2020: The Year Things Started Going Badly Wrong

How today’s energy problem is different from peak oil

Many people believe that the economy will start going badly wrong when we “run out of oil.” The problem we have today is indeed an energy problem, but it is a different energy problem. Let me explain it with an escalator analogy.

Figure 1. Holborn Tube Station Escalator. Photo by renaissancechambara, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons.

The economy is like a down escalator that citizens of the world are trying to walk upward on. At first the downward motion of the escalator is almost imperceptible, but gradually it gets to be greater and greater. Eventually the downward motion becomes almost unbearable. Many citizens long to sit down and take a rest.

In fact, a break, like the pandemic, almost comes as a relief. There is suddenly a chance to take it easy; not drive to work; not visit relatives; not keep up appearances before friends. Government officials may not be unhappy either. There may have been demonstrations by groups asking for higher wages. Telling people to stay at home provides a convenient way to end these demonstrations and restore order.

But then, restarting doesn’t work. There are too many broken pieces of the economy. Too many bankrupt companies; too many unemployed people; too much debt that cannot be repaid. And, a virus that really doesn’t quite go away, leaving people worried and unwilling to attempt to resume normal activities.

Some might describe the energy story as a “diminishing returns” story, but it’s really broader than this. It’s a story of services that we expect to continue, but which cannot continue without much more energy investment. It is also a story of the loss of “economies of scale” that at one time helped propel the economy forward.

In this post, I will explain some of the issues I see affecting the economy today. They tend to push the economy down, like a down escalator. They also make economic growth more difficult.

[1] Many resources take an increasing amount of effort to obtain or extract, because we use the easiest to obtain first. Many people would call this a diminishing returns problem.

Let’s look at a few examples:

(a) Water. When there were just a relatively few humans on the earth, drinking water from a nearby stream was a reasonable approach. This is the approach used by animals; humans could use it as well. As the number of humans rose, we found we needed additional approaches to gather enough potable water: First shallow wells were dug. Then we found that we needed to dig deeper wells. We found that lake water could be used, but we needed to filter it and treat it first. In some places, now, we find that desalination is needed. In fact, after desalination, we need to put the correct minerals back into it and pump it to the destination where it is required.

All of these approaches can indeed be employed. In theory, we would never run out of water. The problem is that as we move up the chain of treatments, an increasing amount of energy of some kind needs to be used. At first, humans could use some of their spare time (and energy) to dig wells. As more advanced approaches were chosen, the need for supplemental energy besides human energy became greater. Each of us individually cannot produce the water we need; instead, we must directly, or indirectly, pay for this water. The fact that we have to pay for this water with part of our wages reduces the portion of our wages available for other goods.

(b) Metals. Whenever some group decides to mine a metal ore, the ore that is taken first tends to be easy to access ore of high quality, close to where it needs to be used. As the best mines get depleted, producers use lower-grade ores, transported over longer distances. The shift toward less optimal mines requires more energy. Some of this additional energy could be human energy, but some of the energy would be supplied by fossil fuels, operating machinery in order to supplement human labor. Supplemental energy needs become greater and greater as mines become increasingly depleted. As technology advances, energy needs become greater, because some of the high-tech devices require materials that can only be formed at very high temperatures.

(c) Wild Animals Including Fish. When pre-humans moved out of Africa, they killed off the largest game animals on every continent that they moved to. It was still possible to hunt wild game in these areas, but the animals were smaller. The return on the human labor invested was smaller. Now, most of the meat we eat is produced on farms. The same pattern exists in fishing. Most of the fish the world eats today is produced on fish farms. We now need entire industries to provide food that early humans could obtain themselves. These farms directly and indirectly consume fossil fuel energy. In fact, more energy is used as more animals/fish are produced.

(d) Fossil Fuels. We keep hearing about the possibility of “running out” of oil, but this is not really the issue with oil. In fact, it is not the issue with coal or natural gas, either. The issue is one of diminishing returns. There is (and always will be) what looks like plenty left. The problem is that the process of extraction consumes increasing amounts of resources as deeper, more complex oil or gas wells need to be drilled and as coal mines farther away from users of the coal are developed. Many people have jumped to the conclusion that this means that the price that buyers of fossil fuel will pay will rise. This isn’t really true. It means that the cost of production will rise, leading to lower profitability. The lower profitability is likely to be spread in many ways: lower taxes paid, cutbacks in wages and pension plans, and perhaps a sale to a new owner, at a lower price. Eventually, low energy prices will lead to production stopping. Without adequate fossil fuels, the whole economic system will be disrupted, and the result will be severe recession or depression. There are also likely to be many job losses.

In (a) through (d) above, we are seeing an increasing share of the output of the economy being used in inefficient ways: in creating deeper water wells and desalination plants; in drilling oil wells in more difficult locations; in extracting metal ores that are mostly waste products. The extent of this inefficiency tends to increase over time. This is what leads to the effect of an escalator descending faster and faster, just as we humans are trying to walk up it.

Humans work for wages, but they find that when they buy a box of corn flakes, very little of the price actually goes to the farmer growing the corn. Instead, all of the intermediate parts of the system are becoming overly large. The buyer cannot afford the end products, and the producer feels cheated by the low wholesale prices he is being paid. The system as a whole is pushed toward collapse.

[2] Increasing complexity can help maintain economic growth, but it too reaches diminishing returns.

Complexity takes many forms, including more hierarchical organization, more specialization, longer supply chains, and development of new technology. Complexity can indeed help maintain economic growth. For example, if water supply is intermittent, a country may choose to build a dam to control the flow of water and produce electricity. Complexity tends to reach diminishing returns, as noted by Joseph Tainter in The Collapse of Complex Societies. For example, economies build dams in the best locations first, and only later build them at less advantageous sites. These are a few other examples:

(a) Education. Teaching everyone to read and write has significant benefits because it allows the use of books and other written materials to disseminate information and knowledge. Teaching a few people advanced subjects has significant benefits as well. But after a certain point, the need for additional people to study a subject such as art history is low. A few people can teach the subject but doing more research on the subject probably won’t increase world GDP very much.

When we look at data from about 1970, we find that people with advanced education earned much higher incomes than those without advanced degrees. But as we add an increasing large share of people with these advanced degrees, jobs that really need these degrees are not as plentiful as the new graduates. Quite a few people with advanced degrees end up with low-paying jobs. The “return on investment” for higher education drops increasingly lower. Some students are not able to repay the debt that they took out in order to pay for their education.

(b) Medicines and Vaccines. Over the years, medicines and vaccines have been developed to treat many common illnesses and diseases. After a while, the easy-to-find medicines for the common unwanted conditions (such as diabetes, high blood pressure and inflammation) have already been found. There are medicines for rare diseases that haven’t been found, but these will never have very large total sales, discouraging investment. There are also conditions that are common in very poor countries. While expensive drugs could be developed for these conditions, it is likely that few people could afford these drugs, so this, too, becomes less attractive.

If research is to continue, it is important to keep expanding work on expensive new drugs, even if it means completely ignoring old inexpensive drugs that might work equally well. A cynical person might think that this is the reason why vitamin D and ivermectin are generally being ignored in the prevention and treatment of COVID-19. Without an expanding group of high-priced new drugs, it is hard to attract capital and young workers to the field.

(c) Automobile Efficiency. In the US, the big fuel efficiency change that took place was that which took place between 1975 and 1983, when a changeover was made to smaller, lighter vehicles, similar to ones that were already in use in Japan and Europe.

Figure 2. Estimated Real-World Fuel Economy, Horsepower, and Weight Since Model Year 1975, in a chart produced by the US Environmental Protection Agency. Source.

The increase in fuel efficiency between 2008 and 2019 (an 11 year period) was only 22%, compared to the 60% increase in fuel efficiency between 1975 and 1983 (an 8 year period). This is another example of diminishing returns to investment in complexity.

[3] Today’s citizens have never been told that many of the services we take for granted today, such as suppression of forest fires, are really services provided by fossil fuels.

In fact, the amount of energy required to provide these services rises each year. We expect these services to continue indefinitely, but we should be aware that they cannot continue very long, unless the energy available to the economy as a whole is rising very rapidly.

(a) Suppression of Forest Fires. Forest fires are part of nature. Many trees require fire for their seeds to germinate. Human neighbors of forests don’t like forest fires; they often encourage local authorities to put out any forest fire that starts. Such suppression allows an increasing amount of dry bush to build up. As a result, future fires spread more easily and grow larger.

At the same time, humans increasingly build homes in forested areas because of the pleasant scenery. As population expands and as fires spread more easily, forest fire suppression takes an increasing amount of resources, including fossil fuels to power helicopters used in the battles. If fossil fuels are not available, this type of service would need to stop. Trying to keep forest fires suppressed, assuming fossil fuels are available for this purpose, will take higher taxes, year after year. This is part of what makes it seem like we are trying to move our economy upward on a down escalator.

(b) Suppression of Illnesses. Illnesses are part of the cycle of nature; they disproportionately take out the old and the weak. Of course, we humans don’t really like this; the old and weak are our relatives and close friends. In fact, some of us may be old and weak.

In the last 100 years, researchers (using fossil fuels) have developed a large number of antibiotics, antivirals and vaccines to try to suppress illnesses. We find that microbes quickly mutate in new ways, defeating our attempts at suppression of illnesses. Thus, we have ever-more antibiotic resistant bacteria. The cost of today’s US healthcare system is very high, exceeding what many poor people can afford to pay. Introducing new vaccines results in an additional cost.

Closing down the system to try to stop a virus adds a huge new cost, which is disproportionately borne by the poor people of the world. If we throw more money/fossil fuels at the medical system, perhaps it can be made to work a little longer. No one tells us that disease suppression is a service of fossil fuels; if we have an increasing quantity of fossil fuels per capita, perhaps we can increase disease suppression services.

(c) Suppression of Weeds and Unwanted Insects. Researchers keep developing new chemical treatments (based on fossil fuels) to suppress weeds and unwanted insects. Unfortunately, the weeds and unwanted insects keep mutating in a way that makes the chemicals less effective. The easy solutions were found first; finding solutions that really work and don’t harm humans seems to be elusive. The early solutions were relatively cheap, but later ones have become increasingly expensive. This problem acts, in many ways, like diminishing returns.

(d) Recycling (and Indirectly, Return Transport of Empty Shipping Containers from Around the World). When oil prices are high, recycling of used items for their content makes sense, economically. When oil prices are low, recycling often requires a subsidy. This subsidy indirectly goes to pay for fossil fuels used to facilitate the recycling. Often this goes to pay for shipment to a country that will do the recycling.

When oil prices were high (prior to 2014), part of the revenue from recycling could be used to transport mixed waste products to China and India for recycling. With low oil prices, China and India have stopped accepting most recycling. Instead, it is necessary to find actual “goods” for the return voyage of a shipping container or, alternatively, pay to have the container sent back empty. Europe now seems to have a difficult time filling shipping containers for the return voyage to Asia. Because of this, the cost of obtaining shipping containers to ship goods to Europe seems to be escalating. This higher cost acts much like diminishing returns with respect to the transport of goods to Europe from Asia. This is yet another part of what is acting like a down escalator for the world economy.

[4] Another, ever higher cost is pollution control. This higher cost also exerts a downward effect on the world economy, because it acts like another intermediate cost.

As we burn increasing amounts of fossil fuels, increasing amounts of particulate matter need to be captured and disposed of. Capturing this material is only part of the problem; some of the waste material may be radioactive or may include mercury. Once the material is captured, it needs to be “locked up” in some way, so it doesn’t pollute the water and air. Whatever approach is used requires energy products of various kinds. In fact, the more fossil fuels that are burned, the bigger the waste disposal problem tends to be.

Burning more fossil fuels also leads to more CO2. Unfortunately, we don’t have suitable alternatives. Nuclear is probably as good as any, and it has serious safety issues. In my opinion, the view that intermittent wind and solar are a suitable replacement for fossil fuels represents wishful thinking. Wind and solar, because of their intermittency, can only partially replace the coal or natural gas burned to generate electricity. They cannot be relied upon for 24/7/365 generation. The unsubsidized cost of producing intermittent wind and solar energy needs to be compared to the price of coal and natural gas, not to wholesale electricity prices. There are a lot of apples to oranges comparisons being made.

[5] Among other things, the growth of the economy depends on “economies of scale” as the number of participants in the economy gradually grows. The response to COVID-19 has been extremely detrimental to economies of scale.

The economies of many countries changed dramatically, with the initial spread of COVID-19. Unfortunately, we cannot expect these changes to be completely reversed anytime soon. Part of the reason is the new virus mutation from the UK that is now of concern. Another reason is that, even with the vaccine, no one really knows how long immunity will last. Until the virus is clearly gone, vestiges of the cutbacks are likely to remain in place.

In general, businesses do well financially as the number of buyers of the goods and services they provide rises. This happens because overhead costs, such as mortgage payments, can be spread over more buyers. The expertise of the business owners can also be used more widely.

One huge problem is the recent cutback in tourism, affecting almost every country in the world. This cutback affects both businesses directly related to tourism and businesses indirectly related to tourism, such as restaurants and hotels.

Another huge problem is social distancing rules that lead to office buildings and restaurants being used less intensively. Businesses find that they tend to have fewer customers, rather than more. Related businesses, such as taxis and dry cleaners, find that they also have fewer customers. Nursing homes and other care homes for the aged are seeing lower occupancy rates because no one wants to be locked up for months on end without being able to see other members of their family.

[6] With all of the difficulties listed in Items [1] though [5], debt based financing tends to work less and less well. Huge debt defaults can be expected to adversely affect banks, insurance companies and pension plans.

Many businesses are already near default on debt. These businesses cannot make a profit with a much reduced number of customers. If no change is possible, somehow this will need to flow through the system. Defaulting debt is likely to lead to failing banks and pension plans. In fact, governments that depend on taxes may also fail.

The shutdowns taken by economies earlier this year were very detrimental, both to businesses and to workers. A major solution to date has been to add more governmental debt to try to bail out citizens and businesses. This additional debt makes it even more difficult to maintain promised debt payments. This is yet another force making it difficult for economies to move up the growth escalator.

[7] The situation we are headed for looks much like the collapses of early civilizations.

With diminishing returns everywhere, and inadequate sources of very inexpensive energy to keep the system going, major parts of the world economic system appear headed for collapse. There doesn’t seem to be any way to keep the world economy growing rapidly enough to offset the down escalator effect.

Citizens have not been aware of how “close to the edge” we have been. Low energy prices have been deceptive, but this is what we should expect with collapse. (See, for example, Revelation 18: 11-13, telling about the lack of demand for goods of all kinds when ancient Babylon collapsed.) Low prices tend to keep fossil fuels in the ground. They also tend to discourage high-priced alternatives. Unfortunately, all the wishful thinking of the World Economic Forum and others advocating a Green New Deal does not change the reality of the situation.

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.
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2,805 Responses to 2020: The Year Things Started Going Badly Wrong

  1. Z says:

    Still saying it is a Pandemic huh?

    Did you see where Ontario Canada is counting suicide victims as COVID fatalities?


    It is a SCAM. Wake up.

    • Maybe a separate category is needed for indirect deaths because of depression, or not being able to get treatment for other conditions, such as cancer.

      • Robert Firth says:

        Gail, I suggest we record them as “lockdown fatalities”. That at least is closer to the truth.

        • Kowalainen says:

          Lemme guess, we got exactly zero lockdown casualties at OFW. What a coincidence that intelligent, thoughtful and kind people for the most part can endure being alone.

          No, actually, it is no coincidence at all.
          Because you know what, most people are simply shockingly boring and it is better being alone than feeling lonely and bored.

          • We certainly have had a number of people who had COVID. It is hard for people who died from COVID to write to us about the issue.

            I know I have a son who suffers from depression, and the lockdown has been difficult for him. He liked being able to go to lunch with his coworkers practically every day. Zoom meetings involving new coworkers became very difficult for him. He is also fairly worried about catching COVID (he is overweight), so he doesn’t want a job working in a store or other place with a lot of contact with others. He is not working now.

            • Kowalainen says:

              You are of course right. It is not only the usual suspects (commenters) that read OFW and is deeply affected by the pandemic.

              Not all people are well equipped for long stretches of the solitude from curfew and lock downs.

              I apologize for being a grand provocateur that occasionally crosses the line of decency for making a point.


    • shastatodd says:

      did you forget to put on your foil hat today?

    • Bei Dawei says:

      So China and the WEF are innocent? Or are they guilty of spreading a virus that either doesn’t exist, or is no worse than the flu?

      • Kowalainen says:

        One thing is for sure, the virus does not exist in Taiwan. Funny how the pandemic turned out as an IQ test, miserably failed, of the decadent west.

        All hail the undisputed dominator and exterminator of the virus. Yes indeed, all hail 🇹🇼🇹🇼🇹🇼🇹🇼


      • Xabier says:

        The advantages to China in the short-term are clear, and if we can see it so did they.

        The WEF and Bill Gates can’t believe their luck, it’s the ideal scenario for them; any more than that we have no evidence for.

        But when they talk about it as an ‘opportunity’ and say ‘normality can never return’, we may have our doubts as to their innocence in this matter.

        At the very least, they have a clear interest in keeping the irrational scare going for as long as possible.

    • Kowalainen says:

      How about you waking up to Our Finite World?

      I’m sick and tired of these “hoax” peddlers.

      Cant be alone for a week or two?
      Well, sucks to be you.

  2. Hubbs says:

    Perhaps the energy predicament begs the question: Will the major energy consumers like China in the South China Sea and Africa or Russia in the Arctic, or the US in Venezuela think that it is cheaper to lay claim to future energy supplies by war (which is costly) or to rely on more costly extraction in the context of peacetime economic constraints?

    • Also, what does war look like, in our current context. Does it look like hacking of the Internet? Or does it look like releasing new lab-made versions of COVID? Or is war still a hot war?

      People working at high levels really do know that energy is required for activities of daily living. Even the Biden/Harris administration cannot be uninformed for long.

      • According to Gordon Chang the Wuhan virus was allowed to escape in order to level the geopolitical playing field. Chinese oil production peaked 2015 while oil consumption is increasing, similar to US peak oil in 1970..The Belt and Road initiative is designed to secure China’s oil import routes. As China’s CCP can control the virus more easily than open, western democracies China can now import the oil the West doesn’t consume due to a Covid related recession

        • Minority Of One says:

          This seems to fit in with what has actually happened this last few months. I am not sure that Fauci, Gates or Klaus Schwab (WEF) would deliberately release a virus as a means to an end, but watching China-specific news bulletins for the last 6+ months or so I am in no doubt China would. Fauci, Gates and Schwab probably thought Christmas had come early though, and milked the pandemic for all it was worth, as have many others, politicians almost everywhere.

          China’s top priority at the moment is securing as much food, in particular grains, from the world market as possible. The CCP says the record floods this year had little effect on their food production this year (the floods continued until early October, very unusual) which is absurd. As usual actions speak louder than words. China is importing record amounts of wheat, rice and corn (maize) from wherever it can import, except Australia.

          Spot price for wheat and corn high at the moment, going higher, rice not quite so pricey but not cheap.

  3. I imagine that the citizens of old empires had the same problem as the latest ones, that of denial.

    I’ve experienced this in trying to talk people out of the Brexit vote:

    ”No no—we want Britain to be as it used to be, ‘great’ again”. So the vote was ‘out’.

    Trying to point out that Britain was never going to be great again was tantamount to treason.

    Trying to point out why—using any or all of the above list is a real party killer.

    It seems a twin problem, on the one hand an awareness that the world situation has changed in some way, but an absolute denial that it will affect their personal situation, and in that respect things will just carry on BAU

    Even Mark Carney, on radio this morning was blathering on about the hydrogen economy. And he was Gov of Bank of Canada, and bank of England.


    Empires are created through energy surplus (either stolen or indigenous) They go on till that energy begins to run out. Then there is the denial phase, before the chaos of final collapse.

    Perhaps final collapse can only be seen in hindsight. The day when you realise your supermarket/filling station isn’t going to get restocked—or just as scary, when water doesn’t flow from the tap in your kitchen

    The American empire was a creation of the (seemingly unlimited) resources found by the early settlers. It’s gone now, in affordable terms, but the American way of life is non negotiable.
    A death-sentence in every way.

    • How are things like around your area? I have heard London is not doing too great.

      • I received an email from someone today who is a taxi driver near London, but not in London. He thinks he may have COVID for a second time now, this time with the new version of the virus. There are people who leave Zone 4 lockdowns and take a taxi to spots with better COVID ratings to party.

        I am fine. No problems here, except many phone calls per day about the Senate races. Also, the mail box is full of ads, and the web is full of advertising aimed at me.

        The weather app on my phone is saying 100% chance of snow tomorrow. It rarely snows in Atlanta.

      • London is a dead zone…just how long that can last is anybody’s guess, cities need traffic to thrive, whether roman empire or our later versions

        even my own little market town is the same though—heartbreaking to go there now,

        I only hope it isn’t the first stage of turning into the abandoned Roman city 7 miles down the road.

        as our local poet (Housman) put it:

        On Wenlock Edge the wood’s in trouble;
        His forest fleece the Wrekin heaves;
        The gale, it plies the saplings double,
        And thick on Severn snow the leaves.

        ‘Twould blow like this through holt and hanger
        When Uricon the city stood:
        ‘Tis the old wind in the old anger,
        But then it threshed another wood.

        Then, ’twas before my time, the Roman
        At yonder heaving hill would stare:
        The blood that warms an English yeoman,
        The thoughts that hurt him, they were there.

        There, like the wind through woods in riot,
        Through him the gale of life blew high;
        The tree of man was never quiet:
        Then ’twas the Roman, now ’tis I.

        The gale, it plies the saplings double,
        It blows so hard, ’twill soon be gone:
        To-day the Roman and his trouble
        Are ashes under Uricon.

        leaves you wrecked—every time

        • Robert Firth says:

          “Remember me as thou pass by
          As thou art now, so once was I
          As I am now, so must thou must be
          Prepare for death and follow me.”

          How long since our churches taught the ‘Ars Moriendi’? Perhaps time they started again.

          • why not just push the handcart and call

            bring out your dead

            and have done with it

          • According to Wikipedia,

            Ars Moriendi was also among the first books printed with movable type and was widely circulated in nearly 100 editions before 1500, in particular in Germany. The long version survives in about 300 manuscript versions, only one illustrated.

            Ars moriendi consists of six chapters:

            The first chapter explains that dying has a good side, and serves to console the dying man that death is not something to be afraid of.

            The second chapter outlines the five temptations that beset a dying man, and how to avoid them. These are lack of faith, despair, impatience, spiritual pride and avarice.

            The third chapter lists the seven questions to ask a dying man, along with consolation available to him through the redemptive powers of Christ’s love.

            The fourth chapter expresses the need to imitate Christ’s life.

            The fifth chapter addresses the friends and family, outlining the general rules of behavior at the deathbed.

            The sixth chapter includes appropriate prayers to be said for a dying man.

          • Bei Dawei says:

            Tuesdays with Mori?

        • Xabier says:

          Housman is wonderful.

          What was the Roman city in Cambridge is now a municipal lawn and car park – it couldn’t be less romantic!

          Nowhere could be less haunted by the past.

          But a lesson: all that vivid history succeeded by….nothing.

          Every vestige of the past was torn down in the 19th c to save on maintenance by the Council!

      • Xabier says:

        To see what London looks like now, try ‘Sanpo Stroll’ on Youtube. He even plods about in the rain, poor soul…..

    • Peak Oil Pete says:

      You nailed it Gail.
      Walking up the DOWN escalator … Good analogy.
      And the escalator is speeding up.

      Good essay.

      • Robert Firth says:

        I concur. Thank you, Gail, for another most enlightening essay. One random comment: the Romans found a simple palliative for the high cost of engineering works: they designed them to last for centuries. Over that span of time, the payback more than covered the building and operating costs.

        Unfortunately, this cannot be done today, because fiat money can no longer transfer wealth across time; everyone is forced to think in the very short term.

        • Herbie Ficklestein says:

          But we can try to upgrade it…
          Italy to reconstruct Colosseum arena where sword-wielding gladiators once did

          For visitors to Rome, it will be a chance to see the Colosseum as the gladiators once did as they gazed up in bowel-clenching anticipation before engaging in blood-spattered combat in front of the emperor.

          Rome is to reconstruct the arena of the Colosseum, the vast oval-shaped space where gladiators armed with swords, tridents and nets did battle with each other and wild animals imported from all over the Roman Empire.

          Tourists will be able to stroll out onto the rebuilt arena and look up at the vast stone tiers of seating that enclose the amphitheatre. The arena could also become a venue for concerts and other events.
          submitted by February 1, with the project expected to cost €18.5 million. Work is scheduled to get underway next year.

          The stage will need to have retractable segments so that tourists can still view the tunnels where terrified beasts – from lions and leopards to ostriches and bulls – and nervous gladiators awaited their turn to fight.

          “We want to put back the arena employing the same principles with which it was first built in ancient times,” said Alfonsina Russo, the Colosseum’s director.

          “The reconstruction of the Colosseum’s arena is a great idea that will capture the world’s imagination,” said Dario Franceschini, the culture minister.

          “It will offer visitors the chance to see not only the subterranean area, as they can today, but to contemplate the beauty of the Colosseum from its very heart

          P.S. the circular tomb of Times first Emperor, Augustus, has been restored and will reopen to the public …thank BAU for funny 🤑💰

          • Lidia17 says:

            They could recoup those costs very easily if they’d allow pay-per-view battles to the death between random “elites”, executions of traitors, etc.

            • Kowainen says:

              I want to see AI designed and controlled battlemechs have a go at each other.

              Imagine 2 storey tall behemoths wielding pneumatic jackhammers, swinging enormous sledgehammers with the business end made of single-crystal depleted uranium.


              Now that is a 21’st century colosseum, with the splashes of blood and gore replaced with hydraulic oil, torn off actuators and metal shavings.

              Humans are just so, flimsy, pathetic. I want more machine. 🤘😬

            • Robert Firth says:

              George Soros versus a rabid hyena? I like it. And Dr Fauci versus a plague rat? I’ll bet on the rat. Or perhaps Joe Biden versus nothing; the game is to watch him try to find the way out.

          • Mirror on the wall says:

            The place is ugliness incarnate turned tourist attaction – a history of slaughter, then a cemetary, squatted by a religious order, ruined and stripped by looters – absolutely ghastly. All the charm of a cesspool.

            I would not waste my money on it.

            Florence is the place to go, anyway.

        • my understanding of, say the Colosseum, was that it was sustained by tributes of grain (energy) from Roman provinces, which delivered the necessary ‘bread’ to accompany the circuses.

          so on that basis, there was no ‘payback’ in money terms

          the arena showed people being killed for sport, the only payback was to satisfy the bloodlust of people going to watch, who didn’t pay anything.

          Much of Rome was effectively supported on ‘free’ energy, which is why is it so scarily similar to today. We are supported by ‘free’ energy too.

          We pay virtually nothing to obtain the 00s of man-hours of energy in a gallon of petrol, same as they paid nothing for the man hours of energy in free food, or slave labour. No doubt they too imagined it was ‘forever’. Just like us.

          The Roman Empire could only be sustained by constant outward growth.

          When our free energy stops, the barbarian hordes will come calling on us too.


          When you stand next to the base-circle of stone blocks of the colosseum, it’s easy to see why it lasted 2000 years, they are too big to move.
          On the other hand, their aqueducts fell down when ongoing maintenance and protection ceased.

          Only one Roman building remains, the greatest of them all, the Pantheon.

          • Robert Firth says:

            Heartily agreed, Norman. I used to visit the Pantheon often before moving to Asia, and I shall do so again when allowed to travel. The most memorable visit was the day after the funeral of Ronald Reagan, when I went there to give thanks for his life and pray for his soul.

            • I wouldn’t have gone that far

              but the pantheon is the place to go to be literally dumbstruck, to feel the thrill of the original builders course through your body as if it had been built yesterday

            • Robert Firth says:

              For Norman: the Pantheon is almost an encyclopaedia of sacred geometry. It was
              also designed by the Emperor Hadrian, a
              very good architect in his own right. He designed the theatre in Athens, where
              I once attended a performance of Sophocles’
              Antigone. Before the play, our tour guide had
              us sit near the top of the auditorium, and then dropped a coin on the stage. The acoustics,
              of course, were flawless. Sydney Opera House, take note.

            • sucking eggs time for the pantheon Robert

              but I do love it, all the same

          • Mirror on the wall says:

            The main defect of the Colosseum is that it is built partly on alluvial (unfirm earth redeposited by water) ground. Apart from that, people largely stripped it of what they could.

            “Severe damage was inflicted on the Colosseum by the great earthquake in 1349, causing the outer south side, lying on a less stable alluvial terrain, to collapse. Much of the tumbled stone was reused to build palaces, churches, hospitals and other buildings elsewhere in Rome. A religious order moved into the northern third of the Colosseum in the mid-14th century[26] and continued to inhabit it until as late as the early 19th century. The interior of the amphitheater was extensively stripped of stone, which was reused elsewhere, or (in the case of the marble façade) was burned to make quicklime.[18] The bronze clamps which held the stonework together were pried or hacked out of the walls, leaving numerous pockmarks which still scar the building today.” wiki

  4. Great Britain is finally paying for centuries of warmongering in Europe.

    Let it have its fun ruled by Hindu. It liked the HIndus so much that it will get to be ruled by them, something they didn’t manage to do so when Britain conquered the Muslim Mughal dynasty.

  5. Xabier says:

    Wonderful choice of image, Gail: I’ve travelled up and down that very escalator many a time when a miserable office rat. I can smell it even now. Ah, the nostalgia for those old days in a London, with people in it…..

    Merry Xmas, and good health for you and your family in 2021. Thank you for all your hard work.

    • You are welcome. I stay in good health. The healthcare system would go bankrupt with my patronage of it.

    • Robert Firth says:

      Agreed, a wonderful image. I also have ridden that rather alarming escalator, all the while thinking of Vergil’s “Fascilis descensus averno”. And I remember a London where the majority still spoke English.

  6. Pingback: 2020: The Year Things Started Going Badly Wrong - Deflation Market

  7. Ed says:

    There are three rates society can invest energy
    1) fast this produces growth
    2) just enough to maintain everything no growth
    3) just enough for the short run, things begin to break due to lack of repair, oil reserves decline due to lack of discovery, pipelines leak and fail, etc…

    As the supply of deteriorating stock grows the noticeable decline accelerates. I would say we are on #3 and by the end of the decade decline will be obvious to all.

    • I am sure we are not on 1) or 2).

      I expect that the situation will always look like there is enough energy for the short run, even though more and more people are being laid off from work, and many stores have empty shelves. Factories will be closed because of because of broken supply lines, but no one will connect this with inadequate energy supply. The prices will look too low for energy producers. No one will image that this is an energy problem.

  8. Malcopian says:

    In 2018 Gail told us that she thought the world was two years away from collapse. Well, she certainly nailed it, if maybe not quite for all the right reasons. Perhaps she should change her name to ‘Cassandra Nostradamus’.

    • It is not clear that the entire world economy goes down together. Perhaps some parts will do better than others and hang on for a while. There are a lot of unknowns going forward.

      • Dave says:

        Trade-Off Financial System Supply-Chain Cross-Contagion:

        a study in global systemic collapse.


        • Harry McGibbs says:

          “It is not clear that the entire world economy goes down together. Perhaps some parts will do better than others and hang on for a while.”

          I think we need to define our terms here. The current story is that some parts of the world, like the EU, UK and Japan are in a state of inexorably declining prosperity, disguised as growth via ever increasing amounts of debt and stimulus.

          Other parts of the world, like Venezuela, Iraq, Lebanon and Yemen are actually slowly collapsing – but they have not yet *collapsed*. Life may be miserable for the inhabitants and economic activity may be very constrained but there is still some food and some electricity. Millions of otherwise healthy people are not dying of starvation and disease.

          David Korowicz’s ‘Trade Off’ is quite one of the most brilliant pieces of work I have read, and I have never encountered a plausible rebuttal. I think he is correct that at some point all nations, irrespective of their current economic strength or weakness, will in a period of weeks or months be paralysed by failing supply-chains, such that the inhabitants will have to relocalise their provisions for food, fuel, drinking water, sanitation etc almost overnight.

          He says, “Central banks, the only party capable of responding [to a global systemic banking, monetary and solvency
          crisis], would be left with the option of recapitalising the world. That is, all critical insolvent countries and banks – because they
          would effectively been tied to the same platform. For example, the Fed and ECB would have to guarantee every liability across much of the insolvent global financial system.

          “In the end the only backstop a central bank has is the ability to print infinite money, and if it has to go that far, it has failed because it will have destroyed confidence in the money.”

          How much elasticity there is in that equation is an open question. The events of 2020 might lead one to imagine that the central banks are omnipotent but of course they are not – just highly skilled can-kickers. They cannot print value and solvency. They cannot print the throughput of nutrition in the form of energy that the global economy needs to be healthy.

          What they can do is allow for some continued functionality by providing the temporary illusion of satiety. It calls to mind the locals in drought-hit Madagascar eating white clay and tamarind to feel full – not a solution that works indefinitely:


          • Harry McGibbs says:

            Terrific article btw, Gail – you’ve distilled a vast amount of learning into it – and I wish you and all at OFW a very happy Christmas.

          • Robert Firth says:

            Thank you, Harry, a most thought provoking post. Two thoughts. 1. There is no “world economy”; there is the economy of the looters, which is prospering; the economy of the complacent, which is unraveling; and the rest of the world, which is dissolving into chaos.

            And 2. Banks today do not create money; the create fake money and destroy real money. And the refiner’s fire will consume them all.

          • JesseJames says:

            “Other parts of the world, like Venezuela, Iraq, Lebanon and Yemen are actually slowly collapsing – but they have not yet *collapsed” “
            Add in Puerto Rico, Lebanon, Syria, Mexico and California.

  9. Herbie Ficklestein says:

    Thank you very much ☺️❣️ for the Holiday write-up, Gail, and found it engaging since I graduated High School in 1976 and we’ll remember the days of the so called energy crisis. Recall the long lines at the pump and waiting only to have the service attendee place a make shift sign, SORRY OUT OF GAS! People freaking out because the gallon went from 29.9 to 50 cents.
    Also remember my beloved muscle cars from Detroit being shuttled and the Asian Rice burners floodng the marketplace.
    Saw Mother Earth News. Popular Science and Mechanics, Whole Earth Catalog with solutions to our energy crisis…though there was really only a 5% shortfall😱
    Yes, many of the younger generation now have no clue what is in store for humanity💙😌 in BAU paradise land.
    I know better. I can smell it….
    Excellent article and thank you again for taking the time and effort to post it here.
    Have a happy Holiday Season….may be our last 😷

  10. justsayin says:

    Thank you for the article Gail! I cant help wondering if things are by design. I know consuming less is not a option with our current form of economy. If FE was still about he would lambast me about spent fuel pools for evening mentioning it.

    It just seems to me we need to accept having less. The paradigms and constructs we have believed in may not be true.

    Can everybody have 5 million dollars worth of medical care at the end of their life? Is that even desirable? Yes everybody should be able to get a few stitches or a handful of antibiotics if they need them.

    At the top of the food chain there are people who money is nothing. The goods and services it buys however ate important to them. Money is not so much important as that the things that they want are available.

    Hoe do you get a good doctor for a difficult procedure? You let him practice on a few thousand people first. How do you get that done? Well those few thousand people have to have access to that procedure.

    The brains mean nothing if you dont have anything to practice on. They need data also. This is just a example. If you wanted a society that produced the best that science and knowledge has to offer how would you craft it? Well one way to do it would be to design it so the bar couldnt be lowered. Design it for infinite growth or bust.

    Once again if FE was about he would now ask how I would like hand cultivating a field. I dont think it has to be like that. We are going to have to get by with less. That IMO is a fact. We can do it with grace and love to the best of our abilities. We may fail totally. Doesnt mean you dont try to do your best.

    In our culture we have a disdain for settling. For accepting. I am not sure that serves what really has value to us.

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