both national and international oil companies, an art that hydrocarbon deficient Japan, the world’s third largest crude oil importer, has executed brilliantly for decades.”
No problem then.
Japan is the model… for all those countries that have turned from exporting to importing oil… if everyone can adopt their model — all will be well … in the garden….
Yemen… Egypt…. Mexico … are you listening?
I made a debt to GDP ratio graph for Japan, and it didn’t even fit on Figure 1 with the other countries. As far as I can see, Japan has used a huge amount of debt since the time that they started industrialization. This may have been for imported fuel and for nuclear power plants. Also, all of the factories and high rise homes. The debt blew a big asset price bubble. Once the bubble popped, both household debt and other non-governmental debt started dropping. Japan’s governmental debt started shooting through the roof, to try to make up for the shortfall in debt growth. Of course, it couldn’t really compensate for the debt growth lost, and the total debt was so high that it couldn’t keep leaping by big amounts. So Japan has been stuck with being on the edge of deflation, pretty much since the bubble popped.
https://gailtheactuary.files.wordpress.com/2016/04/japan-bust1a.jpg
Diversification may be the way out, but so far they are not doing well. This is an EIA chart of China’s monthly “Total Liquids” production and its monthly Crude and Condensate production.
https://gailtheactuary.files.wordpress.com/2018/11/china-monthly-oil-production-by-eia-to-july-2018.png
I think the tight oil is a long shot. They have quite high-cost resources otherwise. (The tight oil may be as well.) China decided to let some of the production decline, not too long after oil prices fell.
China’s natural gas production has been rising, but from a small base. In 2017, China produced 62% of the natural gas it consumed, importing 38% of it. But natural gas amounts to only 6.6% of total energy consumption (primarily because coal is so huge).
I reckon China should have a go at the Americans in Iraq and try to seize their oil fields.
We could use a big war… it is entertaining.
The MSM could make lots of money of ads when they broadcast 47/7 – the arms dealers would celebrate… this could be what is needed to get those green shoots sprouting.
Remember green shoots? How many thousand times did we hear that phrase in 2009?
Right now the global eCONomy is being held together with monetary and central banking superglue and duct tape. Eventually something is going to break free and when it does, good luck putting it back together because the central banks shot their wad in 2008 and there’s no more ammo available unless they decide to roll the dice and hope the global eCONomy doesn’t turn into Zimbabwe or the Weimar Republic.
The timestamp on both of these is 2:41 pm here, so you and Fast Eddy were seconds apart.
I’ve been on a crack, blow, smack, speed etc.. bender since the comments closed on the last article… so my reflexes were lightening fast when this new one hit….
First!
Sorry it took me so long to finish this post. When something is complicated, it is hard to explain the issue simply.
It was worth the wait…I wonder how much 30 year paper the fed sold at the top That would of been a sweet coupon.
well just resist the temptation to spray everybody else with champagne
Third place goes to Norway!
Sorry Norman, fourth …