Energy Is the Economy; Shrinkage in Energy Supply Leads to Conflict

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.

Figure 1. Energy consumption per capita in 2019 for a few sample countries based on data from BP’s 2020 Statistical Review of World Energy. Energy consumption includes fossil fuel energy, nuclear energy and renewable energy of many types. It omits energy products not traded through markets, such as locally gathered wood and animal dung. This omission tends to somewhat understate the energy consumption for countries such as India and those in Middle Africa.

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.

Figure 2. World electricity generation by part of the world, based on data from BP’s 2020 Statistical Review of World Energy.

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.

Figure 3. Estimate by Gail Tverberg of World Energy Consumption from 1820 to 2050. Amounts for earliest years based on estimates in Vaclav Smil’s book Energy Transitions: History, Requirements and Prospects and BP’s 2020 Statistical Review of World Energy for the years 1965 to 2019. Energy consumption for 2020 is estimated to be 5% below that for 2019. Energy for years after 2020 is assumed to fall by 6.6% per year, so that the amount reaches a level similar to renewables only by 2050. Amounts shown include more use of local energy products (wood and animal dung) than BP includes.

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.

Figure 4. Amounts shown in Figure 3, divided by population estimates by Angus Maddison for earliest years and by 2019 United Nations population estimates for years to 2020. Future population estimated to be falling half as quickly as energy supply is falling.

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.

Figure 5. Average annual increase in energy consumption per capita for 10-year periods ended the dates shown, using the information in Figure 4.

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.

Video of Panel Discussion “Energy Is the Economy,” created in October 2020 by Peak Prosperity. Chris Martenson (upper right) is the moderator. Richard Heinberg (upper left), Art Berman (lower left) and Gail Tverberg (lower right) are panelists.

A transcript of this panel discussion can be accessed at this link:

This entry was posted in Financial Implications and tagged , , , by Gail Tverberg. Bookmark the permalink.

About Gail Tverberg

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

2,324 thoughts on “Energy Is the Economy; Shrinkage in Energy Supply Leads to Conflict

  1. Re: Welsh independence

    A new YouGov poll just out finds that support among the Welsh for independence has risen steadily to a third – up 10 points on the year.

    Attitudes to UK have changed drastically over the last five years; half of English voters now support English independence, a clear majority of Scots want their independence, and now Wales begins to form it own sentiment in that regard; NI is demographically maybe a decade away from a clear republican majority and a border poll is only a matter of time.

    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 do what they ‘want’ to do according to physics and to devolve to smaller, less centralised, optimal structures as dissipation declines.

    > 10% increase in support for Welsh independence in a year, YouGov poll finds

    Support for Welsh independence has jumped 10% in just a year, a new poll by YouGov suggests.

    The latest poll puts support for independence at 33%, compared to 22% in early December 2019.

    YesCymru, who commissioned the poll, said it showed support for independence was “the strongest it’s ever been”.

    Independence polls over the last year have shown a steady increase, they say. All figures are with ‘don’t know’ removed:

    YouGov /YesCymru: 11 – 16 November (2020) – 33%
    YouGov /ITV Cymru Wales & Cardiff U: October 26 – 29 (2020) – 32%
    YouGov /ITV Cymru Wales & Cardiff U: August 28 – September 4 (2020) – 32%
    YouGov /YesCymru: 24 – 27 August (2020) – 32%
    YouGov /ITV Cymru Wales & Cardiff U: 29 May – 1 June (2020) – 32%
    YouGov /ITV Cymru Wales & Cardiff U: 20 – 23 Jan (2020) – 27%
    YouGov /ITV Cymru Wales & Cardiff U: December 6-9 (2019) – 22%

    ‘Serious’

    YesCymru Chair, Sion Jobbins, said that the status quo was now no longer an option.

    “Support for independence is the strongest it’s ever been, with 33% of the people of Wales now saying that they would vote for Welsh independence if a referendum was held tomorrow,” he said.

    “That’s a six point increase from January, and a massive 11 point increase since December last year.

    “It’s very clear that more and more people are coming to the conclusion that Westminster doesn’t work for Wales. We’ve seen this not only with the poll results, but with a huge surge in YesCymru membership, recently hitting 15,000 paid up members, where we were at around 2,500 in January. That’s more members than nearly every political party in Wales.

    “In light of Boris Johnson’s comments on devolution being ‘a disaster’, and our recent poll that showed 59% would vote for devo-max in a referendum – a move that stops just short of independence – it really is time for the Welsh Government to get serious about what it wants to happen, and make its constitutional position clear. The status quo just isn’t an option anymore….

    https://www.nation.cymru/news/10-increase-for-welsh-independence-support-in-a-year-yougov-poll-finds/

    • YouGov earlier revealed recent polling that indicates that 59% of the Welsh support ‘devo max’, a maximum devolution that would claim tax and spending powers for the Welsh parliament. Support rises to over 80% of young adults; only those over 65 do not support it. The momentum is growing toward an independent Wales.

      > 59% would support ‘devo max’ for Wales in a referendum, new YouGov poll shows

      A new YouGov poll has shown that 59% of respondents who had a view said they would support ‘devo-max’ for Wales in a referendum.

      The so-called devo-max option would see powers transferred from Westminster to the Welsh Parliament in Cardiff, including the right to control taxation and welfare in a move that stops just short of independence.

      The question asked was: “If there was a referendum tomorrow on the transferring of more powers to the Senedd (Welsh Parliament), including control of tax and welfare, but excluding defence and foreign affairs, how would you vote? Should more powers be transferred to the Senedd (Welsh Parliament)?”

      The poll was carried out by YouGov on behalf of YesCymru, the cross-party campaign for Welsh independence.

      …. ‘Surge’

      There was support for increasing the powers of the Senedd through devo-max in all regions of Wales, with 64% of respondents who had a view in Cardiff and south central Wales backing the move, the highest level of support in the country.

      There was also large support for devo-max from younger respondents with 82% of respondents aged 18-24 who had a view saying they would vote for Wales to have more powers.

      The votes by age group were:

      18-24 – 82% yes
      25-49 – 73% yes
      50-64 – 51% yes
      65+ – 43% yes

      Sion Jobbins said that the best way to protect the people of Wales was for Wales to take control of its own affairs by becoming an independent country.

      “We would then be in the same position as the Irish Republic, where Westminster can’t just get rid of the Irish parliament on a whim,” he said.

      “That is not an option on the table at the moment, but it can be if we make it an issue in the May Senedd elections….

      https://nation.cymru/news/59-would-support-devo-max-for-wales-in-a-referendum-new-yougov-poll-shows/

      • I have scanned this post only, but it seems to be a meme.
        Perhaps the issue is more one of trust, politicians removed from the local lose relevance once they can no longer bring back more money than they take from a community.

        There has been incredible effort to produce conformity, now with on line learning for almost all ages, working from home, people are more or less forming their own local groups. The meme of universalism isn’t selling, somethings perhaps do not scale well and government may be one of them.

        Dennis L.

      • I fully support the above ideas, but on one condition: All tax money raised in Scotland or Wales will be spent in Scotland or Wales. All tax money spent in Scotland or Wales will be raised in Scotland or Wales. Time for the little piggies to grow up and stop sucking of England’s teat.

            • Oh dear, I am going to have to revise my verdict that Harry is the fairest of them all and that he spends half the day cringing, after his engagement with that. Rather I will be cringing for him, which hardly counts.

            • These times call for a little ribald levity, surely? I’ve been known to frequent the odd pub, too.

          • Possibly relevant joke: “What do you call a New Zealander with a sheep under one arm and a goat under the other?” Bisexual!

        • R, that is on the whole a more intelligent response than the usual. The usual ‘herd’ response seems to be to take the message of independence as ‘we don’t like you’ and to respond with ‘we don’t like you either. You are against the herd and the herd is against you.’ There certainly are primal ‘herd’ dynamics in play, even with intelligent, educated persons.

          Also they generally seem to confuse the state with the ‘herd’, whereas the British state obviously has its own agenda, capital accumulation, and could not care less about the particular ‘herd’. If it is a ‘herd’ then it is ‘blinkered herd’ that cannot see the state for what it is. The state is an ‘idol’ to the ‘herd’ and its ruin.

          I have no desire let alone pretence to change that situation. Peoples make their own choices and their own consequences. Same ways really, if Scotland and Wales want to reform their own ‘herds’, their own peoples, then good luck to them. The British state is pointless and frankly boring, and I certainly do not consider myself to be one of its ‘herd’. It is just another ‘idol’.

          • “I against my brother, my brothers and I against my cousins,
            then my cousins and I against strangers.”
            ~ Bedouin Proverb

            • Bedouin are traditional, nomadic, desert tribal people, a very different kettle of fish to the modern ‘national’ state. The capitalist state is not the people.

              Around half of marriages in Europe end in divorce (65% in Portugal); the family stability is nothing like the Bedouin let alone tribal stability.

              The attachment of some on here to the British state is just bizarre. Presumably feudalism has bred them to ‘fealty’. It is a distinct ‘virtue’, not to be confused with Bedouin ‘kinship’.

            • Mirror,

              Kinship is a rather fluid concept.

              Personally, I feel a closer kinship with other engineers in Asia, than with my genetically closer brethren back home.

              Yes, the idol and herd is dead. Long live the idol and herd.

            • K, yes you have a class-based, artisan identification, virtually petit bourgeois. It is not ‘kinship’ a la Bedouin.

              Ideology and identification generally reflect the economic structure of society and often one’s place or desired place within it.

              Your ‘politics’ are quite cool. I tend to favour direct democracy, but of course it depends what people vote for and whether I like them in the first place, which is not a given. Why should I care whether certain other people get what they want, or even what they ‘need’?

              Anyway, my point was that bourgeois state ‘nationalism’ is not the same thing as ‘ethno-nationalism’ and we should not allow them to be conflated. That illusion is passed its sell-by, certainly in UK.

              The TP is practically running on the fumes of the spent far right in UK. The pretence that the state idol is in any way identifiable with the ethnic ‘herd’ needs to end.

              State ‘nationalism’ is the ‘fealty’ of peasants to their lords and nothing to do with Bedouin. The ‘herd’ was bred to it under feudalism for 1000 years and feudal ‘virtues’ remain in their souls.

              ‘Herds’ and their ‘idols’ no longer mean anything to me. I have no ‘politics’ as such. I do not identify with any state, any herd or any class. Zarathustra has reclaimed his sovereignty from the herds and their idols.

            • Bedouin boys go techno in NYC.

              They have some serious progressive* vibes going on.

              * a track structure of gradually developing beats and layers of instrumentation, one of the dominant edm approaches.

    • It turns out that Boris’ announced ‘military spending’ is actually aimed at boosting support for UK in Belfast and Glasgow. Having failed to economically develop the regions for generations, he now intends to pay them to ‘dig holes’ paid for by the government. But not just any holes but ones with military union jacks waving in them. He wants them to relive the 19 c. as ship builders.

      ‘That should keep them happy and patriotic. Here, have a job and a flag to wave.’

      Frankly the idea that Belfast and Glasgow of all places are going to swing back to UK is laughable. Boris thinks that they can be manipulated back into his ‘herd’ with a job building war ships for his state. It is akin to the model busses that he likes to make in his spare time with smiling passengers waving at him. He is frankly a child and a clown, basically an imbecile.

      > Boris Johnson: £16.5bn boost to military spending will restore UK as ‘foremost naval power in Europe’

      …. Warships and combat vehicles could be equipped with “inexhaustible” lasers to take on opposing forces, the PM suggested, with no prospect of them running out of ammunition.

      …. The PM highlighted the boost the extra funding would give to the Navy and shipbuilding, telling MPs: “We’re going to use our extra defence spending to restore Britain’s position as the foremost naval power in Europe.

      “This will spur a renaissance of British shipbuilding across the UK; in Glasgow and South Belfast, Appledore and Birkenhead.

      “Guaranteed jobs and illuminating the benefits of the Union in the white light of the arc-welders’ torch. If there is one policy which strengthens the UK in every possible sense,” he insisted, “it is building more ships for the Royal Navy.”

      https://www.heraldscotland.com/news/18884947.boris-johnson-16-5bn-boost-military-spending-will-restore-uk-foremost-naval-power-europe/

      • Having failed to economically develop the regions for generations, he now intends to pay them to ‘dig holes’ paid for by the government.

        Ha Boris really been failing for generations? I know it can sometimes seem that way, but in fact he’s only been failing in politics since 2007.

      • The Independent (Lib Dem unionist paper) has picked up on the ulterior motives and clownishness of Boris’ defence spending announcement.

        > Boris Johnson’s defence statement: what he said – and what he really meant

        …. What he said: Our warships and combat vehicles will carry “directed energy weapons”, destroying targets with inexhaustible lasers and for them the phrase “out of ammunition” will become redundant.

        What he meant: Whizzo. Just like a computer game.

        What he said: We shall use our extra defence spending to restore Britain’s position as the foremost naval power in Europe.

        What he meant: I ignored Rishi asking awkward questions about why we need two aircraft carriers.

        What he said: This will spur a renaissance of British shipbuilding across the UK – in Glasgow and Rosyth, Belfast, Appledore and Birkenhead – guaranteeing jobs and illuminating the benefits of the Union in the white light of the arc-welder’s torch.

        What he meant: We must build ships we don’t need because the Scottish people show alarming signs of supporting independence.

        What he said: Our plans will safeguard hundreds of thousands of jobs in the defence industry.

        What he meant: Our defence policy is dictated by fear of unemployment and Scottish separatism.

        https://www.independent.co.uk/voices/boris-johnson-defence-statement-spending-b1745019.html

        • Hypersonic missiles are going to change everything, are changing everything. That aircraft carrier is as good as gone if you put it into theater. Turkeys injection of tech into recent conflicts gives us a glimpse of modern conflict.

          Those with the best missles own the air.
          Those with the best electronic warfare own the drones.
          Those with the best drones own the (tanks) ground.

          The model is still valid. Own the air. If you own the air you own the ground. If you have tanks. The means to that models implementation have totally changed/are changing IMO.

          Directed energy weapons will be interesting. A gunner will get a lot more effective without any drop, windage or projectile travel time. They remain line of sight. They may equalize hypersonic missiles somewhat with a good automated targeting system. Maybe. Were talking millisecond windows at mach 5. Human targeting may not be fast enough for most applications in a modern battlefield.

          The paradigm has been high value high tech in concentrated space will prevail. I see that changing. 20 missile frigates are better than a carrier. Much better. Kill ratios are going to get very high with hypersonic missiles. Eggs in one basket is a ratio for failure.

          Understand we are talking both surface to surface and surface to air for hypersonic missile applications. If your opponent has capable surface to air hypersonics the effectiveness of current generation cruise missiles becomes a real question.

          Like it or not the ante to really be in the game is lower much lower. Nuclear weapons have to be delivered. Nuclear weapons have less value with more tech. Mid tier powers will be in the game very soon in a serious way. bottom tier to follow. Just as technology has become ubiquitous in our personal lives it becomes ubiquitous in the worlds militarys. You just cant count on owning one ring that rules them all. Theres too much out there. If its all pretty good… And thats not even considering the xprojects in the closets.

          As flight times are reduced radically response times cant keep up. Mutally Assured Destruction one of mankinds stupidest concepts comes into question. Lets point incredible technologically advanced weapons systems at each other and be ready to launch at any second. Can MAD really be in effect if flight time is smaller than response time? No.

          As response times become totally inadequate handing off launch to automated systems is inevitable if the MAD paradigm is to be sustained.

          If you view vulnerability as unacceptable first strike becomes more of a option as flight time gets radically shorter. Your ability to retaliate becomes much less. Your chances of a devastating blow get much higher.

          Economically what are the implications of trillions of dollars of hardware going obsolete? Could this energy investment be regarded as collateral and if so for what?

          • What the price is? Write off the obsolete gear, make more friends, as fast as possible.

            Then agree on the terms of engagement, i.e., for example, make trade deals while tearing up the bretton woods shenanigans.

            Put hefty gear on the moon. It would take days to get a payload over there and kill off those bases. MAD would be assured with attacks launced from bases there.

            Besides, it would serve as a nice low-gravity outpost for targeting extinction-level space rock.

            Perhaps there is some mining opportunities there as well.

            Something like that.

          • G, thanks for that insight.

            The world seems to be headed to an even more dangerous place.

            Humanity has not even come close to the attaining the conditions of universal peace. ‘Civilisation’ is still pretty much conducted on the basis of ‘grab what you can’.

            The ‘first strike’ scenario sounds ‘realistic’ if there is no longer the deterrent of response due to reaction times. The impetus is rather to shoot first. ‘He who shoots first shoots last. He who does not shoot is liable to get shot.’

            Sadly that may be the only ‘logic’ left. Like the Highlander movies – ‘There can be only one.’ Perhaps the mutual reliance of the global economy deter that – maybe not.

            • “Like the Highlander movies – ‘There can be only one.’”

              I’m thinking two, the Machine and the ecosystem.

              The humanoid shenanigans seem a bit mixed up now. Like a dog turd with some smarties sprinkled on top. It’s hard to avoid the retch when isolating the sweet bits.

    • Does this mean there is no future value, maybe not even any present value? Think of a music recital, when the performance finished unless it is recorded and repetitively sold, it has zero value. When one entered the performance, the value was the price of admission. It was an experience, now a memory.

      Google seems to be reaching, the searches seem to be less and less useful, more about add revenue than helpful.

      Exxon is declining, unable to both pay dividends and capital costs, borrows for one or the other, Exxon is real, Google and its likes sit on top of Exxon. It is almost like monopoly where the hotels are not real, no one can live in them, small simulacrums.

      At YouTube it seems people are putting in a great many hours editing, some sites representing business seem to do more YouTube than actual business processes. Farming videos seem to feature good looking wives and girlfriends, sort of like Chorus Line, you can think about that one for a bit.

      Great educations are almost free, MIT even has Shakespeare. Imagine Shakespeare through the eyes of an engineer, Romeo and Juliet anyone? A good line, “I love your harmonics.” Actually, it’s Merchant of Venice, I looked. Many of MIT’s lectures are more than five years old, math or Shakespeare doesn’t change much over time.

      Politicians are playing games with COVID, when they look up perhaps much of their base will have evaporated, independent sites are coming on line, people walk away from the experts. This seems to be a time of great and fundamental change, anybody want to buy a slightly used 777? It is tangible.

      Dennis L.

      • Hi Dennis. One suggestion is that you’re using too much laughing gas. But I really want to tell you frickin hilarious I found this on rereading it, this time aloud to someone else. It was good to laugh that much.

      • Oh, come on Dennis, all value in life is intangible. It’s not the food itself that makes you have the feeling of tastiness, being full and content.

        It’s all a hallucination in the neural circuitry.

        Unless you are like me and enjoy finely crafted technological artefacts.

        • Why is your ‘enjoyment’ not also an ‘hallucination in the neural circuitry’? It is still a subjective response of the brain.

          • Not quite, it is the inverse “problem” I am impressed of.

            Technology and art is working in the opposite direction. It is the craft of expressing those hallucinations as something animate that exist in objective reality, as opposed to nature that does that by default.

            It is why finely operating machinery (and music) is mesmerizing. As in “who figured out this contraption”, I want this person to teach me.

            • Ah, creativity. I do approve.

              The Roland TB 303 bass synth, behind acid, is available again after 30 years as the Roland TB-03 Boutique Bass Line Synthesizer. Amazon UK has them reduced at the moment and I am tempted to get one to play with. Perhaps my christmas present to myself. Then one just needs the Roland TR 808 or 909 drum box for the classic acid kit.

              Of course, you can always download for free the Ableton music production software that everyone uses these days, and all of its add ons here: https://rutracker.net/forum/index.php It simulates all the old kits anyway and everything else. Google chrome translates the torrent page from Russian. The software is obviously in English.

              If I were just a bit younger then I would invest time learning ableton; I am very happy listening to what the adepts do with it – techno, trance, ambient, house etc. Everyone generally uses ableton these days for music production.

            • Yeah, creativity. The art of turning hallucinations into contraptions in objective reality. Life without tech and music would be an unbearable suck.

              I got inspired of the retro gear restoration vids on YT, went ahead and restored a pair of 70’s Sonab OA-14 floor-standers with modern drivers and crossovers some months ago.

              Why not make a playlist on YT Music and link it in?

              I have shit music taste and zero talent for it. You do the music, and I the listening.

              🤘😬🤘

    • “The S&P 500, or just the S&P, is a stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices, and many consider it to be one of the best representations of the U.S. stock market.”

      90% is an amazing number.

      though there are two sides to the metaphorical coin.

      OFW is intangible, but it has great value to me. Situated on “the internet”, so then the internet has great value to me. Here can be found (almost) the entire history of music to listen to, stuff to read etc.

      Intangible might equal non-essential, but the assets of the S&P 500 could be a representation of how much value the population places on these intangibles.

      To the plus side, the valuation of the S&P 500 also shows how much excess wealth there is in the world, above the wealth needed to provide essentials. Perhaps 80% of its assets could be eliminated, and (perhaps!) the real economy of essential goods and services could continue.

      But yes, the money poured into it in recent years suggests that tangible assets are becoming less and less profitable investments.

      • david,

        Stocks, RE are priced on the margin, it is not the real value of the asset. Things go up and things go down, throw in leverage and things go down faster than they go up, value of organization can decrease very rapidly.

        Dennis l.

        • yes, priced on the margin.

          so TPTB can easily keep stocks elevated from here until The Collapse.

          though RE will be dropping like a rock in 2021.

          • david,

            Respectfully disagree in nominal terms, dollar/currencies are going down, stocks not so much up, best horse in the glue factory.

            Warren is purchasing his own stock, means no growth opportunities, converting cash to what he has, increasing underlying value of stock.

            RE will hold, for most people it is the best option, 30 year money, fixed, very low interest, no risks to purchaser. Subtract rent from payments, everyone rents a roof one way or another, what is left is the risk, basically nothing.

            Dennis L.

            • RE is all cool and that, until the population starts to drop off.

              Then the scenario becomes like that in Japan, with houses in the countryside being given away.

              RE “investment” only works when there is population growth, which is the root cause of the predicament to begin with.

            • As the WEF / WB / IMF promo video showed about their projections for ~2030, the world of tomorrow will NOT be about owning anything but instead renting everything. Now, guess who is going to work merrily for being even eligible for the rented place and who is going to collect the funds and keep the sheep on the tight leash?

              So, in order to bring about this situation (hyper consolidation) they have to smash the RE valuations very hard, so even the middle classes in desperation drop out from direct ownership and then some tiny minority “buys” it all basically for pennies.

          • david,

            I suspect the powers that be are those who own significant shares of high valued stocks, they can and do sell the margin, retain control, influence nations. A politician making less than $200K is an easy target. Politicians in the scheme of things come very cheap.

            If I may observe, too many here are letting their moral sensibilities interfere with understanding how things work. We can’t influence, we cannot predict, we can only ride the wave. It is maddening,it is what is.

            Dennis L.

            • “Because he thought it was good sport. Because some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned or negotiated with.”
              — Alfred Pennyworth

              Yes, Alfred, they don’t care about your delusions, petty greed and rather have the world burn than you having your way.

              And I am all smiles.

      • david,

        It depends on when one sells, no more no less. Looking at one’s 401K is looking to the future, life is now, it is all a guess.

        Dennis L.

    • A few days ago, someone was talking about the value of an asset being the embedded value of the energy involved in making it. This might make sense for tangible asset, such as a factory, or a car, or a fairly new house.

      When the asset is shares of stock, this doesn’t really hold. It is more like the expected value of its future earnings, given the company’s tangible asset and its expected resources and customers in the future. As interest rates get lower and lower, and more debt is added, I don’t think this really works either, though. It seems more like a reflection of bidding up what is available to buy, hoping for a greater fool later.

      • Gail,

        The value of an asset is what one sells it for less transaction/taxes, no more, no less. We are too small to effect control, we surf the margin.

        Dennis L.

        • The value of an asset can suddenly change to zero, if the rules change. For example, if social distancing requires a restaurant to operate at 25% capacity and other COVID changes keeps worker away at breakfast and lunch times, a restaurant may suddenly have a value of zero.

          Bonds are assets to those who hold them. If they stop paying interest and the business ceases operating, their value becomes zero.

          A mailing list of potential customers can have value, until it suddenly doesn’t.

      • Tech companies have their capital in their IP, means of production and workers. It’s a living thing accumulating knowledge.

        Now, would you prefer to put your money on stagnation or evolution? The choice is yours.

        Now the trick with the tech stocks, is which one to buy. Gotta know where the industry and IC is heading.

        It’s pure and simple envy from the old money watching smart whippersnappers making a fortune in no time. Oh, how they despise them, their generations of despotism, crimes against mankind, all becoming dust in the wind.

        Hey, here’s an idea, lets form a world guvmint so that we can keep our hard “earned” dole, by buying a few halfwit winers and diners, dope and prostitutes a chair in the back seat row of the “international community”.

  2. “Rishi Sunak has warned there may need to be cuts as the UK’s debt reached a record high of more than £2 trillion. Public sector debt has reached £2.08 trillion at the end of October…

    “It is thought he will cap pay rises in the public sector to at or below inflation… teachers, police, members of the armed forces as well as NHS managers will all be affected.”

    https://metro.co.uk/2020/11/20/uk-debt-goes-over-2000000000000-for-first-time-ever-13625855/

      • “Almost three quarters of UK pubs and restaurants expect to shut permanently next year following damaging coronavirus restrictions, an industry poll indicated Thursday.

        “The British Beer and Pub Association, the British Institute of Innkeeping and UK Hospitality said in a statement that 72 percent of surveyed businesses “expect to become unviable and close in 2021″.”

        https://uk.finance.yahoo.com/news/majority-uk-pubs-restaurants-expect-152431635.html

      • According to the article,

        UK gross domestic product (GDP) in the third quarter of this year remained 9.7 per cent below its level at the end of 2019.

        The next largest decline among the group of seven wealthy nations was Canada at 4.7 per cent, data collated by the Organisation for Economic Development (OECD) showed. The US endured the smallest contraction at 3.5 per cent.

        Across the 36 OECD nations, GDP fell by 4.3 per cent, leaving the UK lagging behind as an outlier.

        The UK managed to mess up its economy terribly. In fact it seems to be aiming to do that again. Canada, with its attempt to keep COVID-19 out seems to have done pretty badly as well. The US, with its less closed approach, has done better. The parts that have been closed have the worst outcomes.

    • That will inevitably raise questions about Boris’ announcement yesterday that he will raise military spending.

      It will raise questions about priorities and responsible government.

      Citizens left short through public cuts will be riled by that spending and LP is the conventional party to lap that up – and in Scotland it will be the SNP.

      Boris seems to be setting TP up for a ‘fall’ there. LP is recovered in the polls and SNP is rocketing anyway, so he has no ‘buffer’.

      The TP lead in the polls has already fallen by 30 points in six months – just how far can it fall under Boris?

  3. “African countries face another debt crisis and will need more long-term help than the latest G20 debt plan offers them to ward off trouble ahead and keep much-needed investments coming in, according to policymakers, analysts and investors.

    “Around 40% of sub-Saharan African countries were in or at risk of debt distress even before this year, while Zambia became the continent’s first pandemic-era default last Friday.”

    https://uk.reuters.com/article/africa-debt/as-new-debt-crisis-looms-africa-needs-more-than-world-is-offering-idUKL1N2I51PX

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