Our Energy and Debt Predicament in 2019

Many people are concerned that we have an oil problem. Or they are concerned about recession and the need to lower interest rates.

As I see the situation, we have a problem of a networked economy that is not functioning well. A big part of this problem is energy-related. Strange as it may seem, energy prices (including oil prices) are too low for producers. If debt levels were growing more rapidly, this low-price problem would go away.

The “standard way” of encouraging more debt-based purchases is by lowering interest rates. But we are running out of room to do this now. We also seem to be running out of economic investments to make with debt. If expected returns on investment were greater, interest rates would be higher.

Without economic investments, demand for commodities of all kinds, including energy products, tends to stay too low. This is the problem we have today. Our debt problem and our energy problem are really different aspects of a networked economy that is no longer generating enough total return. History suggests that these periods tend to end badly.

In the following sections, I will explain some of the issues involved.

[1] Our problem is not just that oil prices are too low. Prices are too low for practically every type of energy producer, and in many parts of the globe.

Oil: OPEC oil producers have cut back production because they view oil prices as too low. OPEC reports a cutback in production of 2.7 million barrels per day between November 2018 and July 2019 (from 32.3 million bpd to 29.6 million bpd).

In the US, there has been an increase in bankruptcies of oil producers during 2019, relative to 2018. There has also been a reduction in the number of oil drilling rigs of 17% since the week of November 16, 2018, according to reports by Baker Hughes. These are signs of producer distress.

Natural gas: While recent US natural gas prices have bounced up off their recent lows, as recently as August 8, 2019, we were reading:

U.S. gas futures this week collapsed to a three-year low, while spot prices were on track to post their weakest summer in over 20 years. In other markets, such lackluster pricing would cause investment to retrench and supply to contract.

But gas production is at a record high and expected to keep growing. Demand is rising as power generators shut coal plants and burn more gas for electricity, and as rapidly expanding liquefied natural gas (LNG) terminals turn more of the fuel into super-cooled liquid for export.

Analysts believe the natural gas market is not trading on demand fundamentals because supply growth continues to far outpace rising consumption. Energy firms are pulling record amounts of oil from shale formations and with that oil comes associated gas that needs either to be shipped or burned off.

When we look worldwide, we see that the Wall Street Journal is reporting, “U.S. Glut in Natural Gas Supplies Goes Global.” A chart from that article shows falling natural gas prices in Europe and Asia, almost to the level of US natural gas prices.

Coal: The US Energy Information Administration writes, “More than half of US coal mines operating in 2008 have since closed.” USA Today writes, “Is President Trump losing his fight to save coal? Third major company since May files for bankruptcy.”

China has also been closing coal mines in response to low prices. Its coal production ramped up quickly after it joined the World Trade Organization in 2001, but since the 2012 to 2013 period, production has been close to level. An academic paper talks about a “de-capacity program” undertaken in China in 2016 in response to plunging coal prices and overall financial loss of coal enterprises.

Figure 1. 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.

Uranium: A recent article says, “Plummeting global uranium prices hit Namibia hard.” Another article talks about the huge amount of capacity that has been taken off-line because of continued low uranium prices. The article estimates that 25% to 35% of global uranium production had already been taken off-line by the time the article was published (May 20, 2019).

Ethanol: According to the Wall Street Journal, the ethanol industry has been losing money since at least 2015, and is now closing ethanol plants in three states. The trade war has exacerbated its problems, but clearly its problems began before the trade war.

[2] The general trend in oil prices has been down since 2008. In fact, a similar trend applies for many other fuels.

Figure 2 shows that oil prices since 2008 have been trending downward.

Figure 2. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

Figure 3 shows that other energy prices have been following a similar price trend to that of oil. This situation happens because energy products are primarily used in finished goods and services of many kinds, such as cars, homes, vacation travel, and air conditioning. If demand for finished goods and services is high, prices for all commodities can be expected to be high; if demand for finished goods and services is low, prices for all commodities can be expected to be low. Thus, it shouldn’t be too shocking that the problem of prices that are too low for energy producers is very widespread.

Figure 3. 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. They are annual averages, so smooth out quite a few smaller bumps.

[3] The situation of prices being too low for many types of energy producers simultaneously is precisely the problem I found back in December 2008 when I wrote the article Impact of the Credit Crisis on the Energy Industry – Where Are We Now? 

The article mentioned was written in December 2008. If we look back at Figure 2, this was a time when oil prices were very low. I had first noticed a cutback in credit of various kinds (including credit card debt and mortgage debt) in the middle of 2008, about the time oil prices crashed. Later in the year, additional financial problems emerged, including the collapse of Lehman Brothers. Banks became less willing to offer credit to buyers who were deemed insufficiently creditworthy.

In my December 2008 article, I wrote about suppliers in various supply chains not being able to get credit. Without credit, supply chains could not operate. Businesses depending on supply chains were forced to cut back on their purchases. In fact, some suppliers went bankrupt. Workers were laid off in this process; these layoffs added to the lack of buyers for finished goods and services. Energy prices of many types crashed simultaneously because of the lack of demand for commodities used to make finished products of many kinds.

The fix for the problem back in late 2008 was for the US to begin Quantitative Easing. Quantitative Easing lowered longer-term interest rates and allowed more credit to get back to supply chains. By 2011, oil prices had risen to a level that was more tolerable for producers. These higher prices slowly slipped away, especially disappearing when the US discontinued its Quantitative Easing program in 2014.

If a person looks at the late 2008 situation, it is clear that a lack of debt availability indirectly led to low commodity prices. Prices dropped almost vertically when the debt bubble popped. This time, the situation is a little different. We arrived at low prices through the long diagonal black dotted line on Figure 2; this time other factors besides an obvious lack of debt have been involved.

One issue that seems to be involved this time is a shift in relativities between the dollar and other currencies, making energy products more expensive for those outside the US.

A second contributing issue this time is growing wage disparities, as goods are increasingly manufactured in low-wage countries. Low-wage workers (both in developing countries and in advanced economies trying to compete with developing countries) are less able to buy finished goods and services. This contributes to the lack of demand for finished goods and services using commodities of all kinds, including energy products.

[4] In the right circumstances, a rapidly growing supply of cheap energy products can help the world economy grow.

If we look back, there was a period of rapid growth in the world’s energy consumption between World War II and 1980. This was a period of rapid growth in the world economy.

Figure 4. Average growth in energy consumption for 10 year periods, based Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects (Appendix) together with BP Statistical Data for 1965 and subsequent.

In fact, both population and energy consumption per capita were growing. This growing energy consumption per capita allowed living standards to grow as well (Figure 5).

Figure 5. Energy growth amounts shown in Figure 4, divided between amount that supported population growth (based on 2019 world population estimates and earlier estimates by Angus Maddison) and all other, which I have called “living standards.”

Most people would agree that a major increase in living standards took place between World War II and 1980. New buildings were constructed to replace those destroyed or damaged during World War II. Many people were able to buy cars for the first time. Interstate highway systems were built. Electric transmission lines were built, and oil and gas pipelines were laid. In rural areas, homes were often electrified for the first time. With the aid of energy saving appliances and birth control pills, many women joined the workforce. The US, Europe, Japan, and the Soviet Union all saw their economies grow.

[5] It is striking that the period of rapid energy consumption growth between World War II and 1980 corresponds closely to the long-term rise in US interest rates between the 1940s and 1980 (Figure 6).

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

If interest rates rise, it becomes more expensive to borrow money. Monthly payments for homes, cars, and new factories all rise. Evidently, the US economy was growing robustly enough in the 1940 to 1980 timeframe that US short term interest rates could be raised without much economic harm. The big concern seemed to be an overheating economy as a result of too rapid growth.

The huge increase in interest rates in 1980-1981 put an end to any concern about an overheating economy (compare Figures 6 and 7). Oil prices came back down once the world economy was in recession from these high interest rates.

Figure 7. Historical inflation-adjusted Brent-equivalent oil prices based on data from 2019 BP Statistical Review of World Energy.

[6] Starting about 1980, the US economy began substituting rapidly growing debt for rapidly growing energy supplies. For a while, this substitution seemed to pull the economy forward. Now growth in debt is failing as well.

Figure 8 shows how the ratio of total US debt (including governmental, household, business and financial) has changed since 1946. It becomes clear that once the big “push” that the economy received from rising consumption of energy products began to fail about 1980, the US moved to the addition of debt as a substitute.

Figure 8. Ten-year average increase in US debt relative to GDP. Debt is “All Sectors, Liability Level” from FRED; GDP is in dollars of the day.

I think of debt as being one of many kinds of promises. Figure 9 illustrates that while the total amount of goods and services has been growing, debt levels and other kinds of promises have been growing even more rapidly.

Figure 9. Promises of future goods and services tend to rise much more rapidly than actual goods and services. Chart by Gail Tverberg.

Many things can go wrong with this system. If the growth in added debt slows too much, we can expect to start seeing financial problems similar to those we saw in 2008. Also, if the level of debt (such as student debt) gets too high, its payback interferes with the purchase of other needed goods, such as a home. If energy providers decide prices are too low and stop producing, then promised Future Goods and Services can’t really appear. Huge defaults on promises of all kinds can be expected. This happens because the laws of physics require the dissipation of energy for physical processes underlying GDP growth.

[7] Since 2001, world economic growth has been pulled forward by China with its growing coal supply and its growing debt. In the future, this stimulus seems likely to disappear. 

Figure 10. Figure similar to Figure 5, with bump that is primarily the result of China’s accelerated growth circled.

China has been financing its rapid economic growth since 2001 with growing debt.

Figure 11. China Debt to GDP Ratio, in figure by the IIF.

We know that low prices for coal have led to flattening production since the 2012 – 2013 period (Figure 1). In fact, part of the reason for the flattening of non-financial corporate debt in recent years in Figure 11 may reflect swaps of uncollectible coal mine debt for equity, removing part of coal mine debt from the chart.

The failure of coal production to grow rapidly puts China at an economic disadvantage because coal is a very low-cost energy source. Any substitution, even imported coal, is likely to raise its cost of making goods and services. This makes competition in a world economy more difficult. And China’s debt level is already very high, putting it at risk of the problems discussed in Section [6].

[8] The world economy needs much more rapidly growing debt if energy prices are to rise to a level that is acceptable to energy producers. 

Debt acts like a promise of future goods and services. Growing debt, plus increases in other types of promises of future goods and services, helps to keep energy prices high enough for energy producers. There are at least three reasons that growing debt helps an economy:

First, increasing debt can be used to build factories, and these factories hire large numbers of people. The factories utilize various raw materials and energy products themselves, raising demand for goods and services. Furthermore, the workers hired by the factories, with their incomes from their jobs, also raise the demand for goods and services. These goods and services are made with commodities. Growing debt thus raises demand for commodities, and thus their prices.

Second, increasing debt levels by governments are often used to hire workers or to raise benefits for the unemployed or the elderly. This has a very similar effect to building new factories. These workers and these beneficiaries can afford more goods and services, and these goods and services are made using commodities. Governments also use some of their funds to build schools, pave roads and operate police cars. All of these things require energy consumption.

Third, consumers can afford to buy more of the output of the economy, if their debt levels are increased. If debt can be structured so that anyone who walks into a car dealership can afford a new car (such as longer durations, lower interest rates, and no down payment), this added debt allows increasing demand for new cars. It also allows increasing demand for the energy products used to make and operate these new vehicles. Furthermore, if new homes can be made more affordable for young people, this works in the direction of adding more mortgage debt.

The Institute of International Finance (IIF) reports that the ratio of world debt to GDP (red line on Figure 12) has been falling since 2016. This falling ratio of debt to GDP no doubt contributes to the low-priced energy problem with which energy producers are now struggling.

Figure 12. IIF figure showing total world debt and the ratio of total world debt to GDP.

Non-debt promises of many types can also have an impact on energy prices, but it is beyond the scope of this article to discuss their impact. Some examples of non-debt promises are shown on Figure 9.

[9] The world economy seems to be running out of truly productive uses for debt. There are investments available, but the rate of return is very low. The lack of investments with adequate return is a significant part of what is preventing the economy from being able to support higher interest rates.

In a self-organizing networked economy, market interest rates (especially long-term interest rates) are determined by the laws of physics. Regulators do have some margin for action, however. They can raise or lower certain short-term interest rates. They can also use their central banks to purchase existing securities, thereby influencing both short- and long-term interest rates. In addition, they can indirectly affect the system by raising and lowering tax rates and by adopting stimulus programs.

Market interest rates, in some sense, tell us how productive investments truly are at a point in time. Years ago, investments that the economy was able to make were far more productive than the investments we are making today. For example, the first paved road in an area had a huge beneficial effect. New roads were able to open whole areas up to commerce. Once an area had been developed, later investments were much less beneficial. Fixing up a road that has many holes in it takes energy and materials of many types, but it doesn’t really add productivity to the system. It just keeps productivity from falling.

After a point, adding new roads or other infrastructure doesn’t add much of anything. This is especially the case if population is level or falling. If population is falling, it would likely make sense to reduce the number of roads, but this is difficult to do, once there are a few occupied homes along a road.

As another example, a car that gets a person from home to work is a great addition if the vehicle allows the person to take a job that he could not otherwise take. But added “bells and whistles” on cars, such as air conditioning, a musical system, sturdier bumpers, and devices to reduce emissions, are of more questionable value, viewed from the point of view of allowing the economy to function cheaply and efficiently.

Another type of investment is education. At one point, a high school education was sufficient for the vast majority of the population. Now additional years of schooling, paid for by the student himself, are increasingly expected. An investment in higher education can be “productive,” in the sense of helping to differentiate himself/herself from those with no post-secondary education. But the overall level of wages has not been rising enough to compensate for all of the extra education. It is the growing complexity of the system that is forcing the need for extra education upon us. In a sense, the extra education is a tax we are required to pay for having a more complex system.

The need for pollution control might be considered another kind of tax on the system.

Our hugely expensive health care system is another tax on the system. After paying the cost of health care, workers have less funding available for buying or renting a home, raising a family, food and transportation.

[10] Since 1981, regulators have been able to prop up the economy by reducing interest rates whenever economic growth was faltering. Now we have pretty much run out of this built-in source stimulus.

Many observers have noted that central bankers are running out of tools to fix our economic problems. The lack of room to take down interest rates can be seen in Figure 6.

Figure 13 shows that long-term patterns of reductions in interest rates (darker bands) have happened previously. These reductions in interest rates came to an end because they couldn’t go any lower, given inflation expectations and likely levels of defaults. We seem to be facing a similar situation today.

Figure 13. Chart from the Financial Times showing historic interest rates and periods during which interest rates fell.

According to Figure 13, there have been three periods of falling interest rates in the last 200 years:

  • 1817-1854
  • 1873-1909
  • 1985-2019

In the gap between the first two periods of falling interest rates (1854 to 1873), the US Civil War took place. This was a period of very poor return on investments. Somehow it ended in war.

Immediately after the second two periods of falling interest rates (after 1909), the world entered a very unstable period. First there was World War I, then the Great Depression, followed by World War II.

Now we are facing the possibility of yet another end-point for the take-down in interest rates.

[11] The total return of the economy seems to be too low now. This seems to be why we have problems of many types, ranging from (a) low interest rates to (b) low profitability for energy producers to (c) too much wage disparity. 

All of the problems listed above are manifestations of an economy that is not producing sufficient total return. The laws of physics distribute the problem to many areas of the economy, simultaneously.

A person wonders what could be ahead. We seem to be reaching the end of the line regarding the takedown of interest rates, as shown in Figure 13. If a takedown in interest rates is possible, it acts as a relief valve for some of the other problems the economy is facing, including too much wage disparity and energy prices that are too low for producers.

In Section [10], we saw that when the relief valve of lower interest rates had disappeared, wars and depressions have taken place. We can’t know the precise outcome this time, but our current situation doesn’t look good. Will we encounter wars, or a serious depression, or financial problems worse than 2008? We can’t know for certain. Or will we somehow find a way around serious problems?

 

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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1,325 Responses to Our Energy and Debt Predicament in 2019

  1. Harry McGibbs says:

    “Global shipping companies have spent billions rigging vessels with “cheat devices” that circumvent new environmental legislation by dumping pollution into the sea instead of the air, The Independent can reveal.

    “More than $12bn (£9.7bn) has been spent on the devices, known as open-loop scrubbers, which extract sulphur from the exhaust fumes of ships that run on heavy fuel oil… the sulphur emitted by the ships is simply re-routed from the exhaust and expelled into the water around the ships…

    “The change could have a devastating effect on wildlife in British waters and around the world, experts have warned.”

    https://www.independent.co.uk/environment/shipping-pollution-sea-open-loop-scrubber-carbon-dioxide-environment-a9123181.html?fbclid=IwAR1jCX-HrHi5iZwiApobyz6f8qfFDtUE_qq6UUKDWbWWMbDzU0J4ghu6E8A

    • Instead of polluting the air, boats will pollute the sea! They certainly could not absorb the higher cost of diesel fuel, relative to the bunker fuel they were using previously.

      • Robert Firth says:

        So perhaps Greta was a harbinger of future sea transport?

      • Artleads says:

        So here’s a fantasy: For the first time ever we have (within a given window of time) the prospect of transporting people and goods at all kinds of speeds, including a range from earth orbit all the way to sailing vessels. Not everything needs to travel at the same speed.

  2. MG says:

    The World Championships in Doha fail:

    “World Championships brought to the brink of farce in Doha as almost half the field fail to complete women’s marathon in over 30 degree heat

    Extreme heat and humidity caused huge problems at the World Championships
    Only 40 of the 68 runners were able to finish the women’s marathon in Doha
    Ruth Chepngetich won with the slowest time in the history of the tournament”

    https://www.dailymail.co.uk/sport/othersports/article-7514795/Almost-half-field-fail-complete-womens-marathon-30-degree-heat-World-Championships.html

    • MG says:

      The reason why the human civilizations could not achieve much in the tropical places of the origin of the human species is clear.

      • Robert Firth says:

        Conveniently forgetting the Aztecs, the Maya, the Inca, the Khmer, the Ceylonese, …

        • in general terms, they just piled stones on top of one another,

          gracefully I admit,
          but no more than that.

          Northern civilisations used explosive forces to make wheels go round

          disgracefully I admit

          but in that, the difference lies

          • MG says:

            There are better conditions for combustion in colder places – higher density of oxygen in the air. Also the higher density of oxygen in the air makes the athletes achieve better results.

          • Robert Firth says:

            Disgraceful in effect, but perhaps noble in aspiration. And the most aspiring was surely Francis Bacon, whose New Atlantis of 1627 launched the second scientific revolution: the one that sought not merely knowledge of Nature, but mastery over her:

            “The end of our foundation is the knowledge of causes, and secret motions of things; and the enlarging of the bounds of human empire, to the effecting of all things possible”.

            For a most insightful discussion of this turning point, I recommend Sir Peter Medawar’s essay: http://bactra.org/Medawar/effecting/

            And, by the way, Machu Picchu was a lot more than stones piled atop each other; it was a sustainable city 8000 feet above sea level. I know: I have been there.

            • MG says:

              Maybe the higher altitudes provide more oxygen density than hot lowlands in tropical areas. We should not forget the presence of other gases that are products of decomposition of biomass in tropical forests. The air in the mountains is always cleaner.

            • Kowalainen says:

              If it were sustainable it would still be around. No, it collapsed precisely of the same reason as all past human civilizations collapsed, a lack or resources due to overspecialization eventually ending in abuse of power.

              https://i.imgur.com/v7IKbxv.png

            • my comment about piled up stones was obviously a generalisation—it covers roman roads, pyramids, cathedrals and so on

              but it does not change what the structure is

              ie—stones cut hauled and built by muscle power

              there has never been mastery over nature.

              i recall when ”control of the weather” was the major scientific fantasy

              macchu Pichu is piled stones, staggering in concept—but still piled stones, as is stonehenge.
              it was sustainable because the population stabilised itself by whatever means—i don’t know,

              but expansion beyond a certain point was limited by geographical constraints

              An even more unlikely structure is on Skellig Island off Irish coast, a community of monks self sustaining for 100s of years, but still piles of stones put there by human dedication on a peak. It looks impossible, but there it is—again, limited by geographical constraints

      • DJ says:

        “achieving anything”? Humans beat the crap out of everything else by operating with limited capacity in heat where everything else laid down barely surviving.

      • SomeoneInAsia says:

        If what the Northern civilizations have achieved so far is anything to go by, then let’s be frank, I’m not impressed and would far prefer the civilizations of the tropical regions.

        At least with them I won’t have to worry about our prospects for survival as an entire species being seriously compromised by things like energy depletion, environmental degradation, nuclear war etc. None of these ills were ever brought about by the tropical civilizations.

        • Once people got into the business of burning biomass for heat, they started working on making metals using charcoal. This seems to be what escalated the problems.

    • Doha is the capital of Qatar. Who would ever consider running a marathon in Qatar, except perhaps in December- January – February, when it is likely to be cooler?

  3. Harry McGibbs says:

    “Manufacturing sentiment throughout Asia remained mostly bleak in September amid trade tensions and waning global demand. Purchasing manager indexes for South Korea, Japan, and Indonesia were still in contraction territory, with South Korea’s slipped by one point to 48.”

    https://www.bloomberg.com/news/articles/2019-10-01/asia-factory-sentiment-remains-brittle-ahead-of-u-s-china-talks

  4. Harry McGibbs says:

    “It has been a pivotal few months for financial markets. China and Europe have halted the global stocks rally, oil has cooled dramatically and rising recession worries have sent gold and government bonds charging again…

    “The switch back into support mode by the top global central banks has swollen the amount of bonds trading at negative rates — where investors pay rather than get paid to lend – to a record $17 trillion.”

    https://uk.reuters.com/article/uk-global-markets-q3/global-stocks-stalled-in-third-quarter-as-bonds-boom-and-dollar-zooms-idUKKBN1WF1W8

  5. Harry McGibbs says:

    “[As in 2008], the key factor is weakness within a bank’s business model, and of course, whether that weakness is shared by other banks, either by practice or exposure. That’s where Germany’s Deutsche Bank, and indeed, other European banks find themselves today. The weakness isn’t so much from issuing and selling risky mortgages as much as from larger, systemic and business practice issues.

    “At the macro level, a weak European economy is a big factor. As the economy slows down, banking activity slows down as well… This recession pressure is seen in the low and even negative interest rates European banks charge for borrowing money…

    “Unfortunately, as in 2008, the interconnected global financial system results in major banks and financial institutions have exposure to financial risk in multiple markets. A whopping 41 percent of American banks’ foreign balance sheet exposure is to European banks.

    “That’s too big to ignore or to avoid. Problems that begin with Deutsche Bank will certainly be problematic for the Europe and America, which will, of course, impact the health of the entire global financial system.”

    https://www.theepochtimes.com/what-will-the-next-banking-crisis-look-like_3100949.html

  6. Davidin100millionbilliontrillionzillionyears says:

    third quarter of 2019 in the books…

    WTI about $54… high of $66 earlier this year…

    Brent about $59… high of $76 earlier this year…

    the theory is proving correct that oil prices are in a new normal where they will remain relatively low…

    not 100% certain, but sure looks likely…

  7. Denial says:

    I think the above is one of the most ignorant comments I have seen in a long time. You must be a retired white man in America living off a system that is decrepit and failing….with so much time to play on the computer.; While the rest of us have to toil for no real future just to stay alive a little longer….damn I hate the baby boomer generation…..!!!!!

    • poopypants says:

      You prove my point. You immediately start your message of hate. That is what identity politics does. Your comments dont address the content of my post. You identify a race age group and supposed behavior and beliefs. All imaginary. Then you openly express hatred. You are a racist. You are a bigot. You are a hater.

    • Lastcall says:

      Wow ad hominen attack. Sadly, deeply ignorant. The Demo-crats seem to have no other policy/strategy than attack Trump. Where is the shining alternative? Hilary? Bernie? Green new idiots-deal?
      The rest of the world watches the US mafia-state in disbelief.

      Dam I hate people who condemn a generation ad hoc.
      No I am not a BB. Missed by a few years. I really doubt you would have been any different.

    • TIm Groves says:

      Denial, who are you addressing your disgust at? I thought all the above comments were delightful.

      I can well understand why you might hate the baby boomers. Although I was never a member myself, I’m contemporaneous with them and remember them when they were young and wet behind the ears. They were spoilt brats then and most of them never matured.

      In a lot of respects they are not much different to younger generations. They were the first generation to be exposed to TV from childhood and so they were far more effectively propagandized than their elders ever were. That’s how they got into sex ‘n’ drugs ‘n’ rock ‘n’ roll and absorbed a worldview emphasizing freedom, egoism, narcissism, lack of commitment and got stoned every weekend as if coke, weed, acid and speed were the new Holy Communion, not to mention credit card debt. That’s their collective excuse.

      Of course, that’s just my opinion man!

    • Unfortunately, there are a whole lot of people who think the system has failed them, and that the solutions that either the Democrats or the Republicans have put forth will save them. You seem to be one of them.

      We are dealing with limits of a finite world. Young people indeed very often do “have to toil for no real future just to stay alive a little longer.” There is very little that either political party can do to fix our problems, other than perhaps to shift the burden of today’s problems to a different group.

      The physics of the situation says that the there is not enough goods and services, some group has to be frozen out. (Or perhaps everyone has to be frozen out, but usually it is some group first.) The pension and retirement systems, in fact, do promise to give a lot of available goods and services to the older generation. These promises are a very vulnerable part of the system, especially when young people are not earning enough, net of all they need to pay for today’s requirements (health insurance, debt related to college education, transportation (generally by car) to work).

      There are an awfully lot of young people who feel as you do. I would not be at all surprised if eventually, there are huge cutbacks in all of the pension/retirement/ elder healthcare programs. They are just too expensive, relative to total resources available.

    • Country Joe says:

      How many dozen times did I hear some talking head say “We need to have all the healthy young people buy into Obama care to help pay for the sick old people”. Who could possibly not like that idea? These kids these days??? Hope the don’t find out about the guillotine.

  8. poopypants says:

    Sorry off topic rant. These dems and their identity politics are not truthful. Here is the actual transcript of the phone conversation.

    I hope trump gets impeached and is re elected.

    https://www.documentcloud.org/documents/6429120-Trump-Ukraine-transcript.html#document/p1

  9. Harry McGibbs says:

    Some great insights from Mac10:

    “The obligatory delusion that lower interest rates leads to more “investment”, assumes the economy is not going into recession. Despite the collapse in interest rates, it’s now a lack of real fixed investment that is exerting downward pressure on the economy.

    “However, hot money “investors” in secondary markets don’t care as long as they get lower interest rates.”

    http://ponziworld.blogspot.com/2019/09/a-lethal-crack-addiction-cheap-money.html?m=1

    • Harry McGibbs says:

      And his follow-up continues on the same theme:

      “Central banks are subsidizing rampant speculation. In a sane society not otherwise obsessed with zero sum gambling, the central bank incentives would drive economic investment in the real economy. Which would mean ending the self-destructing perverse addiction to low interest rates.

      “In a society over-flowing with capital, the cost of capital is not the problem, the lack of real return is the problem.”

      http://ponziworld.blogspot.com/2019/09/the-efficient-implosion-hypothesis.html?m=1

      • Davidin100millionbilliontrillionzillionyears says:

        “In a society over-flowing with capital, the cost of capital is not the problem, the lack of real return is the problem.”

        and the lack of real return is because the world energy supply is not growing…

        energy is the base of all economics…

        energy makes the world go round…

        • https://www.youtube.com/watch?v=kVo5I0xNRhg

          Interesting it took so many decades to eventually becoming the mainstream analysis.
          This could be debated on many angles and facets, but for our purposes is also important:
          – the lag factor between wrong decision and consequences (yrs, decades)
          – the predicting power for future (access to energy and ability to leverage it)
          ..
          .

          • Why Germany lost WWII = oil

            Why Germany got into WWII = peak coal supply

            Perhaps WWII was energy related. Japan also had a lack-of-energy problem.

          • Kowalainen says:

            What, do we actually fight wars over resources? Who’d thought of that. What a genius.

    • GBV says:

      Good insights, yes, but sometimes I find his blog so biased that it pains me to make it all the way through his posts. I have to take a break from that blog for days or even weeks at a time before I can go back for another helping of half-decent insight slathered in unnecessary sarcasm, vitriolic diatribes on all things Trump / Alt-Right, and a self-righteous / belligerent insistence on how everything everyone does that he does not agree with is contributing to an eminent (for the past 10+ years?) crash of epic proportions.

      But it’s been about a week, so I guess I’ll go check out his blog again now 😀

      Cheers,
      -GBV

      • Harry McGibbs says:

        He’s certainly rather fiery and political but he does have a wonderful way of encapsulating somewhat tricky economic and financial concepts into neat, easily digestible soundbites. Plus he can be very funny.

        I’m pretty good at filtering out the political noise these days – best for one’s psychological well-being to try to be non-reactive as the political climate grows ever more febrile, I think.

  10. Duncan Idaho says:

    Chicago PMI “Drifts to 47.1 in September”, Lowest Quarter since 2009

    https://www.calculatedriskblog.com/2019/09/chicago-pmi-drifts-to-471-in-september.html

  11. Neil says:

    More evidence that repercussions of the the popping of the Shale bubble are reverberating outwards?

    • I have only listened to the first few minutes of this. Kirby’s hypothesis seems to be that the repo market problems are coming out of the fact that oil and natural gas prices are both way too low for producers to make money. My guess is that the financial markets are catching on to this. He seems to have a more complex argument, which I have not listened to enough of to follow.

      By the way, the way, the WSJ had an article a couple of days ago that seemed to suggest that the new head of the New York Federal Reserve (responding to the repo problems) doesn’t know what he is doing.

      ‘Why Were They Surprised?’ Repo Market Turmoil Tests New York Fed Chief
      After years of calm, the financial regulator under chief John Williams must show it can tamp down unexpected turbulence

      John Williams, a Ph.D. economist and Federal Reserve lifer, made his mark inside the central bank with his deep knowledge of interest-rate theory and a solid record as a policy maker and communicator.

      When Mr. Williams won a big promotion to Federal Reserve Bank of New York president last year, senior officials didn’t see his lack of financial-markets experience as a liability. He was so new to the markets side of the job that, in his first month in New York, he received an hourlong tutorial on using a Bloomberg data terminal, Wall Street’s ubiquitous trading-desk tool.

      .

      Not only didn’t he know much, he fired key staffers.

      Mr. Williams’s team was making its moves without key leadership after he ousted two veterans. In late May, Mr. Williams announced the departure of Simon Potter, head of the markets desk since 2012, and Richard Dzina, head of financial services. They had joined the New York Fed in 1998 and 1991, respectively. People familiar with the matter said the exits had less to do with particular policy disputes than with tension over day-to-day management issues.

      The way Mr. Williams executed the abrupt departures rattled upper management and sank staff morale, current and former staffers said. . . . Mr. Potter learned of the decision from Mr. Williams shortly before he was to deliver a keynote address in Hong Kong that had already been announced.

      At a going-away party at the New York Fed’s headquarters, Messrs. Potter and Dzina received an extended ovation that kept Mr. Williams waiting offstage to address attendees. “It was maybe three minutes,” said one attendee. “It is hard to describe how awkward the air felt.”

      • Dennis L. says:

        Gail,

        The money is coming from somewhere, who the heck is saving? Where is all this money, who has money to loan?

        Traders are not academics, karma thing vs. dogma again.

        The ovation could almost be seen as the end of an era when there was a degree of control.

        Dennis L.

      • Chrome Mags says:

        “Kirby’s hypothesis seems to be that the repo market problems are coming out of the fact that oil and natural gas prices are both way too low for producers to make money.”

        Then who’s making all the money on gasoline here in California? It’s over $4 bucks a gallon where we are an hour’s drive north of SF.

        • There is a WSJ opinion article up saying California’s Foreign Oil Problem Why the Golden State is dependent on the Saudis, unlike most of America.

          California has chosen a path of its own, that doesn’t use US oil from shale, and it basically doesn’t work very well. This is what the article says:

          . . . oil production in California has declined about 18% since 2012 as older wells are exhausted and regulatory costs make it less profitable to drill new ones. California has made up for its declining domestic production by importing more foreign oil by tanker, especially from, you guessed it, Saudi Arabia—which emits more CO2.

          Regulatory costs have also forced many refiners in the state to close. The California Energy Commission notes that “the cost of complying with environmental regulations and low product prices will continue to make it difficult to continue operating older, less efficient refineries.” Few refineries outside of the state produce the unique fuel blends required by California.

          Thus when California refineries experience problems, retailers must import foreign gasoline at steep prices, a challenge partly exacerbated by the outages in Saudi Arabia. Add California’s 61-cent-a-gallon gas tax—the highest in the country—and this is why its gas prices are now nearly $1.40 higher than the U.S. average and $1.70 more than in Texas.

  12. The WSJ has a front page article today

    Shale Boom Is Slowing Just When the World Needs Oil the Most
    U.S. oil production grew less than 1% in early 2019 as operational issues weighed on shale companies

    Some points it makes include

    “We’re getting closer to peak production and we are reaching the peak of the general physics of these wells,” said James West, a managing director at Investment bank Evercore ISI.

    . . . a growing body of data indicates the production gains from technological advances that many drillers have touted are leveling off, and older shale fields may have less oil left than originally thought. . . .some are drilling bigger and often more expensive wells to recover a similar amount of oil.

    This is one chart the WSJ shows:

    https://gailtheactuary.files.wordpress.com/2019/09/shale-wells-average-daily-production-on-new-wells-is-lower-wsj.png

    I made a chart to see how EIA reported production was actually changing:

    https://gailtheactuary.files.wordpress.com/2019/09/us-crude-oil-production-has-recently-flattened.png

    These are amounts based on the monthly data the EIA puts out. The EIA also publishes estimates of weekly data. Recent weekly and even monthly data is partly based on models. If the WSJ is right about well productivity being down, my guess is that the recent reported EIA production amounts will be revised downward. It is even possible that with revisions, peak US crude oil production may have may have taken place in December 2018, with November 2018 closely behind.

    Of course, if the big oil companies can jump in and wave a magic wand, things might change.

    • Neil says:

      I disagree with the headline “just when shale’s importance in global markets has reached new highs following an attack on the heart of Saudi Arabia’s oil infrastructure”.If anything, the lack of a massive price increase following the attack which took 5 million barrels per day off the market suggest the opposite, that demand is very poor

      • You are right. I have been saying our problem is a demand problem as well. I thought that it was interesting that the WSJ was pointing out that the problem is a diminishing returns problem.

        • Kowalainen says:

          Yes, demand is being throttled now as we speak. Expect no helicopter money.

          The rulers are cutting down on the frivolous spending by the wastrels. The oil party is basically over. The loco driver in the BAU train is triaging and booting out the most useless assets now.

          https://youtu.be/7Pq-S557XQU

  13. Harry McGibbs says:

    “China’s manufacturing sector shrank for a fifth month in September, government data showed on Monday, amid the effects of the ongoing China-US trade war.”

    https://www.ft.com/content/9fef97d2-e319-11e9-9743-db5a370481bc

  14. Harry McGibbs says:

    One hardly knows whether to be alarmed or reassured by such a comment:

    “Saudi Crown Prince Mohammed Bin Salman warned that war between his country and Iran would lead to a “total collapse of the global economy” and said he prefers non-military pressure to stymie Iranian ambitions.”

    https://www.bloomberg.com/news/articles/2019-09-29/saudi-crown-prince-says-iran-war-would-bring-down-global-economy

  15. Harry McGibbs says:

    “Banks were at the centre of the 2008 crisis because of their excess liquidity and their consequent involvement with dicey debt obligations such as subprime mortgages and other collateralised debt obligations. They have since been brought under control but the big risks have migrated to…

    “…nonbank financial institutions, [which] have increasingly replaced banks by lending to businesses via the leveraged loan market and by buying corporate bonds. (A leveraged loan is one that is extended to companies or individuals that already have considerable amounts of debt or a poor credit history.)

    “Since the 2008 crisis, the global non-financial corporate sector has stepped up its borrowing sharply, boosting outstanding debt to US$73 trillion (or 92 per cent of world gross domestic product), according to the Institute of International Finance. At the same time, the quality of the corporate bond market has deteriorated.

    “If a recession comes or when interest rates rise, a multitude of such companies will be severely distressed and face bankruptcy. If enough fail, that will constitute a major shock to the financial system… It may be much more difficult to stabilise the next global liquidity crisis.”

    https://www.scmp.com/comment/opinion/article/3030442/why-next-global-financial-crisis-may-dwarf-one-2008

  16. Lastcall says:

    Interesting how economists attribute ‘economic output’ to mega-cities. This is a financial approach. The real output is via the wealth pump as such megacities gradually impoverish their catchment surroundings. The tentacles of some mega-cities extend internationally via tribute, military adventure or reserve currency status.

    ‘Unsurprisingly, Bos-Wash reigns supreme even today, with $3.6 trillion in economic output, over 13% of the total. The corridor hosts some of the highest-paying sectors: information technology, finance, and professional services.

    The largest city in Brazil, São Paulo, is the only city in the Southern Hemisphere to make the list. The city was once heavily reliant on manufacturing and trade, but the $780 billion city economy is now embracing its role as a nascent financial hub.’

    http://www.zerohedge.com/economics/visualizing-megaregions-driving-global-economy

    In my mind, cities have always been resource parasites; the middle east is an archeological goldmine with so much history buried in the loess (wind blown soils) they failed to recognise as their givers of wealth

    • Xabier says:

      Greedy kings and queens fastening their hands on gold and jewels, while the soil blew away or turned to salt and the forests that made the ceilings of their palaces and the great gateways never returned…..

      The history of the Near and Middle East is a great teacher on many levels:nothing to beat tramping a round a ruined city or palace that ceased to function 3,000 years ago.

      • Robert Firth says:

        Xabier, I have done my share of tramping around ruined cities. Walking on the walls of Tiryns, standing under the Lion Gate of Mycenae, actually sitting on the throne of King Minos, the oldest in Europe. Walking around Troy, alas the Roman Troy, not the Ilium of the topless towers. And Ephesus, with its famous library.

        “They say the Lion and the Lizard keep
        The courts where Jamshyd gloried and drank deep”

        Yes, many cities have indeed devoured their hinterlands. As London is doing now. But others did not. Walled Urbino, for example, whose Duke took care of all sorts and conditions of men. That was Federico da Montefeltro, who when asked what were the qualities required of a ruler of men, replied “essere umano”.

        In my impossible utopia, all cities would be city states, and all cities would be walled. Good fences make good neighbours.

        • where the people outside the walls have all the food

          and the people inside the walls have all the hunger

          that’s an interesting idea

        • Kowalainen says:

          🙂

          Just like in nature, Robert, just like in nature. Nature is as we all know full of fences and arbitrary regions of man-made walls defining who belongs to “us” and “them”.

          No, fsck that sh1t.

          Mr Trump: Tear down that wall. Give them incentives to stay where they belong and procreate less by banning Catholicism and sending out a CIA asset to the Vatican.

          https://i.ebayimg.com/images/g/HuMAAMXQjWtRNZTx/s-l1600.jpg

          • Duncan Idaho says:

            Ah, Sir Ronnie The Lessor:
            The President’s Speech
            Oliver Sacks
            https://www.nybooks.com/articles/1985/08/15/the-presidents-speech/
            (Don’t know if the New York Review of Books is ok on this site)

          • Robert Firth says:

            Kowalainen, I think you are correct about fences, but a bit unfair in blaming them on man. Many species are territorial, mark their territory in several ways (urine being a common method) and then defend it against intruders.

            It is a way of guarding ones supporting ecology against raiders and parasites, and in many cases it is essential for survival. But there is a difference, I agree, between walls built to keep raiders out, and walls built to keep serfs within. The latter I, like you, unequivocally condemn.

            • According to one analysis I read, a major reason for animals’ marking territory is to keep population down. The areas marked off are more than large enough to provide the food needed for the animal and its family. The territory limits lead to fighting to keep population down.

        • Lizzie says:

          That’s in the bible too.”Good fences make good neighbours”

    • This is related to the idea that the leader of a country is indirectly the cause of the county’s growth.

      The thing that is easiest to see, at the end of the self-organizing chain of events, is what people see and attribute great power to. Of course, if the city loses its manufacturing and trading ability, it may bring an end to the good results.

    • Kowalainen says:

      Centralization inevitably leads to fast disintegration. Nature just abhors these abominations and returns them to its origins without mercy.

      But still, it will be persisted upon and mankind will continue opposing nature with all our might. Though, totally futile, but still, just because we are a bunch of dominator monkeys who thinks it’s possible to out-engineer nature with a brutalist, centralized, non-robust ecosystem which is busy exploiting and depleting the very essence of what make natural ecosystems tick.

  17. adonis says:

    hie guys just got back from holidays in the USA am i absolutely beat 10 days of disneylland im all disneyed out its good to be back home and back to reality on our finite world website while on holiday in the USA i was engaged in a debate for most of the holiday with a friend we were travelling with who believed in the peak oil theory that prices will eventually rise and that fossil fuels would continue for a long time just with higher prices our wives agreed we would not be welcome on anymore holidays with them again . My friend thinks i am crazy for believing in the theory that low oil prices would collapse everything and that we were doomed i referred him to our finite world website for the truth

    • Davidin100millionbilliontrillionzillionyears says:

      “My friend thinks i am crazy for believing in the theory that low oil prices would collapse everything and that we were doomed…”

      low oil prices will not be the driver to collapse…

      low commodity prices are a signal that the net (surplus) energy in the world is not growing…

      it seems very likely that it is not growing or even declining, though it is probably impossible to measure…

      less energy flowing through the economy will make it impossible for CBs and their governments to do anything to prevent multiple years of recession in the next decade…

      it is certainly unknown if this process will cause The Collapse in our lifetimes or not…

      if the CBs lose control of the massive amounts of derivatives in the world, then doom could come sooner rather than later…

      if the CBs can keep contagion from spreading through their absurdly complex and phony financial schemes, then we have a chance to outlive The Collapse…

      it’s too complex to predict right now…

      most of us should be able to ride out the 90+ days remaining in 2019…

      but 2020 could see The Big One…

      fun times!

      I hope your “friend” takes a look here…

      • Kowalainen says:

        Capital is now being shifted towards the production of intangibles since the resource consuming production of traditional goods and services has run its course and is now being abandoned. Factories closing and people laid off since consumerism no longer serves any purpose for redistribution and competition of wealth among the rulers in a post peak oil scenario. It’s their game and their rules.

        Ghawar is only water at this point. The oil party is over and consumerist culture with it.

        If you doubt this, watch a few drones more strike important infrastructure enabling consumerism.

    • doomphd says:

      sorry, but USA does not equal Disneyland, although there are some who are trying mightily to make the equivalence. hope you had a great time with the rides and history burlesque.

      • Robert Firth says:

        I well remember our visit to Disneyland. Main Street, where you enter, is a moving tribute to a sane environment the automobile and its builders systematically destroyed. The futuristic rides were nonsense, but the whole family loved “It’s a Small World”. But that was a long time ago, before Disney became a sanctuary city for child molesters.

        • doomphd says:

          “Main Street, where you enter, is a moving tribute to a sane environment the automobile and its builders systematically destroyed.”

          yet it celebrates the early “horseless carriages” that later began to systematically displace the horses and quaint scale and architecture of 1890s America. a tipping point unrecognized and hardly celebrated except as vague notions of “progress” (‘our most important product’, to quote the GE motto in Tomorrowland). no dystopian Orwellian notions allowed, except of course when cold, hard reality checks in.

    • Jan says:

      you are a brave man to discuss that topic on such a journey! LOL

  18. The Wall Street Journal has a new article:

    Electric-Car Dreams Could Fall a Nickel Short
    Demand for a form of nickel needed in electric-vehicle batteries is starting to outpace supply

    And after years of low prices that stalled investment by global miners, nickel supply is falling short of demand. “There’s no new nickel in the pipeline,” said Angela Durrant, principal metals analyst at Wood Mackenzie, a U.K.-based consulting firm.

    Batteries with a high nickel content are becoming more popular because of the metal’s stability under high temperatures and its resistance to overcharging, UBS said. Tesla Inc. has increased the nickel in its battery packs and reduced the cobalt—achieving the highest energy density of any electric-vehicle battery, it says, meaning a longer driving range. It plans to eliminate cobalt entirely. At a conference in May that included miners and lawmakers, a Tesla manager spoke of the importance of continued investment in mining for battery metals.

    https://gailtheactuary.files.wordpress.com/2019/09/nickel-prices-london-metal-exchange.png

    Somehow, this nickel price curve reminded me of oil price curves and the price curves of other commodities. It seems the biggest use of nickel is in stainless steel. Stainless steel demand seems to follow that of the market in general.

    • Lastcall says:

      I am looking at nickel-iron batteries for my relatively remote location; seems a no brainer for a stationary PV system… my alternative is to spend over 25k to bring powerlines in!

      Bit more expensive but seem to be far more robust.

      https://www.notechmagazine.com/2019/07/living-energy-farm.html#more-4281

      ‘Nickel Iron batteries are experiencing a rebirth in the 21st century for renewable energy applications due to their incredibly long life and robust, durable qualities. Iron Edison is proud to be the leading supplier of Nickel Iron batteries in North America!’

      • Dennis L, says:

        Don’t mean to rain on your parade, but they self discharge like mad. Orlov has a point, one needs a group and the closest thing I see are the Amish who live around me and whom I treated at a FQHC in WI. They are very hard getting to know and say little of their lifestyle, sometimes after a bit one will open up some, but they are a pretty closed group.
        I think the idea of living remotely is a fantasy and Asimov had it right when he put Seldon in what might be described as DC.

        Privilege for me is a warm dry bed, a good washer and dryer and of course a dishwasher. That alone is a challenge on a remote system let alone running it on NiFe batteries.

        If you are remote a large garden with provision for crop failure, chickens(coyotes are a challenge), ideally cattle for grain storage, the list is endless. Little House on the prairie was no picnic.

        The greatest gift is your health and hard work wears the body, Ron Regan had it right when he supposedly said, “They say hard work never killed anyone, but I say, why take a chance?”

        Good luck,
        Dennis L.

  19. erwalt says:

    First, many thanks to Gail for this blog and to many who have written
    comments. I am a reader of this blog (and its comments section) for
    about 1 year now.

    I am often impressed by Gail’s serenity when dealing with (all sorts of) comments
    and I admit I am often enjoying the awkward debates between believers
    in techno-hype (who think that technology will eventually solve all
    our troubles) and the more grounded/earthed (from my perspective)
    faction of people discussing on this side.

    Recently (when trying to clean my hard-disk from old cruft) I’ve
    viewed an older video (not viewed before) which kind of immediately
    resonated with me. It’s https://www.youtube.com/watch?v=m_kAumEqwmY
    (Post-Carbon Music) [published Dec 15, 2017, postcarboninstitute]
    {Post Carbon Institute Senior Fellow Richard Heinberg performs
    Paganini and speaks about what the future might mean for today’s young
    musicians and artists, and the important role they have to play in the
    societal transformation ahead.}

    I think this video could really serve as an obituary to IC —
    and that is why I wanted to share its link here.

    As a referral to what Heinberg mentions about music: another video on my disk
    — although not real my taste in music — nonetheless it had interesting lyrics:

    https://www.youtube.com/watch?v=-AjgauZxeeY (Sun of Gaia – Blinding
    Light | Official Lyric Video) [published Mar 27, 2016, Sun of Gaia].

    • Kowalainen says:

      Well, I think plenty of techno-dystopia content have been posted here as well pointing out the blind spot and delusions of the believers and to show the inevitable road towards mankind’s total and utter irrelevance. Indeed, the era of the humanoid worker drone is drawing to an end.

      https://youtu.be/8nt3edWLgIg

      It is simply the progression and continuation of evolution as science and engineering, which eventually will mimic the intricacies of nature and produce similar systems but totally synthetic and adapted towards an existence not dependent on the ecosystems on Gaia.

      https://youtu.be/7Pq-S557XQU

      Oh, by the way. That thing you are typing your message on is a modern day marvel which nature produced thanks to the relentless hard work and curiosity of engineers and scientists. The network which enables the sharing if our ideas and thoughts on is another one of these synthetic devices enabled by our understanding of nature, which most of us today take for granted and obvious.

      You should be careful with linear thought seeped in Luddite and Fordian misconceptions, because then I might wield the sword of a gedankenexperiment where you and I travel 200 years back in time to discuss the prospects of technological progress. But then today you would be the fool and the “deluded” techno utopist from 200 years ago would be absolutely and utterly correct in everything predicted and then some.

      • Of course, if the Internet comes to an end, or the electric grid stops working, those depending on them have a major problem.

      • Xabier says:

        Except that no one called the technologists and natural scientists ‘deluded’ 200 years ago.

        In fact, from the 16th century onwards in Europe, exciting hopes of a sophisticated Utopian earthly future were nurtured on quite a wide scale among the educated (obviously in conflict with the Church, but that was just a turf war for ideological and social control), and by the time of the French Revolution it was generally held that a perfect and wealthy society could be created through the unfettered application of Reason and Natural Science (faintly reflected in the assumptions of ‘Progessivism’ today.)

        The worker and peasants who broke machines in the early 1800’s were attached to their ways of life and livelihoods, which were at the point of being fatally disrupted or taken away from them: they understood all too well the power of the new technologies, and did not think the engineers ‘deluded’.

        Nor is it in any way a ‘Luddite’ position to point to the massive Earth-poisoning and eco-system disruption caused by all those clever engineers, physicists and chemists beavering away with absolutely no foresight or thought as to the consequences of their researches: we are the heirs of their folly, condemned to live among and use their devices whether we wish to or not, and the poor of Asia and Africa condemned to work and die the amongst mountains of poisonous waste emanating from the advanced economies, and increasingly their own.

        ‘By their fruits ye shall judge them’……..

        And what’s the other one that fits this case? Oh yes:

        ‘Curiosity killed the cat.’

        • Kowalainen says:

          You should be careful placing the blame on the engineers and scientists, in most cases they will not care one iota about how the government corporate complex chooses to implement the findings and devices to the long-term detriment of mankind as a whole. Its simply not their choice to make.

          It is a decision which is and was made, and continues to being made by the people benefiting from the spoils of IC. In extension that means most people on planet earth. We are equally guilty of perpetrating the ruthless exploitation of earth and its ecosystems. Because, us humanoids share the same mentality as apes when they seek to dominate others by force or subjugation. Actually, that applies specifically to the drones operating in the government corporate complex. They lack any means of original thought and carelessness about the unsustainable future their collective minds implicitly seeks.

          So who is to blame.

          • I think that the scientists often do not understand more than a tiny piece of the problem. They make models that they think are right, but are nowhere near right. EROEI modelers working on intermittent renewables were particularly guilty of this.

            • Kowalainen says:

              I agree, omitting the dependency towards the entire system of IC is a fundamental flaw in determining EROEI. But it is still (maybe) useful as a means of characterization and benchmarking tool with plenty of caveats attached to it.

              The problem is when it’s used in propaganda as spread by the MSM megaphones without any deeper systems understanding or interest.

            • It is worse that than that. The EROEI amounts don’t reflect the fact that the physics system is not on an accrual basis. They don’t reflect the need for backup systems, if the systems are to work. They don’t reflect the problem of seasonality. They are just plain misleading.

        • Kowalainen says:

          It is not the intentions of the gedankenexperiment.

          What I meant was the relentless progress of science and engineering eventually leading to devices that mankind, some 200 years ago would consider a pipe dream, delusion and techno-optimism.

          This is my biggest gripe with the arbiters of status quo, victims of linear thought taking the progress so far as obvious and granted. No it is not effin’ obvious at all. It’s the visionaries, weirdos and futurists who stretch the imagination and scope of human endeavors which ultimately sets the course of what is achievable by making it happen.

          • Robert Firth says:

            “Visionaries, wierdos and futurists”, a beautiful phrase. And perhaps in a high place is one Norman Borlaug, the father of the “Green Revolution” that sent world population into overshoot while systematically destroying sustainable agriculture.

            He understood this well enough: “Most people still fail to comprehend the magnitude and menace of the ‘Population Monster’…Since man is potentially a rational being, however, I am confident that within the next two decades he will recognize the self-destructive course he steers along the road of irresponsible population growth…” Which of course did not happen, as a blind fool could have predicted.

            And to make assurance double sure, he started his revolution in Mexico and India, two countries where rational population control was socially and ideologically impossible.

            In other words, I shall set you on an unsustainable course, retire with my Nobel Prize, and leave you to pick up the pieces. A classic visionary. And at the end of the day, I suspect Laureate Borlaug will have caused more deaths than all the tyrants of history put together.

            • GBV says:

              To be fair, “caused” is a bit of a strong condemnation…
              “Contributed to” may be more apt?

              Cheers,
              -GBV

            • Robert Firth says:

              GBV, your correction is both timely and accurate. It is accepted with my apology for some intemperate language.

            • Kowalainen says:

              Well, please hand back the spoils which we shouldn’t have given you in the first place.

              Ah, the irony of the Luddite government corporate drones riled up while frantically typing away on the devices they despise.

              Irrelevance, my friend, yes indeed, irrelevance awaits.

              🙂

          • Davidin100millionbilliontrillionzillionyears says:

            “It’s the visionaries, weirdos and futurists who stretch the imagination and scope of human endeavors which ultimately sets the course of what is achievable by making it happen.”

            only because the world was brimming with cheap FF for the past two centuries…

            today’s “visionaries, weirdos and futurists” will never see their imagination turn into reality…

        • Lizzie says:

          The Luddites were right in many ways. I sometimes feel I am a Luddite: I like to read maps to find my way, write things down on paper, read from paper rather than a screen.

      • erwalt says:

        > Well, I think plenty of techno-dystopia content have been posted here
        > as well […]

        Maybe it sounds odd but I didn’t think of those links as having
        techno-dystopia content. You can view the 2nd video as just an example
        for what Heinberg said in the first:

        “Esthetics are a product of time and place. But the human response to
        beauty and the urge to create it are instinctive.”

        > It is simply the progression and continuation of evolution as science
        > and engineering, which eventually will mimic the intricacies of nature
        > and produce similar systems but totally synthetic and adapted towards
        > an existence not dependent on the ecosystems on Gaia.

        … just to find out that we are very dependent on various ecosystems
        (because we are merely a part of those).

        > Oh, by the way. That thing you are typing your message on is a modern
        > day marvel […]

        And I am glad to be able to tap the Internet for as much information
        as possible that is relevant and potentially related to build my own
        understanding of the world. Maybe that is the only “evolutionary”
        purpose of IT.

        > You should be careful with linear thought seeped in Luddite and
        > Fordian misconceptions, …

        I am quite sure that my thought process is rather iterative.

        > … because then I might wield the sword of a
        > gedankenexperiment where you and I travel 200 years back in time to
        > discuss the prospects of technological progress.

        I am not sure what this kind of assertiveness would be good for.

        > But then today you would be the fool and the “deluded” techno
        > utopist from 200 years ago would be absolutely and utterly correct
        > in everything predicted and then some.

        As I didn’t predict anything and am just observing what’s happening
        around me that’s fine. Recognizing/admitting that I am one of the
        greatest fools (living in Utopia, getting distracted by so much BS,
        not thinking about “life, the universe and everything” for too long)
        is already part of my life.

  20. Harry McGibbs says:

    Is the global economy about to self-reorganise, using the human capacity for wishful thinking, to squeeze out a few more years growth?

    “The world must dramatically rethink its economic model in order to tackle growing environmental stress, inequality and development challenges, the UN said Wednesday, calling for a “Global Green New Deal”.

    “In a fresh report, the UN trade, investment and development agency (UNCTAD) called for countries to join forces and enable trillions of dollars in public sector investments to help reboot the global economy and counter climate change.”

    https://www.france24.com/en/20190925-un-calls-for-global-green-new-deal-to-boost-world-economy?fbclid=IwAR3SHgX7V2vMY1JDbjqLuL3hvdoe_prCPgDotGvO5D7nymGm5QpSyayloAs

  21. MG says:

    What does a black Slovak showbiz star of the 90s do now? Supports his family in Mali in Africa and has a business with importing fertilizers to Mali where he lives with his wife and 2 children:

    https://www.cas.sk/clanok/765098/prekvapive-priznanie-ibiho-maigu-v-afrike-zivim-12-ludi/

    https://sarm.pluska.sk/celebrity/viete-cim-zivi-ibi-maiga-waw-ten-je-poriadne-sikovny

    Ibrahim Maiga parodizing Slovak folclore in the 90s:

    https://youtu.be/8p-5jCN430Q

  22. Davidin100millionbilliontrillionzillionyears says:

    how about some humour tonight?

    https://www.cnbc.com/2019/09/28/spacex-starship-elon-musk-to-unveil-companys-first-starship-rocket.html

    “Called Starship, this rocket represents the vessel of SpaceX’s vision: Make humanity a species that lives on more than one planet.”

    “While Starship’s design has changed over the years, the goal of the rocket has not: Launch as many as 100 people at a time into deep space, using a rocket that can launch and land multiple times.”

    “SpaceX is planning to begin commercial operations with Starship in 2021. Musk previously set 2022 as the company’s goal for its first Mars mission, although Starship would only carry cargo for that initial trip.”

    “While Starship’s end goal is Mars, the company’s founder has said that the rocket would “also be good for creating a base on the moon.”

    “We’ll probably have a base on the moon before going to Mars,” Musk said.”

    some very clever comedy there…

    • Lastcall says:

      Its all part of the religion of progress. The faithful will be ‘Elated by Elon’.
      They will not be distracted by well reasoned argument.

      I have encountered many Tesla Trekkies and pointed out that 70% of all electricity is ff derived, and that all other forms are derived directly/indirectly from fossil fuels. The burning of biomass in Europe (clean green energy) that is imported in the form of wood pellets from the forests in the southern US being one of many tricks of the green facade.

      Its amazing how many atheists po.oh po..oh religi.us believers, but can’t see how they have fallen under a similar spell…..a promise of an afterlife (after fossil fuels) that never quite arrives.

      I no longer participate/debate in such situations; better to save your energy methinks. Time will makes its judgement… in good time!

    • Robert Firth says:

      Science fiction, as usual, was way ahead of them. “Non Stop”, by Brian Aldiss, published in 1958. A great read then; still a great read today.

      And forget bases on the moon. The single most valuable real estate in our vicinity is the L4 lunar Lagrange point. The ideal place for a space station, for many reasons.

  23. Denial says:

    Nuclear waste can power the U.s fit 125 years

    • Davidin100millionbilliontrillionzillionyears says:

      maybe yes, maybe no…

      but will it be tried?

      or will spending money and energy on NPPs be put aside in favor of spending money and energy on Green New Deals?

      I think I know what will happen…

  24. Hubbs says:

    “Natural ecosystems are very inefficient, because survival depends on resilience.”

    This sentence got me thinking. I read once where food gathering efficiency, or EROEI, of hunter gatherers on the African plains was 1 calorie energy expended for 10 calories of energy from food. Very efficient. Manual farming had reversed the ratio, but this was offset by the sheer volume of food produced, despite the increased inefficiency. This ratio went on steroids with modern corporate monocrop agriculture, where the energy offered by FFs was so great, the inefficiency could increase to 1 calorie of food for every 100 calories of energy expended to create it.

    So what was is the “inefficiency” of the hunter-gatherer? The high death rate? I would think carrying a child through pregnancy has to be extremely energy costly and inefficient, but this R-K reproductive strategy was/is successful.

    Is this high gestation rate the hidden resilience we are talking about? Making sure that enough survive no matter how bad the odds or a means to generate genetic diversity? Or is it the high death rate that paradoxically keeps the population low, and the likelihood of enough food for the survivors, that adds to the resilience?

    • Duncan Idaho says:

      However:
      10 Calories in, 1 Calorie Out – The Energy We Spend on Food
      https://blogs.scientificamerican.com/plugged-in/10-calories-in-1-calorie-out-the-energy-we-spend-on-food/

    • Robert Firth says:

      Thank you, Hubbs, for an interesting comment. My response is that you are not really comparing like with like. The energy the hunter/gatherers expended was their own, created by them in real time. But the energy of modern agribusiness is stolen energy, from sunlight millions of years old. We are spending our patrimony, and of course our children will reap the whirlwind.

      Concerning the high gestation rate, I think history disagrees. In the past, one method of keeping populations stable was infanticide, for instance exposing infants to be frozen to death or devoured by wolves. When a society lives close to he margin, it will resort to extreme measures to retain that margin. But yes, it did have the side effect of removing bad genes from the gene pool. In contrast to our current system of social welfare, which subsidises the bearers of bad genes.

    • Kowalainen says:

      How can anyone sustain a 10:1 deficit in energy for manual farming? Something isn’t quite right in your story.

      “ The EROI of agriculture and its use by the Via Campesin”:

      https://federated.kb.wisc.edu/images/group235/48430/martinezjoan.pdf

      • Hubbs says:

        I guess maybe the use of the plow and oxen was the use of supplemental energy, just as FF’s to power tractors is use of supplemental energy that allows for greater inefficiency. The oxen eat grass which is also derived from sunlight and converted to muscle power to pull the plow. Thus with more complexity in society, from oxen to John Deere tractors, there is greater inefficiency in the face of greater quantity of food production- the paradox that hides under the sun.
        The point I was making with high infant death rates is that gestation extracts an energy cost, that is belatedly recognized, especially by cold climate peoples like the Neanderthals who reportedly resorted to infanticide if the baby was born during the winter when food was in short supply. This is still a very inefficient use of energy to carry a child and then destroy it. Of course, other processes such as natural selection were at work, such as a baby born deformed means a wasted, energy consuming pregnancy, although a necessary expenditure in the long run if it kept the gene pool healthy.
        Genetically speaking, we are in a dramatic evolutionary slowdown for many disease processes as far as natural selection against deleterious genes.

        • Kowalainen says:

          Human agriculture is definitely a trait of overspecialization and it enables famine and overpopulation. It signifies a reduction in complexity, not an increase.

          The more biodiverse (high in complexity!) a biome is, the more resilient it becomes. Mono crop agriculture is the epitome of low complexity overspecialization fully dependent on equally overspecialized subsystems which will fail as natural resource depletion progresses.

          Then as you noted, local warlords, sects and wars ensue. Then nature heals and returns to a state of maximum achievable complexity, which IC is nowhere near of achieving.

          • Robert Firth says:

            Kowalainen, we knew better a thousand years ago. Crop rotation: summer crop, winter crop, legumes (to fix nitrogen) and one field lying fallow. Fertilise with manure, your animals’ and yours.

            Keep fields small, one furrow long (the etymology behind that land measure), and in between put rich hedgerows, a safe home for pollinating insects and pest eating insectivores (in England, famously, the hedgehog). For rice paddies, add ducks, which fertilise, eat the rather voracious snails, and help oxygenate the water. Scatter copses throughout the arable land, home to carnivores that will eat the herbivores you need to keep in check.

            And I agree, mono crop agriculture is a curse. It slowly destroys the land, even when dust bows don’t rapidly destroy it. And in energy terms it is far less efficient that traditional agriculture. And it creates a population “bloom”, as did the edible moss on St Michael’s Island. Followed by the inevitable overshoot and collapse. Which is where we are now.

            • Lizzie says:

              Very interesting, thanks, Robert. I’ve been thinking a lot about how it used to be. In the fields around here (Northants), you can clearly see the old field shapes and boundaries.
              When I was at school in NZ in the 1970’s we were taught about nitrogen fixing and crop rotation; it now seems to have disappeared. I don’t know when I last saw a fallow field.

  25. Lastcall says:

    We will miss ’em fossil fuels when they are gone; so many ungrateful people everywhere. Most of us wouldn’t be here to witness the grand fireworks.
    I have said it before, and it bears repeating, a statue of Rudolph Diesel should be mounted outside every petrol station, including ones fo EV (ils). It is the diesel engine that is the enabler of our overpopulation and over consumption, our luxuries and complexities.

    ‘One wide-ranging example of non-linear amplification occurred in the UK. In 2000, a five-day blockade of fuel distribution centres began to cascade through a range of societal systems affecting the work of hospitals, the re-supply of supermarkets and businesses, the ability of people to get to work, the filling of cash machines and so on. Disruptions and failures generated new failures, they interacted, and the impact on society began to accelerate. Had it gone on just a few more days, large parts of the economy and society would have ceased to function. ………….. Later a report by the think-tank Chatham House said “One week seems to be the maximum tolerance of the ‘just-in-time’ global economy” before societies basic functionality begins to shut down. Since then, societal systems have become more complex, faster, more efficient and interdependent.’

    https://www.genevaglobalinitiative.org/brexit-systemic-risk-and-a-warning

    • I take it that this is something recently published by David Korowicz. It sounds similar to what he wrote a few years ago. I didn’t note a date on what seems to be a web page.

    • Robert Firth says:

      “Complexity is the enemy of reliability”, a quote from one of my presentations on reliable systems. I could add that as systems become more efficient, they also become less resilient, because they have no buffer to smooth out random variations. After all, inventory is inefficient, isn’t it, so we move to “just in time”.

      Interdependence is also an enabler of chaos, because you, your family, your company, your country can be held hostage by players over whom you have no leverage. Yemeni rebels, for instance. And hence the narrative that “Iran did it”: blame somebody over whom we do have leverage, to sustain the illusion of invulnerability.

      Natural ecosystems are very inefficient, because survival depends on resilience. We could learn a lot from them, or perhaps from people like the Amish, who have never forgotten that principle.

      • Excellent points!

        As an example of the complexity being the enemy of reliability, I do not use Excel 365 because when I did try using it, I found it too unstable. It kept crashing, when I tried to do things I regularly do. Instead, I use an old version of Excel that is not web based, and doesn’t have the ridiculous number of new features that I don’t want or need. If files are ever changed to require the use of Excel 365, I suppose I will need to use it. I do use Office 365 for Word and PowerPoint.

        • Lastcall says:

          Yes, I absolutely loathe updates going on with my phone; its like you’ve come home and while you were away someone re-arranged the house. Can’t find anything, some good stuff gone missing and some useless stuff turned up.

          You think its your phone, but when you get an unwanted update, you realise you are just ‘borrowing’ it for a fee!

          • Kowalainen says:

            Turn automatic updates off and be prepared to get pwned. Not that you would note anything. But I guess you are cool with people burglarizing your home as long as they carefully steal the Crown Jewels while making sure the furniture stays in place – for your convenience.

        • Kowalainen says:

          Steve Jobs regarding Microsoft:

          https://youtu.be/IKxOywaoUKo

        • MM says:

          The software industry is a perpetual motion machine constantly destroying previous value. It has to be updated frequently and in many cases the update improves some but it it disables some that you were using before it destroys the value that you previously created. Thus this industry is the best capitalist system because it is in a “state of permanent revolution”, hehe

          • Having more computing power and ability store data doesn’t really help, because then there is a tendency to believe that it is necessary house all of this additional power and storage capacity. Excel has changed so that it can be a multi-user system, when I have no need for a multi-user system, for example.

          • Robert Firth says:

            Sigh. I well remember the day after another unnecessary update to the Windows machine in my office, when I could no longer read hundreds of files. Of course functionality improves, but what prize idiot destroys the ability to read data files that for many reasons must be kept for a long time? Of course, a Microsoft idiot.

            And then Apple followed them over the cliff, by replacing a good, intuitive user friendly system with something based not even on Unix, but on Mach, probably the worst OS of modern times, crafted by the geniuses at Carnegie Mellon University, with total contempt for the user.

      • Kowalainen says:

        Yet nature in its infinite wisdom created an interdependent decentralized systems architecture with almost a total elimination of all single points of failure, perhaps with the exception of Earth itself, resulting in an enormous ecosystem of a complexity we will never fully comprehend.

        What mankind have created is a desolate, detached savagery masked by the flimsy veneer of FF enabled IC, a thoroughly low complexity system with plenty of single points of failure and behind it all – the lies, delusions and smoke and mirrors, is the brutalist enablers of consumerist dominator culture which inevitably produces conflict as it seeks to expand its sphere of influence by the subjugation of all people, at all time making the Orwellian 1984 amateur hour.

        True high complexity systems isn’t possible to engineer without the resilience obtained from systems interdependence, spontaneous emergence and a totally democratic order with no ruler or domination scheme in place. And definitely not a single point of failure. Components and subsystems might fail, yet the ecosystem functions as it automatically heals itself as it is a highly complex system. In itself there is a full description of the workings coded into the DNA of every species living in it.

        Because the DNA is the prototype, the genome, the blueprint of the ecosystem itself. DNA is the coding scheme for creating itself through evolution leading to biodiversity which secures its own existence.

        • Xabier says:

          Just take a history of any region of Europe – small area, dense populations,constant drive to more energy-intense civilization over the last 2,000 years – and observe the tribal areas, kingdoms, principates, kingdoms, empires, ebbing and flowing, essentially in an endless succession of booms and collapses in human-made complex structures, but the ecosystem went on its own way regardless.

          Like one of those garden trampolines that allows kids to mess around as they please, with always a soft surface to land on, and protective nets so you don’t fall out.

          With the mass-exploitation of fossil fuels, we worked out how to totally screw up the trampoline itself and its safety nets.

          And yet we persist in thinking our ‘eco-developments’ and ‘sustainable suburbs’ are clever and wise (that’s what the marketing says!) when they are just another nail in our coffin.

          • Kowalainen says:

            The thing is that centralization reduces emergent complexity by overspecialization.

            And overspecialization in any system inevitably leads to extinction as it is not well adapted to change. Take for example the megafauna at the end of the last ice age. It went extinct, not because of human activity but of its own overspecialization to prosper in a specific climate.

            IC is thoroughly low in complexity and utterly overspecialized due to its horrific dependency on fossil fuels and it’s use for enabling 7+ billion people to survive.

        • Robert Firth says:

          “A totally democratic order with no ruler or domination scheme in place”

          Birds fly in flocks, almost wingtip to wingtip and beak to tail. So do bats. And somehow they never collide. So where is the “Bat Traffic Control System” that coordinates the flight of 100,000 in a swarm?

          But human engineers almost always choose centralisation, which creates unnecessary complexity that our minds cannot handle. Watch a few episodes of “Air Crash Investigation” to get the idea.

          Nature uses goal based systems: fly so you don’t hit the bats near you. We build rule based systems, and of course they don’t work, because the rules can never cover every situation.

          • Kowalainen says:

            Engineers and scientists simplify things by abstractions. The reason we are able to speak about the workings of nature at all is because we are able to think and reason about those abstractions and their relations to other abstractions and processes.

            Abstractions can never convey the full picture of nature itself. But at least we can take inspiration from the immense sophistication which is automatically created by the coding scheme (DNA) of, for example, life on earth.

            The problem arise when we start speaking about abstractions without fully comprehend them and then without rigor applying them to all sorts of systems and processes thinking “yeah, that makes sense”, but on closer inspection isn’t a manifestation of that at all, on the contrary is the total and utter diametrically opposite.

            What mankind have done is remove the emergent complexities of nature and instead replaced them with simplistic, centralized and overspecialized systems prone to catastrophic failure, such as our dependency on non renewable resources and a rickety patchwork of a financial system.

            It isn’t emergent complexity at all, rather a contrived expression of obscurity. Proper systems engineering seeks to eradicate this to the benefit of clarity and spontaneous emergence which naturally takes place in a competitive and collaborative environment with no central governing organ. The system itself becomes the governor since it is implicitly coded into the structure itself, just as in a thriving ecosystem. Then it is a matter of evolving the system until it mimics the superior systems engineering project which is nature and in extension; Gaia itself.

            Can mankind do this and prevail? I would like to believe it. But it is highly doubtful. We will most likely go down as another failed experiment, this time as semi-conscious great apes with a few brilliant ideas, but with a terrible knack of ape-behaviors such as dominating others and creating cruel overspecialized hierarchies inevitably failing its intents and ultimately leading to dystopia.

            https://cdn.shopify.com/s/files/1/0535/6917/products/despairdemotivator.jpeg

          • Self-organizing systems work amazingly well!

  26. Davidin100millionbilliontrillionzillionyears says:

    good article that probes the ramifications of Thunberg talk…

    https://www.zerohedge.com/geopolitical/greta-thunberg-poor-countries-drop-dead

    Ryan McMaken with fine quotes:

    “The challenge here arises from the fact that for a middle-income or poor country, cheap energy consumption — made possibly overwhelmingly by fossil fuels — is often a proxy for economic growth.”

    “It is thanks to this fossil-fuel powered industrialization over the past thirty years that extreme poverty and other symptoms of economic under-development have been so reduced.”

    “Greta Thunberg, ignores all of this, mocking the idea of economic growth as a “fairytale.” But for people in the developing world, money and economic growth — two things Greta Thunberg thinks are contemptible — translates into a longer and better life.”

    I’m not sure she “ignores all of this”…

    she is just not up to speed on the various knowledge of the world that is common knowledge here at OFW…

    • Harry McGibbs says:

      Cheap energy consumption isn’t sometimes a proxy for economic growth – it *is* economic growth.

      Developing countries just have growing emissions profiles because they are actually growing economically and demographically, as opposed to stagnating whilst piling on debt like the EU and Japan.

      Also the advanced nations have been outsourcing their manufacturing thus emissions to less developed nations, including the manufacture of ‘clean energy’ devices, which the advanced nations then use.

      We have a fully networked, globalised economy so it makes zero sense to look at emissions on a country by country basis.

      The article is a sneaky attempt to undermine her [apparent] moral authority but it is half-right – there is no decoupling from fossil fuels, *for any of us*. Any attempt to slash global fossil fuel comsumption would totally crash the global economy; and national reductions are pointless in the context of rising global consumption plus economically deleterious to the nations doing the reducing, as the UK may be about to discover.

      • Harry McGibbs says:

        “…whilst piling on *unproductive* debt”, I should have said.

        • Tim Groves says:

          Just a small quibble, but this “unproductive” debt is very handy for keeping people in work and making the money and the wheels of industry go round. If we all—including our governments—had kept pinching our pennies like Ebenezer Scrooge, those wheels would have ground to a halt long ago.

          • Harry McGibbs says:

            Agreed. Perhaps “ever less productive debt” is nearer the mark?

          • This is the strange way the system works, unfortunately. We need a whole lot of unproductive debt to enable the productive debt to work.

          • Kowalainen says:

            I don’t think that explicitly burning fossil fuels at the wellhead will be beneficial for the economy. The same analogy can be made for the consumerist wastrels in the economy “busying” themselves with various forms of frippery as “employment”. It is totally useless and fundamentally detaches us ever more from culture and real economic growth which is a function of utility, technology and productivity.

            In fact, they are only a wasteful detriment which is created by over expanding the money supply causing misallocation of resources leading to an expansion of the production apparatus that ends up in a race to the bottom of ever cheaper goods and services consuming an enormous amount of natural resources and energy in the process.

            Thus we are incapable of growing our culture beyond the nihilistic, self entitled consumerism and becoming something more than drones in the government corporate complex busying ourselves perpetrating the lie and delusion of realizing the hopes and dreams of a better tomorrow.

            • Artleads says:

              Been wondering what are the prospects for using existing paper money as internal currency (like clay tablets from antiquity) in local pocket communities like villages. I don’t know about paying back loans with interest. It would just be currency detached (as far as feasible) from the international system of money. There would be a way for visitors to buy and use this currency, and what they pay for it would be foreign exchange for the community. Such a system would not preclude growth of a sort. Like how many people can be housed with alternative (non market) shelter. Simply measuring the growth of such production, etc. How many roads can be repaired, etc… I’m considering such a prospect for places that are very marginal to the global money system.

            • Kowalainen says:

              Artleads; Tally sticks perhaps?

              https://en.wikipedia.org/wiki/Tally_stick

            • Artleads says:

              Measuring in such detail seems more elegant than what I suppose they call fiat currency.

      • That’s very good overview of the situation.
        In the same vein, and allow me add to your latter paragraphs what I only hinted in above response to MG is also evident from your conclusions. For example the “newly” emboldened position of say Hungary or Turkey (and others) stands on the beefy fossil fuel help line they receive or more precisely which they opportunistically piggyback on thanks to combo of favorable geolocation and relatively smarter govs at given important crossroad for such decision making. Other gov setting in similar situation would simply not risk the challenge at all, or blow all the money and opportunity on corruption only..

        In the very long term it all doesn’t matter, but in terms of short human lifespan these relative position jockeying adventures are all the rave..

      • Hubbs says:

        Quite simply, in a child’s world, the world is facing the “Cat in the Hat Comes Back” dilemma. How to get rid of that pesky pink spot (pollution)? Was Dr. Seuss psychic?
        “Also the advanced nations have been outsourcing their manufacturing thus emissions to less developed nations, …”
        Exactly. More pollution and debt! Less cheap and easy accessible energy. We blame China for pollution, but if they weren’t manufacturing everything, where would all the pollution and high-cost labor go? Right back on our doorstep. Quite the hypocrisy, or wanting it both ways.

        We will go from Cat A all the way to Cat Z, but the only way we will eliminate the pink spot is by a vast explosion/upheaval that is delivered by “Vroom” which sits under Cat Z’s hat. VROOM. And the pink spot was finally gone!

    • Baby Doomer says:

      Exposing the great ‘poverty reduction’ lie

      https://www.aljazeera.com/indepth/opinion/2014/08/exposing-great-poverty-reductio-201481211590729809.html

      Don’t believe everything you read David. I know that is hard for boomers since they will believe pretty much anything that makes them feel good.

      • Interesting!

      • Artleads says:

        Where I disagree is thinking that “poverty” reduction is the province of rich countries’ money. Instead, while a lot of money might be reallocated, the major project I see is to deal with poverty by radical lowering of “lifestyle,” coupled with science and system.

      • Davidin100millionbilliontrillionzillionyears says:

        thanks, BD…

        (wow… BD lurks… is the return of Fast Eddy next?)

        I think both articles have their merits…

        yes, the increasing FF supplies for the past few decades up through 2018 have not done much for world poverty…

        no surprise there…

        but certainly a couple of centuries of FF expansion have given billions of us a level above poverty…

        and personally, poverty reduction doesn’t move my “feel good” meter…

        sure, it would be good if the UN would come up with a Reduce Third World Poverty By Reducing Birth Rates program, but it’s out of my control…

        winning at gambling and eating dark chocolate… yup, I’m in on those typical baby boomer activities…

        welcome back!

    • Dennis says:

      Greta Thunberg mocked the idea of ETERNAL economic growth as a fairy tale. In that, she is correct. But I think that ANY growth will continue taking us down and adding to pollution, etc. But it’s also true therefore that there can be no SUSTAINABLE growth – I don’t know what Ms. Thunberg thinks about that. Does she also understand that a green revolution is impossible? But even continued economic growth will spell doom for many of us, while stopping growth would surely doom even more of us.

      • I wondered at the time, did Thunberg imagine that the boat she used to cross the Altlantic was an exercise in origami?

      • Zanbar Miller says:

        They are a mentally ill criminal family…What they think is not important unless you are studying criminals

      • Artleads says:

        Well, you can grow programs and projects. Most objectives have a growth trajectory of some sort. A baby is expected to grow. I don’t see how you can stop growth, since it seems to be part of how the world has worked for millennia. But if you are treating a cancer, you wouldn’t want THAT to grow.

        • Dennis says:

          You stop growth by dying. You use up your resources and / or poison yourself with your pollution. All societies and civilisations eventually die, collapsing under their own complexity. We are not exempt. Think of the ouroboros, eating its own tail. Of course, eventually something else will grow in our place – in THAT sense, growth never stops.

          • Davidin100millionbilliontrillionzillionyears says:

          • Artleads says:

            Which makes me remember the saying that you start dying the moment you’re born. So maybe it’s just my confused state, but dying and stopping growing don’t seem like the same thing. We could do with language that was more precise and more vague at the same time. But we’re losing languages that could help us every day.

            • Kowalainen says:

              Actually, you stop being dead when you are born. You are a instantiated characteristic of the universe. A pattern, a wave, a frequency realized by your brain and body as you are born and expands as you live. Then you return to the dreamless sleep of nonexistence from there the process start all over again, and again and again. Because; why not.

              Its funny how western civilization gets everything, absolutely everything in the wrong order, upside down, inside out, cart before the horse and wealth before prosperity.

              We are terminally diseased and obsessed with singulars, ones, zeros, monotheistic religion, centralized command and control. This myopia makes us totally miss the whole point and grandeur of nature, from where we originate, and the fine grained, decentralized, democratic and interdependent ecosystems on Gaia. It is magnificent.

              And what do we busy ourselves with? Yes, we are opposing it with all our might and thus setting up ourselves for the inevitable disaster.

              https://youtu.be/UfJhPbFW6qk

            • Dennis says:

              “dying and stopping growing don’t seem like the same thing”

              But one leads to the other, where our BAU economy is concerned, as Gail has explained on many occasions.

            • Artleads says:

              Very interesting thinking indeed.

          • Kowalainen says:

            We live in a _low_ complexity humanoid organizational structure called IC. We have actually regressed from the contentedness and interdependence of the past human civilizations.

            No complex society can form without the principles which nature stipulates:
            1. Mutual and deep systems interdependence, eg. flora and fauna
            2. Spontaneous emergence, eg. bees and flowers.
            3. Implicit democracy, no central governing organ or ruler
            4. No single points of failure, automatic recovery from subsystems failure, eg. IC
            5. Every instance codes the entire ecosystem in the system of evolution

            • MM says:

              The “beauty” of flowers stem from the question of the bees “where do I find food ?”
              What would that look like in human terms ?…

            • Kowalainen says:

              Same thing.

              A blossoming apple tree pollinated by bees signifies food in the autumn, so of course this process is seen as beautiful since apples are tasty and nutritious.

              https://scx1.b-cdn.net/csz/news/800/2011/nativebeesar.jpg

              Now that is pure, raw sophistication, the limitless emergent complexity of nature. Just look at that thing licking the nectar. We are nowhere close to produce anything like it and we have the audacity to call our primitive systems “complex”.

              The only thing we produce is contrived, obscure behemoths of brutalism, low in complexity and abysmal in robustness.

            • Robert Firth says:

              Many years ago, a colleague tried to explain to me the difference between a “complex” system and a “complicated” one. I was skeptical, but perhaps he was right. A complicated system has a lot of moving parts, but they don’t work well together, because there is no overarching goal, such as survival, that they all endeavour to meet. In a complex system, by contrast, the individual components know they are part of a greater whole, and work together.

              A swarm of bats, a flock of birds, are complex in that sense: they all work together for the good of all, for group survival. That is why a starving vampire bat will be fed by the healthier ones; why a herd of elephants will form a ring of protection around their young; why a climax forest will host thousands of species all sharing its bounty.

              As an example of the opposite, the complicated, we have an ongoing case study: the 737 MAX. Complicated, but a rube goldberg job of bolting on new parts with ill defined functionality and inadequate concern over their synergy, or lack thereof. And, of course, the canonical model of needless complication, information technology.

            • Kowalainen says:

              Complex vs complicated, it’s also my understanding of the difference.

              However, I would go so far as to say really complex systems also are complicated, which makes them really hard to fully comprehend. Such as the various functions of the genome. Nature does not care to define a clear set of easily understood interfaces and workings of its intricacies. It’s relentless at producing the most complex system achievable by trial and error. Once a subsystem, such as IC, fails it recovers by the process of evolution restoring the mishaps and the price is our to pay with suffering, but since it is what we implicitly desires, it’s what we will end up with.

              I would call most of what IC produces in its high-level systems as contrived, obscure complications created solely as smoke and mirrors to keep the populace baffled and in shackles.

              Definition of complex:
              “Complexity characterises the behaviour of a system or model whose components interact in multiple ways and follow local rules, meaning there is no reasonable higher instruction to define the various possible interactions.[1]

              The term is generally used to characterize something with many parts where those parts interact with each other in multiple ways, culminating in a higher order of emergence greater than the sum of its parts. The study of these complex linkages at various scales is the main goal of complex systems theory.”

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

              Definition of complicated:
              “involving a lot of different parts, in a way that is difficult to understand”

              https://dictionary.cambridge.org/dictionary/english/complicated

              All well defined and well behaved engineered systems define a clear and precise interface towards its sub components.

              Most larger systems usually ends up being complex from an engineering standpoint, but rudimentary compared with whatever evolution produces automatically, yet it has to be tractable to extend and understand. Once bad engineering practices enters through lousy or absent system engineering practices and careless, careerist clueless management, disaster is waiting to happen as a consequence of contrived complications and patchwork that nobody cares about nor understands.

              IT is for sure the epitome of complications driven by equally complicated brutalist/dominator corporate organizations. However, the sharing of information as enabled by the clearly defined interfaces and standards of Internet communication by the OSI layers.

              The garbage of modern IT systems is an eternal source of frustrations since its complications can be utilized to enable everything and nothing at all to the detriment of people having to deal with these abominations. But it’s slowly getting better as it is extremely costly for the organizations to let it continue.

  27. MG says:

    The desintegration continues: less and less couples in Slovakia applies for mortgages:

    https://spravy.pravda.sk/ekonomika/clanok/527251-coraz-menej-parov-ziada-o-hypoteku/

    Almost every second marriage ends up in divorce and more and more singles or divorced individuals apply for a mortgage. The limits imposed by the National Bank of Slovakia allow taking the mortgage only up to the 80 percent of the price of the property. There is also a limit for the total amount of the mortgage depending on the monthly income of a given person.

    Another level of social desintegration is here…

    • No wonder, when CEErs after the 1990s hostile takeover (to which they at first naively given consent) are each paying to Germany and France dozens B yearly in repatriated dividends/profits on suppressed wages and lower taxation (MNCs effectively allow taxing only bit of labor not profit on that territory). If you aggregate these streams in total amount from several such smaller countries it eventually ends up as one of the key revenue pipelines keeping the W Europe at least quasi stagnating for past several decades, otherwise the fall would be even more pronounced. For exploitation there must be two sides, and in this peculiar case it’s the “voluntary self destruction” form of it. And such conditions naturally after some time tend to affect family formation/social disintegration and such as well.

      ps pre1990s the families paid only ~15% of their income on monthly rent, but they swallowed the ridiculous “promise” of keeping some of the benefits of past regime and only updating it with benefits of the new incoming one; obviously did not materialize like that at all..

      • MG says:

        I do not understand why you are constantly considering the people from CEE inferior? You should thank them that with their low wages they keep the system operating. Your comments are disgusting.

        • No, that’s not proper understanding of the thrust in the argument presented.
          It’s actually very sad, and predictable (~avoidable) development to some extent. It’s kind of interesting that one of the ~lesser industrialized out of them is figuring way out of this mess in the boldest fashion so far (Hungary). Setting strong national foundation vision first (longer term autarkish), allowed eventually for achieving other important locking steps like kicking out foreign meddlers (NGOs) already, and forming non unipolar trade and political alliances on their own, albeit now still under the umbrella and imposed lukewarm sanctions for disobedience by slowly disintegrating EU/NATO. One could easily argue that their case is obvious because 1950s (civil war) and mid late 1980s (western NGOs finally settling down) gave them sort of a head start of decade or two against other “slower motion” insular countries in the region which had to go through similar processes.

          In the same vein one could also admire the active resistance to foreign meddlers in Finland (yes ~different area but), not only in the interwar period but to some degree even today as well. Although this had taken huge hit after they joined EU. Obviously, the geographical advantage is much stronger there vs. landlocked CEErs..

          It’s not about general musings on monolithic block or situation, e.g. Poland is also very specific case and past path dependency to a large degree will likely result in tragedy there again, but I won’t open this huge can of worms here.

        • Tim Groves says:

          MG, I don’t think worldofhumanotg considers Central and Eastern Europeans as inferior to Western Europeans. He may consider the CEE people as naive, but no more so than he considers the rest of humanity naive. Well, perhaps he does, but I haven’t felt that from reading any of his posts.

          In a similar vein, it is common these days for European people to express negative feelings about the level of immigration into Europe from the Middle East, South Asia and Africa. This doesn’t mean that they consider the immigrants inferior. But backers and advocates of high levels of immigration constantly make the claim that anyone who criticizes this immigration is a racist and/or a white superemacist—even when the critics are themselves immigrants who think further immigration is a problem.

          I think what worldofhumanotg was trying to do was to give a brief analysis of how the current EU system is tending to impoverish CEE countries to the benefit of WE. Again, I don’t know if his argument is valid as I haven’t studied this matter very much and I find the complexities baffling, but it seems plausible.

          Could these countries have done better for themselves without the EU there to systematize and coordinate their economic and social policies? That’s another issue, of course. But the end of communism and the entry into the EU has brought the CEE countries a mixture of benefits and burdens.

          Indeed Western Europeans should thank the Easterners for working for low wages and doing a lot of difficult jobs that help keep the system functioning. They should thank Third World immigrants for the same reason. And we should all thank the Chinese and the Indians for working for even lower wages in often hellish conditions to keep the world economy ticking over. But this doesn’t mean we shouldn’t analyze the capital, labor and consumption flows that constitute the global economy, or that we shouldn’t expose and criticize the the things that should be exposed and criticized.

          • MG says:

            The point is that in the times of globalization, there are no such things like Western Europe nations or eastern Europe nations. The large part of the Germany workforce are immigrants. The same applies more and more for eastern Europe. I do not understand this division into cunny Western Europe and naive eastern Europe. His views are simply outdated. It is a pity that he got stuck in these colonialist views.

            • Kowalainen says:

              And what do we got here?

              A nationalist getting butthurt and then reveling in the merits of globalism.

              Just decide which leg to stand on, will ya?

              I guess most people here appreciate worldof’s comments, specially when he rips into our own countries and the idiosyncrasies of our cultures.

              It’s ok, just chill. CEE’s are awesome.

              👍

            • MG says:

              It is not about being or not being awesome but about the population decline in the depleting world that, in the end, can not be offset by immigration and is characterized by isolationism and dieout.

        • I’ve always tried not be insulting, if that’s the case still for some unknown reason I can apologize.

          Now on the subject matter, this pesky factor of uncured and relapsing “naivete” is simply very visible and fascinating, it’s like a flashing sign being fed from some eternal fountain. Western Slavs have had their (occasionally interrupted) statehood for more than past 1k yrs in that very region, the ~Ugrofins (Hungary) only few centuries less, it’s similar.

          And all history of living there is just constant struggle not to be bulldozed over completely by W cultures which had “only” .5-1k head start over them thanks to commingling earlier with the Roman Empire not necessarily as its fully integral part but as heavily influenced cross-periphery at the minimum.

          It’s perhaps too harsh but getting closer to the root of it when Adolf said even Austrians (non Slavic) are merely half baked proper Germans. Similarly W Slavs never were fully part of the core proper, although they managed to settle on the continuum development status between say semi-core and semi-periphery. In fact even the Germans (in modern times) never got into that higher league of proper core of the core status themselves, they never achieved (on time and for consecutive generations) the fullest imperial scale peak vs Britain, France, Spain or Russia, US. Only say for very few brief moments of early WWI and 1939-1941 years.. when trying in manic gamble to attain it at all costs – and also perhaps in recent decade+ through EU structures but this is through other means, shared ownership with few minor players and int capital actors.

          Therefore a complex forcing of many functions seems to rule here, be it nominal formation size of the population relative to others, geography, natural resource mix and depletion, exposure to prior civ cycles + few others.

          I’m trying to visualize it all as an overlapping dance of bubbling concentric spheres (onion peeling) through space-time. In a way (re)playing history timeline of fast forward button.

          So, in effect this “fourth attempt” to form some sort of grandiose core union now on the German-French footprint seems doomed to failure at not too distant point given the other major global IC hubs and their comparative advantages and leverages (incl. energy).

      • MM says:

        I am a frequent traveller to eastern european contries and there is very little they produce in their countries for consumption in these countries. (besides some chocolate bars that keep going because of romantic remembrance). Cement, Oil, Steel, machinery, telekom, contruction electricity, mostly everyting local has been torn down and recreated from scratch with w european / international corporations. This creates a constant flow of capital/value/worktime of the people out of the country. The country stays in defunct slavery state for ever. The problem is, I do not see how the e european companies could have survived in an “open market”. Do we talk about market regulation ? No,that is communism. Do we talk about china trade war ? that is NOT communism

    • This article is about the problem of properly plugging inactive wells. The cost can be quite high for the very deep shale wells drilled today. Companies are required a small bond up front, but this is often not nearly enough. When companies go bankrupt, the problem becomes a general problem.

      I believe that the North Sea is having a similar problem with some of its wells. It is a little like the orphaned (but polluting) old solar panel problem, leaking heavy metals into the water supply. And all of those huge foundations for wind turbines out at sea, with likely no one to take them down.

      • Harry McGibbs says:

        “For small, rural municipalities in Alberta, the fortunes of a single oil and gas company can be acutely felt.

        “This summer in Mountain View County, a rural area just north of Calgary, gas company Trident went bankrupt, leaving 4,700 orphan wells and hundreds of thousands in unpaid taxes in its wake.

        “Bruce Beattie, the reeve of Mountain View, which has a population of about 13,000 people, told The Narwhal Trident’s sudden fall places a significant burden on the county.

        “We “will be looking at a reduction of half a million dollars in our revenue from the oil and gas sector,” Beattie said.”

        https://thenarwhal.ca/rural-alberta-coping-with-81-million-shortfall-in-oil-and-gas-taxes-how-did-we-get-here/

        • People don’t realize how much taxes (including royalties) that oil and gas companies pay. This is a major way that their “energy surplus” gets distributed to the rest of the economy. Without it, citizens need to pay higher taxes to support the services that they are used to.

          I am sure that natural gas wells that haven’t been plugged will contributed to the escaping methane problem, in a few years, if not now.

        • Xabier says:

          They could be honest and re-name the place: ‘Polluted View’? ‘Ruined-ville’?

      • Dennis L. says:

        Again, a depreciation issue,the book depreciation was not fast enough, perhaps tax depreciation was too quick and there was no contingent liability account for retirement of the assets at the end of the lifespan. Those of us who have run our own businesses find accrual accounting to be one of the wonders of the modern world.
        It seems to me that all economics involves is an assumption that each year there will be more resources and a CB to increase the money supply and also balance out liquidity issues secondary to depreciation errors in estimates.
        If the depreciation is accurate and the revenue is accurately reflected in cash income with a growing economy and company it is hard to run it into the ground.

        Dennis L.

        • The problem we have with the real world is that physics doesn’t work on an accrual basis. Energy needs to be dissipated each week, month, and year. Saving it is a real problem if it is electricity. In fact, natural gas is a significant problem for saving as well. It is only oil and coal that are in a convenient form for saving from one period to the next. Batteries work somewhat for saving electricity from hour to hour or from one day to the next, but not from season to season or year to year.

          We build fantasies around an electricity world, or an electricity + natural gas world, not realizing that these each require huge infrastructure and still work on a just-in-time basis, unless the electricity has battery backup.

      • Dennis L. says:

        Periodically I receive invitations to lease out land for $1-1.5K/year/per acre with a 20 year or so lease for solar. The state mandates each utility have so much solar to be environmental, etc. My concern has always been what happens when they are done? Who removes all that crap? Yes, cash flow increases, but at the end of 20 years, the land requires huge expenses to remove all that stuff and listening to those on this site, what does one do with the now toxic waste? I don’t know of tax policies that allow pre tax income to be accumulated for this purpose.

        As I have said before, I think the Amish do better in this area, it works regarding wealth accumulation. Odd, they really don’t seem to think much in terms of cash money wealth.
        Perhaps this weekend I shall drive past the Amish farmer grazing his cow on the highway easement for the ditch – true win win. He gets free grass, the county doesn’t have to mow, but wait, employment drops without increased energy through put running the mower.

        Dennis L.

        • Exactly. The folks who made the solar panels don’t set aside anything for dealing with the toxic waste. Neither do those who install them and distribute them. The people who have them installed on their land do not either. If we install huge multiples of the amount we are installing now, the problem just gets astronomically worse.

      • Dan says:

        My brother in law is a crane operator – He works everywhere then will be off then back on again. He told me once he wouldn’t step foot in a crane for less than $100/HR. His latest work has been pulling pipe out of wells here in East Texas.
        I have to fly in a small aircraft from time to time in my job. East Texas is about timber, refineries, ports and canals, chicken farms, and shale rigs. Get up in the air and the landscape looks like a quilt with pads scattered in the forest, fields, and cuts for miles for pipelines.
        The trucks that carried the sand and tracking fluid and waste – You don’t see them. The wells are overgown with brush.
        A lot of logging but I think it’s a result of increased construction related to storm damage (cat 3-5 hurricanes), Midwest and Texas flood events. House insurance rates up – at least mine are.
        So anyway costs are up for everything and if what we know is correct shale drillers have yet to make a profit much less worry about clean up costs.

  28. Harry McGibbs says:

    “The State Duma of the Russian Federation is preparing a draft law aiming to introduce negative rates on foreign currency deposits…. The Ministry of Finance has already supported this idea, the newsru portal writes…

    “The share of Russian deposits in foreign currency has been growing continuously since early 2019. As a result, by the beginning of autumn it reached a record-breaking $95.5 billion in four years. According to experts, this is due to the weakening of the ruble, which is why Russians use “protective” currencies to save their savings.

    “The new bill on negative interest rates on foreign currency deposits fits into the new government economic initiative within the framework of dedollarization.”

    https://belsat.eu/en/news/russians-to-lose-savings/

    • I saw a WSJ chart today indicating that Russia’s interest rates are the highest of any of the major countries shown in the chart. No doubt, investors from countries whose own currencies has lower yields are trying to pile in, and use derivatives to protect themselves from adverse currency changes.

      Russia seems to be determined to keep this group out by forcing them to take negative yields, like they would obtain in their own countries. This is no doubt money seeking the highest yield wherever they can find it. It is “easy come, easy go” money. It is hard to depend on.

  29. Harry McGibbs says:

    “Indicators that gave an early read to recession in 2008 are flashing red and suggest the UK is already in recession.”

    https://www.theguardian.com/business/2019/sep/27/brexit-watch-indicators-suggest-uk-is-in-recession-an-expert-debates-the-data

  30. Harry McGibbs says:

    “Chinese industrial companies’ profits fell in August, with the 2% drop from a year ago another sign of how the slowing economy is hurting business and increasing problems for the government.

    “The fall was due to a slowdown in industrial production and sales, the deeper drop in producer prices and super typhoons hitting the nation, according to a statement from the National Bureau of Statistics Friday.”

    https://www.bloomberg.com/news/articles/2019-09-27/slowing-economy-deflation-cause-china-s-company-profits-to-drop

  31. Harry McGibbs says:

    “The consequence of continued aggressive easing by the BoJ and ECB is that the US dollar is seeing continued unwelcome strength. Unwelcome in the sense that the US is in effect, importing eurozone and Japanese deflation. I simply don’t think this is sustainable much longer. Patience is wearing very thin at the White House at the Fed’s lack of easing vigor and the impact this is having on the dollar.

    “I expect President Trump to take matters into his own hands and respond with real aggression imposing tariffs on EU auto exports to the US and authorizing unlimited foreign exchange intervention to drive the dollar lower.”

    https://moneymaven.io/mishtalk/economics/currency-war-intensifies-dollar-strengthens-how-long-before-trump-reacts-HNsPmkuzCkS8eu5nPGX9Wg/

    • Mish reports that the BIS claims that the US dollar is 25% overvalued relative to the Euro and 50% overvalued relative to the Japanese Yen. This change took place starting in 2014, when the US discontinued QE and (as a result), the price of commodities in US dollars fell. The US didn’t need QE, but Japan really did, and the Eurozone needed it to a lesser extent. With the changed relativies to the dollar, fuel prices became higher in Japan and the Eurozone, disadvantaging them further, and helping to hold down oil prices.

      https://gailtheactuary.files.wordpress.com/2019/09/bis-view-of-us-real-dollar-exchange-rate-versus-eurozone-and-japan-bloomberg.png

      The US has its own energy supplies. Europe is bad off; Japan doesn’t have any hope at all. Growth is in the doldrums in the Eurozone and doesn’t have much hope in Japan. No wonder Japan has used an off the chart amount of QE!

      • Robert Firth says:

        Who cares how much the US dollar is worth in fake currency? The only trustworthy measure is how much it is worth in troy ounces of gold. Currently, about $1500 for one ounce. And not so long ago, it was $20 per troy ounce. Until an idiot Congress, and a terminally idiot Woodrow Wilson, created the Federal Reserve.

  32. Harry McGibbs says:

    “American corporate debt is close to all-time highs, says Daniel Bergstresser on PBS. The total value of non-financial company debt is now almost $10trn, equivalent to half of America’s GDP…

    “As long as corporate profits remained strong nobody thought that the debt was anything to worry about, writes Justin Lahart in The Wall Street Journal. Yet recent revisions to profit figures have made the “debt-to-income” tabulations look a whole lot worse.”

    https://moneyweek.com/515656/cracks-emerge-in-corporate-debt/

  33. Harry McGibbs says:

    “…several big emerging economies are already in recession and some advanced economies (including Germany and the United Kingdom) are dangerously close… The slowdown in growth in all the major developed economies, including the US, confirms that relying on easy monetary policy and asset price rises to stimulate demand produces, at best, ephemeral growth, while tax cuts for corporations and wealthy individuals fail to trigger productive investment.

    “The bigger concern, according to the report, is that 10 years on from the crisis, the global economy remains excessively financialized and fragile.”

    https://www.hellenicshippingnews.com/slowing-global-economy-reveals-debt-distress-as-biggest-threat-to-international-stability/

    • Harry McGibbs says:

      “That fateful year of 2008, global debt was ‘only’ about $175 trillion, and you’ll recall that it was bad real-estate loans that triggered what came close to the end of money, also known as the end of the world. Now global indebtedness is 40 per cent higher.”

      https://www.spectator.co.uk/2019/09/the-world-is-stuck-in-a-debt-trap/

    • A desire for “sustainable development.” This is really an oxymoron.

      • Harry McGibbs says:

        Like ‘green industrial revolution’. Quite a few of them about in these confused times.

        • Robert Firth says:

          Ah, good people, you have touched a raw nerve. “Oxymoron”, first used in English in the seventeenth century, does not mean a noun and adjective that contradict. In its proper use, it means a seeming contradiction that expresses a deeper truth.

          Sir Philip Sydney, in his “Astrophil and Stella”, coined an early one: “absent presence”; the sense that the beloved, though physically absent, is present in the lover’s thoughts. John Milton, in “Paradise Lost”, coined “darkness visible”.

          But the first oxymoron, and in my opinion one of the best, is two thousand years older still: Sappho’s “Eros glukupikron”, “bittersweet love”. It is with good reason that Plato called her The tenth Muse.

  34. Harry McGibbs says:

    “The global economy faces a prolonged slump as the US slows, the UK and eurozone struggle to recover historic growth rates and China sinks towards 5pc annual growth over the foreseeable future, economists have warned.

    “World GDP growth will slide to 2.7pc this year and stay below 3pc out to at least 2023, according to experts at Citibank, who trimmed forecasts for this year and next by 0.1 percentage points.

    [You wonder if world GDP is even this high, given that the real value of global exports is contracting and global manufacturing is in recession.]

    “This would represent the longest spell of sub-3pc growth on the International Monetary Fund’s records going back to 1969…”

    https://www.telegraph.co.uk/business/2019/09/26/global-slump-ahead-banks-slash-forecasts-predict-four-years/

  35. milan says:

    Greta?
    Go here and see what occurred back in `1992
    https://twitter.com/CalebJHull/status/1177221680999124992

    • 1992 was during another period of low commodity prices and low demand growth. It was immediately after the central government of the Soviet Union collapsed in December 1991. At least some people then felt that some kind of change was needed, too.

  36. Ed says:

    Greta, how do you feel about violent removal of seven billion competitors? It is a solution.

    • Xabier says:

      Good question. These people, however, are in favour of the unhindered ‘Right to Migrate’ as the solution to global problems, not addressing the obscene over-population problem.

      • If people want to live where it is warm year around, the need to migrate will be in the opposite direction from what it has been recently. Hunter gatherers originally came from Africa, after all. People from Sweden and the rest of Europe may want to head south.

      • Country Joe says:

        Damn humans won’t lay down and die. When there ain’t no food they go look for some. Refugees. You got to feed um or kill um. We need a lay down and die virus. This 7 billion mouths to feed isn’t working. Love the old fat white men attacking the little girl. Desperate. Species come and species go.

        • Davidin100millionbilliontrillionzillionyears says:

          “This 7 billion mouths to feed isn’t working.”

          sure it is…

          the world population continues to grow, which is the ultimate measure that it is working…

          down the road in a decade or two, there will be far less FF energy flowing through the world, and there will be far less than 7 billion of us…

          it will work for 7 billion until it doesn’t…

          • Country Joe says:

            Tell those thousands of folks on the Mexican border how well it’s working. I know….let them eat cake. And global warming???? Tell the maid to turn down the thermostat. How hard is that? I got hot and cold running water. It’s all good.

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

      Greta is a product of her generation and times. As we all are and were molded as such.. The College of Hard Knocks is unforgiving and nothing personal. No rhyme or reason on an individual level.
      Gail is correct, we think we are in control but really are not, a self regulating system based on various Laws of Science. We are resource/energy gobblers! As Gail commented, it’s really not our fault, though that does not absolve us from our actions/reactions.
      I like her observation that when the wheels fall off BAU those remaining resources we focus on here will be locked forever (meaning in the foreseeable future).
      I mention sometimes we people take a lot for granted and don’t realize how temporary our modern way of life really is🤑

      • Tim Groves says:

        Greta is also a product of central casting. You don’t get to stand up and speak at the United Nations at the age of sixteen unless somebody is facilitating and coordinating your act.

        Also, Greta is prone to hysterical and theatrical overreaction, is dogmatic and judgmental, and is extremely angry and accusatory. Anyone with an ounce of compassion would hope that behind the public image she is actually a well-adjusted teenager and that her indignant control-freak act is just an act. Sadly, behind the act there seems to be a thoroughly mixed up and tormented young girl who is being exploited by people who want to put a choke hold on everybody else’s future fossil fuel consumption.

        These days, it takes a global village to mind-rape a child. Somebody needs to step in to protect Greta and the rest of her generation from the child abuse they are being subjected to. But as we all know, in our society, children are expendable. Children are props. And by the time the people using Greta are done with her, who knows what kind of mess she will be in. She may be correct that somebody has stolen her dreams and her childhood, but she seems unaware of who the real thieves are.

        https://www.frontpagelive.com/wp-content/uploads/2019/09/greta-thunberg-to-world-leaders-how-dare-you-you-have-stolen-my-dreams-and-my-childhood-2.png

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

          Tim, thank you for your opinion….yes, there is a play on public opinion. Reality is of no consequence as far as BAU is concerned. We have no choice but to go full throttle.
          Perhaps the PTB are holding Greta in reserve for a time when they HAVE TO ration resources among the population and have valid scientific reason for doing so.
          Of course, the share they are enjoying will be spared cutbacks, after all they bear fruits of being in command!
          Others, many not be so lucky….
          Used and dehumanized’: Dozens of boys found chained in Nigeria
          By Garba Muhammad and Bosun Yakusak
          ReutersSeptember 27, 2019, 5:51 AM EDT
          KADUNA, Nigeria (Reuters) – More than 300 boys and men, some as young as five and many in chains and bearing scars from beatings, have been rescued in a raid on a building that purported to be an Islamic school in northern Nigeria, police said on Friday.
          Most of the freed captives seen by a Reuters reporter in the city of Kaduna were children, aged up to their late teens. Some shuffled with their ankles manacled and others were chained by their legs to large metal wheels to prevent escape.
          One boy, held by the hand by a police officer as he walked unsteadily, had sores visible on his back that appeared consistent with injuries inflicted by a whip.
          Some children had been brought from neighboring countries including Burkina Faso, Mali and Ghana, police said, while others had been left by their parents in what they believed to be an Islamic school or rehabilitation center.

          Yes, ideological will go a long way to maintain order and control, regardless of the factual reason of way.
          As Gail pointed out, the general population will probably never have a clue on why!🙄

        • Kowalainen says:

          And what are Greta’s dreams? Let me guess: Living the life she is used to, which is enabled by the ingenious masking of all the heavy industrial processes which is consuming an enormous quantity of natural resources and giving her the prosperity she is spoilt beyond belief from.

          The delusion is strong and universal among us all. Everyone is to blame and its nobody’s fault. But lets pretend for a little while something can be done about it, it feels better that way.

          https://occupymelbournenet.files.wordpress.com/2015/01/alan-man.jpg

        • – Asperger’s lite(er) form of Autism
          – also it’s easy to check upon her “guiding” parents, I guess there is the most notable video with her father from ~2018 outing much of the scam.. ideologue limousine liberal-green spilling the beans in public..

    • Thanks! It does sound ominous. I see the link you provided is a copy over of a Nick Cunningham article from OilPrice.com

      https://oilprice.com/Energy/Energy-General/Secret-Survey-US-Shale-In-A-State-Of-Deep-Anxiety.html

      The Dallas Fed said that the business activity in the oilfield services sector fell to -21.8 in the third quarter, down from 6.6 in the second.

      Another reading demonstrated the pain for oilfield services. The Dallas Fed’s “equipment utilization index” plunged to -24 from 3, and the figure for the third quarter was the lowest since the oil market’s nadir in 2016.

      Problematic for shale drillers is that costs still grew, although at a much slower rate. The “input cost” index stood at 5.6 in the third quarter, an indication of slowing cost increases compared to the 27.1 reading in the second quarter. But the bad news for the industry is that the reading was still in positive territory.

      Employment is also weakening. The employment index fell to -8.0 from -2.5, meaning that the Permian likely saw job losses for the second quarter in a row.

      When surveyed by the Dallas Fed, 42 percent of the executives from 142 oil and gas firms said that low prices was their most significant constraint on growth. Another 20 percent said the lack of access to capital, followed by 13 percent of which said investor pressure to generate free cash flow. Only a small percentage of respondents said that infrastructure bottlenecks and labor shortages were the top constraint on their growth.

  37. Harry McGibbs says:

    “The attacks on Saudi Arabia’s oil facilities delivered a shock to the kingdom at a moment of economic fragility, with its attempts to jump-start nonoil industries struggling and foreign investment down.

    “Even before the Sept. 14 attacks took out half the country’s oil production, nonoil exports were trending down in almost every month this year, according to Saudi bank Jadwa Investment.”

    https://www.wsj.com/articles/attacks-on-oil-facilities-threaten-fragile-saudi-economy-11569427859

  38. Harry McGibbs says:

    Singapore considered a bit of a canary in the coalmine for the global economy:

    “Singapore’s factory output plunged by 8 per cent year on year in August, extending the Republic’s manufacturing decline into its fourth month and proving July’s reprieve short-lived. Industrial production was dragged down by the struggling electronics sector, according to statistics released by the Economic Development Board on Thursday.”

    https://www.businesstimes.com.sg/government-economy/singapore-factory-output-plunges-by-8-in-august-dashing-hopes-of-recovery

    • Robert Firth says:

      Ah, Singapore, my home for 20 years. Under the wise, if autocratic, stewardship of Lee Kuan Lew it made a lot of progress, as a deliberately engineered technocracy. I did not like the man, but I admired him as a modern Polykrates.

      As the saying goes, the son of a good emperor is a bad emperor, and his son causes the fall of the dynasty. Singapore is following that well trodden path.

  39. Aravind says:

    Not sure whether this has been posted before. Interesting interview with Vaclav Smil.
    https://www.theguardian.com/books/2019/sep/21/vaclav-smil-interview-growth-must-end-economists

    • MG says:

      I would question various his statements. The myth of the return back is one of them. Also the overpopulated and poor Phillipines is not a country I would like to live in etc.

      More and more, I feel there is a myth of the origin of the humans in the nature and that returning to the nature saves mankind.

      But no, the humans were created by the energy, the Bible is thus closer to the truth. As the humans face the depletion of the cheap and abundant reliable accumulated energy, our populations face extinction, because we lose our ability to adapt the Earth’s environments to fit our survival.

      The concept of a nature that is our home we should return to is totally false and misleading.

    • MG says:

      This is ridiculous: “So you can cut consumption in Copenhagen or Sussex, but not in Nigeria.”

      They need to cut population growth in Nigeria and then they can enjoy more energy per capita. He does not know that?

      • Lots of people want to distribute antibiotics, nets to prevent malaria, and lots of other things to help life expectancy. No one wants to distribute birth control pills.

    • Thanks! I very much like Smil’s writing. He gets the energy story pretty much right. He doesn’t understand or care about things like prices or other pieces of the economic story, as far as I can tell.

      I met him once, when both of us spoke in Brussels to a support group related to the European Union. He is 75 years old, and goes zip-zip-zip. He flew in and flew out (from Canada), leaving as little time for the talk as possible. Certainly no time to have a dinner with other speakers the night before. He is very no-nonsense. It seemed to me that he would never be interested in a blog post, because that would not be the kind of information he would want to reference in his book. We visited briefly, but I think the visit consisted mostly of my asking him a few questions. He didn’t seem to be very interested in talking to me.

      • Xabier says:

        Smil is, I am afraid, a typical academic in taking that attitude: hence being a little too narrow in his focus, even if he gets quite a lot very right indeed.

  40. Harry McGibbs says:

    “Brexit has been a pressure cooker for our government, our parliament, our political parties, our MPs and for all of us too – and finally the tensions really erupted.

    “…the government’s top legal brain unleashed an unfettered attack on parliament, working himself into a frenzy as he raged against the “spineless” Labour frontbench and “cowardly” MPs for refusing to grant the prime minister an election.

    “This parliament is a disgrace,” he boomed to the jeering of opposition MPs. “This parliament is a dead parliament. It should no longer sit, It has no moral right to sit on these green benches.””

    https://news.sky.com/story/fury-and-mistrust-as-the-brexit-pressure-cooker-blows-its-top-11819619

    • Harry McGibbs says:

      “German export expectations in September fell to their lowest level since 2009, the Ifo institute said on Wednesday, in the latest sign that waning foreign demand and Brexit uncertainty are pushing Europe’s largest economy into recession.”

      https://www.reuters.com/article/us-germany-economy-exports/german-export-expectations-in-september-slump-to-lowest-in-decade-ifo-idUSKBN1WA2O3

      • Harry McGibbs says:

        “…negative interest rates as follow-up and addition to massive QE were effective in keeping the Eurozone glued together because they allowed countries to stay afloat that cannot, but would need to, print their own money to stay afloat. They did so by making funding plentiful and nearly free, or free, or more than free.”

        https://www.truthdig.com/articles/trumps-recipe-for-economic-disaster/

        • This article is by Ellen Brown, who often has useful things to say.

          One point she makes is

          As proprietary analyst Rob Kirby explains, the economy would crash if interest rates went negative, because the banks holding the fixed-rate side of the swaps would have to pay the floating-rate side as well. The derivatives market would go down like a stack of dominoes and take the U.S. economy with it.

          The link she gives is to a youtube video by a fellow named Rob Kirby, called “Gold and Credit Markets to Dwarf 2008 Crisis.” It is a 56 minute video that I have not watched. I need a few more hours in the day. This is the link:

    • Robert Firth says:

      Forget the UK parliament; it is no longer relevant. The sole remaining Power is the (laughably called) Supreme Court.

      It is a fundamental principle of jurisprudence, over 2500 years old, that no man should be the judge in his own case. On Tuesday, the Court acted in deliberate and total violation of that principle, by ruling that it had standing in the case, when no such standing had previously existed.

      With this precedent, it can now rule the same on any case, whenever and by whomever brought, and can then make whatever judgement it pleases, however absurd, and from which there is no appeal. That is not representative democracy; it is tyranny.

      After her defeat by Sparta, Athens was rued by the infamous Thirty Tyrants, a regime imposed on them in 404 BC. It lasted for a year, until they were overthrown, expelled, or killed. Sic semper tyrannis.

      • Xabier says:

        Exactly. By their antics, most MP’s seem rather intent on underlining their irrelevance. ‘Remainers’ seem very happy to overthrow representative democracy: one wonders whether they even grasp what it is (was)?

        • Harry McGibbs says:

          I dare say it wouldn’t be my preference but again one can see the appeal of a straightforward autocrat who brooks no dissent over this endlessly disharmonious rabble of egotists.

          • Xabier says:

            My dog, waiting to be thrown a scrap from the dinner table, shows more calm dignity and self-control than most MP’s at present. Can the institution sink any lower? When a student, I instinctively disliked all the political activists; and on reflection I suspect it was the egotism inherent in their posturing, whatever the cause of the moment.

          • Xabier says:

            Just waiting for the call, Sir Harry: you’d make an excellent chief press officer, if I may say so, and I’d look forward to your daily summaries at No. 10. What did I say? Forgive me! Lord Harry, of course. 🙂

  41. Harry McGibbs says:

    “Central banks “have used their tools to a large extent already” and are running out of options to mitigate the impact of global economic risks, Deutsche Bank’s CEO warned on Wednesday.

    “The likes of the European Central Bank and U.S. Federal Reserve have “no conventional measures left to effectively cushion” the blow of a “real economic crisis,” Christian Sewing said at the Sibos banking conference in London.”

    https://www.cnbc.com/2019/09/25/deutsche-bank-ceo-central-banks-have-no-tools-left-to-cushion-crisis.html

    • Harry McGibbs says:

      “…the financial world is at risk of another crisis. This time, it will be called a “derivatives crisis”, and it will make the subprime mortgage crisis of 2008 look like a walk in the park.”

      https://www.bangkokpost.com/opinion/opinion/1758639/fresh-qe-wont-stop-global-recession

      • I agree that we are likely headed for a derivatives crisis.

        • Davidin100millionbilliontrillionzillionyears says:

          “Common stocks in the whole world are now worth $68.2 trillion, but global derivative investments are valued at $542.4 trillion. If the collapse of stock markets caused a worldwide depression, imagine what the collapse of a system that is eight times bigger could do.”

          if that system was about to collapse, I don’t see why governments would allow the collapse to happen and destroy the world economy…

          somehow, I suspect that these derivatives are sort of useless to the real economy, and any payouts that would destroy the system will not be allowed to be paid…

          that’s a vague understanding from me, but essentially why wouldn’t these derivatives be declared null and void if it means saving the world economy?

          • poopypants says:

            yah but. What about the greek bond defaults? no contagion… so who knows. imaginary things have imaginary fixes.

          • Christopher says:

            There is a lot of confusion concering the derivatives market. Notional amounts and acual market value are often intermixed. The notional amount may be used as a measure of the underlying risk but it is not necessarily meaningful to compare it to global gdb.

            I’m not saying that there’s not a problem with the derivatives.

            “According to the most recent data from the Bank for International Settlements (BIS), the total notional amounts outstanding for contracts in the derivatives market is an estimated $542.4 trillion. But the gross market value of all contracts to be significantly less: approximately $12.7 trillion. ”

            https://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp

            • Perhaps the selling price of those derivatives should be a rather large multiple of what is actually being charged for them. The market is essentially “giving away” guarantees that interest rates and currency relativities will remain stable, and that BAU will continue as before. If they were priced properly, the gross market value would be a whole lot more than $12.7 trillion.

            • Christopher says:

              “Perhaps the selling price of those derivatives should be a rather large multiple of what is actually being charged for them. The market is essentially “giving away” guarantees that interest rates and currency relativities will remain stable, and that BAU will continue as before.”

              The modells used to price derivatives are idealisations, quite different from the real world of cross interdependece. Often you use an underlying assumption of growth in the geometric brownian motion, seneca cliffs are definitely unknown and so on…

              You may be right about that the derivatives will cause the next crisis.

              Yesterday the fed increased the amounts of the repo operations:
              https://www.zerohedge.com/markets/second-term-repo-oversubscribed-funding-shortage-keeps-getting-worse-and-nobody-knows-why

              The guy talking about the huge amount of negative yielding debt fleeing from europe to usa was interesting. Maybe he is right. In that case I guess that fed will have to lower their rates and start doing QE. That may keep things calm for a while, at least a short while.

            • None of the people doing the modeling understand how “fat the tail” of the distributions really is. They also don’t understand that BAU can’t continue indefinitely. Guaranteeing that it can is a recipe for failure.

            • Davidin100millionbilliontrillionzillionyears says:

              “… significantly less: approximately $12.7 trillion.”

              interesting replies…

              so this valuation would be far below the valuation of all stocks of $68.2 trillion…

              not that the collapse of a $12 trillion system would be without problems, but that amount perhaps puts the problem into a more proper perspective…

          • John Doyle says:

            Yes, they are likely to be “Jubilee-d”. as David Graeber reckons. They certainly won’t be paid out

          • I don’t think that declaring the derivatives “null and void” would save the world economy. Cross border investments would suddenly become impossible. There would be big losses for many investors on cross border investments. ETFs would fail to work. Those holding ETFs would find themselves with far less value than they had before. Airlines that have sold tickets based on hedged oil prices might have a problem, as would oil companies who hired workers depending on hedges to provide a floor for oil prices. Money market funds likely would not be able to give back the balances that they promised.

            There would likely be a lot of debt defaults many places in the system. Stock prices would likely fall as well because the “demand” coming from market-tracking funds would be difficult to maintain.

            • Davidin100millionbilliontrillionzillionyears says:

              okay, there’s a lot to unpack in that reply…

              “I agree that we are likely headed for a derivatives crisis.”

              so, maybe a future article about what or where or when or how there will be such a derivatives crisis?

              the idea of others for a Green New Deal article sounds promising as well…

            • The derivatives crisis problem may be very close at hand. Remember that the September 2008 crisis was to a significant extent a derivatives crisis. I am not an expert on derivatives. I need to upgrade my knowledge level before writing about the issue.

            • Christopher says:

              The derivatives may be the straw that breaks the camels back. Derivatives are mainly interest rate derivatives or fx derivatives. The interest rate derivatives market is substantially bigger.

              What is, at the present, our main vulnerability in the global system, interest rate or foreign exchange? Despite the smaller size of the foreign exchange derivatives market I would say that this is where derivatives could start popping and becoming a problem, when/if currencies start being shaky.

              Interest rates can to a higher extent be controlled by the central banks.

      • Davidin100millionbilliontrillionzillionyears says:

        I like his first conclusion:

        “The first conclusion is that new efforts to save the world economy from recession will fail, because central banks are no longer as powerful as before. A global recession is unavoidable.”

        CBs are less powerful because they have no power over the declining flow of energy through the world economy…

        the declining net (surplus) energy in the world will make CB efforts end in failure…

        I think that negative interest rates are one of the first signs of the upcoming complete failure of CBs…

        perhaps in the short run, the CBs will be able to prevent a derivative crisis…

        in the long run, the next big crisis is coming no matter what, whether it’s a derivative crisis or other…

  42. Harry McGibbs says:

    “Weaker growth in both advanced and developing countries means the possibility of a global recession in 2020 is a clear and present danger, the UN has warned.

    “In a flagship report, the UN’s trade and development body, Unctad, said 2019 will endure the weakest expansion in a decade and there was a risk of the slowdown turning into outright contraction next year.

    “The UN said warning lights were flashing around trade wars, currency gyrations, the possibility of a no-deal Brexit and movements in long-term interest rates but there was little sign that policymakers were prepared for the coming storm.”

    https://www.theguardian.com/business/2019/sep/25/global-recession-a-serious-danger-in-2020-says-un

  43. Ed says:

    I love Greta. I love watching billions of people burying their heads in the sand. I did not hear anything, I did not see anything, it is not real. Go Greta Go.

    • Lastcall says:

      Ha, she sums up the stupidity of it all beautifully.

      It is my understanding that in order to save her from flying, several other people took flights to enable her to take a high-tech, fossil fuel-derived boat across the Atlantic.

      Like any software bug, they will apply a patch – you know, arrange a few feel good meetings, bit of PR, wet bus ticket…blah blah blah.

      Face it, this human experiment is a ‘once in a planet-time’ event; I don’t need some little angry face ruining it for me.

    • Lastcall says:

      Hey Greta, start with the US MI Complex; huuuuuuuuge user of fossil fuels, huuuuuuge polluter, huuuuuuuge destroyer. Get back to us when you get that sorted. Now thats the US economy gone.

      • Robert Firth says:

        “Der Krieg ist also ein Akt der Gewalt, um den Gegner zur Erfüllung unseres Willens zu zwingen.” Carl von Clausewitz.

        Well, the US military industrial complex long ago abandoned that relatively same view. It didn’t work in Vietnam, or in Iraq, Syria, Libya, Afghanistan, …

        It has reverted to an older definition: solitudinem faciunt, pacem appellant . And it will end very, very badly. Not thanks to Greta, but thanks to Nemesis.

        • poopypants says:

          Yes the santimonius tone and fanaticism clearly implies unpleasant wishes for those judged climate criminals. In fact I would argue that the real comunication is the implied threat. Politicians of a certain sort have made this their paradigm so its no wonder they enjoy gretas performance. When in doubt judge and condemn! Content optional. Jerry Springer now with new stronger flavor. You have stolen this poor little girls future and every waifs future too climate criminal!

          ‘Do it to Julia! Do it to Julia! Not me! Julia! I don’t care what you do to her. Tear her face off, strip her to the bones. Not me! Julia! Not me!'”

          Orwell 1984

    • Seemingly offtopic but gets you the evidently needed context:

      The migrant “no go zones” terrorizing (not only) elderly locals in southern urban areas of Sweden you probably did not hear anything about or depending on your background could be even deemed as natural order of your(our) world anyway.

      I recall even 20+ yrs ago when first shocking signs of violence of migrants erupted there and to offer in precautionary manner paying for a cab evening ride home crossing such zone was almost deemed as sexist, misogynist, racist, and inhuman. For the indoctrinated Swedish soul in various feel good utopias (past ~80+yrs) it’s better to weather it on their own and suffer no matter what, it’s like some sort of cultist protestant self lynching attitudes go bonkers, truly bizarre. Now, it’s obviously ~10x worse on the ground.

      Sweden is simply leapfrogging ahead in various vectors of social development or rather degradation, they are just ahead by few decades. It’s like Japanese society being (among) first with the phenomenon of spreading workaholic induced problems etc.

      Gretenism seems to be in part another escapist ventilation of this tortured society unable face up to much pressing day to day challenges instead.

      • Xabier says:

        ‘Gretanism’ as avoidance and displacement strategy, very good! ‘Our Lady Greta the Glum, save us!’ But from something which cannot in fact be averted, and lesser but vary nasty social problems are glossed over.

        In Britain, the potential problem with certain ethnic groups, particularly in London, was very apparent by the 1970’s,when there were hardly any of them, but nothing was done, and it was unacceptable even to suggest it.

        Today, parts of the capital are nightmarish, when they still were perfectly clean and decent – if not at all fancy – in the 1970’s.

        To which are now added Eastern European gangs, Arabs, Turks, etc. No less than 6 Turk drug gang-owned shops and restaurants here in this provincial town (how do I know the are owned by drug gangs? Turks told me!)……….

        The process of decline is just starting in the larger cities in the Basque Country, but every crime -nasty attacks on the elderly, gang rapes, attempts to murder police and teachers, etc -politicians and ‘experts’ say that its ‘always been like that’ (!) or ‘just an isolated incident.’ Madness! Reasonable protesters just get called ‘xenophobes’, and ‘haters’, above all by the Left.

        • Robert Firth says:

          Import the Third World; become the Third World.

          • Tim Groves says:

            In the good old days, the Third World was a nicer place even for the poor and destitute. In the seventies, I knew a Peruvian woman in London who told me how her homeland had gone from being a rather nice if poor country in the fifties to a complete mess twenty years later, thanks to the activities of Maoist Shining Path guerillas. And we oldsters remember when Afghanistan was a favorite destination of doped up hippies and you could still visit the Pyramids, the Taj Mahal or Angkor Wat without it costing you an arm or a leg.

            • Kowalainen says:

              Shoving down BAU “third worlders” using gunboat diplomacy and flying bullets for bringing them “up to spec” into from nature detached drones in IC seem to not work particularly well anymore.

    • Kim says:

      She is 100% astroturf, a Soros-Gates + Nobel money creation through parents who are long time globalist activists. And by long-time I mean going back more than 100 years. There are some links to very interesting relevant Twitter material in this article
      .
      https://bigleaguepolitics.com/must-read-greta-thunberg-pushed-to-prominence-by-antifa-parents-and-soros-connections/

      • At this point I am taking more of a practical, “Why this approach will not really work. What the modelers missed,” approach, using the real life example of California. It appears that approximately seven times as much wind and solar are needed as is currently in place, if today’s electricity consumption is to be covered only by wind, water, and solar plus a three-day battery backup. The big problem is getting enough electricity for winter, because wind, water and solar are all low then. The big overage amounts are in April, May, and June if overbuilding is used to provide enough electricity for winter.

        https://gailtheactuary.files.wordpress.com/2019/09/california-electricity-production-and-consumption-monthly-to-june-2019.png

        It also appears that California’s usage spikes are getting higher and higher. Light bulb changes and the like keep winter electricity usage very low, but this is not of practical importance, if it is the monthly peaks that need to be covered by generation.

        I figure enough other people can take shots at Greta’s parents.