Energy Forecast for 2020
Overall, I expect that oil and other commodity prices will remain low in 2020. These low oil prices will adversely affect oil production and several other parts of the economy. As a result, a strong tendency toward recession can be expected. The extent of recessionary influences will vary from country to country. Financial factors, not discussed in these forecasts, are likely also to play a role.
The following are pieces of my energy forecast for 2020:
[1] Oil prices can be expected to remain generally low in 2020. There may be an occasional spike to $80 or $90 per barrel, but average prices in 2020 are likely to be at or below the 2019 level.
Figure 1. Average annual inflation-adjusted Brent equivalent oil prices in 2018 US$. 2018 and prior are as shown in BP’s 2019 Statistical Review of World Energy. Value for 2019 estimated by author based on EIA Brent daily oil prices and 2% expected inflation.
Figure 2 shows in more detail how peaks in oil prices have been falling since 2008. While it doesn’t include early January 2020 oil prices, even these prices would be below the dotted line.
Figure 2. Inflation adjusted weekly average Brent Oil price, based on EIA oil spot prices and US CPI-urban inflation.
Oil prices can temporarily spike because of inadequate supply or fear of war. However, to keep oil prices up, there needs to be an increase in “demand” for finished goods and services made with commodities. Workers need to be able to afford to purchase more goods such as new homes, cars, and cell phones. Governments need to be able to afford to purchase new goods such as paved roads and school buildings.
At this point, the world economy is struggling with a lack of affordability in finished goods and services. This lack of affordability is what causes oil and other commodity prices to tend to fall, rather than to rise. Lack of affordability comes when too many would-be buyers have low wages or no income at all. Wage disparity tends to rise with globalization. It also tends to rise with increased specialization. A few highly trained workers earn high wages, but many others are left with low wages or no job at all.
It is the fact that we do not have a way of making the affordability of finished goods rise that leads me to believe that oil prices will remain low. Raising minimum wages tends to encourage more mechanization of processes and thus tends to lower total employment. Interest rates cannot be brought much lower, nor can the terms of loans be extended much longer. If such changes were available, they would enhance affordability and thus help prevent low commodity prices and recession.
[2] World oil production seems likely to fall by 1% or more in 2020 because of low oil prices.
Quarterly oil production data of the US Energy Information Administration shows the following pattern:
Figure 3. Quarterly World Crude Oil and Natural Gas Liquids production, based on EIA international data through September 2019. This is a fairly broad definition of oil. It does not include biofuels because their production tends to be seasonal.
The highest single quarter of world oil production was the fourth quarter of 2018. Oil production has been falling since this peak quarter.
To examine what is happening, the production shown in Figure 3 can be divided into that by the United States, OPEC, and “All Other.”
Figure 4. Quarterly world crude oil and natural gas liquids production by part of the world, based on international data of the US Energy Information Agency through September 30, 2019.
Figure 4 shows that the production of All Other seems to be steady to slightly rising, more or less regardless of oil prices.
OPEC’s oil production bobs up and down. In general, its production is lower when oil prices are low, and higher when oil prices are high. (This shouldn’t be a surprise.) Recently, its production has been lower in response to low prices. Effective January 1, 2020, OPEC plans to reduce its production by another 500,000 barrels per day.
Figure 4 shows that oil production of the United States rose in response to high prices in the 2010 to 2013 period. It dipped in response to low oil prices in 2015 and 2016. When oil prices rose in 2017 and 2018, its production again rose. Production in 2019 seems to have risen less rapidly. Recent monthly and weekly EIA data confirm the flatter US oil production growth pattern in 2019.
Putting the pieces together, I estimate that world oil production (including natural gas liquids) for 2019 will be about 0.5% lower than that of 2018. Since world population is rising by about 1.1% per year, per capita oil production is falling faster, about 1.6% per year.
A self-organizing networked economy seems to distribute oil shortages through lack of affordability. Thus, for example, they might be expected to affect the economy through lower auto sales and through less international trade related to automobile production. International trade, of course, requires the use of oil, since ships and airplanes use oil products for fuel.
If prices stay low in 2020, both the oil production of the United States and OPEC will likely be adversely affected, bringing 2020 oil production down even further. I would expect that even without a major recession, world oil supply might be expected to fall by 1% in 2020, relative to 2019. If a major recession occurs, oil prices could fall further (perhaps to $30 per barrel), and oil production would likely fall lower. Laid off workers don’t need to drive to work!
[3] In theory, the 2019 and 2020 decreases in world oil production might be the beginning of “world peak oil.”
If oil prices cannot be brought back up again after 2020, world oil production is likely to drop precipitously. Even the “All Other” group in Figure 4 would be likely to reduce their production, if there is no chance of making a profit.
The big question is whether the affordability of finished goods and services can be raised in the future. Such an increase would tend to raise the price of all commodities, including oil.
[4] The implosion of the recycling business is part of what is causing today’s low oil prices. The effects of the recycling implosion can be expected to continue into 2020.
With the rise in oil prices in the 2002-2008 period, there came the opportunity for a new growth industry: recycling. Unfortunately, as oil prices started to fall from their lofty heights, the business model behind recycling started to make less and less sense. Effective January 1, 2018, China stopped nearly all of its paper and plastic recycling. Other Asian nations, including India, have been following suit.
When recycling efforts were reduced, many people working in the recycling industry lost their jobs. By coincidence or not, auto purchases in China began to fall at exactly the same time as recycling stopped. Of course, when fewer automobiles are sold, demand for oil to make and operate automobiles tends to fall. This has been part of what is pushing world oil prices down.
Sending materials to Asia for recycling made economic sense when oil prices were high. Once prices dropped, China was faced with dismantling a fairly large, no longer economic, industry. Other countries have followed suit, and their automobile sales have also fallen.
Companies operating ships that transport manufactured goods to high income countries were adversely affected by the loss of recycling. When material for recycling was available, it could be used to fill otherwise-empty containers returning from high income countries. Fees for transporting materials to be recycled indirectly made the cost of shipping goods manufactured in China and India a little lower than they otherwise would be, if containers needed to be shipped back empty. All of these effects have helped reduce demand for oil. Indirectly, these effects tend to reduce oil prices.
The recycling industry has not yet shrunk back to the size that the economics would suggest is needed if oil prices remain low. There may be a few kinds of recycling that work (well sorted materials, recycled near where the materials have been gathered, for example), but it probably does not make sense to send separate trucks through neighborhoods to pick up poorly sorted materials. Some materials may better be burned or placed in landfills.
We are not yet through winding down the recycling effort. Even the recycling of materials such as aluminum cans is affected by oil prices. A March, 2019, WSJ article talks about a “glut of used cans” because some markets now prefer to use newly produced aluminum.
[5] The growth of the electric car industry can be expected to slow substantially in 2020, as it becomes increasingly apparent that oil prices are likely to stay low for a long period.
Electric cars are expensive in two ways:
- In building the cars initially, and
- In building and maintaining all of the charging stations required if more than a few elite workers with charging facilities in their garages are to use the vehicles.
Once it is clear that oil prices cannot rise indefinitely, the need for all of the extra costs of electric vehicles becomes very iffy. In light of the changing view of the economics of the situation, China has discontinued its electric vehicle (EV) subsidies, as of January 1, 2020. Prior to the change, China was the world’s largest seller of electric vehicles. Year over year EV sales in China dropped by 45.6% in October 2019 and 45.7% in November 2019. The big drop in China’s EV sales has had a follow-on effect of sharply lower lithium prices.
In the US, Tesla has recently been the largest seller of EVs. The subsidy for the Tesla is disappearing in 2020 because it has sold over 200,000 vehicles. This is likely to adversely affect the growth of EV sales in the US in 2020.
The area of the world that seems to have a significant chance of a major uptick in EV sales in 2020 is Europe. This increase is possible because governments there are still giving sizable subsidies to buyers of such cars. If, in future years, these subsidies become too great a burden for European governments, EV sales are likely to lag there as well.
[6] Oceangoing ships are required to use fuels that cause less pollution as of January 2020. This change will have a positive environmental impact, but it will lead to additional costs which are impossible to pass on to buyers of shipping services. The net impact will be to push the world economy in the direction of recession.
If oceangoing ships use less polluting fuels, this will raise costs somewhere along the line. In the simplest cases, oceangoing vessels will purchase diesel fuel rather than lower, more polluting, grades of fuel. Refineries will need to charge more for the diesel fuel, if they are to cover the cost of removing sulfur and other pollutants.
The “catch” is that the buyers of finished goods and services cannot really afford more expensive finished goods. They cut back in their demand for automobiles, homes, cell phones and paved roads if oil prices rise. This reduction in demand is what pushes commodity prices, including oil prices, down.
Evidence that ship owners cannot really pass the higher refining costs along comes from the fact that the prices that shippers are able to charge for shipping seems to be falling, rather than rising. One January article says, “The Baltic Exchange’s main sea freight index touched its lowest level in eight months on Friday, weighed down by weak demand across all segments. . .The Index posted its biggest one day percentage drop since January 2014, in the previous session.”
So higher costs for shippers have been greeted by lower prices for the cost of shipping. It will partly be ship owners who suffer from the lower sales margin. They will operate fewer ships and lay off workers. But part of the problem will be passed on to the rest of the economy, pushing it toward recession and lower oil prices.
[7] Expect increasingly warlike behavior by governments in 2020, for the primary purpose of increasing oil prices.
Oil producers around the world need higher prices than recently have been available. This is why the US seems to be tapering its growth in shale oil production. Middle Eastern countries need higher oil prices in order to be able to collect enough taxes on oil revenue to provide jobs and to subsidize food purchases for citizens.
With the US, as well as Middle Eastern countries, wanting higher oil prices, it is no wonder that warlike behavior takes place. If, somehow, a country can get control of more oil, that is simply an added benefit.
[8] The year 2020 is likely to bring transmission line concerns to the wind and solar industries. In some areas, this will lead to cutbacks in added wind and solar.
A recent industry news item was titled Renewables ‘hit a wall’ in saturated Upper Midwest grid. Most of the material that is published regarding the cost of wind and solar omits the cost of new transmission lines to support wind and solar. In some cases, additional transmission lines are not really required for the first additions of wind and solar generation; it is only when more wind and solar are added that it becomes a problem. The linked article talks about projects being withdrawn until new transmission lines can be added in an area that includes Minnesota, Iowa, parts of the Dakotas and western Wisconsin. Adding transmission lines may take several years.
A related issue that has come up recently is the awareness that, at least in dry areas, transmission lines cause fires. Getting permission to site new transmission lines has been a longstanding problem. When the problem of fires is added to the list of concerns, delays in getting the approval of new transmission lines are likely to be longer, and the cost of new transmission lines is likely to rise higher.
The overlooked transmission line issue, once it is understood, is likely to reduce the interest in replacing other generation with wind and solar.
[9] Countries that are exporters of crude oil are likely to find themselves in increasingly dire financial straits in 2020, as oil prices stay low for longer. Rebellions may arise. Governments may even be overthrown.
Oil exporters often obtain the vast majority of their revenue from the taxation of receipts related to oil exports. If prices stay low in 2020, exporters will find their tax revenues inadequate to maintain current programs for the welfare of their people, such as programs providing jobs and food subsidies. Some of this lost revenue may be offset by increased borrowing. In many cases, programs will need to be cut back. Needless to say, cutbacks are likely to lead to unhappiness and rebellions by citizens.
The problem of rebellions and overthrown governments also can be expected to occur when exporters of other commodities find their prices too low. An example is Chile, an exporter of copper and lithium. Both of these products have recently suffered from low export prices. These low prices no doubt play a major part in the protests taking place in Chile. If more tax revenue from the sales of exports were available, there would be no difficulty in satisfying protesters’ demands related to poverty, inequality, and an overly high cost of living.
We can expect more of these kinds of rebellions and uprisings, the longer oil and other commodity prices stay too low for commodity producers.
Conclusion
I have not tried to tell the whole economic story for 2020; even the energy portion is concerning. A networked self-organizing system, such as the world economy, operates in ways that are far different from what simple “common sense” would suggest. Things that seem to be wonderful in the eyes of consumers, such as low oil prices and low commodity prices, may have dark sides that are recessionary in nature. Producers need high prices to produce commodities, but these high commodity prices lead to finished goods and services that are too expensive for many consumers to afford.
There probably cannot be a “one-size-fits-all” forecast for the world economy. Some parts of the world will likely fare better than others. It is possible that a collapse of one or more parts of the world economy will allow other parts to continue. Such a situation occurred in 1991, when the central government of the Soviet Union collapsed after an extended period of low oil prices.
It is easy to think that the future is entirely bleak, but we cannot entirely understand the workings of a self-organizing networked economy. The economy tends to have more redundancy than we would expect. Furthermore, things that seem to be terrible often do not turn out as badly as expected. Things that seem to be wonderful often do not turn out as favorably as expected. Thus, we really don’t know what the future holds. We need to keep watching the signs and adjust our views as more information unfolds.
“… the Fed was prepared to continue adding to its balance sheet and providing liquidity to the repo market “at least through April.”
https://www.axios.com/federal-reserve-temprorary-liquidity-89c59d7e-7c47-4663-ae55-33b5b55b39f3.html
because that’s about all they can do at this stage in The Endgame…
the repo madness could be a canary in a coal mine or a black swan…
the talk of having to provide liquidity “at least through April” could be a sign that the Fed is losing control of the behind-the-scenes financial levers which they have their hands on…
they certainly are preventing a repeat of the problems of 2008/2009…
but the next GFC 2.0 will involve a different set of problems…
Wolf Richter had an article up on January 9 saying, Fed Drains $45 Billion from Reported Market, back to Oct level. T-Bill Purchases to Continue. Assets Shrink by Most Since QT
He points out that repo balances, as of January 9, were down to the October 30 level. https://wolfstreet.com/wp-content/uploads/2020/01/US-Fed-Balance-sheet-2020-01-09-repos.png
Wolf Richter sees the situation as the Fed continuing to drain liquidity from the money market at it backs away from repo activities and slows down its T-bill purchases. There is no telling what will happen if there is a real crisis, in his view.
okay, so the repo balance sheet has been at just above the $200 billion level since October 30th except for the 2019 year end spike to $250 billion which was supposedly added as a precautionary measure…
it looks like a 2 month plateau, not any better or worse now than it was on October 30th…
so perhaps they do have control of this, and it won’t burst higher… time will tell…
otherwise, the Fed has a bigger balance sheet than this repo one, of course…
as Wolf shows, the low in mid 2019 of $3.75 Trillion has now grown to $4.15 Trillion…
thus the quote in my link above:
“In a note to clients, she added that she expects the Fed’s balance sheet to move above $4.4 trillion this year, near its all-time high.”
so another 10% move higher, which will “help” the economy…
it’s all they can do…
I have to agree with you Gail about expecting “warlike behaviour ” from governments in 2020 it has already begun to influence oil prices the powers that be are in “shellshock mode” as a result of low oil prices just look at “hitman trumps” assasination of the iranian general.
https://www.ft.com/content/e81763aa-2e5f-11ea-a126-99756bd8f45e?segmentId=d8f597bf-0103-5b1a-c0f7-77b36e0407b1
and here are the results:
WTI $59.12
Brent $64.98
both lower than the 2019 year end…
both just about at new lows for 2020…
perhaps those prices would go higher and stay higher for a while if there was an actual big blowup in the Middle East…
one dead general didn’t get it done…
I guess “The Greenies” never count the costs of a fossil fuel free world.
“THE RENEWABLE GREEN ENERGY MYTH: 50,000 Tons Of Non-Recyclable Wind Turbine Blades Dumped In The Landfill”
https://srsroccoreport.com/the-renewable-green-energy-myth-50000-tons-of-non-recyclable-wind-turbine-blades-dumped-in-the-landfill/
Let’s not twist the skinnies too tight, a coal fired plant puts out about 500 tons of fly ash per year. You can bet the folks at GE, Westinghouse et.all are looking to reduce their costs and their waste. Not much you can do to reduce the amount of coal ash produced.
Let’s not compare apples with albatrosses. A dependable coal fired plant putting out 500 tons of ash per year is producing a lot more useful dispatchable electricity than a capricious unreliable wind turbine farm that puts out 50,000 tons of non-recyclable wind turbine blades and chops up zillions of all those birds, bats and bugs that greenies claim to care about.
Moreover, unlike used turbine blades, fly ash is a valuable material!
For instance:
Fly ash is used in the production of Portland Pozzolana Cement (PPC) in three different ways (1) as a raw material along with limestone in the cement kiln, (2) grinding of fly ash and cement in the mill and (3) blending of Ordinary Portland Cement (OPC) with fine fly ash (Bhattacharjee & Kandpal, 2002).
plus, some Chinese companies were adding fly ash to their dry wall, as a filler. this promoted the growth of mold, especially in humid climates.
I know pretty much nothing about different types of cement, and how they are manufactured. But since I can see the mountain ranges cement mining destroys, and the dust, and the visual blight the cement the cement industry produces, I give cement a thumbs down. But it would make more sense to know how to maintain the maximum iof cement jobs without the horrors of the current industry. If fly ash could reduce the ugliness and the loss of mountain ranges, bringing two mining industries together toward overall improvement, wouldn’t that be preferred?
Fly ash is also very effective as a fertilizer for improving crop yields. (Although some people worry about its heavy metals and radioactivity.) That’s something else that old abandoned wind turbine blades are absolutely useless for.
Coal Dust As Manure
In the February number of the Monthly Mr. J. A. Price, Scranton, Pa., says “he believes that coal dust will make an excellent fertilizer.” And so do I. General as the belief has previously been that coal dust and coal ashes was worthless rubbish, and of no possible good in the garden or field where vegetables are cultivated, and would be better hauled away to fill up an unsightly hole somewhere or repair the roads with, seems at last has been proved a common error.
Of course it was admitted that its mechanical action only upon heavy clayey soils might be as beneficial as so much coarse river sand would be, yet it was very doubtful if it possessed any other value. And I confess that for many years I entertained a similar opinion, and would have willingly allowed anyone to have removed it as a nuisance glad to get rid of. Although we may long remain mistaken about many matters, sooner or later “time discloses all things,” and even the virtue of coal dust and ashes has at last been discovered, and through the pages of this magazine made known to all good men.
Late experiments have proved to me that either on light friable loam or sandy land, even as sandy as much of New Jersey soil is, it is one of the best fertilizers I ever used. Wherever it was freely applied, either in the vegetable or flower garden, its beneficial effects were remarkable. Carrots, turnips and parsnips seemed to delight in it; while peas, beans, salsify and beets appeared to glory in it; and for such like things as potatoes, onions and tomatoes, why they, like “Pardoe’s pig, grew fat and big ” among it. And, talk of the flowers, that tasted it, oh, ” such beauties they did grow,” and did indeed “astonish the Browns” when passing by.
I suspect the reason is that trace elements in the coal become concentrated in the ash. And since much modern agriculture leaches trace elements out of the soil without replacing them, this would be a welcome gift to the plants.
Regarding the issue of discussing declining energy availability (through affordability) with others; I often stop myself because I don’t want to trigger someone else’s depression. As I see it, productivity works upon the assumption that workers will have more tomorrow than they do today. I don’t think any analysis has been conducted (that I know of) which looks at the effect low morale would have on productivity. I expect productivity, and thus profitability, would decline drastically if these issues were public knowledge – not to say anything of the strains our legal system would face…
Yes, I refrain from discussing the issue with anyone who can’t or does not desire to make any adjustments for what seems to be coming albeit much more slowly than many would have thought; it is a good way to lose a valuable friend.
Dennis L.
Paradox of productivity:
At a recent continuing ed. course for real estate licensure I spoke with a fellow in the construction trade (about $50m turn according to him) regarding margins and he related that from the nineties to today margins had gone from twenty percent to five percent. For some reason other than being at the absolute top of the pyramid, such as Microsoft, Apple, etc., the margins decrease rather than increase with the introduction of technology.
This topic arose when the presenter mentioned technology had improved productivity, but on reflection in my endeavors in which I have been involved margins have declined. E.g. investing, margins were much better in the days of paper and pencil than computerized screens – it is often referred to as picking up nickles in front of a bulldozer.
Dennis L.
That is a good point, I would if it relates to the license fees of software in the design and construction industry, plus all of the safety certification and insurance required.
A related issue: Insurance companies use data mining to try to fine tune their decisions with respect to how much to charge a particular risk for insurance. But how productive is this really? The major effort is try to spread risk. Will this really give a particular company a bigger margin? Perhaps if data mining is used to search out fraud in claims, it might have a benefit to the bottom line. Of course, if everyone does it, even this benefit will disappear.
Why would you be getting a real estate license? If you believe what you say? Might as well get a cosmology degree as well!
RE is continuing ed. if one purchases RE and it is listed, commission to the buyer’s agent is 3% locally. Need a license to get the commission, RE license very reasonable.
Working on relearning calculus not quite cosmology, really hard for a seventy plus guy, but doable, it is easier to read science that way, one semester at a time; it is a very good test to see if Alzheimer’s is kicking in, and as preventing dementia is supposed to be related to keeping the mind active, it is a twofer. At this age, one has to love a bargain.
Dennis L.
Actually, if there is a financial system, I expect that people will always be trading real estate. If a person’s job disappears, the person may especially want to move elsewhere.
Without a financial system, we won’t have many job options at all.
Dennis, as one who spent ten years at Carnegie Mellon University, I learned from sad experience how bad modern information technology was. And I put most of the blame on degrees in “computer science”, which seemed utterly divorced from the real world. The result was technology that was expensive, slow, riddled with defects, and utterly user unfriendly.
A classic case was their Robotics Institute, which spent eight figure sums of government money, and never produced a single working robot. One of their flagship products was elaborate machine vision software; when this was uploaded into an autonomous vehicle, said vehicle tried to climb a tree. Yes, it saw a flat, parallel surface, but couldn’t tell that this surface was vertical (a tree trunk) and not horizontal (a road).
And don’t get me started on the airline industry. Computers have no situational awareness, which in an emergency makes them more dangerous than even a rookie first officer. Just ask Boeing.
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What is ahead of us?
When we see the megafire in Australia, we see the reason behind the subsidies of the EU for keeping the countryside cultivated. With the ageing populations, there is no one to care for the countryside and the people die in fire of the hell…
Agreed. But there is a problem when activities have to be subsidized on a large scale. The money has to come from somewhere and eventually the source is going to dry up.
The solution? For Europe, the return of the peasant and the re-adoption of lifestyles that make it profitable for individuals to take care of the countryside. For Australia, a return to controlled burning on a massive style and an end to oppressive laws that make it illegal for farmers and ranchers to burn the land that they manage.
“The Japanese economy is apparently in a recession already, credit research firm Teikoku Databank Ltd. said in a survey report Thursday.”
https://www.nippon.com/en/news/yjj2020010901046/japan-already-in-recession-private-survey.html
while I tend to believe this survey is accurate, the next official government report will be plus 0.1%…
“The research firm predicted that the mild recession will continue.”
I suppose “more of the same” is a standard forecast.
“A senior Bank of Italy official warned on Thursday that a number of smaller banks, especially in the country’s disadvantaged south, were at risk of going out of business…
““We need to avoid a traumatic exit of these banks from the market. It’s not an easy challenge. Such banks are all over Italy but the south faces a situation… that is particularly difficult,” she said.”
https://uk.reuters.com/article/uk-italy-banks-popolare-di-bari-bank/bank-of-italy-warns-a-number-of-the-countrys-smaller-banks-are-at-risk-idUKKBN1Z813E
“It has been a cold, hard winter for Italian government debt. The country has been the euro zone’s worst performer; for the first time its bonds are yielding more than their Greek equivalents with maturities longer than three years.
“Italy’s is the only European bond market whose yield spread has widened compared to the struggling German benchmark over the past three months.”
https://www.bloomberg.com/opinion/articles/2020-01-10/there-s-a-40-billion-reason-to-avoid-italy-s-government-debt
It sounds like a big part of the problem is caused by the ECB:
“Unfortunately, the ECB previously over-weighted Italian assets in its mass purchases, so it’s buying fewer of the country’s bonds to bring its holdings back into line with its fixed targets.”
I wonder if Italy will be the next country to leave the EU. If the currency floated lower, it might do better financially.
It was said so about Greece also, but in the end Greece preferred free money.
I realise Italy is 5+× bigger.
For a lower currency Euro-zone-exit would be enough. Bank bailouts may lead to problems with the deficit limits of the Mastricht contract and thus to a strict austerity regime imposed by the EU. More likely seems to emit a parallel currency, Salvini had plans in the pocket. A point for leaving EU might also be migration issues. The current government is pro-EU. But a recession might bring Salvini back. Italy is the fourth biggest EU economy, only Germany and France would be left.
Jan, I agree. And if Italy left the Eurozone, France would follow. The current Macron regime is desperately unpopular; in Asia we would say it has lost the Tien Ming, the Mandate of Heaven. And a populist government will soon take its place, one way or another.
Europe will then return to its true destiny: as Charles de Gaulle said, a “Europe des Patries”.
“The disadvantaged south.” But for centuries the South was the richest part of Italy. The Norman Kingdom of Sicily, in several forms, flourished from 1130 until 1816. It was founded by Count Roger II, to consolidate the lands won by his father, Roger de Hauteville. (My ancestor; my most illustrious ancestor, who by the way rescued these Maltese Islands from the Moslems.)
After 1816 the region became part of the Kingdom of the Two Sicilies, which between 1817 and 1860 was the most economically advanced and prosperous region of the peninsula.
And then came Giuseppe Garibaldi, an adventurer who was backed by the northern Italian cities, principally Milan, and who unified Italy by force. His “Expedition of the Thousand” conquered all of southern Italy and Sicily, and his carpetbaggers proceeded to loot his conquests for the benefit of the North and his puppet king Victor Emmanuel II. He is celebrated today as a great general and the father of Italian unification. But then, history is written by the winners.
Wall Street hitting record highs:
“U.S. stocks hit record highs on Thursday as Middle East tensions eased, optimism about a U.S.-China trade deal firmed and several brokerages boosted price targets on high-profile companies.”
https://uk.reuters.com/article/usa-stocks/us-stocks-wall-street-at-record-high-on-trade-optimism-apple-boost-idUKL4N29E3JM
US rail freight not:
“U.S. rail volumes kicked off the new year by continuing a monthslong slump, with traffic down 5.1% compared with the same period a year ago.”
https://www.benzinga.com/news/20/01/15100601/us-rail-traffic-starts-off-new-year-in-a-slump
“Just over a year ago, the ECB and the Fed were on the path of gradually reducing their massively expanded balance sheets, and the Fed was increasing interest rates from levels first adopted in the midst of the global financial crisis…
“A year later, all of these measures have been reversed… the Fed and the ECB cleared a path for many interest-rate cuts around the world, producing some of the most accommodative global monetary conditions on record…
“By allowing financial markets again to dictate monetary-policy changes, both the ECB and the Fed poured more fuel on a fire that has been raging for years. Financial markets have been driven from one record high to another, regardless of the underlying economic fundamentals…”
https://www.project-syndicate.org/commentary/fed-ecb-captured-by-financial-markets-by-mohamed-a-el-erian-2020-01
The disconnect between financial markets and the ‘real ‘economy is reflected in the expectations of investors:
“Investors are sending a contradictory message. They’re optimistic about financial markets in 2020, but think the economy is likely to enter a recession. Among investors, 58% say a recession is likely in 2020, while only 5% expect a decline in the stock market.”
https://fortune.com/2020/01/09/investors-survey-2020-recession/
“Chief financial officers at big U.S. companies entered 2020 on a cautious note, with almost all anticipating an economic slowdown against the backdrop of an overvalued stock market, according to a survey released Thursday.”
https://www.cnbc.com/2020/01/09/deloitte-cfos-say-economy-is-going-to-slow-stock-market-overvalued.html
“The fear is that central banks will not have enough tools to fight the next recession… The trouble is that today across the rich world short-term interest rates are still close to or below zero and cannot be cut much more, depriving central banks of their main lever if a recession strikes.”
https://www.economist.com/leaders/2020/01/11/monetary-policy-will-not-be-enough-to-fight-the-next-recession
The combination of 58% expecting a recession and 5% expecting a decline in the stock market is hard to believe. Perhaps losing money in the stock market is more personal.
“Investors are sending a contradictory message. They’re optimistic about financial markets in 2020, but think the economy is likely to enter a recession. Among investors, 58% say a recession is likely in 2020, while only 5% expect a decline in the stock market.”
in my opinion, this is NOT contradictory…
I agree with the majority that a recession is likely in 2020, because the stories/data that we read are mostly pointing in that direction, AND government(s), CBs, the Fed do not have the means to prevent this coming recession…
also I agree with the 95% majority who DON’T expect a decline in the stock market(s), because in this case CBs do have the means to continue to prop up the markets, even with degrading economic conditions overall in the everyday world of common people…
these “investors” and many others are seeing the reality of what is actually happening in this scenario where high stock valuations have very little connection to the economic prospects of the 90+% of common citizens/workers/households…
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The robot priest:
https://www.newsweek.com/mindar-robot-buddhist-japan-1458581?amp=1
“In Japan, the trend may be more likely to catch on, though: Goto says Buddhism’s teachings are more compatible with the idea of robotic clergy.”
https://youtu.be/mJDf1GXaF-w
I prefer Douglas Adams’ electric monk. It did all the believing for you.
“The Electric Monk was a labour-saving device, like a dishwasher or a video recorder. Dishwashers washed tedious dishes for you, thus saving you the bother of washing them yourself, video recorders watched tedious television for you, thus saving you the bother of looking at it yourself; Electric Monks believed things for you, thus saving you what was becoming an increasingly onerous task, that of believing all the things the world expected you to believe.”
I should get one.
Recall that wonderful line from Villiers de L’Isle Adam’s “Axel”:
“Vivre? les serviteurs feront cela pour nous” (Live? Our servants will do that for us)
Perhaps we can update it: “Live? Our robots will do that for us.”
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Gail’s message is getting out there.
http://careyking.com/how-wages-are-linked-to-energy-consumption-data-and-theory/
I know Carey King. In fact, I am on his distribution list, so I received a link to this blog post as well as to his academic paper. The academic paper is free until January 30, at this link. https://authors.elsevier.com/a/1aD7P3Hb%7E0MJ%7EI
This is the abstract of the paper:
What Carey is saying is certainly consistent with what I am saying, but I am not sure that Carey makes the connection to the fact that affordability is what cuts off the purchase of end products, pulling down the prices of fossil fuels and pulling down the economies of fossil fuel exporters.
I suppose I should write to him about the connection between what he is saying and what I am saying. I think he looks at the issue from one direction, and I look at it from a different direction.
Thanks for the link, it will take more time to digest though. It’s worthy to have a copy of it before it goes offline, perhaps simple G: archive would store it anyway..
For now, the “summary” seems to be locked inside the 3.2-3.3 chapters and bellow in the US situation discussing paragraphs.
Obviously they admit many ways how they simplified their model, also incl. non manipulated debt/interest rate, which as we know is not fitting existing reality at all..
Nevertheless, lets quote few paragraphs suggesting the Carey King’s team is close to OFW’s viepoint:
—
“In effect, full collapse occurs in the Renewable-Low scenario because the system reaches a point at which there is not enough net resource extraction to provide the required minimum resource consumption for a population that is declining but still “too large”.
We use Fig. 3 to explain the causal process for reaching the full rapid collapse of the Renewable-Low scenarios. Net resource extraction is equal to total resource extraction minus all resources consumed by the extraction sector, both for operating and investing in new extraction capital. Household resource consumption, in units of nature per time (not money), is the residual resource available after meeting all other resource demands, including those for the goods sector. Once the system is constrained at the minimum household resource consumption threshold, resources extraction is already on the decline, and the system must prioritize household resource consumption by reducing goods sector demand for resources by lowering capacity utilization. As net resource extraction declines toward the level of minimum required household resource consumption, goods net output declines to zero. Eventually, the system reaches NEPR = 0, below which it cannot proceed because the net resource flow is too low to meet the minimum household consumption.”
—
In colloquial terms, “..Look mum, there is new scientific paper on the internets suggesting we buy quality doomer&agri gear pronto, while it’s still available on the market (and we can quasi afford it)..”
🙂
Thanks! I tried saving the article as a PDF, but the automatic PDF that was made was almost too blurry to read.
How did your 2019 predictions (https://ourfiniteworld.com/2019/01/09/2019-world-economy-is-reaching-growth-limits-expect-low-oil-prices-financial-turbulence/) fare?
I can’t say myself as your ideas often go beyond my understanding. Still, I find the tone of the ending paragraphs quite different:
2019 forecast: “If we cannot do anything about it, worrying about the many details of what is ahead is not the best for anyone’s mental health. While it is possible that this is an end point for the human race, this is not certain, by any means.” that I interpret as “don’t worry too much”.
2020 forecast: “I have not tried to tell the whole economic story for 2020; even the energy portion is concerning.” that I interpret as “brace for impact”.
By the way, you have a forecast tag unused since 2012…
I see that the title of last year’s post was, “2019: World Economy Is Reaching Growth Limits; Expect Low Oil Prices, Financial Turbulence.”
I was right about the low oil prices; they were lower than in 2018. There wasn’t a lot of financial turbulence. We can be thankful for that. I had expected that the fact that the benefit of the reduction in the US income tax rates was pretty much a one-time event that was going away would have a negative (and perhaps disruptive) impact in 2019. It didn’t seem to work out that way.
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From The Netherlands.
In 2019 wages increased, but taxes, medical costs and especially housing costs increased even more. Affordability of products and services is becoming a problem. Netherlands imports cheap labour in the form of migrants and refugees from Asia, Middle-East and Africa. The younger generation can only find work with lower wages than their parents, often only temporary jobs.
The Dutch will use less oil products in 2020 because the highway speedlimit is lowered from 130 km/h to 100 km/h 🙂
I think and hope airtraffic from and to the Netherlands stops growing this year. It’s a small country, so everyone lives in close vicinity to a noisy airport 🙁
From my childhood I can still remember the blue sky without contrails. I hope I’ll see the day that the sky will once again be immaculate without contrails.
How the Dutch became the world’s tallest people
https://www.telegraph.co.uk/travel/destinations/europe/netherlands/articles/netherlands-rhine-delta/
It sound like milk and other dairy products played a big role in the taller height.
“The younger generation can only find work with lower wages than their parents, often only temporary jobs.”
This issue seems to exist pretty much everywhere, as far as I can see.
“Beleaguered [UK] retailers have suffered their worst year on record as sales were driven into reverse by a whirlwind of collapsing firms, soaring costs and flagging consumer confidence…”
https://www.telegraph.co.uk/business/2020/01/09/retailers-suffer-worst-year-record/
“France’s powerful trade unions plan to “reinvigorate” industrial action against President Emmanuel Macron’s proposed pension reforms with nationwide demonstrations Thursday after talks between the government and union leaders earlier this week failed to break the deadlock.”
https://www.france24.com/en/20200109-france-french-pension-strike-macron-transport-protest-retirement-trade-union-talks-philippe-pivotal-cgt-cfdt-julien-laferri%C3%A8re
“German industrial orders fell unexpectedly in November on weak foreign demand and a lack of major contracts, data showed on Wednesday, suggesting that a manufacturing slump will continue to hamper overall growth in Europe’s largest economy.”
https://uk.reuters.com/article/uk-germany-economy-industrial-orders/german-misery-continues-as-industrial-orders-fall-unexpectedly-idUKKBN1Z70Y1
“The [Eurozone] currency bloc has lagged every other major developed economy since the global recovery started in 2009 as a chasm between the performance of northern and southern eurozone countries emerged”.
https://www.telegraph.co.uk/business/2020/01/04/eurozone-suffers-lost-decade-weakest-growth-major-developed/
The eurozone is in terminal decline for the same reason some other empires went into terminal decline: the centre is cannibalising the periphery. And as the centre shrinks, the periphery expands. Remember when Italy was a rich country? Remember when Greece was a place of good food, good wine, and good humour? I remember both.
I had originally planned to talk about expanding problems with pensions, in areas other than France, in this post, but I decided it did not fit into the “energy related” theme I was discussing. Of course, in a sense it is energy related. If energy consumption and population had kept rising, it is likely that the assumptions that actuaries used in developing pension plans would have been quite a bit closer to correct.
Fundamentally, pension plans have greatly overpromised relative to what is really available to share with non-working members. Back when the world economy was growing rapidly and there were few elderly compared to the number of workers, their assumptions made sense.
If we look back to the situation before fossil fuels, people worked as long as they were physically able to. They generally lived with one of their children. This is the direction that all societies need to go back to. It is impossible to promise much more than this through the tax system, with the way the economy is functioning today.
you will never convince Joe (or monsieur) Average that his pension/future is inextricably linked to infinite growth
French or any other nationality
Most remain certain that rioting and/or votes will restore prosperity to the level he thinks it should be
this dovetails into my thinking that our oil (energy) age will not end through shortage of oil but by fighting over what’s left
Which is what rioting over pensions is.
One problem is the belief and core assumption that growth can go on forever, another is the belief and core assumption that pensions (and, depending upon where one is in the world, social welfare benefits) are a fundamental right. Personal experience and observation tell me that if an economist or politician offers a future of sustainable growth, then he is she is right and clearly knows what he or she is talking about. If someone like myself points out that a finite world equates to finite limits to growth and it looks like we either have reached or are getting very close to reaching that point, then the response is “you can’t tell the future” and “we must have growth”.
That very strong core assumption is a positive in the short term due to keeping the populace content in the belief that things will be better in the future, but a negative in the medium to long term as it means that nobody is motivated to do anything to plan and prepare (including psychologically) for what lies ahead.
People continue to take on mortgages, pay for vacations with credit cards (including credit cards linked to mortgages), because of such assumptions about never-ending growth. I get emails from Greenpeace (due to my having supported them in the past) making it clear that they (being supposedly environmentally aware) assume that we can keep our civilization and lifestyles intact without fossil fuels thanks to wind turbines and solar panels.
Nobody wants to hear or to know that we aren’t going to have the desired wind turbines and solar panels without abundant supplies of cheap and easy fossil fuels.
We live in a world where looking beyond the immediate surface and thinking would seem to be very much out of fashion and unwelcome.
In Europe they tend to talk about pensions, etc, as being a ‘social conquest’ ie they don’t understand the economic side of it at all, and the democratic power of the people brought pensions into existence.
The assumption is that politics will produce adequate and secure pensions, just like that!
The French reforms seem quite moderate, really, and the refusal to accept any losses or changes is simply infantile.
Well said Curt. Total denial in many places. Especially in the Climate change camp, and I say that as someone who thinks the climate is also beyond repair, it’s just going to take longer to fall apart than the economy.
“Nobody wants to hear or to know that we aren’t going to have the desired wind turbines and solar panels without abundant supplies of cheap and easy fossil fuels.”
https://srsroccoreport.com/the-renewable-green-energy-myth-50000-tons-of-non-recyclable-wind-turbine-blades-dumped-in-the-landfill/
Alice Friedman on her website Energy Sceptic posted this
Preface. This article appeared in the magazine Foreign Policy. Some of the points made are:
Renewables to power the world would require 34 million metric tons of copper, 40 million tons of lead, 50 million tons of zinc, 162 million tons of aluminum, and no less than 4.8 billion tons of iron.
The batteries for power storage when the sun isn’t shining and the wind isn’t blowing will require 40 million tons of lithium requiring a 2,700 percent increase over current levels of extraction. Lithium is an ecological disaster. It takes 500,000 gallons of water to produce one ton of lithium. Most lithium is in dry areas, and mining companies are using up the groundwater, leaving nothing for farmers to irrigate their crops with, while chemical leaks from lithium mines have poisoned thousands of miles of rivers, killing entire freshwater ecosystems.
We’ll also need to replace 2 billion vehicles with electric vehicles, leading to even more mind-boggling amounts of materials.
Ecologists estimate that even at present rates of global material use, we are overshooting sustainable levels by 82 percent
http://energyskeptic.com/
Thank you for the new write-up Gail….seems BAU will continue in the short term👍
Alice Friedemann’s article is a summary of an article (behind a paywall) at Foreign Policy. This is a link, if a person cares to subscribe. https://foreignpolicy.com/2019/09/06/the-path-to-clean-energy-will-be-very-dirty-climate-change-renewables/
Norm,
Paragraph 1: Yes, maybe more about surplus energy than growth. I am not familiar with the data now, but in the Quad Cities, a big UAW town anecdotally I was once told that the average retiree from a factory job could expect to collect a pension for about two years before passing.
Paragraph 2: No idea
Paragraph 3: There is currently rioting occurring all over the world, perhaps the elites have lied so much that everyone sees through it and as one movie said in paraphrase, “We are mad as hell and are not going to take it anymore.” Perhaps more to the point one can be a bear, or a bull, but pigs go to market. The elites have become pigs and it is visible to all.
Paragraph 4: Seems like we are already fighting over oil, It has been said that middle east oil is our, read US oil. Well, if it is pumped dry there probably won’t be a great deal of blowback from populations with no resources. A corollary would be, sometimes one does not need to win, one only needs to last long enough.
More positively, we need to invest in our children, we need to examine carefully myths which have come to the fore in an energy rich age and look to those that have worked at various levels of per capita energy.
Dennis L.
I believe the outrage has to do with people (regular Joe average) facing austerity while elites and banks are constantly bailed out.
So what if they are rioting – do they not have a right to be pissed off? Of course I agree with the thesis that the money is gone and the energy is not there to make them whole, but it sure is rich to blame a person who worked for 30-50 years day in and day out for being the problem.
Let’s wrap our heads around how many trillions of dollars have been thrown to the banks and elites (QE1 – QE4 / NOT QE, ZIRP, negative rates, bailouts, TARP, etc, etc…).
We tried it here in the US and it was like you would expect from a police state controlled by corporations.
https://www.theatlantic.com/politics/archive/2012/07/14-specific-allegations-of-nypd-brutality-during-occupy-wall-street/260295/
https://www.cbsnews.com/news/in-day-of-protests-occupy-wall-street-faces-police-violence/
https://www.washingtonpost.com/blogs/blogpost/post/occupy-wall-street-protesters-get-beaten-maced-by-police-videos/2011/10/06/gIQAVdA3PL_blog.html
I agree about elite privilege etc
but that is only the surface problem which most people can see and get angry at—ie redistibute Bezos’s billions and we will all be better off
which is quite true of course, 300 m people get $10 each or whatever
then what?
the actual means of creating money is still the same, because energy availability remains the same. You can of course resort to the Zimbabwean economic system of printing money to create wealth. The zimbabwean government took the means of wealth creation (productive farmland) and redistibuted it. Then printed money to balance the books
The result?
Zimbabwe went from wealth to being in need of UN food distribution in a few years.
Things are never that simple.
People screaming ‘elites’ can never see further than the end of the arm that’s throwing the rock
This is for Norman. I remember the Zimbabwe fiasco, since I was living in Africa at the time. The source of the country’s prosperity was not “productive farmland”; it was productive farmers. But since most of these farmers were melanin deficient, their land was stolen and give to unproductive farmers, typically cronies of the government or tribes that needed to be placated. Agriculture then collapsed, taking the rest of the economy with it.
I took it as read, that ‘productive farmland and productive farmers’ , were, for the purposes of this discussion, one and the same thing. One could nitpick them apart, but to no particular point as far as I can see
the rest of the comment, except for the melanin part, which I was only vaguely aware of, seemed to agree with the point I was making.
The prime energy resource of Zimbabwe was/is farmland, which they messed up.
does it show any signs of improvement yet?
I make the same point about oil. Oil appears to signify wealth, but the wealth can’t manifest itself until the oil is used somewhere
When I hear: But my wife has a ‘guaranteed’ pension from XYZ, I try hard not to roll my eyes or laugh. Another reason I opted for taking early retirement from Social Security when I recently turned 62. I’ll take what I can get now. I am trying to follow JMG’s advice to collapse early and avoid the rush.
To that end, I have a paid off house in a village next to a national park. No car payments. No debt. Low property taxes. Planning to get some geese this Spring. And of course, more chickens.
My mother tells of her grandfather(this was the first decade of the twentieth century) going from child to child, helping out on the farm as he could, and sleeping in a small space under the stairs to the second floor. Being good to one’s children has merit; our current system has separated our children from their parents through pensions, the children can revolt and simply change the laws and the pensions disappear, hard to riot in one’s later years.
Dennis L.
Gail, I worked in France for a few years. Their welfare state, “l’etat providence” was a cornerstone of government policy, buttressed by repeated exhortations to participate and many scholarly articles, for instance the seminal book by Francois Ewald, proving that it was the best thing since sliced bread.
Whether the government knew its promises could not be kept is another issue, but I suspect they did not, and were as deluded as the theorists and economists, for example Paul Samuelson, who wrote that an actuarially unsound social security scheme was invulnerable to failure.
And now the scheme is coming apart, and workers who participated, and were led to believe for their whole lives that it would provide for them, are very angry, and in my opinion with good reason. There is no solution, and rioting will not provide one, but their anger is in my view a righteous anger.
My dad in Germany is 80 years and has moved together with his friends in a shared flat – fit, upper class, well off boys, always in best mood, unbearable. They dont depend on their children at all.
When education declines the elderly are still useful for knowledge. Think of medicine, construction, technology, agriculture. Not to forget property.
A relative in Spain lived until 90 years with her chicken and her garden in the mountains with just a little help from her daughter living close. The roof was only a thin metal, hot in summer, icy in winter, heating and cooking with logs. She had never seen any doctor until then, not even a dentist. She lost all her teeth with 35. With 90, she moved in with her children and died within two years.
The mom of a friend in Austria has risen five kids with the help of potatoes in her garden, half of them made university. Now she is 82 and walks with a rollator. Last year the kids were busy at office and did not help her in time. When they finally arrived, she stood with her gumboots in the kitchen and said: I have done the potatoes. In dialect it sounds a bit like: I have stabbed the potatoes. She had aches for two weeks and the tiny dog needed several showers to get white again. She can still do it.
World recession will drive Italy to the limits in 2020. Social unrest will bring Salvini back. The banking problem will force Italy to emit a parallel currency which will destroy the Euro or Italy leaves the common currency. Spain is de facto ungovernable.
The brexit is also a consequence of the inability of Eastern Europe to feed their people, especially Poland. The refugee problem in Germany, Greece and Italy is not only caused by the Syrian war but by millions of people from Eastern Europe who cannot survive at home.
I have friends and family among them.
Too many people for resources.
The population problem is fundamentally caused by the rapidly rising population of the Middle East and Africa. This, in return, is related to birth rates which have not fallen enough, accompanied by hygiene and other changes that allowed more of those babies to live to maturities.
At the same time, Germany, Italy and other Western European countries had way too few babies to support the promised pension schemes. Leaders opted to let immigrants in, to help balance out the situation.
The fundamental problem is that the Eurozone does not have enough cheap energy resources. Wind and solar are expensive, when all costs are added. Lack of cheap energy resources makes it difficult to provide jobs that pay well. The countries cannot really cannot afford all the programs that would be needed to accommodate the new immigrants. In many cases, they come from quite different backgrounds that the local community, making them difficult to integrate.
The problem is caused by people smugglers, many of them formalized as NGOs and religious organizations in receipt of tax dollars. In the USA they receive, I believe, $4,000 for every warm body that is resettled. A similar situation obtains in Europe. And then of course there are the for-profit activities of mafias too like the Nigerian mafia or Libyan slavery-and-terrorism groups and even individual politicians like this fellow.
https://gatesofvienna.net/2019/10/swedish-politician-is-exposed-as-a-people-smuggler/
Thus the problem is also caused by the fact that European and US governments are populated with Jacobins and stupendously narcissistic sociopaths who are radically hostile to the heritage cultures and populations of the countries to which they supposedly owe their allegiances and indeed, wish to overthrow and destroy them. Or to profit from them.
“The brexit is also a consequence of the inability of Eastern Europe to feed their people, especially Poland.”
“The refugee problem in Germany, Greece and Italy is not only caused by the Syrian war but by millions of people from Eastern Europe who cannot survive at home.”
This is simply not ture, as ageing Great Britain or Germany needs workforce from abroad. The problem is that the quality workforce from Eastern Europe stops to be abundant due to the ageing and the decline of the populations and the influx of lower quality workforce from other parts of the world is not welcome in Britain.
As regards the food, the higher agricultural subsidies in Western Europe make the agricultural production in the Eeastern Europe uneconomical.
Why is Spain ungovernable?
Catalonia is a issue, but it has survived even Franco, a disastrous and blood thirsty right wing hack.
But with overshoot and ecological destruction, hydrocarbon depletion, the whole planet for humans is going down.
it isn’t just Spain, it’s any conglomeration of nations or states.
The EU was governable only so long as the infinite prosperity myth held up
the same applied to the British Empire (wars of denial again there)
The French had empire denial wars too Viet Nam, Algeria.
The USA empire is in the same (denial) predicament too, as are others. They will all resort to brutality as part of that denial, The USA in particular is headed down that road, it will be nastier than all the rest because the American Empire is its own territorial land mass that is about ot distintegrate.
The USA is a fully armed nation like no other, they have a belief in a divine right to infinite excess, and a political system that defines crazy (with apologies here to US OFW doomsters). Top officials in prayer chants that are promised to offer deliverance/rapture to believers and hell to infidels.
If these lunatics were a minor sect, it wouldn’t matter, but they are running the country, having been elected to office
Civil war looks certain, confirmed by far more clever minds than mine, as prosperity collapses and Jesus fails to return to fix things.
It will make French riots look like a snowball fight.
I’ve tried to explain the nation/collapse thing here:
https://medium.com/future-vision/the-european-union-was-a-construct-of-infinite-prosperity-7a401c225171
Spain just initiated its first “progressive” government since the 1930’s.
Good post NP. I like it.
Im afraid I cant disagree. In poor counties trump is universally hated. Im talking bloodthirsty in your face no reasoning hate. In well to do counties people LOVE trump and are STILL talking hair brain stuff about Obama. I keep on saying hey we all have it great were neighbors and they BOTH want to lynch me. I omost got assaulted yesterday because I said i would feel sorry for the Iranian children if we bomb Iran. WTF
Both seem to feel that solutions lie with force and neither want to even entertain the idea that resource depletion is a basic issue that directly correlates to standard of living.
Some calmer heads feel we will pull together in adversity giving natural disasters as a reference. I just dont know. People are not thinking straight.
All of our models, movies ecetera show force via weapons as solution to problems.
Thats pretty much our definition of hero. Both sides think they are the hero.
Whether people would could actually implement the violence they are fantasizing about i dont know- the real thing- not very nice.
thanks for confirming my thinking cash
as i’ve said all along, that if / when the don becomes dictator, he will have no trouble recriuting people to do his really dirty work.
your neighbours would seem to bear that out—hope i’m not being too harsh there, but the screaming mobs around trump’s podium are telling me that.–the jesusfreaks are even worse.
trump literally incites them to violence.—you have experienced this violence up close and personal. they are taking their lead from him.
If you’ve seen it/felt it, then you are not alone.
take away legal restraints and you will have lynch mobs—all in the name of the lord of course.
come SHTF time, the blame will fly everywhere and stick to everything it hits
i definitely think they would resort to personal/mob violence. Few can understand that the problem is resource depletion. i’ve tried it here in uk—fortunately no one’s got around to lynching yet
“If these lunatics were a minor sect, it wouldn’t matter, but they are running the country, having been elected to office”
All leaders of every ideological stripe are always sociopths or even psychopaths. Normal people with normal psychologies don’t want to be the masters of others.
But as they starve and slaughter us they always insist that this is just the best way to bring about a glorious future.
Some monsters even go on to be worshipped: Napoleon, for example, was a greedy, full-blown narcissistic lunatic, but you rarely hear a word against him. It is hard to know what the rule is, but it seems to be that the more successful the leader is in advancing centralization of government and tighter systems of taxation, the more likely he is to get a pass from historians.
Cromwell is another one like that. Killed 500,000 in Ireland – 25% of the population – but massively improved the ability of the state to raise money for the war machine. So he gets a pretty good press.
i think it was socrates who said:
putting oneself forward for public office should be immediate grounds for disqualification
or something like that
In the words of the late Fast Eddy “++++++++++++++++++++++”
“trump literally incites them to violence.—you have experienced this violence up close and personal. they are taking their lead from him.”
Normon. At this point I see the media and its portrayal of trump as much more inciting than anything trump has done. Its absolutely true that they have condemned him from day one with hit piece after hit piece. In fact their blatant bias and the witchunt of impeachment has made trump very popular. people know propaganda when they hear it.
Trump doesn’t have to present his side. He just points at the obvious hate and bias directed against him. Not a good environment to evaluate ideas. An environment created by the press.
The media pretending neutrality with there words while communicating indignant hate with there tone has totally desecrated journalism. Far from encouraging independent thought and analysis they see their role to tell the people how to think and to vote.
The leftist media is unable to accept anything other than total compliance with their views. This is not a free exchange of ideas. Anyone that doesnt just swallow their predigested view point is labeled and hated. I would define that as fascist.
I really do not care about the issues at this point per se. The supposed issues are causing a division that IS THE ISSUE. I value freedom of expression. I value compassion. So i try to encourage that in people regardless of what side they have chosen. Norman. The fact that you have chosen to mold my statements as a condemnation of trump shows your bias. You ignored the jist of my statement. You twist my words. At this point i regard any argument that defines good and evil as absolutes with a political intent as inciting people to violence.
We are all brothers. We are all neighbors. Race politics and religion and everything else deserves respect. Disrespect for ANY choice and inciting hate is fascist. People need to freakin CHILL. On both sides. Self righteous condemnation is the father of all hate. Hate is propagated by more hate. Compassion allows hate to fade away not violently not by force but to just cease.
Every time you demand hate for trump I lose respect for you norman. You are no different from a XXX condemning homosexuality. You had to put me in category X in order to acknowledge my words. I feel at least as much threat of violence from the left as the right. Neither side is demonstrating tolerance. I have over 20 stitches on my face from being a minority race in my youth. Those were not trump supporters that did it. Not the kind of minority that hate based identity politics portrays. A Tunisian in a Eskimo community is a minority. Race does not matter. Do I hate the race that did it? I refuse to hate. Hate hurts my heart. Until we start to find compassion, demonstrate tolerance, stop using words to make us without sin and others evil WE ARE LOST.
Normon. If I was a Armenian did i deserve those stiches? If i was Polynesian was i a victim? If i am a trump voter did i deserve those stiches? If i voted for Hillary Was i a victim?
People are sick of it. They are sick of hating. Whether its a Latino in the barrio who is is sick of having hate demanded from him for whites or the white in the suburbs who is sick of having hate for Muslims demanded from him. WE REJECT YOUR DEMAND FOR HATE. Flavor doesnt matter. Hate hurts our hearts.
cash
your reply has left me somewhat confused.
With respect, I think I may have misunderstood your thinking. easily done in this medium. I regret the injuries you received through racial hatred. That has happened over 000s of years. I am not going to apologise for my race because all races are guilty, one way or another.
Most aspects of humankind deserve respect/toleration. (Though not all).
The politics of obvious insanity greed and megalomania do not because those traits cause misery to others.
My reaction to the don and his ilk is derived from his own recorded words and actions. I take no notice of hearsay or news media. I form my own view from what is presented to me as established fact. And in his own words.
I respond as I do because he is, by force of circumstance, head of the most powerful nation on earth. That concerns me a great deal. What he does will affect me and mine, here in UK
There is a direct correlation to the same thing happening 87 years ago in Germany.
Both of the above were forced to lash out in all directions to keep themselves in power, and destroy nations. Both got rid of anyone trying to moderate their behaviour. He is now surrounded by sycophants in a dance of mutual support.
The jesusfreaks support his excesses. He gives them a free hand in return. The same applies to the EPA—he kills that in return for support. I could go on. He doesn’t care about the misery this will cause. Human rights, climate, environment, nothing comes before personal ambition and greed.
What kind of man mocks the physically disabled?
But please feel free to point out where I “demand hate” here. (Or anywhere) I demand hate from /to no one. But I am quite good at formulating information and presenting it for collective opinion/action. (not mine). I used to get paid for doing just that.
On some of the work I used to do, “opinion” could get people killed. Not a good idea.
Now I admit to tossing in a bit of humour now and then to lighten things up a bit
I don’t think that hate is a core belief of most people. A tiny minority–yes.
Before taking office he was forced (under duress) to settle a $25m lawsuit for fraud. (or maybe that was just a rumour from the leftist press?)
Numerous accusations from numerous women. His ex wife’s silence has been bought. (One shudders to think!!!) Others have been paid off. Current missis obviously can’t stand him. (tweeting at 3am????)
Self obsession is death to any relationship.
Then there’s promises to pay legal bills in respect of violence. And this from POTUS?
He surrounds himself not with honest people of faith, but with individuals who are clearly mentally unstable. (Have you seen that reincarnation of Joan Rivers who dances around speaking in tongues?) But maybe this does count as normal. Who knows? To us in UK it’s nuts. Millions think it relects sanity and logic.
They seek to deny human rights. Probably your rights too.
A housing minister who asserts that the pyramids were built to store grain?
You can see how he becomes a world laughing stock. And unfit for public office
None of the above is my ”opinion” . Just material that is freely available to all.
Norman; I have read your book. I respect that work.
Half the people of the USA voted for each candidate. We can not condemn one half without condemning ourself as a nation. There is zero possibility of getting the other half to change by condemning them. All the people who voted for Hillary are they evil? All the people who voted for Trump are they evil? All the people who voted for Hillary are they perfect? All the people who voted for trump are they perfect?
Im sorry but your comments about trump seldom address his actions or words. They often wish him a bad fate or express derogatory feelings. Its really not worthy of your intellect.
Your characterization of Trump as a dictator and comparing him to other dictators of the past is a common theme of the media. My belief is there is a more core characteristic of dictatorship. Propaganda is used to portray one side as without sin the other as evil. This is basis and creation of war,At this point the media has zero credibility for me. Why? Because from day one of his presidency every single media piece had one focus one conclusion. Trump bad. Trump dictator. They have a very clear agenda. Its so boringly transparent. How can you trust a journalist that is willing to weaponize their words and only cares about implementing their ideas? You cant.
I believe i have a fairly good understanding of understanding how words are used in propaganda. I speak a couple languages and have read on the subject extensively. I was a linguistics major at one point.
Inciting hate is destructive. Lets say Trump loses this year. Half the people of this country hate the other half. Let say trump wins this year. Half the people hate the other half.
So whats the solution? Kill anyone that disagrees with you? Thats the society that is advocated as “progressive”?
I work in my community. I try to help. 9 out of ten people are probing repeating the talking points of the propaganda figuring out if you are in the “good” box or the “evil box”. This is absolutely the anti thesis to a society where people are allowed free expression in their lives.
Then theres the 10 percent that see each other as another human doing the best we can. When compassion is demonstrated all the propaganda falls away. Peoples hearts are real.
WE have to respect each individual and hear where they are coming from to find solutions.
What allows that? Well people have to not demonstrate hate and define others as evil to start. Then they have to have the capacity to be compassionate and value peoples hearts more than words designed to incite.
The people who are advocating picking up the gun or the Molotov cocktail are just indulging their egos and a latent desire for violence IMO. Most of them have never seen blood on the concrete. They cling to there possessions and lifestyle with absolute entitlement. The two sides of the coin are the same coin.
The people I have known who were unfortunate enough to fall into one or another paradigm that involved war… They have to live with themselves afterwords. Like i said the real thing.. not so nice.
I have known two vets who ended their own life. They were trying to respect their hearts after they numbed them to achieve the purpose they had been taught as righteous. They were very effective in that purpose. They did their job well. When they started to feel their heart they couldn’t integrate it with their past actions.
The vets I know who finally respected their heart. They surround themselves with family. with love.
Ive never been to war but i have my own set of trauma. i tried to be tough and numb out. Sooner or later your heart comes out.
So thats how i see it Norman. Thats my viewpoint. You are working toward people coming together or working towards polarization. Where i live people are struggling to heat their homes and not freeze to death. they have less than a week of food on the shelf for their kids. The left sees me as the right the enemy. The right sees me as the left the enemy. But they both figure out i have a heart. That transcends the propaganda. Sometimes… Sometimes people are determined to keep everything in nice boxes.
Why? Its way better than being numb. Compassion and the beauty of the natural world is how i find some sort of meaning. Compassion risks pain. Its better than being numb. Way better.
cash and Tim
thank you for interesting and informative responses. I can only learn from others.
My thinking on this isn’t from the left or right particularly. But I think we can be sure that excess capitalism is going to destroy the economic system we all rely on.
However, I notice that my entire comment has been ”undermined” by my single line about ”mocking disability”
the rest, which is well documented, is ignored for some reason. I find this fascinating.
(Maybe) The only lifebelt of reason in a sea of documented political insanity. The use of jesusfreaks as ‘presidential advisers’ must I suppose be accepted as ‘normal’ as there has been no criticism of this, or of the alarm it should cause among truly righteous people. (which it does actually)
Trump being an obvious atheist using these people for his own ends. They dance around like an aboriginal tribe around a totem pole
The cheering mob seems blind to this, and his blatant self seeking, and the lies that started on day one. The certainty that he is ‘a chosen one’ seems weird in the extreme.>
I didn’t know about the Don’s flight assistance episode. Too remote for us Brits to hear about.
However this other charitable episode isn’t too remote:
https://www.vanityfair.com/news/2019/11/donald-trump-charity-scam
So he defrauds his own charity? Who is making up this stuff. Surely it can’t be true? Please straighten me out if I’ve got my facts wrong. Add that little number to the $25m fake university fraud
(or was that fake news too?)
this isn’t piling up derogratory material, he’s doing it himself, as fast as possible, and in a big a heap as possible. And doesn’t care.
As I said, I only make these comments because he has an effect on the world at large.
He pulls out of the climate conference because it’s ‘bad for business. When its business thats caused the problem in the first place.
But as I often point out, we don’t have a political problem, we have an energy/population problem. This is the one reality the MAGA crowds will never face up to, no matter who gets elected.
There are times for putting together point-by-point refutations, Norman, and then there are times when it’s more apt to resort to memes.
https://memecrunch.com/meme/C54L4/trump-derangement-syndrome/image.png?w=435&c=1
Norman, I’m sorry to have to say this, but you really need to watch this video and unlearn some of the BS you have regurgitated. It could turn out to be a real education for you. It might at least stop you from falling for and disseminating some of the lying propaganda that Trump’s enemies cook up.
https://youtu.be/dY_4BiyMnBA
It is definitely disappointing to hear Norman’s hatred and vile of Trump (and conservatives) given his intelligent discourse on energy and economy.
Yes, MAGA is a joke for a nation printing over a trillion fake dollars a year. But so are the claims and promises of all the Democratic candidates. As with any politician, Trump probably milks the religious support angle, and why not…..those folks have contributed to America’s productivity over the years, and they have every right to choose their belief support system.
As for Trumps allegedly becoming a dictator….that will never fly, unless some sort of major disaster were to occur. It is useful to note that EVERY president has had executive orders in place to assume martial powers. And please don’t provide any stupid claims that Trump will be the one to enact them. War is the surest route to increasing martial powers and control of freedoms and Trump is ….so far the best “non war” president of any in recent history.
As for violence, Antifa, and their leftist ilk are the ones assaulting people right and left, not conservatives.
It is as if every response is a single transmission, while everyone reading said response represents a separate receiver, getting what is written on a slightly different wavelength.
so some get it as reasonable comment, while others get it as various shades of hatred. And lots in between I guess.
Reading through my past comments, it would seem that referencing misdemeanours counts as hatemail. Obviously we use English with a different mindset.
when, as I’ve said many times, I have no hatred for anyone. I have always avoided people I find distasteful and boorish etc. No doubt there are people who avoid me for the same reason.
As the Don and I are unlikely to cross paths, I have no emotional feelings about him at all.
Chances are he feels the same about me.
As to the dictator part, you are quite right, it will never fly.
UNLESS (to quote you):
And here our minds fuse. Unless there is a major catastrophe of some kind.
There is a general consensus that MAGA is a convenient myth, put about to satisfy the cheering mob. Now suppose things go the other way.
We agree that the western developed world is flying on a wing and a debt prayer. That debt is held together exclusively on the promise of an infinite energy rich future. Everything depends on the infinity bit.
Which is of course a nonsense. But the MAGAmob cannot accept that. Jesus is coming back to fix things. The jesusfreaks laying hands on the don are told by god that this is so. The don can only nod and hope, just like the rest of us.
But we doomsters know this isn’t going to happen, Instead, the debt thing will fly us off a cliff, and the economic system will collapse. This is the common thread of OFW. The general consensus is between 2020/30. Maybe earler than later?
When that happens, (not if) all hell will break loose, because basic energy supply systems will break down. When they do, the mob will take what they have to in order to survive.
The military will be drafted in to keep order, with whoever is POTUS as commander in chief. Soldiers fall in behind whoever pays their wages. (first law of dictatorship).
The second law is: Hire others to do your dirty work.
His godbotherers will be only too happy to help in that respect.
I’ve run this through my hatechecker, and it seems clear. No hate, just presentation of the situation in which we find ourselves. Unpleasant yes. Hatefilled, no.
It keys into the energy problem, because all of the above is interlocked with our predicament of no longer having enough cheap surplus energy to underpin our democracy.
Trump is the symptom, not the cause.
And however unpleasant the disease, hating the symptom is pointless
If Trump wanted war he could of done it when Iran hit the Saudi oil refinery’s under the Carter Doctrine . Iran would be destroyed. Iran and Saudi oil production would be offline.
Both Democrats and Republicans voted for the Patriot act and the NDAA that gave executive branch far reaching power. Do you see the left restoring balance between the house senate and executive? No of course not. If any one disrespects the will of the people incites violence (thinly veiled in tHe name of “activism”) its the left . Kids have big hormones. They want to be a hero. The left could be making deals with trump. Thats what trump does. Rather than accept that their agenda is not supported by the people they attack trump.
I value the middle ground. The left doesn’t. They would rather self righteously attack, obstruct and incite. I am supposed to have respect for that?
Hell trumps actions are sheer Classic democratic. He supports labor. Minorites unemployment hitting record lows.
Face it. The democratic party does not believe in democracy. THey dont dare give trump the tinyest respect.
Thank god he is a ass. Anyone else could not take the attacks he has.
Look both partys are crazy. There are aspects of the right i CERTAINLY am uncomfortable with. The actions of the left SCARE me.
Tell you what normon. Catch a flight. Take a walk through Missoula Montanna. Then take a walk through Camden NJ. I Gurantee you will get educated. Theres a reason why I said Montanna first. Welcome to my world. The fact of the matter is your spouting things you know nothing about
Our politics are BS. All i know how to do is work for compassion at as local level advocate respect and moderation. My ACTIONS show who I am not which brand of propaganda I spout. Im done. Polarized now just like they want. I could rescue a orphanage from fire including all the cats and they would comdemn me if I dont HATE TRUMP. 🙂
I have a sister in law from Germany….she hates Trump. It is an interesting phenomena….I’ll tell you what I do love about Trump…he doesn’t play the polite game…. he calls out the media for the hypocrites and liars they are. LOTS of Americans love him for that.
I have no doubt that, when this game is played out, we will resort to feudalism, with an intervening period of lawlessness. As an American I know that at the Presidents order, every bit of food, energy, farm equipment, water , etc will be “ claimed and owned”. By the US government.
Yea that will be an interesting event when it happens.
Franco, a disastrous and blood thirsty right wing hack
After saving Spain from Pedro Stalin, General Franco walks into a bar.
He asks the barman for a pint of AB Negative.
What newspaper did he write for, Duncan?
Franco is actually better than his opponents the Republicans.
The lesser evil by comparison.
One word explanation: Spaniards.
Multi-word: not every Spaniard will accept being called a ‘Spaniard’.
Gladiator did
but that upset the Romans
can always expect to annoy somebody
Spain has not been able to form a stable government over a longer period. Similar to the problems in Great Britain before Johnsons victory. The reason is the incredible corruption that took place and eroded party confidence and controverses over the direction of the economic policy.
I dont see that Katalonia plays a big role, even when they try to benefit from that situation. Katalonia also is an economic issue. They are (currently) much richer than the rest. That has not always been the case and Spain has invested much in Katalonia. The EU supports of course the break up of Spain as that would mean less influence. You might google the term “blue banana”.
In fact whole Europe is made up by the old tribes that in a lot of cases still have their dialects or even languages. It is completely unthinkable to divide Europe in countries where each tribe or language will form an own state. It is only for political reasons that suddenly powerful institutions declare any right of independence.
Most famous example: The frisics are mentioned in De Bello Gallico and spread over at least three countries: The Netherlands, Germany, Denmark, maybe Belgium. They keep their own language and tradition. Has anyone heard about establishing a frisic state of independence?
Of course Germany and Great Britain need people. Nevertheless a lot of the Brexit movement and also of the anti-migrants movements in Germany are driven by migration. The situation is more complex. My point was, that not the Syrian war but the bad economical situation in Eastern Europe is behind it.
We are talking about consequences of peak oil and recession. I think that they will just squeeze out people. It is already happening.
For most of my statements exist links and written sources but it would make it a scientific post and be too much work for me now, I am reading a lot. Just wanna give an impression from Europe. And yes, it is not the mainstream point of view but from my leftist and personal bubble. The mainstream point of view is, there is enough oil, people with sinking income are just not thankful enough and Germany should have control over the British and French nuclear weapons.
Ouch!
Impressing argumentation, Gail, congratulations! At peakoilbarrel.com they come to similar calculations for 2020. It seems as this could be the year of the long awaited peak.
It seems that instead of any sci-fi solution we will have less energy per capita in the near future. If you travel eastern europe, this future has already arrived: More people in one flat, no car, no heating, no electricity, more gardening. Cognitive dissonance teaches at the moment this is a cultural decision, these people dont want to work (there is none). Ethnisation of social problems.
I agree there are depressive effects, but some are mentally stronger. When the bad situation arrives people will do all to make children survive. This was the case in concentration camps, during famine, in the world wars. Now would be a good moment to prepare, so people wont fell into stone age but bronce age at least. The 19th century already had coal so performance will be much slower. Think of the wild west without railways.
At the moment high estate prices stop people to grow their own crop, which might never replace agriculture but helps a lot. This is where the state should jump in. It might be sold as a traditional path to recreation and healthy food.
What else could be done? Simplified methods for medicine and engineering, sold perhaps as a third-world-standards and emergency preparation. This could be implemented through all subjects. Interest in archeological research could help: How did our ancestors stored grain mouse secure in earth holes?
I think it is still interesting to look for the myths that stop us since the 70s to prepare for the inevitable. We are still in the mindset of the 50s, expecting incredible technologic progress, and on the other hand we fall into fear with the revelation. There is no question that human life on earth is possible without fossile fuels and it can be a good life too. With birth control and building up soil and forests we should be able to avoid very traumatic events and to start again from scratch.
To stop gluttany is not a cataclysmic event like the big flood describes. All our religions teach modesty and a simple just life. But in our administrative system the fight against birth control (Africa) and productivity losses {cut backs for unimployed people) still have priority. The successful guy still has a Porsche not a garden. The trick is to create resilience without paradigm change.
Galbraith (Affluent Society) says that market liberalisation is a consequence of the (necessary) restrictions by the states during war times. Any preparation for an energy restricted future besides individual prepping needs financing by the states. Piketti writes that shrinking economies were possible in history but not without state intervention.
This ideologic fixation may be more important for our inability to react on obvious challenges than myths and psychological depression. Perhaps the upcoming Modern Monetary Theory (mmt) and social unrest might change this.
« Any preparation for an energy restricted future besides individual prepping needs financing by the states».
In this respect i find this article iabout climate research funding interesting:
https://www.sciencedirect.com/science/article/pii/S2214629619309119
«Some of the key climate-change and energy transition puzzles are therefore in the realm of the social sciences. However, these are precisely the fields that receive least funding for climate-related research. This article analyzes a new dataset of research grants from 333 donors around the world spanning 4.3 million awards with a cumulative value of USD 1.3 trillion from 1950 to 2021. Between 1990 and 2018, the natural and technical sciences received 770% more funding than the social sciences for research on issues related to climate change. Only 0.12% of all research funding was spent on the social science of climate mitigation».
«Human habits are difficult to change; doing so requires altering attitudes, norms, incentives, ethics, and politics at the personal, community, and national levels [17]. Therefore, some of the key climate-change puzzles are in the realm of the social sciences broadly defined: anthropology, economics, education, international relations, human geography, development studies, legal studies, media studies, political science, psychology, and sociology [18]. Yet, as we find here, these are precisely the fields that receive least funding for climate research».
It was recently mentioned in the comments on this site that when Ugo Bardi inherited his parents’ home that had been built in 1964, one of his concerns was that it was not air conditioned. He would need to air condition it, and that would add to the cost. Another concern was that the taxes on the property were very high, and the cost of fuel commuting would be high, as well.
It struck me as strange that someone who is very much aware of the issues couldn’t give up air conditioning. This would seem to be one of the first things to give up.
aircon is symptomatic of the things one gets used to
here in uk aircon still isnt usual in houses–unusual i think, yet aircon in cars is pretty much standard now, whereas probably only 30 years ago it wasnt. Same with central heating instead of coal fires. 60 years ago houses were still being built with coal fires.
maybe aircon will increase as things warm up here. Florence, at 43 d N is no doubt changing heat wise.
Here at 52 N summers are still OK
i recall when heaters in cars were an optional extra! –aircon meant opening the windows. Now we can’t tolerate the heat of a car that’s been baking in the sun all day, and we want heated seats in winter.
Only today I found my new car has an altimeter—how did i ever manage without one of those all these years?? Yet also today I saw a Trabant (which was in good condition) on a trailer–so somebody wanted to give it a good home! No heater no aircon.
The old classics are gorgeous to drool over, but impossible to live with.
people used to put up with extremes, now they don’t because the means exists not to—for as long as we can afford it
A sad truth in my case too.
Gail you need to talk to my nephews. Strident believers in Man Made Global Warming.
I am a warmist at best more skeptic than anything. I consider CO2 with just about every action(well cost as well), I might be wrong.
Nephews, “somebody must do something.” Forgetting what they are contributing. Driving fast for no reason(they can save minutes), windows open A/C on, and the reverse. 60 inch flat screen tvs and such replaced every couple of years. And so forth.
If it wasn’t so sad it would be hilarious. The truly sad thing is this seems to summarize a significant portion of the believers. Look at President Obama’s homeS, Vice president Gore’s lifestyle …
T2M
“Global air freight demand fell for the 13th consecutive month in November, according to the latest figures from the International Air Transport Association (IATA). Demand—measured in freight tonne kilometers—dropped by 1.1% in November 2019 compared to the year ago period.”
https://airlines.iata.org/news/freight-demand-falls-again-in-november
““Demand for air cargo in November was down 1.1% compared to the previous year. That’s better than the 3.5% decline posted in October. But it is a big disappointment considering that the fourth quarter is usually air cargo’s peak season,” said Alexandre de Juniac, IATA Director General and CEO.”
“According to analysts, a second downgrade of Pemex’s debt to junk status looks likely. Its production targets appear optimistic, and unless the cash-strapped Mexican government pumps in billions more dollars or drops its opposition to lossmaking Pemex partnering with the private sector in exploration and production, the outlook is bleak…
“…output in 2019 was set to drop 7.6 per cent from 2018, compared with declines of nearly 7 per cent in 2018 and 9.5 per cent in 2017.”
https://www.ft.com/content/5d45694e-221f-11ea-b8a1-584213ee7b2b
“Carmaking is a pillar of Mexican manufacturing, and a forecast by the outgoing head of Mexican automotive industry association AMIA that output and exports would decline again in 2020 does not augur well for Mexico’s stagnant economy…
“Last year, Mexico’s auto production slipped by 4.1% to 3,750,841 units, national statistics agency INEGI said. It was the second annual decline in a row, and the biggest since the recession Mexico suffered in 2009 after the financial crisis.”
https://www.reuters.com/article/us-mexico-autos/mexico-carmaking-faces-rough-2020-as-exports-post-first-drop-in-decade-idUSKBN1Z71P4
“Automotive production, one of the historical engines of Argentine industry, slumped by a huge 32.5 percent in 2019 compared to the previous year, the Asociación de Fabricantes de Automotores (Automotive Factory Association, ADEFA) reported Monday.
“In 2019, 314,787 vehicles were manufactured in Argentina compared to 466,649 in 2018, a statement from ADEFA said. That’s the lowest level since 2004…”
https://www.batimes.com.ar/news/economy/car-industry-decline-underlined-by-325-decline-in-automobile-production-in-2019.phtml
“No one can escape Argentina’s biggest economic crisis in almost two decades – not even the dead. The cost of buying, renting and maintaining graves and tombs is so high that many people opt to cremate their loved ones instead.”
https://www.batimes.com.ar/news/argentina/dying-becomes-a-luxury-as-economic-downturn-hits-home.phtml
“Experts said the dramatic slump was due to a sharp drop in domestic demand amid the economic crisis and a heavy fall in interest from Brazil, the main destination of Argentina’s car exports.”
So Brazil is not doing well either.
I expect that Trump’s interest in putting a wall up across the US -Mexico border is out of concern regarding how poorly the country is likely to do without adequate oil revenue.
“The World Bank has highlighted the risk of a fresh global debt crisis after warning of the biggest buildup in borrowing in the past 50 years.
“In its half-yearly Global Economic Prospects, the Washington-based organisation said of the four waves of debt accumulation since the 1970s, the latest was the largest, fastest and most broad-based…
““Low global interest rates provide only a precarious protection against financial crises,” said Ayhan Kose, a World Bank official.”
https://www.theguardian.com/business/2020/jan/08/world-bank-global-debt-crisis-borrowing-build-up
“Bank of England Governor Mark Carney said central banks might not be able to fight off a sharp economic downturn because their monetary policy arsenals are still depleted from the global financial crisis a decade ago…
““If there were to be a deeper downturn, (that requires) more stimulus than a conventional recession, then it’s not clear that monetary policy would have sufficient space.””
https://www.reuters.com/article/us-britain-boe-carney/central-banks-might-struggle-to-fight-deep-downturn-carney-idUSKBN1Z62IO
“Companies around the world have racked up an immense amount of debt. One worry is that these borrowers could default on some part of the $3 trillion in risky borrowing, setting off a wave of losses for banks and investors. The other worry is that officials aren’t sure who exactly owns a sizable swath of this debt…
“A [global] slowdown half as severe as the 2008 collapse could put some $19 trillion of debt at risk, meaning companies’ earnings aren’t sufficient to cover their interest expenses, according to the IMF. That’s 40% of the world’s corporate debt in major economies.”
https://qz.com/1780597/risky-leveraged-loans-risks-are-growing-regulators-warn/
“If anything, the level of systemic risk may be underestimated. Yield-starved investors have gradually replaced banks as lenders to the real economy. Their share of global debt is at record levels.
“With low interest rates and relatively weak economic growth, the financial system is more fragile than before the previous crisis.”
https://www.ipe.com/comment/systemic-risk-may-be-underestimated/10042966.article
Fine, but we need growing debt to keep the economy moving forward. The situation looks like a predicament to me.
I’ve recently come across this blog and the insights and comments are terrific. Thank you Gail.
You are welcome!
It’s difficult to make predictions, especially about the future.
— Yogi Berra
Was no. 6 inspired by the Trump / Soleimani events, or was it written before? If so, it seems prescient.
It was already on my list of things to write about. The recent activities made it stay there.
I was not too surprised to see that prices spiked and came right back down.
(Note to future internet archeologists: What used to be point no. 6 is now no. 7.)
I had two number fives originally, but fixed the problem. Sorry about that!
WTI earlier today $59.15
Brent earlier today $64.94
both new lows for 2020!
I much enjoy this game…
just when some media are shouting It’s WAR involving oil countries, boom, oil prices drop like a rock ( like Uh-raq)…
by the way, natural gas at $2.16 is at a level seen before in the 1990s…
adjusted for inflation, today’s price is way way lower…
The audio posted by “Hubbs” claimed that in Texas, natural gas producers are not even getting the $2.16. There are some fees netted out, bringing the net compensation down into something not a whole lot over $1.00. I would need to listen again to get the exact amounts.
“If a simple retiree (former structural engineer, 6 years, and then 30 years a high school science teacher) such as me can appreciate the grim future for the world, why can’t they?”
Its very simple. They love their wife and children. They need income. Politics and religion are not the biggest taboos of a tech workplace. Finite resources and buildings falling through the path of most resistance are. Why? Cognitive dissonance is unpleasant.
Some just dont care. As a rule real high IQ humans have real big egos. Ideas that stand in the way of their creation are abandoned. You do know humans are capable of abandoning inconvenient truths dont you?
Many bright people understand the truth. They also understand talking about it is not in there best interests. Usually BOTH at the workplace and at home. Usually the missis puts the quash on any “crazy talk” REAL fast.
So talking about it bad. But THINKING about is bad too! Cognitive dissonance is unpleasant. So most people push those thoughts aside.
Why? You dont have a high IQ to realize the implications of taboo subjects. People want to have loving family relationships. People love their children and want them to be happy. These are very basic and not unreasonable desires. Understanding the truth of our situation doesn’t work toward that so its abandoned like any bad habit that doesn’t serve you although it doesn’t deserve that fate.
1. Discard any reference to the cognitive dissonance material anytime it arises. Hit the eject button. by the way if YOU are the source of the cognitive dissonance guess what…
2. Entertain the cognitive dissonance material but only peripherally like a abstract. A sci fi fiction work. A curious idea. But dont act on it likes its real. Certainly dont dwell on it.
3. Attempt to find unity in goals and actions that accept the truth of our situation. Let me know how that goes for you.. The path is fairly predictable usually starting with beans and bullets. We are social creatures. Not going to find many co truth seekers. Why? see above.
4. Simultaneously accept the truth of our situation and the truth that you as a human have a need for love and acceptance. Value both your birthright and the truth. Walk the line. It can be done but must KNOW ZIPIT. Keep discussion within social norms. Like Jan referring to our future as a “bottleneck”. and watch Gails terminology. She slips up very occasionally but she is A MASTER of discussing the truth but keeping it within social norms. Realize however that finite resources doesn’t fit either of the two predominant political narratives both of which are bat shit crazy (didnt say that).
https://www.youtube.com/watch?v=-KLGIMfgahU
https://www.youtube.com/watch?v=WSS4dOe8Ul8
dont pull a hudson
Excellent comment. I especially like point number 4. Your experience matches mine and probably most of us here at OFW. It’s like living in two parallel universes at the same time.
excellent comment—and to sum up in a few words, we have locked ourselves into a social situation where we need wages
about 4000 yr or so ago, someone had the clever idea of tokenizing energy.
the cumulative result of which has been to turn the entire planet into property and cash.
without wages it is now virtually impossible to survive long term. Even your health is a cash transaction
but it is a fundamental law of nature that the planet cannot be owned. Aboriginal peoples know this, we refuse to accept it.
https://medium.com/@End_of_More/our-world-is-not-our-property-eec56987036b
This is a very fine comment. I very much agree.
I learned back in my “Oil Drum” days that any very frightening post had to be balanced out with several numbers-oriented, more neutral posts. Otherwise, there would get to be an overwhelming number of upset commenters.
In my current post, I tried as much as possible to not say anything too specifically scary. I left some room for the possibility that a particular part of the world might not be affected too badly, too soon. If there was any wiggle room, I tried to give it.
My own family gets upset if I say things that are too negative. When I mentioned that I was going to write an article about why Greta Thunberg is wrong, I discovered that my husband is a fan of hers. People can accept that maybe there is an oil problem, but they would like to think that perhaps there is an easy solution as well. A lot of work that is being done today is in the direction of supposedly finding easy solutions to our energy problems. Throwing stones at supposed easy solutions is a major part of what gets people upset.
Thank heaven for little girls!
Greta’s performance is very reminiscent of that delightful creature in the Just William stories, Violet Elizabeth Bott:
https://youtu.be/HXiZHXkG-ac
Thank you Gail (and others) for your honest thoughts and insights and for running a comment section of such commune . I am fortunate in having a close friend around the corner who sees it like this as well as a monthly Green Wizards meeting to share observations from a knowledge of energy, economics and environment.
It is interesting you mention recycling. I remember that we started recycling newspapers after the 1973 oil crisis.
Oil price spikes will again come from events in the Middle East, just like in 1973 (Yom Kippur war), 1979 (Iran peak oil 1975 under the Shah) and 2005-2007 (Saudi Arabia’s decline in oil production)
Once US shale oil has peaked, we are back to square 1.
The chaos in the ME is the continuing and permanent late effect of the 1st peak oil war in 2003.
Bush and Cheney thought to push peak oil 2005 into the future as Iraq had under-produced oil during the Iran-Iraq war and during the oil-for-food sanctions.
This OPEC depletion graph was shown in Oct 2004 at the CSIS in Washington
https://pbs.twimg.com/media/ENoXDKEU0AAdJCa?format=jpg
Therefore, Saddam had to be removed so that the oil production sanctions could be lifted.
Cheney from Halliburton knew about fracking but he could not imagine oil prices at $100 plus for a long time. Nor could he have expected the Feds to print money QE1-QE3 to support that shale oil.
On the 10th anniversary of the Iraq war I wrote following article:
16/3/2013
Iraq war and its aftermath failed to stop the beginning of peak oil in 2005
http://crudeoilpeak.info/iraq-war-and-its-aftermath-failed-to-stop-the-beginning-of-peak-oil-in-2005
Iran filled the power vacuum.
Hillary Mann Leverett thinks that Trump either wants to be better than Obama and make a new deal with Iran or burn the Persian Gulf – not really an option in an election year.
at 19:30 min
https://www.youtube.com/watch?v=3QfZZz-RrfE
Apparently Trump had come to the conclusion that Soleimani was in the way of such a deal
The US failed to act after the Abqaiq attacks
1/10/2019
The Attacks on Abqaiq and Peak Oil in Ghawar
http://crudeoilpeak.info/the-attacks-on-abqaiq-and-peak-oil-in-ghawar
Now we have seen yet another precision missile attack. It seems it avoided hitting personnel
https://www.npr.org/2020/01/08/794517031/satellite-photos-reveal-extent-of-damage-at-al-assad-air-base
More to come:
https://foreignpolicy.com/2020/01/08/iran-revenge-plans-bigger-than-missile-strikes-suleimani-retaliation/
It is only a matter of time until something goes terribly wrong.
Yes, it’s all about nudging the curves on the graph / figure4, and nowadays especially about the red one, when it eventually plateaus and starts to severely deflate (at least per half-decade threshold) this will usher profound changes – suddenly becoming very different planet in many ways (both micro and macro)..
I agree that things could go terribly wrong in the Middle East. In particular, wars could break out. But I don’t know how this will turn out.
Any Middle Eastern country that doesn’t have its huge population of poorly employed civilians would be, in a sense, a lot better off, when it comes to making a living from its oil income. As a country gets poorer, does the population succumb to epidemics? I don’t know. This has been the outcome in some overpopulated areas in the past. But wars with neighbors are also a possibility when there is severe overpopulation, and overthrown governments are other possibilities.
I expect that before the US would allow oil production to be cut off by an overthrown government, it would intervene. There would be another Mideast War to end the problem. Such as war could be short, and any outage short.
I still will not lose sleep over high oil prices.
“Thus, we really don’t know what the future holds. We need to keep watching the signs and adjust our views as more information unfolds.” Very wise.
I noticed there are odd signs of trouble in the Repo market. I don’t know it myself, but there was an article in yesterday’s “Financial Review” in Sydney which concurred with a Kunstler blog about this change. The Fed pumped $990Billion overnight to calm the market. Why? Don’t know. Kunstler says the shale oil business is about to crash as people have stopped funding it since it only loses money. How does this square with your thoughts?
I don’t think the problem is as bad as you described.
This first article talks about 99.0 billion being injected into the repo market. Perhaps you lost a decimal point somewhere along the line.
https://www.zerohedge.com/markets/repo-remains-paralyzed-fed-announces-first-oversubscribed-term-repo-mid-december
This second article, from today, shows that injections keep getting greater, day after day.
https://www.zerohedge.com/markets/markets-repo-addiction-getting-worse-latest-term-repo-operation
https://www.zerohedge.com/s3/files/inline-images/fed%20liquidity%20injections%201.8.2020.jpg
Its concern is that the amount keeps building each day. The longer the Federal Reserve lets this go on, the more addicted the market will get to it, and the more impossible it will get to pull the plug.
Seems more “investors” who have been losing constantly on ‘shale oil (and gas)’ operations are beginning to look elsewhere to put their monies. This could lead to a more rapid decline in shale production – along with 70-90% loss of production over 3 years after fracking for the first time. Wonder what the American people will think and do when their visions of “Saudi America” comes tumbling down?
Sorry, I need to attend a meeting tonight, so I can’t answer questions until tomorrow.
I am afraid that world oil production will drop when US shale production falls. The drop in world production will be enough to badly shake up the world economy. International trade will likely drop substantially. Financial markets will likely crash.
Right now, total energy supplies are almost doing OK because natural gas production is rising rapidly. But natural gas production is probably worse than coal and oil for being unprofitable for producers. US natural gas production is in danger of crashing in the next few years, as companies react to the incredibly low prices.
It is really difficult to ramp up natural gas production, because it has to have a “place to go.” The main thing it can do is replace coal in electricity production. China can perhaps use some natural gas for heating, to replace coal used for heating. Without having buyers for more natural gas, more natural gas just drives prices down.
Gail, Great article. But I don’t understand your concerns about our energy future. Clearly there is no real problem. Earlier today, I heard some discussion on the radio about the big annual electronics/tech convention in Las Vegas. All the new high tech devices and gadgets to be expected in the future were mentioned. In 10 or 20 years, such things as flying cars (Yes, flying cars.), an army of driver-less cars flooding the highways, and other such energy consuming things.
Wow, Amazing. These high tech folks are supposed to be futurists and bright people. In all these gatherings, there is never a mention or even a hint of of the impending energy crisis. Gail, I’m sure you have contact with some of the movers and shakers in the high tech community. Are they really that clueless about the peak oil/ natural gas/ coal/ rare earth minerals, etc? Or are they in denial?
Every time I hear about billions of dollars being spent on new freeways or airports, I say to myself, “what a waste of resources”. If a simple retiree (former structural engineer, 6 years, and then 30 years a high school science teacher) such as me can appreciate the grim future for the world, why can’t they? I mean, really now,,,,,, finite means “FINITE” You rock, Gail
Telling the truth will lower their yearly bonus. Would you pay 20 million dollars to tell the truth?
I know some of them. They are very bright they will not spit on 20 million dollars just so some survivor can sit around the camp fire and say “I remember when Linda Ofenstein (made up name) told the truth”.
The problem we have with energy is a subtle one. People kind of understand that there is a problem, but they don’t understand how self-organizing networked systems work. They think that a shortage will be announced by high prices, but that isn’t really the way it works.
Even the people who do understand that there is a problem are hugely afraid of scaring the population. These people would much rather endorse a global warming model (based on an assumed huge future supply of fossil fuels) than a “fossil fuels are leaving us” story, especially if there is nothing we can do about the problem. They hope that the solutions might be the same for both problems. Unfortunately, it is not clear that there is a solution for either one.
The high tech people are people who need to earn a living. They go where ever they can find grant money. They write stories to try to match what the grant-writers want. Driverless cars really work in the wrong direction because they cut off an important source of jobs for people who do not have much advanced education. Without jobs, people cannot afford to buy finished goods and services. Our big need now is for a lot of jobs that pay well. Devices that take away jobs are not helpful.
https://www.abc.net.au/news/2020-01-08/lithium-sulfur-battery-greener-cheaper-and-more-efficient/11849590
We do have a lot of sulfur, I agree.
The question is whether we can make the whole system work, soon enough, to keep everything going. For example, we use fossil fuels for paving roads. Without paved roads, cars operated by lithium sulfur batteries will be much less useful.
“It is possible that a collapse of one or more parts of the world economy will allow other parts to continue”. Can you expand on that a bit?
Some parts of the economy seem to be inherently less efficient. For example, if a few people in Alaska live in places that can only be accessed by occasional airplane visits in the winter, the whole effort to serve these people makes no sense, unless Alaska has a very rich economy and can afford to service this area with the excess tax revenue from elsewhere. It make more sense to simply tell these people to move. It takes a huge amount of resources (oil, in particular) to service them.
Some people talk about “core” and “periphery.” The core part provides essential functions. It is, in some sense, a net giver to the economy. The periphery is mostly a taker, especially when an economy has surpluses. When those surpluses go away, the periphery is at risk of getting somehow cut off or starved out.
Some examples of periphery:
1. Islands tend to be in the periphery. If most of their income comes from tourism, this income is at risk if the economy is in poorer condition. The cost of electricity tends to be absurdly high unless the island is like Iceland, with its own source of cheap energy that can be used to generate electricity. Without cheap electricity, it is hard to make anything to trade with the rest of the world economy for needed imports. Bermuda and the Cayman Islands make their money from insurance. This works as long as the insurance business holds up, I expect, will not otherwise.
2. Elderly and disabled people tend to be in the periphery. A rich economy can make lots of promises to them, but as the economy gets poorer, it cannot keep those promises.
3. People in the non-oil producing portions of economies in the Middle East would seem to be in the periphery. These economies seem to need to support a large number of hangers on. How they can continue to support these people at low oil prices is a question.
4. Communist countries and other countries that allocate resources in ways that don’t really correspond to the benefits that people provide. The Soviet Union was vulnerable to failing with its inefficient industries. People in Cuba say, “The country pretends to pay us and we pretend to work.”
I really haven’t thought this all out. Clearly, some pieces of a world economy have to go, but where do you stop and how?
Africa was where humans first evolved. Is this where humans can live best in the future? Are all of the layers of things that we think we need (financial planning, video games, advanced education and medical care) superfluous, for example?
Interesting new factors! FYI, Gail. You have two #5’s.
THanks!
How ironic the hedging of oil is these days. Not airlines trying to secure lower prices, but rather producers trying to secure higher prices. The scrappy Jason Burack of http://www.wallstreetformainstreet.com mentioned how there may have been a rush of shale oil producers to lock in higher shale oil price options based on this what looks like is this temporary spike in the price of oil because of Iran’s top general Qassem Soleimani’s death.
Thanks! I listened to parts of this.
Don’t believe statements that companies can generate free cash flow at $35 barrel.
Oil companies locking in higher prices with derivatives, when they can.
Small companies especially being cut off from new financing.
Natural gas price even lower than indicated by indexes. It is an enormous loss in West Texas and Oklahoma. (Indirectly, this affects overall oil+gas results).
Need higher oil prices for more oil production.
Exxon Mobil needs to make big write-off of XTO purchase. $30 billion (?) XTO is mostly natural gas.
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I am honoured to have the opportunity to read and learn from such an amazing systemic thinker as you are. Thanks!
Gail has been the prominent teacher in my life for the past 15 years.
I have been blessed by a large number of commenters who feed me ideas and interesting industry developments. Without their help, I couldn’t write these posts.
In the comments, we sometimes discuss topics that don’t very often get into posts, such as whether there is a god.