2019: World Economy Is Reaching Growth Limits; Expect Low Oil Prices, Financial Turbulence

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

Figure 1. Base scenario from The Limits to Growth, printed using today’s graphics by Charles Hall and John Day in Revisiting Limits to Growth After Peak Oil with dotted line at 2019 added by author. The 2019 line is drawn based on where the world economy seems to be now, rather than on precisely where the base model would put the year 2019.

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).

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.

Figure 3. Brent oil prices with what appear to be debt bubble collapses marked.

Figure 4. Three-month treasury secondary market rates compared to 10-year treasuries from FRED, with points where short term interest rates exceed long term rates marked by author with arrows.

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.

Figure 5.

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.

Figure 6.

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.

Figure 7. Oil consumption as a percentage of total energy consumption, based on 2018 BP Statistical Review of World Energy data.

Figure 8. Energy consumption per capita for selected areas, based on energy consumption data from 2018 BP Statistical Review of World Energy and United Nations 2017 Population Estimates by Country.

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.

Figure 9. China energy production by fuel plus its total energy consumption, based on BP Statistical Review of World Energy 2018 data.

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.

Figure 10.

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.


[1] 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.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,080 Responses to 2019: World Economy Is Reaching Growth Limits; Expect Low Oil Prices, Financial Turbulence

  1. Sagebrush Country says:

    Thought I would share this article:

    The first figure in the article does a great job showing the dependency that India, Australia, Poland, South Africa, China, Kazakhstan and Indonesia still have on coal.

    • There is not much cost savings from using electricity as a fuel. This is the problem. The places where most of these autos are sold have high-priced electricity. Charging with high-priced electricity is expensive.

      • el mar says:

        … and the fuel-taxes for the governments have to b replaced by even higher electricity prices. In Germany the state recievesapprox. 3 € per 100 kilometers.

    • Baby Doomer says:

      EVs existed over 100 years ago. They were abandoned as an idea when gasoline cars became popular. History is merely repeating itself..

    • Moreover, super/fast charging kills the battery life expectancy – why bother..
      Not mentioning the plausible effect on various self combustion incidents in high density batt packs automobiles we have seen recently. Again, lets have max ~25kWh pack, charge it overnight, if that’s not enough for commute, though luck or emigrate to rail based country instead.. lolz

    • Greg Machala says:

      The old saying “pay me now or pay me later” comes to mind.

  2. Baby Doomer says:

    ‘Never underestimate human stupidity,’ says historian whose fans include Bill Gates and Barack Obama

    “It’s one of the most powerful forces in the world,” he added.

    Speaking with CNBC’s Martin Soong, Harari expressed concern about the ability of populist leaders — a group he described as “selling people nostalgic fantasies about the past instead of real visions for the future” — to solve today’s biggest global problems.


    • Davidin100millionbilliontrillionzillionyears says:

      “… Harari said the three biggest “existential” problems faced by the world today are global in nature: Nuclear war, clymitt change and technological disruption.”

      see? he’s a smart man, but this shows his own partial stoopidity…

      “Never underestimate academic stoopidity”, says OFW commentator whose fans include many lurkers…

      • No it’s not stupidity it’s a plan (perhaps stupid anyway), how to curb demand of the masses. I used to think this perhaps might be part of it, but the preponderance of evidence as of now is already here (it’s not about renewables subsidy), they are phasing in a grand plan “how to prepare” lower strata of pop for the reality of far smaller energy budget. Permits/emission allowances are used to prop up energy prices (and stock / debt instruments for the energy sector) throughout forthcoming depression-deflation, the plan is to smooth the attempted transition into the world of less. Hence I’d also not try to short this thing (around GFCII event), it will be a widow maker or you must act super quick, as the volatility on the energy markets would be relatively low, and in the later stages the sector would be nationalized anyway..

        This meddling Is it futile, most likely, but very annoying already..

      • Greg Machala says:

        I will go out on a limb and say that financial collapse is THE biggest “existential” thread facing the world today.

    • xabier says:

      ‘Real visions’: amusing concept. His own brand of fantasy and delusion perhaps?

  3. Baby Doomer says:

    • Davidin100millionbilliontrillionzillionyears says:


      excellent that he admits there are “illegal immigrants”…

      then he calls them “illegals”…

      spot on…

    • Tim Groves says:

      The biggest killer of Americans is modern medicine, followed by unhealthy diets, and lack of exercise. Those are the big three. Between them they get almost everyone in the end.

      But no crisis! Just business as usual!

      • Davidin100millionbilliontrillionzillionyears says:

        “if” I gotta go, then…

        I want it to be “unhealthy diet” all the way, baby…

        see comments below…

    • Peter G. says:

      Of the 40,000 gun related deaths, the CDC reports that 24,000 or 66% were suicides. It makes me wonder how many of the 67,000 drug overdoses were suicides. What does that say about the mental health of our society? It’s a lot easier to build a wall then to fix what’s wrong with America. So sad.

    • Tim Groves says:

      People with Brains will regard Rick Newman’s tweet here as shameless whataboutery.

      445 murders by illegal immigrants is 445 murders too many in people with brains’ book, regardless of whatever other problems the US has got. A word of advice for Mr. Newman: As long as the will was there, it would be possible for the United States to multitask. The country, its government and its people are capable of doing more than one thing simultaneously. Although it often seems that way, the US is not a nation composed entirely of people who can’t fart and chew gum at the same time.

      Central America and the Caribbean region is by far the most violent region on earth, with homicide rates that a lot of people with brains would kill to be as far away from as possible.

      Many of those nations have 5, 10 or even 15 times the US homicide rate of 5.35 per 100,000 inhabitants, which is in turn 20 times higher than the rate in my adopted homeland of 0.28 per 100,000 inhabitants. El Salvador is currently top of the world with 82.84 per 100,000 and Honduras and Venezuela are in second and third places.

      It’s only natural and reasonable that many of the inhabitants of such places want to leave for somewhere more convivial, but equally natural and reasonable that the more convivial places would prefer to have some effective controls on who comes across their borders.

      In the US case, sitting next to the single most violent region on earth, people who use their brains may well consider building an effective barrier against illegal entry to be a no brainer.

      • Tim Groves says:

        On the other hand, I have seen some statistics that indicate that once they’re settled, Hispanics in the US are about as inclined to criminality and violence as Anglos It’s down in the tropics that lawlessness really explodes. And quite honestly, I fault the Pope and his pontificating predecessors for clinging to the be fruitful and multiply mantra all this time.

        • GBV says:

          “It’s down in the tropics that lawlessness really explodes”

          Perhaps there’s something to be said for lack of resources, economic opportunity, education, and living space combined with sweltering heat/humidity.. All those things combined might make me a violent person too… 😐

    • zenny says:

      Not to make light of the deaths of the 445 But the big problem is the cost to the taxpayer
      Jail school and the like…I wonder if Traffic accidents are included in 445.

  4. Davidin100millionbilliontrillionzillionyears says:

    (first… a beautiful photo of a tasty hamburger… yum)…

    “Coal is an anachronism that also happens to be the single largest source of electricity on the planet. Some of its resilience reflects pure politics (“beautiful clean coal”). But there’s another aspect more akin to that guilty pleasure that floods through you when you devour a hamburger.”

    what guilt? burgers are usually pure pleasure, and I never eat one with guilt…

    now “Coal is an anachronism that also happens to be the single largest source of electricity on the planet…”

    how can it be an anachronism and yet still be the #1 source of electricity? that’s just duummbb propaganda……

    “However, continuing problems with air quality in Chinese and Indian cities and the rapid decline in the cost of renewable power and battery storage present chronic problems for coal. Solar power and onshore wind power are now the cheapest sources of new electricity in China and India, as they are in all major economies other than Japan, according to Bloomberg NEF.”

    as we know from reading OFW, intermittent sources are totally dependent on reliable sources…

    “Those economics are what ultimately kill the construction of new coal-fired plants. But the price of renewable energy needs to drop below the running costs of existing plants in order to force their closure. Bloomberg NEF estimates that point will be reached in China in about a decade, while for India it begins from the mid-2030s.”

    now he admits that existing coal plants provide cheaper electricity…

    “Even so, the appetite for coal power is waning inexorably. At some point, why pay more for junk — in terms of money and health — when the healthier stuff is cheaper?”

    because it’s not…

    which is why China greatly increased their coal production in 2018…

    Burn More Coal…

    • adonis says:

      great post

    • Peter G. says:

      China’s coal consumption is similar to Americans gorging on junk food. It’s not because Americans like junk food, it’s because junk food is all that many Americans can afford. Funny how junk coal and junk food are both forms of cheap energy.

      • Duncan Idaho says:

        Really cheap.
        And a reason the life span in the US is decreasing for the first time (from WWI and Flu epidemic in 1918).
        The US is getting fatter and dumber—–
        Why do you think we have our current President?

        • Peter G. says:

          I agree that Americans eating excessive amounts of junk food are probably the same Americans that voted for the current President. I think you’ll find that their motivation for both is one and the same. Americans have discovered that their ability to earn good wages and to support a family have declined significantly over the last decade. A vote for President Trump was a vote against the failed establishment. What’s most unfortunate, is that the current power structure won’t be able to halt the economic decay. History is full of nations experiencing similar economic situations. In the majority of these situations the population continues to radicalize its leadership in a desperate attempt to reverse economic hardships. One day you’ll look back and realize these are the good ole’ days and that President Trump wasn’t so bad after all.

          • Greg Machala says:

            When there are only crappy politicians to vote for then, the food one eats makes little difference in who is president.

        • Tim Groves says:

          That’s easy!
          Because the Oven Mitt Fashionista lost to the Orange Hulk after stealing the nomination from Bernie. I recall that the Bernie Babes and Boosters were absolutely outraged at how their candidate had been swindled, and refrained from voting or else held their noses and voted accordingly.

          • Duncan Idaho says:

            Never voted for a Dim or Repug.
            Reformist politics is far in the rear view mirror.

            • Tim Groves says:

              I can trump you on that—
              Never voted in a national election.
              Lived abroad for most of my adult life and haven’t had access to the franchise, and if I had a vote, I expect I’d be in a quandary about who to vote for. In the US, I’ve cheered on Nader, Perot and Ron Paul from the sidelines, but I never had any expectations that they’d win or that their winning would have changed the fundamental dynamics of this juggernaut we’re riding in. I guess I’m jaded!

            • Duncan Idaho says:

              Lived abroad also.
              Just moved back to the States from Mexico.

      • Davidin100millionbilliontrillionzillionyears says:

        the world economy could have been much better now if there had been way less “investment” in renewables and way more burning of coal…

        renewables will have just a short run…

        in the long run, countries will gladly be burning as much coal as they can get into their power plants…

        ps: I prefer a hot and tasty fast food burger any day over a calamari bisque with artichokes and Brussels sprouts and seasoned with mushrooms, garlic and ginger (ahg!)…

        but that’s just me…

    • doomphd says:

      coal, the Lycopods gift to the world.

  5. Baby Doomer says:

    “Kids have it easy these days”

    • that’s the illustration i always give when trying to explain the difference in finance between then and now

      • Greg Machala says:

        Another thing to consider is that salaries back in 1965 were still increasing every year making the mortgage payment easier to make every year. However, today, wages are either stagnant or decreasing making the mortgage payment harder and harder to make every year as other living expenses increase taking up more of the workers paycheck.

        • Inflation helps a whole lot. It doesn’t even need to be “real” growth, it can just be GDP growth. But we have lost both inflationary growth (difference between top and bottom lines) and true GPD growth.

          • Greg Machala says:

            I agree Gail. When the person who bought the home in 1965 for $3500 sells it for $650,000 today that is a whopper of a windfall. Buying a house today for $650,000 and selling for even and equal amount 50 years later is a lot of lost interest payments, insurance and upkeep. But, at the same time, one can’t even imagine a modest home costing $3500 in 1965 and $650,000 in 2015 being sold for 120+ million dollars in 2065. Exponential growth is a killer.

            • back in the 60s, i could never have imagined a 3k house multiplying 40x or more

              but back then i was oblivious to oil and exponential growth it supported

              the point being that the past 50 years of growth were supported by energy input

              the next 50 years won’t have anywhere near that input, so colla[se is inevitable

  6. Tim Groves says:

    A couple of Jehovah’s Witness ladies visited me today and I listened to them politely at the door.
    When I pointed out that the current world situation seemed to indicate that we were possibly approaching the Last Days—just as the scriptures teach, they became very enthusiastic. All of us on earth live under Satan’s rule, they lamented, and times are going to get tougher, but God has everything in hand.

    These ladies could feel the economic malaise growing all around us, but they had a worldview that put everything into a perspective that they were comfortable with. I was sorely tempted, presumably by Satan, to ask them whether they considered the end of cheap energy supplies had anything to do with our predicament, but my Guardian Angel, perched on my right shoulder, whispered in my ear that it would be bad form to interrupt them while they were doing their useful spiritual work.

    • GBV says:

      I get a JW visiting me and my family pretty regularly now.

      I guess he’s trying to convert me or something, though I’ve been very upfront with my lack of faith in Christ (believe in God, but not so much in the J.C.). Anyway, our conversation almost always gets onto the topic of preparedness and the way the world is now – like your JWs, mine gets very enthusiastic about the subject and points to scripture that captures some of the evil of the world we currently face. I have to say, the Good Book certainly makes the “End Times” sound like the world of today 😐

      I’ve tried to tell my JW friend about my (very limited) experience of canning food with a bunch of Mormons at the Church of Latter Day Saints (sadly, I don’t think they let you can your own food anymore… they just let people of all walks of life buy canned food at very competitive prices, as I guess preparedness / resiliency is a big thing for Mormons… good for them!), and ask if the JWs have any sort of local outreach / programs to increase resiliency / preparedness within the congregation. I don’t think they do, but hopefully his chat with me may light a fire under his butt to start something to that effect with his flock…

      I have to admit, I really don’t mind chatting with him, though it sucks to do so on my front porch in -10 degree Celsius (or colder) weather up here in Canada 😦

      • doomphd says:

        you’re supposed to invite then in for hot tea or coffee, like my father used to do after he retired. the conversations they had kept him occupied, but i don’t recall him ever converting them to atheism.

      • ssincoski says:

        They do have ‘bug-out’ bags prepared (or they are supposed to). My wife has her bag parked next to our bed. I’m not sure she could get it from there to the car, but she is prepared! The JW’s will be ecstatic as conditions worsen. It will just reinforce their world view.

        • i can never figure out where one is supposed to bug out to

          if you live in a city—with everyone else bugging out, the roads will seize up

          if you live in the country, all the bug outers (or is that buggers out?) will be bugging out towards you.

          also, you can’t carry more than a few days supply of food and water, and petrol won’t be available

          just stray thoughts

          • nikoB says:

            bugging you eh?

          • GBV says:

            I don’t think the idea is to have one bug out location.

            Where I am now, I can’t bug out to the south (large body of water), but I can bug out to the west (major Canadian metropolis where multiple family members live), to the North (small semi-rural villages along a Canadian non-400 series highway,one of which my uncle currently resides in), or to the East (to the capital of Canada where my sister lives).

            The direction of my “bugging out” would depend on what the threat is and where it is located (i.e. a nuclear plant meltdown near Toronto would likely have me moving Eastward towards Ottawa… “Hello Sis! Hope I’m not contaminated with nuclear radiation!”). But if I could avoid bugging out and could hunker down instead, that would be the most preferable option.

            Also, why wouldn’t petrol/gas be available? An emergency could be very localized, like a train full of deadly chemicals crashing near your home. People within 30km may have to evacuate, but for everyone else it would be “BAU” – that’s where a bug out bag would really come in handy.

            Side note: everyone should have a 72-hour kit as a minimum. In my past life, I worked for a regional municipality and we went to great effort (on the taxpayer’s dime) to try to let the people know that if a disaster struck, there was a good chance they’d be on their own for at least the first 72 hours…

          • Greg Machala says:

            I agree. If things get bad enough to “bug out,” I would think the last place a person would want to be is out on the roadways. I would think one’s odds of the longest survival time would be in the crawlspace under one’s home with a lot of water bottles, toilet paper, and some magazines. Be sure to bury the turds at downwind side of the house.. With any luck, in a couple of weeks everyone above ground would be killed off or gone. So, you would have done better than most.

            • that’s what I figured

            • GBV says:

              You may come out of the crawlspace to find a bunch of people squatting in your home 😐

            • Greg Machala says:

              True, squatters would be a downside. I did follow my statement with the phrase “with any luck.” 🙂 Luck is probably the best plan of all. There are a lot of downsides to what lies ahead. But, with any luck there would be no squatters. I suppose one could put some fake CDC orange placards on the doors and windows exclaiming the house is quarantined and infested with Ebola.

            • GBV says:

              Get yourself a 12 gauge shotgun and make your own luck? 🙂

      • GBV says:

        One interesting tidbit the JW fellow told me is that the JWs are considered a terrorist organization – just like ISIS – over in Russia 😐

        • Mark says:

          Persecution complex, more like the banned countries just realize they are high control.

          Norm, to answer specifics, the propaganda shows them bugging out to basement bunkers or the forest where they will receive divine intervention as the mobs close in.

      • Whether or not we agree with the religious teachings of any of these groups, I think that there is an extremely important reason that our self-organizing system provides religions of all types for us. The reason, as I see it, is that common religions are very good for keeping groups together. Dmitry Orlov has pointed out that it is especially good if a religious group is persecuted (at least a little), because that tends to bond the group together.

        Whether we like it or not, we cannot survive individually in a lower energy society. We have had the illusion that we can all have our own apartments and that we can each “do our own thing,” with the government and businesses providing all of the support we need. This won’t happen in a lower-energy world.

        There are all kinds of sustainability groups that gotten organized, but generally, they have a terrible time staying together. Members bicker among themselves.They really aren’t very sustainable as a group. If any kind of adversity hits, members are ready to leave to find greener pastures. They want to vote in a new leader.

        As I recall from hearing Dmitry Orlov speak, his view was that historically, groups that that have stayed together in hard times are ones that were bound together by a common view of life, usually a religion. The group would be more tightly bound if it were persecuted a bit. It certainly doesn’t matter if the religion is “right.” It only needs to be suited to the situation at hand. (This is where self-organization comes in.)

        We judge these groups based on what we see coming out of peer reviewed literature and science, and take this as the gold standard for what people should believe. The catch, if we step back a bit, is that what comes out peer reviewed literature and science tends to be distorted as well. Economics in particular is full of nonsense. Economic models of all sorts, such as those used by actuaries, assume BAU will continue forever. In fact, climate models do as well. So these don’t really stand the test of really representing the truth either.

        Maybe the truth, in the peer reviewed literature sense, isn’t as important as we think it is. Maybe what is important is that small groups of people be bound together by a common understanding of the world, and that understanding doesn’t have to be, “He who dies with the most toys wins.” It is easy to criticize any religion. If a person doesn’t like one religion, there are plenty of others to choose from.

        Perhaps we should be looking at cults from a different perspective. If someone really is interested in a sustainable future, that person will likely need to join one “cult” or another, to have a big enough group for protection from others trying to take away what little the group has. It is hard to see the situation from any perspective other than our current high-energy perspective, where “every man for himself” seems to work as a philosophy of life.

        • GBV says:


          One of the reasons I worry ALL groups will inevitably fall victim to internal strife / bickering (including large religious groups) to some degree is the fact that our society is more indebted than any that have come before us (at least to my knowledge).

          To be more specific, how can you ever trust someone who is indebted? They arguably have no real control over their own existence, owing someone something for their (and perhaps their immediate family, who they are likely to be more dedicated to than a member of their social/religious group) continued well-being.

          I have a best friend I’ve known since the 3rd grade. He’s been there for me when many others have turned their back on me. I value his friendship dearly, but at the end of the day I know he’s pickled in debt and has very few (if any) options should BAU start to unwind. Thus, I know I can’t trust him with excess funds/capital I could otherwise provide to him to help him through an emergency (he’d have no choice but to purpose it towards servicing his debts and appeasing his debt-masters), and I certainly can’t rely on him to be there to help me out in the future if things should get bad for him too (despite the fact he’s been there for me in the past).

          Also, there’s the thought that we all belong to more than one group, which will exacerbate strife within all groups. Some of the people you know within your chosen religious group are also likely to be strong members of the “Cult of Self” and the money grubbing “Cult of Mammon”, as everyone one of us in Western Society seems to be trapped in those groups in some way or another.

          Finally, at what point to the groups (religious or otherwise) that you’ve alluded to start to “cut their losses” and exclude individuals that are perceived to be liabilities? Like the lifeboats of the Titanic, they may avoid taking in too many people to avoid capsizing…

          Sorry, my mind is jumping all over the place in this line of thinking, but hopefully whatever point I’m trying to make somehow got across in my rambling rant of post 🙂

    • Mark says:

      You rang?
      XJW here,AMA. Sadly there is a huge problem with child sex abuse within the cult. This channel has some of the best info on JW’s as well as jwfactsdotcom.

      As a side note, it was waking up out of JW that lead to waking up about OFW

      • Unfortunately, there has been a problem with child sex abuse everywhere where men (by themselves) are alone with children. I think that the instances with women being the perpetrators is vanishingly small, but I have not seen insurance company data on this.

        The news in December was that US Boy Scouts may file for bankruptcy because of lawsuits related to sex abuse.

        If an organization deals with children today, insurance companies have changed the rules on how activities can be run, if the organization is to get insurance. Today, every adult who wants to be a leader or to otherwise involved with children’s activities has to undergo at training session (2 hours?) and there are new rules on what adults can and cannot do. There must be two adults present with all children at all times. If a child needs help using the bathroom, another child is to be sent with the child to the bathroom. An adult, by themselves, cannot give any of the children a ride home after the activities. Physical touching (pat on the back; holding a child on the lap to comfort them when crying) is strongly discouraged. The training sessions caution that the people who are most likely to be sexual predators are people who seem to be especially “called” to be involved with children’s activities. They spend an unusually large amount of time at it, and children tend to love them. Other adults like them as well.

        For a very long time, in many cultures, and even today in some cultures, women are property. Marriages are arranged. What the young girl thinks is not of great importance. Children of both sexes were put to work to support the family. In some cultures, baby girls were selectively killed at birth. Slavery has been common in many cultures, and children were sold as slaves.

        We have now moved to a situation that we have enough energy that we can dictate that all activities for children should have two leaders at all times. (One can sit in the corner and read a book, if desired.) Parents need to pick up children, rather than a leader who lives nearby dropping the child off. All of these ideas are ideas of a high-energy society. Activities for children necessarily get to be scarcer, because it is hard to find two leaders who will volunteer their time to take care of, say, four or five children. Parents are expected to take responsibility for picking up their children. And of course, no one would suggest that a child walk home alone; it is just too dangerous.

        I don’t think the “modern” approach works either. The kids end up spending all of their time at home using computer games and toys, or watching TV. They end up badly “adjusted,” but in a different way. It is only the rich kinds to get to take part in group activities.

        • GBV says:

          This will probably be a very unpopular comment, but I think there is some truth to it…

          Perhaps we’d see less “child sex abuse” in society if we didn’t consider adolescents / young adults (i.e. people between the ages of 13-14 to 18), who are in the later stages of puberty (a biological sign of being ready for sexual reproduction), to be “children”… 😐

          “Biologically, a child is generally anyone between birth and puberty”

        • cal48koho says:

          Good but sad commentary, Gail. We just saw the movie made about Mr Rogers and his intuitive kind interactions with young children 40 years ago. A show like that in Pittsburgh would never have a chance getting aired today. Touching and comforting children is so passe’.

      • theblondbeast says:

        That makes two ex JW’s. Same here!

        • Harry McGibbs says:

          Lapsed Catholic here. I won’t name it but the Catholic boarding school I attended was last year stripped of its responsibility for pupil welfare by the Charity Commission amid concerns about its management of sex abuse allegations, which stretched back over 40 years, and several of which resulted in convictions.

          • The Seventh Day Adventists have boarding schools in this country. I know that they have had a lot of problems as well.

            My father attended a Lutheran boarding school for children of missionaries when he grew up years ago in Madagascar. All of the teachers were female, as far as I know. The main complaints I heard were about sending children away from their parents for months at a time, when they were very still young.

          • Greg Machala says:

            It seems to me like there is an epidemic of sexual abuse scandals surfacing now as diminishing returns begin to kick it. So, how can we call the decades past – a time of “prosperity”? Or, is it just easier to hide these kinds of indiscretions in times of “prosperity”? The older I get the more disgusting the world seems to be. A thin veneer indeed!

        • Mark says:

          Wow, fade, DF, or DA?

    • xabier says:

      A fanatical Turkish Muslim taxi driver tried to convert me to Islam; he pointed out that the conversion rate in Britain indicated that the Last Days were almost upon us, and was very happy at the thought….

  7. jupiviv says:

    Art Berman’s latest article addresses the “drilling is becoming MOAR efficient!” argument:
    “The Wall Street Journal confuses tight oil production growth with economic success.

    “U.S. crude production has surged 20% in a year and nearly tripled in a decade thanks to advances in hydraulic fracturing and horizontal drilling. American output is rising at the fastest rate in a century. Earlier this year the U.S. eclipsed Saudi Arabia and Russia as the world’s largest oil producer.”

    How dumb is it to increase oil production when you are losing money on every added barrel?

    The Journal then trots out a sad attempt at proof of its impossible thesis (my Figure 2 below). It shows that rigs are becoming more efficient and that more oil per rig is produced as a result.


    Think about that last sentence and look at their graph again—production per rig?

    Rigs don’t produce oil. Wells do. This is nonsense!

    The number of tight oil wells reaches new records every month as average well output decreases.

    Giving the Journal a more-than-generous benefit of doubt about their chart, if more efficient rigs don’t result in positive cash flow for the oil companies, why is this chart even relevant?”

    • Tim Groves says:

      How dumb is it to increase oil production when you are losing money on every added barrel?

      Some people have more money than sense.
      Others have money to burn.

      The Elites, the Elders, the Powers that Be, seem to have decided it’s worth burning some money to keep America pumping crude. The price of oil is important. But we can surmise that the value oil has to the US economy (or to the Exalted Ones bankrolling the enterprise) is much greater than the cost of subsidizing its loss-making production.

      • Greg Machala says:

        “How dumb is it to increase oil production when you are losing money on every added barrel?” – It isn’t so much a “dumb” thing as it is a “desperate” thing. Desperate to at least keep the standard of living one was born into.

        • for 100 years, oil had a tangible cash asset

          it seems to me that that is still a fixation, so if you have access to oil, you can go on borrowing money against it

          obviously this can’t go on

          our collective collapse point might come when the lenders finally figure this out

    • GBV says:

      For those who prefer to listen to Art rather than read him…


      “How dumb is it to increase oil production when you are losing money on every added barrel?”

      Art touches on this in the podcast, suggesting that many of the shale oil field investors are of the mind that energy commodity prices will skyrocket at some point (so it’s okay to lose money now if they are sitting on such highly valuable resources later). Not sure if I agree, but helps to understand the mentality of the shale oil (oil shale? I always get them mixed up) investor…

      • It may be helpful to think about the situation this way: for any kind of energy, whether oil or electricity, there is a whole lot of infrastructure (pipelines, refineries, roads, transmission lines) and a very long chain of providers needed to keep all the parts operating, including computer controls and replacement parts for anything.

        If the quantity of output falls, the overhead will not drop proportionately. The cost that the government will need to pay keep up roads, relative to the materials traveling on those roads, will increase a great deal. Taxes will need to be much higher as well.

        So it is quite possible that the price to the consumer will be very high. Just look and both oil and electricity costs in the EU, especially where renewables are used. But this doesn’t mean than the producer will get a very high amount, certainly not very high relative to his rising costs. The situation may come out as badly as it does today, even if prices do rise to a high level. And it is hard to sustain high prices, if wages of workers are not very high. We have not had success maintaining high prices in the past. What make us think that we can raise the total price to the consumer very much?

        • GBV says:


          Your comment re-ignited an idea/question I’ve had for some time. I wanted to post it here on OFW in case you (or anyone else) had already considered it or had done any analysis/speculation on it.

          I’m curious if perhaps those of us who assume “BAU” is coming to an end soon are missing something in terms of the excess/inefficiency within the system that could be re-purposed towards energy production (and ponzi finance). Namely, the exuberant amount of money that goes into things such as blockbuster movies, video games, sporting events (and sports-star wages), designer/label clothing and consumer goods, etc.

          If a great deal of this energy/production/effort/money that is currently allocated within the system were re-purposed to energy and ponzi finance, would it not kick the can of BAU-failure down the road a bit?

          I don’t have any idea how to start guestimating the amount of energy & resources those “luxury” or “leisure” sectors of the economy sum to, and how easily that sum of energy/resources could be re-purposed into other more necessary functions… but perhaps someone here on OFW has given that some thought?

          As a side note, I recognize that we live in Neo-Rome, and taking those things away would be akin to cutting out the latter of our “bread and circuses”, which may lead to more revolts as the proles get restless. But when it’s a choice between that and BAU-failure, I’m sure the elites would gladly re-purpose the energy/capital that goes into circuses into more energy (“bread”) and more para-military (“police”) funding…


          • These luxury goods are mostly of the nature of a “service.” They don’t really have a huge amount of energy embedded in them that could be repurposed, as far as I can see.

            This is sort of related to “tax the rich.” The poor would like three meals a day. They would like job opportunities, beyond making handicrafts to sell to tourists. They would like paved roads. It is paving roads and jobs that take a lot of energy.

  8. Chrome Mags says:

    Jan. 20, 2018 = 408.09
    Jan. 20, 2019 = 413.21
    5.12 (never seen that much of a difference before, but must just be an aberration).

    • Duncan Idaho says:

      Consider yourself a unique human– no others have lived with it this high.

    • DJ says:

      Can we make it to 500?

      • Greg Machala says:

        Can we auction it off and make money off of it? Can we get people to pay a tax for it? Think about those questions for a moment. Then look at what we have in the world today: carbon taxes and carbon credits. It is always – ALWAYS – about the money.

      • Davidin100millionbilliontrillionzillionyears says:

        “Can we make it to 500?”

        oh… can we make it to 5 parts per 10,000?

        I hope so!

        the only way to get there is if BAU continues for the next decade, with IC continuing to be powered by the burning of FF…

        getting to “5” would mean quasi-prosperity continuing at least to 2030…

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