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

  1. ssincoski
    ssincoski says:

    Gail gets a shout-out from Tim Watkins in today’s post over at : https://consciousnessofsheep.co.uk/2020/01/22/be-careful-what-you-wish-for-2/
    “There was, however, a minority view put forward by analysts such as Gail Tverberg, that it was oil consumers rather than oil producers who would ultimately determine the price of oil.”

    • 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.
      Gail Tverberg says:

      That reference of Tim Watkin’s is nice. His whole article is pretty much devoted to the issue of oil prices not rising the way folks had expected/would like.

  2. “Without meaningful intervention, the [US] subprime auto loan bubble is primed to burst…”

    https://www.theregreview.org/2020/01/23/alford-subprime-auto-loans-driving-next-financial-crisis/

    • 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.
      Gail Tverberg says:

      The only fix I can see for this problem is the auto loan bubble bursting and used car prices dropping substantially. The lenders take a big hit on the profits. In fact, quite a few go out of business. People who don’t default on their auto loans find that they have far less equity to put into a replacement car loan, so they keep either keep their cars longer or they default as well.

      If used car prices fall substantially going forward, it will give these low-income borrowers a way to buy a vehicle that they can actually afford.

      • Robert Firth says:

        Thank you, Gail; an analysis with which I can find no fault. And please note that this is one of the expected consequences of collapse: salvage. Whatever cannot be replaced is sequestered, repaired, and recycled. We shall not be salvaging stones from the Roman temples, but reusable technology from the flotsam left by our retreating abundance.

      • worldofhanumanotg
        worldofhanumanotg says:

        We had already episodes of destroying idle stock from overproduction.
        They can scrap cars sitting on the factory lot or at dealerships or even take it from people if necessary (on emission claim or other grounds)..

  3. “Should the problem of excess liabilities and bad loans trigger a financial crisis in China, its effects will propagate instantly like a powerful tremor through the world economy.”

    https://www.nippon.com/en/in-depth/d00531/can-china-avoid-a-bad-loan-financial-crisis.html?fbclid=IwAR0aSAJZXsS-cClhAr86xPsvHTt2jX6b3RVxBRYV-Dmy6mI6imCBuCYGVcQ

    • 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.
      Gail Tverberg says:

      As the article says, “There is no effective and easy prescription for reducing excess liabilities and bad loans.”

      I would think a rapidly growing economy with lots of inflation in commodity prices and in wages would fix the problem. But this isn’t the situation that China is facing. Wages may be rising, but commodity prices (especially coal prices) have been lagging.

      • Robert Firth says:

        As the article says, “There is no effective and easy prescription for reducing excess liabilities and bad loans.”

        But there is: default. That puts the burden where it belongs: on those who extended credit to borrowers who could not repay. But Modern Monetary Theory teaches that creditors, however greedy and stupid, must always be reimbursed by someone else, and so this sanction no longer applies. Hence our present problem.

  4. Some good news (for the time being):

    “Cross-border lending by banks is expanding at a “rapid” pace, hitting growth levels last seen in early-2008, despite persistent geopolitical tensions that have undermined global trade…”

    https://www.ft.com/content/10669a00-3d34-11ea-b232-000f4477fbca

    • 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.
      Gail Tverberg says:

      Perhaps led by the belief that the distant prospect has a chance of a better return than one locally. Or maybe it is related to the cost of derivative protection against future currency fluctuations being relatively cheap. The question is how these investments will really turn out. Also, will the derivatives “blow up,” with a rapid shift in currency relativities.

  5. Chrome Mags says:

    https://www.cnbc.com/2020/01/23/the-worst-has-yet-to-come-analyst-says-of-china-coronavirus-outbreak.html

    That article has a map showing the cities where people with coronavirus have been detected.

    “The festive Lunar New Year holiday is set to kick off this Saturday. Hundreds of millions of Chinese will travel domestically and overseas — heightening the risk of more transmissions.”

    • “The spread of the deadly Wuhan virus from its country of origin, China, to other countries in Asia and the United States has raised fears that the virus could lead to a global pandemic, causing stock prices around the world to fall this week.

      “Here’s how the virus could impact the global economy as a whole, according to the economic impacts from past outbreaks.”

      https://www.businessinsider.com/wuhan-virus-economy-impact-based-on-past-outbreaks-2020-1?r=US&IR=T

      • 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.
        Gail Tverberg says:

        A virus that kills off a lot of people quickly is fairly easy to contain.

        I find it difficult to believe that the Wuhan virus can really be contained. It seems to spread easily. If the mortality rate is 3% or 4% (mostly elderly), the virus wouldn’t really hobble the economy, if left alone. But we now have been convinced that humans can fix all problems. The cure imposed (travel bans, etc.) are not likely to fix very much, I am afraid.

        • Robert Firth says:

          Gail, as best I can discover (yes, I’m a scientist, but still find it hard to decipher media reports) the virus is already worldwide. Air travel is far, far better than plague rats at spreading disease. And at present it seems quite mild, (as in “China infected: not many dead”) But viruses have this annoying habit of mutating rather quickly.

          It is already confirmed as being transmissible human to human, and so needing no other carrier. It also seems to have an optimal incubation period: that is, one human can infect many others while still asymptomatic. It just needs one more mutation to become a rather serious problem; as in, say goodbye to a few billion people.

          We flatter ourselves as being the top predator. But these little germs: “the tiniest creatures that God in his wisdom has put upon this earth” may yet outlast us. (By the way, the quote is from H G Wells’ ‘The War of the Worlds’)

  6. “Jamie Dimon doesn’t have much positive to say about negative interest rates in Europe and Japan or public policy in the United States during the past decade.

    “The JPMorgan Chase & Co. JPM, -0.12% Chairman and CEO blasted the policy of negative interest rates adopted in Europe and Japan during an interview Wednesday with CNBC…

    “People think that central banks around the world can do whatever they want. They can’t,” he said during an interview from the World Economic Forum in Davos, Switzerland.”

    https://www.marketwatch.com/story/head-of-us-largest-bank-says-central-banks-are-fueling-a-sovereign-debt-bubble-negative-rates-wont-end-well-2020-01-22

    • “Eurozone bank executives have launched a fresh lobbying push to convince policymakers of the dangers of long-term negative interest rates, warning they will hurt savers and pensioners while fuelling price bubbles in riskier assets…

      “Two chief executives of large eurozone banks said they were also working on plans to pass the cost of negative rates on to a much larger chunk of retail savers, setting the stage for a political backlash that the banking industry hopes will lead to wider public awareness of the ECB’s policy.”

      https://www.ft.com/content/b19b3458-3d25-11ea-b232-000f4477fbca

    • Yoshua says:

      Well…at least the central banks can’t raise rates and do QT…without crashing the markets.

    • 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.
      Gail Tverberg says:

      The system needs ever-more money, through positive interest rates. Taking money out of the system through negative interest rates can’t really work.

  7. “Strength in commodities is turning to weakness, and that can only mean one thing—it’s time to start worrying about the global economy again.

    “Both West Texas and Brent Crude oil are rolling over. Accompanying their breakdowns is weakness in copper. Taken together, their poor price action suggests that perhaps the global economies’ growth rates are slowing.”

    https://www.barrons.com/articles/oil-and-copper-are-falling-thats-a-bad-omen-for-the-global-economy-51579732112

    • “The Baltic Exchange’s main sea freight index fell to its lowest since February on Wednesday, hurt by a seasonal slowdown in demand amid higher costs for shipowners due to a new regulation for shipping fuels.”

      https://www.reuters.com/article/baltic-index/baltic-index-dips-to-near-1-year-low-on-seasonal-weakness-idUSL4N29R3NZ

      • 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.
        Gail Tverberg says:

        Requiring clean-burning fuels is sort of like putting a tax on ocean-going ships. The ships cannot necessarily pass it on to customers. The expected effect, to a significant extent, is a cutback in shipping. I am sure that refiners were hopeful that they would be helped by more business.

    • 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.
      Gail Tverberg says:

      I am wondering whether there was more stimulus effect from front-running tariffs than we expected. Now that the front-running effect is going away, this becomes a problem.

      If China hobbles Wuhan and nearby cities, this will be another negative effect on the Chinese economy. Tourism will be way down as well, even within China.

  8. Yoshua says:

    Another Fed rate cut is coming according to the Eurodollar futures market.

    https://pbs.twimg.com/media/EO6beilX0AAC92g?format=jpg&name=large

    • 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.
      Gail Tverberg says:

      We will have to see whether this really happens. It might.

  9. MG says:

    Sanitation vs security

    I was wondering why there were so many castles on the rocks and the hills in Slovakia that were built during the medieval ages. Usually, this is attributed to the security reasons.

    But let us look at this phenomenon from the side of the changing cl i mat e: the medieval ages were warm, later the colder centuries followed and the castles on the rocks and hills were abandoned. Today, with warmer and warmer winters, we can see the rise of various epidemics of viruses. And when we look at the countriside in the medieval ages, there was a lot of unregulated rivers and streams, marches, huge amounts of insects like mosquitoes in and around them. And also the human waste accumulating in the lowlands.

    It is no wonder that the nobility (but also the church – there is an old legend about a monastery on the hill named Calvary above my village) situated its seats and homes on the hills. Although the medieval people did not have a full understanding of the importance of the hygiene, the waste removal via gravitational force also played an important role.

    https://www.pnky.sk/koktail/na-tematine-nasli-stredoveky-zachod/
    https://www.ancient.eu/article/1239/toilets-in-a-medieval-castle/

    https://live.staticflickr.com/31/65259382_00e3f395f6_b.jpg

    https://www.flickr.com/photos/dsnowdon/65259382/

    • Xabier says:

      The records show that the kings of England were always building themselves fancy new toilets for their castles, ‘sweet-smelling and painted’, but there was a problem: they clogged up quickly. So the post of royal toilet-unblocker was created.

      But this usually failed, and they’d build another one or make do with a chair with a big pot hidden under it, which was the most practical solution.

      The medieval two-hole toilet actually survives in the main tower of Hunterston Castle in Scotland, just off the bed-chamber of the lord and lady – I used to tease a girlfriend from the Hunter family that she should be proud of having an ancestral toilet from the 14th century, but she was not amused for some reason…..

    • 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.
      Gail Tverberg says:

      Interesting point!

      Plagues have been a big problem throughout the ages. Wuhan’s problem indicates the problem with plagues has not been solved. (The pig virus is another reminder of this problem.)

      Visitors to Wuhan (and, in fact, China in general) are warned not to drink the tap water. Today, the concern of outsiders has been especially been with respect to chemical pollution. It is not clear to me that the biological pollution issue has been entirely solved either. There has been a tradition in China of always drinking tea or boiled beverages. I don’t think that salads are very traditional in China either. The people I met in China always drank bottled water or boiled beverages.

      This November, 2018, article says that Wuhan does not publish water quality reports regularly. Wuhan is a low-lying city, next to the Yangtze and Han Rivers that is prone to a lot of flooding during rainy seasons. Even if this is not an issue with the current virus, it seems like it could set the city up for problems, longer term.

      This is an academic article from 2012. If I am reading this abstract correctly, it says that some viruses (at least in the 2012 analysis) were making it through the water system of Wuhan. The abstract says,

      A total of 48 water samples were collected from six water treatment plants in Wuhan and analyzed by real-time PCR assay for viral identification of enterovirus (EV), rotavirus group A (RVA), human adenovirus (HAdV) as well as human adenovirus subgroup F (HAdVF) during the period from December 2010 to October 2011. HAdV, HAdVF, and RVA were all positively detected in the samples of source water and treated drinking water. EV could be found in 46 % (11/24) of all the source water samples, but only 21 % (5/24) positive in treated drinking water. The concentrations of these three kinds of enteric viruses detected were as follows: HAdV > RVA > EV. The highest removal rate was EV (97 %), followed by RVA (82 %), HAdV (73 %), and HAdVF (72 %). HAdV and RVA have been abundant in untreated river water and finished water after conventional processes of water treatment plants, while bacterial indicators could not be detected in tap water, which met the standard of China for drinking water bacterial quality. Some factors that could affect the accuracy of qPCR detection are also discussed in this study.

      .

    • 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.
      Gail Tverberg says:

      I see that there is a downtrend started. What is it that makes you think it will move below the MA 200 line, other than it still seems to have momentum?

      • Yoshua says:

        I actually thought that it would bounce from the MA 200. But I’m always wrong. You can always bet on that.

      • Yoshua says:

        Amit Noam Tal made this chart and the Eurodollar chart.

        He thought that the WTI would break down. He thought that falling Eurodollar rates showed a weakness in the global economy…and falling oil prices.

  10. GBV says:

    Some days you just come across something… different.

    https://www.youtube.com/watch?v=mVLrBJYGxk4

    Cheers,
    -GBV

    • 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.
      Gail Tverberg says:

      Sort of disturbing. A fix to our pension issues.

      • GBV says:

        “… I was kind of hoping that the cycle would never end… ”

        More similar to our world today than some might like to believe?

        Cheers,
        -GBV

  11. Chrome Mags says:

    https://finance.yahoo.com/news/why-economists-worry-reversing-climate-change-is-hopeless-morning-brief-110537963.html

    Tim, here’s an article you may find interesting.

    “We think we will soon enter a stage where there will be a realization of the immense economic and personal trade-offs we will collectively have to make in order to hit domestic and globally agreed climate targets,” the firm writes. “Such sacrifices may shock citizens and be difficult to administer in democracies.”

    Deutsche Bank adds that, “The problem for the environmental lobby is that a world without economic growth may create a damaging backlash against such climate policies. Nevertheless, the problem with the status quo is that the irreversible damage to our planet will increase.”

    On the one hand, modern civilization is screwed. On the other hand, modern civilization is screwed.”

    That conundrum I mentioned in a post yesterday is well summed up in that last paragraph.

    • Malcopian says:

      But it takes around 40 years for all the effects of what we do to filter thru the “etamilC”. So things will keep getting worse for AT LEAST 40 years. Yet we humans just cannot endure things getting worse. I wonder if i’ll still be here even only 5 or 6 years out.

      • Chrome Mags says:

        By “etamilC”, I presume you mean ‘thermal inertia’; the time it takes for added energy in the oceans to influence climb ate. I’ve tried to convey that to people but it always goes in one ear and out the other because they think as soon as we stop emit ting, it will stop.

        What’s so galling about understanding that, is the mainstream idea that we can stop like a truck with hydraulic brakes this side of 1.5

        Things will begin to unravel really fast once the i c e in the a r c t i c is gone with time left in the m e l t season. That was recently proven from Earth’s history.

      • worldofhanumanotg
        worldofhanumanotg says:

        I hear you, but the instability humans wracked on the planet might just flip into another direction, i.e. hasten the upcoming new Ice Age (proper not just few decades min) instead.

        • Chrome Mags says:

          That’s true too, as the thermohaline circulation might get cut off to a location much further south in the Atlantic, with warm water circulation in the oceans confined to a smaller geographical area 8 billion people can inhabit. Which way will it go is the big question.

        • 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.
          Gail Tverberg says:

          It is a good thing that there seems to be intelligent design underlying how the universe operates. There have been a previous “rough spots,” but somehow extraordinarily unlikely solutions have come to the fore. See

          Rare Earth by Peter Ward and Donald Brownlee

          and

          https://www.youtube.com/watch?v=aA-FcnLsF1g

          We think we have the ability to fix things, but we really don’t. We are small part of a universe that is being created, day by day. We assume that we have powers that we don’t have.

          We think that we can stop the fires in Australia by doing more recycling. Instead, what happens is that people who are angry with the system begin starting more fires, once they see how easy it is to bring the system down this way. CO2 emissions go way up in an unintended way: through these fires.

    • Tim Groves – Japan
      TIm Groves says:

      Thanks for the article, Chrome.

      My first problem is I am a climate denier. A heretic even. I don’t believe climate exists except in the abstract. In any place on the surface of the earth we just experience lots and lots of weather, and we absolutely don’t have the power to control the weather. So climate targets are a waste of time, money and effort. Far better to spend more on mitigation of whatever weather and other things nature throws our way.

      My big worry is that all these well-meaning people, including economists and bankers, are worrying about things that we have no power to alter. And that we are devoting massive resources to solutions that it is now clear to almost everybody won’t work. With thinking like that and policies like that, I quite agree that modern civilization is screwed.

      But given the ridiculous nature of what we see on the surface of politics and economic policy, there must be something else going on beneath. Perhaps something wonderful is going on beneath the curtain and the magicians are going to pull something out of the hat for us?

  12. Malcopian says:

    World’s consumption of materials hits record 100bn tonnes a year

    Unsustainable use of resources is wrecking the planet but recycling is falling

    https://www.theguardian.com/environment/2020/jan/22/worlds-consumption-of-materials-hits-record-100bn-tonnes-a-year

    Extract:

    “The materials used by the global economy have quadrupled since 1970, far faster than the population, which has doubled. In the last two years, consumption has jumped by more than 8% but the reuse of resources has fallen from 9.1% to 8.6%. But the report also found that some nations are making steps towards circular economies in which renewable energy underpins systems where waste and pollution are reduced to zero.”

    Reduced to ZERO?! Haven’t they heard of ENTROPY?

    My solution: build a time machine, go back to 1976, then nuke China. Problem solved – temporarily.

    • 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.
      Gail Tverberg says:

      This article links to this report. https://www.circularity-gap.world/2020

      According to it,

      Drive the renewable energy transition
      This means decarbonising ‘Shift’ economies [countries that have become mostly service economies, but still use most of the world’s resources] and creating abundant renewable capacity, storage and smart grid systems. A transition to 100% renewable energy in the US would see a net increase 2 million jobs, halve energy costs for consumers and save taxpayers $600 billion in healthcare costs and $3.3 trillion in climate costs, according to Stanford University research.

      I haven’t seen precisely which Stanford report they are referring to, but it seems to come back to Mark Jacobson’s absurd model regarding what is possible.

  13. YahooFINANCE

    Billionaire Salesforce founder: ‘Capitalism as we know it is dead’
    Oscar Williams-GrutSenior City Correspondent, Yahoo Finance UK

    https://finance.yahoo.com/news/davos-2020-salesforce-founder-capitalism-is-dead-181643945.html

    The billionaire founder of Silicon Valley company Salesforce (CRM) declared on Tuesday modern capitalism is “dead”, saying business leaders now have a “responsibility” to think beyond just shareholders.
    “Capitalism as we have known it is dead,” Marc Benioff, chief executive of Salesforce, said at Davos. “This obsession that we have with maximising profits for shareholders alone has led to incredible inequality and a planetary emergency.”
    Benioff, who is worth $7.7bn (£6bn) according to Forbes, made the comments during a panel on ‘Stakeholder Capitalism’ — the idea that companies should work to maximise the value for all ‘stakeholders’ such as employees and society, rather than just maximising shareholder value.
    “Stakeholder capitalism is finally hitting a tipping point,” Benioff said.
    “Does it mean I have to fight for my employees? Yes. If they’re being discriminated against and if they’re LGBT employees, yes, we will fight for them

    Let’s all rejoice….

    https://m.youtube.com/watch?v=kPIdRJlzERo

  14. Yoshua says:

    Syria is going from bad to worse after the war. The poverty is now so bad that people seem to struggle just to stay alive.

    https://blogs.lse.ac.uk/crp/2020/01/16/syria-let-there-be-mayhem/

    • 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.
      Gail Tverberg says:

      At least part of the problem would seem to be a falling resources per capita problem. This chart is a little out of date.

      https://gailtheactuary.files.wordpress.com/2019/04/syria-and-yemen-energy-consumption-per-capita.png

      Syria at one time was an oil exporter.

      https://gailtheactuary.files.wordpress.com/2013/09/syria-oil-production-and-consumption-eia.png

      The problems spill over to Lebanon. The article you link to says:

      In recent years, Lebanon has been an important economic haven for Syrians, as it is the only neighbouring country that is easy and safe to reach and was not influenced by the turmoil that has swept the region since 2011. Thus, Syrians have relied heavily on Lebanon in many aspects of their lives.

      Lebanon does not have enough resources (including electricity) for its own population, much less adding one million Syrian refugees to the mix. It makes for a volatile situation.

      • Yoshua says:

        What happens in Syria doesn’t stay in Syria. If there’s another mass exodus from Syria into the neighboring nations, then the entire region could start to fall like dominoes.

        The Syrian government can’t control the territory it now rules over. It can’t provide electricity, water, sewage or security.

        The situation is probably very dangerous, but the world has Syria fatigue, no one cares anymore.

        • beidawei
          beidawei says:

          Remember that Turkey (with its much more robust economy) has accepted some 3.5 million Syrian refugees. One reason why Turkey is involved in the Syrian War is that Erdogan wants to be able to resettle some of these people on Syrian soil, and deflect some of the criticism against him. (His initial instinct was to encourage the refugees to naturalize as Turkish citizens after five years, so they could become reliable supporters of Erdogan’s AK Party). Now that Idlib is falling to Assad’s forces and the Russians, this threatens to add a big new wave of refugees, some of them Salafi Jihadi militiamen.

          Europe, with less than a million refugees, is mainly concerned that Erdogan not let more of them flee to Europe. So they keep haggling about money and so forth.

  15. CTG says:

    Another thing coming in (as though we do not have enough problems) – coronavirus.

    https://www.academia.edu/6986931/Catastrophic_Shocks_through_Complex_Socio-Economic_Systems_a_Pandemic_Perspective

    David Korowicz has done this work. I was there when SARS struck. The airports, malls, hotels, etc are empty. Huge impact on the economy. Not because of the virus but people are just scared to do any travelling. In some worse case scenarios, people might just go AWOL. Imagine if half of the workers in a power plant is sick, who will run the power plant? We re just too interconnected and too dependent on each other.

    • 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.
      Gail Tverberg says:

      Or as Tim Groves pointed out, if coronavirus is like other viruses, it is very likely that some people will have the virus but will not have any symptoms. These people will come into work, even though they have the disease and could spread it. So it becomes impossible to spread its stop.

      With this virus, the elderly seem to be especially affected. If there are people with poor nutrition, it would seem like they could be affected as well. I know the thinking at this time seems to be that early pandemics spread partly because a large number of poor people were not getting adequate diets. Their immune systems were not working well. Thus, when they were exposed to the virus, they were more likely to be severely affected. Death rates skyrocketed.

  16. “Eurozone companies’ demand for bank loans has fallen for the first time in six years, in a worrying sign for the region’s faltering economy and the European Central Bank’s attempt to stimulate more lending.”

    https://www.ft.com/content/0a0a11ac-3c33-11ea-a01a-bae547046735

    • “Debt is all around us, even if sometimes we cannot see it. Excessive debt is behind most of the corporate struggles and failures we see played out on these pages every day. Debt stalks many households and last year specialist charities helped hundreds of thousands of people to manage or consolidate their debts.

      “Debt is also back in fashion in [UK] government.”

      https://www.thetimes.co.uk/article/david-smith-long-term-low-interest-rates-raise-the-risk-of-us-all-drowning-in-debt-36rdnhj3k

    • 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.
      Gail Tverberg says:

      Without rising debt, it is hard to keep economic growth rising. Everything that we do today is based on debt.

  17. “India may be experiencing the most glaring setback among emerging economies, but its double pain of slowing growth and surging inflation is spreading far and wide…

    “An analysis of 30 major emerging economies, based on public data and Bloomberg surveys, shows half of them slowing or stagnating in 2020. Two-thirds are set to experience a simultaneous acceleration in inflation. That’s a potent source of mini-economic crises across the group.”

    https://finance.yahoo.com/news/india-painful-double-whammy-spreads-020000559.html

    • “A far-left governor of Argentina’s most populous province is rattling investors with plans to hold off paying back foreign debt, raising fears that his faction of the ruling Peronist coalition could push the rest of the federal government into a messy new debt default.”

      https://www.wsj.com/articles/argentine-governor-rattles-markets-with-plans-to-delay-bond-payment-11579639842

    • 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.
      Gail Tverberg says:

      The slowdown in the 30 countries is concerning. This Yahoo article is obviously part of a Bloomberg article. Is any of this Bloomberg material available? (I didn’t see it.)

      • “An analysis of 30 major emerging economies, based on public data and Bloomberg surveys, shows half of them slowing or stagnating in 2020. Two-thirds are set to experience a simultaneous acceleration in inflation. That’s a potent source of mini-economic crises across the group.

        “Inflation Rises Fastest in 9 Years in Emerging Economies: Chart

        “Here are the details:

        “Six other economies are on course for a fate similar to India, and that includes China.

        “Four Eastern European economies will probably manage to control inflation, but pay for it in terms of slower growth.

        “Inflation Trends Split EU Along Historic East-West Divide

        “Four nations are expected to maintain their gross-domestic-product expansion, but inflation will erode purchasing power in their economies.

        “Seven other countries may see growth accelerate, but also higher rates of inflation. Two of these, the United Arab Emirates and Saudi Arabia, may welcome that given they’ve been suffering from deflation.

        “The following eight are the pick of emerging markets. They will see lower or stable inflation and faster growth.

        “The diverging rates of growth and inflation point to the impact U.S.-China trade tensions have had on emerging markets. Most of the countries on a “stagflationary” path are in Asia.

        “India, however, is not a victim of trade wars. Its slowdown is self-inflicted, caused by the evaporation of consumer demand, proliferation of bad loans and erosion in business confidence. The Reserve Bank of India’s interest-rate cuts have failed to boost the economy, while the government has been distracted by social strife and its fiscal measures so far haven’t done much to spur demand.

        “At the other end of the spectrum, Turkey is projected to post the biggest improvement in growth as private consumption and investment pick up. Yet the growth won’t be strong enough to drive up inflation, which is expected to fall back below 10%.

        “Russia has been a haven amid the trade war and it doesn’t look like it will lose that status this year, even with Vladimir Putin overhauling his government. Add to that its famed twin surplus — on the fiscal and current accounts — and the nation looks well poised. Any increase in oil prices will be a further boost.

        “Volatile Argentina will make progress bringing down inflation. Mexico, whose local bonds offer real yields of 4.4%, will see its economy return to growth in 2019.

        “The bottom line is that each country has its own demons to slay and trouble in its backyard that has nothing to do with tensions between Beijing and Washington.

        “That calls for a dose of caution after a stock, bond and currency rally since August that’s been driven by optimism over the phase-one trade deal.”

  18. “U.S. shale oil fracking has already peaked and is in a period of sustained contraction, according to two major providers of services to the industry… Slower output growth would have global ramifications, given additional American barrels are forecast to account for most of the increase in worldwide supply this year.”

    https://www.rigzone.com/news/wire/us_shale_suffering_from_sustained_contraction-21-jan-2020-160849-article/

    • “Libya’s oil output will collapse “within days” to the lowest level since the 2011 civil war as a blockade of its export terminals has forced a rapid shutdown of production and electricity blackouts in parts of the country, according to the head of the national oil company.”

      https://www.ft.com/content/bf045b36-3c4b-11ea-b232-000f4477fbca

      • worldofhanumanotg
        worldofhanumanotg says:

        Yep, the sequencing can proceed as follows:
        for now still eating through the surplus oil for next ~1-2yrs, then serious shortage (perhaps of peculiar blend/market) kicks in (+regional skirmish here and there) and moderate spike to at least ~$100 per barrel guaranteed, only then followed by demand crash response – energy price collapse to say ~$30 levels..
        That could all unwind before 2025..

        ps mind you this is all surfing on the ongoing trendy cloud of massive $T gov/CB support hence lets not get fooled in the meantime by simplistic economy commentators outside OFW/Surplus

        ps2 followed by serious GFC but not terminal, bailout / phase shift doable

    • Sylvain
      mytrailtosanfrancisco says:

      We’ve read this a thousand times in the last ten years, no ?

      • Ano737 says:

        Yup. I’ve only been here are a couple of months but I recall a recent comment from a long time reader that predictions of imminent collapse have been a regular feature here from the beginning (over 10 years?). I wonder how many of the current predictions of “definitely in a year or two” are from long time readers who have been saying the same thing for years.

        The doomer mentality is interesting. I think it has to do with the fact that the human brain simply can’t process the huge quantities and complexity involved. So just about everything is either very soon, never, or the amorphous medium term which means “who knows”.

        Gail keeps saying from time to time that predicting timing is difficult. Quite an understatement.

        • worldofhanumanotg
          worldofhanumanotg says:

          Welcome. Some have been interested (or sucked into) this vortex ~20yrs ago, some even way earlier in the “first” wake up call of the early – mid 1970s..

          The problem with “doomer mentality” is that it’s a very large encompassing spectrum indeed, lets say from normal precautionary pessimism (low bias) to full blown day/day (y/y) end of the time kind of paranoia (very unhealthy freaking bias).

          Nevertheless, the numbers and social studies don’t lie on the core message that people are doing (or perceive) worse in recent decades because of both relative and also tangible impoverishment which is derived from less per capita resource consumption and or at least stall in growth pattern of these, it’s very likely similar to junkies withdrawal syndromes..

          Yes there is also this often mentioned quality shift for example in the available cheap electronics-comm, progress in healthcare etc. but that’s not (all) how humans tend to evaluate their relative stance in society.

          And obviously the mirror itself doesn’t lie, as we can witness the govs/CBs had to for “some strange reason” opt for series of extraordinary policies. So we are likely into a bouncy road of breaching various thresholds mid term, ultimately reshaping our reality sooner or later in profound ways.

          • Ano737 says:

            Thanks. I don’t doubt for a minute we are up against resource limits and that those limits more than likely account for events for a while now. While this knowledge can be disconcerting, I find it useful even if only to greatly reduce confusion about what’s been happening. The thing is, the scale of still available resources is so immense, perhaps beyond even imagination, with the number of players and options to match, not to mention the stakes, that predictions seem to me utterly useless. I see neither denial nor end-of-days nihilism as useful. With this knowledge I do appreciate what we have more and I recognize that very long term planning is probably moot.

    • 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.
      Gail Tverberg says:

      I see that McDermott International has filed for bankruptcy. It plans to keep operating; it is restructuring its debt. A big part of its losses are related to the Cameron LNG export terminal in Louisiana and the Freeport LNG export terminal in Texas.
      https://www.chron.com/business/energy/article/McDermott-oil-field-company-files-bankruptcy-14991364.php

      I observe that natural gas is doing especially poorly. It seems to be doing much worse than oil, right now.

      • worldofhanumanotg
        worldofhanumanotg says:

        The Russians are now hastily reshuffling their top gov cadre, I guesstimate it might rhyme with similar vector, i.e. pre-panic mode bracing up for further natgas price massacre, although they are running lot of long term contracts, the spot price would affect them anyway..

      • Robert Firth says:

        LNG is a losing proposition and always has been. natural gas ca be piped, event across continents, but the cost of producing and transporting LNG is prohibitive. And what idiot would build liquified natural gas terminals in two of the warmest states in the US?

        • 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.
          Gail Tverberg says:

          Agreed! Shipping LNG across the Atlantic Ocean adds something like $2 per Mcf to the cost of production. Shipping it across the Pacific has to be a lot worse, perhaps double that amount. When the price of natural gas is barely $2 per Mcf locally in the US, then shipping LNG across the ocean doubles or triples the cost.

          At the other end, there is a lot of locally produced natural gas that can easily compete with the high cost of shipped LNG. Natural gas producers in the US are losing money at $2 per Mcf, so this really isn’t really an acceptable price to them. They were hoping that by shipping natural gas abroad, they could create a shortage of natural gas in the US. With this shortage of natural gas, they hoped the natural gas prices would rise much higher, say to $6 or $8 per Mcf. (Shipping costs would of course rise in this scenario.) But this hasn’t happened.

          To make matters worse, methane is a global warming gas. Quite a bit of it is emitted in the shipping process, making the effect on global warming gasses terrible.

  19. “The International Monetary Fund’s pro-forma World Outlook says one thing: the worried tone and faces of its officials in Davos tell quite another. 

    “We came far closer to a global economic and financial crisis over the summer than most people realised. While drastic action by central banks averted a recessionary chain-reaction, the world has patently not achieved “escape velocity” and remains vulnerable to the slightest shock.

    “That is the message – and not so sotto voce, either – from the IMF’s managing director Kristalina Georgieva. “We have not reached a turning point yet,” she said. 

    “Mrs Georgieva’s advice to the world’s governments is switch to a “systematic reliance on fiscal tools” and keep preparing for the storm. “Be ready to act if growth slows again. That means having your portfolio of  projects prepared,” she said. 

    “This fragility remains despite 71 interest rate cuts by 49 central banks worldwide and a return to quantitative easing by the US Federal Reserve and the European Central Bank, what she described as the “most synchronised monetary easing” since the financial crisis.”

    https://www.telegraph.co.uk/business/2020/01/21/alarmed-imf-really-thinks-davos/

    • “A global economic slowdown — caused partly, but not entirely, by trade tensions — has curbed demand for American products abroad. … That slowdown is driving the deceleration of job growth across the American economy. Railroads have been hit particularly hard, analysts said.”

      https://www.nytimes.com/2020/01/22/business/economy/trade-economy.html

      • “Global aluminum production fell by 1.0% last year in its first annual contraction since the Global Financial Crisis in 2009. That should have been good news for the aluminum price, but London Metal Exchange three-month metal spent most of last year grinding steadily lower…

        “The problem is that a rare year of lower production coincided with an equally rare year of weak aluminum demand.”

        https://business.financialpost.com/pmn/business-pmn/global-output-drop-fails-to-disperse-aluminum-gloom-andy-home-2

        • “…sagging exports and global trade tensions pulled [South Korea’s] annual [GDP] reading to its lowest level since 2009.

          “The slowdown comes as President Moon Jae-in’s administration is set to sharply boost fiscal spending this year and as the Bank of Korea mulls further stimulus to shield the economy from the global slowdown.”

          https://www.nasdaq.com/articles/s.korea-posts-slowest-annual-gdp-growth-since-financial-crisis-2020-01-21

          • 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.
            Gail Tverberg says:

            According to the article:

            For the whole of 2019, the economy grew 2.0%, the slowest pace in 10 years and matching the central bank’s projection.

            “Of the 2%, the net government contribution to growth came to 1.5 percentage points, the biggest portion since 2009 but that didn’t change the fact that it was a hard year for Korea in terms of exports,” a central bank official said.

            The quote you gave is with respect to the government sharply boosting increasing its spending on stimulus in 2020. But the huge share of growth coming from government contributions makes it sound like 2019 GDP growth was already significantly impacted by government stimulus.

        • 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.
          Gail Tverberg says:

          What is strange about lower production coinciding with lower demand. Lower demand means lower prices. Aluminum producers are not stupid; they cut back when prices are low and demand is low.

          Aluminum is now used partly in vehicle production. I doubt vehicle production is rising. It is also used in aluminum cans. Perhaps use of these is rising. But the sustainability message is, “Drink fewer beverages from cans. It is hard to get recyclers to take used aluminum cans.”

      • Robert Firth says:

        Yawn. The New York Times, as usual, is cherry picking any and all data that can be used to damage Trump. Don’t believe their conclusions. They are also quoting natural seasonal variations as if they were trends that could be extrapolated.

    • worldofhanumanotg
      worldofhanumanotg says:

      Thanks for that, it was likely not my original idea obviously, but I was almost a lone voice over here for years stressing the “most” important fact of such ongoing [!”synchronized”!] nature of monetary (and fiscal) stimuli agenda in the world..

      Unless this changes in serious fashion lets not naively expect any drastic outcomes of the few next rounds of GFC_ver_xy … at least in the realm of IC hubs and periphery. Yes in some of the 2,5-3rd world countries or the emerging world tied to specific growth pattern the road to ruin could be much quicker though..

      • Trump pushing negative rates again:

        ““President Donald Trump and his top economic advisor Larry Kudlow …offered different views on how effective below-zero government bond yields are on stimulating growth. As he has in the past, Trump heaped praise on the practice, while Kudlow said such central bank contrivances are no substitute for pro-growth fiscal policy.”

        https://www.cnbc.com/2020/01/21/trump-again-pushes-negative-rates-but-kudlow-says-they-dont-work.html

        • 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.
          Gail Tverberg says:

          We seem to have a choice between:

          (1) Lending at negative interest rates and
          (2) Governments overspending tax revenue, and using this tax revenue to fund projects that have virtually no chance of a positive return.

          I would put all of the spending on renewable transmission lines and renewable subsidies in the second category.

          The choices basically are for negative return, one way or another. The second version can be dressed up with, “Let’s be green. Let’s help prevent climate change.”

          Kudlow is advocating the second choice.

          • Ano737 says:

            I’m pretty sure Kudlow means tax cuts, followed by tax cuts, more tax cuts and, well, you get the idea. Does anyone remember him ever advocating anything else when he mentions “fiscal policy?” He sure ain’t no Greenie.

            • 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.
              Gail Tverberg says:

              You are probably correct.

              It seems like at some point, the government will need to start giving away benefits to those with no income at all, if it is going to keep spending on commodities rising sufficiently. Of course, if commodity prices rise based on world spending on finished goods and services, the efforts of a single country may not be of much benefit.

            • Denial says:

              Dummy yeah…. Greenie no……

            • Duncan Idaho says:

              Not the brightest porch light on the block—
              But he does keep the proletariat entertained.
              Has had a cocaine problem, but who hasn’t in his social circle?
              Will Larry Kudlow’s Past Cocaine Addiction Change the Nature of the Presidency?
              https://observer.com/2018/03/larry-kudlow-cocaine-addiction-white-house-precedent/

          • worldofhanumanotg
            worldofhanumanotg says:

            At Davos gathering they just clearly signaled at the option #2, it was all plastered with megaboards on “new green deal” type of activities from now on (both by corp and gov), also being the main or at least overarching focus in panel discussions etc..

      • “Unless this changes in serious fashion lets not naively expect any drastic outcomes of the few next rounds of GFC_ver_xy.”

        This is a financial system and indeed a planet in totally uncharted territory. Making assumptions *either way* would be naive at this point.

        To borrow Tim Morgan’s phrase, “the window of opportunity” for GFC 2.0 has been open since summer 2019, a view echoed by Kristalina Georgieva in her comments above.

        The noose of energy and resource-constraints only ever tightens and the major central banks by their own admission have limited additional firepower after last year’s splurge, which means that window is only likely to open wider…

        At some unknowable point a Purple Prancing Peacock Preparing Purgatory [TM Curt Kurschus] will fly in.

    • denial says:

      Trump says that the FED should do more right now to get the economy going….but the FED has done more crazy crap in the last 6 months than ever before! They are trying to stop leaks at every stage! So my question is ….does Trump not get what is going on? Is he that clueless or that great of an actor. I have to lean on the clueless part because I think if he knew what was going on there is no way he would want to be president again! But then again nothing surprises me anymore.

      • worldofhanumanotg
        worldofhanumanotg says:

        He had to be briefed at least on some limited part of the ongoing agenda, hence the disgusted and freaked out look when he switched from winning “maverick candidate” who can promise anything into boxed in POTUS dealing with antagonistic bureaucracy and various shady perennial deep gov structures and “their projects”. I don’t expect him to have that almost full spectrum access to deep state know how as for example the Bush dynasty though.. They obviously try to marionette Trump blind around as they pulled it on Carter (earlier on Eisenhower, JFK, ..) and the other “outsiders / disruptors” etc..

  20. Tim Groves – Japan
    Tim Groves says:

    For all those Greta fans out there, here’s an except from the young lady’s latest speech at the World Economic Forum.

    Greta is becoming to Davos what Ricky Gervais is to the Golden Globes and Tom Jones is to Vegas. Last year she was sixteen and full of fire, this year she’s seventeen and a lot calmer, although every bit as demanding. On behalf of “the children”, she is demanding demanding an immediate end to all investment in fossil fuel exploration and extraction, calling for a drastic reduction of emissions to zero.

    We demand at this year’s World Economic Forum, participants from all companies, banks, institutions and governments:

    Immediately halt all investments in fossil fuel exploration and extraction.

    Immediately end all fossil fuel subsidies.

    And immediately and completely divest from fossil fuels.

    We don’t want these things done by 2050, 2030 or even 2021. We want this done now.

    It may seem like we’re asking for a lot. And you will of course say that we are naïve. But this is just the very minimum amount of effort that is needed to start the rapid sustainable transition.

    So either you do this or you’re going to have to explain to your children why you are giving up on the 1.5-degree target. Giving up without even trying. Well I’m here to tell you that, unlike you, my generation will not give up without a fight.

    https://youtu.be/6D9iWNL2ahg

    II don’t know about the rest of you, but I’m giving up on the 1.5 degree target so that hopefully, future generations of Swedish children won’t know what hypothermia, chilblains and frostbite are.

    • The Magus says:

      Either Greta is very stupid, or she has just not bothered to think this through.

      Or could it be that she knows that there are no remaining fossil fuels that can be extracted profitably anyway, so this is issue is fait accompli

    • Chrome Mags says:

      Yeah, I’m a fan of hers. She’s tough to stand by her convictions in spite of all the hatred from the right. At the same time I’m not sure there’s any easy answer for the conundrum we’ve gotten ourselves into. Probably why so much is being spent on fusion research even if it’s a long shot.

      • Tim Groves – Japan
        Tim Groves says:

        Is this “hatred from the right” anything like that “race-ism” directed by the British establishment and press at Meghan? As far as I can see, both these “hatreds” seem to be manifest in insufficient affirmation, adoration, admiration and approval of the young celebrities rather than on any feelings of disgust or any wish to do them harm.

        There is a lot of hatred in the world in the sense of extreme dislike or disgust that oozes out of people who have “issues” with things such as anger, aggression, disgruntlement, envy, resentment, and low self-esteem. In such cases, there is often something inside the hater—a personality?—that his primed to hate and attack others on sight for no other reason than they’ve been imprinted as targets and are in range.

        That’s not what we see in the case of GretaHate. The vast majority of the widely expressed criticism about what Greta is doing and also about the vast majority of the gentle mocking or ridicule directed her way is not rooted in hatred at all. Where you see “all the hatred from the right”, I see lots of ordinary sensible responsible, hard-working people who quite reasonably object to being lectured on how they should live their lives by anyone, let alone a junior high-school dropout with her own anger issues who hangs around with the global elite.

        From where I stand, most of the hatred visible in the political world emanates from the left end of the field. And vicious and rabid hatred it is too. From folks like the guys pictured below. Have you heard anyone say they want to shoot, decapitate Greta, punch her in the face? Or, as ex-boxer Mickey Rourke quipped about POTUS, “l would love 30 seconds in a room with the little bitch”?

        https://www.thewrap.com/wp-content/uploads/2017/06/kathy_griffin_de_niro.jpg

    • worldofhanumanotg
      worldofhanumanotg says:

      The future generations of Swedish children are more pressingly going to deal with the multitude of urban no go zones or even self ruled caliphates growing on their former territory, not mentioning the ongoing relative material and social impoverishment vs ALL their Nordic neighbors.. and eventually even in comparison to much poorer countries as well..

    • cashisking says:

      She will have to change her name and her hairstyle in a decade when “her generation” is still using abundant fossil fuel. Us fat old boomers WILL BE WATCHING Greta. :0

  21. MG says:

    Today, I have read a blog in Slovak that talks about the increasing amount of the liabilities in our lives, about the fackt that what was an asset in the past, like money on the bank account, a house, a car, a company inventory etc., is now a liability:

    https://blog.etrend.sk/rudolf-hauzer/vsade-pasiva-kde-len-oko-dovidi.html

    It is a very good observation: we live in the world which contains more and more liabilities and less and less assets. That is a very good description of our current situation.

    • Hubbs says:

      Your biggest liability these days ( if you are a decent, honorable high wage earning male living in KY) is your spouse.
      https://www.archwaypublishing.com/Bookstore/BookDetail.aspx?Book=761645

      Just check the “Free Preview.” It only scratches the surface. Sorry for the shameless plug. I couldn’t resist. But check out the KY Bar Association on Yelp and go from there.

      • MG says:

        It is true. Marriage is a big energy consumer. The family you are born into is an energy consumer. That is why when e. g. Jesus Christ called his apostles they readily abandoned their families.

        Not only celebrating all those family events is a big energy consumer, but also being a religious practices follower.

        One feels like being a wear and tear part of a machine.

      • Robert Firth says:

        “Your biggest liability these days ( if you are a decent, honorable high wage earning male living in KY) is your spouse.”

        It is your biggest liability if you live anywhere in the US, and I know whereof I speak. Enough said.

  22. Trump is like the physical embodiment of the infinite growth paradigm:

    “Donald Trump urged world leaders at Davos to ‘reject the environmental prophets of doom’ during his keynote address to the World Economic Forum on Tuesday.

    “The US President branded climate activists ‘the heirs of yesterday’s foolish fortune tellers’ while rattling off a list of projections that he said failed to come true, including overpopulation in the 1960s and the ‘end of oil’ in the 1990s…

    “He then touted America’s fossil fuel revolution in the form of shale gas and oil, inviting European leaders to invest.”

    https://www.dailymail.co.uk/news/article-7910695/Greta-Thunberg-tells-world-leaders-fight-climate-change.html

    • There is such a huge schism now between those who say there are no environmental limits and those who say we are bumping up against them ever more dangerously.

      Of course Trump’s worldview (or perhaps even a greenwashed version of it) will win out because that is what the global economy needs to continue growing (until it simply no longer can).

      “Utter the term “black swan” in financial circles and it will conjure images of an economic catastrophe triggered by a rare event people should have seen coming, if only they had opened their eyes.

      “On Monday, the Bank for International Settlements (BIS) published its riff on that theory.

      “In a paper titled “The Green Swan” the Basel-based institution warns climate change could unleash “potentially extremely financially disruptive events,” that could trigger the next global financial crisis.”

      https://www.aljazeera.com/ajimpact/green-swan-climate-event-financial-crisis-bis-200120143239211.html

      • Xabier says:

        Green Swan’? We are on the way towards my own prediction: the ‘Pink Flamingo of Doom’. Tremble when you hear its wings beat…….

      • Tim Groves – Japan
        Tim Groves says:

        The Inner Man
        by Jack Hardy

        i have lost my coat on the road today
        cries the man of constant sorrow
        ruin has him in the wind at last
        cries the wolf of time
        merchant make a cloth for a sinner man
        finer than the one that he lost
        but it is nothing to the state of the inner man
        though the wolf goes hungry again
        cries the wolf of time tomorrow

        my house has burned down to the ground
        cries the homeless man of sorrow
        ruin has him in the wind at last
        cries the wolf of time
        build a new house for a sinner man
        stronger than the one that he lost
        but it is nothing to the state of the inner man
        though the wolf goes hungry again
        cries the wolf of time tomorrow

        i have lost my gold in the river drowned
        cries the wealthy man of sorrow
        ruin has him in the wind at last
        cries the wolf of time
        but the boatman has hope for a sinner man
        says you still got you your health
        but it is nothing to the state of the inner man
        though the wolf goes hungry again
        cries the wolf of time tomorrow

        i have lost my son my only son
        cries the worldly man of sorrow
        ruin has him in the wind at last
        cries the wolf of time
        but he’s gone to the father of all sinner men
        in a far far better world
        but it is nothing to the state of the inner man
        though the wolf goes hungry again
        cries the wolf of time tomorrow

        i have lost my name my only name
        cries the vagabond of sorrow
        ruin has him in the wind at last
        cries the wolf of time
        but the mirror don’t frighten no sinner man
        blood blackens on hope’s last door
        but it is nothing to the state of the inner man
        though the wolf goes hungry again
        cries the wolf of time tomorrow

      • Tim Groves – Japan
        Tim Groves says:

        This is one of the loveliest folk songs that almost nobody has ever heard of.

        Five years on YouTube and just 6 likes including me.

        https://youtu.be/2yS3ceQ3Q_k

    • 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.
      Gail Tverberg says:

      At least Shale Oil has a chance of benefit. If oil prices were higher, shale oil production might even be able to scale up a bit.

      Wind and solar don’t have that much going for them, I am afraid. They are simply add ons to the current system that provide no benefit at all, when indirect costs are included.

      Everyone looks for some solution that might work. Some are sold on Solution A; some are sold on Solution B. In fact, probably no solution will work. But whichever solution is chosen, there is a chance to add more debt, and thus keep the world economy going a little longer.

      • As you have yourself pointed out, Gail, there are particular circumstances where wind turbines and solar panels can be useful. Such as for someone or some community living off-grid. However, I certainly agree that wind and solar are not going to save the day where civilisation as a whole is concerned. The are more inclined to make matters worse in some respects. The current push for wind and solar to replace fossil fuel power stations globally is utter nonsense.

        • 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.
          Gail Tverberg says:

          Even the off-grid use of wind and solar is a temporary situation, made possible by other types of energy products. Folks living off grid generally have lots of other things: gas fired stoves; an automobile to drive to town; perhaps some agricultural equipment that requires oil products. The solar that these folks have likely was purchased at subsidized prices. Otherwise it likely would be too expensive for them.

          The long term benefit of the off-grid solar is iffy. The area certainly would need fire protection, or it would likely burn down with the next wildfire hitting the area. Solar panels and wind turbines don’t provide fire protection. Replacement inverters would be needed as well. The family would likely not be providing all of its food in most cases. The family would need to take any food they grows to market, buy whatever they have need of, and bring it back home again. These are not services that the off-grid solar by itself provides.

          It would be hard to make a living with off-grid solar as the only source of energy–no petroleum; no goods (such as inverters) purchased elsewhere.

          • worldofhanumanotg
            worldofhanumanotg says:

            You can look at offgrid systems installation as essentially prepaying the comforts of grid connection for a reasonable forward looking time span (quality product) say at best ~5-15yrs max or completely unknown (non)reliability (cheap product ver)..

            At its core it’s very emotionally driven decision making as opposed to the very hard down to earth focus on the buildup of baseload grid more than century ago and their ideas and realities of life back then..

            Today, if you have the money to spend (among other priorities) it’s certainly nice thing to have, but you build up only a slightly different dependency vs your legacy grid connection.

            • worldofhanumanotg
              worldofhanumanotg says:

              Left out to stress the obvious “prepaying the comforts of the grid” but at much higher price point, especially in terms of three phase power (running high power – amperage demand spikes) etc..

            • 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.
              Gail Tverberg says:

              Good points! In many cases, the rich can have these purchases subsidized by the tax payments of the poor as well, making this a good deal for the rich who want to try to do better than others, for a little longer.

  23. The pre- End of the World Party is warming up just fine, folks…
    Are you ready to RUMBLE?!😜👍

    https://m.youtube.com/watch?v=I6eQ78HCGEA

    French workers cut power to world’s largest food market in pension protest

    https://news.yahoo.com/french-workers-cut-power-worlds-090901773.html
    PARIS (Reuters) – French energy workers protesting against President Emmanuel Macron’s pension reform cut power on Tuesday to the world’s largest wholesale fresh food market, Rungis near Paris, the hardleft CGT union’s energy branch said.
    A spokeswoman for Rungis International Market said emergency power kicked in when the outage began 0530 GMT and that there was no disruption to trade. The power cut lasted 90 minutes.
    “The power source to Rungis is cut this morning,” the local CGT energy branch wrote on Facebook

    What till the Homeland Guard restores order and security to make everyone safe!

  24. https://www.aljazeera.com/mritems/Images/2020/1/20/8a341380ee624582b2e4ad2b74845d5f_18.jpg
    Migrants run towards the banks of the Suchiate River in hopes of evading the Mexican National Guard [Jeff Abbott/Al Jazeera]
    https://www.aljazeera.com/news/2020/01/chaos-guatemala-mexico-border-caravan-advance-200120223801182.html

    Well, I didn’t want to see this by myself — “overshoot”?

    • 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.
      Gail Tverberg says:

      A lot of people thought that we were doing poor people everywhere a favor by helping them greatly reduce the deaths of children by cleaner water and a few antibiotics. Better/greater nutrition through the use of fertilizer and modern methods also contributed to exploding population.

      Most people greatly opposed explaining to these people that mothers would need to have many fewer children than their parents, if population was not to overshoot. Needless to say, having outsiders come in and explain that fewer births were needed would not be popular anyhow. So now we have this mess, a generation or two after we should have been thinking about the problem we were helping to create.

    • Chrome Mags says:

      Look how fit those people are. Says something for being on the run vs. being in the lap of out of shape luxury.

    • worldofhanumanotg
      worldofhanumanotg says:

      On one level we are just not accustomed to fast & large pop movements anymore.
      These people bet on the short horizon window opportunity before Donald completes the Wall construction. Many of them will make it into the US on time, the next migrating waves might not be that successful.

      Who knows perhaps one of the younger kids of the swarm will make it big eventually, shaped deeply by such personal history.. If the collapse scenario is correct, expect all sorts of very unusual characters “getting ahead” in such volatile situation.. don’t be shocked or foolishly trying to stop that historically trued process..

  25. “Pictures from downtown Beirut Sunday night showed an extraordinary standoff between fed up protesters and riot police protecting a ruling class protesters say is out of touch and slowly losing control of the nation.”

    https://abcnews.go.com/International/protests-lebanon-reach-intensity-dozens-hospital-analysis/story?id=68404196

    • “Five protesters were killed on Monday in three Iraqi cities as demonstrators across the country ramped up pressure on the government to implement long-awaited reforms…”

      https://www.aljazeera.com/news/2020/01/iraq-baghdad-police-tear-gas-live-fire-protests-rage-200120094313266.html

      • “The unrest that engulfed India last month after the passing of a new citizenship law that many believe openly discriminates against Muslims and undermines the secular foundations of India’s constitution has shown no sign of abating. Every week, millions have continued to take to the streets…”

        https://www.theguardian.com/world/2020/jan/21/modi-is-afraid-women-take-lead-in-indias-citizenship-protests

        • “Moody’s downgraded Hong Kong’s credit rating on Monday, slashing its assessment on the Asian financial center and blaming the government’s failure to deal with seven months of social unrest that has driven the economy into recession.”

          https://www.marketwatch.com/story/moodys-downgrades-protest-torn-hong-kong-2020-01-21

          • 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.
            Gail Tverberg says:

            Higher interest rates leads to less investment in Hong Kong. Businesses and the Hong Kong government will spend a greater share of their revenue on interest payments, leaving less for improving wage levels.

        • 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.
          Gail Tverberg says:

          This is another sign of too many people for jobs available, especially jobs that pay well. This is a chart that the Pew Research Center represents current and future population in India:

          https://www.pewresearch.org/fact-tank/2015/04/21/by-2050-india-to-have-worlds-largest-populations-of-hindus-and-muslims/ft_15-04-17_indiagrowth/

          There is clearly too much population growth in total, relative to the resources. Discriminating against Muslims is a way of holding down immigration from neighboring countries.

          I can see Muslim women protesting discrimination against rules that discriminate against Muslims. I find it harder to understand why Hindu women protesting, unless it is in general, with respect to governmental repression and frustration with the income levels for their families.

          • Xabier says:

            The first Moghul Emperor in India was delighted with the high population of India; he wrote in his memoirs that it was wonderful to have so many skilled workers, dirt cheap – coming from mountainous Central Asia he couldn’t quite believe it.

            Persecution of Muslims today is partly pay-back for the Moghul invasions, a 500-yr cycle; and also the massacres which took place when the British pulled out (both sides, of course, very, very guilty).

            I hope our friend of former days ‘Third World Person’ is OK, he hasn’t posted in some time.

      • 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.
        Gail Tverberg says:

        Basic problem is that fact that the price of oil is too low for the Iraq government to collect enough funds to pay for programs that would help the Iraqi people. People are frustrated.

        • it’s not so much frustration, though that comes into it, it’s a lack of understanding of the basic laws of an oil economy.

          the same will apply to all nations who are oil-dependent

          • 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.
            Gail Tverberg says:

            A country needs an abundant energy source that is much cheaper than oil. Right now, natural gas, coal, and perhaps hydroelectric (if other sources are available as well) are the only ones that qualify.

    • 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.
      Gail Tverberg says:

      Lebanon is too small to be shown separately in BP data. To figure out more, I looked at the CIA world fact book for Lebanon. It seems that after World War I, Lebanon was carved out of the Former Ottoman Empire province of Syria. Lebanon is a fertile plain, bordering on the Mediterranean Sea. It is a water-surplus state, in a water-deficit region. Its borders with Syria and Israel remain unresolved.

      Lebanon imports nearly all of its energy supplies. There are natural gas resources in the Mediterranean that it might have access to, if its border with Israel is drawn the way Lebanon would prefer. 11% of Lebanon’s electricity is from hydroelectric.

      The people are 95% Arab. By religion, the population is roughly 1/3 Sunni Muslim, 1/3 Shia Muslim and 1/3 Christian.

      The main growth sectors of Lebanon’s economy are banking and tourism. The Syria conflict cut off one of Lebanon’s major markets and a transport corridor through the Levant. The influx of nearly one million registered and an estimated 300,000 unregistered Syrian refugees has increased social tensions and heightened competition for low-skill jobs and public services.

      Lebanon’s Debt to GDP ratio is very high. Most of this debt is held by Lebanon’s banks. The Lebanon’s pound’s exchange rate to the dollar is fixed. Thus, internal problems cannot be fixed by a depreciating currency.

      Lebanon’s export partners are China, UAE, South Africa, Saudi Arabia, Syria, Iraq, and Turkey. I note that none of these countries is doing very well; this by itself does not help export prospects. Import partners are China, Italy, Greece, Germany, US, Turkey, and Egypt.

      The people of Lebanon are generally well-educated (11-12 years of schooling) and have access to the Internet.

      Looking into Lebanon’s electricity problems further, Reuters reported in March 2019, in an article called Fixing Lebanon’s ruinous electricity crisis

      Lebanon’s electricity crisis has pushed it to the brink of financial ruin, as power cuts hobble the economy and subsidies have racked up one of the world’s largest public debt burdens.

      Lebanon has not had capacity to supply 24-hour electricity since its 1975-1990 civil war, leaving many households reliant on their own generators or private neighborhood suppliers who charge hefty fees to keep a few lights on or other appliances running during regular daily cuts that can last several hours.

      It turns out that most of its electricity is from oil, either from aging plants for from diesel generators. This is a very high cost source of electricity. About 11% is hydroelectric, as noted above.

      BBC ran an article in December 2019 called Stealing Electricity to Survive. Needless to say, this tends to downgrade the operation of the electric grid. According to the article, “The country’s national grid can supply only about half the electricity people want.”

      Part of Lebanon’s problems are that its imports of goods vastly exceed its exports of goods. In 2017, Exports totaled $3.19 billon, while imports totaled $20.8 billion.

      • worldofhanumanotg
        worldofhanumanotg says:

        In a way Lebanon has been in ~suspended collapse since mid 1970s.
        The living standards before that civil war were almost om European level.
        So, I gather the Lebanon case could serve as important precursor / laboratory for collapse related phenomena..

        • 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.
          Gail Tverberg says:

          Lots and lots of debt to try to keep the standards where they were before. People expect air conditioning, for example.

      • beidawei
        beidawei says:

        “By religion, the population is roughly 1/3 Sunni Muslim, 1/3 Shia Muslim and 1/3 Christian.”

        It has not been politically possible to hold a formal census since 1932, when Christians comprised about half the population (by design). One study estimated that Christians are now down to 40 percent (with Maronites forming the largest group), and Muslims 54 percent (evenly divided between Sunni and Shi’a), with Druze making up the remainder. There are 18 recognized sectarian groupings (e.g. a Catholic might be a Latin Catholic, an Armenian Catholic, Melkite,etc.), each with its own customary law. The recent protests have been pan-sectarian, and aimed at an entrenched corruption which is abetted by the necessity of dividing every aspect of government according to ethno-religious divisions.

        • Tim Groves – Japan
          Tim Groves says:

          Average wealth among Lebanese residents should have increased last month with the homecoming of Carlos Ghosn (estimated net worth of $120m but he spent quite a bit on moving expenses). Given the current population, Carlos could afford to give away $18 to $20 to every person in the country before running out of assets.

      • Yoshua says:

        I have been following the financial crisis in Lebanon. It is basically a Ponzi scheme involving the banks and the central bank.

        The banks offered a high interest rate on dollar deposits, which attracted dollars from abroad. The banks then lent those dollars to the central bank, who paid an even higher interest rate on those dollars to the banks. The central bank became the borrower of last resort.

        The dollars were the used to finance the government and all the imports. In two decades they took in $175B, which is way about Lebanon’s GDP.

        It worked fine as long as the dollars kept flowing in. When the tide turned the Ponzi imploded.

        • worldofhanumanotg
          worldofhanumanotg says:

          Thanks for that update on timing, that seem to hint the Ponzi imploded also because of the Syrian war. Simply “the machine” wants to continue longer term Ponzis in that region from now on only in Turkey and Israel.. (+Gulfies area which is little bit distant). And the first one is increasingly getting closer to get shafted as well, but as second largest NATO army, they are not bold to do it fully for now.

          • Yoshua says:

            If Turkey imploded, then the chaos spreads to Europe as multi million refugee flood.

            It’s in Europe’s interest as well to keep the Turkish Ponzi going.

            • “Thousands of Greek protesters have demanded asylum seekers be removed from their islands amid overcrowding and violence at the refugee camps.

              “The islands of Lesbos, Samos and Chios staged a general strike, shutting down shops and public services and rallying in central squares, with protesters shouting: ‘We want our islands back, we want our lives back.'”

              https://www.dailymail.co.uk/news/article-7916431/Thousands-Greek-protesters-demand-asylum-seekers-removed-islands.html

            • 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.
              Gail Tverberg says:

              I wonder what these things will do to the tourist trade of Greece.

        • 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.
          Gail Tverberg says:

          Interesting! When I read that Lebanon’s two big industries were banking (with the banks taking on most of Lebanon’s high quantity of government debt) and tourism, I could see the handwriting on the wall. A temporary Ponzi scheme in would be all too possible in the banking industry.

          Their other big industry of tourism looks just as vulnerable. If the banks collapse and electricity becomes even less available, how long will tourism hold up? Lebanon is a big mess.

    • ssincoski
      ssincoski says:

      And if I was a betting man, I would put money down that we are going to see a lot more of this in the near future around the world. People have just had enough.

  26. “The latest report on inflation by Iran Statistical Center says foodstuff prices have climbed 30 percent compared with last year, in an unrelenting trend of rising inflation and prices in the sanctions-hit country.”

    https://en.radiofarda.com/a/food-price-inflation-in-iran-at-30-percent-according-to-latest-report/30387564.html

    • “Roti constitutes the staple in most households across the country [Pakistan]. Therefore, the sudden shortage of wheat flour in the country and the consequent rise in prices constitutes a massive crisis for people who depend on the item for their meals.”

      https://www.thenews.com.pk/print/601649-flour-crisis

      • 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.
        Gail Tverberg says:

        Regarding the flour crisis in Pakistan, Yahoo reports Pakistan to import 300,000 tonnes of wheat to meet flour crises

        Prices of flour and bread shot up last week as the ingredient disappeared from shops and wholesale markets, while bread makers shut in protest at what they called government pressure to sell the staple at controlled prices.

        “It is not possible for me to sell bread for eight rupees a piece if I buy flour bags at high prices,” said Sheraz Khan, a shopkeeper in the garrison city of Rawalpindi, next to Islamabad, the capital.

        “Gas prices have also shot up multiple times since this new government came into power,” he added estimating that the bill for his gas-powered oven had increased four times.

        Pakistan’s energy pricing regulator has proposed yet another hike, which officials say is likely to be approved.

        Pakistan is importing more wheat because of a poor harvest. Compared to a year or two ago, the value of the Pakistani rupee relative to the US$ is way down. This is part of why wheat and natural gas cost more.

  27. “The global auto industry plunged deeper into recession in 2019, with sales dropping more than 4% as carmakers struggled to find buyers in China and India. The pain is likely to continue this year.

    “The number of vehicles sold across major global markets dipped to 90.3 million last year, according to analysts at LMC Automotive. That’s down from 94.4 million in 2018, and well below the record 95.2 million cars sold in 2017.”

    https://edition.cnn.com/2020/01/20/business/global-auto-recession/index.html

    • “More than half of chief executives in an annual survey by PwC expect a slowdown in global economic growth this year, in marked contrast to the confidence that has lifted stock markets.

      “53% of CEOs around the world forecast the rate of global growth will fall, compared with 29% the year before…”

      https://www.reuters.com/article/us-davos-meeting-ceo-outlook/majority-of-ceos-expect-global-economy-to-cool-in-pwc-survey-idUSKBN1ZJ23C

      • 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.
        Gail Tverberg says:

        This doesn’t seem to match up with world GDP forecasts we have been seeing from the IMF and World Bank.

  28. Dennis L. says:

    For your viewing enjoyment:
    The challenge of how it all started.

    https://www.youtube.com/watch?v=aA-FcnLsF1g it has to do with information, or which came first, the chicken or the egg.

    For those mathematically inclined Check out ” Enter the matrix: the deep law that shapes our reality.”
    It was published 7 April, 2010 in New Scientist, Physics and Math.
    One basic conclusion: economic predictions more than 30 days in advance are worthless.

    My guess is Gail is on to something with the idea that there is some guiding force and we really don’t have a clue.

    For myself, I am on what is hopefully a two year math journey so I can read the paper and find out what further math studies are necessary, not so easy for a 73 year old man, but one semester at a time, and no metaphorical popcorn.

    Dennis L.

    • 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.
      Gail Tverberg says:

      Very interesting. I have run into this argument before–there are way too many combinations that don’t work, for it to be possible that random changes explain how the universe is organized.

      I notice that Steven Mayers is the main speaker in this video. He has a more recent video (which I haven’t looked at).

    • Mark says:

      I’d be curious to know how Cellular Automation relates to this.

      And unrelated, Billy Strings gets it.

  29. IMF downgrade:

    https://www.cnbc.com/2020/01/20/davos-imf-world-economic-outlook-january-2020.html

    “The Washington-based institution forecast in October a global growth rate of 3% for 2019 and of 3.4% for 2020. The IMF has now revised down those forecasts to 2.9% and 3.3%, respectively. The downward revision was mostly due to lower growth in India. For 2021, the Fund has forecast a growth rate of 3.4%.”

    “For 2021” is quite reediculous…

    when the actual growth is much lower, the reports will say it was “unexpected”…

    • 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.
      Gail Tverberg says:

      There is a video at the link called, “How Economists Make Predictions.” Perhaps if we were to watch this, we could figure out where the increases in GDP growth are coming from.

    • I should clarify what I am seeing… the revision is now:

      2019 2.9%
      2020 3.3%
      2021 3.4%

      so I suspect the actual 2020 number will be lower than 2.9%, and the 2021 number they are just making up with no justification other than to make it higher than 2020…

      • Xabier says:

        Economists are like Soviet and Chinese psychologists: they provide the answers the politicians want to hear, pretty much pre-determined.

    • denial says:

      It’s amazing how there is a totally different story on mainstream media! When I go to cnbc it is like there is a booming economy for as far as the eye can see with no real challenges other than where to spend all the money!

    • 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.
      Gail Tverberg says:

      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.

        • 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.
          Gail Tverberg says:

          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.

  30. celiacheung85
    celiacheung85 says:

    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?

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

      perhaps a small island somewhere?

      • worldofhanumanotg
        worldofhanumanotg says:

        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.

      • 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.
        Gail Tverberg says:

        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.

  31. “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/

    • “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.

        • 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.
          Gail Tverberg says:

          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 – Japan
            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?!

            https://static.tenki.jp/static-images/pm25/15/japan-detail/large.jpg

            • worldofhanumanotg
              worldofhanumanotg says:

              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..

  32. “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.

      • ” The proportion of raw materials the world is reusing has fallen, researchers said on Tuesday, warning of a “global disaster” as annual consumption of natural resources rose to 100 billion tonnes for the first time.”

        https://www.reuters.com/article/us-global-economy-environment-trfn/world-risks-disaster-as-reuse-of-natural-resources-declines-idUSKBN1ZK02M

        • 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.
          Gail Tverberg says:

          The falling percentage of materials reused, from 9.1% in 2015 to 8.6% in 2017, is very much to be expected. Prices of all nearly commodities started dropping in 2014, and fell further in 2015. With lower prices, recycling made less and less economic sense. A person would expect additional steps down, as paper and plastic recycling have been ended in 2018 and 2019.

          This is the way economic incentives work.

  33. “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

    • 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.
      Gail Tverberg says:

      A fall in assets is equivalent to less lending. This lack of lending needs to be taken up elsewhere, or it has the effect of being recessionary.

  34. “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

    • “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/

      • “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/

      • 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.
        Gail Tverberg says:

        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.”

  35. 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.

    • 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.
      Gail Tverberg says:

      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:

      https://gailtheactuary.files.wordpress.com/2020/01/decline-in-global-real-interest-rates-1317-to-2018-quartz.png

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

      https://gailtheactuary.files.wordpress.com/2020/01/real-interest-rates-for-personal-loans-since-1321-cnbc.png

      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.

        • 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.
          Gail Tverberg says:

          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
            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.

            • worldofhanumanotg
              worldofhanumanotg says:

              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 – Japan
              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.

  36. 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/

    • “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/

      • 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.
        Gail Tverberg says:

        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.

    • 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.
      Gail Tverberg says:

      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.

  37. 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.

      • 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…

        https://m.youtube.com/watch?v=FN_39sXdrog

        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.

          • 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.
            Gail Tverberg says:

            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:

            https://gailtheactuary.files.wordpress.com/2020/01/constraint-payments-to-wind-power-in-scotland.png

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

      • 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.
        Gail Tverberg says:

        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.

        • phononlattice
          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.

          • 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.
            Gail Tverberg says:

            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.

            https://gailtheactuary.files.wordpress.com/2020/01/wages-as-pct-of-gdp-through-2018.png

            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.

            https://gailtheactuary.files.wordpress.com/2016/01/income-top10-percent-comared-to-bottom-90.jpg

            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.

            • Gail,

              What is the source for the second chart?

              Thanks in advance,
              T2M

            • 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.
              Gail Tverberg says:

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

            • phononlattice
              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.

            • 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.
              Gail Tverberg says:

              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.

  38. 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?

      • 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?

            • 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

              https://m.youtube.com/watch?v=xaHBSU6uXaw

              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.

        https://dailystormer.name/wp-content/uploads/2020/01/food-platejpg-7615e46d85c89d94.webp_.png

        • 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.
          Gail Tverberg says:

          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 – New Albany Aquatics Club
            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 – Japan
        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”.

      • fredgunter
        fredgunter says:

        Another great video on energy decline:

        • Kowalainen says:

          Anyone hoping for collapse should first collapse themselves to a normal BMI. Then move out to a subsistence farming life for 10 years. Then come back wishing for collapse.

          Fsck hope, fsck collapse and fsck human chauvinism.

          All that matters is the genome and the memes mankind produces. All else is empty carrying vessels.

    • 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.
      Gail Tverberg says:

      One green teacup to bail out the titanic. Unfortunately, it doesn’t fix much.

  39. Kowalainen says:

    Henrik Jönsson explains the success of swedish socialism.

    https://youtu.be/MKsCfDtVmo0

    For those crypto commies out there.

    🙂

  40. Tim Groves – Japan
    Tim Groves says:

    With all the speculation about which countries are at risk in the first six months of 2020, I was wondering whether the USA might not be up there near the top of the list.

    Governor of Virginia Ralph Northam has just issued an executive order entitled, “DECLARATION OF A STATE OF EMERGENCY DUE TO POTENTIAL CIVIL UNREST AT THE VIRGINIA STATE CAPITOL.”

    https://www.governor.virginia.gov/media/governorvirginiagov/executive-actions/EO-49-Declaration-of-a-State-Of-Emergency-Due-to-Potential-Civil-Unrest-at-the-Virginia-State-Capitol.pdf

    The potential unrest is set to potentiate on Monday January 20, 2020. Mark the date!

    According to the Governor’s order:

    Credible intelligence gathered by Virginia’s law enforcement agencies indicates that tens of thousands of advocates plan to converge on Capitol Square for events culminating on January 20, 2020. Available information suggests that a substantial number of these demonstrators are expected to come from outside the Commonwealth, may be armed, and have as their purpose not peaceful assembly but violence, rioting, and insurrection.

    Many ordinary Virginians are hopping mad and up in arms about the actions of the current Governor,

    Organic Prepper Daisy Luther is on the case:

    Who is sponsoring the rally?
    It’s interesting to note that throughout nearly every article on the mainstream media about this topic, you’ll find multiple references to “white nationalists,” making it seem as though the event is being hosted by white supremacists instead of law-abiding gun owners who have no intention of kowtowing to unconstitutional mandates…..

    …. This isn’t the first tyrannical move in Virginia this week.
    An extremely popular Facebook post that has been shared thousands of times reads:

    So Virginia introduces a bundle of radical laws to destroy 2A rights, militias, sale transfer and registration bills, and the People of Virginia says no, and we’re going to vote you all out next term.

    Virginia government responds by introducing a bill to eliminate voter ID.

    Virginia says we’re not going to wait, we’ll petition your removal from office and gets almost a 3rd of the 240K signatures to remove the governor and starts petitions to remove delegates.

    Virginia government responds by introducing a bill to raise the amount of signatures from 10% of the prevailing vote, to 25%.

    Folks, this is the a textbook example of tyranny. “We’re the government, and we’ll do anything we want, whether you like it or not. We won’t let you vote us out, we won’t let you remove us from office…. And if you can’t possess the weapons that a militia would need to force us out, of office, then there’s absolutely nothing you can do about it.”

    First they came for the Armenians, then the Kulaks, then the Jews, then the Chinese landlords, then any Cambodian who wore spectacles (bty, apologies for all the others I’ve left out!). Now they’re plum crazy and coming for law-abiding gun owners in the great state of Virginia.

  41. Game-changer!

    https://finance.yahoo.com/news/the-bezos-musk-and-branson-billionaire-space-race-is-happening-right-now-131003282.html

    “… commercial space travel could end up being the biggest damn thing to happen this year. In fact, I think it’s the beginning of a real game-changer for humanity.”

    for humanity!

    “As for Bezos, Branson and Musk, Hatch says, “…these people made their billions in totally different industries and are now turning to space. They will make billions if not trillions in space.” ”

    trillions!

    the world economy is saved!

    • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
      doomphd says:

      yes, it’s all out there in the vacuum of deep space, < 1E-15 Torr. and the views are killer!

    • JMS
      JMS says:

      So funny. I’m seeing the promotional slogans:
      The Moon, a Full Bahmas Just For You!
      You Deserve the Moon!
      Etc.
      https://www.look4ward.co.uk/wp-content/uploads/2017/01/179389-f4447172638f445daf89dce02ef0eb89.jpeg

      • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
        doomphd says:

        Ralph Cramden of the Honeymooners was always promising to send his wife to the Moon. “One of these days Alice, one of these days….”

    • 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.
      Gail Tverberg says:

      Goes with burning all of the fossil fuels to create climate change. If you can believe this story, you can believe the burning all the fossil fuels story. Why not link the two, and declare salvation on the moon or another planet?

  42. cashisking says:

    90% of the housing in the USA could be destroyed and there would be enough to house all the people. Not with the amenities and privacy we enjoy. Hell we could probably liver in just the freakin vehicles. Any use of materials is JUST EGO and or seeking amenities/art. I am not saying i dont do it.
    Saying it for for sustainability is GREENWASHING BS.
    The homless crisis is because of using stuctures as financial instruments. Dont like homlessness.
    Bring a homelees person into your house. Hopfully they wont poop in a jar or OD in your bathroom.
    THere is only one thing that could be considered sustainable action. GROWING FOOD. Yes there BS with that. Just 100x less BS than everthing else.

    • hopefully is the critical word there cash

      • cashisking says:

        Well if that risk isnt bad enough. If you invite someone to stay at your house they are a “RESIDENT” . That is a legal term. Say they poop on your cat and u say sorry man not working for me and they go sorry man i live here now… They have RIGHTS. If you put them in a headlock and put them out guess what you going to jail. If they recorded you on their phone or even if they didnt your facing civil for $10k. So now… If you stay someones going to get a physical communication. So you go and start the legal process of removing them from your house. Now YOU are homeless. I am not making this up.

        • my use of the word ‘hopefully’ was in agreement with you

          no different than feeding a stray cat really, it will hang arouind your back door as long as food is available

          you feel sorry for it and invite it in

          in no time it takes up residence

          such is the way of the world I’m afraid

          • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
            doomphd says:

            OTOH, your real or potential rodent problem is solved.

            • oddly enough–a few winters ago I noticed cat footprints round my house in fresh snow (definetely cat btw)

              they were so big I grabbed a tape and measured them

              each print was as big as my fist and front paw to back paw was 4′ 6″

              interesting wildlife round here it seems

            • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
              doomphd says:

              Norman, in your lowest possible baritone say: “here, kitty kitty.” be sure to have a beef steak or pork chop handy.

    • 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.
      Gail Tverberg says:

      I have known people who have taken in otherwise homeless people, with less than good luck. Your luck might vary.

      We had a slightly similar experience with someone who wasn’t really homeless, but couldn’t hold down a job and kept running up debt. I tried to hire her for some housework/childcare and discovered she wouldn’t do any reasonable amount of work. She would get sidetracked, reading the newspaper.

      • Kim says:

        That NYT opinion page can be compelling, though.

      • Chrome Mags says:

        I had a similar experience with 6 homeless, none of which could put in a full day’s work. 3 could only work for an hour and then wanted pay for that hour to then go buy booze. What I found out was there was a reason the homeless are homeless, because they lack the will or motivation or whatever you want to label it to put in a full day’s work. It’s not that they haven’t had opportunities, it’s just that they didn’t capitalize on them.

        • 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.
          Gail Tverberg says:

          I am sure that that is not true for all of them, but there are quite a few who have problems of some kind (mental illness, drug, alcohol, post-traumatic stress, etc.) that means that they need more than simply an opportunity for a job, to fit in. This makes the problem much harder to fix.

          Also, in places like California, where housing costs are absolutely outrageous, I can imagine a lot of people with pay that would be reasonable in other parts of the country will find themselves homeless through no fault of their own. Rent is absurd in relationship to what many jobs pay.

          • Artleads says:

            Totally in agreement. So since homelessness is a big problem for society, and since I like building stranger stuff out of trash, and since I can do it with a great deal of thoughtfulness, I say let’s build cost-free stuff for homeless people. They won’t complain. They have no other choice. Build it for them. maker it (at least structurally) something you could like yourself. And if the homeless you give it to don’t want it they can go and (blank) themselves.

        • Xabier says:

          For many homeless there is a deep trauma in their past which led to their taking drugs, drinking, etc, in an attempt to blot it out.

          Offering a job, or a place to live, can’t heal that in most cases – unfortunately.

          • Artleads says:

            I’ve been homeless, but Cash’s story is on a different level. I too am grateful to BAU and the incredible ease in living if you get a “break.” Norman, if we’re trying to make the best of BAU (not seeing much further than our noses), we might try little adjustments to the system around the edges. One trouble there is the lack of comprehension you encounter, and the inability to cooperate. So in this kind of halway world there is meaningful work through growing food and creating shelter. Repairing stuff, in general, But I don’t think finiteness is so much the issue at this point but more public inability to understand what’s coming, and to help with little things that could help in the near future.

        • Yorchichan says:

          I’ve taken lots of homeless people around in my taxi. I don’t mind, but my wife, whose nose is much better than mine, complains about the smell the next morning. I expect subsequent passengers think the smell is coming from me.

          Usually I’ll take the homeless to a cash point just after midnight, at which time they can withdraw a few hundred pounds in benefits. Not sure how long this amount is supposed to last them, but it mostly gets spent in the next few minutes when we arrive at the dealer’s house. Then it’s onto wherever the homeless (?) are spending the night.

          Most of the money the homeless receive from benefits or begging gets spent on alcohol or drugs. Or taxi fares, and they tend to tip well! They don’t waste money on food, because they can get food from food banks or passers by.

          • 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.
            Gail Tverberg says:

            Remind us regarding in which country you drive a taxi. I expect that there would be differences.

            • Yorchichan says:

              I live in York, UK. You are of course correct: only our generous welfare system allows the homeless here to live in this manner. I suspect the the benefits available to addicts are, in part, an attempt to reduce shoplifting.

          • cashisking says:

            Its a mixed up world. Were all damaged goods. I spent two years homeless starting at age 15. .guv allowed that back then if you stayed out of trouble you wernt brought into custody just because you were a minor on the street. That was a long time ago. Mostly it was alcoholics in the missions.

            Once I got a job it was a no brainer for me. A job was WAYYY better. To this day I consider a job a huge blessing. A job at any wage is the a huge gift. People who create jobs.. They walk on water to me. I have their back.

            Until you get off your ass and take the prevailing wage you live in a different reality than mine.

            Thank god I was homeless. Thank god Im not a spoiled entitled B****.

            Fast forward to now. Heroin and meth addiction on the streets. Mentally ill. BUT. Also people that cant just come up with the $ for housing. New phenomena in these numbers.

            If you are called to service..You cant save anyone. They have to decide that. If you see a light emanating from someone you try. You try and you get burnt. You learn the primary rule. Never trust a junkie.. You try again and you get burnt again. You develop skill. You protect the innocents, the children best you can. You evaluate your resources and try to make appropriate decisions.

            There are plenty of people who are trying hard not lazy that are not making it. The junkies and the lazy.. You cant make someone respect themselves.

            Does it make a difference in light of our situation? No. It makes a difference to the people who are trying. A big freakin difference.

            Without service i would not make it. Ive tried just owning and maintaining things. Its empty to me. Without $ without resources i could do nothing. I would be like a infant in Jurassic park.I have lived in a time were resources came easy. All you had to do was get off your ass get some skill and work. Not so easy now. Only 100x times easier than the third world not 1000x. It will not last. But i have the now. I have BAU. I use it to act appropriately best I can. Now. What comes next… Who knows. we guess this and that. I want my actions to be appropriate. In the end I die anyway. You cant beat death. All we have is our actions. All I have is my actions. Peoples hearts matter. IMO

            • 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.
              Gail Tverberg says:

              Thanks for your story.

              Now that I think about it, I know a woman who was homeless when she was about 20. (This was about 20 years ago, in Canada.) She had gotten kicked out of home by her parents because she had a baby out of wedlock. To make matters worse, the father was of a darker skinned ethnic group that her parents considered unacceptable.

              She now seems to have a more than her share of problems, but she is married and is getting along reasonably well.

              Every homeless person has a different story.

            • your life experience has made you a great philosopher cash

              trouble with paid employment, in the ultimate sense is that in order to work, energy input is required.

              This was ok when work was just labouring in the fields to produce food etc, trouble starts when one labours at something which is ultimately ‘worthless’ in human existence terms, —-disposable in other words. But to the person producing it, it is ”employment”.

              to do that one must acquire/consume ever increasing quantities of energy, which is by definition finite.

              therefore jobs are finite.

              we cannot go on producing ‘stuff’ in return for wages which ultimately has no function.

  43. Craig says:

    It appears quite likely that Lebanon will default and it’s banks implode. Does anyone know to what degree are major banks exposed to Lebanese banks?

    • IMF 2019 estimate is that Lebanon has the 81st biggest economy out of 185 countries but it’s misleading to state that they are “above average”…

      their GDP is 58 billion USD and the world total is 87 trillion USD…

      so they are less than one thousandth of the world economy…

      a total default of their banks will ripple like a pebble thrown into the ocean…

      • 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.
        Gail Tverberg says:

        The condition could spread in more than one way. Displaced people is one. Another is if the conditions that caused the Lebanon problems are causing similar problems elsewhere.

  44. Bank smashing will be featuring in many nations in the coming years, one would imagine:

    “Protesters in Lebanon have turned their ire towards banks during a “week of rage”, attacking financial institutions that many blame for the country’s worst economic crisis in decades.”

    https://www.google.com/amp/s/www.independent.co.uk/news/world/middle-east/lebanon-protests-financial-crisis-banks-beirut-a9288736.html%3famp

    • “At the beginning of 2018, in parallel with a deteriorating energy sector, the value of the Syrian Pound against the USD dropped again… continued protests in Lebanon led to a further currency crisis.”

      https://www.google.com/amp/s/aawsat.com/english/home/article/2088381/syrians-hit-hard-economic-crisis%3famp

    • 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.
      Gail Tverberg says:

      Blaming financial institutions doesn’t sound good!

  45. “The head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial sector instability.”

    https://www.google.com/amp/s/amp.theguardian.com/business/2020/jan/17/head-of-imf-says-global-economy-risks-return-of-great-depression

    • “”It just seems obvious to me that we’ve had a situation where earnings have gone nowhere and the markets have gone straight up,” said Matt Maley, chief market strategist at Miller Tabak.

      “”I don’t want to call it a bubble yet but it’s moving in that direction. The market is way ahead of its earnings.””

      https://www.google.com/amp/s/www.cnbc.com/amp/2020/01/18/stocks-appear-detached-from-reality-rallying-in-anticipation-of-two-things-that-may-not-happen.html

      • 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.
        Gail Tverberg says:

        It definitely looks like a bubble!

        • and it IS a bubble…

          I call it like I see it…

          but the BPT, the Bubble Protection Team (the Fed), will keep on creating money out of thin air so that The Bubble stays inflated…

          • 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.
            Gail Tverberg says:

            In a way, that might be good. Put off the inevitable, a little longer–as long as the BBT can come up with good techniques, and as long as collapsing economies around the world don’t become too much of a problem.

    • 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.
      Gail Tverberg says:

      I would agree with the head of the IMF.

  46. 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.
    Gail Tverberg says:

    Employers Pull Back on Posting New Jobs

    Job openings fell 10.8% in November from a year earlier to 6.8 million, the Labor Department said Friday. That marked the sixth straight month of annual declines and was the steepest fall since December 2009, when openings dropped 18.7% from a year earlier.

    https://gailtheactuary.files.wordpress.com/2020/01/number-of-us-job-openings-2010-to-nov.-2019-wsj.png

    At one point, there were more job openings than available workers for the jobs. This is changing fairly quickly, it looks like.

  47. Kowalainen says:

    If north Sweden claims its independence. Can they buy these from you guys?

    (Asking for a friend)

    https://youtu.be/UPd05ESntC8

    🙂

    • 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.
      Gail Tverberg says:

      With enough issuance of debt by north Sweden, I expect.

      • Kowalainen says:

        Would cash be O.K?
        And a NATO membership?

        (follow up question)

        🙂

        • beidawei
          beidawei says:

          I think NATO would Lapp it right up.

          (rimshot)

            • 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.
              Gail Tverberg says:

              Non-hispanic blacks are far more likely to be fat than whites and hispanics.

              Obesity does not impact all races equally in the U.S.

              The following give the percentage of obese adults in each group:

              non-Hispanic blacks — 48.1 percent
              Hispanics — 42.5 percent
              non-Hispanic whites — 34.5 percent
              non-Hispanic Asians — 11.7 percent

              Does this mean that blacks were more likely to vote for Trump?

            • Tim Groves – Japan
              Tim Groves says:

              Does this mean there are also categories called Hispanic blacks, Hispanic Whites and Hispanic Asians?

              And by the way Duncan, graduates are far more likely than those with no college education to be up to their ears in student loan debt. When will these poor suckers get woke to the scandalous nature of the education ponzi scam?

              https://www.againstcronycapitalism.org/wp-content/uploads/ball-and-chain-cc.jpg

            • 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.
              Gail Tverberg says:

              Hispanics are defined to be of any race. Being from a Spanish speaking country is sufficient. Lots of black slaves in Cuba originally, long ago, for example. Lots of American Indians (sort of like Asian–probably emigrated from there) in Mexico and Central and South America. There is so much intermarriage that no one keeps track of race.

            • beidawei
              beidawei says:

              I don’t know what this has to do with student loan debt, but did you know there’s a college major now called Fatness Studies? You know, like African American studies, Queer Studies, etc., except for Fat people (remember to capitalize the F). No, it’s not about nutrition or exercise or any of that oppressive lookist propaganda. If you’re both Fat *and* black, I guess you’ll need to double major. Triple of you’re a womyn, and quadruple if you’re a lesbian.

            • cashisking says:

              Ahh I remember a poster who actually interacted genuinely rather than snarky snipes.

              Hint; When its mandatory to adopt a rigid viewpoint in order to get a little love something is very wrong.

              All trump voters are fat and stupid. Archie Bunker couldnt have said it better.

            • Kowalainen says:

              The northerners are genetically more diverse and distinct than the (inbred) sect southerners.

              “The northern part of Sweden, Norrland, showed a particularly strong population structure, which could be explained by genetic drift in this sparsely inhabited region. However, this hypothesis was challenged by the genetic diversity within Norrland that was not consistently reduced: in fact, Norrland showed significantly lower IBS similarity than Götaland.”

              https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0016747

          • Kowalainen says:

            Yes, the Swedes hijacked the word Lapp. meaning a Laplander, and changed it into the Sami ethnic group.

            It’s time to Make Lapland Great Again.

            🙂

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