It would be easy to write a story about Venezuela’s energy problems and, in it, focus on the corruption and mismanagement that have taken place. This would make it look like Venezuela’s problems were different from everyone else’s. Taking this approach, it would be easy to argue that the problems wouldn’t have happened, if better leaders had been elected and if those leaders had chosen better policies.
I think that there is far more behind Venezuela’s financial and energy problems than corruption and mismanagement.
As I see the story, Venezuela realized that it had huge oil resources relative to its population, back as early as the 1920s. While these oil resources are substantial, the country misestimated how high a standard of living that these resources could support. To try to work around the issue of setting development goals too high, the country chose the path of distributing the benefits of oil exports in an almost socialistic manner. This socialistic approach, plus increased debt, hid the problem of a standard of living that could not really be supported for many years. Recent problems in Venezuela show that these approaches cannot be permanent solutions. In fact, it seems likely that Venezuela will be one of the first oil-exporting nations to collapse.
How the Subsidy from High-Priced Exported Oil Works
Oil is a strange resource. The cost of oil production tends to be quite low, especially for oil exporters. The selling price is based on a world oil price that changes from day to day, depending on what some would call “demand.” The difference between the selling price and the cost of extraction can make oil exporters rich. In a sense, this difference might be considered an “energy surplus” that is being distributed to the economies of oil exporters. The greater the energy surplus being distributed, the greater the quantity of goods and services (made with energy products) that can be purchased from outside the country with the hard currency that is made available through the sale of oil.
In fact, the existence of such a profitable resource tends to crowd out development of other, less profitable, enterprises. Thus, Venezuela has tended to be a country whose economy revolves around oil. There is a small amount of agriculture and quite a bit of services, but for the most part, the goods used by the economy must be purchased from outside the country. Furthermore, nearly all of the revenue that is available to purchase these goods comes from the sale of oil exports. Thus, the economy tends to follow the fortune of oil sales.
Figure 1 shows a rough estimate of the benefit that Venezuela’s oil exports have provided in inflation-adjusted US dollars. Based on this approach, the per capita benefit from oil exports seems to have peaked very early, in about 1981.
Figure 1. Venezuela per capita value of oil exports, calculated by multiplying Venezuela’s year-by-year quantity of oil exports by the price in 2017$ of oil, and dividing by estimated population. Both price and quantity determined using BP 2018 Statistical Review of World Energy. Population based on 2017 United Nations middle estimates.
The people of Venezuela did not realize that the amount of benefit that oil exports would provide would start falling very early. Instead, leaders set their sights on living standards that would be affordable if the level of subsidy that the economy could obtain from oil exports were to remain as high as during the 1973 to 1981 period.
Figure 2 shows how much energy the population, on average, consumed over the 1965 to 2017 period. This figure shows that energy consumption per capita rose dramatically between 1973 and 1981. In this way, citizens were able to benefit from the huge rise in per capita oil export revenue, shown in Figure 1.
Figure 2. Energy consumption per capita for Venezuela, based on BP 2018 Statistical Review of World Energy data.
This higher level of energy consumption meant that the economy readjusted in a way that added more goods and services using energy. For example, the economy added paved roads, airports, schools, electricity generating capacity and healthcare. People came to expect this higher standard of living going forward, even if the level of subsidy that oil exports had been adding was rapidly disappearing.
The way the amounts in Figure 1 “work” is that they depend both on the quantity of oil exported and the market price for that oil. If Venezuela’s oil exports are not rising quickly enough, or if the price of oil is not high enough, the level of oil subsidy fails to rise enough to support the economy. Also, rising population becomes an issue because as population rises, more homes, cars, electricity, streets, and other goods (requiring energy consumption) are needed. Because Venezuela must import practically everything other than oil, it must either (a) export an increasing quantity of oil per year, or (b) get an increasingly high price for the oil it exports, if it wishes to support its rising population at its chosen standard of living.
It became evident very early that Venezuela had set its sights on a living standard that was far higher than it could really support. In the period since 1965, Venezuela’s first debt crisis took place in 1982, as the subsidy suddenly started falling. Later debt crises occurred in 1990, 1995, 1996, 1997, 1998, 2004, and 2017. Clearly, as soon as the per capita subsidy started falling in 1982 (see Figure 1), Venezuela’s economy became very troubled. It could not really support its chosen standard of living.
How could Venezuela hide the problem of an unsupportable living standard for over 35 years?
I see three major ways the insupportable living standard could be hidden:
(a) Pushing the problem off into the future using added debt
Nearly everyone is willing to believe that oil prices will rise as high as is needed to extract oil resources that seem to be available with current technology. Would-be lenders are also willing to believe that oil resources can be extracted as rapidly as needed to support the economy. Given this combination of beliefs, Venezuela has had little difficulty adding more debt, even in periods not long after it has been forced to restructure previous debt.
Recently, the biggest lender to Venezuela has been China. With this arrangement, Venezuela has been able to obtain the economic benefit of part of its oil resources, before the oil has actually been extracted. Unfortunately, this arrangement makes Venezuela more quickly susceptible to the adverse impact of a downturn in oil prices. To make matters worse, the debt to China appears to include a provision that creates a lower repayment level (in oil) if prices rise, but creates a higher repayment level (in oil) if oil prices fall. This provision no doubt looked favorable to Venezuela, back in the time period when it was believed that oil prices could only rise.
As far as I know, Venezuela is the only oil exporting country that has used debt as extensively as it has. Some oil exporters, such as Saudi Arabia, have taken the opposite approach, setting aside reserve funds to use in the event that oil prices fall. Needless to say, Venezuela’s use of debt has tended to make its economy very vulnerable to restructuring or defaults if oil prices fall.
(b) Pursuing economic simplification
A complex economy is one that is set up, as much as possible, to keep up with growing technology. A significant share of expenditures go both toward making new capital goods and maintaining existing capital goods. There are considerable differences in pay levels, to make certain that those who are providing technical expertise are adequately compensated for their efforts. Business leaders also are adequately compensated for their contributions.
A much simpler economy, which is what most of the Venezuelan leaders have been aiming for, is an economy in which everyone gets a basic level of housing, transportation, and healthcare, but virtually no one gets very much. There is also not much investment in new technology and new capital goods because nearly all of the hard currency being obtained by selling oil exports is being used to purchase imported goods and services to support the basic level of goods and services (such as roads, electricity, education, and food) being provided to the many citizens of the economy. Since the external value of oil exports sets an upper limit on the quantity of goods and services that Venezuela can import, this leaves virtually no capacity to purchase imported goods and services needed to support new capital investment and research.
In Venezuela’s economy, the cost of both oil and electricity have been kept very low–below the cost of production. This helps keep citizens happy, but it also cuts off funds for new investment in these areas. This, too, is part of the simple economy approach.
One disadvantage of a simple economy is that the low wages for engineers and other professionals encourage these professionals to move to other countries, where compensation is more adequate. Another disadvantage of a simple economy is that it encourages bribery, because graft is a way of adjusting the system so that those who “can make things happen” are adequately compensated for their efforts. The simple economy approach also tends to discourage research and investment in new areas, such as natural gas production and improved methods of heavy oil extraction.
A simple economy can be kept operating for a while, but it quickly reaches limits in many ways:
- The limited skill level of residents who have not emigrated for higher wages elsewhere makes the completion of complex projects, such as new electricity generation facilities, difficult.
- The inadequate level of oil export revenue puts a limit on the amount of spare parts and other goods needed to maintain the infrastructure, such as electricity transmission.
- As existing oil wells deplete, little funding (in hard currency needed for imports) is available to make investments in new wells for extraction.
- Research on new techniques for oil extraction is also inhibited.
(c) Neglect of current systems becomes an increasing issue, as the lack of hard currency revenue from oil exports becomes a bigger issue.
Venezuela can, in theory, buy what it needs from abroad, but there is a limit to the total amount of goods and services that can be imported, based on the amount of hard currency funds it obtains from selling crude oil. If the price of oil falls, then Venezuela must, in some way, cut back on goods and services that it had previously supplied. One of the least obvious way of doing this is by cutting back on maintenance and repairs.
The recent long electricity outage in Venezuela seems to be at least partially related to neglect of usual maintenance activities. It seems that Venezuela’s state-owned electrical company failed to keep the brush cleared under electric transmission lines leading away from the very major Guri Dam. It now appears that one of the causes of Venezuela’s recent long electricity outage was damage to transmission lines caused by a brush fire within the Guri complex. This could perhaps have been prevented by better maintenance.
Figure 2 shows that energy consumption per capita has been falling, especially since 2011. This would suggest that standards of living have been falling. Needless to say, if Venezuela’s oil exports drop further, a further reduction in standard of living can be expected.
Why Is America Issuing Sanctions Against Venezuela’s Oil Company PDVSA?
On January 28, 2019, the United States imposed sanctions against Venezuela’s state oil company, PDVSA. The reasons given for these sanctions are the following:
- To hold accountable those responsible for Venezuela’s tragic decline in oil supply
- To restore democracy
- To help prevent further diverting of Venezuela’s assets by Maduro, and thereby preserve those assets for the people of Venezuela
These reasons sound good, but I expect that the primary real reason for the sanctions was to try to take Venezuela’s oil production offline and, through this action, force oil prices higher.
World oil prices have been far too low for oil producers since at least 2014.
Figure 3. Historical inflation-adjusted oil prices, based on inflation adjusted Brent-equivalent oil prices shown in BP 2018 Statistical Review of World Energy.
Many people, thinking about the oil price situation from the consumers’ point of view, are completely unaware of the problem that low oil prices can cause for producers. Oil producers may not go out of business immediately because of low oil prices, but eventually the low prices will cause a cutback in investment, and thus production. Countries that have sold some of their oil production in advance, such as Venezuela, are especially vulnerable.
Figure 4. Venezuela’s energy production by type, based on data of BP 2018 Statistical Review of World Energy.
Figure 4 shows that oil production for Venezuela has been dropping for a very long time. Its highest year of production was 1970, the same early high year as for the United States’ oil extraction. Natural gas is mostly “associated” gas, which is made available through oil production. Hydroelectric is small in comparison to oil and gas. Hydroelectric production has been generally falling since 2008.
There is a widespread belief among oil executives and politicians that reducing oil production will force oil prices up. I expect to see, at most, a brief spike in oil prices. The major issue is that the world economy is a networked system. Prices for oil and for electricity cannot rise higher than consumers, in the aggregate, can afford. If there is too much wage disparity around the world, the low wages of many workers will tend to hold oil prices down, because these workers cannot afford goods such as smartphones and automobiles made with oil and other energy products. These lower oil prices reflect the fact that the economy has been changing in ways that leave less surplus energy to distribute to oil exporters to operate their economies.
The way the networked economy works is determined by the laws of physics, whether we like it or not. As far as I can see, the end of oil extraction comes because oil prices cannot be raised high enough to make extraction profitable. Once oil extraction becomes unprofitable, oil exporting nations will start collapsing. Venezuela is the “canary in the coal mine” in this collapse process, because of the extensive use it has made of debt.
What If Oil Prices Can Be Forced Upward?
If somehow oil prices could be forced up by reducing Venezuela’s exports to practically zero, this would have a double benefit:
- More oil from around the world, including the United States, could be profitably extracted, because oil resources that are more expensive to produce would suddenly become profitable.
- Venezuela’s oil could be more profitably extracted.
If prices actually rise, and if the United States remains in control of the situation, the US could theoretically expand Venezuela’s oil production. Venezuela has the largest oil reserves of any country in the world. Its expected cost of production is relatively low, if the exports of oil are not expected to support essentially the whole economy. The cost of pulling the oil out of the ground in Venezuela seems to be about $28 per barrel, if we believe a 2016 estimate by Rystad Energy.
Figure 5. Cost of producing a barrel of oil and gas in 2016. WSJ figure based on Rystead Energy analysis.
The cost of supporting the entire economy with the revenue from oil exports is far higher. Figure 6 shows that back in 2013-2014, the cost of oil, including the subsidies needed to maintain the operation of the rest of the economy, amounted to about $110 per barrel. I would expect that with all of Venezuela’s debt, the real cost might be even higher than this.
Figure 6. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from Arab Petroleum Investments Corporation.
If the US doesn’t plan to support all of Venezuela’s population with the export revenues from oil extraction, it can theoretically extract the oil more economically than the $110 per barrel price that is needed to support the whole economy. Thus, it could get along with a price closer to $28 per barrel.
Furthermore, the investment capabilities and technical expertise of the United States could, at least in theory, ramp up Venezuela’s oil production, if this is desired at some future date. Similarly, “non-associated” natural gas production could be ramped up, if desired, because this seems to be available, but has been neglected.
I expect that all of this development would be more difficult and expensive than a simple comparison such as this seems to suggest. The ultimate problem is that a whole economy needs to be in place to make the extraction possible. Even if a cursory examination suggests that substantial savings are possible, the cost associated with maintaining necessary support services would make the total cost of energy extraction much higher.
Conclusion
Venezuela seems to be the canary in the coal mine with respect to where oil exporters are headed. Other countries will want to push them out of oil production, so as to try to raise prices for themselves. Debt defaults and lack of availability of debt may also become issues.
One item of interest is the fact that in Venezuela, lack of oil revenues can adversely affect electricity supply. Thus, we should not be surprised if electricity supply fails at about the same time that oil production falls. Even electricity supply provided by hydroelectric plants seems to be at risk.
Another item of interest is how Venezuela’s attempt at even distribution of goods and services, using a somewhat socialistic approach, is working out. This approach (which is now being advocated by some political candidates) seems to have some short-term benefits, because it tends to keep the population happy–almost everyone seems to have a minimum standard of living. But, over the long term, this approach leads to the loss of the ability to maintain today’s high-tech economy. This approach doesn’t prevent collapse either, because a lack of investment and expertise eventually causes important parts of the system to stop operating.
“The Federal Reserve on Monday put forward two proposals to modify regulations put in place after the 2008 financial crisis that the banking industry complained were too restrictive. The proposed regulatory changes were approved on a 4-1 vote with Fed board member Lael Brainard opposing the changes. She said they “would weaken important safeguards” put in place after the crisis.”
https://eu.detroitnews.com/story/news/nation/2019/04/08/fed-looks-ease-post-financial-crisis-regulations/39317521/
“Four top Federal Reserve officials speaking since the March meeting suggested the central bank could hold more short-term bonds than it does now… But two policymakers also noted a downside: Ditching long-term bonds could tighten financial conditions. To offset that problem the Fed might have to lower interest rates. That would make it more likely that rates would hit zero and then force the Fed to do more quantitative easing later.”
https://uk.reuters.com/article/uk-usa-fed-balancesheet-explainer/explainer-for-feds-trillions-in-bonds-size-isnt-all-that-matters-idUKKCN1RK1VW
“The Bank of Japan… may be forced to ramp up monetary support, though many analysts say the central bank is left with few effective tools to prop up growth.”
https://uk.reuters.com/article/japan-economy-recession/rpt-japan-faces-recession-risks-with-dearth-of-ammunition-idUKL3N21Q279
“Bond investors burned by the worst week for Chinese government debt in more than five years should look to the central bank for comfort, according to analysts. Despite data showing a surprise jump in a manufacturing gauge, the People’s Bank of China is likely to keep monetary policy loose, thereby supporting bonds — goes the argument.”
https://www.bloomberg.com/news/articles/2019-04-08/china-bond-bulls-seek-pboc-support-after-worst-week-since-2013?srnd=new-economy-forum
The fundamental problem is the fact that at some point, yields cannot go any lower. Bond investors have been happy about falling yields, because these falling yields make the value of bonds in their portfolios rise. But ultimately, this situation has to stop.
Harry, as much I appreciate all your valuable work – can you find some good news sometimes please?
“Since the last recession, nonfinancial corporate debt has ballooned to more than $9 trillion as of November 2018, which is nearly half of U.S. GDP. As you can see below, each recession going back to the mid-1980s coincided with elevated debt-to-GDP levels—most notably the 2007-2008 financial crisis, the 2000 dot-com bubble and the early ’90s slowdown.”
https://www.forbes.com/sites/greatspeculations/2019/04/08/what-ballooning-corporate-debt-means-for-investors/#48e0d6bb636c
“What is really alarming is that there is a high-percentage of covenant lite loans. If the share of covenant-lite loans in 2006 was around 10%, this became 80% in 2018. Another source of worry is that the ratio of debt to EBIDTA has risen, and that means that companies have taken on more debt than they should have…
“It is important to understand that companies have concentrated on financial engineering to boost stock prices by implementing share buyback programs that have been financed by debt. The capital has not been invested in R & D (Research and Development) or in Capex (Capital Expenditure) in order to strengthen the company and make it more resistant to a crisis or recession.
“Capital has been grossly misallocated, and the economy is basically weaker than it should be and therefore more prone to suffer disastrously when there is an economic downturn. What is more is that the share buyback programs have taken place when the market is extremely overvalued and share prices are very high.”
https://seekingalpha.com/article/4253307-corporate-debt-crisis
Availability of too much debt, with too little cost, and to little in the way of requirements on the profitability of the company using the loan money is headed for disaster!
“Around the world the banks bought nearly 90 tonnes of gold in January and February, up from 56 tonnes year-on-year, the World Gold Council reported. It is the highest level of growth in the first two months of the year since the financial crisis… “Despite a decade passing since the global financial crisis, times seem no less certain. Central banks reacted to rising macroeconomic and geopolitical pressures by bolstering their gold reserves,” the council said.”
http://www.cityam.com/275961/central-banks-glimmer-gold-buying-reaches-highs-not-seen
“Russia is buying gold. A lot of gold. Within the span of a decade, the country quadrupled its reserves… Are the Russian authorities preparing for a renewed clash with the United States and are they attempting to reduce their vulnerability to financial sanctions? Or do they fear a homegrown financial crisis?
“…The sheer size of the purchases might reveal bolder motives, with Moscow preparing its first salvo in the coming battle for a monetary reset. What makes the recent moves especially significant is the fact they are being replicated in Beijing.”
https://www.themoscowtimes.com/2019/04/08/russias-new-gold-rush-could-shake-up-the-international-monetary-system-a65131
I am a little skeptical that this will work. It is necessary to have goods to buy with the gold.
The mindset is certainly interesting though. The central banks are giving every indication of being alarmed of late.
“Almost every major rich-world economy is slowing down in a fresh sign that the risk of a global recession is rising. “The United States, Japan, the eurozone, UK, Canada and Russia are all losing momentum, according to leading indicators compiled by the OECD that seek to predict the path of growth over the next six to nine months.
“Its composite leading indicator points to the worst economic outlook since 2009, when the world faced the depths of the financial crisis. At the same time Germany’s exports slowed and confidence in the Japanese economy fell. The figures come after a series of other warning signs, including the inversion of the US yield curve that has in the past indicated a recession…”
https://www.telegraph.co.uk/business/2019/04/08/global-recession-watch-major-economies-slow-confidence-drains/
“Global air freight demand hit a three-year low in February, down 4.7 percent from last February, according to data released by the International Air Transport Association (IATA)…
““Cargo is in the doldrums with smaller volumes being shipped over the last four months than a year ago. And with order books weakening, consumer confidence deteriorating and trade tensions hanging over the industry, it is difficult to see an early turnaround.””
https://www.freightwaves.com/news/airfreight/global-air-freight-demand-hit-a-three-year-low-in-february
“The drumbeat of warnings about a looming worldwide recession is growing ever louder. According to the latest Brookings-Financial Times TIGER indexes, which track the global economic recovery, growth momentum is declining in virtually all of the world’s major economies. And what this portends in the longer term is ominous, especially given the limited macroeconomic policy options for stimulating growth.”
https://www.project-syndicate.org/commentary/global-economy-slowdown-policy-options-by-eswar-prasad-2019-04
‘What is it Caruthers? You look a bit queer!’
‘I can’t stand it: it’s the drums in the jungle, the incessant beat of the drums, they never stop! On and on and on,….. is there no escape?’ 🙂
The clan McGibbs has an all-purpose recipe for unpalatable realities:
Take one duvet (an eiderdown quilt will do in a pinch) and one bottle of whisky (large, ideally). Drink the latter in quick, panicky gulps under the former. Et voilà! No more menacing drums.
Clearly for the hard men of the North ( I am sure Lady McGibbs just takes tea)!
The woman will take what she’s told! …Please don’t tell her I said that.
“An array of data has pointed to worrying signs of a slowdown in the euro zone with further signs last week that Europe’s largest economy Germany is weakening. And more bad news could be on the way. Euro zone industrial production data for February is due Friday and economists polled by Reuters expect it to have declined by 0.6 percent month-on-month.
“https://www.cnbc.com/2019/04/09/europes-economy-appears-to-be-experiencing-a-crisis-of-confidence.html
“Swedish motor vehicle factory orders dropped sharply in February, according to data released on Monday that highlight the slowdown early this year in Europe’s manufacturing sector. New orders within the Swedish auto industry fell by 12.7 per cent from January to February, data released by Statistics Sweden show.”
https://www.ft.com/content/26a406ce-59da-11e9-939a-341f5ada9d40
Air Freight is needed for just in time supply lines. I notice that Asia-Pacific has been particularly affected.
And lots of airlines struggling or going under.
“Jet Airways India Ltd.’s lenders invited initial bids to buy as much as 75 percent of the debt-laden carrier, starting a process that will determine the future of India’s oldest surviving private airline.
“Potential buyers must submit their interest by April 10, State Bank of India Ltd., the lead creditor, said in a document Monday. A strategic bidder should have a net worth of at least 10 billion rupees ($144 million) in the preceding financial year, or at least three years of experience in the airline business.”
https://www.bloomberg.com/news/articles/2019-04-08/debt-laden-jet-airways-lenders-plan-to-sell-up-to-75-stake
Urban Planning/Zoning in Japan
https://www.planetizen.com/news/2019/04/103734-zoning-japan-versus-zoning-us
“What led to such a wide distinction between zoning in Japan and in the United States? Gray puts forward three main factors. For one thing, “the U.S. privileges real estate as an investment where Japan does not, incentivizing voters to prohibit new supply with restrictive zoning.” Current law encourages homebuyers to treat their property as a way to “build wealth,” standing in for a more robust social safety net. In Japan, however, homes have little resale value, fully depreciating in some cases after an average of only 22 years.”
what happened to the multi-generational mortgages to pay for the high-priced Japanese real estate?
I don’t know how the “multi-generational mortgages” fit this picture.Maybe the author left out something.
“In Japan, however, homes have little resale value, fully depreciating in some cases after an average of only 22 years.”
sounds like BS. Tokyo used to have some of the highest priced residential properties in the world. the only thing i can think of to lower that even a bit might be the Fukushima fallout measured there. there are just too many people wanting to live there, so demand is high.
Interesting! If ” In Japan, however, homes have little resale value, fully depreciating in some cases after an average of only 22 years,” I wonder how buyers can ever get mortgages to buy these homes. Why would anyone lend money on something whose value is disappearing so rapidly? It is sort of like having a nation of mobile homes, whose value depreciates to zero in about the same timeframe as automobiles depreciate to zero. What happens to all of these homes with little value? I have heard than in the countryside, the Japanese government has taken over a lot of homes that children have no interest in inheriting; the inheritance taxes would be too high for the home to have any real value.
I would note, too, that a great deal of the “wealth” of families in the US has come from inflationary appreciation of their homes. People expect this to happen in the future, but with prices as high as they are today, this is highly unlikely, unless somehow wages rise correspondingly. There group of young people who are able to afford to purchase these homes is not large enough to maintain this property bubble.
I’m confused.
“Depreciation” is a tax term, not a market-value term.
You can depreciate a home used for business purposes in the US in about the same amount of time, and then sell it for more than you paid for it. (You then have to pay capital gains on the entire sale price, as you have taken tax benefits from depreciation.)
In order for market value to dissipate over 22 years, there would have to be a steady supply of houses under 22 years old, no? Either that, or population decrease.
What we are seeing across every country is “scrapping off the bottom of a barrel”, doing whatever it takes to extend and pretend. It was easy to do it in the 1970s but the law of diminished returns dictate that this is not the case anymore
“Turkish companies are struggling to get off the hamster wheel of debt as foreign borrowings run near record highs. The reason: a plunge in the lira that has driven up the cost of their obligations in dollars and euros. Banks are being left to carry the burden amid a surge in demand from some of the country’s industrial giants to restructure their liabilities — on top of a jump in bad loans. Lenders are also pulling back on providing new credit as the financial system comes under increasing pressure from the recession and an inflation rate of almost 20 percent.”
https://www.bloomberg.com/news/articles/2019-04-08/turkish-banks-sweat-under-rising-pile-of-debt-restructurings
“Jordan is talking to the World Bank about a $1 billion soft loan as it seeks to cut the cost of its debt repayments and revive an economy strained by more than a million Syrian refugees.”
https://www.bloomberg.com/news/articles/2019-04-07/jordan-seeks-1-billion-world-bank-loan-to-cut-debt-burden
“With [Pakistan’s] inflation at its highest in five-and-a-half years, we are only seeing the beginnings of a period of double-digit inflation. The rupee is losing value every other day, adding to this inflation, and will depreciate a great deal more, whether, or especially when, the government gives in to yet another IMF programme.”
https://www.dawn.com/news/1474662/much-worse-to-come
I believe Pakistan will be the first major over the falls, but it could be India or, less likely, Indonesia.
They all will go soon, as they are not survivable.
Although, like South Africa, Pakistan has recently announced a big discovery of offshore oil and gas (some experts are sceptical though):
https://gulfnews.com/world/asia/pakistan/pakistans-massive-oil-and-gas-discovery-report-to-be-out-in-april-1.62968777
Desperate hopium….”drilling in ultra-deep waters offshore”…..let’s see, how deep….try 18000 ft.
“Pakistan Prime Minister Imran Khan had also hinted at finding ‘massive’ oil reserves off the coast of Karachi.
He said he would soon share good news with the nation. He had said Pakistan would not need to import oil after the offshore reserves are found.”
“According to data of a recent study, existing deposits in Pakistan will further deplete 60 per cent by the year 2027. ”
“Pakistan currently meets only 15 per cent of its domestic petroleum needs with crude oil production of around 22 million tons; the other 85 per cent is met through imports.”
They absolutely must keep the hopium alive to try to manage an orderly transition into bankruptcy versus chaos.
This will end in war.
They may need some assistance from Brazil— very deep.
“UK Business confidence has crashed to the lowest point since 2012, and the economy is only growing because firms are stockpiling ahead of Brexit, according to a key sentiment indicator.
“The BDO optimism index… fell faster in March that at any time since the bleakest days in the aftermath of the Lehman Brothers collapse in 2008. The figures suggest that the UK economy could struggle to post any positive growth in 2019, BDO said.”
https://www.theguardian.com/business/2019/apr/08/business-confidence-in-uk-hits-lowest-ebb-since-financial-crisis
“The recovery after the eurozone financial crisis was never that strong. But in the last year or so, the region has been hit by adverse trade winds. It matters particularly to Germany, which is Europe’s leading goods exporter and number three globally (after China and the US).”
https://www.bbc.co.uk/news/business-47802235
“No other country in the West is undergoing a structural crisis like Italy – and recession is looming large. The current Purchasing Managers Index, which measures the manufacturing activity, is at its lowest level over the last four years, in Italy as in the rest of the world. Hence a very severe crisis of the whole Euro area is expected…”
https://www.eurasiareview.com/08042019-italys-economic-crisis-and-the-oecd-warnings-analysis/
“A cocktail of negative interest rates, over exposure to sovereign borrowing and expanding debt bubbles has left European banks susceptible to shocks, laying the ground for a fresh credit crunch on the continent, experts have warned. Financial institutions in the EU and the US leveraged loan market are two of the greatest threats to the global credit markets…”
https://www.telegraph.co.uk/business/2019/04/07/weakened-european-banks-vulnerable-another-credit-crunch/
“Across the continent [of Europe], far-right populist and nationalist parties are mobilising ahead of next month’s EU parliamentary elections. Polls show their support growing. For Europe’s newly energised hard right, Brexit is both a spur and a sideshow.”
https://www.theguardian.com/world/2019/apr/06/brexit-distraction-far-right-nationalists-eu-elections
Ah, the Guardian: the Right is always ‘hard’, ‘extreme’, menacing and the biggest threat ever; but the Left is always gentle-as-a-dove and ‘progressive’, ‘can’t make omelettes without breaking eggs’, etc…….
I have to admit, though, that Spain is almost back to a 1936 level of political polarisation, thanks to the whole Catalan nonsense. But really it’s more the case that the gloves are now off, rather than it being a new division in the country. The economy is slowing once more.
thanks to the whole Catalan nonsense.
Well, it has been going on for 40,000 years.
And yet in Warsaw, they are still building like crazy. I was downtown yesterday and it was impossible to turn your head in any direction and not see multiple cranes and new buildings going up. Back at my house in the village just spring bird songs and pine cones popping open.
Eastern Europe seems to be one of the very few bright spots in the global economy right now. Poland’s growth is set to slow, according to the World Bank, but it’s still growing at a good rate:
“Poland’s economic growth will slow to 4.0 percent this year from more than 5 percent in 2018 because of a decelerating global economy and shortages on the domestic labour market, the World Bank said on Friday.”
https://uk.reuters.com/article/poland-growth-worldbank/poland-faces-economic-slowdown-wider-deficit-world-bank-says-idUKL8N21N1GT
Sort of like in the last downturn. Bad, but not as bad as eveyone else. In last recession, Poland was only EU drone not to actually enter recession. Most of it is just luck as in right time to be accessing EU funds and lots of Western countries looking to expand east. I’m not complaining!
23.2 thousands new dwellings were completed within Warsaw city limits last year. That’s 70% of what was built in whole Czech Republic. Warsaw pop. 1.8m, Czech pop. 10.6m
“Building lots of homes” helps lead to high energy consumption per capita, because the building of homes requires a lot of energy, to prepare materials that will be used in the building, to transport the materials, and to make all of the devices like hot water heaters, furnaces, and air conditioners that go into building the homes. Considerable energy goes into creating bulldozers to move the dirt going into homes, and into operating them. If concrete is used in any way, (even to build new streets in the areas of the homes), it used a disproportionate amount of energy consumption.
Of course, considerable wages are paid to workers, both on the construction site and making the materials that go into the home. These workers spend their wages on things like vehicles and homes for themselves. These wages tend to be mid-level (not absolutely not rock-bottom, and not way over the top) so provide disproportionate effect to the economy. These workers are ones that often would be left out, if there were not enough building going on.
Warsaw is the capital of Poland, so the overall population is slightly higher 🙂
Doesn’t sound good!
“China’s central auditing authority has sounded the alarm on a surge of dangerous debt at small banks across the nation, elevating the query of whether or not Beijing will proceed to bail out struggling lenders or finally enable some to go bankrupt… Many massive banks have introduced NPLs beneath management, however metropolis industrial banks and rural monetary establishments, which make up greater than 26 per cent of China’s whole banking property, have continued to file greater charges of soured loans as financial progress cools.”
https://www.optimal-money.com/china-sounds-alarm-over-bad-loan-surge-at-small-banks/
“Chinese investment in Australia dropped by more than 36 per cent in 2018, to its second lowest level since the global financial crisis of 2008. The latest report from KPMG and the University of Sydney Business School found that Chinese firms invested a total of $8.2 billion in Australia last year, down from $13 billion the year before.”
https://www.abc.net.au/news/2019-04-08/chinese-investment-into-australia-drops-sharply/10980082
“In an interview with the Australian Financial Review (AFR), the International Monetary Fund (IMF) Lead Economist expressed his take on the Australian housing market contraction… “Australia’s housing market contraction is worse than first thought.” …Leaving the economy in what he called a “delicate situation”.”
https://www.fxstreet.com/news/imf-australias-housing-market-contraction-is-worse-than-first-thought-201904080158
“The state-run Korea Development Institute on Sunday said Korea is slowly going into recession. The KDI said Sunday that the economy is “in a phase of gradual slowdown” as demand both overseas and at home shrinks. Until last October, the institute had said Korea’s economy was improving. According to market researcher CEO Score, investment at 855 subsidiaries of Korea’s top 60 businesses fell 3.1 percent last year to W98.5 trillion (US$1=W1,139).”
http://english.chosun.com/site/data/html_dir/2019/04/08/2019040801409.html
“An economist believes falling Malaysian trade figures are an indication of a looming… recession and says the federal government should begin making preparations to meet the challenge. Barjoyai Bardai of Universiti Tun Abdul Razak said the dip in Malaysian export and import figures for February were in line with a contraction in global trade…Malaysia’s export-oriented industries would be affected by the slowdown in global demand because of the country’s position in the global manufacturing supply chain and as a commodity exporter.”
https://www.freemalaysiatoday.com/category/nation/2019/04/08/fears-of-a-recession-after-fall-in-exports-and-imports/
“The International Monetary Fund’s executive board approved a $10.8 billion disbursement to Argentina on Friday as part of its record credit line to the beleaguered South American nation. The IMF didn’t specify a date for release of the funds, which were approved on the day that the peso closed at a new record low… The currency is under renewed pressure despite the world’s highest interest rate and Argentine officials struggle to tame inflation that surged to 50.7 percent in February.”
“”Your momma!” Brazil’s normally buttoned-down Economy Minister Paulo Guedes snapped, after the lawmaker called him a “Tchutchuca” this week. The word, plucked from a racy hit song, broadly refers to an attractive, promiscuous girl.
“You read that right, grown men (and upper-class lawmakers at that) are calling each other s*luts and trading yo’ mamma jokes on the congressional floor.
“This is not indicative of a political regime that’s going to manage the threat of a recession and potential currency crisis well. The central bankers in Brazil are not dumb by any stretch, but the political situation is going to force them to choose between a rock and a hard place. The rock is to raise taxes or cut spending to balance the budget.”
https://seekingalpha.com/article/4253148-sell-brazil-recession-potential-currency-meltdown-ahead
“The Trump administration announced on Friday its latest round of economic sanctions against the government of President Nicolás Maduro of Venezuela, this time aimed at oil shipments between Venezuela and Cuba, a country that the administration has accused of propping up Mr. Maduro’s authoritarian government.”
https://www.nytimes.com/2019/04/05/us/politics/trump-sanctions-venezuela-cuba.html
“The newsprint shortages which forced Cuba’s Communist daily to run a trimmed-down edition on Friday… carry chilling memories of the not-so-distant past. The last time the government cut back on newspapers because of a lack of newsprint was in the early 1990s, when Fidel Castro ushered in a “Special Period” of drastic belt-tightening in the wake of the collapse of his main sponsor, the Soviet Union…
“Meager growth of 1.2 percent is not enough to cover the needs of an island nation that imports 80 percent of what it eats. Amid shortages, the government is being forced to ration basics like flour, cooking oil and chicken, leading to long lines outside stores.”
https://www.thepeninsulaqatar.com/article/07/04/2019/Cuba-newsprint-shortage-sounds-alarm-for-economy
Sounds not all that different from its “special period.” The solutions of the special period were not really long-term solutions. They helped a bit, but did not really address the calorie needs of the people (more salad, not enough other things).
It’s not just Cuba that’s at risk; it’s the entire Caribbean, with its tens of territories. Those nations that, instead of neutrality, side against Venezuela (which subsidizes their oil supply) should be ashamed of themselves.
Saying you won’t trade with any given country is one thing.
But under international law, interfering in the trade between two other countries is an act of war.
Not that either Cuba nor Venezuela can do anything besides appeal to international tribunals about it, but it sure makes the US look bad, violating international law that the US had a big part in instituting.
There are at least 20 Caribbean territories that aren’t bound by US rules. What happens to them if Venezuela and its oil subsidies to them go away? And yet this spineless “leaders” who run those territories just prostrate themselves and betray their citizens as if they had no shame.
I am coming to feel that ‘leader’ – usually – describes someone who couldn’t get hired for any kind of real job….
“The Trump administration announced on Friday its latest round of economic sanctions against the government of President Nicolás Maduro of Venezuela, this time aimed at oil shipments between Venezuela and Cuba”
Trump has no heart. In this case he’s hitting two countries; one on the ropes in a stage of collapse and the other struggling, facing possible collapse. It’s akin to hitting someone when they’re down. Like enjoying prime rib with horseradish sauce in a posh restaurant while those outside starve.
“US sanctions are preventing aid from reaching Iran after flash floodingclaimed at least 70 lives and left 86,000 people homeless, according to the Red Crescent Society.”
https://www.independent.co.uk/news/world/middle-east/iran-floods-aid-us-sanctions-trump-pompeo-red-crescent-a8859981.html
“An Iranian airliner started direct flights to Venezuela on Monday, in a sign of strengthening ties between the countries which have been engaged in a diplomatic battle with the US in recent months. Mahan Air started direct flights from Tehran to Venezuela’s capital Caracas on Monday, a 16-hour journey for the government officials onboard the carrier, according to Mehr news agency.”
https://www.alaraby.co.uk/english/news/2019/4/8/iran-airliner-begins-direct-flights-to-crisis-hit-venezuela
Simply speaking, there are advantages and disadvantages to being a vassal state and advantages and disadvantages to attempting to break free of vassal status. To be a hegemon, you have to kick ass or your vassals are going to start thinking they can assert their independence, and to seek independence, you’ve got to be tough because your independence is going to be undermined at every turn by those who don’t benefit from a change in the status quo.
Great point, Tim. What about fudging the line? Like a batter caught between bases. You vacillate between bases, choosing the one that’s safest at any given time? (If you’re a potential vassel, that is). I wasn’t exactly sure of the application, but what a Facebook friend said was intriguing: Tread lightly, but step hard.
Also, the Caribbean might escape vassal status if it saw itself as integral parts of a broader African world system. But that tends to take too much imagination for their normalcy bias to deal with.
vassals or serfs, were always regarded as ‘property’—ie they were seen as part of the land acreage, the means by which food energy could be produced from that acreage
they were little different from other animals or food crops, they all added up to the production per acre, and supported the lord of the manor and his family in some kind of elevated status
thus in UK you can trace some lineage back to the Norman invasion, and the primogeniture that held estates in that descent of generations
that lineage was upset in recent years when we all demanded the status of lords, and lived as such—but that was our oil fuelled fantasy
and why our ”degrowth” is going to be messy
“…the global outlook is once again darkening. World trade growth is at its weakest since 2009, the protectionism that the London summit eschewed has reared its head, and central banks have responded to faltering growth by scaling down plans to raise interest rates…
“The IMF’s real headache is that the flaws in the global economy exposed by the financial crisis were papered over rather than properly dealt with. A decade of cheap money has resulted in a build-up of debt, excessive speculation, asset price growth and a sense that the bubble is about to burst. It’s Groundhog Day, in other words.”
https://www.theguardian.com/business/2019/apr/07/global-growth-fizzles-groundhog-day-for-world-economy
“As the saying goes, “the definition of insanity is doing the same thing over and over and expecting different results.” We are doing exactly that by continuing to lever up the global economy and expecting sustainable economic growth without 2008-style crises. With global debt up an incredible $100 trillion since the global financial crisis, anyone who thinks that another crisis is far-fetched is incredibly naive. Unfortunately, I believe that the next one will be even worse simply due to the fact that we have an additional $100 trillion worth of debt to deal with now.”
https://www.investing.com/analysis/what-deleveraging-global-leverage-continues-to-break-records-200404470
“The fear is palpable. Central bankers and policy strategists gathered at the intimate ‘euro Davos’ on Lake Como are shell-shocked by the collapse of bond yields and recessionary warnings across the world. Monetary ammunition is exhausted or running low across the G10 economic universe. The US Federal Reserve has been stripped of key tools needed to fight a financial crisis. It may not be able to rescue the international system as did in 2008.”
https://www.telegraph.co.uk/business/2019/04/07/can-worlds-central-banks-rescue-slowing-global-economy-even/
It is also naive to think that we will be able to solve every crisis.
How about a Hail Mary pass; QE for the masses that leads to currency hyper-inflation. Might as well go out on a high note. People buying Mazeratti’s that usually struggle to put fuel in a small economy car, people going on cruises that normally have no money to vacation. I say let the champagne flow, but oh, what a hangover it will be.
To some extent, that is what we have been doing.
After some point, we seem to reach a limit. Oil price won’t rise high enough, no matter what we do. The companies extracting oil quit. Adding more currency works as well as in Venezuela.
Hello Gail,
Since your article was about Venezuela I thought you might like to see what a good friend over there has had to say of the prevailing conditions – I have redacted the identities:
April 2019
Hi, Friend Peter.
I have about 3 weeks in France, I have been very busy, today I just sit down to read and answer the more than 300 emails that I have in the tray, I have only read the very urgent ones.
I left Venezuela the first week of the national blackouts, were difficult days, without water, without internet, without phone, without being able to buy food as there was no way to pay by card, and cash is not enough due to the huge inflation.
In Venezuela there are at least 3 social classes. 90% who do not have the money to eat, 9% have shops, businesses or a good job and money is enough for everything, and 1% that money is abundant for owning large businesses or for being connected to the government, such as the military, ministers, etc.
So in Venezuela you see two realities, 90% that can not eat well, and 10% that do not lack anything. That 10% gets everything in stores well supplied with everything, but at high prices.
Turning to the political issue, on the one hand is Nicolas Maduro, who only thinks about staying in power and stealing all the money he can. And on the other side is the political opposition, with Juan Guaido and all the other politicians, who hope to take political power to steal them. In both cases 90% of the population is affected, but there is a 10% who is very interested in having their politician win for them to do business with the new government.
Venezuela, like any country, needs leaders who love their country, not opportunists. As leaders who love their country there is no, then the solution is for citizens to join to take power. But there is no one to teach them to join. And we (E-nation Unitycoin), are financially limited to campaign and teach citizens to join.
bienestarmutuo.org
On Thursday, March 14, 2019, 11:48:11 AM GMT-4, Peter Underwood wrote:
Greetings ————-,
The mainstream press here and around the world are suggesting that an humanitarian crisis is evident in Venezuela. I am confused about the truth of the situation. You are on the spot – what is your view on this report:
https://truepublica.org.uk/united-kingdom/venezuela-mainstream-media-fake-news-what-the-un-rapporteur-really-said/
It is difficult to promote your country all while the TV and MSM are spreading unhelpful information. Can you offer evidence of what is going on so I can get it published?
Best wishes
Peter
Thanks! This sounds like the standard wage and wealth disparity problem when there is not enough to go around. The physics of the situation seems to make things work out this way, so that everyone won’t starve at once. It is not a solution we humans really like.
The problem with trying to fix the situation with new leadership is that there is truly not enough energy (funds from selling oil, or however you want to define the current lack of goods and services) to feed the whole population adequately. As nice as it sounds to share everything evenly, this can’t fix the situation for a number of reasons:
(1) A large apartment divided up adds a little, but not a whole lot.
(2) A large business divided up doesn’t really work. A business where everyone is paid the same amount doesn’t work either.
(3) The pixels that the business owners and other wealthy people have are not really redeemable for goods and services.
(4) A big share of what goods and services are available is needed for such things as keeping electric transmission lines in good repair, and keeping the rest of infrastructure up. It needs more, not less.
(5) Dividing up the food, clothing, and other goods of the top 10% would not really provide enough food to feed the full 100%. Everyone would die from lack of calories.
The physics of the situation tries to save a remnant, so that no ecosystem (or economy) will be wiped out by a temporary disruption of some kind. Venezuela was bailed out by loans from China before. Now these loans are part of the problem, not part of the solution.
Thank you Gail for your analysis with which I agree entirely. It sets the idea of socialism as being completely false as all past experiments have proven. There is only so much net energy to go around and the natural process of selection favours those by dint of hard work and/or good luck to be in the right place to benefit from whatever scraps may fall from the table; it has ever been so..
Y’mean, as opposed to capitalism, which has been completely true, proven by all past experiments?
I think the problem is not any particular “ism,” but the scale at which it is implemented. Surely, Big Capitalism is quickly showing current generations how bad it is, even as former “socialist” countries (like Russia and China) embrace it.
And don’t get me started on history, on how the capitalist grain barons of the Tigres and Euphrates turns the ancient bread-basket of the world into a barren salt marsh, on how the capitalist ship builders turned the Peloponnesian Peninsula forests into barren stumps, never to recover, on how capitalist forces, having not learned from history, are doing the same thing to the lungs of the planet in Brazil today.
I find it hard to listed to people who blame problems on this or that “ism,” but you seem open to influence. It ain’t the “ism” that is the problem; it’s the scale.
when i took on the debt to buy my house, I was subsidizing the capital of others who had loaned me the money to do so
luckily my earnings outgrew my debt, and i repaid it
thus that debt-capital was transferred to me
i am therefore now a capitalist
i own part of the earth’s resources that is not available to anyone else for their use
I shall pass it on to my children, no doubt that capital will eventually dissipate in their terms.
The capital of bricks and mortar will pass to someone as yet unknown to me
point being, that my capitalism is the same as that on a national level, the difference is only a matter of scale
There are exceptions, but we all have capitalist tendencies.
there are poor and needy out there, but I cannot bring myself to sell my house, distribute my assets and go and live among them
so at what level does capitalism become ”wrong”?
are we allowed to own a home/goods of a certain value and no more?
because if you do that, then there will have to be oversight and control—and controllers will not subject themselves to the same rules they inflict on everyone else.
Not saying whats right or wrong, just saying what is
Given the situation that humanity finds itself it at the present, I don’t take “what is” as a very strong argument!
“What is” true today, is that we are atop a tremendously tall, narrow spike of fossil sunlight, which I think corrupts all aspects of existence. You cannot seriously say that “what is” happening today is some universal truth, just because of “what is.”
Small clans and tribes have always been small-s “socialist.” That is a “what is” that was contemporaneous with a low-energy existence. A huge part of the indigenous struggle with assimilation is that their traditional “what is” clashes strongly with western industrial civilization’s energy-high notion of “what is.”
Should we not at least study and experiment with these ways of being that seemed to work well for untold millennia before the onset of fossil sunlight?
average human lifespan now is about 80 years or so
that is our current existence —–our ”what is” in general terms
we cannot adequately plan for more than that
if a collective financial crash ends up with me losing the roof over my head—my ”what is” is the gap between now and me acquiring another home—or remaining homeless. The fact that some people live perfectly well without a roof is irrelevant
I am not in a climate that allows that, no matter how I study their way of doing things
It becomes my universal truth because I lack the resources to do anything about it
I have fallen off the energy cliff.
The fact that some people live perfectly well without a roof is irrelevant
I am not in a climate that allows that, no matter how I study their way of doing things
Excellent point, Norman. And may I add that one of the biggest reasons why there are so many people living on the streets in India is because the Indian climate allows that, whereas in Alaska you’d be well advised to find yourself an igloo at minimum, even if you are fortunate enough to be in possession of a fur coat.
i am therefore now a capitalist
Not really– a capitalist makes profit by taking the difference between the user and exchange value. He or she does none of the production.
The classical definition of capitalism is “private ownership of the means of production.”
I’m pretty fine with that, if it means a farmer owning a tractor, or a seamstress owning a sewing machine.
The first distortion of this simple concept is the notion of employment, and “capitalism” has become closely linked with the exploitation of labour. Compensated employment has not existed for all but a tiny fraction of human existence, although I imagine non-compensated employment (slavery) has been around a lot longer.
The second distortion is the notion that bits of coloured paper with pictures of dead people on them are actual “means of production,” and that they somehow copulate in dark bank vaults and reproduce. This is pretty much a fantasy, and is the driver behind our current predicament. I prefer to call this “financial capitalism,” to distinguish it from the miller who owns the mill, or the sawyer who owns the sawmill, or the lawyer who owns the law… wait… what?
Excellent synopsis Jan, thank you. A capitalist does indeed own the means of production, land & machinery etc. But as you say, he also owns the labour under our current distorted system.
My proposition is that labour should partner with the owners of capital, rather than being exploited by them, and share in the profit of the enterprise – as a cooperative or something akin. Problem is, labour doesn’t want to share in the losses if the enterprise fails.
It seems to me that employed people are happy to give up that freedom in exchange for a regular cheque each month without the worry of making payroll. In my own business I had to do this for many years and in times of drought we relied on the good offices of the banks and moneylenders.
I guess it’s all about having one’s cake and eating it at the same time. Labour formed Unions to fight for ‘rights’ but failed to recognise the risks taken by Capital. Unfortunately our current system has become way too distorted to even consider reformation. Only rebuilding after the crash will it transpire to be a more equitable system
I agree, Jan, that scale is very important. I understand that America was able to support a given number of first nation people with traditional lifestyles which sustained for many centuries before the immigrants arrived. I think labels can be and often are confusing by not imparting the true meaning of that which the speaker meant.
I consider myself a libertarian as a political philosophy and I find this consistent with a nixed economy rather than one extreme or another. To me socialism is one extreme and capitalism is the other extreme.
It is often said by some that the Nordic nations are socialist, when in fact I believe that they are a fairly good balanced mixed arrangement. It is not possible to cover all these ideas in a short comment, rather a book or more would be required. But I hope that we can agree on the principles of localised, small scale economies that will need to be establlished after the collapse of the current mad world. http://harrogateagenda.org.uk/
An ism is shorthand for an ideology, a system of ideas. Human society can’t exist without ideology to bind its members together and keep them marching in step in the same direction. You might be able to manage down on the homestead without an ism, but I suspect even you may be following some form of Permaculture with elements of The Good Life, rather than just “mindlessly (Zean-like)” planting harvesting and tending the goats because that’s what needs to be done. And Permaculture and The Good Life are isms in all but name.
+++++++++
War in Libya over the oil.
https://www.bloomberg.com/news/articles/2019-04-07/libya-fighting-erupts-again-here-s-the-oil-impact-quicktake?srnd=politics-vp
I think I would describe the situation as, “It is hard to get the oil out, whenever there is fighting going on in Libya.”
From the article:
A Gadaffi will probably rule Libya again before long. I predicted their return in 2011, and it would make me feel good, ego-wise, to be proven correct. Russia is getting their way already with Haftar, but Saif Al Islam Gadaffi is probably the most palatable candidate from an internationalist standpoint.
t’s amazing that most of the Gadaffi clan survived!
There has been nation wide protests in Sudan as well for some time against the ruling regime…and now there is a total blackout as the electricity went down.
Electricity is something that seems to be pretty easily disrupted.
Yes, as Maquiavelo say in year 1.530 in the book: the prince. “a country is rich if have people working, a country is poor if is rich in resources but the people dont work and live from the resources”. https://mutualwelfare.org/
Hint: It is probably best if humans didn’t extract any resources– and exited the scene.
One needs a little larger box.
U.S,shale oil operations costs per barrel.
By Rajhi Capital
https://pbs.twimg.com/media/D3f5JpvXkAAZwFD?format=jpg&name=medium
The chart shows operating costs per barrel level at about $31 or $32 per barrel. The question then becomes, what are total costs? Clearly, the company has fixed expenses and it has taxes. Both of these are substantial. It has debt repayment. It needs to invest in new wells.
This is almost like Saudi Arabia saying that their oil extraction cost is $20 to $30 per barrel, but they really need $80 to $100 per barrel (or more) to make the whole system work.
I guess that the shale oil companies at least have some cash flow after operating costs to pay down debt. I’m not sure if the wells will ever pay down the entire debt though.
Are they really paying tax?
Some of the tax is required, regardless of whether the company makes any profit. Taxing resource extraction has been done for a long time. Things like royalties.
I would need to look at some financial statements to see how things work out in practice. Oil companies have historically been payers of taxes. I know that North Dakota cut back the tax requirements somewhat when oil prices fell (or perhaps they the tax is somewhat variable, depending on the price of oil).
This may help, Gail:
https://srsroccoreport.com/the-massive-increase-in-central-bank-paper-assets-warns-of-financial-danger-ahead/
“That graph is labeled incorrectly….the numbers shown are finding and development costs, not operating costs. Concho Resources, as an example, reports their lease operating costs in their quarterly reports and for the 4th quarter of 2018 it was $6.00 – $6.50 per boe. They also point out their break even cost on average is around $28/boe which jives with the F&D number of $29.”
Rockdoc
Nuclear Power Can Save the World
Expanding the technology is the fastest way to slash greenhouse gas emissions and decarbonize the economy.
«All this, however, depends on overcoming an irrational dread among the public and many activists. The reality is that nuclear power is the safest form of energy humanity has ever used. Mining accidents, hydroelectric dam failures, natural gas explosions and oil train crashes all kill people, sometimes in large numbers, and smoke from coal-burning kills them in enormous numbers, more than half a million per year.» «Despite its demonstrable safety, nuclear power presses several psychological buttons. First, people estimate risk according to how readily anecdotes like well-publicized nuclear accidents pop into mind. Second, the thought of radiation activates the mind-set of disgust, in which any trace of contaminant fouls whatever it contacts, despite the reality that we all live in a soup of natural radiation. Third, people feel better about eliminating a single tiny risk entirely than minimizing risk from all hazards combined. For all these reasons, nuclear power is dreaded while fossil fuels are tolerated, just as flying is scary even though driving is more dangerous.
Opinions are also driven by our cultural and political tribes. Since the late 1970s, when No Nukes became a signature cause of the Green movement, sympathy to nuclear power became, among many environmentalists, a sign of disloyalty if not treason. Despite these challenges, psychology and politics can change quickly. As the enormity of the climate crisis sinks in and the hoped-for carbon savings from renewables don’t add up, nuclear can become the new green. Protecting the environment and lifting the developing world out of poverty are progressive causes. And the millennials and Gen Z’s might rethink the sacred values their boomer parents have left unexamined since the Doobie Brothers sang at the 1979 No Nukes concert.«
By Joshua S. Goldstein, Staffan A. Qvist and Steven Pinker
https://www.nytimes.com/2019/04/06/opinion/sunday/climate-change-nuclear-power.html?module=MoreInSection_AMP
Okay, let’s ignore accidents like Fukushima for a moment, and assume we’re being alarmist when it comes to thousand-year or more half-life of the radioactive waste we have to concrete cask and bury in (expensive) storage facilities (assuming we even do that, as it seems cheaper just to store it all in spent fuel pools and keep our fingers crossed that no flood, earthquake or tsunami hits the nuclear facility).
How much strip-mining / raping of the earth is required to dig up all the uranium, plutonium, thorium, etc. we would require to power all of these nuclear power plants we are proposing to build, and what is the carbon footprint associated with that activity?
How about all the concrete, re-bar, lead, etc. that is needed to build these power plants? And the ongoing maintenance and security associated with said plants – are those costs factored in?
Finally, it seems like all the nuclear plants that were scheduled for decommissioning here in Ontario always seem to have their lifespan extended; have to wonder if that has to do with the high costs of decommissioning that people always seem to ignore / forget?
There’s always someone on OFW or other sites like this one that feel compelled to point out how thorium breeder reactors don’t leave as much radioactive waste and don’t present the risks of accidents that plants like Fukushima did / do. What these people always seem to miss is that one example of a successful implementation of technology does not guarantee that it can be scaled up to meet all of our current energy needs.
Nuclear power, at least in its current form with all of its high risks and (extremely) long-term liabilities, has to be of the greatest examples of man’s hubris… or man’s madness.
Cheers,
-GBV
Extending the lifespan of existing N plants has looked to be a good plan. Along with greatly improving the safety and maintenance plans around them.
Agree, THAT damage is already done.
A lot of things can look like good ideas, until consequences crop up and the bill comes due.
I’d point you in the direction of the work of Nicole Foss – she’s got a background in nuclear safety in Europe.
Cheers,
-GBV
Another thing that happens is that the bill goes up greatly, as the major players in building the nuclear power plants drop out of the business, because it becomes almost impossible to design a nuclear reactor that is safe enough. We in Georgia have two very expensive nuclear power plants under construction. In fact, we have been paying for it for years in our electricity bills. The main contractor, Westinghouse, filed for bankruptcy last year. The electric utility, Southern Company, is trying to oversee the rest of the construction itself. There are several co-owners of the two nuclear power plants, and they cannot agree on what to do with the project. It is very late, and far over budget. https://en.wikipedia.org/wiki/Vogtle_Electric_Generating_Plant
Also, when only a handful are being built, how is it possible to keep training enough staff to build and maintain these units? We really need a system of small, easily replicated units, that are not so complex.
Read something (or watched a video?) once about the potential for a flu pandemic, and how it could prevent 40% – 90% of employees showing up to work due to personal or family member sickness as the health care system gets overwhelmed.
I think the generation of nuclear power would become quite a bit more risky if 90% of the skilled generation and maintenance staff (not to mention the paramilitary security staff) couldn’t show up to work for the 4-6 weeks the pandemic would take to burn itself out…
Cheers,
-GBV
Totally agree with GBV, although he sounds a little bit like Fast Eddy. Why if I didn’t know any better? 😀
Oh gawd…
Now I have to start referring to it as “kkkkkklimate change” and spewing out crackpot theories ad nauseum?
That being said, I do miss the occasional FE commentary. Hope he will return someday…
Cheers,
-GBV
Okay, let’s ignore accidents like Fukushima for a moment, and assume we’re being alarmist when it comes to thousand-year or more half-life of the radioactive waste
Actually, plutonium has a half life of 24,000 years.
U235 has a even longer half life. We have tons of this just lying around—
We have tons of it just laying around….A “gift” to future generations to remember us by as they mutate in the next phase of evolution directed by Mister DNA (another favorite of FE🤗). I remember from years ago the “logic” behind this radioactive eon nuclear waste.
Nothing much to be concerned about, judging by the leaps and bounds of our technology, We surely will figure out a solution to deal with it in the FUTURE! Maybe Tomorrow.
https://m.youtube.com/watch?v=Yop62wQH498
A lot I need to do….maybe tomorrow….
Didn’t need to read past that to identify a puff piece of propaganda.
Since Chernobyl and Fukushima, nuclear proponents who do not acknowledge real dangers are irrelevant, living in their reality ignortion bubble.
I’m not automatically against nuclear power, but I am automatically against “experts” who make stuff up.
I would have to stick with “photosynthesis” as the “safest form of energy humanity has ever used.” 🙂
+++++++++
Carbon absorbing (biological) plants interacting with (redesigned) FF emissions would be worth checking out too.
I’ve been burned badly on occasion by sunshine, but I still think it”s a great energy source and I am not about to give up on it.
As for nuclear power, that can burn us badly too, but it has one big thing going for it: it works. The main reason so many people are against it is that they have an irrational fear of it that warps their judgement.
Nuclearphobia is as serious a psychological disorder as climatophobia. They come from the same stable—dreamed up by the globalists and communists to destroy the power of the west—and together they will guarantee poverty economic collapse and a descent into cannibalism for all who sail in them.
I’m going to finish this comment with a quote from Robert Heinlein. It isn’t totally apposite but it overlaps with the point I am clumsily trying to make. Consider yourself and the sensible ones who think as you do as “right-thinking people” and nuclear power plant operators, oil and gas drillers and coal miners as “an extremely small minority, frequently despised, often condemned…” and you’ll get my point. 🙂
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”
nuclear energy and oil energy have one thing in common, the forces they release are of no use in human terms unless they are contained and controlled
“Nuclear Power Can Save the World” – NOT!
Nuclear power only produces ELECTRICITY!
Like “renewables” it produces NONE of the essential raw materials we must have, no fertilizers, no high energy dense liquid FUELS, we cannot power our intensive agriculture that currently feeds 7.6 BILLION HUMANS without OIL.
No matter how well you can grow food organically, you still will be unable to feed so many people, most of us will be “culled”.
The laws of physics limits the energy density of batteries so they can never be as energy dense as fossil resources, not even close.
The limits of resources & the energy needed to mine & process those resources is also LIMITED, we will be unable to build the necessarry storage for the electricity produced by those “renewables” either.
Now I’ve read that Ghawar is in decline & fracked production seems to have started it’s decline as well.
There will be no “transition” to “renewables”, we don’t have the energy or the resources to do so.
Now I have to LOG IN AGAIN! WILL THIS POST ALSO GET DELETED?
IT’S ALSO ON NOTEPAD!
I’d rather go nuclear than be culled!
How does that look on a t-shirt.
You correctly point out that the laws of physics limits the energy density of batteries so they can never be as energy dense as fossil resources, not even close. But you omit to mention that those same laws limit the energy density of fossil fuels so they can never be as energy dense as fossil resources, not even close.
Once we get fusion reactors the size of walnuts that can be turned on and off as easily as we currently turn on and off a flashlight, we’ll be laughing. I’m thinking nuclear powered broomsticks and flying carpets for personal transportation and nuclear powered magic wands to create and destroy anything we desire, controlled of course by a system of fiendishly clever magic spells. Don’t tell me the people won’t want one. Look how they’ve gone ape over smartphones!
Whoops! That should have read:
But you omit to mention that those same laws limit the energy density of fossil fuels so they can never be as energy dense as nuclear resources, not even close.
Where’s the little smiley-face? I never took you to be a techno-cornucopian, Tim!
You should be a novelist, Tim, you have conjured up some very enticing images for me!
my condolences to Jays family for their loss.
We should strat an OFW Hall Of Fame of those that are in the here after and exited out of BAU before the SHTF and were the lucky ones….
Surely, Jay Hansen, Michael Ruppert, Randy Udall, Michael Simmons, Marion King Hubbard, Garrett Hardin, Barry Commoner, are on the list off the top of my mind.
Thank you all for giving us a heads up to our collapse and doom!😂
A super book describing the collapse of fossil fuel civilization “Susan” by Fred Rothganger. Here is the review I entered into Amazon.
This is one of the 5 best scifi books have ever read. I have been reading scifi for 48 years. It gives the most humane and compassionate understanding of non-human sentient beings I have ever read. It also gives a realistic and vivid picture of the collapse of our fossil fuel dependent civilization.
Read it before the lights go out.
“Here is the review I entered into Amazon.” —where?
I do not know why it is not showing. May take them time to review.
The guy from the Doomstead diner blog made a new collapse cafe vid!
https://www.youtube.com/watch?v=9dpR3pwcvcU&t=138s
The collapse cafe segments from 2015 and 16 were part of my introduction to collapse issues.
Reverse Engineer had serious health issues for a while that may have interfered with making more videos. I am wondering if he may have been depressed as well.
I am not familiar with the writing of Jeff Heppenstall, who is the fellow he is interviewing today. Jeff writes on his own blog and on Resilience. He writes about our army of 22 billion energy slaves, helping us maintain our current lifestyle, among other things.
Enjoyed this. RE better than ever–somewhat gaunt and wizened, hitting every note. How do I get the url so I can share it?
BILLIONAIRE HEDGE-FUND MANAGER WARNS A “REVOLUTION” IS COMING
Ray Dalio is extremely worried there’s about to be an uprising in America.
Writing in a new essay on LinkedIn, the founder of the world’s largest hedge fund says that while capitalism has worked out exceedingly well for him, he’s also “seen capitalism evolve in a way that it is not working well for the majority of Americans because it’s producing self-reinforcing spirals up for the haves and down for the have-nots.” In turn, that’s created “widening income/wealth/opportunity gaps that pose existential threats to the United States because these gaps are bringing about damaging domestic and international conflicts and weakening America’s condition.
https://www.vanityfair.com/news/2019/04/ray-dalio-capitalism-revolution
In France the non-elites get it – they’ve been rendered essentially as slaves for the super wealthy and they’re mad as hell. But in America somehow the Republicans have convinced a large segment of the population that to be patriotic is the same as sacrificing their lives for the wealthy. They’re willing to be slaves for the rich, to give up the only healthcare ever enacted for people under 65, to accept greater country indebtedness to assist the wealthy with tax cuts and preferential tax policies like no taxes on inherited estates no matter how big. Look at the way they fawn over Trump at rallies. They don’t get it. He’s not for them, he’s for people with wealth like himself. So I don’t see a revolution in the US. In fact, Trump followers will do battle against anyone not towing the line and the result will be any attempt to have a revolution will be cancelled out.
Well said CM – I am with you on this one. The French have always been prepared to challenge their elites and perhaps the guillotine will come back again soon enough. You are right about the Americans though IMHO.
The Brits are slow to anger – but it is building up in UK too – I fear for our social stability in the months and years to come.
“The Brits are slow to anger – but it is building up in UK too – I fear for our social stability in the months and years to come.”
It definitely is getting much tenser in the UK. I have an uncle that moved from an area just outside London to the countryside. He did it to sell high and live well in retirement, but he may not know just how good a decision that was for his family to be away from the fray. Although the countryside will probably at some point have its problems as well.
All the best to you Peter as the situation develops there.
Thanks so much for your good wishes CM. We are well embedded here deep in Somerset with access to 7 acres with springs and local power, horses and the usual gear used on farms, including guns and a large family. But as you say, the rot may well escape from the smoke given time – we will stay vigilant. As they said in Nam: “keep your isht wired at all times!”
Best thoughts to you and yours too.
OH, I forgot a great article about shale oil today, check it out:
https://srsroccoreport.com/the-massive-increase-in-central-bank-paper-assets-warns-of-financial-danger-ahead/
The problem in the British countryside is, as everywhere, young people on drugs – and there will be much more of that as things decline – and thieves driving out from the cities, able to make a quick escape to a motorway.
There is also a fantastic spate of urbanisation going on in many places – villages and small towns having 500-2000 housing units suddenly dumped on them – and the ‘social housing’ element in these developments will bring its own problems in due course, we can be sure.
I think of it as the very last mushrooming of the Concrete Cancer before the collapse arrives. Plant some thorn bushes, outside, a bicycle rack, and of course the mandatory solar panel on the roof, and it is ‘Green’……pull the other one!
The local policeman here apparently used to throw troublemakers into the river, (‘If you make it to the other bank, don’t come back ever!’ ) but that sort of sensible thing is not allowed these days: if it were, crime would not be such a problem. I’m all for a return of the right kind of authoritarianism.
You speak the truth, Xabier. I remember the 1950s well, when what you describe did in fact happen and as you say crime was contained. We are relatively immune in Bruton, UK these days but I am sure what you predict is not too far away. We have made our preparations – it is only the ‘stocks’ yet to construct and we will be ready!
“he advises that:
The solution . . . lies in better leadership at the “top of the country;” treating the wealth and income gap as a national emergency; a bipartisan commission to re-engineer the economic system; more accountability, presumably for elected officials; minimum standards for health care and education; some redistributive taxes on the wealthy; and more coordination of monetary and fiscal policy to stimulate growth.”
since the rich essentially have most of the power, very little of the above will be enacted…
but, let’s not ignore that there is a mini-wave of socialism moving in the USA… AOC, Bernie Sanders… that’s a reality now, though not yet strong…
I doubt the near future will see a “revolution”, but there is a significant minority, on the D side of the aisle, that would want to see Socialists sweep into power in 2020…
it could happen, because we are dealing here with the whims of feeble human beings voting in elections…
but conditions would have to get much worse for the average citizen to vote against BAU…
will conditions be much worse by the autumn of 2020?
But if FE was even a little right, the puppet masters behind the scenes decides these things. It wouldn’t surprise me to see a socialist wave of some sort in 2020.
Gail would probably say no one has power to shape such a thing–that outcomes organize themselves–and I can sense how that could be (little that I know). But I wouldn’t rule out metaphysical forces for change either.
Tesla Board Probed Allegation That Elon Musk Pushed Employee
Word spread that the employee had resigned, leading Tesla Chief Executive Officer Elon Musk to accost the worker, swearing at him and telling him to leave immediately, according to people with direct knowledge of the incident who asked not to be identified for fear of retribution. Musk made physical contact with the staffer in a heated confrontation that drew the attention of other employees and spilled into a hallway and later the parking lot, the people said.
The employee told people that Musk had pushed him, an account corroborated by others with knowledge of the incident.
https://www.bloomberg.com/news/articles/2019-04-05/tesla-board-probed-allegation-that-elon-musk-pushed-employee
I received an e-mail today saying that Jay Hanson of dieoff.com died in a diving related accident. I don’t think I ever met him in person.
This is a photo I was sent.
https://gailtheactuary.files.wordpress.com/2019/04/diver-jay-in-fakarava.jpeg
Bummer—-
I have followed him over the years.
Aw man, he was one of my earliest influences in this mess!
He will be missed. RIP.
“…it may be time to recognize the maximum power principle as the fourth thermodynamic law as suggested by Lotka. — H.T.Odum, 1994”
That quote is from Dieoff.com, that I agree with absolutely. Another way to put is to say the pedal is always pushed down as far as the situation will allow. If we were driving big sturdy, fast cars and the speed limit was 100 mph, people would be going 115. Throw money in the company of people and it’s like throwing sugar to sugar ants. We think we’re so different, but really we’re just animals, given to the same principles.
very sorry to hear about Jay. i thought of him recently, when waiting for a document to print, while doing something else on the PC. Jay wrote the first print spooler program for IBM, among several other useful basic programs, in machine code. this allowed him to retire at a young age and sail the world, settling on Kona, Hawaii as his home. about 10 years ago, we invited him up to Oahu for a seminar on the topic of peak oil and related consequences to the UH faculty and staff.
A real prophet. Read his stuff from 20 years ago. RIP
I once spent three days with Jay in Hawaii. http://theoildrum.com/node/4719?fbclid=IwAR2L0Top3yivcvSYEiPigUR4BkMAKoTGFhQlB3hbiW0AQeA2fy6NPqGOiZ8
Jay was a huge influence on me. I left the city in 1996 to buy a small farm in Vermont largely because of his writings. I got to meet him in Hawaii in 2007 and for that I am grateful. He was a brilliant intellectual and way ahead of his time. He always said he hoped he would be safely dead before the SHTF and he got his wish. RIP Jay.
Yep, that wish to be spared was granted him. Jay “died off” just in time to avoid experiencing the steep downward slope he predicted was due to start any time now, or to avoid having to deal with being proved wrong in the unlikely event if fails to materialize.
http://www.dieoff.com/page193_files/image002.gif
This is a link to a write-up about Jay Hanson.
https://candobetter.net/node/5739?fbclid=IwAR0CC_s8_wsFLea3wSrVxOB7kpcqEA1kTKsxAjdeuhq9hfs4setpvgHXTQw
One thing it says is, “My first report was that it occurred in a diving accident. Subsequently it has been clarified that he fell ill after diving, and died that night.”
RIP
I came across dieoff.org from indymedia, shortly after 9/11. It totally floored me, and I was a peak oil observer from late 2001 up to now. He opened and closed a handful of discussion groups, depending on his mood, I guess.
Anyhow, he had a good mix of humor and a laser-sharp focus on relvant topics of economy and society. It looks like he didn’t allow the worries of peak oil to affect his everyday life.
His academic ‘nemesis’ over the years has been the economist Michael Lynch, if I remember correctly. Perhaps I got his name wrong.
PS: Throughout my term of PO awareness, there have been lots deaths in the PO community since it drew mostly older individuals.
Remember Peak Oil? It’s back!
https://www.treehugger.com/fossil-fuels/remember-peak-oil-its-back.html?fbclid=IwAR0u63IXD31GY_xPBN4_T3EWzzlYdQgQyJyR4VLG0HQwv0yiJAL8ybYPG60
Art Berman recently did an interview with Chris Martenson discussing the Ghawar field depletion. He basically says that SA is lying to put it mildly about how much is now coming out of the ground. He believes the number is much, much lower than 3.8 mbp.
https://www.peakprosperity.com/insider/114934/cuff-twilight-desert-has-begun
Thanks!
Yes, thanks.
Btw when Saudies-Gulfies suddenly agreed to have OPEC(+) production quota system instead it was clear they entered new dimension (and the world with them), it was not merely about adjusting for different geopolitical weight distribution, they are simply working for much lower exports in the future..
Wow, finally a chink in the elephant Ghawar armor.
https://oilprice.com/Energy/Energy-General/Oil-Hits-70-On-Libya-Unrest-Crisis-In-Venezuela.html
‘Oil Hits $70 On Libya Unrest, Crisis In Venezuela’
Brent oil that is. WTI near 63.
Brent was $86 about 6 months ago in October…
so only down about 20% since then…
depends on how we look at it…
Yep, but it was 49 only a short time ago.
We have been steadily climbing–
We shall see.
Gail is right I believe— the new highs will be lower.
Yes, that should be the case, I.e. “the new highs will be lower” due to diminishing returns.
Back in the Peakoil.com days when oil dropped from 147 down to 37, I wrote a post predicting oil would never surpass 147 again and the maximum price over the coming years would continue to decline. Two posters read me the riot act claiming I needed to take Econ. 101, an undergraduate course to better understand supply and demand. I have a BS and took econ. 101 & 102.
Well, maybe those two should have considered my idea, which was economic feedbacks from diminishing returns on people’s ability to afford oil by products would never support that high a price again. At the time those posters thought 200-300 dollars a barrel was easily possible, with 500 as a possible maximum. One poster even thought 1,000 a barrel was possible.
Well, the tale of the tape is max. oil price has since continued to decline. It may go high, but feedbacks from lack of affordability has caused supply to rise and price to drop back down. I figure the price right now is high, and feedbacks (from diminishing returns) will force the price back down.
Just playing devil’s advocate for a moment here:
Technically, oil absolutely could go to $1,000 / barrel… assuming that the amount of oil remained constant while the money supply expanded ten-fold and our incomes increased at a similar pace.
Of course, in that world, chocolate bars would cost $10, a BigMac meal would be $70, and your basic family vehicle would be around $300,000…
The point: prices aren’t really all that important, but affordability is. Even in a world of $1,000 / barrel oil, it’s likely to be unaffordable for either the buyer / consumer or the seller / producer (or both, which seems to be where we are now at our current oil prices).
Cheers,
-GBV
The World Economy Is A Pyramid Scheme, Steven Chu Says
The world economy is based on ever-increasing population, said Nobel laureate Steven Chu, a scheme that economists don’t talk about and that governments won’t face, a scheme that makes sustainability impossible and that is likely to eventually fail.
“The world needs a new model of how to generate a rising standard of living that’s not dependent on a pyramid scheme,” Chu said at the University of Chicago.
“Increased economic prosperity and all economic models supported by governments and global competitors are based on having more young people, workers, than older people,” Chu said. “Two schemes come to mind. One is the pyramid scheme. The other is the Ponzi scheme. I’m not going to explain them both to you, you can look it up. But it’s based on growth, in various forms.”
For example, healthy young workers pay the health care costs for aging workers and retirees, the former energy secretary said, a scheme that requires increasing numbers of young workers. And economic growth requires more and more people to buy more and more stuff, with dire environmental consequences.
There are at least two problems with that:
“Depending on a pyramid scheme or a Ponzi scheme, there’s no such thing as sustainability,” Chu said.
As standards of living increase, population growth declines. So if the economy succeeds in raising standards of living, it undermines itself.
“The economists know this, but they don’t really talk about it in the open, and there’s no real discussion in government,” Chu said. “Every government says you have to have an increase in population, whether you do it through immigrants or the home population. So, this is a problem.”
https://www.forbes.com/sites/jeffmcmahon/2019/04/05/the-world-economy-is-a-pyramid-scheme-steven-chu-says/#62c0772d4f17
Preaching to the choir here Dr Chu..
I a surprised he was willing to point out what we all know is true.
“The economists know this, but they don’t really talk about it in the open, and there’s no real discussion in government,” Chu said.
People don’t like to look at the truth – that’s a big monster, so they put on blinders to the truth and keep trying to do what has worked so far.
This is something I have believed for a long, long time. In fact I prefer not to call “increasing population” but rather, new recruits because that’s really what they are. Babies become future pillars to keep the Ponzi Scheme going. So we have a monetary and banking system that requires exponential growth as well as exponential debt levels. We need exponential population growth to keep the Ponzi Scheme functioning. We need to take these Ponzi Schemes global. We need exponential resource depletion to keep the Ponzi Scheme going as well as exponential cheap energy i.e. fossil fuels.
Yeah, this always ends well. /sarc
Dr Chu has a brilliant and incisive mind, which has penetrated to the heart of the obvious.
Here’s another consideration for him:
Just as increasing wealth and population eventually undermine the economy, so increased understanding of the real nature of our global economy undermines all hope.
Therefore, Dr Chu, shouldn’t wise monkeys such as yourself cover their eyes and ears, and observe total silence on the matter?
Yep, these guys usually have “near truth coming out” sort of mental brake down only when facing some mid age crises, and or life threatening illness, and so on. There are almost none instances of doing this stuff while in office or at the perceived height of their respective careers.
You are correct the increased understanding of the situation would bring only an avalanche of undermining the legacy economy, mind you the threshold could be relatively small, let say when it is widespread knowledge among ~15-30% the lesser millionaires and upper middle classes, the game is over in very short order as the consent for the system evaporates. Obviously afterwards follow the masses and the street level chaos phase.
Chu is an Asian, never wielding real power. he can say that because he is not powerful enough to make the PTB worry
Is this also part of his wiseness?
«Chu, the man who solved the Gulf Oil spill with a doodle on a napkin, then offered two painless solutions to population growth:
“Education of women and wealth creation. Across all cultures. You go negative. You go negative birth.
“In many countries around the world, developed countries, Japan, Spain Italy, we’re talking about 1.3 (children per couple), 1.2 going below 1, where 2 is steady state.”
So Chu expects these effects of rising living standards to eventually offset the growth of human population. That will help the environment, he said, but it will also require a new kind of economy.»
“rising living standards” means MORE consumption of resources, even with flat population…
but then he assumes some magical “new kind of economy”…
Dr. Chu, and all the other idiot-scientists / sociologists / liberal SJWs / etc., get it wrong once again.
As un-PC as it is to say, education of women and reduction of birth rates isn’t going to fix anything. It may even lead to collapse quicker – lower birth rates invert our societal ponzi-scheme-pyramid so that less young people have to carry a larger burden to take care of the over-sized elderly cohort.
To compensate, governments tend to increase immigration – something I personally have no problem with, but recognize can lead to changes (for better or worse) in society which can cause a lot of frustration for the existing native population.
A much better solution:
– Encourage the native population to have more children (i.e. a return to “traditional” norms of feminine and masculine roles in society, a renewed reverence for mothers / motherhood in the household & community, reduction of age of consent laws that are an affront to nature / biology, etc.), and at a younger age;
– Simplify and de-commercialize the education system (i.e. a re-emphasis on college programs & trade skills, university for middle-aged or older individuals who’ve actually accomplished something in life and wish to continue to expand their minds, as opposed to 17/18-year olds who look to expand their capacity for binge drinking – at least, that was my biggest achievement as a young man at university);
– Straight-up murder (or at least leave to their own devices to survive) everyone over 65 years of age who cannot *physically* contribute more to the system than they extract (I say physically, because if you allow them to pay their way out of geronticide, it sets up an incentive to accumulate wealth – even through corrupt or illegal means – over the course of their lives rather than focusing on maintaining their physical health / well-being)
“The world’s older population continues to grow at an unprecedented rate. Today, 8.5 percent of people worldwide (617 million) are aged 65 and over. According to a new report, “An Aging World: 2015,” this percentage is projected to jump to nearly 17 percent of the world’s population by 2050 (1.6 billion).”
– https://www.nih.gov/news-events/news-releases/worlds-older-population-grows-dramatically
Of course, my solution will be viewed as monstrous by most, as it is not aligned with the “values” held by the vast majority of society today:
– Gender norms are oppressive / sexist, and everyone should be able to choose who they want to be and how they want to live their lives (community / societal responsibility be damned);
– Young adults being sexually active with whomever they choose or getting pregnant in their mid-to-late teens is pedophilic (despite the fact the medical definition of pedophilia has to do with pre-pubescents);
– Education is a “right”, and a piece of paper from a corrupt institution is more important than your skills, experience and ability in terms of employment;
– Commercialization / financialization of the public realm ALWAYS leads to efficiencies (i.e. there’s no value in doing anything that doesn’t result in an increase in $$$);
– Easy / glamorous work is more rewarding than physical labour, with celebrities and athletes being the most valuable people in society (we couldn’t exist without them!);
– Murder / violence is WRONG (unless it’s sanctioned by the government, even if it is immoral / illegal, or depicted in movies being used by the “good guys”… then it’s okay!);
– Elderly individuals DESERVE respect and financial support from younger generations, even if said elderly individuals frittered both their physical and financial health / well-being away their entire lives
As a result, we’ll just keep on living in our crazy / illogical / nonsensical world, doing what humanity has always done – leaving it up to war, plague, famine and pestilence to decide who gets to die when sh*t finally hits the fan.
Cheers,
-GBV
Bravo, I agree and that sounds like the way people thought back in the 50’s but it would never work today as the masses have been dumbed down and taught to think the opposite. We are too far down the rabbit hole to turn around.
I hope that you are not correct in your assessment, Rodster – IMO where there is hope there is salvation. It is not impossible to turn peoples’ thinking around – difficult yes, but not impossible. I have a faith in the ingenuity of man and my work is intended to reinforce this belief.
You are welcome to a sneak preview of my Book – Part 2 (Introduction) of The Financial Jigsaw which shows how this can be done. Just request a free copy at: peter@underco.co.uk
“I hope that you are not correct in your assessment, Rodster”
I’m not claiming to be an expert but in the 60 yrs i’ve been on this planet, one thing there is no shortage of is human stupidity and it seems to be on the rise. We are trying to solve our problems with the same solutions that created the problems. Then you have State run News Media’s that are doing their best to confuse the public.
Then you have Gov’t’s doing their best to dumb down their citizens with Sports and Entertainment. I believe that was once called “Bread and Circuses”. This is no longer a US problem but a global one because every Gov’t and eCONomy are pretty much doing the same thing. Hopefully, i’m wrong.
I’m having the hardest time resisting this grim outlook. (When I understood less it was easier.) If the people weren’t so far gone, and incapable of critical thinking, I wouldn’t have much problem with the physics of our situation. Buit the PEOPLE,…!
And no one understands (in my barely rural landscape) that buildings are the problem! Not an ounce of visual understanding.
“If the people weren’t so far gone, and incapable of critical thinking”
And that was precisely the goal of Gov’t, make the people dumb enough where either A) they wouldn’t notice or B) wouldn’t care but smart enough to pay taxes.
Interesting. But if decentralization is inevitable, wouldn’t, there be more varied ways for societies to form?
To the extent that the principles of biological evolution hold true for social groups, as well, I must agree.
Humans have stymied biological evolution in two ways:
1) We have become a global population, and thus cannot have differential evolution. Note that the only reason we can surmise for their being both bonobos and chimpanzees is the impenetrable (to them) Congo River. But human genes routinely circle the globe, on an hourly basis.
2) From a biological evolution perspective, it doesn’t much matter how long you live past child-bearing years. One might say a family with a long history of dying in their early 50s of heart disease has “bad genes,” but having survived their 20s (and conceivably [pun intended!] having children), it matters not that they didn’t survive their 50s.
(There is a small case against #2, above: that that children with influential grandparents might have a better chance of surviving to child-bearing age. But in terms of “social evolution,” even that is largely negated by our industrial day-care system and industrial school system.)
So, to make a long story a bit longer, having reduced lifetimes and reduced global travel opportunities should re-invigorate human biological evolution. These two aspects reduce the impact of two out of three tenets of evolution: heritability and mutability, leaving only selection pressure to determine which of the White Old Rich Men (W.O.R.M.s) live the longest.
By the same logic, social evolution is stymied by our global social systems (#1, above) and the notion of corporate immortality (#2, above). Since there is but one “population” of governance (driven by the notion of “voting,” and especially, the strange notion of “money voting”), and since governance methods do not die, two out of three tenets of evolution, heritability, and mutability, are largely blocked, and thus social systems don’t really evolve.
(Sorry for the long comment. Too much coffee this morning. :-))
Advanced age and third world heritage make me see (and internalize) different ways of living, and the ensuing (regional) third world interaction with (global) first world economic systems provides a very interesting play of systems. The dominant world system is irrevocable, but can be moderated to greater or lesser degree depending on the strength of those remnant third world cultures. And depending on the relevant resource bases. But, sooner or later, the first world system wears down all resistance. A way out, if there is one, requires the world system to collapse gradually as per JMG (who foresees some form of civilization continuing for a long time). Apart from Dmitry Orlov (who doesn’t do it o my satisfaction) hardly anyone focuses on decentralization as inherent in collapse.
I would say decentralization is essential to our plans, and inevitable, in my view.
@ Jan,
“Then came the Chinese invasion. Although it was not a ‘traditional’ invasion, in the form of tanks and bombs, it was no less deadly, and did involve an army of sorts. China held countless trillions of dollars of US debt, and simply called in the notes in the form of real estate purchases after the land price collapse that came with the 2019 depression. The Chinese government filled empty cargo ships with their poor, underprivileged, and politically incorrect, and shipped them off to work the huge collective farms that they had purchased in the US, sending the food back to feed an increasingly unhappy and politically unstable middle class. Americans reacted with violence, killing hundreds of thousands of landed Chinese in random acts of violence, and by 2023, the Chinese immigrants had armed themselves, and began retribution.”
Chinese “investment” is looking more scary, now that you put it this way.
I seem to have been too pessimistic about my timeline in that story: “The recessions of 2006, 2011, and 2015 were interspersed by wildly optimistic growth…”
So maybe this scenario is a bit further off… or not…
– Straight-up murder (or at least leave to their own devices to survive) everyone over 65 years of age who cannot *physically* contribute more to the system than they extract
Your proposal is far too modest. Why not straight-up murder of you or me personally or any one of us at any age in order to eliminate our own individual burdens on “the system”? Unless we can prove we contribute more than we extract—not easy when all of us are subsidized so heavily by high tech and fossil fuel energy and most of us are replaceable by AI—lets harvest your organs to help more productive individuals and use the rest for animal feed and compost.
And how are we going to prove our usefulness when you’ve outlawed money as a measuring rod? We are going to need some kind of People’s Commission on Human Usefulness that will assess each individual’s case on a scientific and utilitarian basis with no namby-pamby appeals to sympathy, mercy, humanity or pity.
Tut tut. 🙂
To answer your question: The Chinese have the solution with their Social Credit System and it will probably be coming to a country near you in due time.
it isn’t a matter of pity or usefulness
humankind is the only species that seeks to preserve the unfit among us, at whatever age, for no better reason than we have the (Temporary) means to do it
We insist that every scrap of life is entitled to life, but that is our fixed opinion on the matter, Your granny or baby is important to you, but not to nature’s function.
It is not nature’s fixed opinion. we do it because we have the resources to do it, and those resources have been ours to use for about 100 years or so. We have convinced ourselves that this is the new normality, and will always be so
It isn’t pleasant to have to point out that we are not the dominant species here. Bugs are
and when bugs decide there’s too many human beings, they will dispose of the excess, because we are consuming and occupying their territory and calling it our own
I’m in that senior age bracket and fit as a flea, but I have friends who cost the state (me) 0000s to keep alive. When the state can no longer afford it, they (and I) will die off very quickly
I am afraid I agree with you. It is just craziness to try to save every low-weight baby born, and everyone with a long-term illness, not to mention all of the elderly. The young ones who could not survive on their own can now have children, and perpetuate the poor genes that they were born with. In a sense, saving them is a worse problem than saving the elderly.
And yet, I can think of no better reason for spending fossil sunlight and putting carbon in the air.
I’m biased. My best friend in high school was on crutches and a wheelchair. He was born with spina bifida. He was smart and an excellent musician. He got me into amateur radio, which got me into electronics and engineering, which got me where I am today. He’s held a productive job throughout his life, and never went “on the dole,” although he has certainly had more health insurance care than most of us. When he turned 40, I recall him saying, “I’
we can all think of exceptions to my comment that make us feel uncomfortable in reading them
i can do that myself–about the things i write. I too had a friend at school with serious disabilities—he went on the make millions. His exception doesn’t alter basic facts
but 1–200 years ago reality could not be avoided, no matter how unpleasant, or how rich you were.
That is part of the point I am making
we avoid reality by throwing resources at it.
Right now we can do that, it puts us in a unique situation that has never happened before, or will again
While acknowledging limits, I can think of no better way to spend excess resources.
My brother just spent half his annual vacation on a sunny beach, 3,000 km from home, driving from hotel to hotel, enjoying exquisite meals and expensive intoxicants, then flying back to what he considers a drab existence.
Which is the greater waste: spending 50 weeks at a job you hate, so you can burn a lot of dead dinosaurs doing things you like, or saving the life of a child?
Agreed. I’m not trying to say that life preservation to extreme extents will always be possible. But I do think that the degree to which we care for each other defines our humanity, and I would hate to see that go away with cheap oil.
Nor do I agree with you that it will go away. Triage will become more important, and people will necessarily pay more attention to the difference between life saving and life preservation. Today, we have a longer period of low-quality life than ever before. My own Mom is so severely demented that she does not know anyone around you. But she can still say, “I love you,” whenever any of us visit.
So I expect things like natural herbal medicine and setting broken bones will continue for a long time, while MRIs and spare-no-expense cancer treatment will go away.
Hope for humanity lies in caring for each other, even while things are falling apart.
a job that provides ‘surplus” is the oddity in all this
in past times, the local lord owned maybe 10000 acres of land
this provided a living for maybe 1000 people, all of whom produced a minute ‘surplus’ which was paid to the ‘feudal lord” as rent, in addition to their own subsistence
the 1000 surpluses added up to a good living for one man/family, who regarded themselves as having the right to be aristos and for whom work was not necessary
Those 1000 people could not produce sufficient surplus to give each of them a luxurious lifestyle, which is what we do now–we see that as our ‘right” just as aristos did 200 years ago
Your brother sees that as his ‘right’, because he produces sufficient surpluses to do what he does.
And while you’re setting broken bones—herbal remedies will not prevent septicemia
I would not call what almost anyone does for a wage or salary or pension “surplus”
misreading again
remind me to write more clearly
employment, in general terms, usually produces ”surplus” at some level
it might be surplus enough to buy a superyacht, or surplus to buy a 20yr old car
or no surplus at all—which we call subsistence living
or like many of us something in between
The job itself isnt surplus, and at no point did I imply that it is. My pension allows me to do a lot more than just eat
What the job produces allows a surplus to be used in discretionary terms–ie to buy whatever you can afford.
Sorry, I’m working at a temporary location, and I somehow keep fumble-fingering some key combination that posts my comment before it is complete. So I didn’t get a chance to explain fully.
Not at all! Subsistence farmers all must have a surplus — or they would eat all their seed and have nothing at all the following year!
The first Permaculture Principle is: “Obtain a yield.” You plant a seed that yields 1,000 seeds. You eat 999 of them. (Well, probably a good deal less, to keep a contingency cushion.) Then the following year, you plant the saved seed, and obtain a yield of 1,000 more.
Whatever we do must obtain a yield. My argument is that salary, wages, pension, etc. are all “illusory yields,” in that they are all based on the assumption of future growth of non-renewable resources.
So these “surpluses” that you cite are not really surpluses; they are bets that a surplus can continue. And the odds are moving away from that!
It’s like debt Jan, being a claim on future surpluses (direct energy or resources). Debt is important to finance production in the future and this I call ‘good debt’. The trouble today is that most debt is used to finance current consumption, like eating all your seed corn. This is how I interpret (in my world) what you are saying.
Future growth of renewable resources is just as illusory, of course. It assumes our whole system can be kept growing sufficiently to allow us to make wind turbines and solar panels, and that somehow the whole system (including transmission lines) can be kept operating.
Assuming that we can take more and more biomass from their normal use by other species is another illusion.
That’s a gross and untrue generalization.
Perhaps you didn’t read of the orca who carried a dead infant above the water for over two weeks. Or the case of dolphins saving a surfer from a shark attack. I have presonally seen mama goats, without human assistance, take on the kids of another mother who died in childbirth.
Goats can form life-long familial relations. I have seen daughters pushing their dying mothers to try to get them to stand up and graze… and then grieving afterward.
There are dozens of other cases documented where animals intervened to prolong the life of what could arguably be called an “unfit” creature. You need to get out more!
I think it is safe to say that, humans with our technology (driven by excess energy) are more successful at “preserving the unfit” among us than other species. I see no evidence that, given penicillin and opposable thumbs, other animals would not do the same.
We have the means to do it, was my pertinent point
other animal species react to death and injuries—of course they do
I took that as so obvious that it didn’t need to be said–I was obviously wrong, but I try to write ”to a point” without too much divergence
My writing, hopefully, does not carry or invite the knee jerk reaction that is apparent in some of the responses I elicit
The point being, if you take the trouble to think about it, that the human species diverts colossal amounts of finite resources to preserve life, which is OK as long as those resources are available.
As resources get tighter, those resources will cease to be available.
The Orca who supports its dead infant, or goats or whatever, are not subverting resources of others of their species, or any other species. They are using what they have. They do not expend energy resources beyond that capability
The odd occasion when I’ve been at close quarters with an injured or trapped animal, I’ve gone out of my way to help or protect it
Had I been starving I would probably have eaten it
As you would
Quite right. We had a goose with a prolapse. We are generally vegetarian, but not foolish. That goose went in canning jars, but I apologized to it every step of the way. And the other geese continue to supply us with eggs and lawn-mowing services, at no cost to us.
Sorry if I missed the part where you acknowledged that other animals would take care of their injured and “unfit” if they could.
All I saw was “no other species,” which tends to get my attention. I very strongly feel that “human exceptionalism” is what got us into this mess, and so I push back whenever it seems to pop up.
Humans are much more like other animals than our big brains are willing to let us admit… to our continual peril.
human exceptionalism began when we started making sharp objects, clay pots and inventing gods to justify it all
building walls around our properly was just an extension of that
In Guns, Germs, and Steel, Jared Diamond makes a convincing case that it was the storing of energy, via grain, that caused “building walls.”
According to Diamond, equitorial people, who subsisted year-to-year, had little need for walls. It is only when you can store energy that you need to defend it, and it was largely due to stored trophic energy that people from temperate lands were able to conquer people from equatorial lands.
I get puzzled when people who agree that excess energy makes everything different these days, then argue that certain behaviours or ways of being are status-quo, and must remain through the coming bottleneck event.
It’s going to be a brand new world, and an excuse to throw out current stereotypes.
Ive been saying the same thing for years
once you learn to grow food instead of chasing it, then you have to defend it
simple logic
Diamond doesn’t refute that.
But he notes that equatorial people — and many indigenous people throughout the world — do not “grow” food, they just gather it. In particular, Diamond cites manioc root as a staple food that did not require defence, because it grew everywhere — you just went and dug some up when you were hungry.
Indigenous people in northern Canada are in a similar situation, and as they have never been “conquered”
i will make sure the citizens of New York and London, and a few other similar places are kept informed of the gathering potential of the surrounding countryside
Not only an excuse Jan, but a sure necessity if survival is going to be possible in the new economy. IMO we need to educate the young especially in understanding not only what is happening and why (Part 1 of my book) but how to manage in the new economy after the crisis (Part 2 of my book being written now).
I think my point was more to suggest that at 65 years of age (admittedly, a random number I selected, mostly because that age aligned with the healthcare cost statistics I stumbled across), a person has lived a pretty full life. To continue to invest in that life, past the point that it can be of productive value, seems ludicrous – those resources would be better used helping out someone young who has health / wellness issues but hasn’t had the privilege of enjoying a full 65 years of life (also, they may be a better investment of resources – in terms of returns to the community – in the long run).
But hey, if you want a completely non-discriminatory solution, I’m open-minded to hearing some proposals. The first thing I’d suggest is getting rid of all the bullsh*t ageism inherent to our system – no more seniors discounts; anyone who is physically able to drive / vote / have sex / smoke / enjoy pornography / etc. should be able to do so at any age (and regardless of any mental / learning handicaps); education should not be compulsory in a legal sense; no young / youth offenders laws that exist separately from the laws written for everyone else; disbanding of any child welfare / child protection services; people should stop respecting their “elders” and just respect those who earn and deserve respect; etc.
Cheers
-GBV
Wow! What a heavy conversation there w/ Norm and Jan! Just a little codicil to it all: Industrial society–to a greater degree at the core–throws away a lot. landfills are full all over. I regard much of what it discards as raw material to do with as I’m willing or able. I regard that as a modern form of hunter gathering. To do my art (as well as for construction, etc.) 90% of what I used is throw-away stuff otherwise destined for landfill. The 10% I spend money on is what feels effortless and comfortable for my tiny income. When I lived in CA, there was so much wild mustard growing seasonally that half the year, you could be supplied with free greens. (Took me some time to figure it out.) Now, in the southwest (and after a wet winter), there is so much wild dandelion and arugula growing naturally that I can’t harvest all of it.
Yes Norman, needs must, as the Victorians used to say. But there are also plenty of people of all ages that cost the state much more than they contribute. It isn’t just the grannies. There are millions of people with all kinds of disabilities, and the mark of a civilized society is that we don’t exterminate people simply because that’s cheaper than feeding and caring for them. This is true even of societies that are only of modest means.
This is especially the case in “the developed world” where our economic philosophy has become, “I consume, therefore I am.” Not everybody can be a productive worker these days, but everyone, even the permanently comatose, and even pet cats and doges, can be a consumer whose needs can provide lots of fruitful work for other people to engage in. What’s not to like?
“This is true even of societies that are only of modest means.”
Like Cuba, for instance.
as energy secretary, i thought one of his more brilliant ideas was to suggest everyone painting their rooftops white, to reflect sunlight and mitigate global warming.
In the 1970s we were entreated to paint our windows white (against a nuclear flash) in the classic government pamphlet:
https://www.theguardian.com/uk-news/2017/mar/16/protect-survive-nuclear-war-republished-pamphlet
History repeating itself or at least rhyming?
I wouldn’t do it, since it’s not the smoothest way for energy to flow, how my world is arranged. But if it’s not going to detract from some other form of energy need, why not paint your roof white? You wouldn’t paint your roof black in a hot climate.
you would save money on air conditioning bills in the summer.
I remember that…thought it was a real lame proposal back then, painting roofs white.
In reflection, perhaps he knew Congress would do nothing, Industry would do nothing, and the people would largely do nothing. Translation: Basically we really can’t do nothing, except symbolic measures that really just bandaid measures that at the most just pretend we are actually are trying!
As far as population control, yeast population have no control in a system that seems the maximum! When I took Economics in College every model I encountered sought to maximize! Once I objected to the Professor, stating we need to minimize because of being on a finite planet. Of course, I told the truth and wasn’t taken seriously.😁Ain’t it a Great Country! (To paraphrase author Ed Abbey,,).
What is the religion of the new Slovak president? She is divorced, lives with a partner and practices Zen Buddhism:
https://komentare.sme.sk/c/22091385/zuzana-caputova-sa-bude-divat-do-steny-necudujte-sa.html
MG, I was raised by strict Conservative Roman Catholics from Slovakia. Mother is still with us and maintains her devotion. Now, as far as myself…yes, I studied Zen practices, along with other belief systems.
Recently read this about Orson Wells,
Orson never joked or teased about the religious beliefs of others”, wrote biographer Barton Whaley. “He accepted it as a cultural artifact, suitable for the births, deaths, and marriages of strangers and even some friends—but without emotional or intellectual meaning for himself
In April 1982, when interviewer Merv Griffin asked him about his religious beliefs, Welles replied, “I try to be a Christian. I don’t pray really, because I don’t want to bore God.
So, maybe it’s more relaxed today with global interconnection.
Even the Trappist Monk, author, Rev Thomas Merton, had a deep connection with Eastern Practices.
Already in 1937, when Merton read Aldous Huxley’s Ends and Means, Merton showed an interest in the Asian religions. When he was a student at Columbia University, Merton sought out a Hindu monk named Bramachari for some counsel. The monk advised Merton to follow his own Christian tradition to find what he was most deeply looking for. A strong admirer of Gandhi, Merton also noted how Gandhi, a Hindu, had found a congenial ‘ second home’ of sorts in the Christian Sermon on the Mount. In the 1950’s Merton began exploring Buddhism, especially Zen Buddhism. He thought he found some resonance between Zen and the Desert Fathers. Like Zen roshis, the Desert Fathers sought a kind of loss of the self and its merger into a larger reality which transcended self or object. They often enough gave the equivalent of koans ( unsolvable and puzzling riddles) to desert monks under their sway. Their meditations on the kenosis or emptying of Christ and the monk’s similar emptying in poverty and acceptance of suffering struck Merton as akin to the Buddhist notion of emptiness. For Merton, the koan meant that the monk comes to experience himself as a riddle without any easy or facile answers. Merton sent a copy of his study of the Desert Fathers to D.J. Suzuki, the leading exponent of Zen in the west. They began a long correspondence in the late 1950’s ( cf. Encounter: Thomas Merton and D.T. Suzuki Robert Daggy, ed., Larkspur Press, 1988)..
https://www.americamagazine.org/faith/2012/07/13/thomas-merton-and-dialogue-buddhism
As Gail noted there is a connection among beliefs.
I don’t know if I could support a president who didn’t adhere to the Prasangika Madhyamaka tenet system.
(Tibetan Buddhist joke)
Yes ST – I too have sought out wisdom in both east and west. My youngest son has found this:
https://www.amazon.com/Children-Law-Lost-Teachings-Atlantis/dp/0966001508
I read 2/3rds and felt uncomfortable but he swears by it. I am studying the bible at present under the guidance of a mentor (non sectarian) and find a close relationship to the good book. I soldier on. BTW Perhaps all these pearls of wisdom come from one source which is to remain unknown to us mere mortals – so all we have is faith?
I liken it to a mind game I play. Imagine that you are a 2 dimensional person happily living on a sheet of paper. A 3 dimensional Higher Power comes along and draws a pencil line right down the middle, cutting you off from half of your world. There is no way that our 2 dimensional person can even concieve of the other side of the pencil line – it does not exist in his world anywmore.
Perhaps we are at the disposal of a power of dimensions higher than our 3rd D world?
Finally, a leader with current social norms.
At least where I live.
I guess we will have more and more short-lived leaders, exhausted by their jobs and lives.
My opinion is that the people are attracted by the Zen Buddhism due to the atomization of the society and because they are exausted: they experience energy shortages in their work and social lives.
My wife and I are metaphysical – eastern religion, but no specific one. Listening to the higher self, watching for and recognizing synchronistic events as they relate to the direction of your own life, karma – it always bounces back whether its good or bad, dharma – find out what that is and do it the best you can, be positive and encouraging of those around you, forgiving when possible, learn to love (better), creating the reality of the life you want. Meaning, you don’t conjure up stuff out of nowhere, but you do tailor your life to alter over time to be what you imagine it could be. You have to imagine it first, to then take a path to make it happen.
Ah yes, CM, so true and well said: Mark 11:24 It is all in the good book!
Thanks. JMG talks about magic as a powerful but morally neutral means. And it can be interpreted (or I automatically interpret it) to mean something similar to what you post. I like the nuanced tones here: “…forgiving when possible, learn to love (better)”
MG, there are those that are drawn to the contemplative life, as it is called.
During the turbulent war years of Vietnam, the Abbey of Gethsemani in Kentucky had an overflow of applicants It also occurred during the WWII war years.
Of course, many were called, few chosen.
BTW, the rule of Benedict maintains a very structured schedule, along with the rule of silence. Of course, there are always methods around rules, such as, sign language!
As Merton pointed out, it was a way to keep conflict at a minimum, after all Monks are human!
Also, the society is perhaps a prime picture of a collective society. The support of each other, low stress, balance of work, study, pray and interaction among the members reflect a very long life for it’s members, barring some accident or terminal illness.
Like Gail mentioned, suppose these places provided an outlet of excess children and limited more population growth, since they have a vow of celibacy!
I went on a retreat to the Abbey of Gethsemani and after many years have vivid memories being there. When I left I gave a very old Monk my supply of new shaving razors and cream, saying ‘It must be hard getting a good shave around here”
He thought that very funny, chuckling, “Among other things”.
The need for contemplative life is surely connected with the need for the retreat from the system that runs on higher and higher revs in order to save the given system. Being tossed here and there until exhaustion in such rescue attempts brings the question: what is the meaning of all this fuss that leads to a collapse?
Thank you for your opinion and reply, MG. Perhaps you are correct, but maybe it is deeper than the external and centers on ones inner life connected to the tremendous energy of the universal. There have been such in all periods of History, prosperous, and otherwise.
Some folks are more receptive than others to the calling. It really requires deep inquiry that can not be done in this format. Thomas Merton did admit Monks are marginal people, living on the edge, so to speak. In later years he commented they lived as millionaires, timewise. Somewhat contradictory. Initially. there was straw bedding, little heat and no air-conditioning or electric at the Abbey. Afterwards, all changed, especially from the royalties from his many best selling titles!
“Some folks are more receptive than others to the calling.” This sounds elitist. The system either functions or not. You either see it is crumbling or not.
Trump is pretty Zen, wouldn’t you say? Antinomian or unconventional behavior? Check. “No reliance on words and letters?” Check. Okay, he’s a little weak on the “Seeing into one’s true nature” part,but one day, if he starts barking like a dog or something, we’ll know what’s up.
I look forward to Trump doing a clap with one hand – applauding himself, of course.
I had 3 separate yet strange incident occur yesterday on the same outing:
1) I bought underwear at Walmart yesterday and had to get a manager to open a locked glass case to get them out. There I am a guy with a strange woman staring at my selection of underwear. Strange and embarrassing and the last time I do that. Next time I’ll just order them online.
2) The woman in a car in front of me (with 2 small children) at Taco Bell was obviously on drugs. I think Meth because of her behavior, although I’ve never taken it, that’s from observation from other people I suspect of being on it. They get easily agitated and unruly, which she definitely was. Snapping her fingers and yelling and oh, it was really strange. I could see her in her rearview mirror and her eyes were energized, lit up in a not good way.
3) The woman in front of me at the checkout in Safeway was also on drugs but what kind I’m not sure. She didn’t say a word – she just kept doing things unrelated to paying for the groceries. We all waited while she stared at her mobile phone. We waited while she stared at the prices of items on the electronic read out. We waited while she dropped things out of her purse then inspected each one as she put them back into her purse. It was really strange. Maybe in some ways even weirder than incident #2. I ended up reading a magazine while waiting. I just didn’t want to get into it. That’s something I’ve learned – don’t get involved.
So people are evidently stealing underwear from Walmart and taking drugs before going out into the world to get things done. I realize ethics and morals have degraded considerably over the past few decades, but it makes me wonder if society is breaking down because of reduced economic opportunity, i.e. financial pressures OR is it the other way around. Are people simply losing interest in a conventional life; not taking drugs, working hard, etc.? I think it’s a valid question even though many of us understand the added pressures from diminishing returns. Or is it a combination of both?
I think that a lot of people are suffering from a form of depression. “Life was supposed to be better than this. I was supposed to do at least as well as my parents. Now the only jobs I can get are for very low wages that don’t pay the rent and car payment. I will self-treat with drugs. Or drop out from the work force. Also, I take a job, do well in it, only to have my job be sent to China or India, because they can do the work for less.”
It doesn’t help that advertising gives them a false ideal of how life should be, and which others appear to be enjoying fully.
Very sound psychology Gail, thank you/ I agree with your prognosis – a symptom of our times.
It’s all interconnected. Drugs are getting stronger and more available. People have less reason to interact socially with screens in every hand. There are less attractive jobs available so people work less and have more free time to fill (with screens and drugs). This makes conditions poor for starting families which further amplifies this pathological behaviour. As the saying goes “too much spare time is the root of all evil”.
Hmmm… I was taught that the root of all evil was “love of money.”
Either way sounds like a bummer. I don’t have spare time, and I don’t have money, so I guess I don’t have to worry about evil! 🙂
There’s a point of similarity.
It is not “money,” it is “the love of money.” You don’t have to have money to love it.
Would all you people who don’t love money, please send me your unwanted cash?
What? Y’mean, you haven’t figured out the difference between “love” and “want?”
I love my wife; I want… no, let’s not go there. 🙂
My father left me no money, but a world of wisdom worth a king’s ransom to me.
My dad said: “Son I have no money, therefore I have no money worries”
Most of the people of wealth we know have problems in their relationships; they have money, too much money, and the family are fighting over the scraps as their parents age and fight over the step children and their deserts. It is so sad to see good families break up over such intangible things. I have emails describing the distress but of course cannot break confidences.
I give up on trying to help because they are locked into a mode of thinking based on FOMO – the market is driven the same way – greed and lust – it ever was the same.
“The Devil makes work for idle hands” might be what you were thinking of.
I entirely agree with your analysis SP and it is not going to change until the final crisis arises IMO
So many questions CM. Had you considered that they might be on alcohol? It is after all the most common of additive drugs, alters behaviour and is generally worse than being hit by a taxi. I counselled in AA for ten years in the 90s – it’s so great to hear all the shares and the madness that accompanies it. Just a thought.
BTW The ‘Big Book’ is the best psychology you can get – IMHO; and there is NA and would you believe, “Codependents Anonymous” as well, I’ve been to one of those meetings also!
“Coal prices for prompt loading at Australia’s Newcastle terminal have lost almost 20 percent since last Friday, dropping to $72 a tonne. That was the lowest level since May 2017 and marked the steepest weekly decline since the global financial crisis of 2008/09.
Coal has slumped by 40 percent from a mid-2018 peak of more than $120 a tonne.”
https://www.reuters.com/article/us-australia-coal-graphic/australia-coal-posts-biggest-weekly-drop-in-a-decade-amid-weak-demand-idUSKCN1RH0IQ
Wow! Doesn’t help the Australian economy!
“Whoever replaces Algeria’s President Abdelaziz Bouteflika, ousted by weeks of protest, will inherit another crisis-in-the-making: the economy. Even before hundreds of thousands of Algerians began their campaign for political change, the government had only a few years worth of foreign currency reserves left. With the OPEC member heading into uncharted territory after Bouteflika resigned on Tuesday, the clock to financial upheaval is now ticking faster.
“https://www.bloomberg.com/news/articles/2019-04-04/algeria-s-economic-doomsday-clock-ticks-faster-after-revolt
“Women and babies are dying in Venezuela and disease is rife amid a collapsed health system and severe food shortages, researchers said on Thursday, urging a large-scale United Nations response. A new report by researchers at Human Rights Watch and the Johns Hopkins Bloomberg School of Public Health said U.N. chief, Secretary-General Antonio Guterres, should officially declare that Venezuela is facing a “complex humanitarian crisis”.”
https://www.reuters.com/article/us-venezuela-health-un/u-n-urged-to-scale-up-aid-as-venezuela-crisis-deepens-idUSKCN1RG2G4
A laboratory for mass epidemics?
An example of mass die-off.
Venezuela represents a perfect (although obviously unfortunate) case study to better understand what happens during collapse.
I think you are right.
agreed
Yes CM I have used live examples in my book and agree with you that it is (sadly) a classic experiential test bed.
I still havent seen a picture of a starving Venezuloan, rather most in the pictures would be healthier losing 15kg or so.
It’s the most vulnerable that starve first:
https://www.thetimesinplainenglish.com/wp-content/uploads/2017/12/18venez-malnutrition-slide-UTI7-superJumbo.jpg
https://i.dailymail.co.uk/i/newpix/2018/06/18/14/4D5D9DD100000578-5856489-image-a-2_1529328831678.jpg
Compare the result between googling yemen and Venezuela.
Yemen has been a war-zone since 2011 and was way poorer to start off with. The UN declared a famine there last year and continues to call it the worst humanitarian crisis in the world.
By contrast the UN has not yet declared a humanitarian crisis in Venezuela. But flu isn’t any less unpleasant because you don’t have cancer. There is still plenty of hunger and suffering and violence in Venezuela.
“There is still plenty of hunger and suffering and violence in Venezuela.”
There’s apparently a lot of Venezuelans who like Maduro too, yet we don’t seem to hear from those people from our mainstream news media very much…
Cheers,
-GBV
Venezuela is a geopolitical football and battleground of ideologies. Heavy media bias is to be expected. You can always read Xinhua and RT (and US-based publications like Counterpunch) as a counterpoint to the US MSM.
I have contacts in VZ and I can assure you DJ, there is serious distress – I get emails regularly.
“A growing number of homes in the US and China are teetering on the brink of a price slump that would drag their economies into a recession, the International Monetary Fund has warned. Using the latest evidence from global housing markets, the Washington-based organisation said there was a clear increase in the risk of a housing price collapse in both countries after years of ultra-low interest rates and loose lending by financial institutions.”
https://www.theguardian.com/business/2019/apr/04/us-china-risk-house-price-slump-trigger-recession-imf-lending
“The Trump administration has finally turned its attention to housing policy. Unfortunately, the president’s Memorandum on Housing Finance Reform, issued last week, is a major disappointment. It will keep taxpayers on the hook for more than $7 trillion in mortgage debt. And it is likely to induce another housing-market bust, for which President Trump will take the blame.”
https://www.wsj.com/articles/the-coming-trump-housing-crisis-11554419785
I can see why Trump is doing this. We need ever-growing debt to keep the system operating. Whether or not the debt collapses a few years hence is the least of our worries. The name of the game is kicking the can down the road further.
“Researchers have said nationwide mortgage defaults [Australia] are the highest they have been in almost two decades. A spokesperson from peak housing and homelessness body National Shelter, an organisation at the front line of housing stress, said too many Australians have hit rock bottom.”
https://www.abc.net.au/news/2019-04-05/researchers-warn-of-rising-mortgage-stress/10972682
Oops!
I think a big part of the US problem is the fact that young people cannot afford the expensive homes their parents had. Also, the change in the tax law makes interest payments above a certain level (equivalent to $750,000 mortgage for a couple) no longer deductible. This makes homes in high priced states (California, New York, Massachusetts etc.) less affordable.
What about the argument that they want to inflate their way out of trouble? Kudlow and others would love to see inflation so that 750,000 mortgage would be cheap. I know that comes with its own set of problems but…
Also you suggest that the only way out is a cheap energy source- I would argue that there are more problems than that with resource depletion.. I do see cheap energy sources in the future ie…some form of nuclear and others that we have not added yet to the system..humans are neurotic and are working on energy systems like crazy now….its the new space race but every country is involved in it..
That limit on interest payments only up to 750k is an interesting one, from the standpoint that it does not benefit the rich, which seems to be the only segment of society DC politicians are interested in. I can’t quite figure why they made that limit when everything about the US is geared for the super wealthy. I mean, if you’re accused of a crime wealth helps buy reduced time in jail, reduced penalties and even if someone rich goes to jail they go to a different less violent one. Most including recent massive tax cuts were for the rich only. So on and so on, but the mortgage limit goes against the grain of doing anything and everything for the rich. It’s quite odd. I wonder if it will be become an important item promised to be changed after the 2020 election. Increased to something like 5 billion.
It was done to punish blue states like California, Washington, Oregon, and New York that have higher home prices and state taxes for not voting for the red team.
“Still psychologically scarred, few were keen last month to commemorate the 10th anniversary of the Dow’s rock bottom close in March 2009.
“Even so, all month long, calls to heed lessons from the last great recession echoed across the media as ominous signs pointing to another pending financial crisis loom. Last week, the US Department of Commerce revised growth forecasts downward. Growth across major European economies is either slowing or negative. And the Chinese economy, a critical global growth engine, is decelerating…
“After Lehman Brothers collapsed, central banks worldwide simultaneously reduced interest rates. In the months that followed, governments would take recourse to this time-tested monetary tool to combat the recession, using rate cuts to encourage borrowing and spending.
“Such expansionary monetary policies are battle-proven and, in tandem with prudent fiscal policies, they enabled central banks to slowly restore the global economy to health. The hard truth, however, is that governments won’t have this weapon at their disposal this time around.
“In the wake of the 2008 crisis, rates across the world were cut to zero, and the fragile recovery has kept them there. For much of the world, including the US and Europe, very low to near-zero rates mean historically little leeway for lowering.”
https://www.scmp.com/comment/insight-opinion/article/3004677/next-financial-crisis-will-be-worse-2008-crash-heres-what
“Germany’s industrial sector is facing an even deeper crunch as manufacturing orders dried up in February, dashing any hope of a quick recovery for the eurozone economy. Exports plunged as the global economic slowdown bit hard, threatening the core of the eurozone’s industrial sector.”
https://www.telegraph.co.uk/business/2019/04/04/global-recession-watch-crunch-germany-manufacturing-enters-freefall/
“New car sales in the UK fell to their lowest level in five years as the biggest selling period of the year — the 19-registration plate change month of March — failed to lift the motor trade. Latest industry figures show that 458,000 new cars were registered in March, down 3.4 per cent on the same month last year and the worst level since 2014.”
https://www.thetimes.co.uk/article/car-sales-lowest-for-five-years-as-19-plate-fails-to-tempt-buyers-sfvf7fnzg
“Italy will struggle to escape recession this year amid reports the Government is set to slash growth forecasts to almost zero. The economy will grow by just 0.1pc this year, according to information shown to Bloomberg by officials. That represented a severe cut from earlier predictions of a 1pc expansion. Relations between Rome and Brussels have become strained because of the country’s failure to cut the national debt…”
https://www.telegraph.co.uk/business/2019/04/04/italy-set-slash-growth-forecasts-recession-maintains-grip-economy/
If China’s demand were higher, things might be better.
Except that the global economy was not ‘restored to health’, and the fiction that it was is now becoming daily more apparent!
The financial system is like Mr. Creosote about to eat that final, ‘waffer’ thin mint, I fear, Xavier.
I love Monty Python too Harry. As an accountant I am always quoting: “My psychiatrist says there is no cure for accountancy” – trouble is, it is so true and my psychiatrist confirmed it!
This is the big “Oops.” At some point, interest rates get too low for further stimulus.
There s always negative rates.
I wonder how well pension plans would do with negative rates.
Not sure if I’ve mentioned this before, but are people here aware of Paul Hanley’s book “Eleven”? (The title refers to the projected world population in the year 2100–11 billion.) Hanley is a Baha’i agronomist:
http://www.elevenbillionpeople.com/
MESSAGE FOR GERD EBELING!
I received your wonderful email Gerd and replied, but as you predicted, it bounced. Do you have an email account that I can reply to please? Lots of good info for you.
peter@underco.co.uk
Thanks Gail for your forbearance.
It is OK to start a new thread, even when what you are saying really relates to an earlier comment. Otherwise, the comments get “too deep” and are hard to read, especially on a phone. Also, the system cuts off comments.
Yes, but I believe I double-posted now as a result?
Grr… this was supposed to be a response to a previous comment… 🙁
Saw my first Renault ‘Twizy’ today: the future?
Quite possibly – but not here, as we lack even a single charging station. And even if we did have the infrastructure, I can’t imagine the rather effete ‘Twizy’ catching on. Robust, farm-friendly vehicles seem likely to remain in vogue for the foreseeable.
Meanwhile:
“Tesla on Wednesday reported a massive drop in auto sales for last quarter… About 63,000 vehicles were delivered to customers in the first three months of 2019 — a 31% drop compared to the prior quarter… It was the first quarter-to-quarter drop in sales at Tesla in nearly two years and the single largest drop ever. Tesla stock was down more than 10% in pre-market trading on Thursday because of the decline.
“Slowing sales are a concern because Tesla needs to keep its sales pace high to pay down its sizable debts…”
https://edition.cnn.com/2019/04/03/cars/tesla-sales-first-quarter-2019-results/index.html
I rode in friends EV’s in the North Bay of SF regularly.
I’m in Bend Oregon now— haven’t been in one here.
https://gailtheactuary.files.wordpress.com/2019/04/eng_renault_twizy_ze.jpg
Electric vehicle, rated as a heavy quadricycle.
The vehicle, excluding the battery, costs almost £7000. In addition, the Twizy’s battery will be leased to the end user, with prices starting from £45 a month and increasing with mileage. Group 10 insurance on top of all that means that owning one is unlikely to represent a saving compared with an entry-level city car.
https://www.autocar.co.uk/car-review/renault/twizy/mpg
I know it’s not electric, but I only paid $10,000. for a Ford Ranger XLT club cab, two tone (forest green with beige on the lower part), with 42,500 miles, and now 20 years later have 210,000 miles. Only needed new tires every 60k, new battery every 5 years and replaced the thermostat. It still sounds the same. But I’ve done impeccable maintenance with Bosch filters and Mobil full synthetic oil every 6k miles, and get the Automatic Trani fluid replaced and filter replaced every 40K. CHEAP to run. Will run another 100-150k miles.
Will not run another 100-150k miles without the international trade system and electricity. It will run as long as the economy stays together. That is, as long as there are stations that sell fuel for the vehicle. Of course, these stations depend on electricity for pumping the gasoline or diesel, so as soon as their is a problem with any part of the system, the whole system fails. These stations also depend on the banking system, so that they have a way of paying their employees and paying for the fuel that they sell. Peak oilers tend not to think through how the system really operated. High energy consumption per capita allows complexity. Once this fails, the whole system collapses.
Perhaps if you store some diesel, the truck will last as long as your supply of diesel.
“Peak oilers tend not to think through how the system really operated. High energy consumption per capita allows complexity. Once this fails, the whole system collapses.”
But that does not preclude another economic system rising up from the ashes of the old one, especially after all the unpayable debts of the old system have been discharged.
To use your gas station example: yes, a gas station does realize efficiencies by having a banking system in place to help facilitate the payment of its employees and the purchasing of the fuel it sells. But that is not to say that a gas station could not procure fuel or pay some sort of wage to employees in an economy without a functioning banking system (as we know them today, anyway).
People will adapt / adjust and find work-arounds to facilitate trade, commerce, and every-day living… even if everyone’s standard of living is declining more and more each day we progress into collapse, to the point that the lives we lead look nothing like the ones we led prior to collapse.
I suppose my (frustrated) point is that I don’t believe collapse has to mean that everything will stop / end. Many things may end, but many may change and continue on in a drastically different form. Many new beginnings (for those who survive collapse) may also occur – likely those things our ancestors used to do to get by.
Perhaps it’s harder for older generations to grasp, but I think there is a hint of desire by younger generations (i.e. those individuals who don’t expect to comfortably make it to the grave before the system implodes) to just get on with collapse so that BAU can end and Neo-BAU (however terrible it may be) can begin to be established…
Cheers,
-GBV
Actually, the laws of physics preclude nother economic system rising up from the ashes of the old one, especially after all the unpayable debts of the old system have been discharged.
The current system has been run on debt and more debt, since the time the price of oil left $20 per barrel in inflation adjusted terms. You really need another source of energy that is equivalently cheap and plentiful.
https://gailtheactuary.files.wordpress.com/2018/09/26-in-the-1970s-oil-became-unaffordable1.png
In terms of EROI, we really need an EROI of about 50 or more, even on the replacement fuel someone tries to make from vegetable oil. Otherwise, we need ever-higher debt at ever lower interest rates to hide our problem.
“In terms of EROI, we really need an EROI of about 50 or more…”
I agree… IC was built at that level and BAU requires that level…
otherwise, there will be downsizing…
though I’m still obsessing about the possibility of “electrifying” IC in the next decade or two… running IC on mostly solar and wind and nuclear as FF depletes… of course this would mean an EROI far below 50…
I think the catch here is that there is enough FF to do this once and only once… using up most of the remaining FF to build the solar panels and wind turbines etc…
and, whether it will work or not (I suppose many of us think it won’t work), an electricity based IC is going to be attempted…
that’s what Twizy and Tesla are all about…
it’s an experiment doomed to failure, but also it is an experiment that has already begun…
the failures may be spectacular…
I can only agree, David. You have put it extremely succinctly. I do believe Tesla is doomed and the idea of electricity coming to the rescue is a fallacy except unless they do get fusion going – then it’s another ball game altogether. Go well.
The failure will indeed be “spectacular” but also sad, sad that a species like us has advanced in knowledge & technology so far & so high, our fall will indeed be harsh.
Our children, if any, will exist in a very different world from us, they will have none of the things we now take for granted, no electricity, no computers, no internet, no cars, no no no no – – – back to the dark ages when priests ruled & the rest struggled to survive.
A world without the other living things we also took for granted, no butterflies, no birds, no snakes in the grass, no no no endlessly no.
Just our massive, sprawling ruins will remain, for a while at least.
But then perhaps survivors can invent a more inclusive way of living, they will be forces to live within the solar budget but it needn’t be hard, brutal or short.
The Greek way of life wasn’t all that bad & we could do even better than that if we don’t raise up our demons again.
“Actually, the laws of physics preclude nother economic system rising up from the ashes of the old one, especially after all the unpayable debts of the old system have been discharged.”
I guess I’m failing to understand you here..
Another economic system could rise up regardless of whether we have affordable fossil fuels, unaffordable fossil fuels, or no fossil fuels at all. I would think this should be self-evident, given we’ve had numerous financial systems collapse in humanity’s past (and yet, here we are today…)?
I’ll just insert this little piece from The Automatic Earth, as I though it captured the concept of “rebooting” the financial system, despite the inevitable energy limits that will be encountered as a result:
“Financial crisis can be expected to deprive people of purchasing power, quickly and comprehensively, thereby depressing demand substantially (given that demand is not what one wants, but what one can pay for). Commodity prices fall under such circumstances, and they can be expected to fall more quickly than the cost of production, leaving margins squeezed and both physical and financial risk rising sharply. This would deter investment for a substantial period of time. As a financial reboot begins to deliver economic recovery some years down the line, the economy can expect to hit a hard energy supply ceiling as a result. Financial crisis initially buys us time in the coming world of hard energy limits, but at the expense of worsening the energy crisis in the longer term.”
Finally, I would also argue we don’t need another source of equivalently cheap & plentiful energy if our expectations are for a drastically reduced (pre-industrial?) civilization with a footprint that is a fraction of the one we have today…
Cheers,
-GBV
The level of complexity of an economy depends on a lot of things, including the amount of energy consumption per capita available. All of the parts need to be there as well; for example, we can’t go back to riding horses instead of using cars, because the system is not in place for the huge number of horses needed. Also, the manure problem would be overwhelming.
Once the system collapses, it is necessary to build up using what is actually available. Wood and other biofuels do not really give very much. Deforestation became a problem, thousands of years ago.
Most of our ancestors were farmers and fishermen of some kind and got everything they needed from a radius of some 3 – 6 miles or less: their lives were not very closely connected to the higher levels of the civilisations they happened lived in.
Hence the possibility of total collapse in most regions of the world now, compared to any previous culture, when farming depends entirely on machines using component parts and fuels from hundreds or thousands of miles away.
The most vulnerable farmers in the past were those who depended on elaborate irrigation systems surrounding cities, and they did disappear very quickly when those systems ceased to function: for instance, the Mongols in the 13th century deliberately destroyed the complex irrigation systems of Persia, turning whole regions into arid wastelands.
We have made farming a mechanized industry and all industries are liable to sudden and irrecoverable collapse.
++++++++
“for example, we can’t go back to riding horses instead of using cars, because the system is not in place for the huge number of horses needed. Also, the manure problem would be overwhelming.”
Gaill, why do you assume a “huge number of horses” would be needed? It’s silly to imagine we are going to replace our current system with some lesser form of technology and maintain the standard of living / transportation / diet / medical care / communications / etc. that we have today – I don’t believe anyone who reads and understands your work is suggesting such a thing (I know that I am not, though your responses sometimes make me feel like you believe that is what I am proposing?).
What I am trying to convey is that, post-collapse, the world might end up looking so different then what we see today that some of the ideas / possibilities you’ve discounted in your examples (like returning to horses for transportation) may become feasible in some form or to some degree once again.
Because who knows… after collapse culls a few billion / trillion people off the Earth, and people’s living expectations drop substantially, some of us (who actually make the effort to survive collapse, or those who just get lucky) may go back to riding horses instead of using cars. It’s not that far-fetched of an idea, really.
Cheers,
-GBV
I can make diesel out of vegetable oil! Or convert a diesel engine to use plant oil.
Right! How much can you make, with just hand labor to grow the canola oil (or whatever), in excess of what you need to eat? I would guess you couldn’t count on a gallon a week, besides what you use for food.
My processor is built from a 50-gallon hot water heater. It makes 120 litre batch of biodiesel. I have only used old cooking oil in it, not oil I have grown.
It currently requires electricity. But unlike making alcohol, which requires exacting temperature and pressure control, the input heat requirement for biodiesel is very flexible, and you could make biodiesel in a black barrel in the sunshine for a week. And about 1/5th of biodiesel comes from methanol, which could be produced by destructive wood distillation or anaerobic decomposition, but which currently is synthesized from natural gas.
Similarly, a diesel engine running on pure vegetable oil (rather than biodiesel) doesn’t need any methanol, but it requires a certain amount of heat, in order to make the thicker vegetable oil flow as easily as lighter diesel fuel.
I am somewhat angry about all the research money that has gone into “flex fuel” vehicles that burn 85% ethanol, when a similar amount of research could have resulted in a “flex fuel” diesel injection pump, capable of burning either diesel fuel or unaltered pure vegetable oil. (Rudolph Diesel’s original design ran on peanut oil!)
My back-of-envelope estimation is that the raw ERoEI for plant oils is about 1:15, that is, the plant oil you get from one acre of an oilseed crop could power mechanized agriculture on another fifteen acres.
The nice think about plant oil is that you can use it for food, and then re-use it for fuel!
All the diesel biofuel I’ve burned has come from restaurants, not from oilseed crops I’ve raised. But you could cook with oil you’ve grown, and then use it in diesel engines.
Of course, none of this is going to “save civilization as we know it.” But in a slow-crash scenario, I think diesel engines could keep running in a critical-use-only manner for another 50 years or so, before they’d wear out and we’d have to step down to 100% animal power.
Where do you get all of this old cooking oil? If the system disappears, the waste oil disappears as well. You need to make all your own cooking oil.
I had been collecting it from 4-5 restaurants, making 120 litres a week, which was way more than I could use, so I distributed it for the same price as dino-diesel to people who wanted to drive on biofuel.
Yes, of course. Given much more time and money, I’d be doing that!
But until the most recent price run-up, it hasn’t really been worth it to even make biodiesel from restaurant oil! Cheap fuel is the enemy in so many ways.
Where are you getting the fuel to go to the restaurants?
And where are the companies getting fuel to deliver to restaurants ?
What restaurants are going to be open? What grocery stores will be open?
Jan and I walk similar paths and yes you can make biodiesel in quantities sufficient to run diesel tractors, till several acres, and feed two or three families+ power equipment with oil / animal fat you produce on your own farm.
Acorns are an amazing carbohydrate source that can feed enough pigs to produce enough fat to keep it all running. I can easily collect two or three hundred pounds a day with a rake and a dust pan. They need to be dried to store them but once dried they last several years . Acorns were a staple for California Indian tribes so the pig food can also feed humans under collapse conditions. A thousand pounds of acorns will feed one pig or a small family for a year. One pig / lard hog will produce 40-50 lbs. of fat or a little more than 5 gallons of biodiesel . 5 gallons bio and an old tractor can deep till an acre and an acre of vegetables can feed a family. Pigs meat can be salt cured and stored without electricity .
In the PAST acorns were a staple food of California & Oregon native peoples but no more.
Sudden oak death has caused the deaths of thousands of oak trees in SW Oregon & it’s spreading, it can’t be stopped, high humidity & birds spread the fungus.
The wild foods so many once depended upon are now either gone or much reduced.
Where is the Passenger pigeon now? Where are the millions of Bison that once flooded the grasslands? where are the great flocks of Prairy chickens? GONE along with thousands of other species they once depended upon.
We have burned all our bridges behind us, there is no going back & no going forward.
We thought our “Titanic” would last forever, taking us to new & exciting places but now it’s sinking, there will be no “Carpathia” to rescue us, even the “lifeboats” are a worthless delusion.
I’m going back down to the bar & pour a tall one or take a long toke, the 45 rests on the bar for when the cold water laps my shoes.
In the meantime, I’ll listen to the band & enjoy my drink.
I wonder what those band members were thinking as they played their instraments for the last time?
Here in BC, the big greenhouse industry seems to think Sudden Oak Death Syndrome (SODS) is spead by re-using pots. At least, they sponsored a bill that made re-using them illegal.
Now, the small greenhouse industry, which used to go to the local recycling centre and get all the used pots they wanted for free, has to go out and buy brand new ones, and the pots the recycling centre used to thoughtfully separate for the small growers, go into a landfill, instead.
Isn’t Big Bidness wunnerful?
“Yes, of course. Given much more time and money, I’d be doing that!
But until the most recent price run-up, it hasn’t really been worth it to even make biodiesel from restaurant oil! Cheap fuel is the enemy in so many ways.”
Given the incredible amount of work fuel can do (with functioning machinery) in comparison to the labour an average man / beast of burden can provide, I have to imagine that in a post-collapse scenario the few gallons of biodiesel you can produce (sans waste oil from restaurants), Jan, would increase your standard of living to a much higher level than the average person’s. That in itself seems like validation for the effort you’ve invested in learning to make your own fuel!
Any chance you’ve read David Blume’s “Alcohol Can Be A Gas!”, Jan?
I’ve got it sitting on my shelf, but haven’t had the time to give it the attention it probably deserves…
Cheers,
-GBV
Yea, attended a Mother Earth News workshop on it, too.
Ethanol has a number of problems that biodiesel, and especially non-biodiesel “straight vegetable oil” (SVO) does not.
•Ethanol is very corrosive, and only newer engines are certified for it — an even then, only at the 85% level. This means you will continue to need 15% gasoline to “cut” the ethanol with, or suffer reduced engine lifetime.
•Ethanol requires fairly precise control of temperature and pressure during distillation, and a special “reflux” still to get the percentage up. Simple “pot stills” that are used for potable drinks won’t work.
•Ethanol spontaneously absorbs about 4% water, which is also corrosive and reduces performance, unless you go to the considerable energetic trouble of “breaking the azeotrope,” to get it to 100% — and then, it must remain tightly sealed, or it will soak up 4% water again.
•But biggest concern of all, is that ethanol is much more valuable for it’s (ahem) other qualities, than it is for burning! Look at Russia since the fall of the Soviet Union, which Dmitry Orlov called a “level-3” (out of five) collapse: alcoholism is more rampant than ever before. This may seem cynical, but I think potable alcohol will be an important “cash crop” in a post-carbon world.
Contrast this with SVO, which can be re-used as a fuel after it has already been used as a cooking oil, straight into a diesel engine that has been heated to 60°C (140°F) or so. One could use biodiesel to warm up the engine, or possibly a solar-thermal system.
So I’m not thrilled with ethanol as a fuel. Like petroleum, it’s much too valuable to burn up!
Yes,the term economic system implies something centrally run, and that is pretty hard to imagine working, whatever it is. Any change from this system to another would involve head spinning complexity.
“Yes,the term economic system implies something centrally run, and that is pretty hard to imagine working, whatever it is.”
Not that hard to imagine. A localized agrarian community could be “centrally run” by the local town elders. Centralization and decentralization aren’t particularly complex concepts – you just have to shrink the scope of the system, which I suppose can be difficult given the sprawling, globalized world we’ve become accustomed to today.
“Any change from this system to another would involve head spinning complexity.”
Not necessarily. If I understand Dr. Joseph Tainter’s work / concepts correctly, collapse itself is just the quickest way for a system to simplify itself.
Collapsing into a another (simplified) system would likely involve head-spinning simplicity…
Cheers,
-GBV
Yes!
This also fits in well with Buzz Holling’s (et. al.) Panarchy Theory, in which everything, from sub-atomic particles to galaxy clusters, go through cycles of increasing complexity, to crashes, to reduction to components, and then rebuilding complexity.
Economies are not “centrally run.” An economic system is self-organized, of many different parts–consumers, producers, governments, laws, international trade, a financial system. It grows for the same reason that hurricanes grow, and plants and animals grow. It grows because of energy dissipation (consumption), under the laws of physics. Its energy consumption allows the growing complexity of the the system.
Not enough energy per capita leads to wage disparity and collapse.
Our leaders would like to think that run the economic system, but it is really the laws of physics that run the system. Our leaders are deluding us.
So true, Gail, they have always been deluding the people – it’s the way they try to ‘control’ things. But of course, as you say, no human or group actually has control – it’s like them saying they can control the weather. But they do try don’t they. Nutters all of them. I just hope that the survivors are PLUs and we find some sanity in the New Economy.
“Our leaders would like to think that run the economic system, but it is really the laws of physics that run the system”
Hmm… agree for the most part, but wouldn’t it be more correct to say the laws of physics (in relation to energy, is what I’m assuming you mean) dictate the upper / lower control limits of our economic systems, but that our leaders still “run” the system? I mean that in the sense that our leaders can (and do) make decisions on what energy sources are permitted to be harnessed / exploited, who gets the wealth generated by society’s use of it’s energy, how much debt is to be issued (i.e. how much the currency or people’s purchasing power is debased), etc.?
If economic systems were formed solely by the laws of physics in relation to energy (and not by the decisions of leaders within those systems), then one would think we would witness very similar economic systems in societies that have very similar energy footprints… yet I’m not sure that is the case?
Not sure there’s an answer to be found here though… the more I think about it, the more it reminds me of the great “self-determination vs. fate” debate. Do we actually make choices that affect our futures and the futures of others, or do the physical forces and limitations of our realities force our decisions upon us? Questions, questions…
Cheers,
-GBV
I think that self-organization plays a bigger role than we understand. Politicians do what they think that they need to do to be elected. Later, they get pressure from business leaders regarding what they think will work. The amount of quantity of energy that is affordable is the limiting factor on a lot of things. Budgeting has to do with figuring which things to buy, given resources of a given amount.
“Politicians do what they think that they need to do to be elected. Later, they get pressure from business leaders regarding what they think will work.”
But who is pressuring the people to think the way that they do, which in turn leads to politicians acting a certain way to be elected?
Who pressures business leaders to pressure politicians in the way that the do?
Who pressures people to recognize yet ignore the fact that the politicians they’ve elected are being pressured to do things that go against what they were elected to do in the first place?
Again, follow that line of thinking for too long and it starts to look as if there is no self-determination, only the fate which the system hands us. And yet, I struggle to accept that to be the reality in which we exist.
Even our religious texts suggest that we have free will, given to us by our Creator… are they wrong?
Cheers,
-GBV
Since there has been posts on this subject, remember reading the initial village settlements were fishing . Just food for thought. Suppose that may be a reason most human populations concentrations are centered there. Too bad the ocean waters are being stripped of the resources.
Home to scores of prehistoric settlement sites, this nearly 100-mile stretch of river is known as the Iron Gates region, named after two dams built decades ago. Just as the Danube is a resource for modern populations, it sustained the hunter-gatherer bands that lived there more than 8,000 years in the past.
While many forager groups in other parts of the world moved with the seasons, hunting game and gathering plants, Iron Gates bands stuck close to the river valley. Excavations of their encampments reveal large amounts of fish bones; dietary clues preserved in the foragers’ bones showed heavy fish consumption
favorite catch was apparently sturgeon, some specimens longer than a man, as they swam upriver in spring from the Black Sea to breed and spawn. The activity required planning, and it was a group effort: Parties would have used boats, nets, harpoons and stone mallets for clubbing, says Columbia University archaeologist Dušan Bori, who has excavated Iron Gates sites. Favorite fishing spots would have been the river’s whirlpools, where the currents confused the animals and made them easy prey — and a protein-rich staple.
Sofija Stefanovi, an anthropologist at the University of Belgrade, says that based on her bone analyses of many Mesolithic remains at Iron Gates, the foragers were healthy with no signs of malnutrition. “Their diet in the Mesolithic was actually perfect,” she says. “In many cases, they lived quite long, 50 to 60 years.”
http://discovermagazine.com/2018/nov/the-farmer-and-the-forager
One fact not disputed among researchers: The farmers and foragers eventually shared their cultures. Both groups saw benefits to it, says Burger. The foragers had a generous food supply, which intrigued the farmers. And the foragers were open to learning about food production. Within a few generations, ancient DNA shows, the two groups were having sex and raising families. “For people to marry into another population, there must be a high economic attraction underlying this process,” says Burger. “Otherwise, you wouldn’t do it. It’s not like you fall in love and it’s a romantic story. You are attracted because you think you can have a better life.”
The transition from BAU to the new power down will probably surprise us all here!
Should be something unexpected…
fresh flowing water delivers the essentials of life to most species
move away from water and you have to evolve a means of doing without it for a certain period of time
ie—the camel’s hump
we can only go a few days without water—so we have to devise a means to carry it around, or live near it
our current delivery method isso recent as not to measure in evolutionary terms
unlimited water delivery allowed our current civilisation to exist
take that away and it’s game over
This is why the poisoning of the rivers and the oceans by industrial civilisation will be fatal for mankind: it was the harvest that was independent from weather extremes – if all your cattle and mules died and locusts ate your crops, there was always fresh or, even more usefully, dried fish….
fish from the sea was Japan’s ace that was played in past overshoot conditions and continues to play an important roll in their quest for fat and protein. they even kill and eat whales, the land-poor inhabitants of a dangerous, tectonically active archipelago.
Also, Japanese thought of eating sea weed. Most of the rest of us wouldn’t.
Great source of iodine.
“Washington: US services sector activity hit a more than 19-month low in March and private payrolls grew less than expected, underscoring a loss of momentum in the economy that supports the Federal Reserve’s move to suspend interest rate hikes this year.”
https://economictimes.indiatimes.com/markets/stocks/news/more-signs-of-a-us-slowdown-emerge/articleshow/68714708.cms
“Truly dreadful data out this morning show that German industrial orders fell at their sharpest rate in more than two years in February, hit by a slump in foreign demand with Brexit uncertainty a possible contributory factor. Contracts for German goods slumped by fully 4.2 percent, double the rate of decline in January… this will add to concerns that the eurozone’s largest economy has had a weak start to the year and suggest that more bad read-outs are to come.”
https://uk.reuters.com/article/uk-europe-view-thursday/daily-briefing-slump-for-german-orders-adds-to-euro-zone-fears-idUKKCN1RG0NX
“An influential survey pointing to a decline in the service sector has sparked fears that the UK could be heading for a downturn. The sector, which accounts for 80% of the UK economy, unexpectedly shrank for the first time in almost three years last month, the survey indicates. The purchasing managers’ index from IHS Markit/CIPS fell to 48.9 in March from 51.3 in February, below forecasts.”
https://www.bbc.co.uk/news/business-47800459
“Distressed assets in Spanish banks have declined sharply over the past five years but they remain above pre-crisis levels, the Bank of Spain says in its annual report on banking supervision.”
https://www.centralbanking.com/central-banks/financial-stability/macro-prudential/4126326/bank-of-spain-warns-stressed-assets-remain-above-pre-crisis-levels
“Five years after the European Central Bank broke ground by cutting interest rates below zero, its officials are considering a redesign of the contentious policy…”
https://www.ft.com/content/e095d00e-5556-11e9-a3db-1fe89bedc16e
How do they square that with the ‘ The Euro has brought endless prosperity and peace to Europe’ propaganda, I wonder?
Hey, who cares: I’m sure ECB perks and pensions are simply wonderful.
The article ends,”The Swiss and Japanese central bank have alleviated the effect of negative rates for many years now with allowances for their banks.”
The European Central Bank has not. It now is considering some sort of tiered system, which would hurt the banks less.
“Last 5 years” = “Since oil prices started falling in 2014”
Lower oil prices can be expected to make oil more affordable, and thus enhance an economy dependent on tourism, such as Spain or Greece.
Lower oil prices may be “better” for the consumer but it certainly isn’t “better” for the extractors, they keep losing money. Thanks to the way the US has been allowing corporations to eliminate good paying jobs leaving just poorly paying jobs & even those are being shrunk thanks to automation, how can businesses & oil companies, especially frackers stay in business? Looking at all the once very prominent businesses that have been going out of business in their thousands, they aren’t.
A capitalist economy needs consumers with MONEY but poor people cannot afford the goods offered & they don’t pay enough in taxes to support the governments endless warmongering, that’s where the deficit comes from, tax breaks for the rich & large non tax paying corporations & illegal, unjust, immoral WARS plus we lock up more people than any other country in the world, often for PROFIT!
So for now, the rich are getting ever richer but their turn is coming & heads will fall.
Now let’s see if WordPress demands I log in again so they can delete this post as well!
It’s on NOTEPAD TOO!
If the UK doesn’t sell enough services, how can it buy the goods that people really need?
no matter how desirable the goods in your shop are
if there’s no one outside who can afford them, your shop will close
Makes me think of that verse from Revelations about the fall of Babylon that Gail quotes from time to time:
“The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore…cargoes of gold, silver, precious stones and pearls; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble…
Woe! Woe to you, great city, where all who had ships on the sea became rich through her wealth! In one hour she has been brought to ruin! [sounds like a rapid collapse to me!]… No worker of any trade will ever be found in you again. The sound of a millstone will never be heard in you again. The light of a lamp will never shine in you again.”
You could pack them in to the Chapel on your island with that one!
I suggest modelling yourself on the preacher in ‘Cold Comfort Farm’…. 🙂
Ye-e-es. Might be rather cathartic to unleash a fiery sermon on the unsuspecting islanders:
“You’re all damned! Damned! Do you ever stop to think what that word means? No, you don’t. It means endless, horrifying torment! It means your poor, sinful bodies stretched out on red-hot gridirons, in the nethermost, fiery pit of hell and those demons mocking ye while they waves cooling jellies in front of ye. You know what it’s like when you burn your hand, taking a cake out of the oven, or lighting one of them godless cigarettes? And it stings with a fearful pain, aye? And you run to clap a bit of butter on it to take the pain away, aye? Well, I’ll tell ye, there’ll be no butter in hell!”
We have a rather unusual 18th century church here. Round it is, so that there are no corners for devils to hide in. Or so the legend goes.
thats cos butter would melt in hell
Maybe so that one can’t hide from the preacher?
Many words of wisdom are found in the bible, Harry, IMHO. Your quote is prescient and some of my believer friends are following the prophecies to the letter and say it is all working out as predicted. Who am I, a mere mortal, to disagree? I merely observe and learn all I can.
Good point!
“If you’re seeking the key to the euro zone’s economic outlook, all roads lead to Rome. Italy’s public debt of €2.4 trillion ($2.7 trillion) is significantly bigger than its economy and among the largest in the currency union, making it the most dangerous. This debt mountain threatens the financial stability of Italy and the future of the euro: Any plans to strengthen the single currency must solve the question of who will bear this burden.”
https://www.bloomberg.com/news/articles/2019-04-04/the-euro-s-2-7-trillion-italy-problem
“Registrations of new vehicles in Italy fell 9.6 percent in March to 193,662, according to the country’s Ministry of Infrastructure and Transport… much of the blame was attributed to a loss in consumer confidence.”
https://europe.autonews.com/sales-market/italy-sales-slump-10-march-consumer-confidence-declines
“Italy’s ruling populists pushed ahead this week with efforts to seize control of the central bank and its gold reserves, stepping up their confrontation with a symbol of the country’s establishment. With two laws targeting the Bank of Italy under debate in parliament, the campaign is the latest attack on Italy’s independent institutions by leaders of the governing coalition, which is led by the antiestablishment 5 Star Movement and the nativist League.”
https://www.wsj.com/articles/italys-populists-covet-central-bank-and-its-gold-11554300000
“A humanitarian vessel with 64 rescued migrants was left stuck in the Mediterranean after Italy’s Matteo Salvini said it could ‘go to Hamburg.’
“Malta refused the ship entry to their waters as it sailed close to the Italian island of Lampedusa on Thursday after the migrants were hauled from the sea on Wednesday. The Maltese and Italian refusal sets the stage for another Mediterranean stand-off that will only be resolved if European governments agree to accept the asylum-seekers.
“Italian Interior Minister Salvini stated on Wednesday the ship could head to Germany but Sea Eye’s spokeswoman said that was ‘out of the question.'”
https://www.dailymail.co.uk/news/article-6885977/Humanitarian-ship-64-migrants-board-stuck-Salvini-says-Germany.html
essentially this exodus is driven by climate change
wars are always about resources—resources are diminishing–people start to move to where they might survive better
wait till CC really kicks in and you have 100 million on the move
Too many people who want better lives elsewhere!
Europe has collectively lost their minds.
“Till now, China has met its GDP growth targets only because soaring debt allowed it to capitalize non-productive activity, i.e. value it at cost rather than its real economic value…
“What’s less-understood even now is that if China begins a serious deleveraging, reported GDP growth rates will fall by a lot more than expected — by more than the amount of non-productive activity that had formerly been capitalized. This is clear from the historical precedents. In every modern case where countries enjoyed similar investment-driven growth “miracles” and then suffered painful adjustments, medium- and long-term GDP growth rates slowed much more than even the most pessimistic projections.”
https://www.bloomberg.com/opinion/articles/2019-04-03/china-s-growth-slowdown-will-be-worse-than-most-expect
“Japanese Finance Minister Taro Aso on Thursday said using government spending as a primary policy tool [MMT] to boost employment and spur inflation, an idea backed by some U.S. academics, would backfire on the world’s third-biggest economy given its huge debt pile. Bank of Japan Governor Haruhiko Kuroda echoed Aso’s view in parliament, saying that the idea was unacceptable because it does not take into account the dangers of running a huge fiscal deficit.”
https://uk.reuters.com/article/us-japan-economy-fiscal/japan-policymakers-shun-modern-monetary-theory-as-dangerous-idUKKCN1RG05Y
China has been spending a lot on minimally productive investments, but treating this as true growth. I am sure it is not alone in this regard. Japan is known for its spending to provide jobs for everyone, whether those jobs are really needed or not. For example, building unneeded roads. Or huge, huge numbers of policemen relative to population. A person could argue that the US’s big increase in debt in the past year was not really for productive purposes. The growing Federal debt stimulated the economy to add a large number of jobs at low levels, but it is not clear what else was added.
It seems like all of these unproductive investments will sometime run into problems. In fact, the whole system has to keep growing, in order for the rest of the system to keep operating. The unproductive investments are have been simply to cover up the fact that the world economy isn’t growing fast enough. The ultimate problem is a lack of growth in inexpensive to produce energy supply. The US has at least been doing its part in the energy supply problem, whether or not the energy is really inexpensive to produce.
Warsaw is big U/C now:
https://uploads.tapatalk-cdn.com/20190402/28415360e9e352c4568adb51e6594ba4.jpg
Adding to this: https://farm1.staticflickr.com/875/42800938022_ee70d9d936_o.jpg
4th best modern skyline in the EU.
Thx G. 🙂
The problem now of course is
To simply hold your horses
To rush would be a crime..
‘Hasten slowly’ as a good friend of mine would often urge.
What is a younger person to do? I am twenty years away from retirement; I can’t put money in the stock market , will pensions be there in the future? Social Security? I don’t pay into any of these as I don’t see any benefit for me. Am I missing something? I know there is the phrase that the market can stayed fluid a lot longer than you can etc….but one more downturn like 08 and I see the projections for the end of social security and pensions etc to be overly optimistic. The rosy scenarios seemed to be based on a continuation of current growth of say 3 percent…not sustainable. The depressing situation is do I follow all the minions and put money in 401 join a company that has pensions etc…overwhelming.
Happy to advise privately: peter@underco.co.uk
A number of years ago Warren recommended a book, “The Death of Money.” It may be the market is not going up but everything else is going down. Reading this blog and others, listening to Gail, there is nothing that can be invested in going forward in the traditional sense.
I seem to have read somewhere that the Medicis protected their wealth by owning property through a difficult time and then reclaimed it later, there are similar stories after WWII.
It is my guess that one’s wealth is between their ears, the skill set they bring to the table along with a willingness to use it as well as a network of people that can be of mutual assistance. This has some serious implications as we grow older we are not able to contribute as much as before; Eskimo stories come to mind as well as what happened to a squaw when she lost her husband, not pretty but life based on physics as someone is fond of noting.
During our productive lives there are interesting implications as various groups mix, some of whom seem to be good at providing a good song and dance and some of whom provide more primary goods such as a potato when there is not a great deal to eat.
Interesting times, eh?
Dennis L.
Yes I have a lot of skills mechanical, electrical, carpentry, hunting etc…. however that is about it. People think I am a fool for not putting money into the stock market but I feel that the ones who are putting it into the market are foolish. But some mornings I am not so sure….I worry about not having anything when I am older…Am I wrong to think that in 15 years there will be no pensions, no 401k etc? I just don’t see how it pencils out.
Who’s to say?
I never thought US Social Security would be around long enough for me to collect on it. But now, I’m catching up on seven years of tax filings, in preparation for starting Social Security. (If I don’t do my taxes, even though I don’t owe them anything, they’ll have just one more excuse not to pay me, right?)
So, who’s to say? I wouldn’t bet on it, though. In fact, I’ve pretty much bet against it already.
Regarding back-filing of taxes in preparation for filing for Social Security, I am probably in the same boat. For sure I don’t owe them anything but someone else a while back possibly even on this site, said they had a friend (expat) in my same situation and she had to file a return for all those years even though she owed nothing. I’ll find out soon. In May I will be meeting with FBU in Warsaw embassy to discuss this.
It’s insurance. Just do it.
If you don’t, they may put a lien on your Social Security if they even think you owe them something.
I also think it would be best to file a bunch of back taxes during the current administration, who has decimated the IRS budget. Emulate the rich. 🙂
In my case, I liquidated all my assets (as I’ve advised others to do), and it was at a small loss, but they don’t know that, so they could conceivably come after me and claim the entire redemption was ordinary income. So I have to at least document my loss.
Thanks for the reply. I’m sure they will withhold something from my Social Security payment even though I owe them nothing for income taxes. I was slowly as you mentioned liquidating all my assets – just enough to avoid penalties and then one year my son got in serious financial trouble and I had to dig deeper and took a major hit. It was worth it for me – I would do it again, but now I owed the IRS money. I started paying it back after we negotiated a payment schedul, but then I ran out of income. I explained the situation and got a forbearance – so I am still paying interest. It is not a big balance, probably < 10K. I might give hardship a try to see if I can reduce the balance before I file. If that fails, they will probably skim off 2-300/month.
But even that will be ok as I have set myself up to be debt free in a country with very low property taxes. What I would get from Social Security would still be double the average wage here in Poland.
15yrs ago people were debating collapse on other web forums, feeling desperate for immediate future prospects – fast forward to present – obviously lot of happened since then but again our exact position on the overall story timeline is unknown. Abrupt style collapse could be imminent, but quasi BAU via Japanese naked CB printing, UBI or other schemes could be brought forward as well, enabling some hubs of the IC kicking the can for few more decades still..
Its not just the fiat currency; we will have depleted all major resources by then…
Not all, Daniel. There will be many resources to tap – it just takes a little thought and ingenuity
“I worry about not having anything when I am older…”
since this is a quasi-Doomer site, I will give my two cents of Doom, which I’m guessing may be unwelcome, but anyway…
never mind 15 years ahead, you may not have much of anything after the next year or two…
or, like worldofh says, the can may be kicked for a few more decades and you will be fine…
and then what?
if you have abundance for all of your retirement years, then what comes next?
ahem… the nothingness of eternal death…
oh no, not that again!
good luck in the coming years…
my advice: do whatever…
I think that you are right to doubt the resilience of your pension pot. There are things that you can do, but first you need to understand how it all works. For much more about all this try reading my book. A free pdf is available on request to: peter@underco.co.uk noting your particular interest.
If you have nothing for old age, there will either be some sort of state hand-out (in return, no doubt, for your vote) or you will die quite quickly (particularly so if medical services fail) : so really, there is nothing at all to be alarmed about if you have in the meantime lived your life well.
My view is that there won’t be pensions or 401ks in 15 years. In fact, everything may have spiraled downhill badly. I do agree with diversify your assets, but I don’t really expect this to be a huge help. Keep up relationships with family and friends. A social network can help as much as anything.
yes I think putting money in to a stock market seems futile….if I am going to play that game I might as well hold cash and wait till the next crash and jump in but the long term viability of markets just don’t seem viable. I think we agree with diversify your assets because it has been programed into us. Just as we are programed to believe that the stock market always go up over the long term. A downturn as we had in 08 might just be enough to lock the engine up….so to speak. I guess the best is to enjoy the sunshine and the simple things in life.
Grow food.
Take your basic needs under your direct control.
No matter our career, we all eat for a living.
What can be more superstitious than thinking that little bits of paper with dead people on them is a substitute for food?
I used to have a “portfolio.” I liquidated it all and bought farmland. Now, I am literally able to “eat for a living.”
Oh, we produce more than we need to of some foods, which we sell in order to buy foods we don’t care to grow or cannot grow. But if push comes to shove, we can feed ourselves from this land.
If you feel as confident with a paycheque, a portfolio, or a pension, go for it! But there’s no antidote for economic angst like going out and directly harvesting your next meal.
Good for you Jan, the problem is that such places of food production would be eventually under attack of serious warlords looking for bolt holes, the best case one could hope for is to strike it lucky, and be able to make a mutually beneficial deal with the feudal lord, who is not complete moorrreoun, so he would see the potential of copying successful land management approach across his wider dominion.
As always we don’t know the precise timing and sequencing into the future, as an simplified example lets say Daniel makes up his mind in ~2019, sells everything buys farmland ~2020, but in ~2023 fuel rationing kicks in so he is unable to use machinery as leverage to make the necessary landscaping changes for no till system. distant nurseries don’t sell – transport stock anymore, cattle is vanishing everywhere, small size agriculture machines – implements, parts and other tools are suddenly unobtanium etc.
So Daniel struck by such ‘timing unluck’ ends up with only fraction of the projected farm size and capacity in operation, struggling just to barely survive on last supplies, not mentioning the increasing threat of banditry in the area, and or one final extra long winter / summer without harvest to finish him..
Sounds like a big, long, elaborately contrived excuse to not take action.
Yea, lots of things can happen, and none of us have a perfect crystal ball. So you can either work on what you perceive to be the most effective action, or you can simply crack open a bottle of wine and watch doomer porn on Netflix.
Given your assumption that people will take your farming away from you, what are your plans for the future?
Again, you don”t appreciate the nuance of importance here, the threat is not taking farming away from me, but my surplus (produce, labor, ..) for the benefit of the new land lord. If you fancy toiling in new feudal regime as none issue, I have no further questions.
It’s not doomer stuff on Netflix it’s rather about historical reality come back.
Very true: the record of the worst feudal landlords was always:
‘Just so long as enough of our peasants get through the winter to do the spring plowing and sowing, and then harvest and store everything, we simply don’t care how they live.’
Same thing for Communist totalitarianism, which – in some form – may very well be on the cards for us.
This is why I say get started now, with other people. A small-s socialist collective will be able to wield as much power as a feudal lord, as long as there is some semblance of governance. There have always been “freemen” on the edges of feudal lite. Emulate the rich, not by having money, but by using the same laws and conventions that they use.
The collective aspect is vitally important. One person holding land might break a leg or get sick (as Gail pointed out), and thus be at the mercy of others who may not have his best interest in mind when they offer to “help out” by putting their name on his title for a bit of food. But ten, or even a half-dozen can cover for each other.
Or, just wait for things to come down, and have no choice who you work for, if you want to eat. Those who are not making plans now to hold farm land are the ones who will be working for the feudal lord.
Yea, none of us have perfect crystal balls. But I like mine better than yours.
I like yours too, Jan. Our ancestors of Anglo Saxon times used a very equitable agricultural system which allowed for private ownership of land and cooperative common land and much more.
It was only when the Normans conquered England (the land of the Angles) that the yeomen were subjugated and had their lands stolen. The UK ruling elite today (apart from the nouveau-riche) are the inheritors of that infamy and will pay the price soon when the people understand and realise how they have been duped all these 1000 years.
Farming is a great thing to pass the time with, but it is no remedy or solution to collapse of civilization. If you have something of value or are perceived as “different”, the zombie hordes will come a knockin’.
It is better not to make merit a matter of reward
Lest people conspire and contend,
Not to pile up rich belongings
Lest they rob,
Not to excite by display
Lest they covet.
(Tao Te Ching)
Fast Eddy? Is that you, Paul? Gosh, I was afraid the zombies got you already!
I have thought about this, but there is no surefire solution, hence the inescapable knawing anxiety some informed people like Daniel express. Even as a retired former orthopedic surgeon, I realize I would be next to useless since my trade required elaborate complex equipment, lighting, sterilization, pneumatic and battery power sources, operating rooms etc. In a SHTF scenario, even the fiberglass cast material limited shelf life would render it useless.
My thoughts are to split the difference, starting with costly, but easy to prepare, portable, long shelf life freeze dried food like Mountain House which in theory would not be wasted as you could always eat it and from there consider purchasing hand tools, rolls of wire, a long two man saw, maybe even some treated lumber to build chicken coops (later), plus the usual assortment of heirloom seeds like from Patriot supply.
The freeze dry food is a requirement for several reasons, among those, to tide you through the “inevitable failures” of trying to grow your own food, raising poultry etc. Farming is hard work, frustrating, and plagued with failure. Obviousy, if you can team up with like minded members of your community, especially the farmers, that is a huge help. But these days, with everyone having their face stuck in their iPhones, a sense of personal community is rare.
some good long suggestions above…
here’s my favorite short answer:
give up…
He’s ALIVE….FE!!!??? No way, thought CC got the best of him😎
https://m.youtube.com/watch?v=0VkrUG3OrPc
But is he FREE to POST!?
Probably not a bad idea if you have limited storage and excess money, but you can store food very efficiently without involving freeze-drying. I’d say, get a bunch of clean plastic buckets with lids that fit tightly, then get a bunch of beans and grains. They will last a decade, if kept from light and moisture. And I dare say, they taste better, too!
Or let’s imagine that the state and economy still function, but the farmer can’t afford farming licenses which are imposed by corrupt political mafias, or insane bureaucrats.
Or that, unable to farm all his land to maximum productivity, it is legally seized by the state to go to someone (connected) who can do so.
All a question of weighing up the odds and going with one’s intuition.
I certainly remember meeting a girl from Eastern Europe who wanted to farm in her home country (maybe Bulgaria?), and had the cash to buy land, but the local Boss had it all tied up, in terms of licenses and taxes, for the benefit of his personal mafia.
I wholeheartedly admire Jan’s attitude and way of life.
But one has to ask, why the lot of the subsistence peasant has always been despised and generally so unhappy throughout history?
Because it has meant dirt, regular famine, impossible taxes, and utter powerlessness.
rather like the classic exchange in Monty Pythons Holy Grail:
Look–there’s the king
How do you know he’s the king?
Because he’s the only one of us not covered in shit
I guess it’s only fair that one takes a reactionary view to my promotion of the virtues of peasantry.
But I think each of us are cherry-picking. Surely, the truth lies in-between. Surely, it is possible to have either a joyful or a piteous life as a peasant.
And just as surely, subsistence peasantry may prove to be a better choice than the alternative.
I don’t think that the peasants’ life was that unpleasant, hard work, yes but rewarding too and mostly concerned with menial tasks and chores which we have machines to do, like the ubiquitous washing machine (how my mother would have died for such luxury) yet we take it for granted.
Which of course is the general conditon of man for unless we find ourselves without such things, that is the time we consider and regret its loss.
I spoke to an octogenarian at the supermarket the other day, reminiscing about the ‘old’ days when sweets were on ration here in UK (1952) and how we went to the sweet shop and were able to buy as much as we wanted with the sixpence our mothers gave us when they came off ration. Ah, those times might return yet and when they do, our younger ones will need to change a lot about their inner aspirations and learn the art of deferred gratification.
“I am twenty years away from retirement…”
The concept of retirement is fantasy, brought about by our belief in our forever-growing economy. Most people will likely have to work until they die… and who knows, that (possibly excruciating) death might be sooner than most people would believe.
Perhaps it’s best to give up the dream of retirement now, rather than have to realize disappointment at some point in the future…
“What is a younger person to do?”
My best advice would be to diversify. Not the BS diversification that most financial advisers/planners will push on you, but real diversification between the three “true” types of wealth – financial, health & knowledge, and social.
FINANCIAL: eliminate all your debt if possible. If the system were to collapse, or even significantly decline, the burden of repaying your debts would likely increase dramatically. So help yourself out by avoiding that scenario.
Keep hard cash on hand, perhaps 3-6 months worth of expenses, if it is safe to do so in your current situation / location. Divert excessive financial wealth into the other two types of wealth (health & knowledge, social), and invest in productive assets (e.g. land that provides shelter, water, land, and security), useful hard goods (e.g. hand tools, solar ovens/cookers, transportation that is not dependent on fuel, spare parts, cold weather gear), and commodities you know you will need (e.g. freeze-dried food, canned goods, fuel). Avoid debt to achieve these objectives.
Regarding gold and silver – you could perhaps purchase some, but I’d be careful about doing so. Precious metals are really only a hedge against hyperinflationary events and / or the collapse of government; several people here on OFW likely believe a massive deflationary event is more likely to occur before either of those events. And even if gold / silver held their value, there’s a great deal of risk in trying to trade/barter with such concentrated wealth in a post-collapse setting (i.e. many may be willing to pepper you with a few ounces of lead for any ounces of gold you’d be carrying).
HEALTH & KNOWLEDGE: I assume you live in the US and thus recognize how costly health care can be. I reside in Canada, and have the privilege of Universal Health Care, though I recognize that may not be in place forever (or even much longer, given the way Canada is going). Thus I try my best to take my health into my own hands by maintaining at least an average level of physical fitness in hopes that I will be able-bodied enough to do the menial, hard-labour tasks I’m likely to encounter regularly in a collapsing or post-collapse world. I avoid things like cigarettes, and only drink alcohol on special occasions, though my diet could certainly be improved. My weight / physique isn’t where I’d like it to be, but I’m trying to do some P90X workout routines on a semi-regular basis to address that.
On the knowledge side of things, I’d recommend investing your spare time towards learning valuable skills / trades that will come in handy when you can no longer afford to pay others to do skilled/trades work for you… or when you can no longer earn an income doing whatever it is you do now. I worked in office administration for 10 years of my life, but have been moving towards re-educating myself on electricity / electrical systems, construction, and plumbing / water distribution.
As a hobby, I try to help my parents out on their property – they have several raised garden beds, and a greenhouse may be added in the future – and I’ve also started to learn a bit more about firearms… though I try to constantly remind myself that becoming Rambo is no panacea for economic collapse.
I highly recommend getting a copy of “The Permaculture Handbook: Garden Farming for Town and Country” by Peter Bane and “The Encyclopedia of Country Living, 40th Anniversary Edition: The Original Manual for Living off the Land & Doing It Yourself” by Carla Emery. There’s several other resources out there that can be purchased quite cheaply, but those two books are a great starting point for anyone looking to become more self-sufficient / self-sustaining.
SOCIAL: this is probably the most difficult type of wealth for me to opine on, as I’ve had very limited success in growing my social capital beyond my immediate & extended family, save for a few life-long friends and a wonderful significant other which I have been blessed with.
All I can really recommend is to look for like-minded individuals whom you can work with towards the goals you are setting for yourself. Also, keep an open mind about others try to understand how they think and what they believe in. For example, I am not a very religious person, but I would have no problems attending a religious function with my significant other or a friend, if only to learn / understand something new.
If you do have excess financial wealth, consider funneling it into local projects and efforts – it may help your community and will likely build up your social capital within that community. Also, consider investing in family by helping them to liquidate their debts or achieve the goals they’ve set for themselves, as your family may be the only ones you can count on to help you out when things really go bad.
Finally, I learned the (very) hard way that the quickest way to destroy your social capital is to lie or keep secrets from others. Do your best to live honestly, openly and with integrity in all things you do… it may be difficult at times, but it is far better than becoming socially bankrupt. Trust me.
Cheers,
-GBV
Nice finish to a very nice list!
Fear drives the need for secrecy and the “necessity” of lies. Fear is the little mind-killer…
Yes indeed Jan, for me “Love is letting go of Fear”, a stunning book by Prof. Jampolsky which I use when counselling clients.
Still, worth bearing in mind the law that ‘the more you help, the less gratitude you will receive’, unless the person you assist is of a naturally grateful and loyal nature – most people aren’t, whether family or otherwise. A debt of gratitude also makes people uncomfortable.
During the Spanish Civil War, families had their richer relations arrested and murdered so as to seize what they had, and people who’d helped their neighbours out with money (in a kindly not a loan-shark way) were likewise betrayed so as to liquidate the debt….
My cousin’s grandfather was murdered – arrested as an ‘atheist free-thinker’ – so that his land could be taken, and he was marched to prison by a cousin in the police, who was crying, but if he had refused to do so he would himself have run the risk of being killed.
When things unravel, they can get very nasty.
I’ll rely on my Guardian Angel. 🙂
Exactly, the North American ‘hippie leaning’ attitudes based on extraordinary calm ~150+ yrs of no major internal/security conflict fail to realize at some point the US is going to implode hard, balkanize as any other place on Earth; true some enclaves are likely to secede earlier to avoid the rush/worst chaos and or regroup onto some level from the ongoing mayhem, but it’s very naive to extend helping hand and depend on kindness of strangers in such world.
I’m not advocating to insulate totally on the social level, but in terms of planning simply expect to be with one foot in the grave, all the time for every hour and day, no matter how sincerely hard you work on your property, improving self reliance or whatever.
And that’s what is truly sick about this predicament, not that xy billions of humanoids would likely and eventually vanish out of this collapse situation.
Then don’t do it!
I think what is “truly sick” is the herd mentality that gets people all doing the wrong thing, because they fear that otherwise, they will be taken advantage of.
What a dismal outlook. It implies that the only reason to help is for the thanks. It is a sort of self-fulfilling prophecy, no?
So, are you going to be part of the problem, or part of the solution?
For every tale you can tell of treachery, back-stabbing, and failure to “profit” from good behaviour, there must be dozens of tales of people who stuck together and helped each other get through.
Life is 90% attitude. My biggest regrets are for when I acted out of fear.
I too have a guardian angel which my past ‘near-death’ experiences have proven beyond question – for which I am eternally grateful. Perhaps you may have heard of ‘parking angel’ – no joke – the honest truth.
I read of this some 20 years ago in a magazine and applied the method to see if it would work. Believe me, it does and it is so simple, like all good methods:
When approaching a place you need to park, ask the parking angel to find you a place, that’s all, and you will find that one appears in a multitude of different ways. BUT you must thank the angel after parking (don’t grovel), just say “thank you parking angel – have a nice day” :-)))
Many of my friends say it works for them.
I learned early that you can’t trust anyone, not even family members.
My grandmother spent months taking care of her dying mother who had refused medical care because of her Christian “science” religion.
When she finally died after months of suffering, when my grandmother returned to her mothers home in Hermosa beach, the relatives has stolen everything of value!
Gone were all her antiques, her wooden shelf clock, the stereo cards from the early 19th century, the old Singer treadle sewing machine, the hand blown glass Xmass tree ornaments & more.
What low lifes they were to do that to my grandmother!
Yes, even after 60 years have passed since then, I still remember what my great grandmother had in her little home in Hermosa beach.
My grandmother in turn stole everything I got as a child & gave it away to other children in the “family” so I have nothing from my childhood. She also denied me corrective lenses even after she was told I needed them because I couldn’t see the chalk board where most of the lessons were being taught, I got poor grades because of that but then I was just a “worthless” girl destined to be just another housewife – WRONG!
All this was when times were “good”, what will family members do to each other when times go bad?
I’m so glad I didn’t have any children!
You can argue both ways about the Christian Science religion. Our current way of doing things burdens young people with heath care costs that often are aimed at people who are dying, whatever you do. Hunter gatherers seemed to walk away from the members who no longer keep up with the group. We have put in place a very unsustainable system.
I HAD written this before but then WordPress demanded I log in because they somehow didn’t have my Email address, the same address I’ve had for at least a year! Then after I had logged in, they DELETED THIS POST! GGGGRRRRRRR!!!!
I learned early that you can’t trust anyone, not even family members.
My grandmother spent months taking care of her dying mother who had refused medical care because of her Christian “science” religion.
When she finally died after months of suffering, when my grandmother returned to her mothers home in Hermosa beach, the relatives has stolen everything of value!
Gone were all her antiques, her wooden shelf clock, the stereo cards from the early 19th century, the old Singer treadle sewing machine, the hand blown glass Xmass tree ornaments & more.
What low lifes they were to do that to my grandmother!
Yes, even after 60 years have passed since then, I still remember what my great grandmother had in her little home in Hermosa beach.
My grandmother in turn stole everything I got as a child & gave it away to other children in the “family” so I have nothing from my childhood. She also denied me corrective lenses even after she was told I needed them because I couldn’t see the chalk board where most of the lessons were being taught, I got poor grades because of that but then I was just a “worthless” girl destined to be just another housewife – WRONG!
All this was when times were “good”, what will family members do to each other when times go bad?
I’m so glad I didn’t have any children!
So sorry to hear your share, Sheila, and tale of woe, but many thanks for the ‘grounding’. It is a shame that you had no children. I did not plan any either, but they came along anyway, c’est la vie
From my experience, children don’t just “come along” unless you have unprotected sex, I avoided that & I also didn’t think I was good genetic material, too short, too fat, too hairy, too ugly & too tired all the time to have the energy to raise children.
I also thought it foolish for someone without a partner to have children, it takes more than just the mother to raise a child, she can grow a child but that just results in a oversized brat who didn’t get socialized.
Later on I read “the population bomb” followed by “the end to growth” & that made me even more convinced that to have children knowing that our current population was unsustainable clinched it for me, now our situation has deteriorated even further.
I’ve seen too many images of dirty, scrawny children digging in trash heaps for something to eat or sell, little girls selling their bodies on the streets, young boys struggling to do a mans job, children being abused because they were not wanted, their mother was FORCED by someone elses religion to have children, infant girls slowly dying of neglect in Chinese orphanages & on & on the horrors go.
I’m very glad I didn’t have children & I feel sorry for the children who will have to grow up in this polluted, dying world that we made for them.
My sentiments exactly.
But I married into someone else’s children, just in case I needed a retirement plan… 🙂
If you gotta have children, that’s the best way to have them, let someone else go through the LABOR!
But I wouldn’t count on them as part of your “retirement” plan, they tend to take care of #1 first & your not #1. The only person you can actually count on, is YOURSELF!
If Trump had his way, we would lose SS, medicare, medicade, SNAP, welfare, “affordable” health care, unemployment benifits & any other program that might benefit ordinary working class people. Good luck with what ever retirement plan you come up with.
WOW, Sheila, you have seen a few amazing things, in the flesh? So you have travelled well – such an education and so much to offer our young ones who, as you say, will have to face extreme tests. But Jan and his clan do have answers and I hope my book offers some help too.
Wonderful wisdom, GBV, and extremely good advice to our younger bretheren – thank you for spending the time to help another in distress.
I agree that ‘retirement’ is likely to be unobtainable in future but who wants to retire anyway? I sold out my business in 1993 aged 50 – to ‘retire’ because I always said that I would retire at 50. But that lasted about 3 months before I was bored out of my mind without any challenges. Then I bumped into the Citizens Advice Bureau (CAB) here in UK: https://www.citizensadvice.org.uk/ and became a volunteer – helping others to solve their life management issues – a most rewarding experience which I have written about in my books.
So, Daniel, take notice of GBV – his advice is sound and forget about retiring or planning for same – live for now, plan for tomorrow.
Guy McPherson says we are on our last legs and that when it tips over (in fact its already tipping) it will go fast. Pretty sobering stuff. Not only is he talking collapse he’s talking extinction – for everything. The we have Gail and her peak oil theory (oil will decline given what consumers can pay but it won’t be enough for the production costs). Geopolitical tensions are simmering in a world bristling with nuclear weapons. The economy is being propped up with debt backed by nothing. Etc., etc..
https://www.youtube.com/watch?v=Gh30Kx1o5lI
I’m 48 – about 20 years from “retirement”. I guess I’m the odd duck here in that I do save for retirement (15% into a 401k). In fact I worry often about it. Here lately more and more I am finding myself not really caring. I’ve lived and worked through 3 recessions. Prices are rising faster than wages, my retirement account has been wacked twice severely (2000 / 2001 and 2008 / 2009). After 2008 / 2009 I invested into my 401k very conservatively and still do and my account balance proves it – so I’m screwed and I know this cannot be sustainable. I’ve paid into SS and medicare for 32 years and counting, I guess someone else needed that money for something so I doubt I’ll ever see any of it. So I worry and that’s all it is because there isn’t like I can change it.
I bought a home (its my home not a house) with a couple acres. It came with a greenhouse and a well. My wife mainly is the gardener but I help, mainly I’m her labor. I’ve done the usual prepping (food, guns / ammo, silver, some cash, meds and medical, water filter, etc.) but here lately I’ve pretty much stopped. I don’t see myself being able to defend it or move it all. I’d burn it if I thought someone was going to steal it. On a personal comfort level I value my preps more than my 401k but I’ve taken them as far as I’m going to. If the world ends all they are going to do is delay the inevitable.
I think I am getting to the point of just letting it go and acceptance. 10 years ago when I was bench pressing 275 lbs and could run 3 miles without every joint in my body hurting I could maybe take on the collapse. Now I’m just going to enjoy getting old and watch with amusement and terror how this show ends.
Enjoy the now and keep yourself around to see how it goes down. It is baked into the cake at this point.
The next step is a hard one: find people of like mind to join up with, what Richard Heinberg calls “Lifeboat Communities.”
If you own your land clear, you can offer young people food and lodging in exchange for work. This is how future “retirement” is going to work.
The coming bottleneck is going to be really, really tough on Americans, who have made a national career out of individualism.
Or, as Benjamin Franklin said, “If we don’t hang together, surely we will hang separately.”
I suspect that having your own relatives and clan works better than trying to find young people who will stick with a bunch of older people. Unless the older people are really pulling their weight, at some point there is likely to be some excuse to get rid of them, especially if there isn’t enough food/clothing/water to go around.
I have rapidly come to that conclusion, as well.
Collaboration needs a binder, be it blood, or religion. I no longer think the threat of human extinction is enough to motivate people. 🙂
I’ve got step-kids who say, “If tSHtF, we’ll be up there!” But we need them NOW, before things crash! It’s going to be a whole lot harder to build up something while everything else is falling apart.
The other alternative to blood seems to be religion. Every now and then, I entertain the notion of starting one, but then the white robe gets itchy, and I put it back in the box in the attic. 🙂
Seriously, I have been thinking about starting a First Nations (them’s injuns, to you Mercans) retreat centre. I sincerely feel that their notion of spirituality may offer the bottleneck survivors the best future.
Dmitry Orlov talks about a common religion being important for keeping a sustainability group operating. (Blood ties help as well, because they often go with common beliefs.) If the group is persecuted at least a little, that helps the group stay together.
In today’s society, people have decided that they can vote on who they like as a leader and walk away if things aren’t going well. This approach does not work in a sustainability group. You really need a low-energy approach, which is what the religious approach is. The religious beliefs can be bizarre, by the way. It doesn’t matter if they are in any way “right”. It is the fact that they keep the group together that allows the group to stay together and thus be sustainable.
I suppose if everyone were related, the gene pool would get to be too small. So a religion works better.
Yea, I’m pretty soured on voting: two wolves and a sheep, voting on what’s for dinner. Or if that doesn’t resonate, three children and their parents, voting on ice cream for dinner. Voting always favours the short-term, individual benefit over the long-term, collective benefit, and I’ve grown to think voting is responsible for much of what ails us.
The hereditary chiefs of the un-ceded northern areas of Canada had big feasts, where they would all discuss issues and alternatives, and then come to elder-led consensus agreement. This worked well for them for some 12,000 years, until the Indian Act of 1876 dictated that tribes under treaty must use majority vote to choose leaders, who then made decisions. The Trans Mountain Pipeline was “approved” by a dozen or so “elected” councils who were promised jobs and other perks — but none of the reserves under direct control of those treaty councils even touched the pipeline route! That’s like the city of Atlanta approving the pipeline!
Luckily for them, not all First Nations peoples signed treaties, and the Indian Act does not apply to such people. Plus, Canada has signed on to the United Nations Declaration on the Rights of Indigenous People, which states that they have a right to determine their own governance structure.
I’m not known as a “hopeful” person, but I see a great potential for indigenous people to re-frame civilization after the bottleneck event. In particular, various houses and clans of the Wet’suwet’en tribe have been successful at stopping five out of six pipelines across their un-ceded territory.
I share your view of ‘them Injuns’ Jan. I spent time with the Comanche in Texas in 1997 and got a lot of spiritual energy from just being with them and learning about living ‘with’ as ‘against’ Mother Earth. I have their DVDs and the music is astounding – it brings joy to my heart during these long, dark, damp, gloomy and grey winter days here in UK – Uhggg – I hate this climate but welcome its nurturing during the joy of summer months nevertheless.
Our spirit of cooperation is certainly helped by our blood connections but I must say in my experience many of my friends are in fact an antipathy to my own view of life – but we still work well together. Perhaps this is what it is all about, tolerance and acceptance mixed with forgiveness and a belief in a Higher Power who taught such things.
Dan,
“10 years ago when I was bench pressing 275 lbs and could run 3 miles without every joint in my body hurting I could maybe take on the collapse”
I’m ten years your junior, so I guess I am where you were 10 years ago. But I’d be lucky to bench 275lbs or run 3 miles without dropping dead 😐
I’d suggest, however, that while physical ability is incredibly important, the capacity for rational thought as well as having strong mental resilience is what is really required when enduring collapse.
If you’re starting to feel old or doubt your ability to make a difference in a collapse scenario, pop a copy of “Legends of the Fall” into your DVD/Blu-Ray player and watch a stroked-out Anthony Hopkins shotgun some crooked lawmen to save his son (only to then be saved by his estranged eldest son, Aidan Quinn). While I recognize that Hollywoodized 1920’s Montana has nothing to do with a collapsing modern society, the idea of “the family that slays together, stays together” tears me up every time. Who knows – perhaps one day, you too will be able to dole out hot, fiery vengeance to help or save ones you love? 😀
Oh, and take Guy McPherson with a grain of salt. A lot of the “science” he pushes is apparently debatable (gasp!) – though don’t suggest that to him, or he’ll just write you off as a “denier”. I also sometimes wonder if his unshakeable belief that near-term human extinction is unavoidable stems from the fact he’s given up on humanity, and thus believing in the idea that we are all doomed relieves him of the **moral responsibility** of having to try to prepare for a terrible future.
No offense to Gail and OFW (it’s one of my favourite sites and I’m grateful for its existence!), but I suppose I levy the same criticisms at her and this site at times… that is to say that advocating for governments / central banks / etc. to do anything and everything they can to defer societal / economic collapse for as long as possible is not, in and of itself, a solution. Nor does it do anything to assuage or alleviate the burdens that future generations will have to endure, which I suppose I believe is a shared responsibility of everyone currently on the planet.
Cheers,
-GBV
The question is whether there will be future generations. Or if there are, will they hunter-gatherers in some other part of the world. Saving things for the next generation only makes sense if there really is a next generation that will live with a level of complexity that is anywhere near today’s. Perhaps there will be another generation, but it will be similar to some generations of the Old Testament.
“The question is whether there will be future generations”
Of course there will be, unless you’ve been drinking Guy’s Kool-Aid!
Humans have been making babies for a lot longer than civilization has been around… I haven’t seen a compelling argument (short of catastrophic meteor strike or nuclear holocaust) to suggest that won’t continue.
And even if there is a huge drop-off in births, there are many young people alive in the world today who might like to live as long as you have. Even if they are doomed, I don’t seen how anyone could argue from a moral perspective that we shouldn’t be doing something to make their long descent into collapse (and near-extinction?) a little more pleasant…
“Saving things for the next generation only makes sense if there really is a next generation that will live with a level of complexity that is anywhere near today’s”
I don’t want to put words in your mouth Gail, but are you suggesting we consume for consumption’s sake? One of the things I liked about TAE was they advocated saving resources for the future, as they still believed humankind might wake up one day to the fact that all the resources we are burning through to gin-up the economy / GDP are being wasted, and instead could be re-purposed in some manner that could help people weather collapse and maybe even bounce back from it.
Even if you believe their view to be wrong, I would still question how moral it is to consume everything we possibly can before we implode / expire as a species. I could only see that kind of behavior as being a colossal act of Gluttony…
In the Summa Theologiae, medieval theologian Thomas Aquinas said of Gluttony: “Gluttony denotes, not any desire of eating and drinking, but an inordinate desire… leaving the order of reason, wherein the good of moral virtue consists.” (2, 148, ad 1)
Cheers,
-GBV
Without electricity and modern medical care? Without batteries for all of their devices? Without imports?
I don’t deny the difficulties that your questions raise, but at the same time I don’t think modern society will collapse all at once, nor in all places to the same degree. I do believe those (few?) who weather collapse will adapt new ways of living… perhaps there could even be some sort of transition into a “junker” / true recycling society where people will have to be very clever about what they can fix / repair rather than disposing of things at the first sign of trouble.
There most likely will be massive amounts of death as a result of plague, pestilence, war and famine, both during and after collapse. But the silver lining that comes with a massive population drop-off is the increased value placed on the individual – those who survive will likely be healthier and more well-adapted to the new reality, and will likely recognize the need to work together rather than just kill each other off to grab the last remaining resources above ground.
Even if my views are naive / overly optimistic, I still don’t see how the lack of electricity or modern medical care, batteries or imports will prevent people from procreating… odds are some of those new lives will survive despite how bad the future may be, given that the human population survived and thrived during other difficult times over the past 200,000 years.
Finally, I didn’t see anything that addressed my concerns that continuing BAU is nothing more than sinful gluttony. But given the fact I am not very religious or very well versed in what passes for Christian morality, I would respectfully say that I am more than willing to be corrected / educated should my viewpoint prove to be misguided…
Cheers,
-GBV
Many thanks for sharing, Dan, and I empathise with your situation, for it would have been me years ago. But I am of the blessed generation who benefitted from the high ERoEI prior to the 50s and 60s This is why I have written a book about it all and Part 2 will describe how to, not only survive, but prosper in the New Energent Economy after the crash.
It is not all doom and gloom if your 401k falls apart, for money is not the ‘real’ thing that the post crash economy will require as a priority. Jan has much to say about how this might work.
Thanks Peter,
To be fair, I believe much of my advice originates from the wisdom of Nicole Foss, who writes (wrote?) for The Automatic Earth. I think this article was one of their best:
https://www.theautomaticearth.com/2012/01/how-to-build-a-lifeboat/
And this is probably the best comprehensive summary of all of TAE’s work (though I must admit, I think the last primer guide I saw was back in 2015 or so… will have to take a look at this summary to see if there was something I missed):
https://www.theautomaticearth.com/2017/05/the-automatic-earth-primer-guide-2017/
Cheers,
-GBV
Yep, I follow TAE too when I have the time, but I find commenting on it difficult, but not sure why it won’t register me. I must try again. Many thanks for the links which I will follow up as I have copied the refs for later.
How do you make a small fortune being a family farmer? Start with a large one!
“The more you think about it, it becomes overwhelming. You’re out of your element.” Says Don Rief,
a Pottawattamie County Farmer, “I hope everyone can realize the financial loss we have coming.”
Don and his brother Dale farm near the Missouri River, on land still feeling the effects of major flooding, “Infrastructure that’s been in place since I was a kid and stuff that I’ve done since I’ve been active in farming. So much of it’s torn apart and ruined. I don’t know if we’ll be able to come back with the infrastructure.”
Water in this area crested at above 30 feet.
USDA Under Secretary Bill Northey says, “You know, you see a lot from the ground, certainly hear a lot when you talk to folks. Feel the emotion and challenge that they have. Get up in the air, and be able to look and you see a lot of water, a lot of damage. Grain bins, that the grain is lost
Normally farmers have four to seven days of notice before a flood, but with levee breaks and ice jams, some farmers only had 24 hours to prepare. Cattle and equipment had to be saved so ultimately it was grain that had to be left behind. In the floodwater, it expanded and busted out.
Naig says, “This damaged stored grain is not covered under any current program or any disaster assistance and so is there something that could be done there to help out some of these folks who are, it’s a total loss
But Don is concerned about the future, he thinks there are many issues that contribute to flooding, but river control needs to be addressed by the federal government.
“They have a lot of recreation dollars up north and it’s peanuts compared to what’s getting lost down south here it might make $100 million in South Dakota on the recreation and their wildlife when Iowa and Nebraska, we’re losing $3 billion.” Don says, “They’re trying to do too much with this river, and people are losing their lives and their livelihoods. They’ve got the wrong priorities.
https://www.kcrg.com/content/news/Agribusiness-Report-Iowa-Leaders-Check-Out-Farm-Flood-Damage-508046411.html
For Gail about her home state of Iowa.
And a classic song that was a remake by Led Zeppelin
https://m.youtube.com/watch?v=WgeqMb7oKh0
When blues musical duo Kansas Joe McCoy and Memphis Minnie wrote “When the Levee Breaks”, the Great Mississippi Flood of 1927 was still fresh in people’s memories.[2] The flooding affected 26,000 square miles of the Mississippi Delta – hundreds were killed and hundreds of thousands of residents were forced to evacuate.[3] The event is the subject of several blues songs, including “High Water Everywhere” by Charley Patton and “Backwater Blues” by Bessie Smith.[1]
Ethel Douglas, Minnie’s sister-in-law, recalled that Minnie was living with her family near Walls, Mississippi, when the levee broke in 1927.[2] The song’s lyrics recount the personal toll on a man who lost his home and family. Despite the tragedy, biographers also see in it a statement of rebirth.
From Wikipedia.
I presume you are talking about me as Gail.
My home state isn’t Iowa. I usually give my home state as Wisconsin, since that is where I mostly grew up and graduated from high school. I was born in Ohio, while my father was a student at Case Western Reserve. My parents lived in Iowa, for quite a few years, after I went away to college, but later moved to Minnesota. I have quite a few relatives in Minnesota, and graduated from college there.
Thank Gail, knew you were hailed from that bioregion….should have used that terminology!
Remember a past post you mentioned Iowa…like that area myself, except for the winters!
“When the Levee Breaks…”
again, when humans build on flood plains and expect levees to protect their property, they are asking for trouble, and it’s almost a near certainty that eventually all levees will age out and fail…
have levees made human life better or worse?
at first, it seems like a good idea to build near a source of water, but…
«Market-stimulating policies were responsible for a large share of PV’s cost decline.»
«Marker-stimulating policies»? I guess another word for it are different kind of subsidies.
https://www.sciencedirect.com/science/article/pii/S0301421518305196?via%3Dihub
though other factors besides subsidies were there…
efficiency gains… benefits of scaling up…
I still have this idea that it might be possible to “electrify” most of IC in the next decade or two and maintain quasi-BAU…
there might just be enough cheap FF (low cost natural gas!) to do this…
the catch is that it might be possible to do this build out only once, before there is too little remaining net (surplus) energy in the world’s FF resources…
thereafter, the solar and wind infrastructure will likely be unable to be maintained or replaced…
time will tell…
I think you are right. One of these subsidies is allowing these providers to go first. Also requiring fossil fuel providers (with a little help from hydro) to deal with the greater variability of demand and the distorted pricing that results from wind and solar going first.
The Inuits were NOT doing too great. In fact, it is a rare case where the arrival of whites saved a people; the inuits’ lack of vitamins and genetic diversity were making them marginalized by the 15th century, and by the 19th century, when extensive meetings with whites occurred, they were on the way out. Foodstuff imported from south and intermarriage with other neighboring tribes enriched their genetic material; it is probable that without contacts with outside they would have been dying out by now
From Wikipedia..
Contact with Europeans
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Contact with Europeans was another important impetus for change in the culture of the Inuit. The earliest contacts with the Vikings, later with explorers, fishermen and whalers, affected Canadian Inuit (as opposed to Greenland’s) less profoundly and more locally. Those early European arrivals did not intend to settle Canada. Such contacts proved fatal for many Inuit due to the spread of sexually transmitted diseases, smallpox and other infectious diseases.
…..Due to trade, the Inuit could acquire goods of the European-Canadian civilization, such as weapons and ammunition, tobacco, coffee, tea, sugar and flour. To keep the hunters associated with the trading posts, the traders lent them traps and extended credit to the Inuit. Becoming more dependent on another people meant that the native society had lost its former self-sufficiency. Therefore changing their cultural development.
…….The basic social structure of the Inuit in the 19th century consisted of an estimated 50 groups of 200 to 800 members apiece. The membership was based upon the voluntary association of large and loosely composed clans. The clans in turn were made up of extended families- the grandparents, parents, and children. Such a loose social structure, which allowed families self-sufficiency and self-governance, increased the chances of social survival in times of scarcity
……Between 1800 and 1950, the culture and way of living of the Canadian Inuit, who had not known any monetary system before, changed fundamentally. Complete self-sufficiency and independence were to a large extent replaced by dependence on goods of western industrialized countries, such as clothing, many kinds of foodstuffs, weapons, tools and technical equipment.
….Traditional ways of living were increasingly constrained and eliminated, with no provision made for the transition to the new way of living. The transitional difficulties were further enhanced, for example, by the fact that at the end of the 1940s, the Kivalliq Region had to be placed under quarantine because of the appearance of serious infectious diseases such as polio (for which there was as yet no vaccine). At the same time, the caribou population west of Hudson Bay nearly perished. As a consequence, the Inuit of that area lost their food supply. . Those Inuit still mostly living in camps faced an increasing threat from tuberculosis; many who contracted the disease had to be treated in sanatoriums in the south. Many Inuit tried to continue their traditional way of living in their ancestral regions while adapting to the new conditions. But, they became more dependent on governmental welfare.
……Challenges created by a changed way of life
Edit
Given such changes in their way of life, keeping their own identity and recollection of history and ancestors proved to be an extraordinary challenge many Inuit could not meet. These changes led to alcohol and drug problems. The suicide rate of the Inuit rose four times as high as the one of the remaining population of Canada
https://en.m.wikipedia.org/wiki/Inuit_culture
The Inuit have become consumers who make their living by fishing, hunting, trapping and production of artwork. They also perform wage labour, and often must be supported by additional social welfare. Government support is often the only source of income. The number of recipients is much higher than the average of Canada. Also, the share of employees in public service is 20 to 30 percent, compared to 7 percent for Canada. This is extremely high, and has been rising even higher since the creation of Nunavut. Nowadays only a few areas are left where traditional methods of hunting and fishing have been preserved in their original form.
Must of missed the part of them dying out before the White man came and saved them.
A person cannot expect too much of Wikipedia. This seems to be mostly a write-up of the later period.
On the other hand if you check the reference of Wikipedia it may just provide useful knowledge….wonder where klumthestatusquo got his?
From the link…
References…151 studies listed
Thanks for that, Supertramp.
There is evidence that some 90 million indigenous people inhabited the Americas, pre-contact. By any measure, contact has not been good for them.
You are welcome! There is much more to read if you go to the link.
I could have provided much more here, but space limits.
Actually, many years ago my friend, a librarian for Boston University, had an exchange student that was Inuit from Greenland. A quiet, shy soft spoken girl and if I remember correctly, did have a difficult time of it adjusting to the school she attended.
Happily, she was able to make it through the time she had and hopefully it was a positive experience in the end.