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. Jan says:

    I cannot find any warning that a “second Great Depression” is looming in the IMF World Outlook. The Guardian writes: ‘In a separate analysis, as part of the IMF’s annual economic outlook, it warned that “large challenges loom for the global economy to prevent a second Great Depression’.”

    I did not find that in the report itself. There it reads: “The policy efforts of the past decade helped forestall an even worse outcome with deeper output and employment losses. After faltering at times over the past 10 years, the global economic recovery experienced a long-awaited synchronized growth upswing in 2017–18. Nevertheless, large challenges loom for the global economy. The extraordinary policy actions to prevent a second Great Depression have had important side effects. The extended period of ultralow interest rates in advanced economies has contributed to the buildup of financial vulnerabilities, as discussed in the April and October 2018 GFSRs.”

    • We are all equal says:

      You have quoted a statement that avoids saying that the actions taken to avoid a Great Depression may not have done anything but delay another Great Depression by being vague and misleading. This is what people learn in graduate school, how to be non-specific and inconclusive,that way no policymakers or think tank people in academia can be blamed for the next downturn.

    • xabier says:

      One just inserts ‘postponed’ in the place of ‘forestall’.

      A magnificent postponement of the the inevitable: I hope everyone enjoyed the last ten years, it was a generous reprieve……

      We – the privileged – may look back on these as the Golden Years of full stomachs and safety.

    • Thanks for highlighting this paragraph of language intended to obscure as much as enlighten. If a person substitutes “postpone” for “forestall,” a much clearer view is given.

      I looked up GFSR. They are “Global Financial Stability Reports.” This is a link to the October 2018 version. https://www.imf.org/en/Publications/GFSR/Issues/2018/09/25/Global-Financial-Stability-Report-October-2018

      The following is the IMF’s summary, with paragraph breaks added for readability. Also, I added emphasis for some of their words:

      The October 2018 Global Financial Stability Report (GFSR) finds that global near-term risks to financial stability have increased somewhat, reflecting mounting pressures in emerging market economies and escalating trade tensions. These risks, while still moderate, could increase significantly. An intensification of concerns about emerging markets, a broader rise in trade tensions, the realization of political and policy uncertainty, or a faster-than-expected tightening in monetary normalization could all lead to a sharp tightening in financial conditions.

      Medium-term financial stability risks remain elevated, driven by high non–financial sector leverage in advanced economies and rising external borrowing in emerging markets. Although the global banking system is stronger than before the crisis, it is exposed to highly indebted borrowers as well as to opaque and illiquid assets and foreign currency rollover risks. This all raises the urgency for policymakers to step up efforts to boost the financial system’s resilience by completing the financial regulatory reform agenda as well as developing and deploying macroprudential policy tools.

      This GFSR also takes stock of global regulatory reform 10 years after the global financial crisis. It reviews the main precrisis failings in financial sector oversight and assesses the progress in implementation of the reform agenda designed to address these failings. It also looks at whether shifts in market structure and risks in the global financial system since the crisis have been in the direction the new regulatory agenda intended, that is, toward greater safety.

      It finds that the broad agenda set by the international community has given rise to new standards that have contributed to a more resilient financial system—one that is less leveraged, more liquid, and better and more intensively supervised, especially at large banks. The forms of shadow banking more closely related to the global financial crisis have been curtailed, and most countries now have macroprudential authorities and some tools with which to oversee and contain risks to the whole financial system. The chapter also identifies areas in which consolidation or further progress is needed and warns against rolling back reforms, which might make the global financial system less safe.

      So, in summary, IMF says that near term risks have increased somewhat. Medium term risks remain elevated. And global regulatory reform should give a more resilient financial system. This is a report intended to reassure, not to alarm people.

      • xabier says:

        These people would watch a sunami rolling in and merely say:

        ‘Risk is somewhat – but only somewhat, mind – elevated in the near to medium term.’

      • Fast Eddy says:

        We must never forget…. ‘when it gets serious – you have to lie’

    • Jan says:

      Tanks, all, for discussion! Just wanted to point out that the source for the citation seems to be unreliable – though it was published by the Guardian! A citation must be (at least more or less) a citation and not an interpretation. Maybe someone has access to the mentioned “separated analysis”? I think a critical discussion of sources helps the credibility of the matter.

  2. Harry McGibbs says:

    “Financial markets are headed for an unusually bad year, with the overall global bond and equity universe shrinking by a cumulative $5tn since the start of 2018 — the biggest contraction of capital markets since the financial crisis.

    “Parallel declines in both bonds and equities are rare, as stocks tend to do better when growth is robust and fixed income thrives more in subdued or poor economic conditions. In 2008 the global equity market shrank by more than $18tn, even as the bond market was buoyed by investors desperate for the relative safety it offers.

    “But 2018 is starting to look like an inflection point for the post-crisis market era, as central banks have started paring back monetary stimulus. The Federal Reserve has led the charge, lifting even three-month Treasury yields to a 10-year high of 2.37 per cent this week. That has left almost every major asset class nursing losses in 2018…”

    https://www.ft.com/content/343736c0-e9b0-11e8-a34c-663b3f553b35

  3. Harry McGibbs says:

    “Asia-Pacific leaders failed to agree on a communique at a summit in Papua New Guinea on Sunday for the first time in their history as deep divisions between the United States and China over trade and investment stymied cooperation.”

    “These two countries [China and the US] were pushing each other so much that the chair couldn’t see an option to bridge them,” said the diplomat, speaking on condition of anonymity.”

    https://www.cnbc.com/2018/11/19/trade-war-apec-fails-to-reach-consensus-as-us-china-divide-deepens.html

  4. Harry McGibbs says:

    “… borrowing by governments and corporate entities on Wall Street reached US$6.8 trillion in 2017. Global total debt hit US$247 trillion in the first quarter of 2018. These are unprecedented numbers and the associated risks are high.

    “An important financial barometer is the Damocles Index. The Index has called to attention the risk of exchange rate crises for Argentina, Egypt, Pakistan, South Africa, Sri Lanka, Turkey and Ukraine. Apart from South Africa, the other six countries are already in or facing a currency crisis and seeking assistance from the IMF.”

    http://www.eastasiaforum.org/2018/11/17/is-an-asean-currency-crisis-looming/

  5. Harry McGibbs says:

    “More Chinese companies could default on their debts issued in U.S. dollars, experts warn. They say that the rising cost of borrowing and a weakening Chinese yuan could see more firms fail to meet upcoming payments.

    “Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management in Hong Kong, stressed that he currently sees no systemic risks, but noted that financial strains often begin in one area before spreading. “I think the government needs to be very mindful of some of these potential links,” he said, adding that the property sector should be foremost in mind.”

    https://www.cnbc.com/2018/11/19/china-corporate-bonds-experts-warn-of-more-defaults.html

    • Harry McGibbs says:

      “No wonder the rise in oil prices has started to reverse. A slowdown in China followed by the US deprives the global economy of its two biggest engines. If the world economy is akin to an airliner, those two engines are not just necessary for lift-off – they are needed to keep the plane in the air.”

      https://www.theguardian.com/business/2018/nov/18/oil-price-tumbling-warning-turbulent-times-world-economy

      • Right! Not enough demand!

      • Chrome Mags says:

        We haven’t even gotten to the rough patch of tariffs between US/China beginning in Jan. 2019, but then again it could be oil traders are anticipating that ahead of time. My take on it is Trump sees the tariffs with China as one of his signature efforts (possible achievements), so it seems unlikely he’ll back off and China seems very stubborn to make any changes. I read something last evening in which a Chinese consultant for US/China goods, said China won’t bend.

  6. Baby Doomer says:

    France’s Macron: Europe must prevent ‘global chaos’

    https://www.bbc.com/news/world-europe-46254393

    • “Growth is likely to slow significantly next year, from a recent pace of 3.5 percent-plus to roughly our 1.75 percent estimate of potential by end-2019,”

      This is not something I would get excited about.

    • Chrome Mags says:

      “Goldman sees the Fed raising rates this December and then four more times in 2019. It will do so because inflation will reach 2.25 percent by the end of next year because of tariffs and increasing wages, the bank predicted, noting there was also a chance of an “inflation overshoot.”

      Things could be rough next year. Feather those nest eggs people.

  7. Yoshua says:

    Mrs DNA

    Chromosome XX female
    Chromosome XY male
    Chromosome YY do not exist

    The female is the original and true life form.

    • jupiviv says:

      Earliest life forms were as-exual, just like the vast majority of life forms today. Viruses aren’t even cellular.

      • Yoshua says:

        Some insects turns asexual and the females start to clone them selves. The soon dominate the area, but are at risk to die out from viruses, since they are the same, with same immunity against viruses.

  8. Baby Doomer says:

    America’s largest bridal store “David’s Bridal” files for Chapter 11 bankruptcy

    https://www.usatoday.com/story/money/2018/11/19/davids-bridal-bankruptcy/2053083002/

    America’s largest Toy store, Guitar store, mattress store, and bridal store..All file for bankruptcy this year..Dropping like flies..

    • Duncan Idaho says:

      I AM THE MOB on Mon, 19th Nov 2018 8:46 am

      America’s largest bridal store “David’s Bridal” files for Chapter 11 bankruptcy

      Are you the same?

      This was 8:46- yours was 9:46

    • We are all equal says:

      Reasons
      Women are empowered to work and therefore will not get married and start families unless the suiter earns very high wages.

      Toys are bought for children. Less women are having less children.
      People usually buy a new mattress for children or if they are getting into a serious relationship.

      Bridal stores profits, I imagine, are driven by heterosexual marriages.
      Two lesbians wearing tuxedos doesn’t do much for bridal stores.
      Gay couples don’t buy into tradition and a lot of what bridal stores play into is tradition.

      A lot of heterosexual people of child-bearing age are too poor to afford a traditional marriage.

      Music software has devalued real musical instruments.

      Comments are welcome.

  9. jupiviv says:

    Since Crazy Eddy has recently seen fit to conjure up his ghost, we might as well remind ourselves of what old Noam had to say about the “science” Mr. Lippmann created:

    “As we have stressed throughout this book, the U.S. media do not function in the manner of the propaganda system of a totalitarian state. Rather, they permit—indeed, encourage—spirited debate, criticism, and dissent, as long as these remain faithfully within the system of presuppositions and principles that constitute an elite consensus, a system so powerful as to be internalized largely without awareness.”

    The “elite consensus” doesn’t, and has never, existed. What is really at work is the reticence of human beings in general to question the very foundations of their way of life, or BAU. If one asks enough questions eventually one will entail oneself.

    • Fast Eddy says:

      I used to like Gnome… but now I just think he is another stuuuupid moreon…. as I am sure Bernays would also.

      • jupiviv says:

        Lol…if you had actually read Bernays you might know why he would call all of us on OFW *dangerous* mo-rons. Today he’d have been a techno-disney-topian policy mogul. Go ahead and educate yourself:

        https://www.goodreads.com/book/show/24432722-take-your-place-at-the-peace-table

        • Fast Eddy says:

          I don’t think so.

          I think he’s be by my side … anonymously …. along with the other jackals (the CORE) smashing in the heads of the stuuuupid more ons that attempt to hijack FW….

          If anything, he would have a great deal of respect for the very few on FW — who despite being bombarded with propaganda (PR) from cradle to grave — have managed to see through the matrix….

          He was rather vociferous in his dismissal of just about everyone … repeatedly calling them stuuuuuupid f789ing id iots.

          Remind you of anyone????

          If he is somewhere looking down on FW …. he is smiling whenever the word DelusiSTAN is posted… because it is his creation.

          Oceans of idjits…. even if you provide them with the truth … they will continue along their Path of Re tar Dation.

          Bernays must have marvelled at that!

          • jupiviv says:

            You seem to think he was an evil genius bent on thought control for all save those edgily nihilistic enough to join his secret evil cabal.

            That is one of the many reasons he would have nothing but contempt for you.

            • Fast Eddy says:

              Evil? Not at all….

              Genius? Most definitely.

              In case you missed it… I agree with him … just about everyone on this planet is stuuuuupid…. and I might add… dangerous…

              There is nothing more dangerous than a crowd of stuuuupid humans…. they will tear you apart in seconds…

              And that is why humans need to be controlled… that is why real democracy has never been permitted…

              It would only end in tears… and chaos… and violence….

              Fortunately because humans are stuuuupid… they are easily controlled… the tools of control are the MSM… the education system… religion … debt … and if those don’t work… open fire on the basturds with live ammo ….

            • jupiviv says:

              Yes you agree with the edgily nihilistic version of him you have created, which pretty much amounts to fictional evil genius. The fact you don’t think its evil doesn’t make it realistic.

              Bernays wanted a small group of well-meaning and enlightened people like himself to implement a liberal/progressive/socialist utopia for everyone. So yeah, deranged mo-rons like yourself wouldn’t even be worthy of his disgust.

            • Fast Eddy says:

              I reckon Eddy were alive … and he was following FW…. he’d reach out … and ask Fast Eddy to Join the Team.

              We have a great deal of common ground…. we agree that most people are stuuuupid more-ons … who deserve nothing more than condescension … we agree that they are as easily controlled as rats in a maze … we agree that they are very dangerous… making it critical that they be told what to think and do….

              I could of course never vie for the top spot in the matrix machine…. because I have a normal nose…

            • jupiviv says:

              Bernays today would be decrying Trump and calling for car-bon taxes+re-newables wave, and he’d STILL be smarter than you.

    • Kurt says:

      I think you can impale yourself, but you can’t entail yourself.

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