Seven Reasons Why We Should Not Depend on Imported Goods from China

It seems to me that the situation in China is far different from what most people think it is. Even if we would like to depend on China, we really cannot.

Reason 1. When we depend on goods from China, an amazingly large share of the world’s industrial activity gets concentrated in China.

The five largest users of energy in the world are China, the United States, India, Russia, and Japan. The International Energy Agency shows total energy consumption as follows for the year 2016:

Figure 1. IEA’s estimate of energy consumption (total fuel consumed, or TFC) by sector in 2016 for the top five energy consuming nations. Mtoe is million tons oil equivalent. Source: IEA. Non-energy use is the use of fossil fuels as a material to create end products that are not burned. Examples include medicines, plastics, fertilizers, asphalt, and fabrics.

When these countries are compared, restricting our analysis to the portion of energy used by industry, we find the rather disconcerting result shown in Figure 2:

Figure 2. Chart by the International Energy Agency showing total fuel consumed (TFC) by industry, for the top five fuel consuming nations of the world.

China consumes more fuel for industrial production than the next four countries listed (United States, India, Russia, and Japan) combined. Of course, we don’t know exactly the corresponding amounts for other countries of the world, but we can observe that if a country is concerned about its CO2 emissions, the easiest way to reduce these emissions is to send heavy industry elsewhere, such as to China or India. There are likely many countries that are primarily service economies, thanks to the option of outsourcing most industry to other countries.

Much of the discussion I have read regarding sending industry elsewhere has been in the direction of, “As advanced as our economy is, we don’t need heavy industry; service jobs will substitute. Industry can be developed at lower cost elsewhere. Everyone will be better off with this arrangement. The invisible hand will provide jobs and goods and services for everyone.” In addition, corporations saw the possibility of adding customers from around the world. Not too many thought about the real-world problems that might result.

Clearly there is a problem with the jobs being lost to China and other Emerging Markets. When new service jobs are added, they often do not pay as well the industrial jobs they replaced. In fact, there might not be enough jobs in total, if automation plays an important role as well.

Another issue is that the level of industrial concentration can be a problem. We are now depending on China and perhaps a few other countries to provide for a large share of the “stuff” we use. Even if China is not the only provider, it is often an important part of the supply chain. If something should go wrong (for example, widespread riots in China), we don’t have a Plan B.

Reason 2. China needs energy products to make the goods it uses for itself and for the goods it exports. China’s own energy supply is faltering. Because of China’s huge size, it is becoming increasingly difficult to keep China’s energy consumption rising sufficiently rapidly using imported energy.

China’s own energy production is shown in Figure 3. (Note: Hot off the press! New BP report released this week.)

Figure 3. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.

It is easy to see that China’s coal production hit its highest point in 2013 and has stayed at a lower level since that date. Also, China’s highest oil production occurred in 2015, with lower production since that date. China’s total energy production has been rising recently, but only with great effort. Total energy production is only 8.9% higher in 2018 than it was in 2012, implying an increase of less than 1.5% per year, relative to 2012 amounts.

A standard workaround for inadequate energy production growth is imported energy products. Even with these imports, it has been impossible to keep total energy consumption rising as rapidly as it rose in the 2002 to 2007 period. The cost with imports is greater, also.

Figure 4. China energy production by fuel, plus line showing its total energy consumption (including imports), based on BP 2019 Statistical Review of World Energy data.

In 2018, China imported 71% of its petroleum (either as crude or as products), and 43% of its natural gas. It was the largest importer in the world with respect to both of these fuels.

In 2018, China’s coal imports shrank as its own coal production surged. This was almost certainly a change planned by China. China would much prefer producing its own coal (and keeping the jobs within the country) to importing coal from elsewhere. China imported 4% of its coal from elsewhere in 2018.

Reason 3. The commodity demand from China is so huge that, to a significant extent, it determines world commodity price levels. Where regional energy prices exist, China’s choice regarding whether or not to import from a country can influence local price levels.

Chile is the largest copper producer in the world. A recent article regarding problems associated with lower copper prices notes that the demand for Chilean copper has been driven “almost entirely by the expanding Chinese economy over the last three decades.” For many commodities, China consumes over half of the world’s commodity supply. If China’s industrial demand is growing, prices will tend to rise, allowing more of the mineral to be extracted. Higher commodity prices tend to be needed over time because the ores of highest concentration (and otherwise easiest to extract ores) tend to be extracted first. Ores extracted later tend to be more expensive to extract, so higher prices are required for extraction to be profitable.

This situation of China playing an extremely large role in commodity prices holds for a very large number of commodities. If China is building widgets or any other product, using a particular commodity, China’s need to buy this commodity in the world market will tend to hold up world prices for the commodity. This situation holds even for fossil fuel prices.

Reason 4. Over the next few years, China’s coal supply is likely to fall significantly because of depletion. This lower fuel supply is likely to lead to a shrinkage of China’s industrial capability, and, indirectly, falling world commodity prices of all kinds.

The problem that China is encountering in Figure 3 is “peak coal.” This is a similar problem to that encountered by the United Kingdom immediately before World War I, and to that Germany encountered just before World War II.

Figure 5. The timing of the peaks is peculiar, relative to wars.

Coal tends to be the industrial fuel of choice because it is cheap. Goods made with coal tend to be inexpensive, especially if wages paid to workers are low and if the company making the goods does not spend much money on pollution prevention. Hydroelectric can be an adequate substitute for coal, if the water flow can be depended upon. Wind and solar are too intermittent and not sufficiently inexpensive to be adequate substitutes for coal. Wind and solar (included in “Other Ren” on Figure 3) are also far smaller in quantity than coal.

Outsourcing a large share of the world’s manufacturing to China seemed like a great idea back when it was started, often in the early 2000s. If, at some point, China cannot really handle the responsibility it has taken on, outsourcing gets to be a huge problem.

The reason why coal prices cannot rise very high is because if they do, the prices of finished goods will need to rise as well. Wages of workers around the world will not rise at the same time because the higher cost of production takes place due to something that is equivalent to “growing inefficiency.” The coal mined is of lower quality, or in thinner seams, or needs to be transported further. This means that more workers and more fuel is needed for each ton of coal extracted. This leaves fewer workers and less fuel for other industrial tasks, so that, in total, the economy can manufacture fewer goods and services. Because of these issues, countries experiencing peak coal are pushed toward contraction of their economies.

Unfortunately, rather than leading to high prices (to compensate for the higher extraction costs), running short of inexpensive-to-extract fuel tends to lead to war, or to tariff fights. Countries whose coal is depleting will try to maintain their own supply as long as possible. They will invent excuses to stop importing coal. Back in September 2018, the Financial Review reported, “China has introduced unofficial restrictions on coal imports in a bid to prop up domestic prices by slowing down customs approvals at key ports.” China needed higher internal prices to make it profitable to extract coal from its depleting coal mines.

Figure 6. Chart showing prices of Brent Oil, China Qinhuangdao Spot Coal price, and Asian Marker Coal, all in US$ of the day. Amounts from BP 2019 Statistical Review of World Energy. Note also that the units of coal (ton) are much larger than the units of oil (barrel) used on this chart. Thus, the same number of dollars of buys a much larger quantity of coal than of oil; coal is cheaper.

If higher coal prices really were possible over the long term, it would make it possible to open new mines in more distant locations. The location of coal mines is important because transport costs by rail or truck tend to be high. China built the large ghost city of Ordos, Inner Mongolia, on the expectation that coal prices would rise, making development of coal in the area profitable. Unfortunately, coal prices fell, making the project not economic. I visited the area in 2015, after teaching a short course on Energy Economics in Beijing. There was a large almost empty airport, and few vehicles were using nearby multi-lane roads.

Reason 5. All of the concern about future tariffs artificially raised China’s 2018 industrial production and commodity prices. Because production was brought forward into 2018, China’s production and world commodity prices can be expected to be lower in 2019 and in future years.

Manufacturers wanted to front-run tariffs, so they tended to ramp up production in advance of the tariff implementation date. This higher production in turn tended to raise commodity production and prices around the world. Note on Figure 6, above, that coal and oil prices are both higher in 2018 than in 2017. Prices in 2019, not shown, are tending to trend downward again.

China badly needed higher coal prices in order to help its coal extraction. Thus, part of the reason that China was able to continue to function as well as it did in 2018 was because of all of the discussion about future tariffs. If this discussion had not taken place, employment in China would likely have been lower. With this lower employment, sales of automobiles and smartphones would have been lower as well.

Note, too, that even with the demand brought forward into 2018, China’s economy was not functioning very well in 2018. Private passenger automobile sales for the year fell by 4%. Smartphone sales fell by a worrisome 15.5%. Clearly, workers were having difficulty buying the kinds of goods a person would expect a growing economy to be selling. I would attribute these problems to the peak coal problem mentioned earlier, making it increasingly difficult to increase the amount of industrial operations provided by China’s economy.

Reason 6. The Chinese economy has been gradually changing and adapting to hide its energy problems. Even more changes will be needed in the future, potentially affecting the world economy, with or without tariffs.

The Chinese economy reports carefully massaged GDP numbers, which many analysts consider to be inflated in recent years. Its debt level keeps rising to try to keep all of its operations going.

We know that China discontinued one major industry at the beginning of 2018: recycling plastic and other types of low-valued recycling. With low oil and natural gas prices, this type of recycling cannot be profitable. Of course, discontinuing a major industry can be expected to lead to a loss of jobs within China. But, on the positive side, it frees up coal and other energy resources in China for other industries that can (perhaps) make more profitable use of them.

On a world basis, the loss of the plastic recycling industry becomes a problem. If rich countries are willing to subsidize the cost of sending plastic recycling to China, this subsidy allows containers that bring goods to rich countries to be sent back to China with a paid load inside. Thus, operating the plastic recycling industry helps keep the cost of shipment of goods from China to the US or Europe down because the shipping costs only need to cover the one-way cost of transit, rather than also covering the cost of shipping the empty container back. Without the subsidy to pay the freight of the plastic recycling, costs for the shipping industry rise, making international trade more expensive. Eliminating the subsidy that rich countries are paying to ship otherwise-empty containers back full of mixed trash is part of what pushes the world economy to contraction.

Other countries are not taking over very much of China’s role in recycling plastic, either. The net effect is that the loss of recycling is one of the things pushing the world toward contraction.

China has no doubt been cutting back in other ways as well. It is likely that it is not building as many uninhabited cities and roads that are really not needed. Ugo Bardi recently posted this chart showing global cement production.

Figure 7. World Cement Production by Ugo Bardi from a blog post on January 19, 2019.

China produces over half of the world’s cement; part of the reduction we are seeing relates to China’s falling use of concrete in new buildings and roads.

In some cases, China is moving in the direction of being a service economy. A recent video states that of the $237.45 cost of producing an iPhone in China, Chinese workers only provide assembly services, worth $8.46. The US contributes $68.69 of the cost, mostly in the design and distribution phases. The parts are generally outsourced from other parts of the world.

One way of looking at what is happening in China’s economy is to analyze the country’s oil consumption in terms of the relative amounts of diesel (used primarily by industry) and gasoline (often used by private passenger vehicles).

Figure 8. Gasoline and diesel consumption for China, based on data from 2019 BP Statistical Review of World Energy.

Based on Figure 8, it appears that China’s industrial growth suddenly leveled off about 2012. This, not by coincidence, is about the time that China’s coal problems were becoming apparent in China. China’s gasoline consumption has continued to rise, however. It appears that once it became apparent that its coal supplies were starting to seriously deplete, China began to “grow” China’s economy more as a service economy. After 2012, most growth seems to have come in the non-industrial sectors of China.

Reason 7. A major concern should be a financial collapse, far worse than 2008, both in China and for the world as a whole.

The world needs growing energy supply to support the world economy. China is increasingly having difficulty with its energy supply. When China has trouble with its energy supplies, the world as a whole has a problem with its growth in energy supplies.

A few months ago, I showed the role China has played in the world economy is this chart:

Figure 9. Ten year growth in world energy consumption, divided between the blue portion associated with rising population, and the red portion associated with higher energy consumption per capita, which I have called “Living Std.”, meaning “Higher Living Standards.”

China added a little bump in GDP growth at the end of the nearly 200-year time period shown, after it joined the World Trade Association in December 2001. The energy added by China (mostly in the form of coal) allowed the world economy to continue to grow, when it otherwise would have been up against limits.

Now we are reaching a situation where China’s energy production is likely to flatten or fall because of the depleted state of its coal mines, and the fact that coal prices can’t rise high enough, for long enough, to open new mines. The world economy, over the period shown, has always had rising energy consumption. In most cases, energy consumption rose faster than population growth, allowing some growth in the standard of living over time.

Changing to a situation of shrinking energy consumption per capita would likely be extraordinarily traumatic. Population would likely fall. Commodity prices would drop to low levels. Debt would tend to default; prices of shares of stock would fall. Many governments would fail. If shrinking energy consumption per capita starts in one country (whether China or elsewhere), it could easily spread to other countries around the world.

We don’t know what is ahead, but we know that the low points on Figure 9 were very bad times, even though energy consumption in total was not contracting. The decade of 1860 to 1870 was the decade of the US Civil War. The decade of the 1930s was the decade of the Great Depression. The decade of the 1990s was the decade of the collapse of the central government of the Soviet Union.

We also know that world energy consumption and GDP growth tend to be highly correlated.

Figure 10. World GDP Growth versus Energy Consumption Growth, based on data of 2018 BP Statistical Review of World Energy and GDP data in 2010$ amounts, from the World Bank.

This is as we would expect, because energy consumption is required for the many aspects of GDP growth. Transportation, heating and/or cooling, and electricity all require energy consumption, for example.

The recent divergence between GDP and energy consumption on Figure 10 may be the result of overstated GDP amounts by China, India, and other countries. If a country wants to appear inviting for new investment, there is a temptation to overstate GDP since other countries seem to be doing so, without penalty.

Back during the Great Recession of 2008-2009, our problem was with homeowners who took out loans that were far higher than they could really afford. Today, we have whole economies taking on more debt than properly stated GDP reports would suggest they are able to handle. We go from one version of optimism regarding debt levels to another.

Conclusion. If a person doesn’t understand how badly the energy situation is working out for China, or how important energy consumption is, it is easy to think that the problems China is facing are primarily tariff-related. In fact, China’s situation is a very worrisome one, with or without tariffs being added.

To fix the situation, China would need a very cheap, non-intermittent, locally produced, non-polluting additional energy source. This energy source would also need to be rapidly scalable. Such an energy resource doesn’t appear to be available.







About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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890 Responses to Seven Reasons Why We Should Not Depend on Imported Goods from China

  1. richard b says:

    Surely a key turning point is when the damage inflicted by climate change exceeds global economic growth.
    When we reach this point, further economic growth becomes impossible and the collapse is locked in.

    Don’t know if anyone has seen stats on this, but I’d suspect that if you costed in the damage to the entire biosphere ( fish stocks, coral reefs, insect populations, etc) we are there already

    • Global economic growth is an illusion created by ever increasing debt and other promises. We are likely far past the point where economic growt is much more than an illusion that takes place as a result of falling interest rates, rising debt, and rising asset prices. Once the debt bubble pops, the story looks like game over.

      Damage to the biosphere will likely self-correct, to the extent such correction is possible, once humans are out of the picture. People today get “hung up” on problems that we have no ability to correct.

      • Grant says:

        The biosphere will always correct in one way or another.

        Should another Ice Age arrive at some point and have the same extent as the last one, how much of our ‘civilization’ would be rediscovered within a few tens of thousands of years as the ice receded and those who might come after us develop the ability to move beyond survival and seek to discover the ways of their forerunners?

        What might be left for them to find once the ice has performed its grind??

        • At least a few humans or prehumans seem to have lived through past ice ages. It might be possible fo a few to survive any future climate fluctuations.

          • The sheer terraforming power of iceage(s) as they receded – profoundly influenced the mammals on these affected more diverse and complicated landmasses and shorelines. For example it’s documented how new races (sub species) of mammals developed in response bigger brains (+ %% volume) at that time to cope with the newly changed more complex environment etc..

            From arctic circle to clubmed..

            But now we have sort of reversal direction forcing as the deforestation, heat waves are spreading from south to north. Nevertheless and counter intuitively this could flip into new iceage beginning anyway.

          • Grant says:

            Indeed Gail but the evidence of their existence may be trickier to discover.

            What might be left of the bone fragments? And where might they be?

            Structures and evidence of habitation and civilisation before the ice came? Yes, perhaps, if anything survived the grinding ice and someone was lucky enough to stumble across it and recognise what it might be.

            • John Doyle says:

              There are voices that reckon North America had an earlier civilisation that was scraped off by advancing glaciers and the giant flood event about 12,500 years ago. Lake Winnipeg is the remnant of it. All pure speculation, except the physical events did occur:


            • Good points! The civilization in the Americas was awfully far along. It may have started much earlier that people generally believe.

            • The last ice age disappeared only about 10,000 years ago. We seem to have a lot of bones, cave drawings, and other evidence from an earlier period. This was back in the hunter gatherer period. We wouldn’t expect any structures other than caves then.

            • Grant says:

              There could be a question about whether the information discovered in caves indicates a first time increasing ability of ‘humans’ to do smart stuff or the back end of a failed prior civilisation (or two).

              Living deep in a cave and adding artwork to the walls seems like a strange thing to do but presumably means they had sources of light (and therefore heat and thus the ability to ‘cook’ and broaden the diet options?) and access to at least rudimentary technology related to dyes.

              If they could do that presumably knowledge about how to create some sort of outdoor shelter was available – and of course would likely be necessary for those with a relatively nomadic hunter gatherer life style. Not much of that would survive an ice age or even just the passage of time.

              Human constructions since the end of the ice age and the introduction of farming that tended to lead to settlements rather than a nomadic life, will also have had an inconsistent survival quality but in the main for most of the world will have been satisfied by materials that were not general very long lifed. Wood for example.

              To discover more permanent construction requires some site identification and digging for those site that have, for whatever reason, been inundated (and so protected) over time.

              They may be relatively few and scattered far an wide. Not that much of the earth’s surface as we know it has been studied. Places that were viable in the last ice age are likely to be covered with water now and so difficult or impossible to spot or investigate.

              After several thousand years of steady and slow development in the last few hundred years things have accelerated rapidly. So a lot of development in a very narrow window in geological time frames.

              We have had the energy necessary to create ways to protect humans from naturally occurring disadvantageous effects of climate and weather and the after effects of ice ages (for example.)

              If that came to sudden end, for whatever reason, it would not take long for things to start to crumble and not much longer for relatively minor changes to start to obliterate the evidence of original existence. Or at least cover it up.

              Advanced civilisations could develop and disappear in a period the length of which currently know archaeological techniques could probably not identify with any degree of accuracy and exactitude.

              Only the availability of what seem to be ancient coal seams and oil reservoirs suggest that humanity has never been at this point before.

              But what if there was no need to mine for coal or drill for oil to find the required level of energy to support humanity in earlier times?

            • By the way, China used coal at least a bit, over 2000 years ago. We saw bells in Wuhan that had been made using coal over 2000 years ago, but general industrialization didn’t start that early.

              All of the potential uses for coal aren’t necessarily immediately obvious.

    • Tim Groves says:

      Surely—and I’m not joking—a key turning point is when the damage inflicted by climate change protestors exceeds global economic growth. If they can get us to turn off enough coal and nuke plants and shut down enough oil wells and pipelines, further economic growth becomes impossible and the collapse is locked in.×2-700×467.jpg

      • Old grumpy (wise) elders of the OFW sort should positively troll these youngsters every day in the following manner:

        Oh well, jolly good, so:

        How many trees did you plant this season/year ?
        How often do you eat out, what % of your diet is long distance imported?
        How do you operate-dial up your climate control (house and carz) ?
        Did you consider for your “online life” simple low energy tiny board ala (RaspBerry) instead of big gaming rig PC, notebook or top spec smart phone.. ?

  2. Chrome Mags says:

    Shale Pioneer: Fracking is an “Unmitigated Disaster”

    “In fact, I’m not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.”

    “While hundreds of billions of dollars of benefits have accrued to hundreds of millions of people, the amount of shareholder value destruction registers in the hundreds of billions of dollars,” he said. “The industry is self-destructive.”

    The industry is at a bit of a crossroads with Wall Street losing faith and interest, finally recognizing the failed dreams of fracking. While shale E&Ps have succeeded in boosting oil and gas production to levels that were unthinkable only a few years ago, prices have crashed precisely because of the surge of supply. And, because wells decline at a precipitous rate, capital-intensive drilling ultimately leaves companies on a spending treadmill.

    Did you read that last part? “…leaves companies on a spending treadmill.” There’s that red queen effect us peak oilers warned about regarding fracking. I suppose its a bit like knowing gold is in a mine, but its spread so far and wide and takes so much equipment, time and manpower, that by the time you’ve mined it, it’s at a loss. The allure of being able to get something has to be weighed by the profit results from attaining and selling it.

    • When the frackers first started, they put together models of how the finances would work out. These models considered all aspects of the system—-how many wells, how much these wells would produce, over what period of time, what would be the ongoing costs, and what would be the selling price. The probably would also need the cost of borrowed money.

      I think that the models that were put together were very much optimistic. Later wells were not as productive as wells in the sweet spots. Wells couldn’t really be counted on to produce for 30 years (or some other long period). Oil prices go down as well as up. Expenses don’t just disappear; some wells need to be re-fracked. Interest rates rise as banks have less faith in this type of operation.

      The models “proved” to buyers of shares of stock that everything would come out fine. Auditors signed off on financial statements based on the model results. But reality is proving to be much different.

      I am not sure how EROEI calculations are being done. The only way that makes sense to me is on a year by year basis. For example, in the year 2009, how much energy was invested, versus how much was extracted. The same calculation would be needed for 2010, for all frackers in the aggregate. This is the EROEI calculation done for traditional oil, gas, or coal. But this approach produces ratios which change each year, for frackers in the aggregate, I would expect.

      While EROEI calculations look objective, they have a lot of the same issues that model estimates of any kind have.

      The temptation would be to use a model approach of hoped for future production for frackers. This is the same type of model approach for wind and solar. When this approach is used, it is very easy to get an artificially high EROEI indication, because of all of the wrong assumptions built into the model, and because of the improper year matching. The Limits to Growth model makes it very clear that the world economy works only on “actually available net energy,” not on “model hoped-for future net energy.”

  3. Tim Groves says:

    You want fries with that?

    And there was me thinking tight synthetic underpants were to blame for falling birthrates.

    Male fertility is being irreversibly damaged by a diet of western junk food by the time men reach 18, a study has found.

    A groundbreaking investigation has established that teenagers who favour high-fat and processed foods like pizzas, chips and snacks are killing off sperm-producing cells that can never be replaced.

    It showed that a diet dominated by fish, chicken, vegetables and fruit is best is for protecting those cells and ensuring healthy levels of sperm.

    • I would be interested to learn more details of the study. The four food groupings don’t seem very obvious to me for example. The “prudent diet” (as described) doesn’t look to me like a diet anyone is following. Maybe they mean people who are trying to skew their eating toward whatever is currently being considered healthy. This is the winning diet in their study, according to the article.

    • Actually, the reality of food intake across the population is quite shocking on both extremes, I know people who never ever eat out (incl. those taking home made food – lunch boxes – into office jobs), as well as those who only eat out various degree of junk food 24/365. Obviously, the latter, second mentioned group has recently made majority in many countries of the IC hubs.. moreover sometimes it’s the ~third generation doing that, and the physical as well as mental disorders are pretty much obvious even from a distance..

    • Yorchichan says:

      They appear to have omitted to test the healthiest diet of all. This is a diet:

      a) High in saturated or mono unsaturated fat, with zero polyunsaturated seed (vegetable) oils. This would further reduce the oxidative stress touched on in the article;

      b) Low in carbohydrates (no bread, sugar, pasta, rice or tubers).

    • Grant says:


      Population control via the food chain?

      • Yorchichan says:

        Plus obesity, diabetes, atherosclerosis and cancer. Carbohydrates increase insulin production causing fat to be deposited and eventually insulin resistance.

        If anybody is sufficiently interested, check out any of Ken D Berry, Ivor Cummins, David Diamond, Dave Feldman and Gary Taubes on youtube.

        • Grant says:

          The one certainty about the habit of living is that one will eventually stop doing it irrespective of diet.

        • Kowalainen says:

          Oh well, how convenient to omit the well established scientific and easily observable fact that in countries where people eat most fruit and vegetables, a diet high in carbohydrates, are the least likely to develop obesity and other metabolic diseases such as diabetes.

          How convenient indeed. Actually, the more carbohydrates I eat, the better I feel and with the energy i easily sustain a 300 watt output for about 1h. Try that with your disease provoking diet high in fats.

  4. Tim Groves says:

    I found this fascinating. As well as a warning that smartphones and apps being used to “groom” us into slavery to Big Tech, There is a lot of footage on how the system of social “points” is currently working in China.

  5. Davidin100millionbilliontrillionzillionyears says:

    Bund 10 year is minus 0.3%…

    how low can they go?

    in other news… also a very strong sign of economic decline:

    Bitcoin is over $11,000

    something is terribly wrong here…

  6. Dennis L. says:

    Cold here in Rochester, attached link shows corn height last year and this year. I have no idea of how much is stored, but it is a long way to the fall harvest of 2020 and a challenge to diet that long. This is bothersome as not only is it troubling for the food supply, if the farmers go out of business along with the supporting infrastructure, how does it get started again? Many farmers are in their late fifties or sixties, who replaces them? Farm equipment is now computers on wheels and yet at a local, chain restaurant I occasionally chat with a equipment technician for a major implement dealer who tends bar one night to make ends meet. This is a talented man, hard to replace, vital when there is a narrow window in which to plant/harvest the crop and the equipment must run. Take out one piece of the chain and everything stops; people still want to eat and as Gail points out over and over, it is not demand but the ability to pay for that demand.
    Dennis L.

    • The forces of globalized make believe economy are taking over.

      For example in Europe many of the family and mid sized farming operators are going bust, everything is moving into these giant conglomerates, who not only reap the ‘efficiency’ benefits from centralized aggregation but more importantly have secured through lobbying the most beneficial access to gov subsidies etc., also speculators flocked into land..

      So, the future crash will be epic, no local food.. backup at least for most of the urban masses.. and the centralized giga producers are prone to so many risks, it’s uncanny, from sanitary to energy and logistics..

      • Xabier says:

        Apart from the ever-growing domination of giant agri-business and the elimination of mixed medium-scale family farms, we have good farmland disappearing to make way for ‘eco-friendly’ housing and light-industrial/ hi-tech bio-medical developments and – wait for it – ‘green transport solutions’ -happening all around me.

        A ‘green transport solution ‘ is, of course, just more concrete being poured, like everything else.

        There is no hope: they will take us to extinction through the erosion and elimination of all the resilient layers built up over centuries.

    • Grant says:

      That this engineer can still find employment at a restaurant is interesting.

      Around here bars (and especially pubs – the tradition drinking place of old with food service added in the past 4 decades) have been closing rapidly for a decade and there seem to be no signs of that slowing.

      Restaurants of long standing have been disappearing despite a growing population. Other restaurants that would often appear and disappear within a year – usually about 11 months for tax reasons – now seem to disappear within 6 months due to lack of trade.

      Thus jobs of the type you describe are becoming more difficult to find and presumably pay less, one way or another, than they once did.

      This may not yet have become obvious to the majority but I doubt it will stay like that for long.

      • Where are you located Grant?

        • Grant says:

          UK. In the middle of England.

          But I think the story is much the same everywhere.

          The ‘culture’ of eating out rather than at home only really developed to any scale in the past 4 decades or so. Maybe earlier in the cities after WW2.

          Now with wall to wall TV, often on quite expensive subscription model contracts, video games and the internet for the younger generations and many choosing to “entertain” (even if only themselves) at home since Supermarket drinks will inevitably be cheaper than full service drinking in a public house (bar).

          Indeed there are suggestion that the latest newly maturing generations are not interesting much in drinking as a basis for socialising. Drugs may be cheaper? Even the upwardly mobile (old term that may still apply) seem to be (according to media reports) tending toward cocaine rather than booze.

          But those details aside there seems to be a change in the patterns of which types of business are viable and which are not.

          In the news today is a report that a large town a few miles from where I live and which was at one time for a number of reasons a major centre for brewing beers (up until about 20 years ago I guess when things started to change), is about to lose a major business that employs 900 workers. Currently the largest employer in the town apparently, if the reports are to be believed.

          It will close in August. It prepares foods to be sold under other brand names presumably through some of the major supermarkets.

          On the same day the owning company announced a £20 Million investment in a new plant in India. I imagine £20M goes a lot further in India than the UK and recent population growth and some measure of ‘success’ for the Indian economy may suggest to them that investment there is likely to beat the results of anything they can produce in the UK.

          Taken in isolation the story is only a big deal locally due to the scale of job losses relative to the size of the population.

          However it may be representative of a trend throughout the country in different business areas – the death of the traditional ‘High Street’ shopping areas has been well documented over the past decade or so. As has the rapid decline in Bank branches, Post Offices and Gas (Fuel) stations for local people to replenish the fuel for their transport without needing to travel significant distances to do so.

          It could be deceptive but it does seem that the pace of these changes is beginning to catch people out and many profess that they would like the opportunity to change habots and preserve at least some of the familiar live actions that they have not realised were disappearing.

          That apparent desire may not result in any real reversal even if it could be achieved – and the target may already have moved too far for reversal to be an option.

          One other things that has become much more common recently (or so it seems to me but this could simply be the result of adverting campaigns largely via Google and some of the ‘press’ outlets) is the “equity release” option to free up cash by re-financing one’s home in older age.

          Whether this is something that people feel the need to do to ‘survive’ (or at least maintain their standard of living for a while) or because government is encouraging it for some reason (probably a selfish political reason) I am as yet not sure.

          I can’t image that it is really a positive and fiscally prudent thing to do for most people.

    • Those are shocking pictures. Think of what will happen to the ethanol production. States requiring ethanol in the blend (California comes to mind) will have difficulties.

      Corn syrup is used as a sweetener in many things, including soft drinks. I would consider the loss of corn syrup sweetened soft drinks a “plus.”

      Many animals are fed the leftovers after making ethanol and corn syrup (DRG). This is poor food for them, but cheap. Generally, it must be mixed with other food. Farmers will send their animals to market sooner, if they cannot get the expected food for the animals. If more animal products are sent to market, the price of meat may fall. Or eventually, it may rise. If US meat consumption falls, this would also be a plus.

  7. Chrome Mags says:

    ‘Trump: We Won’t Protect Foreign Oil Tankers For Free’

    “Countries that get their crude oil via the shipping routes in the Middle East should protect their own ships along the lanes, U.S. President Donald Trump said on Monday, as tensions between the United States and Iran continue to simmer.

    “China gets 91% of its Oil from the Straight, Japan 62%, & many other countries likewise. So why are we protecting the shipping lanes for other countries (many years) for zero compensation,” President Trump tweeted on Monday.

    “All of these countries should be protecting their own ships on what has always been a dangerous journey. We don’t even need to be there in that the U.S. has just become (by far) the largest producer of Energy anywhere in the world!”

    If I’m reading between the lines correctly, it sounds like Trump got a call from Putin and was told not to start a war with Iran, small or big, and now Trump is trying to find a way to distance the US Navy from a potential conflict with Iran. Trump is opting instead to squeeze Iran financially and let other countries deal with potential ship damage in the Straits of Hormuz. That strategy works up until the cost of oil skyrockets and the world economy descends into a deep recession. It’s a very dangerous high stakes game.

    • Lastcall says:

      So The Don would welcome Chinese navy ships to the gulf?
      Maybe a Chinese flag, and an Iranian pilot on a ship would be protection enough.

      • Grant says:

        He could invite the Russians as well – I’m sure they would not want the Chinese to have the run of the area.

        Or is he just seeing an opportunity of a deal to sponsor the Game of Ships as if it was some sort of computer game – which it sort of is if you consider the use of drones.

        • Davidin100millionbilliontrillionzillionyears says:

          Game of Drones…

          but won’t be on HBO…

          this new epic tale will be free to view on many news channels…

          • Grant says:

            Now and again I wonder if the sources of entertainment are in fact State sponsored and the content is intended to act as an information and eduction channel to prime the viewers for their future futures.

            At which point they will likely start to adopt the roles and actions that they see on screen.

            That could be interesting.

  8. Harry McGibbs says:

    “A steady rise in employment has been one of the eurozone’s big successes over the past six years of economic expansion. But there are signs the region’s job market may be cooling as manufacturers cut back on hiring in response to weaker global demand for their exports. That could place the eurozone’s already faltering recovery in peril, since it would lose the support of consumers at home just as it has lost buyers abroad.”

    • Harry McGibbs says:

      “The [UK] car industry suffered its worst month in more than six and a half years in May as a slump in demand weighed on production, figures show… The PMI reading for May was 43.5, down from 48.9 the previous month. A reading below 50 signals contraction.”

      • Part of the problem is all of the rules requiring higher mileage and less pollution. Get rid of these rules and a bit of the problem would go away.

        • John Doyle says:

          Cars are way overdesigned now. Apart from a few safety features we just don’t need all the stuff incorporated. 4WD’s are now advertised as town cars, What is wrong with a sedan or even a wagon? cars compete with one another for some angle that will make their model sell better. It’s conspicuous over consumption. It’s also why there is so much waste. Millions of tons go to landfill. Some is recycled. Plastic water bottles are used once then end up in the ocean, break down in the sun and end up in the food eaten by Krill, who then get into the whales, not to mention straws up turtles nostrils and fishing nets strangling sharks even. It’s all just affluence, waste and even the third world is complicit. 3 rivers in Asia contribute 80% of the plastic waste in the ocean, We sorely need a new narrative.

          • Grant says:

            What would the new narrative be John?

            Cars may be over engineered in many ways. Gail mentions the rules about fuel use – a lot of effort for little real gain – well into Pareto principle terrority. Not just vehicles either – the cost of fuel together with regulation is causing envelopes to be pushed hard in most engineering situations. Aerospace being an example. Added complexity and people’s expectations tending to run in opposite directions.

            As for safety, well there was time back in the 80s or thereabouts when lighter and more Aerodynamic vehicles was the objective, especially in Europe and Japan. Then along came the safety brigade and the easiest way to make the rather odd safety test work was to add size, padding and structures thus increasing weight and putting further press=ur on economy.

            The advent of electric cars and their somewhat weighty batteries suggests that only a miracle of science might revert design efforts to small and light engineering once again. The physics of the battery demands will always takes precedence.

            As for plastics. Look at everything around you, assess what is ‘plastic’ in some sort of interpretation and then decide with what you would replace it. (Presumably some sort of wood, metal or silica derivative …?).

            What would the global economy look like if modified accordingly?

            Now consider the changes and time scale likely required to to deliver the change.

            How do things look?

          • Dennis L. says:

            Yes, I agree with the superfluous features.
            At dance classes I see many four wheel drive vehicles even in smaller in sizes driven by women. It seems to be an internal safety thing, they feel more secure with four wheel drive, less chance of getting stuck. The other solution with front wheel drive only is dedicated snow tires, a pain to change over with the seasons and a pain to store.
            Maintenance of these cars is also a problem when things go wrong which is not often but when it is, a thousand dollars does not go far at a dealership.
            The interior, design, upper end speed and handling performance does however put a 1960’s Cadillacs to shame except at the drive-in, oops, they don’t have those anymore, no problem.
            Dennis L.

          • Rodster says:

            “Cars are way overdesigned now. Apart from a few safety features we just don’t need all the stuff incorporated.”

            That’s on purpose because when things break it requires service and cars now are purposely designed to combat the DIY’ers on YouTube so it tends to require a trip to the car dealer.

        • If I’m not mistaken econoboxes still start at EUR ~8k, incl. advanced pollution measures, so that’s reasonably cheap. But producers moved up the chain and make money on ~25k carz and pricier models only.. Also the problem is elsewhere, the market bamboozled people that they need to upgrade their car sooner that say ~8yr intervals chiefly on the fashion not technical merits.

          • Grant says:

            It’s probably a bit more nuanced than that.

            Political regulation has pushed towards diesel engined for improved economy and lower CO2.

            Then they saw fuel prices (and often the tax take) increasing and the buying public were displeased.

            The politicians then spotted the potential for more controls baqsed on nasty NOx emmissions and particulates – especially the very small particulates that earlier legislation had virtually mandated to happen. SO not millions of people persuaded to ‘go diesel’ in recent years find that they are now the bad guys not the good citizens they thought they were becoming. Cars that can withstand at least 20 years of rough roads and typical levels of corrosion potential are being scrapped after 8 or less because the political climate and the rush to complex mechanical and electrical controls has on the one hand made the vehicles antisocial and therefore of reduced value and on the other hand people have discovered that the fancy hi-tech stuff fails and has become expensive to replace.

            Or ate least the manufacturers OEM spares are expensive since they really want to shift more new metal boxes and the alternative spares from China, possibly coming of the same production line and looking identical, are often of poor quallity with a short life. Cheap but not for long.

            So 50% or more of the potential value of the asset is wasted for reasons that will NEVER cover the loss of materials and energy by any measure.

            Now at the same time to reduce CO2 engines have been getting smaller and more powerful and therefore under significant stress. So they fail after not to much use far more frequently then we might expect after a coupe of decades of really solid engineering quality advances.

            People have to make small engines to meet the CO2 and emissions targets. But the latest targets are too much to attempt to engineer in the time available – especially so for smaller engines where the % improvements required are just not possible.

            The only option, due to the way the penalties for non-conformance for CO2 reduction targets across the entire range of what the customers BUY (not the average across range of vehicles the manufacturer MAKES) are structured is to go electric and offset electric production ‘credits’ against the main product line penalties caused by what the buyer wants to buy.

            This is the removal of freedom of choice by the back door with the manufacturers likely to take the blame. The politicians will still be sailing off to their fantasy island sails full of wind powered virtue.

            Meanwhile the cost of infrastructure adaptation to accommodate the ‘chicken and egg’ situations related to electric vehicle re-charging infrastructure will absorb a lot of debt, a lot of energy and a lot of construction materials and their associated CO2 output before any of the allegedly “urgent” CO2 reduction benefits could possibly be delivered.

            Some may think it is utter madness.

            Politicians, believing their own propaganda, see it as the new normal demanded by the voters.

            It could be a fun ride.

            • The whole idea of the changeover to electric is madness. The charging capability won’t be available (except perhaps for those in US with garages) and the sustainability of the electric grid is very poor. It cannot outlast oil supply.

              The use if diesel for cars in Europe makes little sense, because it tends to make too much demand for diesel products relative to gasoline, and thus sends the price old diesel to a high level. Not to mention all of diesel’s pollution issues. Using gasoline all along would have been more sensible.

            • Kowalainen says:

              High performance recuperated gas turbine range extenders will surely be introduced as the archaic piston engines are shifted out. They can be adapted to burn basically anything from LNG to coal powder.

              Microturbines have around 15% efficiencies without a recuperator, 20 to 30% with one and they can reach 85% combined thermal-electrical efficiency in cogeneration.

              Just the sound of them pistons rattling about in the guts of the unwieldy large clump of metal barely and loosely connected to the crank shaft makes the engineer in me cringe. What an old-fashioned well beyond the best before date one can ever imagine.

              They are more akin to steam engines than to any other form of modern propulsion technology.

  9. Harry McGibbs says:

    “China has the strength and patience to withstand the trade war, and will fight to the end if the U.S. administration persists with it, China’s state-run People’s Daily said in an editorial Saturday. The U.S. must drop all tariffs imposed on China if it wants to negotiate on trade, and only an equal dialogue can resolve the issue and lead to a win-win, the newspaper said.”

  10. Harry McGibbs says:

    “Whether it is a result of contagion or trade disputes, there is growing evidence from freight flows that the economy is materially slowing. Our confidence in this outlook is emboldened by the knowledge that since the end of World War II (the period for which we have reliable data) there has never been an economic contraction without there first being a contraction in freight flows…

    “There is no official definition of a “global recession”. Some define the term as under 2% growth. Others say under 3.0%. I am willing to split the difference.

    “The US recession may not have started yet, but a global recession (under 2.5% growth), likely has.”

    • Harry McGibbs says:

      “Factory output is faltering in a number of key economies, darkening the outlook for the global economy and increasing the likelihood that leading central banks will respond with fresh stimulus. Global industrial production has been weakening since the start of 2018… Europe has suffered the sharpest downswing, and there is little relief in sight…”

      • Harry McGibbs says:

        “The [US] economy’s vital signs are deteriorating. For the week ending June 15th U.S. weekly rail traffic was 527,989 carloads and intermodal units, representing a 5.4% decline versus the same week last year. This means businesses are shipping fewer goods and services cross country via railroads. It also connotes business activity is in decline… Rate cuts may not stave off another recession.”

        • Harry McGibbs says:

          “…it is only a matter of time before the bubbles pop and the economy moves into the downward spiral.”

          • Harry McGibbs says:

            “Eventually, risks to global outlook overshadow world GDP growth, which could linger at 2 percent-2.5 percent or worse. World trade and investment plunges. Migration crises abound. The number of globally displaced, which has exceeded World War 2 figures since the mid-2010s, soars to record highs. A series of new geopolitical conflicts prove harder to contain.

            “So where are we today vis-à-vis these scenarios? A simple answer: Moving closer to the edge.”


          • Davidin100millionbilliontrillionzillionyears says:

            seeking alpha “feds endless boom bust cycle”…

            concludes: “… the ups and downs of the business cycle as it has played out through time.”

            this seems to assume that we are merely in a downward portion of the normal business cycle…

            but we are getting closer to the new normal where down years will be the majority and growth years will be getting more rare…

            and that’s a best case scenario… sort of the Creeping Collapse model…

            Sudden Collapse is another scenario…

            we might know in 10 months or 10 years…

            to be continued…

        • Both rail shipments and shipments by rail are in decline right now. Both indicate a drop in business activity.

    • Not everyone understands that the world economy needs to grow, or it tends to collapse. If growth is too slow debt cannot be repaid with interest. Too many businesses fail. We seem to be reaching the shrinking point,

      • MM says:

        Growth of 2% is not shrinking and at 1% interest credit payment is not hard

        • Harry McGibbs says:

          A lot of the world has way higher interest rates than that. The global economy is adaptive to a circa 3% p/a growth rate. Drop below that and the situation can become self-amplifying.

          Re the drop in US rail freight, I am wondering if the floods had anything to do with it.

        • Depletion of energy resources and mineral ores is at more than 1% and world population growth is at more than 1% per year. Energy consumption per capita is in danger of going negative. This has had severely negative consequences previously.

  11. Dennis L. says:

    Some of you might find this guy interesting, it was my first experience with his ideas although I am told he posted to the OD some years previous Gail probably knows him.

    Dennis L.

    • I have corresponded with Tom Therramus over the years, but never met him in person. We posted some of his posts on The Oil Drum. I don’t think I have posted any on OFW, in part because I do few guest posts. His approach is somewhat related to technical analysis of stock prices. It often seems to work, but it is not easy to see why. Increased price volatility is to me a sign that no price is really acceptable to both buyers and sellers. It is a sign that the end is likely not too far away.

  12. SuperTramp says:

    Aahh., Something we discussed here at OFW…mainstream news now…how about that!
    A worthless degree? Betsy DeVos wants to change rules for which colleges stay open, close

    Alexis Gurrola, a dental assisting student at Brightwood College, said she was told Wednesday, December 5, 2018 that the college was closing. She said students and staff were told they would finish out the week, but that classes would not resume next week.

    Many of them still struggle. In a Facebook group for students of the closed college, some commiserate over what they call worthless degrees. Others try to give advice about how to get their student loan discharged or receive their transcripts.
    What’s more, the Accrediting Council of Independent Colleges and Schools had a checkered history itself. President Barack Obama’s administration had moved to strip it of its powers to OK school programs, but after a legal battle, President Donald Trump’s administration undid that move.
    The Education Corp. of America colleges were just some of the institutions that suddenly closed in recent years. ITT Tech closed in 2016. Corinthian Colleges did the same in 2015. Both had been accredited by ACICS. The accrediting group said it gave multiple warnings, but the colleges weren’t able to meet its standards
    Now, the Education Department is looking to change the arcane and bureaucratic process of accreditation.
    Education Secretary Betsy DeVos and accreditors of universities say new rules will ultimately allow colleges to offer programs more quickly and effectively. That means students landing a job in fields that are hiring, they say.
    “With these reforms, our nation’s colleges and universities can spend more time and effort on serving students and less time, energy, and money focused on bureaucratic compliance,” DeVos said in a statement.
    Critics of the newly proposed rules say they would make it easier for shady colleges to operate for longer and with less federal oversight.
    “What these regulations really do is make it so it is much harder to hold those schools accountable,” McCann said.
    If anything, the government should hold these agencies to a higher standard, she said.
    The public has until July 12 to give feedback on the proposed changes. Here’s what you should know.
    Sounds like the new improved regulations for the financial industry….whatever it takes!

    • The whole educational system seems to provide multiple services simultaneously. It keeps young people out of the workforce. When children are young, it provides baby sitting services so that parents can go to work. It does to some extent educate for jobs, and also gives some version of general background.

      In many countries, advanced education is restricted. Tests are give to figure out which children will advance to the next level. In the US, this is less the case. Anyone can apply for higher education, even with poor previous grades. For profit schools seem to particularly take advantage of this, and offer entrance to those who have little chance of finishing. But even public colleges offer far too many young people degrees in subjects where at most a few with advanced education are needed.

      There are all kinds of other issues involved, including competition for elite status by having most of the faculty involved in publishing (mostly useless or worse) academic papers. Actual teaching is left to poorly paid adjunct faculty members.

      • MG says:

        This is a very good observation: the educational system is a collective baby sitting service.

        Lets name the reality as it is, because in our era of information present on cheap smartphones there is no need to move to another place (i.e. school) to get the information.

  13. SuperTramp says:

    This is good, isn’t it?
    U.S. consumer debt is now above levels hit during the 2008 financial crisis
    Mark DeCambre
    MarketWatchJune 21, 2019, 5:13 PM
    Consumer debt is growing to worrisome levels. Ben Mohr, senior research analyst of fixed income at investment consultant Marquette Associates, calculated that total U.S. consumer debt hit $14 trillion in the first quarter of 2019, surpassing the roughly $13 trillion of leverage accumulated in credit cards, auto loans and mortgages and other debt back in 2008, when those souring loans and securities pegged to them helped to send global markets into a tailspin (see attached chart). Mohr told MarketWatch that the increase in student loans — often cited as a source of consternation for economists and strategists — saw a notable increase
    Boy, the next financial crisis should be a doozy! Just around the bend, Tonto.

  14. Pingback: June 23, 2019 – Aporia Cafe

  15. SuperTramp says:

    Surprise, surprise!
    Bloomberg) — Japan is still winning the Southeast Asia infrastructure race against China, with pending projects worth almost one and a half times its rival, according to the latest data from Fitch Solutions.
    Japanese-backed projects in the region’s six biggest economies — Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam — are valued at $367 billion, the figures show. China’s tally is $255 billion.
    The figures underline both the rampant need for infrastructure development in Southeast Asia, as well as Japan’s dominance over China, despite President Xi Jinping’s push to spend on railways and ports via his signature Belt and Road Initiative. The Asian Development Bank has estimated that Southeast Asia’s economies will need $210 billion a year in infrastructure investment from 2016 to 2030, just to keep up the momentum in economic growth
    Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth $209 billion — more than half of Japan’s total. That includes a $58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.
    For China, Indonesia is the primary customer, making up $93 billion, or 36%, of its overall. The prized project there is the Kayan River hydropower plant, valued at $17.8 billion.
    Across all of Southeast Asia and by number of projects, Japan also carries the day, though by a smaller margin: 240 infrastructure ventures have Japanese backing, versus 210 for China in all 10 Southeast Asian economies

    BAU full speed pedal to the metal…

    • I hadn’t heard the idea that Japan is ahead of China in infrastructure spending in Southeast Asia. High speed electric trains always sound iffy. Transporting goods, not necessarily rapidly, is important for commerce. High speed transport of people doesn’t add much. Airplanes would seem to be more flexible, if speed is needed.

      • SUPERTRAMP says:

        At this point in the game, does it really matter? Sounds like the high speed rail is a symbolic unification political project to unit the North to the South as one.
        Yes, I was surprised myself Japan has a leg up on China. I know Vietnam and China in the past have had their squabbles. So it makes sense that Japan has a presence there.
        Many immigrants from CHINA are in Indonesia and have commercial ties with the mainland, so that makes sense too.
        Oh, from what Ive read, China is also investing in airport projects too.
        Beijing is building hundreds of airports as millions of Chinese take to the skies
        World’s largest aviation market
        Even as China is on course to overtake the United States as the world’s biggest air travel market within the next three years, the country’s hunger for aviation seems set to continue growing exponentially.
        To sate that hunger, the government has embarked on an airport building program on a scale rarely witnessed before anywhere. Billions upon billions of dollars are being poured into runways and terminals that will plug the entire country directly into the global transport network.
        China currently has around 235 airports, but with many lacking the capacity to sustain the coming increase in passenger numbers and flights, government officials estimate around 450 airports will be needed across the country by 2035
        How about THAT!
        That should help keeping BAU alive

      • Grant says:

        But Japan does not have Aerospace technology to compete with China whereas they can compete in the area of High Speed trains. Especially since they don’t seem likely to need any more HSTs of their own or a while so exporting the tech is the only way to keep the industry relevant. And put one over on the Chinese.

        Quite why Vietnam needs a HST remains to be seen but a good salesman with a decent product and few sales opportunities will know all of the way to influence a prospective client dreaming of grand schemes and a place in history.

        it would be one way of taking the cash from selling shoes without having to manufacture the shoes in the first place. Must look up the other main exports from Vietnam.

      • HST is not main thrust of this topic.

        It’s rather about overall industrial capacity outsourcing (and investment development) of China vs Japan. And Japan ruled (made factories) there between the wars already.. therefore much more experience. Also they tend to focus on a bit different market segments (aka Chinese ‘crap’ vs Japanese ‘reliability’ at decent price level..)

        So, to me even the article might be a bit of propaganda piece, nevertheless it documents how Chinese expansion strategy is severely under many other stress factors..

      • Xabier says:

        HST has become a totem of modernity and ‘progess’.

        Much economic activity is now merely totemism and cargo-cults.

      • Kowalainen says:

        That goes until you try the Japanese high-speed rail service and then find yourself cringe every time you have to take that god awful domestic flight.

        Their new Shinkansen Alpha-X rips through the landscape at close to 400km/h. By the time you are still sweating and panting in the airport check-in queue and security check, you sit comfortably with ample leg space, holding a cup of green tea while the high-speed service is presenting you with the magnificence of mount Fuji as the rail bound high-tech wizardry passes by the still-active volcano at ridiculous speeds.

        Heavy infrastructure investment is indeed the right way to go for upholding economic growth and increase the competitiveness of the country while keeping the lesser productive populace with jobs.

        It is a matter of national pride as well. If your country isn’t capable of produce advanced rail bound infrastructure, then what are you really good for? Slap down another motorway that will be left to decay perhaps?

        Just look at it; thing of beauty. Shape inspired by nature itself.

        • As long as you don’t need to take luggage with you, train services works OK.

          Domestic air service works better if a person has luggage. If I remember correctly, the rapid train service did not connect up with international flights. In fact, I am not certain they connected up with the airport at all.

          • Kowalainen says:

            You are right, the HST service in Japan is mainly from city center to city center. The airports are for obvious reasons not too close to these areas. Which is also the reason why it is very fast and convenient for domestic travels.

            Did you try out Shinkansen on your trips to Japan? Your suit case can be stowed away in luggage compartments between the cars.

            Imagine business class international flights, plenty of leg room, much more silent, basically virtually totally silent and a smooth ride on the well-maintained tracks with no take offs, landings and air bumps. And most importantly, no check ins, security checks, irritating pat-downs, queuing and scurrying around in the sprawling airports.

            It is first class transportation and there is a lesson to be learned from the Chinese adoption of this system. Perhaps we should do the same?

            Just burn the coal required, lay down the tracks, it “creates” jobs and economic activity to keep off the deflationary demon while upgrading the domestic transportation system.

        • Grant says:

          What outright NEED does it service that could not be eliminated or achieved some other way?

          Japan is relatively special for a smaller country (by land area) in that most of its development is strung out along coastal strips.

          Having the potential for relatively long sections of high speed ability linking large areas of conurbation potentially makes sense – until one finds a way to avoid the travel. The challenge is whether the availability of the service in some ways simply creates a need for itself. Do people start to commute longer distances to work because it becomes just about viable in terms of both time used and the fiscal rebalancing that is inevitably required?

          China, as will be obvious, has vast distances that its population will likely need to travel for both business and social purposes and a huge population to cater for. Again that requirement potentially makes some sense to use rail alongside air. At least the things can start moving and keep moving at speed that makes then viable for journey times.

          The size of France just about justifies what they have build of their HST network but the German experience may not be quite as effective.

          In the UK the proposed HS2 development seems to be very expensive and very limited by capacity considerations.

          Like most airports there will be a need to travel from where you wish to start you journey to get to a terminus. Go through an air travel type of security and boarding operation. Make the journey, some of it at the advertised speed and save, perhaps 20% of the existing journey time by rail city centre to city centre, but end up 20 miles from where you wish to be.

          By the time it is likely to become operational I would guess that our imaginative Law Makers will have mandated electric only vehicle transport with severely restricted speed capabilities in order to support some dreadful and overly complicated Autonomous driving mode.

          Nevertheless I would bet that the door to door journey time that ought to be available would be no longer than the 3 part travel via the HS2 system and would have the benefit af allowing work or leisure activity along the way in some personal or family space. Luggage need only be loaded once and unloaded once.

          Extend the route to several hundred mile and the benefits of the train might come to the fore. But then it would be in competition with flying – if it has not been banned – where the inconvenience factors at the start and end of the journeys would likely be relatively similar.

          Of course that STILL assumes that there is some useful purpose to the travel activity by the time the world reaches the target dates involved by the time the world economy has spent another 20 years “developing”.

          • Kowalainen says:

            It is an established fact that economic activity is closely correlated with transportation efficiency.

            Domestic flights are a cringe fest of inefficiency and inconvenience.

            Furthermore, you need to closely study how the Japanese rail network creates a more decentralized economy with people moving away from the very densely populated areas and still can maintain their time proximity to larger cities.

            If you have ever been taking a trip in Shinkansen, then you are well aware of the huge investments required to drill through the Japanese hilly landscape to lay down the HST tracks and other infrastructure.

            The whole point of high speed rail is to bring cities and people closer together without having to resort to centralization.

            Of course the economy of the future will be coal powered and connected by rail. The kerosene should be saved for international flights.

            It is beyond me why the obvious superiority of such a system even sparks counter arguments such as yours. Just burn more coal and lay down the tracks. It creates jobs and a better society.

            • Grant says:

              As I have said previously I don’t think the conceptual benefits necessarily apply in all countries. Certainly not in the same way.

              Here in the UK High Speed rail travel *but not ultra-high speed travel) has been around for several decades. It works at speeds that are suitable for scheduling for maximum serviceability for most people who need to travel.

              Those commuting more locally into major conurbations – notably London of course – will benefit little and perhaps not at all, even peripherally, from the latest proposals for the HS2 development.

              IN the UK bringing cities closer together is being achieved by building development that removes any gaps and creates a spreading conurbation that will eventually join them into massive areas of concrete, bricks, mortar steel and tarmac of a sort that is more likely to hinder productivity than help it (IMO) and in effect just creates new ‘centres’ without any identity or individuality of purpose.

              There is precious little evidence that I have seen that (almost) connecting the largest city to the second largest city using a system that will be constrained in its maximum carrying potential by is likely to create more jobs (beyond those required to run the system minus those no longer required elsewhere because of the system) or a better society (whatever that means).

              Nice objectives, certainly, but for the tens of Billions of £££s this is currently estimated to cost, and rising with decades to go, There are likely more effective ways of ‘boosting the economy’ with this alleged ‘cash’. Things that would have a more immediate effect and return on the various types of ‘capital’ invested.

              Just my opinion of course.

            • Maybe high speed rail needs to be thought of as an extension to the suburban commuter rail system. It allows a person to commute among nearby cities, almost as if you lived in them.

              If your needs are more diverse, or you need to transport goods as well as people, it doesn’t work as well. When we needed to got to trans Atlantic flights, we didn’t find high speed rail helpful.

            • Kowalainen says:

              Of course long haul flights are a necessity. I actually argue for more international flights bringing countries and economies closer together and improving overall economic efficiency and activity. Better make the mid size domestic airports handle larger airplanes for international flights, or shut the smaller ones down completely, than obstinately crowding the airspace with various barely airworthy and rickety kerosene burners.

              It’s so simple really, a properly built and maintained HST system is superior to domestic flights. Why is it even worthy of debate? Just go to Japan and experience it yourself and compare with the run of the mill sprawling US/EU airport with all of its millions inconveniences.

              Just because you are used to something does not mean you are incapable of taking in the advantages of other things, or does it perhaps? Has dogma gotten in your way when all you see is congested roads, crappy train service and the cringe fest of domestic air transportation.

              Is it that hard to take in the obvious advantages of creating jobs in the process, burning more coal as the US/EU is building and operating the HST rail network?

              Let’s lay down the tracks and crank it up to 11.


    • Nice find, thanks.
      On similar note, It would be interesting if out of the next recession and or GFC_vXY, against the dominating narrative, specifically China ends up as holding the looser card in comparison to US, Japan etc.. BAU extensions for ever (at least ~two more decades)!

  16. MG says:

    More and more frail women in jobs that were the domain of the muscle men here in Slovakia before:

    The 2 examples that caught my attention: the heavy trucks drivers, the prison guards.

    • SuperTramp says:

      MG, bet these women doing these masculine jobs as truck drivers or prison guards are getting a lower pay scale than their male counterparts! That’s the norm here in the United States, even if it’s suppose to be against discrimination regulations.
      As far as not feeling secure….just got my Concealed Weapons License for Florida.
      I feel more secure already! What did the Beatles sing…”Happiness is a Warm Gun!”
      Just in case, it is obvious there is too much money in it to stop selling guns.
      Too many killings and nothing being done, the NRA is too powerful lobby here in USA.
      So, if you can’t beat them, pack one!

      • Duncan Idaho says:

        Truth flows from the barrel of a gun–

      • MG says:

        I do not think that having a gun can solve anything, e.g. you can be attacked by an insane person or a person influenced by drugs unexpectedly, from some hidden places etc. This is the problem now, the people mask more and more.

        Even the men spend more on cosmetics:

        “Research shows that just like many women, men today are increasingly dissatisfied with their bodies.”

      • DJ says:

        I wonder what percentage of bad situations could be avoided by having a gun, provided you can actually use it.

        • SuperTramp says:

          Just go to the website…”Surviving in Argentina”….plenty of examples of why gun ownership is a prudent act. Hopefully, will NEVER have to use it in an encounter, but if the SHTF, like in Argentina, a “must have” item to have on hand, with plenty of ammo and needless to point out, adequate training , safety and practice.
          Owning a firearm holds great responsibility and duties. One should not take likely.
          Here in Florida, unlike other parts of the world, not difficult to purchase one online or in a shop. Must have a 10 day waiting period and pass a quick background check, be over 21.
          That’s about it and answer a list of questions on the FFL form.
          What can I say, easy peasy.

        • Xabier says:

          If you watch videos of gun fights from Argentina, you will see that the criminals are still very bold, even though they know they can expect the target to be legally armed: they rely on being more numerous, on surprise, on taking hostages, on the target being scared and shaky. And they may be on drugs,

          Just like S Africa: guns do not scare people away, but may help you to survive.

          Also, big dogs.

          Train, train, train or a gun is next to useless. And close-quarters a knife can be faster, which is also a survival factor. I’ve seen police with automatics killed by a knifeman who was faster because they under-estimated him.

          Very brutal place, which is why my step-mother and her friends left (also high rate of rapes and general street robbery) even before the big crisis which caused an explosion of crime by very desperate people.

  17. Rodster says:

    “Feeling the Heat of a Civilization on the Downside”

    ..or as it has been said before, there is nothing we can do because the Clowns are in charge of the circus.

  18. MG says:

    What a week: This morning a man from the neighbouring village shot 3 men at the disco in another neighbouring village, one of them died. They write he had bunkers in the surrounding woods and fields:–FOTO-Dvaja-su-v-kritickom-stave–ozbrojeneho-muza-zadrzali

    3 men were shot dead in total in this week in my surroundings:–mrazive-detaily-priamo-z-miesta-cinu–Obeti-malo-byt-viac–FOTO-strelca

    I feel less and less secure…

    • MG says:

      Is the Sun leaving us again here in the Northern Hemisphere as from this week? Then surely, this is energy implosion…

    • MG says:

      Sometimes the killer simply fullfills the hidden wishes of the people: like the one who killed the given foreman. The rumour is that various people feel better when this foreman as their manager was killed. The other side of the picture is that this foreman just fullfilled the wishes of the higher managers and the owners of the company: achieving the profit.

      But how can you achieve a profit when it is harder and harder to achieve it? This is the saddest part of the story, i. e. when you become a victim of the system that pursues growth that is no longer possible.

  19. 2019 Indian heat wave

    I’m not so sorry fossil-fuel use may have maxed out.

    • Grant says:

      What’s the connection to fossil fuel?

      And what caused the longest recorded drought?

      • Tim Groves says:

        Inclement weather used to be put down to acts of God or the gods, as payback for the evil men do, or to witches casting spells. Nowadays we’ve cut out the supernatural elements, but some of us can’t give up the basic superstition that the weather is a punishment for our sins.

        • I am afraid you are right.

          Of course, we have come back to thinking we can influence the weather, as well. Instead of rain dances or human sacrifice, we have decided to kill off fossil fuel providers because they seem to be the sinful actors.

  20. SUPERTRAMP says:

    How did that happen?
    PHILADELPHIA (Reuters) – A massive fire at Philadelphia Energy Solutions Inc’s oil refinery on Friday damaged the largest U.S. East Coast plant to the point that it could remain shut for an extended period, according to Philadelphia city officials and company sources.
    As of late afternoon, the fire was “confined and contained,” but could not be put out entirely, because a connection line feeding fuel to the tank where a combination of propane and butane was burning could not yet be shut, Philadelphia Deputy Fire Commissioner Craig Murphy said in a press conference.
    The cause and extent of the damage were unclear, Murphy said
    Massive Philadelphia refinery fire threatens facility’s future
    By Jarrett Renshaw
    By Jarrett Renshaw
    ReutersJune 21, 2019, 12:17 PM EDT
    By Jarrett Renshaw

    PHILADELPHIA (Reuters) – A massive fire at Philadelphia Energy Solutions Inc’s oil refinery on Friday damaged the largest U.S. East Coast plant to the point that it could remain shut for an extended period, according to Philadelphia city officials and company sources.

    As of late afternoon, the fire was “confined and contained,” but could not be put out entirely, because a connection line feeding fuel to the tank where a combination of propane and butane was burning could not yet be shut, Philadelphia Deputy Fire Commissioner Craig Murphy said in a press conference.

    The cause and extent of the damage were unclear, Murphy said.

    Several explosions sent a huge fireball into the sky, engulfing the surrounding areas in smoke after 4 a.m. EDT (0800 GMT), following the ignition of a fire that started in a tank at the 335,000 barrel-per-day (bpd) refining complex, also the oldest in the Northeast.

    By mid-afternoon, the city’s fire department was working with PES in its response to the fire, though it was letting the flammable gases burn under control. Murphy said PES was not yet able to access a valve that would shut the connection to the tank. The fire department could not entirely extinguish the fire as long as it is being fed fuel, he said.

    PES said in a statement it believed the product that was burning was “mostly propane.” Local news showed large water cannons continuing to hose down the site.

    Four workers were injured, according to a company statement, and treated on-site, while city emergency workers treated one person, who did not need to go to the hospital. The extent of the damage was unknown, but similar fires have shut refineries for months or years.

    “It was the worst I’ve ever experienced,” said a veteran refinery worker who was at the plant when the fire broke out.
    “It looked like a nuclear bomb went off. I thought we were all going to die.”
    The complex was still running at a reduced rate, PES said, but depending on the extent of the damage, there will be questions as to whether the company has enough money to rebuild.

    Why rebuild? The end of the Oil Age is upon us all….maybe it was arson?

    • Wow! That was quite the fire!

      I found an article saying that the refinery refines 335,000 barrels of oil a day. I imagine it supplies mostly to the East Coast.

    • Duncan Idaho says:

      Why rebuild?
      I’m sure the econ is being looked at– probably take 30 years to break even, and that is not happening.
      But as we know, econ often does not apply to oil these days, just look at shale.

  21. ktoś says:

    Warsaw PL, under construction, after 4 decades of Russian occupation:
    https: //
    Wider view: https://

  22. Harry McGibbs says:

    “Growth in global wealth ground to a halt in 2018 as major equity market corrections lowered the value of many investors’ assets, according to a report by Boston Consulting Group…

    “When the firm adjusted for the rebounding dollar, wealth in 2018 actually declined by 1.6%… “For the first time since 2008, we saw wealth growth was negative when you take into account all the factors,” said Anna Zakrzewski, global leader of BCG’s wealth-management practice…”

  23. Harry McGibbs says:

    “Forget Brexit, there’s something far more worrying afoot in Europe: Italy’s debt problem. It’s on course to spark an existential crisis for Europe’s single currency area, the eurozone.

    “While the European Union will aim to fix the problem it looks like they’ll be no escape from the coming calamity, experts say.

    “”[…] it does seem a matter of ‘when’ rather than ‘if’ – another full-blown sovereign debt panic will happen,” states a recent report from London-based financial firm TS Lombard. The report continues bluntly:

    “The bottom line is that as and when a serious new crisis blows up, the Italian government is positioning itself to demonstrate to its voters that it has not sought to leave the Eurozone, but rather that the Eurozone is leaving Italy.

    “In other words, Italy’s government is gearing up to inform the European Union it has had enough. Then the ruling parties will tell Italy’s population that the EU is to blame for everything.”

  24. psile says:

    When you’re pushing on a string…

    Just to give some background: The coalition government was returned to power in the recent Australian federal election, and thought it would be a good idea to try and blow up the housing bubble some more, by enlivening “animal spirits”. Cutting interest rates, and making it easier for more sub prime loans to be written. But it seems to be having the opposite effect on the electorate.

    Oh dear…

    Consumer confidence tumbles after the Reserve Bank cuts rates×3-340×255.jpg

    If the Reserve Bank had hoped to fire up the economic engine room of consumer spending with a rate cut last month, it will be sorely disappointed by the initial reaction.

    The 0.25-percentage-point cut sent consumer sentiment tumbling from net optimism to pessimism, according to the latest Westpac-Melbourne Institute survey.

    “Responses over the survey week show a marked drop-off after the Reserve Bank’s official rate cut,” Westpac’s Matthew Hassan said.

  25. Yoshua says:

    EIA is cooking the books to support oil prices. U.S crude inventories are 222 million barrels higher than reported.×900

    • Do you have a link to the Arthur Burman post that this seems to be from? Art is the person behind Labyrinth Consulting.

      • Yoshua says:

        There is no article, just this graph and some comments by him on his Twitter account.

        • Harry McGibbs says:

          That’s a lot of oil to go ‘missing’. Cushing has a capacity of 85 m/b for context.

          I wouldn’t be surprised though. It seems the dangers of very low oil prices are well understood by TPTB:

          “…cheap oil became bad news for the fragile global economic recovery. With that, central banks stepped in early last year [2016] and responded with coordinated easing (which included direct asset purchases, which likely included outright oil and oil-related ETFs). Oil bottomed the day the Bank of Japan intervened in the currency market, and prices jumped 50% in a month as other major central banks followed with intervention.”

  26. Harry McGibbs says:

    “Companies are taking a much more cautious view on mergers and acquisitions this year, particularly when it comes to transactions involving the United States and China, as the world’s two biggest economies square off in an escalating trade war, according to deal advisers.

    “Transaction volumes – and the value of deals – are down, driven by fewer mega deals and increased uncertainty about the global economic outlook, advisers said.”

  27. Harry McGibbs says:

    “HSBC said that the airline market is growing at its slowest rate since the financial crisis, leading it to conclude that the underlying problem was a collapse in demand… The cautionary note follows a profit warning from Frankfurt-listed Lufthansa on Tuesday.”

    • Harry McGibbs says:

      “Gudrun Asta Gunnarsdottir found herself at ground zero of Iceland’s latest crisis. Four months into her second pregnancy, the 33-year-old check-in desk operator was told she was one of 315 workers being laid off at Reykjavik’s international airport.

      “The news came as “a shock” and “caused a lot of sadness for everyone, especially because a lot of people are now looking for work at the same time,” said Gunnarsdottir…”

      • Harry McGibbs says:

        “Global oil consumption rose last year at the slowest rate since 2014, as higher prices and broad deceleration in manufacturing activity and freight movements took their toll on fuel use and petrochemicals. Consumption is likely to rise even more slowly in 2019, given the further weakening of most manufacturing and freight indicators since the start of the year.”

        • The chart I showed suggested that China’s diesel use is about flat, helping to hold down the world ‘s rate of growth in oil consumption.

      • maybe someone will correct my arithmetic here

        but if 312 workers are laid off, I’m guessing that’s 10% of the airport workforce (give or take), of say 30 k people total

        Iceland has a population of about 300,000

        300k people means a working population of about 100000

        so how can a population that size have a third of its workforce working in air traffic and continue with the delusion that it’s sustainable?.

        Even if my figures are way out on airport staff, that would still leave about a quarter or a fifth of Icelanders working in air traffic services, which is still a crazy proportion

        • apologies for a senior moment there

          got my %’s wrong—before all and sundry point it out

          • Harry McGibbs says:

            Easily done!

            Their capelin fishing seizing was a total bust as well, compounding their economic misery, but I haven’t been able to find out why.

        • Tim Groves says:

          Norman, this seems to be part of an ongoing rationalization (read “cost-cutting”) effort on the part of the airport operator Airport Associates. They hired a lot of people three or four years ago to cope with expanding tourist traffic and now they are rationalizing. Sack people, offer them new employment at cheaper rates, rinse and repeat.

          From April 2019:

          Of 315 Airport Associates employees who were laid off in the wake of WOW’s bankruptcy next week, 205 will be offered new contracts, RÚV reports. The positions range between 50% employment and full-time.

          Airport Associates provides terminal service at Keflavík Airport. The company laid off 315 members of its staff of 400 last week following WOW air’s announcement the airline was ceasing operations. Though Airport Associates provides support service to around 20 airlines at Keflavík, WOW air flights accounted for around 50% of its workload.

          For some of the company’s employees, the layoff is their second in less than six months. Airport Associates laid off 237 workers at the end of November, reinstating 156 of their jobs in late January. The layoffs were also in response to WOW air’s financial difficulties, as the airline itself let go 100 employees in December as part of a significant downsizing of operations.

          The government airpor company Isavia runs over 30 airports and landing strips in Iceland. Their current number of employees is 830 (or 1,040 including subsidiaries).

          According to some corporate information i was reading, the combined total of jobs with Airport Associates an another company IGS at Keflavik increased from 967 to 1,490 between 2015 and 2016.

      • I hadn’t realized how bad Iceland’s problems were. There are quite a few US flights to Scandinavia that stop in Iceland.

    • SUPERTRAMP says:

      HAHAHA, ….collapse in demand!?? That’s a good one….here in the States the Airports I deal with ALL have MAJOR EXPANSION projects for the NEXT TWENTY YEARS!!!!
      MIAMI, FORT Lauderdale, Charlotte NC, Dallas Fort Worth TX….multi billion $$$$ spending and no end in sight.
      Need I go into details?
      Booming growth is expected at Fort Lauderdale-Hollywood International Airport. These changes will make it an ongoing construction zone for the next 20 years. An intermodal center near U.S. 1 will connect a people mover to other transportation, possibly Brightline in the future, and with the potential for future connections to cruiseships at Port Everglades and the Broward County Convention Center. Increased lanes will be added to improve traffic flow, and a hotel and commercial center on the airport property. Expansion of gates are in the plans as well as more airy, interior transformations.
      The Fort Lauderdale airport of the future will have millions more passengers each year. But the time to get ready for them is now.
      Future construction projects and improvements include:
      — An elevated people-mover circling the airport terminals and connecting to a transportation center above U.S. 1. The center could allow future passengers to connect to Brightline or another rail service, or make a connection that takes them to the Broward County Convention Center or cruise ships sailing out of Port Everglades.
      — Terminal expansions increasing the number of gates from 62 to 95, allowing for hundreds of more flights a day to and from the airport.
      — Widening the terminal roadway with more curb space for picking up and dropping off passengers.
      — Adding a new hotel that would be built with an adjacent nine-level parking garage on the airport right next to the terminals, complete with conference space and an exterior courtyard.
      — Installing higher ceilings, wider corridors and expansive windows. These changes are already visible from recent construction work and would continue with future expansions, along with more shopping and restaurant options for travelers.
      The airport currently is in the middle of $3.2 billion in improvements that has added gates, built a runway above Federal Highway, added new parking, stores and shops, and which will internally connect all the terminals so travelers will no longer have to go outside to get from one terminal to another.
      “We know that we’re in the billions of dollars. But again, this is a 20-year planning horizon,” Airport Director Mark Gale said. “We know we have a population in Broward that is growing and we have airlines … that want to grow.”
      New terminal in DFW and CLT and Miami just announce and BILLION plus expansion/renovation.
      More, more more

      • Collapse in demand happens at this point mostly in other countries. People in Britain buy fewer vehicles. In fact, people in other European Countries buy fewer vehicles. Germany finds fewer orders for its products from China. Venezuela buys fewer goods, because of the low cost of oil. Other oil exporters buy fewer goods. In the US, young people delay buying homes and having families because of all their college loans and their relatively low wages even with a college degree.

        All of this is the lower demand I am talking about. A person cannot simply demand a new car or home. He or she has to have and adequate income, and probably needs to take out a loan. If the conditions are not right for this to happen, “demand” stays too low.

        • Now, the question remains, what if the collapse in demand is temporary or more precisely doesn’t matter much at this point of overall prop up support, before new stimulative fix is in again or are we entering serious new situation for real.. ?

          You see, we have had exceptionally moribund growth for past decade (synchronized with exploding debt), so why we can’t have from now yet another one, this time moribund de-growth for decade+ with the obvious help of even more ‘creative’ BAU extension tools..

          Mind you, the mega trends such as over saturated markets, falling surplus disposable – purchasing power, stagnating demography, increasing cost of accessing energy, .. etc. still being valid forces. But as noted by that linked new study few pages back, human civilizations tend to go into very large and lengthy over hangs first, and collapse only at some point quickly afterwards (quick process of years/decades).. So, who should be the judge to measure said over-hang exposure – is it ripe enough today?

          Unimaginable things ca intervene still, like for example the US ‘wining’ the tariff – sanction attack on China in terms of destabilizing them first..

        • SUPERTRUMP says:

          Being on the bottom gets DEEPER
          June 16 marked the 12th year that Congress hadn’t raised the federal minimum wage, the longest amount of time the minimum wage has remained unchanged since it was first established in 1938. The last time the U.S. government raised the minimum wage was in May 2007 — that decision increased wages to $7.25 an hour starting July 24, 2009
          Until 1980, Cooper says, Congress increased the minimum wage “relatively regularly — every five years or so.” But in the last 40 years, he explained, Republicans started to strongly oppose minimum wage increases.
          “It wasn’t raised at all during the Reagan administration,” he said. “That’s when we saw nine, 10 years between increases.”

          But Tax cuts very the very wealthy are deemed socially acceptable, because we are told taxes are “evil” and government “waste”.

          While inflation levels are holding steady the purchasing power of the current minimum wage has steadily eroded over the last decade. Since the minimum wage was raised to $7.25, its purchasing power has declined by 17%. That’s a loss of $3,000 in annual earnings for full-time minimum wage workers. Since reaching its buying power peak in 1968, the minimum wage has lost 31% in purchasing power. That means that effectively, minimum wage workers are “earning” more than $6,800 less than they would have in 1968 — when the minimum wage was only $1.60
          Like Gail posted…the policies of the Fed hurt the underclass

  28. Grant says:

    It recently occurred to me that slavery (not a subject we studied at school in the UK) had been a source of cheap additional energy, for the most advanced societies at any time and worldwide, for some millennia before the build up to the industrial revolution.

    In many ways one might consider that there is still some element of the concept of slavery throughout today’s global economics although in general it will purport to be something different.

    The most logical result of increasing cost of energy to drive machinery and its attendant needs could be to drift back towards a form of slavery. Perhaps without the invidious direct ‘ownership’ concept that was once used but something more akin to the financial indebtedness that might mean an individual is somewhat under the control of anyone who can give them a means of earning enough, by some means or other, to obtain at least food and shelter and from time to time a little of something that passes for security.

    This comes to mind. For the well known lyrics, obviously.

    • pale dark people sold darker dark people to white people.

      Each transaction was an exercise in energy transfer—the white people couldn’t capture dark people themselves—they needed the paler dark people to do that.

      They were shipped to America as an energy resource, just like oil is now, the paler dark people were paid in ‘energy’ in the form of metal goods and guns—which they used to capture more dark people—ad infinitum, or so they thought.

      Which is the same ‘ad infinitum’ philosophy we have now

      • Tim Groves says:

        You’ve highlighted only a small fraction of what passed for slavery back in the day. Light to medium-dark dark civilized people also captured barbarian people of all colors and fed them into the human-resource-powered economy of the civilized world from Casablanca to Cathay. Without continuing access to fresh chattel, it would be difficult to keep the farms, factories, mines, navies, and harems well-staffed, and that would be the end of civilization.

        • Xabier says:

          My favourite slavery statistic: 25-75% death rate in making eunuchs out of boys, but they fetched a price 8-times higher on the slave market.

          Worth a punt, put in those terms.

          Long before evil white imperialist capitalism…….

          One of the most extraordinary journeys made by a slave was that of a Basque girl captured in the Pyrenees by the Arab slavers who, when it was discovered she had an exceptional singing voice, was sent to Mecca to learn Arab Classical music, and then re-imported to Cordoba to entertain the Caliph. Probably not so bad a deal, as she enjoyed prestige.

    • DJ says:

      “The most logical result of increasing cost of energy to drive machinery and its attendant needs could be to drift back towards a form of slavery.”

      I think the logic breaks on up to 10 kcal fossil energy needed to create 1 food kcal.

      Population must go way lower before energy can be substituted by manual labor.

      • Grant says:

        Surely that’s a chicken an egg situation DJ?

        But as and when the machinery stops working (for whatever reason and there could be many) it seems likely that any return to the use of human energy would also have some effects upon the population.

        • DJ says:


          Food for billions of people can only be produced by fossil fuels.

          So first population must die off to what can be sustained by organic agriculture.

          Then manual labor can substitute energy work.

          • Organic agriculture of today contains many unsustainable elements. Most irrigation is unsustainable. If nothing else, it tend to add salinity to the soil.

            Crop rotation is not sufficient to get all of the elements back in the soil. Some elements must be brought from a great distance. Waste products of humans and animals need to go back to the soil.

            Somehow, all of the microbe and animal pests must be dealt with. For example, bird netting is an organic approach to keeping birds away from fruit. But this netting is not available without fossil fuels. Rabbits need to be kept away from some crops.

            All in all, the amount that can be raised with manual labor is far less than the amount that can be raised with today’s organic agriculture.

            • DJ says:


            • Grant says:

              Rabbits may need to be attracted rather than kept away – so long as there is still fire and enough fuel to attempt to cook them.

            • Hideaway says:

              The ‘organics’ practiced by today’s ‘organic farmers’ is laughable, and I’m a former secretary of an organic certifying body (about 30 years ago).
              What people call and allow as ‘organic’ is closer to a religion than a method of farming, plus whenever the ‘sustainability’ card is played in making decisions, 99.9% of the people in the industry have no idea about what sustainable really means.

              Some of the ‘organic farms’ I know of rely on huge truckloads of chook manure from non-organic farms, where they compost it with huge machinery used to turn it while it cooks. They then use large tractors to spread the compost on fields for whatever crop. The number of holes in the concept of organic and sustainable is just ridiculous, but people will pay a premium thinking they are helping the planet by buying such produce.

              The farmers themselves also think they are sustainable, well in conversation any way. Once you make them realise that no huge (non organic) chook farm down the road and their model collapses, they talk seaweed extracts etc, and getting by with some alternative source of nutrients.

              My argument is simple like Gail’s above, you need to replenish the soil with exactly what you take away or there will be a limiting factor, ie Liebig’s law of the minimum.

              These days while not wanting a whole cocktail of chemicals on my food, so we farm with minimal inputs (no sprays, why poison ourselves?), we do use some modern aids like NPK as our soils were never going to grow what we want to grow without the extra help. We use lots of organic principles, but I’m under no illusion that when collapse comes for energy production world wide, the same will happen to every farm.

              We could probably feed 500 with the production from our patch, if I increased intensity, but after TSHTF that number will decline to about 5% of that at best.

              The food riots and revolution in North Africa and the Middle East back in 2011 were a warning for what to expect in the future IMHO, only the energy production and food shortages will become negative feed-back loops on one another.
              Sudden trouble in the ME, that could lead to farmers (in western countries) not being able to use their tractors due to lack of fuel, will increase the food shortage problems, that will further reduce fuel supplies etc, etc.

              At some point we just run into shortages anyway, but it seems we were nearly Trumped into an early collapse just the other day.

            • Shortly after I started writing about energy issues, I started trying to see first hand what was being billed as organic. I realized back then that quite a bit that was being billed as organic wasn’t sustainable with manual labor and a few hand tools.

            • JesseJames says:

              The rule is, if it is sold in a chain grocery store of any kind, regardless of publicity or propaganda, it is factory food and not even close to healthy or sustainable. I don’t care how much they label/certify it as organic…whatever they label it, it is factory food. Putting pretty picture of the farmers family petting the sheep does not make it organic.
              People who wish to get their food second hand, ie by buying it in an building called a grocery store are getting adulterated, contaminated, chemical laced stuff labeled as food.

            • ;lksfhd86 says:

              Food stamps are a subsidy for organic food. No one who has to pay cash can afford it.

            • Kowalainen says:

              For sure the life style of the farmers need to be adopted to close proximity to the farm lands for any real and sustainable organic and ecological farming.


              If there is a will, there is a way and plenty of hard work.

            • This eco-village uses a huge number of devices that would no t be available without fossil fuels. The chicken cages, for example, and the big container for carrying cabbages, as another. How is an eco village lifestyle supposed to be sustainable?

            • Kowalainen says:

              No one is doubting that. Their footprint is however reduced and gives them purpose in life.

              It’s just. Nice. It’s how we should be doing it; with style, humanity, technology, speed and grandeur.

              Absolutely not with unfettered nihilistic frivolous consumerism.

          • Grant says:

            Lack of available food would tend to push population lower.

            Not just by starvation of course.

            Disease and conflict would have their time as well.

            • Hideaway says:

              A real eye opener for me was about 30 years ago when I quit the organic industry to concentrate on my own farm and style of farming. On the certifying committee for organic farms, a farmer wanted to certify a property where the soil had unbelievably high levels of DDT and DDEs.
              The organic committee was going to reject it outright, but legal action on the fruit quality changed minds quickly. The farmer was made to have random samples of his fruit (apples) tested for the pesticides and a range of derivatives.
              The organic committee was certain that this would settle the issue, but it a found that none of the poisons in the ground translocated to the fruit.
              The fruit came up residue free, to as good as soils never sprayed with anything. He received his organic certification.
              Over the years testing always showed residues on fruit sprayed or on properties next to those that sprayed, but high soil levels of ‘nasties’ did not translocate through the plant.

              Basically most of what is portrayed as important organic principles is rubbish, and what is sprayed onto the crop all important. Organic industries allow some sprays that simply shouldn’t be allowed, but because it is ‘natural’ is perceived as good (and allowed).

              Organics certification is about as safe and trustworthy as OPEC oil reserve numbers.

            • Interesting!

    • Lots of “interns,” working for room and board, and not much more. Called by a modern name instead of slaves.

      • Grant says:

        True although even the rewarded are still slaves to the system in one way or another.

        People earning significant sums in Banking careers sometimes refer to themselves as Wage slaves awaiting the opportunity to retire.

        The Illusion of Freedom sustains us all. Some are less free than others.

  29. Dennis L. says:

    Peak Food?
    I am sure many of you have noticed the weather is changing, rain has been very heavy this year and farming is having a difficult time of it. What if we have passed peak food? Exogenous forces, ie weather could have some interesting effects. So, in economic terms is food elastic or inelastic? Droughts have happened and been recorded, but Noah had a flood and low lands in the Midwest are flooded, crops have been killed and it is too late to replant.
    When I go to purchase food I am amazed at the variety and the still low cost combined with almost effortless collection as compared to a hunter gather’s efforts to secure dinner, which many on this site seem to think we will become. The good news probably is with a hunter gather there is no salt added as in prepackaged food and certainly much less fossil fuel is required to run down dinner. The real issue then becomes the net energy problem, when dinner fails to provide sufficient calories to cover the hunt. An interesting physiological question is what the ideal body mass of a hunter is so as to have the most efficient musculature with the least amount of excess mass to use additional energy? Too little fat and a just in time food collection system could result in some problems.

    Dennis L.

    Dennis L.

    • DJ says:

      10-15% bodyfat is plenty for making it through a few weeks with little food.

      I think it is unrealistic fattening up like a bear and survive on fat for months.

    • There has always been a lot of variability in weather. Early people understood that they needed to put aside stores for times of crop failure. Even with crops in storage, famines have been very common historically. We have lived in a very unusual time. Fossil fuels have allowed us to have far more than we need.

    • Volvo 740 says:

      Energy products (food, gas, electricity, etc) all have the problem that the bottom 20% need some to survive also. As we saw in the chart above they are pretty much broke (at least compared to the rest of the US population), and beyond that there’s people across the world, easily 1B that have very little in terms of financial resources.

      That creates tremendous price pressure on these products. In the future there is going to be shortages, but as Steve from Virginia likes to put it: Shortages don’t make anyone richer. Shortages can lead to closed auto plants, and other “bad” events. Usually negatively impacting someone.

      I think the big risk right now, is that all those “horizontal straws” are starting to suck dry, and then who knows what happens. Cliff warning ahead.

  30. Sven Røgeberg says:

    «The conversation about a Green New Deal is bold, timely, and necessary. The most important component of the Green New Deal as currently drafted is its commitment to complete decarbonization. That is the destination, the moon for our moonshot. The question is: how do we get there? What we learn is it is at least twice as easy as we think.»

    • I read that Medium piece with a mixture of hilarity and sadness

      hilarity that anyone could confuse ‘Electrical power abundance” with abundance of everything else–that somehow the two are linked in a pattern of infinite growth.

      then an overwhelming sadness that this sort of thing will be believed by the great mass of unthinkers, who remain convinced that provided we generate enough electricity, our cornucopia will go on delivering goodies in ever-increasing volumes.

      The picture says it all: we can go on building/using roads using the power of windmills and solar power, and presumably planes, trains as well—not to mention hospitals, and every kind of factory.

      Wheels will continue to deliver wealth.

      still the old ”moonshot” thing is trotted out–ignoring the fact that moonshots are/were a colossal expenditure/waste of fossil fuel energy

      Ask yourself why the apollo program didnt continue?—insufficient return on energy invested. It really was that simple.
      The chinese will find that out soon enough when the aura of prestige evaporates and they just bring back rocks and photographs—just like the last visitors (if they actually go there at all.

      • Harry McGibbs says:

        For more hilarity and sadness, Norman, take a look at socialist firebrand, Aaron Bastani’s manifesto – ‘Fully Automated Luxury Communism’.

        “Fully Automated Luxury Communism claims that new technologies will liberate us from work, providing the opportunity to build a society beyond both capitalism and scarcity. Automation, rather than undermining an economy built on full employment, is instead the path to a world of liberty, luxury and happiness.”

        • Tim Groves says:

          Now that more Americans are waking up to just how low their place is on the pyramid wealth, it’s understandable that quite a few of them are dreaming of a socialist or communist promised land.

        • Xabier says:

          Amusing. That is exactly what my mother was taught at school in the early 1950’s: a world of infinite leisure was dawning, enabled by technology…….

          When will they get the basic psychological point that having everything, materially, does not lead to happiness, only to neurosis and a sense of meaninglessness?

          It would have to be a balanced by a sense of society moving to some desirable end-point: as for instance Soviet citizens, who were guaranteed food and housing, clothing, etc, still felt that their lives had an ultimate purpose in constructing something new and eventually achieving full Communism, always on the horizon.

          Only some very rare psychological types might truly flourish in a world of guaranteed plenty without effort – artists mostly, as it would give them complete freedom to pursue their art and their own targets without financial worries. But they often do this anyway without financial reward, its their nature.

          • doomphd says:

            you could say the same about some scientists, but most of the ones i know are very interested in the pursuit of money, for their salaries and for the support of their research projects. success in this endeavour is rewarded with tenure, promotion and receipt of academic awards. failure usually means administrative positions or exit from academia.

        • Kowalainen says:

          Yes, it will be communism for the owners of the highly automated mass production capability, Not for you and I. It is a big club of wealthy business interests that will reap the seeds they sow with the latest automation and AI push.

          And listen carefully, what have you done lately to be a member of that club?

      • Hideaway says:

        Norman, all those types of articles I’ve ever read make the same error, they always look at the cost of building a ‘renewable future’ in terms of dollars and never in terms of energy.

        Whenever I bother to challenge someone that thinks of a renewable future, based on electricity, I just concentrate the argument down to copper. e basically need at least double the current copper produced per annum for the 25 years it would take to build a renewable system, just for the solar and wind farms (based on 5.5t/Mw, current ave), plus associated charging facilities for cars, trucks, boats etc. The amount used on top of this for the electrical appliances (cars/trucks/boats/tractors etc) is extra.
        I then point them to how the copper grades mined are declining (from 1.2% to 0.6% on average) over the last 20 years, and ask the simple question of where does the extra energy come from to get all the necessary copper??

        People usually just fumble some answer about not knowing how depleted copper was, or something similar, but really find they have no answer at all and their original thought of ‘easy’ transition to renewables is not so easy.

        Of course the conversation gets changed at that point with something like “they will figure it out”, but people just want to talk about something different if I try to talk further realities.

        As I alluded to a couple of days ago, the Charles Mackay book “Extraordinary Delusions and the Madness of Crowds” is really relevant to our future, with ongoing civilization itself being the mass delusion.

        • Greg Machala says:

          Exactly Hideaway! One must think in terms of resource expenditure, not dollars, to get the true picture. But so many folks make the mistake of pricing “renewables” in terms of dollars. Presumably to make “renewables” appear more useful than they really are.

      • Dan says:

        Completely agree and a good analysis. The conclusion. I come to through the haze of sadness and hilarity is that maybe the whole and only point is to give hope. People need hope without it they become wild and dangerous.

        • Grant says:

          You know Dan things are becoming so bizarre now that I have come to the same conclusion. It may all be simply an exercise in hiding the truth whilst those in authority hope fervently that a miracle will suddenly appear from the world of technology.

          Someone I know who has a neighbour whose son is, apparently, quite involved with some hi-tech fossil replacing energy generation academic project (possibly based on Hydrogen?) has heard that there is strong hope of an imminent breakthrough.

          However what they may mean I have no idea.

          If they have come up with a way of combining some readily available and cheap to obtain components that require little or no energy to make ready, add some water and suddenly one has copious amount of electrical power via the gas produced, then indeed a miracle might be possible.

          However, if I owned a farm I would not be betting its value on such a result.

          • Ed says:

            Hydrogen is just a medium of exchange for energy. In physics we know energy is conserved. The energy value of hydrogen and by products is EXACTLY equal or less than (if some waste) to the energy of the input materials plus whatever heat/electric was applied.

    • psile says:

      The moonshot was a handful of people, for about 15 minutes. What this is proposing is akin to landing everybody on the Moon – permanently.

      To paraphrase (unsure who made this comment originally).

    • ljgljhvf76507gtp89 says:

      Critical thinking is not taught in school . Learning institutions have largely become political indoctrination centers. When the so called transition to clean energy is shown to be a farce with the most rudimentary logic the response is anger. Most people do not possess the ability to do a analysis. When this skill is needed cognitive dissonance is felt and avoided. The prevalent paradigm is one of like and dislike as a real entity, The physical universe is believed to be malleable to any idea no matter how nonsensical. It may be for the best. We are fundamentally unable to function in a capacity appropriate to our potential now. We are unable to even come to terms with our flaws and weaknesses as a species and our inability to change in any meaningful fashion. Better to live deluded or in sadness? All i know that is appropriate is to try to show some compassion now. Compassion now does make a difference now to those creatures suffering now. I realize that decision is a function of feelings and perhaps the prevalent paradigm. Its the best I can do. As far as the future I am as powerless and puny as the rest.

    • Grant says:

      It’s been a few years since it became evident that the ‘green’ agenda was purporting to be driven by Science but is ultimately an entirely political adventure.

      Maybe more people are beginning to work that out but the majority seem to be so influenced by the propaganda that any critical thinking possibilities they had are in hibernation. Or they have simply given up caring. That catch all phrase “It is what it is” comes to mind. Abandon hope all ye who enter there.

      Perhaps this goes some way to explaining why I rarely meet anyone who seems to have a well considered grasp on our current use of Energy and the potential challenges in the not too distant future.

      Does no one think of the children?

  31. SuperTramp says:

    Ha, ha ,ha….what do you MEAN…my Education didn’t guarantee the Good Life? How DARE they!

    College students have “seriously unrealistic expectations” for their starting and mid-career salaries, according to a new report commissioned by Clever Real Estate and conducted by online polling software Pollfish.
    “In particular, we labeled business students as the most ‘delusional majors’ because they overestimate how much they’ll be making out of college by $14,585 and how much they’ll make 10 years into their career by $47,070,” Tommy O’Shaughnessy, head of research at Clever Real Estate Analyst and the author of the report, told Yahoo Finance.
    The report, which asked 1,000 college undergraduates about their salary expectations, stated: “It seems the next generation of college graduates might be in for a rude awakening … the average college student has seriously unrealistic expectations for both their early and mid-career salaries.”
    The average Gen Z college student pursuing their bachelor’s degree expects $57,964 just one year out of college.
    Too funny, The disconnect between expectation and reality was “definitely due to a lack of information,” O’Shaughnessy explained.
    As Gail as often stated….
    Many borrowers are increasingly missing payments, with delinquencies and defaults rising, causing them to fall behind on major life milestones like buying a house or getting married.

    • Xabier says:

      Incredible as I find it, my little sister is in just this phase: two useless degrees under her belt, and blaming everyone for the lack of decent job prospects – only qualified to work in retail or in a bar. No debt, fortunately, as she received grants in Spain, but unless she now wakes up and trains afresh as a school teacher – and I’m not sure how that might be funded or even if possible – she is rather screwed.

  32. Harry McGibbs says:

    “China’s total public and private debt has reached new highs compared with the size of its economy, raising fears that Beijing’s stimulus push will expand it even further.”

    • Harry McGibbs says:

      “Facing a record amount of debt that’s about to mature, India’s non-bank financing companies are finding their troubles worsening as a crisis of credibility starts to bite.

      “The shadow lenders, which have been under increased strain after the collapse of IL&FS Group last year, have a record 1.1 trillion rupees ($15.8 billion) of local-currency bonds due next quarter, according to data compiled by Bloomberg.”

      • India should be higher up in our list of countries with debt problems.

        • Harry McGibbs says:

          “China’s central bank has acknowledged its monetary tools are insufficient. The most powerful ones are proving too blunt to drill through a hardening financial system.

          “The country’s money markets have been shuddering since regulators took over Baoshang Bank Co. last month, despite initial assurances from the central bank and other authorities that they would maintain ample liquidity…

          “Funding costs for companies have shot up as large banks flinch from lending to some counterparties in the interbank market. For the first time in more than two decades, lenders face the prospect of defaults and haircuts on loans to other financial institutions…”

          • Harry McGibbs says:

            “Bond traders in China are rethinking counterparty risks as shock waves from a government takeover of a bank ripple through the country’s financial markets.

            “It’s now getting harder for corporate bonds to be accepted as collateral for repo financing as lenders increasingly demand top quality bonds such as Chinese sovereign bills and policy bank notes as pledges. Traders are having second thoughts on taking even AAA rated short-term bank debt as security in the wake of last month’s seizure of Baoshang Bank Co.”


          • SUPERTRUMP says:

            Maybe they should seek a loan from our Federal Reserve at a special rate cut!

        • Harry McGibbs says:

          “Car dealerships in Delhi wear a deserted look as there’s no end to India’s auto blues…

          Nitin Kumar, a young automobile salesman in South Delhi’s Lajpat Nagar, isn’t having the best of days at work. “The situation has worsened in the past six months,” Kumar said. “Earlier, 60-70% of customers who made enquiries through phone calls and other channels, used to visit the showroom. This has now gone down to 10-20%.””

          • We keep hearing about problems in India. If people there aren’t buying cars, it will not be long before car dealerships have financial problems. Also Indian companies manufacturing vehicles.

  33. Harry McGibbs says:

    “Experts say ensuring antibiotics are only used when absolutely necessary is a vital way to stop the spread of antimicrobial resistance (AMR). A United Nations report published in April warned that unless urgent action is taken AMR will cause 10 million deaths a year by 2050 and damage to the global economy similar to the 2008-09 financial crisis.”

    • Harry McGibbs says:

      “Britain will face a cyberattack from a hostile state soon that could bring down the financial system, a Bank of England policymaker has warned. Anil Kashyap, an external member of the financial policy committee, told MPs that it was only “a matter of time before one of these things happens on a big scale”. He said that the Bank was vulnerable despite preparing its defences.”

      • HDUK says:

        And this would be just the cover the financial elites will crave as their financial manipulations hit the rocks big time. I wondered why they were poking Iran/Russia with very large sticks. OR may be they will instigate it and blame the former.

    • Good luck!

      • John Doyle says:

        Antibiotic resistence was on TV last night. Colistin, a last resort antibiotic, was sent to China for swine sickness. Within a year bacteria had developed resistence. This sort of failure is unaffordable. BIg Pharma is not much interested in finding new antibiotics. Reason being that they will be last resort applications and so not profitable to produce.
        This sort of profit distortion should be stomped on.The fed should pay the drug corps to develop the drug as profit is no excuse to not do so. The Fed pays ‘free’ money to settle it.

  34. Harry McGibbs says:

    “Donald Trump has accused the European Central Bank of unfairly manipulating the euro, further raising the stakes for Washington in its trade and diplomatic disputes around the world. The US president suggested in a tweet that comments by Mario Draghi, the head of the ECB, had triggered an immediate slide in the value of the euro versus the dollar, “making it unfairly easier for them to compete against the USA”.”

  35. Harry McGibbs says:

    “An obscure product made by oil refineries has a grim story to tell investors right now about the fortunes of the global economy.

    “That product is naphtha, something used to make a vast array of goods while also being integral to churning out gasoline. Oil refiners’ margins from making it are the weakest in years in Europe and Asia. Unusually, some petrochemical plants in Asia have even been losing money when processing it.”

  36. Baby Doomer says:

    New study shows how environmental disruptions affected ancient societies

    A new study shows that over the past 10,000 years, humanity has experienced a number of foundational transitions, or ‘bottlenecks.’ During these periods of transition, the advance or decline of societies was related to energy availability in the form of a benign climate and other factors.

    With the human population having exceeded the capacity of Earth’s resources, this analysis suggests that a transition toward sustainability for the current energy-dense, globalized industrial society will be very difficult if not impossible without dramatic changes.

    They found that when energy was abundant, societies expanded and prospered. Conversely, when energy sources declined, there was societal contraction and collapse.

    Here is the study;

  37. Harry McGibbs says:

    “Investors haven’t been this pessimistic since the global financial crisis of 2008.

    “That’s according to a Bank of America Merrill Lynch survey of money managers with $528 billion between them. Equity allocations saw the second-biggest drop on record, while cash holdings jumped by the most since the 2011 debt-ceiling crisis, the June poll showed.

    “Concerns about the trade war, a recession and “monetary policy impotence” all contributed to the bearish sentiment, Bank of America said.”

  38. You say: “China’s total energy production has been rising recently, but only with great effort”

    Is it something you already explained before, may I ask further clarification ?

    • I am looking at the chart if total energy production for China. Up until 2012, it as rising fairly rapidly. Then growth in coal production slowed remarkably in 2013, and began to decline in 2014. Oil production has also begun to decline. China has recently been able to raise coal production (but not to the level of 2013 coal production) by forcing imports down, so coal prices will rise in China. This involves great effort. It is not really sustainable in my opinion. China is facing a peak energy problem, brought on by coal and oil prices that are both too low.

  39. Yoshua says:

    ECB is ready for more stimulus to fight low inflation. The time has come to end old rules and buy moooooore debt.

    • Xabier says:

      I’d dearly love to be stimulated by Signor Draghi, but the last 10 years really haven’t done much for me, or most there people. not like that terrific ride pre-2008.

      He’s a washout.

      All talk and no trousers: so Italian……

      • ssincoski says:

        I’d like to see him give every family 1000Euro per month with the only stipulation being that it has to be spent. Maybe some kind of time limited debit card. Spend it or lose it. If their real goal was to stimulate growth this would be much more effective than giving money to his banker friends. Of course not good for the environment but what can you do?

        • Tsubion says:

          No need for more plastic.

          Just an app on your smartphone.

          Still… that’s a lotta lotta fantasy money every month just to keep people fed and drugged.

      • Yoshua says:

        Mario printed and pumped in 4 Trillion euros into the euro zone. It is the best money making machine ever created by an Italian.

        Well…the Italian mafia is also printing euros…but not on the same scale…

        I have never heard him talk…but I’m sure he is wearing trousers when he does.

        • Xabier says:

          But he left me feeling flat and unsatisfied, after such big promises. What went wrong? 🙂

          • Harry McGibbs says:

            That’s what happens when you substitute monetary via*gra for true passion, Xavier. Mario left us feeling cheap. 🙁

          • Yoshua says:

            Mario:” I will do whatever it takes…and trust me…it will be enough”.

            So the Italian lied. But let’s give him another shot. We all know that it’s never enough…and the euro zone is after all a black hole.

        • ssincoski says:

          Just more proof that the ‘trickle-down’ effect doesn’t work as advertised. It might work as planned (no trickle-down allowed or expected). Ask the Greeks how much better they have it after all that money-printing.

  40. Re-election campaign scam, unicorn promises or not, POTUS has just announced the mass deportations of illegal aliens are about to commence NOW for real. In total the number is like ~10M people affected, which is obviously a big aggregate demand for the US economy, also jobs etc.., so not sure how serious and how many individuals will be actually deported before the next elections..

    This will also possibly corroborate the OFW story about plausibility of sanctions/tariff war as illegals (repatriating money to Latin America and depressing wage levels in the US) is integral part of circling the wagons around insular national economy (theory).

  41. Harry McGibbs says:

    “The global slowdown will extend into next year as mounting trade war uncertainty forces businesses to rein in spending and Chinese consumers turn cautious, Fitch Ratings has warned.”

  42. Harry McGibbs says:

    “Fears over economic growth are spreading, and investors are pricing in the Federal Reserve cutting interest rates three times this year, beginning next month. And yet, various measures of market volatility are surprisingly subdued…

    “It is not just a vague sense of unease that is increasing. The global version of Citi’s Economic Surprise index — which reflects how data comes in, compared with expectations — is locked in its longest run in negative territory on record. In other words, economic data has been disappointing for an unnervingly long stretch.”

  43. Harry McGibbs says:

    “Inflation expectations for the eurozone have plunged to a record low. Investors and traders are worried its economy is slipping into “Japanification”, an inescapable period of stagnant growth and ultra-low interest rates.

    “The decline in a closely-watched inflation gauge – the five-year forward rate – has accelerated as global growth stutters, tumbling to an all-time low of just above 1.10pc yesterday.

    “The drop indicates investors believe the European Central Bank (ECB) might be incapable of stopping the region sliding into deflation if the world economy suffers a downturn…

    “Interest rate swaps indicate investors are starting to brace for the ECB to cut rates deeper into negative territory. However, Bank of America Merrill Lynch has warned further cuts risk the eurozone reaching the so-called “reversal rate” – the point at which ultraloose monetary policy “reverses and becomes contractionary for lending”.

    “”The ECB does not have many bullets left when it comes to cuts and it certainly has fewer than other central banks,” it said.”

    • Harry McGibbs says:

      “We are faced with a pile of s***,” an activist investor said during the nine-hour event, while another shouted: “If even Pope Benedict XVI can resign, why not [Deutsche Bank chairman] Paul Achleitner?”

      “It is no surprise that investors are angry (tempers were described as “boiling over” in the Frankfurt concert hall where the annual meeting was held). Once a symbol of German economic might, Deutsche’s downfall has been dramatic…”

      • If I recall it correctly this DeutscheBank story has been chiefly about one particular faction of euro capital trying to enter the big boys scene and duke it out on the highest parlors of global terra/giga finance. And they lost bigly.. you can’t compete with accumulated pirate wisdom of centuries of the anglos and other old factions there, what a predictable outcome.. Too bad someone had to pay for it, the skimmed value has been already redistributed not only from Germans but their vast colonies in the wider EU realm as well.

    • Harry McGibbs says:

      “At a time of rising U.S.-China trade tensions and a marked slowdown in the European economy, the last thing that the world economy now needs is a deepening in the U.K.’s Brexit crisis. Yet, it is difficult to see how the U.K. economic and political situation will not worsen meaningfully as the world’s fifth-largest economy approaches its Oct. 31 Brexit deadline.”

  44. Dennis L. says:

    I came across a book by Ahrens, Sönke regarding note taking entitled “How to Take Smart Notes.” For those of us who read widely and attempt avoiding confirmational bias it is an interesting system and the “slip box” system might be worth a try; Luhmann’s ideas on which it is based seem to be a very interesting. He wrote on a wide range of subjects but mostly human society if I understand the ideas at this point.
    The idea of confirmational bias seems to be a serious issue in many areas of American and world debate, avoiding it is a challenge. In our world of “oil” it was evident at the ASPO meetings and in retrospect Gail avoided this problem.
    Were any readers in Lisbon? That was a wonderful meeting in a facility which was in large part due to the efforts of Calouste Gulbinkian known as Mr. 5%. Some of you may find his life interesting, one smart cookie.

    Dennis L.

    • Davidin100millionbilliontrillionzillionyears says:

      “The idea of confirmational bias seems to be a serious issue in many areas of American and world debate, avoiding it is a challenge.”

      I see confirmation bias everywhere I go… 😉

      anyone else?

      • If a group needs to sell its product, or even to get donations, it has to tell a consistent story that readers want to read. It is very difficult to get an unbiased look at what is happening.

  45. theedrich says:

    With all of the hysteria whipped up by the DeepState and Fake News media about how Satanic President Trump is, the elephants (plural) in the room go completely unnoticed, in particular the growing drug cancer. On Tuesday, 2019 Jun 11, C-SPAN ( recorded a Senate Hearing on Combating Drug Trafficking. A few points made during the discussion about this existential crisis:
    Illicit drug trade in U.S.: profits $426 to $652 billion/yr
    Distribution: global and growing
    Adapts to market changes
    Deaths due to drugs (2017):
    California, 5,000;
    Texas, ~3,000, about half from synthetic opioids;
    U.S.: approaching 70,000 – 174 every day;
    globally (2015, latest): 450,000;
    # people murdered in Mexico since 2006 in connection with the drug trade: 150,000.
    In 2018, in Mexico, an estimated ⅓ to ½ of 33,000 murders committed were drug-trafficking related, with only 21% of the cases having gone to trial.
    In 2018, National Drug Assessment: drug poisoning = leading cause of death and injury in the U.S.
    (outnumbers deaths from firearms, motor vehicles, suicide and homicide).
    # of major source or transit countries: 22, primarily in Central and South America, as well as Asia
    Domestic and transnational cartels operating in Mexico and Texas: Sinaloa; Jalisco New Generation; Gulf; Los Zetas; many others
    In the last few years, fentanyl has “skyrocketed” in prominence
    In 2018, more than 133,000 pounds of heroin, cocaine, meth and fentanyl, were seized in the U.S.
    (To date in 2019, nearly 101,000 pounds of these substances have already been seized, and we’re just halfway through the year.)
    The cartels traffic in: cocaine, heroin, fentanyl and other illegal drugs; migrants; humans for sex slavery; money laundering; counterfeit goods; etc.
    World’s largest supplier of illicit opium: Afghanistan. (Mission accomplished — after 17 years of war?)
    Migration and drug trafficking may arguably be separate issues, but when Border Patrol has been overwhelmed by this mass influx of humanity swarming into entry points, Customs and Border Protection officers have to be assigned different duties to take care of children and families; consequently, the drug cartels exploit that chaos and uncertainty to move more of their poison into the U.S. It is, thus, impossible to separate migration from drug trafficking entirely.

    Note that the “Beto” (true name: Robert Francis) O’Rourke, darling of the Leftist media, ridicules the War on Drugs and says it should be eliminated.
    And the Democratic Party, holding the House of Representatives hostage, refuses to pass laws to stop the invasion coming through the southern border. It wants more outhouse parasites imported so that the Democratic Party will be the only political party in the U.S.

    Yet the DeepState and media are more interested in pursuing foreign wars than in saving the lives of Americans at home.

    Also of note: According to 𝕿𝖍𝖊 𝕹𝖊𝖜 𝖄𝖔𝖗𝖐 𝕿𝖎𝖒𝖊𝖘, the Pentagon, through its Cyber Command, is now using cyber “implants” to attack Russia’s power grid ( (Of course, if Russia did the same to the U.S., it would be declared an act of war. See The paper also says that the Pentagonians have refrained from telling Trump about what they are doing for fear that the President might leak the information to Russia. So now we know that the “heroic” military has its own foreign policy, which supersedes that of the U.S. True democracy.

  46. SUPERTRAMP says:

    Setting ALL kinds of records…..
    633 divers collect over 1,500 pounds of trash at a Florida beach — and set a world record
    The Guinness World Record-setting 633 divers retrieved at least 1,626 pounds of trash and 60 pounds of fishing line at the Deerfield Beach International Fishing Pier in Florida.
    The official weight of the trash recovered is still being tallied, and the number is likely to grow, said Tyler Bourgoine, who participated in and helped organize the cleanup. Ocean conservation group Project AWARE estimates that the cleanup might have removed as much as 3,200 pounds of marine debris
    Plastic and other human-produced waste have become a growing presence and problem in the oceans. About 8 million metric tons of plastic enter the ocean annually — equivalent to the weight of nearly 90 aircraft carriers, according to the National Oceanic and Atmospheric Administration (NOAA).
    When I walk my little chiwawa/terrier, Cricket, I bring along an empty bag to collect trash thrown along the side of the street….mostly empty plastic water bottles. The bottlers call it “Blue Gold”,
    Must be a high profit product..sarcasm.

  47. SuperTramp says:

    Well now, if this isn’t a message to all of us relying on SA to provide BAU Oil to fuel our cushy lives!

    The privatisation drive is part of Vision 2030, a package of reforms led by Crown Prince Mohammed bin Salman that is intended to wean the economy off oil and create jobs for young Saudis.

    HA,ha,ha….wean off oil… that’s funny…create jobs for young Saudis…that’s even funnier…young Saudis have no interest in working….

    It gets better….The government’s aim to attract investment into everything from education to sports, a cornerstone of its effort to trim dependence on oil revenues, has been mired by some holdups and fallout from the murder of journalist Jamal Khashoggi.

    Sure, they will….seems the giant elephant oil field is in terminal decline and the handwriting is on the wall.
    Maybe, they can invest in solar power and export the energy via Satellites?!

    The end of the Oil Age should provide a lot of comedy shows. Humans have a lovely imagination that entertains to no end.

  48. MG says:

    Just happened in my surroundings: the employee shot dead his foreman into forehead and himself in an engineering company in Dubnica, western Slovakia.

    He went directly to the meeting of the managers where he commited the murder:

    The preceding hot weather, drugs etc. could play the role, too.

    • MG says:

      This former employee has been fired from the given company and the given foreman contributed to his dismissal as the employee was not reliable and the drugs also played a role in his case.

      We live in more and more dangerous times…

    • SuperTramp says:

      MG, this is common here in the United States. Tired of watching the nightly news and hearing another work or school related shooting.
      The sad part, many are committed by young adults for seemingly no reason other than being alienated from family or their peers.
      Unfortunately, this may be a world-wide trend.
      I can post examples but……here in South Florida we are still getting over this tragic event

      Roughly a year before the massacre at Marjory Stoneman Douglas High in Parkland, school officials were warned by a student that Nikolas Cruz had mused about shooting up the school, according to a young woman’s sworn statement to police, which was released Friday.
      As a result of that warning, she said in her statement, Cruz was “expelled” from the student body.
      If true, it would add to a list of what critics have called a series of warning signs missed or downplayed by the Broward school district, law officers and mental health professionals, all of whom had troubling encounters with the Parkland teenager.

      P.S. On the school property that day a Broward County Sheriff was on duty and the head of the Active Shooter program, but did nothing during the shooting.

      The Broward Sheriff’s Office has also fired Peterson for neglecting his duties at the high school on the day of the shooting after an internal investigation.The Broward County Sheriff’s Deputy who fled at Marjory Stoneman Douglas High School when a mass shooting broke out has been arrested for failing to do his job and help limit the carnage … and he’s facing up to 96 years in prison.
      Scot Peterson has been arrested and charged in Florida and has been hit with 11 criminal charges stemming from the Parkland shooting on February 14, 2018. from TMZ

      • MG says:

        There is a growing number of the people who become alone or alienated from their family. The quest for higher and higher expectations in work and lower and lower wages squeezes them out from the society.

        Who talks about the truth about the implosion that is going on?

        • MG says:

          His story is quite interesting, here from google translate, slightly corrected:

          The shooter Martin P. grew up at the Dubnica housing estate Centrum 1. He only lived with his mother, he didn’t know his father. “He was always weird. She even beat her mother so much that one day she left the apartment and moved to her father, whom she was looking after. But she returned to Martin every day, she was cleaning, washing, cooking. Whatever it was, he was her son, “the neighbor sighed.

          Martin’s mom died three years ago, he stayed in the apartment himself. According to the people, his oddness has deepened. “He took drugs, first marijuana, then others, also pervitin, and he was fired from work, he had debts. He used to have the cars, then got rid of them, always using a bike. Occasionally he walked alone on the street and laughed, I had chills out of it. On Monday morning I saw him sitting on his bike, wearing overalls, putting his hood on his head, always walking around, lighting a cigarette and kicking off. I had no idea that he was going to murder when the cops came in and took his apartment. They were looking for weapons. He was supposed to have three, two of them he took with him, ”she said. Some time Martin worked abroad, but he always came back. “Had he not taken drugs, he would have been handy, had a good knowledge of electrical installations, but he became spoiled,” the neighbor closed”

        • TIm Groves says:

          On the other hand, what is Czech Republic homicide rate?

          According to this source it is down to 0.6 per 100,000, just a third of what it was 20 years ago.

          For comparison, the US homicide rate is 5.3 per 100,000, the Russian rate is 4.9, many Caribbean and Central American countries have homicide rates that are ten times the US rate, and some US cities are up there with them.

      • Chrome Mags says:

        This is why I don’t watch local news. I also don’t watch national news for all together different reasons.

    • I am sure that news stories of what others had done played a role as well.

  49. Harry McGibbs says:

    “Chinese leaders argue their citizens can outlast Americans in a trade war because they can endure hardship better. But, as China’s economic slowdown deepens, there’s a growing sense of restlessness. Not only does the next rung of the ladder look increasingly out of reach for many Chinese, they’re starting to question whether government decrees can fix the situation.”

    • Harry McGibbs says:

      “Rabobank estimate China’s pork production may fall by a third as a result of African swine fever. If correct, that would be a major impact on the global food supply chain.”

    • Xabier says:

      When Russians were faced by the onslaught of the Germans in WW2, they stuck with it because 1/ there was no alternative, it was a life or death struggle; and 2/ they still believed fervently in the ideals of the Revolution.

      Whereas the Chinese are no longer motivated by any ideal,as far as I can see, except personal enrichment, have never, ever had it so good, and now expect the government to ensure it for them.

      The government telling the Chinese people: ‘You can take, you’re made of steel!’ is s bit rich.

      It will be fascinating to see how this plays out, as far as we are allowed to know.

      • Yorchichan says:

        Stalin’s Order No. 270 published on August 16, 1941. This order stated in regard to captured Soviet POWs:

        If…instead of organizing resistance to the enemy, some Red Army men prefer to surrender, they shall be destroyed by all possible means, both ground-based and from the air, whereas the families of the Red Army men who have been taken prisoner shall be deprived of the state allowance and relief.

        The commanders and political officers…“who surrender to the enemy shall be considered malicious deserters, whose families are liable to be arrested [the same] as the families of deserters who have violated the oath and betrayed their Motherland.”

        So, for a Soviet soldier, surrendering to the Germans meant almost certain death for oneself and ones family. Retreating without orders would likely result in instant summary execution. I expect these facts were at least as motivating as fervent belief in the ideals of the Revolution.

        • Chrome Mags says:

          By decreeing not one step back and enforcing it, essentially turned millions of soldiers into army ants. Later of course it was sentimentally referred to as the great patriotic war.

          • Xabier says:

            All very true. But they did actually have an ideal they believed in, and fear alone does not, never has, make men and women fight and make sacrifices.

            It’s worth reading their memoirs, the real ones.

            On the other hand, the more advanced tribal peoples – Alans, Huns, Turks, Visigoths, etc, generally fought for wealth, fame and the sheer love of war and violence – no higher ideals there.

  50. Harry McGibbs says:

    “Bleak’ market signs for global economy, warns ECB hopeful. A leading contender to head the European Central Bank has warned of “bleak” indications about the health of the global economy and said a breakdown in co-operation was paralysing officials’ ability to fight the next crisis.”

    • Harry McGibbs says:

      “British companies look set to cut their investment by the most in 10 years in 2019 as the Brexit crisis drags on, weighing on future economic growth prospects, a survey showed on Monday.”

    • Xabier says:

      Except, of course, what this chap would call a ‘healthy’ economy is -a la Catch 22 – a globally-destructive, waste-creating one.

      If it ails and dies, so do we.

      If it thrives, we also die – poisoned.

      Damn, I never volunteered for this doomed mission on planet Earth…… 🙂

      • Niko B says:

        For many days we travelled from a distant place and time,
        To reach a place they call the planet earth,
        There was to be a celebration,
        On the mission of the sacred heart.

        The planet earth from way up there is beautiful and blue
        And floating softly through a rainbow,
        But when you touch down things look different here,
        At the mission of the sacred heart.

        Watching all the days roll by
        Who are you and who am i?

        On a dirty worn-out sidewalk, sits a mother with a baby,
        In her vale of tears she sees no rainbow
        And someone’s singing from a window
        In the mission of the sacred heart.

        Chorus — repeat

        There’s a building on a corner, in a city, in a land,
        On a place they call the planet earth,
        My orders are to sit here and watch the world go by,
        From the mission of the sacred heart.

        Chorus — repeat

        Electric Light Orchestra – Mission Lyrics

        • Tsubion says:

          If you rise up just a little bit… you don’t see ANY activity on the planet.

          An observer would see that earth has water at a certain distance but that’s it.

          The same as when you look at a tenis ball you just see a ball.

          You don’t see the billions of bacteria crawling over its surface going about their business.

          The bacteria, of course, from their perspective, think they are the most important thing in the universe and pontificate to each other about collapse and other fads.

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