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.
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.
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.
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).
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.
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.
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.
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.
This spike in interest rates led to a major cutback in energy consumption and in GDP growth.
Oil prices began to slide, with the higher interest rates.
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.
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.
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.
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.
“A slump in Turkey’s industrial production gathered pace in October, prompting warnings that the country is headed for a recession….
“Retail sales suffer worst drop on record.”
“China is staring at a bigger-than-expected slowdown next year as credit shrinks, said an analyst who made her name warning about the dangers of the nation’s credit binge. Total credit in the country, including lending to companies, has “absolutely collapsed” in 2018, according to Charlene Chu, a senior partner at Autonomous Research in Hong Kong. The estimate is a calculation by Chu, who adjusts official figures with elements she didn’t share.”
Wow! Falling credit is what makes the system collapse!
“That’s how much the total value of companies listed on the world’s stock markets has declined since peaking at $87,289,962,917,450 on Jan 28. In other words, almost $15 trillion has been wiped off the global equity market this year.”
“A number of strategists have underscored the recent spate of death crosses materializing—a death cross appeared in the S&P 500 index about 10 days ago and another formed in the small-capitalization oriented Russell 2000 index RUT, -2.32% in mid November. The barrage of pessimistic death crosses isn’t the only worrying sign in markets. MarketWatch columnist Philip van Doorn says more than half of the S&P 500’s constituents are in bear market…”
“Corporate bonds and stocks are to set hand out annual losses on both sides of the Atlantic for the first time since the global financial crisis a decade ago…
“It will be the first time since 2008 that buyers of stocks and credit both get negative returns, and only the second time since at least 1998, data compiled by Bloomberg show.”
Also, if interest rates have risen in 2018, I expect that the value of bonds on balance sheets of pension plans and other organizations will decline as well. There is a lot more “value” in bonds than in shares of stock.
“Japan’s output gap in the third quarter turned negative for the first time in almost two years, in a sign the Bank of Japan’s 2 percent inflation target will become even more distant due to waning price pressure. A negative output gap occurs when actual output is less than the economy’s full capacity and is considered a sign of weakening demand.”
“It’s been the most radical cash injection in history — a staggering $3.5 trillion, pumped into Japan’s economy over more than five years to slay deflation and kick growth into higher gear. That’s still not enough to save Tomoaki Nagai’s metal parts factory near Osaka and it’s a similar story throughout the world’s third-largest economy.”
Wow! More evidence of collapse!
“a staggering $3.5 trillion, pumped into Japan’s economy over more than five years to slay deflation and kick growth into higher gear.”
How do you kick growth into high gear when you are stealing purchasing power from the consumer via high inflation which is what the Japanese Gov’t wants? If anything history shows that the Japanese are savers and the more you punish them via inflation, they save more. And what makes matters worse is that Japan is an aging population so they tend to spend even less as they get older.
“More Americans are predicting an economic downturn in the coming year, a shift that could affect President Donald Trump as he seeks re-election. Only 28 percent of Americans think the economy will get better in the next 12 months, according to an NBC News/Wall Street Journal poll released Sunday. Meanwhile, 33 percent expect it will get worse and 37 percent believe it will stay about the same, the survey found.”
“With fears about the next economic downturn looming, banks are taking a step back from risky lending… According to a survey out this month from the Federal Reserve Bank of New York, nearly half of applicants with low credit scores were rejected in the four months ending in October.
“The credit rejection rate was 21.2% that month, well above its reading of 15.7% at the same time a year earlier.”
This is how lending gets cut off. Banks get frightened. Also, banks find themselves hit by the falling difference between 10-year interest rates and short term interest rates. They can’t make much money on lending. Therefore they cut off the least profitable types of loans.
Gail will like this article
City Planning 101
Why universities became big-time real estate developers
Harvard’s Allston plan may be the largest university-led urban development project in the country. But you would be hard-pressed to find a peer institution that has not thrown itself into commercial property development. While the word campus comes from the Latin for “field,” the old-style gated quad, set apart from the town or up on a hill, is decidedly out of fashion. Universities remain nonprofits to be sure, exempt from all manner of taxes. But as the Slate 90 list shows, they are very large businesses. And because of this, their economic role in the American city is rapidly evolving. Yale (No. 2 in the Education sector) has spent the past two decades buying strips of storefronts around its New Haven campus, recruiting a Barnes and Noble and an Apple Store to what had once been low-rent rows of local businesses. Yale is now New Haven’s largest commercial landlord.
But as the Slate 90 list shows, they are very large businesses. And because of this, their economic role in the American city is rapidly evolving. Yale (No. 2 in the Education sector) has spent the past two decades buying strips of storefronts around its New Haven campus, recruiting a Barnes and Noble and an Apple Store to what had once been low-rent rows of local businesses. Yale is now New Haven’s largest commercial landlord.
This activity is rooted in a deep change that has occurred in the American city in the past 50 years. In a famous 1976 essay, “The City as a Growth Machine,” sociologist Harvey Molotch outlined the coalition of private and public interests that had made economic growth the paramount goal of local government. “Most of those institutions have disappeared,” Wim Wiewel, the president of Lewis & Clark College and the editor of a pair of books on university development, observed in a recent conversation. “The department store is closed, the newspaper is bankrupt, the local bank is no longer local, and the manufacturing is gone.”
What remains is the university. A university is now the largest employer in two-thirds of America’s 100 largest cities (and a handful of states as well). Even in New York City, home to 45 Fortune 500 companies and a global capital of finance, media, and fashion, five of the top 10 private employers are anchor institutions like universities and academic medical centers. It can be easy to exaggerate the importance of higher ed as an anchor, an extreme example of which is the argument that Detroit’s bankruptcy might have been avoided by the presence of its own Case Western or Carnegie Mellon. But there’s no question that as cities have hollowed out, universities have enthusiastically seized more economic and urban development responsibilities.
I just spent a day in Boston and was amazed on the transformation in a decade since I’ve been there last. Harvard Square in Cambridge is HARVARD and a few megabanks and chain stores/restaurants. Downtown Boston much the same…there is still Macy’s holding on there, but low end retailers Marshalls and TJ Maxx have set up shop right next to them with Verizon megastore! The food vendors at Haymarket have been pushed aside by a new Hotel being constructed. Fanueil Hall. Quincy Marketplace still much the same, as with Copley/ Newbury Street.
Love Boston…great walking city and for 12 bucks to ride the T trains for a day…what a deal.
Thanks! I hadn’t realized how strong the connection was.
I live on the edge of Kennesaw State University, with 38,000 students. Huge student housing complexes on and near campus. Lots of students and faculty in my neighborhood. Also, a new Jewish Student center is planned a couple of blocks away. There are a number of restaurants on campus, and free bus service to quite a number of area places (including a second campus), without showing a student or faculty ID.
The stock market is on pace for its worst December since the Great Depression
The decline of sex is the end of civilization
The bimbo who wrote this has no clue about the mice utopia experiments where the same exact thing happened..And her claim the economy is booming made me laugh at out loud..
Europe’s Retail Apocalypse Spreads to Online From Stores
Here’s how the global financial crisis is still affecting your wages
US 10 year rate is in a better place…
oil prices have become better for consumers…
US oil $49(!) and Brent $59
natural gas back below $4… about $3.60
stock markets plunging…
VIX is way up to around 24.5
it seems to be economic whack-a-mole…
“they” haven’t lost control yet, but it’s worrisome that the Plunge Protection Team seems to have no power at the moment…
FE is missing and presumed captured by TPTB…
but in 2 days it will be 12/19 and adonis will stop his “reset” predictions…
a mixed bag, as we Americans say…
Confucious say, when painting the floor, paint toward the door, not the corner.
i didn’t know Confucius had a decorating business?
I was noticing WTI oil price is down. I can believe that VIX is way up.
The world is changing.
Yes WTI is below $50 today! Crazy.
This morning I see WTI is at $48.75.
The barrel counting nerds over at peakoilbarrel have been saying that the EIA has been putting out bogus production numbers over the last several months to manipulate the price of oil..
How do these bogus production numbers get into crude oil export numbers and the high operating ratios of US refineries? US refineries are operating flat out, and even at that need to keep exporting. We can’t accept much Canadian bitumen, because there is too much other oil filling the system.
FE in recent days reappeared at Surplus blog, but I doubt it’s the legitimate ID, the writing style is now somewhat mellower / non repetitive, and different..
Maybe FE found Jesus? Or Buddha, or something….
Perhaps his air-purifying machine business in China has run into trouble, with the Chinese down-turn?
Impersonation is quite possible in the blogosphere. I can see IP addresses of posters, so I recognize impersonation here.
Yeah, where is FE? Love/Hate relationships is the one that will stand the trials of time.
FE, we want your loose cannon rants back!
he’s evolved into another species
just to annoy the creationists
RYSTAD expects oil discoveries for 2018 to be around 9.4 billion barrels
And the world is currently consuming around 36 billion barrels a year..So this is close to only 25% of our present consumption..
Last years numbers were slightly up from that so the trend line continues to go down.
NAHB: Builder Confidence Declines in December
And this site is pro growth and building.
Higher interest rates can’t help building.
I see the US 10 year is down to 2.85%…
manipulated down or pushed down by market(s) turmoil?
either way, it’s below what was being called the “critical” 3.00 level…
Right. The 10 year is down. The 2 year is down as well. So they are not inverting yet.
It is hard to keep interest rates up, when so many economies are faring poorly. Self-organized interest rates tend to fall.
Neither can material prices which are through the roof according to a friend of mine who builds homes.
Part of the material prices problem has to do with the use (or lack of use) of Canadian lumber. Canada doesn’t tax its lumber much; the United States does. In the past, the US has used quite a bit of Canadian lumber. Trump has put tariffs on Canadian lumber, to stop the import of untaxed lumber. This is a link to one of the stories about the issue. Wildfires also have been an issue.
U.S. Student Loan Debt Sets Record $1.5 trillion, Doubling Since Recession
Politicians have caused a pay ‘collapse’ for the bottom 90 percent of workers, researchers say
Now who gave the politicians the orders to do that? Shirley they didn’t think of such wonderment on their own!
The new US reality.
IMF says trade war already hurting Asia, may cut global growth forecasts
California Bay Area Home Sales Decline 17% YoY in November, Inventory up 27% YoY
Nice time to be upside down in your Bay Area mortgage!
End of days: Is Western civilization on the brink of collapse?
This is a fantastic article! It was behind a pay wall until recently..
I wanted to check out the reference in this article where it says,
The reference it gives with respect to order of magnitude larger is this article: Modeling sustainability: population, inequality, consumption, and bidirectional coupling of the Earth and Human Systems
When I look at the article, I cannot find anything that talks about “order of magnitude larger.” What it does say is,
So I an not convinced that the linked article is a very good reference for what the linked article is saying about the economy with fossil fuels growing by an order of magnitude larger than that with renewable fuels only, unless a person interprets Figure 5 in the article as saying something like what the author says. If it is important, why didn’t the paper mention it?
This is a link to another of Motesharrei’s papers. Human and nature dynamics (HANDY): Modeling inequality and use of resources in the collapse or sustainability of societies
Its highlights include:
These are what the model says. The model doesn’t recognize some very real things, like the fact that human population continues to grow. Something is clearly wrong with the model. It can prove all kinds of untrue things.
Perhaps I am being too picky. There are other authors that I am more familiar with, including Joseph Tainter and Peter Turchin. What they are saying makes more sense.
William Strauss and Neil Howe just talks about cycles, as far as I know. Howe spoke at same conference I did in September in Bermuda (international actuarial group).
Yaneer Bar-Yam of the New England Complex Systems Institute, who is quoted for his outlandish forecast, is one of the founders of the New England Complex System Institute. They were the ones who put on the conference that I went to this summer, where Carmen Reinhart and Peter Turchin spoke. I talked a little about that in the comments, after the visit.
So to avoid collapse we only need to redistribute the worlds wealth and put in strict population and resource consumption limits worldwide..
And how many people think this could be achieved?
A whole lot of people who don’t understand what a mess we are in today.
I think the world’s “wealth” is just really debts and promises that really can’t be realized anymore. So, spreading the “wealthy” folks money around might buy a few more months I suppose. But sustainable? I don’t think so.
Plan B which will begin on 18th of DECEMBER
No need to comment on population and consumption, but I’d like to understand redistribution of wealth better. Whether it’s stable and congruous with a resource base or not, couldn’t it raise demand to have MOL universal income, housing, health care?
Wouldn’t that, a) make the global system more durable?, and b) couldn’t it, depending on whether it faces resource shortage or not, create a better approach to a stepping down economic scenario?
So can industrial society be subdivided into smaller units that are heterogeneous instead homogeneous like it is now? I continue to be puzzled by why there is never consideration of anything other than a monolithic global system that everyone should know can never work?
This belief system only mesmerizes people into doing nothing; they don’t know where their resources come from, or that they might have to replace some of those resources regionally. They shut down nearby coal plants. They talk about global climate change when they should be focused on local development. (OFW, wisely, doesn’t encourage that. But if people are not doing that, what better could they be doing?)
The shift toward a more hierarchical organization as limits approach hits animals as well as humans. It seems to be a physics response to “what to do when there is not enough to go around.” The more hierarchical organization allow for some survivors, even if all cannot survive.
In theory, we could try for a flatter pattern in some countries. That might mean that the entire population of those countries will be wiped out, as surviving parts of other countries are better able to provide better return on energy investment.
People tend to think in terms of their own country. It is the fact that we are part of a world economy that makes the flat income plan a non-starter.
In fact, when the total nutrition available is inadequate if it were to be shared equally, a hierarchical and unequal distribution – determined traditionally by status, sex and age – is most likely to ensure the survival of the whole group as an active entity, and is the most rational option.
This is particularly so if a tribe needs to maintain the strength of warriors (usually male of course), without whom the tribe would be destroyed or enslaved by competitors for scarce resources.
Good article in The Guardian on the collapse in Caracas, Venezuela, by the way.
we can deliver solutions to other people
what we can’t do is deliver them to ourselves
Hm, that doesn’t matter.
What does matter is that in it we have another confirmation that at least one faction of the visible govs is tasked with attempted plan to slow or counter act these trends. Because large part of the enviro protection and security policies oriented policies are evidently tasked with the aim subjugating and corralling masses in the times of less or no (reverse) growth.
Hence the theory that visible govs or those inner shadow deeper circles are not briefed on the situation (to some degree) is disproved once more time.. as sheer lunacy..
That doesn’t mean their position is not evolving, my working theory fitting the record quite accurately is that TPTB were up to certain point mostly preoccupied with the classics Peak Oil / energy depletion scenario but since ~mid/late 2000s regrouped – refined more closer to OFW type of scenarios..
“… many researchers avoid the word collapse, and talk instead about a rapid loss of complexity.”
sure, but it’s more fun to use “The Collapse”…
greater surplus energy = greater complexity…
we know complexity must decrease greatly in the next decade or two because world surplus energy is guaranteed to decrease greatly…
rapid decrease or slow decrease? who knows?
We might put it like this:
‘Something that looks like a ‘steady-state’ society can be maintained, in some regions, provided we accept very high mortality rates, much shorter lives, epidemic and endemic disease, euthanasia and infanticide, wars to further limit population, and regular winter famine’. And it must, of course, be non-industrial.
But of course, the ‘steady-state’, ‘no-growth’ theorists would never promise that.
I think Norway had close to a steady state economy for a while, because it was so cold that die-off was very high whenever the economy hit a little bump. I was told that when the plague hit Europe, Norway was especially hard hit. It needed to import workers from Germany, to keep population high enough to continue businesses.
Spain also imported workers from Eastern Europe after the plague Black Death – to make up the work force; Italy, too. Slaves were also purchased to work domestically.
Norway also placed restrictions on the right to marry, limiting growth without infanticide or contraception -humane and sensible, as every had the chance to marry eventually.
Thomas Malthus observed this system and approved.
“End of days: Is Western civilization on the brink of collapse?”
yes, of course it is!
and don’t we have fun discussing it?
we’re wobbling close to the edge of the cliff…
I think the wobble gets more severe in 2019…
but will we go over the edge then?
maybe… maybe any year in the 2020s…
maybe into the 2030s… let’s watch and see!
‘Dancing along Death’s icy brink’……
This article has some great graphs on concrete production which is prodigiously led by China. Wow!
I think that the drop in concrete production is related to the drop in coal production, which took place about the same time. Incomes have not been rising enough for people to afford the huge number of new apartment buildings being built. When China cut back on building new homes and factories, less coal was consumed.
Volume vs. Quality.
The Chinese urban infrastructure is mostly of exceptionally low quality. If you look at German lamp post or block of concrete, chances are it will be there for several decades, while the Chinese stuff is rotting, falling apart just few months after completion..
World, in that article it has photo of the Pantheon in Rome, which it says is the largest ever structure that used non-reinforced concrete, never surpassed in size, as contrast to the apparent poor quality concrete in China. They need to slow down a bit and do things right.
Well yes, and there is a something of a scandal now in the UK, as the mortar holding bricks and blocks together disintegrates within a few years – cost-cutting by suppliers of ready-mixed to the big housing builders.
I’ve also seen fascias going mouldy and falling to bits in a similar time-frame here in the much-vaunted hi-tech hub of the UK……
A Russian friend called it, with glee, the Sovietization of the UK. – whatever you get your hands on turns out to be crap.
There are one or two Roman forts still in good shape in England though -good places to erect a lean-to shelter. 🙂
The Chinese surely know how to make good stuff. However, the endless staircase of middle management corruption makes all infrastructure materials diluted and of poor quality.
Another benefit with lousy materials is that it will have to be replaced more often. Broken window-fallacy style corruption.
Not to mention the little issue of peak coal. Coal prices have not risen high enough for them to keep raising coal production/consumption on the trajectory it was previously on.
Did you see, what the young girl from Sweden said at Katowice?
She said: your old recipies don’t work anymore. Stop lying. You lie, because you don’t want to be unpopulaire. We need a system, which works.
Hm, the irony of human existence in time and space, one can place bets as to whether her own children (assuming she is the end of next ‘third turning’ – grandma early 1960s hippie, mother 2000s feel good gov-ngo subsidized enviro-freak) are going to resume to true Scandinavian hands on tradition or end up in Malmo’s Chalifate leisure facilities..
I think Swedes will have to prepare themselves for a housing market crash and then some not so attractive favelas popping up in our capitol for the migrant crowd that can’t access the credit system.
How far is it before some of the more pretentious housing areas in Sweden will be lit on fire in the same manners as the automotive carbeques of recent times.
It will be glorious. But I’ll be safely in east Asia long before SHTF.
Good description of her mother.
Ok, by Trump’s own declaration back in 2015, any standing president that has two days in a row totaling 1,000 pts. or more down on the stock market, should be impeached. On Friday Dec. 14th it went down 499 pts. Today the next day of trading, call it day #2, it went down a little over 500 pts. which is over 1,000 pts down in two days. Therefore Trump should be impeached and he should call for it himself.
Since Oct. 3rd, 2018 when the Dow was at 26,828 it has fallen now to 23,600, a fall of THREE THOUSAND TWO HUNDRED AND TWENTY EIGHT POINTS ON THE DOW (-3228).
Just joking around about impeachment, with the greater point being why is the plunge protection not working for the US stock market? Maybe they’re losing control.
Maybe they need to shake more off the producers retirement accounts. Can’t let the worker bees retire.
“Economist Xiang Songzuo talked abt how Chinese economy could tank soon, due to wrong policies, delayed reforms & trade war. He said “a very important institute” in China just predicted in an internal report the growth in 2018 is 1.67%, or negative.”
Is that before oor after taking inflation into account?
Someone I talked to at the conference last week said that the situation was much worse in China than what is being reported in the press. The group he works for has cut back from 9 offices in China to 3, because of the fall off in demand.
hi everyone, theparty in ChCh has already started and we weill be eating steak for Xmas and controlling hydropower and giving ourselves pleasure during slaughter. Fast Eddy i love you bud but stading on one’s feet corwing glory of the last battle is better than a rock wall. i will be the marauder who tires to steal your veges unless you feed me with whiskey, i always rememebr that invitation to yoour last days party and i’ll be trunign up in a subaru or a toyota landcruiser methinks cause i knows where you live…. tee hee
A federal court has vacated an environmental permit that would have allowed The Atlantic Coast Pipeline to cross two national forests, according to a court opinion filed Thursday with the Fourth Circuit Court of Appeals.
The opinion quotes Dr. Seuss’ The Lorax, saying: “We trust the United States Forest Service to ‘speak for the trees, for the trees have no tongues.’ ” A review of the permit records led the court to decide that the Forest Service “abdicated its responsibility to preserve national forest resources.”
“This conclusion is particularly informed by the Forest Service’s serious environmental concerns that were suddenly, and mysteriously, assuaged in time to meet a private pipeline company’s deadlines,” the opinion reads.
Trump Interior Secretary Zinke resigns amid ethics probes – “Surrounding himself with former lobbyists, it quickly became clear that Ryan Zinke was a pawn for the oil and gas industry”
Guess it is time to throw out the trash?
What is ethics indication and what is the right story? The standard story is pawn for the Greens.
Take a look:
He has always smelled bad— and I’m a former Montana resident.
I just returned from visiting Tokyo. I know it doesn’t represent the country as a whole. One thing that stood out was just how busy so many people were doing unnecessary activities. There were too many staff in hotels, too many merchandisers in the stores. I know the japanese are different then most other cultures but how much is wasted keeping people busy?
Tokyo was filled with young people and I hear they are trying to discourage/pay people not to move there. One smaller town we visited outside Tokyo was a ghost town very eery.
If history is a lesson don’t count them out.
Japan was the last nation to shake off medievalism (if you ignore Saudi, who are still there) they look like to be the first to return there
I’ve been to Japan many a time—-
They may be the first to return.
Japan is a strange country. It is losing workforce, because of the long-term low birth rates. It is using more robots than other countries, keeping new jobs down. But it really needs jobs for the many people it has (including older people without pensions), so there are a lot of make-work jobs, just to keep people busy. Some of these make-work jobs are paid for by Japan’s government debt.
this guy is definite unstable
Perhaps he realizes that the whole system cannot go forward as in the past. Or his voters are passing this message to him.
At least Trump has noticed problems elsewhere. Maybe he should start looking at the Dow which is dumping again today, Monday. Definitely proving it’s in a bear market.
Once the computer programs figure out the direction the market is going, I am afraid we will have a lot of days headed in the same direction, namely down.
And where it stops on the way down, nobody knows.
“The pillars of the global financial system are fundamentally unstable and could lead to a frightening chain -reaction in the next crisis, the world’s top watchdog has warned.
“Giant central counterparties (CCPs) that clear much of the $540 trillion ($795 trillion) of derivatives are themselves vulnerable to failure in times of extreme stress.
“This is a worry looming ever larger as rising US interest rates expose the weak links in global debt markets.
“The Bank for International Settlements said in its quarterly report that the CCPs could cause “a destabilising feedback loop, amplifying stress”.”
“We are fast approaching that critical time of the year when investors must place their bets for 2019. It will be no easy task as investors face a battery of negative forces, adverse headwinds and a sense that the world is sinking into complete confusion. As if investors have not already been through enough hell and high water in the past decade, there is a prevailing sense that things are about to go pear-shaped again.”
“Ray Dalio, the billionaire founder of investment management firm Bridgewater Associates, said a gauge that measures conflicts around the world is at its highest level in more than 70 years.
““We created a conflict gauge — various ways of measuring different conflicts — and the conflict gauge now is the highest, really, since the war years,” Dalio said in an interview with CNN’s Fareed Zakaria that will air on Sunday. “There is more polarity, more conflict internally, of a sort.”
“Investors and business leaders are watching the rise in populism and protectionism to assess their impact on global economic activity. In 2017, Dalio warned that populism will be a more powerful force than monetary or fiscal policies, with politics affecting markets as happened in 1937.”
This is an article by (economists?) David Brown called, “A recession is looming, easy money is ending and the yuan is falling – get set for 2019, the year of living dangerously.”
2019 is looking fraught with risk at this point. I’m keeping my fingers crossed the that the ECB is sensible enough to postpone QT in January and the Fed calms down a bit with these interest rate hikes. Some sort of Brexit breakthrough and a de-escalation of the trade war would also be good for the nerves.
I can see that central counter-party failures could be a huge problem.
“China’s consumers and businesses are losing confidence. Car sales have plunged. The housing market is stumbling. Some factories are letting workers off for the Chinese New Year holiday two months early. China’s economy has slowed sharply in recent months, presenting perhaps the biggest challenge to President Xi Jinping in his six years of rule. Gauging the magnitude of the slowdown is difficult, given the unreliability of China’s economic data. But there are signs that the country’s problems are deepening.”
“As the risks to the global economy rises, the Bank of Japan is expected to join a chorus of warnings from other policy-makers of the threat to growth from protectionism and signal its resolve to keep the money spigot open. At this week’s policy review, the BOJ is seen maintaining its ultra-easy monetary settings even as years of heavy bond buying dries up market liquidity and hurts bank profits.”
” Some factories are letting workers off for the Chinese New Year holiday two months early.”
I’m starting to get an uneasy feeling about where things are headed. The real bugaboo is how will the CB’s shock the system back into coherence once it’s descended into buyer’s market on steroids and unemployment is scaling up into the stratosphere? A new QE program might not even budge things at that point. “Here’s some cheap money. Please, do something to get things moving again.”
If the credit markets freeze, it’s over.
I’m wondering if it will be free money. They could justify an emergency, and not even have to pay it (or interest) back for years. Anything to re-inflate. To them, failure is not an option. (until it happens)
And now, back to 1971
Hey Mark, I randomly came back to this website today. I don’t come here often anymore as the story is pretty clear as to what is about to happen in the next few months/years. No sense in reading about it anymore. I just spend my time enjoying myself. Anyway hope you’re well and enjoying the (little) time we have left. Happy Holidays!
I stop by here most days, but don’t post much. Glad your well!
The same feeling here, ITEOTWAKI. We already know what will happen (collapse) and more or less how (too fast for our taste) We just don’t know how many months or years (I do not believe it will be decades) we have to get there. Meanwhile, we are reduced to waiting, trying to make the most of our days.
But I regularly attend OFW , since it’s the only place of sanity I know. All the rest is noise (or mere fun).
Glad for the vote of confidence!
Hello JMS, I totally agree, we are stuck in limbo, amongst the few who see this will finish in total and utter collapse of Industrial Civilization, and soon! I have taken the attitude of a healthy, active 90 year-old. I don’t think he wakes up everyday thinking OMG I only have a few years left. He wakes up and does his things and activities. He is not depressed even though he knows that the laws of nature limit him to just a few more years on this earth! Carpe Diem, that’s been my motto for a while now! Hope everything is well with you JMS! Happy Holidays! 🙂
“The “everything bubble” is deflating. The fact that it’s happening relatively slowly shouldn’t blind us to the real threat: The world is dangerously underestimating how hard it’ll be to deal with the fallout once it pops.
“Frothy markets can’t disguise the warning signs. The shift to tighter monetary policies in the West is putting pressure on global equity and real estate values. Even more critically, it’s weakening credit markets. Over-indebted emerging markets face headwinds from rising borrowing costs and dollar shortages…
“…even after recent US interest rate hikes, the Fed has nowhere near enough room to cut rates that much without going negative. In Europe and Japan, where rates are already less than zero, easing would require substantially negative levels, which would likely be politically impossible. Even current levels are controversial. Negative rates are a disguised way of writing down debt; they penalize savers and weaken the banking system…
“Ultimately, central banks might have to resort to QE variations such as “helicopter money.” …To make it palatable, the measure could be packaged as a way to rationalize welfare systems by reducing frictions and administration costs.
“Direct intervention, such as lending to or investing in businesses, or taking over banks and large parts of the economy to restart activity, are also possible. Those would be awfully desperate measures, however, which points to the real problem. Since 2008, governments and central banks have stabilized the situation without fundamentally addressing high debt levels, weak banking systems and excessive financialization…
“In any new crisis, then, policymakers are likely to be badly exposed. Central bank purchases of real estate and equities, helicopter money and more direct intervention could well fail to boost economic activity. That would contribute to a collapse in confidence in authorities, as the sight of governments forced to print money and throw it out of the window or take over markets increases people’s anxiety about the future.
“There is already a crisis of trust – a democracy deficit – in many advanced economies, accompanied by rising political tensions. A loss of faith in the supposed technocratic abilities of policymakers to manage economies will compound these pressures.
“The political economy could then accelerate towards the critical point identified by John Maynard Keynes in 1933, where “we must expect the progressive breakdown of the existing structure of contract and instruments of indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate outcome we cannot predict.””
Good article re helicopter money and currency debasement and and the risk those pose to the financial system’s credibility:
“Global bond investor PIMCO said that since the 18th century there have been 56 examples of direct monetary financing, from France in 1795 to Zimbabwe in 2007. All had dire economic consequences.
“Dropping cash directly onto consumers may well be the end of that line and, if that fails to work, governments may be very reluctant to reinstate monetary financing bans in future – creating the threat of systemic collapse.
““The main difference between helicopter and other possibilities, lies in the credibility of the whole monetary system,” Swiss economist Reto Foellmi told a discussion on Reuters Global Markets Forum this week. “If helicopter money is done literally, they would cross a point of no return.””
This article talks about Japan. Japan is the home of a huge debt bubble that sort of collapsed about 1992, without bringing down the whole economy.
I think that a debt bubble that only slowly collapses represents a permanent drag on the economy. The economy had more inflation than other economies, before 1992; now it has more deflation.
Also, the falling size of the workforce represents a drag on the economy. The economy really needs fewer homes, fewer cars, fewer roads, fewer clothes, fewer schools, and fewer of pretty much anything else. (This is true of much of Europe, as well.) It is hard to make much money tearing down old building. At the same time, keeping infrastructure operating requires more maintenance. The economy ends up creating a lot of robots (to save labor) plus a lot of make-work jobs for its citizens, because they need to do something besides tear down old buildings.
Japan’s energy costs are high, because it imports its fuels. Nuclear was the one type of energy that helped them for quite a few years, but now it is having problems as well. It is hard for Japan to compete in the world marketplace unless it can hold down labor costs, to try to offset its high fuel costs for oil, coal, and natural gas.
Thank you for your informative articles. You are changing my mental map of how the world operates. I just read an article that says each American has the energy equivalent of 600 human energy servants. Just a couple hundred years ago, not many people could afford careers that didn’t involve caring for and feeding their families. Oil gave us so many energy servants, we could afford a bizarre variety of well-paid careers. Even though the average American farmer can feed an additional 155 people (with the aid of oil-fueled machinery) it barely pays the bills. Isn’t your article discussing commodity collapse a pre-cursor to a collapse of these high-paid jobs that have nothing to do with the basics of survival?
Right! We very badly need commodities for to help us grow food using modern methods, and for transporting food and for refrigerating it or otherwise making it last longer. If only a small fraction of the population works in farming, it is possible to have many types of goods besides food, including clothing, devices for transport, and homes that are sturdy enough to withstand storms and can be climate controlled. It is also possible to have many types of services, including education, medicine, financial services and elected government.
How the system will collapse back is uncertain. Hunting and gathering is the most basic system. People who currently support themselves in this way may be able to continue.
What lifestyle above hunter-gathering can survive is less certain. If we cannot make metal tools and insecticides, farming will be very different. Intergovernmental organizations (such as the European Union and World Trade Organizations) seem to be among the most vulnerable. Financial organizations and financial promises are very vulnerable as well. Banks may fail. Governments may not be able to bail them out. Some governments may collapse, in the way the central government of the Soviet Union collapsed. Smaller units may be left on their own.
this is why european medieval castles needed 000s of servants and 000s of acres to support them
one family lived in luxury while most of the rest lived in mire
Great article on conventional vs. non-conventional oil. There is a graph part way down that shows conventional oil shaded in blue and non-conventional in yellow on top of the blue. It’s easy to see that conventional plateaued in 05 and since then it’s only peaked above that line a couple of times, with non-conventional use steeply climbing.
not possible to go on using/producing non-conventional stuff without conventional input and support
‘Hungarians rally again against ‘slave laws’
“About 10,000 people have rallied in Hungary’s capital Budapest against new labour laws, which have been labelled “slave” legislation by opponents. The crowds marched towards parliament and the state TV headquarters, in what was the fourth and largest protest since the laws were passed last week. Police fired tear gas to disperse protesters near the TV station. New rules mean companies can demand up to 400 hours of overtime a year and delay payment for it for three years.”
Imagine being forced to work an extra FOUR HUNDRED HOURS of OVERTIME a YEAR and not getting paid for 3 YEARS!!! What companies will do is end the company name after 3 years and open with a new name, and tell employees they have to get their overtime from the previous company, even though none of the top executives or the address will actually change.
They do that with those counter top chicken cookers. They provide a warranty, but end that company name a couple months after advertising on TV so they can avoid replacing broken or damaged parts. Then a year later they come back with the same unit, except for a minor name change or slight design variation and sell on TV, rinse, repeat.
RESISTANCE PEOPLE!!! I wonder how long before our govt. comes up with a similar plan. I’m still surprised they didn’t end minimum wage once they had the power to eliminate it. They talked about getting rid of it for decades. As thing squeeze down except more of this type of legislation. Going to get tougher and tougher to pay the bills.
And not get paid for three years! That sounds like the big problem. How many of these companies will still be around? Will the currency still buy the same goods and services? It sounds like something that won’t work.
Won’t work for who, the workers maybe not, management yes, if they can get away with it. Hard to say no to management when your paycheck is all that keeps the family afloat and probably harder yet to get paid so much later. It’s hard enough to get people to pay when something is due, let alone 36 months later. “We don’t show you had as much overtime as you claim. You say 1200 hours, our records show 13 hours”. Then what’s the recourse?
Common sense says people will get what they are owed one way or another. You discredit the working too much.
I don’t discredit the working – I see an attempt to defraud the workers by a plan to pay them 3 years later, which could easily lead to not paying them. Are those terms you would agree to?
They can get away with it because CEE effectively became German-French colony, and both sides of the deal know it and acknowledge it in some capacity daily. Local people strive for maintaining the illusion they are again fully integrated (semi-) core part of the West, but obviously as they lack the proper seat at global debt issuance table, hence have to keep subjugated in these factories and warehouses at conditions (pay, working hours, . ) which would make sedate Western proles riot immediately..
This will only end when Germany wobbles in serious fashion (onset of true global recession/depression) and the industrial overcapacity of their subcontractors won’t be needed anymore..
My ‘black sheep’ cousin in Spain, in the swimming pool business, hires workers over 50 so he can get a government subsidy for employing them, and he doesn’t pay them in full or on time.
They are so afraid of having no work, that they continue in the job. One did rebel, and went on welfare.
He even doesn’t pay his brother on time (for legal reasons, he can’t leave the family company).
Local governments are also leaving workers with huge arrears of pay. When they get really fed up, the refuse workers set fire to the rubbish…..
But hey, at least they can say, we had it good, actually better than most,
way back during the 16-17th century at the peak of colonial inrush bonanza..
Or upto 1970s, perhaps somewhere till 2000s..
It’s hard to explain people good times are just passing pigeons, it’s not meant to be permanent human condition.
More to your/mine general point, I think there are some specific traits in certain cultures, which often push people into unnecessary servitude just to prolong the imaginary self status a bit more irrespective how self destructive to continue at all costs actually is.
While other avenues, albeit more ‘radical” (like leaving the city) are still at hand, even at the age of ~50’ ..
Basically, same occurred in Russia collapse. Workers still reported to work. What’s the saying?, “They pretend to Pau, so we pretend to work.”.
Article in the news a major US Oil Company leaving Venezuela and paying it’s workers with TIRES..much more demand than money!!!!
Record immagration in that poor country
new Brookings Institution study forecasting that the number of Venezuelan refugees will skyrocket to 8 million should trigger alarm bells in the United States and Latin America. It would be the world’s biggest mass exodus in recent times — bigger than the Syrian refugee crisis — and could destabilize the region.
The study, by Brookings’ Venezuelan-Israeli resident economist Dany Bahar and researcher Douglas Barrios, says its projection includes the 3 million Venezuelans who, according to the United Nations, have already left their country because of its humanitarian crisis. Most of the refugees have fled to Colombia
This is just the start…hold onto your seats…
Even the laws of medieval England, written by aristocrats and lawyers, allowed workers a lunch (and siesta) of one-and-a half-hours, and other proper meal times.
Incredible regression that we are seeing now.
you ain’t seen nuthin yet
human muscle is the final energy resource before collapse
it comes in slow easy stages, each one blending into the stage before and after
Ron Paul: A 50% correction will spark depression-like conditions that may be ‘worse than 1929’
There is a poll at the end of the article. Slightly over half of those taking the poll say that they think the market is headed for a major downturn. The remainder is divided between, “No downturn,” and “Undecided.”
Ha of course there is a poll; if it moves they poll it, if it doesn’t they poll it until it does.
I wont miss some of the rubbish polls that proliferate lately; how many people with first year stats think they can make a career out of it?
As you probably know Paul is macro economic perma doomer (given current system), he has been saying exactly the same since 2007/8 and even several decades before that..
And on some occasions the msm just picks the message up again, like right now for some reason, i.e. people slowly getting uneasy about the wobbling situation and or preparing alibi as “we did forewarn you..”
It’s amazing how many commenters out there don’t understand how we’re living off of millions of years of stored sunlight, and consuming it all in 300 years.
Here is one:
Dr. Brian Poe
“It would help if people of all demographics—especially established power—would clearly state that if fossil fuels aren’t aggressively phased out & other emergency interventions taken, billions of untimely deaths are expected.”
One could add that billions of deaths would occur if we aggressively phase out fossil fuels. I’m quite sure they aren’t talking about diesel fuel for tractors! Or fertilizers.
it has been suggested that homo sapiens evolved as a species to get rid of excess stored carbon from the planet
we’just about finished that job
any ideas on what comes next?
bear in mind that we also represent a store of excess carbon in the system–and we certainly seem to on the point of self-disposal
Technically, and in a very abstract way of thinking, from an evolutionary standpoint, life forms evolve in endless competition with other life forms in a battle to see who can capture the most energy and use it most efficiently, as manifested by reproductive fitness. I’d say H. sapiens has been doing just fine (7 billion population added in less than 2 centuries) in this endeavor, but don’t forget, extinction is part of the evolutionary landscape too.
Yep, that’s the humans appearing on the scene in clockworky fashion as nature’s desired terraforming agent using fossil fuels, which I had bounced around here for several past years. However, even for overshoot – rapid decline – if you zoom in there must be some stages of echo booms and stabilization, doesn’t matter how short. But the entire process will be counted at least in generations not faster.
The know-how cat is out of the bag already – irreversibly, if you have biomass, you have charcoal, if you have charcoal you can do iron and agricultural tools, doesn’t matter if that’s only sickle and few bolts level regression. Hence agricultural civilization of some sort is here to stay unless something way bigger than nuclear standoff takes place, e.g. un precedent wobble in sun’s output and its effect on climate, space ray burst, etc..
So, one should not be worried about people in general, but rather stay more alert about immediate surroundings, neighbors, relatives, compatriots and migrants as we likely crash into uneasy depop scenario soonish..
Yes. Pretty regional though. It seems. Seattle, Mexico City, Miami. Different situations.
‘While mankind had its plans, the Earth had her own.’
Always loved that quote from Doris Lessing, from ‘Shikasta’.
That is a really nice collection of graphs on wage disparity and failure of the wages of the lower classes to grow. Many other links too.
Thank you Gail!
Things never really went back to the way they were before 2008. Mark that year in the historical accounts as a major step down year. It wasn’t collapse, but it was a step down, from which nothing could get it back, not even trillions in phony money conjured up to jump start the economy.
We all wonder when the next step down will occur. I figure there will be 3, and by then things will be so tough you won’t know one step down from another.
please explain the 3 steps.
the steps down correlates with my skimming stone analogy
the stone bounces on the water–loses energy–bounces up but lower—hits the water again–bounces lower—hits the water again, losing energy each time till it sinks altogether
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.
This moment in history marks the end of a long, sad tale of greed and murder by the white races. It is inevitable that for the final show we vomited a grotesque figure like Trump. Europeans and
Americans have spent five centuries conquering, plundering, exploiting and polluting the earth in the name of human progress.
They used their technological superiority to create the most efficient killing machines on the planet, directed against anyone and anything, especially indigenous cultures, that stood in their way. They stole and hoarded the planet’s wealth and resources.
They believed that this orgy of blood and gold would never end, and they still believe it. They do not understand that the dark ethic of ceaseless capitalist and imperialist expansion is dooming the exploiters as well as the exploited.
i love Chris hedges writing
South Korea: Suicide nation
Loneliness, poverty, chronic illness, losing one’s job, the death of a loved one or the breakdown of a marriage – there are many reasons why people fall prey to heartbreak and despair, but most of us, thankfully, will find a route out of that unhappiness or at least develop ways of dealing with it.
not 5 centuries
the viable steam engine was invented in 1776—along with the American revolution. Before then, there wasnt enough power available for conquest. Before then it was conquest of the American continents by European states, Spain, France England etc
Americans (as a cohesive nation) didnt start muscle flexing until the 1860s onwards, things didnt really get under way till the 20th c when oil came on the scene
It/s too easy to lump some people into an isolated group and blame certain aspects of history on them. America was a product of its time in European history and culture. We gave the world democracy and the beginnings of the rights of individual man, vs the providence of Kings and authority of church. The conquering of natural America, including natives, the ownership of slaves, was not activities invented and carried out by the “White race”, these are activities that happened throughout the world and throughout time. One could say our culture has lead to an introspection and admittance to our past mistakes. We didn’t conquer the world through military might, we rescued Europe from Fascism and protected the world from Communism. Only the discovery of oil and its byproducts allowed such a global array of affects, both good and bad. Chris is a bit one-sided in his opinions that he expresses. There is always a mixture of good and bad in the world and in every culture.
cheap surplus energy provided democracy—or at least a temporary illusion of it
fascism wasn’t conquered—it was delayed…..again through the availability of cheap surplus energy
the ‘Americas” were cheap open spaces to spread into
It will be interesting too see what type of government society turns too as fossil fuels run out. Interesting from a future perspective, not so interesting to live through I think. We still have quite a bit of open space in America, perhaps this will help speed up the healing of the damage modern man has done.
i dont see how it can evolve into anything other than a version of fascism
people ”demand” what they had—blame others for not having it, and believe a fuh rer who promises it
Correct Jason, slavery existed long before a small portion of the “white race” decided to profit from it. Slavery existed in Africa, and in many Muslim nations throughout history. It still exists today in certain cultures. Like many current social justice warrior creeds today, it is in vogue to blame the “white race” for slavery. Perhaps they should recognize that it was the “white race” and only the white race that ended slavery and brought the light of personal freedom to much of the world what endured that horrific practice.
it was africans who sold africans to the slave shippers and traders
In fact. ‘the white race’ is just rhetoric – whether pro or anti-Empire; like calling all Africans ‘black’. Tell that to the Berbers!
Other rather light-skinned Imperialists in history: Turks, Afghans, Chinese, Japanese Arabs, Persians, Syrians……
I agree, Hedges gets it right.
I have looked at the Chris Hedges piece, frankly just a load of buzzword spaghetti. I wish people would stop promulgating race hate, we are all the descendants of genocidal monsters and life is terribly simple, we have all forgotten we are just animals programmed like heat seeking missiles to home in on the resources, nothing more nothing less. It’s all about resource grabs and preening opportunities plenty of that on here.
Deepfake Videos Are Getting Real and That’s a Problem
Computer-generated videos are getting more realistic and even harder to detect thanks to deep learning and artificial intelligence. these so-called deepfakes can be playful, but can also have real, damaging consequences for people’s lives.
now no politicians need worried about anything
Maybe the EU’s Juncker could amend videos in order to make himself look sober.
Teresa May could look confident, decisive and competent……the possibilities are endless.
Video and advertising culture has also taught people to respond instantly, rather than analyse and reflect.
As for reading comprehension – of anything but the most simple sentence – ,hasn’t that collapsed?
All of the new “information” in our lives becomes a problem, rather than a solution.
With inadequate energy supply, it looks like we can switch to an information economy, but we really cannot. We end up in a world of endless unwanted phone calls and movies that are meant to deceive.
This is more speculation than understanding so please do not take as an opinion.
There is conjecture that the universe is basically information, eight dimensions I believe and if memory serves me right projecting it down through dimensions gives tetrahedrons. We do something similar when we draw 3D figures on paper. It seems to me that underlying understanding our visible world could be in these ideas. Quantum mechanics is bizarre at best and yet LEDs are a demonstration of this behavior visible to us in a somewhat analogue world which apparently is not the “real” world.
In an interesting twist, Putin has declared rap music should/will be regulated so as not to corrupt their society. The west seems to have lost the wisdom of the ages, the Catholic church was at one time very involved in movie censorship which seems to have ceased around the time of Vatican 2, with Pope John XXIII who as I understand it was a “common” man. Judging from the behavior and out right failure of the lives of many “stars”, perhaps common is not always a very good way to go.
Information can be organized, the noise rejected; it is not easy but Claude Shannon did some interesting work in this area around 1950 or so. In the universe, information came from someplace, perhaps we don’t as of yet see from whence it came.
Have you been eating wild mushrooms again?
Laughing quietly, very nice.
You might drop over to Quantum Gravity Research, they seem to have some interesting ideas, we have pretty well beat every idea on this blog to death with a great deal of certitude that we know everything. Wilhelm Roentgen once commented after discovery of the nucleus that now we know everything about physics or something close. Well, not quite.
Gail touches on this very often when she mentions a “guiding hand” or something similar.
Claud Shannon was real and modern information theory was the result – he was initially employed by Bell Labs and moved on to MIT.
Vatican II changed many things in the Catholic church and much to our loss in my opinion, many dioceses are now bankrupt secondary to very poor behavior. We as humans need norms, general patterns of good behavior even if we fail(sin?), we need to try, we seem to need a belief in something bigger than ourselves. Man seems to fail at this regularly, does anyone recall a pediatrician(physician) on television set as a role model who in the end was found to have feet made of clay?
We are having some societal challenges and they will need to be solved or resolved in some manner, we need hope without it we succumb to nihilism.
We definitely need hope. It looks very much like there is a guiding hand, somewhere in this whole process. But it is hard to prove this to people who are convinced that we know everything through science.
Dennis, are you saying that humans can’t be good without religion? Catholicism is the only way you can find hope?
And Gail, it sounds like your saying you can prove there’s a guiding hand? I’m not convinced science knows everything, can you please provide your proof?
I don’t think that Catholicism is half-way correct. The self-organizing power of the system leads to all religions on earth, including African religions. These religions gradually change over time, as conditions change.
There seem to be a lot of overlapping themes among many of these religions. The system operates better, when we co-operate with those close to us. Simply choosing what is best for ourselves doesn’t generally provide the optimal group outcome. Instead, it is better if we treat our neighbor as we would want to be treated. We have specific responsibilities to our families.
Also, the Higher Power of creation is really an ongoing higher power, active in our lives and within the system today. This Higher Power acts through seeming coincidences. There may be something for us after death, but exactly what is unclear. Enough different cultures have buried their dead with some items from the current world, that it seems like this belief has been quite prevalent. We don’t know whether this is simply wishful thinking. Likewise, we don’t know whether belief in hell is simply wishful thinking that those who do not behave as we would like, will meet a bad outcome in the next life. I understand that some Africans believe that stealing food from other people’s crops will lead to illness in today’s world. This would seem to be another version of the story.
There is a lot we don’t know. The self-organizing system is so miraculous, however, that we need to believe that there are things that are beyond our understanding that may happen in the future.
as far as we can tell, humankind is the only species that possessed a concept of far future and deep past
We can recall our grandparents faces–see pictures beyond them. No other animal can do this.
Similarly we can plan/imagine a future, keep track of offspring when they are no longer around, should we wish to do so
because of this we project ourselves into an imagined ”future” that goes on forever, we cannot accept that our single existence is all there is
So we create alternative realities to accomodate this.
Ancestor worship—they watch over us etc etc—or some ‘healer’ from the past who, through repeated tellings. takes on a supernatural presence in our lives–a natural development of this is the desire to have a better existence than the one we have, reinforced by priests who repeat that over and over,
It is natural to believe that. Most of human existence has been rubbish–who wouldnt want something better to look forward to?
on the plus side, organised religion does offer a cohesive community
Undoubtedly, we are all heading for the great sleep. Some have said that we exist now so that we can prepare for that final rest, and therefore “do it” properly.
This we have now Is not imagination.
This is not grief or joy.
Not a judging state,
Or an elation,
Those come and go.
This is the presence that doesn’t.
What is the “presence” of which Rumi speaks? Words sometimes used synonymously are the sacred, spirit, the transcendent. All suggest the nearness of something greater than the rational mind and the human ego.
Baker Phd, Carolyn (2013-11-19). Collapsing Consciously: Transformative Truths for Turbulent Times (Sacred Activism) (p. 112). North Atlantic Books. Kindle Edition.
Even if one simply learns that he is not the center of the universe and then knows nothing else after death, it is better than not taking advantage of the simple truth that death is coming to learn.
Information is made possible by energy dissipation. Self-organized balancing prices are a high form of information.
What happens when there is no place to go!?
Venezuelans who have fled the country already surpass the 3 million mark, with over one million in Colombia. Colombian authorities have stated that they expect the amount of Venezuelans in the country to double over the next 12 months. Venezuela appears to be tragically stuck in a perverse modern-day “Malthusian trap”, where lack of access to food is an important determinant of the emigration rate. The current conditions are so bad that even if the government were to put all of its net income from oil—Venezuela’s main and almost only export, which is publicly owned—to feed the poorest of the poor, there would still be a substantial portion of the population whose basic caloric needs wouldn’t be covered.
Set sail in a boat with a pantry?
The price of oil is incredibly important in this situation!
Millions have also fled Ukraine, just to eat and survive.
Why Colombia has taken in 1 million Venezuelans
Colombia is currently dealing with a massive wave of refugees coming from Venezuela. Venezuelans are fleeing their home because of a severe economic crisis under President Nicolas Maduro. There are high inflation rates and there isn’t enough food available for people within Venezuela to even eat. Thousands of Venezuelans cross the Simon Bolivar bridge located at Cúcuta every day and Colombia doesn’t seem to be turning anyone way.
this just a trailer
I is APOTHEOSIS
Bitcoin was having an Xmas sale today at $3130
a bit higher now but by next weekend we might be seeing under $3000…
heading towards trivia…
Most Americans Received No Pay Increase In 2018
Most Americans say they didn’t get a pay raise at their current job, or start a better paying job in the last 12 months, according to a Wednesday survey from Bankrate.com.
According to the poll, 62% of Americans report not getting a pay raise or better paying job in the past year – up from 52% last surveyed last year.
From the article:
These are the folks who get whatever kind of low paid job happens to be available, often part time. I am sure that people in rural areas are particularly hard hit.
Let me piggyback a blast from very recent past, I’m going to print it and hang it on the wall – it’s that important and far reaching knowledge of human nature:
December 9, 2018 at 7:43 pm
People under estimate how bad the State will be for them as growth goes into reverse;
especially those parts of the economy with both the vulnerability of fixed assets
(particularly land) and little political clout (depopulated rural areas).
A quick read of the history of collapsing empires shows how long the wealth pump
towards the centres of power can remain intact.
December 10, 2018 at 6:46 am
Farmers always, always, get stamped on and crushed. It was the same in Europe:
the city people in Italy made the farmers grow wheat for their nice white bread,
and left the farmers to had eat bean and barley bread.
Obviously such situation eventually reverses, but that’s likely several generations away.
Namely, retreat to fortified manor dwellings providing at least some ad hoc protection to some (lucky) part of their subjects working 24/365 in the open land again..
Debt slavery? Pay off the tractor or else…
That’s an interesting YouTube video discussion on debt. I’d jump in at 19:00 and go to about 28:00. She doesn’t think debt will be forgiven. That’s an interesting viewpoint, considering how much debt there is globally.
The function of debt within industrial civ is to reassure people that the system won’t collapse anytime soon. The need to forgive debt won’t arise until after the system begins collapsing.
Thanks, I’ll check that out. For a good X-mad read check out Atwood:
Weird how peakoil.com nowadays contain so many “happy ever after” stories and oil independence stuff. True that there are some depletion stories still but very bi-polar.
peak oil’s refs are weird
they are scathing about gore saying global warming was the cause of syria’s civil war—when it’s obvious that’s exactly what happened
Peak oil in Syria played a big role as well.
Peak oil badly hurts the finances of a country. When the finances are in terrible shape, any weather problem becomes a big deal.
Another BIG piece of the mosaic is that Syria as Russian ally refused to host that Gulfies to EU markets bound natgas pipeline.. So if you combine all these major triggers to single bowel of misfortune:
domestic energy balance going awry, overpop and crop failure-droughts, instable regional setting, proxy war for natgas pipeline..
agreed that peak oil affected their economic system, but the 4 year drought drove farmers off their land into cities, and into conflict there for space and jobs
if the drought hadnt happened, they would have stayed on their land
A lot of other things drove people into cities as well. Look at every other country in the world. Jobs are disappearing in rural areas, as they are being added in cities. It is another example of what happens when there is not enough energy to go around. Physics freezes out the areas with poorer returns on energy investment, and encourages growth of the areas with better returns on energy investment. This is part of what caused the Soviet Union to collapse in 1991. The Soviet system was not efficient. (Besides the Soviet Union being an oil exporter, in the days when oil prices were low.)
I suppose that physics is freezing out young people with advanced degrees, today, as well. By the time they finally graduate, they have so much debt, and they are so old, that they can’t have families. The part of the world that seems to most encourage growth is sub-Sahara Africa. There, birth rates remain high. Homes are simple huts. A man can have as many wives as he can afford. Young women don’t have a choice in husbands; the system decides for them.
all equally unpleasant—on balance
Have you ever been to Africa, Gail? They are leaving for the cities there too.
«Sub-Saharan Africa (SSA) is often regarded as the world’s fastest urbanizing region. Urban areas currently contain 472 million people, and will double over the next 25 years. The global share of African urban residents is projected to grow from 11.3 percent in 2010 to 20.2 percent by 2050. SSA’s 143 cities generate a combined $ 0.5 trillion, totaling 50 percent of the region’s gross domestic product (GDP).»
I have never been to Africa. My father grew up in Madagascar, and I have a cousin who is often in Africa on medical missionary do-good trips. So I have seen and heard a lot over the years. My cousin is my facebook friends, so I see the pictures she takes. She is a semi-retired nurse, whose husband has died, and who has no children. Without dependents, she feels that this is a good kind of service to be in.
Africa is clearly growing rapidly. It is the one area of the world where the birth of new babies still seems to be increasing. Energy consumption per capita is pretty much flat. All of the growth in energy supply goes into longer-life expectancy and more new births.
Thanks for the link to the interesting article. The diseases in Africa have always “put me off” from visiting. My father became a physician, because disease was such a problem in Africa. Also, tours seem to revolve around “see the wild animals” or something else I am not as interested in.
When people cannot eat, revolutions occur. Droughts have always occurred throughout history. The mini ice age that occurred during the period roughly 1300s to the 1700s also contributing to massive famine and deaths throughout Europe, and contributed to the French Revolution. These conditions are currently returning to our earth, courtesy of our sun, that controls our climate, along with our inter-planetary magnetic environment. If the mini ice age conditions kick in for 20-30 yrs, shorter summers, longer winters, rainy, wet springs and falls, that prevent crops from being planted, or, if they are planted, prevent them from being harvested, expect some large scale food shortages. When that happens, you haven’t seen nothing yet when it comes to revolution, chaos and death across the world.
Add the coming energy deficit to this, and add multiple popping bubbles due to unsustainable debt, and we have multiple cascading disasters of biblical proportions heading our way.
Roger Hallam talks about farming in the UK and the Extinction Rebellion.
Fast forward to 18:50 for his piece.
Really interesting video about the changing weather patterns. Related to the Syria situation as well as Africa.
Debt Worldwide Hits Record $184 Trillion, or $86,000 Per Person
Part of the problem is that households are getting poorer, and can’t borrow as much. Their incomes are being taken up by student loans; they cannot afford mortgage loans. It is hard to get detail data on this issue. This is household debt, as a percentage of GDP, through 2016. In other words, it is not very up to date. And detail doesn’t seem to be available. But it is clear that household debt to GDP fell, and has stayed at a lower level. The peak was right at the time of the oil price peak.
One factor that affects this ration is the fact that households are leasing more cars, rather than buying them. I believe this shows up as commercial debt for vehicles. I don’t think it appears as debt for the buyers. When the lease is up, those holding leases need to scramble for new transportation options, if interest rates go up, and if companies are less generous in calculating trade in values. These two problems are happening now.
Also, young people are living in their parents basements, longer. When they move out, they rent apartments, rather than buy houses. An increasing share of individual homes are investor owner, rather than owned by those living in them. If there is appreciation due to inflation, the investor will gain the benefit, rather than the homeowner. Home equity cannot grow in such a situation.
Businesses are taking over the debtor roll. But I am not convinced that this really helps the system, especially when interest rates go up. If interest rates go up, those with commercial mortgages are likely to find themselves with higher rates fairly quickly. If commercial interest rates go up, they will need to pass on these higher costs to renters. But renters cannot really afford these higher costs–their incomes are not rising enough. So building owners will be caught in a squeeze. (Homeowners more often had fixed interest rates on debt in the US. Some even paid off their mortgages, so they could live without mortgages. They could even get reverse mortgages from the government, when older.)
Vehicles are very interesting. Fords decision to not make cars in the US is a clear signal that something has shifted. Affordability is down. It’s much more profitable to sell cars to rich people but there are only so many of them.
On the EV front it’s even more interesting. More or less a scam. The fuel consumption will not be lower with these cars and if deployed at scale the self discharge of the batteries will start to amount to something substantial.
Tesla keeps talking about a $35000 car, but GM already has one, and it’s not selling! It mat not havs the looks or a Tesla bit still. 3000 sold last month. And then there is the lack of infrastructure and solutions for people without driveways. The list goes on. TCO including batter change is through the roof.
We’re in a predicament because there are no solutions. That’s kind of by definition.
Most of the “solutions” are just for the 1% to continue to skim from the 99%. Or so it seems.
I am afraid you are right.
They’ve been gaming the system for the top 1% ever since Reagan substantially dropped their tax rate, and now some judge in Texas has sent Obamacare back to the Supreme Court. Says it’s unconstitutional. Wow, I didn’t know it was such a threat to top 1%, excuse me for wanting affordable healthcare.
But the trouble with gaming the system for a tiny percentage of the population is it begins to cave in as we see with household indebtedness for the rest of us. People will do whatever they can to keep up including going deep into the red, but it doesn’t make for a very happy populace. There’s what I call the happy/laughing factor. In the 60’s-70’s people smiled a lot, laughed it up, but not so much anymore. Things have gotten downright serious and even deadly if you’re in the wrong place at the wrong time.
Huge Human Inequality Study Hints Revolution is in Store for U.S (Kohler 2017) Nature
One can be poor, just going from day to day, and (if not starving) comparatively happy. Italian and Spanish peasants really did once sing and dance after work: Northerners who saw them thought they were crazy, but were they?
Poor rural people used to grit their teeth to get through the winter, when everyone was in the same boat and deaths were higher; and were certainly very anxious at harvest time, but they didn’t always live in the shadow of fear – it was seasonal.
But one cannot be deeply indebted and carefree: it’s the stuff of nightmares and constant anxiety. Still less when advertising tells you that you should be getting more every day and be one of the happy smiling people in the ads.
U.S corporate profits in 3Q 2018 rose to a record high of USD 2.07 Trillion!
That is the equivalent of 40 percent of U.S GDP in the 3Q…or 10 percent of world GDP in the 3Q.
Are these numbers correct? Is the U.S sucking the rest of the world dry? Or does the U.S exist in a different dimensions?
I am wondering if those are annualized numbers. The US usually reports quarterly figures on an annualized basis.
Of course, profits are needed for dividends and reinvestment. With fossil fuels, a big share of what is called profits gets used for reinvestment.
I get the same numbers for Europe: corporate profits 40 percent.
Corporate investments at 22 percent.
You have to watch what you are looking at. The European numbers are gross profits. Gross profits can be on any one of a number of different bases. The US numbers are some version of net numbers.
I prefer to get my data from a little closer to original sources, such as US Bureau of Economics Analysis Data numbers. The charts here a step removed– charts put together by FRED, using US BEA data.
The following chart is US Corporate Profits, without Inventory Valuation Adjustment and Capital Consumption Adjustment. The chart is clearly labeled, Seasonally Adjusted Annual Rate. It looks fairly flat, with a small uptick at the end.
The $ 2 trillion is clearly an annualized rate, not a quarterly rate.
There is a second version available as well:
US Corporate Profits, with Inventory Valuation Adjustment and Capital Consumption Adjustment. It looks quite different.
I believe “inventory value adjustment” has to do with increases or decreases in the values of commodities, during the quarter. Adding this makes the numbers bounce all over. When oil prices are high, profits suddenly look very high.
I believe that “Capital Consumption Adjustment” is a reduction for the loss of value, when an oil field pumps oil out, or a coal fields loses the coal that was originally purchased in the field. This would tend to reduce reported profits. If I had my choice, I would include (that is, reduce profits) for using up part of the original capital, but I would not include the inventory valuation adjustment. It is just too volatile. It is like including unrealized capital gains in profit calculations. Not generally done.
I now see that the corporate profits are annually adjusted rates.
“Mounting global growth fears rippled across Wall Street on Friday.
The Dow dropped 497 points, or 2%, on Friday. The S&P 500 declined 1.9%, sinking to the lowest level since early April. The Nasdaq tumbled 2.3%.
Markets were dinged by a batch of negative corporate and economic developments, especially weak growth numbers out of China and Europe.
“Something is wrong here. There is this global slowdown. We can’t deny it,” said Michael Block, market strategist at Third Seven Advisors, a private wealth management firm.”
In Oct. 2019 it will be exactly 90 years since the big crash of 1929.
A $9 trillion corporate debt bomb is ‘bubbling’ in the US economy
Debt numbers the world over, corporate, national, provincial/state, municipal, household & individual are beyond absurd. Most of it is never getting paid back. There are not enough economically extractable fossil fuels left to service the interest let alone pay back the principle.
You will note that the chart does not put households at the bottom. They are the problem. They can’t handle as much other debt now that they have student loans to deal with.
Gail, is there any kind of projection as to what will happen when part or all of the debt bubble begins to pop, i.e. in the aftermath? Is there a plan B? Maybe a new currency, a debt jubilee, some way to begin anew? Hard to find someone to lend I suppose would be the biggest problem.
Do not discount the elders so quickly finite worlders they may still have a couple of tricks up their sleeve to keep the ‘lights on’ .Read this article i am providing a link to and remember get some silver while you still can it could be the last best investment to survive and thrive during the next depression.
You can’t print resources -; that is the bottom line. That is what we are up against now. Debt is piling up. Resources are not cheap anymore. They are getting difficult to physically access and to sell profitably. Money, no matter what it is, has to be backed by energy and resources. All those debt promises out there are not going to be made whole with real goods and services. Another currency isn’t going to magically make goods and services appear out of thin air (like the money does).
what about a combination of nuclear solar and wind backed by a pile of debt set on negative interest rates.thats called free money it pays itself off .
what about aliens arriving and showing us how to produce incredibly cheap and incredibly abundant energy?
or, perhaps a bit likelier:
what about a combination of ending all subsidies for nuclear solar and wind, and backing the coal and oil and natural gas industries with piles of debt so that we can have larger surplus energy?
I’d go for that. But you must enjoy punishment if you wish to share this view within your community. Actually. try saying that coal should be king, and other FFs might best be seen as boutique supplements for coal.
the clock is ticking…
in 5 days, when December 19th arrives, doesn’t your promise kick in to make no more “reset” predictions?
Is that a Monday? Anyway, we’ve been through this. The youngers are in charge now and their plan be is going to keep BAU going for quite some time.
DECEMBER 18th is the date of the big one,that is why fast eddie has disappeared
“they” got Eddy!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
can any of us really be safe?
But as history (and present times) tend to amply demonstrate, you or rather TPB can “easily” reshuffle and redistribute, juggling all the necessary core subsystem in a way to stay on top while the world around them fluidly changes..
For example, in practical terms, the Russians still can export some energy carriers (notably natgas) in exchange of some high end imports, notably high end lithography derived like CPUs and other electronics and or various niche technologies without domestic analogues available, imported both from the West and increasingly from the East as well.
Now, we return full circle to the art of maintaining power, hence you have to bamboozle the public, that from now on they have to live merrily on way less resources and frivolous opulence footprint, hence onslaught of PR / propaganda like “globulal werming”, “refugee welcoming” culture, where people in the end gladly return to bicycles and train service, and further on the road obviously even swallow various openly authoritarian measures in personal freedoms etc which are going to take place.
But as we have seen some factions of the elite are not capable to perform this as smoothly as others (e.g. Putin vs. Macron) or more precisely Macron (and his cadre of civil service lieutenants) vs. some incoming other hard on populist next time after him..
In summary, this system has got some legs, lets assume up to two decades of quasi BAU in some selected core industrial countries, plus few more time of suspended collapse after that before key infrastructure could no longer be maintained and staffed. Other parts of the world are not that lucky already as we speak, not mentioning the immediate future developments in store for them..
“But as history (and present times) tend to amply demonstrate, you or rather TPB can “easily” reshuffle and redistribute”
I could be wrong but I think history demonstrates the inverse of that statement. In other words it is precisely the elites’ belief in their ability to change an already changing world to suit their narrow needs, that tends to hasten their demise.
Yes, good point, but we are sort of picking up the opposite end points of the same continuum so to speak. Lets make practical observation again, TPTB (mostly core of the industrial civilization) certainly DID manage the transition from reaching that important threshold in ~1970s cunningly and superbly, at least from their vantage point + few % top pop of the elite workforce servicing them. The results are clear = gaining 40yrs+ of plush existence at the expense of:
– their own salaried class citizens working longer hours (pairs/families) with less benefits
(partly offset by advances in technology hence longer lifespan yet of dubious quality)
– bamboozling China and wider Asia they can join the rich club, while only JAP and South Korea seem to keep at least some advantages to themselves to a degree relatively speaking out of that process
– bamboozling CEE+Russia similarly to above as they were actively sabotaged doing the Asian maneuver (mid late 1980s as well), hence they were incorporated into the “global club” on very inconvenient terms, basically as 2nd, or rather third class passengers, now even pressed for paying up for the master class’ own excesses (migration-forced relocation wave)..
– throwing the Latin America under the bus
In summary, planned and executed success. Is it going to last for ever, most likely not.
As mentioned recently (Dr. Tim’s thesis) the French are getting restless while they lost only ~7% of prosperity since ~2000 so far, while there are ~neighboring countries doing ~2x worse already, i.e. are on the trajectory further down the road and not rioting, it’s all relative..
So, it might be that countries such as France, i.e. with “premature rebellion trigger” problem might end up shutting down the system sooner than otherwise assumed but I doubt it for now, the real shock will come only with that add on debilitating demographic slump effect apparently starting ~2025 onward, plus incompatible migrant waves finally taking over formerly fairly homogeneous societies around say past ~2035.. I always have to chuckle when mostly 50-60yrs+ old Belgian, French or Dutch rejuvenate inside out heritage site cathedrals at great financial expense, while it will be very soon (in next 2-3 decades) all remodeled (thrown out) into mosques.
Again, it all points towards future trends punctuated by various interwoven waves, steps, and reshuffles.. hard to navigate. For example people ask, shall I leave the city now or wait till next decade, or perhaps it doesn’t matter at all given specific local and or even in global terms and “fast scenarios”.
The difference now vs 1970 or 1929 is we still had energy that was profitable to extract. We don’t have that anymore. Something has to give.
The idea that Europe will be taken over by Muslims is a complete fiction. The reality is that the incoming Muslims will most probably become atheists. The ultimate energy decline will be marked by the rise of atheism.
The energy starved Iran, with its fallen birth rate is the example of that:
Gregory and Norman> Nope, the point is the system clearly re-calibrated for more expensive energy (via backstopping it by mountain of fraudulent debt) after 1970s, so you have it very wrong. Without the debt the NorthSea natgas shelf and another projects would not have been possible to launch off and sustain, since most of the gains evaporated into 3-4decades of frivolous personal consumption anyway, was not “meaningfully” reinvested into the energy economy by for example new fleet of NPPs to kick the can few more decades than by renewable crap installations.
We are know at another crossroad, when formerly docile pop is again with their backs to the wall (well sort of since ~10-20% prosperity fall is not much), hence new trick from TPTB is demanded NOW.
Will they deliver, if so how long is it going to last this time, hardly another ~40yrs, that’s almost certain.
Sorry for all these typos, I’m currently more sober than the proverbial judge, the old fellow Jean-Claude J., the protective father of all things European..
The factors that enabled the transition to greater efficiency + debtonomics were beyond anyone’s control. No one “managed” OPEC oil and untapped Asian markets into existence. There is no reason to assume that some intricate plan changed the dynamics of the global economy if that was the natural direction to begin with. Likewise, there is no reason to believe such a plan would change or modify the current trajectory.
Of course there will still be various kinds of transitions all over the globe, but don’t expect them to match your narrative. For one thing even local/national efficiency improvement projects which can delay living standard drop for 20 years in isolation from declining/collapsing BAU elsewhere are not analogous to the 70s.
the basis of the problem is the concept of ownership
humankind is the only species that owns stuff
we deluded ourselves that the planet was there to be bought sold and traded. Which is only possible on an infinite world. On a finite world you run out of planet, this is the bottom line that few can grasp and accept. There must always be ‘more’ of everything.
because there always has been
Now there’s too many of us demanding too much from too little. We all insist on owning a piece of it. This is why the earth-system is disintegrating.
I “own” a house, car and all this other stuff. But all that ”stuff” is essentially a piece of the planet. It wont go back into the earth whence it came when I’ve finished with it. Rust and decay change the molecular structure
Right. Also, the “stuff” owns you, as much as you own it. You somehow must organize it and fix broken parts. If it takes electricity or oil to operate, you must find these. Stuff you don’t need can get in the way of how you would like to live.
I went to a party a couple of days ago at the home of a couple that keeps their home incredibly clean and polished. The house looked like the inside a hotel room, when a person arrive. Trash cans were carefully hidden away in special bins. There were decorator items everywhere, but no family photos or souvenirs from trips. It seemed very strange to me. Even the garage was free from any leaves, or lawn mowers, or any other devices. Their home is part of a development were the homeowners association takes care of all outside maintenance, so these things aren’t needed.
we visit a home just like that—might even be the same folks
never a newspaper left lying around–or a used cup or glass—i’ve even had crumbs picked up from around my feet when such a thing dared to get dropped
everybody calls it ”the show house”
Home Owners Associations (HOAs) are another form of debt that never goes away. Even if you pay your home mortgage off, you still owes the HOA fees FOREVER.
The Russians import little.
You need another strategy.