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.

Note:

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.

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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.

2,450 thoughts on “Reaching the End of Early Stimulus – What’s Ahead?

    • I have no objections to the 200,000 dead – simply eliminating the less fit physically and mentally.

      • Sorry, but what makes you think, that the reported 200.000 dieceased died OF covid?

        Even if this were so, you would have to put it in perspective. Every year 3 mn americans die of various causes. So far, this is a far cry from black death, ebola, etc.

    • It’s just the flu, Duncan.

      Any old how, since you were dancing at Woodstock, you can’t have much longer on planet earth yourself, can you? The big questions for you include “are you going to spend your stash or leave it to your heirs?” and “are you going to recant your atheism on your deathbed and send for a priest?

      You elimination process, has already been set in motion and will strike like a thief in the night. It’s part of the genetic program, the grand design. Even if you avoid choking on a cocktail olive, becoming a victim of other people’s murderous intentions, or being felled by your diet, lifestyle habits or medical interventions, that genomic clock is winding down and death is inevitable.

      Your bucket’s been kicked man.

      Mine too, of course.

      But as a reader of Jon Kabat-Zinn’s work, I know in my bones that each of us has only moments to live!

      Was this the late Mr. Tenpenny? Recovered substance abuser? Rescuer of other substance abusers? Good Samaritan? Ideal target for you to gloat over, I would have thunk.

      https://www.leehousenashville.com/directors-page

    • The majority of people bumped off by COVID are Blacks and Hispanics Duncan.

      Should I be quite as unsympathetic as you about that? I suppose if I was, you might splutter on your own warped sense of justice.

  1. Thank you for this very good analysis! I’d like to add a few things:

    1. You need much less energy than you think. You dont need light, electric devices, hot showers. You need nice, caring people, a warm place, a cooker, hot water and some tools to do some timbering, sewing and pottery – and water and food.

    2. People will loose education very soon as they cant use it. All people need a task to contribute. So there will be a growing workforce.

    3. A lot can be provided by nature doing intensive gardening and foresting. A political consequence will be that people need gardens, water, forests and areas for cattle. That leads us to a big thing: property reforms.

    4. Goverments will fall because people in need cannot agree on common politics. People will fight for basic resources to survive. There will be little energy for classic military action though.

    5. People will die like the flies because their minds cannot deal with the stress. People will go into camps and being killed, trying to reach their families, run the cities and not being cared for.

    6. At the entrance of the cities armed guys will confiscate your bug out bag and your golden teeth.

    7. People cannot stay in the cities as they need to be close to their gardens. The current houses cannot be maintained, so soon there will be new shelters and constructions.

    8. If radioactive waste is spread mankind will not survive as such. We will degenerate into species with shorter reproduction cycles and give birth before the cancer catches us. That will reduce our mental capacities.

    9. In a slow or sudden crash our technologic ability will deteriorate. It means we have neither machinery nor containers to move our radioactive waste.

    10. Additionaöly, it seems as we are in front of a solar cycle which leads to colder winters and famine.

    11. A lot of things will just get visible when we are in front of them.

    12. Yes, we will also need old people with strong minds and mild hearts to organise and teach the families. This is something we can just walk into together.

    • Laughing quietly,

      10. That one will be interesting, time will tell.

      12. Definitely, we will need older people, keep up the good work.

      Dennis L.

    • Most today humans are not fit for farming, most westerners know nilch about farming and even less about sustainable farming (permaculture). Why not simply accept that MMP rules and human species is 99.9% (or whatever) doomed? And if we were “meant” to failure and are presently failing, that is wonderrful success, so why worry?
      Cheers.

    • 1. no, I need lots of energy, otherwise no dark chocolate.

      2. many lazy people do not want to work.

      3. but this does not provide dark chocolate.

      4. militaries will get the remaining energy resources.

      5. all people will die, so we agree!

      6. cities are becoming unlivable, and anyway, I get my teeth cleaned every 6 months.

      7. yes, huts and tents for the survivors, but not me!

      8. fun fact: the average person is stooooopider than in previous decades, so no big deal if this continues.

      9. but if it glows at night, that would be cool.

      10. if there is no dark chocolate, then famine is okay.

      11. far in the distance, I see my toes at the end of the couch. Is that what you mean?

      12. kumbaya!

      • 6. Look at history from the castle point of view. We live as a group, cities will work because they have worked. Those who are not able to contribute and who have no history of contributing will find themselves on the wrong side to the city walls.

        Dark chocolate is good.

        Dennis L.

        • You savages.

          Liquorice it is. No life worth living is without some Finnish or Italian made Liquorice.

          Yummy. 😋

    • #8 the radiation risk is largely overblown (from macro), but I like your vision of ever shrinking (mentally) post human-humanoids dispersing-mutating into ~animal kingdom again, that’s an interesting concept, although not sure how probable vs direct punch end of the line overs specialized species die-off scenario..

    • The need for extensive on demand lighting is related to literacy, to much leisure and leading an unnatural life, divorced from the daily cycle.

      Up at dawn, to bed, or around the only fire at sunset, works best for mental health, too.

      I have quoted before a French 19th -century peasant girl who became the mistress of an artist – she was astonished to see everyone sitting up very late at night, drinking and playing cards:

      ‘I suppose I’d know how to stay up late if I’d been born rich…’

      Wax candles for a posh dinner party used to cost about a week’s wages in the 18th-century.

      How spoiled we are.

      • Exactly.
        Imagine graph plotting “free hours” per day (season) not directly dedicated to subsistence and another one showing the (enabled) population rise. There should be some cross points – intervals on such graph then for various stages of achieved civ thresholds. And this is obviously all underwritten by accessing excess energy.

        ps and it most likely doesn’t work as smoothly played in reverse by withdrawing the energy surplus..

        • Even in September, I keep thinking about how much shorter the days are getting. And, I live in the Southern part of the US. By winter, closer to the poles, there is little sunlight at all. Some sort of supplemental lighting is very helpful.

  2. ‘The Tesla team has been proving people wrong for over a decade.’ So says the presenter of this video. But just how does Tesla make money? What are its successes? Where are the products that are household names?

    Elon Musk: Affordable $25,000 Tesla and Better Batteries Are Coming:

      • Is a “hydrogen plane” powered by hydrogen or kept in the air by hydrogen? Either way, it seems like a bad idea.

          • Thank you; a good comment, even though I find the fate of the Hindenburg, and of airships in general, one of the tragedies of history. But concerning hydrogen powered cars: it is easy to calculate how much hydrogen a car needs to have a reasonable range, and also easy to count the cars in the five storey car park uses by the organisation I once worked for. Multiply the one by the other; imagine just one car springing a leak, recall that compressed hydrogen heats up as it expands and spontaneously combusts … O the humanity!

    • In terms of biz view, incoming tech disrupting companies simply pre-burn money to feed insane retooled growth. That’s normal, actually needed as validation they are on the good path.. Their factories and robotized assembly plants both for batts and carz are spreading around the globe (US, EU, China).

      In terms of tech, they co-helped (apart from others – general consumer electronics manufs) to kick start ~10x drop of long cycle life battery prices in a ~decade by increasing volume. Now, even ~poor people can afford at least small backup to deal with less dependable grid, e.g. fridge & light & pump & ebike, say with ~ >1-3kWh storage..

      So, lets not get stuck only on the mid-upscale market options they specialized in, i.e. running whole house and performance carz 24/365.

      They just confirmed previous rumors/hints/expectation of moving into dry cell batteries – the pilot factory is running already: way smaller footprint for manufacturing, no rare metals, vertically integrated raw resource inputs etc.. All this in aggregate means moving from GWh to TWh production capacity, and that starts to bordering on feasible plan to offset large part of today’s energy mix via residential renewables.

      Perhaps it comes too late, but there is [a small] probability it will at least enable quasi BAU (or extend some sort of livable emergency) a bit in some parts of the world.

      • Yes, never live too far from a hydro power plant or nuke in the near-term future.

        Preferably upstream or elevated from those hackable behemoths.

      • “Now, even ~poor people can afford at least small backup to deal with less dependable grid, e.g. fridge & light & pump & ebike, say with ~ >1-3kWh storage..”

        The poor people I know live in apartments. Some are even homeless. Being able to own one’s own stand-alone home, with a roof suitable for solar PV, is a luxury to begin with.

        Also, I hope the person doesn’t want to operate these things through the winter on a miserly amount of storage. There are likely to be long periods without enough sunlight to adequately recharge the batteries. I also hope that more essential things (cooking and heating, in particular) are handled by some other kind of fuel.

        Businesses who hire people are not going to get along on with PV plus small amounts of storage. There will be massive layoffs, if we try to depend on this system. Where do poor people get the income to buy food? Do they possibly have enough left over for all of these luxury items you are suggesting?

        • My bad should have described the category of ![~]poor in that context even more precisely, as you know it’s a wide gamut. For example, as we speak there are many people living in US/EU “trailer parks” and similar doing just that.. having low voltage (small batt) setup with few panels. Yes, true, there are even more destitute people “bellow them” and their numbers are likely to grow..

          Nevertheless, even the ~poor~ are not all stupid, after unrealiable grid makes their fridge content for second or third time spoil precious food, it’s time to prioritize. Few families pooling together, saving up for the kit instead of other expense, etc. Obviously, at some time the affordability of the wares might not be there anymore, i.e. Asian trade not flowing across the pond anymore..

          • I would point out, too, that refrigerators are a rich world luxury. My experience is that in Palestine, people don’t have refrigerators. They are not common in India, either. It the grid is unreliable, a refrigerator is one of the first things to “go.” A television will stay, as will light bulbs. Food will be cooked another way.

            A person probably needs an inverter to run a “regular” refrigerator. Otherwise the person will need a special low voltage DC refrigerator that they can use in addition to a regular refrigerator. The owner would need a place for this extra refrigerator, as well.

            • gail, we had refrigerators in Africa back in the late 1950s. When there was no grid electricity. They worked well, mainly because they had only one moving part: the circulating cooling fluid. And they were powered by a small flame.

        • If there is still grasslands. A nomadic lifestyle driving cattle and subsisting on Cattle and Sheep while living in Yurts.

        • They will be living in Yurts. Driving Sheep and Cattle. Eating their Meat and drinking their milk.

          As long as there is Grasslands available.

      • Push the problem elsewhere! Let others in poor countries die of starvation or of other illnesses. Let depressed people nearby drink themselves to death with alcohol. Keep myself safe at all costs!

      • It’s anyone’s personal option to stay home. Forcing other people to stay home is ridiculous and illegal!

        It was only supposed to be for two weeks, and then just to “flatten the curve”, remember?

  3. Things seem to have got more serious in UK this week. First an intensification of lock down, with WFH recommended for those who can; and now a replacement for the furlough scheme with another whereby employers will have to pay 55% of wages for workers who work 33% of their time.

    The intention now seems to be to destroy ‘unviable’ jobs. It is now said that unemployment may hit 4 million (there were 33 million employed in UK in Jan 2020, with minimal unemployment, so about 12% unemployment.) Taxes will be higher and the state shrunk.

    We are six months into c19 and UK lock down 2 is expected to last another 6 months. One can only wonder what the situation will be 6 months from now. Just how high will unemployment go, not to mention public debt? This is starting to look like a voluntary demolition of the economy.

    > Chancellor Rishi Sunak tells of ‘hard choices’ as he axes furlough scheme

    Chancellor announce a wage subsidy scheme for workers but said it would not be enough to “save every job or every business”

    Rishi Sunak killed off the Government’s furlough scheme as he said it would be “fundamentally wrong” to save jobs that were only “viable” through taxpayer support.

    The Chancellor announced a new scheme to support workers but said it would not be enough to “save every job or every business” and refused to rule out unemployment hitting four million.

    Mr Sunak said the furlough scheme, which ends on Oct 31, would not be extended, but would be replaced by a new Job Support Scheme in which the Government will help top up the wages of anyone who works at least a third of their normal hours.

    He had always insisted the furlough scheme would have to come to an end, but gave employers a harsh reality check as he said there would have to be a “more permanent adjustment” to the economy and it was “not sustainable or affordable” to continue with the previous pandemic support package.

    Three million people remain on the furlough scheme, and more than a million of them could lose their jobs at the end of next month, according to independent estimates.

    The new wage subsidy scheme will mean businesses having to pay 55 per cent of employees’ full-time wages even if they only work 33 per cent of the time, leaving bosses with difficult decisions to make about whether to make people redundant.

    The Institute for Fiscal Studies (IFS) think tank warned the scheme was “significantly less generous” than furlough and will translate into “sharply rising unemployment” as jobs which relied on state funding will cease to exist.

    Mr Sunak said he would be “lying” if he tried to put a figure on how many people might be made redundant, adding: “I can’t promise that everyone will be able to go back to the jobs they used to have.”

    With new cases of coronavirus hitting 6,634 cases on Thursday, the highest daily total of the pandemic so far, Mr Sunak warned that the economic damage of the virus had become far longer term than the “temporary period of disruption” he had originally envisaged.

    He said: “We have so often spoken of this virus in terms of lives lost, but the price our country is paying is wider than that.”

    He added that he would have to make “difficult decisions in the future” to repair the economy in a clear pointer to higher taxes, and said he would like to see the state shrink to keep taxes as low as possible.

    Downing Street was forced to deny a rift at the top of Government after Boris Johnson chose to visit police in Northamptonshire rather than being by his Chancellor’s side in the Commons as he made the announcement….

    https://www.telegraph.co.uk/politics/2020/09/24/chancellor-tells-hard-choices-axes-furlough-scheme/

    • It is perfectly obvious what has happened. The global economy has crashed vertically downwards, as long predicted here, in a massive step down, and all of this covid rubbish is the cover story that allows TPTB to escape blame and manage to maintain their positions. The top oligarchs will garner even greater wealth/power.

      Can we all stop pretending this is not a monstrous beat-up?

      Is it illegal yet to say that? Will the authorities bulldoze my family home if I speak up?

      • Most people are unwilling to entertain this. They haven’t yet found a reason to doubt the authority figures that rule their lives and their LCD screens. They’ve been living quite comfortably with the mainstream worldview as presented to them. As I see it, the comfort derives from the conclusion that, no matter how benign or horrific the mainstream narrative, “I don’t have to do anything about it.”
        Simply remain seated in Plato’s cave and watch the manufactured images flickering on the wall in front of you. Tonight’s broadcast is a tale of a new and deadly virus, COIVD-19; remain transfixed as it spreads its way through the global telecommunications networks and infects policymakers worldwide, emboldening the opportunists who invoke it as their reason for tightening societal controls, and crippling the cowardly who submit and sacrifice their independence of thought in an effort to get along in the “New Normal.”
        For those of you in the audience who enjoy numbers there are endless streams of data on cases, cases by state, cases by county, demographics of cases and deaths, hospital capacities, testing, contact tracing, daily trends and more. The COVID-19 program has so much data you’ll never feel bored. It will feel like you’re trying to solve a puzzle that truly has no solution!
        For those of you in the audience who enjoy trying to sort out the logic behind byzantine health regulations, see if you can reconcile the contradictions between the recommendations of the WHO, the CDC, your state government, your county government and your city government. Consider keeping a scorecard handy as you track the endless and shifting policy changes.
        Whatever you do, most importantly, be sure to watch. Remain in your seat and enjoy the show. That’s all TPTB want from you. They can’t have you exercising personal agency, except within their narrowly defined parameters (e.g. stay home, isolate yourself, wear a mask). Leave agency to them.

        • https://www.dailymail.co.uk/news/article-8762023/Innocent-Victorians-arrested-street-new-draconian-law.html

          Read this newsarticle, but prepare to be gobsmacked.

          Is there anyone who reads or posts on this site who believes that these acts are even remotely justifiable?

          Is it possible that covid is anything but a cover story for introducing this kind of police state lockdown legislation? Because the death rates certainly do not justify it.

          Note that this insane and draconian legislation has already passed the Lower House!

          Innocent Victorians could be arrested in the street or at work and detained indefinitely by power-crazed officials under a new law Daniel Andrews wants to pass, top lawyers have warned.

          The proposed new law, which will be debated in the Victorian parliament next month, would allow the government to give anyone it chooses – such as public servants – the power to enforce coronavirus restrictions and make arrests.

          The unprecedented plan would also allow officials to detain people they suspect may spread coronavirus even if they have done nothing wrong.

          The measures are outlined in the COVID-19 Omnibus (Emergency Measures) and Other Acts Amendment Bill 2020, which will meet resistance when read in the upper house next month.

          Liberty Victoria president Julian Burnside has raised concerns that government workers authorised to make arrests may not be able to accurately determine whether someone poses a risk of spreading Covid-19.

          ‘The bill introduces a preventative detention regime which appears to have little protections or oversight, and provides far too much discretion to people who may lack the necessary expertise to determine risk, including police officers,’ he said.

          Victoria’s state of emergency and disaster powers, extended until October 11, give police the power to detain someone ‘for the period reasonably necessary to eliminate or reduce a serious risk to public health’.

          Police officers can also search people’s homes without a warrant and restrict movement between locations such as between regional Victoria and Melbourne.

          In their letter the group of retired judges and prominent QCs said they were ‘deeply concerned’ about how the bill would expand the power of the state.

          They said the bill would allow anyone to be authorised to exercise emergency powers.

          ‘There would be no requirement that persons authorised be police officers, or even public servants,’ the letter read.

          Allowing citizens to make arrests ‘on the basis of a belief that the detained person is unlikely to comply with emergency directions’ is ‘unprecedented, excessive and open to abuse,’ the lawyers said.

          Gideon Rozner, Director of Policy at free market think tank the Institute of Public Affairs told Daily Mail Australia the legislation was ‘extremely dangerous’ and would create the ‘Daniel Andrews Stasi’.

          • Haven’t you realised yet that there is no virus, and no proof of any virus.
            The aim of the parasite class organising this police state is control and depopulation, brought about by technological insanity. And, of course, even bigger profits for them.

          • I am curious as to what officers would be searching homes for….are they trying to find Covid viruses?

          • Of course, this is all about goings on in Australia.

            If nothing else, it should discourage anyone who ever considered moving to Australia from another country from doing so. Of course, this becomes a problem for the home construction industry, if it made its money by building new homes for wealthy people seeking a second home in Australia.

        • If a person can count on a pension, there is little to worry about. COVID can become a full-time hobby, beside watching the TV and visiting the doctor for minor ailments. Now, the pension even seems to go farther.

        • Excellent!
          I enjoy the Internet because it constantly spiits out sewerage at high flow rate through my LCD screen.
          People love to bathe in sewerage! And in case the sewerage is confusing, they take up even more sewerage (to be even more confused?)
          This is an interesting trait of humans..

          • “Sewerage is the infrastructure that conveys sewage or surface runoff (stormwater, meltwater, rainwater) using sewers. It encompasses components such as receiving drains, manholes, pumping stations, storm overflows, and screening chambers of the combined sewer or sanitary sewer.”

      • Kim, I am afraid you may be close to right. COVID-19 looked very serious when it first hit China. And, the actions China took were (fairly) consistent with actions that someone would expect to take, when an unknown, apparently very serious virus came along.

        But then, the story started to deviate. The virus mutated and wasn’t as serious as originally feared. There seem to lots of approaches/drugs that can be used to prevent/limit its damages, many of which are not very expensive. Vitamin A as something that can be taken in advance to reduce the severity of the illness, but it rarely gets adequate mention. Data began to be collected, and it become clear that death rates were very low, outside of nursing homes.

        No one had the courage to say, “Let’s move on,” basically, because the economy really couldn’t move on. Also, leaders like their new level of control over citizens.

    • Thanks for catching these quotes, yep, sometimes they spill the beans and call it more or less openly and directly..

      Evidently, attempted degrowth-triage mandate it is.
      Looking for the next sequencing though, UBI, rural plantations, suicide vouchers, .. ?

      • Yes, imagine if the ever growing numbers of permanently unemployable bourgeoisie and their cohort of equally unemployable dregs would garner power and implement some form of socialism/communism, putting themselves on top as the politburo redistributing misery equally to everybody, except for them.

        Now, “we” obviously can’t have it that way at any circumstances. Get them out of the cities and into a life as subsistence farmers. Their loathsome sanctimony is no longer needed by TPTB.

        Good riddance!

  4. Yet another tremendous avalanche of MSM BS. Reading this breathlessly-reported rubbish one only wonders what it is specifically that our overlords want us to fear today.

    It is always worthwhile to bear in mind Mencken’s advice about practical politics and hobgoblins.

  5. Interested to hear how you think these broad patterns square with the thesis in “Disunited Nations” that the USA is now actively withdrawing from their role as global hegemon (which made global trade feasible for smaller nations during the lengthy Pax Americana). Does this suggest the global system could contract and cast off net negative segments could allow the viable parts of the core hang on a bit longer than if the system simply stretched and broke? Does this abandonment of the Pax Americana have a lot in common with how the British Empire was basically abandoned piece by piece once it became unprofitable? And if history repeats/rhymes does that suggest a conflict between the old declining hegemon and new contenders to take its place is on the cards? (or series of regional hegemons if global empire is no longer possible).

    • “Does this suggest the global system could contract and cast off net negative segments could allow the viable parts of the core hang on a bit longer than if the system simply stretched and broke?”

      sure, the core countries, ie those with lots of resources, could continue to trade with each other, even as more peripheral countries are cast out of the club.

      there is an irreversible decline in per capita prosperity underway now, but the core could slow its decline if the periphery has a faster decline.

      • Hmm, but aren’t the resource-rich countries actually on the ‘periphery’?

        The ‘core’ of industrialised states have generally bankrupted their resource base, or if they have some left are vastly over-populated in relation to what is left of soil and woodland.

        • All of these issues do make it difficult to figure out which parts might continue. There is also the issue of the necessary skill set to make do with the available resources.

          I can imagine a scenario in which a combination of (a) Some international organizations disappearing, (b) Big pieces disappearing from net negative countries, through higher death rates and through movement away from very densely populated areas, (c) Remaining parts of countries breaking into smaller parts, perhaps ruled by dictators/kings.

          A world with lower population and old equipment might be able to hang on, for a while, in some parts of the world, at least until existing equipment broke and replacement parts became unavailable. Some parts might even have electricity/oil for a while. The US, Russia, China, and Canada would seem to have salvageable parts. Maybe also Australia and New Zealand. If the population were low enough, Europe would be inhabitable for a while, with the food it could produce. Warm countries would again have an advantage over cold countries because they would not have to use so much energy for heat.

          • This is basically the view of Jack Alpert.
            If the peope would “get it” they should concentrate at certain locations to maintain some sort of complex life style. The rest will go down the drain.
            Otherwise, if we tried to “resue all” we will be left at farming with oxen globally.

  6. tHE OLD COLONIZED NEED TO LATCH ON TO THE OLD COLONIZERS AND HELP THEM TO STAY STRONG. (caplock error)

        • When I first found Gail’s blog earlier this year, Fast Eddy was so everpresent I thought he was part of the staff!
          I started to grow tired of his dominance in the comments – but always thought his point of view worth reading.

          Then I stopped seeing him and wondered where he went? If there was a controversial moment that tipped-the-scales and resulted in his expulsion, I was unaware.

          With that being said, if his absence isn’t by his choice, I’d like to add my voice to those in favor of a reconciliation.

          • He comes and goes. There seem to be a number of commenters that are less noticeable than Fast Eddy who come for a time, disappear for a while, and come back again. They seem to get tired of a particular line of discussion after a while. They may come back when there is a new crisis at hand.

          • He’s disappeared from all the sites I used to spot him on. I’m sure his business is claiming his attention these days.

      • Not in this case. The colonizers often seem to have lost their mojo. They are not proud of their achievements even when some pride is justified. GB, IMO, was the best colonizer of all. After ditching its colonies, it seemed to abandon much of the rationality and rigor of the old days. The old colonized, in turn, never acquired or were taught those qualities, and tend to flounder. If the old colonized stay where they are (and by no means try to migrate to the colonizer’s home turf!), it is offering numbers and political support, traded goods to the old, drooping colonizers. If they are as aware of limits, or are as innovative as they could be, a little systematic help from the old rulers will go a long way. This could be win/win instead of the lose/lose it’s shaping up to be. Craven materialism and zero sum games are not useful for the human animal just now (if they ever really were).

        • How true that summary is, Artleads: old, drooping Brits. That’s it exactly.

          Empire seems to have drained away all the energy and acumen of the race – much the same thing happened to the Venetians in their day.

          Although beginning as pirates and adventurers, more or less, the Brits did eventually evolve an ideal of fair rule, which was quite often kept up, although marred by racial arrogance.

          Now, they can’t even control their cities and protect them from gangs: it could also be the dreadful disease of being ‘too civilised’….

          • “it could also be the dreadful disease of being ‘too civilised’….” The former colonized could fix that in a hurry.

  7. Dr. Carrie Madej on Covid-19j:

    “You see these numbers and they’re scaring you with the numbers, but the numbers aren’t really meaningful when we have bad data. This is very concerning; we’re shutting down our economy, we’re really putting our food supply at risk; we’re already seeing effects around the world of people starving and dying because of this; our suicide rate is at an all time high; depression; domestic abuse—all of these things are happening. Private businesses are shutting down permanently—we could go on and on.

    And what scares me is what they are proposing to do to us—the population: Mandatory vaccination. That is the scariest thing to me. This is what I want to get people to think about; be critical thinkers and voice our opinions, all of us around the world. We need to voice our opinions about this. I don’t know if everybody knows this, but this is a brand new technology—not just one but many technologies—that they propose to roll out on the public. It’s brand new. We’ve never done this on humans before. We’re the experiment.

    People say “Whoa, they’re gonna go through and they’re gonna do their studies.” They have some studies going on, but they’re really small and tiny. As a scientist you can’t use that as something that’s safe for the public—you need large numbers of people. OK, so they are rushing through these studies. One of the studies may be done by October 2022. They propose to give us the vaccine—everybody—in January 2021. That’s before the study will be completed. So technically, all of us would be lab rats in an unknown setting.

    • She the data we are working with is not very good. The tests are not very good. Three labs in Florida reported 100% positive, for months on end. Some people who never took the test are getting letters saying that they have tested positive.

      The vaccines are brand new technologies. The studies are not really big enough. They won’t be done until Oct. 22, but they want us to start take the vaccines earlier. We are really part of an experiment.

      The video says more, but this is as far as i watched.

  8. https://www.lifesitenews.com/news/australian-state-law-empowers-officials-to-forcibly-remove-underwear-to-administer-vaccine?utm_source=top_news&utm_campaign=standard

    WESTERN AUSTRALIA, September 24, 2020 (LifeSiteNews) — The state of Western Australia has legislated to allow police officers or other “authorised officers” to restrain individuals and, if deemed necessary, forcibly remove their underwear in order to administer a vaccine.

    The so-called “reasonable force” includes the powers to:

    (a) to apprehend and detain the person to whom the direction applies (the relevant person) and take the relevant person to a place where the person is required to undergo medical observation, medical examination or medical treatment or to be vaccinated in accordance with the direction; and

    (b) to detain the relevant person at the place where he or she is required to undergo medical observation, medical examination or medical treatment or to be vaccinated in accordance with the direction; and

    (c) to restrain the relevant person —

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    (i) to enable a medical observation, medical examination or medical treatment to be carried out; or

    (ii) to enable the relevant person to be vaccinated;

    (d) to remove anything (including underwear) that the relevant person is wearing, if —

    (i) the removal of the thing is reasonably necessary to enable a medical examination or medical treatment to be carried out or, as the case requires, to enable the person to be vaccinated; and

    (ii) the relevant person is given a reasonable opportunity to remove the thing himself or herself, and refuses or fails to do so.

    On the Western Australia government website showing “Original Acts as passed” for Western Australian legislation, the text is included in the original 2016 Public Health Act. An updated version of the act as of September 12, 2020 is also available on the government website and includes the same text.

    • The “underwear” is important because it implies people being held face-down and injected in the large muscles of the glutes.

      They’ve had meetings about this. They’ve thought it all out. Every.little.step.

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