It seems like a reset of an economy should work like a reset of your computer: Turn it off and turn it back on again; most problems should be fixed. However, it doesn’t really work that way. Let’s look at a few of the misunderstandings that lead people to believe that the world economy can move to a Green Energy future.
[1] The economy isn’t really like a computer that can be switched on and off; it is more comparable to a human body that is dead, once it is switched off.
A computer is something that is made by humans. There is a beginning and an end to the process of making it. The computer works because energy in the form of electrical current flows through it. We can turn the electricity off and back on again. Somehow, almost like magic, software issues are resolved, and the system works better after the reset than before.
Even though the economy looks like something made by humans, it really is extremely different. In physics terms, it is a “dissipative structure.” It is able to “grow” only because of energy consumption, such as oil to power trucks and electricity to power machines.
The system is self-organizing in the sense that new businesses are formed based on the resources available and the apparent market for products made using these resources. Old businesses disappear when their products are no longer needed. Customers make decisions regarding what to buy based on their incomes, the amount of debt available to them, and the choice of goods available in the marketplace.
There are many other dissipative structures. Hurricanes and tornadoes are dissipative structures. So are stars. Plants and animals are dissipative structures. Ecosystems of all kinds are dissipative structures. All of these things grow for a time and eventually collapse. If their energy source is taken away, they fail quite quickly. The energy source for humans is food of various types; for plants it is generally sunlight.
Thinking that we can switch the economy off and on again comes close to assuming that we can resurrect human beings after they die. Perhaps this is possible in a religious sense. But assuming that we can do this with an economy requires a huge leap of faith.
[2] Economic growth has a definite pattern to it, rather than simply increasing without limit.
Many people have developed models reflecting the fact that economic growth seems to come in waves or cycles. Ray Dalio shows a chart describing his view of the economic cycle in a preview to his upcoming book, The Changing World Order. Figure 1 is Dalio’s chart, with some annotations I have added in blue.
Figure 1. New World Order chart by Ray Dalio from an introduction to his theory called The Changing World Order. Annotations in blue added by Gail Tverberg.
Modelers of all kinds would like to think that there are no limits in this world. Actually, there are many limits. It is the fact that economies have to work around limits that leads to cycles such as these. Some examples of limits include inadequate arable land for a growing population, inability to fight off pathogens, and an energy supply that becomes excessively expensive to produce. Cycles can be expected to vary in steepness, both on the upside and the downside of the cycle.
The danger of ignoring these cycles is that researchers tend to create models of future economic growth and future energy consumption that are far out of sync with what really can be expected. Accurate models need to include at least some limited version of overshoot and collapse on a regular basis. Models of the future economy tend to be based on what politicians would like to believe will happen, rather than what actually can be expected to happen in the real world.
[3] Commodity prices behave differently at different stages of the economic cycle. During the second half of the economic cycle, it becomes difficult to keep commodity prices high enough for producers.
There is a common belief that demand for energy products will always be high, because everyone knows we need energy. Thus, according to this belief, if we have the technology to extract fossil fuels, prices will eventually rise high enough that fossil fuel resources can easily be extracted. Many people have been concerned that we might “run out” of oil. They expect that oil prices will rise to compensate for the shortages. Thus, many people believe that in order to maintain adequate supply, we should be concerned about supplementing fossil fuels with nuclear power and renewable energy.
If we examine oil prices (Figure 2), it is apparent that, at least recently, this is not the way oil prices actually behave. Since the spike in oil prices in 2008, the big problem has been prices that fall too low for oil producers. At prices well below $100 per barrel, development of many new oil fields is not economic. Low oil prices are especially a problem in 2020 because travel restrictions associated with the coronavirus pandemic reduce oil demand (and prices) even below where they were previously.
Figure 2. Weekly average spot oil prices for Brent, based on data of the US Energy Information Administration.
Strangely enough, coal prices (Figure 3) seem to follow a very similar pattern to oil prices, even though coal is commonly believed to be available in huge supply, and oil is commonly believed to be in short supply.
Figure 3. Selected Spot Coal Prices, from BP’s 2020 Statistical Review of World Energy. Prices are annual averages. Price for China is Qinhuangdao spot price; price for US is Central Appalachian coal spot index; price for Europe is Northwest European marker price.
Comparing Figures 2 and 3, we see that prices for both oil and coal rose to a peak in 2008, then fell back sharply. The timing of this drop in prices corresponds with the “debt bust” in late 2008 that is shown in Figure 1.
Prices then rose to another peak in 2011, after several years of Quantitative Easing (QE). QE is intended to hold the cost of borrowing down, encouraging the use of more debt. This debt can be used by citizens to buy more goods made with coal and oil (such as cars and solar panels). Therefore, QE is a way to increase demand and thus help raise energy prices. In the 2011-2014 period, oil was able to maintain its price better than coal, perhaps because of its short supply. Once the United States discontinued its QE program in 2014, oil prices dropped like a rock (Figure 2).
Prices were very low in 2015 and 2016 for both coal and oil. China stimulated its economy, and prices for both coal and oil were able to rise again in 2017 and 2018. By 2019, prices for both oil and coal were falling again. Figure 2 shows that in 2020, oil prices have fallen again, as a result of demand destruction caused by pandemic shutdowns. Coal prices have also fallen in 2020, according to Trading Economics.
[4] The low prices since mid-2008 seem to be leading to both peak crude oil and peak coal. Crude oil production started falling in 2019 and can be expected to continue falling in 2020. Coal extraction seems likely to start falling in 2020.
In the previous section, I showed that crude oil and coal both have the same problem: Prices tend to be too low for producers to make a profit extracting them. For this reason, investment in new oil wells is being reduced, and unprofitable coal mines are being closed.
Figure 4 shows that world crude oil production has not grown much since 2004. In fact, OPEC’s production has not grown much since 2004, even though OPEC countries report high oil reserves so, in theory, they could pump more oil if they chose to.
Figure 4. World crude oil production (including condensate) based on data from BP’s 2020 Statistical Review of World Energy. Russia+ refers to the group Commonwealth of Independent States.
In total, BP data shows that world crude oil production fell by 582,000 barrels per day, comparing 2019 to 2018. This represents a drop of 2.0 million barrels per day in OPEC production, offset by smaller increases in production for the US, Canada, and Russia. Crude oil production is expected to fall further in 2020, because of low demand and prices.
Because of continued low coal prices, world coal production has been on a bumpy plateau since 2011. Prices seem to be even lower in 2020 than in 2019, putting further downward pressure on coal extraction in 2020.
Figure 5. World coal production based on data from BP’s 2020 Statistical Review of World Energy.
[5] Modelers missed the fact that fossil fuel extraction would disappear because of low prices, leaving nearly all reserves and other resources in the ground. Modelers instead assumed that renewables would always be an extension of a fossil fuel-powered system.
The thing that most people do not understand is that commodity prices are set by the laws of physics, so that supply and demand are in balance. Demand is really very close to “affordability.” If there is too much wage/wealth disparity, commodity prices tend to fall too low. In a globalized world, many workers earn only a few dollars a day. Because of their low wages, these low-paid workers cannot afford to purchase very much of the world’s goods and services. The use of robots tends to produce a similar result because robots can’t actually purchase goods and services made by the economy.
Thus, modelers looking at Energy Return on Energy Invested (EROI) for wind and for solar assumed that they would always be used inside of a fossil fuel powered system that could provide heavily subsidized balancing for their intermittent output. They made calculations as if intermittent electricity is equivalent to electricity that can be controlled to provide electricity when it is needed. Their calculations seemed to suggest that making wind and solar would be useful. The thing that was overlooked was that this was only possible within a system where other fuels would provide balancing at a very low cost.
[6] The same issue of low demand leading to low prices affects commodities of all kinds. As a result, many of the future resources that modelers count on, and that companies depend upon as the basis for borrowing, are unlikely to really be available.
Commodities of all kinds are being affected by low demand and low selling prices. The problem giving rise to low prices seems to be related to excessive specialization, excessive use of capital goods to replace labor, and excessive use of globalization. These issues are all related to the needs of a world economy that depends on a high level of technology. In such an economy, too much of the output of the economy goes to producing devices and to paying highly trained workers. Little is left for non-elite workers.
The low selling prices of commodities makes it impossible for employers to pay adequate wages to most of their workers. These low wages, in turn, feed through to the uprisings we have been seeing in the last couple of years. These uprisings are part of “Revolutions and Wars” mentioned in Figure 1. It is difficult to see how this problem will disappear without a major change in the “World Order,” mentioned in the same figure.
Because the problem of low commodity prices is widespread, our ability to produce electrical backup of all kinds, including the ability to make batteries, can be expected to become an increasing problem. Commodities, such as lithium, suffer from low prices, not unlike the low prices for coal and oil. These low prices lead to cutbacks in their production and local uprisings.
[7] On a stand-alone basis, intermittent renewables have very limited usefulness. Their true value is close to zero.
If electricity is only available when the sun is shining, or when the wind is blowing, industry cannot plan for its use. Its use must be limited to applications where intermittency doesn’t matter, such as pumping water for animals to drink or desalinating water. No one would attempt to smelt metals with intermittent electricity because the metals would set at the wrong time, if the intermittent electricity suddenly disappeared. No one would power an elevator with intermittent electricity, because a person could easily be trapped between floors. Homeowners would not use electricity to power refrigerators, because, as likely as not, the food would spoil when electricity was off for long periods. Traffic signals would work sometimes, but not always.
Lebanon is an example of a country whose electricity system works only intermittently. It is hard to imagine that any other country would want to imitate Lebanon. Lack of reliable electricity supply leads to protests in Lebanon.
[8] The true cost of wind and solar has been hidden from everyone, using subsidies whose total cost is hard to determine.
Each country has its own way of providing subsidies to renewables. Most countries give wind and solar the subsidy of “going first.” They are often given a fixed rate as well. Both of these are subsidies. In the US, other subsidies are buried in the tax system. Recently, there has been talk of using QE to help wind and solar providers lower their cost of borrowing.
Newspapers regularly report that the price of wind and solar is at “grid parity,” but this is not an apples to apples comparison. To be useful, electricity needs to be available when users need it. The cost of storage is far too high to allow us to store electricity for weeks and months at a time.
If we were to use intermittent electricity as a substitute for fossil fuels in general, we would need to use intermittent electricity to heat homes and offices in winter. Sunshine is abundant in the summer, but not in the winter. Without storage, solar panels cannot even be counted on to provide homeowners with heat for cooking dinner after the sun sets in the evening. An incredibly huge amount of storage would be needed to store heat from summer to winter.
China reports that it has $42 billion in unpaid clean energy subsidies, and this amount is getting larger each year. Countries are now becoming poorer and the taxes they are able to collect are lower. Their ability to subsidize a high cost, unreliable electricity system is disappearing.
[9] Wind, solar, and hydroelectric today only comprise a little under 10% of the world’s energy supply.
We are deluding ourselves if we think we can get along on such a tiny total energy supply.
Figure 6. Hydroelectric, wind, and solar electricity as a percentage of world energy supply, based on BP’s 2020 Statistical Review of World Energy.
Few people understand what a small share of the world’s energy supply wind and solar provide today. The amounts shown in Figure 6 assume that the denominator is total energy (including oil, for example), not just electricity. In 2019, hydroelectric accounted for 6.4% of world energy supply. Wind accounted for 2.2%, and solar accounted for 1.1%. The three together amounted to 9.7% of the world’s energy supply.
None of these three energy types is suited to producing food. Oil is currently used for tilling fields, making herbicides and pesticides, and transporting refrigerated crops to market.
[10] Few people understand how important energy supply is for giving humans control over other species and pathogens.
Control over other species and pathogens has been a multistage effort. In recent years, this effort has involved antibiotics, antivirals and vaccines. Pasteurization became an important technique in the 1800s.
Humans’ control over other species started over 100,000 years ago, when humans learned to burn biomass for many uses, including cooking foods, scaring away predators, and burning down entire forests to improve their food supply. In my 2018 post, Supplemental energy puts humans in charge, I wrote about one proof of the importance of humans’ control of fire. In the lower layers of a cave in South Africa, big cats were in charge: There were no carbon deposits from fire and gnawed human bones were scattered around the cave. In the upper layers of the same cave, humans were clearly in charge. There were carbon deposits from fires, and bones of big cats that had been gnawed by humans were scattered around the cave.
We are dealing with COVID-19 now. Today’s hospitals are only possible thanks to a modern mix of energy supply. Drugs are very often made using oil. Personal protective equipment is made in factories around the world and shipped to where it is used, generally using oil for transport.
Conclusion
We do indeed appear to be headed for a Great Reset. There is little chance that Green Energy can play more than a small role, however. Leaders are often confused because of the erroneous modeling that has been done. Given that the world’s oil and coal supply seem to be declining in the near term, the chance that fossil fuel production will ever rise as high as assumptions made in the IPCC reports seems very slim.
It is true that some Green Energy devices may continue to operate for a time. But, as the world economy continues to head downhill, it will be increasingly difficult to make new renewable devices and to repair existing systems. Wholesale electricity prices can be expected to stay very low, leading to the need for continued subsidies for wind and solar.
Figure 1 indicates that we can expect more revolutions and wars at this stage in the cycle. At least part of this unrest will be related to low commodity prices and low wages. Globalization will tend to disappear. Keeping transmission lines repaired will become an increasing problem, as will many other tasks associated with keeping energy supplies available.
https://www.globalresearch.ca/davos-great-reset/5715515 a interesting read on the great reset and if the covid 19 was part of a masterplan to bring in agenda 2030 then what transpires over the next few years could be even more crazier
Came across this, yes, purchased a few books not all – they do click bait you well done ad site.
Basically about living simply and not poorly, there was a couple in Maine who did something similar, name escapes me. At first appearance, no children, basically good health, a photo or the wife standing next to a wood cookstove shows an attractive but not “beautiful” woman with a nice, inviting smile. I see it as a contrast to our modern world with all the anger. It is a peaceful site.
https://www.theselfsufficientbackyard.com/my-book/
OFW is starting to make a me a believer regarding things becoming more difficult going forward. Some of the books from the above mentioned site will come soon, I hope, and perhaps some ideas in them can be applied.
The biggest issue I see with this type of life is time and no children. Looking at their homestead, it has many fossil fuel items in it, wisely chosen, but still manufactured.
At the other end of the educational spectrum some of you might look into the MITx series – it is incredible and free.
Dennis L.
I look forward to the inevitable Netflix movie about the Wirecard scandal:
“A German businessman responsible for one of Wirecard’s biggest sources of stated profits has been reported dead a month after Philippine authorities announced he was under investigation over the payments company’s collapse…
“Wirecard collapsed in June after saying €1.9bn purportedly held in escrow accounts in the Philippines did not exist.”
https://www.ft.com/content/a22f372e-87bc-4cfd-8caf-052a98dc873f
Strange “coincidence.”
yippee covid test came back negative
That’s because you didn’t die in a motorcycle accident, (thank heavens)..
Good stuff, Adonis.
I have known quite a few people who have contracted coronavirus. Two people I knew through work died from it – both BAME, working in healthcare and in their sixties, so high risk.
A good friend of my parents had a routine test prior to an eye operation and was startled when it came back positive. His only symptom had been a mild, though annoyingly persistent headache.
“Researchers [in South Korea] found that the viral load of those without symptoms is just as high as infected people who cough and run fevers.”
https://www.dailymail.co.uk/health/article-8596113/Asymptomatic-COVID-19-patients-shed-virus-symptoms.html
I have heard anecdotal reports that the viral load of those without symptoms is high. This seems to be new confirming this problem.
Yes, that is good news! Adonis…seems we all must eventually deal this virus bug as it travels about….
Unfortunately, so e it comes in contact with will take it with them to the other side of the Mountain
Everything at the grocery store is getting more expensive
By Danielle Wiener-Bronner, CNN Business
Updated 4:46 PM EDT, Wed August 05, 2020
New York (CNN Business)Grocery prices have skyrocketed during the coronavirus pandemic. That has Americans spending more at the supermarket than they have in years.
Prices are spiking — and not just because people are buying more groceries as they spend more time at home.
The pandemic has had a strong impact on grocery prices this year, according to seasonally adjusted data released Friday by the Bureau of Economic Analysis. The BEA tracks personal consumption expenditures to help measure inflation
From February to June, meat and poultry prices rose nearly 11%, with beef and veal prices seeing the highest rise, spiking 20%. For pork the increase was about 8.5%. People are paying more for other staples, too: During the same time period, egg prices shot up 10%, and shoppers shelled out 4% more for cereals and fresh vegetables.
The pandemic has caused a surge in demand for groceries as millions of Americans stay home and avoid eating out. While there’s no significant shortage of food, disruptions in the supply chain have created scarcities and driven up prices.
Nothing to do with the money supply, or the added cost of doing business.
Working class people, retirees and the like will get it both ways and poverty is knocking on the door….most will get wiped out….
Saw on the news a small landlord frustrated from the lack of rental income from his tenants…there is no checks on if the tenant actual is in a bad situation.
He may have to sell and sees large institutions or hedge fund types swooping up properties on the cheap and raising rents…
The sharks are circling around for prey
Thank you ☺️ Harry McGibbs for the morning roundup
Seems to me these vulture hedge funds will swoop in, buy on the cheap, and then quickly flip to the buyer of last resort: The FED. After all, there won’t be any lasting income stream from these acquired properties if all the renters are driven into extreme poverty and afford the rents. In the end, it will be increasingly subsidized, and that means control.
“Harry McGibbs for the morning roundup.”
You are welcome. 😊
https://www.zerohedge.com/political/uk-gives-town-councils-power-bulldoze-contaminated-homes-if-outbreak-not-contained
Isn’t this what the Israelis used to do to recalcitrant Palestinians?
Ha ha ha ha ha. Now Britain is for it, it seems. Of course it would require a magistrate to sign off on it. That makes it all okay, you see, the signature of some know-nothing, glued-on establishment barnacle. Makes it all fine. And it is oh so necessary. Urgent even. Because, you know, this is a real plague-level bring-out-your-dead medieval crisis.
“Bring out your dead!”
Oh, listen! Isn’t that convenient? Did you hear the dead-collector’s bell just now? And just when I’ve got a bunch of old corpses cluttering up the whole place like a cemetery after an earthquake. It’s a wonder where they all come from, isn’t it? But I do like the sound of the bells ringing on the dead-cart. Gives me a kind of Merry Olde England cheery-feeling. Look at the cart groaning coming around the corner, piled with corpses higher than a fattie’s ice-cream sundae.
It’s all very sad, of course, but what are you going to do?
“Bring out your dead!”
Problem: A building is contaminated with an airborne virus.
Solution: Bulldoze the building and release the virus into the environment.
What could possibly go wrong?
Get with the program, man! Do you think that with that kind of negative thinking, Boadecea could ever have turned back the Spartans?! Learn to think outside the box! This is bigger than 1066 × 1939, (i.e., 2,066,947) dammit!
Sorry, Kim. O course, we must all obey our lords and masters, even when they are stupid beyond belief.
Queen Boudicca is another of my heroes. The only person in history who captured London / Londinium by force of arms. But I think you meant 2,066,974.
Bizarre! Sounds like a way to get rid of real estate that can no longer be profitably rented out. Or perhaps this is a scheme to get real estate prices up.
Nah, it’ss to get the useless eaters out from the cities. The artisanry is getting irritated. Their offspring can’t find reasonable housing and education without taking on massive debt.
“The Fed’s [huge bond-buying spree], coupled with heightened investor demand in the face of a dimming economic outlook, have helped to push Treasury yields to all-time lows, but the coming wave of issuance of longer-dated debt could alter this dynamic, strategists say.
“Moreover, they warn that the borrowing estimates put forward by the Treasury — an additional $2.2tn by the end of the year — could swell even further if yet another fiscal stimulus package beyond the one currently under debate is delivered.”
https://www.ft.com/content/c1d0847f-1f9a-4304-8413-5d64501c2ef4
“America’s fragile jobs market recovery, after just two months of improvement, appears to be losing steam as Covid-19 infections rise and federal funds for businesses begin to dry up…
“Although most economists say the pace of the recovery slowed in July, some say it reversed.”
https://edition.cnn.com/2020/08/05/economy/july-jobs-report-preview/index.html
“What will happen next for America’s economic scene? It appears a depression may be here…”
https://www.arabnews.com/node/1715091
Strange article… seems to have little facts and mostly opinion. I Do agree though. I just don’t think things will bounce back in two or three years. I wonder how much somebody gets for writing these fluff articles.
It is hard for an economy to operate, when many people are afraid to visit malls and otherwise make purchases. When there are partial shutdowns, and many mothers who cannot work because their children are at home without school to attend, the economy suffers.
“China’s efforts to curb predatory lending to the country’s small and medium-sized enterprises could harm the sector rather than helping it by cutting off access to crucial finance, analysts have warned.
“Multiple shadow banking lenders have told the Financial Times they would stop servicing medium to high-risk borrowers after the Supreme Court announced a plan last month to “significantly” cut the interest rate shadow banks could charge.”
https://www.afr.com/world/asia/fears-for-china-smes-after-crackdown-on-shadow-banking-20200806-p55j9m
“China’s 290 million migrant workers have been the hardest hit by the coronavirus having already been under pressure from the US-China trade war.
“One worker, Rao Dequn, has worked for 25 years in Chinese factories making goods for overseas markets, but will lose her job in less than a month.”
https://www.scmp.com/economy/china-economy/article/3096248/chinas-migrant-workers-facing-end-era-worlds-factories-winds
Of course, China will never give the world information on how badly the migrant workers are faring.
“Over a million people are living in subterranean tunnels in China [beneath Beijing] 50 years after they were built as a bomb shelter during the Cold War.
“Low income workers known as the ‘Rat Tribe’ now occupy the tunnels, which cover an estimated area of 30 square miles.”
https://www.dailymail.co.uk/news/article-8596711/Over-million-people-live-subterranean-tunnels-China.html
Wow! I had never heard of this. It would be a nightmare if COVID-19 got into this complex.
Another article you posted earlier talked about a couple working for twenty years and now losing their migrant worker jobs. They had a 10 foot x 10 foot apartment, with a shared bathroom. The room had one set of bunk beds, a small desk/dining table, a rice cooker and not much else. Hard to have a family in such an apartment.
On the other hand, I saw apartments of similar size where whole families lived in Mumbai, India. The walls had several fold-down “shelves” for people to sleep on.
Gail, many poor people have solved this problem, from Scandinavia to (native) North America. It is called the Longhouse, and is far more efficient than separate family homes, in terms of heating, lighting, cooking, and child care. We may have to reinvent it. Of course, they were associated with some sexual “experimentation”; but then, so was my all male boarding school.
A cutback on lending to high-risk borrowers is one of the things that pulls an economy down.
“Expiring emergency payments to millions of low-paid Brazilians and the likely restoration of growth-choking austerity measures, as unemployment rises, risk torpedoing growing optimism that Latin America’s economy may not tank as much as feared.”
https://uk.reuters.com/article/uk-brazil-economy-risks-analysis/brazil-unemployment-end-of-emergency-aid-threaten-economic-recovery-idUKKCN25126I
“Poverty in Argentina is set to rise sharply this year due to the impact of the coronavirus pandemic, but the rate was already climbing amid a recession since 2018 and high inflation…
“Experts say half the country’s population could be plunged into poverty this year.”
https://uk.finance.yahoo.com/news/argentines-battle-rising-poverty-hunger-120546938.html
It will be difficult for any country to keep up subsidy programs, whether it is wage substitutes for the poor, or subsidies for green energy.
“Five months since the coronavirus outbreak began in Africa, the impact is clearly visible across the continent, with massive job losses, indefinite closure of businesses and increasing poverty rates…
“…some businesses were already grappling with various challenges before the advent of coronavirus, the pandemic has worsened the situation…”
http://global.chinadaily.com.cn/a/202008/05/WS5f2aaee8a31083481725e733.html
“The growing number of uneducated youths is a significant burden on the economy as this demographic is likely to struggle amidst an economic downturn. To worsen the situation, most of the approximately 40 million SMEs in the country, where young people find employment, have also been badly hit by the pandemic and necessary restrictions to business activity.
“To summarise, Nigeria is in a precarious position.”
https://www.theafricareport.com/36412/nigeria-what-is-most-important-is-we-put-millions-of-young-people-in-jobs-and-quickly/
In Scotland the ‘made up’ school leaving grades rose by 10% on last year even though they missed 1/3rd of the final year’s studies. Who needs an education when you can just get certificates handed to you.
Child labor has been around for a long time. The world will likely need to go back to more of it, if schools become harder to support and parents cannot earn enough.
“The UK is drowning in private debt. At least £6bn of household debt – and probably much more – has been racked up by 4.6m people during the pandemic. More than one in eight people on furlough have defaulted on a payment… There will be no “V-shaped recovery” – and recognising the scale of over-indebtedness is key to understanding why.
“UK households and businesses were already over-indebted before the pandemic… This made our economy extremely fragile – even more so than before the crash of 2008.”
https://www.theguardian.com/commentisfree/2020/aug/05/uk-private-debt-crisis-recession-coronavirus
“UK recruiters are reporting the steepest rise in the number of people seeking work since the depths of the financial crisis, as companies dismiss staff who had previously been furloughed.
“The increase in the supply of temporary staff in July was the biggest in 23 years of records, according to the Recruitment & Employment Confederation.”
https://www.ft.com/content/2a056fbc-7e63-4b9e-bb0d-2045836a4b03
“The coronavirus pandemic will cost nearly three million travel and tourism jobs in the UK because of the collapse of the industry, according to the World Travel & Tourism Council.
“Bosses described the job losses as ‘heartbreaking’ and warned that positions were ‘disappearing by the day’.”
https://www.dailymail.co.uk/news/article-8592619/Covid-cost-THREE-MILLION-UK-travel-tourism-jobs-bosses-warn.html
Harry, we have not seen a coach with tourists here on the Isle of Wight in three months. The place at this time of year is usually over run with the them. Either they have all gone bust or are in the process.
Great piece by Mervyn King in Actuary magazine. I quote..
King maintains that it would be “better to ask questions like: What could go really badly wrong? What would be a disaster here?“There’s no point being as lean and efficient as possible in normal times if, when some unexpected event comes along, you fail to survive it,” he says. “Survival is a very important characteristic of a company (or a person I added this bit) that wants to have a long life.”
In this context, King warns against the potentially spurious accuracy of results derived from models. “I think it is important not to get fooled by the apparently precise nature of black box models, which are usually designed by someone else with fancy distributions but made-up numbers. If the numbers are made up, it doesn’t matter what distribution you have. These numbers can be very dangerous and misleading.”
I think this is something OFW has been discussing for some years, nice to hear an ex central banker thinking along similar lines.
Thank you Gail for asking those questions and providing a space for us to explore them. I quote.
‘actuaries in their day-to-day business, asking ‘What is really going on here?’
‘Radical uncertainty’ or in the other words the self organising system.
https://www.theactuary.com/features/2020/08/05/interview-lord-mervyn-king-thinking-beyond-box?utm_source=Adestra&utm_medium=email&utm_term=
It is hard for people to understand the extent to which models can be misleading. Models are now deemed “scientific,” but they still deal with the problem of “garbage in, garbage out.” Nearly everyone misses the extent to which “outlier” situations determine the actual situations. How many people, when forecasting the number of nursing home beds needed, would have thought about the COVID crisis, for example? How many lenders would have over-lent to this industry?
Economies drowning in debt–this shouldn’t be a surprise.
Debt only “works” in an expanding economy.
Bingo!
Capitalism also only works in an expanding economy.
“…this depression arrived at a time when the economic fundamentals in many countries—including many of the world’s poorest—were already weakening. In part as a result of this prior instability, more sovereign borrowers have been downgraded by rating agencies this year than in any year since 1980.
“Corporate downgrades are on a similar trajectory, which bodes ill for governments, since private-sector mistakes often become public-sector obligations. As a result, even those states that prudently manage their resources might find themselves underwater…
“The shadow of this crisis will be long and dark… Officials need to press on with fiscal and monetary stimulus. And above all, they must refrain from confusing a rebound for a recovery.”
https://www.foreignaffairs.com/articles/united-states/2020-08-06/coronavirus-depression-global-economy
“Against masks and lockdowns: Wave of anti-coronavirus protests swept the world.”
https://112.international/society/against-masks-and-lockdowns-wave-of-anti-coronavirus-protests-swept-the-world-53650.html
It’s not just the US with this issue!
Entire scam is a false positive
Scamdemic
https://www.oann.com/nfl-lions-remove-stafford-from-covid-19-list-after-false-positive/
no big deal, it’s just the NFL and one player, but:
“The Lions said Stafford never had COVID-19 and had returned two negative coronavirus tests before the false positive. His following three tests were all negative.”
False positive sums up this entire situation.
Infected minds will bring this potemkin village to its knees.
Its the flu; its impacting worst in people who are futherest from nature in their lifestyles, their food, their medical chicanery.
Hospitals are no place for sick people!!
https://www.oann.com/exclusive-16-republican-senators-back-new-payroll-assistance-to-u-s-airlines-letter/
“A group of Senate Republicans on Wednesday backed extending a $25 billion payroll assistance program for U.S. airlines after warnings that carriers may be forced to cut tens of thousands of jobs without government action, according to a letter seen by Reuters.”
this is crayzzie. These jobs are going away as soon as this program ends.
they are Zommmbie Jobs, in an industry of largely Zommmbie Companies.
let two of the three major airlines fail, since one is more than enough for the future self-organizing economy which is relentlesssly resetting at a lower level.
I like that last clause about endless resetting at a lower level. I am stealing that phrasing.
Insane, but all politics and graft.
Cargo Cult economics: maintaining the form without any substance.
A cousin of mine thought she’d hit the jackpot when she hooked up with an airline pilot: loads of cash, secure employment, expanding industry, etc
Now, he’s history and working in his family cake shop, rather depressed to say the least. And of course that business has itself been hard hit, too.
I’m impressed by her pragmatic ruthlessness though. She knows love doesn’t pay the bills.
interesting slice of family dynamics there xabier
i’ve tried to offer very subtle warnings to a couple of my very prosperous grandkids–that things are going to change—but they too are convinced it will go on forever
I know a couple who were both Virgin cabin crew. He was a purser; she was a flight attendant and they made a reasonable living by supplementing their income with a bit of low-key smuggling. They were laid off a couple of months ago with pay-outs totalling £16k.
They have two children under ten and were already very stretched on an ambitious mortgage. Ordinarily the obvious move for laid off cabin crew would be into hospitality but of course there are no jobs there either, so their prospects are not good, to say the least.
They have all moved into her mother’s house and are trying to rent out their home so that the can keep up with the mortgage – a miserable situation for all concerned!
This pattern of moving in with relatives and renting out the old home would quickly lead to too many homes relative to the number that the market actually needs. This would seem to be the underlying problem associated with the idea of demolishing homes because they might be infected with COVID. The total amount of energy required is lower, if fewer homes are in use.
When the music is playing and the wine flowing, no one wants to recognise the ghost seated quietly at the banqueting table……
I feel that banshees get the conveying of bad news just about right.
Amusing. Perhaps I shall start a “horse and buggy” company and ask for a few billion from the government. And after all, that’s green, isn’t it? The Republicans can vote to save the drivers’ jobs, and the Democrats can vote to save the horses from the glue factory. Win/win!
on BBC world service this morning, they were interviewing Montana coal miners
They all intended to vote for Trump next time, because he was the only hope they had of saving coal. No matter about his lying record
Voting for prosperity wins every time
Depletion is hard to do battle with. Coal mines have been closing for a long time, because their cost of production is too high relative the to the market price. It is an earlier version of the problem that oil and natural gas are facing now.
Re mail-in voting, it should be taken into accunt that a very large portion of teh populatin, especially in a place like New York, is functionally illiterate. They cannot follow or act on written instructions. So we will see quite a cock-up in November, exactly according to plan.
https://nypost.com/2020/08/05/84000-mail-in-ballots-disqualified-in-nyc-primary-election/
The mail-in ballots of more than 84,000 New York City Democrats who sought to vote in the presidential primary were disqualified, according to new figures released by the Board of Elections.
The city BOE received 403,213 mail-in ballots for the June 23 Democratic presidential primary. But the certified results released Wednesday revealed that only 318,995 mail-in ballots were counted.
That’s means 84,208 ballots were not counted or invalidated — 26 percent of the total.
One out of four mail-in ballots were disqualified for arriving late, lacking a postmark or failing to include a voter’s signature, or other defects. The Post reported Tuesday that roughly 30,000 mail-in ballots were invalidated in Brooklyn alone.
there is a splendidly sweet aroma of irony here.
the D side of politics is the side that seems most eager to do mail-in ballots for the November election.
the story here of course is a sckrewwwed up D primary vote.
oh well, come November, as they say “vote early and often”.
Wow, maybe they couldn’t actually sign their names? Just at the ‘make a cross here’ level…..
That is a real possibility.
This is a nice overview of how the energy supply has underpinned economic life over the past thousand years by someone who understands the need for “a theory of energy” and seems to get the predicament we are in.
There is, then, no “puzzle” behind our inability to increase productivity; it is a symptom of our economic disease. We are, quite simply, out of power. We are running the economic machine as fast as it can go. We have squeezed all of the economically viable productivity improvements out of our technologies and are now dependent upon raw energy – which is currently declining globally across the non-energy sectors of the economy – to drive further growth.
This was already a crisis long before SARS-CoV-2 put in an appearance; as witnessed by the divisions and extremities that gave rise to the Brexit vote in the UK, the election of Donald Trump in the USA and the wave of nationalist-populism around the world. Sadly, this is only a taste of what lies in store if the energy available to us continues to decline. Only a more energy-dense, zero-carbon and at least equally versatile alternative to oil can save the day. And for now at least, no such alternative exists. Renewable energy is neither dense nor versatile enough; although it may slow the decline in fossil fuel energy. Hydrogen is three times more powerful but it doesn’t exist freely in nature; meaning that most of its energy would have to be used in separating it from natural gas or (even more expensively) water. Nuclear has enormous theoretical energy but as yet nobody has figured out how to safely and productively utilise it. And even if one of the many new reactor designs were to be economically viable, it will be the 2030s and beyond before these put in an appearance and long after 2050 to deploy them on anything like the scale required to replace the energy we currently obtain from oil.
Like medieval plague doctors seeking to respond to the Black Death, without a theory of energy modern economists blithely imagine that our problems can be overcome by simply printing new currency out of thin air. The left would choose to invest it in non-renewable renewable energy-harvesting technologies for which there is simply not enough left of Planet Earth to achieve more than a fraction of the intended aim. The right, on the other hand, will go full steam ahead in attempting to extract fossil fuels which lie beyond the hard limits of an oil-powered economy. Whichever path we take, the final destination will be the same – a much smaller population living a much less consumptive life on a largely depleted planet whose changing climate may ultimately render even that life unsustainable.
With a theory of energy, we might, perhaps, cushion the blow by saving the best of our current way of life – like access to clean drinking water and basic healthcare – before it is too late. But, at a time when emotions outweigh data and reason in decision making; I’m not holding my breath.
https://consciousnessofsheep.co.uk/2020/07/20/the-symptom-of-our-disease/
“But, at a time when emotions outweigh data and reason in decision making; I’m not holding my breath.”
I always find these kinds of “I’ve got a big brain and should be making all of the decisions” comments very strange. So what would Mr Bigbrain’s solution have been – at any point in the development of these events over the last 10,000 years? Oh, let me guess, I’ll bet that at some point – I’m so sorry but this is what the computer tells us – million or even billions would have to die.
But don’t worry, I have a big rational and unemotional brain and therefore always make correct decisions.
This “I have a big brain and sop should be making all of the choices” way of looking at things is obviously inhuman, as well as being so fabulously unsophisticated (and solipsistic) that it disproves its own claim to intelligence. But it is also insane. This is the serial killer’s view of the world and of other people.
Utiltarianism – which this amounts to – as a doctrine for centralized social organization has proven to be a monstrous tragedy every time it has been tried. It doesn’t even work at the level of the domestic home. Centralized “rational”, “data-driven” control over all of human life is NOT “rational”. Utilitarianism is not “rational”. It is insane.
Or maybe I am wrong. Let’s try an experiment, yet again. So here is what we’ll do: we’ll count up all of the relevant numbers, using Likert scales to assign numbers to more sensitive social values, then make life-value-decisions based on viability, the ability to contribute to society, and other “rational” metrics, and using these very scientiifc calculations, we (the special bigbrains) will assign every individual a life-value score. Based on that we can then implement centrally-directed rationing of some kind, right? Next step, calculate death rates (I think we are going to need bigger abacuses) and report back to the data-collectors – who of course just concidentally have the highest life-value rankings of any of us. .
Because – as we all know – the most important thing is to get that “emotion” out of the decision-making, right?
the concluding sentence with “emotions” seems to be relatively unimportant to the rest of his thesis.
he is spot on that energy is the base of all economic activity.
Tim Watkins here, and Tim Morgan, and Gail Tverberg, each in their own ways, are the best we have at articulating the dilemma faced by humans as the base of most prosperity keeps on eroding away.
this Tim Watkins article is quite excellent, with or without a few imperfections.
I see what you are saying but the idea of the tyranny of those who advocate rationality is always – I believe – to be guarded against. And in this instance the comment ended with the promotion of rationality as a society-organizing ideal, which it most definitely is not. So I was triggered.
To those who tell me that there is any (large scale) salvation in rationality I answer with just two words – game theory.
Well said, Kim. Yes, these “rational” people have never heard of game theory. Their idea of rationality is based on B F Skinner’s “stimulus / response” stuff, which didn’t even work on his tame rats (as several of his former students hilariously documented). The “rational” philosopher kings create the stimulus, and the sheep obligingly respond. Except we don’t. For example, a favourite way to raise more revenue is a “luxury tax”. But luxuries, by definition, are optional, and when the angry sheep simply stop buying diamond necklaces, or private yachts, the revenue drops towards the floor.
That’s why I long ago stopped believing in philosopher kings (helped along by Karl Popper’s “The Open Society and its Enemies”), and decided Nature was a better ruler than all our kings put together.
Deviating from ones own nature, pretending being something “more”, that is indeed nothing else than pure delusion and a recipe for disaster. Who are we (as a species) even to try to comprehend the processes and intents of a planetary sized extremely complex dynamic system, a behemoth organism floating around in the plasma sheath of a goddamn star.
Believing that mankind is somehow the only true sentient beings is ignorance. Shocking ignorance. A bunch of rapacious primates rummaging around and dreaming up all sorts of fantasy to motivate their actions more or less completely dictated from the limbic system.
It’s about time to come to terms of who we are, and figure out how to curtail the worst behaviors.
He is certainly quite wrong, and utterly naive, in implying that emotion and lack of rationality is the root cause of our predicament.
Lets hand over all decisions to A Great Thinker, or to the dispassionate AI God soon to be manifested among us, and all will be well?
What did the enthronement of the Goddess Reason avail in the early and hopeful days of the French Revolution? Soon she was wading in blood, rape, torture and wars.
The Nazis saw themselves as ruthless rationalists – most ironically in their insane social and racial policies.
The Soviet state was meant to be a manifestation of pure rationality, free of superstitions and bourgeois emotions.
All delusion and a waking nightmare.
https://www.yahoo.com/lifestyle/cdc-methanol-hand-sanitizers-poisoned-15-killed-4-172919134.html
‘CDC: Drinking methanol hand sanitizers poisoned 15, killed 4’
‘Two months after the Centers for Disease Control and Prevention revealed that some Americans were DRINKING BLEACH to stave off the coronavirus (a practice that’s both extremely dangerous and ineffective), a new report has found evidence of an equally dangerous trend: DRINKING HAND-SANITIZER.’
“Four of the individuals — all of whom were located in Arizona or New Mexico — died and three were released with “VISUAL IMPAIRMENT.” At least four of the patients were still in the hospital by early July.”
these are all of the same type, Americans, who are expected to wear masks in public, keep at a social distance when it’s reasonable, wash their hands and otherwise practice good hygiene, and stay home when they feel like they are running a fever.
perhaps the intelligence of a hundred million Americans should not be overestimated when it comes to living in a pandemic,
Until recently, “panic” was not usually spelt “pandemic”.
Fools.
The secret is to consume a small amount daily over several years, so you build up an immunity to it…
https://m.youtube.com/watch?v=rMz7JBRbmNo
Cheers,
-GBV
“Inconceivable!”
This practice was introduced by Mithridates VI Eupator, King of Pontus, who was so worried about being poisoned that he took small doses for years to build up immunity. According to legend, when he later decided to kill himself he found that no poison would work, so he had himself run through with a sword.
They were just trying to get high. The article says, “It’s important to note that the study says all of the patients had a history of hand-sanitizer consumption, suggesting that some may have been using it as an alcohol substitute.”
Let me repeat that: “all of the patients HAD A HISTORY of hand-sanitizer consumption.”
Hilarious. Too poor to drink eau-de-cologne, one supposes. Victims of Capitalism and the Patriarchy.
If you came for the TRUTH….this is straight talk…never before in History has this been done in concert Worldwide
https://m.youtube.com/watch?v=Vv6dq36aiUY
Extreme money printing, diluting the value of the Dollar, the old rules do not apply anymore
Seems adjusted for inflation, Precious Metals may have more legs for the run…if you can get it!💥🤑
That’s not to say panic selling by the poor may flood the supply and the price crashes.
Life is gamble…..
https://m.youtube.com/watch?v=7hx4gdlfamo
Changes in US Federal Law may affect small scale solar and address the issues Gail has brought up regarding the cost of spinning reserve. I have personally thought about expanding solar to better utilize net metering, my concern has always been the Fed giveth and an the Fed taketh away. Bummer.
https://www.utilitydive.com/news/a-blow-to-small-solar-a-win-for-states-and-utilities-regulators-analysts/582467/?utm_source=Energy+News+Network+daily+email+digests&utm_campaign=15e053ac7c-EMAIL_CAMPAIGN_2020_05_11_11_36_COPY_01&utm_medium=email&utm_term=0_724b1f01f5-15e053ac7c-89250807
Dennis L.
The fixed prices for solar were a huge subsidy. They were wrong originally, both for small scale solar and large scale solar. Also wind. Sometime, they have to go away.
Central banks inflate debt and make the rich richer. Nevertheless, they are unable to bring up inflation and economic growth.
A piece worth reading, Gail!
https://www.citivelocity.com/citigps/negative-interest-rates/
Sweden’s unorthodox response to COVID-19: What went wrong?
Health Minister Lena Hallengren discusses Sweden’s coronavirus death toll, the worst by far in Scandinavia.
https://www.aljazeera.com
(search page)
Sweden’s rate is by far the worst in Scandinavia.
what do they mean “wrong”?
while countries such as Spain are having a second spike, Sweden probably got it over and done with in one spike.
we really need to wait and see what the data is for Finland and Norway a year from now.
got patience?
Logic, reason, and critical thinking are just tools of oppression. \sarc
Well, Marxist ‘critical’ thinking got a lot very wrong – always depends on the fundamental axioms.
I think all of the countries, including Sweden, have more coming. Perhaps in many waves.
very likely.
but logic, reason, and critical thinking suggest that Sweden, by taking a bigger hit earlier, will have less coming than Finland and Norway.
it will be clearer by next Spring.
The results would give an indication of longer term immunity.
We will see soon enough.
If that theory would hold, then why hasn’t Taiwan at a ‘stone throw’ distance from Mainland China been stricken much harder in the second and third wave?
Something tells me they won’t even notice the “regular” flu and colds anymore. The Wuhan sh1tshow put an end to those perpetual disgraces of WHO and all the other half-assed government efforts to classify those perpetually ongoing pandemics as “normal”.
No, the flu and regular colds isn’t “normal” in a technologically advanced civilization. There should be ZERO regularly occurring pandemics. Yes. ZERO.
Just wait a while. The virus will get to Taiwan also.
What do you base you “should” conclusion on?
We’re up to 26 live cases, all apparently imported. (476 total cases, high of 311 live cases, low of 3, 7 deaths.) The government has been vigilant and proactive, and at the slightest sign of a spike, the whole population will be wearing masks again. The biggest danger seems to be from asymptomatic spreaders.
Yep–
This is just the start, if you are paying attention.
Hopefully Sweden learned a lesson, and will keep infection down like the rest of Scandinavia.
Hint:
I’m of Swedish heritage.
I don’t trust aljazeera. this network is owned by Qatar, a vassal US state.
??????????????????????????????????????????????
Maybe you could try one of the new news subscrpition services from Mars. Just ignore the anti-Venusian bias.
Sweden’s coronavirus death toll, the worst by far in Scandinavia.
Why would you judge Swedish deaths as any worse than those of Danes, Finns, or Norwegians?
Hmmm, natural gas may have some issues going forward, production is plunging.
https://wolfstreet.com/2020/08/05/us-crude-oil-production-plunged-most-ever-natural-gas-followed-the-great-american-oil-gas-bust-phase-2/
Dennis L.
Good point! Low prices affect oil, natural gas and coal. We can expect production of all three to plunge, more or less simultaneously. Natural gas is often produced with oil. If the oil production is stopped because of low prices (or another issue, such as pipeline problems), the natural gas production will stop at the same time.
Silver like $27.00 an ounce this morning….do I here a panic buy? The premiums to get physical actual metal must be Outrageous….last time I looked it was $4.00 an ounce!😭
Might be more now…some wholesalers can’t get it! Wow….
Should have listened to me months back….
https://m.youtube.com/watch?v=912UykAeVX0
Gold’s way up too…the sky’s the limit….saw on YouTube a trader that had an order of $6,000,000 for the actual metal and his suppliers would not touch the order!
Watch out, a lot of Hanky Panky going out with paper trades and such.
You may think you own it but it might be just a number on a screen…
August 03, 2020 – 09:02 AM EDT
Top Federal Reserve official says US needs another lockdown to save economy
BY REBECCA KLAR..the Hill
To do so, he suggested strict shutdowns, which is contrary to what President Trump and many of his allies have been pushing in recent months as measures to aid the economy.
“I mean if we were to lock down really hard, I know I hate to even suggest it, people will be frustrated by it, but if we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it’s happening in the Northeast right now,” Kashkari said. “They had a rocky start, but they’re doing a pretty good job right now.”
“We’re going to see many, many more business bankruptcies, small businesses, big businesses, and that’s going to take a lot of time to recover from to rebuild those businesses and then to bring workers back in and re-engage them in the workforce. That’s going to be a much slower recovery for all of us,” Kashkari said
Sounds like Vietnam…In order to save the Village, we had to destroy it.
According to the Atlantic article, the virus is too widespread now in the World to contain it and manage it’s spread, we just have to live with the Kung Flu, like Gail said👍😜
https://pieceofmind.files.wordpress.com/2020/08/screenshot_20200801-195212_twitter4174468899840971209.jpg
Thanks for the Selfie!🤗. Not to worry. He also stated they have plenty of $$$ to cover it all. Suppose he’s wearing a Tin foil hat too!🤗
That is pretty funny. Thanks.
bonjour
https://twitter.com/Rasputinish/status/1290847578083536905
I am struggling to think of a motive.
I can’t imagine it would (or will) suit Israel to have an entirely failed state of nearly 7 million people along its northern border.
It also has Palestine with a population of 5.1 million, practically mixed in with its own population. Israel’s population is about 8.7 million. No wonder a person sees so many soldiers in Israel.
Who could have foreseen such an outcome in 1948?
James Vincent Forrestal foresaw it. That is why he was an implacable opponent of US support for a Jewish State in Palestine. He pointed out, correctly, that this would alienate all the Arab states that the US needed as allies against the USSR. He died in 1948 of a mysterious “fall” from a sixteenth floor window.
Radiation spike in the Eastern Mediterranean Region.
It is possible the large chemical explosion squeezed hard enough that some fusion occurred and that is what shows as elevated radiation.
“Alaska’s first cruise ship of 2020 is returning to port early after a passenger tested positive for COVID-19, according to written statements issued late Tuesday by the City and Borough of Juneau and UnCruise Adventures, the ship’s operator.”
https://www.adn.com/alaska-news/2020/08/04/alaskas-first-cruise-ship-of-2020-returns-to-port-early-after-passenger-tests-positive-for-covid-19/
“At least 41 passengers and crew on a Norwegian cruise ship have tested positive for Covid-19, officials say…
“Hurtigruten [the Norwegian company that owns the ship] has halted all leisure cruises because of the outbreak.”
https://www.bbc.co.uk/news/world-europe-53636854
I noticed in ads I received in the mail from a different tour company that the only tours that were not cancelled were those going from the south of Norway to the north of Norway. I suppose people believed that there would be no COVID problem in Norway because the number of cases was low. Unfortunately, this is not really true.
Another example of “low case counts in the past doesn’t mean that there won’t be illnesses now.”
Alaska’s current spike in cases is several times as high as its early spike in cases. Total deaths is still very low: 25 according to the data base I am using.
“The Spanish tourism sector has lost 27.3 million visitors and €28.4 billion in revenue in the first half of the year compared with the same period last year.
“And the new outbreaks, coupled with travel advisories issued by several countries, suggest that things will not improve significantly during the second half of the year.”
https://english.elpais.com/economy_and_business/2020-08-05/covid-19-crisis-devastates-spains-tourism-industry.html
“Africa’s fast-growing tourism industry could lose up to $120 billion and millions of jobs.”
https://finance.yahoo.com/news/africa-fast-growing-tourism-industry-174750560.html
“‘Singapoliday’ and other dubious tourism board initiatives amid the coronavirus pandemic…
“Regional tourism authorities are pulling out all the stops to get domestic travellers travelling, even if they don’t want to.”
https://www.scmp.com/magazines/post-magazine/travel/article/3095958/singapoliday-and-other-dubious-tourism-board
One big issue is local citizens being able to afford to buy goods and services, if there is no tourism. Another issue is an indirect cutoff in supply lines for imported food and parts needed for manufacturing.
“A fresh mass outbreak of Covid-19 could increase the risks of an external debt crisis among emerging and developing economies which are vulnerable to sudden capital outflows, the IMF warned on Tuesday.
“The economic impact of the pandemic has been especially acute for countries that rely on oil, tourism or remittances from migrant workers.”
https://www.ft.com/content/4da1ab53-bb92-4c87-895a-f827a517a627
“Philippine GDP shrank an annualized 0.7% in the first three months, worse than the preliminary 0.2% year-on-year contraction reported in May…
“The downward adjustments, which are regularly done to reflect late data arrivals, increase the likelihood of a bigger economic collapse…”
https://www.philstar.com/business/2020/08/05/2033090/philippine-economy-shrinks-faster-initially-thought-q1
“Indonesia’s economy contracted for the first time in over two decades in the second quarter as efforts to contain the new coronavirus dealt a blow to consumer demand and business activity in Southeast Asia’s largest economy.
“Gross domestic product shrank by a bigger than expected 5.32% in the April-June period from a year ago…”
https://www.bangkokpost.com/business/1963199/indonesias-economy-contracts-for-first-time-since-financial-crisis
“The collapse in tourism as a result of the coronavirus pandemic has left a gaping hole in Turkey’s finances. Foreign investors have fled, pulling out almost $13bn from the country’s local-currency bonds and stocks over the past 12 months.
“In the face of those outflows, the country has burnt through tens of billions of dollars of reserves this year in a bid to maintain an unofficial currency peg.”
https://www.ft.com/content/cb70275f-8b7d-453c-9184-6d65815a8b10
I am at a wedding today. There are about 200 people here right now. Another 200 are expected as the day goes on. No masks. No distancing. Close proximity in fact. Plenty of old people.
People here live in each other’s pockets yet I have yet to hear tell of a single case of anyone falling ill with corona and neither have I yet met anyone who knows anyone who has fallen ill with corona.
Maybe I am just lucky. Maybe it is all the sunlight and fresh air here.
I don’t know anyone who has met Corona-chan, nor anyone who knows anyone who has met Corona-chan. Perhaps she’s saving us for latter.
Where are you?
Java.
0.7% is pretty tiny, in the whole scheme of things. Perhaps low labor costs still “sell well.”
Philippines is a country that didn’t have many COVID cases earlier. It seems to have quite a few now, however, and the trajectory is definitely upward. It added 6,263 new confirmed cases yesterday, according to the database I am using.
And much of the nation has just returned to lockdown, which obviously doesn’t augur well for their economic performance moving forwards:
“Tens of millions of people in the Philippines are back in lockdown, after doctors warned a surge in new coronavirus cases could push the healthcare system to collapse.
“Stay-at-home orders are now in place in Manila and four surrounding provinces on the island of Luzon for two weeks.”
https://www.bbc.co.uk/news/world-asia-53646149
“The economic impact of the pandemic has been especially acute for countries that rely on oil, tourism or remittances from migrant workers.”
In other words, countries that are not “developing” and will never “emerge”. But the IMF would never say that; it might remind rich countries that giving tons of money to the third world never did any good and never will. As I saw in Nigeria: a stable economy bankrupted by oil.
“Société Générale has culled its top ranks, announcing the departure of two deputy chief executives, after the French bank slumped to its worst quarter for more than a decade.
“France’s third-largest bank on Monday revealed a surprise €1.26bn loss for the three months to June, its weakest quarterly performance since the losses associated with rogue trader Jérôme Kerviel in 2008.”
https://www.ft.com/content/37483951-8a8a-4bba-9bb4-8169045c33c9
“The coronavirus pandemic is deepening the pain for Japan’s regional lenders, heightening concerns that a potential wave of business closures will test policymakers’ ability to avert a damaging banking-sector crisis.
“Many central government and bank officials see the risk of a crisis emerging in the next few months, when more struggling firms could go under and hit regional banks already weakened by a shrinking domestic economy and years of ultra-low interest rates.”
https://uk.reuters.com/article/us-health-coronavirus-japan-banks-insigh/japan-short-of-rescue-plans-for-regional-lenders-hit-by-pandemic-idUKKCN250317
Japan’s governmental debt is already unbelievably high.
With the populace itself as creditors. That could change with one pencil stroke.
Cut off all of the income that these people are expecting in their old age?
The japs won’t let that happen oh no. The Confucius connection is a bit too strong for that to even be a remote possibility.
Take it from me, I have some experience with those national and cultural characteristics.
The same of course holds true for mainland China, Taiwan and S. Korea.
Why do you think so few old people died from Covid over there?
Yes, think about it.
https://www.straitstimes.com/sites/default/files/styles/article_pictrure_780x520_/public/articles/2020/01/12/wh_32561339_120129.jpg
Japan solved that problem after 1600, when Tokugawa Ieyasu dispossessed the daimyo. Now do the same to the zaibatsu and the yakuza. And not before time.
Perhaps this time isn’t different.
“The U.K. plans to adopt its full no-deal Brexit border plan to avoid traffic chaos when it completes its split from the EU in 2021, even if the two sides sign a free-trade agreement…
“Britain is bracing for an economic shock when the Brexit transition period finishes at the end of the year, as commerce with its largest trading partner becomes subject to new red tape and paperwork.”
https://www.bloomberg.com/news/articles/2020-08-04/u-k-to-use-no-deal-brexit-border-plan-fearing-traffic-chaos
“The British government has urged medicine suppliers to prepare for the country’s exit from the EU single market and customs union on Dec. 31 by building up six weeks’ worth of stocks in case of disruption to imports…
““We recognise that global supply chains are under significant pressure, exacerbated by recent events with COVID-19,” the health ministry said in a letter to medicine suppliers which it published on Monday.”
https://uk.reuters.com/article/us-britain-eu-medicines/uk-urges-medicine-suppliers-to-stockpile-before-brexit-transition-ends-idUKKCN24Z27Y
“Britain’s banks took a gloomier view than almost all their European peers in their second quarter earnings, as coronavirus fears, Brexit and low interest rates caused them to bake tougher “worst-case” scenarios into their risk models…
“The British economy is forecast to shrink 11.5% this year, while the euro area contracts 9.1%, according to OECD forecasts in June.”
https://uk.reuters.com/article/us-health-coronavirus-britain-banks/britains-banks-brace-for-22-billion-loan-losses-as-outlook-darkens-idUKKCN2510NG
“Hundreds of thousands of small UK businesses are unable to access emergency funding as banks take weeks to process applications or turn down customers – sometimes without giving reasons why.
“Almost 250,000 of the 1.4 million applications for Government-supported “bounce back” loans were either still being processed or had been declined as of Aug 2. Nearly a fifth of struggling applicants remain cut off from support.”
https://www.telegraph.co.uk/money/consumer-affairs/small-businesses-brink-banks-delay-250000-bounce-back-loans/
Six weeks’ supply is hardly enough!
Well, the Brexit loons always promised ‘a little’ pain and disruption at first, followed by great benefits in 20 yrs……
So, Brits, just hang on for that glorious Nirvana of full sovereignty and Trading with the World!
Ideology over reality—–
Reality always wins.
But, hey, one may feel alright for a while.
I thought the ideology was the ‘united Europe’ nonsense.
Forging a United States of Europe was never a tenable project. The reality that’s biting right now is that it’s doomed to fall apart.
states of any size are only willing to work together when there is mutual prosperity/advantage.
when one or the other begins to fail, for whatever reason, then conflict becomes inevitable.
it is possible to trace that right back through history.
The USA is no different, when the USA had a kind of prosperity for the majority, it could hold together—now that prosperity is failing the concept of a ‘United States’ is no longer viable, Europe is headed the same way.
I’ve tried to explain it here, for what it’s worth:
.https://medium.com/future-vision/the-european-union-was-a-construct-of-infinite-prosperity-7a401c225171
The lebansraum project never quite died after WW2.
Dominating the Eurasian continent is such an alluring prospect.
Well, I’m glad it came to an end with Erdogan, Puting and now the vicious sea monkeys calling it quits.
Perhaps the way is now open for Archduke Karl von Habsburg to continue the AEIOU project? (Which stands for “Austriae est imperare orbi universo”, coined by Frederick III) After all, Maria Theresa came close (another of my heroes, by the way).
“Congressional leaders and White House officials warned on Tuesday that they were still far away from a deal on more economic stimulus…
“Democrats have called for a $3.4tn stimulus package, but Republicans have said they would only support a smaller deal. Mr Mnuchin said on Tuesday: “We’re not going anything close to $3.4tn.””
https://www.ft.com/content/575ed375-b48a-4012-8acf-fb7ac3e68a65
“Even if Congress passes a new rescue package with more unemployment benefits, the cumulative effect of the ongoing economic catastrophe may finally trigger a credit card default deluge, a new survey reveals.
“More than half of consumers with credit card debt said they will need more bailout money to make minimum payments over the next three months.”
https://www.bloomberg.com/news/articles/2020-08-05/more-bailout-cash-may-just-delay-wave-of-credit-card-defaults
A person wonders about late rent and late mortgage payments as well.
Here is the quote that matters:
“While an April survey for CreditCards.com found that 47% of U.S. adults said they had credit card debt, that number dropped to 36% in the latest poll.”
In other words, the people are doing exactly the right thing. A fact which Bloomberg buries deep below the fold, because it does not support their “big government” agenda.
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