Many people, including most Peak Oilers, expect that oil prices will rise endlessly. They expect rising oil prices because, over time, companies find it necessary to access more difficult-to-extract oil. Accessing such oil tends to be increasingly expensive because it tends to require the use of greater quantities of resources and more advanced technology. This issue is sometimes referred to as diminishing returns. Figure 1 shows how oil prices might be expected to rise, if the higher costs encountered as a result of diminishing returns can be fully recovered from the ultimate customers of this oil.
Figure 1. Chart showing expected long-term rise in oil prices as the full cost of oil production becomes increasingly expensive due to diminishing returns.
In my view, this analysis suggesting ever-rising prices is incomplete. After a point, prices can’t really keep up with rising costs because the wages of many workers lag behind the growing cost of extraction.
The economy is a networked system facing many pressures, including a growing level of debt and the rising use of technology. When these pressures are considered, my analysis indicates that oil prices may fall too low for producers, rather than rise too high for consumers. Oil companies may close down if prices remain too low. Because of this, low oil prices should be of just as much concern as high oil prices.
In recent years, we have heard a great deal about the possibility of Peak Oil, including high oil prices. If the issue we are facing is really prices that are too low for producers, then there seems to be the possibility of a different limits issue, called Collapse. Many early economies seem to have collapsed as they reached resource limits. Collapse seems to be characterized by growing wealth disparity, inadequate wages for non-elite workers, failing governments, debt defaults, resource wars, and epidemics. Eventually, population associated with collapsed economies may fall very low or completely disappear. As Collapse approaches, commodity prices seem to be low, rather than high.
The low oil prices we have been seeing recently fit in disturbingly well with the hypothesis that the world economy is reaching affordability limits for a wide range of commodities, nearly all of which are subject to diminishing returns. This is a different problem than most researchers have been concerned about. In this article, I explain this situation further.
One thing that is a little confusing is the relative roles of diminishing returns and efficiency. I see diminishing returns as being more or less the opposite of growing efficiency.
Figure 2.
The fact that inflation-adjusted oil prices are now much higher than they were in the 1940s to 1960s is a sign that for oil, the contest between diminishing returns and efficiency has basically been won by diminishing returns for over 40 years.
Figure 3.
Oil Prices Cannot Rise Endlessly
It makes no sense for oil prices to rise endlessly, for what is inherently growing inefficiency. Endlessly rising prices for oil would be similar to paying a human laborer more and more for building widgets, during a time that that laborer becomes increasingly disabled. If the number of widgets that the worker can produce in one hour decreases by 50%, logically that worker’s wages should fall by 50%, not rise to make up for his/her growing inefficiency.
The problem with paying higher prices for what is equivalent to growing inefficiency can be hidden for a while, if the economy is growing rapidly enough. The way that the growing inefficiency is hidden is by adding Debt and Complexity (Figure 4).
Figure 4.
Growing complexity is very closely related to “Technology will save us.” Growing complexity involves the use of more advanced machinery and ever-more specialized workers. Businesses become larger and more hierarchical. International trade becomes increasingly important. Financial products such as derivatives become common.
Growing debt goes hand in hand with growing complexity. Businesses need growing debt to support capital expenditures for their new technology. Consumers find growing debt helpful in affording major purchases, such as homes and vehicles. Governments make debt-like promises of pensions to citizen. Thanks to these promised pensions, families can have fewer children and devote fewer years to child care at home.
The problem with adding complexity and adding debt is that they, too, reach diminishing returns. The easiest (and cheapest) fixes tend to be added first. For example, irrigating a field in a dry area may be an easy and cheap way to fix a problem with inadequate food supply. There may be other approaches that could be used as well, such as breeding crops that do well with little rainfall, but the payback on this investment may be smaller and later.
A major drawback of adding complexity is that doing so tends to increase wage and wealth disparity. When an employer pays high wages to supervisory workers and highly skilled workers, this leaves fewer funds with which to pay less skilled workers. Furthermore, the huge amount of capital goods required in this more complex economy tends to disproportionately benefit workers who are already highly paid. This happens because the owners of shares of stock in companies tend to overlap with employees who are already highly paid. Low paid employees can’t afford such purchases.
The net result of greater wage and wealth disparity is that it becomes increasingly difficult to keep prices high enough for oil producers. The many workers with low wages find it difficult to afford homes and families of their own. Their low purchasing power tends to hold down prices of commodities of all kinds. The higher wages of the highly trained and supervisory staff don’t make up for the shortfall in commodity demand because these highly paid workers spend their wages differently. They tend to spend proportionately more on services rather than on commodity-intensive goods. For example, they may send their children to elite colleges and pay for tax avoidance services. These services use relatively little in the way of commodities.
Once the Economy Slows Too Much, the Whole System Tends to Implode
A growing economy can hide a multitude of problems. Paying back debt with interest is easy, if a worker finds his wages growing. In fact, it doesn’t matter if the growth that supports his growing wages comes from inflationary growth or “real” growth, since debt repayment is typically not adjusted for inflation.
Figure 5. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.
Both real growth and inflationary growth help workers have enough funds left at the end of the period for other goods they need, despite repaying debt with interest.
Once the economy stops growing, the whole system tends to implode. Wage disparity becomes a huge problem. It becomes impossible to repay debt with interest. Young people find that their standards of living are lower than those of their parents. Investments do not appear to be worthwhile without government subsidies. Businesses find that economies of scale no longer work to their advantage. Pension promises become overwhelming, compared to the wages of young people.
The Real Situation with Oil Prices
The real situation with oil prices–and in fact with respect to commodity prices in general–is approximately like that shown in Figure 6.
Figure 6.
What tends to happen is that oil prices tend to fall farther and farther behind what producers require, if they are truly to make adequate reinvestment in new fields and also pay high taxes to their governments. This should not be too surprising because oil prices represent a compromise between what citizens can afford and what producers require.
Figure 7. Illustration indicating that the world has already reached a point where no oil price works for both oil suppliers and oil consumers.
In the years before diminishing returns became too much of a problem (back before 2005, for example), it was possible to find prices that were within an acceptable range for both sellers and buyers. As diminishing returns has become an increasing problem, the price that consumers can afford has tended to fall increasingly far below the price that producers require. This is why oil prices at first fall a little too low for producers, and eventually seem likely to fall far below what producers need to stay in business. The problem is that no price works for both producers and consumers.
Affordability Issues Affect All Commodity Prices, Not Just Oil
We are dealing with a situation in which a growing share of workers (and would be workers) find it difficult to afford a home and family, because of wage disparity issues. Some workers have been displaced from their jobs by robots or by globalization. Some spend many years in advanced schooling and are left with large amounts of debt, making it difficult to afford a home, a family, and other things that many in the older generation were able to take for granted. Many of today’s workers are in low-wage countries; they cannot afford very much of the output of the world economy.
At the same time, diminishing returns affect nearly all commodities, just as they affect oil. Mineral ores are affected by diminishing returns because the highest grade ores tend to be extracted first. Food production is also subject to diminishing returns because population keeps rising, but arable land does not. As a result, each year it is necessary to grow more food per arable acre, leading to a need for more complexity (more irrigation or more fertilizer, or better hybrid seed), often at higher cost.
When the problem of growing wage disparity is matched up with the problem of diminishing returns for the many different types of commodity production, the same problem occurs that occurs with oil. Prices of a wide range of commodities tend to fall below the cost of production–first by a little and, if the debt bubble pops, by a whole lot.
We hear people say, “Of course oil prices will rise. Oil is a necessity.” The thing that they don’t realize is that the problem affects a much bigger “package” of commodities than just oil prices. In fact, finished goods and services of all kinds made with these commodities are also affected, including new homes and vehicles. Thus, the pattern we see of low oil prices, relative to what is required for true profitability, is really an extremely widespread problem.
Interest Rate Policies Affect Affordability
Commodity prices bear surprisingly little relationship to the cost of production. Instead, they seem to depend more on interest rate policies of government agencies. If interest rates rise or fall, this tends to have a big impact on household budgets, because monthly auto payments and home payments depend on interest rates. For example, US interest rates spiked in 1981.
Figure 8. US short and long term interest rates. Graph by FRED.
This spike in interest rates led to a major cutback in energy consumption and in GDP growth.
Figure 9. World GDP Growth versus Energy Consumption Growth, based on data of 2018 BP Statistical Review of World Energy and GDP data in 2010$ amounts, from the World Bank.
Oil prices began to slide, with the higher interest rates.
Figure 10.
Figure 11 indicates that the popping of a debt bubble (mostly relating to US sub-prime housing) sent oil prices down in 2008. Once interest rates were lowered through the US adoption of Quantitative Easing (QE), oil prices rose again. They fell again, when the US discontinued QE.
Figure 11. Figure showing collapsing debt bubble at the time US oil prices peaked, and the use of Quantitative Easing (QE) to stimulate the economy, and thus bring prices back up again.
While these charts show oil prices, there is a tendency for a broad range of commodity prices to move more or less together. This happens because the commodity price issue seems to be driven to a significant extent by the affordability of finished goods and services, including homes, automobiles, and restaurant food.
If the collapse of a major debt bubble occurs again, the world seems likely to experience impacts somewhat similar to those in 2008, depending, of course, on the location(s) and size(s) of the debt bubble(s). A wide variety of commodity prices are likely to fall very low; asset prices may also be affected. This time, however, government organizations seem to have fewer tools for pulling the world economy out of a prolonged slump because interest rates are already very low. Thus, the issues are likely to look more like a widespread economic problem (including far too low commodity prices) than an oil problem.
Lack of Growth in Energy Consumption Per Capita Seems to Lead to Collapse Scenarios
When we look back, the good times from an economic viewpoint occurred when energy consumption per capita (top red parts on Figure 12) were rising rapidly.
Figure 12.
The bad times for the economy were the valleys in Figure 12. Separate labels for these valleys have been added in Figure 13. If energy consumption is not growing relative to the rising world population, collapse in at least a part of the world economy tends to occur.
Figure 13.
The laws of physics tell us that energy consumption is required for movement and for heat. These are the basic processes involved in GDP generation, and in electricity transmission. Thus, it is logical to believe that energy consumption is required for GDP growth. We can see in Figure 9 that growth in energy consumption tends to come before GDP growth, strongly suggesting that it is the cause of GDP growth. This further confirms what the laws of physics tell us.
The fact that partial collapses tend to occur when the growth in energy consumption per capita falls too low is further confirmation of the way the economics system really operates. The Panic of 1857 occurred when the asset price bubble enabled by the California Gold Rush collapsed. Home, farm, and commodity prices fell very low. The problems ultimately were finally resolved in the US Civil War (1861 to 1865).
Similarly, the Depression of the 1930s was preceded by a stock market crash in 1929. During the Great Depression, wage disparity was a major problem. Commodity prices fell very low, as did farm prices. The issues of the Depression were not fully resolved until World War II.
At this point, world growth in energy consumption per capita seems to be falling again. We are also starting to see evidence of some of the same problems associated with earlier collapses: growing wage disparity, growing debt bubbles, and increasingly war-like behavior by world leaders. We should be aware that today’s low oil prices, together with these other symptoms of economic distress, may be pointing to yet another collapse scenario on the horizon.
Oil’s Role in the Economy Is Different From What Many Have Assumed
We have heard for a long time that the world is running out of oil, and we need to find substitutes. The story should have been, “Affordability of all commodities is falling too low, because of diminishing returns and growing wage disparity. We need to find rapidly rising quantities of very, very cheap energy products. We need a cheap substitute for oil. We cannot afford to substitute high-cost energy products for low-cost energy products. High-cost energy products affect the economy too adversely.”
In fact, the whole “Peak Oil” story is not really right. Neither is the “Renewables will save us” story, especially if the renewables require subsidies and are not very scalable. Energy prices can never be expected to rise high enough for renewables to become economic.
The issues we should truly be concerned about are Collapse, as encountered by many economies previously. If Collapse occurs, it seems likely to cut off production of many commodities, including oil and much of the food supply, indirectly because of low prices.
Low oil prices and low prices of other commodities are signs that we truly should be concerned about. Too many people have missed this point. They have been taken in by the false models of economists and by the confusion of Peak Oilers. At this point, we should start considering the very real possibility that our next world problem is likely to be Collapse of at least a portion of the world economy.
Interesting times seem to be ahead.
Dow today -496.87
https://www.google.com/search?source=hp&ei=eEMUXI_bD4i6tQWc94foDg&q=dow&btnK=Google+Search&oq=dow&gs_l=psy-ab.3..35i39l2j0i67l2j0l2j0i131l2j0l2.1739.2653..2920…0.0..1.413.1128.0j3j1j0j1……0….1..gws-wiz…..6..0i131i67.nqv-6WaGgcE
“In November 2012, Donald Trump proclaimed on Twitter that “If the Dow drops 1,000 points in two days the President should be impeached immediately!”
https://www.snopes.com/fact-check/trump-impeachment-dow-jones/
I don’t know if it’s done that yet, but if Trump stands by what he says, he may find himself impeached just on that comment alone fairly soon. All that would have to happen is for the market to go down 505 pts. on Monday. (Ok, so I know he’s not held to anything he says, but it was fun for a moment).
@ Norman Pagett
A Rant for Santa Fe
Why is there so much concern over fossil fuels and so little over development? If I’m correct that the soil contains twice as much carbon as the atmosphere, then why is there not consternation over cement production, or the massive scraping away of topsoil along south Cerrillos and the 599 corridor? I also just come across the photo of children digging for cobalt to put in batteries to power electric energy, but digging in deep pits with their bare hands. But that didn’t bother me as much as it did the poster. I’d rather see kids digging for cobalt than seeing their arms cut off due to the massive and genocidal wars over Congo minerals that go to run our computers. In the light of the Congo catastrophies that have cost over 5 million lives, I wonder if the west’s obsession with fossil fuels (which is the very reason for its civilization) might not need some recalibration?
Congo….Congo? Hmm, when did I last see that on the front page? About as often as the starving Yemeni children….
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” F.A. Hayek
It seems like it is those from the field of physics that really send out the negative messages.
Physics is a real party-pooper.
“Beijing had high hopes that tax cuts for individuals would lift consumer spending and boost an economy which is showing the effects of the trade war, but overall retail sales in November proved disappointing.
“Even record spend on Singles’ Day’ on November 11 could not prevent retail sales from posting their weakest growth rate in 15 years.”
https://www.scmp.com/economy/china-economy/article/2178024/lowest-retail-sales-growth-15-years-dash-chinas-hopes
“China’s factory prices rose in November at their slowest pace since October 2016 as domestic demand lost further momentum, piling pressure on policymakers to unveil more measures to support the economy.”
https://www.businesstimes.com.sg/government-economy/china-factory-prices-rise-at-slowest-pace-since-oct-2016
Ouch!
“The risk of a U.S. recession in the next two years has risen to 40 percent, according to a Reuters poll of economists who also found a significant shift in expectations toward fewer Federal Reserve interest rate rises next year.”
https://uk.reuters.com/article/us-usa-economy-poll/u-s-recession-risks-jump-fed-rate-hike-expectations-slump-reuters-poll-idUKKBN1OD00P
“Between 2012 and 2015 — a period when the recovery seemed to be gaining speed — nearly half of all counties nationwide saw flat or declining growth, according to new government data. More broadly, the Commerce Department figures highlight a stark and worrisome reality: While a handful of places around the U.S. are thriving, most regions are barely trudging ahead.”
https://www.cbsnews.com/news/half-of-america-hasnt-recovered-from-the-recession/
“The national housing slowdown is spreading to markets like Las Vegas and Phoenix, where prices still haven’t reclaimed their pre-crisis peaks. After home values rose sharply this year, the market has shifted in recent weeks.
“Prices fell slightly in November while the inventory of unsold homes in the Las Vegas region has roughly doubled compared with a year earlier, according to the Greater Las Vegas Association of Realtors. Existing home sales slowed nearly 12% in November compared with a year earlier.”
https://www.wsj.com/articles/las-vegas-housing-weakness-signals-the-slowdown-is-spreading-11544702400
“Wall Street banks are offloading leveraged loans at discounted prices and demanding that borrowers accept less advantageous terms, as they move to protect themselves from rapidly weakening demand.”
https://www.ft.com/content/7fac8926-fe6d-11e8-aebf-99e208d3e521
Weakening demand is a real problem. Pops debt bubbles.
By the way, my talk was very well received. I talked for 45 minutes on Wednesday, with lots of interruptions for discussion. I covered only 2/3 of the talk. On Thursday morning, one of the plenary speakers canceled out. The person in charge of our section asked me to come back, and talk some more about my presentation. So I completed the presentation, again with lots of discussion. All that was sceduled for later in the morning was presentation of academic papers by graduate students, and it was not clear that they would arrive much before the time they were originally scheduled.
There were also some one on one sessions available later in the morning, which we could sign up for. So I left the student talks and explained my talk, first to a representative of the Electric Power Research Institute, and afterward to a representative of the American Petroleum Institute. The EPRI representative was especially interested. The talk was really aimed at electricity issues.
I will be driving home today.
This pattern shouldn’t be a surprise, with rising interest rates
Interesting! Another way of showing increasing energy concentration among those areas that are already big users.
Or maybe 100%.
“The risk of a U.S. recession in the next two years has risen to 40 percent…”
yes, could be close to 100%…
but…
a) gov data could be fudged to make the negative number into a positive one…
b) the lower 90+ % of the population could be falling economically, but the top 1% to 10% could do so well that it pushes the overall number positive…
I’d guess this more likely:
c) the recession is so severe that by the end of 2019, the gov data will have to show that the number is negative…
“European carmakers couldn’t shake the slump that’s shadowed them since September as new car registrations declined for the third month in a row — adding fresh worries to an industry already facing declines in its largest market.”
Registrations fell 8.1% yoy.
https://uk.reuters.com/article/uk-europe-vehicleregistrations/european-passenger-car-sales-fall-8-1-percent-in-november-idUKKBN1OD0JM
“French business activity plunged unexpectedly into contraction this month, retreating at the fastest pace in over four years in the face of violent anti-government protests, a monthly survey showed on Friday.”
https://uk.reuters.com/article/uk-france-economy-pmi/protests-plunge-french-business-activity-into-contraction-pmi-idUKKBN1OD0RQ
“Once again, British Prime Minister Theresa May has returned from Brussels empty-handed…
“An EU diplomat told CNN before the meeting that the other 27 EU nations were looking to May to “convince” them she can get the withdrawal agreement through the UK Parliament, something she appears to have failed to do.
“”We’ve seen what happened (on Wednesday). Convince us that what you ask will make a difference. If she pulls that off then we can talk… in the end they are politicians and they will want to help her. We are ready to be convinced,” the diplomat said.
“The diplomat added that the “most likely scenario is stumbling into a no deal.”
https://edition.cnn.com/2018/12/14/uk/brexit-theresa-may-eu-brussels-intl/index.html
So most of Western Europe plus Japan seem to be going into recession. China isn’t really growing, either.
I’m already getting ‘Christmas Clearance’ emails from companies – no need to wait until the New Year. Looks rather unpromising for company trading results. Maybe 2019 will be the year of mass redundancies.
So, in a year or less, we shall see what QE 2.0 looks like….
I’m putting some nice wine (not extravagant, but guaranteed to cheer) in my cellar (the space under the sink!): what cheered people up in WW2 more than anything was a damn good drink.
Coffee beans and, of course, high-quality dark chocolate. 🙂
Our business is wrapping up one big job and trying to negotiate a contract on another that will pay the bills right through any 1.5 year recession, but the person keeps trying to cut the price down. Driving us batty, because we sense that if we don’t get it, we may go idle until we can land another job and if the recession hits hard, who knows how long that could be. So how far do we cut to keep the lights on but not so much we work for low wages? If our small business is going through that, I’m sure many others are as well, because we’ve been busy for 15 straight years, even through the 08/09 debacle. Only recently have we had difficulty in getting another job on the books. One of our sub-contractors is also thin on work and putting out calls all over to drum up business. This world better not go belly up on us but then again I suppose we have no control over it.
“… if the recession hits hard…”
could we already be there?
I would keep in mind that recessions don’t seem to be “officially called” until many months after they have started…
so, is it a choice between no work or lower paying work?
then may you choose wisely…
Good luck – all my customers (they were mostly US) disappeared for 5 years in 2005- 2010 : most unpleasant memories, but character-building!
In retrospect I’m grateful that I went through that,as now nothing much can actually worry me or leave me sleepless, I just make adaptive plans.
I should hate to have the responsibility of employing people at this juncture.
“so, is it a choice between no work or lower paying work?
then may you choose wisely…”
Nicely put. Learning to be happy with less means you can charge quite ridiculously low prices and live to tell about it.
“Global debt hit a record $184 trillion last year, equivalent to more than $86,000 per person — more than double the average per-capita income.
“Borrowing is led by the U.S., China, and Japan, the three biggest economies, the International Monetary Fund said Thursday, highlighting potential risks to global expansion given that their share of debt exceeds that of output. Overall, the amount of worldwide public and private debt is equal to about 225 percent of gross domestic product.”
https://www.bloomberg.com/news/articles/2018-12-13/debt-worldwide-hits-record-184-trillion-or-86-000-per-person
“A synchronised, global fiscal expansion may be able to moderate the pace of an eventual slowdown by some degree, or put it off longer than otherwise would have been the case.
“But with a trade war between the US and China unresolved (and starting to bite), Brexit chaos, riots in France and an Italian debt crisis, there’s certainly no shortage of strife weighing on global sentiment.
“In the words of top IMF official David Lipton, “storm clouds” are gathering. Time to grab that umbrella.”
https://ftalphaville.ft.com/2018/12/14/1544767201000/Governments-can-t-prevent-the-next-global-economic-slowdown/
But see they’re not thinking like Paul Krugman. Just hand everyone $86,000 then give it back to the Gov’t, problem solved. Actually if everyone were to get $150K not only would we pay off the Global debt but everyone would have extra cash to spend so we’d have a booming eCONomy. Paul Krugman always has the answers.
We need record debt. The question is, “Is the debt growing rapidly enough?”
I was just using a 5lb bag of sarcasm.
Record debt is blowing up next generations. We screwed up, we should suffer.
“We need record debt” – and we need it every consecutive year to keep the illusion of growth alive. Looking at this chart it looks like the rate of increase in govt debt is slowing.
Recently, it has been doubling every 10 years. Perhaps the debt doesn’t have another doubling left in it.
https://ei.marketwatch.com/Multimedia/2018/03/20/Photos/MG/MW-GF810_1_tril_20180320102507_MG.jpg?uuid=7d6d25ee-2c4a-11e8-8734-ac162d7bc1f7
Lot of promises of future growth and abundant and cheap resources.
Shale-Oil Growth Down 30%: That Could Spell $100-Brent In 2019
International Energy Agency (I.E.A) and Schlumberger have been quietly warning of a potential supply crunch caused by under-investment in conventional oil.
If the trend in shale-oil growth continues down, the crunch they are talking about could be in 2019.
Market disruptions are common when new ideas come along; and participants have problems pricing because there are few precedents. Dot.com was an example, so were the derivatives that led to the financial meltdown in 2008.
There are signs shale oil might turn out to have been a similar story, currently unfolding. What is not commonly understood is because legacy losses are so high, a 10% increase in new production gives a 60% increase in the total shipments, that explains the 2.4 million barrels per day increase in total shale oil shipments over the past two years; that’s more oil than OPEC took off the table. But a 10% drop in new production delivers a 60% drop in shipments.
There are signs shale oil might turn out to have been a similar story, currently unfolding. What is not commonly understood is because legacy losses are so high, a 10% increase in new production gives a 60% increase in the total shipments, that explains the 2.4 million barrels per day increase in total shale oil shipments over the past two years; that’s more oil than OPEC took off the table. But a 10% drop in new production delivers a 60% drop in shipments.
According to the latest report by The International Energy Agency (I.E.A.), if U.S. shale oil does not increase production by 1.6 million barrels per day per year, next year, and the year after, and the year after and Amen, there will be a “supply-shock”. The CEO of Schlumberger has a similar view.
Over the past five months the trend in new-shale oil went from 150,000 barrels per day per month (i.e. average 1.8 million barrels per day per year), to 100,000 (i.e. 1.2 million barrels per day per year); the trend-line is pointing at zero by mid 2019. I believe there is a real risk that the war that OPEC denies they were waging; could have created the World’s Worst Nightmare, with OPEC and Russia as the main beneficiaries.
The spike to 3.0 million in August 2018 was not all about shale; it was mostly due to offshore oil, sanctioned before the bust, coming on line. There is not much more of that in the pipeline. Notice the down-tick in shale-oil after August.
Last but not least, is the trend in legacy-loss (red-line), right now shale needs to find 500,000 barrels per day new oil every month, just so as to stay-even; that number is going up; when it equals I.P.; that’s Peak-Shale, in other words, that’s the end of the road.
Don’t be surprised if peak-shale comes in 2019, and if that happens, don’t be surprised if the supply-crunch the I.E.A. warned of, comes sooner than anyone was expecting.
https://seekingalpha.com/article/4228060-shale-oil-growth-30-percent-spell-100-brent-2019
Or maybe it will look like demand falling flat.
Demand doesn’t slow down when you are adding around one billion more people to the worlds population ever 12 years..
https://imgur.com/a/Em7klJW
It does if energy consumption Per Capita falls. There are not enough jobs that pay well for all of these folks. It is not people, per se, that provide demand. It is the overall functioning of the system.
Pretty much all of the worlds oil demand is coming from Asia.. And since 1970, Asia’s per capita incomes have increased fivefold. So there is no per capita issues with them..You are just scared of peak oil..
I am afraid there is a problem with Asia. What happened in the distant past is not the issue; it is what is happening now. In a networked world, part of Asia’s damand comes from around the world. Without demand from around the world, there is a problem. But even locally, things have not been going so well. Growth is not keeping up with what has been promised in debt. We have been counting on Asia to pull us along, and that is not realy possible any more.
Demand is the permanent wish you have to buy, buy, buy.Affordability is the reality that hits you when you realise that your wishes cannot be fulfilled. (My demand for et brand new Mercedes is always there in my mind, but I cannot afford it).
Right! Economists made a poor choice of words.
If the energy is unaffordable then there is no “demand”. If the energy is unprofitable there is no investment into oil discovery. It is such a conundrum. The Goldilocks zone of affordability/profitability is long gone. Traditional economics no longer applies to oil prices and production.
“Traditional economics no longer applies to oil prices and production.”
Amen, and that’s an excellent place to start. (so maybe I can figure it out myself!)
Minimum wage earners can not afford $30,000 total knee replacements, and as we shall see, Medicare will eventually go bankrupt, and /or the hospitals relying on such government largess (Medicare/Medicaid) will suffer, as then will the Medical implant makers Stryker, Johnson and Johnson, Smith and Nephew, Medtronic, etc., etc., Medical insurance companies, United Health etc. will lose former healthy customers who can no longer afford the premiums, or they suddenly find their employers can’t or are unwilling to pay. (BTW, IMO the best, fastest predictor of whether a person is a good health insurance risk is simply to determine whether he is holding a full-time job. A sick or chronically ill person can’t hold a full-time job, or conversely, in order to keep a full-time job, you have to be healthy.) Health care is a mess. (Two hours on the phone today to just renew my non Obama care approved (ACA) temporary policy for 10 months until I have to switch to Medicare. But remember computers are supposed to save time? Right! like electronic hospital records EHR and electronic medical records EMR.
Both health and energy are a cluster of counter-intuitive negative feedback loops. I predict health care will be RATIONED, first evidenced by the withholding of services at the VA Hospitals for example, then dialysis or other chronic diseases, and from there, corporate medicine etc. will be cut to preserve the bottom line, and there will be an epic battle between health care insurers vs the hospital providers. The physicians, ironically now classified as “providers” are upon to be chewed as over 50% are now employed by health care corporations who are already starting to tighten the screws on physician reimbursement.
In the same way, the cost of energy for the common man (gas, heating oil, etc.) will go up to the point that he can no longer afford it, especially when the whole system is drowning in debt (consumer, corporate, government), and demand drops. The demand destruction will outpace the traditional increased “supply. ” The tail now wags the dog.
“In the same way, the cost of energy for the common man (gas, heating oil, etc.) will go up to the point that he can no longer afford it, especially when the whole system is drowning in debt (consumer, corporate, government), and demand drops. The demand destruction will outpace the traditional increased “supply.””
I agree…
that’s why 2019 may see lower oil prices, even if “supply” decreases…
I think that a global recession looks very likely in 2019, and that almost guarantees that “the common man” will find energy to be less affordable…
I mean, there are many ways to string together words to explain this…
if supply decreases in 2019, then it remains to be seen if lower demand/affordability will “outpace” the lower supply…
some nations are ready to cut production in January, so decreasing supply may “outpace” demand destruction for early 2019…
and prices may rise temporarily…
or not…
I’ve called it a race…
so that’s why I appreciate the word “outpace”…
I don’t see how a 2019 global recession will lead to higher FF prices…
Your chart is oil. The problem is total energy, another difference.
That’s when we start worrying about seized tankers, not peak oil.
And how many of those barrels does the shale business use itself just to spin their wheels?
A lot is used but, it creates jobs too. For a while.
https://imgur.com/a/6LMrHSE
right now, I’m sitting in a comfy chair with a video screen in front of me…
the room is dry and quite warm, while beyond the walls, the air is damp and quite cold…
I just had an evening snack, but I may open up a bar of dark chocolate…
earlier today, I finished up my 40+ hour work week…
now there are about 55 hours in front of me to do other things…
too bad that I’m trapped in this maze with no escape…
to be sure, this maze is not my creation, but I was born into it…
I usually somewhat enjoy my time here, including the working hours…
I could try to find a good way out of this maze, but I am quite sure that my efforts would be futile…
alas, I learned at a young age that there is a way out, and everyone eventually finds the exit, usually after no more than 90 to 100 years…
but it seems to be a mostly unpopular option…
U.S bank assets outside of treasuries have started to shrink. They haven’t done that since the GFC in 2008-09.
https://www.alhambrapartners.com/2018/12/11/us-banks-havent-behaved-like-this-since-2009/
This certainly looks like we are already starting to reach a problem period in the United States. We know of many other parts of the world with problems as well. The author doesn’t quite seem to understand the full picture. We need to look at several authors, to see what is really happening. Part of the problem seems to be that the deflation of the debt balloon never really got fixed, even with all the QE.
Hungary ‘slave labour’ law sparks protest on parliament steps
Protests have broken out in Hungary after the country’s parliament passed new labour laws, which have been labelled “slave labour” by opponents.
New rules mean companies can demand up to 400 hours of overtime a year and delay payment for it for three years.
Police used tear gas against crowds on the steps of the parliament building on Wednesday night as crowds gathered.
Opposition politicians had created chaos inside, blocking stairways and blowing whistles to disrupt the votes.
https://www.bbc.com/news/world-europe-46551904
but i was tell that right wing partys will save europe
oh even Austria doing same thing
https://freedomnews.org.uk/austria-12-hours-work-day-approved-by-the-parliament/
The middle class in Austria has disappeared. One of my friends, who works there for about 20 years, says that when he started to work there, it was a norm for the Austrians to go to 2 holiday trips per year. Today, they can afford 1 per year with difficulties.
It was largely the middle classes of Germany, after their brutal post WW1 drop in living standards was accelerated by the events of 1929, who boosted Hitler from 2.6% of the vote in 1928 to 36.8% in 1933, allowing him to make his play for absolute power.
It is always the wishes of the populations, that the leaders (try to) make come true. Using whatever means, otherwise somebody else is elected. I.e. when there was no Hitler, there could by anyone else instead of him under such circumstances that would be allowed and required by the prevailing population to do the same.
and with Trump on the ropes
imagine what will happen if there’s another 9/11 allowing him the sieze ”emergency powers”
it could easliy happen
IWith all due respect, it couldn’t easily happen because to have a successful 9/11 type event would require control of the dying legacy mockingbird Ted Baxter formerly mainstream media to frame the events in a way that identifies the perps and shows the President as presidential.
Trump obviously has no control over the media—he can’ even stop them from characterizing him as a criminal, a clown and a thug—and unless makes a deal with those who actually control said media to cooperate with their agenda, he isn’t going to be allowed to get away with picking his nose in public, let alone picking up emergency powers.
at the point of the ”9/11” type event–whatever it might be, the POTUS is commander in chief of the military—like it or not
everyone is used to a nominally sane president behaving sanely—this is a different scenario–a bonkers pres, but everyone can only respond as if he is sane–which he clearly isnt
so in that brief interval–a day or few–he siezes control before he can be stopped, then the generals are running round mindlessly, never having experienced this before
fanciful?—maybe
but not beyond possibility
Then we must consider ourselves extremely fortunate that we had the relatively sane GWB on the job last time there was another 9/11—i.e. another Pearl Harbor type event.
https://pbs.twimg.com/media/DJWe6b7XUAAaN2E.jpg
the POTUS has been criminal and insane
but never at the same time like this one
Think of the crazy things Obama encouraged. Then you appreciate the improvement.
interesting
i suppose we must be getting a biased view of the don’s nuttery here on the other side of the pond
But the anti FF people are way more crazy. Just sent you a post on that subject.
where was that post—I seem to have missed that?
“i suppose we must be getting a biased view of the don’s nuttery here on the other side of the pond”
This is the whole point, Norman. On both sides of the pond, the mass media has created an image of the Don that is a mere caricature of a human being. Our perceptions on this, as on many other issues, are being micromanaged.
No word, no gesture, no act or decision of Trump’s is too insignificant for them to draw a damningly negative conclusion about it in stark contrast with the sheer hagiographic iconography with which they presented us with Obama—the Liberator of the Libyans and very nearly the Liberator of the Syrians—what was it, exactly, that he was awarded the Nobel Peace Prize for?—and the more nuanced although still airbrushed image they painted of George W. Bush—the Hammer the Taliban and Al Qaida and the Liberator of Afghanistan and Iraq? Even Bubba Bill Clinton—the Hammer of the Serbs and Liberator of Kosovo, as well as a serial groper and rapist almost in the same league as Jimmy Saville, and who is still “dicking bimbos” if Colin Powell is to be believed—has been pre-posthumously beatified into something of a paragon and a statesman.
And you’re going on about the don’s crimes and nuttery? Well all I can say is that if and when they catch him committing some actual crimes or practicing some real world nuttery, rather than just making stuff up, then no doubt the don will be prosecuted to the full extent that US law allows. Just to keep the circus running until the 2020 elections, the Dems in the House are going to look even deeper into his taxes and investigated whether the inauguration was funded in accordance with the law and a total of about 80 other things including whether talking to Russian people and paying money to extortionists who threaten to tell the world unflattering tales is strictly legal.
And they are going to keep going after the guy’s wife and children, including his autistic teenage son, as they continue to scrape bottom in their obsession to find fifty ways to hang the guy for any offense whatsoever.
Because, let’s face it Trump is the biggest problem the US and the World has. Without him we could all have wine and roses again and crank back up those Globalist projects for the good of all mankind.
I’m just an outside observer, and all politicians must lie as part of the job they have to do
but to lie consistently, on a day to day basis, even when proof of his delusions are clearly recorded day by day, plus his clearly stated attitudes to ”lesser people” is clearly evidenced, together with denial of any scientific material related to global warming and suchlike, his recorded bragging about sexual predations, seems to render the potus highly suspect, both as a man, and a president, someone obnoxious at every level.
body language would seem to indicate that even his wife can’t stand him. (watch how they exit a car, un-together. Walking together, where Melania disengages her hand from his isn’t trivial—whether your POTUS or Mr and Mrs Bloggs in Tesco—the meaning is exactly the same. (get lost)
Obama no doubt had his faults–just like everyone else, but as far as I know none of his government circle was in any danger of criminal prosecution, much less Obama himself
Being scrutinised by the press is an unfortunate part of the job of any politician, you’ve got to be squeaky clean to start with
I try not to base my judgement of politicos on anything other than material that can be shown to be factual
Artleads says:
December 14, 2018 at 4:34 pm
@ Norman Pagett
A Rant for Santa Fe
12 hours a day is cruel. For a day or two, or if you’ve got your own business is one thing but all work days?! It’s cruel because the person has hardly any time to themselves/family. At the grocery store I go to one woman checker said she works then just goes home, sleeps, wakes up and goes to work again, and that’s 8 hours a day, but checking peoples groceries is tiresome. Most of them have to bag the groceries too, because management won’t spring for anymore than one bagger for the whole store.
Fact is it seems to be a natural force at work, that over time management gets the upper hand on labor, and it gets worse and worse until people revolt. That’s what happened in the US early in the 20th century, which led to unions, but now management has once agin gotten the upper hand and the workers are bleep out of luck. It’s time for Austrians and Hungarians to rise up in revolt just like their brethren in France. In life, the basic rule is; if you can’t get a fair shake, you have to fight back. Will people take advantage of workers if they can? You bet.
I come from a country where you bag youre own groceries. I wonder, what do the customer do while their groceries are bagged? Very inefficient.
There must be a shortage of workers for them to gain power. It will never be a shortage again on this side of collapse.
The countries competing against us often have very long hours for workers. In fact, workers may work seven days a week. Globalization makes every economy compete with the lowest cost economies.
We Don’t Mine Enough Rare Earth Metals to Replace Fossil Fuels With Renewable Energy
A new scientific study supported by the Dutch Ministry of Infrastructure warns that the renewable energy industry could be about to face a fundamental obstacle: shortages in the supply of rare metals.
https://motherboard.vice.com/en_us/article/a3mavb/we-dont-mine-enough-rare-earth-metals-to-replace-fossil-fuels-with-renewable-energy?fbclid=IwAR1t8Z-JMNxM_kYsoIY3NMJkrYNmn7HCnOS2AMLExrJkK6Mo_N3yuMkKPxQ
Warning of shortage of essential minerals for laptops, cell phones, electric cars, solar panels, wiring
https://www.sciencedaily.com/releases/2017/03/170320110042.htm
Imagine, that today with ever deeper wells that need to be drilled due to the droughts and the depletion of aquifiers, all water pumping is dependent on electronics!
In some places, desalination is being used as well. This gets really expensive.
That guy N Ahmed again? Circular economy will save us;)
«The key is the ‘circular economy,’ a regenerative approach designed to minimise resource inputs and waste by implementing principles and methods of design, maintenance, repair and recycling. According to Metabolic founder Eva Gladek, “It is essential for us to manage materials in a circular fashion in order to ensure that we have enough for the technologies critical to a low-carbon future.»
So funny… see to France how well reducing resource inputs work. I’m pretty sure Eva Gladek has a comfortable well paid desk-job and not hustling to put food on the table. This hustling does not include thinking much about “technologies” and “low carbon future” LOL
All we need to do is get rid of diminishing returns. We will get a circular economy as soon as we get a perpetual motion machine.
We need that red queen to run in place faster all the time. Go, go, go!
Interesting report, consistent with the issues in France which if I understand correctly Gail has pointed out are the manifestations of declining affordability of fossil fuels.
https://www.zerohedge.com/news/2018-12-12/has-peak-diesel-arrived-data-doesnt-look-good
Dennis L.
This report quotes the same data that I think is not really right.
At some point, I should write an article on what diesel data from “normal” data sources really says.
The planet runs on diesel.
https://www.zerohedge.com/news/2018-12-11/real-implications-new-permian-estimates
Agreed, it runs on diesel as now organized, but the planet self organizes. What does it mean going forward, what is possible, what is no longer possible? In the midwest Kwik Trip is running some of their trucks on natural gas.
This is a smart site, sometimes only hearing what can’t be is a bit boring, this old world is going to go on, mankind is pretty inventive when need be. What if we don’t need a huge military presence in the middle east, what does that do for our economy, the national debt, our society? If wars are resource wars and the US has the ultimate resource, trade for what we need, learn to build again.
Thank you Gail for all the data work you do, we look forward to the article on diesel data.
Dennis L.
Short trips in cities, NG and EV makes sense.
On long trips, it is all about diesel.
We shall see if a solution arises (rail, for instance)– but basic psychics is not your friend.
With the ageing populations, the flexibility of diesel is crucial. The trains are not very flexible. They can not get everywhere where it is needed. Unless all population is concentrated in the urban centers…
It takes resources to build new trucks to make a change. We will have to wait and see how this works out.
Meanwhile in the world of fast food.
https://www.zerohedge.com/news/2018-12-11/walmart-testing-flippy-job-stealing-robot-cook
It is getting tougher and tougher to find a niche. At Sam’s more and more checkout lanes are automated. At first I resisted, they seem faster although that may be due to my doing something other than standing around; we have become unpaid Sam’s checkout people.
Dennis L.
“It seems that in Italy misery loves company. In the midst of their own budget travails, Luigi di Maio and Matteo Salvini, Italy’s two powerful deputy prime ministers, now seem to be rejoicing in France’s budget problems. Before doing so, they might want to consider that far from reducing the chances that Italy will suffer another round of its sovereign debt crisis, recent French political developments heighten the chances that such an Italian debt crisis might occur sooner rather than later.”
https://thehill.com/opinion/international/421082-macrons-concessions-add-fuel-to-italys-debt-fire
“The European Central Bank is fully expected on Thursday to affirm its plan to end its bond-buying program at year-end. But investors expect less clarity when it comes to signaling when Mario Draghi and fellow policy makers will move to nudge up ultra-low interest rates… The ECB’s key lending rate, known as the refi rate, stands at 0%, while the rate on deposits held overnight at the central bank is at negative 0.4%.”
https://www.marketwatch.com/story/ecb-will-say-goodbye-to-quantitative-easing-but-when-will-it-hike-rates-2018-12-12
Europe cannot withstand this change, I don’t think. But it might help the differential to the US$.
The £ is going to start feeling like an emerging market currency with the dollar already strong and the Euro strengthening, plus the Brexit related chaos dragging it down. 🙁
Makes life very difficult!
For another view on this, a wealthy friend has all their money in dollars and sterling, and won’t touch the euro at all – estimating that it will disintegrate before sterling does.
They are quite confident that this is the best position – we shall see!
That would be a preferable scenario, obviously, Xabier, and with Germany contracting, Italy about to enter a recession and the French government facing a no confidence (only 24 hours after Theresa May’s), he could certainly be right.
https://www.bloomberg.com/news/articles/2018-12-12/french-no-confidence-vote-forces-premier-to-detail-2019-budget
Britain is simply on the perifery, like Japan on the other side of Eurasia. The center and the perifery are the key factors that shape the future of the depopulating Earth. The centers are where energy and water are affordable. The rest is perifery.
The center is where energy supply is relatively cheap and available. Any place that has to resort to solar panels marks themselves as periphery.
“Companies and industry groups in Britain issued strident warnings against further political turmoil Wednesday after a challenge to Prime Minister Theresa May’s leadership underscored the strength of opposition in her own party to her government’s plan for Brexit.
“Underscoring the high stakes for business, a major UK manufacturing firm confirmed it has activated contingency plans. Airplane engine maker Rolls-Royce said that it has begun stockpiling parts to help minimize the damage from a disorderly Brexit.
“There are only 107 days to go before Britain is scheduled to leave the European Union, but parliament remains deeply divided on how to break with Britain’s biggest trading partner… Companies across the country have already taken steps to prepare for Brexit…
“The most worrying scenario for business is one where Britain crashes out of the European Union without a deal, leading to new trade barriers.
“Aerospace giant Airbus has said it could be forced to quit the country if there’s no deal on EU trading arrangements. Carmakers such as Nissan, BMW and Jaguar Land Rover are also heavily exposed.
“Mike Cherry, chairman of the Federation of Small Businesses, said that confidence among the group’s members has fallen to its lowest level since the financial crisis.
“The deepening confusion over Brexit comes at a terrible time for the British economy. Data from the Office for National Statistics show the UK economy grew just 0.1% in October compared to the previous month. Industrial production fell 0.6% and manufacturing slumped 0.9%.
https://edition.cnn.com/2018/12/12/economy/rolls-royce-brexit/index.html
“Brexit is battering the UK property market, pushing it to its weakest level in more than six years, with almost half of surveyors reporting that sellers and buyers are sitting tight because of political uncertainty. The Royal Institution of Chartered Surveyors (Rics) said its monthly indicators for demand, supply and prices fell to multiyear lows in November.”
https://www.theguardian.com/business/2018/dec/13/uk-property-market-at-weakest-since-2012-as-brexit-takes-toll-rics
“[Fashion Retailer] Bonmarche’s chief executive Helen Connolly said: “The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/9. “I hope that in the fullness of time, our cut to the forecast may prove to have been overdone, but in the current market, this seems the appropriate stance to adopt.”
https://www.yorkshirepost.co.uk/news/bonmarche-says-trading-is-even-worse-than-during-the-recession-1-9490464
Ouch!
On the one hand, people are complaining because property prices in San Francisco are too high and on the other hand they’re complaining that property prices in London are too low. It seems you can please anybody these days.
An interesting premise – but behind a paywall for me.
“The obsession with US shale oil is leading the world into an energy crisis. The world’s leading forecasting agencies have hailed shale’s tremendous growth as key to meeting oil demand in the coming decades. But by focusing on volume rather than quality, they are missing the point.”
https://www.ft.com/content/d4a8c0ea-f8ad-11e8-8b7c-6fa24bd5409c
New article on the Economic-undertow blog:
https://www.economic-undertow.com/2018/11/27/delusions-of-grandeur/
“Modern industrial militaries and political systems have become much more adept at fighting wars rather than winning them. Conflicts last for decades even when one side or other possess material and technical advantages. Witness the 40 year struggle between Ankara and independence-minded Kurds; 71 years of on-and-off fighting between Pakistan and India over control of Kashmir, 54 years between the Colombian government and various militants; 40 years between Afghan factions versus the West and between the various factions themselves. Israel has been at war vs. most of its neighbors since the founding of the country in 1948. The Syria war has its roots in the militant uprising against the Hafez al-Assad government in 1982. The Baathist army destroyed much of the city of Hama in a destructive siege that foreshadowed events 30 years later. Modern victory has become expensive, as much or more than defeat. Money- and resource costs put it out of reach leaving combatants to inhabit a shadowy middle ground, war as perverse kind of entertainment.”
Sounds a lot like Orwell’s 1984…..if one lives long enough, one may experience the future…
Old Chinese proverb…Yogi Berra
Is it a perverse kind of entertainment, or a perverse way of being able to employ young people who would not otherwise have a job?
Remember a while back an article concerning CHINA and their mismatched ratio between male and female births. The border war with Pakistan was a method of employing and reducing male members of child bearing age. Wether this was in mind, but certainly is a possibility given both countries situation.
It is the number of potential mothers that determines births of the next generation. It makes sense to hold down births of girls, if a person is concerned about the size of the next generation. India has used that approach too.
You are right, however. Wars are ways to employ a lot of single men. If the death rate is high, there are not many dependents to worry about.
Parker Drilling Bankruptcy Kicks off “Oil Bust 2”
https://wolfstreet.com/2018/12/12/oil-bust-2-kicks-off-with-parker-drilling-bankruptcy/
Sort of strange. In earlier bankruptcies we heard about how the workers and those on pensions were treated. (Those on pensions especially came out badly.) I don’t see any of that in this article.
Terrified by the French protests, Spain raises minimum wage by 22%
http://www.bbc.co.uk/news/world-europe-46539748
That’s funny especially from a Country who has sky high unemployment and youth unemployment has been around 50% the last few years. That should work out well.
You could apply the same logic to 90% of the jobs in any western society.
“World Bank senior vice-president Mahmoud Mohieldin said that the unemployment rate among Arab youths is 30 per cent.”
https://swarajyamag.com/insta/weather-seems-to-be-cold-for-oil-prices-experts-warn-stating-gulf-economy-could-slow-down
Makes young people quite unhappy!
https://www.sfgate.com/technology/businessinsider/article/san-francisco-so-expensive-housing-waiters-food-13461447.php
If working cannot even provide basics like food and shelter what is the point?
In 2001 I was offered a 100K high tech job to work in SF and I had to turn it down because I couldn’t offered the cost of living. Back then rent just outside the SF area was averaging $2,500 per month if you could find a small 1 bd room apt. That was right around the high tech bubble. Factoring having to pay Federal, State and Local taxes did not leave a whole lot left over as I was paying on other financial obligations at that time.
I don’t know how people can live in that area even today but SF is a beautiful city at least before the homeless starting pooping in the streets.
This sounds like the lead in to epidemics. Also, governments cannot collect enough tax revenue from the increasingly poor workers.
“Brexit: stage one in Europe’s slow-burn energy collapse………..
The Brexit fiasco and French riots are accelerating symptoms of Europe’s earth system crisis”
Nafeez Ahmed
https://medium.com/insurge-intelligence/brexit-stage-one-in-europes-slow-burn-energy-collapse-1f520d7e2d89?source=collection_home—1——0———————
My prediction of the resurgence of the far-right was based on analysing the probable consequences of a long-term ‘system-failure’ in which we are unable to return to the levels of economic growth we had become accustomed to in the heyday of the 1980s and 90s. That system-failure, I explained, is rooted in the economics of the energy production that enables economic growth:
“…. a full and lasting recovery… is likely to be impossible in the constraints of the current system, because we’re running short on the physical basis of the last few decades of exponential (and fluctuating) ‘growth’ — and that is cheap, easily available hydrocarbon energies, primarily oil, gas and coal.
The turning point has arrived, and without that global cheap energy source in abundant supply, we cannot continue growing, no matter what we do. Something has to give. Our economies need to be fundamentally, structurally, transformed. We need to transition to a new, clean, renewable energy system on which to base our economies. We need to transform the way money is created, so that it’s not linked to the systematic generation of debt. We need to transform our banking system on the same grounds. Whitehall, and the three political parties, recognize only facets of the picture, but they don’t see it as a whole.”
We can’t transform to a different energy system because the amount of energy and debt it requires. And we can’t switch to a new money system without billions dying because everything would collapse as a result.
I just want to state the obvious here:
“We can’t transform to a different energy system because the amount of energy and debt it requires.”
because such an energy system must be built and maintained by the higher surplus energy in (formerly abundant cheap) FF…
and as each component of the new system ages and fails, there always will be the need for the higher surplus energy in FF to rebuild…
the author seems to almost get to that conclusion, then fails to grasp it right at the end of his line of thinking…
You can’t win, you can’t break even and you can’t get out of the game.
That is the problem!
“We need to transition to a new, clean, renewable energy system on which to base our economies.”
May I suggest that either Dr. Ahmed is being disingenuous here or else he hasn’t looked into the details of how we should go about trying to fulfill this need or ours.
If there was a nice new clean renewable energy system available to meet our needs, we’d be building it now, surely, instead of pouring our resources into ineffective energy technologies and pretending they are going to safeguard our future prosperity.
Ahmed does not come from a practical, engineering point of view. If he did, he would see the problems. Instead, he is a firm believer in EROEI theory. As long as a (bad) calculation seems to prove the EROEI is high enough (relative to a poorly calculated lower bound) he is convinced that the proposed solution will work.
“May I suggest that either Dr. Ahmed is being disingenuous here”
He isn’t being disingenuous in the least. We do need a rapid global transition to clean, renewable energy that more than pays for itself, resource and energy -wise, within a decade or so after it has replaced fossil fuels almost entirely. It just won’t happen.
Jup, the sentence I quoted doesn’t stand on it’s own in splendid isolation. It is rooted firmly within the larger context of the paragraph in which it is located, and that context reads like a plea for just such a transition to just such a new renewable energy system.
A person being disingenuous might use the exact same sentence in the exact same context with ulterior motives. They might be confident, as you and I are, that the transition to a new system just won’t happen, but they might be employing “we need blah, blah, blah” as a motivating tactic to sell the idea of “renewables” to a gullible public in the hope of profiting from the gravy train.
Whether Dr. Ahmed is among the duplicitous and is employing this rhetoric for an ulterior motive despite being convinced it isn’t true, or whether he is among the gullible who think it is true, or whether he’s among the sanguine who is aware it isn’t true and is implicitly lamenting the fact ISN’T CLEAR from sentence itself. But it becomes SOMEWHAT CLEARER from the context.
As for your own sentence “We do need a rapid global transition to clean, renewable energy that more than pays for itself, resource and energy -wise, within a decade or so after it has replaced fossil fuels almost entirely,” I strongly disagree with that. What I think we do need is to give up on “clean, renewable energy” and embrace a mix of “dirty FFs and nukes” that will keep us going long enough for us to develop warp drive, dilithium crystals, zero point energy and starship engines the size of walnuts. Then we can explore strange new worlds, seek out new life and new civilizations, and boldly split infinitives that no man has split before!
Foreign Affairs Minister says second Canadian may have been detained in China
https://www.theglobeandmail.com/politics/article-foreign-affairs-minister-says-second-canadian-may-have-been-detained/?intcmp=notifications
https://www.bloomberg.com/news/articles/2018-12-12/u-s-debt-under-trump-has-swelled-by-size-of-brazil-s-economy
“Total public debt outstanding has jumped by $1.36 trillion, or 6.6 percent, since the start of 2018
and by $1.9 trillion since President Donald Trump took office.”
https://www.nytimes.com/2018/07/25/business/trump-corporate-tax-cut-deficit.html
“The Trump administration had said that the tax cuts would pay for themselves by generating increased revenue from faster economic growth, but the White House has acknowledged in recent weeks that the deficit is growing faster than it had expected.”
https://washingtonmonthly.com/2018/06/26/the-republicans-have-never-cared-about-debt-or-the-deficit/
https://1.bp.blogspot.com/-4xmva6oBor8/XBCgbR4C0II/AAAAAAAAV4s/O5A4qyZVDUon892lfAeuZtCMQB440J8XgCLcBGAs/s640/ZCOAL%2BBOARD.png
Rape and scrape— who cares about the future?
https://imgur.com/a/Lz5tWOM
“An honest politician is one who, when he is bought, stays bought.”
— Beloved & Respected Comrade Leader Simon Cameron (Abe Lincoln’s Secretary of War)
That’s a good one, BD. Trouble is they don’t even realize their being used. I guess that’s what happens when people develop a cult following.
Duncan, you should see the mess made in producing photovoltaics and wind turbines, and the estimates of the amount of new landfill and general blight that infrastructure is going to be producing half a century from now. It makes clean coal look, what’s the word…. ah yes, clean, by comparison. But as you say, who cares about the future?
http://bujier.com/assets/images/portfolio/9.jpg
No one talks about the waste nightmare awaiting in 20-30 yrs. All those solar panels, batteries and windmill blades…mostly toxic.
I can’t check now, but my impression has been that US mortgage debt for individuals has been pretty flat recently. Some other pieces of debt have been rising. It is really the whole “package” of debt that matters. If, in fact, mortgage debt is not growing much, then Federal Government debt may need to grow fairly rapidly to keep the total package of debt growing.
—-and joining Team Trump is akin to diving head first into a pit of quicksand. You may well find yourself expected to do things that would taint you forever.
Don’t know if I would mix the word taint and Trump together. It just takes you places you don’t won’t to go.
Report: Trump Panama Tower ‘Riddled’ With Drug, Mob Money
https://www.thedailybeast.com/report-trump-panama-tower-riddled-with-drug-mob-money
Ouch!
The implication in your Trump-bashing, Duncan, is that there is a better alternative to the current POTUS, when the fact is that to rational unbiased observers, Trump is the best President the US has had this century. I know that for Americans it may feel as if living under Trump is like undergoing a colonscopy with no anesthetic, but think of it as an enema for the country. You will emerge from this experience cleansed.
it wasnt a pit of quicksand i had in mind
She who laughs last..
https://imgur.com/a/juBmRh0
hey guys elon musk saying that Australia’s energy emergency is easily fixable
https://youtu.be/w7BMaG3zyVo
this guy is a genius /s
btw why no media ask when musk will start make
solar powered rockets
Solar powered rockets LOL. Why not wind up rockets? At least wind up rockets work on the scale of toys.
Need fossil fuels for propulsion. Electricity doesn’t work for this purpose. Wind up might work.
The interview on 60 minutes was on Dec. 14, 2017.
Here’s a link to an article about how much money the installation of huge Tesla batteries has saved South Australia. https://interestingengineering.com/tesla-battery-installed-in-south-australia-saved-the-region-40-million-in-its-first-year
“Tesla’s Australia battery project is garnering global recognition and forcing companies to rethink the traditional energy power plants structure. The Tesla 100MW/129MWh powerpack project in South Australia proved to pay some dividends or at the very least save tens of millions of dollars according to a recent report, again delivering on a promise made by the eccentric founder Elon Musk.”
He said he could do it and he did.
South Australia demands seems to be about 2000 MW. Live generation stats:
https://www.sa.gov.au/topics/energy-and-environment/energy-supply/sas-electricity-supply-and-market
So a 129 MWh battery (5% of demand) could save 40 mn only if they were previously *losing* that trying to abate intermittency in the areas most affected by it.
Good point!
“Theresa May has vowed to fight a vote of no confidence in her premiership, warning restive Tory MPs that toppling her could result in Brexit chaos.
“A secret ballot will run between 6pm and 8pm after Conservative backbench leader Sir Graham Brady announced he had received the necessary 48 letters to trigger a no-confidence vote in the prime minister.
“Ms May endured a brutal prime minister’s questions clash, where she faced calls to resign over the chaos ahead of tonight’s vote. If she loses, the Conservative party will immediately start seeking a new leader.
“The drama comes after Ms May shelved a crunch Commons vote on her Brexit deal on Monday in the face of near-certain defeat.”
https://www.independent.co.uk/news/uk/politics/theresa-may-no-confidence-vote-live-latest-update-conservative-leadership-challenge-election-brexit-a8678986.html
I think us Brits subliminally (for the most part) tend to believe ourselves to be too savvy and too ironic and sophisticated in outlook to be taken in by a demagogue, as some of those foolish continentals were in the 30’s.
But I can well imagine that, if this political paralysis were to worsen and we were to crash out of the EU without a deal with disastrous economic repercussions, the public might be tempted to listen to a charismatic strong man, offering a clean break with the old political paradigm. Certainly it seems much less of a stretch than it did a year ago.
Upon landing at Heathrow after her trip to Brussels, Mrs May walked out of the plane, and to loud cheers waved a piece of paper in her hand and said “Brexit in our time!”
The only problem for Mrs May and the rest of the Brits is that the EU is shaping up into a latter-day version of Hotel California. You can check out any time you want, but you can never leave.
Lol, Tim. She is certainly ineffectual and self-deluding in the Chamberlain mould. I really think it is an impossible situation though.
The farmers up here would love for us to remain in the EU somehow, as they are stuffed without those subsidies. I hardly know what to wish for, as every possibility seems to entail significant collateral damage.
I do know what I fear most – a no-deal scenario. FWIW the bookies are offering 5/2 on that, so they still see it as one of the less likely possibilities.
Cheer up. We Brits have always fought against the odds! How about a no-deal scenario with Boris as the next PM? I can imagine that being a heck of a roller-coaster ride.
I remember when the UK went into the common market, much against the wishes of the majority of people, and suddenly all that cheap Australian and New Zealand beef and lamb and butter and cheese was no longer cheap. And suddenly the UK fishermen had to share their traditional fishing grounds with the Danes, Dutch,Germans and Spanish. I would guess that some of the Brexit voters are motivated by the sentiment that if the country could extract itself from the EU, it could regain some of the things that were good about the good old days, although to a large extent, joining the EEC was to some extent done as a solution to what was not so good about those times.
I wonder if—after the betrayal they suffered in the 1970s—the Australians and the New Zealanders are going to want us back as best buddies in the hostile world of the 2020s. .
“How about a no-deal scenario with Boris as the next PM? I can imagine that being a heck of a roller-coaster ride.”
And like a heck of a roller-coaster ride, it would certainly induce severe nausea.
we havent fought against the odds
we had predominance in coal and iron till 1914, that produced the british empire
after that we went into decline, relying on imported oil to survive
Not a coincidence that peak coal and iron came at the time of WWI. Also, the flu epidemic was probably made possible by the weakened health condition of workers with inadequate pay.
You’re quite right, of course.
I was quoting from memory something the Right Honorable James Hacker said in Yes Prime Minister.
Why women have better sex under socialism, according to an anthropologist
https://www.vox.com/identities/2018/12/12/18125659/women-sex-socialism-feminism-kristen-ghodsee?utm_campaign=vox&utm_content=chorus&utm_medium=social&utm_source=twitter
I probably won’t read it…
but…
as a general rule, everything is better when there is more prosperity…
I doubt this has much at all to do with socialism…
it’s probably all about wealth…
You should read it——
okay, I did skim it…
“According to Ghodsee, it’s about social safety nets. If, she argues, you build a society that supports women and doesn’t punish them for having children or devalue their labor, it turns out they’ll be happier and have better sexx.”
yes, if “you build a society” etc, and therefore need the prosperity/resources/wealth to actually build such a society, does that make socialism the root cause for the effect she describes?
no, I don’t think so…
a dirt poor socialist country would have different results…
I seriously doubt that the socialist women of Venezuela are feeling really sexist right now. They are too busy scavenging for food.
Sexy not sexist
I could be wrong, but I don’t think sex is bad in dirt poor socialist countries either.
you only get socialism when there’s enough surplus energy to spread around
democracy is essentially the same thing
thanks, Norman…
I was thinking about that on and off all day…
Dictatorships are popular when there is pretty much no surplus. As they say, a committee of one, gets thing done. Having a king works, because then the line of succession is clear.
“Mexican President Andres Manuel Lopez Obrador’s declaration of war on “neo-liberal” economics has shaken investors holding Petroleos Mexicanos bonds, fueling concern about the future of the highly-indebted state oil company he has pledged to revive… Fitch and Moody’s have in recent weeks flagged concerns about Pemex’s $106 billion of financial debt – the highest of any state oil company in Latin America.”
https://www.reuters.com/article/mexico-pemex/mexico-presidents-pemex-plans-rattle-faith-of-debt-holders-idUSL1N1YF0G2
“Goodyear employees in Venezuela are each to be given 10 tyres as part of their severance payment, as the US firm halts operations in the country. Quality tyres are valuable on the black market, in a country where there is a chronic shortage of all sorts of goods. A number of foreign firms have pulled out of Venezuela, citing a growing economic crisis and US sanctions.”
https://www.bbc.co.uk/news/world-latin-america-46513571
“Nigerian lenders are in retreat. Rising costs and declining appetite to lend are prompting banks to repay dollar borrowings. Brent crude prices near their lowest levels in a year have slashed earnings from Nigeria’s main source of foreign income, reducing the amount of foreign exchange banks need to fund deals.”
https://www.businesstimes.com.sg/banking-finance/sputtering-oil-industry-halts-nigeria-bank-loans
Most oil exporters cannot survive on today’s prices.
Pales with the debt of our shale game.
Instability and populist unrest is the new world order
https://www.washingtonpost.com/politics/instability-and-populist-unrest-is-the-new-world-order/2018/12/11/0959c858-fd7b-11e8-862a-b6a6f3ce8199_story.html?__twitter_impression=true&tid=sm_tw&utm_term=.23ea543e86de
This is what peak fossil fuels looks like!
Or “The End Of More” as Norm would say.
France is so the End of More.
Tear down this…middle class.
https://i.redd.it/jlx0ktlrjp321.jpg
I was going to post it, but I see I’m a bit late.
Sir Ronnie was not the brightest porch light on the block, but he could get on his knees for the elite.
He was just an actor following the script he is given.
It was a badly written script, for a badly corrupt B actor.
it must have been Congress that changed the tax laws…
there are dozens of other persons equally to blame…
Ending the Ronald Reagan lie
https://www.bostonglobe.com/opinion/2017/07/10/ending-ronald-reagan-lie/RF3guIcPrjoZI3WWagT3rM/story.html
thank you, Duncan…
yes, lots of names in that article besides “Reagan”…
I’m no fan of today’s huge economic inequalities….
ps: I found this part to be bizarrely humorous:
“Jeffrey D. Sachs is University Professor and director of the Center for Sustainable Development at Columbia University, and author of “The Age of Sustainable Development.”
For the 7th day in a row, students in Albania are demonstrating against high fees in public Universities
https://i.redd.it/7zaq1uaq8n321.jpg
Gimme gimme
free lunches remain
a common refrain
for those who want a utopia
a few can now see
that cash isn’t free
the rest have acute myopia
Even Rupert Bear does better rhymes than that.
I th8nk Norman is pretty good. He has found his knew occupation after the collapse.
Then after they graduate they will be demonstrating because there are no jobs. Or, taxes are too high. Welcome to diminishing returns.
https://imgur.com/a/VOu6yXb
GOTCHA!
Over the past three decades , the oldest and thickest ice in the Arctic has declined by a stunning 95 percent, according the National Oceanic and Atmospheric Administration’s annual Arctic Report Card.
The finding suggests that the sea at the top of the world has already morphed into a new and very different state, with major implications not only for creatures such as walruses and polar bears but, in the long term.
The oldest ice can be thought of as a kind of glue that holds the Arctic together and, through its relative permanence, helps keep the Arctic cold even in long summers.
“The younger the ice, the thinner the ice, the easier it is to go away,” said Don Perovich, a scientist at Dartmouth who coordinated the sea ice section of the yearly report.
If the Arctic begins to experience entirely ice-free summers, scientists say, the planet will even more, as the dark ocean water absorbs large amounts of solar heating that used to be deflected by the cover of ice.
So much for it will never reach that point…BAU FULL TROTTLE!
The oil producers have a problem.
https://pbs.twimg.com/media/DuIFES2W4AIN-3d?format=jpg&name=360×360
After January 1, Tesla’s government tax credit will shrink from $7,500 to $3,750. And beginning in 2020 they will not receive a federal tax credit.
That means those who are waiting for the $35,000 base-priced version of Tesla’s Model 3 sedan will not be eligible for the tax credit..The least expensive Model 3 currently available starts at $49,000.
https://www.businessinsider.com/tesla-refund-customers-cant-get-tax-credit-before-deadline-2018-12
Tesla’s business model seems likely to only work if energy is cheap and wages are high.
Needs tax revenue made possible by fossil fuels to pay subsidies to buyers. Sounds not too different from intermittent renewable problems.
Trump administration replaces academics on National Park Service advisory panel with business executives and big Republican donors
http://www.desdemonadespair.net/2018/12/trump-administration-replaces-academics.html
IMF warns storm clouds are gathering for next financial crisis
https://www.theguardian.com/business/2018/dec/11/imf-financial-crisis-david-lipton
Macron’s concessions set to blow out French deficit
https://www.reuters.com/article/uk-france-protests-idUKKBN1OA14J?utm_campaign=trueAnthem:+Trending+Content&utm_content=5c0fbe3404d3014199f4521f&utm_medium=trueAnthem&utm_source=twitter
Adds debt to the system. This is what keeps collapse away.
Like dancing on the head of a pin. Raise taxes and fees until people riot in the streets, then back off of doing that and raise minimum wage which raises debt level. So all arrows point to ballooning the debt until for some reason it pops. Then what? Should be entertaining to see what measures are attempted to kick start it over again. “Well folks we’ve cleaned the books of all debts, a debt jubilee, and started a new currency that can be attained with gold or silver. If you have no precious metals, then get a job as the system reinitiates. Good luck.” Then they play that tune from Double Jeopardy during the final answer as people scramble around trying to find a way to kick start the new economy. A few cars on fire during these recent riots will seem like a marshmallow roast.
Okay for France but not for Italy?
57% of the French economy Is government spending. 9% unemployment. The riots are the canary in the coal mine that the system is fraying. They are not far behind Ukraine.
guillotines don’t need fossil fuel inputs
i guess the rioters will have thought of that, they’ve already found out there’s no cake left
Cliffs certainly don’t require fossil fuel inputs.
They are having energy problems as well, the last I heard. Substituting intermittent wind and solar for aging nuclear will not work.
Former Canadian diplomat detained in China: sources
https://www.reuters.com/article/us-china-icg/former-canadian-diplomat-detained-in-china-sources-idUSKBN1OA1EB
couldnt the chinese have waited till the don went on a state visit?
woulda solved everybodys problem
Yellen warns of another potential financial crisis: ‘Gigantic holes in the system’
https://www.cnbc.com/2018/12/11/yellen-warns-of-another-potential-financial-crisis.html?__source=twitter%7Cmain
Interesting, given that she said this last summer:
“U.S. Federal Reserve Chair Janet Yellen said on Tuesday that she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash.”
https://www.reuters.com/article/us-usa-fed-yellen/feds-yellen-expects-no-new-financial-crisis-in-our-lifetimes-idUSKBN19I2I5?fbclid=IwAR0IL03zfv_fFkLthPC6duUYSpDkniMrNplJLNOJVm-wdeacH8ukJkAxaq8
Sure!
https://medium.com/insurge-intelligence/brexit-stage-one-in-europes-slow-burn-energy-collapse-1f520d7e2d89?fbclid=IwAR39sirRwJfa4xz6G4Ddu9DzX0FZUvJv0K5xNcVwQYpv2X9E3-kq1kLNvOU
Thank you for the link, looks like a well researched site and author. This article seems consistent with Gail’s ideas.
Dennis L.
Sorry. Didn’t have time to check this out. But it looks from the comments that he is promoting clean (renewable) energy, which I doubt that Gail would think makes any sense. Not that I can follow her intricate points all that well, but I think, very generally speaking, that the planet’s economic system is too complex and tied to the use of fossil fuels to imagine it can be changed to renewables-based. Gail seems to be trying always to talk about this mind blowing fossil fuel enwebment in everything. Infrastructure of all kinds. The financial system. Pensions. Spare parts of all sorts. Just to up and change them requires the economic means, which are not only scanty and set to unravel even at the best of times, but is so culturally, environmentally and politically wrenching, it should close the discussion immediately.
But what I don’t understand is why it isn’t more clear that:
– we must use fossil fuels to keep some level of global civilization going?
– a centralized global system is harder to manage than one subdivided into smaller, regional units while maintaining inter-coordination between them?
–
The simplest system is hunter gatherers, with a local chief. Every step above that takes more energy. Giving pensions to the elderly takes a lot of energy.
A HG system doesn’t seem to be in the cards. I’m not seeing why, if every other system is more complex than that, it can’t use fossil fuels to keep it survivable. I know you think the economic system, as it exists today, is the only viable option till it collapses. I just haven’t gotten to the point where I understand this. It just can’t be so centralized as it is. And people in smaller jurisdictional areas can’t remain as disorganized as they are. And they are EXTREMELY disorganized. I come from a place where there is no social security. It is very badly governed. But so far, old people aren’t dying on the street. Their relatives abroad that benefit from their financial system help by sending money. That seems to work in Cuba too. But Cuba has a fairly rigorous government system that prevents old people from dying in the street. And yet, even Cuba doesn’t appear to be nearly as rational in governance as it could be.
It is a good article, except for Nafeez’s talk of a “post-carbon transition,” and his assertion that this social and political upheaval are “a symptom of the great civilisational phase-shift to life after fossil fuels”.
It is interesting though that he is not explicitly positing renewable energy as a panacea as he has in the past. Perhaps his views on that are in flux.
From that linked article, BD, is this:
“The turning point has arrived, and without that global cheap energy source in abundant supply, we cannot continue growing, no matter what we do. Something has to give. Our economies need to be fundamentally, structurally, transformed. We need to transition to a new, clean, renewable energy system on which to base our economies. We need to transform the way money is created, so that it’s not linked to the systematic generation of debt. We need to transform our banking system on the same grounds. Whitehall, and the three political parties, recognize only facets of the picture, but they don’t see it as a whole.”
the old—we need….we must…. mantra again
without the thought of who exactly is going to implement the need and must part—or who “we” are
yet its repeated over and over in article after article right across the internet
I must have skim-read right past that, Chrome. Apparently his views are the same as they always were – realism served with a topping of delusion.
Per my earlier comment he should really say “…so that it’s not linked to the systematic generation of INTEREST payments…” not debt. The governments basic commitment in generating money is a guarantee to accept it in payment of taxes. The point of money being to circulate and facilitate economic transactions.
From the Ahmed article…“The crisis of Brexit and the eruption of the riots in France are symptoms of a great unfolding civilizational transition, in which an old reductionist paradigm of materialist self-maximation is dying.”
“in which an old reductionist paradigm of materialist self-maximation is dying.”
I think every farmer in human history, every business operator, every shop owner has participated in “materialist self-maximation”
I don’t care whether we are an economy of electronic transactions or a 19th century farm economy. Everyone is participating in “materialist self-maximation”.
A pretty fancy way of saying everyone is working for themselves.
I find this article as full of pc speak with excessive use of the term “far right”, avoiding the truth of the matter that the EU should not continue to exist as it is a vehicle of enslavement and cultural and racial destruction. I will also argue that Europe and The UK imported immigrants not because of an “earth crisis” but directly as a result of liberal democracy…hijacked government more interested in globalism than the welfare of its own citizens.
The mistake of course, was signing on to the EU in the first place.
With falling energy consumption per capita in Western Europe, there is not as much energy supply to support international organizations of all kinds, just as there is not as much energy to support international trade.
This is probably a good general point, Gail, which i wish you could elaborate more in detail in a post: the dependence of the international institutional arrangement after the WW2 on the energyconsumption.
“Oil prices dived on Monday, erasing Friday’s gains following an output cut deal between OPEC and its allies, as further global stock markets weakness spurred concerns over slowing global economic growth… Analysts cautioned that the stock market slump would turn to undermine oil market, as the negative status quo stoked fears of a slower-than-expected global economy and a worsening demand outlook.”
http://www.xinhuanet.com/english/2018-12/11/c_137664579.htm
“One of the International Monetary Fund’s top officials warned on Tuesday that storm clouds were gathering over the global economy and that governments and central banks might not be well equipped to cope.”
https://uk.reuters.com/article/uk-imf-economy-lipton/imf-warns-storms-clouds-gathering-for-global-economy-idUKKBN1OA0SN?il=0
I will be traveling for the next three days–speaking at a conference tomorrow. May not be around as much.
Have a good and productive trip
Thanks! Leaving now.
dove
nope
dove is American english
dived is English english
depends which side of the pond you’re on
And we Brits also say “sneaked”, not “snuck”. I’ll inform Theresa May so that she can fine Ed for his misuse of our fine language by sending a nuclear drone to his door. 😉
agreed
“UK economic growth slowed in October as car sales went into reverse, while factory output stalled amid heightened uncertainty over Brexit. According to the Office for National Statistics, GDP growth cooled to 0.4% during the three months to October… In a sign of the continuing woes on the British high street and the worst period for car sales since the financial crisis, the retail and wholesale sector also recorded a drop in growth of 0.02%.”
https://www.theguardian.com/business/2018/dec/10/uk-economy-slows-cars-sales-manufacturing-brexit
“According to the November PMI, Italian private sector output declined at the sharpest pace in five years. Our survey data suggest the Italian economy will decline once again in the fourth quarter following a 0.1% quarterly contraction in GDP in the third quarter, meaning the country will enter a technical recession for the first time since 2013.”
https://seekingalpha.com/article/4227398-pmi-suggests-italy-enter-technical-recession-fourth-quarter
“Toronto’s cooling real-estate market is on track to cost its municipal government nearly $100-million in tax revenue – something critics of Mayor John Tory warn could force the city to choose between higher property-tax hikes or cuts to services in next year’s city budget.”
https://www.theglobeandmail.com/canada/toronto/article-real-estate-slowdown-to-cost-toronto-nearly-100-million/
“Property price declines in Sydney and Melbourne are no longer confined to expensive dwellings, with the price falls spreading to middle and lower segments of the market. Bureau of Statistics figures show property prices in Australia’s eight capital cities fell 1.5% on average in the September quarter, marking nine consecutive months of price declines.”
https://www.theguardian.com/australia-news/2018/dec/11/sydney-and-melbourne-housing-price-falls-reach-lower-end-of-market
“For moneyed Americans, most of the past year has felt like 1929 all over again — the fun, bathtub-gin-quaffing, rich-white-people-doing-the-Charleston early part of 1929, not the grim couple of months after the stock market crashed.
“After a decade-long stock market party, which saw the stocks of the S. & P. 500 index create some $17 trillion in new wealth, the rich indulged in $1,210 cocktails at the Four Seasons hotel’s Ty Bar in New York, in $325,000 Rolls-Royce Cullinan sport-utility vehicles in S.U.V.-loving Houston and in nine-figure crash pads like Aaron Spelling’s 56,000-square-foot mansion in Los Angeles (currently on the market for $175 million, more than double what it fetched just five years ago).
“Will it last? Who knows. But in recent months, the anxiety that we could be in for a replay of 1929 — or 1987, or 2000, or 2008 — has become palpable not just for the Aspen set, but for any American with a 401(k).
“Overall, stocks are down 1.5 percent this year, after hitting dizzying heights in early October. Hedge funds are having their worst year since the 2008 crisis. And household debt recently hit another record high of $13.5 trillion — up $837 billion from the previous peak, which preceded the Great Recession…”
https://www.nytimes.com/2018/12/10/style/2019-financial-crisis.html
“As the average American household’s credit card debt soars and interest rates rise, a debt problem appears closer than ever. In its study of American debt load in the third quarter, personal finance site WalletHub found that the average U.S. household now has $8,284 in credit card debt… According to WalletHub, which analyzed debt against average income, the current debt load is just $177 away from being “unsustainable,” suggesting a debt crunch could be in the offing.”
http://fortune.com/2018/12/10/american-household-credit-card-debt/
“Former Federal Reserve Chair Janet Yellen is worried about excessive leveraged lending and the level of corporate debt across Wall Street. “Corporate indebtedness is now quite high and I think it’s a danger that if there’s something else that causes a downturn, that high levels of corporate leverage could prolong the downturn and lead to lots of bankruptcies in the non-financial corporate sector,” Yellen said.”
https://www.cnbc.com/2018/12/11/janet-yellen-says-excessive-corporate-debt-could-prolong-a-downturn.html
“Global equity markets could struggle to come to terms with a dramatic slowdown from the world’s largest economy next year, one Goldman Sachs strategist told CNBC on Monday, with trade tensions elevating the risk of near-term volatility. Fresh signs of slowing global growth, and emerging pockets of weakness in the U.S., rattled financial markets last week.”
https://www.cnbc.com/2018/12/10/goldman-sachs-warns-of-a-sharp-us-economic-slowdown-next-year.html
“U.S. government debt yields fell on Monday while the so-called yield curve continued to flatten amid projections of slowing economic growth and weaker inflation… Investors are increasingly concerned about a possible economic slowdown…”
https://www.cnbc.com/2018/12/10/us-bonds-treasury-yields-move-higher-amid-fears-of-a-slowdown.html
The Xmas shop-a-thon ought to push a lot of American households over the edge, then. Oh well, party on.
“China’s automobile sales fell about 14 percent in November from a year earlier, the country’s top auto industry association said, marking the steepest such drop in nearly seven years in the world’s largest auto market.
“The drop in sales to 2.55 million vehicles, a fifth straight decline in monthly numbers, comes against a backdrop of slowing economic growth and a crippling China-U.S. trade war…
“The November drop comes on the heels of almost 12 percent declines in each of the past two months, putting China on track for an annual sales contraction not seen since at least 1990.”
https://uk.reuters.com/article/uk-china-auto/china-car-sales-drop-at-steepest-pace-in-almost-seven-years-idUKKBN1OA0FZ
“The global growth drivers that produced the [Asia-Pacific] regional upturn have started to fade. And with that, the economic picture has darkened in recent months with expectations building for a sharper slowdown in 2019, according to a report by S&P Global Ratings titled, “Asia-Pacific Crystal Ball–Mild Economic Slowdown Should Extend Through 2019″. Further, the report does not expect global growth drivers to pick up in 2019 and so growth should keep slowing…”
https://www.econotimes.com/Asia-Pacific-economic-picture-darkens-in-recent-months-likely-to-witness-sharper-slowdown-in-2019-SP-Global-Ratings-1470772
https://oilprice.com/Latest-Energy-News/World-News/Libya-Faces-Oil-Disaster-As-Biggest-Field-Stops-Pumping.html
‘Libya Faces Oil Disaster As Biggest Field Stops Pumping’
“Libya is facing a major oil crisis as a group comprising local tribesmen and members of the field’s security guard seized the largest field in the country, Sharara. Reuters reported the field had already shut down on Sunday, quoting petroleum engineers working on the site. At the time, however, The National Oil Corporation said in a statement quoted by S&P Global Platts, “The oilfield at present remains open.”
Today, however, Reuters carried a report citing a statement from NOC that said the company had declared force majeure on exports from the Sharara field.
The danger of it shutting down, however, remains serious as NOC acknowledged in its statement. “A shutdown of the Sharara field would result in a production loss of 315,000 b/d, with a knock-on effect of 73,000 b/d at El Feel due to its dependence on Sharara electricity supply,” the company said, adding “Supply to the Zawiya refinery would also be affected. This would equate to a combined daily cost to the Libyan economy of $32.5 million.”
Oops!
https://www.usatoday.com/story/news/world/2018/12/10/mexico-pump-30-billion-into-central-america-halt-migrant-caravan-donald-trump-lopez-obrador/2272077002/
‘Mexico to pump $30 billion into Central America to halt migrant flow’
Mexico attempts to stop migrant flow by reversing slow collapse in central America by financing it’s improvement. Good luck with that plan.
Shouldn’t post count be around 2000 by now?
yes, but no FE comments to this OFW post.
I’ve heard rumors FE has met his own challenge….went on a sail sea voyage to a small island, part of the Andaman and Nicobar chain which sits in the Bay of Bengal and is inhabited by. members of the Sentinelese tribe, who have resisted contact with the outside world for generations and are known to attack outsiders with bows and arrows.
Once the see and encounter his presence, they will be in awe and bow down to worship his Kingship and grovel at his feet. He will live the life of splendor and luxury with a harem of maidens.
You are so wicked! Yes, FE did like to spout the “he man” stuff. 😉
that tribe is on a diet
they cant stomach denier
Russia Just Sent Two Nuclear-Capable Bombers to Venezuela
http://time.com/5475681/russia-nuclear-bombers-venezuela/?xid=time_socialflow_facebook&utm_source=facebook.com&utm_campaign=time&utm_medium=social
https://imgur.com/a/FPAOnQz