Why we get bad diagnoses for the world’s energy-economy problems

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.

 

 

 

 

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,136 Responses to Why we get bad diagnoses for the world’s energy-economy problems

  1. Harry McGibbs says:

    “Iran has executed the so-called “Sultan of Coins” and his accomplice for hoarding gold coins and other hard currency, signalling zero tolerance as it tries to shore up its currency in the face of an economic crisis. State TV reported that Vahid Mazloumin and his accomplice, Mohammad Ismail Ghasemi, were hanged early on Wednesday (local time).”

    https://www.abc.net.au/news/2018-11-15/iran-executes-sultan-of-coins-convicted-of-hoarding/10499818

    • Chrome Mags says:

      Success smashed? In the US they’d build a shrine to that kind of person and start a reality show. “Ok, we’re now going into the vault of…”

    • Uncle Bill says:

      Hmm…gold bugs should take note…the Homeland Guard is no doubt keeping track of bulk sales to individuals here in the USA. FDR called in all physical gold back in the Depression…wait till the perpetual Downturn occurs….turn over it to the Feds for IOUs
      LOL..or be shot…

  2. Harry McGibbs says:

    Indian developer rupee bond sales have slumped to the lowest in almost four years as investors become more cautious about default risks after the shock from non-payments by Infrastructure & Leasing Financial Services Ltd… Dwindling sales may make it harder for developers to repay $4.9 billion of debt that comes due in 2019.”

    https://www.bloomberg.com/news/articles/2018-11-14/india-property-bond-sales-stall-as-il-fs-fuels-default-concerns

    • Excerpts:

      “If realty projects need funding or refinancing, there is no-one to go to,” said Nachiket Naik, managing director of IREP Credit Capital, a non-bank lender.

      With IL&FS, among the largest non-bank financiers, out in the cold, and corporates steering clear of mutual funds that have exposure to the non-bank lenders, developers are finding it harder to raise money.

      This is another Indian real estate article I found. 2018, the year real estate died: Invest in residential real estate only if you have the patience and the staying power to play a very long waiting game for returns.

      The article shows charts indicating huge property inventories and practically no one buying. The article says that real estate prices have escalated irrationally in past years, so the author of the article does not expect upward price appreciation for quite some time.

  3. Harry McGibbs says:

    “Hong Kong housing prices could fall 25 percent next year if the trade war between the United States and China worsens, real-estate and investment management company JLL has warned. The forecast is the latest bearish call for what is traditionally one of the world’s most expensive real-estate markets.”

    https://www.cnbc.com/2018/11/15/hong-kong-housing-prices-could-fall-25-percent-on-trade-war-jll.html

  4. Harry McGibbs says:

    “The world’s third- and fourth-largest economies are shrinking. The European Union is battling with the UK and Italy over Brexit and a deficit-boosting budget, respectively. Traders are reeling from a plummet in oil prices that sent shockwaves through the stock market.”

    https://qz.com/1463327/the-global-economy-is-looking-shaky-heres-whats-happening-today/

  5. Harry McGibbs says:

    “Fifteen percent (15%) of Americans – including roughly two in 10 millennials (19%) – say they’re still paying off debt from the 2017 holiday season, which could put a damper on spending in 2018. Majorities of Americans indicate that they’re planning to spend less and hoping to use credit cards less that they did during last year’s holiday season (58% each), and the ghosts of spending past can have an exaggerated effect on future spending plans.”

    https://today.yougov.com/topics/consumer/articles-reports/2018/11/14/americans-holiday-debt-credit

  6. Harry McGibbs says:

    Interesting. The EM + Chinese debt bubble still inflating:

    “Emerging market debt rose by $1 trillion to more than $71 trillion in the second quarter, with China accounting for more than 80 percent of that increase, the Institute of International Finance (IIF) said in a report on Wednesday. The latest numbers from China pointed to a continued issuance boom in the world’s second-largest economy, wrote IIF executive managing director Hung Tran.”

    https://uk.reuters.com/article/us-global-markets-debt-iif/emerging-economies-see-debt-rise-1-trillion-in-second-quarter-face-record-redemptions-iif-idUKKCN1NJ2IT

    • CTG says:

      It has to rise. Stagnating is bad

      • Harry McGibbs says:

        Agreed – happy that it is. I guess I’m just a little bit surprised by how much it is still rising, given China’s rap on the knuckles from the rating agencies and all their talk of reining in credit growth.

        • xabier says:

          Really, from now on I just want to hear about everyone buying magnums of champagne on credit – wonderful for GDP and keeping the debt bubble pumped up.

          Throw Prudence to the wind if you want to save the world.

          (Prudence probably needs livening up anyway).

          • Fast Eddy says:

            YES! Harry … can you grab some stories about people living large? All this negativity is getting me down… surely there must be some feel-good stories out there…

            • Harry McGibbs says:

              You *know* you need to re-evaluate your life when FE is finding you too negative!

              So, in more positive news, the old space reptiles had a nice party for Charles’s 70th. I think that’s something we can all feel good about:

              “Royals from across Europe descended on London last night for a glittering party honouring Prince Charles’ landmark birthday.

              “King Harald, 81, thanked the Queen, 92, for her hospitality last night as the pair carried out their engagement at The Naval & Military Club in London without Queen Sonja of Norway, who was said to be feeling unwell.

              “Harald said: “Thank you for a nice party yesterday.”

              “The Queen replied: “I’m so glad Charles enjoyed himself.” [Scintillating stuff!]

              https://www.express.co.uk/news/royal/1045841/the-queen-news-prince-charles-birthday-party-pictures-king-harald-norway

            • Fast Eddy says:

              Did they all compare birth defects and low IQ’s and complain about their ancestors who insisted on breeding with brothers, sisters and first cousins?

    • The big problem area in the report is the falling overall global debt level, not the rising EM debt levels.

      Meanwhile, mature markets painted a different picture. Overall global debt levels declined by $1.5 trillion to $247 trillion in the second quarter of 2018, mainly driven by a decline in the financial and government sectors in developed markets, the IIF found.

      “Against the backdrop of strong global growth and higher inflation readings across EM and some mature markets, this decline brought the global debt-to-GDP ratio down to 317 percent in Q2,” IIF wrote.

      This looks like a sign of the global debt bubble starting to collapse!

      • Harry McGibbs says:

        Oh, I skim-read it and missed that – very concerning!

        • I looked back at the IIF report itself, and it was the decline in the total that the IIF highlighted. So they thought the overall decline was important, even if Bloomberg decided to highlight the rise of the debt of EM countries.

  7. CTG says:

    Just some of my thoughts. It may sound trivial but it does have a a huge impact.

    From the beginning of time until early 1900s, people lived in a world where things or technology do not change much. Things/tools/equipment used in the 1800s are basically almost the same as the previous hundreds of years. It is not complicated. Smart people can look, take them apart and understand how it works and possibly replicate them. Unfortunately, from the 1900s until today, it is just not possible.

    Our latest technological marvels today are basically electronics and it is far too complex for anyone except the designer to understand. No one else can replicate them unless you steal the information related to it.

    ** The key here ** All these new tools/equipment/toys need a comprehensive supporting ecosystem in order for them to work. ** This is the key.

    Just some thoughts for academic exercise – if you time travel back from 1800s to 1500s and your brought along what is the latest in 1800s (steam engines), can you use it in 1500? Yes you can. Can the people of 1500 replicate that engine? Yes they can because it is not complex and even people in 1500 know that steam is powerful (it is just that they don’t know how to harness it).

    Now, think about it. You bring what is best now in 2018 and bring it back to 1980 or even 1950 or 1900. Will those things work? No

    Smartphones will not even work if you bring it back to 2000. When new phones comes out, they push out the old technology. Smartphones do not support 2G anymore. They support 3G, 4G, 5G, etc.

    Computers – even if you bring it back to 2000, it can still be used but they don’t have USB back then. The computer does not floppy disks, etc. So, this 2018 computer may have a problems working with the devices back in 2000 (remember this is just like 2 decades ago only, not 200 years).

    ** In 1990s, we have the 80286, 80386 with DOS and Word Perfect, Lotus 123, etc. Was the system slow? No, it was pretty good to me. 99% of the users of latest Office 365 (2018) will not use any advanced features and they can continue to be productive with Word Perfect and DOS. I am a avid computer user (gaming, productive work, etc) and I remembered that DOS was very stable and it did not crash often. Uses little memory and what I do today, I can do it easily with the old system.

    Microprocessors advanced leaps and bounds but the OS took away all the processing power (in the name of “ease of use”). Compare with 1980s and present system, we did the same set of things (word processing, spreadsheet). Once with old system and one with new system. Improvements? no. Productivity increase? Maybe but not significant (can you draft more letters with Office 365 as compared to Word Perfect 5.1?) Headaches? Yes (more complexity more crashes). So, in other words, we spent 30 years improving something for nothing.. What a waste of energy.

    Power tools cannot be used in 1900 because electricity was not easily available. Can anyone replicate that power tool in 1900 ? Cannot.

    Supporting ecosystem
    If you were to time travel yourself and a brand new and best 4WD SUV, tractors or any modern conveniences back to 1900s, you will realize that you can only use them for a short while. Let us assume that you transported a huge tank of gasoline/petrol/diesel, you will soon realize that if your puncture your tire, you have no way to repair the leak If your windscreen cracks, you have no way to change it. If your car or tractor breaks down, you cannot even tow it back. Will the locals in 1900s help you? yes, just to tow it back to your place and it will be a piece of junk because no one knows how to repair it and they have no idea how to replicate the parts. If you want to fully utilize the modern conveniences, you need to bring along everything (the ecosystem) with you. That includes everything and everyone. Tesla? you cannot even charge it unless you have a way to generate electricity. New cars/trucks/tractors are full of electronics. They need special people, special tools (and yes electricity and internet) to diagnose what happen to your car/tractor/truck.

    There was a movie that I saw a long time ago. It was about a US aircraft carrier time travel back to the days of World War 2 where Japan was about to attack Pearl Harbour. If the aircraft carrier was a 1960s type of aircraft carrier and its jet planes, the people of 1940s may still be able to use/repair them. However, if you send back the 2010s version of military equipment, it is just as good as junk once the tools/equipment/parts spoil because no one knows how to repair them easily. They are all too complex and top secret (only certain people know how to repair them).

    So, after writing all these paragraphs above, what is my point?

    ** In a post apocalyptic world, only the delusional will say they can salvage parts of the collapsed society and make things work.

    • difficult to replicate a steam engine with 1500s ”technology”

      the power of steam relies on the close tolerances of the machined cylinder–ie metal cutting/finishing

      same applied to gun barrels of relevant eras

      • CTG says:

        They can learn, they can try to do it and there is a chance they can do it. But this?

        • Kowalainen says:

          Those 6 assembled PCB’s look quite rustic.

          Here is one that is above and beyond:

          This is only the wiring. Modern PCB’s is almost of the complexity of the semiconductor devices that sits on top and bottom of them.

    • xabier says:

      Exactly, CTG,: what I’ve summarised as ‘kicking the rungs out as you climb the ladder’.

      I’ve been reading about early aviators, the trans (no, not that kind of Trans!) and inter-continental flyers. Amazing what the mechanics could do when they crashed with some simple tools and some wire, cloth, etc.

      In contrast, I watched a film about elite British soldiers in Iraq: when some computerised element failed on one of their – admittedly fantastic and very expensive – trucks, the mechanic could hardly do a thing, and they had to limp home after barely starting the tour, and very vulnerable. In the 1940’s, he’d have had that truck up and running, or cannibalised it for parts.

      The first species to do itself in through sheer inventiveness?

      • CTG says:

        I will always remember what you said many years ago in your posts here… “‘kicking the rungs out as you climb the ladder”

      • JesseJames says:

        Read Grapes of Wrath about how they repaired their Model T mid trip. It is an amazing story. CTG, you are correct… when it goes it will be spectacular.

      • Artleads says:

        And the new things are ugly. The most beautiful vehicles might be the skeletal boxy ones built before 1920. Follow the beauty.

    • xabier says:

      People will starve to death in the shadow of wind turbines they can’t even reach…..

    • milan says:

      @ CTG
      You remind me of a guy ‘greek extraction’ who back in the late 1970,s decided to ship over to Greece a brand new Camaro. He had fun with it driving the roads of Greece looking like a big shot with his American Muscle until lol what you have described happened to him.
      Thanks for memory lane CTG lol

    • Fast Eddy says:

      And remember how streaming p orn (or sports) was impossible 20 years ago?

      How could we ever go back!

  8. Uncle Bill says:

    The NEW Economics of Scale..

    The U.S. Postal Service lost almost $4 billion in 2018 even as package deliveries rose, according to results released on Wednesday, potentially giving U.S. President Donald Trump ammunition against Amazon.com Inc (AMZN.O), which he claims pays too little for the agency’s services.

    Trump, without presenting evidence, has accused the world’s largest online retailer repeatedly over the past year of taking advantage of USPS by not paying enough for deliveries to make the service profitable
    https://mobile.reuters.com/article/amp/idUSKCN1NJ2HS

    The new norm…pile on the debt until you exit out the door…
    P.S. is Amazon turning a profit!?

    • Greg Machala says:

      And for the Average Joe, shipping costs are incredibly high. I used to trade and ship a lot of car parts on Ebay. Shipping costs for me have tripled over the last 10 years. Shippers are hitting the Average Joe shipper to try to offset all their losses shipping for the Wal-Marts and the Amazons. If things could continue to go the way they are, shipping would only be used by mega corporations. It seems that would then bankrupt the shipping companies as most of their shipping would be below costs. If shippers relied only on a handful of bulk shippers like Wal-Mart and Amazon they would loose all their business if Wal-Mart and Amazon walked away. The shipper would be trapped. It is becoming increasingly clear to me that centralizing retail (like Amazon is trying to do), will not work by itself. There has to be a thriving middle and working class that underlies the economy of scale to really make things work. Amazon is chasing the dust of what was a thriving middle class thinking they have a valid business model. Amazon will bankrupt suppliers and shippers by trying to monopolizing their services.

      • Uncle Bill says:

        Recently, Amazon has started up a delivery service enticing independent operators to slepp their good to their final addresses. See several plain white vans in my neighborhood doing such, often late at night!!! Seems “contractors” can be utilized in a more efficient, profitable structure. Same system is in place at airports..more and more contract workers not directly hired by the airlines….we are going backwards…

        • aaaa says:

          My local newspaper was talking about people calling up and reporting white vans in town. Amazon is basically bringing chinese-tier management practices to America, i.e., anti-worker.. no, anti-human

  9. CTG says:

    One of the interesting thing that happened in the 1980s when there were financial “liberalization” was that it started a process that ultimately will end up destroying civilization. It was called “short-termism”. Many large corporations think only about quarters instead of long term because of this liberalization. Evey thing is about meeting the numbers today at the expense of tomorrow. The “tomorrow” or 1980s is “today”. Yes, what we sowed in 1980, we reaped in now.

    GE is one good example. Do you think the existential crisis that happened today was a result of something bad happening in 2016 or 2017? No. It is not. It started probably when Welch was there.

    JIT is another example. People think about inventory as money that is stuck and they pushed all the inventory back up the supply chain until the source. They don’t want to hold parts because it is money to them. They want their supplier to hold for them and the supplier of the supplier will hold for them. As the chains become too long due to globalization and the increase in complexity (internet toaster or fridge anyone?), the entire supply chain became too convoluted and interconnected (supply chain used to a subject in school but now, you can even get a degree or masters in supply chain – that is complexity). With the source holding all the inventory, it is very difficult for the inventory to flow down quickly to the end users if there is a disruption.

    https://www.ukessays.com/essays/information-technology/dells-just-in-time-inventory-management-system-business-essay.php

    “Interconnectedness”- (new word) – we are essentially living on “luck” and “low cost energy” when it comes to supply chain. We are living in a circular economy and when there is a break somewhere, it will be felt somewhere else instantly.

    There is just anecdote that I heard a few decades ago (unverified claims) but it showed what a circular argument is – One day, Steve Jobs (Apple CEO) went to the office Cray Supercomputers. He walked in and talk to the receptionist that he wanted to buy a supercomputer. The receptionist was surprised because no one will actually walked in and say they want to buy a supercomputer. She lead Steve in and set up an appointment with Seymour Cray. They sat down and discussed. Seymour asked Steve on the reason why he needed a Cary Supercomputer. Steve replied that he needed on to design his latest Apply computers. Seymour laughed because they use Apple computers to design the Cray Supercomputers.

    Now just imagine a food processor (say canning chicken soup) has a JIT system where the chicken stock, cans,etc are all under JIT. They keep about one day’s worth of inventory with them and they will make them based on the order they received. To cut cost, they do not even want to hire truck drivers and all their IT systems, HR and accounts are all outsourced. The logistics company whom this food processor hires also outsourced (this is the “interconnectedness”) some of their trucks because some work are seasonal and they just don’t want to hire them. One small trucking company managed to get this business from this logistic company. This small company is poorly run and when the financial crisis starts (like in 2008 at the point where everything froze) they have problem with cash flow and they closed down immediately leaving all the workers stranded (when they report to work the next day). The logistics company that contracted them are screwed because it needs the trucks to carry cans from the aluminium can makers to the chicken food processor. They have only a few hundred cans and without the cans, the local supermarkets will not have any food 3 days later.

    Now think about, the food processor outsourced the trucking, IT systems, HR, finance. The IT company who contracted this may also outsource some to India, etc. The accountant or HR “supplier” may also do the same. The can factory that is supplying to this company may also do the same. The levels of “interconnectedness” is just too mind boggling that many just (1) don’t understand how fragile it is (2)too complex to even comprehend how it works and how one part can bring the other down. (3) It is heled together by the glue of “cheap energy” and “banking/finance/credit/trade financing”

    In Asia, it is very common for companies to go the bank and show the bank that they have a large order for a reputable company and this company wants the bank to give a loan so that they can produce for this order. International trades requires LC (letter of credit). I have seen so many cases of companies shutting down their doors immediately without any warning when their cash flow has gone negative and they have no access to credit. The workers who turned up the next step found that the company is already bankrupt and they get no wages. It is very common in Asia.

    Now imagine the “interconnectedness” between financial companies after the liberalization that started in 1980. Exotic products, financial services, etc. I sell to you, you sell to him. I underwrite yours and you underwrite hers. It is a tangled web, same like the example above but much more complex and the sum of money are orders of magnitude higher.

    So, what is my point

    1. When it crashes, it will be spectacular and JIT and population overshoot in urban areas will be in big trouble. The amount of ‘credit/money” is just way too much even compared to 2008. It is always the straw hat broke the camel’s back. It is just that we don’t what straw that will be.

    2. Compared to 2015, 2016, 2017, there are way too many indicators that points to a very bad situation – falling credit, failing companies, falling trade, housing pricing slumping, etc. These were not present in 2012-2017. It was rising and there are many optimists than realist in those years.

    3. Interest rates goes back to zero will not help to make the property prices go up again because people (buyers) are just “too tired/weak/broke” buy.

    Lastly – almost everyone cannot accept – our system must grown in order to continue. Without growth, our system will collapse. People talk about China has USD1T in reserves. They have a long way to go. Why they say that? It is because they think that the problem will only start when the USD1T becomes zero. NO! that is not the case. Just the fact that they want to draw down may be the trigger. They don’t even need to drawdown any money to trigger this event.

    You may have a lot of money, gold or silver at home but you have no way to buy any food when the time comes because the food is made by machines made in China with parts from Japan, Singapore and the wheat comes from Ukraine with harvesters made in USA from parts from UK, Europe, etc.

    That is why I just keep to myself when people say that it will drag on for another 3, 5 or 10 years. This is exactly the same type of person who thinks that China will only have a problem when their reserves drop from USD1T to zero. The world does not work that way.

    • theblondbeast says:

      With you except for the China USD1T part. All they can do with this money (which by the way only exists digitally on a computer at the US federal reserve) is use it to buy goods and services priced in dollars – which would create demand/jobs. Possible inflation if they did it quickly – but so what, aren’t we afraid of a deflationary death spiral?

      So if China draws down these savings all it means is that (a) the Federal reserve strikes a key moving dollars from digital savings to digital checking, (b) holders of these dollars can now make purchases. The degree of inflation this purchasing power causes (in goods denominated in U.S. dollars) is related to the ability to increase production of said goods.

      • CTG says:

        Actually my point for the USD1T (China)is just to show that things need not go down to zero before bad things happen. You can use Sears. The stock price need not go down to zero before it goes into bankruptcy. The 1T need not go down to zero before bad things happen. People always say that they have 1T and can last a long time. My point is that, these people think that it needs to go down to zero before bad things happen.

        When Enron went down, it was at its peak and when the accounting fraud was discovered, it just went down to zero instantly. Same goes to Lehman Bros.

    • Duncan Idaho says:

      Yep-
      The 80’s were a strong turn to the right.
      Reagan, Thatcher, and all the rest of the rape and scrape people.

    • Greg Machala says:

      It isn’t rocket science to understand that our growth based financial system cannot continue indefinitely. The fact that there are so many dependencies in our industrialized economy makes me wary that the whole system is prone to catastrophic and very rapid failure. We have literally built a house of cards on a foundation of a house of cards. And we have repeated that blunder a thousand times over by now. Nearly every aspect of human existence (medicine, food, water, clothing, shelter etc) for billions of people on this planet depend on this house of cards to survive. One small example of this is the idea of careers.

      Persons in one career assume all the other careers will remain functioning but take this idea completely for granted. There are people today who literally think they built their own livelihood themselves. The invisible machine that made this livelihood possible remains hidden. For those who care to look, the machine is not well. The people who made its gears turn can no longer afford to live on its output of goods and services. To make matters worse, careers are so specialized now that no one sees the big picture and too many assumptions are being made.

      And of course all this takes ever increasing amounts of energy to function. This is yet another house of cards whose initial abundance gave the impression that humans can essentially have infinite growth in a finite world.

      • Dan says:

        I was on the road working yesterday and caught a portion of the Rush Limbaugh radio show and he says not to worry. I found it so insane I even tried to call into the show to explain that it was debt pulling future consumption / resources forward not what he was proclaiming. I know it would have been futile to go against the self imposed narrative – the narrative most people have “that we’ll just invent our way out of the box we are currently in”, but I found it to be maddening. I arrived at the job site and had to hang up while on hold.

        Here is an excerpt:

        All of this stuff, it was all part of the psychological game that was needed to make people believe in the finite supply of things, and the reason for that was ultimately to raise prices on it all. But you don’t hear about that anymore, because the whole idea that I’ll comes from fossilized dinosaurs is gone. Oil is being produced all the time. The earth is making oil everywhere. We just have to find it.

        Remember it wasn’t long ago the United States, you would hear this in political campaigns every year, “We’ve got to do something about the dependence on foreign oil. We are too subject to the whims of people who hate us, like the militant Islamists in Saudi Arabia.”

        How many campaigns did we put up with this, that we had no oil, that American oil wells are being capped because producers couldn’t make any money, they’re being capped forever. U.S. oil production plummeting, down to absolutely nothing. We’ve become totally dependent on Saudi Arabia or anywhere else we could buy it, the Russians.

        From then — and that’s not very long ago — we are now among the largest exporters of oil and producers of oil in the world. Now, how did this happen? How did we go from being total prisoners and totally dependent on the Saudis to now having more oil than they do? How did it happen? A simple invention called fracking, invented and created by the human mind.

        We went from a belief of finite fossil fuel resources, so finite that your grandkids might run out during their lifetimes, to now we are presented with an abundance of those same fossil fuels and abundance of oil to the point that we have become among the largest producers in the world. How does that happen?

        https://www.rushlimbaugh.com/daily/2018/11/14/the-human-mind-is-the-answer-to-every-liberal-apocalypse/

        • xabier says:

          Rush Limbaugh: incredible…….so ‘Liberals’ are the only people who ‘believe’ in a finite world, rather than it being a self-evident fact?

          • Dan says:

            X,

            That is a very inconvenient fact that does not fit the narrative and our way of life. A life built on JIT systems, massive debt, and a world of nearly 8 billion people.

        • folks listen to rush because he tells them what they want to hear—thats how the don got elected

          life’s easier like that

          • We are all equal says:

            Liberals believe in that solar panels and other green products can allow BAU to continue indefinitely.
            The only real threats to BAU are Co2 emissions according to liberals.

            We can see this point of view embodied in people like Elon Musk and Silicon Valley.

            • Dan says:

              Huh? And Rush the spokesperson for hard core conservatism can’t grasp the concept of ERORI with debt pulling it forward. By god its all those poor people that rang up all that debt. Jesus Fing Christ their lobbying power is unbelievable. Who gives a flying rip about global warming at this point? You are damned if you do and damned if you don’t.

            • theblondbeast says:

              They believe in one additional threat – being mean. The belief that we only have enemies of our own making, of course, because there are plenty of resources for all.

            • Greg Machala says:

              “Liberals believe in that solar panels and other green products can allow BAU to continue indefinitely.” – You mean uninformed people not liberals! A liberal would want to use fossil fuels liberally not conservatively. A conservative would want to conserve energy!

          • JesseJames says:

            How simpleton a comment that is Norm….truth is, folks, both liberal and conservative, listen to politicians ( and other “leaders”) because they tell them what they want to hear—thats how the pols get elected

        • Greg Machala says:

          “How did we go from being total prisoners and totally dependent on the Saudis to now having more oil than they do? How did it happen? A simple invention called fracking, invented and created by the human mind.” – We did it by using massive amounts of new debt to pump millions of gallons of (essentially toxic waste) solvent deep into the ground (contamination ground water and causing earthquakes) to fracture very dense rocks to extract a small fraction of their oil content. Never mind that these types of wells deplete incredibly fast compared to conventional Saudi oil wells. No, we have done nothing but extend and pretend. We went from being prisoners of foreign oil to being debt slaves. These fracking companies are all in the red. The production is not profitable. The US oil production “revolution” is only possible as long as we can import cheap conventional crude to “finance” the extraction of shale oi.

        • Fast Eddy says:

          Rush has a bad case of https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect

          Either that or we are all really over-thinking a non-problem!

          Maybe oil is like weeds… you tear them out… but they just keep on regrowing….

      • xabier says:

        ‘Prone to catastrophe’ is probably the best way to put it: compare to the bio-mass civilization which could be hit by something like the Black Death – a real catastrophe – and yet survive.

      • el mar says:

        Right now the world ain’t looking too hot
        Unless you’re dead you must know what I mean
        There’s a lot we lost (……..) nothing to see
        They say they’ve got an answer but I think it’s all a dream

        Well it’s easy to forget about it, just get high
        Live up in your castle in the sky
        But you still breathe in the same air as me
        Eating, drinking, poisoning where it should be

        We’re messin’ up the land
        We’re messin’ up the sea
        We’re messin’ up the air
        Messin’ up on you and me
        (repeat)

        Things are worse than going wrong
        Here we still go rushing proudly on
        Take a look around, (like?) around you everywhere
        This must be the age, the age of I don’t care

        Right now the world ain’t looking too hot
        Unless you’re dead you must know what I mean
        You can read it in the papers, hear it on the news
        The earth is going down, going down in pollution blues

    • Fast Eddy says:

      I could never stand that sun of a bi tch Welch… the sanctimonious jack a ss…. with the voice of a pre-pubescent school boy …. and his wife… someone should stuff a baseball in her mouth to shut her up…

      They both came across as if they believed they were the greatest thing since sliced bread… Jack even had a book about his ‘system’

      Well his system was a pile of f789ing sh it… he simply financialized GE …. and when 2008 hit his system was exposed …. and needed a massive bailout https://seekingalpha.com/article/105984-general-electric-gets-a-140b-bailout-whats-the-point-of-aaa

      The rat and his More onic wife don’t say too much these days… I guess they are under a rock or down in the rat hole… where they belong

      As for your wise words on JIT… the thing is…. most people do not believe it can possibly come to that…. they believe in BAU Lite or that ‘They’ would never allow the system to collapse.

      Of course people who believe this nonsense — particularly after seeing what nearly happened in 2008… are just plain f789ing stoooopid.

      Then there are those who are completely unaware of what happened in 2008…. I had the window repair man here the other day and he was complaining about the high cost of living in Queenstown… particularly the property prices… he expects the madness to end….

      And I mentioned… ya … we are due for another 2008 situation… a big correction ….

      He said 2008? That’s when I moved to Queenstown – what happened in 2008???

      This is about the depth of the understanding of the vast majority of people…. they are clueless…. and they do not want to know

      • Dan says:

        Scary isn’t it? 2008 was such a turning point and somehow the world didn’t end. I wonder what happens when faith and credit meets energy.

    • Slow Paul says:

      Great stuff CTG. But what I’m not fully grasping is how this will grind everything to a halt instantaneously. My view is that JIT supply chains will fail in pieces and chunks at a time, not necessarily all at once, and then people will manage with their existing stock for a while until that also dries out.

      E.g. if the Volkswagen factory suddenly stops receiving gaskets and pistons for their engines, they will stop making _new_ cars of that model/brand. But there are still plenty of existing cars both on the road and in storage, to be driven as the day before or scavenged for parts.

      Same goes for the financial system. There will probably be a collapse at some point where nobody’s credit is good. But people will not sit on their behinds and starve. The ukrainians will call Russia for help, the UK will call France, and so on making ad-hoc deals, this-for-that, until a somewhat stable situation is reached. This won’t be BAU as we know it but it might work for a while in regions where the food/energy-to-people-ratio is decent.

      • xabier says:

        At the moment the VW factory in Pamplona is actually suspending production for random 5-9 day periods, claiming that it ‘can’t source the right (diesel) engines’. And it has told the workers that it ‘can’t foresee when things will return to normal’. Stop, start, stop, start.

        But of course, this is not due to finance problems in VW as far as one can tell. If anyone has heard of this happening at other VW plants it would be interesting.

      • in a city with 8m people—the food/energy ratio to people is non existent

        all developed nations now have multi-million cities that are forced to suck in energy from the surrounding country in which they exist

        London, as one example uses the energy equivalent of 2.5X the rest of the UK. The same applies everywhere.

        Once the system begins to fail (ie foodtrucks no longer supply city shops) there will be a tsunami of people leaving the cities. They will overwhelm surrounding farmland and consume what’s there.
        Then, just like a tsunami—their force will collapse because there will be no energy left to sustain the outflow.

        Those who live through that might be able to sustain some kind of basic existence.

        A horrible forecast I agree, but we built our world on oil. There doesn’t appear to be an alternative

      • Harry McGibbs says:

        In his ‘Trade Off’ paper, David Korowicz cites this study by the US Trucking Association, which gives a timeline of what would happen in the event that trucks ceased operating:

      • CTG says:

        Slow Paul, probably you are not exposed to HIT or financial systems. JIT is either fully functional or not. It is an extremely complex system that is solely dependent on all parts/components working in sync. If any of the critical nodes are not functioning then the whole system collapses. Same as in financial systems. It works out does not. Kind of like pregnant but not a little bit pregnant. I don’t blame people for not understand. Unless you are involved in it, you will take it for granted that there will always be good at the supermarket and that the parts of any equipment will always be available. At mist you wait for a few days for it to arrive.

    • The 1980s was the beginning of many related bad trends.

      Employees suddenly started to become something that companies used and disposed of. Before that, companies were more concerned about training and keeping their employees.

      Utilities had been paid to keep up their infrastructure, prior to the push toward deregulation and “competition.” Once everything was based on the low bid, the trend was to defer maintenance as long as possible. Overuse infrastructure. Then we end up with the California fire problem.

  10. Chrome Mags says:

    https://www.cnbc.com/2018/11/15/us-china-trade-war-beijing-written-response-to-us-trade-form-demands.html

    “China has delivered a written response to U.S. demands for wide-ranging trade reforms, three U.S. government sources said on Wednesday, a move that could trigger negotiations to bring an end to a withering trade war between the world’s top economies. U.S. President Donald Trump has imposed tariffs on $250 billion of Chinese imports to force concessions from Beijing on the list of demands that would change the terms of trade between the two countries. China has responded with import tariffs on U.S. goods. Trump is expected to meet Chinese President Xi Jinping on the sidelines of a G20 summit in Argentina at the end of November and in early December.”

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