Reaching the End of Early Stimulus – What’s Ahead?

Many people thought that COVID-19 would be gone with a short shutdown. They also thought that the world’s economic problems could be cured with a six month “dose” of stimulus.

It is increasingly clear that neither of these assumptions is correct. Despite the claims of epidemiologists, our best efforts have never been able to reduce the number of newly reported COVID-19 cases for the world as a whole for any significant period of time. In fact, the latest week seems to be the highest week so far.

Figure 1. Chart of worldwide COVID-19 new cases, in chart prepared by Worldometer with data through September 20, 2020.

At the same time, the economy, despite all of the stimulus, is not doing very well. Airlines are doing very poorly. The parts of the economy that are dependent upon tourism are having huge problems. This reduces the “upside” of economic recovery, pretty much everywhere, until it can be corrected.

Another part of the world economy doing poorly is clothing sales. For example, many fewer people are attending concerts, weddings, funerals, out-of-town business meetings and conventions, leading to a need for fewer “dressy” clothes. Also, with air travel greatly reduced, people don’t need new clothing for visiting places with different climates, either. Most clothing is bought by people from rich countries but made by people in poor countries. This cutback in clothing purchases disproportionately affects people who are already very poor. The loss of jobs in these countries may lead to an inability to afford food, for those who are laid off.

Besides these difficult to solve problems, initial programs set up to help mitigate job losses are running out. What kinds of things might governments do, if they are running short of borrowing capacity, and medical solutions still seem to be far away?

In Section A of this post, I outline what I see as some approaches that governments might take to try to “kick the can down the road” a while longer, as well as some general trends regarding near term outcomes.

In Section B, I explain how our current problems seem to be related to the more general “overshoot and collapse” problems of many prior economies. I show that historically, these overshoot and collapse situations seem to have played out over a number of years. In many ways, the outcome might look more like “overshoot and decline” than “overshoot and collapse” from the point of view of an observer at the time.

In Section C, I explain two different types of “breakage” we can expect going forward, if we are really dealing with an overshoot and collapse situation. In the first, oil production is likely to fall because of the collapse of some of the governments of oil exporters. In the second, the international trade system breaks down because of problems with the financial system and countries no longer trusting each other’s currencies.

[A] Ideas for “Sort of” Addressing the Economic Problems at Hand 

The following are a few ideas regarding possible mitigation approaches, and the expected results of these attempted solutions:

[1] Programs to keep citizens in their homes will likely be extended. Mortgage repayment programs will be extended. Renters will be allowed to stay where they are, even if they cannot afford the rent.

[2] New programs may be added, allowing those without adequate income to pay for electricity, heat, water and sewer connections. These programs may be debt-based. For example, homeowners and renters may be given loans to pay for these programs, with the hope that eventually the economy will bounce back, and the loans can be repaid.

[3] More food bank programs will be added, with governments buying food from farmers and donating it to food banks. There is even an outside chance that people will be given loans so that they can “buy” food from the food bank, with the hope that they can someday repay the loans. All of these loan-based programs will appear to be “cost free” to the government, since “certainly” the crisis will go away, and borrowers will be able to repay the loans.

[4] Loans to students will increasingly be put in forbearance, to be repaid when the crisis is over. Auto loans and credit card debt may be also be put into forbearance, if the person with the debt has inadequate income.

[5] Even with all of these actions, families will tend to move back together into a smaller total number of residences. This will happen partly because citizens won’t want to be burdened with even more debt, if they can avoid it. Also, older citizens won’t want to move into facilities offering care for the elderly because they know that COVID restrictions may limit with whom they can have contact. They will much prefer moving in with a relative, if anyone will take them in return for a suitable monthly payment.

[6] As extended families move in together, the total number of housing units required will tend to fall. Prices of homes will tend to fall, especially in areas where citizens no longer want to live. Governments will encourage banks and other mortgage holders to look the other way as prices fall, but as homes are sold, this will be increasingly difficult to do. In many cases, when homes are sold, the selling prices will fall below the balance of the debt outstanding. Governments will pass laws not allowing financial institutions to try to obtain the shortfall from citizens, at least until the crisis is over.

[7] Some businesses, such as restaurants without enough patrons and colleges without enough students, will need to close. Clothing stores without enough sales will also need to close, as will retirement homes without enough residents. All of these closures will lead to a huge amount of excess commercial space. It will also lead to the loss of more jobs, raising the number of unemployed people.

With these closed businesses, the price of commercial real estate will tend to fall. Lenders will be encouraged to “extend the loans” and “pretend that asset prices will soon recover,” when renewing loans. Even this approach won’t be enough in many cases, as businesses file for bankruptcy.

[8] With fewer residences and business properties occupied, the amount of electricity required will fall. Wholesale prices for electricity will tend to fall, pushing ever more fossil fuel and nuclear electricity providers out of business. Electricity outages will become an increasing problem, as renewables become a larger share of the electricity mix and are unable to increase supply when needed. Rolling outages will become more common.

[9] Pensions of all kinds will become more difficult to pay. Government programs, such as Social Security in the US, will have less revenue to pay pensions. There are funds set aside in the Social Security Trust Fund to cover a shortfall in funding, but these funds are simply non-marketable US government debt. In theory, the US government could add more debt to the Trust Fund and make payments on the basis of this added debt. Otherwise, the US will likely need to either raise taxes or increase the “regular” government debt level, in order to continue to pay Social Security pensions as planned.

Private pensions, backed by bonds and shares of stock (and perhaps other assets), will find the values of their available assets are falling. Governments, if they are able to, will try to hide this problem. For example, regulators may develop a new way to value assets, so as to make pension funding shortfalls mostly disappear.

In the case of pension bankruptcy, government insurance is often theoretically available. In the US, Pension Benefit Guaranty Corporation provides coverage; other countries may have similar programs. Unfortunately, this program is not set up to handle a large influx of new bankrupt plans, without raising taxes. The problem then will be raising taxes enough so that one year’s pension benefits can be paid, pushing the problem down the road a bit longer.

Bank accounts have similar guarantees, with similar funding problems. The guarantee organization has very little funds available, without raising taxes or somehow increasing debt.

[10] Stock market prices will tend to fall, leading those who have purchased shares using debt to want to sell quickly, pushing the stock market down further. Currency relativities will fluctuate wildly. Derivatives of many kinds will encounter payment problems. Many ETFs likely won’t work as planned. Governments will try to figure out ways to somehow mitigate these problems to the extent possible. For example, stock markets may be closed for a time to hide the problems. Or, additional time may be given to settle purchases, so that perhaps the deficiencies can be corrected. Eventually, some banks may be taken over by governments, to assure the operation of the parts deemed essential.

[11] Eventually, governments may find it necessary to nationalize a wide range of essential businesses. These could range from trucking companies to banks to oil companies to electricity transmission repair companies. If the balance sheets of these companies are too bad, governments may simply stop publishing them.

[12] These types of actions will mostly be available to “rich” countries. Poor countries can tap their “rainy day” funds, but these will soon be exhausted. In this case, poor countries will find that there is little they can do unless international organizations bail them out. Because of cutbacks in tourism and in orders of finished goods, such as clothing, these countries are likely to encounter high levels of unemployment. Without aid, the poorer citizens of these countries will find it impossible to afford an adequate diet. With inadequate nutrition, the health of low income citizens will decline, and they will easily succumb to communicable diseases, such as tuberculosis and malaria. Death rates are likely to skyrocket.

[B] What Happens When an Economy Outgrows Its Resources? 

Most people think that the issue we are dealing with is a temporary problem associated with a new coronavirus. I think that we are dealing with a much worse problem: The world’s population has outgrown the world’s resource limits. This is why our current problems look so difficult to solve from a financial point of view. This is part of the reason many people feel that shutting down the economy for COVID-19 is a good choice. There are really many reasons for the shutdowns, besides preventing the spread of COVID-19: Keeping people inside stops the many protests related to low wages. The shutdowns appear to restore order to a troubled system. Broken supply lines from shutdowns elsewhere reduce raw materials availability, making it more difficult to keep production in one part of the world operating, when others are closed.

Overshoot and collapse is a problem that many smaller economies have encountered over the years. If I am right that we are now encountering a similar situation, there is a big change ahead. The change will not be instantaneous, however. The big question that arises is, “Over what time scale does such a collapse take place?” If it takes place over a number of years, it may look more like “overshoot and decline” than “overshoot and collapse” to those who are living through the era.

A recent partial collapse was that of the Soviet Union in 1991. The Soviet Union was an oil exporter. Oil prices had hit a high in 1981 and had been declining for 10 years when the Soviet Union collapsed. With low oil prices, it had been difficult to earn enough revenue to reinvest in new oil fields to replace the production that naturally declines as oil is extracted. Oil, directly and indirectly, had provided many jobs for the Soviet Union. After ten years of stress, the central government of the Soviet Union collapsed in 1991.

Low oil prices first slowed production growth between 1982 and 1987 (Figure 2). Oil production began to decline in 1988, three years before the government collapsed. Production gradually rose again in the early 2000s, as oil prices rose again.

Figure 2. Oil production and price of the former Soviet Union (FSU), based on BP’s Statistical Review of World Energy 2015.

What was surprising to me was the fact that consumption of all types of energy by the Soviet Union fell at the time of the central government collapse in 1991, even hydroelectric. The overall level of energy consumption never bounced back to its previous level.

Figure 3. Former Soviet Union energy consumption by fuel, based on data of BP’s Statistical Review of World Energy 2018.

What happened was that many inefficient industries were forced to close. Some of these industries were in the Ukraine; others were in Russia and elsewhere. As they closed, less electricity and less oil and gas were used.

The loss in energy consumption was pretty much permanent. The manufacturing that left the Soviet Union was replaced by other, more efficient, manufacturing elsewhere. Also, without their previous manufacturing jobs, the people of the former Soviet Union were poorer. They could not afford to buy cars and homes, keeping fuel consumption lower.

Another indicator regarding the speed of collapses is the analysis done by researchers Peter Turchin and Sergey Nefedov, regarding collapses of eight agricultural economies from earlier periods. I compiled the information they provided in the book Secular Cycles in the chart shown in Figure 4. In the cycles they analyzed, the “crisis period” seemed to last 20 to 50 years. One thing that is striking in their analysis is that epidemics often played a major role in the declines. As wage disparity grew, poorer workers ate less well. They became more vulnerable to epidemics and often died.

Figure 4. Chart by author based on information provided in Turchin and Nefedov’s book, Secular Cycles.

In these early cycles, the major industry was farming. These collapses were in the days before electricity use. In these situations, collapses tended to play out over 20 to 50 years. Our more modern economy, with its just-in-time supply lines, would seem likely to collapse more quickly, but we can’t know for certain. This analysis is thus another data point that suggests that what may be ahead could be closer to “overshoot and decline” than “overshoot and collapse.”

[C] What May Be Ahead

[1] We are likely to experience the collapse of central governments of several of the oil exporting nations, in a manner not entirely different from the collapse of the Soviet Union in 1991.

Oil prices have been low for a very long time, since 2008, or at least since 2014.

Figure 5. Weekly average spot oil prices for Brent, based on data of the US Energy Information Administration.

Most OPEC oil producers seem to require prices in the $100+ per barrel range in order to be able to fund the programs their people expect (Figure 6). One important program provides subsidies for imported food; other programs provide jobs. Without these programs, revolutions to overthrow the current leaders seem much more likely.

Figure 6. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from APICORP. Figure is from 2014.

At this point, oil prices have been below $100 per barrel since 2014, a period of 6 years (Figure 5). Stress is increasing; OPEC producers have cut production in an attempt to try to get prices up. Prices are now in the low $40s.

We should not be surprised if, over the next few years, oil production starts to fall in several areas around the world because of internal problems. Another possible impetus for the drop in production may be wars with other nations. Some such wars might be started simply to try to get the price of oil up to a more acceptable level.

We have been falsely led to believe that oil is not important; renewables can handle our needs in the future. In fact, oil is essential for today’s farming. It is essential for transportation of goods and services of all kinds. It is essential for the construction industry and for mining. Researchers in academic institutions have received grants, encouraging them to put together models regarding what could be ahead. These models tend to be extremely unrealistic.

One of the most absurd models is by Mark Jacobson. He claims that by 2050, the world economy can operate almost entirely using wind, solar, and hydroelectric. Unfortunately, we don’t have until 2050; world oil, coal, and natural gas supplies look likely to decline in the 2020 to 2025 timeframe because of low prices. Another problem with this approach is that there is not very much fossil fuel to extract, because most of what appears to be available from resource studies cannot really be extracted at the low prices set by physics. 

The underlying problem is confusion about which direction prices go, as an economy reaches limits. Economists assume that scarcity will cause prices to rise; the real story is that fossil fuel prices are set by the laws for physics because the economy is a dissipative structure. As the economy approaches limits, prices tend to fall too low for producers, rather than rise too high for consumers.The sad truth is that we can’t even count on the continued extraction of the small amount of fossil fuels that Jacobson assumes will exist after 2050.

[2] We are likely to see a huge change in the international financial system and in the international trade system in the next few years. 

As long as there were plenty of resources, relative to the world population, the optimal approach was to do as much international trade as possible. This approach would maximize world GDP. It would also add jobs in developing areas of the world without too huge an impact on job availability in the countries moving their manufacturing to lower-cost areas.

In the last few years, it has become increasingly evident that there aren’t enough jobs that pay well to go around. This is really the underlying problem with respect to the increased hostility among nations, such as between the US and China. Tariffs are being used to try to bring jobs that pay well back to those who need them. Strange as it may seem, it takes fossil fuels to create jobs that pay well.

Figure 7. World Trade as a percentage of GDP, based on data of the World Bank.

Figure 7 shows that international trade was rising as a percentage of GDP for many years, and it hit a high point in 2008. Since then it has bounced around a little below that high point. In 2020, it will clearly take a big step down because of all of the cancellation of trade related to COVID-19 restrictions.

We saw earlier that commodity prices tend to fall too low for producers. Indirectly, this means that profits tend to fall too low. Interest rates tend to follow these low profits down, since businesses cannot afford to pay high interest rates.

With these low profits and low wages, the financial system gets strained. “Debt and more debt” seems to be the way to fix the system. Growing debt at ever-lower interest rates is encouraged. These low interest rates tend to raise asset prices because monthly payments to buy these assets fall with the falling interest rates. Stock markets tend to rise, even when the economy is doing poorly.

If the many strange approaches I outlined in Section A are used to add even more debt to keep the system afloat, eventually some part of the system is going to “break.” For example, banks will stop issuing letters of credit with respect to purchases made by buyers that don’t seem sufficiently creditworthy. Banks may stop trusting other banks, especially if the banks do not really seem to be solvent. At some point, the international financial system seems likely to start “coming apart.” Eventually, the US dollar will stop being the world’s reserve currency.

My guess is that a new two currency system will develop. Governments will issue a lot of currency for local use. It will not be useful for buying goods from other countries. Much of it will be used for buying locally produced food and other locally produced goods.

Very little international trade will be done. Any international trade that will be done will occur between trusted partners, at agreed upon exchange rates. Perhaps a special currency will be used for this purpose.

In this new world, individual countries will be very much on their own. With very little fossil fuel, countries will tend to lose electricity availability very quickly. Transmission lines will go unrepaired. It will become impossible to fix existing wind turbines. Road repair will become impossible. Electric cars will likely be as unusable as gasoline powered ones.

There will likely be fighting about resources that are available, leading to countries subdividing into smaller and smaller units, hoarding what little resources they have available.


1Energy prices tend to fall too low because, as the economy gets more complex, wage and wealth disparity tend to grow, reflecting differences in training and responsibility. The problem occurs because low-paid workers cannot afford to buy very large quantities of goods and services produced by the economy. For example, many cannot afford a car or a home of their own. The spending of high-paid workers does not offset the loss of demand by low-paid workers because high-paid workers tend to spend their wages more on services, such as advanced education, which require proportionately less energy consumption. Ultimately, the lack of demand by low-paid workers tends to pull down the prices of oil and other commodities below the level required by producers.

About Gail Tverberg

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

2,450 Responses to Reaching the End of Early Stimulus – What’s Ahead?

  1. MG says:

    The cities in troubles:

    The Collapse of American Cities Has Started. And Yours Is Next

  2. Oh dear says:

    Re: Brexit

    The clock is ticking on Brexit negotiations. Boris has issued another unilateral ‘deadline’ on talks but the only thing ‘dead’ about his ‘deadlines’ is the deadlines themselves. It is clear that his strategy of trying to thus pressurise EU into a deal is not working. EU remains adamant on its ‘red lines’.

    Presumably, everyone will know where they stand within three months – it would be political suicide for Boris to extend the real Dec. 31 deadline after he won the GE on a platform of ‘get Brexit done.’

    Public opinion is hardening in Scotland and NI. A ‘no deal’ Brexit, and the implementation of Boris’ Internal Markets Bill, could split the UK on two fronts – and scupper a trade deal with USA.

    Meanwhile, “It comes as Ireland’s government has announced its 2021 budget is based on the assumption of there will be no Brexit trade deal between the UK and EU – reducing Irish growth by an estimated 3 per cent.” (Independent, today)

    And, “A total of 55% [in NI] said they’d rather see a Brexit border between Northern Ireland and Great Britain than one with the Republic. The LucidTalk poll, commissioned by the Belfast Telegraph, showed 38% support for customs checks on the island of Ireland rather than with the rest of the UK.” (Belfast Telegraph, today)

    And, remilitarisation quietly announced of the border in Ireland: “An armed Garda support unit deployed temporarily along the Fermanagh border is to be expanded and made permanent. Garda Commissioner Drew Harris announced a year ago that the unit was to begin patrolling the border in Cavan and Monaghan. He told members of Cavan’s Joint Policing Committee last week that work was almost finished on a new base for the ASU which will now become permanent.” (Irish News, today)

    And, “Three-quarters of Scots say that Brexit will make Scottish independence more likely, a new poll has found… The poll also found that 73% agreed Brexit makes Scottish independence more likely, while 27% disagreed. The impact of the Internal Market Bill on independence voting intentions sees 32% more likely to vote Yes, with 15% more likely to vote No, while 53% say it will make no difference to them.” (The Scotsman, yesterday)

    > Brexit: Barnier mocks Johnson’s ‘third deadline’ on talks

    Michel Barnier has mocked Boris Johnson for issuing a “third unilateral deadline” during a meeting with EU ministers, warning that the Brexit talks remain difficult with little prospect yet of the two sides entering a decisive “tunnel” negotiation.

    With 48 hours remaining before an EU leaders’ summit in Brussels, by which time the British prime minister has demanded a breakthrough moment, the bloc’s chief negotiator suggested a deal was “very difficult but still possible”, according to diplomatic sources.

    He noted that Johnson had twice previously suggested that the UK needed the certainty of a deal by a specific date, only to later backtrack. “It is the third unilateral deadline that Johnson has imposed without agreement,” Barnier was said to have remarked. “We still have time.”

    Johnson had said he wanted a deal before the end of summer, and then by the middle of October, before saying in recent weeks that a confident sign of a deal was all that was required.

  3. Nehemiah says:

    Very interesting clip from 18:45 to about 20:20. Historians and demographers “lie” when they show us graphs of extremely slow and gradual population growth until Modern times. Instead, it is perfectly normal for human populations, not just in civilized states but even hunter-gatherers, to grow from 1 to 2 percent per year before their population crashes, usually due to disease outbreaks, “on a centennial scale.”

    • I only listened to part of this video. One thing Kyle Harper seems to say is that humans have a lot more potential pathogens than other animals. Another thing he says is that dense population groups seem to have allowed these pathogens to grow. A third thing he says it that there are an awfully lot of small crashes in populations, relative to the big crashes we see on population graphs. He isn’t quite certain whether these are “Malthusian” or from parasites. If populations are weakened by bad diet, they become very susceptible to parasites. So I am not sure that there is a major distinction between Malthusian and parasitic crashes.

      One thing that Turchin and Nefedov say in Secular Cycles is the expected length of time until population crash is reached because of too much population relative to resources depends on the length of time between generations and also marriage patterns. If rich men can have lots of wives, most of them young, then the time between generations can be very short, and population can rise quickly. In some situations, say 20 years between generations and lots of children per father, population crashes can be expected in not very much more than 100 years. Poor diets makes people vulnerable to viruses and bacteria that had already been around, so it is hard to tell the exact cause.

  4. Fred says:

    Gail, have you come across a conference called “Beyond Oil”?

    I subscribed in a moment of curious optimism, but I think it’s really a vehicle to ramp and trade green energy company shares.

    It says things like “. . . But for oil to compete with electric cars, it needs to be around $9 to $10 a barrel.”

    Sample docs:


    • energy system ‘proposers/producers’ miss a fundamental point

      energy production is only half the equation.

      Energy use is the other half

      only the ‘whole’ is of any use in terms of basic economic growth.

      If the majority of humankind cannot make use of energy produced– then it is useless and meaningless.

      Or to simplify it still further:

      If every adult in the world is given an electric car, it will not make them wealthy and prosperous.

      Travel between A and B doesn’t create wealth, it’s what you do at A or B that creates wealth. And if there is no actual work to do there, wealth cannot be created, so the car, (electric or otherwise) becomes pointless.

      We cannot sustain a society that depends on transportation for its continued existence.

      We tried exactly that from the early 1900s for the following century. It hasn’t worked and is grinding to a halt
      The basis of our current human existence has been the conversion of explosive force into rotary motion.

      (Civilisation summed up in just 7 words!)

      That commercial model brought us to where we are right now.

      • Tim Groves says:

        Speaking of travel, or wanderlust, to be more precise:

        In the county of Iraq lived two frogs; one in Baghdad and one in the city of Basra.
        At about the same time, a similar thought occurred to each frog. The Baghdad thought he would like to visit Basra; the Basra frog yearned to go to Baghdad.

        And, at about the same time, each started out on his travels.

        Halfway between the two cities, or as close to that as makes no difference, they met.

        ‘Where are you going?’ asked one frog.

        ‘To Basra. And you?’

        ‘To Baghdad.’

        ‘And where are you from? I’m from Basra myself.’

        I am from Baghdad.’

        They sat there for a time, thinking. In the meanwhile, a fool came along and asked them their origin and destinations.

        When he heard their stories he said, ‘There’s no point in your travels al all. Each of you should go home.’

        The frogs were unconvinced.

        Then a wise man came along. When he heard of the frogs’ plans, he gave the same advice as the fool.

        But the frogs were not interested in the world of the fool or of the wise man. They hopped on their respective ways.

        When, however, the frogs had been at their destinations for some time, they realized that both fool and the wise man had been right.

        Because, for a frog, no matter how he might feel delight at the journey and its experiences, Baghdad and Basra were so similar it made little difference where they were.

        Before you start hopping, you may have to cease being a frog…

        from The Commanding Self
        by IDRIES SHAH

        • Xabier says:

          Idries Shah, one of the great philosophers of the 20th century.

          His tales have possibly helped to keep many sane in a world of immemorial and seemingly invincible madness.

          For those who like pictures, my friend ‘Daby’ Faidhi Ihsan has illustrated some of his stories for children in some beautiful books.

          She is well worth supporting, one of the most talented and dedicated artists I have ever met.

          • Robert Firth says:

            Thank you, Xabier, and I agree. Idries Shah ( سيد إدريس هاشمي ) was devoted not only to Sufism bt to explaining its relevance to our modern world. His novel “translation” of the Rubaiyat, however, I think we could have done without. Fitzgerald’s version may have been bad “cultural appropriation”, but it was great poetry.

          • Tim Groves says:

            Also, thanks for the tip.

            I will definitely check out Daby’s work

        • and no matter how many girls kiss me

          I have yet to turn into a prince

          (though I can fake it pretty well

      • Xabier says:

        Ship and mule transport were a good model, and as sustainable as anything is in this world – but we just had to go a step further with that old explosive force thing……

        In the 18th and 19th centuries people got excited about fast carriages, running on the new smooth roads, so the triumph of the automobile was assured when it came.

        • Robert Firth says:

          Thank you, and I agree. Ship travel on the oceans, mule travel on land. But within the city walls, foot travel. And if that sets a maximum size for the city, and encloses it with walls, so much the better. Our modern megalopoleis are cancerous growths on the body of civilisation, just as Imperial Rome was.

    • Fred> it’s doable to have PV-home storage combo for every family at least in the West, even perhaps sponsored by some debt program. But on the following conditions:

      – way way way smaller consumption, tiny fridges (and what’s the point if you can’t store even weekly shopping load anyway), no large stove-ovens, no vacuum cleaners etc..

      Basically with say <5$k sized system you can only run small PC (non gaming), coffee maker, internet router, phone chargers, smaller "LCD TV and stereo, few tiny lights, washing machine (no preheat!), perhaps rice/slow cooker, kiddy pool/not serious well pump, ..

      Basically, the ALREADY existing grid allows for at least ~10x higher (likely way higher) consumption and elevation of living standards.

      Yes, it's available now you can have all the comforts in renewables 24/365 as well, but the costs of such system capable of large kW and inductive loads is enormous with the needed spare capacity for winter/overcast. Not mentioning many people (outside US) like to enjoy 6/12kW basic 3phase connection at home, and that's getting really extra pricey on top of that with renewables.

      • MM says:

        I bet on having 3 chickens for every household. This could render industrial chicken farming useless in short time. One pig also gives meat for one year!
        A clever wooden stove can do good cooking.
        A lot of things can easily be done way down without collapse. But not without collapse of the financial system and not without collapse of the cities.
        Question remains open: What about out technology. Where should this come from. The main question about downsizing is: what do we want to keep and how do we acomplish this. Needs global coop. But the WEF or the CCP are on to it, as far as I can see it.

        • Yes, my point was that some of these groups are pushing the agenda of having – maintaining near the same comforts as in today’s opulent living on the legacy grid, which is impossible (for everyone) as I tried to point out on some known practicalities.

          Now, more to your point, yes down scaling is possible and doable (preferable) along the lines you suggested, but that’s outside of the current system.

          Given that all technology is a degradation/loss of material structure in time, be it stone or metal tools, even if we revert to some previous “quasi idyllic plateau” enabled by biomass harvest and animal power.. there still will be need for reusing the scrap metal from today’s age or rather fresh new ores even at say 1/10000000th capacity of today. In other words just reaching another temporary plateau, eventually exhausting this option for good, followed by further fall from the ladder (into animal like state) or direct extinction.

        • 1 year’s pig-calories coming out—(somebody fill me in on the total?)

          requires a lot more than that in calories going in

          just sayin.

    • For what it is worth, when I look up “Beyond Oil,” one of the first things I encounter is a Sierra Club subgroup. This is a link to one in California.

      There is also a reference to a similar one in Minnesota. There are a lot of groups using something close to this name, basically to push “green agendas.”

    • Nehemiah says:

      From time to time I have run across rumors that many engineers and physicists privately scoff at the future of the pure EV (as opposed to hybrids), but do not speak of their skepticism publicly because they are getting grant money. I am sure the same thing happens in global warming research.

  5. Tim Groves says:

    This is an important message from Dr. Margarite Griesz-Brisson MD, PhD, a German Consultant Neurologist and Neurophysiologist with a PhD in Pharmacology, with a special interest in neurotoxicology, environmental medicine, neuroregeneration and neuroplasticity.

    In this video, she is warning that mask wearing causes cumulative and irreversible brain damage.

    The video has already been banned by YouTube and Facebook. That’s an indication of how important it is.

    This is a transcript of the gist of the first part:

    “The rebreathing of our exhaled air will without a doubt create oxygen deficiency and a flooding of carbon dioxide. We know that the human brain is very sensitive to oxygen depravation. There are nerve cells for example in the hippocampus, that can’t be longer than 3 minutes without oxygen – they cannot survive. The acute warning symptoms are headaches, drowsiness, dizziness, issues in concentration, slowing down of the reaction time – reactions of the cognitive system.

    However, when you have chronic oxygen depravation, all of those symptoms disappear, because you get used to it. But your efficiency will remain impaired and the undersupply of oxygen in your brain continues to progress.

    We know that neurodegenerative diseases take years to decades to develop. If today you forget your phone number, the breakdown in your brain would have already started 20 or 30 years ago.

    While you’re thinking, that you have gotten used to wearing your mask and rebreathing your own exhaled air, the degenerative processes in your brain are getting amplified as your oxygen deprivation continues.

    The second problem is that the nerve cells in your brain are unable to divide themselves normally. So in case our governments will generously allow as to get rid of the masks and go back to breathing oxygen freely again in a few months, the lost nerve cells will no longer be regenerated. What is gone is gone.

    • Tim Groves says:

      By the way, Dr. Griesz-Brisson is originally from Romania. Decades ago, she escaped from Nicolae Ceaușescu’s magic kingdom and found refuge and freedom in Germany.

    • I can only imagine lack of oxygen being a problem for the tiny share of medical professionals who wear tight-fitting N95 masks for hours on end.

      I see an awfully lot of people wearing masks in a way that they do not even cover their noses. They protect from sneezes and coughs, that is all.

    • Nehemiah says:

      Where is the experimental data? All I hear is an untested hypothesis. However, we have a lot of experience with mask wearing in medical and industrial environments. Do people in these occupations have higher than normal incidents of brain disease in later life? Has anyone looked?

      • Tim Groves says:

        Oh yea of little faith!

        1. Wearing a mask reduces blood oxygenation, especially in people over 35. Indeed, a team of researchers from the Department of Neurosurgery at Ufuk University in Ankara, Turkey reported that the longer a mask is worn the more the blood is desaturated. These researchers also assert that: “Surgeons in the operating room frequently experience physical discomfort, fatigue, and possibly even deterioration of surgical judgment and performance. Although considerable information exists about the effects of ambient environment on both mental and physical performance, the final “personal” environment for the surgeon beneath the surgical mask is often very inadequately conditioned…it is known that heat and moisture trapping occur beneath surgical masks…”

        2. Wearing a mask increases blood carbon dioxide levels. Citing four different scientific studies, Dr. Zheng Zhaoshi, PH.D. M.D. at the Department of Neurology, The Third Hospital of Jilin University, “Oxygen concentration inhaled by healthy subjects wearing a surgical mask covering an N95 respirator decreases to about 17%, and the concentration of carbon dioxide increases to about 1.2% – 3% in a short period of light work (2-3). Although participants did not show any obvious changes in physical function and did not have any discomfort ratings, the average carbon dioxide concentration inhaled was far higher than the limit of 0.1% of indoor carbon dioxide concentration in many countries. With prolonged mask wearing, untoward reactions may gradually appear. In another long-term study, after wearing an N95 mask for 12 hours the CO2 concentration of subjects increased to 41.0 mmHg, far higher than the baseline value of 32.4mm Hg at the beginning of the test (4). The subjects mainly reported headache, dizziness, feeling tired and communication obstacles. In real life, the situations and time of wearing masks are much longer than the above experimental research settings”.

        3. Wearing a mask increases risk of headaches.

        4.Masks may increase your risk of infection, mostly because they are worn inappropriately, and also because mask-wearers fiddle with them, frequently touching their face. There is no scientific evidence that shows that cloth masks will help reduce the spread of COVID-19, according to Lisa Brousseau, ScD, and Margaret Sietsema, Ph.D.

        5. Wearing a mask concentrates the exhaled viruses in the nasal passages. Our bodies have several effective detoxifications pathways. One of the ways we rid ourselves of a viral infection is by exhaling. If you are sick with COVID-19 or any other viral infection, the last thing you want to do is impede your ability to breathe.

        6. Wearing a mask causes problems for people with special needs. Deaf people who rely on lip reading, people with autism who have trouble understanding verbal cues and need visual cues to help them, and anyone who is hard of hearing suffer the most when people are wearing masks.

        7. Wearing a mask can cause severe and painful contact dermatitis, painful rashes, and other skin damage on your face.

  6. Harry McGibbs says:

    “£5bn cost of the wind turbine fiasco: Botched eco scheme will push up household bills for 20 years after blundering officials set high subsidy rate.

    “Turbine-owners in Northern Ireland were paid over the odds in energy subsidies. One turbine reaps £375,000 a year yet only produces electricity worth £51,000.”

    • neil says:

      Anyone in rural Northern Ireland (like me) could see “swindle” written all over this from the word go. Only a means of extracting money from no 11 Downing Street.

      • Robert Firth says:

        Agreed, neil. The scheme was not “botched”; the result was intended. And the proof is that the subsidies were locked in from day one, and legally cannot be revised. Pure rent seeking by big business and bribed officials, at the expense of the Treasury. And not even their own treasury, but (of course) England’s. The hapless bill payers of NI are just “collateral damage”.

    • The US does better at hiding the subsidies paid on wind and solar. To a significant extent, they are buried in the Federal Government tax collections. Companies can “invest” and get a huge tax credit. With the reduction in corporate tax rates a couple of years ago, this benefit became less helpful for companies. I suppose if Biden can raise corporate taxes again, tax credits for wind and solar can have more benefit in the future (with the “right” legislation granting these credits).

  7. Harry McGibbs says:

    “The U.S. oil consumption recovery is getting worse, not better. U.S. oil consumption recovered to 65% of normal in July and has since decreased to 61%.

    “It took 4 1/2 years for oil consumption to return to the five-year average after the 2008 Financial Collapse (Figure 4). The present collapse is far greater and September use was lower than all but the worst two months of the last recovery from 2009 to 2013.

    “This is very significant. Why should we expect this recovery to proceed any faster than the last one?”

    • Harry McGibbs says:

      “A fracking binge in the American shale industry has permanently damaged the country’s oil and gas reserves, threatening hopes for a production recovery and US energy independence, according to one of the sector’s top investors.

      “Wil VanLoh, chief executive of Quantum Energy Partners, a private equity firm that through its portfolio companies is the biggest US driller after ExxonMobil, said too much fracking had “sterilised a lot of the reservoir in North America”.

      ““That’s the dirty secret about shale,” Mr VanLoh told the Financial Times, noting wells had often been drilled too closely to one another. “What we’ve done for the last five years is we’ve drilled the heart out of the watermelon.””

    • Tim Groves says:

      60% is the new 100%!

      • Yes, it will be amazing to watch societies adjusting to ~60-70% “utilization” levels in next years, perhaps the entire incoming decade. I guess we have some clues already, selected upper middle class and top luxuries continue to churn out easily, while low-mid income pop segment frivolities and increasingly also their basal consumption-demand being severely restricted. Strange antidote to previous ~full spectrum~ opulence of synthetic credit-ism, but this could work for some additional time nevertheless.. Now, the unused production overcapacity will continue receive some sort of life-support (say next few yrs), then follows hard triage and consolidation, e.g. several auto brands, airlines, hotel and restaurant chains are no longer for this world etc.; today higher unemployment yet for a while placated over by “online activities” and food ration, 2nd-3rd tier countries not managing the resulting street chaos already.

        So, again we are waiting till ~2025-35 for another severe (magnitude) leg down where much of the above won’t be possible anymore even for first tier world places. Perhaps only few countries-civ hubs managing core infrastructure.

        • Xabier says:

          Very fair assessment, ‘world of.’

          For the mass of people, the category of ‘disappeared things’ will grow, but be bearable.

          I feel like a Persian watching from a watchtower the dust cloud on the horizon which is an approaching Mongol Horde.

          But for now the wine is still sweet, the palace garden beautiful, the slave girls and boys alluring, the music they play enchanting.

    • Robert Firth says:

      Harry, as usual Forbes does not understand systems theory. The amount of oil consumed is not relevant; what matters is what is produced by that oil consumption. If it s just more SUV miles, of course there will be no recovery; if it were used to expand public transport, far more intelligent.

      Could the same reasoning be applied to other industries? That would be a “recovery” well worth having, if we could make simpler, more efficient, and more human scale machines. Downsizing? Yes, but think of the savings in bulk transport if that was accomplished by also localising. Why fly a lettuce 3000 miles when it could be sourced from the town greenhouses.

    • I think Art Berman has the story right: The recovery in oil consumption seems to have stalled out. In fact, consumption in September may be lower than in previous months. I am not certain how accurately we know September consumption as this point, however. EIA weekly estimates of “Product Supplied” can be quite far off.

      Even without a drop in consumption in September, the he fact that oil consumption growth has stalled is a big deal, however. The only way the economy gets back to normal is by oil consumption rising back to previous levels. On a world basis, it needs to rise even higher than previous levels.

      • Peak Oil Pete says:

        Don’t forget to factor in the Autumn demand drop (however small it may be this year). Seasonally we usually see a drop in consumption at this time due to a slowdown in agricultural demand and an end to the driving season. In the colder states and provinces, bitumen and diesel demand also drop as roadwork and infrastructure projects come to an end for the season. I suspect this is a normal pullback for this time of year.

      • Nehemiah says:

        We are in a global recession. It has to run its course. Governments cannot just flip a switch and have the economy go back to its pre-recession level. Once you shut things down for a while, positive feedbacks kick in and reinforce the downturn, especially when so many financial imbalances were just waiting for a trigger.

  8. Harry McGibbs says:

    “…while banks’ capital and liquidity positions are more robust on the whole vis-à-vis 2008, it remains decidedly difficult to ascertain just how much they will eventually rack up in toxic debt as the coronavirus continues to shutter economic activity. As such, the liquidity phase of the crisis will soon give way to the solvency phase as liabilities start to flare up.

    “… banks are now potentially staring down the barrel of a wave of collapses should conditions continue to deteriorate.”

    • Harry McGibbs says:

      “Rising unemployment? Check. Soaring government deficits? Check. Corporate collapses? Check. So far the Covid-19 recession, one of the worst on record, has followed the script for a major economic downturn in every respect.

      “Except this one: a financial crash. So far, the banks seem to be doing fine, so do the hedge funds, and the bond markets and the asset managers. Even the insurers seem OK.

      “There are two potential explanations for that. It is possible the regulators and central banks have done such a fantastic job of managing the crisis that they have been able to steer us through the downturn without a collapse. Or else it is just a matter of time.

      “Sure, it could be the former but somehow the second explanation is more convincing.”

      • Nehemiah says:

        US banks really are in much better condition than in the last crisis, but European banks are another story entirely. The question is how interconnected is the financial system? Might a banking crisis in one part of the world threaten us all?

    • I would expect that central banks are aware of the likelihood that widespread defaults are likely to have a terribly negative impact on banks. Whether they can somehow hide the problem is the big question.

  9. Minority Of One says:

    The BBC’s Radio 4 early morning news today was Covid19 scare-mongering as usual. In fact, I think all the news was about sars-cov-2 / Covid19.

    In an interview with someone from the office of national statistics we learn that 9% of the working population (UK), or 3 M people, are still on furlough, which ends 31 Oct.

    The BBC is also making a big deal that the govt did not return to full lockdown a few weeks ago, as ‘the science’ said they should.

    Covid: Sage scientists called for short lockdown weeks ago

    Maybe time for Boris to get new scientific advisers.

    • Xabier says:

      ‘The Science (TM)’: the brand you can trust!

      Or the blind man leading us into a deep ditch?

      • Robert Firth says:

        Xaoer, the tests being used in the UK are known to be unreliable, since they test only for virus fragments, not for the entire virus. Controlled comparisons performed in the US have shown false negatives ranging from 50% to 90%.

        The unreliable tests are cheaper and faster, so in the best tradition of technical incompetence, they produce “wrong answers fast”. And are costing the economy billions in the process. And in the best tradition of tyrannical medicine, these so called “scientists” are using this misinformation to treat the whole population as lab rats.

        • Xabier says:

          Agree fully: the information is out there but largely ignored – tests will ‘save’ us is the official line. Amen.

Comments are closed.