Do the World’s Energy Policies Make Sense?

The world today has a myriad of energy policies. One of them seems to be to encourage renewables, especially wind and solar. Another seems to be to encourage electric cars. A third seems to be to try to move away from fossil fuels. Countries in Europe and elsewhere have been trying carbon taxes. There are also programs to buy carbon offsets for energy uses such as air travel.

Maybe it is time to step back and take a look. Where are we now? Where are we really headed? Have the policies implemented since the Kyoto Protocol in 1997 had any positive impact?

Let’s look at some of the issues involved.

[1] We have had very little success in reducing CO2 emissions.

CO2 emissions for all countries, in total, have been spiraling upward, year after year.

World CO2 Emissions

Figure 1. Carbon dioxide emissions for the world, based on BP’s 2019 Statistical Review of World Energy.

If we look at the situation by part of the world, we see an even more concerning pattern.

Figure 2. Carbon dioxide emissions by part of the world through 2018, based on BP’s 2019 Statistical Review of World Energy. Soviet Empire is an approximation including Eastern Europe and the Former Soviet Union, based on the BP report. It would not include Cuba and North Korea.

The group US+EU+Japan has been able to reduce its CO2 emissions by 5% since 2005. Emissions were slowly rising between 1981 and 2005. There was a dip at the time of the Great Recession of 2008-2009, followed by a downward trend. A person might get the impression that CO2 emissions for the EU tend to rise during periods when the economy is doing well and tend to fall when it is doing poorly.

The “star” in emissions reductions is the former Soviet Union and its Eastern European satellites. I refer to this group as the Soviet Empire. Emissions fell around the time of the collapse of the central government of the Soviet Union in 1991. This big decrease in emissions seems to be related to huge changes that took place at that time. Instead of one country with a single currency, the individual republics were suddenly on their own.

The high point in CO2 emissions for the Soviet Empire came in 1990, the year before the collapse of the Soviet Union central government. By 1999, emissions had fallen to a level 37% below their 1990 level. In fact, even in recent years, emissions for this group of countries has stayed low. Much industry collapsed and has never been replaced.

The group that has more than doubled its emissions is what I call the Remainder Group. The group includes many countries, including China and India, that ramped up their manufacturing and other heavy industry in the late 1990s and early 2000s, when the World Trade Organization added members. The Remainder Group also includes many countries that suddenly found new export markets for their raw materials, such as oil, iron ore, and copper. The Remainder countries became richer; they became more able to pave roads and build more substantial homes for their citizens. With all of this GDP-related activity, CO2 emissions increased rapidly.

[2] Population growth has followed a pattern that is in some ways similar to CO2 growth. 

Figure 3. Population from 1965 to 2018, based on UN 2019 population estimates.

In Figure 3, we see that population has been virtually flat in the former Soviet Empire (2% growth between 1997 and 2018). With the economy not doing well, young people emigrate to countries that seem to provide better prospects.

Population in the US+EU+Japan Group grew by 11% between 1997 and 2018.

The group that is simply outstanding for population growth is the Remainder Group, with 35% growth between 1997 and 2018. A big part of this population growth comes from improved sanitation and basic medical care, such as antibiotics. With these changes, a larger percentage of the babies that are born have been able to live to maturity.

It is hard to see any bend in the trend lines, which would indicate that recent actions have actually changed the course of activity from the way it was headed previously. Of course, the trend is only “linear,” implying that the percentage growth is gradually slowing over time.

This rapidly growing population feeds into the CO2 problem as well. The many young people would all like food, homes and transportation. While it is possible to obtain some version of these desired products without fossil fuels, the version with fossil fuels tends to be vastly improved. Most people prefer homes with indoor plumbing and electricity, if given an opportunity, for example.

[3] Deforestation keeps growing as a world problem.

Figure 4. Chart showing World Bank estimates of share of world forested by economic grouping.

High Income Countries keep pushing the deforestation problem to the poorer parts of the world. Heavily Indebted Poor Countries are especially affected. Worldwide, deforestation continues to grow.

[4] With respect to fossil fuels, there is a great deal of confusion with respect to, “What do we need to be saved from?” 

Do we have a problem with too much or too little fossil fuel? We hear two different stories.

Figure 5. Author’s image of two trains speeding toward the world economy.

Climate modelers keep telling us about what could happen, if indeed we use too much fossil fuel. In fact, the climate currently is changing, bolstering this point of view.

It seems to me that there is an equally great danger of collapse, accompanied by low energy prices. For example, we know that energy production in the European Union has been declining for many years, without the countries being able to do anything about it.

We also know historically that many civilizations have collapsed. The Soviet Empire collapsed in 1991, illustrating one type of collapse. The Soviet Union was an oil exporter. Its collapse came after oil prices were too low to allow adequate investment in new oil fields for an extended period of time. The Great Recession of 2008-2009 offers a much smaller, temporary version of what collapse might look like.

Another example of low prices accompanying collapse comes from Revelation 18: 11-13, warning of possible collapse like that of ancient Babylon. The problem was inadequate demand and low prices; even the energy product of the day (human beings sold as slaves) had little value.

11 The merchants of the earth will weep and mourn over her because no one buys their cargoes anymore— 12 cargoes of gold, silver, precious stones and pearls; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble; 13 cargoes of cinnamon and spice, of incense, myrrh and frankincense, of wine and olive oil, of fine flour and wheat; cattle and sheep; horses and carriages; and human beings sold as slaves.

What we have been seeing recently is falling prices and prices that are too low for producers. Such a result can lead to collapse if too many energy producers go bankrupt and quit.

Figure 6. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.

If we are in danger of collapse from low prices, renewables would not seem to be of much assistance unless they (a) are significantly less expensive than fossil fuels and (b) can be scaled up sufficiently rapidly to more than replace fossil fuels. Neither of these seems to be a possibility.

[5] Early studies overestimated how much help renewables might provide, especially if our problem comes from too little energy supply rather than too much.

Renewables look like they would be great from many points of view, but when it comes down to the real world situation, they don’t live up to the hype.

One issue is that while wind, solar, hydroelectric, geothermal, and other devices for capturing energy are called “renewables,” they are really only available through the use of the fossil fuel system. They are made using fossil fuels. If a part breaks, or if insects eat away the insulation on wires, replacements need to be made using the fossil fuel system and transported using the fossil fuel system. At best, renewables should be considered fossil fuel extenders, using less fossil fuels than conventional electricity generation. They are also dependent on other resources, which may eventually deplete, but which are not a problem at this time.

A second issue is that it is extremely difficult to do a proper cost-benefit analysis on renewables because they can only be used as part of a larger system. They tend to look inexpensive, when viewed in isolation. But when total system costs are viewed, they often are quite expensive.

One difficulty in a proper cost-benefit analysis is the fact that renewables are often sited at quite a distance from where electricity is to be used, leading to the need for a significant number of long distance transmission lines. Furthermore, if renewables provide intermittent power, they need to be sized for the maximum output, not their average output. All of these long distance lines need to be properly maintained, or they tend to cause fires. In some instances, burying the lines underground at significant cost is the only solution. Somehow, these higher costs need to be recognized as part of the cost of the system, but this is rarely done.

Another difficulty in a proper cost-benefit analysis is the fact that renewables’  intermittency must be overcome, if the electricity is to be of benefit to a modern economy that requires electricity 24/7/365. In theory, we could greatly overbuild the renewables system and the transmission. This might work, but we would end up with a large percentage of the system that is not used most of the time, greatly adding to costs.

Batteries can be added, but the cost tends to be high. One commenter on my site recently observed:

EIA reports the average cost for utility scale battery systems to be about $1500 per kWh. At that rate the batteries needed for backing up a solar or wind facility for three days cost around 30 times as much as the RE facility. But wind is often unpowered for more like seven days, during huge stagnant high pressure episodes. Thus the backup battery cost is more like 100 times the wind farm cost. Batteries are not feasible.

The major intermittency problem is season-to-season, especially saving up enough for winter. We do not have a way, today, of storing energy from one season to another, short of making it into a liquid (such as ammonia), and storing the liquid from season to season. This would be another way of driving up costs of the overall system. It has not been included in anyone’s cost calculations.

For the time being, we are forcing nuclear and fossil fuel to provide backup electrical services to intermittent renewables without adequately compensating them for their services. This tends to drive them out of business. This is not an adequate solution either.

A third issue is that renewables really need to be “economic” to work. In other words, they need to generate a profit for their owners, when comparing the unsubsidized costs with the benefits of the system. In fact, their owners need to be able to pay fairly substantial taxes to governments, to cover their share of governmental costs as well. If renewables truly were providing substantial benefit to the system, their use would tend to “take off” on their own, because they would be providing “net energy” to the system. Instead, renewables tend to act like “energy sinks.” They need endless subsidies. They can never substitute for fossil fuels. In fact, they can’t even pay their own way.

A related issue is that, because of the high total costs (as well as their lack of true net energy benefits), it is almost impossible to ramp up the quantity of renewables such as wind and solar very high. The EU has been a big supporter of renewables other than hydroelectric. Figure 7 shows a chart of the EU’s own energy production, together with its energy imports.

EU Energy by Type and Whether Imported

Figure 7. EU energy by type and whether imported, based on data of BP’s 2019 Statistical Review of World Energy. Renewables are non-hydroelectric renewables such as wind, solar, and geothermal.

After at least 20 years of subsidies, the EU has been able to increase renewables (other than hydroelectric) to about 10% of its total energy supply. The EU’s oil imports are roughly level, and its natural gas imports have been increasing. Even with rapid growth in non-hydro renewables, the EU has been experiencing a decrease in total energy consumption.

[6] Looking at the actual outcomes, a person might ask, “What in the world were policymakers really thinking about?”

We are told that the reason policymakers made the decisions they did was because they thought that they could reduce CO2 emissions in this way. Really? If a person really wants to reduce CO2 emissions, it is easy to see how to do it. A person simply has to take steps in the direction of reducing global co-operation. One step would be to reduce international trade. Another would be to get rid of umbrella organizations such as the World Trade Organization, the United Nations and the European Union. In fact, within individual countries, the top level of government could be removed, leaving (for example) the provinces of Canada and the states of the United States. In other words, policymakers could push economies in the direction of collapse.

Another way collapse could be encouraged would be by rapidly raising interest rates or cutting off credit. With less purchasing power, the world would be pushed into recession.

At the time of the Kyoto Protocol, policymakers moved in precisely the opposite direction of pushing the economy toward collapse. They moved in the direction of adding international trade and more debt to enable the growth. The countries with greater trade had huge coal resources that had not been used. With the help of this coal, the world economy was able to continue to grow. This approach only made sense if the real problem at the time of the Kyoto Protocol in 1997 was too little energy resources, not too much. The economy needed the stimulation that more low-cost energy and more debt could provide.

It is now more than twenty years later. The coal resources of China are starting to deplete. Coal is also causing serious ground-level pollution problems, both in China and India. Without growing coal production, world GDP growth starts slowing. We are again facing low oil prices and other commodity prices–a problem similar to the one present when the government of the Soviet Union collapsed. The world economy seems again to be headed toward having some of its governmental organizations collapse from inadequate energy. Political parties are becoming more extreme; countries are enacting new tariffs. If we go back to Figure 5, the concern should again be collapse, on the left side of the figure.

[7] The scenarios considered by the IPCC climate model need to be revisited.

A climate model looks to the past and tries to forecast what would happen in alternative “scenarios.” The concern I have is that the scenarios evaluated are not realistic. To get to the level of CO2 that would produce the most extreme scenarios, coal production would need to continue at a high level for many, many years. This seems unrealistic because world coal production has been fairly flat for several years, and prices tend to be lower than producers require if they are to stay in business. The likely direction for coal production seems to be down, rather than up.

Figure 8. World Energy Consumption by Fuel, based on data of 2019 BP Statistical Review of World Energy.

In order for coal production to grow as much as the higher emission scenarios assume, there needs to be a major turnaround in the situation. World coal prices would need to rise substantially. In fact, coal in very difficult locations for extraction, such as under the North Sea, need to become profitable to extract. This situation seems very unlikely.

It seems to me that climate modelers should be considering more realistic scenarios regarding CO2 emissions from fossil fuels. One scenario which should be considered is the possible near term collapse of several governmental organizations, such as the European Union, World Trade Organization, and the governments of several oil exporting countries.

[8] The push toward renewables makes little sense without a firmer foundation than currently exists.

Early studies looked only at the cost of renewables themselves, without the cost of extra long-distance grid transportation and battery storage. Such an estimate makes renewables look far more valuable than they really are.

We now have enough experience that we can see what goes wrong. A hydroelectric plant that operates during the wet season in a tropical country may be of little practical use, for example, if there is no fossil fuel energy available to provide backup electricity production during the dry season. The total cost of the overlapping systems needs to be taken into consideration, including the need to hire staff year around for both the fossil fuel and hydroelectric facilities. Electricity transmission will likely be needed for both types of generation.

There are many other real-world examples that can be examined, before blanket “use renewables” recommendations should be issued. If renewables are not truly very inexpensive (around 2 cents per kWh or less), without subsidies, they are likely not to be long-lasting. Subsidies become more and more difficult to maintain, as a system scales up.

This entry was posted in Energy policy, Financial Implications and tagged , by Gail Tverberg. Bookmark the permalink.

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.

1,380 thoughts on “Do the World’s Energy Policies Make Sense?

  1. Just for fun….this guy failed the Fast Eddy Challenge…
    Booby trap kills man in his own home on Thanksgiving night
    Good Morning America
    Good Morning AmericaDecember 1, 201

    Ronald Cyr, 65, of Van Buren, Maine died of injuries sustained at his home on Nov. 28 after a handgun that was designed to fire upon anybody entering the front door of his residence went off.
    Officer Chandler Madore and the Van Buren Police Department, assisted by the U.S. Border Patrol, responded to a call indicating that Cyr had been shot. But when officers arrived on scene they discovered that he had been injured by a booby trap that he had allegedly set up himself, according to a statement released by the Van Buren Police Department
    Several other booby traps were found at Cyr’s residence causing investigators to contact the Maine State Police Bomb Squad.
    However, following an extensive investigation that last several hours, it was determined Cyr had been shot unintentionally after discharging his own booby trap.
    “Regretfully, Mr. Cyr succumbed to the injuries sustained from the gunshot,” said a statement from the Van Buren Police Department.
    It is unknown why Cyr had set up the booby traps at his home or how he managed to accidentally detonate the device.

    Or should I say, We are our own most dangerous enemies!🙃

      • Home alone was maybe a favorite movie?

        Read he had some break ins 😂 and frustrated by lack of police follow up.
        Hope he deposited at least on Social Security cheque!

  2. Another bites the DUST….
    Gee, MOM, when I grow up I want to be a small family FARMER!
    “We’ve lost a great deal of our productive capacity,” said Peter Spyke, a third-generation citrus farmer
    Fort Pierce (United States) (AFP) – Peter Spyke has two types of oranges in his groves: those that are the color orange — and those that are green, unsaleable and responsible for the collapse of Florida’s orange crop over the past 15 years.
    Florida farmers have observed, almost powerless, the spread of the huanglongbing bacterium (“yellow dragon disease” in Chinese), known worldwide as “HLB” and native to China. It was first reported in Florida in 2005, and has been conquering groves ever since.
    The bacterium causes one of the most devastating citrus diseases called “greening”: the leaves of the infected trees turn pale, the fruit fails to ripen and remain green, and eventually fall to the ground.
    The bacterium is transmitted by a small insect called citrus psyllid.
    Compared to the 2003-2004 season, Florida’s orange production will be down by 80 percent this season (harvests last from November to April depending on the citrus variety). Grapefruits are the most affected.
    “We’ve lost a great deal of our productive capacity and along with that we’ve lost juice plants, we’ve lost jobs, we’ve lost packing houses,” said Spyke, a third-generation citrus farmer.
    “At this point we haven’t identified any way to make the trees immune to HLB,” he said during a tour of his orchard.
    Florida citrus farmers have generally been reluctant to destroy contaminated trees, and as a result 90 percent of their groves are infected — compared to only 19 percent in Brazil, while Europe so far has been spared the blight. Sprays used to treat trees in Florida have been ineffective.

    Oh well, now we see how the native American Indians got wiped out by blight of European illnesses.
    Well, this is good news in the sense these vacant orchards can now be put into housing developments! See, there is a silver lining in every dark cloud.
    Oranges can be imported from overseas…..with other agricultural pests

    • Bananas have a somewhat similar problem. Fulsarium wilt of bananas, popularly known as Panama disease, is a lethal fungal disease of certain types of bananas.

      The banana is one step closer to disappearing
      A fungus that devastates banana plants has now arrived in Latin America, the Colombian government confirms.

      ICA, the Colombian agriculture and livestock authority, confirmed on Thursday that laboratory tests have positively identified the presence of so-called Panama disease Tropical Race 4 on banana farms in the Caribbean coastal region. The announcement was accompanied by a declaration of a national state of emergency.

      The discovery of the fungus represents a potential impending disaster for bananas as both a food source and an export commodity. Panama disease Tropical Race 4—or TR4—is an infection of the banana plant by a fungus of the genus Fusarium. Although bananas produced in infected soil are not unsafe for humans, infected plants eventually stop bearing fruit.

    • One should always open a bottle of champagne to celebrate the opportunity for more real estate development, quite right!

      Just so long as it has the right Greenwash certification, of course…..

    • “Gee, MOM, when I grow up I want to be a small family FARMER!”

      These are mostly mono culture citrus plantations, so good riddance – that’s not proper farming in the first place..

    • Turkey are raised in bio isolation. We will have to raise oranges in bio isolation also. No issue for those with money and well….

  3. “Between the slings and arrows of China’s global trade war with the United States, a separate battle has been brewing between the Asia-Pacific’s next two largest economies: Japan and South Korea.

    “But unlike the economic issues underpinning Beijing’s fight with Washington, Tokyo and Seoul’s dispute is fundamentally rooted in bitter grievances that date back to Japan’s occupation of South Korea during World War II.”

      • Should be good for beer-producers in South Korea, right? I have to admit though I don’t recall ever seeing or drinking any beer made in South Korea. Do they have any decent nationally produced brands?

        • It looks like they have a couple of major indigenous manufacturers – Hite-Jinro and OB – but their favourite imported beer is Tsingtao from China, so perhaps this is one trade conflict that is benefiting the Chinese.

      • The South Korea-Japan trade war seems to stem from “not enough jobs for everyone.” Semiconductors manufacturing has been major problem area.

        A decrease in auto sales is no doubt another problem area.

        • Yes, China wants to source all the electronics it uses, Samsung is huge, TSMC and Taiwan are huge and the US DOD wants to pull back electronics to domestic production (hot dog this is so good for me). Let the fight go on hurray DOD and Donald Trump I can stay employed until 70 and max social security, there are no pensions in the electronics industry. Currently 61.

          • It is all energy policy. Curb the clumsy Chinese geopolitical interests by denying them access to high-tech chips and dollars, and then let those US coal and natgas power plants electrify the domestic oil producers squeezing the last bit of oil from the rocks, while the Chinese energy usage and prosperity plunge as a consequence of an idle manufacturing industry.

            If you don’t agree with El Trumpo’s policies, maybe quite suddenly you no longer can source the coveted Military grade GaN’s, FPGA’s and misc IC’s for the next generation ‘fireworks’ plans of yours.

            Yup, that mfg capability is coming back “home”, that is for sure. Let’s see if the Chinese makes blunder of signing that trade deal and then proceed with rolling in tanks on the streets of HK. That’s all the excuse there needs to be for a complete embargo.

            The clock is ticking for Winnie the Pooh.

          • I’m about the same age…

            so you’re planning on retiring in 2028, and then I assume you will be hoping to enjoy your retirement into the 2030s…

            I don’t think I’ve seen this high level of optimism here at OFW in a very long time…

            maybe your optimism will be warranted by the actual reality of 2030…

            we can hope…

            • i don’t think the odds are with you, but we will see. it sure would be nice to have 10+ moron years of BAU.

              when i turned 66, i did the math on not withdrawing SS until age 70 versus taking it then. it would take at least 10 years beyond age 70 at the higher pay rate to break even with the money lost by deferring the payments. only then would the SS checks exceed the age 66 rate + four years of deferred (lost) payments.

              well, how lucky do you feel, p-u-n-k?

            • I have already started the process of taking early retirement (62 last August). Still waiting for first payment. I’ve always joked with my son that I would never see a single payment. it would suck to be right this time. Wife is up for spousal benefits too, so it could be good if it happens. I have no debt and live in a country (Poland) where $1500 +$1250 per month would still put us 2-3 times above average wages.

            • retiring with 2 to 3 x the average wage?


              in a decade or two from now, your descendants will speak in amazement that such a thing was actually possible…

              after another decade or so, others may need to be educated about what the word “retirement” means…

              at least the Polish word…

    • While ~25yrs ago S. Korean manuf production was a joke, nowadays they are eating significantly into established markets of European and Japanese car industries.. Similarly, ~15yrs ago some of their electronics started to leapfrog Japanese on innovation and quality.

      Japanese tend to stagnate – reaching maturing plateau – even if it means very slowly improving the already perfected (but not branching – refusing – stalling out in venturing into the new opening up domains).

      • They already ate up their market share and as the quality and reputation for reliability increase, so does the prices.

        Next wave will be cheap Chinese cars. If they manage to get past the regulations in the west.

        • Yes, I was after this very larger cycle – wave of passing baton change if you will phenomenon. The Chinese are almost already there in niche products like electric motorcycles – scooters. And the car segment looks almost on par with the West as well, surely by ~2020-25 threshold. But mind you Koreans had to build up factories in the customer-importing based countries for the fullest effect. That’s not in the cards for China (for now – near term).

          • Import tariffs and regulations will hinder that. The US and European car industry is already feeling the burn from finite world issues and transition to electrification.

            • “Transition to electrification” is a way of reducing total car usage. People cannot afford them, so they don’t buy them. The cost of road maintenance will stay virtually equally high. The cost of road maintenance per driver will rise. The total cost of personal vehicle use will soar, with electrification. Vehicle electrification is just another way that differentiates the rich from the poor and pushes the economy toward collapse.

            • there is also a surge in the use of public transport, quite separate from issues like parking. Today nearly everyone has a mobile phone. The young are preferring public transport over the private car because the car disconnects them from their friends etc. They can stay connected on the train or bus. It is making a substantial difference

            • They are preferring public transport over the private cars because they cannot afford private cars. The system self-organizes in a way that leads to a “sour grapes” story. The sour grapes story says, “I didn’t want those grapes anyhow; they were probably sour.” Today’s version says, “I didn’t want my own car anyhow; I would rather take Uber or a bus.”

              In most places in the US, public transport, apart from Uber, is not really an option. People drop out of the work force when transportation cost becomes too high relative to expected earnings. This is part of the reason for the large number of “not in the labor force” people.

      • Why I can name US companies that have been around for more than 100 years that are every bit as stubborn about refusing anything new.

  4. “What do recent trade data portend? The news is not good, and suggests that not only is the world economy weaker than it was earlier this year but that more weakness lies ahead…

    “The Baltic Dry Index, a closely-watched indicator based on bulk commodities shipping that serves as a reliable indicator of future trade activity, has fallen by nearly 50 percent since August (after doubling in the first eight months of the year), squelching hopes for a rebound in global trade…

    “Slowing trade growth is adding to economic woes around the world. What is worse, trade tensions and the uncertainty they have spawned are likely to leave a long-lasting scar on the world economy if they continue affecting business confidence and, therefore, investment growth.”

    • “As the U.S.-China trade war drags into its 16th month and continues to disrupt supply chains, more than one-quarter of multinational firms have not made contingency plans, showed a survey from a subsidiary of courier giant DHL…

      “48% from the engineering and manufacturing industry and 40% from the automotive mobility sector reported that they had no contingency plans at all…”

      • And in a further blow to the confidence of everyone except the village idiot (happy soul!) Homo Sapiens reported that, as a species, it has absolutely no contingency plans to deal with the mess it has got itself into over the last century or two.

        There is of course always the hope that Something Will Turn Up…….

          • Your thesis of onset into pervasive depression seems to be gaining on strength / likely-hood every day.. I’m wondering about the possible sequencing events-scenarios in its wake:

            – UBI for some IC hubs
            – global fin reset
            – sheer full spectrum chaos
            – balkanization / trade block structures / escalation of protectionism
            – BAU-ish muddling through (without UBI) as long as possible (Japanization)
            perhaps all of the above attempted and abandoned shortly for the next “best” option
            Therefore endless possibilities for the short-midterm quasi BAU..

          • There are jobs all right. The problem is that those are highly abstract or technical.

            Working in complex systems is a challenge even for the skilled.

            Not much hope there, thus the government industrial complex must retort to theft to keep the charade going.

            • It is mainland China.

              TSMC is the elephant in the room. It is one of the Crown Jewels of western IC manufacturing capacity. And yeah, they got Her.

              Hooray for Tsai Ing Wen.

          • Wasn’t there a related story to this CPU question in the wake of the hot Huawei sanctions? If I recall it correctly, the Chinese understood the weakness in reliance on foreign CPU designs and build (fast tracked) their own program ..

            Similar thing happened in Russia yrs ago, they opted for own CPUs at least for the core mil-defense and some telco/banking application, doubt they managed to have it all incl. the most powerful (clusters/mainframes) yet – or partnered with Asia on that one..

            • Once behind the technological bandwagon, there is no tractable way catching up. The ship has left the harbor.

            • And I think the Russians got it right. Yes, they built processors with about 1/20 of the speed of the best Western products, but then, they have programmers who can write excellent software that needs less than 1/20 of the power. It’s not that hard: even I, many years ago, wrote systems software for a military machine that ran four times faster than the contractor’s offering on a civilian machine with five times the power.

              And it even gave me a quote: “The ability of hardware engineers to enhance is far exceeded by the ability of software engineers to degrade.”

            • Thing is Robert, we soon will no longer write software. All complex logic will eventually be automatically generated or trained to specification.

              We have all heard stories of the exemplary skills of the “other guys” to prop up the domestic sense of emergency. It is trope by now.

              Garbage software gets written all over the world and is caused by bad system design, incompetent management and lack of time.

  5. “When 6pm struck in Colombia, the sound of banging pots and pans – the “cacerolazo” – echoed across the country like they have since the mass anti-government protest kicked off more than a week ago. But on Sunday, the thousands of Colombians gathered on the streets of the country’s biggest cities were not alone.

    “Colombia joined at least nine other countries in the region in what was dubbed a “Latin American Cacerolazo”.”

      • all industrial products contain a proportion of surplus energy

        it used to be cheap, now it isn’t and people are finding it less and less affordable—hence the slowdown in buying stuff

        I bought a VW on Saturday—but it obviously hasn’t improved things

        • You need to be drinking some Japanese beer as well, Norman, now that the South Koreans are turning their noses up at it – but obviously not at the wheel of your fine Volkswagen.

          • i found Asahi Japanese beer goes very well with pork gyoza. But neither is available here. I do miss the Asian food in Singapore (except for their Cantonese food, which tastes of nothing) and tends to be overpriced.

            But Maltese beer is good, especially the “1565” brand. Naming your beer after a victory over the Ottoman Turks is real class, don’t you think.

            • Perhaps a break from doom and gloom; would you be willing to tell us about life in Malta and how you came to chose living there to see the end of the world which we now is coming in twelve years or so( a bit of gallows humor, who really knows?)

              Dennis L.

        • Was it a second hand one of these?

          In good condition with minor scuffs and dents from the few guys that so many owed so much.

            • Those fire bombs over Dresden was a bit excessive, wouldn’t you agree? Specially after he gifted you the troops back home from Dunkirk.

              But being a Swede I have no right to complain due to the fact that our government corporate complex was involved in eager collaboration and profiteering with the nazis which prolonged the war with an estimated 1.5 years. One can only imagine the consequence of that calculated in human lives and untold suffering.

              But yeah, some things are timeless; the VW beetle, Churchill, Hitler and Swedish “neutrality”.

            • what? no Jaguar for you?

              don’t we all have that image of you, cruising around the English countryside in style?

            • your image is perfectly correct

              but I had to get rid of my coach and four, and the postilions, because the local peasants were getting restless and sharpening their pitchforks

              trouble was you see, that because I’d written a book and made a fortune prophesying their doom, it was all my fault

            • I fear the Swedes, even when they come dancing to Abba’s hits.

              Their empire wasn’t quite as large as the later German ones, but it crumbled less fast!

            • Tim> curiously enough, this video doesn’t show the brief but huge extent of their continent bound invasion during the 30yrs war in mid 17th century, they ~almost reached the Alps and Danube river. They pillaged among other lands: Saxony, Bohemia, Bavaria, ..

              Up to this day their museums are up to the roof packed with this very loot.

            • Hej, hey hey worldof.

              HOW DARE YOU?

              Speaking bad about the virtuous Swedes who would never, evaaaar hurt anyone else through their inaction and profiteering rackets with aggressor states and other regimes corrupt to the core.

              “ Ericsson has been cooperating since 2013 with an investigation by the United States Securities and Exchange Commission (SEC) and, since 2015, with an investigation by the US Department of Justice.

              The investigation covers a period up to the first quarter of 2017, and involves operations in six countries: China, Djibouti, Indonesia, Kuwait, Saudi Arabia and Vietnam.”


            • The “Swedish Empire” was decisively ended on 8 July 1709, by Peter the Great of Russia, who had celebrated an earlier, partial victory by building a log cabin near the river Neva. That cabin is now Saint Petersburg. May God and his holy Archangel, St Michael, bless, preserve, and defend Svyataya Rus, Holy Russia.

  6. Now the peak oil theory is debunked, what will happen is oil will be out of touch for most of the world’s pop. Sorry, but Gail’s theory of non elite worker has been superseded by automation.

    What will happen is the world will adapt to higher priced oil, and those who can’t afford it will simply die. It is cruel but it is reality.

    • The issue is low-priced oil. Robots cannot buy goods, just as low paid workers cannot buy goods. It is low prices that will bring the system down.

      You are still looking at the world through the high-priced peak oil lens.

      • Oil prices will be too low to keep the system ticking over, but they will seem too high for the billions non-elite workers or former workers whose consumption is needed to keep the oil price high enough to keep the system ticking over.

        When you’ve got no money, everything is too expensive.

        • oh, reminds me of the Goldilocks sub-theory of the Peak Oil theory…

          oil could stay in that perfect zone where it was priced low enough for consumers but high enough for producers…

          ah yes, those were the naive days of yore…

          • Yep, there were various sub theories floating around, some better than others..
            For instance the “heretic one” mentioned ever lower price of oil via “Triangle of Doom” could have made (did) some people rich during the 2015/16 price collapse. Similar occurrence (albeit of not so intense amplitude) could happen again, i.e. brief collapse bellow $30-40 barrel.. say before 2023-25… Although these days there are other instruments at play, e.g. naked markets support by CBs for propping up big corps and govs etc..

          • The WSJ has come up with another story along those lines, today: Oil Trading in Sweet Spot Adds to Improving Economic Signals

            Oil prices have stayed in a contained range that analysts say benefits both producers and consumers, bolstering hopes that the global economy can rebound.

            U.S. crude has generally stayed between $50 and $60 a barrel in the past six months and is on pace for its best year since 2016 following a sharp selloff late in 2018. Brent, the global gauge of prices, has also been steady and traded between $55 and $65.

            Because it is critical for the transportation and shipping industries, oil is used by some investors to gauge momentum in the economy. Prices had sent an alarming signal when they tumbled earlier in the year, hurt by worries that crumbling demand would result in a glut. But recent progress toward an initial U.S.-China trade accord and stabilizing economic data around the globe have fueled bets on an improving picture for consumption.

          • No need for that. Video games are cheap. Plenty of interactive entertainment without the hassle of owning physical stuff.

            They just don’t care about worldly stuff. The near perfect form of escapism is here.

      • Robots can however be turned off and won’t revolt if their access to the spoils of IC gets rationed.

        That is the whole point of circling the wagons around the last productive areas and assets of the world. The rest is subject to triage.

        • However, perhaps a government administration populated by robots would be a major improvement: “A bureaucrat shall not harm a human being, or through inaction allow a human being to come to harm”.

          • The MIC might find that objectionable.

            In other news, Asimov still lives. All hail Isaak Judovitj Ozimov and R. Daniel Oliwav.

            And my personal favorite.

    • Is peak oil theory “debunked”?

      M King Hubbert clearly stated the incompleteness of the interaction between the ancient monetary system and the FF energy systems that underpins IC.

      Read some Hubbert and you will find.

      • We have a lot of Peak Oil followers who have decided that low oil supplies mean high prices. This doesn’t mean that Hubbert necessarily believed this nonsense.

        • Reading directly from the source is the way to go. Hubbert was indeed a profound mind. I wish the peak oilers would take inspiration from his principles of thought.

          There is nothing inherently wrong with price hikes as resources deplete. Unfortunately it does not work that way when the dependency to that specific resource is endemic, systematic and an integral part of the fabric of IC.




    Global trade and manufacturing is in contraction despite central banks stimulus. How bad would the prints be without stimulus?

    • now comes more months/years of manipulation to keep the markets up…

      as has been said before, The Collapse may very well come when markets are at all-time highs…

      • Are you talking about the collapse of the entire system?


        I didn’t think of that. The collapse is still just a theory for me… impossible to really comprehend.

            • Is it the end of the beginning of the collapse then? Is the second derivative of economic growth showing clear signs of plunging?

              Luckily we got some serious momentum built up into the oil guzzling behemoth. Plenty of time until it shrieks to a halt.

            • 2019 has certainly been a year of partial collapse in some/many peripheral countries…

              2020 looks like we could see partial collapse moving closer to The Core… UK, Italy, etc… and deepening collapse in The Periphery… Argentina, South Africa, etc…

              I’ve said we are in The Endgame…

              probably the beginning of The Endgame, but who knows?

              2 months, 2 years or 2 decades… it’s coming soon… even 2 decades is soon to me…

  8. Trump’s trade deal with China is dead.

    China has already signed an agricultural deal with Brazil and Argentina.

    Trump just imposed tariffs on steel and aluminium from Brazil and Argentina…claiming that the devaluation of their currencies are hurting U.S producers…and of course to punish them for hurting U.S farmers.

    Trump has restricted sales to Huawei on national security issues. Huawei’s latest smartphone doesn’t have any U.S components. China now either produce or source components from other nations.

    Trump is now looking at targeting E.U with tarrifs and House and Senate will soon impose sanctions on E.U over Nord Stream 2.

    The U.S is still the largest military power in the world and owns the world reserve currency. So what’s next?

    • Trump showing no urgency to resolve issues with China:

      “I have no deadline on #China deal and it might be better to wait until after November 2020 election”

      • You’d guess it would hinge mostly on whether the “phase-one” trade deal between China and the US is signed by Dec. 15th – even though such a deal is really just a can-kicking exercise:

        “Investors look set to make money when Washington and Beijing sign their “phase one” trade deal — but in the long term, the Sino-U.S. trade war is “unresolvable,” according to one analyst.”

        • but long term, it is easily resolvable…

          if the D candidate wins in 11/2020 then the Ds could quite readily cave in to most/all of the demands from the Chinese side…

          a very real return to pre-Trump…

    • Yes, the US is still the largest military power in the world. but is it the most effective? Look at Afghanistan, no victory after 20 years of war, in a land Alexander conquered in two months.

      One Russian or Chinese hypersonic missile, launched from a strategically located small boat, can send an aircraft carrier to Davy Jones’ Locker. In other words, the entire US carrier fleet (11 in total) could be sunk for less than the cost of one F35 fighter. Welcome to the age of asymmetric warfare.

      • The drone attacks on the Saudi refinery highlights that true assertion.

        However, it is not the purpose of the MIC to be effective. It is a jobs program. And sinking one of those floating behemoths is basically asking for becoming eradicated from the surface of earth.

      • There are some wonderful people working with the huge numbers of orphans in Afghanistan, and I encourage people to help them with donations.

        Among others, The Idries Shah Foundation publishes beautiful children’s books based on ancient tales from the region (some illustrated by my supremely talented artist friend from Iraq, ‘Daby’ ,now herself a refugee in the US) and the sales go to the orphans – they also get copies of the books.

        In this bleak and in many ways quite evil world, make an orphan smile!

      • Israel said that the Iranian missile attack on Saudi oil infrastructure had an 80% accuracy.

        The U.S missile accuracy is 60% at best.

        The U.S military force is too large to be effective?

        • No they just have to fire 133.33% more missiles. Not a problem, they got plenty of gear.

        • There was no Iranian missile attack. That claim is pure Israeli propaganda, designed to further their aim of inducing the US to attack Iran. And since US foreign policy in the Middle East is dictated from Tel Aviv, and has been for years, it may well succeed.

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