Debunking ‘Lower Oil Supply Will Raise Prices’

We often hear the statement, “When oil supply is lower, oil prices will rise because of scarcity.” Now, we are getting to see firsthand whether oil prices really do rise, as oil supplies become more scarce.

Figure 1. Figure from the OPEC Monthly Oil Market Report for August 2019 showing world and OPEC oil production by month.

Figure 1 shows that world oil supply hit a peak in November 2018 and has declined since then, mostly because of a decline in OPEC’s production. So, total oil production seems to be down for about eight months, relative to the peak in November 2018.

Despite this big cutback by OPEC in its oil production, prices have not responded as OPEC had hoped:

Figure 2. Average monthly spot Brent Oil prices, based on EIA data.

In fact, as I write this, Brent oil price is currently quoted as $60.48, which is back in the range of December 2018 and January 2019 low prices. Also, reducing production doesn’t seem to be reducing inventories. Figure 3 suggests that they are now higher than they were before the reduction in oil supply took place.

Figure 3. Figure from the OPEC Monthly Oil Market Report for August 2019 showing OECD commercial oil stocks.

Why aren’t oil prices rising and oil inventories falling, if oil production has fallen?

The basic issue is that the economy is very much interconnected under the laws of physics, because energy is required for every activity that is considered part of GDP. Energy is required for any kind of heat or any kind of movement. Energy is even required for electricity. Without energy from the sun, food can’t grow; without supplemental energy of some kind (such as using electricity to heat an electric stove or burning animal dung or sticks), it becomes impossible to cook food or smelt metals.

One strange phenomenon that arises from the interconnected nature of the economy is the fact that the prices of all energy products (including those not listed on Figure 4) tend to move together.

Figure 4. 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.

This strange phenomenon arises because energy products are well-buried within every part of the world economy. A person’s job requires energy consumption. The tasks that governments do, such as building roads and schools, require energy consumption. Both transporting and cooking food require the use of energy products. Refrigerating food requires energy products. These energy uses, as well as many other everyday hidden uses of energy, aren’t things that we can easily cut back on.

Consumers often think, “I will drive less, and that will cut back on my energy consumption.” Unfortunately, in the whole scheme of things, whether or not individuals cut back on their optional use of gasoline doesn’t get the world economy very far. Gasoline accounts for about 26% of world oil consumption, or about 8.7% of total energy consumption, based on the most recent BP energy data. Cutting back on the optional use of gasoline would not reduce total consumption very much. If it were possible to reduce gasoline consumption by 10% by voluntary cutbacks, it would still reduce world energy consumption by less than 1%.

The strange pattern of the price changes shown on Figure 4 indicates that there is something affecting energy prices of many kinds, simultaneously. I would describe this as “affordability.” It has to do with how affordable finished goods and services are to the population in general, much more than it does scarcity. (Economists call this affordability issue “demand.”) If finished goods and services are affordable to a large number of consumers, as they were in 2008 and in 2012 and 2013, prices will be bid up to very high levels (Figure 4). If finished goods and services aren’t very affordable, a drop-off in prices, such as that experienced in November and December of 2018 (Figure 2), is likely to occur.

When OPEC decided to cut back its production of oil in response to the low prices in late 2018, this cutback in oil production didn’t help the affordability of finished goods and services. In fact, this cutback probably made the worldwide total quantity of affordable finished goods and services a little lower. This happened because, with the cutback in oil production, the governments of OPEC countries were able to collect less tax revenue on the smaller quantity of oil that the countries were selling. In fact, this smaller quantity of oil wasn’t even being sold at a higher price.

With lower revenue, governments of OPEC countries are being forced to cut back on funding of new projects such as roads and schools. These projects will use fewer energy products, and the would-be workers will have less money to spend on goods made with energy products. Thus, these cutbacks help to lower the world’s “demand” for oil and other energy products and thus help lower the price of oil.

The fact that the economy is interconnected in this strange way makes shifting prices upward much more difficult than if scarcity were the primary issue. In effect, the whole stack of energy prices in Figure 4 must somehow be made to rise. This is difficult to do because it is the lack of wages of the many poor people around the world that is holding back “demand” for energy products. If, somehow, higher wages could be sprinkled on the many poor workers of the world, including those in India and Africa, then oil (and other energy) prices would tend to rise. With higher wages, these poor people would be able to afford items such as nice homes, cars, and air conditioning, pulling world food and energy demand upward.

One difficulty with rising oil (and other energy) prices: They don’t translate into rising wages.

Rising oil prices tend to cause recessions and layoffs. We can see this from historical data. Average wages, considering layoffs, tend to fall rather than rise during times of spiking oil prices. In fact, the chart seems to suggest that the big increases in average wages tend to occur when oil prices are under $40 per barrel. A growing supply of cheap energy thus seems to be the magic ingredient that shifts wages upward.

Figure 5. Average wages in 2017 US$ compared to Brent oil price, also in 2017 US$. Oil prices are from BP’s 2018 Statistical Review of World Energy. Average wages are total wages based on BEA data adjusted by the GDP price deflator, divided by total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Because of this difficulty with spiking energy prices, high energy prices tend not to last for very long. One issue is that regulators quickly raise short-term interest rates to solve what they perceive as “the problem of rising food and energy prices.” Once recession sets in (gray bars in Figure 6), regulators find that they need to lower interest rates and raise the level of debt to stimulate the economy again. With lower interest rates and more debt, major purchases (such as homes, cars, and factories) become more affordable, because purchases bought on credit have lower monthly payments. With greater affordability, food and energy prices again rise, to again encourage more production.

Figure 6. Three-month and ten-year interest rates through July 2019, in chart by Federal Reserve of St. Louis.

So we end up with an endless see-saw of energy and food prices. In fact, the peaks have tended to fall lower and lower since 2008, as can be seen in Figure 7, showing monthly average prices.

Figure 7. Monthly average Brent Oil prices since January 2000, based on data of the US Energy Information Administration.

Monthly average peaks started at $132.72 in July 2008. More recently, peaks have fallen as follows:

  • Peak of $125.25 for the month of March 2012
  • Peak of $109.54 for May 2014.
  • Low month average price of $30.70 in January 2016.
  • Most recent average peak was $81.03, for the month of October 2018.

From this pattern of falling peaks, we can see that the stimulus being used recently (which includes Quantitative Easing in some parts of the world) has become less and less effective at stimulating demand for food and energy products.

It looks as though growing debt at ever-lower interest rates is becoming a less effective workaround for the economy’s real need, which is a need for a rapidly growing supply of under $40 per barrel oil and other low-priced energy products.

Oil prices can be a problem in two different directions: (a) Too high for consumers or (b) Too low for producers.

From the Point of View of the Consumer. Many people have had the “Ah Ha” moment, in which they have figured out that high oil prices are a problem from the point of view of consumers. In part, they have deduced that these high oil prices may mean that we are “running out” of cheap-to-extract oil. Processes are becoming more complex, and as a result, consumers need to pay more to cover the higher cost of extracting and refining the oil.

But there is a related issue: Higher oil prices are likely to cause recession. If oil prices rise, the prices of many different types of goods and services (such as food, goods transported by truck or airplane, and vacation travel) rise at the same time. Wages don’t rise as quickly, in part because it is the true energy content (measured in Btus, barrels of oil equivalent, or something similar) that the economy requires. If the economy needs to dedicate a larger share of its resources to producing energy products, this is an issue that is akin to growing inefficiency. There are fewer resources remaining (such as human labor, metals, fresh water, and energy products) for investment that might provide goods such as new homes, cars, clothes and air conditioning.

With fewer resources to use, the economy reacts by shrinking back. I think of the situation as being akin to the way a chemist might “make a smaller batch,” if the quantity of one necessary reagent is low. An adequate supply of energy products is what makes the economy operate as it does; if buying an adequate amount of energy products becomes too expensive for consumers, a cutback in the buying of discretionary goods is forced on the economy (Figure 8). Lowering interest rates tends to make the debt repayment portion on new purchases lower, helping to alleviate the squeeze.

Figure 8. Chart made by author in 2010, to illustrate a talk called Peak Oil: Looking for the Wrong Symptoms.

From the Point of View of the Oil Producer. There are oil producers of many kinds, including:

  • Tight oil producers from shale operations,
  • Heavy oil producers in places such as Canada and Venezuela,
  • Producers of oil from deep water such as Brazil and Angola, and
  • Middle Eastern oil exporting countries that seem to have a very low direct cost of oil production.

Strange as it may seem, Middle Eastern oil exporting countries are among the most vulnerable to problems associated with continued oil low prices. The reason why these countries are so vulnerable is because their entire economies are oriented toward oil and gas production. They often have large populations with inadequate income unless the government provides them with handouts or with programs that provide jobs. If these governments need to cut back too much, there is a real danger that the governments will be overthrown. In fact, the population may break down into warring factions. Oil production may stop because of internal disorder.

It is because of issues such as these that the OPEC countries have cut back on oil production, in the hope that prices would rise to more acceptable levels for their countries. Fiscal Breakeven prices, relating to the level of oil prices that are needed so that each government can collect sufficient taxes for its budget, are published from time to time.

Figure 9. Chart published by the Arab Petroleum Investments Corporation (APICORP) giving Fiscal Breakeven Prices estimated to be needed for 2013.

Now that oil prices have been low since late 2014, Middle Eastern countries won’t admit to the true level of oil prices that are needed to operate their countries in the way that they have in the past. Their populations have been rising faster than their oil production, so it is hard to believe that the oil prices that the countries truly need, if they do not cut back on programs, are any lower than the amounts shown in Figure 9. At about $60 per barrel, the current Brent Oil price is clearly far too low for the major oil producers of the Middle East.

Shale and heavy oil producers are often less vulnerable than Middle Eastern producers, because the entities funding their operations (that is, buyers of shares of stock and providers of debt) believe that “of course” oil prices will rise in the future because of scarcity. Because of this, they are willing to provide additional funding, even when a recent owner has gone bankrupt from low prices. Middle Eastern oil producers have less of this benefit. If the money isn’t available for major programs, they are forced to cut back. Growing debt is unlikely to cover more than a portion of the shortfall.

There are other producers in the energy price “stack” in Figure 4 that are vulnerable to collapse or bad outcomes from continued low energy prices. One example is coal producers in China. China seems to be experiencing Peak Coal because of continued low coal prices; While new mines have been opened, they do not act to increase the total quantity produced, because so many mines needed to be closed because they were losing money at current low prices.

Figure 10. China energy production by fuel, based on 2019 BP Statistical Review of World Energy data. “Other Ren” stands for “Renewables other than hydroelectric.” This category includes wind, solar, and other miscellaneous types, such as sawdust burned for electricity.

If the world economy is hoping for China’s increasing demand to pull the world economy forward in the future, it is likely kidding itself. China cannot expect imports to make up for its lack of growth in coal production. China’s lack of adequate energy supplies likely underlies the tariff issue that we hear so much about. There is a need to pull back production of goods from China, if China doesn’t really have the energy resources to continue in the role it has been playing.

The big question is how high oil prices will be in the future

The contention of the IEA and many others is that energy prices can rise arbitrarily high. For example, the IEA showed the figure I have numbered Figure 11 in its World Energy Outlook 2015 .

Figure 11. IEA Figure 1.4 from its World Energy Outlook 2015, showing how much non-OPEC oil can be produced at various price levels.

The big groupings in Figure 11 are

  • Conventional Crude (such as from the Middle East and perhaps deep water like Brazil),
  • Tight Oil from Shale, and
  • Extra Heavy Oil and Bitumen (such as from Canada and Venezuela).

Evidently, in 2015, the IEA believed that $300 per barrel oil prices were not too high to show as a possibility on a chart. With $300 per barrel oil, there would certainly be enough oil. At such a high price, it might be possible to move the city of Paris, France, out of the way and extract the tight oil from shale underneath it!

Unfortunately, in the real world, prices cannot rise this high. Market prices are set by the laws of physics. The economic limit we reach is a price limit that pushes the economy back into recession. We have seen in Figure 7 that this price limit seems to be dropping lower and lower, over time. In fact, I am one of the coauthors of an article published in the journal Energy called, An Oil Production Forecast for China Considering Economic Limits. This 2016 article makes the point that the economic limit we are reaching is a limit on how high oil prices can rise. I am the lead author of Section 2, which discusses this issue at length. If prices cannot rise high enough, the vast majority of the oil that seems to be available based on published reserve amounts and geological surveys cannot really be extracted.

Whether there are ways to raise oil and other energy prices higher than they are now remains to be seen.

Why don’t standard models forecast low oil prices in the future? 

Economists have put together a simple model of how the economy works. In their model, there are always substitutes. The only thing that goes wrong seems to be that prices rise, if there isn’t enough supply. These rising prices encourage greater supply and substitution. The type of chart a person typically sees is a Supply and Demand curve as shown in Figure 12.

Figure 12. Supply and Demand model from Wikipedia.
Attribution: SilverStar at English Wikipedia CC BY 2.5 (http://creativecommons.org/licenses/by/2.5)%5D, via Wikimedia Commons

They have never considered a situation where energy products are deeply buried within essentially all goods and services that are made. If there isn’t enough supply, a “smaller batch” of the world economy is made. We think of this as recession, but it can take on other forms as well:

  • Depression
  • Wars
  • Epidemics
  • Defaulting debts; falling prices of assets
  • Failing governments and intergovernmental organizations
    • Collapse of the central government of the Soviet Union in 1991
    • UK’s decision to leave the European Union
  • Increasing conflict between political parties and between countries
  • A reduction in globalization
  • Ultimately, the collapse of a civilization

Economists have not understood the connection between physics and the economy. There is a need for a sufficient quantity of affordable energy products every moment of every day. In fact, we seem to need a vastly increased quantity of inexpensive-to-produce energy supplies right now if we are to fix the world economy’s problems from an energy point of view. The “lower interest rates and more debt” way of hiding problems seems to be reaching an end point. If nothing else, interest rates today are close to as low as they can go.

Is the economy approaching a singularity?

In physics and math, a singularity is a point at which a function takes an infinite value. We end up with a situation that seemingly cannot exist. It is like dividing the number 1 by the number 0. No matter how many times that the number 0 is added together, it will never equal 1.

The economy seems to be reaching an equally strange situation. It is not a situation where we are running out of oil; it is a situation of too much wage disparity, and this wage disparity makes the prices of many commodities too low for producers of these commodities. For example, farmers cannot afford to pay their mortgages. And prices for all fossil fuels and many metals are too low for companies extracting these materials to make an adequate profit for reinvestment and taxes. The problem is not simply low oil prices.

This situation of excessive wage disparity is related to globalization, with many workers around the world earning very low wages, so that they cannot afford goods such as homes and cars. It is related to the increased use of robots substituting for manual labor. It is also related to wage disparity within countries as jobs become increasingly specialized.

As this situation plays out, energy prices fall when common sense would seem to suggest that they should rise. In fact, the problem of falling prices extends to more commodities than fossil fuels and food; it extends to minerals of many kinds, including copper and aluminum.

In such a situation of falling commodity prices, we can expect many related problems. For example, governments of countries that depend on the revenue of these exports may fail, leading to Balkanization of these countries in some cases. A wide range of debt defaults can be expected, leading to failing financial institutions that need to be bailed out. Rapidly changing relativities among currencies are likely to put markets for derivatives at the risk of failing. Needless to say, stock markets are likely to be adversely affected. So-called renewables will quickly fail because they are currently dependent on fossil fuels for repairs and the electric grid. In fact, it is hard to see any aspect of the world economy that can continue unaffected.

How does what appears to be an approaching calamity play out?

Perhaps it is fortunate that we don’t really know. Collapses of early economies seemed to take many years, typically over 20 years. Today, the world economy depends on global supply chains and the electric grid. The financial system is also very important. It is hard to believe that the overall system can stay together for many years, but perhaps, in parts of the world, it can. We just don’t know.

Given how connected the economy seems to be, and how widespread the problems seem to be at the singularity we are reaching, it almost appears that there is a plan behind what is happening. From what we can observe, there seems to be some literal higher power behind all of the energy flows that we observe in the universe. This literal higher power seems to have put into place all of the laws of physics. This literal higher power seems to also be behind all of the self-organizing elements within the universe, including humans, ecosystems and economies. I cannot help but wonder whether there is some plan for what is ahead that we don’t understand.

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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1,469 Responses to Debunking ‘Lower Oil Supply Will Raise Prices’

  1. MG says:

    What is the difference between communism and capitalism when there is not enough around? The reason why capitalism is more successful is that it provides at least to some people a possibility to win enough. In capitalism, you take part in a lottery that provides such possibility, while in communism, there is no such hope that you can win something. If you have more, this is immediately confiscated and redistributed in communism. That way no one has enough in communism.

    • Hm, perhaps one day you might surprisingly experience “enough” when the public transport services still run in some capacity post crash while regions of NA largely not endowed with that thanks to proper lineage of capitalism will be already at that point in “suburban cannibalism” phase..

      • info says:

        Since its not centrally planned. People will adapt with what is most optimal at the moment. So cannibalizing old industrial areas would be the order of the day.

        • MG says:

          The perfect example of total crash was Romania during Nicolae Ceaușescu: the energy crisis from rising population and falling oil production made Ceaușescu destroy villages and move people to the towns. It did not help. The system collapsed anyway.

        • If that was not apparent enough I simply alluded to the fact virtually no solid case of “communism” or “capitalism” existed to make such bold evaluations as MG suggested, it was always a mixed system on some continuum of options.

          For example today’s form capitalism in the US means ~near socialism for the folk employed in the wider mil-industrial complex (as long as the overprint piggy bank works). Similarly in different guard, trade unions are still somewhat powerful in certain parts of W Europe, while crushed in CEE and Eastern Europe.

          • MG says:

            I agree, we have mixed systems, EU is also a lot so called socialist.

            As regards the trade unions, their proposal are simply dependent on reality: if they propose a too high wage increase, the production is moved to another area or country, or it can be completely stopped due to bankruptcy of a given company.

          • I notice that the economic growth and the manufacture of automobiles has been coming from Eastern Europe. This would suggest that trade unions are not good for economic growth. They make the price of manufactured goods too expensive.

            • It depends, luxury brands (could) share with their employees adequately, while more volume production oriented brands have the apparent model of more assembly line robots vs. ever cheap(er) labor treadmill competition. So for example in Czech/Slovak/Polish/Hungarian car assembly lines for various global brands the staff is increasingly imported from one or two levels poorer countries like Ukraine, I guess there must be similar trend in Romania and Turkey etc.

              There is also the factor “Jope R” mentioned bellow, that old global megacorps can reach to very cheap (well free) financing, which in turn means total leverage: against labor, against local gov, against anything..

              Fair competition needs impartial empire judges, that’s impossible to achieve in a skewed world of tax heavens and accumulated speculative capital (+ overall control knowhow) for past several centuries. The only “successful” antidote for that was the way of nurturing “national champions” ala Germany/SKorea/Japan, but that was connected to huge debts anyway in the end as well. While gullible-naive CEErs sold everything to pirates for pennies, perhaps only Slovenia, Poland and Hungary retained some level of autonomy in their economy, Baltics and E Germany depopulated massively (no future for young).

          • MG says:

            “While gullible-naive CEErs sold everything to pirates for pennies, perhaps only Slovenia, Poland and Hungary retained some level of autonomy in their economy, Baltics and E Germany depopulated massively (no future for young).”

            The statement above says nothing about the reality. You are terribly undereducated.

            If there is enough workforce and suitable location for logistics, then we can create some production for some markets. Without the imported workers, the car industry in Slovakia does not have enough workforce. The same is valid for Germany – at some point, when the costs must be kept down and the production must continue, the declining population must be offset by the imported population.

            Slovenia is too small, not well positioned with only one nuclear power plant and dependent on coal. Poland does not have nucelar power and is dependent on harder to get coal, too. The population of Hungary is falling down since 80s, due to its origin and language it is a small nation somewhat isolated in the middle of the Europe.

            Moreover, Slovakia or Czech republic have a lots of common with other Slavic nations – so there is no problem for Ukrainians or Serbs to be attracted to these Central European energy centers.

            Your views sometimes lack complexity.

            • It’s simply fact that temporarily imported Ukrainian worker for car manuf plant in CEE is at present cheaper than a robot. Also it is true that Poland-Hungary and say Slovenia repatriates to western (co-)owners way less profit on domiciled production in comparison to idiots in CZ/SK/.. In other words some countries are keen to be robbed blindly more than others.

            • Sorry, I won’t rewrite the article into even more understandable form to you. it’s simply fact that temporarily imported Ukrainian worker for car manuf plant in CEE is at present cheaper than a robot. Also it is true that Poland-Hungary and say Slovenia allows through taxation to repatriate to western (co-)owners-investors way less profit on domiciled production in comparison to i#iots in CZ/SK/.. In other words some countries are keen to be robbed blindly more than others.

          • MG says:

            Dear worldofhanumanotg,

            probably the Sun is heating your head: if a country has got lower taxes, these taxes are lower for all – the domestic population and the foreign investors alike.

            Dont you understand it? If you discriminate, then you have problems on other levels…

            • Sorry, you are continuously presenting arguments from another dimension frankly.. something like kinder garden “free” market economy ideology-theology seminars, pls. don’t take it personally..

              It’s plain obvious fact to all that tax structure is in fact very different across the table as big foreign MNCs have corp structure which prioritize and moves-siphons added value away from local taxation into tax heavens. Similarly their initial entrance on the market, e.g. as discussed previously in CEE(EU) and wider Eastern Europe or other Asian/SAmerican context, means they arm twist (and bribe) the local govs to provide wide reaching investment incentives such as delayed taxation, cheap land and other provided conditional infrastructure demands, often also demand tweaks to existing labor and enviro laws, etc. etc. Compare contrast to hawk eye approach on domestic mid and smaller sized domestic biz.

              Oh my god.. that’s surreal.. level of non comprehension of the real world situation.

          • MG says:

            I must be an idiot. Who knows? Who cares?

        • aaaa says:

          so bartertown in mad max 3? Roger that

    • Duncan Idaho says:

      Hint:
      Capitalism is when a profit is taken from the difference of user value and exchange value–
      The person does not do any of the making of the product.
      Arose in the City States in Italy in the 14th Century.
      A new concept.

    • Dan says:

      Foolishness. Look at any “communist” country and there are haves and a bunch of have nots just like here in the socialist for the rich and capitalism for the poor USA.
      Once it is looked at with a critical eye we are mutant form of facisism.

  2. Jope R says:

    Lawrence Summers is talking about demand problem and zero interest doesn’t help rising demand. So

    1. Global competition is pushing down wages

    2. People consume mostly with debt

    The problem now again must be peak debt. Consumers are indebted so they can’t consume more and zero interest doesn’t help the problem anymore.

    What do you think about this?

    • snarf says:

      MOAR helicopters. Dont be a hater.

    • It's different this time around....NO says:

      Helicopter Money….

      That should make the Rabble happy….don’t forget another “Tax Cut”, got to keep everyone happy!😜

      • Jope R says:

        One option is to shut down the tax havens and try to adjust the global competition. If very oligopolized (which are using tax havens) global market economy could be adjusted more like fair market economy that would affect wages and better demand without constant rising debt .

        Now small and middle sized companies can’t compete with oligopolies because they don’t have the capability to use tax havens and in this unfair competition they are alive because of zero interests (zombiefirms).

    • Add #2 Yep, was it not just linked on previous page that ~80% of newly manuf cars are sold on lease/credit. That sums up the situation fully. Frivolous opulent lifestyles, surfing on the debt tsunami..

      There is only one, albeit ~temporary solution, and that’s complete “post crash” realignment of the society onto some sort of authoritarian – command style rule. It will be attempted both by “socialist” as well as “fascist” leaning factions, e.g. the demographic change practically ensures the US will get a socialist into gov sooner or later. What’s the plutocrats to do then? Carve out at least few “dissenting” states out of it, hence one of the key vectors in balkanization going forward.

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  4. snarf says:

    Sorry this topic is probably more suitable for Gails previous article. Bernie Sanders 17.3 trillion Green New deal plan. Is the .3 worth typing? A mere 300 billion. So a massive $ printing and now everyone can work for the green new deal. YAY! If you feel this plan has a bugaboo or two you are a hater. I heard a interview with a senator last night that called the plan “visionary” and any critique of it “elitist”. Ah the “ist” card. Fascist racist and elitist. Is there any way we could just silence debate with a word that could just denote all the ists. How about thought crime ist? TCist for short.

    Bernie Sanders
    “We need a president who will face down the greed of fossil fuel executives and the billionaire class who stand in the way of climate action. I welcome their hatred.”

    Who is the real hater? Were going to need a quadrillionaire class to hate very soon. Infinity and beyond on a finite planet. Oh well I suppose its less crazy than printing infinite money and creating weapon systems.

    • Harry McGibbs says:

      The sanctimonious socialists pushing a green pseudo-solution are every bit as tiresome as their opposites on the right.

      Political discourse in 2019 is a tale told by an idiot, full of sound and fury, signifying nothing…

  5. Snarf says:

    China is not going to blink. Their stances on hong kong and Iran signal that. This is the new normal. The USA will blink in 2020 with a new pres and beg for some more slave labor goods
    with a president way more crazy than trump just in a different way. Or maybe a nice war? Wait until wall street gets full into their shorts and in bear mode. Luring folks in to catch falling knives. They have talents there and its time to use them as the upside is a bit over the horizon..

    • Chrome Mags says:

      “…way more crazy than trump…”

      Is that even plausible?

      https://www.salon.com/2019/08/24/trump-considering-slashing-medicare-and-social-security-after-1-5-trillion-tax-cut-for-the-rich_partner/

      “After exploding the federal budget deficit with over a trillion dollars in tax cuts for the rich and massive corporations, President Donald Trump is reportedly considering using his possible second term in the White House to slash Medicare and Social Security — the final part of a two-step plan progressives have been warning about since before the GOP tax bill passed Congress in 2017.”

      “Sen. John Barrasso (R-Wyo.) told the Times that his party has discussed cutting Medicare and Social Security with Trump and said the president has expressed openness to the idea. “We’ve brought it up with President Trump, who has talked about it being a second-term project,” said Barrasso.”

      “The Trump/GOP tax cuts for the wealthy will add over $1.5 trillion in debt,” said the National Committee to Preserve Social Security and Medicare. “Now we know how they’ll pay for those tax cuts, by cutting Social Security and Medicare.”

      I suppose none of this matters if we actually do have a complete collapse followed by mayhem and whatever comes after that, but since predictions of collapse keep slipping into the future well beyond earlier predictions, we may not want to commit anymore abuse to ourselves than has already occurred by the huge tax cuts outlined above.

      But many Americans seem to feel that sacrificing their own well being for a minor percentage at the top is their patriotic duty, and if that is the case then by all means the US should re-elect Trump. Go for it, but don’t whine when retirement is much harsher than expected because everyone was warned.

      • Dennis L. says:

        Retirement appears to becoming harsher, returns of 7-8 percent assumed in pensions are no longer available, SS is cash flow negative and is really a very good deal for almost everyone except the young paying into the system. As Gail states, it is a pay as you go system which requires a growing population, the simple example is assume your children have to provide for you in your retirement, how much can they afford? A constant influx of workers means more workers per retiree. The problem is us, we want more than our resources can afford or our direct descendants can afford to provide.

        Many politicians have stated publicly the main budget issues are the entitlements. Defense spending probably has as many spin offs of good ideas as any program and could well be an excellent investment. Doubt that? Well, the internet is a direct result of defense programs if I understand correctly. Modern jets are the most efficient way to travel, the jetliner is a direct descendant of the B-47 and B-52 programs the swept wing of which was a direct descendant of German Defense programs in jet aircraft. Think of jet transportation as being ecologically friendly, trains are not efficient which is why they require government subsidies all over the world.

        So this post should be good for some discussion.

        Dennis L.

        • Don’t agree with the latter points/paragraphs.
          Jet fuel burns the higher quality fossil product distillates, also the implied idea that air travel is the most/more efficient and stands on its own legs economic-wise is preposterous. As airports build up is usually connected to massive public subsidies and jet travel companies are known perennial debt junkies if not worse (scams).. Recently free money/credit subsidized jet travel eats into long distance fast railway passenger occupancy (economic book) that’s obvious.

          On the other hand surface urban/suburban public transport (notably trams/trolleys) is the most efficient mode of transportation, single coach (of many in series) takes ~1,5-3kW of peak power per passenger given spec nominal occupancy. Now in real world with mean/avg lower occupancy that still translates into ~ <<20kW of power per passenger, which is a fraction of today's private car fleet. True, big fast trains tend to consume a bit more but not by much, on the other hand the infrastructure is massive upfront investment.

          Now to your point of more distant travel-transport options. Fast rail comes in many flavors as there are various ~160-200-250-300+ km/h route designs and traction systems available. Every region and country deals with slightly different topography and urbanism, so to force on every problem the fastest option makes no sense.

          Is that a magic solution, nope, it runs on spare parts and upkeep as any human made contraption and infrastructure.

          • Latest reiteration of Shinkanzen : “Alfa-X” with 22m long nose – high speed train for deployment across Japan. Somewhat more unique project is the 500+ km/h Maglev – magnetic levitation train and track under construction..

            • Kowalainen says:

              It is awesome, an true exercise in technology, industrial prowess, speed, and grandeur. Samurai style.

              We are indeed watching the future of transportation for the industrial civilization.

              What are we waiting for? Let’s crank up the nukes, concrete and steel factories to 11.

          • Dennis L. says:

            https://www.theprch.com/this-vs-that/fuel-efficiency-planes-vs-train-bus-car/

            W, I am not an expert and really have nothing intelligent to add but an interesting exercise might be to compare the cost of a plane ticket to a train ticket to a bus ticket between two cities. As of this post, Chicago to Minneapolis flight is about $110, train train $75 and eight hours travel time per schedule, bus about $35. This would agree with the web site regarding bus being the most economical way to travel in US.

            Chicago to Seattle air about $160, train $147, bus $238 which is a long ride on the dog. Amtrak gets some government subsidy, air probably very little(a guess only) as airport landing fees should cover costs of airport along with leasing shop space, etc.

            Light rail in the cities is nice but very slow if the walk to and from stations is included, I tried it and it was about an hour from Grand Avenue in St. Paul to the UM campus, there is generally about a ten minute wait for the train on average. It is very nice but I have witnessed a purse snatching by a group of youths of lone, unaccompanied women. No one offered to help her, everyone looked away, I did move close to her, still three against one, poor odds. Transit police on every car would raise costs considerably or dental bills to repair missing, damage teeth would also increase the cost of the ride.

            Dennis L.

            • Yes, the situation in the US is exceptionally skewed towards “subsidized” air travel. I tried to explain some of the reasons above. Realistically, Amtrak slow service performance is something even ClubMed/ME or Russia abandoned decades ago..

              Interestingly enough, I found out that even Japan still runs in parallel trans national bus service to this day, not sure why, it could be because there is % of pop which can not afford high speed train tickets in 2nd class or for some other backup considerations. It would be nice to know the the overall share of ridership for both, most likely the train wins by a high margin.

              In terms of light rail, the train must arrive very frequently, lets say each 3-5minutes on major arteries, otherwise it makes less/no sense. Usually “big” cities run a network of at least few hundred miles of light rail, plus buses (plus subway).. US used to have it too, but “efficient capitalists” removed it between and especially after WWII..

            • I agree that looking at the cost of tickets and the time involved is the way to look at things. Another consideration is whether the timetables are dependable. For long-distance trains in the US, they definitely are not.

              In the US, the train system is mostly a freight system; in Europe, the train system is mostly a passenger system (partly because gauges of track on not constant throughout Europe. Passengers can get out and change trains, but freight cannot).

              In the US, trains are used for transporting heavy bulky things, like coal, long distances. Light parts are often carried by air. I am sure that companies have studied which method or combination of methods is most appropriate for the particular substance being transferred.

          • Robert Firth says:

            Heartily agreed! For most travel on land, rail is the best way to do it. It is city centre to city centre, so no need to spend an hour getting from Denver to its white elephant airport and then waiting 2 hours to board. You arrive at the station 10 minutes before departure and hop on the train (as I have done many times in the UK and Europe). Speed, as you say, depends on topography and other local factors, but a fast train beats an aeroplane anywhere up to 600 or 800 km. Further than that, well, you can work much more comfortably on the train.

            For travel over rugged terrain, or over the ocean, we had the answer 90 years ago and forgot it: buoyant flight. A jetliner expends 60% of its fuel just to stay in the air, LZ127, Graf Zeppelin, stayed in the air for free. If you think in terms of energy per passenger kilometre, the Hindenburg was five times as efficient as the A380, and did not need an enormous infrastructure. A cargo airship would be as efficient as a lorry, and again with essentially zero infrastructure.

            Also, as a bonus, you can power an airship with ethanol and a steam engine. Or of course with Blau Gas, the fuel that flew the Graf Zeppelin around the world in 1929.

          • Kowalainen says:

            Agreed.

            Even in Japan and it’s tectonic active and hilly surface the Shinkansen zooms through the landscape constantly going into and out of tunnels, that must have been a massive undertaking in terms of capital per meter of tracks. But it didn’t deter them from concluding the obvious benefits from going city center to city center by high speed rail.

            Air travel is one big exercise in inconvenience and humiliation. Fsck domestic flights. Yes, put down em’ rails and crank up those locos to 11 powered by nukes, (coal) and hydro. Once you experience Shinkansen you know what’s up. Chilling out on the Nozomi, a cold Asahi in your hand, watching the amazing Mt Fuji’s scenery to the right as the Japanese nukes accelerate the train from Tokyo towards the direction of Osaka, Kyoto and Okayama. Comparing that to the jank of domestic flights, well, there is no real comparison.

            Indeed, save the kerosene for long haul flights and let the interstate abomination of highway network decompose back into nature. Or simply just rework them into quad rail tracks. Heavy gauge bidirectional tracks for commercial and local transportation, and bidirectional high speed rail for city center to city center passenger service. While at it, put in high speed fibre optic networking gear combining old school transport with high-tech information sharing networks.

      • snarf says:

        The only dem candidate I would vote for Is Tulsi Gabbard. Since she is anti war she has no chance in the dem party. She is a vet and is strong honest and courageous. Instead of a candidate like that we get choice of a swamp creature and or nut cases with competing offers of free stuff. Plus the politically correct BS that characterizes anyone with a different viewpoint as a racist homophobe. True believers in tolerance don’t call people despicable names casually. I don’t trust people that do that. Dirty pool. That behavior works against the trust and tolerance we so badly need in the USA and the world. Then that PC is applied to the worlds largest military… Power hungry dirty pool playing entitled intolerant world police. Uh count me out. When the dems become ends justify the means party? Illegal fisa warrants? law doesn’t matter , constitution doesn’t matter only thing matters is hate for trump or anyone else that doesn’t buy into there beliefs 100%. Yea that’s way more crazy than trump. Like 10x. I dont like trump. Pretty sad that he is the best choice. Want my vote? Get Tulsi in. Someone who can heal our country not divide it. Heck bring Obama back. Compared to the dog and pony show now he wasn’t half bad.

        • Despite some obvious leanings to this trajectory before hand I’m afraid the US simply caught some sort of very nasty infectious bug just after WWII – not only mine working theory is the upper echelons got tainted with all these imported naz#is, while Russians used them too but merely as technicians for a while, in the US they eventually metastasized the entire political apparatus, incl. think tanks and major advisory bodies, media, as proteges of the elites etc.

          It’s weird and sad because I encountered wonderful down to Earth people in the more slow moving “backwater” parts of the US..

          Yes Tulsi like positive energy characters will emerge and eventually help turn the country around for the better, but it will be likely on very different footing by then, i.e. perhaps post industrial / fossil fuel reality / even perhaps post nuclear war exchange situation..

  6. Icarus Soars says:

    Entropy is a cold bitch

    • Xabier says:

      Cold: but everyone and everything is, somehow, drawn towards her……..

    • Ed says:

      Entropy is the ultimate peace, just go with the flow you will be assimilated.

    • Kowalainen says:

      Do you even know the definition of entropy, energy, temperature and how it is defined?

      It is simply a measure of how many joules(energy) needed for a temperature increase. Different materials need different amounts of energy for a corresponding increase in its temperature.

      There exists high entropy alloys which require an unusually large amount of energy for increasing its temperature. It is an active field of research.

      https://en.m.wikipedia.org/wiki/High_entropy_alloys

      So high entropy alloys are apparently a b*tch?

      🙂

      • Interesting! I have never run into these before.

      • definition of entropy
        1.
        PHYSICS
        a thermodynamic quantity representing the unavailability of a system’s thermal energy for conversion into mechanical work, often interpreted as the degree of disorder or randomness in the system.
        “the second law of thermodynamics says that entropy always increases with time”
        2.
        lack of order or predictability; gradual decline into disorder.

        • Kowalainen says:

          Cutting and pasting stuff from Wikipedia does not constitute understanding. You must have a clear knowledge of the units, multiplication and division.

          Just as Gail explains that multiplication is a form of compact addition, division is a form of subtraction. The same holds true for units in thermodynamics.

          Entropy in its simplest form is a measure of a material resistance to temperature increase per energy unit supplied, since the unit for entropy is is in Joule(energy) per Kelvin(temperature) J/K.

          It is similar to the Ohm relation, dividing the voltage by the current gives a measure of resistance. U/I

          It is of course ripe for esoteric explanations, just like quantum physics and relativity theory have given rise to all sorts of jank science.

          I can recommend the series from Sky Scholar created by the scientist behind the theory and application of modern microwave MRI scanners

          • i understand it perfectly well

            I cut it from wiki for reasons of simplicity, because that is the basic definition of entropy, no point in me rewriting it using a different set of words to arrive at the same meaning.

            left in a pot or cup—your tea will grow cold, not hot, untill additional units of energy are added to the original volume of tea.

            Left untended, (ie no energy input) your house will crumble to dust, as will your car. And yourself of course. Maybe I’ve missed something, but I can’t see what difference word-embroidery will bring to that.

            • Kowalainen says:

              You are confusing thermodynamic processes with other kinds of processes in the real world. Just because something is underpinned by thermodynamics does not make it analogous with all processes.

              For example: You and I are genetically programmed to crumble with age. It has nothing to do with thermodynamics.

              Trees are eternal, it is forest fires, disease and man made chainsaws that brings them down.

              “The Senator was one of the oldest and biggest bald cypress trees in the world with an estimated age of 3,500 years.”

              http://www.oldest.org/nature/trees/

              The moon and earth is billions of years old, when do they crumble to space dust and disperse in the cosmic wind?

              Now; does not entropy care about trees and planets in the solar system?

            • hkeithhenson says:

              http://www.oldest.org/nature/trees/

              It never fails to amuse me when I read into a web site and find an old friend, Tom Harlan, listed.

  7. colin Appleyard says:

    Given the close tie between energy consumption and growth, I consider falling production, falling or stable prices and rising inventories a clear recession indicator.

    • A person might think so.

    • aaaa says:

      Well it’s obvious that the financial and tech economies are the not-so-clandestine attempts to work around the constraints of energy supply and demand. I expect a market rally on Monday.. just because.. why not? Tech will save us, the bourse will save us, economic redefinition schemes will save us, etc etc. So China nor Trump will affect the 200-day moving averages of techno-optimism, progress, and growth

  8. hkeithhenson says:

    Gail, engineers need a target if they are tasked with solving a problem. We have discussed what the target should be for years. Worth restating?

    BTW, unexpected behavior from social and economic systems was one of the main results from Urban Dynamics, the study that eventually led to the LTG model.

    • I am afraid I have never looked at Urban Dynamics. Is there a book about it?

          • hkeithhenson says:

            https://en.wikipedia.org/wiki/Jay_Wright_Forrester#Counterintuitive_Behavior_of_Social_Systems

            Counterintuitive Behavior of Social Systems is a 1971 paper by Jay Wright Forrester. In it, Forrester argues that the use of computerized system models to inform social policy is far superior to simple debate, both in generating insight into the root causes of problems and in understanding the likely effects of proposed solutions.
            Description

            Forrester characterizes normal debate and discussion as being dominated by inexact mental models:

            The mental model is fuzzy. It is incomplete. It is imprecisely stated. Furthermore, within one individual, a mental model changes with time and even during the flow of a single conversation. The human mind assembles a few relationships to fit the context of a discussion. As the subject shifts so does the model. When only a single topic is being discussed, each participant in a conversation employs a different mental model to interpret the subject. Fundamental assumptions differ but are never brought into the open. Goals are different and are left unstated. It is little wonder that compromise takes so long. And it is not surprising that consensus leads to laws and programs that fail in their objectives or produce new difficulties greater than those that have been relieved.

            ^^^^^^

            It strikes me that the price of oil staying low is counterintuitive. I wonder if a dynamic model would show low prices?

            • We have two sides in this contest–the producers and the consumers. Some of the time, the balance is tipping toward the consumers; some of the time, the balance is tipping toward the producers. Whenever the price gets too high, the Powers that Be raise interest rates, squashing demand, and sending oil prices lower. This, by itself, determines that prices will never rise too high.

        • Duncan Idaho says:

          The library is radical democracy.
          I wont comment further.

    • Kowalainen says:

      LTG derivative models are already running at supercomputer installations predicting likely outcomes of economic and governing policies.

      “Supercomputing has the potential to be the underlying layer to support solutions for many of the world’s most pressing contemporary challenges: global privacy and identity issues, stalemates in medical research, and sustainable supply-chain logistics, to name a few.

      As we move from the conclusions of the first Council to the goals of the second, we will build upon what has already been achieved to advance a human-centric vision of the future of computing. After all, it’s not only computers that will soon go exascale: humanity will, too.“

      https://www.weforum.org/agenda/2019/02/supercomputing-could-solve-many-of-the-world-s-problems-and-create-many-more/

      There you have it. It is time to go exascale and floor this mofo and keep going until the end of this century and beyond.

      The consumerism is dead, long live the consumerism. Let’s put all the capital science, engineering to get rid of this brutalist BAU and stop financing the ultimate perpetrators in mainland China.

      • hkeithhenson says:

        “supercomputer”

        You don’t need supercomputers to run system dynamic models. The original work was done on computers with substantially less number-crunching capacity than a typical smartphone.

        The main problem is how well does the model correlate with the real world? A long time ago Dr. Peter Vajk went through the code for the model that generated the graphs for LTG. He found that the model had completely unexplained “fudge factors” in it.

        Vajk’s work was to see how the outputs would change given inexpensive energy from space. He reported on this work in a book, “Doomsday has been Canceled.” https://www.amazon.com/Doomsday-been-cancelled-Peter-Vajk/dp/0915238241

        I don’t understand the psychology involved, but there is a great deal of hostility toward any ideas that might provide an alternative to the conclusions of LTG. It seems to be widespread that humans get emotionally attached to doomer ideas. We certainly have seen a lot of that here.

        • Kowalainen says:

          I agree.

          The point of supercomputer is to allow real-time simulation and policy making.

          Faster computation results in more effective policy making ahead of other (nations).

          That’s the raison d’être.

        • Hideaway says:

          Original LTG model included “unlimited energy” as one of the ‘runs’, the conclusion was the same, with collapse due to something else going wrong ‘pollution’ from memory. I reread LTG a couple of months ago. I suggest others do the same before trying to call Meadows et al, incorrect.

          • The Limits to Growth authors have made it clear in their talks, perhaps more than in the book itself, that the shape of the curve after collapse starts to hit cannot be relied upon, because that is something they did not understand and is not built into the model.

            This limitation is especially important in a model that doesn’t include debt or a financial system.

            • Kowalainen says:

              Does population decline signify a reduction in well-being? It is doubtful, since most industrial nations without a positive net immigration has a shrinking population. For example, the population of Japan will be back to the levels in the 1950’s by the year 2100.

              Is that a bad thing as resource constraints hits? I would definitely conclude it is a good thing to ensure the prosperity of the children as the resources dwindle. And it will also naturally re-balance the population pyramid into a flatter pole-like shape instead of the two pyramids of madness.

              Continuing the trend of growth by consumption and population is surely a way to dystopia in which the interpretation of the LTG model is completely different.

              Again, let’s read the words of Isaac Asimov:

          • DJ says:

            But they didnt include space colonization or uploading!

            • hkeithhenson says:

              No, those were utterly beyond the imagination of the people who worked on LTG. In fact, people who got into LTG, for example, those at a conference I was at in 1976, seemed to be utterly hung up on doom and were actively hostile to anyone one who said there might be ways out.

              One of the authors, Behrens I think, moved out into the woods and waited for the food riots to start.

              I should add that either space colonization or uploading may cause a population crash on earth. I have speculated about uploading in the fictional “clinic seed.” I suspect that if uploading becomes possible at all, the entire population will do it. However, I had to leave 1% of the population out of the uploaded state just to have characters for the other chapters of the story.

              It is one way for the race to go biologically extinct. If you want to read it,

              http://www.terasemjournals.org/GNJournal/GN0202/henson1.html

            • DJ says:

              Didnt they run a dozen scenarios where only about half ended in doom?

              But since they stayed on the planet all ended growth.

            • I looked back at the book, which is available free online.
              http://www.donellameadows.org/wp-content/userfiles/Limits-to-Growth-digital-scan-version.pdf

              There are 10 different models. The models only go to 2100. It is clear in all of them that resources will keep running down, so that at some point, they will have to crash. But a few of them don’t crash before 2100. Two of them are clearly on the way to crashing in 2100, and another two are considered “Stabilized.” If a person looks at the resource lines in each of these Stabilized models, they also are crashing, so it is clear that they are not stabilized for long. So I would say that none is a truly sustainable state.

              This is what the book says in the captions of each of these models that crash after 2100.

              Figure 45 WORLD MODEL WITH STABILIZED POPULATION AND CAPITAL

              Restriction of capital growth, by requiring that capital investment equal depreciation, is added to the population stabilization policy of figure 44. Now that exponential growth is halted, a temporary stable state is attained. Levels of population and capital in this state are sufficiently high to deplete resources rapidly, however, since no resource-conserving technologies have been assumed. As the resource base declines, industrial output decreases. Although the capital base is maintained at the same level, efficiency of capital goes down since more capital must be devoted to obtaining resources than to producing usable output.

              Figure 46 STABILIZED WORLD MODEL I

              Technological policies are added to the growth-regulating policies of the previous run to produce an equilibrium state sustainable far into the future. Technological policies include resource recycling, pollution control devices, increased lifetime of all forms of capital, and methods to restore eroded and infertile soil. Value changes include increased emphasis on food and services rather than on industrial production. As in figure 45, births are set equal to deaths and industrial capital investment equal to capital depreciation. Equilibrium value of industrial output per capita is three times the 1970 world average.

              I think the assumption of births equal to deaths each year is absurd. Can you imagine allocating a number of births to every country in Africa based on the number expected to die, for example? Industrial capital equal to capital depreciation means that a large share of resources must go into replacing what has depreciated, bringing down resources. I think all of these things are wishful thinking, “Technological policies include resource recycling, pollution control devices, increased lifetime of all forms of capital, and methods to restore eroded and infertile soil.”

              Figure 47 STABILIZED WORLD MODEL II

              If the strict restrictions on growth of the previous run are removed, and population and capital are regulated within the natural delays of the system, the equilibrium level of population is higher and the level of industrial output per capita is lower than in figure 46. Here it is assumed that perfectly effective birth control and an average desired family size of two children are achieved by 1975. The birth rate only slowly approaches the death rate because of delays inherent in the age structure of the population.

              While this model doesn’t crash before 2100, it is clear that resources are rapidly dropping, so it will crash. At least the population estimates are a bit less unreasonable.

              Figure 48 WORLD MODEL WITH STABILIZING POLICIES INTRODUCED IN THE YEAR 2000

              If all the policies Instituted In 1975 in the previous figure are delayed until the year 2000, the equilibrium state is no longer sustainable. Population and industrial capital reach levels high enough to create food and resource shortages before the year 2100.

              So the system is well on the way to crashing. Resources are hugely depleted by 2100.

            • DJ says:

              Ecofascism is not a new idea.

          • hkeithhenson says:

            ” included “unlimited energy””

            It has been a long time, but I don’t think the LTG model had an energy input. Perhaps they used unlimited resources without any provisions to reduce pollution.

            Of course, with unlimited cheap energy, we could quit burning fossil fuels and even pull CO2 out of the air.

  9. Volvo740 says:

    I went back and re-read this article of yours. It’s now 12 years old!

    http://theoildrum.com/node/2984

    It really feels like the tariffs could the the start of the collapse of the monetary system, which by and large I think still “works”.

    Gold gaining now could also be a sign the someone is starting to move fiat money. Whether it will keep the value or not I’m not sure, but if you have lots of $$$ why not allocate some in gold?

    Thanks for the article!

    • The article you mention is called, “Economic Impact of Peak Oil Part 3: What’s Ahead?”

      This was written back when I first started thinking about the potential impact of limited oil supply, and didn’t realize how tightly linked it would be to other energy supply. It is also before the Great Recession.

      Regarding investments, I have tended to say diversification is a good idea. Gold coins might be part of this diversification. The farther a person gets from the real thing (shares of stock, or ETFs), the less likely that they will be helpful when needed.

  10. Rhisiart Gwilym says:

    Gail, regarding your speculation about a higher power, in the last paragraph of this article: Look into the work of Tom Campbell: lifelong professional physicist, mathematician and – most productively – a gifted mystic (or shaman, if you prefer; fruitful combination!). It seems to me that Tom’s ‘Big TOE’ – his comprehensive Theory Of Everything – will prove to be a major advance in our understanding of the basic nature of reality, a key contribution, in fact. And yes, it does start from the postulation of a Larger Consciousness System, the LCS, as the originator of our entire reality, including the laws of physics as its – carefully-tweaked – operating system and basic rule-set. I surmise that, when viewed from the perspective of hindsight, this will be regarded as another Galileo/Copernicus/Kepler/Brahe moment in the history of science; literally that revolutionary, in the current paradigm-shift ferment that’s right now going on in theoretical physics; and deeply pertinent to the global upheavals now happening in the ecologico-politico-economic field:

    https://www.my-big-toe.com

    • I looked at this a bit tonight. I will need to listen to some of his lectures or do a little more looking at it when I am more awake.

    • Robert Firth says:

      Thanks Rhisiart: I took a little time to view his slide show.

      1. It doesn’t help that in slide 3 he misspells “matter” and cannot tell the difference between “bottom up” and “bottoms up” (perhaps he was thinking of a virtual pub). Also, they are some of the worst prepared slides I have ever seen. Virtually unreadable, insanely repetitious, and dense with jargon. A slide full of 8pt type doesn’t really work.

      2. Presentation aside, what of content? I am a former student of Paul Dirac with a PhD in quantum mechanics from Cambridge, so do have some understanding of this subject. My take is that his “TOE” is almost pure drivel. He even gets something as simple as the double slit experiment completely wrong. Taking about 30 slides to “explain” what Cramer’s “Transactional Interpretation” polished off in five lines of mathematics.

      Feel free to disagree (vehemently if you wish; QM allows that), but colour me unimpressed.

      • Rhisiart Gwilym says:

        Catch up as you can, Robert. But don’t delay: the materialism/idealism pendulum is swinging again. Good luck! 🙂

      • snarf says:

        Thank you for your evaluation Robert! I appreciate your willingness to honestly evaluate material.

Comments are closed.