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.
Every business cycle has ended with a stock market top. This business cycle has been fueled by zero rates and QE. What comes next? QE forever and rates deep in negative territory?
World PMI vs. World Stocks
https://pbs.twimg.com/media/D-beTh1XUAEUgcd?format=jpg&name=medium
Quite a divergence!
I just received my new ten-year UK passport in the mail, and I notice that on the cover it no longer bears the words EUROPEAN UNION at the top.
Instead, it simply states UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND.
It’s not just that we have left the EU in spirit if not yet in law, it’s like we were never there!
https://www.cnbc.com/2019/07/01/companies-are-warning-that-earnings-results-are-going-to-be-brutal.html
so then Jerome Powell will start yakking about lowering interest rates and the stock markets will go up…
the US can lower rates for quite a while before they go negative a la Germany and Japan…
the new normal…
the new whatever-it-takes-for-BAU…
when will the fed announce the next interest rate movement is that soon
as the first half of 2019 is a wrap, insayne bonds:
Bund 10 year is minus 0.354%
Japan 10 year is minus 0.153%
whatever it takes to keep BAU wobbling along…
the duct tape is holding…
95% of people with car loans are still paying their loans…
99+% of people with jobs are still showing up for work…
the financial wizzards of The Core continue to push the major economic problems out to The Periphery…
recession looks near certain for The Core soon, but the full effect seems highly unlikely until 2020…
(that’s merely a quasi-educated opinion there)…
BAU FULL THROTTLE 2019, BABY!
There’s an online account being offered in Japan by a respectable, reliable financial organization offering 0.23% positive interest on term deposits. I saw an add in the paper about it this morning. I noted the rate with interest because the interest rates normally quoted these days are homeopathically small.
Preppers, looking to head out to the rural countryside to escape collapse!?
It’s already there! The Piedmont Plantation is in hard times….
e shocking. Urban and metropolitan employment today is well above what it was prior to the Great Recession, whereas total employment in nonmetropolitan areas is still below what it was prior to the Great Recession. And there is clearly just an absence of job opportunities in the countryside that is making these sort of economically unappealing places to live.”
Parts of rural America are ‘projected to never fully recover’
While 97% of America’s land mass is rural, only around 20% of the population resides in those areas, according to the U.S. Census. The data also showed that around 65% of the total rural population lives east of the Mississippi River, and nearly half of the people living in rural areas are in the South.
These rural areas “are increasingly in distress, and we find that rural economic well-being is more volatile generally,” said Fikri. “As the recovery progressed, metropolitan areas really benefited disproportionately. The Great Recession didn’t impact rural zip codes that severely as a group, but the recovery didn’t really reach them either.”
Distress was defined through seven metrics: educational attainment, housing vacancy, unemployment levels, poverty rate, median income, the change in number of jobs, and in business establishments.
“It’s really troubling, we did a casual overlay of the [Distressed Communities Index] map with that of where student debt is most burdensome and found that delinquency rates are higher in places where economic opportunity is worse,” Fikri said
https://finance.yahoo.com/news/rural-america-distressed-communities-181618799.html?bcmt=1
Perhaps if you can hire a few locals to pull weeds in your survival garden and clean out the hen house, you’ll be welcomed!
/////delinquency rates are higher in places where economic opportunity is worse,”/////
that is why social breakdown will occur in those areas
they do not understand the reasons for their misfortune—so ”blame it on the guvmint”
but no one can back surplus cheap energy.
and without that, there cannot be jobs that pay higher and higher wages year on year.
jobs require energy consumption, far more than to 2000cal a day necessary to keep someone alive
the sick joke is of course that they believe capitalism is the answer to their problems, whereas that’s the very thing that’s worsening their condition
Capitalism = more technology; more debt; more competition; more big companies
These only work when there is a rapidly growing supply of cheap to produce energy products of the types needed by the system. Coal seems to be especially important, because it is difficult to make steel without it. (Electricity-based workarounds for lack of coal seem to depend on partially processed materials as inputs.) Concrete also tends to be coal-based, in much of the world. Without steel and concrete, commercial and industrial construction grind to a halt.
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The Leader of the Free World brought her daddy along to Osaka.
https://pbs.twimg.com/media/D-X3nnlWwAADae0?format=png&name=small
It’s infrastructure week!
https://pbs.twimg.com/media/D-YXI-hXYAM0CFz?format=jpg&name=large
Yes… it’s starting to look crazy hot out there…
Whatever you do…please don’t vote for crazy Sanders!
https://twitter.com/i/status/1145520734980075520
You don’t think Trump is crazy? He allowed a banned insecticide linked to damage to developing children’s brains to once again be used. He allowed the killing of mammals and turtles caught in fish nets and that’s just to name a few. Trump isn’t for regular people you know, just the wealthy and corporations. But maybe you’re wealthy or part of a corporation.
I would imagine what Trump’s advisors are saying is, “If we want to keep prices of goods low enough for consumers to afford the products we are selling, we need to use the banned insecticide. We need to allow the killing of mammals and turtles cause in fish nets.”
“If we adopt the policies that environmentalists and others advocate, we would end up selling a product only to a few wealthy customers. Many current customers would not be able to afford the new higher-priced goods. Nearly everyone would lose out, including businesses, and all but the wealthiest customers. In fact, if we cut corners (like China and India), it probably would be possible to get production costs down enough that even poorer customers could afford our products. If this should happen, many people would benefit: the businesses that grow; the additional workers who get jobs at these businesses; and the many poor customers who could now afford our product.”
I suppose that they might discount the harm that a banned insecticide might have. Perhaps they might think of this as only an occasional person who is affected. Or they may not believe the impacts are as bad as claimed. This is just my guess, regarding how the change would be viewed. It would not be viewed as only benefitting corporations.
What tosh! US Presidents from LBJ to Bill Clinton allowed chlorpyrifos to be used without restriction. It was the George W. Bush administration who for banned it for most residential uses in 2001. So well done Dubya!
We are all contaminated! We’ve been affected by chlorpyrifos ands a thousand and one other chemical poisons specifically synthesized to kill organic lifeforms! But Trump is crazy because he took time out of his busy schedule to personally allow this one to go on being used?
On top of that, American kids for the past 40 years or more have been jabbed into heaven knows what kinds of brain damage and autoimmune-related problems by dozens of needles full of heaven knows what witches brews of bits and bobs, and lamentably Trump has done nothing since getting elected to put a stop to any of that.
https://dasg7xwmldix6.cloudfront.net/episodes/791023_w8Weq5Hg.jpg
He allowed the killing of mammals and turtles caught in fish nets
So did Obama, Bush and Clinton.
You are a referring to a new rule scheduled to go into effect in 2017 aimed at protecting endangered whales and sea turtles on the West Coast from mile-long gill nets meant to catch swordfish, that the Trump Administration decided not to put into effect because it judged alternative conservation measures in recent years had been very effective at reducing numbers of whales and turtles caught in said mile-long gill nets.
I don’t like killing endangered species either. I don’t like killing, period. I’m like a Jain in that respect. But it seems to me that you don’t like Trump; that for you, any excuse to show your disgust with Trump trumps all other considerations.
https://ethicsalarms.files.wordpress.com/2016/02/trump-meme.jpg
It simply seems like a very strange choice of ads to me.
It’s totally crazy!
Nice table showing manufacturing contracting in nations around the world over the past year:
https://pbs.twimg.com/media/D-YpsxZXUAAz-jg.jpg
https://pbs.twimg.com/media/D-ZJYhqU0AAujVr.jpg
The second chart seems to be the same information, in a different form.
Notice that the latest readings are on the left. Of course, red is contraction; green is expansion. Almost every country show is doing badly now. The ones that are doing less badly than the others are Viet Nam, Greece, and India.
Global PMI contracts for two consecutive months:
“Two months of contraction in global trade has not happened in six-and-a-half years, according to the J.P. Morgan Global Manufacturing Index.”
https://www.bloomberg.com/news/articles/2019-07-01/global-factory-output-contracts-for-the-first-time-in-80-months
What I find striking in the Global PMI article is that the PMI index hit a peak in December 2017 (in other words, 18 months ago), and has been declining ever since. The index went below 50 (indicating contraction) two months ago. But the other thing we should be aware of is that the manufacturing growth of the world economy seems to have been slowing for a very much longer period, namely 18 months. This period included the time when the US was cutting tax rates, particularly for businesses. It also includes the time when China and the US were stockpiling goods, in advance of the possible imposition of tariffs. Both of these activities provided temporary stimulus. Once this stimulus was off, a slowdown in manufacturing should be expected.
This is the chart Bloomberg shows:
https://gailtheactuary.files.wordpress.com/2019/07/global-manufacturing-index-becomes-progressively-worse-jp-morgan.jpg
^^^Thanks for that, Gail. I must confess I have maxed out my allowance of free Bloomberg articles, so could only see the first para.
“Australia is about to reach its last percentage point of interest-rate ammunition, dragging the country’s economy and markets deeper into the low-yield world that’s already engulfed many of its developed-world peers.
“Yields on the nation’s 10-year government bonds hit an all-time low 1.26% last week…”
https://www.bloomberg.com/news/articles/2019-06-30/-is-that-a-typo-australia-recoils-at-record-low-yield-reality
“[South African] Institutions and municipalities in financial crisis for the past five years have no recovery plans.
“The management of beleaguered state institutions and local municipalities last week reached new crisis levels after employees at a number of institutions were either not paid on time or not at all.”
https://city-press.news24.com/News/state-runs-out-of-cash-struggles-to-pay-salaries-20190701
As I have remarked before, South Africa is a coal exporter. It also uses coal for its own electricity supply. It seems to be suffering from Peak Coal. South Africa’s own coal consumption peaked back in 2009. South Africa is suffering from a problem of needing higher prices for its coal, but customers (including its own citizens purchasing electricity made from coal) not being able to afford such electricity.
Perhaps Australia’s future prospects for investment return aren’t very good. This seems to be a worldwide problem.
yes investment return will be a world-wide problem but if the financial system does not collapse but contracts as the years go by we may just survive although their will be many changes many useless activities will disappear as the net energy will net be there for them.
well, at least we made it through the first half of 2019…
BAU tonight, baby!
https://www.azquotes.com/picture-quotes/quote-something-that-s-unsustainable-like-a-dysfunctional-relationship-can-go-on-longer-than-peter-r-orszag-141-41-56.jpg
and something that’s unsustainable can go on longer than the longest-it-could-possibly-be-expected-to-go length…
to beat a nearly dead horse, if BAU can’t possibly go on beyond 2025 (which is merely an opinion), then the actual future could be BAU until 2030 or longer…
it’s fun to analyze trends and make guesses/predictions…
finally:
the end could be slower and less messy “than you think”…
Very true. Or it could end in accordance with my own preference with a curtain coming down, zany music, and Porky Pig saying “Th.. th.. that’s all,. folks!”
I think between us, we’ve covered all the bases there.
“The world’s biggest central banks, having been on a money-printing binge for years, are about to embark on a fresh round, it seems… the consequences of profligate money-printing will thrust themselves upon world attention probably not far down the road. They are like the unseen but massive roots of a tree that threaten to undermine and topple the house – or global economy – it is supposed to shade.
“Such risks to the delicate, and false, equilibrium in which the global economy is poised at present ought to be obvious. But policymakers are either ignoring them (hoping they will go away) or have just too much on their plates with trade and currency wars to pay much attention.”
https://www.scmp.com/comment/opinion/article/3016579/central-banks-are-stoking-dangerous-fire-inflation
“Corporate borrowing poses a danger to the global financial system and could trigger a crisis in the same way US sub-prime mortgages sparked the 2008 banking crash, the organisation that represents the world’s central banks has warned… While it was not clear whether or how a crisis might unfold, the $3tn (£2.4tn) market for low-grade corporate debt was already “overheating” and risked provoking a panic that could send market values crashing as happened 11 years ago.”
https://www.theguardian.com/business/2019/jun/30/corporate-debt-could-be-the-next-subprime-crisis-warns-banking-body
“Global central banks may have to issue their own digital currencies sooner than expected, the general manager of the Bank for International Settlements has said, after Facebook recently unveiled plans to create its own stablecoin.”
https://www.ft.com/content/428a0b20-99b0-11e9-9573-ee5cbb98ed36
We are really off in never-never land if this happens.
It’s apparently deemed as necessary for the quasi BAU extension..
So, yet another predictable threshold to be reach/(breach)ed.
if they can eliminate paper currency and replace it with digital currency then negative interest rates can be used without worrying about bank runs BAU for another 10 years?
Paper currency is no problem for slightly negative Interest rates .
Regular people who average a half salary won’t trade the convenience of cards for a few euros interest .
People with a million euros will still accept -1% over having a million euros uninsured at home . (But most likely just “invest ” in stocks or real estate or …)
I imagine all kinds of things will be tried. Negative interest rates in Europe and Japan have been less dreadful than I would have expected.
The article doesn’t mention China’s debt by companies that are not government-owned organizations. It is my understanding that this debt has increasingly been underwritten by world markets, because China is not providing debt to these entities the way it has in the past. It seems like these businesses could be in trouble as well.
“But policymakers are either ignoring them (hoping they will go away) or have just too much on their plates with trade and currency wars to pay much attention.”
I think the 08 mortgage meltdown and the subsequent trillions in bailouts and after that QE globally shocked policy makers to the core. The fear is now greater than the willingness to risk even greater folly with ever more outrageous fiscal policy moves. Unfortunately, that just means the crest of the wave will reach higher and the fall will be from much higher and probably finalistic.
I saw a TV program about 10 or so years ago and there were several well known writers and blogosphere personalities, and they each took turns explaining how they thought there could be a collapse. One, and I can’t recall his name, explained exactly what is happening now, and he said that collapse comes quickly. That within a couple of weeks the financial markets, lending, bonds, currency, commodities, everything financial would falter. It’s starting to seem like that scenario was the most accurate – we’re just waiting now for the other shoe to fall.
I wonder if anyone else saw this as well, and remembers who made the forecast about collapse coming quickly. I am not much help; I don’t watch television.
Happy BIiRTHDAY RED CHINA….show us how BAU is done.
No end in sight! And we are really worried about CO2 and peak oil….PLEASE…..
Peak Demand,? Affordability? Duh, that’s what. Credit Card is for PEOPLE.
Chairman Mao say….If you can’t pay for it, Charge IT!
Work on the Beijing Daxing International Airport officially ended on schedule Sunday, ready for a September 30 inauguration — on the eve of the anniversary of the foundation of the People’s Republic on October 1, 1949 by Mao Zedong.
Celebrations of that event will see President Xi Jinping reviewing a huge military parade through the centre of Beijing, with the opening of the futuristic hub a fitting embodiment of the “Chinese dream” he has offered his fellow citizens.
Located 46 kilometres south of Tiananmen square, the new airport will operate at full capacity in 2025, with four runways and the potential to receive 72 million passengers per year.
– Biggest aviation market
By 2040 the hub is expected to have expanded to eight runways including one for military use, and will be able to welcome 100 million passengers per year — which will make it the world’s largest single terminal in terms of traveller capacity, according to its designers.
Atlanta airport, in the United States, can currently receive more than a hundred million passengers, but across two terminals.
This is crazy….like leaps beyond anything every done….I’m impressed….got to take a flight there when it’s done!😜! No collapse in THEIR future models….is there?
China uses the same absurd models that everyone else does!
“Factory sentiment across Asia became even more frigid in June, signaling a worsening in the region’s growth outlook as U.S.-China trade tensions continue to simmer.
“Waning global demand, particularly in the electronics sector that’s vital to much of the region, continued to weigh on Asia purchasing manager indexes, according to releases Monday. Trade friction between the world’s two biggest economies is straining the outlook despite both countries agreeing over the weekend to resume negotiations.
“June PMIs for Japan, South Korea, Malaysia, and Taiwan fell further below 50, signaling deeper contractions in factory output. South Korea’s index slumped to a four-month low of 47.5, while Taiwan’s reading of 45.5 was the weakest since November 2011, according to IHS Markit data. Both China’s official manufacturing PMI and the Caixin report signaled declining production last month.
” Recent U.S.-China developments — including a pledge by U.S. President Donald Trump, at the weekend’s Group of 20 meetings, to delay any further tariffs — have done little to convince economists that the data will show a turnaround this year. ”
https://www.bloomberg.com/news/articles/2019-07-01/asia-factory-sentiment-dealt-a-blow-in-june-as-trade-war-simmers
“Signs of weakness in the manufacturing sector have been mounting left and right in recent months, adding to concerns that the decade-long expansion could be running out of steam…
“The US purchasing managers index, which gauges activity based on a survey of firms, dropped this May to its lowest level since President Donald Trump took office. Regional readings have been similarly dismal, with the Empire State manufacturing index posting its largest drop ever this month.”
https://markets.businessinsider.com/news/stocks/next-recession-manufacturing-activity-signaling-more-economic-weakness-2019-6-1028319045
“Unfortunately, there are an increasing number of signs that are warning that the expansion is soon coming to end and that a recession is not far away. Particularly alarming is the fact that the New York Fed’s very accurate recession probability model is warning that the current odds of a recession in the next year are the same as they were in July 2007, which is when the subprime debt crisis kicked into high gear.”
https://www.forbes.com/sites/jessecolombo/2019/06/30/current-u-s-recession-odds-are-the-same-as-during-the-big-short-heyday/#e47e386708d1
“Currency Warrior; Why Trump is Weaponising the Dollar…
“The dollar’s share of global foreign exchange reserves has slipped in the 10 years since the financial crisis, but at 62 per cent of the total it still dwarfs all rivals… the world is locked into the dollar as the default currency.”
https://www.ft.com/content/5694b0dc-91e7-11e9-aea1-2b1d33ac3271
I thought this paragraph was interesting:
What we need is more borrowing, to support more investment. If the situation looks like shrinkage in demand, there is little need for more debt.
Another set of solutions seems to be to get people to spend more of what they already have by;
Allowing more gambling to occur
Legalizing or decriminalizing drug use seems to be another.
These things increase the circulation of money rather than the supply of money.
I think that getting people to spend more of their money comes through government programs that seem to protect a person so that there is no need to save. Social Security (providing partial wage replacement in old age) helps. So do health insurance programs, and unemployment insurance programs.
I am not sure that permitting more gambling helps people spend more of what they have. A few people are likely to get into financial difficulty, spending more than they have available.
I am not sure that legalizing or decriminalizing drug use helps people spend more of their money either. It seems like making a drug legal would tend to lower its price. More people might try it, but wouldn’t such purchases be a substitute for a different kind of entertainment (or pain medication) that a person is purchasing now? Usually, substitution goes toward the cheaper product.
That’s a generalization; Most of mass media has razor-thin margins.
Much of it exists to “program” the masses, such as the “news.”
The biggest companies in Silicon Valley receive subsidies–I mean, government contracts, to the extent that they have state constantly that they’re Equal Opportunity Employers.
The print industry is virtually unprofitable. The few products that sell well, subsidize the unprofitable ones.
It no longer makes financial sense for anyone to pay for the quality of journalism many people reading this were exposed to in prior decades
The FIRE economy has had very high margins because creating money out of thin air and lending it requires nothing but electricity and few highly skilled workers and the use of coercion to collect your profit.
Actually, what the highly skilled workers use is models that assume that we live in a world without limits. With these models, it is possible to prove all kinds of false things. Peer review allows these false views (with the same wrong models) to be repeated over and over. Of course, the real world is different. It doesn’t keep growing and growing.
Precisely when and how the end comes is not certain, but we seem to be getting closer and closer to an unsustainable situation.
Furthermore, these models are the result of a desirable trait in humans, “optimism” and an
“abundance mentality.”, which success gurus claim is critical for success.
There’s an entire field of various types of coaches and motivational speakers to keep people believing that they can reach for the stars and that limitations are psychological.
Sounds like religious thought is creeping into secular and rational stuff.
«If we cannot define what we mean by value, we cannot be sure to produce it, nor to share it fairly, nor to sustain economic growth. The understanding of value, then, is critical to all the other conversations we need to have about where our economy is going and how to change its course.»
Gail and many others here on OFW could of course tell her something very basic energetic about value, as could Steve Keen, however i doubt whether she would get the point?
«Third, in trying to steer the economy in particular directions, policymakers are – whether they recognize it or not – inevitably influenced by ideas about value. The rate of GDP growth is obviously important in a world where billions of people still live in dire poverty. But some of the most important economic questions today are about how to achieve a particular type of growth. Today, there is a lot of talk about the need to make growth ‘smarter’ (led by investments in innovation), more sustainable (greener) and more inclusive (producing less inequality).»
http://evonomics.com/value-of-everything-mariana-mazzucato/
I’ll never understand it – products that are difficult- to-make and require massive energy and labor inputs have razor-thin margins, while mass-media, marketing, internet fluff, and FIRE sector firms get all of the capital.
It is the sideshow of the fiat fractional reserve Central Banking system which encourages misallocation of capital, transfer and concentration of wealth. Why do honest, productive, value-added work when you can sit in a chair in front of a computer and game such a system? ( For completeness, formerly plentiful cheap energy and other resources also enabled such a system. )
The people gaming the system get to control how valuable honest, productive, value-added work is. Since it is valuable honest, productive, value-added work is difficult and gets people thinking too much about limits , I think that they’ve found it in everyone’s best interest to devalue it and raise the pay of people gaming the system. Its best for everyone that everyone lives in the moment, like ghetto fabulous media stars.
and believes that there are no limits just discrimination.
The subtitle of this article is, “Where value meets profit meets economic rent.”
We are dealing with more model stuff here as well. If something costs more, it must be worth more. Well, not really! There needs to be a whole system that works using it. If the system allows more 85 year olds to live to be 95 year olds, it is not clear that there is true value being added at all. What really is needed is a rising supply of cheap-to-extract energy products. But no one is looking at this.
Central banks have run out of ammunition.
https://www.cnbc.com/2019/06/28/central-banks-have-run-out-of-ammunition-says-oecd-angel-gurria.html?__source=sharebar%7Ctwitter&par=sharebar
You wonder why august individuals keep pointing this out of late. Surely it’d be better if we keep pretending the emperor has clothes.
The sight is too ugly?
Well…the world GDP hit a new record in current USD according to the World Bank.
How is that even possible when the dollar rose 10 percent against all major currencies?
https://data.worldbank.org/indicator/ny.gdp.mktp.cd
Simply, USD has not much to do with the US economy.
It has become instead (long ago) the financial substrate for the global economy and its players. This will change only with the true balkanization or deglobalization of the world, which is decades away, according to one possible scenario out of many plausible.
Run out of ammo? Only if you believe monetary policy is the best way to gee up the economy. Fiscal policy has all the tools needed.
I would agree.
I am traveling today, so I am limited in my responses.
Yoshua, good linked article. I’m beginning to wonder if this is the calm before the storm. Makes me think of that scene at the end of Terminator when some Mexican kid says something in Spanish and Sarah Connor asks the gas station owner what he said, and he replies, “There’s a storm coming!”, and Sarah says, “I know.”
Scott Nearing LIVES!!!!
At the request of NYC Extinction Rebellion, I (Dr. Guy McPherson) testified to the New York City Council Committee on Environmental Protection on Monday, 24 June 2019. The proceedings were video-recorded here, with my testimony beginning at the 3:29:15 mark. Alternative, you can view Tim Bob’s version, embedded below.
https://guymcpherson.com/2019/06/yesterdays-testimony/#more-20487
But this isn’t about me. We are meeting here today to discuss the most important topic in human history.
I left active service in the academy more than a decade ago to set an example. I stepped away from the monetary system, which I knew was driving anthropogenic change and also the worst of the Mass Extinction Events on Earth. I hoped that many people would follow my lead as I lived off-grid in a straw-bale house, secured my water supply with two solar pumps and a hand pump, grew a vast majority of my food, defecated in a bucket, and contributed to the creation of a decent human community. These actions seemed like great sacrifices at the individual level. They did not produce the desired outcome, in part because the sacrifices did not “scale up” to the level of society.
We are in the midst of abrupt, irreversible climate change. We are in the midst of the Sixth Mass Extinction on Earth. As a result of these two, ongoing phenomena, we are faced with near-term human extinction.
Ah, don’t worry, The Eaarth will be just fine without civilization.,…
Nah, it’s never about Guy McPherson cause the Nutty Professor is too humble to ever focus on himself. The funny part is, that he said he had to write that out that response because he messed up his oral presentation to the NYC commission because he was only allotted 4 instead of 5 mins.
If you listen to his statement the panel moderator repeatedly interrupted him with
“Wrap it up”. From my understanding, NYC has indeed passed a measure of “Planet Emergency”. As long they are just on paper, no need to pay too much need.
Doubt much will come of it in a meaningful, material way.
Dr. McPherson is a good intellect speaker and conveys a message. The whole point of Gail’s Blog is basically “collapse”. So, right or wrong Guys right on topic!😭
While Guy defected in his 5gallon bucket, peoplez of the IC hubs upgraded – bought 2-3x SUVs, flown to sea resort vacation to make a splash in micro plastic sewer and other plethora of leisure activities so on.. consuming hundreds of gallon of various fuels per year. What a wasted time opportunity, Guy!
Lot of typos delivered to the post new meaning, lolz, ..
All Right…Everybody now…
Clap your hands and shout…
World’s Largest Solar Power Plant Switched On
As of today, the Noor Abu Dhabi project with a total capacity of 1,177MW is the largest operational single site solar project in the world. It’s important to make the distinction between this and a ‘solar park’. These are essentially areas of land ear-marked for solar and often with ready-to-go grid connections, where multiple projects will be built under the same banner, but developed and financed individually.
The Noor Abu Dhabi project, which is not state-financed is the work of a consortium that includes Abu Dhabi Power Corporation, Japan’s Marubeni Corp and Chinese solar manufacturer Jinko Solar
The $870 million project was the result of a competitive tender process that will see electricity from the site sold to the Emirates Water and Electricity Company (EWEC) for around 2.4 cents per kWh, a record at the time of the auction and a record for any completed solar project. It was built by the Indian firm Sterling & Wilson with nearly 3000 people working on site during the peak of activity.
“Noor Abu Dhabi will generate renewable energy and will enable us to improve the use of our natural resources,” said Othman Jumaa Al Ali, CEO, EWEC
https://www.forbes.com/sites/johnparnell/2019/06/29/worlds-largest-solar-power-plant-switched-on/amp/
More to come….A framework agreement is in place for 2.6GW of solar power in Mecca, Saudi Arabia
Sustainable, renewable energy forever! That will an ever growing population and economy….I must be living a dream
Renewable energy forevah! Don’ it just make ya feel so good inside!
Desperate times…
“Saudi Arabia’s economic growth more than halved on a quarterly basis to 1.66% in the first quarter of this year, in line with expectations of only a modest pick up as oil production cuts weigh on the world’s top crude exporter…
“On Sunday, Saudi Energy Minister Khalid al-Falih said the cuts would most likely be extended by nine months.”
https://uk.reuters.com/article/us-saudi-economy-gdp/oil-production-cuts-weigh-on-saudi-growth-in-first-quarter-idUKKCN1TV08D
I always wonder how economic growth is calculated. I Saudi Arabia really growing, even with reduced oil exports? There seem to be a lot of fudge factors in every country’s calculation of GDP growth.
US coal generation falls to 47-year low in April: EIA
https://www.spglobal.com/platts/en/market-insights/latest-news/coal/062619-us-coal-generation-falls-to-47-year-low-in-april-eia
US power generation from coal totaled 60.1 TWh in April, down 23.4% from March and 18.1% lower than the year-ago month, Energy Information Administration data showed Wednesday. The figure was the lowest month in over 47 years, including below the previous record of 62.87 TWh generated from coal in April 1974.
Total US coal production peaked in 1998, according to BP. Total US coal consumption reached its maximum level in 2005, but it was on a bumpy plateau between 1998 and 2008. US coal consumption has been falling since 2008, (I would suspect) partly because of “peak coal” in the US and partly because of the availability of natural gas to offset coal usage in electricity production. Wind and solar (with their subsidies) also play a role.
BP shows that over the period 2007 to 2017, the US generation from coal fell by an average of 5.0% per year. The year 2018 shows generation from coal falling by 4.9%, which is basically in line with the previous 10 years.
April is a very low month for required electricity generation, because it is basically not needed for either heating or cooling. April is often a high month for wind generation. If it is given priority, it offsets pretty much everything else. I would have to look at detail data regarding how this is working out. Basically, wind (with its ability to “go first”) makes all other generation unprofitable. It tends to drive other producers out of business. This is not good news for the system as a whole.
Can anyone here on OFW show me the historical development of the global energy balance mostly carried by coal and oil?
100 years ago when you only had to dig a few meters down into the ground I think that coal had a very fine energy balance (energy input/output) the same can probably be said of crude oil. As far as I know, you have to invest 8 energy units to get 100 energy units today, that is an energy balance of (100/8) 12,5.
But how has this number changed during the last 100 years?
You mentioned – ?100yrs? – ago the coal industry already ran on very deep mine (shafts) and or surface mining powered by giant (steam) machinery.. So, you probably meant more like ~250yrs ago, and even back then lot of deposits were partially explored since the middle ages.. In essence we have come a very long way.. And the post WWII BAU spike and stagnation was enabled only thanks to long distance shipment be it giga tankers or trans continental pipelines or railways..
Directly to your question such studies indeed exist and should be available, try google ‘energy return’ + ‘coal seam / deposits’ etc..
As far as I can see, what a person needs is essentially the calculation that goes into the Limits to Growth model of 1972. In other worlds, how much “energy out” does the economy get, relative to each unit of “energy in,” in a given time period. The time period used seems to have been 6 months, but any suitably short period of time could be used. The energy would need to be in the form actually used by the consumer, whether electricity or gasoline on natural gas, and reflect all of the processes involved to get it to the consumer so that the 24/7/365 economy can exist. There aren’t many calculations on this basis.
The 100 to 1 ratio is a very crude estimate for oil. It reflects only the initial “getting out” energy. I think I have seen some historical long range trends for oil. These trends probably do not include recent extraction from shale formations. EROEI of tight oil from shale seems to be relatively high, suggesting that the average EROEI for oil can go up as well as down.
Oil and other energy are used together as part of a combination of energy sources. In many parts of the world, individuals burn animal dung and fallen branches for cooking. The EROEI of such sources can be even higher than 100 to 1, especially if it is immediately available to the user, and there is plenty in the area. So even 100 to 1 is not necessarily the maximum.
Wind and solar EROEIs are being estimated using a model approach that leaves out many things, and assumes that the system will operate for many years in the future. It really has nothing at all to do with today’s energy in and energy out, which is what we should be interested in. The Wind and Solar EROEI calculations are very much distorted on the high side, as far as I can see. Given the distortions in their calculation, it does not make sense to include them in any model of overall EROEI. They seem to bring down the overall EROEI of the energy system, but it is hard to determine by how much.
EROEI modelers nearly all work on a local basis. Thus, nearly all EROEI calculations are local.
The most frequent aggregates a person sees are combinations for a particular type of generation, such as how much EROEI wind turbines can produce, based on the results of a number of different modelers. They tend to use very narrow “boundaries” so that EROEIs are biased on the high side. Sometimes, they reflect amount based on manufacturers hoped-for output. These overviews are typically put together to show how worthwhile these investments will be.
Chinese EROEI modelers whom I work with have shown that the EROEI of delivered coal in China has dropped remarkably in recent years. As I recall, the ending EROEI of delivered Chinese-produced coal is about 8:1. This is not enough to support the Chinese economy. This is a critical problem for China. But this information is not being widely distributed. I believe I have a copy of the Chinese coal report, somewhere. I know I saw early versions of it, before it was published.
I don’t think anyone even makes an attempt at putting together reasonably calculated EROEI from different parts of the world, for different energy sources, to get aggregate numbers for all energy types combined. If they do, they only look at oil. I think coal is at least equally important from an overall EROEI of energy products perspective.
I know it sounds crazy—but in fundamental terms are we acting differently to the south sea islanders and their cargo-cult?
I pull up to a petrol pump and fill up my car . It doesn’t cross my mind (at least not on a day to day basis) that fuel won’t be there. Same with the supermarket—I expect to buy just about any item I fancy, at any time, for virtually nothing (when compared to my available income)
Most people I know dont have a clue about food sources beyond the supermarket shelf, or have the slightest concern about fuels.
such things are just ”there”
and if they are not, then ”they” will find an alternative.
In terms of ”magical thinking” I find no difference between our current situation and the cargo cults. No doubt their chiefs promised infinite cargoes too
We are also living in a world of magical thinking. We think that what we have will always be available.
We all build models that are not quite right in our minds. We assume the best case possible will occur.
EROEI, as it was implemented, is another version of a model that is not quite right. EROEI calculations sort of give an indication regarding the problem we are facing. EROEI modelers didn’t understand how the self-organizing world economy works. They didn’t even understand how the 1972 Limits to Growth model works. They found approaches that were computationally fairly easy to do, and assumed that these methods would tell them more than they really do.
Surprise, surprise….NOT….like we didn’t know….
CNN) For 15 years, oil from one particular spill has been leaking into the Gulf of Mexico.
A new federal study estimates that each day, about 380 to 4,500 gallons of oil are flowing at the site where a company’s oil platform was damaged after a hurricane. That’s about a hundred to a thousand times worse than the company’s initial estimate, which put the amount of oil flowing into the ocean at less than three gallons a day.
The report, released this past week and written by scientists at the National Oceanic and Atmospheric Administration and one at Florida State University, also contradicted assertions from the Taylor Energy Company about where the oil was coming from.
The leak started in 2004, when an oil platform belonging to the Taylor Energy Company was damaged by a mudslide after Hurricane Ivan hit the Gulf of Mexico. A bundle of pipes and wells sank to the ocean floor and became partially buried under mud and sediment
Yep, betcha all kinds of data from models and such make it so we can continue BAU going and going and going…..
We’ll just file this report among all the others 😉….no need to act…at this point why bother?
OMG…..and they said we were at PEAK….fooled ya…..
(Bloomberg) — U.S. crude output soared to new heights in April, highlighting OPEC’s dilemma just days before the producer group meets amid growing geopolitical threats.
A government report on Friday showed U.S. production grew 2.1% in April to 12.16 million barrels a day. Booming shale production from places like the Permian basin of West Texas have enabled U.S. oil output to overtake Saudi Arabia and Russia.
At the same time, trade disputes and escalating tensions in the Persian Gulf have clouded the outlook for the Organization of Petroleum Exporting Countries, which is expected to extend current output cuts next week.
“It really means that OPEC has to make a decision to balance the market or shale will do it for them,” said Jim Lucier, managing director of Washington, D.C.-based Capital Alpha Partners LLC. “Despite all the talk about Wall Street forcing capital discipline, we’re not seeing any diminishing production yet
This is what Trump had to say on Wind and Solar. He gets it.
https://thehill.com/policy/energy-environment/451021-trump-rejects-need-for-climate-action-at-g-20-us-has-the-cleanest
“Speaking to reporters on Saturday, Trump said, “I’m not sure that I agree with certain countries with what they are doing. They are losing a lot of power. I am talking about the powering of a plant.”
“It doesn’t always work with a windmill. When the wind goes off, the plant isn’t working. It doesn’t always work with solar because solar [is] just not strong enough, and a lot of them want to go to wind, which has caused a lot of problems,” he continued, according to The Washington Post.
“Wind doesn’t work for the most part without subsidy. The United States is paying tremendous amounts of subsidies for wind. I don’t like it. I don’t like it,” he added.”
well thats good news at least Trump is being honest telling the world about renewable energy being a dead-end maybe Trump will be the catalyst for the rest of the worlds leaders to change their minds
Trump as the little boy telling the fawning Green courtiers that their Emperor has no clothes. Delicious!
Of course, the Sunny Windy Hopey lobby, currently brainwashing schoolchildren world-wide, will put this sensible view down to Trump’s evil nature – ‘He wants to destroy our future!’; ‘He’s just dumb!’; ‘Fossil fuels get subsidies!’ , etc.
All that is needed now is for Putin to confirm that Europe, for instance, would grind to a halt without sufficient Russian gas, and Arabian oil, and the Fossil Fuel Axis of Evil will be complete in their eyes……
So my prediction: the new line will be ‘Trump’s against Green, clean, renewables because he’s Putin’s agent!’
saying that you don’t like something isn’t the same as offering a realistic alternative
remember trump said: there’s coal for 400 years—i love coal. so he imagines that infinite coal burning=infinite prosperity. In his mind the side effects are irrelevant. his only recognises profit on a balance sheet
He has no concept of EROEI, no acceptance that climate change is real—or the danger it presents. His concern is primarily for his own financial setup, and those who support him
What Trump needs is a concept that the price of coal cannot rise endlessly, because buyers will not be able to pay infinitely high prices for goods that are made.
Unfortunately, EROEI researchers were not connected enough to the real world to understand how problems with falling EROEI would play out in the real world. In their imaginary world, prices of finished goods made with coal would rise to enable higher prices. It doesn’t work that way. With coal, even more than with oil, there is such diverse use of coal in making end products that there is effectively nothing workers can do to avoid the higher cost, if it is passed on to them.
what the Don has is a concept of BAU with him running it, or the dynasty that he thinks he has founded running it after he’s shuffled off this mortal coil.
Thus the country can be bled dry, just as all dictators bleed their countries dry, before they get killed or fly off to live in a friendly country where they’ve stashed their loot
Even in Ancient times, it was risky to depend on world trade to deliver the goods….
In a statement, Cyprus’ Department of Antiquities explained that the wreck is the first undisturbed Roman shipwreck found in the Mediterranean island nation’s waters. The ship is loaded with amphorae, or large ancient jars, which are likely from Syria and ancient Cilicia on modern-day Turkey’s southeastern coast.
Analysis of the shipwreck will shed new light on seaborne trade between Cyprus and the rest of the Roman provinces of the eastern Mediterranean, officials explained in the statement.
https://www.foxnews.com/science/undisturbed-roman-shipwreck-discovered.amp
Other Roman shipwrecks have been grabbing attention in recent years. In 2017, for example, archaeologists in Egypt discovered three Roman-era shipwrecks and other stunning ancient artifacts on the Mediterranean seafloor off the coast of Alexandria.
researchers working in the Black Sea also discovered 60 shipwrecks dating back 2,500 years, which include vessels from the Roman and Byzantine eras.
Maybe we should pay attention to the past….nah, it’s different this time around!
Super,
Life has always been risky with the only certainty death at a time and manner unknown. Even ideas are risky, a vacuum tube looks great one decade, a transistor the next and then microchips come along. Or, from RCA to Intel, picture tubes to flat screens.
Spain took a risk on Columbus, found riches that were tokens, ignored riches that allowed the tokens to be owned by others, steel, energy which ultimately made weapons and allowed great universities to collect knowledge. England became preeminent in knowledge, Spain’s universities languished in comparison, England became an industrial power and the Armada sunk.
Sixty shipwrecks, not a big deal, Gail will compute the odds, insure the ship and contents, add this to the shipping cost and voila, all is well with the universe.
Think Beach Boys and the song “Good Vibrations.” It is still a beautiful world.
Dennis L.
Oh well, Boeing finding out the hard way why it shouldn’t depend on outsourcing to China or India for it’s 737 Max software…
(Bloomberg) — It remains the mystery at the heart of Boeing Co.’s 737 Max crisis: how a company renowned for meticulous design made seemingly basic software mistakes leading to a pair of deadly crashes. Longtime Boeing engineers say the effort was complicated by a push to outsource work to lower-paid contractors.
The Max software — plagued by issues that could keep the planes grounded months longer after U.S. regulators this week revealed a new flaw — was developed at a time Boeing was laying off experienced engineers and pressing suppliers to cut costs.
Increasingly, the iconic American planemaker and its subcontractors have relied on temporary workers making as little as $9 an hour to develop and test software, often from countries lacking a deep background in aerospace — notably India
From the article…The coders from HCL were typically designing to specifications set by Boeing. Still, “it was controversial because it was far less efficient than Boeing engineers just writing the code,” Rabin said. Frequently, he recalled, “it took many rounds going back and forth because the code was not done correctly.
https://finance.yahoo.com/news/boeings-737-max-software-outsourced-204657048.html
.
Increasingly, the iconic American planemaker and its subcontractors have relied on temporary workers making as little as $9 an hour to develop and test software, often from countries lacking a deep background in aerospace — notably India.
Engineers who worked on the Max, which Boeing began developing eight years ago to match a rival Airbus SE plane, have complained of pressure from managers to limit changes that might introduce extra time or cost.
“Boeing was doing all kinds of things, everything you can imagine, to reduce cost, including moving work from Puget Sound, because we’d become very expensive here,” said Rick Ludtke, a former Boeing flight controls engineer laid off in 2017. “All that’s very understandable if you think of it from a business perspective. Slowly over time it appears that’s eroded the ability for Puget Sound designers to design.”
Rabin, the former software engineer, recalled one manager saying at an all-hands meeting that Boeing didn’t need senior engineers because its products were mature. “I was shocked that in a room full of a couple hundred mostly senior engineers we were being told that we weren’t needed,” said Rabin, who was laid off in 2015.
The typical jetliner has millions of parts — and millions of lines of code — and Boeing has long turned over large portions of the work to suppliers who follow its detailed design blueprints.”
Hard to believe that an iconic corporation of the USA may have fallen off the Seneca cliff.
Cutting corners kind of works, until it doesn’t work.
Actually, increasing complexity works for a while, until it gets to be too much to handle.
When cutting corners and increased complexity are put together, it is more or less a recipe for disaster. Boeing is now seeing the results.
More interestingly one of the ‘presumably’ latest standing as other industries left decades ago already (carz, IT/electronics, consumer-goods appliances..). So, now its demonstrably only about the global fin industry substrate left.. which might be good enough to freewheel for a decade or two as China nor India and such won’t – can’t rebel yet out of the legacy system since their top brass needs it to siphon off wealth..
Predicted in such detail decades ago by few great minds, yet very unusual to witness this slow motion process in real time though.
Zero carbon YAY!
Tear down all the existing infrastructure.
Jobs for all!
The best thing I can see to do is jump on to some aspect of her campaign and try steering it in a different direction.
https://grrrgraphics.com/wp-content/uploads/2019/02/2020_democrats-1024×727.jpg
The Dims are center/right at best.
The Repugs are so far right, they would make Mussolini blush.
But that is what happens with late stage capitalism.
Please hang on long enough for president AOC
I can’t wait for 2028, AOC for president!
Sure. That Green New Deal will fix things.
http://consciousnessofsheep.co.uk/2019/03/06/the-green-deal-is-hopium/
Faux News!
lol
At least it is entertainment and comedy for our less educated proletarians.
But the Dims are not much better—-
Not especially directly related to the original topic but something of a parallel perhaps.
The link is the the UK BBC and so may not be available to all.
“Iran seizes 1,000 Bitcoin mining machines after power spike”
https://www.bbc.co.uk/news/technology-48799155
Apparently the Iranian authorities have spotted a 7% power spike somewhere and then discovered 2 abandoned factories housing around 1000 bitcoin mining computers.
One firstly has to wonder about the pros and cons of the logic behind the bitcoin concept and then wonder about the energy required to make it function.
About a year ago I read something that suggested the entire anticipated output growth from “renewably” generated electricity would be required to keep up with the scale of bitcoin mining and similar methods of transaction recording.
The miracle of creating GDP growth from nothing.
I am reminded of the concepts of “loaves and fishes” deployed to feed mass gatherings.
Bitcoin mining is part of what is holding the demand for electricity up. I suppose, in that sense, it might be helpful to the system. The use of bitcoins might also allow a few people to avoid currency controls of their own countries. In that way, it might slightly increase world demand for goods and services.
Indirectly, the use of bitcoin tends to hold the demand for fossil fuels up (at least coal and natural gas), because the more electricity demand there is, the more fuels must be used to generate that electricity. Without bitcoin, perhaps demand for coal and natural gas for electricity would fall.
But it seems like there ought to be a lot more productive uses for electricity.
if crypto currency had any viable function, every with wage or particularly pension liability would immediately convert their liquid assets into it, and cure all their money problems overnight.
I’ve tried to point this out since bitcoin appeared on the scene a few years ago, but for some reason everyone wants to believe in the wealth creation of ponzi schemes.
https://medium.com/@End_of_More/the-myths-of-crypto-currency-f5dea863d116
the hard reality remains, that money can only have actual value if it is underpinned my energy, bitcoin doesn’t have any energy underpinning it, it relies instead on energy consumption to sustain its imagined rising value
bitcoin’s value depends on what other people say it is. It is the currency of hoarders and speculators, it is not the currency of business and exchange
You are right, of course!
All of the nonsense about moving away from fossil fuels is exactly parallel to the “stop nearly all abortions” issue.
Each political party has a version of purity that it wants to reach. I am not sure that it is deities that they want to appease. But ultimately it fits with the narrative that bad things happen to bad people; good things happen to good people. A person would hope that that view went away with the Old Testament. But there certainly are a lot of people of all political persuasions who believe that result.
Yes, very Old Testament.
A relation of mine worked for a firm of Orthodox Jews, and they sincerely believed that if they were making a profit, it was because God loved them.
They even employed one man whose main daily task was saying prayers and putting up little prayer rolls around the office ( this was charity, as he was useless but had married a daughter of one of the owners).
Every year, the senior partner would visit his in-laws in Switzerland and his wife would show off the jewels he had been able to buy her – signs of divine approval.
The firm crashed due to bad management…….
I love a story with a happy ending.
Here’s Jordan Peterson on the chance we will do something to save ourselves;
It’s too bad he dosen’t see/know about our overshoot predicament. So smart, but thinks as we go over the cliff, we’ll be saved by the demand for parachutes lol.
Abortions are going to be a lot less safer for abortees in our brave new feminized fossil fuel-free world, that’s for sure.
I think the political parties are being influenced by the false belief that renewable energy can replace fossil fuels that has been preached to them by the person’s representing the United Nations.
There seem to be quite a few preaching the “We can save ourselves by moving away from fossil fuels,” message. The first one I remember was OECD. This was the group that was put together to counter OPEC. It needed a way to counter the concern about “running out.” Its sister organization IEA was the one that gave the IPCC essentially absurd forecasts of future fossil fuel extraction, far higher than in any of its published reports. The forecasts might vaguely make sense if fossil fuel prices could rise endlessly, but they made no sense otherwise. Future coal production was particularly absurdly high. (Coal under the ocean could be extracted, for example.) With these numbers, our worst future problem was endlessly rising future carbon emissions.
Our earliest training (apart from feral children) ‘That’s good, but that’s bad!’; ‘You want people to think you’re a good child don’t you?’ etc. It leaves an ineradicable imprint.
Prepping!? Well, read this and after the cushy life of BAU the microbacteria monsters will come get you…
It’s fast moving and deadly
The family reached out to Kylei’s doctor on the way back to Indiana. The doctor told Brown to take Kylei to the emergency room at Riley Hospital for Children at IU Health, and that’s when the family found out that the infection behind her knee was necrotizing fascitis, a rare flesh-eating disease. It’s fast moving and deadly, and 1 in 3 people who get it die, the Centers for Disease Control and Prevention says.
“They were taking her into emergency surgery trying to remove the infection from her leg. And doing that, they were trying to save her leg and save her because the infection was moving so rapidly,” Brown told the TV station.
“If it wasn’t for the quick responses and aggressive treatments, I wouldn’t have her,” Brown told CNN affiliate WXIN.
Days of surgeries lie ahead
As she recovers, Kylei faces days of surgeries and months of therapy so she can learn how to walk again. So far she’s had three surgeries.
https://amp.cnn.com/cnn/2019/06/27/us/florida-girl-flesh-eating-bacteria-trnd/index.html
Necrotizing fascitis can be caused by different kinds of bacteria, like Group A Strep or Vibrio vulnificus. The bacteria, often found in water, can enter the body through an open wound. Brown thinks Kylei had a wound on her lower leg after she hurt herself on a skateboard before the family left for Florida.
The CDC recommends avoiding spending time in natural bodies of water, hot tubs or swimming pools if you have an open wound.
The Florida Department of Health said it had not been contacted by the family or anyone who said they may have been exposed to this bacteria in the state.
How do you prep for that….
We have been spoiled by the ability of today’s medicine to cure almost anything. We have not been keeping up with the ability of germs mutating away from what we are doing. When this effect is added to increasingly dense population and energy per capita problems, we have the formula for epidemics of kinds we have never had before.
Phages
http://www.microbe.tv/twievo/twievo-44/
Maybe phages will work, especially if some company can make money off of their use.
So far it is all academics, who do all the research, as we all know.
Academics make lots and lots of models, all of which are dependent on growth lasting forever. They have a peer review system that leads to each one patting their friends on the back for all of the fine models. The only problem is that the models are basically nonsense.
Of course, they may do a bit better in medicine. But even here, they assume that the ability of citizens to pay for increasingly expensive treatments will continue to rise forever.
Go back to pre-antibiotic days and you see even the very rich, young, and apparently healthy, dying easily and quickly from infections that we think little of.
I know that my life has been saved at least 3 times with antibiotics – I certainly wouldn’t have made it past 30, when I had a very serious infection from a small cut, and it would have been a horrible death of the kind I’ve read about.
Once read an account of Mark Twain s life and one thing I remember reading that letters exchanged frequently told of untimely deaths in the family or of friends/acquaintances.
Yes, Gail is correct…we live extraordinary long lives and enjoy access to remarkable health care, not to mention not having to exhaust ourselves with grueling work, at least in BAU member States.
No doubt, I would be also pushing up daisies now myself. Xabier.
Yes, but antibiotics are kind of special.
In (not so) distant past the issue was apply available low tech when it could help, but not everybody did, surprisingly… For instance the gross method of stitching open wound via hot iron or flushing wound with strong alcohol etc.. – voila the survival rate then was relatively high, although the aftermath was not ‘pretty’ in terms of visible beautynomics..
Certainly sufficient people survived, and lived long enough, to get us all in this mess…..
“…finance still heads Europe’s worry list. Italy in particular stands out. Its budget and debt problems all but ensure a return to the multi-stage financial crisis that has plagued Europe off and on since 2010. This next round promises to be the most severe. Italy, after all, is ten times the size of Greece, the center of the last phase of the crisis.”
https://www.forbes.com/sites/miltonezrati/2019/06/27/danger-from-rome/#84a44105217a
“Brussels has sounded a warning that Boris Johnson’s familiar use of “false promises, pseudo-patriotism and foreigner-bashing” to win the keys to Downing Street is locking Britain into a no-deal Brexit.”
https://www.theguardian.com/politics/2019/jun/27/boris-johnson-brexit-deal-claims-rubbished-guy-verhofstadt
And still Brussels fails to grasp that telling Brits what is and isn’t ‘patriotic’, in so patronising a manner, is what – in part – helps drive the Leave vote .
the EU was a great idea, so long as things were expanding into a state of infinite prosperity. Everybody wanted to get on the gravy train.
the nations of Europe had at last stopped fighting among themselves over resources, wealth was to be self generating and everybody loved everybody else.
nobody in any position of power made the link between infinite wealth and infinite energy.
This was why Greece collapsed, and had to be propped up by the rest of the EU.
Italy will go the same way.
Germany will collapse when there’s no one left to buy the expensive toys they produce
Then Europe will revert to more traditional methods of acquiring reserves of surplus energy
https://medium.com/future-vision/the-european-union-was-a-construct-of-infinite-prosperity-7a401c225171
^^^A splendid if sobering read, Norman.
“The USA is also collection of disparate nation states that will hold together as long as prosperity lasts. Without oil-fuelled prosperity…”
Well, we know the result on a general term, but the details are still emerging.
whoever has the job of POTUS will cling to the notion of USA for no better reason than there will be nothing else to cling to.
And his mass of unthinkers will believe the same thing.
not only that, they will engage in whatever acts of violence necessary to disprove the inevitable—that the usa cannot hold itself together without cheap surplus fuels.
the most scary are those who are convinced that if only the USA follows the path of righteousness, Jesus will return to claim his kingdom—that is the last hope of the hopeless, and the worse conditions become, the greater will be the wailing to god
and i don’t say that with any humour or sarcasm—i offer it as the logical conclusion to the growing level of theofascism that the don is whipping up among his neckless followers, as the Don waves his bible at his wannabe stormtroopers–(and yes, they would gladly take that job)
There is no difference between that and Mein Kampf—whipping gullible people into a frenzy
This is where the current prolife thing comes from—remove all sin before Jesus can return. They focus on something that ”can be done” Gods holy work, in other words.
https://extranewsfeed.com/theres-more-to-this-than-roe-vs-wade-60190233b78c
They are the emerging/coalescing details.—Most people dont recognise those details as an unpleasant whole
And when prayer is seen not to work—there will be reasons sought as to why prayer isn’t working—and someone will have to be blamed—they are being blamed right now–the muslims, coloured people–you name it
I don’t put all this down with a sense of European superiority–we are headed exactly the same way, with the rise of fascism again, just under different names.
Every participant in European wars had god on their side.
Trump has done more to help ordinary Americans in the past two years than the Bushes Clinton, and Obama did in the previous 28. Exhibit A: passing two criminal justice reform bills, the “First Step Act” and the “Juvenile Justice Reform Act” last December.
This was a definite improvement on “three strikes and you’re out” and “super predators” that need to be brought “to heel”, I would have thought. And so I am wondering why the entire world isn’t mouth agog at the current POTUS and spontaneously emitting cries of “What a guy!”
https://youtu.be/mLjxbGlyuYA
Press coverage determines what people think. People want a person who says “nice things” to other people. Whether or not they accomplish anything is less important than form.
The “Christians” and their brand of purity has been growing steadily in the US – I’ve held the belief to each his own.
To me this was shameful and very much against Christianity yet our leaders especially the political right panders to them like no other.
Personally I would have told them to go to he’ll.
Unfortunately there is example after example of their cheerleading God’s wrath on anyone they deem not worthy.
https://www.theatlantic.com/technology/archive/2010/01/pat-robertson-blames-natural-disaster-victims/341489/
it is the mindset of every ”ism”—there is no difference, as i said before, between Trump waving a bible in the air, and Hitler waving Mein Kampf—except that Hitler actually wrote it
It will be used to justify every evil necessary to do the fuhrer’s work, just as they did in the middle ages., just as they did in the 1930s/40s
It is the same continuity of thinking, a certainty of righteousness to justify everything necessary to bring about the promised utopia
Just to be irritatingly pedantic, Norman, I am going to point out that Hitler didn’t write Mein Kampf.
Actually, he dictated its contents to Rudolph Hess and Max Amann, who wrote down what Adolf said during visits to him during his imprisonment in the Fortress of Landsberg.
Would you go as far as to agree that every ”ism” includes “climatism”—and that there is no difference between Teresa May waving her “Climate Emergency” declaration committing the UK to zero net “carbon” emissions by 2050 or AOC waving a copy of the New Green Deal in the air, and Hitler waving Mein Kampf?
After all, both May and AOC are poised to destroy Western civilization as we know it based on climatist ideology .
I try to make comments brief and to the point in a way that fits the general understanding of the majority
to state that Hitler dictated Mein Kampf etc etc, would cause readers eyeballs to fog over. I try to avoid pedantry where possible
There may be shades of difference in the climate emergency that we face, but to enter into discussion about the reality and danger of it is as pointless as telling Mike Pence that Jesus isnt going to return, or the Don that women don’t find him irresistible
May and AOC are not poised to destroy western civilisation, or Trump for that matter
We are doing that ourselves, each in our own determined way, convinced of our own rightful place on the planet
It is important to try to stop seeing our planet as a commercial enterprise. (western civilisation is exactly that) If you can manage that, the imminent danger will clarify itself
Thanks Norman!
From my vantage point, I see H. sapiens as a force of nature, mindlessly modifying the planet’s surface and its biology at a dizzying rate. If I was David Attenborough, I would be livid.
But mindless it is. Although some people and groups who are making decisions on whether to change things or protect things or just leave things be are doing so mindfully, the overall practice is as mindless as a flock of locusts, a heard of elephants, or a hurricane moving across the landscape.
Which brings to mind the ancient Chinese story of the empty boat.
If a man is crossing a river
And an empty boat collides with his own skiff,
Even though he be a bad-tempered man
He will not become very angry.
But if he sees a man in the boat,
He will shout at him to steer clear.
If the shout is not heard, he will shout again,
And yet again, and begin cursing.
And all because there is somebody in the boat.
Yet if the boat were empty.
He would not be shouting, and not angry.
When we see malign agency at work and witness the unappealing results of this work, we are apt to curse and swear. But once we realize that all our encounters as we meander through life are with empty boats, or with thoughtless or mindless people, we no longer feel the need to get angry.
With apologies to Rudyard, I say:
Put down the white man’s burden
Have done with childish days
This world is beyond taming
It’s set in its own ways
Cast aside those ambitions
For progress that you bought
Watch Sloth and heathen Folly
Bring all your hopes to nought.
I think you are right.
We now have brought the white man’s burden to new levels, even though the system has a great deal more preordination involved than we would like to admit.
We yell and yell, even though we are basically dealing with empty boats.
“[Turkish] voters are souring, and Erdogan’s power is crumbling… The economic and currency crisis that has plagued the country and burdened citizens since the summer of 2018 was one of the main factors contributing to AKP losses in cities. High unemployment and soaring inflation have led to an explosion in prices for basic foods such as onions and other vegetables — and that has frustrated most Turks.”
https://www.dw.com/en/in-turkey-recep-tayyip-erdogans-power-begins-to-crumble/a-49380884
“Slowing capital inflows to Lebanon and weaker deposit growth increase the risk of a debt rescheduling or other steps that may constitute a default despite fiscal consolidation measures in the 2019 draft budget, Moody’s Investors Service said… Lebanon’s public debt is 150% of gross domestic product, among the largest in the world.”
https://www.reuters.com/article/lebanon-economy-budget-moodys/update-2-moodys-sees-risk-of-lebanon-debt-rescheduling-despite-budget-idUSL8N23Y24H
“Tunisia’s ageing president, Beji Caid Essebsi, a major figure in the country’s transition to democracy in the wake of the Arab spring, is in critical condition in hospital, officials have said. News of Essebsi’s illness adds to an already dramatic day in Tunis, where two suicide bombers blew themselves up in separate attacks… high unemployment has stoked unrest.”
https://www.theguardian.com/world/2019/jun/27/suicide-bombers-kill-police-officer-in-attacks-in-tunis
Erdogan’s main promise to his supporters was, of course, ‘Ottoman Revival’: no revival, no votes…..even aspirant dictators have to deliver prosperity.
Sort of like a Turkish version of MAGA?
MAGA in the US seems to relate more to lowering tax rates than it does to increased borrowing for stupid projects. So it seems to be somewhat different.
I’ve been cycling in Turkey few months ago, from southwest to northeast, five weeks. Everywhere I saw brand new giant empty highways, and the last few small roads will become the same. I saw thousands of plastic playgrounds, even in the middle of nowhere. And brand new neighborhoods made of 10 floors. “Erdogan loves flats” someone told me. Despite all these big useless new deals, economy is not at its best, the question to me was, what will happen next?
Something funny, I’m French, and most of the people I met there were asking me about the yellow jackets, I felt a real fascination and sympathy for them
Interesting. Lots of borrowing for very questionable purposes, it sounds like!
New empty Highways?
Sounds like parts of Spain.
Did you see any evidence of 90% complete but abandoned airports too?
New highways, empty or not, would be hugely welcomed in the UK, though there is precious little land that ought to allowed to be available to build them along logical and commonly travelled routes.
Well here we are getting a hugely expensive busway, along an illogical new route. destroying the green-belt. Where there’s a will there’s a way! 🙂
https://www.tampabay.com/environment/trump-wetlands-rule-rollback-makes-about-6-million-acres-in-florida-unprotected-20181213/
Can you tell us, have the Yellow Jackets died out? We don’t hear much these days….
Turkish people were asking me the same: what about them, we don’t hear about them anymore.
Well, they still organise manifestations every Saturday, but the number of participants became so small that we don’t speak about them anymore Im afraid. It all started in November when Gaz prices were rising up, let see what happens next…
Thank you: I read elsewhere that protests in France had fallen from 300,000 every weekend to only 30,000 or so, but didn’t trust the source. Seems to have been fairly accurate.
Who cares about protests?
The power was worried in the beginning because it could lead to something else.
Now they can ignore it.
Rt covers them saw the last protest live….Saturday
Funding silly projects with debt (as shown in another article linked) sounds like a prelude to problems. We should not be shocked that they don’t work out. Of course, there is a lot of similarity with other parts of the world, where silly investments are also made.
There is no work for state highway workers here in New York. So, about every four months they change the signs, the big 10 foot by 20 foot sign, rip out old supports and install new supports. They are also painting lines, symbols, words all over the road surfaces. They add new signs and markers turning a “parkway” into a garish cartoon ride.
The construction sector has been the backbone of Turkey’s economic boom and its growth has been founded on an overly rapid expansion of credit (shades of China there):
“Those observing Istanbul’s construction boom will not have been surprised by last week’s currency collapse – it’s all based on debt…
“From a distance, Esenyurt, a newly built up neighbourhood on the edges of Istanbul, looks a bit like Hong Kong or Dubai, with a bustling downtown of shiny skyscrapers. Upon closer examination, however, you notice that tower after tower stands incomplete, lacking windows or furnishings; others are only half-occupied, their windows dark after nightfall.
““In the residential areas, 100% of the construction has stopped,” says Mohamed Karman, a local estate agent, from his small office in the central square of Esenyurt. “Do you know why? The materials. Everything is in dollars, you pay in dollars.””
https://www.theguardian.com/cities/2018/aug/23/how-turkeys-lira-crisis-was-written-in-istanbuls-skyline
It is quite amazing how our predicament has been not seen by the experts wont they have an awful realisation when the dominos finally fall but permanently this time
Perhaps they caught a glimpse of what is likely to happen, but couldn’t bear to point it out to others. They understood the results their followers wanted, even if there was virtually no chance that they would actually happen.
“China’s factory activity is expected to have pulled back for a second straight month in June, according to a Reuters poll of analysts, as domestic business conditions worsened and the protracted Sino-U.S. trade war hit demand… A downbeat reading, along with somber indicators seen in May and April, would suggest economic growth is likely to slow this quarter and increase the prospect of further policy easing in the coming months.”
https://www.kitco.com/news/2019-06-27/China-s-June-factory-PMI-seen-in-contraction-as-demand-falters-Reuters-poll.html
“Baoshang was a small, seemingly healthy bank that authorities took over in May. A bank run was avoided, but not all of Baoshang’s interbank liabilities were guaranteed. Suddenly people realized they could actually lose money as counterparties. A new kind of fear was injected into the market, triggering a liquidity crisis…
“…the run on smaller banks could spread to the wider financial system. Chu estimates that bad debt could make up as much as 20 to 25% of the sector. Societe Generale called this possibility “the source of under-appreciated risk for the global economy.””
https://www.businessinsider.com/china-economy-going-into-xi-jinping-trump-g20-meeting-2019-6?r=US&IR=T
“China’s Shanghai Interbank Offered Rate (SHIBOR) shot up to a record of 13.44 percent last week as deteriorating loans at rural banks forced panicked short-term borrowing…
“The People’s Bank of China flooded the banking system with 50 billion yuan ($7.2 billion) of short-term liquidity to push the overnight rate back to 1 percent. However, Diana Choyleva of Enodo Economics warns that financial distress from China’s growth crunch is building in the non-bank sector in what she warns is a “very slow-motion crisis.””
https://www.theepochtimes.com/surging-china-interbank-interest-rates-reveal-rural-bank-slow-motion-crisis_2977489.html
According to the article, losses on loans related to state-owned enterprises look to be very large:
It would seem like there are a lot of other pieces to the problem as well. Non state-owned enterprises were having difficulty getting loans. If I understand the situation correctly, quite a few of such businesses have dollar-based loans. They are likely also having difficulty. There are also the many homeowners who have borrowed a high amount, relative to income. If there are layoffs from jobs, the situation will get worse.
China has officially stated that the smaller banks have up to 50 percent in NPL’s.
Wow! Do you have a link?
I imagine larger banks also have a fairly good-sized share of nonperforming loans as well.
Even a fairly small share of non-performing loans could lead to the insolvency of the bank, unless it can endlessly “extend and pretend.” In other worlds, extend the term (and perhaps the amount) of the loan and pretend that it eventually will be paid back.
https://speculatorsanonymous.com/articles/china-bank-failing/
“Worrying excesses are building up in the world’s $52 trillion nexus of shadow banking and investors risk serious losses when the financial cycle turns, the ratings agency DBRS has warned.
“The hunt for higher yield has led to a surge in leveraged loans, collateralised loan obligations (CLOs), and other arcane high-risk instruments with echoes of the Lehman crisis.
“While banks have been forced to raise their capital buffers and are deemed much safer than in 2008, the hazards have migrated to dark pockets of the vast non-bank sector. This now makes up 62pc of the $97 trillion assets of the financial industry…”
https://www.telegraph.co.uk/business/2019/06/27/concerns-mount-reckless2008-style-lending-52-trillion-shadow/
“The global economy is likely heading toward a “significant market downturn,” according to billionaire Paul Singer. “The global financial system is very much toward the risky end of the spectrum,” Singer said during a panel Thursday at the Aspen Ideas Festival. “Global debt is at an all-time high. Derivatives are at an all-time high.””
https://www.bloomberg.com/news/articles/2019-06-27/elliott-s-paul-singer-sees-global-market-slump-ahead?srnd=markets-vp
“On the backs of central banks around the world tilting, dovish, the value of [Emerging Market corporate] debt surged higher to an eye-watering $12.5tn.”
http://ftalphaville.ft.com/2019/06/27/1561626529000/Reaching-for-yield–the-reshaping-of-the-EM-corporate-debt-market/
The shape of the curve of dollar denominated debt is interesting. I am not certain that this link will really work.
https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F9dccc59a-3262-4621-a45f-e74ec14066be_FINAL.png
It shows a big drop off in emerging market debt about the same time the oil prices crashed in 2014 and 2015. This makes sense.
Why does this remind me of 2008?
CNN Reports that Ford are cutting 12,000 jobs in Europe in the next few months and closing several plants, some of which are in areas with lower costs such as Slovakia.
If they can’t make things work in lower cost locations one has to wonder what is going on.
Ford brand (and its models) simply lost appeal on over supplied market. While other brands keep their own niche or even expanded by offering more ‘desirable models’ ..
In particular the French brands have risen from the grave, and South Koreans finally make more than price competitive offering..
Obviously apart from biz decisions, if you dig deeper, it’s also question about access to cheap(er) labor and various gov-cb support etc..
I’ve said it before and I’ll say it again – people (working consumers / the people who keep the wheels turning) are maxed. The economy never improved for the working class and there is only so much cheap debt a household can sustain on stagnant wages.
As we all know without cheap energy there can be no real wage growth so we can expect things to worsen. In past recessions car sales have been the Canary in the coal mine.
There is no escaping EROEI
Point estimate: I feels like it, things a retired person purchases are increasing in price, I use Quicken and nothing has gone down in price. Looking at the market, actual cash returned in the form of dividends/capital is down, it is buying the dips and selling the highs, all paper wealth. In the real world, hard to escape. Millennials feel it in rent and useless college credits at exhaubrant cost. Periodically I peruse college bookshelves in mathematics, Calc I thru Calc III has been dumbed down compared to the 60’s, the good books are in the honor sections and these would have been standard sections in the day.
This site looks for macro solutions, I live on a daily basis and look more at the micro and how to navigate and storms. It is not easy. Subscribed lately to a periodical on grass fed cattle, crp land is now on a yearly sign up, looking ahead, picked out a cowboy hat, growing my hair long over my neck is no longer a viable option to say nothing of the top.
Dennis L.
Diluting standards at universities has been the means to increase the flow of debt-sucker students: just another an industry now -sometimes even the only major one supporting a town – not an educational endeavour Property speculation is the main university preoccupation here as far as I can see and hear (all the building!)
Diluting standards for entrance and the need for retraining to focus on increasingly specialized areas have also added to the pool of potential students. Students find that they need to come back, for more study, to keep up with new requirements.
apparently Ford made a loss in its Europe operations in 2018 after taxes and interest of 398 million dollars they will cut 12000 jobs from 51000 in Europe or just over 25% of the workforce from 2018 levels
If the sale of automobiles is shrinking, it is very difficult to make a profit. Companies try to make the best of a bad situation by laying off workers and closing plants. It becomes more and more difficult to maintain earnings per share and to repay debt with interest.
People buy products for irrational reasons. And it’s never clearer than why they buy art. While my art is essentially non commercial, I’m starting to appreciate the “business” side of it. As far as I can tell, a niche market, at least, could be had for battered old vehicles from a simpler era and easier to repair. There’s a lot of art around battered old pieces of metal, and battered old vehicle often function (without maximizing its advantages) as mobile art. A less rigid market more on the art side is likely to interest more people over time.
my son who works in a major supermarket here in Australia also told me that the profits are very low under 5% about two years ago about a few weeks ago he was told he would be made redundant along with a bunch of other managers . my feeling is that they are laying off workers due to profits disappearing similar to what’s happening in the car industry
That seems to be true everywhere so far as I can tell.
Also the usual round of business feeling a need to increase prices at a rate above that of inflation (probably entirely false numbers) and any assessment of typical ‘average wage increases’. Wages increases in the general market are rather meaningless for retailers when large numbers of workers are being released across all industries.
Worst of all, of course, are the organisation that are not in a truly competitive situation and have some form of legalised enforcement behind them.
Local authorities, for example, who see an ever extending need to pay their executives more and more for less and less – especially in terms of generous pension scheme contributions. When the largesse from Central Government dries up they simply apply their own increases well above the rates that the population can support and carry on reducing services.
In the commercial sphere the Insurance companies are past masters at the art of gouging and have a significant client base that is legally obliged to employ their alleged services – in this case any insurance that is mandated by some level of ‘government’ gives the insurance companies specific opportunities to cash in .
Since everyone is looking for 10% take from the consumer’s phantom 1% rise in disposable credit the time seems ripe, once more, for some major shake outs and perhaps significant social upheaval.
Again, we need food on a somewhat regular basis and with corn as Gail has noted, we have tied corn to fueling of automobiles and associated ethanol.
Spoke with tenant, he is optimistic as always, I don’t know what beans should look like at this time of year and I didn’t see much corn, but the link paints a stark picture. Caution: excess sells news and gets notice, it never is as bad as presented nor as good as it seems.
It is raining here today, sprayer parked, half a day’s work done; it will take a few days to dry out.
https://www.zerohedge.com/news/2019-06-25/its-scary-picture-midwest-farming-turmoil-being-compared-2008-housing-crisis
We are running everything on the edge, it is thrilling until one falls.
Dennis L.
“Corn futures headed for the biggest quarterly gain since the end of 2010 after the spring deluge in the U.S. Midwest left planting at the slowest since records dating back to 1980, eroding prospects for production.”
https://www.bloomberg.com/news/articles/2019-06-27/midwest-deluge-drives-corn-to-biggest-quarterly-gain-since-10
To plagiarise a well know phrase from History related to matter in France (allegedly) some years ago, perhaps the attitude is “let them drink gasoline”?
At least – metaphorically speaking that might be the message.
I suppose the results would, in the minds of some, still be beneficial in terms of the “War against Climate Change”.
Let’s see how long the high prices really last. They might be possible for a little while, for a small share of their normal uses. But people will not pay a whole lot more for food for animals or for ethanol, for very long, I expect.
The WTI 50 DMA & 100 DMA are just about to form a death cross as the global trade is contracting.
https://pbs.twimg.com/media/D-DclpjW4AEHup2?format=jpg&name=900×900
So this means the path of the 50 day moving average is likely to change dramatically?
I see that Wolf Richter has an article up, talking about the stimulative impact of today’s very low long term interest rates. Ten year US treasuries are a little over 2%, stimulating refinancing of homes and new investment of all kinds. I suppose this is part of what is bidding oil prices up.
How long all this can last is not clear. At some point, high energy prices get in the way of profitable investment. The time may be close at hand.
The retail brick and mortar meltdown continues…
Pier 1 Imports plans to close 57 stores, and more closures could be coming, interim CEO says
Based on figures from global marketing research firm Coresight Research, bankruptcy filings and company earnings reports, more than 7,000 stores are already slated to be shuttered in 2019. Coresight tracked 5,864 closings in 2018.
The trade war with China could force “widespread store closures” and put $40 billion in sales at risk, according to a May report by UBS investment bank.
Days after Pier 1 reported financial results in April, S&P Global Ratings, a major credit rating agency, said the retailer was careening toward a potential bankruptcy restructuring.
According to company documents, there are more than 965 stores in the U.S. and Canada. The chain sells home décor, furniture and other accessories
The Texas-based home goods retailer said Wednesday it was looking to close 57 stores in the fiscal year, up a dozen from the April estimate of 45 stores.
https://amp.usatoday.com/amp/1580216001
Looks like we are headed for hard times…remember when retail jobs were survival work you could get it you needed a employment. Now with self check-out .
The stores that seem to sell the “nicer” things tend to do worse. There were no doubt cheaper substitutes available at Walmart for Pier 1 goods.
“The global economic mood is souring. At their meeting in Fukuoka, Japan, earlier this month, G20 finance ministers and central bank governors warned that economic growth remains weak, with risks still tilted to the downside.
“Just a few days before that gathering, the World Bank had lowered its 2019 global growth forecast to 2.6 per cent – the lowest in three years – and predicted that growth would remain tepid in 2020-2021.
“These headlines conceal an even gloomier story: the worsening plight of the world’s poorest people.”
https://www.scmp.com/comment/opinion/article/3016140/global-economy-slows-spare-thought-worlds-poorest
It really takes more very cheap energy to help these countries. No matter how much we would like to help them, it is doubtful that we really can help them.
“These headlines conceal an even gloomier story: the worsening plight of the world’s poorest people.”
As available surplus energy declines, that scenario will continue to get worse, much worse. Then what had been the middle class will be a worsening plight in the next recession. Think of the super wealthy as the epicenter, with the perimeter getting the shaft first, then working its way in. Its gonna be rough.
People will wake up to the fact, after a big crisis, that they didn’t actually belong to a class, it was merely an economic accident: goodbye ‘middle-class’ status forever…..
your ”class” is defined by the surplus energy available to support you
thus, a king/president has available the energy of the nation to sustain his ”class status”–whether in modern times (presidential jet) or previous times, coach and horses with outriders and so on.
there are numerous ”class stages” until you get down to the lowest peasant, who does not have enough surplus energy available to feed clothe and house himself in any sustainable way.
There has always been a tendency to look down on ”classes” lower down the scale.
As surplus energy depletes, the wealthy elite will lose their class status. Then there will be a reversion to holding on to status by physical force, for as long as possible,
that part is going to be very unpleasant
There may be fighting among the elite, besides the non-elite trying to bring the elite down.
that’s where pitchforks came in very useful
“US President Donald Trump has called new Indian tariffs on US products “unacceptable” and demanded that they be withdrawn.
“India imposed retaliatory tariffs on 28 US products earlier in June, after the US announced it was withdrawing India’s preferential trade treatment.
“Mr Trump’s criticism came a day after the two sides had downplayed tensions. He is due to meet Mr Modi on the sidelines of the G20 summit, which begins on 28 June in Osaka, Japan.”
https://www.bbc.co.uk/news/world-asia-india-48782197
“Vietnam’s recent fame as a big winner of the U.S.-China trade war may be bringing it unwanted attention from President Donald Trump.”
https://www.bloomberg.com/news/articles/2019-06-27/trade-war-winner-vietnam-is-finding-itself-in-trump-s-crosshairs
“President Donald Trump flew to the G20 summit on Wednesday sounding warnings that China was “ripe” for new tariffs…”
https://www.theguardian.com/business/2019/jun/27/trump-warns-china-is-ripe-for-new-tariffs-and-suggests-vietnam-could-be-next
More tariffs? Sure, the tariffs so far haven’t garnered much in the way of actual changes to trade policy, so I suppose it makes some kind of weird sense to have more? But what if that just slows the world economy more? What if the US is begging other countries to go back to the way it was in the throws of a full on recession?
What if it is the lack of inexpensive oil and energy products that is forcing the world economy too shrink. Tariffs are just a symptom of problems such as the need to find a cure for too much wage disparity. Farmers are in particularly bad shape.
I agree. If what Gail said is true, it makes sense to implement tariffs. This is pretty much the only way to reduce people’s dependency on foreign goods (less oil and energy products, less foreign goods)without causing a mass panic. I seriously do not think that most people would take it well if the government tells everyone that the party is over….
You are right. The people would not take it well if the government tells everyone that the party is over.
Just keeps getting deeper and deeper…
While the FAA and Boeing didn’t disclose the exact nature of the flaw, CNN reports government pilots found an issue with the microprocessor that may lead to the plane pointing downwards if the chip fails. According to one of the outlet’s sources, during the simulator tests, “it was difficult for the test pilots to recover in a matter of seconds. And if you can’t recover in a matter of seconds, that’s an unreasonable risk.” It’s not clear if the microprocessor played a role in the crashes.
The 737 Max has been out of service since earlier this year after two crashes killed 346 people. Last month, Boeing said it completed an update to resolve software flaws that contributed to the incidents
https://www.engadget.com/2019/06/26/737-max-faa-boeing/?yptr=yahoo
A new report from the New York Times details a bureaucratic mess, caused by the overhauling of an A.I. system, that it says is responsible for the two fatal Boeing 737 Max 8 crashes in Oct. 2018 and March 2019.
Boeing allegedly introduced “aggressive and riskier” changes to an A.I. system built for safety. Those changes, plus siloed departments and a lack of pilot training and regulatory oversight, reportedly led to the deadly Boeing 737 Max crashes.
P.S. Boeing CEO Personnel changes have occurred due to the MAX 8…..give the man his Bonus…
He earned it!
Oh, well 50% decline in bat deaths…what about the other 50% that die?
Now Duke Energy Corp. is deploying technology to dissuade the creatures from flying headlong into their deaths. It uses ultrasound to block sonar bats use to navigate at night, prompting them to avoid areas around turbines.
The Charlotte, North Carolina-based utility owner is using the “Bat Deterrent System” at installations in the Rio Grande Valley. It’s first time a company has commercially deployed the system, developed by ESCO Technologies Inc.’s NRG Systems, according to a statement Wednesday. A two-year study found it can reduce bat fatalities by 50%, Duke said
https://finance.yahoo.com/news/bat-killing-wind-turbines-outfitted-191851343.html
A two year study it CAN!? Sure it can…makes the green brigade feel good and put a WWF approved seal on it, after Duke donates $$$ to them? Mission Accomplished, next!
“Demographic Doom? Germany, Italy, Korea, & Japan Face Workforce Collapse By 2050“
https://www.zerohedge.com/news/2019-06-26/demographic-doom-korea-germany-italy-and-japan-set-see-workforce-collapse-2050
I’d offer few factoids to ponder – muse about..
– Unemployment of youngsters in Italy is currently at shocking %40+
– Germany started their Turkish import workers program in late ~1960-70, many of them were directly employable in industries, services, true some contributed to parallel economy etc. While today’s wave of Afghani and subsaharan migrants are in majority NONE employable at all..
The immigrants to the US from Mexico have generally been very employable. The people seem to be conscientious and hard working. The culture is not too different. For the most part, they have been easy to absorb into the economy.
We will have enough other problems by 2050 that this won’t matter much, however.
Gail and commenters on this blog have mentioned some likely consequences of a fast collapse, such as starvation, disease (especially infectious disease from lack of sanitation), and violence. These consequences would result from systems that no longer work to distribute food and water and handle waste and conflict (no more police). Most of these bad outcomes probably would develop gradually, on the scale of weeks to months.
There are also less obvious vulnerabilities that modern society has which could involve fast, cataclysmic consequences (at least locally) due to the permanent loss of electric power, fossil fuels, or workforces (staff no longer paid). The most common consequence I’ve seen mentioned is spent nuclear fuel in (evaporated/boiled off) cooling ponds exploding, spreading radioactivity. I’ve wondered what other cataclysmic consequences there might be in a fast collapse. Here are some that occurred to me:
– hydroelectric dams bursting from uncontrolled flow (during rainy/high flow periods) devastating downstream communities (also, ruptures eventually from lack of maintenance)
– pumps failing/ceasing to operate, causing flooding in low-lying areas (polders in the Netherlands, much of New Orleans during heavy rains) or downstream areas (mining tailings ponds overflowing, as in a toxic spill a few years ago in Colorado)
– prisoners escaping from jails and prisons (no more guards or electronically controlled locks), causing large increases in violence
– deaths of persons now sustained by special medicines, electrical devices, gases, therapies, and/or caretakers, including many who currently live otherwise normal lives
What other cataclysmic consequences might there be from a fast collapse that we don’t often consider?
Lack of clean water is one that would likely come along quickly. What water would be available would be polluted. This by itself will spread disease. Also, dehydration is likely to become an issue.
Of course, irrigation pumps are essential for growing many crops. If electricity is not available for electric pumps, this will be a problem. Diesel powered pumps are limited by the ability to purchase diesel fuel. There are some solar pumps, but my understanding is that they are much more limited in their pumping ability.
“Gary Shilling, an economist and financial analyst who is credited with predicting several recessions over the past 40 years, thinks the U.S. is in a relatively mild slump.”
https://www.usatoday.com/story/money/2019/06/25/2020-recession-economist-gary-shilling-says-us-may-downturn/1559657001/
““I think we’re probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5% to 2%, not the 3.5% to 4% you had in the very serious recessions,” Shilling said…
soften the message here… must not cause alarm…
couldn’t possibly be down more than 4%… that’s unthinkable… and this assumes a run-of-the-mill recovery also…
and this, the usual scenario:
“They generally don’t call recessions until well after they start,”…
Right. The main stream news will say as little as possible until after the fact.
“Intensifying trade war fears and an inventory overhang are weighing on the [US] manufacturing sector. Regional surveys suggest the national ISM manufacturing index will fall below the breakeven 50 level on Monday, which will only heighten fears of recession for the sector.”
https://think.ing.com/articles/us-manufacturing-on-the-path-to-recession/
“U.S. consumer confidence fell in June to the lowest level since September 2017 as Americans became less upbeat about the economy and labor market amid trade tensions with China and Mexico. The Conference Board’s index declined to 121.5, lower than all forecasts in a Bloomberg survey, data from the New York-based group showed Tuesday.”
https://www.bloomberg.com/news/articles/2019-06-25/u-s-consumer-confidence-falls-to-lowest-since-september-2017
“The [US] nation’s federal debt is projected to reach “unprecedented levels” over the next 30 years if lawmakers do not change current laws… Currently, the nation’s level of debt is the highest level since shortly after World War II, according to the CBO.”
https://eu.usatoday.com/story/news/politics/2019/06/25/cbo-federal-debt-projected-reach-unprecedented-levels-next-30-years/1566356001/
The US still has a ways to go to get to the government of Japan’s debt level.
Forget the debts. What matters now is how much is the next “payment” and how, when and where the next fiat dollar can be conjured up to make that payment.
Borrow in the moment.
Good point.
You are right!
“The [US] nation’s federal debt is projected to reach “unprecedented levels” over the next 30 years…”
so that is a projection of (quasi) BAU for the next 30 years…
I think it’s a safe bet that this scenario has a zero percent chance of actually happening…
Let’s give a whomping massive tax cut for the top 5% wage earners so they pay nothing, not even sales tax or property tax. That will initiate a systemic chain reaction of Niagra Falls scale trickle down, forming a flood of tax revenue symbolically breaching the banks of the Mississippi to pay off the debt nationwide. For more laughs go to the comedy channel.
If potential purchasers were receiving higher and higher wages, there would nur be a fear and f recession.
“Britain’s next prime minister will take charge of an economy beginning to falter, as Brexit uncertainty and the mounting risk of a no deal scenario serve as a brake on growth, according to a Guardian analysis.
“As the Conservative leadership race reaches an acrimonious finale, the sugar hit for the economy from the stockpiling rush before the original Brexit deadline has run its course, with warning signs emerging that growth will flatline.”
https://www.theguardian.com/business/2019/jun/26/no-deal-brexit-uk-growth-pound-boris-johnson
“U.K. retail sales fell at their fastest pace since the financial crisis in the year to June… The volume of goods sold slumped by the most since March 2009, with almost one-in-six stores saying they sold less than the same time a year ago. Motor traders reported the fastest sales shrinkage in 7 1/2 years…”
https://www.bloomberg.com/news/articles/2019-06-25/u-k-retail-sales-shrink-at-fastest-pace-since-financial-crisis
“France’s public auditor on Tuesday warned that the country’s debt level, which is hovering at close to 100 percent, was “worrying” and urged the government to control spending. France’s debt-to-GDP ratio is set to reach 98.9 percent this year… after President Emmanuel Macron loosened the country’s purse strings to try end months of often violent “yellow vest” protests.”
https://www.france24.com/en/20190625-france-debt-level-worrying-government-auditor
“Italian banks must be ready for when the current economic slowdown translates into a bigger proportion of loans turning sour, a senior Bank of Italy official said on Tuesday. Deputy Governor Luigi Federico Signorini said in the text of a speech that the economic cycle was bound to have an impact on credit quality sooner or later.
““The reduction in the inflows of new soured loans cannot go on indefinitely,” he said…
https://www.euronews.com/2019/06/25/italy-central-bank-says-lenders-must-prepare-for-pickup-in-bad-loans
“Sanford C. Bernstein strategists said on Monday that although global earnings recession isn’t their base-case scenario, there’s a “real” possibility of one in Europe amid trade-war and policy uncertainty.”
https://www.bloomberg.com/news/articles/2019-06-25/europe-earnings-recession-risk-is-back-as-stock-rally-stumbles
Mar on has the right idea. Keep adding debt, as long as it is possible to do this.
“Ten months ago, I warned that storm clouds were brewing over the global technology industry. The situation today is much worse.
“Back then, a U.S.-China trade war was more risk than reality, Apple Inc.’s pending iPhone update held promise, and central banks were still in tightening mode. Yet inventories at the end of June 2018 had climbed to the highest since the financial crisis a decade earlier and a sector-wide slowdown was looming.”
https://www.bloomberg.com/opinion/articles/2019-06-25/tech-inventory-buildup-worsens-on-huawei-demand-slowdown
“Global trade stumbled in April as the tariff war between the United States and China showed few signs of ending, figures released June 25 showed…
““An array of more timely country data on manufacturing and production reflect the impact of the trade slump and suggest that activity has yet to bottom out and that world trade volumes are on track to decline through the remainder of the second quarter,” Mickey Levy, chief U.S. and Asia economist at Berenberg Capital Markets, said in an e-mail note after the CPB report was released.”
https://www.ttnews.com/articles/trade-war-hinders-global-trade-april
“A toxic trifecta of growing political instability, escalating trade tensions and slowing global growth will confront world leaders at the G20′s annual meeting later this week in Osaka, Japan. That alone would present the group its biggest collective challenge since it first met in November 2008 in the jaws of the last financial crisis.
“However, beyond that the 19 leaders of the world’s largest economies and the European Union gather as history’s tectonic plates shift underneath them…”
https://www.cnbc.com/2019/06/25/g-20-leaders-face-poltical-instability-trade-tensions-and-slowing-growth.html
just finished reading the Kissinger Report and according to that document the population would not be allowed to go past 8 to 9 billion so we shall soon know what the powers that be have in store for us .
“The global housing market is showing cracks… A decade since the 2008-09 U.S. housing bubble imploded, sparking a global financial crisis, worries about the health of the global housing market persist. An Oxford Economics’ proprietary gauge of housing conditions in the globe shows that home prices have declined by 10% and investments in houses have shrunk by 8%.”
https://www.marketwatch.com/story/a-housing-market-slump-could-drive-global-growth-to-a-decade-low-economists-warn-2019-06-24
“As property prices crumbled and the sharemarket sagged last year, Australian household wealth plunged by close to $500 billion, according to Fidelity International estimates. Indeed, 2018 goes down as the steepest fall in household wealth since 2009, when more than $1 trillion was chalked off the country’s notional chalkboard.”
https://www.afr.com/markets/equity-markets/property-slump-wipes-500b-from-wealth-20190625-p5211t
Home prices declining by 10% is a big deal, relative to most people’s wealth. It makes debt much harder to repay.
While in some places land prices doubled in less than a decade.
“With growth stalling pretty much globally, the pressure is building on central banks to take appropriate measures. [But do] central banks have the required policy tools to arrest the slowdown? US interest rates are less than half of what they were before the 2008-2009 crisis… So, the key takeaway is, central banks don’t really have the policy tools. And secondly, examples from other countries suggest that low interest rates haven’t really lifted the economies. India and Europe are cases in point.”
https://marketrealist.com/2019/06/is-the-dreaded-synchronized-global-slowdown-back-on-the-table/
“Despite a near-record US economic expansion, the Fed sees something on the horizon it doesn’t like… The US-China trade war is taking its toll, global economic confidence is stalling and regional problems abound. It’s time for the Fed to lead the way to lower global rates. The key question is whether the world really needs it and if there is a better alternative…
“The major economies need to break the mould of neoliberal economics, put an end to fiscal austerity and promote major deficit spending directed towards improved infrastructure investment in both developed and developing nations.”
https://www.scmp.com/comment/opinion/article/3015762/global-growth-slows-world-needs-new-marshall-plan-not-lower?fbclid=IwAR1fXGwRXynHzjtW4ilSpzxQGTbjVIaeiSBmp74INm6Vxi4g3Y0sCt3oZog
“Since the global financial crisis central banks have slashed rates and pumped trillions into the bond markets, and they still cannot hit their inflation targets.”
https://www.ft.com/content/9093d760-9659-11e9-8cfb-30c211dcd229
Perhaps a larger supply of cheaper energy that matches the types needed by today’s machines.
Low interest rates have so far prevented debt implosion, but that is about all. Of course, preventing debt implosion is important, too.
Financial War & Weaponising the Dollar
Chinese bank stocks have been falling. Chinese banks could lose access to U.S financial markets and dollars.
http://world.kbs.co.kr/service/news_view.htm?lang=e&Seq_Code=146145
What does any of this matter if human civilization is a flying bug looking for a windshield? I mean there seems to be a general consensus on this blog that we are toast in anywhere from a few months to a decade. Shouldn’t we be sharing the adventures we”re having knowing what is to come?
yes, absolutely. hope for the best, plan for the worst. splitting the difference yields 2025. some of my doomer friends maintain that is the date, plus/minus a couple of years.
As a rule of thumb, I’m allowing for a superficial status quo 2019-2025 – in reality eroding and highly unstable; a serious dislocation 2025-30, and after that a wild ride, probably impossible for me to survive even if I have made it past 2025 (my sources of income would probably go then).
It helps one to focus, if nothing else, and enjoy the present.
I am struggling, though, to fake much joy at the recent birth of my first nephew……
My Grandsons visited yesterday.
The older one, just approach 3 1/2 years, seems to have naturally mastered the art of mathematical subtraction as mental arithmetic.
It occurred to me that subtraction is probably a good skill to have within his generation.
Well, there is perhaps a lot of juicy ruins left to fight over..
when this edifice of industrial, urban civilization crumbles.
The future sequencing, and cascading of events might include several decades of attempted openly-feudal rural revival, and again in such kind of society there are perceived various levels of losers and winners to be had for next several generations.
Some % of population would be necessarily drawn to compete – jockeying for these positions.. It’s likely that only a fraction of today’s elite would make it through that bottleneck, on the other hand it’s preposterous to expect NONE of them would make it into the new reality..
My ‘adventure’ is just surviving……. 🙂
Quite true, Kevin. Being a member of the human species compels me to be far more concerned about us and our civilization than whoever or whatever is to come millennia hence. And what we do to correct out gross misbehavior, insofar as we can, will determine much of this future anyway. It’s just that such a future is not what we should be focusing on. Foolish though it may be, I’m convinced that we can do very much better. We would need, of course, to jettison individualism and work cooperatively instead.
Cooperation seems to work best when a group is coming from a situation of “not enough to go around.” Then, shared resources (such as partial use of a car, or shared laundry, or shared meals) seem OK. Once there are a few more resources, then each one wants things his own way.
Religious beliefs might help to maintain sharing, above this limit. If some are earning more, they want their family to have better education and other things.
That’s a good point and that’s why scenario of transient period of circling the wagons of essentially enforcing command style economy is likely -soonish- response. There are many clues already, e.g. pushing legislation on CO2, which in effect only curbs supply of frivolous energy per capita activities and outlays (demand is attacked on propaganda level and curbed wages).
But there much more legs into it in the near future..
Quite so worldof: the mass Techno-utopian/Green New Deal indoctrination in schools, and the talk of lowering the voting age to 16 (why not 12? It’s ‘Their Future’ (TM) after all?!!) is also a part of this kind of strategy.
Next stop: green-uniformed ‘Youth Militias’…….
Education seems to be of the form, “Whatever you wish for can come true. Anything is possible. We humans are in charge of our futures.”