Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:
- There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
- Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.
Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences.
Let’s look at a few of the issues involved:
[1] Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.
Figure 1. 2019 World Population Estimates of the United Nations. Source: https://population.un.org/wpp/Download/Standard/Population/
Advanced economies in particular have been reducing birth rates for many years. But despite these lower birth rates, world population continues to rise because of the offsetting impact of increasing life expectancy. The UN estimates that in 2018, world population grew by 1.1%.
[2] This growing world population leads to a growing use of natural resources of every kind.
There are three reasons we might expect growing use of material resources:
(a) The growing world population in Figure 1 needs food, clothing, homes, schools, roads and other goods and services. All of these needs lead to the use of more resources of many different types.
(b) The world economy needs to work around the problems of an increasingly resource-constrained world. Deeper wells and more desalination are required to handle the water needs of a rising population. More intensive agriculture (with more irrigation, fertilization, and pest control) is needed to harvest more food from essentially the same number of arable acres. Metal ores are increasingly depleted, requiring more soil to be moved to extract the ore needed to maintain the use of metals and other minerals. All of these workarounds to accommodate a higher population relative to base resources are likely to add to the economy’s material resource requirements.
(c) Energy products themselves are also subject to limits. Greater energy use is required to extract, process, and transport energy products, leading to higher costs and lower net available quantities.
Somewhat offsetting these rising resource requirements is the inventiveness of humans and the resulting gradual improvements in technology over time.
What does actual resource use look like? UN data summarized by MaterialFlows.net shows that extraction of world material resources does indeed increase most years.
Figure 2. World total extraction of physical materials used by the world economy, calculated using weight in metric tons. Chart is by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel. Non-metallic minerals include many types of materials including sand, gravel and stone, as well as minerals such as salt, gypsum and lithium.
[3] The years during which the quantities of material resources cease to grow correspond almost precisely to recessionary years.
If we examine Figure 2, we see flat periods or periods of actual decline at the following points: 1974-75, 1980-1982, 1991, and 2008-2009. These points match up almost exactly with US recessionary periods since 1970:
Figure 3. Dates of US recessions since 1970, as graphed by the Federal Reserve of St. Louis.
The one recessionary period that is missed by the Figure 2 flat periods is the brief recession that occurred about 2001.
[4] World energy consumption (Figure 4) follows a very similar pattern to world resource extraction (Figure 2).
Figure 4. World Energy Consumption by fuel through 2018, based on 2019 BP Statistical Review of World Energy. Quantities are measured in energy equivalence. “Other Renew” includes a number of kinds of renewables, including wind, solar, geothermal, and sawdust burned to provide electricity. Biofuels such as ethanol are included in “Oil.”
Note that the flat periods are almost identical to the flat periods in the extraction of material resources in Figure 2. This is what we would expect, if it takes material resources to make goods and services, and the laws of physics require that energy consumption be used to enable the physical transformations required for these goods and services.
[5] The world economy seems to need an annual growth in world energy consumption of at least 2% per year, to stay away from recession.
There are really two parts to projecting how much energy consumption is needed:
- How much growth in energy consumption is required to keep up with growing population?
- How much growth in energy consumption is required to keep up with the other needs of a growing economy?
Regarding the first item, if the population growth rate continues at a rate similar to the recent past (or slightly lower), about 1% growth in energy consumption is needed to match population growth.
To estimate how much growth in energy supply is needed to keep up with the other needs of a growing economy, we can look at per capita historical relationships:
Figure 5. Three-year average growth rates of energy consumption and GDP. Energy consumption growth per capita uses amounts provided in BP 2019 Statistical Review of World Energy. World per capita GDP amounts are from the World Bank, using GDP on a 2010 US$ basis.
The average world per capita energy consumption growth rate in non-recessionary periods varies as follows:
- All years: 1.5% per year
- 1970 to present: 1.3% per year
- 1983 to present: 1.0% per year
Let’s take 1.0% per year as the minimum growth in energy consumption per capita required to keep the economy functioning normally.
If we add this 1% to the 1% per year expected to support continued population growth, the total growth in energy consumption required to keep the economy growing normally is about 2% per year.
Actual reported GDP growth would be expected to be higher than 2%. This occurs because the red line (GDP) is higher than the blue line (energy consumption) on Figure 5. We might estimate the difference to be about 1%. Adding this 1% to the 2% above, total reported world GDP would be expected to be about 3% in a non-recessionary environment.
There are several reasons why reported GDP might be higher than energy consumption growth in Figure 5:
- A shift to more of a service economy, using less energy in proportion to GDP growth
- Efficiency gains, based on technological changes
- Possible intentional overstatement of reported GDP amounts by some countries to help their countries qualify for loans or to otherwise enhance their status
- Intentional or unintentional understatement of inflation rates by reporting countries
[6] In the years subsequent to 2011, growth in world energy consumption has fallen behind the 2% per year growth rate required to avoid recession.
Figure 7 shows the extent to which energy consumption growth has fallen behind a target growth rate of 2% since 2011.
Figure 6. Indicated amounts to provide 2% annual growth in energy consumption, as well as actual increases in world energy consumption since 2011. Deficit is calculated as Actual minus Required at 2%. Historical amounts from BP 2019 Statistical Review of World Energy.
[7] The growth rates of oil, coal and nuclear have all slowed to below 2% per year since 2011. While the consumption of natural gas, hydroelectric and other renewables is still growing faster than 2% per year, their surplus growth is less than the deficit of oil, coal and nuclear.
Oil, coal, and nuclear are the types of energy whose growth has lagged below 2% since 2011.
Figure 7. Oil, coal, and nuclear growth rates have lagged behind the target 2% growth rate. Amounts based on data from BP’s 2019 Statistical Review of World Energy.
The situations behind these lagging growth rates vary:
- Oil. The slowdown in world oil consumption began in 2005, when the price of oil spiked to the equivalent of $70 per barrel (in 2018$). The relatively higher cost of oil compared with other fuels since 2005 has encouraged conservation and the switching to other fuels.
- Coal. China, especially, has experienced lagging coal production since 2012. Production costs have risen because of depleted mines and more distant sources, but coal prices have not risen to match these higher costs. Worldwide, coal has pollution issues, encouraging a switch to other fuels.
- Nuclear. Growth has been low or negative since the Fukushima accident in 2011.
Figure 8 shows the types of world energy consumption that have been growing more rapidly than 2% per year since 2011.
Figure 8. Natural gas, hydroelectric, and other renewables (including wind and solar) have been growing more rapidly than 2% since 2011. Amounts based on data from BP’s 2019 Statistical Review of World Energy.
While these types of energy produce some surplus relative to an overall 2% growth rate, their total quantity is not high enough to offset the significant deficit generated by oil, coal, and nuclear.
Also, it is not certain how long the high growth rates for natural gas, hydroelectric, and other renewables can persist. The growth in natural gas may slow because transport costs are high, and consumers are not willing/able to pay for the high delivered cost of natural gas, when distant sources are used. Hydroelectric encounters limits because most of the good sites for dams are already taken. Other renewables also encounter limits, partly because many of the best sites are already taken, and partly because batteries are needed for wind and solar, and there is a limit to how fast battery makers can expand production.
Putting the two groupings together, we obtain the same deficit found in Figure 6.
Figure 9. Comparison of extra energy over targeted 2% growth from natural gas, hydroelectric and other renewables with energy growth deficit from oil, coal and nuclear combined. Amounts based on data from BP’s 2019 Statistical Review of World Energy.
Based on the above discussion, it seems likely that energy consumption growth will tend to lag behind 2% per year for the foreseeable future.
[8] The economy needs to produce its own “demand” for energy products, in order to keep prices high enough for producers. When energy consumption growth is below 2% per year, the danger is that energy prices will fall below the level needed by energy producers.
Workers play a double role in the economy:
- They earn wages, based on their jobs, and
- They are the purchasers of goods and services.
In fact, low-wage workers (the workers that I sometimes call “non-elite workers”) are especially important, because of their large numbers and their role in buying many items that use significant amounts of energy. If these workers aren’t earning enough, they tend to cut back on their discretionary buying of homes, cars, air conditioners, and even meat. All of these require considerable energy in their production and in their use.
High-wage workers tend to spend their money differently. Most of them have already purchased as many homes and vehicles as they can use. They tend to spend their extra money differently–on services such as private education for their children, or on investments such as shares of stock.
An economy can be configured with “increased complexity” in order to save energy consumption and costs. Such increased complexity can be expected to include larger companies, more specialization and more globalization. Such increased complexity is especially likely if energy prices rise, increasing the benefit of substitution away from the energy products. Increased complexity is also likely if stimulus programs provide inexpensive funds that can be used to buy out other firms and for the purchase of new equipment to replace workers.
The catch is that increased complexity tends to reduce demand for energy products because the new way the economy is configured tends to increase wage disparity. An increasing share of workers are replaced by machines or find themselves needing to compete with workers in low-wage countries, lowering their wages. These lower wages tend to lower the demand of non-elite workers.
If there is no increase in complexity, then the wages of non-elite workers can stay high. The use of growing energy supplies can lead to the use of more and better machines to help non-elite workers, and the benefit of those machines can flow back to non-elite workers in the form of higher wages, reflecting “higher worker productivity.” With the benefit of higher wages, non-elite workers can buy the energy-consuming items that they prefer. Demand stays high for finished goods and services. Indirectly, it also stays high for commodities used in the process of making these finished goods and services. Thus, prices of energy products can be as high as needed, so as to encourage production.
In fact, if we look at average annual inflation-adjusted oil prices, we find that 2011 (the base year in Sections [6] and [7]) had the single highest average price for oil.1 This is what we would expect, if energy consumption growth had been adequate immediately preceding 2011.
Figure 10. Historical inflation-adjusted Brent-equivalent oil prices based on data from 2019 BP Statistical Review of World Energy.
If we think about the situation, it is not surprising that the peak in average annual oil prices took place in 2011, and the decline in oil prices has coincided with the growing net deficit shown in Figures 6 and 9. There was really a double loss of demand, as growth in energy use slowed (reducing direct demand for energy products) and as complexity increased (shifting more of the demand to high-wage earners and away from the non-elite workers).
What is even more surprising is the fact that the prices of fuels in general tend to follow a similar pattern (Figure 11). This strongly suggests that demand is an important part of price setting for energy products of all kinds. People cannot buy more goods and services (made and transported with energy products) than they can afford over the long term.
Figure 11. Comparison of changes in oil prices with changes in other energy prices, based on time series of historical energy prices shown in BP’s 2019 Statistical Review of World Energy. The prices in this chart are not inflation-adjusted.
If a person looks at all of these charts (deficits in Figures 6 and 9 and oil and energy prices in general from Figures 10 and 11) for the period 2011 onward, there is a very distinct pattern. There is at first a slow slide down, then a fast slide down, followed (at the end) by an uptick. This is what we should expect, if low energy growth is leading to low prices for energy products in general.
[9] There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.
Many people believe that the only energy problem that an economy can have is prices that are too high for consumers. In fact, energy prices seemed to be very high in the lead-ups to the 1974-1975 recession, the 1980-1982 recession, and the 2008-2009 recession. Figure 5 shows that the worldwide growth in energy consumption was very high in the lead-up to all three of these recessions. In the two earlier time periods, the US, Europe, and the Soviet Union were all growing their economies, leading to high demand. Preceding the 2008-2009 Great Recession, China was growing its economy very rapidly at the same time the US was providing low interest rates for home purchases, some of them to subprime borrowers. Thus, demand was very high at that time.
The 1974-75 recession and the 1980-1982 recession were fixed by raising interest rates. The world economy was overheating with all of the increased leveraging of human energy with energy products. Higher short-term interest rates helped bring growth in energy prices (as well as food prices, which are very dependent on energy consumption) down to a more manageable level.
Figure 12. Three-month and ten-year interest rates through May 2019, in chart by Federal Reserve of St. Louis.
There was really a two-way interest rate fix related to the Great Recession of 2008-2009. First, when oil and other energy prices started to spike, the US Federal Reserve raised short term interest rates in the mid 2000s. This, by itself, was almost enough to cause recession. When recession started to set in, short-term interest rates were brought back down. Also, in late 2008, when oil prices were very low, the US began using Quantitative Easing to bring longer-term interest rates down, and the price of oil back up.
Figure 13. Monthly Brent oil prices with dates of US beginning and ending Quantitative Easing.
There is one recession that seems to have been the result of low oil prices, perhaps combined with other factors. That is the recession that was associated with the collapse of the central government of the Soviet Union in 1991.
[10] The recession that comes closest to the situation we seem to be heading into is the one that affected the world economy in 1991 and shortly thereafter.
If we look at Figures 2 and 5, we can see that the recession that occurred in 1991 had a moderately severe effect on the world economy. Looking back at what happened, this situation occurred when the central government of the Soviet Union collapsed after 10 years of low oil prices (1982-1991). With these low prices, the Soviet Union had not been earning enough to reinvest in new oil fields. Also, communism had proven to be a fairly inefficient method of operating the economy. The world’s self-organizing economy produced a situation in which the central government of the Soviet Union collapsed. The effect on resource consumption was very severe for the countries most involved with this collapse.
Figure 14. Total extraction of physical materials Eastern Europe, Caucasus and Central Asia, in chart by MaterialFlows.net. Amounts shown are based on the Global Material Flows Database of the UN International Resource Panel.
World oil prices have been falling too low, at least since 2012. The biggest decreases in prices have come since 2014. With energy prices already very low compared to what producers need, there is a need right now for some type of stimulus. With interest rates as low as they are today, it will be very difficult to lower interest rates much further.
Also, as we have seen, debt-related stimulus is not very effective at raising energy prices unless it actually raises energy consumption. What works much better is energy supply that is cheap and abundant enough that supply can be ramped up at a rate well in excess of 2% per year, to help support the growth of the economy. Suitable energy supply should be inexpensive enough to produce that it can be taxed heavily, in order to help support the rest of the economy.
Unfortunately, we cannot just walk away from economic growth because we have an economy that needs to continue to expand. One part of this need is related to the world’s population, which continues to grow. Another part of this need relates to the large amount of debt that needs to be repaid with interest. We know from recent history (as well as common sense) that when economic growth slows too much, repayment of debt with interest becomes a problem, especially for the most vulnerable borrowers. Economic growth is also needed if businesses are to receive the benefit of economies of scale. Ultimately, an expanding economy can be expected to benefit the price of a company’s stock.
Observations and Conclusions
Perhaps the best way of summing up how my model of the world economy differs from other ones is to compare it to other popular models.
The Peak Oil model says that our energy problem will be an oil supply problem. Some people believe that oil demand will rise endlessly, allowing prices to rise in a pattern following the ever-rising cost of extraction. In the view of Peak Oilers, a particular point of interest is the date when the supply of oil “peaks” and starts to decline. In the view of many, the price of oil will start to skyrocket at that point because of inadequate supply.
To their credit, Peak Oilers did understand that there was an energy bottleneck ahead, but they didn’t understand how it would work. While oil supply is an important issue, and in fact, the first issue that starts affecting the economy, total energy supply is an even more important issue. The turning point that is important is when energy consumption stops growing rapidly enough–that is, greater than the 2% per year needed to support adequate economic growth.
The growth in oil consumption first fell below the 2% level in 2005, which is the year that some observers have claimed that “conventional” (that is, free flowing, low-cost) oil production peaked. If we look at all types of energy consumption combined, growth fell below the critical 2% level in 2012. Both of these issues have made the world economy more vulnerable to recession. We experienced a recession based on prices that were too high for consumers in 2008-2009. It appears that the next bottleneck may be caused by energy prices that are too low for producers.
Recessions that are based on prices that are too low for the producer are the more severe type. For one thing, such recessions cannot be fixed by a simple interest rate fix. For another, the timing is unpredictable because a problem with low prices for the producer can linger for quite a few years before it actually leads to a major collapse. In fact, individual countries affected by low energy prices, such as Venezuela, can collapse before the overall system collapses.
While the Peak Oil model got some things right and some things wrong, the models used by most conventional economists, including those included in the various IPCC reports, are far more deficient. They assume that energy resources that seem to be in the ground can actually be extracted. They see no limitations caused by prices that are too high for consumers or too low for producers. They do not realize that affordable energy prices can actually fall over time, as the economy weakens.
Conventional economists assume that it is possible for politicians to direct the economy along lines that they prefer, even if doing so contradicts the laws of physics. In particular, they assume that the economy can be made to operate with much less energy consumption than is used today. They assume that we collectively can decide to move away from coal consumption, without having another fuel available that can adequately replace coal in quantity and uses.
History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely.
Note:
[1] There was a higher spike in oil prices in 2008, but averaged over the whole year, the 2008 price was lower than the continued high prices of 2011.
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Japanese tax coffers are fuller than expected!
According to the local media:
The Japanese government’s general-account tax revenue in fiscal 2018 hit a record high of 60,356.4 billion yen, the Finance Ministry said Tuesday.
The revenue, which had been estimated at 59,928 billion yen, exceeded the previous record of 60,105.9 billion yen marked in fiscal 1990 during the asset inflation-driven bubble economy era.
In fiscal 2017, the total national tax revenue was 58,787.5 billion yen. In fiscal 2018, which ended in March this year, income tax revenue logged a 24-year high of 19,900.6 billion yen on the back of growth in salaries and dividends.
The income tax revenue was some 430 billion yen larger than expected.
Back in 1990, ordinary people were paying less tax as a percentage of their hard-earned income and the budget shortfall was lower. These days that 60 trillion in tax receipts has to be augmented by about 40 trillion in borrowing to finance the current FY’s 100 trillion yen budget. Tax revenue fell to as low as 40 trillion yen in FY 2009, but for the past nine years it has risen every year in absolute terms.
https://i.redd.it/zwp3ywh4lk021.jpg
“Japanese-style interest rate caps are drawing interest from global central bankers worried about a downturn, including U.S. Federal Reserve officials grappling with how to bolster their options as prospects for the global economy darken.”
https://uk.reuters.com/article/uk-usa-fed-ycc/groping-for-new-tools-central-banks-look-at-japans-yield-controls-idUKKCN1UA0DS
“Central bankers readying to fight another economic downturn are tossing hand grenades rather than firing bazookas.
“Federal Reserve Chairman Jerome Powell and European Central Bank President Mario Draghi stand ready alongside many of their counterparts to cut interest rates to bolster the weakest growth in a decade and lackluster inflation. Yet they have little to work with and, perhaps more worryingly, what they do have lacks potency.”
https://www.bloomberg.com/news/articles/2019-07-14/central-banks-launch-growth-mission-with-arsenals-questioned
Also, if the US reduces its short term interest rates, it will tend to push Europe and Japan’s interest rates further into negative territory.
With all of Japan’s borrowing, perhaps more of the borrowed money is getting back to be wages of ordinary citizens, allowing tax revenue to rise.
I am still astounded by, “These days that 60 trillion in tax receipts has to be augmented by about 40 trillion in borrowing to finance the current FY’s 100 trillion yen budget.” No wonder Japan has so much debt. It doesn’t have much in the way of its own energy supplies, but it seems to be able to (more or less) promise a job to everyone who wants one. These jobs are financed by increasing debt.
If we look at auto sales in Japan, we see that January-June 2019 auto sales are up by 0.8% over the corresponding period in 2018. The increase is astounding in a country with a falling population that is increasingly aging.
I found one article that says, “The impending sales tax hike from 8% to 10% in October 2019, exacerbated by the still-unresolved US-China trade tensions, is expected to weigh on consumer spending this year.” I am wondering to what extent the impending increase in the sales tax hike is helping the Japanese economy. If I wanted to purchase a high-priced item like a vehicle, I would certainly purchase it before a known sales tax increase was going to take place. This might also be true of items like furniture or a new computer.
I agree, Gail. People will be spending more in advance of the tax increase. If I had a budget to purchase any big ticket items such as a new car or a new bathroom, I would do my shopping before Halloween, as the sales tax rate is due to go up on November 1.
Foreign tourists—particularly from China and South Korea— have also given a huge boost to the Japanese economy in recent years. The numbers are impressive, passing 5 million for the first time in 2002 and 10 million in 2013. Since then they have rocketed to 13 million in 2014, 19 million in 2015, 24 million in 2016, 28 million in 2017, and 31 million in 2018. And so far this year numbers have been at record highs every month.
And most of these people are world-class shoppers. 2018 saw foreign visitors spend more money in the country than ever before. The Japan Tourism Agency says visitors spent about 4.5 trillion yen, or 41.5 billion dollars last year. That is also a record. And of course, next year, barring accidents, the Olympics is set to bring even more foreign tourists to Japan, so a lot of people’s economic and business hopes are riding on that wave.
We have simply entered new paradigm, where debt rulez supremely and unquestionably..
It sounds to me as if people from Southeast Asia are spending money on travel rather than on vehicles. This might make sense, if there is practically nowhere to drive the cars and governments are charging high tolls to use roads.
Also, if the shift in the future seems to be electric cars, the change will bring down the resale value of other cars. Buying a new electric cars will often be too expensive for existing car owners. Probably not enough places to charge the vehicles, either. Better to spend the money on something else, like foreign travel.
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Gail, What about the increasing consumption of the average citizen in many areas of the world? How many world citizens have “moved up” to a “middle class” consumption profile over the last 30 years? – My point – One low consumption world citizen using one fiftieth of the energy and resources of on “modern middle class” citizen… So, by some estimates, in the last 20 years or so.. approximately 4 or 5 “Americas” of consumption have been added to the world Citizen/Consumption profile.. It is not just Numbers of Humans, that are the problem, it is the increasing number of “high consumption” humans. Add I billion low consumers, or 1 billion high consumers, it is a Massive difference in energy and resource consumption.
What has been happening is that the high consumption (per capita) economies have outsourced their manufacturing to the lower consumption (per capita) economies. When the production is shifted to these other economies, it isn’t just that new factories are added to these economies. The whole economies suddenly blossom, with more roads, more schools, and more mines of many kinds. The countries that have coal available ramp it up, because it tends to be a cheap, easy to use fuel. Natural gas can be cheap, if all of the pipeline and other transportation issues can be solved. Oil hasn’t been used (to any great extent) for factories since the 1970s, but it is still required for transportation.
There also tends to be a whole lot of population growth outside the advanced economies that people in advanced economies fail to see. Part of the population growth comes from better hygiene and some basic medical treatment. Part of it comes from parents with more resources being able to raise more children to adulthood. The most astounding rise in births over deaths has been in sub-Saharan Africa. By five year period, this is average population number added per year in Sub-Saharan Africa, comparing births to deaths. The UN belief that “educating the mothers” will be sufficient is clearly incorrect.
1950-1955 3.7 million
1955-1960 4.6 million
1960-1965 5.6 million
1965-1970 6.7
1970-1975 8.2
1975-1980 9.8
1980-1985 11.6
1985-1990 13.2
1990-1995 14.3
1995-2000 16.0
2000-2005 18.2
2005-2010 21.6
2010-2015 24.9
2015-2020 27.5
These excess people are what cause the migration problems we have, as people from poor countries spill over to more resource rich countries. The last several cohorts are too young to migrate, but will be the migration problem of the future. There is also a lot of excess population spilling over from Middle East and North African countries, and from Asia in general. There is a somewhat smaller problem from Mexico southward of excess population wanting to migrate.
Stimulus. What a curious word. What is it? Money is created. It is distributed. One financial instrument is traded for another. The real difference in the two financial instruments one creates more demand for resources than the other. No stimulus cant fix our problems despite our delusions that money somehow has a inherent power. It sure as hell can kick the can. Can is getting pretty beat up from so much kicking. In the end the truth comes out. Yes Gail should win a Nobel prize. If the Nobel prize actually reflected what it it is supposed to. But I digress.
There are a lot of indirect promises for future goods and services. These promises, in some sense, reflect more demand for energy products. Money and other financial instruments represent more demand for goods and services, especially if they get back to people who will really spend the money. If they simply increase wage disparity or wealth disparity, they will not do very much, or anything.
Interesting that the inflation target of the Federal Reserve has always been 2%. Not that I think they had any insight into it, but the economists seem to have observed its link to growth. Gail explains where that number actually comes from in the real, physical world.
I am wondering if it is the same 2%, or a related, but slightly different, 2%. Somehow, prices need to keep going up by 2% to make debt easier to repay with interest. The system needs to grow at least a little, or it won’t work. In that sense, it is the same 2%.
I was going to go out and look for some UV protection long sleeve shirts at Bass Pro Shops.
First, I went to their website to see if they had anything, they did not, so went to Amazon and purchased two right away….so…..
The record year for closings was 2017, with 8,139 shuttered stores, Coresight found. This included an earlier round of Payless closings, the entire HHGregg electronics and appliance chain, and hundreds of Sears and Kmart stores.
The pain is expected to continue into future years, according to an April report from UBS Securities. UBS analysts said 75,000 more stores would need to be shuttered by 2026 if e-commerce penetration rises to 25% from its current level of 16%.
A separate analysis by UBS said tariffs on Chinese imports could put $40 billion of sales and 12,000 stores at risk.
“The market is not realizing how much brick & mortar retail is incrementally struggling and how new 25% tariffs could force widespread store closures,” UBS analyst Jay Sole wrote in the May report. “We think potential 25% tariffs on Chinese imports could accelerate pressure on these company’s profit margins to the point where major store closures become a real possibility
https://finance.yahoo.com/news/more-store-closings-coming-estimated-100014142.html
Saved time and wear and tear, gas on my auto. Hope they are OK, if not, I’ll send them back.
I even buy my sneakers online now…..
Bass Pro bought out Cabela last year.
Hows that for freedom of consumer choice!?
When you stop buying locally and by online instead, you are sending a message to the local stores to close because they are not needed. This eventually puts local store staff out of work. But on the upside, it creates more jobs for online store staff and delivery drivers—until they are all replaced by robots, that is.
Australian readers are probably familiar with the ‘rebel’ economist Steve Keen. He’s briefly back in Australia and just did a talk with Martin North from DFA “A Conversation With Steve Keen: Part 3 – Ecology and Energy”. In it Steve fully admits that economics has manifestly failed to account for energy and the ecological ramifications arising.
https://www.youtube.com/watch?v=uUXKNAQIdO0
Judging from the comments following it, I suspect that the majority of readers don’t know what energy actually means, or its importance. They’re hung up arguing about climate change and I speculate they think energy = electricity and natural gas (as the consumer is currently feeling their high prices). If Steve had used the word oil instead, then more understanding may have been had. But probably not; oil is like the air we breathe, don’t notice it until its gone. Perhaps we should practice saying grace before each fill at the petrol station?
It is frustrating to try to educate a general audience about energy and the economy because they need a huge amount of background to understand anything. And it seems to take a while to sink in. Our educational system has done an incredibly bad job in this area, perhaps because it leads to uncomfortable questions. Back in 1957, Rear Admiral Hyman Rickover gave a talk in which he said,
As I reread this section now, I see that Rickover did not understand the threat of collapse to the whole system. At least, he didn’t talk about it. But he did talk about education (which is possible), and trying to save some for the future – something that doesn’t really seem to be possible. Keeping population down would have been an even more important topic to talk about. The audience was actually a group of doctors. It seems like they would have been interested in such a topic.
Admiral Rickover did not think the process through, or if he did, he did not share the view. Perhaps, like Hubbert, he was hoping for some new form of nuclear energy to replace the fossile fuels. Looks like that solution will not make it in time.
Steve ends by saying that economists are part of the problem. I definitely agree. They set up their various theories without having any idea about the role of energy. I wrote about Steve Keen’s view that energy is what makes both labor and capital productive. I showed this graphic of his:
https://gailtheactuary.files.wordpress.com/2019/05/s_keen-correct-way-to-view-energy.png
Steve Keen dismantles William Nordhaus model on climate change.
http://evonomics.com/steve-keen-nordhaus-climate-change-economics/
Oh no, my discussion on climutt change! Come now, regardless, nothing will be done about it on its own accord. Just grin and bear it and allow the natural forces to play out, for better or worse. All I know is converting liquid or solid form of oil, coal into gas molecules by burning added to the atmospheric composition by the gigatons will have an impact.
Cheers!
How about shifting the dialog to the importance of teaching birth control in places from Nigeria to Iraq to the Philippines? With world population growing by 83 million per year [originally said day], we have a long way to go to get population growth down to close to zero.
At the same time, start pointing out that having fewer than a replacement number of children will make it impossible to permit pension plans without bringing in a lot of immigrants from elsewhere. This adds a different problem to the equation. Somehow, people without children will need to be taxed heavily to permit the lighter taxation of those who bear the financial burden of having children. In a sense, this needs to happen even in countries that are just now talking about adding a government sponsored pension plan. Pension programs depend on the earning power of working age people. At any given point in time, whatever is produced (food, cars, clothing, etc.) must be divided up between workers and retirees. Young working people must be capable of producing the surplus that the retirees and disabled consume.
We need just the right number of children living to maturity, on average (not too many, not too few). Of course, we also need a growing supply of inexpensive energy products that those children can use to provide the necessary goods and services for whatever population is alive.
In fact, the need to not come up short in the number of children living to maturity is part of the reason that world population keeps growing.
I say leave the population growth rate alone. Who are we to play God/Allah/Jehovah/Flying Spaghetti Monster and tell people to stop having babies? It’s one of the last enjoyable things left in the world that the government doesn’t interfere in (well, too much anyway)!
Instead, let’s just kill a bunch of people (war? euthanize old folks? I’m sure someone here has a really clever Final Solution they could propose…), redistribute their wealth to the remaining “players”, and let the Great Game continue until another cull is required.
I mean, c’mon… it’s not like each and every one of you here couldn’t think up someone who deserves a sweet dose of murder 🙂
https://www.youtube.com/watch?v=11DYt7GOsaw
Cheers,
-GBV
The way animal and plant ecosystems are set up is with parents producing a fairly large number of offspring, with only the best adapted to the current situation surviving. It is not set up for a system where we determine, in advance, how many children we want to have, and use birth control or abortion to limit the number. Our choices will not prove to be correct. We are so tender-hearted, we think all offspring need to survive to maturity, and we think we need to develop a medical system to make certain this is the case.
From that point of view, I agree with you. We are kidding ourselves, if we really can fix the system the way we like.
Also, once governments start offering pensions when people get old or disabled, we need to have parents with enough children, to make the system work. But, way too often, it doesn’t work out that way. I imagine that part of the reason for putting the pension system in place was to stop couples from having as many children. Instead, what seems to happen, is that many of them have too few. And those with few also tend to be ones who live very long, because they take care of their health. The system fails because there are not enough young people to support the many elderly.
83 million more a year perhaps
You are right. I will fix the it. Not 83 million per day!
Next time on The Walking Elderly…
https://si.wsj.net/public/resources/images/P1-AX386_Zombie_G_20100926162416.jpg
Cheers,
-GBV
But you also point out that dictatorship is what a future might demand. And a good dictator would enact a collective style of child rearing. I don’t see how a significantly collapsed future could work without dictatorship and collectivity.
My guess is that in many OECD- countries it`s not just the elderly that represent a drain on public finances. In Norway an econimist working at the Statistic Agency has shown that also children are «too expensive». The total entitlements we receive from the state must also take into account what we get for «free» before we enter the workforce (in Norway also the education you get at the universities and highshools are almost free) – this makes every citizen a net loss.
Why would collective child rearing be better?
Impoverished but still somewhat automated future means lots and lots of unemployed. Should allow plenty of free time to raise children.
There’s too much work to be done not to have children as part of the work force. We can’t afford the lack of system and coherence we get from individual child rearing. The public are too ignorant to do better. Everybody must pull in the same direction.
You have touch upon an important topic here ….good on you, as we say down under. We are all around us surrounded by childless couples who, somehow, are drawing equal amounts of energy from the system. This is a form of parasitism, is it not?
No, it is not. People who think like that are suffering from warped perception. As long as people work for a living, pay their taxes, and contribute something positive to their communities through their work, they should be considered productive and valued members of society.
If Australia chooses not to burn more coal or build more nuclear power plants so that its system provides a lot less energy than its population is currently used to accessing, then pretty soon if you are not careful all of you be surrounded by people who see everyone else as engaged in a form of parasitism. If that happens, we won’t be calling Oz “the lucky country” anymore. I can’s see how viewing other citizens as “parasites” based on whether they have too many or not enough kids is going to do the country any good at all.
It is a bad sign when the people of a country stop identifying themselves with the country and start identifying with a group. A racial group. Or a religion. Or a language. Anything, as long as it isn’t the whole population.
—Robert A. Heinlein
As long as people work for a living, pay their taxes, and contribute something positive to their communities through their work, they should be considered productive and valued members of society.
Don’t you think it’s a bit naive to assume that people doing those things automatically present a net benefit to the system? Do you not recognize the dangers in declaring something “productive” and “valued” without doing anything to objectively measure said productivity and value?
I’d suggest people considering the following questions:
– Does working really create value if you’re not productive (falling productivity seemingly a problem for developed nations these days, according to some)?
– Does paying taxes really improve our lot in life if we keep electing governments who spend far more than they bring in from taxes/fees/fines, or worse, channel our tax dollars into misery-causing wars of occupation and an increasingly powerful police state?
– Do you or anyone else have the wisdom/understanding to know exactly what is a net positive contribution to society (i.e. everything has a good and bad side to it… as Gail pointed out, saving more young people from infant mortality only creates a new problem and/or shifts problems out into the future), and how long that positive effect will play out (i.e. not just positive in the immediate sense, but positive for the entirety of humanity for all time)?
Instead of suggesting someone’s perception is warped, consider that all ideas/perceptions are both correct and incorrect – it just depends on the timing, circumstances, and personal/social biases at play. Perhaps there even was (or will be) a point in time when we’ll think to ourselves that, gee whiz, the world really needs more Jeffrey Dahmers and Jeffrey Epsteins…
Cheers,
-GBV
Heinlein was wrong in this case. People will identify with their own language group…hey, you and I are doing it right now. Identity politics has got a bad name because groups are using it to withdraw more from society than they put in- hence parasitism. Good word don’t you think?
Don’t you think it’s a bit naive to assume that people doing those things automatically present a net benefit to the system? Do you not recognize the dangers in declaring something “productive” and “valued” without doing anything to objectively measure said productivity and value?
Yikes! Firstly, I was simply making a value judgement about value. In my view, if people contribute something positive to their communities through their work, they should be considered productive and valued members of society. I wasn’t suggesting that all work is valuable or that all work contributes something positive to society. If you read that into what I wrote, I apologize for not writing clearly enough.
Secondly, I wasn’t declaring any particular kind of work in particular as “productive” or “valued”. I was arguing that IF people contribute something positive (without me making any judgement about whether any particular something is positive or not), THEN they should be considered productive and valued members of society (without making any judgement about whether any particular something they do makes them productive and valued or not), RATHER than being considered parasitical because they don’t have kids, and WITHOUT making any assumptions that any type of work automatically presents a net benefit either to the system or to society, which in my view are different things.
More broadly, any opinion about what is productive and valued is going to be a subjective value judgement regardless of what criteria are used to objectively measure said productivity and value because the selection of the criteria is bound to be subjective.
The three questions you suggest we ask ourselves are, likewise, only capable of being answered subjectively. Ten people will have ten different opinions on them. That’s why I’m not arguing that any one answer is more definitive or any better than all the others. Society decides the answers to such questions collectively, with a relative few people pushing their views and trying to force them on the rest of us through a process I like to call social engineering.
After considering what you’ve written, and written very well, I’m still not persuaded that not having children equates to parasitism as the word is generally understood in society as we know it, and I still think anyone who holds the view that it is parasitism in today’s Australia for instance is suffering from warped perception. If we get to a point where the world really needs more Jeffrey Dahmers and Jeffrey Epsteins or even more Jeffery Archers for that matter, then we are in a very different world and all bets are off of course.
Heinlein was wrong in this case. People will identify with their own language group…
Au contraire, Heinlein was correct in this case. He didn’t write that people will not identify with their own language group, etc. Quite the contrary, he implied that they did so, and he thought it was a bad sign when they did. If you read the quote again, I’m sure you will see that.
I think you make a good point about iIdentity politics being used on occasion to withdraw more from society than they put in, and in such cases I think it could justifiably be termed parasitism. And historically, a lot of selfish human behavior, notably when it occurs among politicians, CEOs, investment bankers, hedge fund managers, senior executives and managers of NGOs and charities, bureaucrats, apparatchiks and landlords has been compared to that of parasitic organisms.
But I don’t see the logic of couples being compared to parasites by virtue of not having children. How does not having children equate to sucking the lifeblood out of society? And if couples who choose not to have kids are parasites, how about couples who may desperately want to have them but can’t have them for physiological reasons? Or people who remain single? Are all these people also parasites? I must be missing something blindingly obvious here.
The issue I was talking about for higher taxes for those without children is related to our government pension programs. They all, pretty much by definition, must be pay as you go. The taxes collected in one year will go to pay benefits in the year they are collected. The crops farmers grow in one year will need to be divided between retirees and workers. If there are a lot of retirees, and not many workers, there will soon be a problem. There will not be enough workers producing food, clothing, and other essential items. The retirees will expect too large a share of what is produced.
If parents take care of children when they are young, there is to some extent a reciprocal arrangement that takes place as well, when people get older. The younger generation takes care of the older generation.
In countries without a government pension plan, people tend to have a lot of children to make certain that some of their children live to adulthood. Often, an adult son is what they would like to have, since an adult daughter will not be able to financially support older parents. Governments adopt pension plans, in part to discourage children from having so many children. Suddenly, there is no need to, because the government will take care of you.
Except that the government can’t really take care of the elderly, without very high taxes, or without people working very long. Citizens tend to have too few children to keep the system operating.
Governments either need to take in a lot of immigrants, or they need to somehow discourage people from opting out of parenthood. Taxation of couples without children would be one way of leveling the playing field. Of course, it is hard to tell who fathers are. It is a lot easier to tell who mothers are, and they often don’t have much money. If couples would marry (and stay together), it would make things somewhat more clear.
I know that you obviously meant a population increase of 83 million per year. I often ask people “how many more people are alive today than yesterday.” When I tell them that it’s around 200,000 they just sort of stare at me.
Keen focuses on Nordhaus’ model of climate change, and shows that it is wrong. I think the thing Keen misses is that there are just as many errors in the rest of the inputs that economists are putting into the climate model. We end up with basically a worthless model, in all respects. We do know that the climate is changing, but not much more. The belief that humans have the power to change how the climate will behave, going forward, has not been shown. The model output just reflects what those who put the model together would like us to believe.
Just for reference, from Wikipedia:
DICE Model
The Dynamic Integrated Climate-Economy model, referred to as the DICE model or Dice model, is a computer-based integrated assessment model developed by 2018 Nobel Laureate William Nordhaus that “integrates in an end-to-end fashion the economics, carbon cycle, climate science, and impacts in a highly aggregated model that allows a weighing of the costs and benefits of taking steps to slow greenhouse warming.” Nordhaus also developed the RICE model (Regional Integrated Climate-Economy model), a variant of the DICE model that was updated and developed alongside the DICE model.[1][2][3][4] Researchers who collaborated with Nordhaus to develop the model include David Popp, Zili Yang, and Joseph Boyer.[2]
The DICE model is one of the three main integrated assessment models used by the United States Environmental Protection Agency, and it provides estimates intermediate between the other two models.[4][5]
“Self-cloning ticks that suck animals’ blood dry spark concern humans may be next”
https://www.nydailynews.com/news/national/ny-self-cloning-ticks-suck-animals-blood-spark-concern-humans-20190712-wcx3nxiwrfbg7bin4kb6qxk5li-story.html
And when energy supply goes flat or declines? Do we finally get the price up or a deflationary death spiral with no lower to go than zirp.
I don’t think the price ever goes up, except for an occasional brief spike because of a temporary shortage. In fact, debt defaults will tend to push prices lower.
One way of seeing the price problem is the way I explained in this post. There isn’t enough demand to keep the prices up, if the energy supply is too low.
Another way of seeing the problem is the way it is described in a paper by Aude Illig and Ian Schindler, titled Oil Extraction, Economic Growth, and Oil Price Dynamics. This was published in 2017 in Charlie Hall’s journal, “Biophysical Economics and Resource Quality.” https://link.springer.com/article/10.1007/s41247-016-0016-6
Their argument is that energy services are the most necessary part of the economy. If the economy is to grow in total, the cost of the most essential part must shrink, so that the less essential parts can grow.
The energy services we are talking about the combined effect of (a) the price of energy and (b) the growing efficiency with which this energy is used. For example, in the early days, insulation was added to homes, allowing the need for less heat.
In fact, if we look at the work of Roger Fouquet, he shows that since the beginning of the Industrial Revolution, the price of energy services has fallen. http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/06/LREnergyPricesREEP2011.pdf
https://gailtheactuary.files.wordpress.com/2017/11/fouquet_average-price-of-energy-and-energy-services-in-the-uk-1700-2008.png
A slightly different version of the falling price argument is one I am personally the author of. It is given in Section 2 of an article published in the journal Energy in 2016 called “An Oil Production Forecast for China considering Economic Limits.”
One part of Section 2 of this paper says:
If people don’t understand how a networked economy works, and instead have only seen the goofy little supply and demand chart of economists, they are likely to jump to the conclusion that prices go up when there are shortages. The catch is that a lack of energy supply affects both supply and demand, so the economist’s chart doesn’t work for energy supply.
https://gailtheactuary.files.wordpress.com/2018/09/33-low-energy-supply-affects-both-supply-and-demand.png
Their argument is that energy services are the most necessary part of the economy. If the economy is to grow in total, the cost of the most essential part must shrink, so that the less essential parts can grow.
The energy services we are talking about the combined effect of (a) the price of energy and (b) the growing efficiency with which this energy is used.
This is a clear and easy-to-grasp view that makes sense. It also tells me that as long as we are relying on fossil fuels for the vast bulk of our energy, we can’t expect the economy to grow very much from here on.
of course you are correct…
economic growth will not happen…
but the MSM will be telling us that the lack of economic growth was “unexpected”…
“The catch is that a lack of energy supply affects both supply and demand, so the economist’s chart doesn’t work for energy supply.”
and as you well described, there are problems when energy supply growth is under 2%…
“And when energy supply goes flat or declines?”
then the economic problems become even worse than when the energy supply was still growing minimally…
now we know that oil is a significant part of the energy mix, and it’s quite interesting that OPEC is trying to deal with their too-low-price problem by cutting their production…
but from where we sit, we see that this cut in production means that the energy supply is going to be lower, and perhaps soon we’ll see that day “when energy supply goes flat or declines”…
OPEC may want higher prices, but their production cuts may cause unintended economic consequences…
Right!
Gail, thanks for that explanation.
By the way do you think that applying similar Fouquet & Allen’s methodology now would tend to plot really noticeable uptick on the graph (fig8) of avg energy prices and energy services for 2015-2025 as well? Or is the source available data tainted too much with feelgood adjustments.. There also might be a (lagging) factor that UK is not producing – manufacturing domestically much these days and into the future (energy intensive production moved to continent, Asia)..
I know that worldwide, the cost of energy services has tended to fall, as a percentage of world GDP, has tended to fall. The United Nations puts out reports. The most recent report I am aware of is the United Nations “Global Material Flows and Resource Productivity” report published in 2016. http://wedocs.unep.org/bitstream/handle/20.500.11822/21557/global_material_flows_full_report_english.pdf?sequence=1&isAllowed=y or http://wedocs.unep.org/handle/20.500.11822/21557
It shows this chart of world GDP by Sector on page 26. The chart seems to show data through 2013.
As we would expect, the bottom two sectors tend to shrink over time.
https://gailtheactuary.files.wordpress.com/2016/10/un-estimate-of-world-gdp-sector-added-value-shares.png
Gail,
I am not very good at recursive functions but this seems to be a case that could be done in Excel by discrete iterations and is dependent on rates of increase/decrease feeding into each other. Is it not the absolute amount that is important but the rates, e.g. if the rates are less, the value of the capital invested is less and the value of the oil is less as it cannot be used/extracted at a growing rate. On the demand side the per capita are waiting in line for their bucket of oil and unable to use say their car as much which decreases the value of the car.
These are odd functions in that they do not seem to asymptotic but become chaotic. The debt of the oil companies is owed to the consumers in the form of interest or taxes as you have noted. Lack of ability to service debt as in many shale oil plays can be covered by printing money but that is a exponential function which is again a rate issue, rate of increase.
The recurring metaphor of snake eating its tail comes to mind, economists unlike philosophers assumed demand and supply were not recursive which behave much differently from standard models.
Is the whole system based on a model that only works by pumping in paper debt? Debt in this case seems to cover a timing problem more than a capital problem until it does not work in which case the emperor has no clothes.
Please forgive this not being very well thought out, more throwing ideas up in the air and seeing how others view them.
You could win a Nobel prize for this work, it is a different view and a young man working in a patent office with little to no peer review comes to mind.
Dennis L.
I can’t win a Nobel Prize for this. It is something no-one wants to hear.
I believe the Limits to Growth model of 1972 modeled the recursive function (without debt or prices). There were a range of indications given. The base indication seemed to show a collapse happening about now. What they were looking at was the weight of materials used, which is the same thing as in Figure 2 of my post.
https://gailtheactuary.files.wordpress.com/2019/01/1972-base-limits-to-growth-forecast-with-2019-dotted-line.png
The too low prices and the debt allow for the extraction of the harder to get resources and wipe out the population via lowering the birth rates. “Consuming” the children is also a part of the story.
People are spending so much of their time on jobs (plus commuting) and their income on housing that they cannot afford to have children.
found fast Eddy.
I wonder what kind of down payment & mortgage I’m looking at for a place like that…
hmm…
Cheers,
-GBV
Oil or drinking water
The recent oil seeps in the Eastern Slovakia made drinking water from local wells in several municipalities unusable:
https://dolnyzemplin.korzar.sme.sk/c/22166821/ropu-vo-vode-maju-uz-v-siedmich-obciach-odbornici-zistuju-odkial-sa-vzala.html#storm_gallery_132573
It is no wonder that the Eastern Slovakia, recently also repeatedly plagued by hails with big ice lumps, is depopulating.
https://www.imeteo.sk/clanok/v-kosiciach-opaet-padali-5-cm-krupy-vyskytla-sa-supercela
Could you pls share more about the land prices in that particular sub-region, because as long as agri subsidies both on EU as well national level continue to pour as gusher in – it only goes up and up as ‘capital’ seeks rental opportunity this way (not real food production).. Since the GFC_I land prices went absolutely nuts (3x-5x ..) even in more distant low pop regions such as north eastern Germany/Baltics or agricultural ClubMed areas of formerly little interest at least since WWII.
Although similar process has been underway in the US as well, interestingly the tide has turned in the sense there are signs of people actually relocating into formerly abandoned – depop areas like around greater Appalachian, simply the times (decade+ ago) of acquiring there 50-100acres farming estate with buildings all for few silly thousands bucks is over, never ever to return..
I guess this has not yet fully happened in Europe as the prevalent drive is only speculative in terms of acquiring land for guaranteed subsidies – rent, ‘displaced’ and young people still flocking to cities / suburbs instead.
There is already a fight over this land for subsidies among the local people and also the Italians who spotted the chance, various frauds regarding the classification of the land etc.:
https://www.google.com/search?q=eastern+slovakia+subsidy&oq=eastern+slovakia+subsidy&aqs=chrome..69i57.9255j0j7&sourceid=chrome&ie=UTF-8
I think the issue with oil seeps is that there are an awfully lot of naturally occurring oil seeps. In fact, this is the way most oil has been found. I used Google Translate to figure out that this article is about trying to figure out whether these are naturally occurring, or if there is some other cause of the problem.
There has been going natural gas extraction in this region, but no oil extraction. These oil seeps seem something surprising, as the region was geologically surveyed in the 50s.
The energy poor Austria faces terrible shortage of workers:
https://www.expatfocus.com/c/aid=5394/articles/austria/what-might-austrias-labour-shortage-mean-for-potential-expats/
“According to the most recent survey conducted by the Austrian Economic Chamber, a skilled labour shortage is hitting almost 90 percent of Austrian companies. This increases the workload for business owners and current staff, compromises the quality of service and decreases customer satisfaction. The situation has the potential for a decline in the economic success of Austrian companies in general, leading to decreases in sales and increases in costs.”
This looks like a problem with respect to too many retirees relative to the number of working age people. This is why a lot of countries are encouraging immmigration. Those entering the country likely would be young, but perhaps not too well educated.
The world facebook says that Austria is 201 out of 244 with respect to “total fertility rate,” averaging 1.47 per children. This is way below replacement level.
Still, their pop has increased 10% this century.
The issue is that Austria had been able to lure in working migrants from their nearby former Austro-Hungarian realm + wider Balkans with somewhat compatible mindset and so on. These people tend to have fewer kids similar to native Austrians after relocation. On the other hand incoming migrants from more exotic destinations like ME tend to have larger families for generations.. and the working participation is questionable at best.
Also, the resource base question is a bit more nuanced, since Austria as ‘neutral’ country gained semi tax heaven status for the global upper echelons, hence lot of money per capita for doing wise (re) investments when possible, hence attained higher living standards in comparison to many W. German states-regions..
The average consumer has been becoming poorer over time and is adding more debt in the form of revolving credit in order to support his lifestyle.
I can offer a very interesting (although purely anecdotal) observation.
I have been making the same 72 mile, week day commute (36 miles one way) in and out of Philadelphia for the past twenty years.
When I first started, what struck me was that everyone seemed to be driving fairly new cars. Clunkers were very noticeably absent from the commuting vehicle rolling stock. And the number of broken down vehicles I would see along side the road were, for all practical purposes, almost non-existent. I mean, I could count the number of breakdowns I would see over the course of an entire year on the fingers of my two hands.
But starting about a year and a half ago, it became very apparent to me that the number of roadside breakdowns had suddenly increased noticeably and so I started paying closer attention. I started seeing at least one broken down vehicle every commute, in other words, roughly two per day.
Lately, I am seeing as many as three (sometimes FIVE) breakdowns per one way commute on a regular basis.
I find this fascinating.
Many of these broken down vehicles have flat tires. On the surface, this seems like a fairly simple and “benign” type of breakdown. Until one realizes that tires are a relatively low cost maintenance item; costing less than many typical car repairs, such as break jobs. In other words, people are struggling to keep up with the most basic car maintenance items.
This anecdotal observation seems consistent with data that shows falling new car sales, an ever increasing age for the American private car “fleet”, rising prices for used vehicles, longer term car loans and higher rates of loan defaults.
This sort of goes with the broken down Boston transit system that the WSJ reported on a day or two ago. Too much deferred maintenance combined with a desire to bring the system up to a higher standard current standard is leading to a need to run the system at less than full service and spend a huge amounts to keep the system going. You can run a transit system without much maintenance or upgrading for a time, but it catches up with you.
I have noticed an increased number of disabled semi tractors, although I dismissed it because I had moved from flat eastern coastal NC to the mountainous western area. I would see lots of trucks pulled up along I-40 west before Asheville along the six mile long climb, but that is nothing compared to out west. Are the rigs suffering from lack of upkeep?
I have also noticed the increased number of unrepaired dents at my apartment complex, even on some relatively new cars. Is it because they are actually older cars (it’s relative I guess when mine, a 1998 BMW Z-3 1.9 liter, is 20 years old and has a shopping car dent on the driver’s side door)…or because people can’t afford to repair them? And what about the responsibilities of lease owners if their car gets dented? Aren’t they obligated to get them repaired?
Is delaying the repair and collecting insurance a hardship way of “borrowing?”
Purely anecdotal with no statistical basis that I am aware of, but an interesting observation unless I have confirmation bias.
It is my understanding that the increased use of things such as DEF along with the more stringent emission standards has lead to a decrease in reliability of truck engines. CAT stopped making diesel truck engines and the business of buying “sleds” which are trucks without engines and the installing older, rebuilt engines is due to the maintenance issues.
Tough situation for truck owners, decreased freight volume and increased maintenance costs for the equipment.
Dennis L.
I would not consider a set of four tires as low cost maintenance. Maybe you’re referring to auto repair. I maintain our vehicles and that’s the highest recurring maintenance cost. After oil price skyrocketed in 08, the price of tires shot up and never came back down even when oil price dropped.
Here’s a tip on tires. The ‘best tires for the price’ in my opinion from experience are Hankook from South Korea. I got a set of four for my truck 8 months ago in winter and now even though its a lot hotter now, the air pressure on all four tires is still the exact same as when they were bought new, 34 lbs. I’ve never had that happen before even with Michelin, as tire pressures are usually quite uneven and change with the seasons. Also, great traction in wet weather and at high speeds in rainy conditions. No hydroplaning that I’ve experienced like I did with Chinese tires that wore out in 9,000 miles. Those things were complete junk. I’m not saying that about all chinese products are bad but I suggest avoiding tires from China.
As far as new vs. old vehicles, I’m not seeing what you’re seeing with lots of cars at the side of the road or lots of older models, but this is fairly well to do CA, but it is an interesting observation for your area.
For a fixed mass of gas at constant volume, the pressure is proportional to the absolute temperature. The fact the pressure in your Hankook tires has not increased from winter to summer, means the mass of gas has decreased i.e. some air has escaped.
Human beings thrive or starve, and civilisations rise and fall, on the basis of the weather patterns
– and hence harvests – over a very limited period. Particularly when governments fail -or are unable – to keep proper stocks of emergency dried food.
Watch the weather, not the grander theories and predictions, whatever they happen to be – this field has been polluted by propaganda and deliberate misinformation from all sides, so it’s a sterile debate.
But the weather itself doesn’t lie, and you can see what is happening to the crops in the fields by direct observation.
What we see now are ever more severe oscillations, with the probability of production being wiped out in whole regions for a succession of years.
‘Weather bombs’ are becoming more common, undoubtedly: severe droughts, dry winters, sudden devastating storms of rain and hail, etc. It’s getting a bit crazy.
This invariably leads not only to political unrest, but epidemics. Nothing new under the sun……
If a civilization has an “energy margin” of some type, it can set aside extra food in storage, or it can build long distance trading arrangements, so it is not so disrupted by short term events.
But if it is operating at close to the edge, any little fluctuation will cause a problem. The fact that the current economy is operating close to the edge makes it more vulnerable. For example, in most families, both spouses/partners are working, and the family depends on both incomes. If one gets laid off, or even gets reduced hours of work, it causes a problem.
I agree, Gail,: a whole system now close to the edge
“Human beings thrive or starve, and civilisations rise and fall, on the basis of the weather patterns…”
for those long ago civilizations, what caused their severe weather patterns that led to their fall?
it wasn’t see oh two…
The economy needs to be growing sufficiently that it can store up surpluses to deal with all of the weather fluctuations. Also, rising population tends to drive (food and other output) per capita too low. Farms need to be divided up, because of large families. No one can produce enough surplus. Weather changes fit together with other changes at the same time.
“Auto suppliers Johnson Electric Holdings and Sensirion slashed their earnings forecasts on Thursday, blaming a slowdown in car sales and pessimism about the prospects of a Chinese car sector recovery. The news is the latest to signal weaker global industrial activity…”
https://www.reuters.com/article/us-autos-suppliers-warnings/bleak-china-autos-outlook-triggers-raft-of-profit-warnings-idUSKCN1U6194?il=0
“Passenger vehicles sales in India slumped 17% in June, underscoring a deepening slowdown that sparks concerns about production cuts and layoffs. Automotive demand in Asia’s third-biggest economy has been cooling for more than a year amid a credit crunch and distress in rural markets.”
https://asia.nikkei.com/Business/Business-trends/India-passenger-vehicle-sales-slump-17-in-June-sparking-job-cut-fears
“AI-Trained Robots Set To Automate Recycling Centers, Will Displace Countless Jobs”
https://www.zerohedge.com/news/2019-07-07/ai-trained-robots-set-automate-recycling-centers-will-displace-jobs
A new wave of automation investments in recycling facilities across the US could displace tens of thousands of jobs in the next decade. Overall, robots could replace 20% to 25% of current jobs by 2030 — equivalent to 40 million job losses.
just what the ecomony needs, more unemployed workers. one way to stop this madness is to tax use of robots, to pay for human unemployment benefits.
Perhaps 1000% tax on the cost of the robot!
I can picture it now. Robot’s handing out unemployment checks to unemployed human workers.
LOL!
A few years down the line I can picture rows and rows of unemployed robots carrying cardboard signs reading “Will work for a recharge.”
………..or, “No change? I take PayPal”
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“..Shard Capital strategist Bill Blain suggested on Thursday that investors might want to have their “hard hat handy.” He suggested Chinese growth could slow to as low as 4% as its economy continues to mature.
““If China is 4%, the shocking global reality is global growth is much, much lower than the central bank geniuses expected,” Blain said in a note on Thursday.
““They’ve been juicing asset markets for the last 8 years with lower-for-longer rates and QE (quantitative easing) — with the effect of creating massive asset bubbles in both.”
“Blain suggested central bankers had been hoping that Chinese-fueled rising growth would justify the levels financial assets have reached, with stock and bond markets pushing records.
““But it won’t — global growth is slowing because China is maturing, which means financial assets are, and will remain, a bubble,” he argued.
““When the market finally grasps the fact lower interest rates are not going to be supported by growth, that’s when you really want your hard hat handy.””
https://www.cnbc.com/2019/07/11/sharp-correction-brewing-for-next-18-months-strategist-says.html
“The case for Chinese policy makers to ramp up stimulus grew stronger, as tepid domestic demand and falling commodity prices increase the risk of a return to factory deflation. Growth in China’s producer price index slowed to zero in June from a year earlier, the weakest reading in almost three years. Prices fell 0.3% from May.
“The downward trend accentuates fears of a return of deflation for manufacturing, which would erode company profits and increase debt repayment pressures.”
https://www.hellenicshippingnews.com/chinas-looming-deflation-fears-strengthen-policy-easing-case/
“As Beijing considers how to cushion the blow from trade, it’ll also have to weigh the country’s other major challenge: debt. China’s total debt surged to 271% of gross domestic product last year, from 164% before the global financial crisis, according to estimates by Bloomberg Economics.
“That’s left officials wary of rolling out any broad-based stimulus.”
https://economictimes.indiatimes.com/news/international/business/china-was-already-in-trouble-trump-just-made-it-worse/articleshow/70186944.cms
“Central China Securities claims borrower falsified documents Case adds to a string of frauds as defaults surge in China Central China Securities Co. said two asset management products totaling 240 million yuan ($35 million) are in danger of defaulting after the borrower falsified documents.
“The brokerage said Thursday that it conducted follow-up checks on the products following missed payments to investors in April and May and found that documents used to obtain financing had been fabricated.”
https://www.bloomberg.com/news/articles/2019-07-12/china-broker-says-35-million-of-investment-products-may-default
“An unexpected contraction in Singapore’s economy sent a warning shot to the world economy as simmering trade tensions wilt business confidence and activity.”
https://www.bloomberg.com/news/articles/2019-07-12/singapore-s-economy-contracts-sharply-as-manufacturing-slumps
The Singapore article says several interesting things. It says imports in the second quarter were down 7.3%, which was more than expected. It particularly singles out the electronics industry.
The article also says, “China’s quarterly GDP numbers on Monday are expected to show a clear weakening in the economy.”
Really? Or will China’s numbers simply reflect what the country wants to report?
Singapore has never won a Nobel Prize (Denmark, about the same size, has won 12).
Let’s just say it has some “limitations” intellectually.
As a former resident of Asia, I always passed, although I had many friends there.
It’s all part of the division of labor, Duncan. 🙂
Why go to all the bother of growing your own Nobel prizewinners when you can simply import them?
April 5, 2019 (behind a paywall):
In a first for Singapore, a Nobel Prize winner is joining a university here.
Professor Konstantin Novoselov, 44, is part of the duo behind the revolutionary supermaterial graphene. He starts work at the National University of Singapore (NUS) on Monday as distinguished professor of materials science and engineering.
https://www.straitstimes.com/singapore/nobel-laureate-for-physics-to-join-nus
Or perhaps the committee picking winners is more familiar with the work of nearby scientists/economist/etc.
Fraud in China seems to be awfully widespread.
Cooking the books can be a way of kicking the can although it comes with negative consequences down the road. The story is told that Mao was not directly responsible for the widespread famines at the time of “The Great Leap Forward” because his underlings were afraid to give him accurate economic figures that were below what had been targeted.
$2 trillion in negative yielding debt is also fraud. We just try to hide it in a different way.
Lifting up one out of three cups in China, the ball is always under a different cup. In the west, the ball simply isn’t there, so no one will notice.
The article’s title says, “China was already in trouble. Trump just made it worse”
I very much agree.
This chart (to me) regarding the proportion of jobs paying above 10,000 yuan ($1,453) shows that the Chinese economy has been headed downhill since January 2018.
https://gailtheactuary.files.wordpress.com/2019/07/high-paying-jobs-in-china-harder-to-find.png
It is from your article
https://economictimes.indiatimes.com/news/international/business/china-was-already-in-trouble-trump-just-made-it-worse/articleshow/70186944.cms
The question of internal instability of China is a great unknown.
In comparison we know the French Revolution kickstarted -only- when the unbearable situation of food expenses taking already ~60% of wages turned into apocalyptic 90% ..
Similarly, large contributing factor (apart from active foreign meddling via color revolutions) for the so called Arab spring was reaching ~40% of such outlays of income due to long term droughts, gov incompetence etc. I can’t find now the number quoted recently for today’s France, was it something like ~15% ? Perhaps some similar hard threshold awaits contemporary China as well..
It is easy to produce a bubble economy. Just add more and more debt at lower and lower interest rates, without having the rising energy consumption at a suitable low cost to go with it.
“We may be in the longest economic expansion in American history, but there are already plenty of warning signs that the next recession may be on its way… According to a Reuters report in May, factory activity dropped to near 10-year lows, sparking fresh concern…”
https://fortune.com/2019/07/11/next-recession-warning-signs-yield-curve-confidence-manufacturing/
“The [US] trucking industry is officially in a recession, according to data tracked by ACT Research. After months of suggesting a pullback was possible, ACT President Kenny Vieth told FreightWaves on Thursday, July 11 that all metrics his firm tracks meet the technical definition of a recession – two consecutive quarters of negative growth.
““Every freight metric we look at has been negative for at least six months,” he said.”
https://www.freightwaves.com/news/act-research-says-trucking-sector-is-in-a-recession
““We are awash in debt – whether it’s auto loans, mortgages, corporate debt, credit card debt or student loans,” Cohan said. “Why? Because the Fed has decided that interest rates are going to be low for an extended period of time, and you get rewarded to borrow money. There’s going to be a colossal reckoning, in my opinion.”
“Cohan points out that at the time of the financial crisis there was about $5 trillion in corporate debt. Today, we’re getting closer to $10 trillion on corporate issuance, with a good portion of it sitting in junk territory.”
https://uk.finance.yahoo.com/news/why-low-interest-rates-could-cause-a-colossal-reckoning-151351867.html
“Lower-income U.S. consumers are showing signs of weakness despite the strong market, and if the economy enters a recession, any possible credit crunch could be “material,” according to UBS. Strategists led by Matthew Mish and Eric Wasserstrom wrote in a note Thursday that they’re worried about lower-income consumers who have seen little net worth improvement since the financial crisis. Debt burdens for many of those households have grown…”
https://www.bloomberg.com/news/articles/2019-07-11/bottom-50-of-consumers-are-showing-signs-of-weakness-ubs-says
“…after years of falling farm income and an intensifying U.S.-China trade war – JPMorgan and other Wall Street banks are heading for the exits, according to a Reuters analysis of the farm-loan holdings they reported to the Federal Deposit Insurance Corporation.
“The agricultural loan portfolios of the nation’s top 30 banks fell by $3.9 billion, to $18.3 billion, between their peak in December 2015 and March 2019, the analysis showed. That’s a 17.5% decline.”
https://www.reuters.com/article/us-usa-farmers-lending-insight/wall-street-banks-bailing-on-troubled-u-s-farm-sector-idUSKCN1U618F?fbclid=IwAR1mvafFsZHt0rISQ6VD87LZLhisn75gngL4o_gq8lsaCe6K5EfHfjPFww4
It looks from one chart as though the percentage of non-current loans has approximately doubled since 2015. This doesn’t make lenders feel confident.
OPEC 14 crude only production was down 68,000 barrels per day in June.
We read articles earlier about a change, probably a little more than a year ago, that required rigs to have devices to monitor the number of hours drivers could drive. Before this change, many drivers were driving more hours than it is probably safe to drive. Now we are looking data, a while after the change in rule was put in place.
The uptick in shipping about a year ago partly reflected real growth and partly reflected a change in rules for drivers that capped the number of hours they could drive more tightly, raising the number of rigs to carry the same amount of goods. Of course, this was a kind of built in inefficiency. It is possible to raise rates for this inefficiency for a while, but it is harder to make it “stick.”
I am sure that businesses substituted away from the higher costs as much as they could, (used closer-by suppliers, for example), creating at least a small portion of the downdraft in shipping now.
But this whole scenario is not mentioned in the article. Only that rates had risen 30%, and now are back down 20%.
People on Moloka’i’, one of the Hawaiian islands, have been trying to go 100% solar power. This article, written by a sympathetic author, shows that their success has been very limited, despite much cost and effort:
https://www.hakaimagazine.com/features/the-hot-mess-of-hawaiis-renewable-power-push/
The hope and illogic run deep among supporters. The optimists see it as a case study of success, not failure. Many of the problems with solar power that Gail and others have noted figure prominently in the story.
Even King Saul aka Donald Trump even figured out that wind and solar power is a losing proposition.
I notice that renewable generation investment worldwide is down 14%, comparing the first half of 2019 to the first half of 2018.
https://dieselgasturbine.com/global-investment-in-renewables-dropped-14-in-first-half-of-2019/
Global Investment In Renewables Dropped 14% In First Half Of 2019
Excerpts:
And the funny part is how most if not all of the so-called renewable energy is only made possible via fossil fuels.
Right on — have people noticed, that without fossil fuels, there wouldn’t BE any power grids, or even hydro, nuclear, or even wind/solar?
Anyway, what AC power grid gets even nearly half its energy from IRE (intermittent renewable energy — wind, solar, tides, etc.)?
People do and have noticed, but then they just say to themselves: “oh well, no point in worrying about it… They’ll take care of it!”
Always wonder those these mythical they are, whom the people put their faith/trust in despite their continued inability to resolve any of the world’s serious issues…
Cheers,
-GBV
Believers in the Windy Sunny Hopey cult will always see it as a case of ‘The glass is 1/10 full!’, rather than a demonstrable failure in respect of the original objective – which was 100% renewables powering a modern society.
To fervent religious belief there are no obstacles……
On the other hand, the cornucopians who assume progress and prosperity based on endless access to affordable fossil fuels—and I’ve met quite a few of them—are in for a rude awakening.
In case someone will try to counter argue by saying the Hawaiian example is too lowtech or not broad on diverse renewable resources enough.. you can easily point out at El Hierro project in Spain, which is well documented -disaster- incl. the energy storage component, simply it doesn’t ever work in self sustaining mode 24/365 irrespective of any upgrades and investment-cost over runs..
“The grid can only accept as much power as the island is consuming. Juario must mix and match different sized generators to balance what solar rooftops are producing while ensuring that the generators have enough “spinning reserve”—room to throttle up and down to handle those grid surprises. The Maui Electric chief operator must also keep the generators running hot to prevent inefficient combustion from sending dirtier exhaust up the stacks and violating the air quality rules that protect residents’ health.”
So, not only do they have to run their generators “hot” all the time, but they have to have multiple, different capacity generators to manage the variability. They are moving to natural gas….expensive to ship in, in place of diesel. Their experiment will end in colossal failure, with the highest electric rates in the nation. By 2045, when they are supposedly 100% renewable, all of their present solar panels will need replacement. That will be fun to deal with.
Too much solar on the grid results in “backwardization” causing the utility to struggle to maintain frequency. California is also having this problem. California….that is where it’s largest utility, in supposedly the wealthiest state in the nation, went bankrupt. Yea, this massive utility experiment will not end well.
Very interesting, long article.
It sounds like the project started after the oil price run-up in 2008 (or perhaps earlier). So it has been going for ten or more years. Near the end, it says,
This is not a project that is going to 100% renewable anytime soon!
Moloka’i’ is an interesting place, and you will only know it if you’ve spent quite a bit of time there. Never made it back to Maui when it was scheduled (where I was living).
Not disputing the data, but just might not be top of the list. Still agree with the data on its use by my comrades here.
Will be interesting to see if this study has any impact, or if people will still keep going on about man-made climate change and how it’s the biggest problem we face today…
https://www.zerohedge.com/news/2019-07-11/scientists-finland-japan-man-made-climate-change-doesnt-exist-practice
Cheers,
-GBV
Cheers, First, tried to find the “study” myself and was not able to at all from Zero Hedge or the reference it was summarized into by “Science Daily”.
This from Wikipedia
Science Daily is an American website that aggregates press releases and publishes lightly edited press releases (a practice called churnalism) about science
The site was founded by married couple Dan and Michele Hogan in 1995; Dan Hogan formerly worked in the public affairs department of Jackson Laboratory writing press releases.[4] The site makes money from selling advertisements.[4] As of 2010, the site said that it had grown “from a two-person operation to a full-fledged news business with worldwide contributors” but at the time, it was run out of the Hogans’ home, had no reporters, and only reprinted press releases.[4] In 2012, Quantcast ranked it at 614 with 2.6 million U.S. visitors?
In many of these cases the authors are misrepresented, so not impressed
I didn’t look at this particular paper in detail and it may not have much merit, but the peer-reviewed science publishing establishment also has a badly tarnished reputation these days, doesn’t it?
Nature, Science and prestigious journals specializing in physics, medicine, climatology it goes without saying—and lets not get into the pathetic state of social science publishing— publish seriously flawed study after seriously flawed study as if there were no peer review. And yet you are concerned about this one particular site?
We’d better wake up and and start realizing that we have already lost what credible peer reviewed science publishing we ever had. Come on, admit it, would you have raised this objection to this particular paper if the authors had concluded we have only 18 months to save our world?
What irritates me about people like you is that even with the litany of junk papers that make it to Nature etc., you still treat these propaganda organs and their peer review process as if they represented some kind of standard of excellence. Which they don’t. They are as corrupt as the Catholic Church was when Luther nailed his 95 Theses to the door of that church.
https://i.kym-cdn.com/photos/images/newsfeed/001/254/891/e08.gif
I didn’t realize before I got involved with publishing a few peer-reviewed papers myself that the journals often ask authors for a list of people that they would consider suitable for peer review. Even if they don’t, the current fashion is for the rise of lots and lots of journals with particular focuses, whether it is EROEI, or how future growing energy supply will save us, or something else. Every journal has a list of like-minded people for peer review. The result is a situation where new papers are expected to follow in the footsteps of past papers, whether those are right or wrong.
In the economics area, if early authors neither knew or cared about how energy consumption affected the economy, this would be the expectation for future writing.
Peer review, while it can be beneficial, can also perpetuate wrong ideas.
What’s the saying? “Keep your eye on the ball”. Because while those are fixated on GW, Kl.imate Khange, Kl.imate disruption or whatever the flavor is this month, there are more pressing problems such as global plastics pollution that is having an immediate impact on the oceans. Studies are suggesting that we are currently eating approximately a credit card a week in our foods because plastics pollution.
Then there is NPP with nuclear waste that is being created. Russia has just built the first floating NPP. It should be interesting to see how long that can go before the first accident. Then of course the godfather of GW and CC, James Hansen is pushing for more NPP’s. Now the Nutty Professor, Guy McPherson is calling him out for his hypocrisy.
Well, for #1 we know for sure by now that there is a faction in the upper echelons of power which is deliberately using climate change as a ramrod to push certain unpopular policy shift priorities like deny diesel products to lower classes and or generally tame or corral consumer appetites in desired way.
For #2 chances are it could be a complete hoax – I’m not decided upon that one and frankly it doesn’t matter at all because we can get scenarios and sequencing like little ice age first and then runaway warming period etc.
Actually, try a little mind game, deploying third-fourth turnings, e.g. I personally know about members of a family doing ~20x turnings in one lineage so far, they recognize their ancestors pretty good (portraits, writings, ..) at least to mid 16th century, and there are even way older families and organizations with some aggregate knowledge.. Now for simplicity let’s assume 20x such turning equals 500yrs of history. So from last ice age that’s only ~23x of such described 20x blocks of turnings.. You see it’s almost nothing in the time and space, even from human perspective..
Oops, sorry for my confusing -math- lolz..
So, lets try again, ~20x generations ~= 5x turnings ~= 500yrs;
from that lets assume last proper ice age ended ~115 turnings ago..
Not exactly long for civilization attempts, which are even more so skewed toward the last half or third of it, since ~4000BC meaning past ~60 turnings..
This is a non-peer-reviewed paper on Archiv, no data, and almost no discussion of method. I would consider it a rhetorical piece.
Thanks!
“Peer review is a form of censorship, which is tyranny over the mind. Censorship does not purify; it corrupts…There is a lot of junk science and trash that goes through the peer review process.” – Wal Thornhill
“The mistake, of course, is to have thought that peer review was any more than a crude means of discovering the acceptability — not the validity — of a new finding…We portray peer review to the public as a quasi-sacred process that helps to make science our most objective truth teller. But we know that the system of peer review is biased, unjust, unaccountable, incomplete, easily fixed, often insulting, usually ignorant, occasionally foolish, and frequently wrong.” – Richard Horton
*And now for the Conceptual Penis…* (https://www.wakingtimes.com/2018/02/19/scientific-peer-review-sham/)
Recently two scientists performed a brilliant Sokal-style hoax on the journal Cogent Social Sciences. Under the pen names “Jamie Lindsay” and “Peter Boyle,” and writing for the fictitious “Southeast Independent Social Research Group,” Peter Boghossian and James Lindsay wrote a deliberately absurd paper loosely composed in the style of “post-structuralist discursive gender theory” — what exactly that is they made no attempt to find out.
The authors tell us:
“The paper was ridiculous by intention, essentially arguing that penises shouldn’t be thought of as male genital organs but as damaging social constructions…We assumed that if we were merely clear in our moral implications that maleness is intrinsically bad and that the penis is somehow at the root of it, we could get the paper published in a respectable journal.”
And they did. After completing the paper, and being unable to identify what it was actually about, it was deemed a success and ready for submission, which went ahead in April 2017. It was published the next month after some editorial feedback and additional tweaking. To illustrate how deliberately absurd the paper is, a quote is in order:
“We conclude that penises are not best understood as the male sexual organ, or as a male reproductive organ, but instead as an enacted social construct that is both damaging and problematic for society and future generations… and is the conceptual driver behind much of climate change.”
In plain English, they (seemingly) argued here that a penis is not a male sexual organ but a social construct; the “conceptual penis” is problematic for “gender (and reproductive) identity,” as well as being the “conceptual” driver of climate change. No, really. How this ever got published is something to ponder. The paper is filled with meaningless jargon, arrant nonsense, and references to fake papers and authors.
As part of the hoax, none of the sources that were cited were even read by the hoaxers. As Boghossian and Lindsay point out, it never should have been published. No one — not even Boghossian and Lindsay — knows what it is actually saying.
Almost a third of the sources cited in the original version of the paper point to fake sources, such as created by Postmodern Generator, making mock of how absurdly easy it is to execute this kind of hoax, especially, the authors add, in “‘academic’ fields corrupted by postmodernism.”
https://www.wakingtimes.com/wp-content/uploads/2018/02/sceptical-against-everything-except-scientism.jpg
Cheers,
-GBV
I’m amazed that there are any climate deniers/sceptics on OFW since man made climate change is simple common sense backed with consistent and coherent evidence in the natural world. And all of this within never seen before timeframes.
So are we headed for worse? Of course yes. And will we halve our emissions in the next 10 years and go carbon zero by 2050? Of course not. It’s equally wierd to be that any rational bieng could believe such evident nonsense.
And so Guy MacPherson, our favourite nutty professor, is to my mind, spot on. Not with timing, because no way do I imagine that mankind will be extinct by 2030, but by the end of the century is a lot more moot.
Where most OFM readers are spot on is that renewables are not up to the job of saving us at all.
Here’s a really interesting article from Forbes setting out their limitations. In the end the author argues for a global Manhattan project but it’s very doubtful that this would come up with anything.
https://www.forbes.com/sites/stevedenning/2019/07/12/the-one-viable-solution-to-climate-change/
No one is denying that the climate is changing.
What we are denying is the idea that humans have any power to change the situation, other than dying out themselves more quickly than they would otherwise would die out.
Ancient people did rain dances and prayed to the gods that supposedly governed rain. All of this emphasis on what we humans can supposedly do about climate change is no different. Climate change is the new religion of the day.
100%.
Richard, I too am surprised that there are so many people on OFW who are skeptical of the idea that human emissions of CO2 are making any discernible difference to that coupled non-linear chaotic system we call the climate system.
For so long I’ve witnessed the vast majority of “public intellectuals” paying deference to the orthodoxy on this issue that I had come to expect the mass of curious intelligent laypeople would never wake up.
But it seems that decades of fruitless and increasingly shrill alarmist predictions are finally having the effect of forcing people to question why they never questioned the “simple common sense-backed” dogma that so many people apparently still find credible.
A couple of centuries ago in the West, consensus-hugging types used to get very edgy when dissenters suggested that inclement weather wasn’t caused by acts of God. Back then, witches were no longer thought capable of “cooking the weather” but even in respectable scientific circles the Deity was considered personally responsible for all kinds of natural phenomena including the weather. That dogma was based soundly on the Bible—which had “peer reviewed” by generations of the clergy and found flawless— and very few people felt justified in questioning it.
These days very few people hold God responsible for unseasonable or excessive bouts of rain, snow, drought, heat, cold, floods, tornadoes, hurricanes or the like. But instead they put all the blame on these poor little innocent molecules of a trace gas that sustains life on earth and does no physical, chemical or biological harm to anyone in the concentrations in which it is commonly found in the air.
Actually, however, blaming God makes a lot more sense since God is, at least conceivably, almighty, while the gas molecules most definitely are not.
“There are two different ways that oil and other energy prices can damage the economy: (a) by rising too high for consumers or (b) by falling too low for producers to have funds for reinvestment, taxes and other needs. The danger at this point is from (b), energy prices falling too low for producers.”
This situation happened several times already. There is this quote from the highly recommended book to OFW audience:
War, Power and Oil by Matthieu Auzanneau
https://www.amazon.com/Oil-Power-War-Dark-History/dp/1603587438
pages 336-337
“The ex-minister of Saudi oil, long retired [it was in 2001] from his weighty responsibilities, told two journalists of the English weekly Observer: “I am 100% sure that Americans were behind the increase in the price of oil.” In the early 1974, according to Yamani, when the shah called for even higher price increases, the king of Saudi Arabia asked his oil minister to go to Tehran to probe the intentions of the Persian ruler: Was he not worried about the anger of their common American ally? When Yamani raised the question with the shah, the latter, according to the Saudi minister, responded: “Why are you against the augmentation of the price of oil? Is this not what they want? Ask Henry Kissinger, it is he who wants a higher price.” Yamani reaffirmed those remarks in 2010.)”
…
Sheikh Yamani explained Kissinger’s motive to the Observer: “The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.
Thanks! It is interesting that Auzanneau reports that the oil companies had borrowed a lot of money (about 2001), and they needed a high oil price to save them.
The 1998-2000 period was a terrible time for world oil prices (Figure 10). If you look at Figure 5 in the text of my post, GDP growth rises high above energy supply growth about this time. This is another period with slow energy growth and lagging oil prices, even with high reported world GDP growth.
If you look at Figure 12, the US first raised short term interest rates a few years before 2001, effectively causing a brief recession. (It is hard, at this point to understand why rates were raised to cause this brief recession, however.) Then interest rates were suddenly decreased, and what later became the subprime bubble was started with very generous underwriting standards for new loans plus low interest rates.
Looking at the charts, I wonder what Alan Greenspan had to do with all of this. I presume he was involved with the interest rate manipulations. I expect that Kissenger and Greenspan conferred about issues such as this.
I can certainly believe that the oil companies were in real trouble at the time. The oil prices were too low for anyone to make money off of. They needed the major drop in interest rates and the sub-prime bubble to help pull oil prices up. Maybe I need to add another recession to my list of recessions in which interest rate manipulations were used to save the day.
After China joined the World Trade Organization in December 2001, I expect the need for the additional stimulus for low interest rates and lots of new housing starts was not as needed, because of the stimulus that China’s growth added to the world economy.
Gail gets an acknowledgement in the notes at the end of the book for her talented and steadfast work on affordability. I only looked at the note because I thought the passage read as very Tverbergian and i wondered if she would be mentioned.
Interesting!
Nice write-up and glad to have you back with us, Gail. Hope the trip went well and if you have a minute to recap just a bit.
Seems we will pull all stops to keep the can rolling along….
Got this to share, sing along…
https://m.youtube.com/watch?v=Un_HgZ512FU
Seems we have some issues…
Washington (AFP) – US President Donald Trump on Thursday accused China of backsliding on promises to increase purchases of American farm exports.
The president’s latest salvo on Twitter comes the same week that US and Chinese trade officials had their first contact in months in an effort to revive negotiations that nearly collapsed in May.
Trump and his Chinese counterpart Xi Jinping met last month on the sidelines of the Group of 20 summit in Japan, agreeing to cease further hostilities while the talks resumed.
“Mexico is doing great at the Border, but China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would,” Trump said Thursday on Twitter
https://news.yahoo.com/china-fails-buy-agricultural-goods-promised-trump-152338507–finance.html
This will not help our predicament at all.
““Chinese officials have been exercising a strikingly high degree of caution over trade negotiations with the US, appearing reluctant to rush into a new round of talks with US officials, given the latter’s lack of sincerity and continued aggressive approach toward China on multiple fronts…”
https://www.fxstreet.com/news/china-cautious-over-trade-talks-with-the-us-global-times-201907110312
“Mexico’s economy is showing signs of a greater slowdown than anticipated, the Central Bank of Mexico (Banxico) said on Thursday… Banxico blamed the slowdown mainly on a dip in domestic consumption and “weak” investment, but added external factors were also in play.
“One key uncertainty weighing down the economy is that the United States and Canada have yet to ratify the United States-Mexico-Canada Agreement…”
http://www.xinhuanet.com/english/2019-07/12/c_138219056.htm
““Britain has failed to make meaningful progress towards a free trade deal with the United States. Amid “chronic” staffing shortages and communication breakdowns in Whitehall.
“Details of meetings spanning two years show how overstretched departments have been working “at cross purposes” as transatlantic talks have repeatedly stumbled over politically sensitive topics such as rules on health, farming and the finance industry.””
https://www.fxstreet.com/news/leaked-document-uk-has-failed-to-make-meaningful-progress-towards-a-free-trade-deal-with-us-the-telegraph-201907110206
I found this link describing US trade with the UK. https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom
The US exports more to the UK than it imports. Exports totaled $141.1 billion while imports totaled $121.2 billion in 2018.
Top export categories in 2018 were
Top import categories in 2018 were
The article is expressing China’s view of the situation. Political motives are also mentioned.
Meanwhile in Philly, the merchandise is moving quickly at Walgreens.
https://www.westernjournal.com/police-release-shocking-video-60-teens-storming-walgreens-attacking-employees-looting-merchandise/
I found this article from September 2018:
https://whyy.org/articles/poverty-still-plaguing-philadelphia-poorest-big-city-in-the-country/
Poverty still plaguing Philadelphia, poorest big city in the country
Poor cities will have a disproportionate number of problems. If nothing else, it is difficult for them to raise enough tax dollars. Taxes sometimes come on income. Often they are property taxes.
Boundaries make a big difference. In some parts of the world, a city includes all of its suburbs. In the United States, this is generally not is the case. High wage people with high -priced homes like to be in separate suburbs, leaving poor people to take care of themselves. A lot of “push” to move to high-priced suburbs has to do with the better schools and other services those suburbs have.
The desperate measures against the depopulation:
Warsaw plans big income tax break for young Poles
https://www.ft.com/content/58908dee-9da8-11e9-b8ce-8b459ed04726
“Mateusz Morawiecki, prime minister, said the measure would improve opportunities for young people “so that they would match those available in the west”. He said that since Poland joined the EU in 2004 1.7m people had left the country for other countries in the bloc.”
The point is that this measure is only for the employed, not for the self-employed young people. The inflexibility of the permanent employment vis-a-vis the ageing population is a big problem.
That is a good point. I did not know about that. In other words it just seems like PR since more and more people are forced into self-employment. I have been working in Telecom software for the last 10 years in Poland and that is always the first question: do you have your own company (can you submit an invoice)? Companies don’t want to have to deal with benefits, insurance, etc. You are on your own.
I’m also self employed and have been for many years. It does have it’s +/- but overall the pluses at least for me far outweigh the minuses.
Yes, it looks like PR, the politicians SURELY KNOW that the budget will not be ruined by this PR campaign.
One source of confusion in looking at population is the extent to which people move around.
For example, I notice that all of the following countries in Europe show rising population:
UK
France
Germany
Norway
Sweden
Ireland
Denmark
Finland
Austria
Belgium
Netherlands
Switzerland
I imagine a lot of the increase is immigration.
The point is that the amount of the countries that need immigration is rising. On the other hand, there is this sinking amount of the permanent jobs. It is the same story as with marriages: no permanent relationships.
What will be the outcome?
It is sure that the countries that have favourable climate are the winners. If there is a scarcity of energy, if there is a scarcity of food, the last thing that you can have for free is the mild climate.
Gail,
I think it is immigration (of one kind or another) plus new, young working age immigrants from some parts of the world being able to bring in their relatives (once fully accepted) and also adding to the population by their own breeding desires.
In many cases (but not necessarily all) the the cultural background of these younger people is, historically, based on a higher birth rate, whether a lot or a little higher is debatable, than the pre-existing population. It may also be part of a younger breeding age trend – which in many western countries has tended towards starting a family (or what passes for a family in the current era) in one’s 30s or a little before rather one’s early 20s.
Starting later effectively skips and entire generation every 3.5 to 4 generations.
The rate of breeding can also have a significant effect on cultural influences across the entire population.in ways that seem to be non-linear.
Whether future projections can fully allow for such influences (or the future moderation of such influences) is an interesting question that may need to be answered quite soon.
Look at Australia
Sydney’s Immigration Metros (Part 1)
http://crudeoilpeak.info/sydneys-immigration-metros-part-1
There are a huge number of countries where births outnumber deaths, leading to a situation where resources become very stretched unless part of the population moves out. It is possible to calculate the difference between expected births and deaths, using the latest UN data. This is the net average increase per year, over the 2015-2020 period, expected by the UN:
Worldwide: 83 million
Sub-Sahara Africa: 27.5 million, and increasing each year
Northern Africa and Western Asia (Mostly oil producing countries): 8.8 million, steady
India: 14.5 million, decreasing
China: 6.8 million, decreasing
Latin America and the Caribbean (Mexico southward): 6.5 million, decreasing
Australia/New Zealand: Less than 200,000
Japan: Net decrease of 373,000; amount of decrease in increasing
Eastern Europe and Russia: Net population decrease of about 400,000
Rest of Europe: Net population decrease of 49,000
United States and Canada: 1.2 million increase based on births over deaths
Rest of world (Parts of Asia and Oceana not listed separately such as Pakistan, Bangladesh, Viet Nam) 18.3 million population increase, fairly steady
There seem to be lots of places in the world to get immigrants from.
I think there is too much focus of peak oilers and those who criticize them on the global peak. But history shows that many different peaks have caused crises already in the past.
The US peak in 1970 resulted in the Nixon shock (birth of petro-dollar and all its future problems) and allowed OPEC to impose an oil embargo after the Jom Kilppur war
The Iran peak in 1975 under the Shah caused the Iranian revolution which impacts on the world to this very day
The mid 80s peak in the West Siberian oil fields and the Chernobyl accident brought about the collapse of the East-block
The North Sea peak in the early 2000s brought oil prices out of the $20 range
The 2005 peak caused the US recession end 2007 and the oil price shock in 2008 (together with additional Chinese oil demand for the Olympic Games)
The response to the 2008 shock was low interest rates and QE1-QE3, which financed the US shale oil boom.Without this the world would be in a deep oil crisis.
I think the weak economy now is caused by the debt and asset bubble problem created with that quantitative easing.
Barring a war in the Middle East, the next event will be a peak in US shale oil production. But both could come together.
And yes, just like energy, CO2 emissions have only stagnated in recessions.
I agree that individual country peaks have been important for oil. Oil that is being extracted is important source of jobs and of tax revenue. If prices are high and extraction costs are low, the tax revenue can be very substantial. I consider that tax revenue to be in some sense a measure of the “surplus energy” that the oil gives back to the country. If oil production peaks, this tax revenue falls. It also falls if oil prices fall or if oil extraction costs rise, and the amount refiners are willing to pay for the oil does not rise correspondingly.
The lower selling price of oil in many ways is like the peaking of oil supply. Producers are finding their tax revenues falling greatly, even if they still continue to pump oil. Very often, other fossil fuel and mineral prices drop at a similar time. If a country is also extracting these, its revenues from these sources are reduced as well. Then the country is truly badly off.
CO2 emissions have been remarkably stable though. You’d struggle to identify recessions by looking at the CO2 trend.
Actually, CO2 emissions have not been very stable, if you look at BP data relating to CO2 emissions from burning fossil fuels.
This is chart of the CO2 emissions as stated.
https://gailtheactuary.files.wordpress.com/2019/07/world-co2-emissions-from-burning-fossil-fuels.png
These are the three year average growth rates.
https://gailtheactuary.files.wordpress.com/2019/07/growth-of-co2-emissions-from-fossil-fuels.png
They are not very stable. They vary by more things than just recessions, so I agree that they are not a very good indicator of recession.
I am not convinced that these calculated amounts tell us much of anything. For one thing, there are a whole lot of other sources of CO2 emissions besides burning fossil fuels. For example, all of the emissions associated with raising cows and other animals. Cutting down forests seems to add to emissions (even when it is done in the name of increasing the amount of renewables).
Also, natural gas has multiple issues. It tends to leak methane emissions (another global warming gas) into the atmosphere, both from leaky pipelines and from long-distance transport of LNG by ship. The BP calculation makes natural gas “look better” than oil and coal, but it is not clear that it really is, as it is actually used.
With Deutsche Bank dumping 18k employees worldwide and seemingly being investigated for other matters, the global car industry apparently losing sales everywhere and even the traditional (if such a word can be used for such a relatively recent technology) digital camera market reporting yet another year of significant unit decline in sales there seem to be few if any areas of consumer purchasing activity that are likely to be broadly positive. Better paid jobs disappearing (DB is merely and example of that – there are many others) would not suggest that the shortfall in car and camera sales – or any other primarily elective purchase outside the “needs” pyramid – are likely to pick up soon. Indeed perhaps the opposite.
For example I saw a comment recent from a youngish person reporting that most of his friends and associates in their 20s had elected not to learn to drive and had no intention of doing so in the future. If one lives in a city and intended always to live in a City that probably makes sense as an individual but is very likely to shake up the automotive industry more than a little.
Slovakia, it seems, has a huge reliance on Auto manufacturing and has the largest unit output per capita of population in the world. But it’s not looking like a strong basis for the future at the moment.
https://www.reuters.com/article/us-autos-easterneurope/warning-light-flashing-for-slovakias-auto-industry-idUSKCN1TZ12B
Likewise people will see (at least for now) more value in their smart phones that come with a camera (or even cameras) than they would in having some extra lumps of technology to carry around. The results of their photographic efforts, for most, will be good enough or maybe even better than good enough.
I would imagine that similar comments are likely to be valid for most business sectors – especially in the consumer area. For example what will the cheap trinkets plastic industry turn to once the use of plastics is either banned or finds its raw materials costs have increased to a level that makes the trinket unaffordable for the increasingly unemployed consumer market?
It may be that much of whatever GDP growth has been achieved in the past 2 or 3 decades was based in short term more or less affordable (paid for by credit plans) development and introduction of energy consuming short-life products in higher tech technology industries. If that IS the case they could disappear (or see value reduced as they become established and development works slows) very quickly.
What new demand might come along to replace the opportunities for consumer driven growth?
Will it need to be low energy as a matter of course?
The big demand, in theory, could come to serve the ever-growing population of elderly.
I read an article a while back about Japan’s efforts to create gadgets that would help elderly people continue to live in their homes longer. I don’t remember exactly what they were.
There is one gadget that has been used by the nursing home industry to help reduce staffing needs and also reduce back injuries to staff working in the nursing home. The gadget lifts up people who are physically too weak to stand up on their own, and transfers them between two close-by points. I think of a patient being in a chair, and being picked up by the device to be transferred to a near-by wheel chair. Then, somehow the patient needs to get to where he wants to go, and the device (assuming it can move as well), needs to be able to transfer the patient to his next sitting or lying position. Usually, there is an attendant moving the device from room to room, as well as pushing the wheel chair from room to room. But I suppose someone could figure out how to work around this issue.
The question is: Is this a good use of the world’s limited resources?
From 2007 to 2012, the UK’s peak electricity demand fell from 61.5 to 57.5GW. In 2019 peak demand was 34.6GW, a 43% drop since 2007! Demand is dropping at ~ 1GW/year.
I don’t believe this is all due to more efficient light bulbs and better insulation, I think it indices how badly the economy has fallen the past decade
You might want to double check the 2019 peak demand amount you quoted. It doesn’t look reasonable to me, based on new BP data.
BP Statistical Review of World Energy gives UK electricity consumption in terawatt hours. If I divide by the number of hours in each years, I calculate the average UK electricity demand for each calendar year.
https://gailtheactuary.files.wordpress.com/2019/07/uk-average-electricity-demand.png
It looks to me as though peak demand for 2019 would be expected to be about 52 GW. The earlier amounts you quote look reasonable.
Hmmm, you may be correct. I was using figures supplied by a New Scientist article but I can’t see the source of those figures. https://www.newscientist.com/article/mg22129501-900-electricity-use-drops-as-uk-passes-peak-light-bulb/
Looking at the date here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/811879/ET_5.2.xls 2007 consumption was was 342TWh, 2017 was 300TWh, ~12% reduction.
@Kowalienen
Remember this comment you made last time informing us that high fat low carb diets are bad? Sadly, I didn’t read it until after comments were already closed otherwise I’d have replied sooner.
I hate to be the bearer of bad news, but it turns out that the Dr Greger whose youtube video you linked to is a lying vegan shill whose website “Nutrition Facts” used to be called “Vegan Research Institute”:
https://www.humanewatch.org/hsus_doc_exposed_as_schlock/
Who’d have thought it? I’m sure you weren’t to know, but I would urge caution on the internet because it is full of vegan trolls spreading misinformation in order to advance their cause.
To be clear, it’s an established scientific fact that carbohydrates (and to a lesser extent proteins) and not fats cause insulin to spike. Anyone who would pretend otherwise is, to quote the late, great Fast Eddy, a MORE-ON.
Here’s an actual cardiologist, whose only agenda is improving public health, talking about what really causes heart disease:
https://www.youtube.com/watch?v=M6UnBOWQ8Bc
I watched it a while ago, but I remember that as well as ascribing heart disease to refined carbohydrates, Dr Malhotra is damning of the food and pharmaceutical industries for putting profit before people’s health.
I think veganism, or eating bugs is being pushed by elitist think tanks as a way to continue the financial ponzi, by being able to add even more “consumers” to an already woefully overpopulated planet. I am not going to eat bugs so that 3 more people can be added to the population. Sorry, not sorry.
Low or zero meat diets have been used by elites in power to render the population of “plebs” weaker, dumber, shorter, more passive, etc. across time and space in human history, from feudal Europe to Mesoamerica to Rome (think bread & olive oil on the dole) to Hindu India (where it was made a religious rule that only the Kshatriya and Brahmin castes could eat meat, the latter only sacrificial meat).
@Yorchichan notes with a few good sources, we now have a pretty good grasp on the science behind this but it is buried by misinformation pushed by elites and big ag/processed food industry shills.
@Kowalienen
You wrote:
Actually, the more carbohydrates I eat, the better I feel and with the energy i easily sustain a 300 watt output for about 1h. Try that with your disease provoking diet high in fats.
In fact, a ketogenic allows far greater endurance than a high carb diet. A person adjusted to burning fat is able to quickly draw on the large reserves of fat stored in the body; a person who is not a fat burner can only draw on the comparatively small glycogen reserves and “hits the wall” once the glycogen reserves run out:
Interesting, nay, fascinating stuff, Yorichan. Thanks!
I’m currently pursuing a medium fat, medium simple carbohydrate, medium complex carbohydrate, medium protein diet with medium exercise, medium relaxation, a little coffee, a lot of tea, a little beer or wine, and generous amounts of several vitamins and minerals in the form of supplements. I also assiduously avoid imbibing tap water as chlorine and fluorine ions are poisonous, and heaven knows what else might be in there.
I don’t know what the ideal diet is but I’m convinced that on the average, for every vitamin pill we take, we will avoid one pharmaceutical pill. Also, in my opinion, the less processed the food you eat, the healthier you are likely to be. I wouldn’t go quite as far as Scott and Helen Nearing—you don’t have to grow it all yourself and eat it all raw. After all, we are men, women or something in between, not rabbits or mountain goats.
However, Scott made it to 100 and then died by fasting, while Helen reached 91 and died in a car accident—so there must have been something health promoting about their lifestyle. Anyone knocking veganism must take into account the fact that those two poster children lived far longer than the average, mean or median Americans of their generation.
My wife had artery placque build up with assoc. angina, heart pain. A doctor wanted to put her under then decide himself if she needed stents to open the arteries, with her only finding out after coming to, but then anti-rejection drugs would have to be taken for the rest of her life. She has bad reactions to medications, so instead she opted for a Vegan diet. Here we are 6 years later, no heart pain, no stents, no medication.
What doctors don’t tell you is what to eat. Whatever you eat its good to keep the # of saturated fats down. That’s what sticks to your artery walls, slows the flow, raises the blood pressure. Don’t let anyone tell you differently. I eat small amounts of chicken or fish, cheese but mostly eat salads and am now at an ideal weight. If you stick salads in between less healthy meals, the nutrients are so abundant that your appetite decreases and you naturally lose weight. I also feel a lot better. More alert, higher energy, better sleep and so on.
Keep in mind the medical multi-millionaires don’t talk about diet because they make their money off of poor diets, so you have to stick up for yourself by making healthy choices. Oh, and the secret to eating salads is finding a low fat salad dressing you like. Try Red Shell Premium Japanese Miso Dressing, available only at Amazon. 5 grams of fat per serving which is low for salad dressing, but creamy and extremely tasty. Also, put avocado on salads. That’s a mono-unsaturated fat.
Most people will feel better on switching to a vegan diet, IF what they are switching from is a diet high in processed foods. However, in my opinion, and that of many more knowledgeable people, a vegan diet is a not good for long term health.
The latest thinking on artery plaque is that it is caused by the oxidation of small dense LDL particles in the blood. Polyunsaturated vegetable oils are complicit in this oxidation process; saturated fats are not.
Most medical research indicates a J shaped curve in many areas, such as necessary BMI and input of various kinds of nutrients. In other words, too much is bad, but too little is as well.
If a person has been on a diet high in processed foods, they almost certainly have been getting food with too much calorie density and too little in the way of the nutrients the body needs. Switching to a vegan diet will help balance this out. But over the long term, the vegan diet may very well prove inadequate, especially if the person is doing significant physical exercise. It is the J-curve problem. People with very low body weight tend to be most susceptible to secondary infections and to all kinds of things that go wrong. Unintentional weight loss in the elderly is a real problem. Studies everywhere seem to show that elderly with low BMIs have higher mortality rates. But a vegan diet (especially with minimally processed food items and not too much fat) can help get weight down in many people with high BMIs.
You should really read Phinney & Volek’s book if you want to thoroughly understand this stuff, Dr. Tim. It’s called The Art & Science of Low Carbohydrate Living (there’s also one on The Art & Science of Low Carbohydrate Performance if you’re more interested in the athletic aspects).
In contrast, veganism is based on pseudoscience that was originated with religious fundamentalist Seventh Day Adventists and funded by grain/cereal companies, which also have many links back to the Seventh Day Adventists (look up Dr. John Harvey Kellogg).
Thanks for the book recommendation. I have looked it up and the dietary advice seems very reasonable. The diet is primarily aimed at keeping us healthy with weight loss as a side benefit. Also, it’s an attractive and enjoyable diet once you get used to restricting the intake of simple carbs. I think I’ll get myself a copy of the book.
But I couldn’t personally adopt either Phinney & Volek’s diet or a vegan diet as in either case, my wife would kill me. She’s the primary chef around here while I’m only the washer-upper. As it is, we argue over whether to eat our rice white or brown—she is addicted to white rice while the dog and I eat ours brown. I warn her about the dangers of foods with a high glycemic index but she reassures me that as long as the total percentage of such foods one consumes remains reasonable, there is no problem.
As an example, she points out one of our neighbors’ thirty-something daughter who, following a previous breakdown ten years ago, has ballooned out to the point where she resembles a baby seal. This young lady consumes two liters of sugary juice and coca cola every day and loves eating those soft, insubstantial, sweet and creamy cakes that can be cut with a finger. “THAT’s what I call a high-carb diet,” she says. The young lady’s mother and her doctor have worried about her habit for years, but mum has lately come around to the conclusion that if her daughter is happy with the lifestyle, she’ll let her indulge, even though she knows it will shorten the daughter’s lifespan and probably make her an invalid into the bargain.
If you feel fine on your current diet, Tim, don’t change. When I was in Japan 30 years ago, I ate nothing but tempura and okonomiyaki for a month and, despite all the rice and noodles, I felt as good as I’ve ever felt. These days if I eat plants I get ill within a few days (high temperature, headache, elevated pulse, nausea). I don’t get better until about the third day after I stop eating them, so I have little choice but to avoid them.
That reaction sounds nasty, Yorichan. So you WON’T be adopting a vegan diet then? Do you have an allergy to certain plant foods, could it be something to do with your metabolism that will pass in time?
At present I am being force-fed cucumbers, eggplants, tomatoes, onions, paprikas and fresh green beans with almost every meal. The veggie patch has been very productive this year and we are suffering the consequences. When I go to town I am always passing out bags of this morning’s harvest to friends and acquaintances and helping to depress prices in the local produce market. 🙂
I think the first rule of healthy eating, in anyone’s book, should be “Stay away from junk.” And the second rule, to balance the first, should be “A little of what you fancy does no harm.” I think we all know what junk is. But in moderation, we can get away with an occasional ice cream, chocolate bar, or even something from the fast food store such as a double cheeseburger or a honey dip donut. Individually these are small sins, but they can add up if indulged in regularly.
What I don’t subscribe to are commandments like, “Though shalt not eat flesh!” or “Though shalt avoid like the plague anything containing gluten!” Especially if somebody else has gone to a lot of trouble to prepare a meal for us, we should appreciate their efforts and accept whatever’s on the plate in the spirit of “for what we are about to receive may the [insert deity name here] make us truly grateful.” And if we really don’t like what’s been served by our hosts, we should eat it anyway and make a not to dine there again.
I know, I’m out of the ark.
For everybody, it’s very difficult to decide exactly what foods they are allergic too, largely because of delayed reaction and the difficulty of isolating foodstuffs. Doctors are useless in diagnosing the culprits.
Last summer I was on a carnivore diet, so only meat, fish cheese and eggs. Easy to imagine how boring this is. Buttered coffee for breakfast, an omelette with cheese and (e.g.) bacon for lunch, a piece of meat or a fish for dinner, day after day after day. So towards the end of September I gave it up and started eating a “super healthy” diet, containing lots of nuts, berries, fruit, vegetables, brown rice and tubers. I still ate animal products as well. This dietary switch occurred just before the start of freshers week, so for the next week I was ferrying drunken students to and from night clubs. At the end of freshers week I got sick with the symptoms I’ve described. I assumed I’d caught freshers flu off of the unhealthy dears, however, the symptoms persisted for months. I visited a doctor once, who prescribed a course of antibiotics (of course). The antibiotics had no effect (do they ever?). I know it beggars belief, but I never considered my symptoms might be due to diet until the middle of January, at which time I cut out the plant products again. Within three days I felt fine.
At the start of this week I stupidly ate some carrots and various types of beans. My symptoms came back again far worse than before. Thursday night I thought I was going to die and since then I’ve been barely able to make it from bed to sofa. That’s why I have lots of time to post.
Plants don’t want to be eaten (apart from their fruits). Because they can’t run away, their only defense is to create phytotoxins to damage any animals that eat them. Humans are not as well adapted to deal with these phytotoxins as many other omnivores, because our diet through most of the last million years of our evolution was meat based. It seems my own ability to deal with phytotoxins is poor even by human standards. This has not always been the case, so perhaps it was brought on by the long periods without eating plants last summer.
Forget peak oil. We are at peak water. Unlike oil, which in theory can be substituted for (windmills anyone?), there is no substitute for water. Global climate change threatens what we already have. Aquifers are being pumped dry. Desalinization is energy intensive. only useful in coastal areas and too expensive for agriculture. Already, as I write this, two cities, Capetown South Africa and Chennai India are out of water and many more are headed there.
Cape Town’s drama is over for now. Its reservoirs are back up near 60%, although there are still some water restrictions in place.
Chennai is still in trouble though and it doesn’t tend to get much rain until October or even November when it benefits from the Retreating Monsoon. The mathematics of India’s overall water situation are dire – it has 17% of the world’s population but only 4% of the world’s water share.
Sao Paolo in Brazil ran dry to the point where water had to be trucked in in 2014, I recall. You would imagine that sooner or later a large city is going to be rendered totally non-viable due to water shortages.
I agree that water is a very important limit. Water is used both by people themselves and by industry. Even desalination doesn’t get to exactly the kind of water that humans normally drink. Water needs minerals added to it, to be the kind of water our bodies are in need of, and this is an additional cost (as well as complexity). Pumping water uphill, long distances, can theoretically work, but it is an energy-intensive way of getting water to where a person wants it.
“Every day, 15,000 tankers ferry water from the countryside into the city. Everywhere you look, rows of bright neon plastic water pots are lined up along the lanes, waiting.
“This is life in Chennai, a city of nearly five million on India’s southeastern coast.”
https://www.nytimes.com/2019/07/11/world/asia/india-water-crisis.html?fbclid=IwAR38SJP-KK9hmHiiiTl5A9v6KUit-RmvA8WcDbxCzXAD168PB6wdQ-RcMwQ
Population of Chnenai City (Madras)
1791 300,000
1871 367,552
1881 405,848
1891 452,518
1901 509,346
1911 518,660
1921 526,911
1931 647,232
1941 777,481
1951 1,416,056
1961 1,729,141
1971 2,469,449
1981 3,266,034
1991 3,841,396
2001 4,343,645
2011 7,088,000*
2019 9,118,623
*The city’s boundaries were expanded in 2011
Overpopulation certainly at the root of pretty much all of our problems, Tim.
Whoops! Excuse my spelling of Chennai.
Harry, I agree with you there. That’s basically the point I was trying to make. What blows my mind is that this particular city has almost ten times as many people today as it did at the time of Indian independence.
By the way, your island and the McGibbs Estate is still has plenty of space and—I hope— water for everyone, doesn’t it?
Too much water at the minute, Tim! I’m yearning for a bit of sunshine.
Fresh water is in some sense a renewable resource. But even if it is possible to get the same amount, year after year, it certainly doesn’t fix the “per capita” part of the problem.
JMG, recently posted an article called “The Long View”. He says we probably have another couple of centuries until we are back in the Dark Ages. I gotta disagree with the couple of centuries and the Dark Ages. There’s a little problem called 450 NPP around the world that need constant attention along with the nuclear waste they produce i.e. spent fuel rods.
https://www.ecosophia.net/the-long-view/
“That’s the logic of the Long Descent: the slow, ragged, unevenly paced, but inexorable process by which a civilization that’s overshot its resource base winds up in history’s compost bin. The Western world has been on that trajectory now for just over a century, and probably has another couple of centuries to go before things bottom out in a deindustrial dark age. Over the months ahead, with the usual interruptions, I plan on surveying what’s happened along each of the trajectories that are dragging us down. Two weeks from now we’ll talk about the first of those: the imminent return of peak oil.”
Let me stop right where it says the immenient return of peak oil like it is coming. On an EROEI basis I think we are there and have been. This is the point of Gail’s article is that you can only stretch the band so far with financial hocus pocus. Exhibit A – The shale industry.
I recommend on the topic as additional or overview material reading Ted Patzek’s recent series of articles, incl. the comment section. There are several different plays taken on by the “shale industry” and the early ‘neo peakoil’ theorists (one of them Patzek himself) severely undershot these diverse resource as well as the vehicle (fraudulent debt issuance) to get it from the ground in the first place.. These alt plays are good to placate the public as well as most experts at least till mid 2020s.. while OPEC+ is curbing the output, and also the factor of looming recession (possibly next round of GFC), so supply side constrain is not momentarily a problem. Simply put, all it takes -much more- time than previously speculated – (guess) estimated..
two moron centuries before collapse? i think he’s off by 180-190 years, or more.
there may not even be any megafauna left on this planet in two more centuries, given the warming trends. maybe jellyfish and algae in the warm oceans.
There’s megafauna and then there’s megafauna.
Maybe in another two centuries the world will be overrun with Brontosauruses reconstituted by scientists in white coats. Apparently they did fine for millions of years during the Jurassic Period when there was no ice at the poles and five times as much car-bon-di-oxide in the air than now.
http://www.prehistoric-wildlife.com/images/species/b/brontosaurus-size.jpg
@Tim,
The brontosaurus isn’t likely to return unless gravity on Earth changes first…
https://www.youtube.com/watch?v=okMOfYcbdI8
Cheers,
-GBV
Great video, GBV. Thinking about this will take my mind off of all the world’s current problems. It’s a real conundrum.
What are the possibilities. Did these 180-ton animals live in shallow water and swamps? And did those huge flying dinosaurs live in a much thicker atmosphere?
Did they have bones made of rebar and high-tech plumbing?
Or did they all live under 1/3rd of current earth gravity?
And how does this fit in with the expanding earth theory? Could the planet be being pumped up from the accretion of matter being brought into existence in the core, or raining down from space?
Or is gravity everywhere increasing as a consequence of some other process going on in the Universe.
It’s enough to keep a paleontologist up all night.
At least it got you thinking anyway!
“Settled science” really isn’t all that settled, and I wish more people would wake up to the fact that we really don’t know what we think we know. But that’s probably a pipe dream; I suspect that most people don’t like living with uncertainty tainting their belief systems…
Cheers,
-GBV
I read JMG’s post. He got one part correct:
What he got wrong was the long-term direction of oil and other energy prices. He says,
I think he also misses the role of debt, and the need to repay debt with interest. Also, the world’s ever-rising population, who expect to be fed.
But the falling energy prices, by themselves, doom the system.
@Gail,
Going to modify JMG’s quoted text to see if I can’t make it “more correct”. Let me know how I do!
(going to try to italicize & bold this… it’s my first time, so hopefully it works!)
No, what will happen is that energy AFFORDABILITY will PLUMMET, people will panic, economies will lurch and shudder and go through troubled times. Then another round of frantic jerry-rigging will find some liquid fuel source even dirtier and more costly than shale oil and another round of demand destruction will push more people into poverty, so that the charade can keep going. The AFFORDABILITY of fuel will never go down to what it was before the spike, energy costs will become an even greater drain on economic activity, the global financial system will be twisted into ever more baroque shapes to preserve the fiction of a free market, and more of what used to count as a normal lifestyle will become inaccessible to more people.
Cheers,
-GBV
Good job!
Well done – uniting minds
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I think you are absolutely correct about the importance of economies and about the dominant narrative that ours could never collapse. I am reminded of Joseph Tainter’s argument in The Collapse of Complex Societies that because of our proclivity to exploit the easiest to access/extract/process/distribute resources first, leaving the more costly ones for later, we encounter diminishing returns on our investments in complexity. And “once a complex society enters the stage of declining marginal returns, collapse becomes a mathematical likelihood, requiring little more than sufficient passage of time to make probable an insurmountable calamity.”
We have been led to believe that ‘this time is different’ primarily because of our ingenuity and technology…oh, and the idea that infinite growth is indeed possible on a finite planet.
I agree that diminishing returns to increased complexity is a big part of the problem.
I can think of a couple of examples in the WSJ today. There was article about all of the time/cost/downtime associated with bringing the Boston transit system up to current standards. It was called Boston’s Frustrations with Transit Mount After Derailment. If Boston had simply kept fixing the system all along to the old standards, the situation would not be as bad as it is today. Now there is a lot of accumulated lack of fixing known problems, plus the issue of trying to make the system work with current expectations how the system to operate and serve a growing population of transit riders. They have to shut down parts of the current system, to work on them. A big mess.
Another WSJ article is PG&E Knew for Years Its Lines Could Spark Wildfires, and Didn’t Fix Them
Documents obtained by The Wall Street Journal show that the utility has long been aware that parts of its 18,500-mile transmission system were dangerously outdated
The catch is that California is a state that decided to import electricity from outside (Washing state hydroelectric, especially, because it is cheap). It also came up with other demands for its grid, relating to wind and solar. Our electrical system, nationwide, was set up basically for local generation and local distribution. Trying to use the system for long-distance transit with rapid switching is like trying to use 2-lane gravel roads for long distance car travel. Trying to work around the fire issue is a major problem. In fact, causing fires seems to be the same problem Venezuela has with trying to use hydroelectric from its big dam, and move it long distance to urban areas. Venezuela used to hire crews to cut down vegetation near the power lines, if the wind blew, but ran out of money to do this.
These problems are very much complexity related. No one figured out what the real cost of a more complex system was.
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There is no lack of energy from the Sun. The Earth intercepts under 1 part in a billion. However, making that energy into something humans can use like electricity might or might not be within the capacity of current technology.
https://www.msn.com/en-us/money/markets/stocks-close-higher-after-fed-chief-signals-rate-cut-ahead/ar-AAE7xYf?li=BBnbfcL
https://www.bing.com/videos/search?q=Youtube+different+strokes+what+you+talking+about+willis&&view=detail&mid=A64D945F69DA5E214411A64D945F69DA5E214411&&FORM=VRDGAR
Well, to be honest there is only one small thing that economists overlook. This small thing is called reality.
You hit the nail on the head.
“You can ignore reality. But you cannot ignore the consequences of ignoring reality.” Ayn Rand
Like the man said, if you close the door on reality, it comes in through the window.
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“Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era.”
A world economy collapse seems like a daunting possibility, because once begun it would be really difficult to change course. What do you think would happen Gail, if there was a debt jubilee? Wipe all the debt off the books globally and start anew?
A narrow debt jubilee can sometimes be done, if there is some lender who is in a position to cancel debt. I expect that the ancient debt jubilees were cancellation of agricultural debts, many of which could not be repaid anyhow due to inclement weather. If a king or central fiat lender is making the loans, this is pretty easy to do.
Cancelling debt, when debt is what is “holding up” banks, insurance companies, and even the value of people’s homes is another question. What happens after the debt is cancelled? Is there no financial system any more? Can people no longer buy and sell homes and high priced vehicles? Debt is just one side of a two-sided system.
I have seen the situation in Russia when no debt is available for building homes. A couple (both of whom earn good wages) will work for years on building a home. They will work on week-ends, buying supplies when they have saved up a bit of money and doing most of the labor themselves. They will gradually add on, as they have saved up funds. The result will not be very professional, but it is a no-debt way of producing a home.
Another issue is all of the promises of governments. For example, governments promise Social Security and Unemployment insurance. If a government collapses, these promises all disappear. They are not considered debt, but they certainly are debt-like. They are a big part of the reason the current system continue as it is.
My home was built without debt. The previous owner and builder (adding to and adapting an old miners cabin) never had a bank account and only used cash, which she probably stashed under the mattress. She and a group of friends from our village helped with the building. None of the new walls are true. It might be over a foot thick at the top, but only 6 inches thick at the bottom. We have to pray that the wiring doesn’t go too extremely haywire (and that’s by far the major concern). But with all the weirdnesses, we still love the place, and visitors keep using the term comfortable. We like it weird, if not so extremely weird that it’s quickly noticeable or too inconvenient. So your Russian example doesn’t seem inherently terrible. Having a home like ours on a tiny income in these hard times seems like an INCREDIBLE luxury.
Gail, I remember the same thing happening in Greece about 40 years ago. Wherever I traveled through the countryside I would see half-built concrete houses and various other small structures that the owners were building a bit at a time, usually with no financing from the bank and no debt.
I think it would be a buying and spending spree like no other. It would also be a quick last burn on remaining semi-cheap energy and raw goods. After that it crashes.
What other options are their besides war – and yes it may be the answer the elites want / need.
I wouldn’t discount a nubiles as an option – I see it as stretching BAU out to the last drops.
Gail wrote: “Cancelling debt, when debt is what is “holding up” banks, insurance companies, and even the value of people’s homes is another question. What happens after the debt is cancelled? Is there no financial system any more? Can people no longer buy and sell homes and high priced vehicles? Debt is just one side of a two-sided system.”
Oh yeah, good point, like the one’s that hold the debt as in banks, etc. Whoops!
Well then, that only leaves economic collapse. One thing I like that my Mother says who lived through the London WWII bombings and dodged a U2 by running around the corner, “People still have to eat.” But that will get very difficult post collapse.
Thanks Gail for The new insightful posting. At the moment, the population is growing mainly only on handful of countries, mainly in sub-Saharan Africa, Indian and Pakistan. Many of these are standing outside of main energy flows of oil and gas, with exeption of Nigeria and South-Sudan with oil reserves and India with coal and close proximity to Middle-Eastern oil How long those countries can keep growing their population, untill they hit bottle necks on affortable energy or later Malthusian bottleneck? I would expect, that succesful service economies have long ago started to trim their economies and used all means possible to reduce import energy costs, like Nordic countries, but inefficient poorer countries or those producers have had the luxury of vanton energy use and political elites who have lived large on expence of their nation. Can any nation avoid the problems longer than others as we live in networked economy, as here been often suggested of partial collapse? Where lies The true resilience? Is it on places like Bhutan?
Right now, I am responding on a little iPad without access to the population files I downloaded. So I can’t give you figures. But the problem is a lot more widespread than I expected.
A major way the problem appears is in all of the controversy regarding immigration. Many of the immigrants are from countries whose population is still rapidly growing. A country with a deficit of young people (quite a bit of Europe, for example) may decide to accept immigrants, to support the country’s need for young people to pay taxes to support the growing population of elderly. But this doesn’t always work out well. Wages can end up unacceptably low for example.
Many, maybe most, countries have fertility rates below replacement. A lot of these have stagnating and sometimes falling life expectancies.
Still only a few (Japan, any other?) have falling population numbers.
There are really different questions you are asking. I did look up more on population. Of the 83.2 million additional population that the UN believes were added between 2017 and 2018, 31.7 million are from Africa and 41.6 million are from Asia. Latin and South America added another 6 million.
Besides Africa, the countries with high population growth also include a lot of Moslem countries. Some I note (with growth rates between 2017 and 2018) are the following:
Iraq 2.3%
Saudi Arabia 1.8%
Palestine 2.4%
Turkey 1.5%
Yemen 2.3%
Phillipines 1.4%
Pakistan 2.0%
Egypt 2.0%
Countries that allow multiple wives per husband tend to get greater population growth because rich men can afford multiple wives. Many poor men can’t afford to raise children to maturity. The children of rich fathers have a better chance of living to maturity. Both Africa and the Middle East tend to allow multiple wives. I haven’t seen anyone comment about limiting the number of wives to one. I know that Turchin and Nevedov in Secular Cycles comment that the pattern of multiple wives for husbands, with the wives often starting to bear children at a young age, tends to be a major factor in rapidly outgrowing the resource base.
Regarding whether any country can avoid problems more than others, it is hard to know. The countries of the world are so networked today that it is hard for one to do much better than another. There are some countries that are less uniform than others, with multiple languages and some groups that are almost hunter-gatherers. These groups that are almost hunter-gatherers today would seem to have an advantage over other groups, I would expect. I am sure that some people would like to believe that the United States, with its many local resources and much less dense local population, might be able to do better than other places. There are also sustainability groups that are trying to set up their own local systems. I wish them well, but think that it will be difficult to replace the many services that we are used to.
Also, local weather is too variable to depend on crops in one part of the world indefinitely. Somehow, big stores of grains are needed, or international trading schemes, or both. These are hard to manage without a fairly big supply of “surplus energy” (energy products that are not being used for other purposes).
This is some of your best work yet Gail. IMHO- it doesn’t matter how sick and broken the economy gets, the Fed will be there to backstop the markets. Until the unthinkable finally happens. Go long, sleep well. This warped, perverted party is just getting started.
We need to understand how the economy really works to understand what goes wrong and why the current system looks like it will fail. I didn’t think I could call my post, “How the economy really works,” though. Everyone thinks that they already understand how it works.
Hi Gail, there is ONLY ONE type of argument that explains the workings of the REAL economy. Modern Monetary Theory doesn’t have all the added paraphernalia the Mainstream puts on. The mainstream constructs models based on assumptions that are not right, but are useful to make the model appear to stand up. They have never got a forecast right. The culmination of that was during a visit to the LSE [London School of Economics] when the Queen asked why they didn’t forecast the GFC. Embarrassed, those present said they didn’t know why. An Economist from your neck of the woods, Lars Syll writes scathing condemnations of the standard economic theory. Here is just one;
https://rwer.wordpress.com/2019/07/03/the-logic-of-economic-models/
So while as you say; “everybody thinks they already understand how it works” In reality they have little idea and less competence. The politicians we have world wide today are just about all venally incompetent pushing Neo-liberal agendas that anyone with basic book keeping skills can see it rubbish, such as the Household Analogy where money is a zero sum operation and aims to have a Surplus Budget. You cannot spend or save a budget surplus It’s a hole requiring the private sector to stump up the assets to bring the budget into zero balance. [Which drives the economy backwards towards a recession]. It’s not needed to say MMT is responsible it’s just sensible book keeping which MMT adopts. The main pillar is the understanding that a currency issuing government has zero need for taxation as revenue. They don’t use even 1 cent of tax There are such things as tax dollars but they only apply outside the Federal system.
Your main argument over resources as the limiting factor is 100% compatible with MMT.
The Fed can buy any and every expense right up until it comes up against a resource bottleneck. As long as there are resources, services and full employment not fully utilised, deficit spending can continue. After that competition will drive inflation.
Actually, the financial system collapses. Or governments collapse. The concept of inflation disappears.