Expect low oil prices in 2020; tendency toward recession

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:

  1. In building the cars initially, and
  2. 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.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Financial Implications and tagged , , , , . Bookmark the permalink.

1,162 Responses to Expect low oil prices in 2020; tendency toward recession

  1. Herbie R Ficklestein says:

    Trump not only undoes all programs enacted by President Obama, now he’s turning attention to Michelle! Way to go Master BAU😘👍

    Trump Targets Michelle Obama’s School Nutrition Guidelines on Her Birthday

    https://news.yahoo.com/trump-targets-michelle-obamas-school-151227058.html

    WASHINGTON — The Trump administration moved on Friday to roll back school nutrition standards championed by Michelle Obama, an effort long sought by food manufacturers and some school districts that have chafed at the cost of Obama’s prescriptions for fresh fruit and vegetables.

    The proposed rule by the Agriculture Department, coming on the former first lady’s birthday, would give schools more latitude to decide how much fruit to offer during breakfast and what types of vegetables to include in meals. It would also broaden what counts as a snack.

    A spokeswoman for the department said that it had not intended to roll out the proposed rule on Obama’s birthday, although some Democratic aides on Capitol Hill had their doubts. Food companies applauded the proposal, while nutritionists condemned it, predicting that starchy foods like potatoes would replace green vegetables and that fattening foods like hamburgers would be served daily as “snacks.

    Ketchup is back on as a serving of a vegetable!

    • Artleads says:

      That’s what you get when communities don’t step up to organize themselves and see that their schools teach students how to grow their own healthy food. What the devil are they teaching the youth instead?

      • Herbie R Ficklestein says:

        Poo, poo, grow your own food!😜… Sure thing Artleads….like that’s gonna happen
        You pointed why that doesn’t happen…the Fed Got does NOT desire to have self reliant citizens. That is reflected by the fact the Independent Small FAMILY farmer is largely a thing of the past. Can’t have too many of those folks out and about…got to run the off to the big city and herd them into big urban, metro areas to be controlled….
        Believe that was pointed out by someone much wiser than myself

        • cashisking says:

          whatever. What if .gov didnt want you to wipe? Would you give up on that too?

          • Adam says:

            nothing to say pertinent to the discussion i see.

            • cashisking says:

              Whats not pertinent? Humans. We make up words to justify. YOU EAT. I EAT. WE NEED FOOD. Providing food is part of our existence. Just like wiping.

              Whats more appropriate action growing food, interacting with mechanisms and processes that provide it or asserting some invisible all powerful malevolent entity is preventing you from doing so?

              I find the study of pro athletes psychology enlightening. On a given day they have all the physicality of winning. One day they are “in the groove”. There best performances are based on mental construct. Loser have list of excuses long as their legs. Winners dont have excuses. They encounter the same obstacles in the physical world. One mental construct is a exercise in productivity. One is a exercise in laziness.

              Im probably the worlds greatest pessimist. My nickname is eeyore. Right now we create constructs with words that are either appropriate or not. Our constructs create our actions. Those actions alone do not determine outcome. The question is our essence reflected in those actions.

              Here we often get caught up in realizing inappropriate actions are resulting from not acknowledging our situation. Thats the truth. It also the truth that the constructs we create determine our actions and their relative success and failure.

              Gotta go. helping a family with their build today. In January. It will have a full greenhouse. Its taken them three years. Thats with the husband with a bad wrist that got smashed working for someone else that he never sued over 12 years ago. He should have stayed in bed blamed dot gov and took disability?

            • Herbie R Ficklestein says:

              Without BAU….status quo …building a greenhouse will not be an option…
              We assume just because we can do it now, after collapse, because we have the “know how”, we will be able to continue ….sure right….in your dreams.
              Yep, helped build a greenhouse myself once or twice in my years and here is one example

              I was there when Jerome had a home made salvaged greenhouse way back in 1989!
              Guess what….it was attached to a chicken coop that had a wood fired stove and BURNED DOWN!
              BAU to the rescue….the community of Aspen CO pulled together and gathered energy credits….money to build a modern state of the art design…good for Jerome!
              Without BAU no greenhouse….no food….

            • cashisking says:

              “Without BAU….status quo …building a greenhouse will not be an option…”
              Well that is absaloutly true.
              Going even one layer deeper there will the water for the plants comer from post BAU.
              Oh and if that cow manure that you haul with your pickup truck is not going to be there
              If the ferrtiliser for the gtass that those cows eat not there?

              I could do what most do and jump to the defense of the “green” actions saying somthing snarky like well just **** yourself right now.

              Thats not what i choose to communicate.

              We have a situation where we all suck from the teat of fossil fuel.

              Yet we all are of and have connection to this planet.

              We think we have to choose one or the other. That creates enormous cognitive dissonance because two truths can exist simultaneously. Our brains dont like it when two artificial constructs conflict. BECAUSE WE SEE OUR THOUGHTS AND WORDS AS BEING MORE REAL THAN MODELS.

              What we do have is our life and our actions. I put that forward as truth. Our thoughts have power. Are thoughts do not have power. Both of those are absolutely true. Because our thoughts are a model a representation. A very poor representation compared to a cad (oops dating myself make that solidworks) drawing or such.

              Yet we seize on these poor representations as absolutes. Take extreme actions like war.
              No wonder because we have created a war in our selves.

              I will leave you with a statement. Condemn it if you wish. Applaud it if you wish. Realize it is a artificial construct if you wish. I consider it truth. My actions often reflect it.

              Understanding the truth of our situation it is appropriate to participate in activities that connect us to the planet with much greater frequency and depth.

    • Dennis L. says:

      Kids need to eat better, they need examples, we need to invest in our children and food is an investment. Were one to go further what were once called food stamps, principally designed to help farmers, could eliminate processed foods, more money to the producer, better nutrition, what’s not to like?

      We need to seek policies to help our children in ways that are not designed to funnel ever more funds to the providers as a first goal and children only an afterthought.

      Cheetos are delightful, easy to eat, but not very good for us, A piece of cheese and an apple have protein and fruit in a package that does not need recycling, it is a twofer.

      Michelle was right on this one, and this idea truly cut across all groups, benefited all children and was inclusive without being divisive, brilliant policy.

      Dennis L.

      • Kim says:

        Michelle Obama’s suggestions are confused and stupid. Where are the fats? Are “fruit” and “dairy” comparable with “protein”? Protein is a macronutrient. Fruit and dairy are not.

        • There seem to have been some strange things about how precisely the Obama requirements were stated. One article I read claimed that the way the Obama quantity requirement for fruit was stated, a small child needed to be given two bananas, rather than one. There can be a lot of “devil in the details” problems.

          Also, kids who live on french fries and hamburgers at home have a culture shock when they get different food at school.

          I understand that a lot of the food kids get now is individually packaged, adding to the paper and plastic waste around the world. I expect that most of it is fairly processed, whether it meets the Obama requirements or the newer ones.

        • Dennis L. says:

          “Dairy Products Contain Protein, Fat, and Carbohydrates.
          Low fat milk is about 30% protein, 50% carbohydrates, and just 20% fat. To make cheese, on the other hand, they separate out the whey, which contains most of the carbohydrates. Cheese is about 25% protein and 75% fat” “https://www.google.com/search?q=is+cheese+p%3Brotein&oq=is+cheese+p%3Brotein&aqs=chrome..69i57j0l7.3760j0j8&sourceid=chrome&ie=UTF-8”

          As for macronutrient, I don’t understand your comment, again lack of knowledge. Googled macronutrient and came up with this: “Those that are needed in large amounts are called macronutrients. There are three macronutrients required by humans: carbohydrates (sugar), lipids (fats), and proteins. Each of these macronutrients provides energy in the form of calories.”

          This reference in web MD also has information on diet including protein.
          “https://www.webmd.com/fitness-exercise/guide/good-protein-sources”

          Over the years I have cut back on meats other than fish and chicken, trying to get used to salmon. Many days I have garbonzo beans with a salad and thanks to the comments here, I researched it a bit and became an expert. “As a rich source of vitamins, minerals and fiber, chickpeas may offer a variety of health benefits, such as improving digestion, aiding weight management and reducing the risk of several diseases. Additionally, chickpeas are high in protein and make an excellent replacement for meat in vegetarian and vegan diets.May 7, 2018” Healthline.com. Harvard also thinks they are good for you so what is not to like? You might want to watch that fiber if you have a meeting or a TV presentation, some possible sounds can cause discussion such as Eric Swalwell made recently on MSNBC, but then some say there is no such thing as bad publicity.

          Diet seems to have been influenced more by what people had to sell and make a profit on that what is good for us. NYT once reported the sugar lobby tried to shift the blame for heart disease to fat in the 1960’s apparently by shifting research dollars, imagine that. No one can say that that idea was bad for dental incomes, again, a silver lining is always there if one looks carefully. https://www.nytimes.com/2016/09/13/well/eat/how-the-sugar-industry-shifted-blame-to-fat.htm

          No matter, one would think it must better for the kids than various stuff in a bag which is typical, and yes, I do like the taste, don’t most of us?

          Enjoy,
          Dennis L.

          • naaccoach says:

            Yes, all of the pictures of chick peas on the cave walls…

            Web MD is a poor reference for diet. Carbohydrates are in no way required for humans, a non-essential (macro)nutrient. Most vegetable protein is incomplete and difficult to digest for humans with lots of indigestible fractions (lectins, gluten, etc).

            The cave wall paintings were our ancestors key to survival and successful procreation. Might still be useful today. Non-processced Paleo diet – check Weston A Price and his adventures/investigations.

    • cashisking says:

      Well as everyone knows I am not a trump basher. His obsession with all things Obama and their undoing concerns me. Jeez get a rooom. 🙂

      • Tim Groves says:

        At least America’s kids will no longer have the contents of their lunches and the number of bananas they are allowed or obliged to eat dictated by Michelle Obama. And “dictated” is the word here. Do we really want the Federal Government setting rules that govern ordinary citizens’ eating habits? Surely that’s someone else’s job.

        • Chrome Mags says:

          Michelle was trying to help children eat healthier lunches. I don’t see anything wrong with that. But politics has reached the point in which hatred of anything from a Democrat means doing the opposite if the goal even if it’s unhealthy for children. I think that’s unfortunate, especially for the kids.

          • Robert Firth says:

            Chrome, I also see nothing wrong with “trying to help children eat healthier lunches”. But that is not what Michelle did. She *ordered* children to eat lunches that *she* considered healthy, and even tried to prohibit parents from packing lunches for their own children. That is not good government; it is tyranny.

            • Xabier says:

              Quite so: it’s the same with those of my relations who are teachers in state schools in Spain.

              They say it is their responsibility (not families!) to ‘shape the good citizens of the future’; but of course they do so according to their ideology, and it’s really brainwashing.

              Tyranny, and an attempt at total control disguised as benevolence, in collusion with politicians – the very last people one would trust with shaping the future!

              As Jung would have put it, an attack on ‘the sacrosanct dignity of the individual soul’.

              The individual to them is a blank slate to be imprinted with their idea of virtue: in other words, Totalitarianism.

              Hitler thought that he had the right to turn all the males in Germany into soldiers, and exterminate the unfit. There is no philosophical difference in their approach.

            • Dennis L. says:

              Robert,
              The Ten Commandments were simple and phrased, “Thou shall and thou shall not.” In modern terms they were not situational. We can spend endless hours debating something as simple as fruits, or eat fruits, etc., assume they are better for a child than a burger and fries and accept the idea that perfection is the enemy of good enough.

              A good mother orders, a good father enforces those orders, or so it was in my youth; on reflection those orders were more often right than wrong. Until a child leaves the home, it is tyranny. In my youth we had the metaphorical tyranny of a very persuasive tiger selling sugared cereal. That tiger ordered sugar, my mother bought Cheerios with no sugar, pure tyranny, a higher tyranny.

              Yes, Michelle did “order.” Perhaps that plate was not ideal, but it was not bad. So for me, I’ll take another order, Michelle.

              Dennis L.

            • Robert Firth says:

              Dennis L, I agree entirely: “A good mother orders, a good father enforces those orders, …”

              But that is not what the Obama administration tried to do. It tried to usurp the natural authority of mothers and fathers, an authority grounded in Nature and her impulse to love ones children, and to replace it with the coercive and uncaring authority of the bureaucratic state. That is why I call it tyranny.

              The family is the smallest civilisation, but it is the bedrock upon which all the others rest. To learn what happens when that foundation is destroyed, visit Detroit.

            • cashisking says:

              A mythical political creature goes to the bar and orders a shot with a beer chaser. This creature has talking arms. The left arm cries out “the right arm is evil it must be removed”.
              The right arm responds with a pious crie “the left arm is evil it must be removed”. A week later the creature is wheeled into the bar with all arms legs lungs and heart gone and asks a shot be poured in his mouth. The bartender asks what happened and the creature goes “oh u know, politics”.

  2. Herbie R Ficklestein says:

    What do expect!? A Welfare Bonus or extra Food stamps!?
    Ocasio-Cortez sums up inequality in 5 words after Dow breaks through 29,000

    https://finance.yahoo.com/m/e9f12251-cdbf-37e5-bcfa-9de4634c43b4/ocasio-cortez-sums-up.html

    The New York Democrat tweeted her thoughts on “inequality in a nutshell,” in a response to NBC’s coverage of a fresh high for the Dow Jones Industrial Average on Friday
    New York Democrat was making the point that while the blue-chip index rallied more than 20% last year, U.S. average hourly earnings gained less than 3%. And since stocks are generally held by those with higher wealth levels, the data would support her “rich getting richer” stance.
    Of course, President Trump constantly touts record highs in the market — like his “409K” tweet last week — but critics like Ocasio-Cortez maintain that such a message is irrelevant to the working class, which has missed out on such gains.

    Only about half of Americans own stock, according to the Fed.

    No, AOC ….14 states, New York City and Washington, DC are suing to block a recent Trump administration rule that will deny food stamps to about 700,000 poor adults.
    The new rule tightens work requirements for food stamp eligibility for able-bodied adults without children.
    The rule ignores local labor market conditions that can make it hard to find work, the suit says
    From CBs News…

    Don’t fret too much, as Shortonoil posted recently on PeakOil News

    You are referring to the MAF (maximum affordability function). And yes, it broke when the central banks dumped $26 trillion in counterfeit money into the system, and it broke along with the pricing of every other asset class in the world. One can now buy a share of stock for a company for $500 that has never turned a profit, and never will. The system is no longer functioning, and will self destruct in the very near future.
    There are now two key variables to watch: 1) the world is burning 9 barrels of oil for every 1 it finds to replace it, and 2) the debt is growing exponentially. The rest is fluff to keep the sheep preoccupied as the lights go out, people drink themselves to death in despair, and the store shelves go bare. We will soon not be able to fix anything that is broken, replace anything that has been destroyed, or have the benefit of a functioning government. The wheels are coming off modern, technological civilization. It may be a coincidence that it is all ending with the end of oil age; but most likely, it probably isn’t.
    For anyone who wants to disagree, fine. Go book a flight on a Boeing 737 MAX. You won’t be missed.

    Boy, this will be a wild End of the World Party!😜🚀👴

    • Dennis L. says:

      The last sentence, “Boy, this will be wild End of the World Party.” Your frustrations are so noted and appreciated, but this old world has been around for a long time.

      Technology is not slowing down, it appears to me as one who uses it to be getting ever better. Cars for all the complaints are better and seem about the same price as the sixties when I worked for minimum wage of $1.00 per hour. Minimum wage is now $15.00 per hour which correlates well with a Cadillac being $5,000 in the sixties and $75,000 today. Gasoline was $.25/ gallon and is now $2.50 or less than a ten multiple. A very nice house was say $30K and now for $450K one can get a much better house, better windows, insulation and nice appliances. It is not all bad.

      Oil, we produce more today than in the sixties, and we are not involved in a silly war that would kill 50K Americans, countless Asians, etc.

      Paul Ehrlich thought the sky was falling and humanity would starve in the 70’s, it did not happen.

      Herbie, given the two examples given, cars and housing, help me out on why things don’t work?

      Herbie, I was part of the generation that faced the draft, I was a resident at the VA and saw the mostly young men come through with fewer body parts than they had previous to war, it was heart breaking; I see those young men in my memory even today, I see their wives in indescribable pain looking at their husband. We couldn’t fix what was broken. We have gone from wars that killed tens of millions, destroyed whole continents , to wars that only kill in the thousands – too many for sure, but better by several orders of magnitude compared to the first half of the twentieth century. We are doing better today geopolitically and locally the cities are not burning.

      If you want wheels to come off technology, go back to the early eighties and try and make a Novell network work.

      Human beings wear out, there comes a time when even the most gifted surgeon cannot replace that which is broken; nature has a different solution, skip the repairs and start over. Why do we think other aspects of life will be different? A star lives, dies and blows itself to bits; the universe keeps expanding, so far it has not ended and those having their popcorn ready for the end have some very stale popcorn.

      It is frustrating, things change in ways that are not comfortable for us, it seems to be some sort of deep law of the universe.

      Dennis L.

      • Herbie R Fickle Steiner to says:

        Technology only works with energy…ie..oil….coal…natural gas….wood….
        You wrote
        “Technology is not slowing down, it appears to me as one who uses it to be getting ever better”

        Technology is only a transferer of energy..just ask Gail…

        This old world ain’t that old brother, just ask George Carlin…

        Sure, tommorow will be the same as yesterday…thought the same in Ancient Rome…
        After all it was called “Eternal”

        • Robert Firth says:

          Speaking of energy, a news item from this morning:

          “Over £12 million was handed out to wind farms in the United Kingdom last week, following a major outage in a powerline that transported energy from Scottish wind farms to England. The handouts will be tacked onto consumers’ energy bills throughout the country.”

          “The firms were paid between 25 and 80 per cent more than they would have earned were the turbines actually running, reports The Telegraph.”

          In other words, the firms were paid more *not* to generate power than they would have earned from the power they didn’t generate. This is an obvious scam, the totally corrupt “devolved” Scottish government rewarding its cronies. And the reason for this fiasco is that that the billion pound “interconnector” that was supposed to transport the electricity South doesn’t really work, so the power must be turned off to protect the local grid.

          Note also that, as usual, England’s taxpayers will be required to fund Scottish malfeasance, as they have been required to do for the past 300 years.

          • I tried to find out more about this issue. I found this article from April, 2019.

            High-profile interconnector to boost renewables fails again.

            The £1.1 billion, 422km Western Link Interconnector between Scotland, England and Wales is still offline for the fourth time since its completion a year ago.

            It would be out of action for at least a fortnight, with no date set for its repair, said Western Link, a joint venture between National Grid and ScottishPower Transmission, which manages the unhappy project.

            . . .

            The failure of the interconnector, which ministers once called the “perfect symbol” of Britain’s single electricity market, left consumers to pay up to £2.4 million in compensation, known as constraint payments, to wind farm companies in Scotland.

            The link is key to the Scottish government’s green energy strategy, sending electricity south and enabling imports when renewable generation in Scotland is sluggish.

            So this is what happened last time, or perhaps time before last.

            I also found this chart from here:

            It doesn’t look like a good situation. The amounts keep getting bigger each year.

      • You are right, “Things change in ways that are not comfortable to us.” You also say, “Human beings wear out. . .Why do we think other aspects of life will be different?”

        One of the issues is diminishing returns. We keep adding technology, but adding technology reaches diminishing returns. The added technology starts causing wage disparity problems. The added technology seems to be helpful, but after a point, it really is not.

        • Alfonso says:

          Hi, Gail

          It would be nice if you can expand on (here on comments or on another post) why exactly adding technology/complexity creates wage disparity problems, and if there are situations or scenarios where this may not happen or could be avoided. I’d like to fully grasp that point.

          Thank you for your enlightening posts and comments.

          • Perhaps I should write a post about this topic. I can give you some idea now.

            In the simplest case, there is no technology, other than perhaps a few spears (and perhaps the ability to make a bow and arrow) and the ability to make fire. Everyone lives at pretty much the same level. The Gross Domestic Product (all of the goods and services produced) is pretty much shared equally by everyone. In a sense, the (total wages of the economy) = (total goods and services of the economy) = GDP.

            Specialization allows more goods and services to be produced, but it has two big drawbacks:
            (1) Lots of government and business overhead.
            (2) Wage differentials, with those with more education or more managerial responsibility getting more than the rest.

            We can see how little wages are relative to GDP in the US, using this chart. It is clear that wages have been falling as a percentage of GDP since 1970. They especially fall during recessions. They can sometimes make up part of the fall during good times, but the wage component gets “squeezed down” each recession.

            Let’s think about the part of the economy that is not wages. This would include:

            (a) Stuff paid for by government that isn’t wages. This would include the cost of buildings, roads, research labs, and military weapons that aren’t wages. It would include pensions paid to the elderly, so that they don’t need to work. (Without these pensions, fewer people could work. They would need to stay home and take care of their elderly relatives). It would include interest paid on debt. It would include the cost of fuel used by the government (net of the wage component). All of this overhead seems to be needed to make the system work.

            (b) Stuff purchased by businesses that isn’t wages. This would include interest and dividend payments. It would include payments for machinery and buildings of all kinds, net of the wage component of these items. It would include rent and lease payments received, relative to all of the capital goods of the businesses. The more technology, the more capital goods! It would include payments for transportation of goods, net of the wage component. As the world becomes increasingly globalized, these transport costs would tend to rise.

            Then there is the wage disparity problem. This gets worse with more specialization.

            It turns out that the wage disparity problem took a major turn for the worse about 1970 as well. In fact, it became very bad by 1980.

            It looks to me as though as long as energy consumption per capita is growing very rapidly, it is possible to have enough energy for everyone to participate, at an adequate level, even with growing “overhead.” Such a situation existed in the 1950 to 1970 period, and even toward 1980.

            But as energy consumption per capita became flat and what I called “overhead” became larger, then less was left for wages. The self-organizing system distributed what was available for wages using more disparity, to have enough to go around.

            Energy consumption was still rising rapidly during the 1970s, but debt payments were rising as well, because of higher interest rates. By the 1908’s, debt was growing rapidly. More financial debt was used as well, adding to the interest burden. Wages got more and more pushed aside.

            If we can somehow find a very rapidly growing supply of very inexpensive energy (less than $20 per barrel oil), we likely can work around the growing wage disparity problem, even with some added technology. Otherwise, I wouldn’t count on it.

            • Thinkstoomuch says:

              Gail,

              What is the source for the second chart?

              Thanks in advance,
              T2M

            • What I have written down is “By economist Emmanuel Saez. Based on an analysis of IRS data, published in Forbes.”

            • Alfonso says:

              Thanks a lot.

              It seems that as complexity grows and structures suffer from aging, more money/energy flows have to be diverted to sustain the old structures & processes, and grow and evolve new ones. And an easy way to achieve this (through self-organization), moreover in the context of diminishing returns on energy extraction, is by squeezing down wages of working classes/non-elite workers. Of course, globalization has helped a lot to diffuse the wage gradient, as you explained various times.

              Another concept that needs further reflection would be that of inflation/deflation and how is related to the biophysics of socioeconomic systems. I’ve read Tim Garrett’s work on his macroeconomic dynamical system model and there he speaks on inflation as a consequence of 2nd law of thermodynamics action on system’s structures, if I remember correctly. Not very sure about all this. I have a physics and complex systems background and on the way of improving it, but I lack lot of economic/financial basics.

            • I would have to look again at Tim Garrett’s work to comment on that.

              I think, however, that as large amounts of cheap energy were added to the economy, there was a bonus. As the first railroads, the first interstate highways, the first commercial airports were added, they all made transportation much easier and more convenient. Electric appliances, together with the electric transmission lines that allowed electricity to be transported to homes, farms, and places of businesses made huge changes in how things were done. Homemakers had more time for activities other than housework. There was a boom in women going to work outside of the home. Farms became more productive. Factories became more productive.

              Once that one-time bonus went away, there was a lot less inflation. Workers didn’t find their wages rising faster than the quantity of goods and services available, to nearly the same extent, after 1980.

              Now, we are dealing, worldwide, with more wage disparity. Instead of a bonus of cheap energy, governments are spending huge amounts trying to subsidize very inefficient approaches to electricity production (wind and solar) and transportation (electric vehicles). We don’t get any bonuses from adding these types of energy. Instead, we keep running into hurdles that are not included in EROEI models because they use such . Wind and solar are not stand-alone devices. They need lots and lots of subsidies–the subsidy of going first, the subsidy of pricy long-distance transmission lines that are not included in any of the calculations, the subsidy of a wildfire prevention program, to prevent these long distance lines from keeping being downed by fire. Electric cars still need paved roads and many other parts of the system. They are basically expensive add-ons to the current system that were evaluated as if they replaced the current system.

  3. Harry McGibbs says:

    Interesting chart. I would rate “Financial Failure” higher on both axes FWIW:

    “Today’s chart uses data from the World Economic Forum’s annual Global Risks Report, which surveyed 800 leaders from business, government, and non-profits to showcase the most prominent economic risks the world faces.”

    https://www.visualcapitalist.com/biggest-risks-global-economy-2020-environment/

    • Harry McGibbs says:

      “Low central bank interest rates are turning hedge funds into a systemic recession risk, say the IMF and European Central Bank.”

      https://www.google.com/amp/s/www.ccn.com/how-central-banks-turned-hedge-funds-into-a-new-recession-risk/

      • With interest rates so low, everyone is looking for more return. So any kind of gamble that looks like it might have some payoff is of interest.

        I believe insurance companies and pension funds can invest in hedge funds. It may vary by country and by state within the US. They would like more yield as well.

    • The chart seems strange to me.

      I agree that “Financial Failure” should probably be higher on both axes.

      Deflation would likely bring down the economy because future wages would drop relative to debt currently in place. Thus its impact would be high. It is a likely a part of “Financial Failure.”

      The emphasis on environmental issues would seem to show that the makers have been looking at what is currently in vogue to blame for almost everything.

      State collapse is deemed not to be very likely or very harmful. I presume the assumption is that only tiny states will collapse.

    • Dennis L. says:

      Thanks for the reference, I subscribed a few months back, they have very nice ways of representing data.

      Dennis L.

  4. Very Far Frank says:

    Very long-term study of interest rate trend (1311-2018) shows clear trend towards a negative average for the 2020s:

    https://qz.com/1787281/what-700-years-of-interest-rates-reveal-about-the-global-economy/

    • Dennis L. says:

      Thought:
      Information is the new energy, doubt it? Refer to current valuations in the stock market; returns on intellectual capital a very high, maybe never higher than before.

      Could student loans be an attempt to financialize the best of this human capital? If you are very bright, don’t mess up your health, are in a reasonably hospitable environment, loss of monetary capital is not much of a big deal: think very good entertainers, they come back financially too many times to be chance. Student debt is now second to mortgage, and it is guaranteed by the government and parents. Banks are pretty smart people, they are betting on ideas, out of every 100 students 1 is in the 99th percentile.

      Networks are about the same, current network systems are orders of magnitude simpler to manage than those of fifty years ago, but they are also much more complex, understanding them is very difficult, but the value is in understanding, not so much hardware, e.g. Cisco vs Microsoft or Google. Even in retailing, capital required is much less with Amazon than conventional, the wealth is in the data; there aren’t that many companies needed and they are very rare, hence very expensive.

      Amazon is much more efficient than bricks and mortar; the evidence is there. For outsiders it is easier to invest in a building, very hard to invest in an idea, even harder to preserve that investment. The building has only cost, the people in it determine the income, stuff is secondary to knowledge and easily replaced.

      Haven’t we had intellectual progress over the dates covered? This is not a biblical period.

      Dennis L.

    • This is interesting. It is a different write-up than we saw a few days ago, about the same Working Paper from the Bank of England. In my opinion, this one is better.

      The Working Paper is a long one, with lots of charts in it.
      https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2020/eight-centuries-of-global-real-interest-rates-r-g-and-the-suprasecular-decline-1311-2018.pdf

      The summary chart shown in the qz.com writeup is this one:

      This compares to the summary chart shown in the CNBC article:

      The charts are of slightly different things, so they can be different.

      The qz.com article particularly points out the collapse back when the bubonic plague arrived in Europe in 1348. The interest rates on the qz.com chart are very low, at the time of the collapse. They also are more distinctly low in a double pattern, at the time of World War I and the Great Depression.

      Low interest rates seem to go with collapses (Surprise!) The CNBC article only talks about the long secular decline, and its forecast that interest rates can continue to go lower.

      • Dennis L. says:

        “Low interest rates seem to go with collapses.” Gail, long term we have not had collapse, we have had incredible achievements in overall human wellness for want of a better word. As recently as the fifties polio was a major source of immense pain and suffering both financial and emotional. We have gone from stories to science which is still a story but which can accurately predict how and what will occur with many processes given initial conditions.

        Looking at investments could the problem be the duration of depreciation/amortization, actual, not statutory investments? Personally I practiced dentistry for 41 years, had a very good initial education and was one of the best students by rank, etc., but at age 50 in order to stay current I had to spend three years in a post secondary education on modern dental materials as well as considerable time updating ideas on infection control, and contemporary diseases which were appearing over those first 25 years. The initial education was a foundation, but over 25 years time span half of that educational investment essentially depreciated 50%, the second half was amortized over only 16 years and then is value completely disappeared. That education now has negative value as I maintain a license in which only I could invest, was investable by others, it can’t be sold and still costs money to maintain.

        A castle in good repair still has some value today, even if it is only a residence for the descendants and a tourist attraction. An airplane literally goes to junk secondary to metal fatigue and has scrap value alone, it is a much shorter depreciation period, overall it can pay much less interest, it has less value. The rate of return can be “juiced.” but in the end its total value is fixed, only so much utility is coming an of the investment.

        AI seems to be indicating that even the learning how to think idea is flawed in that large databases are the foundation of learning. The ideas that we could teach people to think may be incorrect, hence much of our education incorrect.

        If one bases the level of a civilization on its knowledge, we are very wealthy indeed, the knowledge is widely embedded in our society; the problem comes from the life span of the vessel into which that knowledge is placed, it turns to “corruption” as in “We therefore commit his body to the deep, to be turned into corruption…” The value of the knowledge remains, but its dissemination leads to an inability to invest in it, this could give some interesting ideas as to the reasons for guilds and the idea of not spreading knowledge, limiting it. In a tightly knit group as long as that knowledge remained relevant, one could invest in one’s offspring, give them the “secrets” of the trade and they could earn an income, share it with the parents and call it a pension. The smarter, more hard working the offspring, the better the pension or, “Them that gots, gets.”

        Dennis L.

        • Collapses can be of different forms. They can be like the collapse of the central government of the Soviet Union, in 1991. This had, indirectly, to do with low oil prices, and not enough revenue/energy getting back to the central government of the Soviet Union.

          They can be like the World War I, World War II, and the Great Depression. Here, they seem to be related to Peak Coal, first in UK and then in Germany. It took World War II, with the ramping up of oil, to bring energy levels up high enough to fix the situation. The bubonic plague of 1348 was the result of low wage people being unable to afford adequate food. Thus, their immune systems were weakened. It was another form of collapse.

          We are wealthy, in terms of AI and lots of other things, but if we lose electricity, we are in terrible shape.

          • ssincoski says:

            … if we lose electricty, we are done. To me, modern developed societies losing access to electric power will be the end. In that scenario, those already without or having minimal access will fair much better. Can you imagine what would happen in the US, if the power was out for even just a few weeks? What would the typical resident of a 17th floor apartment do after the first week without power. Lugging a case of water up 17 floors in the dark, will quickly lose its appeal.

            • That’s interesting take on the problem – predicament.
              You could be right, lets assume (sub)scenario in which reliable access to electric power is denied even in core IC hub countries. How should the little people mitigate.. ?

              Options:

              1. Do nothing, merely surf on the dependency over provided crumbling infrastructure and enjoy the temporary fixes – ups and downs of the “dying world” for as long as possible etc.

              2. At some point bail out of “the system” via some level of individual preparedness and “high tech” commercially available products – maneuver which however likely ends up by expropriation or worse.

              Now setting up necessary timelines for the above is not much helpful either as you can’t operate any modern gadget (or rather interdependent set of them) say beyond ~10-15yrs of expected lifespan if some indiv key component/spare part is gone for ever.

              Hence, given the above to simplify and trivialize the situation, maturing complex systems are by inner dynamics not survivable at their formerly achieved level..

            • Tim Groves says:

              Can you imagine practicing or submitting to dentistry once the power goes off for good?

              The dental assistant will hold a candle while Dennis works on your fillings with his hand drill. And when it’s time to rinse your mouth out that fountain of water will NOT refill the parer cup!

              This is just one more reason why keeping the electricity running is an imperative and people who are campaigning against keeping the electricity running by advocating banning the combustion of hydrocarbon fuels and nuclear power are arguably guilty of mutiny, treachery, heresy, larceny, chicanery and mendacity, although not necessarily in that order.

  5. Harry McGibbs says:

    “The global economy grew at 2.3% in 2019, the lowest in a decade… Meanwhile, 2019 was one of the best years for Wall Street, with S&P 500 gaining close to 30% and NASDAQ close to 40%. What’s behind this disconnect between Wall Street and the global economy?”

    https://www.forbes.com/sites/panosmourdoukoutas/2020/01/19/global-economic-growth-is-the-lowest-in-a-decade-why-is-wall-street-racing-to-the-moon/#7c9ecb70e051

    • Harry McGibbs says:

      “Combined stimulus from the world’s biggest central banks is likely to top $1.2 trillion this year, the highest amount since 2017, but it may well disappoint stock markets, which have surfed to successive record highs on the back of this tide of super-easy money.”

      https://www.hellenicshippingnews.com/central-bank-largesse-risks-disappointing-markets-this-year/

      • Harry McGibbs says:

        “It is hard to put a finger on anything systemic that could cause the next recession. Instead, something much more sinister is lurking under the surface  —  the colossal levels of cheap money in the system. All this easy money is looking for a home, being pushed into all asset classes in investors’ desperate search for yield.”

        https://venturebeat.com/2020/01/18/the-next-global-recession-why-this-time-it-is-really-different/

      • According to the Hellenic Shipping News article, “According to Pictet, 90% of the variation in equity prices since 2008 is down to central bank liquidity injections.”

        Another quote: “Liquidity-driven markets have a habit of ending badly, so a key question is whether central banks are willing and able to keep up this easing pace?” CrossBorder Capital told clients, noting that more monetary stimulus may be needed than policymakers envisage.

        The other type of stimulus is “fiscal stimulus,” which involves governments spending more than they take in, in tax revenue. According to the article,

        Fiscal stimulus is “slow moving”, however, and it is unable to respond to market selloffs as rapidly as central banks can, Neuberger’s Jonsson said, adding: “It’s going to be a bumpier year.”

  6. Harry McGibbs says:

    “Shadow banks have experienced their first fall in assets since 2008, according to new data from the Financial Stability Board, as a Chinese crackdown and stock market declines threw the sector’s growth into reverse…

    “Trust companies in China, which offer a variety of financial services outside the formal banking system, saw their assets drop 22 per cent in 2018 after regulators strengthened their monitoring and took enforcement action.”

    https://www.ft.com/content/3ef94826-3957-11ea-a6d3-9a26f8c3cba4

  7. Harry McGibbs says:

    “Malaysia has sent back 150 containers of plastic waste to 13 mainly rich countries, including 42 to the UK, since the third quarter of last year.

    “The country’s environment minister warned on Monday that those who want to make Malaysia the rubbish bin of the world can “dream on”.

    “Shipments of unwanted rubbish have been rerouted to Southeast Asia since China banned the import of plastic waste in 2018, but Malaysia and other developing countries are fighting back.”

    https://www.msn.com/en-gb/news/uknews/malaysia-sends-42-containers-of-plastic-waste-back-to-uk/ar-BBZ8api?ocid=spartanntp&fbclid=IwAR1R0i0_Yn5KS5b5Yag2EAKLxtx_a0svBh2WsFlhkGhoyEWTHfy0NuUfbGY

    • Xabier says:

      Oh, but Europe is so Green Clean (TM)! Can this really be happening?

      Were we just smothering the world with our waste all the time?

      Well, I suppose it will just be burnt when possible, so look forward to all those carcinogenic toxins in the air…….

      Some new housing developments in the UK will have waster-burning plants on their doorstep, to provide the electricity for their ‘eco-friendly’ heat pumps That’s called ‘luxury housing’ to fulfill your ‘lifestyle dream’, by the way.

  8. Harry McGibbs says:

    “Chinese authorities confirmed on Monday (Jan. 20) that an outbreak of a new pneumonia-like illness had spread to two more mainland cities. The number of new infections reported has also sharply jumped in Wuhan, the Chinese city where it was first spotted last month, officials said.

    “The worrying turn for China’s mysterious new coronavirus comes as the country readies for one of its busiest travel seasons in the upcoming Lunar New Year holiday, and as some health experts caution that the actual number of infections could be far higher than what authorities are saying.

    “South Korea, meanwhile, confirmed its first case on Monday…”

    https://qz.com/1787720/chinas-coronavirus-has-spread-to-more-cities/

    • Harry McGibbs says:

      “China has confirmed the new SARS-like virus that has killed three people can spread between humans.”

      https://www.dailymail.co.uk/health/article-7906235/China-counts-sharp-rise-coronavirus-cases-2-Beijing.html

      At least the mortality rate is currently low with this virus.

        • The WSJ has a related article. https://www.wsj.com/articles/china-coronavirus-kills-third-person-spreads-to-more-cities-11579494221
          It shows three cases outside of China: One in each of Bangkok, Japan, and South Korea. Also several areas around China.

          • Chrome Mags says:

            It’s hard to know how that new virus will play out, but so far it’s doing exactly what something that can build into a pandemic should do, i.e. spread easily and apparently air born (since there is no info. to the contrary), but not kill enough people yet to get too much attention and cause people with it to be quarantined. By the time it’s known how bad the virus is, it will have spread around the world and it will be too late to isolate.

          • Tim Groves says:

            Just as with the Black Death or any other bacterial or viral pandemic we’ve so far encountered, this one will kill less than all the people who show symptoms, and it will produce symptoms in less than all the people it infects, so people are advised to take precautions, firstly to avoid contracting it and secondly to avoid dying from it if they contract it.,

            With any respiratory illness, living in present-day China with its highly polluted air is a recipe for problems. China is Ground Zero for PM2.5 , which peaks in January and February, and India is pretty bad too. Smoking and big cities generally are also hard on the lungs. In most places, if you get out of the city and avoid smoking tobacco, working in mines, taking poppers, sniffing glue, cooking over open fires, etc.,your lungs will be better able to cope with any respiratory diseases that come your way. But in China, there’s currently no way out. In most of the eastern half of China, where the bulk of the population lives, the air is filthy at this time of year.

            Here’s today’s PM2.5 chart from my local weather service. Typically for this time of year. it shows Chinese air as the Red Menace threatening the Chinese themselves and all their neighbors. Why isn’t Godfree Roberts on the case? And why is Greta ignoring this Great Red Blot on the global ecological landscape? How dare they?!

            • That’s why they are ramping up nuclear and clean(er) coal from western deserts like crazy. Is that going to be enough and on time to matter (i.e. pre collapse / phase shift) is another question..

  9. Since there is a lack of energy in this world due to low price, I guess diseases like the wuhan pneumonia will get worse in China (not enough energy, not enough medicine). I have an EU passport and can earn money online, where should I move in order to avoid the worst case scenario?

    • Davidinamonthorayearoradecade says:

      EU actually could be in the centre of “the worst case scenario”…

      perhaps a small island somewhere?

      • Yes. The Europeans have atrophied relatively the most vs. US and Asia, therefor it’s very likely they will suffer the most and among the first in order. Take for example the nominally largest country by army (domestic nuke capability and conventional arms industries) France, it’s bordering ungovernable by now..

        The Russians won’t be foolish enough to again sacrifice millions of dead soldiers on the treacherous Western Slavs, they might perhaps only help to the Balkans (Serbs and Bulgarians) but that’s also very volatile and questionable..

        That all screams power vacuum across large distances and provinces over the continent, and nature abhors vacuum.. Europe will be torn apart within (new quasi-feudal fiefdoms emerging) and by external forces again, e.g. Turkey.

      • The problem with going to a small island is that, while you may be able to avoid disease, you will not have enough food, clothing or anything else unless you can make it yourself. If you have visitors from afar, they are likely to spread germs.

    • It sounds as if the mix of streets (big vs. little) stays pretty much the same, regardless of top down planning. People want to minimize travel times, so the self-organizing nature of roads leads to some being widened, to maintain this pattern, even if the system isn’t originally planned this way.

      • Artleads says:

        So when a developer goes in there with a completely different idea, and scrapes away buildings and roads, he isn’t just destroying those physical entities, but also destroying a long developing and subtle self organizing system that he can’t see, and considers to be insignificant.

        • Right! Of course, the way the city was organized with horses is likely to be different that the way a city would be organized around street cars and local population. Atlanta seems to have been organized around a world where everyone has a car, and no one really wants outsiders in their neighborhoods. You get different patterns, based on the energy and society of the day.

          • Artleads says:

            The developer has no idea (or concern) over what he’s removing. He may believe in progress, or he may more likely believe in his entitlement to make as much money as he can, as quickly and as disconnectedly as he can (and I suppose that “works” when things are good).. Were he concerned that there might be a selF organizing system worth considerIng, he would move more incrementally than he does when he replaces a whole town in a single swoop.

Comments are closed.