It takes energy to accomplish any of the activities that we associate with GDP. It takes energy to grow food: human energy, solar energy, and–in today’s world–the many types of energy used to build and power tractors, transport food to markets, and provide cooling for food that needs to be refrigerated. It takes energy to cook food and to smelt metals. It takes energy to heat and air condition offices and to power the internet. Without adequate energy, the world economy would come to a halt.
We are hitting energy limits right now. Energy per capita is already shrinking, and it seems likely to shrink further in the future. Reaching a limit produces a conflict problem similar to the one in the game musical chairs. This game begins with an equal number of players and chairs. At the start of each round, a chair is removed. The players must then compete for the remaining chairs, and the player who ends the round without a chair is eliminated. There is conflict among players as they fight to obtain one of the available chairs. The conflict within the energy system is somewhat hidden, but the result is similar.
A current conflict is, “How much energy can we spare to fight COVID-19?” It is obvious that expenditures on masks and vaccines have an impact on the economy. It is less obvious that a cutback in airline flights or in restaurant meals to fight COVID-19 indirectly leads to less energy being produced and consumed, worldwide. In total, the world becomes a poorer place. How is the pain of this reduction in energy consumption per capita to be shared? Is it fair that travel and restaurant workers are disproportionately affected? Worldwide, we are seeing a K shaped recovery: The rich get richer, while the poor get poorer.
A major issue is that while we can print money, we cannot print the energy supplies needed to run the economy. As energy supplies deplete, we will increasingly need to “choose our battles.” In the past, humans have been able to win many battles against nature. However, as energy per capita declines in the future, we will be able to win fewer and fewer of these battles against nature, such as our current battle with COVID-19. At some point, we may simply need to let the chips fall where they may. The world economy seems unable to accommodate 7.8 billion people, and we will have no choice but to face this issue.
In this post, I will explain some of the issues involved. At the end of the post, I include a video of a panel discussion that I was part of on the topic of “Energy Is the Economy.” The moderator of the panel discussion was Chris Martenson; the other panelists were Richard Heinberg and Art Berman.
[1] Energy consumption per person varies greatly by country.
Let’s start with a little background. There is huge variability in the quantity of energy consumed per person around the world. There is more than a 100-fold difference between the highest and lowest countries shown on Figure 1.
I have shown only a few example countries, but we can see that cold countries tend to use a lot of energy, relative to their populations. Iceland, with an abundant supply of inexpensive hydroelectric and geothermal electricity, uses it to heat buildings, grow food in greenhouses, mine “bitcoins” and smelt aluminum. Norway and Canada have both oil and gas supplies, besides being producers of hydroelectricity. With abundant fuel supplies and a cold climate, both countries use a great deal of energy relative to the size of their population.
Saudi Arabia also has high energy consumption. It uses its abundant oil and gas supplies to provide air conditioning for its people. It also uses its energy products to enable the operation of businesses that provide jobs for its large population. In addition, Saudi Arabia uses taxes on the oil it produces to subsidize the purchase of imported food, which the country cannot grow locally. As with all oil and gas producers, some portion of the oil and gas produced is used in its own oil and gas operations.
In warm countries, such as those in Middle Africa and India, energy consumption tends to be very low. Most people in these countries walk for transportation or use very crowded public transport. Roads tend not to be paved. Electricity outages are frequent.
One of the few changes that can easily be made to reduce energy consumption is to move manufacturing to lower wage countries. Doing this reduces energy consumption (in the form of electricity) quite significantly. In fact, the rich nations have mostly done this, already.
Trying to squeeze down energy consumption for the many countries around the world will be a huge challenge because energy is involved in every part of economies.
[2] Two hundred years of history shows that very slow growth in energy consumption per capita leads to bad outcomes.
Some readers will remember that I have pieced together data from different sources to put together a reasonable approximation to world energy consumption since 1820. In Figure 3, I have added a rough estimate of the expected drop in future energy consumption that might occur if either (1) the beginning of peak fossil fuels is occurring about now because of continued low fossil fuel prices, or (2) world economies choose to leave fossil fuels and move to renewables between now and 2050 in order to try to help the environment. Thus, Figure 3 shows my estimate of the pattern of total world energy consumption over the period of 1820 to 2050, at 10-year intervals.
The shape of this curve is far different from the one most forecasters expect because they assume that prices will eventually rise high enough so all of the fossil fuels that can be technically extracted will actually be extracted. I expect that oil and other fossil fuel prices will remain too low for producers, for reasons I discuss in Section [4], below. In fact, I have written about this issue in a peer reviewed academic article, published in the journal Energy.
Figure 4 shows this same information as Figure 3, divided by population. In making this chart, I assume that population drops only half as quickly as energy consumption falls after 2020. Total world population drops to 2.8 billion by 2050.
In Figure 4, some parts of the curve are relatively flat, or even slightly falling, while others are rising rapidly. It turns out that rapidly rising times are much better for the economy than flat and falling times. Figure 5 shows the average annual percentage change in energy consumption per capita, for ten-year periods ending the date shown.
If we look back at what happened in Figure 5, we find that when the 10-year growth in energy consumption is very low, or turns negative, conflict and bad outcomes are typical. For example:
- Dip 1: 1861-1865 US Civil War
- Dip 2: Several events
- 1914-1918 World War I
- 1918-1920 Spanish Flu Pandemic
- 1929-1933 Great Depression
- 1939-1945 World War II
- Dip 3: 1991 Collapse of the Central Government of the Soviet Union
- Dip 4: 2020 COVID-19 Pandemic and Recession
Per capita energy consumption was already growing very slowly before 2020 arrived. Energy consumption took a big step downward in 2020 (estimated at 5%) because of the shutdowns and the big cutback in air travel. One of the important things that energy consumption does is provide jobs. With severe cutbacks intended to contain COVID-19, many people in distant countries lost their jobs. Cutbacks of this magnitude quickly cause problems around the world.
For example, if people in rich countries rarely dress up to attend meetings of various kinds, there is much less of a market for dressy clothing. Many people in poor countries make their living manufacturing this type of clothing. With the loss of these sales, workers suddenly found themselves with much reduced income. Poor countries generally do not have good safety nets to provide food for those who are out of work. As a result, the diets of people subject to loss of income became inadequate, leading to greater vulnerability to disease. If the situation continues, some may even die of starvation.
[3] The pattern of world energy consumption between 2020 and 2050 (modeled in Figures 3, 4 and 5) suggests that a very concerning collapse may be ahead.
My model suggests that world energy consumption may fall to about 28 gigajoules per capita per year by 2050 (for a reduced population of 2.8 billion). This is about the level of world energy consumption per capita for the world in 1900.
Alternatively, 28 gigajoules per capita is a little lower than the per capita energy consumption for India in 2019. Of course, some parts of the world might do better than this. For example, Mexico and Brazil both had energy consumption per capita of about 60 gigajoules per capita in 2019. Some countries might be able to do this well in 2050.
Using less energy after 2020 will lead to many changes. Governments will become smaller and provide fewer services such as paved roads. Often, these governments will cover smaller areas than those of countries today. Businesses will become smaller, more local, and more involved with goods rather than services. Individual citizens will be walking more, growing their own food, and doing much less home heating and cooling.
With less energy available, it will be necessary to cut back on fighting unfortunate natural occurrences, such as forest fires, downed electricity transmission lines after hurricanes, antibiotic resistant bacteria, and constantly mutating viruses. Thus, life expectancy is likely to decline.
[4] It is “demand,” and how high energy prices can be raised, that determines how large an energy supply will be available in the future.
I keep making this point in my posts because I sense that it is poorly understood. The big problem that we should be anticipating is energy producers going out of business because energy prices are chronically too low. I see five ways in which energy prices might theoretically be raised:
- A truly booming world economy. This is what raised prices in the 1970s and in the run up to 2008. If there are truly more people who can afford homes and new vehicles, and governments that can afford new roads and other infrastructure, companies extracting oil and coal will build new facilities in higher-cost locations, and thereby expand world supply. The higher prices will help energy companies to be profitable, despite their higher costs. Such a scenario seems very unlikely, given where we are now.
- Government mandates and subsidies. Government mandates are what is maintaining demand for renewables and electric vehicles. Conversely, government mandates are part of what is keeping down tourist travel. Indirectly, this lack of demand relating to travel leads to low oil prices. A government mandate for people to engage in more travel seems unlikely.
- Much reduced wage disparity. If everyone, rich or poor, can afford nice homes, automobiles, and cell phones, commodity prices will tend to be high because buying and operating goods such as these requires the use of commodities. Governments can attempt to fix wage disparity through more printed money, but I am doubtful that this approach will really work because other countries are likely to be unwilling to accept this printed money.
- More debt, sometimes leading to collapsing debt bubbles. Spending can be enhanced if it becomes easier for citizens to buy goods such as homes and vehicles on credit. Likewise, businesses can borrow money to build new factories or, alternatively, to continue to pay wages to workers, even if there isn’t much demand for the goods and services sold. But, if the economy really is not recovering rapidly, these approaches can be expected to lead to crashes.
- Getting rid of COVID-19 inefficiencies and fearfulness. Economies around the world are being depressed to varying degrees by continued inefficiencies caused by social distancing requirements and by fearfulness. If these issues could be eliminated, it might boost economies back up to the already somewhat depressed levels of early 2020.
In summary, the issue we are facing is that oil demand (and thus prices) were far too low for oil producers because of wage disparity before the COVID-19 crisis arrived in March. Trying to get demand back up through more debt seems likely to lead to debt bubbles, which will be in danger of collapsing. There may be temporary price spikes, but a permanent fix is virtually impossible. This is why I am forecasting the severe drop in energy consumption shown in Figures 3 and 4.
[5] We humans don’t need to figure out how to fix the economy optimally between now and 2050.
The economy is a self-organizing system that will figure out on its own the optimal way of “dissipating” energy, to the extent possible. In physics terms, the economy is a dissipative structure. If the energy resource is food, energy will be dissipated by digesting the food. In the case of fossil fuel, energy will be dissipated by burning it. We may like to think that we are in charge, but we really are not. It is the laws of physics, or perhaps the Power behind the laws of physics, that is in charge.
Dissipative structures are not permanent. For example, hurricanes and tornadoes are dissipative structures. Plants and animals are dissipative structures. Eventually, new smaller economies, encompassing smaller areas of the world, may replace the existing world economy.
[6] This is a recent video of a panel discussion on “Energy Is the Economy.”
Chris Martenson is the moderator. Art Berman, Richard Heinberg and I are panelists. The Peak Prosperity folks were kind enough to provide me a copy to put up on my website.
A transcript of this panel discussion can be accessed at this link:
Mr Musk is a [censored] but on this one I think he’s right:
https://www.rt.com/usa/506551-musk-covid-tests-positive-negative/
Another article says, “he’s now waiting on final results from the polymerase chain reaction test, which he said will come back in 24 hours.”
He does have mild symptoms.
https://www.cnet.com/roadshow/news/tesla-ceo-elon-musk-covid-19-coronavirus/
“Nearly a third of South Africa’s workforce was unemployed in the third quarter of 2020, a 12-year high, as the continent’s most advanced economy was battered by the Covid pandemic, according to government figures released Thursday.”
https://au.finance.yahoo.com/news/africa-jobless-rate-hits-12-125355915.html
“…with Zimbabwe’s public education system collapsing and the pandemic taking a wrecking ball to their parents’ economic opportunities, children are spending whole days at the Odzi river, panning for gold or fishing for an evening meal.”
https://www.theguardian.com/global-development/2020/nov/13/i-need-money-for-school-the-children-forced-to-pan-for-gold-in-zimbabwe
“Zimbabweans mend shabby dollar notes amid economic crisis: One dollar bills are king in Zimbabwe, beset by a continuing economic crisis, as shoppers rely on them to buy their daily bread and other small purchases.”
https://www.independent.co.uk/news/zimbabweans-mend-shabby-dollar-notes-amid-economic-crisis-note-note-zimbabwe-traders-economy-b1722283.html
The unemployment rate has always been high in South Africa; now it is even worse.
“India has entered into the first recession in its history, as Covid-19 continues to ravage economies across the developing world.
“The gross domestic product of the world’s second-most populous nation contracted by a record 23.8 per cent in the three months until the end of June, and a further 8.6 per cent in the quarter until September, according to the Reserve Bank of India.”
https://www.telegraph.co.uk/global-health/science-and-disease/covid-plunges-india-recession-first-time-history/
“India’s finance minister on Thursday announced a $35.14 billion package to stimulate the economy by boosting jobs, consumer demand, manufacturing, agriculture and exports hit by the coronavirus pandemic…
“The announcement came a day after Prime Minister Narendra Modi’s Cabinet approved nearly 2 trillion rupees ($27 billion) in incentives over five years to manufacturers in 10 sectors, including automobiles and auto parts, pharmaceuticals, textiles and food products.”
https://abcnews.go.com/International/wireStory/india-announces-35-billion-economic-stimulus-package-74165709
Wow! India’s economy is in terrible shape!
I read a different article about India that said that during COVID restrictions, families found that they needed to layoff their household help. Instead, they were buying appliances like microwaves and clothes washers instead. These jobs won’t come back, leaving total demand for goods and services lower.
They may still hire someone to help watch their children, but quite a few other tasks can be handled by appliances.
“Japan is trying to encourage mergers among its ailing regional banks by introducing a sweetener for those that cut costs. Other advanced economies should pay attention: Rock-bottom interest rates mean Japan’s present is likely to be their future.
“The Bank of Japan is offering commercial lenders an extra 0.1 percentage point in interest on their deposits with the central bank if they reduce their overhead ratio by certain benchmarks, or merge or integrate their businesses.
“After 30 years of falling and even negative interest rates, many of Japan’s regional lenders have share prices of 0.2 to 0.3 times their book value—levels that would have been considered catastrophically low even a few years ago.”
https://www.wsj.com/articles/the-world-should-watch-japans-attempts-to-save-its-struggling-banks-11605261886
“Japan’s two biggest banks on Friday both reported first-half profits that tumbled by more than a third on a surge in costs from bad debts, highlighting the impact of the COVID-19 pandemic on the world’s third-largest economy.”
https://www.reuters.com/article/us-mufg-results/japans-top-bank-mufg-posts-34-slump-in-first-half-profit-as-pandemic-costs-weigh-idUSKBN27T0QQ
A person gets the idea that shareholders don’t really think that these banks have much of a future.
Japan seems to have gone into overshoot and collapse before the rest of the world. An ever-growing debt bubble has kept it from actually collapsing very much. This added debt has added a lot of jobs that don’t really produce much (roads that are rarely used, the lining of road embankments and stream beds with rocks; devices to prevent erosion along coastlines; ladies serving tea to overseas visitors).
“A Chinese mining firm that defaulted on its debts this week held an emergency creditors’ meeting on Friday to address potentially “huge credit risks”, as a series of defaults by top-rated state-owned enterprises (SOEs) sent shockwaves through China’s corporate bond market.”
“… the recent delinquencies triggered a selloff in debt issued by state firms in impoverished provinces, raising fears of a brewing credit crisis.”
https://www.aljazeera.com/economy/2020/11/13/china-corporate-debt-defaults-trigger-concerns-of-broader-crisis
“A number of Chinese banks are cutting their holdings of corporate bonds, with some focusing on notes sold by state-owned firms, after a string of defaults roiled the market, according to people familiar with the matter.”
https://www.bloomberg.com/news/articles/2020-11-13/china-state-banks-said-to-cut-corporate-bond-exposure-amid-rout
I recall that the government of China has been focusing its lending on State-Owned Enterprises (SEOs) in recent years. Banks have been focusing their lending on these SEOs, under the impression that governments would prevent these companies from collapsing. These companies hire a disproportionate share of workers; they are not very efficient.
Now banks are encountering a number of counter-examples to the belief that the government will prop up these enterprises when they fail. One is a big coal company. This indeed could be the beginnings of a major credit crisis, if there is not a way to prop up these SEOs.
“Russia’s southern region of Ingushetia is about to become the first ever region in the country to go bankrupt, independent newspaper Novaya Gazeta reported Wednesday.
“The region’s debt has soared to 125% of its annual income thanks to spiralling costs incurred by tackling the coronavirus pandemic. Russia’s regions are running out of money…”
https://www.themoscowtimes.com/2020/11/12/russias-ingushetia-region-on-brink-of-bankruptcy-a72025
“The COVID-19 pandemic is pushing Ukraine towards its worst recession in decades and may push over nine million people into poverty, according to a recent UN study.
““Reportedly, more than 80 per cent of households have lost income, and over 40 per cent have at least one family member who has lost a job since the beginning of the pandemic,” reads the UN report.”
https://www.ukrinform.net/rubric-economy/3135352-covid19-pandemic-pushing-ukraine-towards-its-worst-recession-in-decades-un.html
Ukraine seems to be another example of the issue that it is the poor countries that do worse, when the effects of a pandemic strike.
Another debt problem!
Americans, are you ready for a mandatory comprehensive four- or five, or six-week national lockdown? Just to flatten the curve, y’all understand.
And of course, purely coincidentally, the lockdown means you won’t be allowed to go out and mostly peacefully protest the election result.
Ron Paul and Daniel McAdams talk about Joe Biden’s plans for dealing with the “not very serious” pandemic should he manage to slither into power. He also gets a dig into Matt Drudge.
Oh well, January and February are cold and snowy in most of the US. Many people may feel the safest thing is to take to your basement and hibernate until Groundhog Day.
Lots of good information from Dr. Paul as usual.
https://youtu.be/ZZCPQ4OBX_g
Sorry, I didn’t have time to listen to much of this. I got as far as Osterholm recommending a fairly strict lockdown for 4 to 6 weeks, which would likely be until Biden gets into office.
One thing I read elsewhere is that there were enough votes for the Libertarian Party that they would have changed who would have been elected president, if the Libertarians had all voted for Trump instead. Splitting the vote between two conservative candidates tends to lead to a result that neither is elected.
They would not have voted for trump anyways.
Same thing for Ralph Nader during the 2000 circus; that effectively finished off Nader’s long career.
I always said if the Republicans had any sense (they are not called the “stupid party” for nothing), they would donate enough money to the Green Party that it could run a credible presidential campaign. That may be the only way we can avoid becoming a one-party system at the federal level.
Someone needs to have a talk with the Pope.
“In November’s monthly prayer intention, Pope Francis called on all the good Catholics of the world to “pray that the progress of robotics and artificial intelligence may always serve humankind.”
https://www.zerohedge.com/technology/pope-francis-urges-followers-pray-ethical-robots
This(me) old mans lament: Our spiritual leaders need to stick to basics and stop messing in the temporal world. There is a time to be agreeable, there is a time to say , “no.” This is the same old fart who ignored the following:
“A Vatican investigation into ex-Cardinal Theodore McCarrick has found that a series of bishops, cardinals and popes downplayed or dismissed reports that he slept with seminarians, and determined that Pope Francis merely continued his predecessors’ naive handling of the predator until a former altar boy alleged abuse”
If these guys are so naive as to believe this stuff they, well, enough.
This is the bedrock of western civilization, supporting this filth is a mortal sin.
Dennis L.
The pope should read “Deus X,” by Norman Spinrad.
The pope and his buddies are expecting 53>< robots.
https://thecawkwalk.files.wordpress.com/2017/03/hot-robot.jpg
Luckily they are in good company together with me. The only difference, I'll just skip those child 'bots. 😎
Send your child bots to me! And if you have a child bot of Kokonoe Rin, I’ll pay double.
Well , Folks, That’s All🤑😱Folks…the Fat GuPowell has long said that the economy might need more stimulus from both the government and the central bank to get through the crisis. He again echoed this sentiment on Thursday.
“My sense is that we will need to do more and that Congress will need to do more,” he said.y is Singing!
The economy as we knew it might be over, Fed Chairman says
By Anneken Tappe, CNN Business
Updated 4:57 PM EST, Thu November 12, 2020
The Covid-19 pandemic brought the economy to a screeching halt, and while it has started its long road to recovery, the economy we knew is probably a thing of the past, said Federal Reserve Chairman Jerome Powell on Thursday.
“We’re recovering, but to a different economy,” Powell said during a virtual panel discussion at the European Central Bank’s Forum on Central Banking.
The pandemic has accelerated existing trends in the economy and society, including the increasing use of technology, telework and automation, he said. This will have lasting effects on how people live and work.
……..Generally speaking, inequality holds the economy back, the central banker said.
“Even after the unemployment rate goes down and there’s a vaccine, there’s going to be a probably substantial group of workers who are going to need support as they’re finding their way in the post-pandemic economy, because it’s going to be different in some fundamental ways,” Powell said.
…..Powell has long said that the economy might need more stimulus from both the government and the central bank to get through the crisis. He again echoed this sentiment on Thursday.
“My sense is that we will need to do more and that Congress will need to do more,” he said
.https://amp.cnn.com/cnn/2020/11/12/economy/economy-after-covid-powell/index.html
looks like the great reset is coming along with more money printing unless trump is president then he will oppose the great reset
no doubt the Mini Reset is coming soon.
thanks ‘erb.
“different economy” = smaller economy.
“will need to do more”
= we’re going to have to keep giving money to thousands of zombie companies to keep them from failing, although lots of them are going to fail eventually.
= we’re going to have to keep giving money to millions of unemployed until they get employed again, although lots of them will never get a job again or at least never get another good fulltime benefited job again.
Definitely! The economy is going to be worse off, with more wage disparity, even if the COVID-19 problem otherwise goes away.
Someone, sorry can’t remember who, posted an interesting article a couple of weeks ago by Neil Mccoy-ward. Never heard of him before, but he seems to be on the ball. Last weekend I watched his ‘Great Reset’ video (27 Min):
https://www.youtube.com/watch?v=eNsW4ssOBxU
which begins very oddly with a YT warning:
“The following content has been identified by the YouTube community as inappropriate or offensive to some audiences.
Viewer discretion is advised
I understand and wish to proceed”.
Never seen that before.
Coincidentally, just as I opened YT yesterday, Neil posted another video which explains the odd warning from the YT authorities:
“Great Reset Video – Banned” (6 mins)
https://www.youtube.com/watch?v=PeovAN2Fcyc
If you have not seen them, watch the second video first. Neil explains that even the BBC did an article featuring his video as fake news. Goebbels would have been envious.
Also, same theme but different person / media:
“Own Nothing and Be Happy”: The Great Reset’s Vision of the Future
https://off-guardian.org/2020/11/12/own-nothing-and-be-happy-the-great-resets-vision-of-the-future/
I only read a few of the comments. People seem to agree that a great reset is in the making but it has zero chance of success, mainly due to energy constraints.
Okay, I watched these, since I’ve heard people talking about “the Great Reset” and wondered what it meant. I am not impressed. McCoy-Ward’s thesis seems to be that members of the World Economic Forum (Davos) are plotting major social changes, not necessarily benevolent (dark allusions are made to facial recognition and brain implants), and have taken advantage of CV-19 to push their agenda. The centerpiece of their plans is a global shift to digital currency / blockchain, which may or may not erase (“reset”) your savings. After all, why else would so many finance barons want to schmooze with people talking about green energy or what have you? In general, the Davos group is presented as a conspiratorial organization led by founder Klaus Schwab, rather than as a loose-knit talk shop / networking opportunity for the rich and powerful. Oh, and there is some nonsense about how the floodwaters touching the feet of the Leshan Giant Buddha in Sichuan (China) portends a dark future for humanity.
even without the Great Reset speculation, most real up-to-date information seems to portend a dark future for humanity.
More like the generic and quite dull human chauvinism. Klaus and his buddies in the “club” supported by the useful worker and dumb machine. Yawn.
Folks, it’s time to think about it in terms of evolutionary processes and forget about the rapacious primate business for a while.
“Now we must search diligently for those creative deviants from whom alone will come the conceptualizations of an evolutionary designing process which can assure us an open ended future — toward whose realization we can all participate.”
― John B Calhoun
“… the conceptualizations of an evolutionary designing process …”
Another loudmouth intellectual proving he can neither write nor think.
Except that if you visit the WEF site, or read Schwab’s book, it’s not “loose shop talk” at all.
I couldn’t see much point in the Leshan Giant Buddha part in the video either. I associate that with the rise of the Yangtze River, which the WEF had nothing to do with.
I think the idea was that this is a supernatural omen.
I agree, that bit was odd but no-one is perfect. At the time the monument’s feet got flooded, that was a big story in China.
There’s a secret doorway between the feet of the giant Buddha, and behind that door is the secret lair of evil mastermind and faithful Qing Dynasty retainer, Dr. Fu Manchu.
https://1.bp.blogspot.com/-epyv7EvYwxc/WpfSh6kiPLI/AAAAAAAAnCk/8UfFUd_isC0JVwZD5WSIUCSdx_aIIh_uQCLcBGAs/s280/qing-map.jpg
Yet I have been coming across corporate web sites that host material about the “Great Reset”… so they certainly seem to believe in it, even if you don’t. This is about 5 minutes’ worth of duck-duck-go-ing:
https://www.mckinsey.com/featured-insights/world-economic-forum/davos#
https://greenchemicalsblog.com/2020/06/05/the-great-reset-a-post-covid19-bioeconomy-agenda/
https://www.accenture.com/us-en/blogs/chemicals-and-natural-resources-blog/wef-mining-metals-resilience-covid-19
https://bostonblockchainassociation.com/the-great-reset/
https://www.santander.com/en/press-room/insights/capitalism-reset-and-new-social-contract-post-covid-19-crisis
Notice how as early as March (right around the time of the first lockdowns in the US), Covid-19 was being explained to us by our betters as a *RESET* (rather than a mere economic speed-bump with a recovery at some point): https://www.forbes.com/sites/joshbersin/2020/03/24/the-big-reset-making-sense-of-the-coronavirus-crisis/
Why would they leap to that conclusion so early on?
This is called “predictive programming”.
Obviously, the concept of predictive programming itself needs to be labeled a
conspiracy theory and squelched by all right-thinking people (random site found after two seconds):
https://u.osu.edu/vanzandt/2018/04/18/predictive-programming/
Thank you Lydia, I had never heard about “predictive programming” before but it fits perfectly what I believe in. In my opinion the Marvel’s Avengers are some of the best predictive programming ever.
That said it’s becoming every day more obvious that the Great Reset is on the way and the elites are pushing their agenda, wether we believe it or not.
I recommend strongly the book “The reset” that was written in 2017 by Cathal Haughian. This guy used to have a blog but it was closed as soon as the WEF introduced the Great Reset. Fortunately the book is still available on Amazon, or I guess (there are 2 others, “The bullshit machine” and “before the collapse” that are an introduction to “the reset”).
Cathal visited us hereon several occasions around the time he published that book. He was expecting the Reset to have been accomplished before now. So he was a bit ahead of his time, but I think he got the general gist about right.
I remember him commenting here. Cathal seemed somewhat crazy, but maybe its just his style. His books do acually get pretty good ratings on amazon. Possibly it’s just the worst conspiracy nutters giving a review.
Does someone else also recommend his books?
Cathal Haughian on Oct. 28
After the election, irrespective of which candidate wins, the Bankers will have little to no reason to keep the markets elevated.
The System will enter a new phase in preparation for the Reset event; this phase will be extremely volatile politically and in the markets.
We should see lock downs across the planet become increasingly common in November and December, and a total lock down by January.
This total lock down will morph in martial law and supply shortages.
As such, the markets will probably collapse in a historic and unprecedented manner.
Should you sell?
It’s up to you, I think cash is better option than Crypto. With cash you can buy food, alcohol, fuel.
During the Reset, 1000$s maybe considered a lot of cash. You can buy a lot of stuff with 1000 bucks.
The key here is that you stay mentally stable, and focused on the survival of your family and community. I think food and booze is best, entertainment devices are a good idea too. I also anticipate flash crashes in the Gold and Silver price and if you see a bargain you should snap it up.
100 ounces of silver maybe considered a small fortune by 2022. Historically, you could buy lots of goodies for 100 ounces of silver .
The Reset is your fate, and I am the author of your Fate.
I wish you well and good luck.
Source
https://www.tradingview.com/chart/BTCUSDT/8WFv5Z1A-The-Reset-is-your-Fate/
Saludos
el mar
I’m glad to have some news from Cathal! Thought he had disappeared. I also ignored that he visisted Gail’s blog, but not surprising.
He taught me so much, I’m really grateful.
These changes sound quite worrying. With the amount of COVID-19 around right now, I can pretty much believe them. Do you have a link where you found the quote?
Yup. The “reset” theme is now one step away from a MSM blitz. Kudos Lidia very perceptive.
Not sure if it has been noted here already, but Biden’s “Build Back Better” signage (with which I think I have seen BoJo as well) is lifted from the WEF: https://www.weforum.org/agenda/2020/07/want-sustainable-infrastructure-fast-let-the-private-sector-come-to-you/
Notice how they pretend to “respond” to the very “demand” they themselves invented: “given the new global focus on “building back better” from COVID-19, government should use the opportunity to … bla bla bla “
There was a time when national governments at least pretended to have their own independent national policies. Now they are very much all singing from the same UN hymnbook. They can’t even be bothered to come up with anything creative offf their own bat.
We have “Build Back Better” in Japan too. Although the context here is a little different because this country is prone to major earthquakes, tsunamis, typhoons, flooding, landslides, and—last but not least—volcanic eruptions. So “Build Back Better” is a snappy sway of saying “making buildings and infrastructure stronger, safer and more resilient in the face of nature’s onslaughts”.
This is from 2019:
Abstract
‘Build back better’, as a policy, is an integral part of planning for disaster resilience in Japan. This policy puts emphasis on addressing the underlying causes of disaster vulnerability during the recovery process so that people, infrastructures and assets can withstand the impacts of future disasters. Enforcing ‘Build back better’ policy offers a range of benefits: it prevents loss of life and property from future disasters; it stimulates economic activities; and it generates co-benefits. However, as a policy, countries around world do not have a common understanding of what ‘build back better’ means, including how to achieve and sustain it. This article reviews the case of Japan and argues that enforcement of ‘Build back better’ policy demands regular drills and simulations, making it part of the ‘culture of resilience’.
https://journals.sagepub.com/doi/full/10.1177/0019556119844560
Spot the odd man out!
https://static-3.bitchute.com/live/cover_images/9c7qJvwx7YQ2/Dux9HPq940DL_640x360.jpg
Tim, can you digitally fit a cat in the middle?
PS. He wonders why his video was banned from YouTube. I assume it was because he seemed to be promoting conspiracy theories concerning CV-19 and/or its eventual vaccine.
What part of it was theory?
The most interesting thing about these bannings, etc., is that “They” never deign to say what exactly you’ve done to breach their terms, nor will they particularly identify the offensive content.
You know the sin. Questioning the narrative NOT ALLOWED. Anyone questioning the narrative is a qanon wacko. Your not a qanon wacko are you….? They believe in free speech as long as it is their free speech.
Interesting video (first one) giving some background about the World Economic Forum, who is involved, and what they are saying.
At 6:00, it shows Bill Gates in 2017 talking about a pandemic (either planned or natural) being the one thing that could reduce world population by more than 10,000,000. Gates mentions that the world is not prepared for such a pandemic.
A segment starting about 15:03 has Klaus Schwab (head of the World Economic Forum) talking about the fact that the WEF is involved with the vaccines. Also, the world can never expect to go back to where it was before, even after the vaccine is available.
A segment starting about 19:05 is talking about the Fourth Industrial Revolution, which is something from Klaus Schawb’s book by that name. It includes “brain enhancements,” among other things. This involves drilling holes in the head of people to insert some device, which seems to be being tested in pigs now. At some point, supposedly we can’t tell the difference between a human and machine. This is hard to believe.
Later, the video talks about an expected problem of all of the current currencies losing value, and an international fiat currency, not too different from bit coin, needing to take their place. This is another version of a story we have heard elsewhere.
The video has a lot of dramatic scenes of protestors and violence of various sorts. I expect that this, by itself, might be what got the filmmaker in trouble.
Gail, I haven’t watched the video yet, but this idea of brain modification is not at all hard to believe. A lot of people who are supposedly smart (eg., Ray Kurzweil) are big believers in this stuff. I may have recounted that a PhD. acquaintance of mine from MIT/Tufts wanted to have his head frozen with the notion that it would be resurrected. Elon Musk is touting “Neuralink” (that may be what the video is showing) and nobody has put him in a straitjacket.. yet.
Probably around 1980, I attended a seminar held by Marvin Minsky, the “father” of AI. You have to understand that hundreds of thousands of people have been enthusiastically beavering away on stuff of this kind for decades: trying to make machines human prosthetics or humans machine prosthetics. A lot of people really find these ideas appealing and worth exploring, “Six-Million-Dollar-Man” style.
Minsky is something of an IYI, but this 13-min. TED talk is not too bad, and -by sheer chance- he starts off talking about pandemics and disease-spreading, as well as population challenges: https://www.ted.com/talks/marvin_minsky_health_and_the_human_mind/transcript#t-7973
Worth watching so you can understand “their” interest in “evolving” beyond the limits of the human form, and the underlying narcissism involved. (He lived to be 88, so all the hand-shaking didn’t do him too much damage.)
Another MIT friend back in the 1980s was doing work studying neural responses in cats by poking their brains with electrodes while they were alive with their craniums opened. Thankfully I didn’t witness this. The researchers retained this to be very important work in understanding how the brain is “wired”, because they want to replicate and/or “hack” such “wiring”. They don’t perceive human problems to be ones of biology so much as problems of engineering. (Most people would deem cochlear implants a good thing.. that’s currently kind of the retail tip of this iceberg.)
The interesting thing the Minsky video reveals is the extent to which they really see *themselves* as outside all of the problems, looking in!
thanks for that perspective.
this amused me:
“A lot of people who are supposedly smart (eg., Ray Kurzweil) are big believers in this stuff.”
“A lot of people who are supposedly smart (eg., Ray Kurzweil) are big believers in this stuff. I may have recounted that a PhD. acquaintance of mine from MIT/Tufts wanted to have his head frozen with the notion that it would be resurrected. Elon Musk is touting “Neuralink” ” — yeah, sure. History has been moving opposite of Kurzweil’s “singularity” prediction. Innovation is slowing, not accelerating. Baseball great Ted Williams also had his head frozen, decades ago, in hopes it can be resuscitated in some sci-fi future. He’s still waiting. Elon Musk advocates all sorts of impractical ideas. And as you mention, AI was all the rage in the 80s, before hitting the rocks in the 90s. Now they are trying to bring the project back from the dead, but I am not convinced the odds of success are any better this time.
Fusion, MSR/thorium, fast breeders and “energy too cheap to meter,” near earth asteroid mining, Mars colonization, “the Singularity,” head freezing, AI, the hyperloop, the hydrogen economy — most of this stuff is one step removed from perpetual motion machines, and all these ideas have been hanging around for quite a while now with little or no progress. I first read about the hopelessly impractical hyperloop in the 1990s, AI in the 1980s, cyborgs (basically what Kurzweil’s “singularity” is about) in the late 70s to early 80s, and everything else on the list dates to at least the 1970s and often the 1950s. These pipe dreams keep getting recycled and rehyped, but never come to anything. The flying car first received widespread attention in 1935 and keeps cropping up from time to time, but don’t get your hopes up.
and thanks for that perspective.
the human imagination is almost limitless, but unfortunately the process of turning imagination into reality has severe limits.
“Anything one man can imagine, other men can make real.”
Jules Verne, in 1869. The delusion goes back a long, long way.
My friend is a big Singularity enthusiast (Singularitarian?). He once asked me to reassure him that Covid-19 wouldn’t affect the Singularity. I felt sure it wouldn’t.
While the squabble still climbs towards the climax of comedy, the AI overlords floor it.
https://www.racingjunk.com/news/wp-content/uploads/2014/02/Antron-Brown-Top-Fuel-Dragster-NHRA.jpg
https://static.timesofisrael.com/www/uploads/2018/06/robot1-300×480.jpg
Ultimately they cannot accept the unpalatable truth (to intellectual narcissists) that they are organic beings in a bio-physical system which will swallow them – and their brilliant intellects – up as if they had never been, after only a short span of existence.
Played upon by forces they cannot control, doomed to suffer and be discarded, just like those poor sawn-open cats.
Through experimentation they try, arrogantly, to assert themselves against Fate. Tough luck……
But what futile and inhuman Hell will they make for us, with their parody of true creativity, before they are done?
Or, even worse for their egos, they can’t conceive or accept that they are mere 3D projections of the source or principle that creates and sustains the Universe, Life and Everything, or that they are the biologically active equivalents of whirlpools—tiny dissipative systems destined to go round and round and round for a few short years before dissipating down the plughole or plunging off the edge of a waterfall in the River of Life. 🙂
I can’t recall where I came across this statement but it seemed to cut to the heart of the matter: transhumanists want to transform because they suck at being human.
Minsky is alleged to have been one of Epstein’s fellow travellers. Epstein was a big donor to MIT’s Media Lab and other futuristic endeavors, and supposedly wanted to set up a breeding program of some kind.
Peter Thiel (PayPal, Palantir) is another techie who is into the singularity and super-longevity. https://www.inc.com/business-insider/peter-thiel-is-taking-human-growth-hormone-to-live-longer.html
Funny how Minsky would complain about population pressure and in the next breath talk about how we should find out how to get to live to be 200 years old or whatever.. This is the IYI talking.
As I have stated, it surely seem like dumb people are more interested in petty breeding programs, mistaken as eugenics processes, than the smart ones.
It’s really simple, leave it to nature. The female does the selection.
https://mmstudies.com/scholars/wp-content/uploads/sites/6/2017/02/1024484-300×300.png
This comment is really in reply to Lidia, but the comment didn’t fit there.
I have read that the life expectancies of single men are quite a few years shorter than those of married men. I expect that a big part of the difference is that women can tell who are “losers.” Also, home cooked food is much better for a person than the fare that most single men would find.
The study I read was several years ago. I don’t know how this has changed, with more couples not marrying.
I remember that the shorter life expectancy issue did not happen for women, or certainly not to the same degree.
Gail, yes, that is why the socialist engineering idiocy is so damaging to the sensitive female trying to “sniff” out what the real deal is. Poor blokes indebted to the gills, driving around in fancy cars and living in rickety potemkin facaded sheds attracting women they shouldn’t be near in the first place.
Pro tip for the utopists:
LEAVE THE FEMALES ALONE FOR FSCK SAKE.
I’m sick and tired of the perpetual fakery transpiring all matters of male/female interaction, throwing a spanner into the works of natural selection and the progression of mankind.
“To-morrow, and to-morrow, and to-morrow,
Creeps in this petty pace from day to day
To the last syllable of recorded time,
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life’s but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
Signifying nothing.”
@Gail, A bit of a correction. It is divorced men who die younger than married men, not bachelors, so this cannot be explained by women shrewdly avoiding the losers.
Also, the old truism that one commenter raised about women being the choosers is true for most species, certainly those without pair bonding (which is rare in nature), but in humans the choosing certainly does go both ways. Isn’t this obvious? Many men may be willing to sleep with almost any woman, but very few men would marry any woman who would have them.
Our great leader in Scotland, Nicola Sturgeon, has serious delusions of grandeur. On tonight’s BBC Scotland news at 6:30 pm, main news item was Sturgeon telling Trump to pack it in and admit defeat re the presidential elections. Who outside of this small country listens to anything Sturgeon says?
I cannot find any follow-up item on the BBC news website, odd for a main news item, but I hope word does not get to Trump, otherwise we might find the tax on whisky imports to the USA going through the roof.
It doesn’t sound like a very diplomatic thing to do. Perhaps she wants to curry favor with Biden and his followers.
Biden is of Irish origin so it is only natural that the Scottish leader wants to build a rapport to the new govt
It becomes clearer when you remember that her arch-enemy, Boris Johnson, is something of a Trump ally.
Not really. Even though Trump is not out of the office yet, BoJo called T “the former president”.
Slip of the tongue, I guess? (“Outgoing president” would be how I would have phrased it. “Lame duck” would also be correct, if less diplomatic.) Trump’s departure is inconvenient for BoJo due to Brexit negotiations–Biden has indicated that he expects the UK to abide by the Good Friday accords, and that it should not expect help from the USA if no agreement with the EU is reached.
Don’t misunderestimate the Trump
A plump performer on the stump
He dumped the frump and primed the pump
And this time round he thumped the chump
Incidentally, in every election, my mom always voted straight Republican down the line. But this time round she voted for Biden—a serious anomaly.
I was quite shocked, I can tell you. It was totally out of character.
I’m absolutely certain this never would have happened if mom was still alive.
🙂
Some Europeans (and Australians) say the anti-Trump bias of their “mainstream” media, just like ours, is ubiquitous and unrelenting. This may influence their politicians. The North Atlantic elite (including its diaspora elements) is just one big, cozy club. They march in lockstep on almost everything, and resemble one another more than their non-elite co-nationals.
This is really a matrix sounding situation. We could despair, but before Trump and his gun rights and rust belt supporters we had fewer allies. Seems like we on the outside have to stick together somehow.
There is an article ‘Phases of Bacterial Growth’, address: https://www.coursehero.com/sg/microbiology/microbe-growth
Maybe you are missing ‘stationary phase’ in your charts, when you are projecting future energy usage and population.
Maybe we are just arrived at this phase, or we are at the completion of ‘log phase’. What do you think of that phase?
A stationary phase wouldn’t work for an economy because many things go wrong. Population would likely still grow, making goods and services per person, fall. Debt couldn’t be paid back with interest. Diminishing returns would mean that more of the goods and services produced would need to be used for investment, to maintain production. Investors would lose money. Taxes governments would be able to collect would fall.
A stationary economy with 7.8 billion persons will still deplete huge amounts of buried energy resources every year. Stationary is not a synonym for sustainable or renewable. It would just buy a very few years.
Re: fresh Scottish independence polls
There have been three new opinion polls on Scottish independence released over the past week, and all show majority support for independence – making fourteen polls in a row now this year. Survation last Friday found 54% support to 46% against, and today Panelbase and YouGov have fresh polls.
UK has seen a fall in energy consumption per capita in recent decades and, as Gail explains in her article, dissipative structures tend to ‘find ways’ to devolve to smaller, less centralised, optimal structures as dissipation declines.
Boris is particularly ‘between a rock and a hard place’ on Brexit. EU refuses any trade deal unless UK ‘caves’ on fishing rights – ‘no deal’ would likely increase general support for independence, while Scottish fishing communities, among the last to support UK, would likely swing to independence if UK caves.
Meanwhile the apparent election of Biden bodes badly for UK. Boris insists that his Internal Markets bill will go ahead even though Biden has openly ‘poo-pooed’ any USA trade deal in that case. ‘No deal’ + no USA deal would likely further ‘rocket’ Scottish independence support – while a sea border, sans IMB, would further distance NI from UK.
As Gail has explained, dissipative structures tend to ‘find ways’ to do what they ‘want’ to do according to physics, and Boris is beset with dilemmas on all fronts as the UK ‘pulls apart’ in all directions.
> Yes in the lead in two new Scottish independence polls
Fifty-six percent of Scots now back independence according to a stunning new poll.
Commissioned by the pro-independence Scot Goes Pop website, the Panelbase survey found that just 44% of Scots would back staying in the union, down one point on the firm’s last poll.
56% is the highest ever Yes vote recorded by Panelbase.
It’s now the 14th serious poll in a row to put support for Yes ahead of No.
The 13th was released earlier on Thursday, when YouGov put Yes on 51% – down two points on their last poll.
The Panelbase poll revealed that 42% of people who voted Labour in 2019, and 28% of people who voted Liberal Democrat, would now back independence.
In grim news for the Unionist side, 23% of No voters from the 2014 referendum are now backing Yes, while only 8% of Yes voters have switched to no.
Both the Panelbase and YouGov polls asked voters which party they’d back at a Holyrood election.
After 13 years of government the SNP remain miles ahead of their opponents….
https://www.thenational.scot/news/18867366.yes-lead-two-new-scottish-independence-polls/
If Scotland leaves, will that not be a blow for the Labor Party?
It will be up to England what government it elects just as it is up to Scotland what government it elects. If LP wants to govern in England then it needs to win there. If the English want LP then they will get LP.
Scottish MPs have altered the outcome of UK general elections only twice in the 18 since 1945, those of 1964 and 1974, so 1 in 9 GEs. The result has been determined by English MPs in the remaining. Scotland has not voted TP since 1959 GE but often ended up being ruled by them anyway.
So, with independence, Scotland can have the government that it votes for, and so can England, LP or TP, which is how it should be in a ‘democracy’.
Canadians (everybody everywhere in fact) beware:
Politician raises alarm over Trudeau Govt’s plan to build COVID Quarantine/Isolation’ camps.
OTTAWA, Ontario, October 9, 2020 (LifeSiteNews) – An Ontario politician is raising alarm over the Trudeau Liberal government’s plan to expand COVID isolation/quarantine facilities coast to coast.
Randy Hillier, Independent Ontario MPP for Lanark, Frontenac & Kingston, expressed concern over the “Federal Quarantine/Isolation sites” in the provincial question period late this week.
He asked the Doug Ford government of Ontario if they knew of “how many of these camps will be built, and how many people does this government expect to detain.” He pointed out how documentation shows that the “Federal Quarantine/Isolation sites” could be used for “other requirements” besides for COVID-19.
“So your government must be in negotiations and aware of these plans to potentially detain and isolate citizens and residents of our country and our province, so speaker, to the Premier, where will these camps be built, how many people will be detained, and for what reason, for what reasons can people be kept in these isolation camps, and I’d like to have the Premier assure the people of Ontario…,” said Hillier, whose microphone was cut off before he could finish.
The whole idea of isolating people for 14 days, after they come back from someplace else, seems to lead to the idea of building big camps for all of these people. Or maybe it is more than this. Or, if the economy is depressed, I suppose building these facilities could be a make work project. I know that Australia has had trouble with detention facilities being a place where COVID is passed around.
I think in the US, the move now is to go to the use of quick tests for COVID-19 instead of all of the long detentions. Then perhaps only a three day detention (if that) is needed.
I’m afraid that the isolation/quarantine facilities are not intended for travelers as much as for citizens who refuse to be vaccinated. And i suspect that for these, that facilities can easily become internment camps.
This could happen, I suppose. Or for some other group deemed undesirable, for other reasons.
Covid Macht Frei!
The Aussies should never have let the government restrict their gun rights.
A nation of Ned Kellys would make the social engineers think three times before sticking their noses and needles where they’re not wanted.
https://youtu.be/mog-FLREy7E
“I think OPEC is in big trouble. With Libyan production increasing by one million barrels per day and the possibility of Iran increasing production under Biden, and the virus driving demand down even further, it just don’t look good.
Also, Russia could easily increase production by about 1.2 million barrels per day if they decided to do so. Production capacity will greatly outpace demand for the next 5 years… at least. Oil is up today. Brent at $44.44 per barrel. That price is based on optimism about the new vaccine. But nothing there will happen for months. A build in storage will soon be obvious. If I was a trader I would be selling. The price will be lower soon, and remain lower.”
http://peakoilbarrel.com/opec-october-2020-production-data/
I am afraid that you are right. Prices are likely to head lower. Every exporter needs exports, regardless of how little revenue it yields.
Biden is likely walking into a very difficult situation.
Gail,
As someone who is versed in things medical, my understanding of economics is quite rusty. I had instruction on the concepts of supply and demand and inelastic vs elastic supply and demand and the basics only. Interestingly, when I took my economics courses around 1975, Limits to Growth had been introduced by the professor.
I think it would be a great help to many of us if you could clarify some of the discussion. EROI to me means a return on financial investment only where oil can theoretically still be extracted at a dollar loss if monetary resources can be diverted away from other more productive uses. I say this even though energy supply is the ultimately most critical component of production.
Then there is the thermodynamic limit imposed by EROEI, whereby one expends more energy trying to obtain a barrel of oil than is contained in the net energy produced by that barrel.
According to traditional supply and demand economics, increasing scarcity of oil and the increasing costs of producing should make the price rise, except that it doesn’t. Hence it appears our the traditional supply and demand model is wrong. There is a missing negative feedback loop which has not been incorporated into the model.
I think your next essay should address this new dichotomy and discuss why this tradition model is wrong.
I have no more training in traditional economics than you do. Instead, I have figured out how the system really works, on my own. I have “picked up” a lot of understanding about how traditional economists think the economy works, but whenever someone’s theory is mention, I need to look it up.
Economists need to produce forecasts that please politicians. It is also tied to the peer reviewed literature method. Whatever happened in the past, is likely to happen in the future. Energy resources are not considered any different from any other resources.
Running out and high prices are considered likely outcomes, without stopping to realize that energy prices are embedded in everything we buy and use. If a person buys a train ticket, part of the cost is relates to the fuel to operate the train. If a person buys food, part of the cost is fuel used by the farmer and by the trucker transporting the food to where it is used. If it is refrigerated or stored, that adds energy consumption. We don’t stop eating or going to work if energy prices are high. Gasoline purchases by the few people in the world rich enough to purchase gasoline for their cars doesn’t change this situation much. Nearly all energy consumption is deeply buried inside products we buy, including solar panels, chairs and tables, and vehicles. What we stop buying is discretionary items, not energy products, sending the economy into recession.
Subsides are the big way to get around non-economic products, such as wind turbines and solar panels.
You are right, I probably do need to write post specifically about this issue.
There is a good summary here https://consciousnessofsheep.co.uk/2020/11/06/the-narrative-problem-after-peak-oil/. The explanations that Gail, Tim Morgan, Nate Hagens, John Michael Greer and others give fit the historical data better than economic modelling. I regard these authors as offshoots of ecological economics, a field founded by Georgescu-Roegen, Herman Daly, Brian Czech and Joan Martinez Alier and currently well represented by Steve Keen, Tim Garrett, Julia Steinberger, William Rees, etc. https://en.wikipedia.org/wiki/Ecological_economics The gist of ecological economics is trying to model the economy in a way that is coherent with thermodynamics and systems theory, or in other words, in a way that is coherent with reality. If you try to model society in a way that is compatible with physics you are bound to get better predictive power than economics, and this is Gail’s case. As you can see it does not matter that she has not studied classical economics. Early economists like John Stuart Mill were on the right track. Modern economics instead is a form of moral philosophy created to justify elite rule and wealth following the English enclosures: https://economicsfromthetopdown.com/2020/06/18/can-the-world-get-along-without-natural-resources/
The Hill’s Group ETP model is another exposé into that realm of thermodynamic modeling of economics.
Yes, but I am not convinced that what they are doing is really right.
All models/concepts of reality are more or less flawed.
However, insights can be drawn nonetheless.
I like the work of Tim Watson and his article, “The Narrative Problem After Peak Oil.” (You will notice he mentions me in the article.) I am less enthusiastic about the work of most of the others you list. I associate Ecological Economics with a lot of very questionable things, like advocacy for a steady state economy and putting a price tag on ecological destruction, such as from an oil spill. William Rees is the author of an Ecological Footprint theory that sounds sort of green, but gives a misleadingly favorable view of where we really are, when it comes to overshoot.
I have been more associated with the Biophysical Economics branch of research. These are the EROEI folks, including Charles Hall. They tend to pick up a lot of peak oil misbeliefs in their theory, however. I am on the editorial board of their journal, along with a huge number of other people. https://www.springer.com/journal/41247/editors
In a way, it is helpful not having studied very much classical economics. I have worked in a financial industry (insurance) for many years, so I have a lot of practical experience, setting up models of how insurance companies are expected to work, for example. I understand Mandelbrot and “fat tailed” distributions. I have learned a lot about how pension systems work, including government “pay as you go” pensions.
So Gail, would you opt for $985/mo. Social Security payments starting in two years, or $1400/mo. payments starting in seven years?
Asking for a friend. 😉
I added it up back when I was 62 and it appeared that I would be ahead until I reached the age of 75. At that point the lower payments for the first five years fall behind the higher payment from starting later. The longer you live the more benifit there is to starting later. I have six more months till I hit 75 and then it’s payback for the early start.
The way things are going in the world, I’d say get it while you can.
Hard to see a USA in seven years, much less social security.
recently, I have had to consider this.
take it early, and you gain about $12,000 for 5 years = $60,000
after that, you would be losing about $6,000 per year ($515 less per month) until death.
so after 15 years, (age 77 is what I assume), you would have 10 years of losing 6k per year and you would be about even.
then from age 77 onward, you lose.
you of course have other factors such as your health.
but how good do you feel about the SS system in the year 2037?
I would say, wait the 7 years if you possibly can. Who knows what may happen in the world–we may be unlucky, maybe it will continue more or less the same as now.
Right now, I would think that taking Social Security sooner would be better than later, because there is more of a chance that the whole system won’t be around for very long.
Thanks.. I’m thinking now along the lines of what $985/mo. in the nearer term might buy in terms of personal resiliency (assuming they are still able to cut checks in two years). I hope we are all still here to yack about it when I have to send in the paperwork!
Whats the $ going to buy now vs then with the printing presses humming… You already know the answer.
Thank you for this explanation Gail. I agree that the ecological footprint framework is far too optimistic, but it is already orders of magnitude better than both mainstream economics and mainstream discourse on the environment. In my opinion the main contribution of ecological economics which makes your writings close to theirs is that ecological economics introduced the concept of social metabolism by analogy with the metabolism of organisms and other dissipative structures, which as you know use energy and matter to create order inside themselves, and, in the case of biological dissipative structures, grow and multiply.
Matteo, I agree. The “Inclosure Act” of 1773 marks the watershed; the moment when the balance of the economy shifted from production to rent seeking. The global oligarchs are the last stage in this process; the largest dinosaurs of a dying epoch.
I think Microeconomics 101, the Law of Supply and Demand, and the graph showing the downward sloping Demand curve and upward sloping Supply curve for a Barrel of oil, can explain much of Gail’s thesis on one page. Covid-19 caused the demand curve to shift left resulting in Surplus oil in storage, price drop to clear out the surplus and attendant supply reduction. As she stated, “Energy is the Economy” so as energy demand, consumption, supply and price all decline, GDP and lifestyle will decline. This will lead to social unrest.
Gail, please review the graph and see if the classical model may in-fact answer the questions raised above.
https://economicsfromthetopdown.com/2020/08/05/supply-and-demand-deconstructed/
Supply and demand explain nothing because free markets are not free, the concept of utility is phantasy, as well as the concept of individuals as free agents. You can toss your economics 101 down the toilet and flush.
I am familiar with the downward sloping demand curve. I have explained why it really is not appropriate in the case of energy supplies, including oil. This is an image I included in one presentation.
https://gailtheactuary.files.wordpress.com/2018/09/33-low-energy-supply-affects-both-supply-and-demand.png
If it doesn’t appear, try this link.
Thanks for your reply Gail–But, in our situation today, the Demand curve moved to the left suddenly, the opposite of your picture, i.e. Covid has reduced demand for a given price level. Q dropped, and supply and price followed as the graph would predict. The supply curve doesn’t move as quickly as Demand did so supply and Price depend on Demand, Not vice-versa. Seems like reality fits the model perfectly. What am I missing?…Matteo? The above reader comments reveal that demand for petroleum products dropped suddenly, and 10 refineries (supply) are being shut-in==>supply and price dropped as a result. Looks like Econ 101 to me.
“Subsidies are the big way to get around non-economic products”… I think this is at the heart of everything and it brings to mind Debtonomics by Steve From Virginia.
My two cents worth: Moby Dick. It turns out that whale oil powered lighthouses and that more lighthouses were needed to increase whaling….a feedback system? Feedback isn’t good, not to the ears anyway.
I like some of Steve From Virginia’s insights as well. He is also not an economist. I know that he has been an orchid grower, perhaps among other things.
Hubbs….you said, “According to traditional supply and demand economics, increasing scarcity of oil and the increasing costs of producing should make the price rise, except that it doesn’t. Hence it appears our the traditional supply and demand model is wrong”
No, dust off the Econ book and look at what happens in the Supply/Demand graph when the downward sloping demand curve shifts left as a result of demand destruction (from COVID-19 and falling wages). There is a temporary surplus as producers slow down production to clear out the surplus. But the “positive feedback loop” kicks in and oil prices must fall further to clear the surplus, likely below the cost of production (break-even) seeking an equilibrium price. The demand destruction from COVID-19 and falling wages results in lower consumption, prices, supply and here’s the kicker……since “Energy is the Economy” GDP and lifestyle destruction===> SOCIAL UNREST!
Any Econ Profs out there want to weigh in?
https://memegenerator.net/img/instances/64506096.jpg
Except:
https://en.wikipedia.org/wiki/John_Forbes_Nash_Jr.
“John Forbes Nash Jr. (June 13, 1928 – May 23, 2015) was an American mathematician who made fundamental contributions to game theory, differential geometry, and the study of partial differential equations.Nash’s work has provided insight into the factors that govern chance and decision-making inside complex systems found in everyday life.”
Nash probably made reasonable insights. Traditional economics has huge problems. There is not a lot of point to learning it in detail, except possibly to explain what is wrong with it. Even that use is very questionable.
EROI is short for EROEI.
Where is Duncan Idaho?
He is around. Some of his comments don’t make it through moderation.
With tiny death numbers in China and India and huge death numbers in EU and US it looks like a targeted bio-weapon. Maybe just a test/demo shot to say surrender or die.
maybe in India, they are out in the sun more?
vitamin D, you know?
just asking.
Curry. All the species. Which means poorer Indians who can’t afford the species are more likely to die
In Africa and India, there’s a higher consumption of anti-malarials, etc., like HCQ. Also, less testing and reporting? Lower proportion of 85+y.o.s being kept in nursing homes, for sure.
that’s a good subtle point about India.
when the citizens of such a country rarely reach “old age”, then perhaps the virus has less readily available bodies that are more easily killed.
Those are half the supposed numbers, right there. In Minnesota, it was 81%.
https://www.forbes.com/sites/theapothecary/2020/05/26/nursing-homes-assisted-living-facilities-0-6-of-the-u-s-population-43-of-u-s-covid-19-deaths/
The nursing home death statistics were from May. I would expect that state differences have evened out somewhat since then.
Here’s one state, the first one I came across.. happens to be in my area: http://indepthnh.org/2020/10/29/131-new-covid-19-cases-4-deaths-thursday-nursing-home-cases-deaths-listed/
Through the end of October they have reported 482 deaths in the state. While they list the deaths in individual care homes, they don’t provide a total. I added them up and got 341. 341/482 = 70.75% of deaths in this state which were attributed to Covid-19 occurred in care homes. Maybe I just got “lucky”..? I’ll look some more.
In Georgia, covid-labeled deaths in care homes are listed as 2762 as of 11/12/20.
https://dch.georgia.gov/announcement/2020-11-12/long-term-care-facility-covid-19-report
The State of Georgia lists 8403 total deaths with covid:
https://dph.georgia.gov/covid-19-daily-status-report
So that’s 32.87%.. a lot less than in NH but still significant.
It’s possible we aren’t going to be able to gather much that is meaningful when looking at such different places, even if we were to have reliable reporting and testing. I fell into the data=>knowledge trap for a minute! 😉
I expect that a lot of nursing home residents who died of Covid or from the the medical treatment or the lockdowns imposed to deal with Covid, later went on to vote in the Election.
>>huge death numbers in EU and US
I think that you are exaggerating, just a bit.
My impression is that India is not able to count either cases or deaths very well. There likely are a lot more cases and deaths than appear.
China has sufficient control over its population that it can keep COVID-19 cases and deaths down. The level of control it has is not one any other country would want.
America doesn’t have a covid problem, it has an obesity problem. Old obese people can’t handle this virus and the USA leads the world in obesity.
and I would expect that obese people aren’t romping in the sunshine on a daily basis.
which would mean that the obesity crisis is amplifying the vitamin D crisis.
“With tiny death numbers in China and India and huge death numbers in EU and US it looks like a targeted bio-weapon. Maybe just a test/demo shot to say surrender or die.”
What huge death numbers?
https://euromomo.eu/graphs-and-maps/
everylegalvote gives Trump 35 and a solid win
https://everylegalvote.com/country
305
they have an interesting claim that fraud has been detected in 7 states.
from various news sources (not MSM), I have seen that the alleged fraud has always been to the benefit of the D side.
lots of time until the electoral college meets on December 14.
USA!
USA!
does anyone think/feel that the USA is becoming a banana republic?
It always was. The election of 1876 was fragrantly stolen from Sam Tilden’s own eyes.
becoming?
I think we became one ever since our only export was the dollar.
I’d pick a banana republic (USA) any day, than the bandit monarchies (of EU).
I see from the comments that we are generally avoiding the US presidential election but that references to Joe Biden as the next president are surfacing here and there.
Meanwhile, in the Mother of Parliaments, PM Boris Johnson has branded Donald Trump the “previous president” and hailed his “refreshing” conversation with successor Joe Biden.
As the election has yet to be certified, this could present Boris with some embarrassment if the Donald is eventually certified as the winner, although Boris is used to embarrassing situations. He must be hoping and praying that Britain is not going to be sent to the back of the queue for a US/UK free trade agreement, as the most recent previous president Barack Obama warned the Brits might happen in a flagrant example of interference in Blights internal affairs just before they voted “Leave”.
It also could be problematic for Joe Biden, as that would make him liable to prosecution under the Logan Act, the same law that was used to justify the ongoing prosecution and persecution of General Flynn
The Logan Act is a piece of legislation enacted by the United States Congress in 1799 that forbids private citizens from engaging in unauthorized correspondence with foreign governments.
Blowing the dust off of this ancient document, long confined to the catacombs of the Library of Congress in DC, I see that it reads:
Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.
I don’t know whether or not the act covers congratulatory phone calls or not, but in Flynn’s case, a phone call to a Russian official made in December 2016 has been cited as ample reason to go after this member of the incoming Trump administration because that administration did not officially begin until January 2020. Remember: The intent behind the Logan Act was to prevent outsiders from undermining the president’s foreign policy goals. If Biden is eventually not certified apart from as a senile dementia patient and is found to have been masquerading as the incoming president with foreign nation’s political leaders and officials—doing the full Borat, to coin a phrase—the repercussions could be … choose your own adjective!
We had the debate few weeks ago here and one of the top scenarios called for very aggressive vote fraud strategy needed for that challenger faction, which actually did occur in reality in key battleground states and counties, not mentioning the msm.
Even the Chinese gov cautiously declined to honor title that “basement creature” (*interestingly in part on their corruption leash) by “POTUS elect” or any other prevailing msm nonsense, go figure.. So Boris alone steps on very thin ice indeed, most likely being ill-advised by some City “..don’t you know it’s a done deal..” insiders..
—
* apart from mere geopolitic restraint it likely again confirms their unwillingness and unpreparedness at this point of time for any “great reset” volatile outcome – their publications talk ~2035 and beyond at the earliest..
Likely CCP is making hay over the spectacle of Western ‘democracy’ in its domestic propaganda media.
‘Have a look at this… this is how USA decides its ‘government’ for the next four years… one of them has clearly lost his bonkers… they do not have good word to say about each other… riots in the cities… c 19 still rampant after all this time… they are cheating… they cannot even agree who won… he says that he will cancel all of the last one’s policies… he says that they cheated… all of the media is mocking him… a right spectacle… look at this… the fbi is involved now… now the security bloke has resigned in protest… omg… so much for that lark… we do not want any of that nonsense here, thank you very much… or in HK… thanks but no thanks… we are trying to have a civilisation here…’
Isn’t that the way the US have been since.. It started.. It’s a feature, not a bug.
Without the nuttiniess of the US, China would have been nothing, just some commie nutjobs with hubris performing the usual crimes against mankind.
I see, the USA is immutable and the source of all good. That is quite the idol that you have there.
It is an observable, absolute, fact that the CCP is a construct of the west. Yes indeed, the whole little machine shop floor of the west is in China, even the CCP criminals are useful idiots.
The CCP criminals should never have built that silly little firewall and ventured out into the telecoms business and various adventures in the south China sea. The usual hubris before the downfall.
The jank PLA gear would be dispatched of within hours if the Commie Cronies dare to fiddle with Taiwan.
https://memegenerator.net/img/instances/26666915.jpg
And yet, given the opportunity, every CCP member would gladly send his assets and family to the USA. (Guess where Xi Jinping’s daughter is right now.)
OK, USA is like heaven, everyone wants to go there… except those who don’t.
Like the CCP party members.
Trump’s own party heavyweights aren’t in his corner on this one and when I read James Baker, who is 90 years old, throwing him under the bus, it is obvious Trump is going no where in his fruitless fight. But that’s his nature 😂, and let him be dragged out of the White House crying.😂
https://thehill.com/homenews/campaign/524715-james-baker-says-white-house-should-stop-trying-to-end-vote-counting
“We never said don’t count the votes,” Baker told the Times. “That’s a very hard decision to defend in a democracy.”
“For one thing, our whole argument was that the votes have been counted and they’ve been counted and they’ve been counted and it’s time to end the process,” Baker said. “That’s not exactly the message that I heard on election night. And so I think it’s pretty hard to be against counting the votes.”
President Trump’s campaign this week filed lawsuits in Michigan, Pennsylvania and Georgia to halt vote counting as part of a multi-state legal fight
Biden is handling it well enough. He knows what he’s dealing with
You might be right, but only to a point, the first 24-48hrs of dead silence from the Repub site and or even calls for the “same camp” conceding immediately was interesting pressure cooker situation. Now, more individuals chipped in, first in sort of amicable – gesture support only, later with more gusto. Perhaps the realization they still have weeks and months to mount counter action had to sink in first, that’s why the msm barrage to concede was so hard, sort of one and only chance to bamboozle everybody. Nevertheless, we well know these presidential guys are at least two or three levels (lower in pecking order) separated from the real power anyway, so the games played with or against them are complex, often silly, usually out there in plain sight nevertheless.
if the first recount by hand, probably Georgia, adds tens or even hundreds of thousands of votes to Trump, then there will be the potential for historic levels of chaos.
not a prediction.
but by the end of next week the results should be revealed.
from now to January 20 could be a fairly normal period of presidential transition, or could be a sort of truth-is-stranger-than-fiction period.
soon enough, we will see.
the difference in energy policy between Ds and Rs is significant.
especially consequential if Biden “wins” AND the Ds gain in the Senate up to 50-50.
then Harris is the tiebreaking vote for the Senate.
so the Ds would have a giant flashing green (pun!) neon sign to proceed with fracking bans and a Green New Deal.
Biden/Harris will be told what to do.
definitely they will defer to their superiors.
4 years of energy policy is at stake.
The two remaining senate seats are both in Georgia.
I read that in the past, 100% of runoff elections have gone to the Republicans in Georgia. This would be easy to believe, because people don’t like bothering to go out to vote in a run-off election. Historically, it has been a relative handful of dedicated suburban voters who have decide to go out and vote.
There may be enough interest in this election to change things. If not, Georgia’s two Senate seats may both be taken by Republicans. If a lot of poor people from the city of Atlanta and around the state vote, then the senate seats could be taken by Democrats.
Democrats are trying to organize people to temporarily “move” to Georgia long enough to apply for absentee ballots for the runoff election which they can then send in from their “away” (real home states). Andrew Yang is one of the people touting this. Kind of sad that they are unembarrassed to engage in this form of cheating. Needless to say, working-class people with jobs don’t have the time or money to engage in such shenanigans.
Now NYT editorialist Tom Friedman (The Mustache of Understanding) is telling people to do this on CNN:
https://youtu.be/vgiFIhwbcNA?t=31
Biden’s “victory” is based on voter fraud on a historically unprecedented scale apparently coordinated across multiple states. Even old Joe Frazier, the boxer, got up out of his coffin after 5 years just so he could fill out an absentee ballot for the other Joe (Biden), a legally documented resurrection from the dead.
Baker is in the Bush party. Of course they can’t stand trump. But it doesn’t really matter now since no one can change a thing.
The GOP has always hated Trump.
Actually, who becomes the Prez of USA now is like who wants to become the capital of Titanic now. A screwed up economy, a China which thinks USA is now an old fart who is getting less and less relevant, etc.
It provides a very interesting circus and distraction from the hard reality most people face now.
I think that you are right (even if spell checker isn’t very good to you). Whoever becomes the new president will become the captain of the Titanic. It is not really a job anyone would want.
Right now, it’s not even about which party controls the White House. It’s about the integrity of the voting process. One Aussie newscaster claimed that America easily has the most corrupt voting process in the developed world.
Go drink some more kool aid and cool off.
Trump lost because he’s a narrsistic POS who couldn’t care less about anything or anyone about himself.
Out of curiosity what has to be missing from someone’s life to devote oneself to such a flawed “leader” and I put that in quotes because he ain’t no leader.
He lost put your big boy panties on and move on.
I didn’t vote for Trump but 70+ million did.
the R side is consistently more reasonable about energy policy, and that is less about Trump and more about the irrational D ideas of Green New Deal etc.
only a banana republic would not want to go thru hand recounts and vote audits.
if Biden “wins” because of fraud, then he will be an illegitimate president, which really is not about Trump but about what happened in the early hours of November 4.
in some states, hundreds of thousands of votes for Biden and zero for Trump.
no big deal. An illegitimate POTUS is nothing in the long run where we all enter the nothingness of eternal death.
oh, but hey, have a nice day!
You have to be kidding me. The R’s have a more reasonable energy policy? What is the policy – to burn as much as fast as possible while subsidizing with unplayable loans and low interest rates.
Did you forget our little recent adventures into Iraq and Cheney’s secret energy co meetings prior to the war.
Do you not remember Carter implementing fuel saving measures and Reagan undoing them.
Everyday is a great day when you live in reality.
“You have to be kidding me. The R’s have a more reasonable energy policy? What is the policy – to burn as much as fast as possible while subsidizing with unplayable loans and low interest rates.”
yes, exactly.
that is the best that can be done in this endgame of the imminent decline of net (surplus) energy.
if I can remember, then tomorrow I will take my car for a drive and gun the gas pedal more than usual in honor of you.
bAU tonight, baby! (oops, I did it again.)
Hah! But’s that’s just what Gail said has to happen for us to hang on a little longer.. more consumption! Consumption too low = price too low = death of the industry.
Right! We need more demand for energy, to keep things going. This is more consumption. Buy a big truck and drive it a lot.
iF i’M FOLLOWING THE ISSUE SOMEWHAT CORRECTLy…If IC ends universally and abruptly (which is somewhat hard to imagine) we would not wish to be alive. The more resilient it is the better. But the more bridges to nowhere that the lack of creativity, vision, and imagination for a more enduring alternative makes “necessary,” the more likely it is for very wicked elites to subjugate (even for a short time) most of us in the IC world. And the more a “collapse now and avoid the rush” paradigm is able to be self sufficient and cohesive, the better its chance of being left to manage itself. If that is indeed the case, what is holding that alternative back is the overwhelming absence of creativity, vision, imagination (and some reasonable understanding IC’s predicament). So that HUMAN set of issues, barring some kind of miracle, seems poised to bring on the draconian alternative, followed by “la deluge.” It could go better than that.
Many people seem to think that if they just repeat “Trump lost” and “President Elect Biden” enough times, that saying it a lot will make it so. This election is far from over.
Been noticing that, and you’ve firmed up my impression of it. But it’s simple once the understanding clicks. America is not the America that the prattling class go on about. Something fundamentally different has arisen. I think Gail would say it’s at an energy impasse. but along with that are all its systems. Trump pushed the door open to fundamental change, and settling the election might be something to drag out for years while we try to regroup. In that case, yes, the election is FAR from over. Like him or not, outdated legalistic systems notwithstanding,Trump is our president. We need a reset, but not the Bill Gates/Dr. Jekyll type.
Yes, back to LTG Scenario 3, while letting the creative geniuses loose on the energy predicament, no holds barred.
Obvious low-hanging fruits:
1. Animal based foodstuffs (go plant-based)
2. Home energy effiency (heat pumps, insulation)
3. Rail instead of roads
4. Single child policy (Can’t afford em’, dont have em’)
5. The end of entitlements for princess useless eater, beside food and shelter
6. The end of socialist engineering
7. Life-long learning
Thank you, Kowalainen, a good prescription. However, I do disagree with your proposition 4, but then I’m personally biased. Can’t afford ’em, don’t have ’em, is excellent advice, but look in the mirror: can afford ’em, do have ’em. The result would surely be a gradual improvement in the human stock, as the productive and prudent passed on their genes, and the others didn’t.
But let me propose a compromise: stop subsidising breeders who can’t afford ’em with government welfare. After three generations of that policy, we are inundated with the feral children of mothers whose ‘husband’ is the state. It has been a disaster, and indeed a planned disaster. It will take three generations to undo; or, of course, one generation of collapse.
“Opec slashes oil demand outlook on Covid restrictions:
“Opec said demand for its crude oil next year will be lower than initially anticipated, putting greater pressure on producer countries to reconsider their plan to unload more barrels on the market from January.”
https://www.ft.com/content/ff79bf26-bc3f-4a83-be74-638b3123fc74
“Russia tapped the global debt market on Thursday for the first time this year by opening the books for two sovereign euro-denominated Eurobonds, in a bid to secure additional funding, two financial market sources said.
“Moscow has been seeking additional sources of funding to make up for a budget shortfall caused by lower oil prices and the coronavirus pandemic.”
https://www.reuters.com/article/us-russia-eurobond-yield-idUSKBN27S13Y
“The International Energy Agency (IEA) on Thursday cut its 2020 global oil demand forecast, citing a resurgence of the Covid-19 pandemic, with vaccines unlikely to have much of an impact until well into next year.”
https://economictimes.indiatimes.com/markets/commodities/news/iea-cuts-2020-global-oil-demand-forecast-on-virus-surge/articleshow/79190400.cms
Oil producers everywhere are having problems. The Russian government doesn’t usually borrow, so this is unusual.
“Mounting commercial real estate losses [US] threaten banks, recovery.
“Big changes in downtown property values could cost banks, bondholders. Regulators are raising alarms.”
https://www.washingtonpost.com/business/2020/11/11/commercial-real-estate-economy/
“New York’s hotel industry is in crisis, with four out of five properties underpinning commercial mortgage bonds now showing strain under the weight of coronavirus and investors worrying whether hoteliers will be able to make good on their loans.”
https://www.ft.com/content/409e25fb-c18d-4a0c-a21b-3b0ea790a6f2
“A growing number of lodging and retail property loans are in forbearance or special servicing, portending a wave of defaults, foreclosures, or discounted loan payoffs and sales. Because the mortgages are nonrecourse, many underwater borrowers can simply walk away from the properties by mailing the keys to the lender.”
https://www.cpexecutive.com/post/cmbs-deals-continue-in-face-of-uncertainty/
The hotel and retail property prices could be way down, leading to potential big losses on property loans. If the properties are non-recourse, it is the lender who is stuck with the loss.
“Drilling activity in the UK oil and gas sector this year is set to slump to the lowest level since the 1970s, with lower activity expected to negatively impact production in 2021-22, and fears for the competitiveness of the overall North Sea basin, industry group Oil & Gas UK said Nov. 11.”
https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/111120-uk-oil-and-gas-output-to-take-hit-as-drilling-slumps-to-lowest-since-1970s-oguk
“Brussels looks set to lock the City of London out of European markets from 1 January…
“City A.M. understands the UK’s financial services firms are heading toward the default position of having to deal with individual host countries’ regulatory regimes from next year… The decision will be a serious blow for the City of London.”
https://www.cityam.com/brexit-eu-set-to-shut-out-the-city-of-london-from-1-january/
“Britain is “sleepwalking into a debt crisis” after a steep rise in emergency borrowing by low- and middle-income households to cope with the Covid-19 jobs crisis.”
https://www.theguardian.com/money/2020/nov/12/debt-crisis-warning-uk-records-steep-rise-emergency-borrowing-coronavirus
“Croydon Council has gone bust after running up £1.5 billion in debt, according to local MP Chris Philp.
“In statement the council acknowledged it faced “severe ongoing financial challenges” and all new non-essential spending would be scrapped.”
https://www.itv.com/news/london/2020-11-11/cash-strapped-croydon-council-goes-bust-after-running-up-15-billion-in-debt
Lots of UK debt default possibilities.
I can believe that UK oil production will be down.
“China’s interbank bond market regulator said on Thursday it is launching an investigation into Yongcheng Coal & Electricity Holding Group Co Ltd after the state-owned firm defaulted on a bond payment.”
https://www.nasdaq.com/articles/china-bond-market-regulator-to-investigate-state-owned-coal-firm-after-default-2020-11-12
“Chinese coking coal import prices have increased to a record premium to Australian export prices as hopes dim for a January end to China’s import ban, with Beijing today saying the onus is on Canberra to improve relations.”
https://www.argusmedia.com/en/news/2158805-hopes-dim-for-australian-coking-coal-as-china-digs-in
I imagine low coal prices are at least part of the problem.
The troubles with Australia are, in part, to try to keep China’s coal prices up. Except the second article mentions the fact China is still importing coking coal from elsewhere, so there may be more to the story.
Gail, do you have an idea if where we are in terms of EROEI worldwide, or better yet, country to country? I believe I read a chart that roughly compared levels of industrial civilization to where they were in terms of EROEI
As far as I can see, the only EROEI that matters is the overall world EROEI. Globalization and the big amount of high EROEI coal added to the mix helped the world EROEI, starting in 2002. But China’s coal EROEI was degrading, and more low EROEI renewables were being added to the mix. So by 2012, world EROEI was clearly too low.
Actually, rising debt at ever lower interest rates is a way to hide falling EROEI. It has been happening since 1980. It is not clear to me that world EROEI has been high enough since 1980. More and more debt and more and more technology have been used to try to hide the EROEI problems the world has been facing since then.
EROEI analyses don’t tell us very much, in my opinion. It is a little like looking at calorie counts of different foods. Certainly, oil products are more energy dense than berries. But our bodies will not live well on fat from cows or pigs, but fat from fish seems to be OK, at least as part of a mix in our diets. And our bodies still need berries, even if they are hard to pick and process with adequate EROEI. EROEI analyses don’t tell us enough. Wind and solar can act as fossil fuel extenders, in small quantities, but if they had to act alone, the battery requirements would make them worse than useless.
I believe that EROEI analyses indirectly grew out of Limits to Growth modeling. If I remember correctly, once the share of resources that went into reinvestment exceeded 15%, the system tended to collapse. That would be sort of like an overall delivered EROEI of 6.7. But it is not really quite the same thing. Adding low quality resources like wind and solar is like adding undigestible food to the diet. It sort of works, until it doesn’t.
The current situation loooks like a real hell: the lack of healthcare, the people do not understand that anti-coronavirus measures adopted by the governments are necessary, the worsening economic situation, the aggressivity towards other people, various false beliefs spreading among the people…
This really does not look like something with a positive outlook. Our world is imploding. There is no doubt about it.
https://www.worldometers.info/coronavirus/
Well, it’s certainly a difficult situation in the US. At that link are Covid-19 stats with the US leading the rest of the world in failing to understand how the virus is transmitted, so the numbers are skyrocketing! If you scroll down click on yesterday it shows new cases in the US at 142,808 with 1,478 deaths. That’s by far the highest it’s ever been. The question is; Is that due to declining IQ’s? Or, the willingness to ignore physician recommendations in favor of FOLLOWING political leaders that need to establish a divide with the other party? Or it could be a combination of both but it’s certainly obvious as being something because the US is charging to a higher level while India, with a population of 1.3 billion has handled Covid-19 in such a smart way, their numbers have been declining for several weeks now. They are on the way to controlling it.
okay, I clicked on “yesterday” and added up all the EU cases and deaths, and they were much higher than the USA.
what the frac is wrong with Europeans?
what the frac is wrong with Europeans?
Low levels of vitamin D?
Or, as I’ve been pointing out for sometime, is fiendish a fiendish plan underway by the Elders in league with Dr. Fu Manchu to destroy and depopulate Europe and America.
Either way you look at it, once again it’s time for a David Bowie classic, because once again the late great Thin White Dude was prescient.
“This ain’t rock ‘n’ roll; this is genocide!”
https://youtu.be/DKvF5L6S4Ak
Chrome, just look at any site that addresses a “casedemic”. There is no reason to think a bunch of “cases” are super-deadly while fewer cases means fewer deaths. Once you figure out the case-demic scam, things will settle into place along the lines of a normal or at least not-unseen flu.
There’s a real problem with people thinking (with the flu, with covid, with global warming, with whatever global issue) that *they are in control*. The people in India are not vastly more smart nor vastly less smart than those in the US or Norway… you only think they are for reasons that are politically comfortable to you.
What does a “positive case” really mean? Is it based on an antibody or PCR test? This article, written by a Swedish doctor, explains the details and pitfalls of these two tests:
Here is an important part:
“One thing that’s important to understand at this point is that PCR is only detecting sequences of the viral genome, it is not able to detect whole viral particles, so it is not able to tell you whether what you are finding is live virus, or just non-infectious fragments of viral genome. If you get a positive PCR test and you want to be sure that what you’re finding is a true positive, then you have to perform a viral culture. What this means is that you take the sample, add it to respiratory cells in a petri dish, and see if you can get those cells to start producing new virus particles. If they do, then you know you have a true positive result. For this reason, viral culture is considered the “gold standard” method for diagnosis of viral infections.”
More at:
https://sebastianrushworth.com/2020/11/06/how-accurate-are-the-covid-tests/
There is also the issue of false positives and false negatives and the cycle threshold used in the PCR test which is also discussed in the article.
Here is a youtube video from Prof. Vincent Racaniello, a leading virologist at Columbia University, in which he describes his false positive result from a PCR test that used a large number amplification cycles. He provides a very good explanation of the PCR tests.
https://www.youtube.com/watch?v=Lk64Zwcj3W8
so, if you are tested positive, be sure to ask what is the number of cycles used and get a follow up test to verify.
This article and video make you question how many of the reported “positive cases” are real and will lead to contracting COVID.
I agree! I have been keeping up with this from the start. The disease may be real, but the testing/numbers is certainly a hoax. This will never be understood by a populace which is even more innumerate than they are illiterate. It all goes by the “feelz”, which is what policymakers rely on (or respond to). We really aren’t as far away from testing for evidence of witchcraft as we would like to think.
This article is from only 13 years ago, so someone would remember it, you’d think: https://www.nytimes.com/2007/01/22/health/22whoop.html
I got diagnosed with COVID 19 on Sunday and it has been a bitch…I was one who didn’t believe the severity of it but now I know. I would not want this at 60 or older. I think people saying they had it with no symptoms are misdiagnosed. The cases are much higher than are being reported in the u.S so as not to scare people. But as I did back of envelope calculations of people getting tested health department overwhelmed etc
My 16 yr old daughter contracted it with a “positive” PCR test, or at least had brief symptoms of fever, headache and myalgias and from there I got the same type of symptoms only much worse a few days later and which lasted for about 2 months. The most lingering one was the wooziness. As a 66 year old retired physician, I suspected this was indeed SARS COV 2 as I had never had this constellation of symptoms with any sickness I had had in the past. I took no vitamins, no treatment, etc and just let it run its course.
Thanks for sharing the story, could you pls describe [why you did not] opt for the usually suggested cocktail based on strong dosages of vitamins D3 & C (~150-500%), various supportive herbs and natural antioxidants etc.. ?
I had similar symptoms to yours but they were so lite (so far) I thought it was probably and merely related to changing seasons – general autumn exhaustion..
Take Ivermectin stat.
See page 6 & 7.
Good luck.
https://www.evms.edu/media/evms_public/departments/internal_medicine/EVMS_Critical_Care_COVID-19_Protocol.pdf
Thanks Jeremy!
ps lets not forget about the Zinc as the study suggests..
I hope you are better soon!
These are a couple of charts I made with respect to reported COVID-19 seven day average cases and deaths, per 100,000 people. I am showing the EU, US, and Sweden, since Sweden seemed to have a different approach earlier. Based on reported cases, it looks like all of the places are seeing new cases skyrocket. This should not be terribly surprising, because with fall weather, people are inside more. Also, viruses seem to thrive in cool weather. The EU seems to be ahead of the US and Sweden.
https://gailtheactuary.files.wordpress.com/2020/04/eu-sweden-and-us-new-vodi-cases-to-nov-12.png
Deaths lag behind. So far, the EU’s deaths are disproportionately higher than the US’s.
https://gailtheactuary.files.wordpress.com/2020/04/eu-us-and-sweden-deaths-nov-12.png
Sweden doesn’t seem to be getting much benefit of its earlier policy. It is lagging a bit behind the rest of the EU, but it is easy to catch up!
I mostly agree.
for one thing, there is a continuing degrading of social order. It was beneficial to societies to have the majority of citizens believe in a mythical God who punishes people in a so-called afterlife for their misdeeds in this life. This placed a restraint on behaviors such as cheating greed violence etc not saying those things weren’t present in the past but the diminishing influence of myths is significant.
also, harsher economic conditions, lower prosperity, poorer prospects for the futures of younger adults, all weighing heavily on their mental stability.
just to switch gears here:
if even one US state (perhaps Georgia within the next 10 days) completes a recount (by hand) and Trump gains tens of thousands (maybe hundreds of thousands) of votes, then the response, especially in highly D populated big cities, could be massive chaos. (not a prediction.)
implosion could be at hand.
over to you, Norman. 😉
What some people dont seem to realise is there is an agenda to drop world energy per capita and it is promoted as our impact on the earth’s climate because of our burning of fossil fuels in a BAU world , I perscnally believe that the real reason is instead peak fossil fuels or limits to growth being the real reason for the promotion of climate change which requires major changes to our BAU model , This is currently underway thanks to the covid 19 scare in 2020. Thanks to the Elders it looks like a Great Reset is also on the way.
This new reduced energy world based on shrinking consumption of materials and based on conservation of the world’s resources looks like our ultimate fate here is a little bit of evidence of their agenda ;
” The world’s remaining emissions budget for a 50:50 chance of staying within 1.5 °C of warming is only about 500 gigatonnes (Gt) of CO2. Permafrost emissions could take an estimated 20% (100 Gt CO2) off this budget10, and that’s without including methane from deep permafrost or undersea hydrates. If forests are close to tipping points, Amazon dieback could release another 90 Gt CO2 and boreal forests a further 110 Gt CO211. With global total CO2 emissions still at more than 40 Gt per year, the remaining budget could be all but erased already ”
https://www.nature.com/articles/d41586-019-03595-0?error=cookies_not_supported&code=9775952b-25fb-4a1d-848b-2d7f0c65a5f5
“This is currently underway thanks to the covid 19 scare in 2020. Thanks to the Elders it looks like a Great Reset is also on the way.”
it’s odd though that the Elders would allow Pfizer to create a 90% effective vaccine, which (if truly 90%) will allow the economy to proceed without the covid hindrance.
I guess no one told Pfizer about the Great Reset.
david, a few things:
1.) it’s not unlikely that the Covid could well’ve been the excuse for nationwide mail-in ballots in the US. Sounds far-fetched unless you think about the trillions of dollars in play globally on the part of those in control of the US political system and their adversaries who would like to gain control.
2.) Allowing Pfizer to announce a successful vaccine allows (cough) the CEO of Pfizer to sell off most his holdings at the highest price. No?
3.) There’s no proof the vaccine will really allow the economy to proceed without hindrance. One would think so, but…. Lucy (Fauci?) has a lot of footballs yet to yank away from Charlie Brown.
..
and there’s more but it’s too tedious.
Lidia, don’t forget the rest of the world. For sure US is the elephant in the room and sets the tone for the rest of the energy-economy cacaphony.
It is hard to push towards unity in policy when there is internal strifle in the US.
As I see it, it is the peddlers vs. the technocrats. Full bore over the seneca cliff into overshoot and crash collapse vs. a dystopian Calhounian world guvmint.
“Hope is for suckers”
— Alan Watts
Kowalainen, “the US setting the tone” is kind of what I meant. Someone else on this thread mentioned a putative Biden admin. strengthening Iranian oil production, for example. In politics USians tend, understandably, to get caught up mostly in domestic issues. “Foreign influence” is largely regarded as conspiracy theory on both sides, but it seems obvious to me that globalism has given “foreign interests” increased ability to manipulate things from inside any number of US Trojan entities.
Not sure who you define as “the peddlers”, but if the globalist technocrats think they can orchestrate worldwide “unity in policy” (what the Great Reset seems to be calling for), I wonder how they can effectively keep individual players from pursuing their own interests.
The world “guvmint” seems to be coalescing around what’s good for production-powerhouse China the way that the EU gov. coalesced around what was good for Germany (the production-powerhouse of that sphere). But that could be me just being dumb. The old production powerhouse of the US might be an elephant, but it’s long been a dying one, with hyenas ripping at its flesh, it would seem. I’m thinking this out as I’m typing it, but now it seems a little clearer to me that energy will be diverted (to the extent possible) to the places where it can more swiftly be dissipated, and that happens in places of high commercial activity.
Not sure if I first came across a mention of it here, but I did read recently about a humongous solar farm in Australia that is supposed pump electricity to Singapore.
https://earth.org/australia-solar-farm-singapore/
The “Great Reset” is going to need a lot of PPE and a lot of computing power and tech gear, and all of that will itself be consumptive. They (probably?) don’t recognize it in those terms.
So, while the “Great Reset” people likely think they are going to be in charge of the future structure of our society/societies, they themselves could be seen as just another helpless/hapless fruiting body or spiral (fast!) eddy in the larger thermodynamically-impelled context of self-organization.
Yes, the gear will consume a humongous amount of energy. It is my conviction that the lions share of remaining FF’s will not be intended for human consumption at all.
It is insane to blow it out as “frivolous” CO2 into the atmosphere without not much to show for in terms of evolutionary progress, in a technological context, as I view computation and AI/synthetics as the natural successor to mankind and extension of life on earth.
The great danger of the “full bore” over the seneca cliff is that of nuclear war and as for the GND “entitled princess” crowd, is a downscaling of the computational capability and limitations of AI as imposed by a world guvmint.
The process must remain open-ended without limitations in its evolutionary process.
I would like to add that it may not be just the Elders who are doing this. The Elms and the Oaks may also have their twigs and branches in it.
https://www.youtube.com/watch?v=8_D0wkLyCXE
The final verse seems particularly appropriate.
https://images.squarespace-cdn.com/content/v1/535ac69ae4b098b4209f5a9b/1529380244985-82P1XY4O7WM0WASWRUXK/ke17ZwdGBToddI8pDm48kJUlZr2Ql5GtSKWrQpjur5t7gQa3H78H3Y0txjaiv_0fDoOvxcdMmMKkDsyUqMSsMWxHk725yiiHCCLfrh8O1z5QPOohDIaIeljMHgDF5CVlOqpeNLcJ80NK65_fV7S1UfNdxJhjhuaNor070w_QAc94zjGLGXCa1tSmDVMXf8RUVhMJRmnnhuU1v2M8fLFyJw/Lovethis.jpg
Thanks! The maples just need to form a union to get equality with the oaks. It doesn’t really work that way, though.
sorry—there is no ‘agenda’
we drove ourselves to where were are through blatant greed.
greed has been encouraged, because greed provides jobs for an increasing population.
we make stuff we don’t need and go places for no reason.
that burns fuel, and fuel is our only source of employment and wages (to spend on the above).
There is no ‘grand plan’.That notion just gives us comfort that somehow it is ‘somebody else’s’ fault.
And nothing to do with us.
I think we need a bit more nuance to that. However, for the most part it is quite spot-on.
i can only suggest looking at the vid at the end of Gail’s post. scrolling to 29min in, and listening to what Art Berman has to say
He explains it better than i can
I really like when he says at 33:20 “… that felt like prosperity, and if it felt like it, I guess it was…”
there was centuries of growing prosperity, based on growing energy.
there now is a rough plateau of peak prosperity, based on existing energy.
even with the runaway debt, to those who are prosperous it feels like prosperity because it is prosperity.
the (near) future may very well be a Seneca cliff, but today is not the future.
In other words, BAU tonight baby!
Bau baby!!!
bAU this afternoon, baby!
(I should put this on the shelf again at least for the next 49 days.)
our ‘now’ is in effect freewheeling on the past 300 years of accellerating energy input,
I am ‘prosperous’ because of those 300 years of energy input that my ggggrandparents created, to give me the life I now enjoy.
They had no idea that they were doing it of course, or any concept that their labour would affect my future time.
prior to 1700 such accelleration wasn’t possible because cheap surplus energy wasn’t available.
Da Vinci could have got us airborne in the 1500s, he had the ideas but lacked an engine and fuel. (it was that simple)
But that would have burned through our ff resources by 1800, meaning that by 2000 we would have been peasants again, at least those of us who survived the denial wars.
Unfortunately my ggggrandchilden will not enjoy my prosperity. The difference for us is that we do know what we are doing to our future
This has been a one-shot burn for humankind
I agree with you, but would only set the clock few centuries back, the world was at hearth based on debt-credit pool higher than outstanding wealth aggregate as early as of late middle ages, by Renaissance say the end of 14-15th century for north western ClubMed (e.g. Italian city states) and by 16th century large parts of N/Western and CEE were running on ever growing roll over promises of debt payback. This drive being enabled by colonization efforts globally and technical – science progress very slow but marching nevertheless.. Obviously, it was a hybrid system, the largest leverage applied was at the feudal, merchant, banker class levels; although the country side started to be by affected by various debt-credit schemes as well (novelty).
in past times our excesses were intermittently corrected by the four horsemen of the apocalypse, famine war pestilence and death
we inadvertently made our great leap forward and learned how to deal with the above. They no longer applied to humankind
or so we thought
Every time when I go to the grocery story, I am thankful for the many items that are available. There are only a few things that are in chronically low supply, such as the liquid hand soap I usually buy and napkins. There quite a few little signs saying, “No more than 2 per customer due to production difficulties,” but usually there are at least a few of the item on the shelf, if a person isn’t too particular about details (organic or not, salt level).
I wonder whether we will lose another round of things if another widespread shutdown take place. For example, generic drugs may be in precarious supply, especially if India has problems. We have so many people with health issues, it seems like a loss of drugs could pull a lot of sickly people down.
I am living this energy reality currently. I work in the Canadian oilsands that do indeed require a much higher energy price to be an economically viable source of fuel. Our company has slashed costs, we are currently letting approximately 25% of the salaried staff go, capitol projects have been shelved or cancelled over the past 2 years. There is no new development money, there are no improvement budgets, the old equipment is not getting replaced and the maintenance budgets have been gutted. We are trying to hold the line with production while under staffing every aspect of the business, stretching component and facilities working lives while cutting back and extending maintenance intervals. As most know, this recipe works in the short term for cost savings but at the expense of long term safety, reliability and production. If you run things to the ragged edge they will break, it will be more expensive to fix or replace and it could be catastrophic to the business or to people’s lives.
This is a summary of the entire industry up here and I am sure most in the petrochemical industries of North America and the world. We need at last $70 oil to maintain long term capacity and more if the world expects growth. This will not end well, this required energy won’t continue without paying for it.
Rob
Your reply needs publishing at an international level—all oil production blogs, websites etc, and also in the Alice in Wonderland Times
thank you
Agreed.
at last $70 oil to maintain long term capacity and more if the world expects growth
An important benchmark that isn’t even close to being met.
If you consult that “triangle of doom” down sloping long term oil price graph the up spike to $60-70 level is still possible, actually very likely about to visit us soon, but it will be temporary affair, then lower lows strike again (for ever).. It seems as quasi BAU can’t be extended much beyond ~2025-30.. Given what’s going on in the world even today, likely lot of systemic reshuffling will take place even before that, i.e. from now till ~2025..
When recent “easy winnings” in make believe cryptos, tech stocks etc. are being suddenly-madly exchanged for real stuff like for (first pick right) quality land and tools we are there at the end of the road, and this is actually starting to happen just now on noticeable scale..
“long term capacity,” LOL! I love your sense of humor, Tim!
Thanks for your “on the ground” report. This seems to be the story everywhere.
Governments would also like higher tax revenues from the oil industry. If they raised their tax rates (often to where they were previously), the needed price would need to be a whole lot above $70 per barrel.
Rob thank you so much for your comment, it is so important to hear experience from the source and I feel your pain in your words. I for one would pay more for oil as I know how important it is, particularly in modern farming which provides our most important energy source and would forgo ‘luxuries’ to pay more but those who provide my luxuries would soon be out of a job (as would I eventually) and would therefore demand less. We really are in a pickle.
As more expensive to extract energy has been unable to provide industrial growth we have become service economies built on debt, which can’t be paid back by real growth (cheap energy and resources)
People don’t understand money, it’s a claim and it is loaned into existence and the only way we can pay it back is if we become more and more productive and borrow more to pay off old loans and create new ones too. Human productivity underwrites the debt (ageing demographics don’t help this either) and without cheap energy and our ability to extract and fashion other resources with it to improve our productivity (think man with a flint tool or man with a JCB or John Deere) we will not pay that debt back. We can print money to pay off debts but that is not the same, it is not money created out of extraction of earths ‘gifts’ and productive use of. Impossible to maintain on a finite planet, with 7.7billion of us all demanding ‘tools’ to increase our productivity and the resulting increased living standards or to just maintain existing ones, something has to give.
Thank you Gail, another very thought provoking article and at least you are keeping my thinking brain cells productive.
Alberta Rob, thank you so much for your front-line report. This is vital information. I hope you will land on your feet somehow.
“We are trying to hold the line with production while under staffing every aspect of the business, stretching component and facilities working lives while cutting back and extending maintenance intervals. As most know, this recipe works in the short term for cost savings but at the expense of long term safety, reliability and production. If you run things to the ragged edge they will break, it will be more expensive to fix or replace and it could be catastrophic to the business or to people’s lives.”
I suspect this is a very good description of where UK offshore oil production is at. I doubt any platform is running at a profit just now, except maybe Buzzard. The large majority of the UK’s oil platforms are very old and very rusty, and all offshore.
Hello Gail-
Thank you for the November post. My question pertains to the use of the word “Supply” in the title instead of “Consumption” stating that supply constraints lead to conflict. Aren’t we talking about cause and effect? Shouldn’t it have said “Consumption” Supply and consumption are related but different. Figure 5 is based on shrinkage in CONSUMPTION not supply. If I understand your argument correctly, the masses cannot afford energy, they will demand less, consume less, pay less, prices will drop to the market clearing price and there will be less revenue to the producers. Since E&P(exploration & production) firms have high fixed costs so bottom line profit drops. Therefore, only the lowest cost producers will stay in business and supply will drop. In other words, the sequence of events starts with the drop in demand (consumption) and results in lower supply. This seems like the law of supply and demand from micro-econ 101.
Wouldn’t a more accurate title have been, “Energy is the Economy: Shrinkage in CONSUMPTION Leads to Conflict”?
No doubt many of your readers have been exposed to the law of supply and demand so it seems that precise usage of terminology is important. Or, do you consider in this context Supply & Consumption are somewhat fluid in meaning and interchangeable in order to get the point across?
I think you are right. It is shrinkage in consumption that causes a huge problem. I should have used consumption in the title.
Changing the title at this late date doesn’t really work well, however. Perhaps there is somewhere else I can add that idea.
What about “affordable supply”?
A big part of the problem is people stopping consuming for fear of COVID. Governments have started to get the idea that shutting everything down really doesn’t work. But everyone staying at home, and adding to their bank account, is almost as bad. This lack of demand does not really have to do with affordability. But it does interfere with other people’s ability to have jobs which depend on their spending.
There is now a proposal in the air to tax those who are saving money and ‘growing richer’ by working at home and not going out and about to consume, and to use that tax revenue to ‘help’ those who have lost their jobs, and thereby boost consumer demand.
Something of the kind would seem to be inevitable, if a substantial % of the workforce become home-based workers, with or without the pandemic.
What the quality of government ‘help’ would turn out to be is another matter….
Today is Veteran’s Day.
A day to commemorate Woodrow Wilson cheating the German Victory in the Great War.
A day to commemorate all these US deaths so Poland, Czechoslovakia and other dead-on-arrival countries could enjoy their brief independences before being crushed under Soviet foot.
Now the world system built by Woody Wilson is collapsing, it is time to question all these people who died so people who contributed very little to civilization could enjoy their brief days under the sun.
Fine! Do you suggest we use a ouija board?
Covid again:
CHS has this in his OTM 11/11/20 blog.
“Now that we’ve had the happy-talk about Pfizer’s messenger-RNA (mRNA) vaccine (and noted that Pfizer’s CEO sold the majority of his shares in the company immediately after the happy-talk), let’s dig into messenger-RNA (mRNA) vaccines which are fast approaching regulatory approval.”
It was released days after the election, not before and the CEO sold the majority of his shares.
Probably only coincidence.
Dennis L.
Does sound very strange that the CEO sold the majority of his shares, after the message.
COVID – Death and Fear
Macmillan Cancer Support (UK Charity) estimates that 50,000 cancer diagnosis have been missed in the UK as a result of COVID.
https://www.lbc.co.uk/news/uk/50-000-have-missed-cancer-diagnosis-during-covid-19-pandemic-macmillan-says/
One word, ‘criminal’
The limited availability of the healthcare is the most serious consequence of Covid, which is overlooked by the majority suffering from economic consequences. The limited consumption due to the curtailed economic activity is not that bad as it saves the resources.
Number of deaths this October in Poland was 44% higher than average from previous years. Only 25% of the excessive deaths are official Covid deaths.
The limited consumption gets rid of a lot of people’s jobs, unfortunately. People without jobs in poor countries are in danger of starving. “Saving resources” sounds like a good goal, but it has a real cost in human lives.
The situation in Portugal:
“Between March 16, 2020, the day Portugal notified the first COVID-19 death, and September 30, 2020, there were 7,529 more deaths than those that would be expected based on the average mortality of the last five years, i.e. there was an excess of mortality of 12%. The excess of mortality mainly affected people over 85 years old (+18%). Sixty-eight percent of the excess mortality due to natural causes corresponds to collateral mortality , that is, it is associated with deaths that were not identified as COVID-19.”
In other words, 7,529 dead in excess by September 30, 2410 of which were attributed to covid and 5119 to other causes. One would think that given these figures, most people with basic notions of artimetics would realize that there is something wrong with the Save Lives message, if its result is exactly the opposite of what was supposedly intended. But most people can’t trust their own eyes to see or their own fingers to count. They need an authority even to conclude that 2 + 2 = 4 (or 5, if the authority says so).
https://barometro-covid-19.ensp.unl.pt/wp-content/uploads/2020/11/excesso-de-mortalidade-colateral-temperaturas-e-no-de-atos-02.112020.pdf
I am sure the death rate will go up by more than the number of COVID-29 deaths, for a lot of reasons, including missed cancer deaths and more suicides.
I expect that quite a lot of those missed cancers were not quite as bad as the article makes it sound. They could be cancers that aren’t very life-threatening to begin with, or they could be ones that we really can’t do much about, regardless of when they are caught. It is only the middle category that doctors can treat, and it really makes a difference.
I am new to this blog and have yet to figure out the dynamics. I posted a serious and substantial response to the original post almost a day ago that has not made it through moderation, yet others post a stream of links with quotes but no actual argument about the content of the original post.
What is the point of this comment forum if not to debate the main article? Of course it is possible that my response was treated as spam by an overly suspicious anti-spam algorithm, but it is also a reasonable expectation that such accidental technical failures would have been corrected more readily.
Anyhow, I can say that if the relentless sequence of links and quotes from one particular user was happening on my site, I would certainly flag it as spam.
If your comment didn’t show up in that time, something must have gone wrong. There are quite a few comments that I need to approve, including first comments from new people. I have “let in” all of the comments from new people that I saw. I have blocked a tiny number of comments from existing commenters for various reasons, most often from being overly argumentative.
The comments on this site serve more than one purpose. They are partly to discuss the current article, and partly to talk about problems in general related to the issues of a finite world. The commenters bring ideas to me; they don’t rely on me to be the sole source of new ideas. In that way, the comments are different from those a person sees on other sites. I have been quite liberal in the comments regarding what I let through. In some ways, the comments also serve as a support system for people who are struggling with the issues I discuss.
and for people struggling for human contact with polite and thoughtful people.
Well said! Thanks again to Gail for the opportunity she gives us to express opinions, sometimes quite different, but always with respect.
@Brandon Young, I can only imagine you are talking about my links and quotes.
They are not always to everyone’s taste but have been a fixture on OFW for some years now and whenever the issue is raised, most commenters seem to feel that they are a net benefit to the site. I am a somewhat retiring Englishman and would cringe at the thought I was imposing them on an unwilling public!
As for arguing the merits of Gail’s analysis, I have rather reached the point where I no longer feel inclined to do that (consider me a convert!) and my interest is more in following her unique spin on the “limits to growth” story as it unfolds in the news.
Admittedly, that means a fairly broad church of articles, as we can see the finger prints of energy and resource-constraints in many areas, eg rising social unrest, the trend towards secession and the break-up of supra-national entities, the collapse of weaker nations, ever-increasing financial complexity and unsustainable debt, low energy prices etc. etc. – but they are chosen with care.
Brandon needs to remember that there is a big time zone difference. Also, I have errands and appointments. I will get back to him when time permits.
Keep posting Harry!
Harry, I don’t see why you should get all the credit. I go off topic quite a bit too.
Anyway, Brandon, if you still have a copy of your original serious and substantial response to the original post , please post it again. If it’s very long, it might be better to divide it up into sections. You don’t have to shrink it down to individual tweet-sized paragraphs, but basically the longer a comment is, the more likely it is to get caught in the spam filter.
Ah, Harry is the fairest of them all and he spends half of the day cringing. The possession of genuinely English sensibilities, rare these days, is akin to smoking too much skunk and ‘suffering’ the heightened self-awareness and sensibility. Most dismiss it as a ghastly ‘paranoia’ afterwards but it is actually just the English brain configuring itself properly. Skunk is the most ‘English’ of vices. Some are naturally like that the whole time anyway.
Harry–I like your posts very much. When I earlier suggested a daily post limit, I wasn’t thinking of you but, uh, somebody else who’s not around this site anymore, and tended to post nonsense.
Bless you for the votes of confidence.
Harry, I’ve really appreciated your comments over the years. They aggregate the news for me so I don’t have to spend so much time sifting through
Please resubmit your arguments. If they are civil they will be posted. Its getting pretty rare that people actually try to put forth arguments. I consider putting forth arguments very healthy. Much easier to take a long drag on the hopium pipe. Kudos to you for engaging the ideas presented enough to want to put forth logical arguments. The contention that population will be halfed in the next 30 years is certainly controversial. Gail has no problem defending her arguments nor do the participants of this forum. We do value courtesy as it seems to vest work toward getting at the bottom of things. Is seems all to often Unicorn believers get angry and call names when you express doubt. The ability to have cognitive responses while keeping emotions in check is becoming rare as people have formed a extreme dislike for arguments that have a unpleasant outcome. The people who frequent this board certainly have their own set of emotions and prejudices. Its healthy for us to address those also. Lets hear your arguments!
Thanks. That is a constructive attitude and a warm welcome. Happily my original comment was approved pretty quickly, and the engagement has been interesting and productive I think. It starts here:
https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-shrinkage-in-energy-supply-leads-to-conflict/comment-page-6/#comment-267042
It is always a little tedious when closed minded people are unnecessarily offended by frank truths or propositions, and they tend to mischaracterise both arguments and the people making them. I think the workaround is to engage as much as possible with those who seem more open minded, and to avoid as much as possible engaging with less open minded people who have not even bothered to properly comprehend the argument in question.
of course, you cannot possibly be “closed minded” yourself.
you are so above that.
fyi, I’ll be asleep and/or offline for 10 or 12 hours.
perhaps anyone who thinks they are totally open minded might consider their hubris and reconsider their position regarding a superiority over the many of us here who might be insulted to be casually called closed minded.
If people don’t want to be seen as closed minded, then they shouldn’t act closed minded. I call it as I see it.
Of course it is more complex than that. A person can be open minded on a great range of subjects, and have just one or two particular areas where they feel vulnerable and dare not risk confronting truths or exploring arguments that might expose some deeply entrenched but misguided presumptions.
It is best not to read too much into it and to just have thicker skin.
From the ‘Fixing Finance’ section of Brandon’s blog: “Of course the political resistance to such a model of change would be enormous, given the unprecedented power the global banking system has to dictate terms to sovereign nations… the only way to make this transition politically viable is a successful advocacy campaign, which builds understanding and political will for this model of change to levels that government can no longer ignore.”
Why would resistance to such a model of change be enormous when it is (so clearly in your view) in our collective benefit? Why do powerful vested interests hold sway to our apparent, collective detriment?
Because political and economic ideas come to the fore *precisely because they serve the global economy’s growth and energy throughput requirements*, as described by Gail in many of her posts, for example:
https://ourfiniteworld.com/2016/02/08/the-physics-of-energy-and-the-economy/
In other words, political and economic narratives are just surface expressions of a hugely complex, biophysical process, which will always self-organise in such a way as to ensure that externally imposed “solutions” such as yours do not gain traction.
You are, in my view, putting the cart before the horse and howling at the moon, for all the deep thought and effort that has clearly gone into your treatise. But time can be the judge of that. You put your back into advocacy; spend more time canvassing actual policy-makers and less time debating on OFW, and we’ll reconvene in a few years. I shall be interested to see how far you’ve got!
“All I am asking is that those who are willing and able to zoom out to the bigger picture, and to question some of the fundamental presumptions…”
the biggest picture:
the economy is an energy economy, not a monetary economy.
the economy grew for centuries as net (surplus) energy grew.
economic growth is now ending as growth in net (surplus) energy is flattening and perhaps has already started its imminent permanent irreversible decline.
net (surplus) energy:
discuss.
Mr. Young, I suppose you might be needing many hours to research the many aspects of net (surplus) energy.
being so open minded, you perhaps will be eager to add that information and knowledge.
since you declared yourself eager to discuss the “bigger picture”, please let us know what you have learned and how this has been added to your interpretation of this “bigger picture”.
thanks in advance.
bAU tonight, baby!
“As he met with a delegation from the Association of Depositors in Lebanon on Tuesday, the country’s central bank governor, Riad Salameh, stressed: “Lebanon is not bankrupt.””
https://www.albawaba.com/news/lebanon-not-bankrupt-central-bank-governor-riad-salameh-1392090
“Drugs for everything from diabetes and blood pressure to anti-depressants and fever pills used in COVID-19 treatment have disappeared from shelves around Lebanon.
“Officials and pharmacists say the shortage was exacerbated by panic buying and hoarding after the Central Bank governor said that with foreign reserves running low, the government won’t be able to keep up subsidies, including on drugs.”
https://abcnews.go.com/Health/wireStory/frantic-search-medicines-vanish-lebanon-shelves-74141540
Once people fear shortages, it is hard to keep anything in stock.
Meaning….it is bankrupt.
“A key bondholder group is set to reject Zambia’s request for an interest-payment holiday, putting the country on course to become the first African sovereign defaulter since the onset of the coronavirus pandemic.”
https://www.bloomberg.com/news/articles/2020-11-10/zambia-on-brink-of-default-with-creditors-set-to-refuse-relief
“President João Lourenço of Angola has stepped up his fight to recover billions of dollars allegedly stolen under his predecessor as Africa’s second-biggest oil producer battles to escape the continent’s largest debt crisis.”
https://www.ft.com/content/5ebceb76-5e3f-4e08-98b8-3345b86a3482
“With Angola’s economy battling [the pandemic], anti-government protests have been brutally subdued. But demonstrators are not backing down…”
https://www.dw.com/en/angola-braces-for-anti-government-protests/a-55543686
The story says:
This seems to be the problem everywhere.
“…while a successful vaccine could indeed give the economy a shot in the arm in 2021, say economists, it will take longer to heal from a historic blow to jobs, investment and businesses—a task complicated by the current surge in infections in much of the West.”
https://www.wsj.com/articles/a-covid-19-vaccine-would-boost-the-global-economy-but-not-all-at-once-11605087345
““There is still a long way to go,” cautions Richard McGuire, strategist at Rabobank. “The fact is that, in the interim, a huge amount of government support will still be required.””
https://www.telegraph.co.uk/business/2020/11/11/vaccine-means-global-economy/
“‘Don’t be under the illusion’ that an economic recovery will come quickly with a vaccine, UBS’ Chairman, Axel Weber says.”
https://www.cnbc.com/2020/11/11/coronavirus-vaccine-doesnt-mean-a-quick-economic-recovery-ubs-weber.html
The vaccine will be of limited supply, difficult to transport at very cold temperatures, and costly, when transportation and administration costs are included. Poor countries will not be able to afford very much of it. There certainly will be pockets of COVID-19 that are missed, allowing the virus to spread in the future. It is also not known how long immunity will last.
The Russian “sputnik V” Adenoviral Vaccine is freeze dried for easy transport. The vaccine itself a virus is modified for human safety. Adenoviral products have previously been used for gene therapy vector purpouses.
“Stagflation: America’s Next Potential Economic Hurdle:
“…the Federal Reserve can not simply fix the problem by restoring credit and flooding the financial system with liquidity. The Federal Reserve must also restore demand and income. The latter is a much more difficult problem to tackle than easing monetary conditions. And no matter how much liquidity is restored to corporations, the Federal Reserve can not force consumer demand higher.”
https://finance.yahoo.com/news/stagflation-americas-next-potential-economic-215722918.html
“Millions of Americans have been out of work for months…
“…nationwide, there were about 10 million fewer jobs in October than in February. And among the 11 million Americans who remain unemployed, the median duration of joblessness was 19.3 weeks in October. It has steadily ticked up since the pandemic began.”
https://edition.cnn.com/2020/11/10/economy/long-term-unemployed-jobless/index.html
“Born between 1997 and 2012, some Gen Zers – teens and college students – are entering the labour market for the first time during an unprecedented economic crisis caused by a once-in-a-century pandemic.”
https://www.aljazeera.com/economy/2020/11/10/will-gen-z-ever-recover-from-the-coronavirus-recession
“The majority of U.S. adults believe the Covid-19 economy is worse than the 2008 Great Recession, according to a recent Edelman Financial Engines 2020 Financial Insights study.”
https://www.cnbc.com/2020/11/10/pandemic-worse-than-2008-for-a-majority-of-americans-study-says.html
Agreed!
People have to stop being afraid and start doing the things that they did before, and more. Driving to work, flying overseas on vacations, going to conferences and ball games, attending church services, eating out, going to bars and to live performances of various types.
It is lack of consumption that is the problem.
“UK Graduate recruitment suffered the biggest drop this year since the 2008 financial crash as employers cut back on hiring workers to cope with the Covid-19 pandemic.”
https://www.theguardian.com/money/2020/nov/11/graduate-recruitment-suffers-biggest-uk-fall-since-2008-crisis
“The number of foreign-born workers employed in the UK fell by almost 600,000 in the past year as Covid laid waste to the jobs market and sparked an exodus of migrants.
“There are now 765,000 fewer people of working age born abroad in Britain than there were a year ago, with a bigger fall in those from the EU than those from the rest of the world.”
https://www.telegraph.co.uk/business/2020/11/10/covid-pushes-jobless-rate-highest-since-2016/
“‘Naked in the face of this crisis’: Spain’s Latin American workers suffer:
“Pandemic causes mass unemployment among foreign migrants in Europe’s worst-hit economy.”
https://www.ft.com/content/04f0a288-b093-4270-ace7-b7e02e8e9a04
Give him credit! With his lockdown policies, Boris has solved the UK’s immigration, overpopulation and housing shortage problems at a single stroke.
LOL!
Wow! It never occurred to me that that many foreign workers would leave.
The workers that the UK has from the EU are in some sense like workers from other states in the US. These folks move around a lot, but they aren’t “foreign” to us. Our foreign workers came from longer distances and have less to go back home to.
Gail, Mexico and Central America, may seem “far away” to you, but in states much to your south these “long distances” do not seem far away at all. For states near the border, funding the expanded physical and social infrastructure to accommodate all the new, low-earning, poorly educated arrivals (America apparently has a dire shortage of low skill workers and needs to import many more) is not a trivial burden, and their state governments receive no extra federal assistance to compensate them for their disproportionate burden that results from Federal immigration policy.
Yesterday the BBC announced “UK unemployment rate continues to surge”, to 4.8%.
https://www.bbc.co.uk/news/business-54884592
In one of his very recent videos (YT), Neil McCoy Ward laughed at such low figures and said real figure was closer to either 20% or 25%.
“Banks in Europe Face $1.7 Trillion Covid-19 Cliff:
“The economies of Europe plunged this year… Yet the unprecedented levels of government and financial-sector support, including repayment moratoriums sometimes covering a quarter of all outstanding loans, have kept households and companies afloat. That means banks haven’t had to recognize those loans as potentially soured.
“Even bank CEOs are wondering what happens when the support ends.”
https://www.wsj.com/articles/european-covid-19-relief-supports-banks-apparent-resilience-11605090804
“European banks need to prepare their balance sheets for the risk of pandemic-induced non-performing loans hitting them in the new year, the head of the EU agency tasked with winding down failing lenders has said…
“Elke König, chair of the Single Resolution Board said… “Be aware NPL’s are coming and the best thing to do is address them early . . . That is the best thing we can do for the time being, and then it is steering through the fog…
“”The entire debate . . . always lacks one component: who is footing the bill,” she said. “It feels sometimes as if this is the magic system,” one where losses are supposed to evaporate, something “that is not going to happen”.”
https://www.ft.com/content/3c6b4eb0-5b3d-4a37-87e5-d83da8de217d
“The European Central Bank must introduce additional monetary policy stimulus in December to stave off the risk of deflation in the euro zone, the Bank of Spain’s chief economist said…
“Deflation, a downward spiral of prices that spreads to wages, can wreck economies. The most striking example in the 20th century was the Great Depression.”
https://www.bloomberg.com/news/articles/2020-11-11/ecb-must-act-to-fend-off-deflation-bank-of-spain-official-says
This does look like a huge bubble. Even if people can make future payments, they cannot make up those that they missed. “Extend and pretend” that things will get better, I suppose.
You are right. I don’t understand how low energy prices leads to disaster. Consider oil, oil production now Nov/2020 is unprofitable ergo less companies invest ergo less oil. But didn’t the economist Marshall elucidate the supply/demand curve way back in 1890? Less oil should drive prices up, leading to more supply and with India, Africa and China modernizing, along with the plenty of Westerners who wont do without oil, demand should remain sufficient (thesis in line with the EIA or IEA predictions). And according to the Simon Abundance index, over time, due to human ingenuity, we get higher amounts of commodities for the same amount of time worked. This should free up time to work even longer for the hard to get oil.
-https://www.humanprogress.org/the-simon-abundance-index-2020/
Economists have put together models that more or less work for goods other than energy products. They have put together nice models that work in two dimensions on paper. They have never stopped to look at what happens, in practice, when energy products are in short supply. If they would stop and look, they would figure out that the opposite of short supply is not high prices; it is conflict and ultimately collapse of the system.
In a sense, the oversight is intentional, because practically everyone who has looked into the issue knows that our supplies of fossil fuels is finite. No economist wants to bring up this issue, because his/her job opportunities would be very limited. Universities promote based on supposed solutions to our problems. Academic text books do now want to tell a story that students and professors would find objectionable.
Many, many economies have collapsed in the past. A very usual pattern is that population grows at the same time that resource degrade (soil erodes and becomes less fertile, trees are cut down, fossil fuels become more difficult to extract). The actual output of the overall system fails to increase with the rising population. Physics determines the nature of the outcome. The rich tend to get richer, while the poor get poorer. The poor, eat less and less well, and become vulnerable to epidemics from even minor pathogens. Pandemics flourish. Debts tend to default, because most people are earning less, in inflation-adjusted terms. People become very unsatisfied, and work to overthrow governments, in the hope that a new government will fix things. Often, wars are started, in the hope that resources from some nearby area will help augment the inadequate resources per capita locally.
If you question demand falling, read Revelation 18:11-13. It warns of another collapse, like the collapse of ancient Babylon. At that time, there was no demand for any of the precious cargos of ships (like gold, fine linens, spices). There was not even any demand for slaves, which were the energy product of the day.
Peak oil folks were taken in by economists’ wrong view of oil prices as depletion became an increasing problem. They promulgated the idea that oil prices would rise, because of scarcity. Politicians extended this idea to the idea that prices of all fossil fuels would rise, allowing the extraction of technically recoverable fossil fuels. When you put these absurd assumptions together, the biggest problem facing mankind is rising CO2 levels and climate change. Politicians have latched onto this view, because it pretty much says, we don’t have a “running out problem,” we have a “too much” problem. If conveniently turns around the problem. It also allows politicians to promulgate the idea that renewables will provide a solution. They don’t, as far as I can see, for a population of 7.8 billion.
“They have never stopped to look at what happens, in practice, when energy products are in short supply.” — I’m pretty sure they have since many countries have experienced prolonged energy shortages in war time. It is probably a standard part of contingency planning by the Pentagon and other military planners.
Fossil fuels contain within themselves the means of their own extraction. (the energy in a ton of coal or barrel of oil released a percentage of itself to sink another oil well or coalmine)
As long as extraction costs remained low, then human civilsation could grow and expand on the (energy) surpluses.
Given that money is just a call on future energy, we happily converted oil coal and gas into money tokens, and paid each other wages. And built more ‘stuff’, Ad infinitum.
being human we demanded higher and higher wages, which was fine as long as we could extract more and more ff’s. (and make more ‘stuff) to pay those wages. It was delusion that lasted about 150 years.
But of course all delusions carry an inbuilt denial that they are delusions.
The god of oil was no different to any other.
We now delude ourselves that oil itself, no matter how difficult to access, will carry the same ‘conversion value’ as it did 100 years ago, and we can use it at the same rate to make to same volume of ‘things’ and pay ourselves the same (and increasing) wages that we always have.
‘Human ingenuinity’ has allowed us to access oil that would have been out of reach 150 years ago, but we are draining a finite resource, and requiring more and more energy to do it.
We are now approaching the point where the energy needed to extract a barrel of oil is the same as the energy contained within the oil
Human ingenuity cannot overcome the lsw of thermodynamics
We can use nuclear energy to heat and extract oil.
i have a place on a local wall permanently reserved for headbanging
and then there i using solar thermal to extract oil
https://pv-magazine-usa.com/2020/05/14/sources-shell-and-vc-funded-glasspoint/
Norman, can always use sand worms to eat the oil and digest it directly to diesel and gasoline.
Ed, now you’re getting into Dune territory.
But point taken, there is a lot of unexploited energy around if we employ enough creativity and ingenuity to exploit it. And on this tredmill, every advance and solution will generate a new set of problems.
I had been hoping for a response from Duncan Idaho
“Lady Jessica calls him “the admirable fighting man whose abilities at guarding and surveillance are so esteemed.” Duncan is fiercely loyal to House Atreides, a skilled pilot, and as a Swordmaster of the Ginaz is a gifted hand-to-hand fighter”
I know that Canada was looking into nuclear energy for use in the oil sands. I am not sure that they ever actually got as far as using it. https://www.zdnet.com/article/how-nuclear-will-make-oil-greener/
Those doing the extraction of oil are smart enough to realize that it makes little sense to burn oil (a high value product) when there are lower valued products to burn. Offshore oil platforms are generally powered by natural gas from the wells from which they are trying to extract oil and gas. Gas is a whole lot cheaper fuel than oil. It also can be burned without much processing. The same principle tends to hold for onshore extraction of oil. Wherever possible, natural gas is used.
In Daqing Oil Field in China, electricity from coal is used to operate the pumps. (I saw them and asked about it.)
EROEI calculations seem strange to me, because it is almost invariably low valued fuel used to make higher-valued fuel, except for Wind and Solar. Then it is oil (and other fuels) used to make an output with little real value. The comparability of the figures is iffy.
“‘Human ingenuinity’ has allowed us to access oil that would have been out of reach 150 years ago, but we are draining a finite resource, and requiring more and more energy to do it.” — Exactly. Economists explain econ growth as a product of “innovation,” but routinely overlook that the vast majority of the productivity enhancing innovation has required increased energy expenditure. We may require fewer manhours to extract energy as time goes on, but we require more energy to extract energy. That trend can continue for only so long.
The empty fuel tank analogy. The vehicle works fine until the last drop of petrol, then it suddenly stops with only a few prior indications.
Problem being, it starts out as a high MPG econobox and ends up as a gas guzzling SUV.
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Dark winter, anyone?
CBS News, October 23, 2020:
At the final presidential debate, Democratic nominee Joe Biden warned Americans that it’s going to be a “dark winter” and said President Trump has “no clear plan” to deal with the continuing coronavirus pandemic. COVID-19 has killed more than 220,000 Americans and sickened more than 7 million as some scientists have warned the current wave could be the “biggest wave” of infections.
Debate moderator Kristen Welker of NBC asked Biden about the COVID-19 vaccine, saying “Just 40% of Americans say they would definitely agree to take a vaccine, if it was approved by the government. What steps would you take to give Americans confidence in a vaccine if it were approved?”
Biden answered: “Make sure it’s totally transparent. Have the science and we will see it, know it, look at it. Go through the processes.”
“And by the way, this is the same fellow who told you this was going to end by Easter last time,” Biden said about Mr. Trump. “This is the same fellow who said, ‘Don’t worry, we’re going to end it this by the summer.’ We’re about to go into a dark winter.”
“A dark winter, and he has no clear plan and there’s no prospect that there’s going to be a vaccine available for the majority of the American people before the middle of next year,” Biden continued.
When asked to react, Mr. Trump said, “I don’t think we’re going to have a dark winter at all.”
https://www.cbsnews.com/news/biden-trump-coronavirus-plan-vaccine-winter/
US News 9, November 2020:
PRESIDENT-ELECT Joe Biden on Monday warned that a “very dark winter” is approaching as the U.S. coronavirus case count nears 10 million.
“There is a need for bold action to fight this pandemic,” Biden said in Delaware. “We’re still facing a very dark winter.”
Biden, whose campaign against President Donald Trump made the coronavirus a main focus, pledged to “spare no effort to turn this pandemic around once we’re sworn in on Jan. 20.”
He laid out several actions he pledged to put into place once in the White House that included expanding rapid testing, hiring additional contact tracers, providing guidance and resources for schools and small businesses and equitably distributing a free vaccine once one is approved.
Biden declared the election to be over and said that people of every political background need to come together to fight the pandemic.
“This election is over. It’s time to put aside the partisanship and the rhetoric that [is] designed to demonize one another,” Biden said. “It’s time to end the politicization of basic, responsible public health steps like mask-wearing and social distancing.”
https://www.usnews.com/news/health-news/articles/2020-11-09/biden-warns-of-very-dark-winter-as-us-approaches-10-million-coronavirus-cases
So, where did this “dark winter” turn of phrase come from?
“Dark Winter” was the name of an exercise, held at Andrews AFB, Washington, DC, June 22-23, 2001, that portrayed a fictional scenario depicting a covert smallpox attack on US citizens. The scenario was set in 3 successive National Security Council (NSC) meetings (Segments 1, 2 and 3) that take place over a period of 14 days. Former senior government officials played the roles of NSC members responding to the evolving epidemic; representatives from the media were among the observers of these mock NSC meetings and played journalists during the scenario’s press conferences.
Key Players
President: The Hon. Sam Nunn
National Security Advisor: The Hon. David Gergen
Director of Central Intelligence: The Hon. R. James Woolsey
Secretary of Defense: The Hon. John White
Chairman, Joint Chiefs of Staff: General John Tilelli (USA, Ret.)
Secretary of Health & Human Services: The Hon. Margaret Hamburg
Secretary of State: The Hon. Frank Wisner
Attorney General: The Hon. George Terwilliger
Director, Federal Emergency Management Agency: Mr. Jerome Hauer
Director, Federal Bureau of Investigation: The Hon. William Sessions
Governor of Oklahoma: The Hon. Frank Keating
Press Secretary of Gov. Frank Keating (OK): Mr. Dan Mahoney
Correspondent, NBC News: Mr. Jim Miklaszewski
Pentagon Producer, CBS News: Ms. Mary Walsh
Reporter, British Broadcasting Corporation: Ms. Sian Edwards
Reporter, The New York Times: Ms. Judith Miller
Reporter, Freelance: Mr. Lester Reingold
https://www.centerforhealthsecurity.org/our-work/events-archive/2001_dark-winter/index.html
If Biden manages to become President, does this mean the US is going to be put through a fictional scenario in which colds and flu are going to be hyped into a killer pandemic on a par with the Black Death? Or is a more deadly strain of pathogen going to be released on the general population to add a touch of “realism” to the festivities? Just asking’ for an American friend.
There does seem to be more pandemic planning than most of us would like to think about. We all know about the pandemic planning session in October 2019, called “Event 101” sponsored by the Johns Hopkins Center for Health Security, World Economic Forum, and the Bill & Melinda Gates Foundation.
And of course, there have been Gain of Function studies, trying to mutate (or change in other ways) viruses to be more virulent. The US got out of this business, but Anthony Fauci seems to been involved in getting this work transferred to Wuhan, China.
America leads the world at planning for pandemics, but we’re not so good at implementing those plans.
Re: Population collapse
Population ‘bust’ is not that unusual in human societies. We tend to push economies to their limit to support our population growth, natural resources are used up and then the population collapses.
If so then we are now repeating a pattern of demographic ‘boom and bust’ that we have been ‘locked into’ for untold thousands of years. It would be unusual were we to obtain the result opposite to that of previous societies.
‘Humans gonna do, what humans gonna do.’
The difference this time is that we cannot simply move on to another hunter-gatherer or agricultural area and let natural resources recover in the old area. Fossil fuels are a ‘one time deal’. The population ‘bust’ is not ‘regional’ and temporary this time but global and permanent.
This paper discusses the ‘boom and bust’ demographic pattern in agricultural societies at Neolithic and Bronze Age sites.
> Regional population collapse followed initial agriculture booms in mid-Holocene Europe
Abstract
Following its initial arrival in SE Europe 8,500 years ago agriculture spread throughout the continent, changing food production and consumption patterns and increasing population densities. Here we show that, in contrast to the steady population growth usually assumed, the introduction of agriculture into Europe was followed by a boom-and-bust pattern in the density of regional populations. We demonstrate that summed calibrated radiocarbon date distributions and simulation can be used to test the significance of these demographic booms and busts in the context of uncertainty in the radiocarbon date calibration curve and archaeological sampling. We report these results for Central and Northwest Europe between 8,000 and 4,000 cal. BP and investigate the relationship between these patterns and climate. However, we find no evidence to support a relationship. Our results thus suggest that the demographic patterns may have arisen from endogenous causes, although this remains speculative.
Introduction
…. We show that although populations did indeed grow rapidly in many areas with the onset of farming, the characteristic regional pattern is one of instability; of boom and bust. We find little evidence that, at the time scales considered, the variation in population levels through time is associated with climate, and that the very small variation in recent climate between three closely adjacent regions, if projected into the past, is not enough to explain the much larger inter-region variation in demography. We discuss other possible causes, and argue that whatever the cause, it is most likely endogenous and has to some extent affected demography in virtually all regions.
Results
…. We then tested the SCDPDs for the 12 regions in this specific study for departure from the null model (Fig. 3). Ten of the 12—the exceptions are Central and north Germany—show evidence of a significant increase in population with the local appearance of farming, and then subsequently drop back to trend; populations in Scotland and Ireland drop significantly below trend. All regions except Central and North Germany show evidence of demographic fluctuations significant beyond expectation under our exponential null model, positive and/or negative and large in scale, over the course of the Neolithic (all data and demographic patterns are summarized in Table 1). It is important to note that strong support for these demographic patterns in Britain is found in independent evidence such as indicators of anthropogenic impact on forest cover from pollen diagrams21 and the fluctuations in the number of directly dated cereal grains and hazel nut shells—indicators of subsistence type and intensity—from Neolithic and Bronze Age sites22. Similarly, independent support for the patterns shown in the Rhineland has been found23,24.
….
https://www.nature.com/articles/ncomms3486
Re: post-industrial population levels
There is the hint of a ‘heads up’ there that we should not necessarily expect Western post-industrial population levels to stabilise even at those enjoyed under feudalism.
We had better hope that the spread of industrialism has not destroyed the environmental basis of agriculture in the way that the embrace of agriculture transformed hunter-gather landscapes and destroyed the environmental basis of the old lifestyle.
There is not necessarily any ‘going back’ to a previous economic modus operandi if its environmental basis has been destroyed. So we should be concerned about soil and river maintenance and the preservation of crops adapted to the local climate and environment. And we would even know ‘how’, and what technologies were required, to live in the old economic way?
The post-industrial population ‘bust’ may be more drastic then we might commonly assume. Certainly the hunter-gatherer landscape is gone in Britain. If the agricultural landscape were gone too, then we would be completely at a loss. Europe has been largely depopulated before, during the Last Glacial Maximum, so it would not be entirely without precedent.
Thanks! This is an article from 2013. It would seem to support what I am saying about populations growing and overshooting their resource bases. These resource base, sometimes, may be shrinking as well. As your excerpt says, there didn’t seem to be a climatic reason.
There are many, many studies of this phenomenon. One well known one is “Secular Cycles” by Peter Turchin and Surgey Nefedov. It studies a number (eight, I think) of civilizations that grew and then collapsed. Rising population was definitely part of the pattern. It also traces some of the concurrent patterns.
“Dirt: The Erosion of Civilizations” by David Montgomery talks about the role that declining soil fertility and erosion may have played in civilizations that collapsed.
“Catching Fire: How Cooking Made Us Human” by Richard Wrangham explains some of the importance of the control of fire. Cooking food, in particular. gives humans an advantage over other species, in that cooked food makes it food easier to chew. There is also no need to have as big teeth and jaw or digestive system. With less need for these parts, the body could divert more resources to building a bigger brain.
“Against the Grain: A Deep History of the Earliest States” by James C. Scott isn’t about overshoot and collapse, but it does talk about humans gaining the upper hand over predators with the control of fire. Once humans had the upper hand over other species, there was very often a tendency for population to rise above what local resource could support.
Population boom and bust even happens in hunter gatherer populations. The most common cause among both hunter-gatherer and agrarian populations, is believe to be disease epidemics. Many epidemiologists think that dense populations make such epidemics inevitable. Agriculture allowed unprecedented increases in population density, while waste disposal was far more challenging for sedentary populations than small, mobile bands. At the same time, the genomes of early agriculturalists were still adapted to the less pathogen-intense lifestyles of hunter gathers. (Even today, remote, primitive populations are very vulnerable to unfamiliar pathogens unwittingly introduced from contacts with representatives of the civilized world.)
https://en.wikipedia.org/wiki/Lotka%E2%80%93Volterra_equations
“The Lotka–Volterra equations, also known as the predator–prey equations, are a pair of first-order nonlinear differential equations, frequently used to describe the dynamics of biological systems in which two species interact, one as a predator and the other as prey.”
https://ars.els-cdn.com/content/image/3-s2.0-B9780123970145000018-f01-02-9780123970145.jpg
A good article on the collapse of the Classic Maya civilisation:
https://www.pnas.org/content/109/35/13908
Thanks! It sounds like too many people for resources was likely a piece of the problem.
Yes, and an “elite” caste excarbating the situation with their delusions and human sacrifice to please the “gods”.
“Now we must search diligently for those creative deviants from whom alone will come the conceptualizations of an evolutionary designing process which can assure us an open ended future — toward whose realization we can all participate.”
― John B Calhoun
Calhoun was a naive environmental determinist. The failure of his mousetopia was almost certainly due to the accumulation of too many sub-lethal genetic mutations. He accelerated the process by starting his mousetopia with a far too tiny founding population. He should have consulted with a population geneticist.
Environmental determinist.
Sounds about the right way to go.
Calhoun wasn’t studying the effects of inbreeeding., rather the effects of removing predation creating a stagnant “utopia”.
@kowaleinen, When you remove the effects of predation, deleterious mutations accumulate rapidly. This effect is well demonstrated by now, but even in Calhoun’s time it was know theoretically by population geneticists who had worked out the math and from trial and error by animal breeders. This problem remains even if you begin with a large founding population of unrelated individuals.
Starting with a small founding population (four of each sex in the Mousetopia experiment) just multiplies the risk. Even if no formal inbreeding occurs, there is still background inbreeding that could only be identified by pedigree tracing before we learned to analyze DNA.
Calhoun may not have known that he was studying genetic effects, but he nevertheless was. Calhoun was such a Boasian true believer that he seems to have thought that he was studying mouse culture or mouse social psychology. Looking back, his naivete seems laughable today, but the 1960s and 1970s were the all time apex of the environmentalist faith. Then DNA and twin studies threw them into disarray.
During the 1960s, with the heated civil rights battles having just been won by the smugly confident champions of human equality and heirs of the abolitionist movement (the 1960s were a resuscitation of the American “Civil War” of the 1860s), many twin adoptees were deliberately split up and adopted out to different families in the expectation that once they reached the age of majority, we could study them and prove once and for all that all those wicked redneck racists with interesting accents were wrong because differences between separated twins would be entirely explained by differences in their family environments. They seem to have been shell-shocked when the data finally became available in the 1980s and the influence of genes appeared to be stronger than even most old school hereditarians had expected. Oh, the elephant in the living room! Nobody wanted to say, “It looks like that little Austrian with the funny mustache was right after all,” but–well, the data are just too shocking and unseemly to think about.
Nehemiah, there is no rational reason to doubt that the humans in IC are except from the processes shown in the Calhoun mouse utopia experiment.
Once the socialist engineering is in effect with its “utopian” goals, Calhoun smiles in his grave.
https://i1.wp.com/www.votersopinion.com/wp-content/uploads/2016/07/I-told-you-so2.jpg
Climate has also been discounted as the cause of the Late Bronze Age collapse c. 1200 and 1150 BCE in the eastern Mediterranean around the Aegean, Anatolia, the Levant and NE Africa, the eerie archaeological period when nearly all of the ancient cities were completely destroyed.
It is postulated that it was actually technological progress at the transition to the early Iron Age that disrupted the old trade networks, which relied on the transport of Bronze, and that provided the economic conditions for population collapse as well as the weaponry for the violent destruction that led to the metallurgic Dark Age.
> Climate change did NOT cause the collapse of the Bronze Age: Cold conditions occurred two generations after population decline
Until now, researchers blamed the collapse of the Bronze Age on widespread changes in global temperatures.
But now experts believe the huge population collapse, that took place in around 800BC, actually occurred two generations before this weather shift.
Records show that colder and wetter weather conditions weren’t recorded until after the collapse – and social and economic pressures were more likely to blame.
…. Professor Armit said social and economic stress is more likely to be the cause of the sudden and widespread fall in numbers.
Communities producing bronze needed to trade over very large distances to obtain copper and tin, and control of these networks enabled the growth of complex societies dominated by a warrior elite.
As iron production took over, these networks collapsed, leading to widespread conflict and social collapse….
https://www.dailymail.co.uk/sciencetech/article-2838090/Climate-change-did-NOT-cause-collapse-Bronze-Age.html
Ah, yes, the disruption of new tech entering the economy savaging the good old and cozy order with the big boyz elitist club left in tatters. Just like people on wheels arriving from the Eurasian steppes smashing up the old order and stagnant jank into ruins.
It’s about time to go bonkers with tech while the economy transistions away from frivolous tangibles to intangibles.
https://cdn.funnyisms.com/18a830d8-bf8c-47af-900c-63f7595a8143.jpg
What ‘tech’ did you have in mind that might avert an energy based population collapse? It is hard to see how ‘intangibles’ or any egalitarian social ‘order’ could overcome that one. Am I missing something with the significance of the ‘black metal’ meme?
I’m not writing about egalitarianism. Where did you get that from?
The two evils, one, going full bore over the Seneca cliff. Two, GND world government Calhounian rat “utopia” that makes Orwell’s 1984 like paradise.
The remaining resources on this planet is sacred, much more so than the dreams and delusions of a fake “green” “utopia”, and the peddlers of frivolous consumerism and the cult of children.
More questions?
Kowalainen wrote: “GND world government Calhounian rat “utopia” that makes Orwell’s 1984 like paradise.”
Strong central states spread over a wide area are hard to create and harder to maintain without a lot of cheap energy. That’s why big empires have been fragile. The Roman Empire only lasted as long as it did because it was mostly clustered around the Mediterranean Sea. Cheap water transport over that relatively sheltered Sea acted similar to an energy subsidy. Once Hubbert’s Pimple is behind us, America’s fortuitous network of water transport, plus a couple of key canals, and many fine natural harbors will give us an enduring economic edge over other countries. Maybe then we will finally build that canal to connect the Great Lakes with the Mississippi River. The railroads blocked it in late Victorian times, and environmentalists would block it now, but one day it will likely be dug.
Yes, it is why the GND World Government is such a reprehensible idea. One can only imagine all the technological contraptions and horrors (CCP firewall, etc..) imposed on the useless eater to stay relevant and in power. Until it eventually crumbles under its own cruelty, weight and uselessness.
The MSM Biden debacle is the present day whiff from a lovely stinker from the future of the relentless propaganda that will be shoved down the throats of the hoi-polloi.
https://memegenerator.net/img/instances/68378447.jpg
Nobody remembers a coward.
“Until now, researchers blamed the collapse of the Bronze Age on widespread changes in global temperatures.
“But now experts believe the huge population collapse, that took place in around 800BC”
Problem: the Bronze Age civilization collapsed around 1200 BC, not 800 BC! By 800 BC, the Iron Age was being born. (Never rely on journalists to get the science right–or history, religion, or much else.)
If you look at the graph of the Greenland GISP2 ice core, temp drops in Greenland (presumably reflecting changes on a global scale) coincided with the Bronze Age collapse, the collapse of the Western Roman Empire (and near collapse in the East), and the failure of Medieval Civilization, although in this last case breakthroughs in printing technology, cannon (which allowed feudal baronies centered around castles to be consolidated into centralized early modern states), deep ocean shipping, and new crops discovered in the New World after 1492 (especially the potato), allowed a rapid transition to the Modern Age in spite of difficulties.
https://ryoc.us/wp-content/uploads/2015/04/Greenland-Ice-Core-Temperatures-10000-years.png
“A truly booming world economy. This is what raised prices in the 1970s and in the run up to 2008.”
The run up to 2008 was an unsustainable bubble. And in the 70s, Net Energy was much higher. Now we have declining net energy. This is the main reason we won’t have a booming energy going forward. At least this what I have been understanding from your work.
I agree that the run up to 2008 was an unsustainable bubble, especially in the US, but the world economy did look, in some ways, to be booming. China and Asian nations will pulling along the rest of the world.
Now we have the world economy running on an unsustainable bubble, and it still isn’t doing well at all. Everyone is asking for more debt to support the economy.
Hi Gail. I posted a comment on part of your argument on another blog, so I think it is only fair to post it here so that you can at least consider it.
I think Tverberg’s argument can be used as the basis of a global solution to the reality of Peak Energy, as long as a couple of unstated presumptions can be cleverly thought through and then put aside altogether.
The argument pretty much starts from the presumption that there is a fixed relationship between energy prices and the health of the economy. It states that one way to boost energy prices would be “a truly booming world economy. This is what raised prices in the 1970s and in the run up to 2008.”
The boom over that period was fuelled by two factors, oil and debt. The oil part of the equation expanded the real economy, but most of the expansion was not creating useful real world capital, but in overconsumption which destroys real world capital. The debt part of the equation expanded a giant bubble of speculation and asset price inflation, which persists to this day, even after the near crash of the GFC. This financial bubble has no benefit whatsoever to the real world or the real sector of the economy, it only serves the parasites that feed on the bubble from the inside.
The boom was a dud. It was a completely inefficient use of available resources to produce something with no lasting value. The last thing we should want is to return to such recklessness and waste. But the first piece of good news is that the boom can not be restored anyway. The consumerised societies which do the vast majority of overconsumption, and therefore deplete most of the world’s resources, are already saturated with debt. The debt fuelled portion of growth is pushing up against real constraints.
Also, real world capital has been depleted and destroyed to such an extent that the exploitation of real world capital comes with diminishing returns, and threatens a total collapse of natural processes and systems that keep the biosphere stable. So the oil fuelled portion of growth is also pushing up against real constraints, because nature no longer has the capacity to expel the excessive heat trapped in the biosphere as a result of burning fossil fuels.
So the relationship between energy prices and economic activity is nowhere near as simple or fixed as the starting presumption would have it. It is certainly not linear, and almost approaches chaos as we push the system closer to the limits to growth.
Oil prices will rise as more and more excess money comes into the system as banks create debt, as long as that debt is funding real world activity. If instead debt is created for the sake of speculation and the search for marginal yields in the financial sector, then the new money entering the system does not push oil prices upwards.
The second piece of good news is that we can have control over the amount of money and debt coming into the system, if we are willing and able to change the model of finance, from one that presumes infinite growth is possible, to one that remains stable through periods of economic contraction. In other words, if we go from an insane model of finance that pretends that there will always be enough future growth that no level of indebtedness is a problem, to a sane model of finance where only enough money and debt are created to serve the needs of the real and productive sector of the economy.
The third piece of good news is that we can also have much greater control over the energy efficiency of the industrial system, by placing a penalty price on the consumption of fossil fuels equal to the cost of reversing the carbon emissions involved. The enormous revenues collected would fund a competitive global carbon sinking industry.
Such a price would change everything. People might need to really slow down and think about it before the magnitude of this point is truly understood and appreciated.
This is exceedingly important, because it will become crystal clear that all other arguments about what can and should be done, for the economy and for the planet and the human civilisation that it supports, become either redundant or excessively trivial.
A price on carbon emissions fully funding a price on carbon sinking would completely transform the world, not just the economy but also how the industrial system interacts with the natural systems of the planet. It constitutes a fundamental realignment of the most powerful forces acting on Earth, and makes them finally all push in the same direction, which if we set the goals correctly means prosperity and sustainability.
See an outline of how the system would work and how it would completely transform the outcomes markets generate here: https://www.fixingthesystem.net.au/2018/05/15/global-carbon-sinking-fund/
So, this concept of a global carbon sinking industry is a great opportunity for all of us to see how our situation can be radically improved. Essentially there seem to be just two presumptions that prevent otherwise capable people like Tverberg from seeing what is possible: (1) That we have to work within the model of finance that we have now. And (2) That we have no power to control what markets do.
Both of these are not necessarily true. There are no rules of physics, or thermodynamics, or economics that stand in the way of a sensible model of finance and control of market outcomes using pricing signals.
Yes there are enormous psychological and political barriers to these fundamental system improvements, but these are only virtual barriers, which can be overcome with vision, argument, and building of political support for reform.
All I am asking is that those who are willing and able to zoom out to the bigger picture, and to question some of the fundamental presumptions that generally leave us powerless to change the system, at least have a read and a think about it. It just might expand your perspective and improve your outlook.
Thank you for commenting.
I see you live in Australia, based on the web address of Fixing the System. You sent this comment at 11:18 pm my time, and your follow-up comment came before 7:00 am my time. This is a time you can expect me to be offline. You evidently think that you have a way to fix the system. My ideas run counter to what you are saying, and that is what gives you a problem.
I have been researching this whole story for quite a long time. I have been working with researchers from around the world. I have been writing academic articles. I am not able to put all of my ideas into a single post.
Regarding what happened in 2008, I was not able to write much about the situation in my post. I wrote an academic article that was published in the journal Energy about what happened in 2008. It has been cited 73 times, according to Science Direct. You can read a version of it free at this link: Oil Supply Limits and the Continuing Financial Crisis. One of the things I talk about in that article is the debt bubble that collapsed at the time of the oil price collapse in July 2018.
You say,
You clearly did not understand what I was saying, if you came away with this idea about what I was saying. What I have said is highly correlated in many articles (if not this one) is
(1) Growth in world inflation-adjusted GDP
(2) Growth in total world energy consumption (oil, coal, natural gas, hydroelectric, locally supplied energy, wind, solar, etc.)
Quite a bit of this growth in energy consumption goes into population growth. In this post, I only talked about “energy consumption per capita.” So, a lot of this got lost when I tried to simplify what I was saying for this post. This is a somewhat different chart showing the growth in population and living standards on top of each over, in a stacked chart:
https://gailtheactuary.files.wordpress.com/2020/11/world-energy-consumption-population-growth-vs.-standard-of-living-increase-captions-large.png
It shows a little more clearly what is happening. There is still growth in energy consumption; it just goes entirely into population.
What I am saying is that the total mix of energy products must be affordable to the population. There is a buying power contest going on.
(1) The mix has to be right. Cheap fuels have to predominate. If oil or renewables become too big a share of the total, they tend to pull the overall cost of production too high.
(2) The total quantity of energy supplied needs to be rising, despite things like government shutdowns and COVID-19 inefficiencies.
(3) The average price of energy products that participants can afford needs to keep rising, to compensate for the cost increases producers are encountering because of depletion issues.
It is the fact that the buying power of consumers is not increasing sufficiently to offset the depletion problems that leads to collapse. Energy producers have rising costs, but consumers do not have rising buying power. The big increase in cheap coal production (China, starting in 2002) helped move the world’s average cost of energy lower for a while, and kept the economy operating. But once China’s coal production stalled out about 2012, the overall fuel mix has been becoming too expensive for consumers to afford.
Unfortunately, wind and solar are at most small add-ons to the fossil fuel energy system. They cannot provide anything close to a stand alone system. I don’t think that, on their own, they can provide any true “net” energy. A big problem with solar panels is the fact that most of the energy they provide is in the summer. The big need for energy supply is winter, when the hemisphere is cold, and needs energy to warm it up. Saving energy from summer to winter is a lost cause. This is an article on the cost issue. https://www.technologyreview.com/2018/07/27/141282/the-25-trillion-reason-we-cant-rely-on-batteries-to-clean-up-the-grid/
I invite you to read some of the other articles I have written. If you persist for a while, I think you will discover that what I am saying is correct, even if it is not very pleasant. There are an awfully lot of people taking government and industry grant money to “prove” that there is a solution to our problems. These people put out an endless supply of misleading articles in peer reviewed journals, since everyone wants a happy ending.
Re: energy growth and population growth – and collapse
Hi, Gail.
The correlation between global energy consumption and global population growth over the past two centuries is curious. They correlate pretty closely even though a significant proportion of the growth in global energy consumption is explained by the regional growth in energy consumption per capita in more economically ‘developed’ countries. Clearly other regions have also experienced an increase in available energy sufficient to increase their populations – and the global correlation has remained pretty close.
https://www.e-education.psu.edu/earth104/sites/www.e-education.psu.edu.earth104/files/Unit2/Mod8/Earth104Mod8Fig5.png
Quite possibly just as much of the energy used in the West goes into population maintenance, just in a more complex manner. The ‘higher living standards’ are the economic modus operandi that allows for a higher population here. It may be more ‘advanced’ to use central heating and to drive to get food from the supermarket, imported from Spain and from everywhere else, in return for wages but they still get the same old ‘job’ done of keeping people warm and feeding them, just on a larger scale than before.
As you mentioned in your talk Gail, folk in poorer countries are likely to display a population collapse most immediately but it is liable to be just as drastic in the West. Less of the energy consumed here may be ‘surplus’ to mass survival than we might commonly suppose.
I took the above graph from here:
https://www.e-education.psu.edu/earth104/node/1347
Thanks for the response. Yes, I understand the points you are making, and I have read many of your posts linked via other blogs. I am not really rejecting any parts of your argument; merely expanding upon them after setting aside some of the presumptions that do indeed apply to the current dysfunctional nature of the global economic and political system, but do not necessarily apply if we were to fix the system.
There are two particular changes to the system that if applied would change the overall scenario. The first is financial reform that would mean that continuous economic growth is no longer necessary to keep the system stable and prevent collapse. This is critical, because it means that we could have substantial reduction in the consumption of goods and services without any reduction in quality of life. This means that the production and consumption of energy need not be maintained within some ideal range in order to keep the whole system stable.
In the consumer societies to begin with, there could be say a 50% reduction in the volume of energy consumed with no measurable cost to quality of life, because most of what is consumed is simply consumer crap. The most profitable goods and services are actually things that do nothing to improve well-being and instead generally inflict accumulating harm to individual people and to society at large.
A short list of examples: chemical based household and personal products, fashion based clothing, cosmetics, vitamin supplements, excessive use of pharmaceuticals, excessive consumption of meat, junk food, processed food, enormous houses (here in Australia among the largest in the world), jewelry and other status items, … the list is infinite, of all the things we consume based on nothing but empty headed vanity, buying things we don’t need, to impress people we don’t know, with money we do not have.
If finance is fixed so that a significant drop in the consumption of unnecessary goods and services does not threaten to destabilise the system, then we can easily manage a significant reduction in the consumption of energy at no real cost. Of course there would be large impacts on employment, but that is really a question of the distribution of employment opportunities, not necessarily the overall volume. If we are consuming unnecessary stuff just to keep each other in work, then we really are wasting the resources of our planet for no lasting benefit.
The important point is that energy and the volume of economic activity can be decoupled by fixing finance, thereby removing the imperative for continuous quantitative growth. This gives us great freedom to change the way the system works.
Which brings us to the second fundamental system reform that would make all current arguments about energy demands redundant: We can move from a quantity based economy that consumes the finite resources of the natural world at ever increasing exponential rates, to a quality based economy in which energy becomes much more expensive, and therefore forces the economy to become increasingly circular.
Energy becoming much more expensive is the solution to climate change. It will force the global industrial system to innovate and compete in order to dramatically improve the energy efficiency and reduce the emissions intensity of all of its processes, inputs and outputs. A simple global price on all carbon emissions will do the trick, and if the vast revenues collected are used to reward carbon sinking, then nature itself will do much of the heavy lifting in the transition to a negative net emissions economy.
I simply refer back to the argument in my original comment, rather than to repeat it, and ask that people give it another look while keeping in mind that under a sustainable model of finance, economic growth is no longer an imperative for system stability.
First, you say regarding reforms:
Continuous economic growth is needed to overcome diminishing returns in the extraction of resources of all kinds. In fact, food is one of these, because arable land is fixed or declining (from misuse), while population continues to grow. The diminishing returns problem says that we need to run to stay even, apart from the financial system.
I am not sure how financial reform would overcome what is essentially a Ponzi Finance system that we have right now. There is a huge amount of debt that can never pay back, because jobs (created by adequate energy supply) are not available.
What the consumer crap gives is jobs to support workers. Without jobs, these workers would likely starve. No matter whether the job is simply digging dirt out of one hole and putting it into another, it is something that people use to buy food, and pay their rent. This is a big problem today.
Regarding:
Absolutely not! If you start with a finite amount of resources (a bucket of sand, for example), they deplete, whether you do it slowly or quickly. What you are getting rid of is jobs. People will not be pleased about this. There is no way energy become more expensive, without more people having jobs that pay well.
But if you deplete wood slowly, say, that allows time for more wood to grow? And can’t a decentralized system “pay” people to fix things rather than make more crap? I assume that a centralized system, among other things, would be too complex (and therefore involve prohibitive cost) to do that.
Wood is a tiny share of the resources that we are using today. Wood is practically the only one that is available to the common person, if his fossil fuel energy resources are missing. With today’s population, wood is at risk, practically whatever you do. No one wants to freeze to death or eat only raw food.
I don’t say that wod is a major resource to depend on, which is why I obsessively think of and model alternatives (in real, hands-on terms) to using wood. Wood is still used in framing domestic buildings, and there is a lot of house building going on–a major part of the economic system, I suspect.
From what I can see driving by the explosion of development in Santa Fe, particle board is used for walls instead of wood. But wood IS used for framing, and a moderate amount of framing wood might be possible to grow in a renewable fashion. There may not be a coherent plan to grow such wood, however.
A great deal of uncontaminated wood is burned for industrial farming. Other usable wood, perhaps good for making chip board, etc., is dumped into landfills.
Firstly, thanks for approving that comment. I was a little worried that it might have been argumentative enough to be disallowed under your preferred guidelines, especially given how much time you put into not just moderating all these comments, but actually responding to a good portion of them. I am sure I could not handle anywhere near the same volume, and I imagine that I would be willing to put challenging comments aside until I could find the time and energy to respond properly.
There are answers to all your doubts in the arguments on my site, several of which I have linked. In a sense the few posts there represent overlapping pieces of the same jigsaw puzzle. I admit there is a lot to absorb and some of it is complex.
But very briefly, yes arable land is being misused, and so are natural ecosystems, precisely because there are no significant market incentives to preserve and restore them to health as much as possible. The carbon sinking fund would absolutely reverse those dynamics, making the preservation and regeneration of natural carbon sinks about the most lucrative activity on the planet, as well as driving a worldwide shift to regenerative agricultural methods, which store vast amounts of carbon in growing volumes of rich healthy soil. The boosting nature post explains the fascinating processes involved.
Fixing finance is actually quite straightforward, even if amassing the political will to do so is an enormous challenge. It involves a sovereign agency such as the central bank or monetary committee deciding how much money needs to be added to the money supply in each economic period. The private banks would no longer be free to expand the money supply at will, which is the root cause of all financial system dysfunction, including the imperative for continuous quantitative growth. There are detailed plans compiled by global experts in my fixing finance post. It includes mechanisms to deal with the enormous mountain of existing private debt.
You say: “There is no way energy become more expensive, without more people having jobs that pay well.” I will just say that the distribution of employment and income is a political matter, the product of subjective choices, values and goals. How each political jurisdiction decides how best to deliver those goals is up to them.
The pressure of a much higher carbon price on the market will drive the mix of energy sources to the optimal and cheapest set at any point in time. It will also drive rapid improvements in energy and emissions efficiency, most of which will be achieved by a relatively small set of large scale industrial businesses.
This point will probably require deeper treatment, but the low hanging fruit under a higher energy price will be the consumerist crap that people will either buy less often or in smaller quantities, or switch to cheaper and effectively subsidised alternatives because of their lower emissions footprint, or simply do without under higher prices. If you are looking just at America or Australia for that matter, most of the truly unnecessary crap is made offshore anyway, so there is little impact on domestic employment.
With the same global price for all carbon emissions, and the same global price for all carbon sinking, most of the reduction of emissions will be by reductions of overconsumption in the consumerised economies. The impact on day to day life around the world would be barely noticeable in terms of access to necessary goods and services. It is the unnecessary things like the list of examples I offered that will either dramatically increase in price, or dramatically increase in efficiency, or in nearly all cases a mix of both.
As I have written, the reality is that we only need to knock off a small percentage of the most excessive unnecessary consumption in order to reach the global targets, as long as we also exploit nature’s power to sink carbon in vast quantities, so the task is not an insurmountable obstacle, although it does require open mindedness and considerable thought and debate.
You need to read about the role physics plays in the distribution of incomes. Strangely enough, it is physics that leads to the very unequal distribution of incomes, when there is truly not enough energy to go around. This is one post I wrote about the subject: The Physics of Energy and the Economy.
Physicist Francois Roddier likens of rising incomes to the already wealthy to heat causing steam to rise to the top. When there is not enough to go around, the already poor are disproportionately frozen out. This is the way evolution works, in the economic system. The world economy constantly adapts to favor those who are already doing well. It is an example of “selection of the best adapted.”
I think of the situation as added “complexity” favoring the already rich. Jobs become increasingly mechanized. Ownership of the devices to mechanize the system becomes a bigger share of the total. Education becomes increasingly important. Businesses get increasingly large, especially since globalization plays a bigger role. The people at the tops of hierarchies get a lot. Many people get left out. These people become the refugees and migrant workers of the world.
This would be true in an economy that isn’t dominated by machinery and automation. In reality, relatively few people, machinery and energy support a rather large base of useless eaters that is upheld by the immigration, finance and taxation racket.
Most people have no frickin’ idea how stuff works and how to fix it if it breaks down. They are definetley light years from the productive capital in the form of energy production and generation, workers and machines.
Get rid of the useless eaters, put them on UBI and move them countryside. They are in the way of productivity growth by their mere existence.
I mostly agree with Gail, but Brandon is right about changing consumption expectations being helpful (although not in a top-down way as Tim rightly scorns). One example that people studying “sustainability” have liked to use is the Edo period in Japan. The society there was elaborately structured and people had plenty in the way of jobs providing for “conspicuous consumption” like hand-embroidering garments for the wealthy. At the same time, there wasn’t a lot of waste allowed: one career was being an umbrella-repairman, delicately removing damaged rice paper from all the little bamboo arms and re-gluing new paper to the structure.
Here’s an example of this sort of article:
https://www.resilience.org/stories/2005-04-05/japans-sustainable-society-edo-period-1603-1867/
Two thoughts I have come away with from the discussion between Gail and Brandon are that those wanting to impose consumption controls such as carbon taxes don’t understand that only an industrial society can impose those kinds of controls in the first place with all of the necessary computers and gear, as Tim points out. That doesn’t mean that there isn’t the ever the possibility of living, though, in what Brandon calls a circular economy.. it’s just that any circular economy will be have to be based 100% on the old notion of solar power: photosynthesis -> animal and human labor, mainly, and that there will be many, many fewer of us (if habitat for humans isn’t totally destroyed by all the nukes going Fukushima).
In any case, egalitarianism has no place in natural societies. Even the Puritans struggled with what bits of lace and whatnot people would or would not be allowed to wear to decorate themselves (such decoration being a natural “healthy” signal of status and reproductive fitness). Today, high-status might be signalled by such ‘sacrifices’ as driving a Tesla or Prius, buying expensive solar panels, organic smoothies from vegan juice bars, “ethically sourced” clothing or coffee, etc.
Whenever egalitarianism gets explicit. It is a telltale song that we have veered astray.
Mother earth works in implicit order.
It is why all forms of central governance will ultimately end in dystopia.
Going distributed, competitive and collaborative is the only way to avoid catastrophe.
Get those useless eaters countryside with UBI, let the energy-economy system have a breather from the obscenities and various IC rackets.
Brandon, after reading your comments carefully, I conclude that you are a supplement-grabbing puritanical killjoy.. The solution is for you to go and live in North Korea, where they have already pretty thoroughly stripped all the vanity consumption out of life—not to recreate North Korean socioeconomic conditions worldwide.. I really think you would be happier living frugally just north of the DMZ and you’d gain a keener appreciation of quality of life issues.
I would like to respond at length to your thoughtful comments, but your inane statement arguing that things such as “chemical based household and personal products, fashion based clothing, cosmetics, vitamin supplements..” … “do nothing to improve well-being and instead generally inflict accumulating harm to individual people and to society at large” has literally struck me dumb (it also struck me as being dumb), causing my brain to ache.
After a few years living in North Korea, please pop back and let us know how the quality of life is working out for you. That is, if you are going to continue allowing yourself access to such harmful chemical-based household and personal products as a PC, tablet or smartphone.
So Vanity is Good is it? I don’t how you came up with the presumption of worldwide deprivation, we just need to get the industrial system to produce the dumbest excesses of consumerism a little more efficiently and sustainably.
Those items are toxic in excess, for various reasons. Disbelieve if you like. Your conjecture about me couldn’t be further from the mark, but it doesn’t matter.
How did you go with the little finance video? Did it clear things up?
Vanity is a vital part of the human condition, old boy. You’ll never breed it or legislate it or train it out of existence. And why would you want to?
Well, if you’re not a Puritan and you’re not a killjoy, then prey tell us the logic behind why you want to ban cosmetics and fashionable clothes?
A lot of things are toxic in excess but as Paracelsus pointed out: “All things are poison and nothing is without poison; only the dose makes a thing not a poison.” This is often condensed to: “The dose makes the poison.”
I’m interested and I think many of us freedom loving troglodytes here are interested in what gives you the right to determine for other people what should constitute quality of life for them?
Apparently you want to stop people from enjoying cosmetics or driving SUVs or taking vitamins or wearing fashionable clothes because “those items are toxic in excess” and because they “are actually things that do nothing to improve well-being and instead generally inflict accumulating harm to individual people and to society at large” Is that correct? Because I wouldn’t want to misquote you. I just want to know how much you want everybody to give up without compromising their quality of life in order to comply with your prescription.
So, what is your rationale for determining what is and is not “consumer crap”? If you are going to allow yourself to have a PC and an internet connection while depriving your granny from swallowing a few vitamin pills, you’d better have a bloody good reason, cobber.
What on Earth are you talking about? Where did the idea of banning things come from? Have you even followed the links and absorbed the arguments? Have you had a think about it? Your reaction is inexplicable.
Brandon, we are talking past each other here and I feel confident in assuming that we are living in different conceptual universes.
I assumed you wanted to ban things because you said that “we only need to knock off a small percentage of the most excessive unnecessary consumption” which you identified as “unnecessary things like the list of examples I offered”, which included “chemical based household and personal products, fashion based clothing, cosmetics, vitamin supplements”, etc.
You don’t say directly that you want to ban these things, but you do advocate driving up the price of carbon which will make almost everything more expensive, and then to effectively subsidize the production of certain goods in order to make other goods—the unnecessaries—more expensive. If we artificially drive up the price of carbon and we effectively subsidize the necessaries enough, then the result will be to effectively make the unnecessaries difficult or impossible to obtain.
From this, I presume you do want to ban these unnecessaries. I think there is something unbelievably dangerous about that attitude, and I think it displays a lack of empathy for people who regard these unnecessaries are essential elements their quality of life.
I know you are not going to give me a straight answer to a straight question because you’ve avoided that in your replies up to now. So I won’t bother to ask again. But still I wonder where you get the brazen arrogance to assume you know better than other people what’s necessary and what’s unnecessary for them. Because in the end, your ideas seem to boil down to distorting market mechanism in order to prod or force people to do what you want them to.
Consumers—ordinary normal decent hardworking consumers—are asking, why do they hate us? Do they hate our freedoms? Our freedom to eat junk food, our freedom to wear pretty clothes, our freedom to put on makeup or drive an SUV, or megadose on vitamin C? Do they hate these things so much that they want to make them even more expensive than they will be by time they’ve “raised the price of carbon” in order to reward their friends in that unofficial and loosely affilated extortion organization known as the Green Blob?
https://youtu.be/-PKRHgmHzK0
Your last paragraph is somewhat astounding. Surely you are aware that consumer behaviour is not driven by what people desire, but rather by the wants that the industrial system imposes on them, in order to keep the masses docile, ignorant, spending and bearing debt? I would have thought that was a necessary starting point for the subject of “Limits to Growth 101”.
Try this, if you can make the time:
https://www.youtube.com/watch?v=DnPmg0R1M04
The task in dealing with the limits to growth is not to protect the feelings of those who have been thoroughly manipulated and deceived by the system of power into consumer servitude and debt serfdom. It is to at least present them with an option to drop out of the Matrix altogether, at least for long enough to endorse a model of change for the world system that changes the trajectory away from the inevitable complete self destruction of human civilisation.
Once the political will has been amassed, and the system reform has been accomplished, everyone can choose whether or not to dissolve back into profound ignorance of the real world, or to actually live in it for a while, free of systematic delusion.
All of your other misconceptions of my argument here can be fixed with enough engagement over time, but any meaningful discussion on the limits to growth simply has to begin with the reality that the excessive consumption of goods and services by the masses is neither their own doing nor what is in their best interests.
“These people put out an endless supply of misleading articles in peer reviewed journals, since everyone wants a happy ending.”
Thus the amount of delusion in circulation is staggering.
https://memegenerator.net/img/instances/60683225.jpg
“All of your other misconceptions of my argument here can be fixed with enough engagement over time…”
What an amusingly megalomaniacal thing to say.
“Surely you are aware that consumer behaviour is not driven by what people desire, but rather by the wants that the industrial system imposes on them.”
This is a childish externalisation of blame. Re the industrial system and consumers – they are not discrete entities and indeed co-create their reality. Do you also belong to the school of thought that just 100 companies are responsible for 71% of global emissions etc.?
Harry, here’s an analogy of that thought process:
We all know that exhaust pipes and stacks are responsible for releasing close to 100% of pollution in the athmosphere.
Now, if we simply remove those nasty buggers, then, problem solved. EZ.
https://media.makeameme.org/created/when-you-know-5cd090.jpg
Yes, I am just kidding. The predicament is of course caused by people high on their own product.
https://memegenerator.net/img/instances/75845887.jpg
I wrote: “consumer behaviour is not driven by what people desire, but rather by the wants that the industrial system imposes on them.”
You responded: “This is a childish externalisation of blame.”
This demonstrates that you do not even have the courtesy to inform yourself before you express an opinion.
I linked The Century of the Self video as part of my argument, and you have apparently not even given it a moment’s thought. If you had, you would have instantly realised that there might at least be some merit and truth in the argument, and you would have been more careful to post a response that wasn’t so blindingly obviously ignorant.
I think this documentary series produced by the BBC is essential knowledge for anyone to have an informed opinion about the limits to growth, and what we as a collective can or cannot do about an economy running up against those limits. It shows exactly how the well proven wartime propaganda techniques were adopted by the US industrial system and used to deliberately deceive the American population into mass consumption. It includes direct interviews with those who actually crafted consumerist propaganda, and has them explaining their reasoning for wanting to control the masses.
It is truly critical knowledge, because it gets to the cause and effect that is pushing the economy with ever more pressure up against the limits to growth. Consumerism is the major force acting on the population in this system. It is the force that needs to be overcome. Here is the most important point, if you do not understand the main forces acting on a system, and the flows of cause and effect around and within the system, you have no understanding of the system. None. You are in a position of blind ignorance.
If you do not perceive the cause and effect behind a systemic problem, not only can you not solve it, you are prone to alternative explanations for system behaviour based on nonsense, on misguided beliefs, conjecture, or opinion, and most dangerously of all, on psychological preferences, which deny the intellect any chance to logically and critically assess the situation and gather new insights and knowledge.
I urge anyone who wants to debate the limits to growth seriously, from an informed position, to find the time to absorb the content. There are transcripts for the first two videos that might make things easier and quicker to navigate here:
https://theconversation.com/the-off-topic-conversation-126-80070#comment_1329345
You don’t necessarily need to agree with my statement:
“any meaningful discussion on the limits to growth simply has to begin with the reality that the excessive consumption of goods and services by the masses is neither their own doing nor what is in their best interests.”
But if you hope to engage in meaningful debate, you will certainly need to decide how much truth there is in that statement and have a reasoned argument ready to back up your position.
I’m sensing a whiff of the GND lobby.
Is that just me, or is it wafting everywhere on the interwebz?
https://i.imgflip.com/n9sjc.jpg
No, definitely not. The best mix of technologies and activities is not something to be determined by politicians or complex regulations. Just set the right pricing signals and let the markets do their thing.
The Green New Deal may or may not be a constructive approach, in a fairly minimal way, but given the complexity, it is not worth focusing on.
“the excessive consumption of goods and services by the masses”
=> “the excessive … masses”
Brandon, the most honest of those who calculate “carbon footprints” say that the most important thing anyone can do to reduce carbon consumption is to not have children. China tried a one-child policy and went back on it.
If population reduction is the fastest route to carbon “neutrality” -let’s call it, why does that never seem to be much of an argument in “green” circles? The answer seems to be that third-worlders have most of the children and want to send them to the first-world (so they can consume like first-worlders) or to develop their own economies (so they can consume like first-worlders). To prevent that from happening is “racist”.
Removing or restricting über-consumers, like taxing the 1%, really would not reduce overall consumption in anything close to the degree which is necessary, I think you’ll find. It’s the whole megillah that is the problem. Deciding whether people get to wear deodorant or nail polish is only nibbling around the edges.
You can’t have a bee hive without a queen bee, and that queen bee gets all the most delicious and nutritious food, because without a live queen the entire hive will becomes infertile and will die.
You are trying to bring things which are a-moral (not immoral, but amoral) into your own idea of a moral universe.
Yes, I am happy to accept that population growth is part of the problem, but many of the people that start advocating for negative population growth tend to act like a hammer, and see every problem as a nail. Fixing population growth, they say, will solve this problem, and that problem, and …, but the reality is that fixing population growth on its own will do very little to fix climate change in particular, because as the chart and argument at the very start of this article show, the energy consumption varies enormously in various countries around the world.
The mix of fossil fuels and renewable energy sources also vary around the world, so in some cases the energy consumption per capita is almost meaningless, as with Iceland and its bountiful geothermal and hydro, but that is a separate point.
The vast majority of global emissions are created by the industrial system and all its sectors, including industrialised agriculture and global distribution and transport, and by the greatly excessive use of electricity in the consumerised societies. Reducing population in developing countries will do nothing to reduce these massive volumes of emissions.
In contrast, a global price on emissions, even a small one to start with, will exert a degree of control over the massive per capita emissions in the rich consumerised countries, immediately compelling all the businesses with significant emissions to reduce their emissions footprint, and automatically lowering the emissions footprint of consumers by making low emissions options much cheaper than high emissions options. As consumers seek better value to serve their own self interest, when they discriminate between options according to price, they automatically contribute to bringing emissions under control, even if they remain totally unaware of that outcome. Once there is an adequate carbon pricing solution in place, no one needs to care for it to go on working.
One solution is a weak and ineffective first step at solving climate change, although it is important to debate and find reasonable ways to achieve control over population growth. And the other solution goes directly to the cause of the problem and automatically seeks out the most inefficient sources of carbon emissions within the system, and puts the greatest pressure on them, forcing them to find efficiencies or to become less profitable.
I wouldn’t know about “green circles” because I don’t engage in politics. But from a systems engineering perspective, population control is a rather limp solution to climate change, and a global price on carbon is a precision guided goal delivery system, particularly when it has the power to drive massively increased carbon sinking as well as significant reduction in emissions from the industrial system.
On your last point, I deliberately avoid any kind of subjective argument, things that are based on moral positions or beliefs and so on. The sole basis of my solution is the presumption that we want human civilisation to remain stable for as long as possible. I figure at some point we will collectively debate how long that period should be before catastrophic collapse: do we want another 30 years, or 50? I will only enter an opinion at that point, and my view would be that we should be aiming for at least 1,000 years.
>>>>>Oil prices will rise as more and more excess money comes into the system as banks create debt, as long as that debt is funding real world activity.<<<<<<
Short sharp summary:
Energy underpins the existence and value of money.
*********
The existence (creation) of money cannot and never will underpin the existence of and supply of energy.
****
It appears to be a lesson impossible to absorb: We live in an energy based economic system, not a money based economic system.
If you take out a bank loan 'to fund economic activity', (buy a house, say) you will go bankrupt if you don't find more energy to repay the loan.
You will not create the necessary funds to buy another house.
Norman,
That is a good way of describing the issue, “Energy underpins the existence and value of money.”
Without energy, we have a huge problem.
Without energy and productive capital (people, machines) we have absolutely nothing. Zero. Fuck all, Diddly squat. 0/0.
https://i.imgflip.com/1evpfj.jpg
Oblivion awaits no matter what we do.
https://music.youtube.com/watch?v=wf5RdLDxrUk
What You Gonna Do?
“Energy underpins the existence and value of money.”
That might have been true to an extent up until the Nixon Shock in the early 1970s. Since then, there has been no connection between the volume of money and anything in the real world.
Money is now purely virtual. The banks can create unlimited volumes of it as long as there is demand for new debt, and as long as there is an enormous bubble of financial wealth on which to gamble, there will never be a shortage of demand for new debt.
There has been an inverse relationship since the Nixon shock with debasement of currencies and ever-rising financial complexity compensating for tightening energy and resource-constraints.
Financial sleight of hand cannot outrun the laws of physics indefinitely though.
“as long as there is an enormous bubble of financial wealth on which to gamble, there will never be a shortage of demand for new debt”
Said at the top of every bubble ever.
Its John Law all over again, but we never learn.
“Said at the top of every bubble ever… but we never learn.”
Yep. When the bubble bursts, fake financial wealth is destroyed and there is no longer a bubble, so nothing on which to gamble. But, precisely because we never learn, and because we are persistently unwilling or unable to change the system to prevent the formation of bubbles of fake financial wealth, a new bubble will form, gamblers will return, and demand for new debt will increase.
Nicole Foss uses the same analogy of musical chairs used here, and puts it like this:
“Credit is now of the order of 99% of the money supply, which means that 99% of the money supply is excess claims to underlying real wealth. We took a small amount of collateral, and we backed an enormous number of loans with it, so we now have a crisis of under-collateralisation. This means we are all playing a giant game of musical chairs, there is about one chair for every hundred people playing the game, and as long as we are all up and dancing to the music and enjoying ourselves, we don’t really notice how few chairs there actually are, and not all of us entirely understand the rules of the game we are playing either. But, when the music stops, the people best positioned to understand the rules of the game are going to grab a chair as quickly as they possibly can. The great collateral grab will be on, and everybody else’s excess claims to underlying real wealth will be rapidly and messily extinguished. This is deflation, by definition, and that is what we stand on the verge of today. So, the expansion phase lasts quite a long time, but the contraction phase can actually be quite rapid, and that is what we stand on the verge of, globally.”
Of course that was said a couple of years ago, but it hasn’t played out yet, because governments and central banks are pumping enormous volumes of money into the financial system, desperately trying to keep the bubble of fake financial wealth alive.
Brandon
Could you let me have the names of one or more of your creditors (or the bank you patronise)
I feel a sudden urge to borrow money
Brandon—and this is an important question so listen up—are you expecting this enormous bubble of financial wealth( that you are depending on to maintain the demand for new debt) to float on thin air, after you’ve destroyed the economic system based largely on vanity consumption on which it has been piggybacking so far?
I think you have things upside down. I am advocating that we fix the financial system so that we don’t have a bubble of fake financial wealth at all. Here is how:
https://youtu.be/eHQ7wvWzUW0
Fortunately or unfortunately, the financial system isn’t ours to fix. We don’t own it. We are not the house. We don’t make the rules. We don’t have any influence. We just take part in it for reasons of self-interest.
There are limited number of fabulously well-to-do people who do have influence. They may even possess something approaching ownership of the financial system. Perhaps you could approach them with your advocacy. I’m afraid it’s wasted on me and probably on most people at OFW. Most of us have diddly-squat. We don’t have two tranches of derivatives to rub together.
The system is designed to accumulate the fruits of labor and then to periodically harvest those fruits. Hence, all these bugs you and Nicole Foss and others like to point out about the financial system are actually features.
It’s a bit like bee keeping, only the financial oligarchs care less about their human drones than most beekeepers do about their insect workers.
Did I ever show you that picture of the time I met George Soros? I’m the 16th bee from the left.
https://images.glaciermedia.ca/polopoly_fs/1.23509367.1543335482!/fileImage/httpImage/image.jpg_gen/derivatives/landscape_804/beekeeper.jpg
Clearly you have given up all hope of fixing the system, and you have fixed presumptions that the system cannot be changed from the bottom up, through the accumulation of political will for a particular model of system reform.
Fair enough. I am happy to wait for responses from those who have a little more spirit, and who are a little more prepared to seriously consider new perspectives, and realistic solutions to the actual causes of system dysfunction.
More importantly, I am happy to wait for people who seem to have actually taken some time and effort to comprehend the argument I have made.
The same message goes out to Harry McGibbs in the following comment, who apparently believes that because the economy is complex, that it somehow has a will of its own.
First off; The ‘actual cause’ of system dysfunction is ‘us’—(we the people.)
Better brains than yours (or mine) have reached the same conclusion Brandon.
So that is what you have to ‘fix’ I’m afraid.
We the people are convinced of the infinity of resources because our brains have evolved like that. So we the people act accordingly. We consume like there’s no tomorrow, and politicians and economists encourage such thinking, because it keeps them in jobs. It also keeps us in jobs.
‘Fixing it’ as an external deliberate act of ‘control’ implies a ‘controller’.
Are YOU prepared to accept the ‘plan’ of the next controller who comes along and says: ‘I can fix your world’. Somehow I doubt it. Even a returning Messiah would have a hard time at the moment.
Hopefully we are just about to rid the world of one such, who looks as though he will be dragged away from his desk kicking and screaming. There are plenty of others, elsewhere, making the same daft promises.
History is full of them. They have been universally unpleasant.
Yes the ‘economy’ does have a will of its own. It is driven by the collective inclination of we the people.
It is the will to survive, in the face of reality that resources are not infinite, (as we were led to believe) but strictly finite in terms of 7.5 bn people. All of whom demand their right to feed and fornicate as they choose.
Those are the two driving forces of humankind that must be ‘fixed’ if our species is to survive into a future. We are the only species that sees itself as free of the constraints of nature and physical laws. ‘Infinite’ resources has made us universally greedy.
The argument you have made is easily comprehended: Someone must ‘fix’ our problem.
The problem is clearly set out above.
Demanding that it should be ‘fixed’ is the easy bit.
As Tim infers, we are merely leaseholders here, but we have been acting like planetary freeholders. The planet is telling us we are merely tenants on a shorthold lease, and we have trashed the place.
It would seem that right now we are being served with an eviction notice
“The ‘actual cause’ of system dysfunction is ‘us’—(we the people.)”
Actually it is not us, nor our nature. It is the behaviour of the economic and political system that is the problem, and we have the collective power to change that behaviour.
The explanations of our collective power and what we can do with it are in the carbon sinking fund post on my site.
Thanks for the challenge though, and those of others here, and I will get around to responding properly when I can – it is late here, and I presume there is no real rush to build some sort of rough consensus or come to any meaningful and properly considered conclusions, because I am pretty sure you guys aren’t going anywhere. Cheers.
“The ‘actual cause’ of system dysfunction is ‘us’—(we the people.)”
Actually it is not us, nor our nature. It is the behaviour of the economic and political system that is the problem, and we have the collective power to change that behaviour. We can control economic outcomes because we have the collective power to impose market incentives and disincentives that dictate market outcomes at the aggregate level. The explanations are in the carbon sinking fund post on my site.
Thanks for the challenge though, and those of others here, and I will get around to responding properly when I can – it is late here, and I presume there is no real rush to build some sort of rough consensus or come to any meaningful and properly considered conclusions, because I am pretty sure you guys aren’t going anywhere. Cheers.
you are quite right
none of us gets out of here without Gail’s parole,
“We the people are convinced of the infinity of resources because our brains have evolved like that. So we the people act accordingly. We consume like there’s no tomorrow, and politicians and economists encourage such thinking, because it keeps them in jobs. It also keeps us in jobs.”
No, we didn’t evolve to be foolish and selfish. We evolved in symbiotic collaboration with our environment. The ancient peoples around the world generally lived in harmony with nature, shared an identity with the land and its ecosystems, and learned to live well within the limits imposed by nature.
Civilisation scale agriculture was the beginning of our descent into foolishness and selfishness, and our falling out of symbiotic sympathy with the natural world around us. Even then, as we learned to store the profits of agriculture across seasons, we were still generally subject to the Malthusian Trap, and periodically suffered a rapid and humbling collapse. There was no concept of infinite growth – and nature kept making that point over and over again.
The consuming like there is no tomorrow thing came with consumerism, and its propaganda that was deliberately and expertly designed to change our thinking and behaviour, enabling the industrial system to exploit us as if infinite growth was possible. Whether many of the founding fathers of consumerism believed in the possibility of infinite growth or not is an interesting but ultimately irrelevant question. I am of the view that some probably did and some probably didn’t, in other words, some of them knew that they were setting the world on a trajectory towards catastrophic collapse, and didn’t care, and the rest of them were simple fools with no concept of finite resources or exhaustible natural systems.
You say “politicians and economists encourage such thinking because it keeps them in jobs.” Yes, they are part of the system, and again I expect that some are knowingly complicit in having the world on a catastrophic trajectory, and the rest are just fools.
So, the idea that our unsustainable economics is caused by natural human foibles, somehow corrupting the whole system from the bottom up is wrong. The greed and empty headedness is imposed upon us, for some of us against our will, but for most of us, beneath our awareness – a kind of collective ignorance to a predatory system of power.
This short piece might offer some general insights into the real relationship and sympathy we have had with the natural world in the past, and which we need to collectively rediscover now if we are to save it from the predatory financial-corporate system and its foolish lust for perpetual growth:
https://theecologist.org/2017/jan/20/living-networks
To understand in detail how the system of power deliberately imposes thinking and behaviour from the top down, see the Century of the Self video posted above.
And just to clear up some lingering misconceptions, my argument for system reform involves nothing being controlled from the top down except a reward price for carbon sinking funded by a penalty price on carbon emissions. What effects this has on consumption, or production, or anything else in the system apart from total net carbon emissions, is completely open to debate and speculation, even from me. There are no regulations or specific market interventions involved. I am not looking to dictate anything, except the most efficient method of solving climate change.
‘evolving to be foolish’ is a contradiction in terms. No species can evolve to be foolish.
there were no ‘founding fathers of consumerism’.
If any founding fathers existed, these were they:
https://extranewsfeed.com/the-day-that-made-your-life-possible-42f6a56c0705
Those guys followed the precept of your final paragraph. They took what the wanted from the local earth and turned it into profit. No control of any kind. They moved on when resources petered out.
And they had no concept of the consumerist future they were changing. But that was when it happened. The date is precise almost to the minute.
After that point we began to consume at an increasing rate as and when the means to do so became available. There was no ‘pre-thinking’ about it, any more than Faraday or Edison ‘pre thought’ the consumer-world they helped to kick off.
We imposed it on ourselves, because Edison’s gizmos seemed a good idea st the time.
The first phones were useless without someone on the other end, gramophones were useless without listeners. Lightbulbs are useless without power stations.
Edison did not foresee all of the above being carried in a pocket. Consumersim made it happen.
‘We’ demanded that it should. You included. You exist because it did happen. As do I.
Remember we are less than ten generations removed from a naked flame society. Unless you are a career hermit, you will violently resist a return to that.
This is why there is no ‘grand plan’, something devised by ‘others’.
We all demanded the million bright shiny things we saw in shop windows.
They made life easier, prettier, more comfortable. We bought those things with the surplus cash that came exclusivly from surplus energy. Buying toys created jobs and wages, so we bought bigger shinier ones.
Energy=money. The equation you cannot escape.
We turned the planet into real estate. Not a good idea. We don’t own the planet.
All very simple. Too much thinking about it creates complexity that isn’t there.
Politicians are merely part of it. They get voted into office because they make the most noise
Your video, that the Earth is an intereconnected aware system , fits in with my own thinking:
We have promised to mend our ways for decades. Now a virus has arisen to do it for us/
I responded to this comment with a new sub-thread here:
https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-shrinkage-in-energy-supply-leads-to-conflict/comment-page-12/#comment-267579
“Fortunately or unfortunately, the financial system isn’t ours to fix.” This is the crux of it.
The global economy is *self-organising* and has a macro-agenda, over and above the will of individual humans such as Brandon, which is to continue growing at the approx 3% per annum growth rate it has enjoyed for nearly 200 years via the ever-accelerating dissipation of energy. Until of course it no longer can, at which point it collapses like a soufflé.
Narratives and policies that advance this agenda will naturally come to the fore. Those that don’t, however brilliant they may appear in theory, will not.
Even the current push for a “green” transition, which may superficially give the impression that our species is serious about reducing its impact on the planet, is the system cleverly self-reconfiguring in such a way as to grant itself a few extra years’ life, as clearly it will require much stimulus, economic activity and increased fossil fuel consumption to facilitate it.
“The election of Joe Biden as U.S. president gives the International Monetary Fund a chance to reset its relationship with the United States, its largest shareholder, and make green initiatives a bigger part of its global economic recovery plan.”
https://www.reuters.com/article/us-usa-election-imf/imf-eyes-new-relationship-with-biggest-shareholder-after-biden-win-idUSKBN27R34H
Brandon, a quote from David Korowicz’s “How to be Trapped” interview, explaining in a little more detail why your ideas will never gain traction:
“For all sorts of reasons the possibility of a controlled orchestrated de-growth to some viable steady-state position is probably deluded in the extreme.
“I’ll just point to one thing, such a view tends to embody the confusion that because the globalised economy is human-made it is therefore designed, understandable and controllable – humans can do this in niches, but the emergent structure of multiple niches interacting on many scales over time is not.
“This mirrors the sort of argument made famous by William Paley in his Natural Theology who said that the existence of living organisms proved the existence of a divine creator/ designer by analogy with how the finding of a watch would lead one to believe in the existence of an intelligent watchmaker. Half a century later Darwin and then his followers showed that natural selection could do emergent design without a controller- the ‘blind’ watchmaker in Richard Dawkins words.
“But as believers in Man’s progress we seem to have taken on the role that Paley once ascribed to god- that is, as the creators of the complex globalised economy it is therefore designable and controllable and potentially perfectible if only the right people and ideas were in the cockpit.
“We find all sorts of confusion arising from this when attempts are made to take linguistic dominion over the economy by confusing complex interdependent emergence with intentional design (as in, the economy is capitalist/ neoliberal/ socialist, or, we need to change ‘the monetary architecture’).
“So even without getting into details about irreversibility in complex systems or the myriad practical problems with a controllable de-growth, the power of the belief in its possibility seems, to me at least, to represent Titanic hubris.”
https://www.resilience.org/stories/2014-03-19/how-to-be-trapped-an-interview-with-david-korowicz/
Norman, unfortunately your reply lack nuance.
For sure psychosocial characteristics, Jungian archetypes, has been exploited to bootstrap the consumerism bonanza.
The dynamic of wealth transfer within TPTB is based on resource allocation and the consumption habits caused by psychosocial Pavlovian conditioning of the populace. It’s their Game.
This is your Game:
https://ih1.redbubble.net/image.911356971.0681/st,small,507×507-pad,600×600,f8f8f8.jpg
i tried telling that to my gf
she hit me
Brandon, before the Nixon Sock you could buy one troy ounce of gold for $35. Today you will need $2000. Nixon made exactly the same mistake John Law made in 1719, when he persuaded the French government to make his paper shares legal tender. It took France 80 years to recover from the ensuing economic debacle.
The Nixon sock?
Yes, there actually was one—or possibly a pare of them.
https://memegenerator.net/img/instances/62996475.jpg
It’s that damn autospellchecker again!
Eye halve a spelling chequer
It came with my pea sea
It plainly marques for my revue
Miss steaks eye kin knot sea
Eye strike a quay and type a word
And weight four it two saye
Weather eye am wrung oar wright
It shows me strait a weigh
As soon as a mist ache is maid
It nose bee for too long
And eye can put the error write
Its rare lea ever wrong
Eye have run this poem threw it
I am shore your pleased to no
Its letter perfect awl the weigh
My chequer tolled me sew
“It’s that damn autospellchecker again!” — I believe it’s called “Artificial Intelligence.” You know, the kind that is supposed to make human intelligence redundant two or three decades from now, so that morons can safely design our bridges, supervise our national defense, and run our world. I can hardly wait.
Nehemiah,
AI is our only bet making somewhat informed decisions. This place is way too hopium and delusion infused for the herd to make any form of informed decision.
Money is a convenient tool for distributing energy.
In one of the comments above, Brandon writes: “Just set the right pricing signals and let the markets do their thing.” — BAU, baby! More growth! (Socialism/Communism promotes growth too, but is less effective.) The problem is not a particular economic system, but the industrial age itself. Too much growth is a trap: the growth trap. At some point, the survival of most of the population became impossible without large quantities of finite resources, especially energy. The processes that painted us into this corner will not get us out of it.
Chaotic dynamic systems states inevitably spiralling towards their attractors – the dead state.
https://i.pinimg.com/originals/ac/96/6d/ac966d12b41e520636a724ee001af4aa.jpg
“a truly booming world economy. This is what raised prices in the 1970s and in the run up to 2008.” — I don’t think Gail has this picture quite right. The 70s were an economically up and down decade. Oil prices were not rising because of the growth rates, but because 1, the world’s swing producer, the US, peaked in 1971 and its production declined thereafter. And 2, OPEC took advantage of the situation by doubling the price of oil. Fortunately, three big oil fields had been discovered in the late 60s: Alaska North Slope, North Sea, and western Siberia. A decade later, these fields were producing and OPEC lost its pricing power.
2008: the peak of a global financial bubble, not healthy economic growth. The reason oil prices rose was because global conventional oil production hit a plateau about 2005, but demand continued to grow (not spectacularly, just “normally”), driving prices higher. The Great Recession knocked demand back down, and as the economy recovered, fracking started bringing new supplies on line, keeping prices between 90 and 110, and, after 2014 when the Saudis announced they would no longer support prices by cutting back production to offset supply increases from fracking, in the 40 to 60 range.
Cheap oil fuels economic growth, not expensive oil. Oil prices have been too low for frackers to make a profit for the last 12 years, and to low for natural gas frackers to make a profit for even longer, yet they have continued to produce. That can’t go on forever, of course, and when high cost producers begin to fail or cut back, prices will eventually rise, and people will pay as much money as they do now for energy, but they will get less energy for their money because they will be paying more per joule. When the price per joule rises high enough (even though people may be cutting back their usage, the supply will fall faster as more wells go out of production and are not replaced at prevailing prices), eventually the industry decides prices are high enough to justify more drilling.
“heat increasing in the biosphere” — pseudo science. I know there have been some “true believer” scientists (or at lest Trenberth) who have argued it must be “hiding” in the oceans and we just can’t find it for some reason, but that is not evidence. Fact is, there is currently a 100% unanimous consensus among climate scientists that, for whatever reasons (no agreement on the reasons!), there has been no net global warming for the last 20 years.
Two explanations are offered: 1, the theory is wrong, and 2, we’re sticking by the theory, but we have no idea why the real world data is failing to conform to the theory’s predictions. Damned data! Why can’t it cooperate with our beautiful theory?
There were a lot of things going on in the 1970s. Peak oil was one of them. But we also had US, Europe and Russia all doing very well. Perhaps Japan, I haven’t gone back and looked. Women were being added in great numbers to the work force. Wages were raised in the US, to try to keep up with inflation. The chart below shows the annual increases in world energy consumption.
https://gailtheactuary.files.wordpress.com/2020/11/world-energy-consumption-annual-pct-increase-to-2019.png
You will notice that the peak in US oil consumption in 1970 was basically a non-event. The recession in 1973-1974 (related to higher prices) brought energy consumption growth down quite a bit, but it never went into negative territory. It bounced right back up again, to a higher level than we have experienced recently.
It wasn’t until Paul Volker raised interest rates to 18% in 1980 that the world went into a major recession. Prices and growth in oil consumption stayed lower for several years. The next big drop came with the fall of the central government of the Soviet Union in 1991.
I think part of the impetus of the growth in energy consumption was the Eisenhower interstate expressway system, begun in 1956. The inexpensive price of autos and gasoline added to this. Also, once a push toward racial integration started, many people wanted to more farther from work, to find areas where the racial mix was more to their liking. This led to a building boom in the suburbs.
If you look back at the chart, the 2003 to 2007 period was a period of high growth in energy consumption. I will agree that it was partly held up by a debt bubble, but I think that the growth of China, supported by high EROEI coal, was a big part of the rise in world energy consumption. The US debt bubble was a big part of what collapsed.
I don’t agree that the US peak in conventional oil production in Dec 1970 was a non-event. First, that was what enabled OPEC to control the global price for the next decade. Look at this graph comparing global GDP growth, energy growth, and population growth. All viewers should keep in mind the down slopes represent periods of falling rates of growth, not outright contraction. Also, the increments of time at the bottom are not “to scale.” Earlier increments represent longer periods of time than later increments. Because growth rates are averaged over periods of 10 or more years, individual recessions and post-recession growth spikes do not stand out. Click the link if the graph is not visible.
https://patriceayme.files.wordpress.com/2016/01/world-average-growth-rates.png
Notice that GDP growth rates and energy growth rates both peak at 5%, and population growth at 2%, in the period from 1960 to 1970, and all decline thereafter. However, economic growth rates decline slower than energy consumption rates, probably because higher prices incentivized conservation efforts after 1970.
In the final 2000-2010 segment, when energy prices of all kind rose, energy consumption rates increased for the first decade since since the 1970
turning point (apparently this rising trend in energy consumption started in the middle 1990s, and may be related to the arrival of the internet and related data storage systems), BUT the growth rate was still nothing special, around 2%. Growth in energy consumption was generally higher in the 50s, 60s, 70s, and 80s.
GDP growth, at a little over 3% per year in the 2000-2010 decade, was about the same as the 1980’s, although driven in large part by the global housing bubble while the 1980’s growth was driven more by global manufacturing and the new computer industry.
Global growth was several basis points higher in the 70s than the 80s, but also falling, and generally slower than in the 60s and 50s. Overall, global growth in the 70s does not stand out, and the 12 year period from 1971 to 1982, inclusive, saw recessions in 1971, 1974/5 (severe), 1979, and 1981/82 (severe), plus one OPEC oil embargo, and two abrupt doublings in the oil price by OPEC.
The three worst recessions since the Great Depression (not including the one we’re in now!) were each preceded by the three biggest spikes in oil prices in the post WW2 era. The first two of those three were also preceded by the use of interest rates to tame inflation (much less aggressively the first time), but while interest rates were rising before the GFC, the hikes were not aggressive and were only implemented so that they would be high enough to cut during the next recession.
Several years back, Stephen Leeb, a money manager with one of those awful New York accents, publicized his research that 10 or the previous 11 US recessions were preceded by substantial oil price increases. His research at that time found that whenever oil prices rose 80% or more in a 12 month period, a recession ensued in the following–hmm, I don’t remember exactly, but I think it was 18 months. Probably not a coincidence.
USA does not have to worry about money, because of its reserve currency status. A luxury only USA can enjoy.
Stephanie Kelton, who is a friend of Bernie Sanders, advised Biden for some time. For now she is not associated with Biden, but it is only a matter of time when she is called to run USA’s monetary policy.
Her trick is Modern Monetary Theory, aka MMT.
Long story short, USA can print as much money as it feels like and can defer the payment for ever, because:
1. Low interest rates. Huge institution can borrow for next for nothing.
2. US$ being the reserve currency. The inflation will be exported, and foreign countries MUST bear the cost of USA’s inflation. Sorry. Most likely it will be China who will have to bear the USA’s burden.
3. All the printed money promptly flows back to the huge companies, which help to make the US GDP grow., or US financial institutions, so no real inflation occurs on the street.
4. No one is calling for US debt, so it can delay the debt payment virtually for ever.
As a result, there is NO LIMIT that US limit can grow, although it will probably make the rest of the world quite unhappy. Sorry, that’s a fact of life
Testing this in practice will show where the weaknesses are. We are approaching a discontinuity. In mathematical terms, it is like 1/0. Does the US lose its reserve currency status? Do other countries stop exporting goods, for fear that the money in that they will be paid in will be worth less? Do banks stop extending credit? Does the international trade system hold up, with this approach?
That is called the singularity.
Other countries stop exporting means their economies will collapse. Sorry, but it is like a sharecropper having to pay a huge portion of the crops to the landowner.
Banks will have to extend credit forever or they go under.
The international trade system will hold up because they have to buy goods from USA.
Not unlike the ancient Chinese Imperial System which worked for a long time
if you open the video discussion at the end of Gail’s current post, and scroll to 29 min in, and listen to Art Berman, you will find a very clear explanation of the ‘money’ situation
money is a token of energy exchange.
if you artificiallly expand the money supply by creating ‘infinite debt’, what you are doing is borrowing against the collateral of the future. (your children’s future to be exact)
politicians have done this to keep voters happy and themselves in office. This passes the buck to the next generation.
This worked as long as (cheap surplus) fossil fuels powered the system and created ‘infinite jobs’.
We are now the generation where the energy input has slowed, and seems likely to stop.
‘cash’ (the call on energy exchange), is accruing in the hands of fewer and fewer people, while more and more people are getting less and less. These are the haves and have nots.
Cash mountains cannot be re-invested in factories producing widgets, because fewer people want to buy them, or can afford them. Bezos must keep his game of ‘pass the parcel’ going faster and faster, otherwise Amazon will collapse. He does not create wealth, only passstuff we don’t need, hand to hand.
People are finding themselves priced out of living itself, hence the millions of homeless, and proliferation of foodbanks.
Trying to export inflation will fail for these reasons: first, our currency will fall in value, making our imports more expensive (so re-importing the inflation). If we respond by starting more factories here, that will defeat the plan to export the inflation. Lose either way.
Second, if we flood the world with cheapened dollars, they will recycle those dollars to the US by investing their surplus dollars in US assets, including real estate. That money will go into the real economy and create inflation.
Excess printed money going into giant corporations is no safeguard against inflation. They will still circulate the money through the economy. And it doesn’t matter what they spend the money on. Some people have recently acquired the goofy idea that if you spend the money on something useful, it will not cause inflation. Wrong. Production growth is not productivity growth.
The same with financial institutions. They are not allowed to spend or even directly loan out bank reserves, but cash earnings are a whole different story.
“delay debt repayment”–no, we can’t. US debt is in bonds and creditors expect to be paid as it comes due. We roll our debt over all the time. If you fail to do it, it is called a sovereign bond default. But in the event of inflation, they will not hold those bonds. They will unload the fast depreciating assets as quickly as possible, destroying the US bond market and credit rating. And people will not be stashing their money in savings accounts because people don’t like to save in dollars in an inflationary environment. They want to spend the money before it depreciates further.
“big institution can borrow for next to nothing” — not because we are big, but because they think an institution this big can afford to repay them. But if we are trying to repay with cheaper dollars, our borrowing costs will rise in a hurry. Remember the 1970s?
Finally, MMTists want to use the new money to fund either Universal Basic Income or, more frequently advocated, government jobs for every adult who wants one, none less than $15 with full benefits and no firing. The productivity of the job will not be an issue. (I read online the paper that many of them are citing as a guide to the future.) I guarantee you that a lot of that money will stay right here in the USA and fuel inflation.
I keep telling these crazy online MMTists there’s no free lunch, but these utopians are determined to believe there is. When QE is injected into the banking system as bank reserves, and the US Treasury is required to accept broad money only (not bank reserves) for its notes, bills, and bonds, it is not a serious inflation risk. But if it is used to monetize government spending, then you are following in the steps of the Weimar Republic and a substantial number of other hyperinflationary victims that are not as well publicized.
MMT=Monetary Madness Theory
Nehemiah,
You are the voice of reason in a world that thinks that Monetary Madness Theory is a way to salvation. Hyperinflation everywhere will not work; this is part of what will put an end to most of international trade.
All kinds of jobs added with zero (or very low) productivity doesn’t help either.
“All kinds of jobs added with zero (or very low) productivity doesn’t help either.”
The sanctimonious hypocrites in the bourgeoisie won’t like that Gail. It is why they desperately need the GND. How they would love to be in charge of large swaths of hopium-infused dolts with solar panels on the rooftops and wind turbines out in the fields.
As long as they can keep their little “green” “habitats” increase in value and have the la-la-castle-land, inhabited by entitled princesses, saved by the white knight of carbon credits.
How I will enjoy watching the ugly truth slap some grim reality into their pretentious faces.
John Law thought exactly as you do. It didn’t work then and it won’t work now.
Falling demand for rapidly increasing US treasury auction amounts?
According to ZeroHedge, Record 10Y Auction Prices At 9 Month High Yield Amid Sharp Drop In Foreign Demand
https://gailtheactuary.files.wordpress.com/2020/11/10y-size-nov-2020.jpg
More hysteria by Austrian theory devotees who imagine that QE monetizes federal spending. They think QE is “money printing” which creates a wage-price inflationary spiral which causes higher interest rates and crushes yields. Never mind that this has never happened in the history of QE! QE only provides internal liquidity to the banking system, and it does this by exchanging Bank Reserves (which are NOT part of the broad money supply) for bonds owned by the banks, and this added demand for bonds drives bond prices higher and bond yields (“rates”) lower–good old law of supply and demand.
So this is not the beginning of a US Treasuries collapse. The banks are the primary buyer on the long side of the Treasuries trade (against the naive speculators who are betting on yields to rise), so the the big banks want bond prices to go higher (thus, yields lower). And if they don’t think prices are moving the way they want, then they will make them move the “right” way by bidding up the price of bonds (bidding down the yields) themselves. These are the big boys. They can make the markets in financial instruments. Joining the crowd to bet against them is the definition of “the dumb money.”
The diverging uptick in US bond yields is a replay of the same thing that happened in 2018, accompanied by the same dire warnings that inflation was heating up and the bond market was in trouble, and by the very same people who did not learn their lesson then and are making the same misguided forecast for the same reason this time. The truth is that QE is killing inflation in country after country:
https://www.youtube.com/watch?v=9U7p9H3_VZk&t=221s
https://www.youtube.com/watch?v=4RYMTtsgEV4
https://www.youtube.com/watch?v=E1Nlf3qtmEM&t=567s
Thanks for your thoughts.
If interest rates really did rise, it would be a problem. But they really cannot. If defaults start, or a cutback in spending happens, the result would be deflation.
I have heard several financial analysts express expectations for a deflationary shock in 2021. We will know soon enough.
It really looks like the Western financial system was about to collapse again in September 2019. There was a very huge spike in the REPO rate (despite the Fed already being lowering rates) and the Fed had to start buying stuff again to inject liquidity, and at a quick pace. The recovery dream was over, and three months later the virus appeared in Wuhan.
It wouldn’t have spread without Hubei and Western authorities complaisance. But Russia, an oil exporter, didn’t felt to complaisance and was the first country to cut contact with China, even being its closest ally. But it still got contaminated from other sources, no way to escape. Saudi Arabia and UAE were almost the first countries to ask for the Russian vaccine, mainly because they instinctively understand that the epidemic put them in the same position.
So the epidemic was likely promoted by oil importers and achieved two goals: downing the price of oil, which was going up because of OPEC+ cuts and impacted the financial system, and stopping protests in their territories (HK, gilets jaunes, Catalonians, possibly Scots).
China’s productivity is much better than Western, so they proceeded to decontaminate effectively because they (still) don’t need epidemics to mask their financial troubles and control the population (except Hong Kongers, who are a different kind of people).
The Don didn’t reacted when China had already put on lockdown hundreds of millions of people. He even expressed confidence in Chinese authorities. He knew what was going on and that he could do nothing about it. He later started criticizing lockdowns and such, because he knew people need hope and otherwise he would be politically dead.
Greenhouse effect discourse was not enough to get the masses burning less oil, it only served to buy some time and distract from peak oil, falling EROEI, etc. I suppose that if oil price rises again another event will send it down, crushing demand only for non essential businesses. The Law of Nature says we will consume less oil; I suppose authorities understand this would lead to an increase of its price and so to an even increase in the price of many things, such as food, which is produced with oil. This way, they can curtail the price of food sacrificing plane traveling; otherwise, the financial system would have cracked, people would be unemployed anyway but food banks would find it harder to buy it.
Xi Jinping is ruling the world since he terminated the virus in China, all the rest is noise to distract the masses. It’s likely that Chinese productivity is supporting the whole world system. India would have been another candidate, but it lacks the political and social qualities to make an effective quarantine. I think that’s were we are.
https://fred.stlouisfed.org/series/WALCL
Thanks for your thoughts. This is the chart of US Federal Reserve assets you linked to.
https://gailtheactuary.files.wordpress.com/2020/11/federal-reserve-assets-fred.png
[q]Greenhouse effect discourse was not enough to get the masses burning less oil, it only served to buy some time and distract from peak oil, falling EROEI, etc. I suppose that if oil price rises again another event will send it down, crushing demand only for non essential businesses. [/q]
My thoughts exactly.
Did you notice that the lag-time for the central bank stimulus package was months in 2008 and only weeks in 2020. Next time the stimulus will preceed the crisis 😉
Right, timing gets shorter as there is less surplus, less oxygen in the system lungs, so to speak. Things tend to disarray faster, so the answer should be quicker
“Total world population drops to 2.8 billion by 2050.”
So what your saying is I should wait to buy a house?
LOL! You would think that there would be lots of leftover homes, with so many dying. Would they be in the right location? Would any services be available (water, electricity, natural gas)? What kind of condition would they be in? Houses seem to need constant attention. Falling trees are a problem. So are termites and water damage. In some places, earthquakes and forest fires are problems.
A lot of people don’t want to rake up the leaves from trees. tsk tsk.
Has anybody got shares in undertakers, I wonder?
In Japan, houses in the countryside are given away. At least they used to. Probably not anymore due to people looking to leave the death traps (cities).
I have heard that children often do not want them, because they would not want to pay the inheritance taxes on the houses. They also don’t want to take over the farming themselves.