Financial markets have been behaving in a very turbulent manner in the last couple of months. The issue, as I see it, is that the world economy is gradually changing from a growth mode to a mode of shrinkage. This is something like a ship changing course, from going in one direction to going in reverse. The system acts as if the brakes are being very forcefully applied, and reaction of the economy is to almost shake.
What seems to be happening is that the world economy is reaching Limits to Growth, as predicted in the computer simulations modeled in the 1972 book, The Limits to Growth. In fact, the base model of that set of simulations indicated that peak industrial output per capita might be reached right about now. Peak food per capita might be reached about the same time. I have added a dotted line to the forecast from this model, indicating where the economy seems to be in 2019, relative to the base model.1
The economy is a self-organizing structure that operates under the laws of physics. Many people have thought that when the world economy reaches limits, the limits would be of the form of high prices and “running out” of oil. This represents an overly simple understanding of how the system works. What we should really expect, and in fact, what we are now beginning to see, is production cuts in finished goods made by the industrial system, such as cell phones and automobiles, because of affordability issues. Indirectly, these affordability issues lead to low commodity prices and low profitability for commodity producers. For example:
- The sale of Chinese private passenger vehicles for the year of 2018 through November is down by 2.8%, with November sales off by 16.1%. Most analysts are forecasting this trend of contracting sales to continue into 2019. Lower sales seem to reflect affordability issues.
- Saudi Arabia plans to cut oil production by 800,000 barrels per day from the November 2018 level, to try to raise oil prices. Profits are too low at current prices.
- Coal is reported not to have an economic future in Australia, partly because of competition from subsidized renewables and partly because China and India want to prop up the prices of coal from their own coal mines.
The Significance of Trump’s Tariffs
If a person looks at history, it becomes clear that tariffs are a standard response to a problem of shrinking food or industrial output per capita. Tariffs were put in place in the 1920s in the time leading up to the Great Depression, and were investigated after the Panic of 1857, which seems to have indirectly led to the US Civil War.
Whenever an economy produces less industrial or food output per capita there is an allocation problem: who gets cut off from buying output similar to the amount that they previously purchased? Tariffs are a standard way that a relatively strong economy tries to gain an advantage over weaker economies. Tariffs are intended to help the citizens of the strong economy maintain their previous quantity of goods and services, even as other economies are forced to get along with less.
I see Trump’s trade policies primarily as evidence of an underlying problem, namely, the falling affordability of goods and services for a major segment of the population. Thus, Trump’s tariffs are one of the pieces of evidence that lead me to believe that the world economy is reaching Limits to Growth.
The Nature of World Economic Growth
Economic growth seems to require growth in three dimensions (a) Complexity, (b) Debt Bubble, and (c) Use of Resources. Today, the world economy seems to be reaching limits in all three of these dimensions (Figure 2).
Complexity involves adding more technology, more international trade and more specialization. Its downside is that it indirectly tends to reduce affordability of finished end products because of growing wage disparity; many non-elite workers have wages that are too low to afford very much of the output of the economy. As more complexity is added, wage disparity tends to increase. International wage competition makes the situation worse.
A growing debt bubble can help keep commodity prices up because a rising amount of debt can indirectly provide more demand for goods and services. For example, if there is growing debt, it can be used to buy homes, cars, and vacation travel, all of which require oil and other energy consumption.
If debt levels become too high, or if regulators decide to raise short-term interest rates as a method of slowing the economy, the debt bubble is in danger of collapsing. A collapsing debt bubble tends to lead to recession and falling commodity prices. Commodity prices fell dramatically in the second half of 2008. Prices now seem to be headed downward again, starting in October 2018.
Even the relatively slow recent rise in short-term interest rates (Figure 4) seems to be producing a decrease in oil prices (Figure 3) in a way that a person might expect from a debt bubble collapse. The sale of US Quantitative Easing assets at the same time that interest rates have been rising no doubt adds to the problem of falling oil prices and volatile stock markets. The gray bars in Figure 4 indicate recessions.
Growing use of resources becomes increasingly problematic for two reasons. One is population growth. As population rises, the economy needs more food to feed the growing population. This leads to the need for more complexity (irrigation, better seed, fertilizer, world trade) to feed the growing world population.
The other problem with growing use of resources is diminishing returns, leading to the rising cost of extracting commodities over time. Diminishing returns occur because producers tend to extract the cheapest to extract commodities first, leaving in place the commodities requiring deeper wells or more processing. Even water has this difficulty. At times, desalination, at very high cost, is needed to obtain sufficient fresh water for a growing population.
Why Inadequate Energy Supplies Lead to Low Oil Prices Rather than High
In the last section, I discussed the cost of producing commodities of many kinds rising because of diminishing returns. Higher costs should lead to higher prices, shouldn’t they?
Strangely enough, higher costs translate to higher prices only sometimes. When energy consumption per capita is rising rapidly (peaks of red areas on Figure 5), rising costs do seem to translate to rising prices. Spiking oil prices were experienced several times: 1917 to 1920; 1974 to 1982; 2004 to mid 2008; and 2011 to 2014. All of these high oil prices occurred toward the end of the red peaks on Figure 5. In fact, these high oil prices (as well as other high commodity prices that tend to rise at the same time as oil prices) are likely what brought growth in energy consumption down. The prices of goods and services made with these commodities became unaffordable for lower-wage workers, indirectly decreasing the growth rate in energy products consumed.
The red peaks represented periods of very rapid growth, fed by growing supplies of very cheap energy: coal and hydroelectricity in the Electrification and Early Mechanization period, oil in the Postwar Boom, and coal in the China period. With low energy prices, many countries were able to expand their economies simultaneously, keeping demand high. The Postwar Boom also reflected the addition of many women to the labor force, increasing the ability of families to afford second cars and nicer homes.
Rapidly growing energy consumption allowed per capita output of both food (with meat protein given a higher count than carbohydrates) and industrial products to grow rapidly during these peaks. The reason that output of these products could grow is because the laws of physics require energy consumption for heat, transportation, refrigeration and other processes required by industrialization and farming. In these boom periods, higher energy costs were easy to pass on. Eventually the higher energy costs “caught up with” the economy, and pushed growth in energy consumption per capita down, putting an end to the peaks.
Figure 6 shows Figure 5 with the valleys labeled, instead of the peaks.
When I say that the world economy is reaching “peak industrial output per capita” and “peak food per capita,” this represents the opposite of a rapidly growing economy. In fact, if the world is reaching Limits to Growth, the situation is even worse than all of the labeled valleys on Figure 6. In such a case, energy consumption growth is likely to shrink so low that even the blue area (population growth) turns negative.
In such a situation, the big problem is “not enough to go around.” While cost increases due to diminishing returns could easily be passed along when growth in industrial and food output per capita were rapidly rising (the Figure 5 situation), this ability seems to disappear when the economy is near limits. Part of the problem is that the lower growth in per capita energy affects the kinds of jobs that are available. With low energy consumption growth, many of the jobs that are available are service jobs that do not pay well. Wage disparity becomes an increasing problem.
When wage disparity grows, the share of low wage workers rises. If businesses try to pass along their higher costs of production, they encounter market resistance because lower wage workers cannot afford the finished goods made with high cost energy products. For example, auto and iPhone sales in China decline. The lack of Chinese demand tends to lead to a drop in demand for the many commodities used in manufacturing these goods, including both energy products and metals. Because there is very little storage capacity for commodities, a small decline in demand tends to lead to quite a large decline in prices. Even a small decline in China’s demand for energy products can lead to a big decline in oil prices.
Strange as it may seem, the economy ends up with low oil prices, rather than high oil prices, being the problem. Other commodity prices tend to be low as well.
What Is Ahead, If We Are Reaching Economic Growth Limits?
1. Figure 1 at the top of this post seems to give an indication of what is ahead after 2019, but this forecast cannot be relied on. A major issue is that the limited model used at that time did not include the financial system or debt. Even if the model seems to provide a reasonably accurate estimate of when limits will hit, it won’t necessarily give a correct view of what the impact of limits will be on the rest of the economy, after limits hit. The authors, in fact, have said that the model should not be expected to provide reliable indications regarding how the economy will behave after limits have started to have an impact on economic output.
2. As indicated in the title of this post, considerable financial volatility can be expected in 2019 if the economy is trying to slow itself. Stock prices will be erratic; interest rates will be erratic; currency relativities will tend to bounce around. The likelihood that derivatives will cause major problems for banks will rise because derivatives tend to assume more stability in values than now seems to be the case. Increasing problems with derivatives raises the risk of bank failure.
3. The world economy doesn’t necessarily fail all at once. Instead, pieces that are, in some sense, “less efficient” users of energy may shrink back. During the Great Recession of 2008-2009, the countries that seemed to be most affected were countries such as Greece, Spain, and Italy that depend on oil for a disproportionately large share of their total energy consumption. China and India, with energy mixes dominated by coal, were much less affected.
In the 2002-2008 period, oil prices were rising faster than prices of other fossil fuels. This tended to make countries using a high share of oil in their energy mix less competitive in the world market. The low labor costs of China and India gave these countries another advantage. By the end of 2007, China’s energy consumption per capita had risen to a point where it almost matched the (now lower) energy consumption of the European countries shown. China, with its low energy costs, seems to have “eaten the lunch” of some of its European competitors.
In 2019 and the years that follow, some countries may fare at least somewhat better than others. The United States, for now, seems to be faring better than many other parts of the world.
4. While we have been depending upon China to be a leader in economic growth, China’s growth is already faltering and may turn to contraction in the near future. One reason is an energy problem: China’s coal production has fallen because many of its coal mines have been closed due to lack of profitability. As a result, China’s need for imported energy (difference between black line and top of energy production stack) has been growing rapidly. China is now the largest importer of oil, coal, and natural gas in the world. It is very vulnerable to tariffs and to lack of available supplies for import.
A second issue is that demographics are working against China; its working-age population already seems to be shrinking. A third reason why China is vulnerable to economic difficulties is because of its growing debt level. Debt becomes difficult to repay with interest if the economy slows.
5. Oil exporters such as Venezuela, Saudi Arabia, and Nigeria have become vulnerable to government overthrow or collapse because of low world oil prices since 2014. If the central government of one or more of these exporters disappears, it is possible that the pieces of the country will struggle along, producing a lower amount of oil, as Libya has done in recent years. It is also possible that another larger country will attempt to take over the failing production of the country and secure the output for itself.
6. Epidemics become increasingly likely, especially in countries with serious financial problems, such as Yemen, Syria, and Venezuela. Historically, much of the decrease in population in countries with collapsing economies has come from epidemics. Of course, epidemics can spread across national boundaries, exporting the problems elsewhere.
7. Resource wars become increasingly likely. These can be local wars, perhaps over the availability of water. They can also be large, international wars. The timing of World War I and World War II make it seem likely that these wars were both resource wars.
8. Collapsing intergovernmental agencies, such as the European Union, the World Trade Organization, and the International Monetary Fund, seem likely. The United Kingdom’s planned exit from the European Union in 2019 is a step toward dissolving the European Union.
9. Privately funded pension funds will increasingly be subject to default because of continued low interest rates. Some governments may choose to cut back the amounts they provide to pensioners because governments cannot collect adequate tax revenue for this purpose. Some countries may purposely shut down parts of their governments, in an attempt to hold down government spending.
10. A far worse and more permanent recession than that of the Great Recession seems likely because of the difficulty in repaying debt with interest in a shrinking economy. It is not clear when such a recession will start. It could start later in 2019, or perhaps it may wait until 2020. As with the Great Recession, some countries will be affected more than others. Eventually, because of the interconnected nature of financial systems, all countries are likely to be drawn in.
It is not entirely clear exactly what is ahead if we are reaching Limits to Growth. Perhaps that is for the best. If we cannot do anything about it, worrying about the many details of what is ahead is not the best for anyone’s mental health. While it is possible that this is an end point for the human race, this is not certain, by any means. There have been many amazing coincidences over the past 4 billion years that have allowed life to continue to evolve on this planet. More of these coincidences may be ahead. We also know that humans lived through past ice ages. They likely can live through other kinds of adversity, including worldwide economic collapse.
 Note that where the dotted line for 2019 is placed is based on where I see the 2019 economy relative to the downturn in industrial output per capita, based on a number of kinds of evidence, not all of which is cited in this article. The 1972 base model would give a slightly different timing of the downturn, a few years earlier. Also note that while the original “The Limits to Growth” book is no longer in print, Limits to Growth: The 30-Year Update by the same authors is available for sale.
“The Trump administration has tightened the screws on Venezuela’s embattled president, Nicolás Maduro, announcing sanctions against the country’s state-owned oil company PDVSA in what the US national security adviser admitted was partly an attempt to counter strategic threats from Cuba and Iran.
“At a briefing in the White House, the US treasury secretary, Steve Mnuchin, told reporters the sanctions would help punish “those responsible for Venezuela’s tragic decline” and boost Juan Guaidó, the opposition leader who last week declared himself Venezuela’s rightful interim president and was recognized by the United States.”
“The White House is not tamping down tensions after national security adviser John Bolton was seen Monday holding a yellow legal pad inscribed with the words “5000 troops to Colombia.”
“”As the President has said, all options are on the table,” a White House spokesman said when asked for an explanation of the notes, which were seen during a briefing with reporters about new sanctions on Venezuela.”
“The United States has filed criminal charges against Huawei, escalating its fight against the Chinese tech giant and potentially complicating efforts by Washington and Beijing to negotiate an end to their bruising trade war.
“The Justice Department on Monday unsealed two cases against Huawei that detail a slew of allegations. One indictment accuses Huawei of trying to steal trade secrets from T-Mobile, and of promising bonuses to employees who collected confidential information on competitors. A second indictment claims the company worked to skirt US sanctions on Iran.”
“The US housing market was at the heart of the financial crisis that rippled through the global economy a decade ago. Today, emerging cracks in a property recovery are darkening the outlook for housing-related stocks.”
“[Australian] Companies suffered the worst slump in conditions since the 2008 global financial crisis as evidence mounts that the economy slowed in the latter part of last year.
“The business conditions index – measuring hiring, sales and profits – dropped to 2 in December from 11 a month earlier, a National Australia Bank report showed on Tuesday. A gauge of employment fell to 4 from 9 in November, while profitability plunged to zero from 8.”
“China’s state planner has been rapidly approving big infrastructure projects, as it looks to give its flagging economy a shot in the arm…
“The acceleration comes after the NDRC vowed to speed up project approvals. This was in response to Beijing last month signalling more stimulus to counter the effect of the trade war with the United States and a broad-based slowdown in the domestic economy.”
” Chinese regulators have cut the premium that local governments must pay to issue debt, sources with direct knowledge of the matter told Reuters on Tuesday, lowering their borrowing costs as Beijing hopes to kick start investments and shore up growth.”
“Caterpillar Inc. manufactures huge yellow bulldozers. Nvidia Corp. makes minuscule computer chips.
“Their products have little in common, but their earnings on Monday pointed to the same direction: demand in China is slowing down for a widening range of goods. The world’s second-largest economy, which contributes about a third of global growth, has been weakening for years…”
“Taiwan’s economy continued to weaken as the key economic indicators for December 2018 flashed a “blue” light for the first time since April 2016, indicating contraction, the National Development Council said Monday.”
Sounds like a familiar path. But who will be the buyers?
More spending on infrastructure = more debt = more wages = more demand = higher prices for commodities, it is hoped. Unless countervailing forces are too great.
“Italy risks sliding into a recessionary vortex after corporate lending slumped by 5.5pc in December, raising the odds of a fresh debt crisis in 2019 without a shift in policy by the eurozone authorities…
“Italian lenders are now being forced to rein in credit as the ECB imposes draconian capital requirements when the country is already in a technical recession, and in the midst of a serious economic slowdown across the eurozone…
““The ECB halted its bond purchase programme at the end of December, leaving Italy without a buyer-of-last resort standing behind its sovereign bonds. The political bar in Frankfurt to renewing quantitative easing is extremely high. The institution would do so only after a crisis was already well underway.”
“Economic data from France last week was so bad that one analyst simply wrote “?!” on a chart measuring confidence in the services sector.
“The survey in question was the INSEE services-confidence poll. It showed a cliff-edge drop in expectations from France’s non-manufacturing companies.”
“World trade growth slowed starting early 2018 just when the German auto industry was dealing with a wrenching drop in domestic sales.
“This concurrent hit to two of Germany’s vulnerabilities — overwhelming dependence on buoyant world trade and accelerating obsolescence of its industrial structure — is pushing the economy into recession.”
“[Key EU negotiator] Sabine Weyand said of the two years of talks due to end on 29 March: “There’s a very high risk of a crash out not by design, but by accident. Perhaps by the design of article 50, but not by policymakers.”
““We think we can handle it,” Weyand said. “I’m less sure about UK side. For us it’s about EU-UK trade relationship and disruption to supply chains. For the UK a no deal would mean that a part of the regulatory and supervisory structure of economy breaks away – a much bigger challenge.””
Appalling hypocrisy: the EU negotiators’ have pushed things right to the wire by stonewalling for 2 years, hoping to break support for Brexit and engineer another
more favourable referendum. All this is entirely by design,
I suspect the EU is determined to punish the UK for having the temerity to vote to leave, and also as a warning to other uppity countries that might want to follow the British example.
However, after seeing what has happened to the Greeks, why any nation would want to remain in the EU in its current form is a mystery.
Good article on Germany’s industrial problems.
Interesting that the UK is betting everything on science and bio-tech with the Cambridge-Oxford-Milton Keynes Triangle development.
Germany has had an easy ride for some time now, carried by over-spending Southern Europe and China.
During the great depression the world population was around 1 Billion and we had barely made a dent in our natural resources. Recovery was easy. We are now at 8 Billion and our natural resources are completely denuded. Collapse is one way of describing it. Extinction level event might be more accurate. System reset back to the stone age if we lucky.
can negative interest rates be the new normal according to this document it can which may mean ‘BAU’ continuing for a lot longer than we think. file:///C:/Users/computer/Downloads/wp18191.pdf
Please load up again, it appeared as sourced from your local drive file..
In general, yes it’s very probable that “new normals” can surprisingly endure for very long time. People at the helm are not momentarily suicidal, there remains a lot to enjoy from their time and toy availability perspective. Therefore we might expect only some tightening along the edges like SouthAmerica, Asian and European peripheries etc.
No surprise then that the US is about to “liberate” Venezuela (from their oil)
Super-rich early Amazon investor: Wealth gap crisis is the ‘direct result’ of ‘moral failure’
“This exclusive, highly unequal society based on extreme wealth for the few may seem sturdy and inevitable right now, but eventually it will collapse,” writes Hanauer. “Eventually the pitchforks will come out, and the ensuing chaos will not benefit anyone — not wealthy people like me, and not the poorest people who have already been left behind.”
Trump Economy Lags Clinton’s, Obama’s, Reagan’s and Even Carter’s
Trump Administration Rolls Out Low-Yield Nukes
‘Is The Permian Bull Run Coming To An End?’
“The CEO of one of the largest players in the industry, Continental Resources, predicted that growth in shale oil production could fall by 50 percent this year compared to last year. In reality, we should expect worse as the industry for obvious reasons tends to exaggerate its prospects.”
“… predicted that growth in shale oil production could fall by 50 percent this year compared to last year.”
so, still growing!
just at half the rate…
if growth actually ends in a few years, the rumored Venezuelan oil import boom may arrive just in time…
BAU full throttle to 2030… 😉
or running on fumes… stalling in 2020…
Just wait till the oil shortage hits in a few years..I guarantee the anti abortion crowd will be the first ones calling for genocide to lower the global population
The electricity blackout will make this whole discussion ridiculous.
Yep, as long as the extraordinary debt spigot is open the US shale will likely reach plateau ~2025 onwards (NOT sooner) and then perhaps as final slow down sets in, and in reaction to that perhaps some global reshuffle could commence as people of wealth/[power realizing the kaiser has no domestic energy to tap into or export..
Meanwhile, the Gulfies might limit output in the face of overdue recession, depression, so OFW issues again swept under the rug of obfuscation in the next decade.
Hence all of the above combined effects the overall mind set, which has some legs almost for next ten years, obviously it could be disrupted by some extra ordinary events any moment but that’s low probability.
Hence, good advice should be, among other things, load up on PVs and EVs around ~2023-6 window, no rush at current pricing – availability. So, then you can enjoy the last decades (~2030-40) of industrial civilization and its crumbling services with some comforts.
Most shale companies and plays aren’t likely to survive the next oil price lower high.
But that goes back to the core question, disagreement, understanding again.
If you let the entire shale sector go under the US image is finished and the global (debt) then disorderly cascades immediately into some sort new trans regional barter / local currencies system. I doubt the owners and or major players of the system are well positioned for it at the moment.
So, instead the shale will be propped up (again and again) till the utmost ridiculous physical end, i.e. reaching plateau and crashing.. and that’s almost a decade away.
There is also the possibility using US shale collapse as an intentional trigger, but again the overall situation does not speak for it much as there are too many instability points at the moment, namely Brexit, altparties taking over Italy, Russian sanctions, China slowdown, US domestic cat-fights, etc..
I don’t think the end of the shale boom will trigger the end of BAU or the US image for that matter. However it will happen unless prices rise high enough and stabilise. So it will be another step towards bigger things likely around the 2025-35 period.
Without shale the US can’t continue the “opulent substrate” strategy of successful consumerist society mirage, not mentioning withholding large part of feed lot for the mil-industrials etc. Let’s not forget US lives since 1970s on extended – borrowed time, there were several innings to it, shale is very likely the very last one miracle, even though as ridiculously artificial as ever.
If this no longer works, the levels bellow the Elders, the supporting columns of global rich leave/retreat in whatever means necessary, and that’s the end of BAU. Not necessarily the end of IC everywhere though, at least for some enclaves..
$1.5 trillion US tax cut has no major impact on business spending plans: Survey
Ranking the Trump Economy:
The president brags about U.S. prosperity. But conditions improved more under his predecessors. (Even Carter.)
“$1.5 trillion US tax cut has no major impact on business spending plans”
That’s probably because businesses spend money only when it supports projected greater profits. Meaning, just saving money on taxes does not do anything to enlarge the market a business is targeting. A presumption was made when planning these tax cuts that apparently wasn’t warranted. Either that or lies about business expansion were made to justify tax cuts as favors to people that support their campaigns with contributions. Simply a gift at the expense of piling up greater debt.
U.S. Treasury Set to Borrow $1 Trillion for a Second Year to Finance the Deficit
Let me guess. This is what is takes to power a battery/electric future!
Based on the way derivative sales are trending, it looks as though shale drillers are expecting a price downturn, and thus are protecting themselves.
Of course, this leads to a chance for more derivative defaults. It also is an omen for low oil prices ahead.
It is hard to be optimistic about demand moving forwards, given that it is predicated on the continued inflation of an ‘everything bubble’ that is looking increasingly vulnerable from all sides.
The temporary deflation of late 2015/early 2016 with its sub-$30 prices was profoundly unnerving. I hope we’ve got a bit of time before we plumb those depths again.
it’s that skimming stone economy thing
NP, what’s the skimming stone economy thing? I’m only on here occasionally so didn’t see what you wrote before.
putting an armsworth of energy into a flat stone
skimming it across a pond
the stone hits the water, and bounces, then bounces again but each bounce gets less as the stone loses energy
then finally the stone makes its last bounce, loses the last of its energy
and sinks without trace
that is what our economy has been since we started using fossil fuels as our energy source
Interesting analogy – thanks, NP.
great analogy loved it
This is why shale oil won’t work. The economy needs low oil prices and shale needs high oil prices . We need oil that is economic to extract at $30/barrel. Can we get that in Venezuela if we take it by force? I don’t know. But, something tells me we might find out.
How do Venezuelan oil exports to America translate into “our” oil prices?
I am sure that we buy the oil very cheaply. That is part of Venezuela’s problem.
Can Venezuela even raise production at this point? Much of her reserves consist of bitumen I think. The consequences of subverting V’s governmental system could result in a messy war and refugee caravans in the hundreds of thousands, and there would be major calls to let them in since we created the mess. I’m sure many economists consider such an outcome a positive event.
Well that is what they are getting now and the Venezuelans don’t seem too happy about it.
Also, you have to add in the war costs.
If Iraq and Libya were test cases then I don’t believe the math is going to work out.
I think the plan is to have the “real” president assume the reins in a peaceful, or nearly peaceful, domestic coup. In fact, since the National Assembly is already stacked in his favor and the US is going to release assets to him, they can just bypass Maduro and start legislating US favorable laws. The new president has been groomed at George Washington University and one of his first tasks will be to rescind the 2001 “hydrocarbon law” that prevents foreign ownership of Venezuela’s resources or companies. This will allow Western multinational oilcos back in. Let’s see if this is what happens.
The planning for the theft of Venezuela’s oil has been ongoing for decades…since 1999. It has little to do with spreading Democracy, or Socialism, or humanitarian reasons, and everything to do with controlling resources.
Venezuela crisis: Former UN rapporteur says US sanctions are killing citizens
The first UN rapporteur to visit Venezuela for 21 years has told The Independent the US sanctions on the country are illegal and could amount to “crimes against humanity” under international law.
as I’ve said before, the last of the oil will come through fighting over it
Venezuela is the West’s last full fuel tank
if the American’s don’t grab it the Chinese will
”citizens” are irrelevant when survival is at stake—shale oil can’t keep the country afloat.
I tend to agree. Mexico is in decline. Canadian oil is expensive. Venezuela may well be home to the most significant conventional oil reserves left on this continent.
but i thought venezuela only had heavy oil and was also guilty of inflating its reserves like the rest of opec
Venezuela signs oil, gold investment deals with Russia: Maduro, December 6, 2018
“We have signed contracts to guarantee investments of more than $5 billion with our Russian partners in joint ventures to raise oil production,” Maduro said in a video posted on his Twitter account.”
This is what the US’s imports from Venezuela look like. They have been trending downward. They are nearly all crude.
This chart is what we are sending back of Venezuela. This portion is entirely oil products, not crude (despite the label).
Our net imports seem to be in the 500,000 barrels per day range. We pay them a low price for crude oil and sell them back some oil products at a higher price.
Novel diaper flushing system for the elderly in the works
“Plans are afoot in Japan to enable elderly people and their caregivers to dispose of dirty diapers at restrooms more easily using dedicated drainpipes.
With the increasing graying of society, the land ministry, which is in charge of water supplies and sewage systems, is considering ways to reduce the burden of discarding used diapers, including a plan to flush disposable ones down the toilet.
While some of the ministry’s plans are expected to become a reality by fiscal 2020 at the earliest, flushing diapers could be problematic, as marine pollution caused by plastics is regarded as a global challenge.”
An approach to increasing demand for resources? I remember a “flushable cat litter” product that went badly awry. IIRC, the sewage system as a whole was not designed to handle the increased load. Either that, or some part of it made it through the system unprocessed. It doesn’t sound like an idea worth testing.
You dont need so many trucks and people for collecting waste, if waste is transported via pipes. With the ageing populations, there is an increasing problem with the affordable waste collecting services.
Something new on https://econimica.blogspot.com/:
“While Texas, Florida, Washington, Oregon, Utah, Colorado, Arizona, Nevada, the Carolinas, and Georgia all continue to grow well above the national average…there is one typical growth leader that is lagging. California’s present annual population growth has slowed to levels only seen previously in post recession periods. If this trend continues, California will soon be joining the depopulation list.”
Modern depopulation is a bottom up process that has been underway for decades. Monetization (central banks creating money with which they “retire” assets) is the inverse action to continue boosting asset prices in the face of depopulation and decelerating demand. Expect these two trends to inversely accelerate over the coming years…until something breaks.”
Yesterday, our parson, during the Sunday Mass in my village, expressed his concern about no baptism in our village for a longer time. I know what is going on: despite the short construction boom allowed for by ECB, the outright population decline is here…
maybe folks have given up on sin
Housing is very expensive in many parts of California. I only advise people to come to this state if they’re going to be gainfully employed with a solid income or a business that will afford them to not only live here but enjoy what it has to offer. So I’m sure a lot of people give up on having a decent life here and move somewhere else.
there are some things we need less information on
As a society, we are toast. Investing resources into a system to allow the elderly to flush diapers? Seriously? Are we that pathetic of a species? Do we really want to live to an age we need diapers, wheelchairs and elevators? Shoot me first.
thats what we all say—including me
but come trigger-pulling day?
who can be sure
Sissy, what are you afraid of? 😉
“Self deliverance” is a touchy subject. I’ve had a (nitrogen hypoxia) setup at the ready for some years, should I choose to use it. If I am to hope for the best, but prepare for the worst, then IMO the worst would be a situation where one would ‘envy the dead’.
I work part time at a nursery home so I have some limited insight in how things often work out. My general feeling is that most people expect a comfortable retirement, just relaxing each day, fine wine and dine, taking a walk in the park on a sunny day.
At first, you move to a “elderly community” or a new apartment with all the “accessability” trimmings. You get some homecare service as your health detoriates, to help you with groceries, medicines or other daily activites. Dementia starts creeping in, and you lose track of any thoughts of “self deliverance” to end it all before you get too dependant on others. One day you suddenly get lured to the nursing home by your greedy offspring who wants to sell off your home and belongings.
Pretty soon you are being kept alive, spoon-fed medicines you don’t know by people you don’t know in a place you don’t know. Care personnel are pressed for time so they will often toss you around in bed, changing your diaper, shove some mashed food in your mouth and move on to the next patient.
Better to end it all before you lose this choice.
on my 99th birthday i hope to be shot by a jealous husband
You have to sell the belongings quickly, as their price is falling fast.
One of my aunts died last year with no heirs and those from our family, who managed her things and care during her Alzheimers years in the nursing home, were pretty pressing on the things regarding the inheritance procedure, as they had a potential buyer for the house and the corresponding plot she co-owned. Looking now at the cadastral portal, I can see they were successfull and sold it.
“Dementia starts creeping in, and you lose track of any thoughts of “self deliverance” to end it all before you get too dependant on others. Better to end it all before you lose this choice.”
I agree. Saw this happen to a close relative and it was very difficult to see that person in that situation. I asked this relative a pertinent question; Do you enjoy your life in this place? This was the answer; “Well, uhh.” The person couldn’t put it into words. If a person can’t state they enjoy their life, then guess what, they don’t. The fact is it all goes downhill for people at a certain stage, so why put off the inevitable to suffer a little while longer? Having seen what I saw, there’s no way I’m allowing it.
I feel certain I am going mad again. I feel we can’t go through another of those terrible times. And I shan’t recover this time. I begin to hear voices, and I can’t concentrate. So I am doing what seems the best thing to do. You have given me the greatest possible happiness. You have been in every way all that anyone could be. I don’t think two people could have been happier till this terrible disease came. I can’t fight any longer. I know that I am spoiling your life, that without me you could work. And you will I know. You see I can’t even write this properly. I can’t read. What I want to say is I owe all the happiness of my life to you. You have been entirely patient with me and incredibly good. I want to say that – everybody knows it. If anybody could have saved me it would have been you. Everything has gone from me but the certainty of your goodness. I can’t go on spoiling your life any longer.
I don’t think two people could have been happier than we have been.
Please call Dr. Horder.
Excuse the blood, but I have slit my wrists and neck. No one will understand the reason for this, anyway. To give some semblance of an explanation, I’m not a human, this is just a dream and soon I will awake. It was too cold and the blood was coagulating all the time, plus my new knife is too dull. If I don’t succeed dying to the knife I will blow all the shit out of my skull.
Things just seemed to go too wrong too many times.
Meanwhile in Norway: Battery based excavator.
Interesting1 A huge amount of changes were needed to make the system work. In the end,
“The excavator should have enough capacity to be used between five and seven hours between each visit to the charging station.”
So even with all of these changes, the excavator is not up to doing a full days work, unless it is actually plugged into an electric power source. The specially durable batteries used for it act to substitute for the counterweight it would need otherwise. I expect the cost of building one of these, even if done in quantity, would be considerably above that of a diesel powered excavator. But Norway has lots of electricity, so this is the place to try the idea out.
Fossil fuels power almost everything we have right now. We are literally mining ready to burn energy out of the ground. The problem I have with battery/electric energy storage is how do we build all these batteries? Second, how long will these batteries last? Third, batteries are not a form of energy, they store energy so how do you charge them all? If billions of batteries have to be replaced every 5 to 10 years, it seems to me the transition will never be complete. We will burn up a lot of energy trying to build more and more batteries and never make a dent in fossil fuel use because it will take fossil fuels to build, maintain and recycle these batteries. It seems to me the most direct use of energy is often the most efficient use of energy. For example, wind on sails. sun on water, coal in a furnace. With battery/electric there are just too many lossy conversions going on to make it worthwhile.
For something to really replace fossil fuels, it has to be able to do it on its own merits. Fossil fuels are time-tested and proven sources of cheap, affordable energy. Solar, wind, electric and batteries are derivatives of fossil fuels. Show me a solar panel plant or battery plant that is built with solely the input of solar panels and batteries. I mean from building the machines that do the resource extraction, to actually doing the resource extraction and building the infrastructure needed to manufacture solar panels. To grow the food and feed the people working in the plants. To expand an economy to pay back debt with interest. Fossil fuels did this and much much more. Fossil fuels kick started itself. Can battery/electric do that? If it cannot then, it cannot be a replacement for fossil fuels.
Greg, they have freight trains now that have a giant battery snapped on to the back of the electric train, then when they stop a special crane pulls it off and replaces it with a charged one. It’s the same idea as a cordless drill. Just snap it on and away they go. Just having a little fun – couldn’t resist.
Electric locomotives are several decades older than ICEs and more or less coincided with steam (coal) powered ones. The former didn’t replace the latter because 100% of electricity generation was fuelled by coal anyway. Also, they were slower and could haul less weight.
Rough terrain and handling while operating at full hp will be the real test. I predict it won’t be much good for anything besides what it seems to be doing in those pictures viz. urban snow removal.
“A prominent anti-government “yellow vest” activist was badly injured in the eye after being hit by a rubber bullet used by the French police, his lawyer has said.
“Philippe de Veulle, the lawyer of Jerome Rodrigues, fears he will be disabled for life following the injury in clashes with the police in Paris on Saturday during the 11th straight weekend of protests against President Emmanuel Macron.
“”He is in shock. He will be handicapped for life. It is a tragedy for him and his family,” the lawyer told French news station BFM TV, adding that he was going to lodge a complaint against the police.
“Rodrigues was placed in an artificial coma overnight after the incident at the Bastille monument in central Paris.”
“Senior EU intelligence officials fear there could be violence on the streets of Britain which,
they claim, will be “unstable” for decades due to Brexit .
“In a secret report, EU officials are believed to have warned that civil unrest and rioting is almost inevitable, regardless of the outcome of the current political deadlock.
“The analysis has been prepared for top EU officials and will be available to EU committees and the British government.
I”t predicts independence referendums in Scotland and Northern Ireland within 18 months of Brexit…
“The report has been shared with European heads of state, including Theresa May.
“One senior Government source said: “We are seeing civil disobedience across Europe and a growth of the far-right.
““Anything which changes the status quo, like Brexit, gives those people the opportunity to foment division. We could see protests and public disorder offences.”
“Health Secretary Matt Hancock yesterday said Britain had the option of martial law to quell civil disorder that might follow a no-deal Brexit.”
Growth of the Radical Left, too. Funny they never mention that…..
Anyway, rain will stop play in Britain, lack of Gallic temperament, etc.
And if it’s hot, Brits just go a funny grey-red colour and melt, or collapse in the local park clutching a pack of lager.
That’s my scientific observation, for what it’s worth.
But if chorizo supplies are interrupted, things could get tricky here, I grant that. 🙂
I’m really looking forward to the spontaneous German ‘Yellow Vest’ protests: remind me again, when are they planned for ? To the minute, knowing the Germans…..
700 German yellow vests turned out for a protest in Stuttgart on Saturday. A low-key start but perhaps it will snowball.
“A low-key start but perhaps it will snowball.”
It will as i’ve been saying! People are starting to get pissed around the world.
Is it me, pr are those German yellow vests green?
A colleague recently predicted a pivot to Russia/China. He thinks London will host a future bbrics system (the first b is Britain) in exchange for trade/oil deals.
I wasn’t convinced.
A really small box.
“Earnings at China’s industrial firms shrank for a second straight month in December on slowing prices and sluggish factory activity, piling more pressure on an economy in the grips of its slowest growth in nearly three decades.”
“With the Chinese economy slowing, Beijing has been leaning on banks both to absorb the build-up in shadow assets and to continue lending to drive investment-dependent growth.
“With new loans outpacing new deposits by 20 per cent in 2018, and a similar trend expected this year, capital is becoming increasingly constrained.”
“Three mainland Chinese companies have missed a combined 2.5 billion yuan (US$369.6 million) in debt repayments over the past two months despite apparently high cash holdings, a development that has exposed deep flaws in the auditing and financial disclosure practices in the country.”
We can’t really believe the what Chinese companies are reporting on their financial statements. As long as the shadow banking system was in place for quick short term loans to cover the deficiencies of reported results, this wasn’t a problem. But with a crackdown on shadow banking, optimistic reporting can start showing up as debt defaults.
According to the article:
This cannot end well, especially when China has problems with its supply of cheap coal being limited, and other types of energy being more expensive and, because of this, constrained by affordability.
“From the National Park Service to NASA, the Coast Guard to border patrol, the Internal Revenue Service to the Transportation Security Administration – federal agencies are now filled with workers with damaged credit ratings, missed mortgage payments, new debts and, especially, new doubts about their basic job security and the future.”
“During 2018, the Federal Reserve increased interest rates multiple times, and additional increases are widely expected to occur during 2019. This could have substantial consequences for student loan borrowers…”
““With the pace of economic expansion slowing across major economies and the balance of risks tilting to the downside, the G-3 central banks — the U.S. Federal Reserve, the European Central Bank and the Bank of Japan — are all signaling a wait-and-see approach.”
This article talks about the impact on a subset of past student loans that were made at variable interest rates. It point out that students should think about refinancing at fixed rates, perhaps with a different lender.
I think an even bigger issue is that new loans will have a higher interest rate. This is likely to enter into students’ decisions on whether to go to college or graduate school, or not. Colleges and universities are likely to have a harder time raising tuition amounts. Student enrollment may very well drop, because of the higher cost of loans, leaving more overhead per student. This puts financial pressure on universities.
College and universities have already been under a lot of pressure, because of falling enrollment. Many citizens borrowed money and went back to school during the 2008-2009 recession. Peak enrollment for US degree granting institutions seems to have occurred in the fall of the year 2010, according to the US National Center for Enrollment Statistics. Enrollment in US degree granting institutions peaked at 21.0 million in the fall of 2010, and was down to 19.8 million in the fall of 2016, a decrease of about 6%. Foreign student enrollment is no doubt down as well; these students have traditionally paid the highest fees.
A college where I did graduate work, Wheelock College, was taken over by Boston University last year. My undergraduate college, Hampshire College, announced a couple weeks ago that it is looking for a partner school and may not admit a freshman class next year.
Kennesaw State University, where my husband teaches, will start being somewhat selective regarding the students it takes in, presumably hoping that its dropout rate will fall. Also, the school, while it has historically been drawing from a growing area, no longer wants to grow. Data from the University of Georgia system of schools shows that total enrollment for the schools in the state still is increasing at about 1% per year.
out here, the university president has just announced a tuition cut, and future freeze, after several years of ramping up tuition costs. the reason: enrollment drops. the real reason: students are getting wise to the loans so they can attend college in hopes of a better job opportunity-NOT scam.
One article I read said that the Internal Revenue Service (agency for collecting taxes) seems to be particularly hard hit. One point made was that programmers who could find more stable jobs elsewhere used the time off to look for new jobs. Also, all of the changes associated with the new tax law adds to their need for people.
I have a long list of things that I want to do to TSA agents…Thanking them is not on that list.
Bankruptcy is tho.
So saddd…but we don’t care.
“For much of 2018, it appeared that the world economy was finally getting out of the rut it had been stuck in for the decade since the global financial crisis.
“But it now looks as if the era of persistently low growth, low inflation and low interest rates isn’t over after all.”
or lack thereof
This is exactly the problem!
“While that broad brush assertion could remain over-simplistic, White House officials aren’t making it any easier for the opposition in terms of Maduro painting it as tainted by a foreign hand. As a prime example, Trump’s national security advisor John Bolton recently admitted to Fox Business that the US has a “lot at stake” amidst the ongoing Venezuela crisis given the fact that it has the world’s largest proven oil reserves. Bolton told host Trish Regan:
It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela”.
So much for Trump not wanting to get involved in foreign interventions / regime change.
Can’t use that argument anymore eh Tim? Looking pretty swampy to me.
Trump has no choice but to get involved
“The American way of life is non negotiable”—–wayyyyy before Trump
but having the same effect
and just as meaningless in the long—or maybe not so long term
Agreed by and large. However my point is that overall he is no different than his predecessors. Given the outcomes from previous adventures (mainly Iraq and Libya) I doubt this will be a gain either financially or acquiring additional oil. We could have access now if control was not the objective and at a lower overall cost.
If Trump doesn’t want immigration now I doubt he’d like the immigration we’d see post conflict with Venezuela.
Bear in mind the newly minted residents (legal and illegal) desire and consume energy with an appetite that we already do adding to the overall need (i.e. Industrial World demand / consumption / increased infrastructure for a growing population). I fail to see the net gain.
The tactic I believe is to prevent the Chinese from getting the oil.
However my point is that overall he is no different than his predecessors.
I agree. He is just not as intelligent.
A good TV host, I’ve been told.
What do you want Trump to do?
I don’t remember my exact words, but I’ve always thought Donald Trump was against the US going to “war” militarily on order to get involved in foreign interventions/regime change. I never expected the US under Trump would refrain from interfering non-militarily either openly or covertly and nefariously abroad.
Yes, it’s a swamp and a terribly slippery slope. And yes, “war” can be carried out by non-military means. I’d go further and say that Trump is no M.K. Gandhi; he is not the sort of guy to stick to “non-violent” methods of confrontation.
BUT… and there’s always a BUT in these arguments … BUT what’s happening in Venezuela today is in no way analogous to what happened in Serbia when Bill Clinton was running the show, or in Iraq or Afghanistan when BW Bush was in power, or in Libya when Obama was in the driving seat. Just to remind everyone incase there are some doubters, we don’t have US and other Nato jets in Venezuela conducting military strikes, cruise missiles and bombs taking out targets, blowing up infrastructure that ordinary people rely on such as power plants, water supply and sewage treatment facilities, commercial aircraft, bridges that are just about to be crossed by passenger trains, we don’t have tanks fireing depleted uranium shells all over the place or towns being shaked and baked with their residents inside.
Are people’s memories so short? If that sort of thing was going on in Venezuela, I could understand people condemning Trump for making it happen.
A QUESTION: Why is it that the globalist forces who are Trump’s sworn enemies and who strongly oppose his plans for the Wall, for the pull outs from Syria and Afghanistan, for ripping up the Paris Accord, and for his trade policy shift, why is it that these folks are all in favor of getting tough with Venezuela? Why is it that the British, French, German and Spanish Governments on the same day issued almost identical statements on Venezuela calling for regime change? Are they doing all this at the Behest of Trump? Are they all marching to the beat of Trump’s mad drum?
And is Trump “getting tough” on Venezuela yet more “poof” that he is under the thumb of Vlad? How does that work?
The negative coverage of Trump in the failing globalist legacy media is relentless. Day after day after day, like clockwork, 95 percent of the stories on Trump are character assassination attempts. It’s a very interesting topic. Who is running this campaign and what are their motives and why do so many apparently intelligent people just not get it?
No one talks about how good it is that Trump is bringing US soldiers home from conflicts that Bush and Obama sent them into and kept them involved in. The story is only touched upon in order for people who object to a wall along the US Mexican border to accuse Trump of endangering US security. No one talks about how good it is that Trump is brokering a peace deal between North and South Korea. Nobody mentions the more than 400,000 manufacturing jobs the US economy has added under Trump or the 3% GDP growth rate the country has achieve, or that unemployment rates among both blacks and latinos are at record lows.