Feb 122016
 
 February 12, 2016  Posted by at 7:07 pm Finance Tagged with: , , , , , , , ,
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Crowd outside Wall Street Stock Exchange on BlackThursday Oct 24 1929

What we see happening today is why we called our news overview the “Debt Rattle” 8 years ago. The last gasps of a broken system ravished by the very much cancer-like progress of debt. Yes, it took longer than it should have, and than we thought. But that’s pretty much irrelevant, unless you were trying to get rich off of the downfall of your own world. Always a noble goal.

There’s one reason for the delay only: central bank hubris. And now the entire shebang is falling to bits. That this would proceed in chaotic ways was always a given. People don’t know where to look first or last, neither central bankers nor investors nor anyone else.

It’s starting to feel like we have functioning markets again. Starting. Central bankers still seek to meddle where and when they can, but their role is largely done. It’s hard to pinpoint what exactly started it, but certainly after Kuroda’s negative rate ‘surprise’ fell as flat on its face as it did, and then fell straight through the floor and subsequently shot up through the midnight skies, a whole lot more ‘omnipotence credibility’ has disappeared.

Kuroda achieved the very opposite of what he wanted, the yen soared up instead of down -big!-, and that will reflect on Yellen, Draghi et al, because they all use the same playbook. And the latter so far still got a little bit of what they were shooting for, not the opposite. Still, one could also make a good case that it was Yellen’s rate hike that was the culprit. Or even Draghi’s ‘whatever it takes’. It doesn’t matter much anymore.

Though what should remain clear is that it was in their interference in markets to begin with, as extremely expensive as it has been extremely useless and dumb, that the real guilt resides. Or we could take it even a step further back and point to the credit bubbles blown in the west before 2008. Central banks could have let that one go, and allow it to run its natural course. Instead, they decided they should inflate their own balance sheets. What could go wrong?

Then again, these inane policies concocted by a bunch of bankers and bookworm academics who don’t even understand how their own field works, as Steve Keen once again explained recently, would have blown up in their faces long before if not for China’s decision to join in and then some. Some $35 trillion, that is.

Money, debt, spent on ghost cities and on what now turn out to be ghost factories. Ghost jobs, ghost prosperity,a ghost future. Makes us wonder all the time what people thought when they saw China used as much cement in 2011-2013 as the US did in the entire 20th century. Did anyone think that would continue for decades, even grow perhaps? Have we lost all sense of perspective?

How much cement or steel can one country need, even if it’s that large? How much coal and oil can it burn, let alone store? Blinded as we were, apart from the financial shenanigans, much of what the ‘developed nations’ engaged in since 2008 was overleveraged overinvestment, facilitated by ultra-low rates, in industries that would feed China’s hunger for ever more forever. Blind? Blinded?

And now we’re done. If Elon Musk doesn’t come back soon with a zillion little green Martians to pick up China’s slack, we’re all going to be forced to face just how distorted our media-fed visions of our economic futures have become, and how much pain it will take to un-distort them.

Which is what we’re watching crash down to mother earth now. And the central bankers’ loss of ‘omnipotence credibility’ is not something to be underestimated. It encourages people like Kyle Bass to dare the PBoC to show what it’s got left, even if, as Bass said, he’s got maybe a billion to go up against the multi-trillion Chinese state windmills of Beijing. It shouldn’t matter, but it does. Because the windmills are crumbling.

Bass won’t be alone in challenging global central banks. And that’s probably good. Without people like him, we would never see proper checks and balances on what the formerly omnipotent are up to. Kuroda has next to nothing left -or even less that that. Draghi and Yellen only have negative territory left to plow into, and at the very least that means putting positive spins on any economic numbers becomes exceedingly hard to do -and be believed.

Granted, they can still all go for helicopter money -and some will. But that will be the definite last step, and they know it. Dropping free money into a festering cesspool of debt is as useless and deadly as all previous QEs put together.

As we watch the world crash down to earth in epic fashion -and it ain’t even the 1st inning- people are already looking for a bottom to all of this (a waste of time). But if there’s one law in economics, it’s that when a bubble pops it always ends up below where it started. So look at where levels were before the bubble was blown, and then look out below.

Want to argue that this is not a bubble? Good luck. This is the mother of ’em all.

The Lunar New Year, and the breather it brings for Beijing -though we’re sure there’s not a lot of family time off for PBoC personnel- seems like a good moment to take stock of the multiple crises that simultaneously and in concert accelerated head first into the new year. And boy, the rest of the world decided not to wait for China, did it now? For those who’ve seen this coming and/or have no skin in the game, it’s an amusing game of whack-a-mole. For others perhaps not so much.

To take a few steps back, if you ever believed there was a recovery after 2008, or even that it was theoretically possible for that matter, you’re going to have a much harder time understanding what is happening now. If you’ve long since grasped that all that happened over the past 8 years of QE infinity-and-beyond, was nothing but “debt passed off as growth”, it’ll be much easier.

It’s stunning to see for everyone at first blush that the “book value” of global proven oil reserves is down by $120 trillion or so since summer 2014. And it certainly is a big number; the S&P has lost ‘only’ $2 trillion in 2016. But what counts is the speed with which that number sinks in, and that speed depends on one’s reference frame. In the same vein, what’s perhaps most important about all the seemingly separate crises developing before your eyes is how they feed on each other.

Or, rather, how they all turn out to be the same crisis, kind of like in the perfect whack-a-mole game, where there’s only one mole and you still can’t catch it. So try and whack these. Or better still, try and imagine central bankers doing it, or finance ministers, spin doctors. They’re all so out of their leagues it would be funny if they didn’t have the power to make you pay for their incompetence.

Home Forums Is This Debt’s Last Rattle?

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February 12, 2016 at 7:07 pm #26740

Raúl Ilargi Meijer

Crowd outside Wall Street Stock Exchange on BlackThursday Oct 24 1929 What we see happening today is why we called our news overview the “Debt Rattle”
[See the full post at: Is This Debt’s Last Rattle?]

February 12, 2016 at 8:52 pm #26741

jal

If all of the mfg that was transfered to China had happened in my back yard, I would have died (with everything else), from the pollution.

Long live capitalism.

  • This reply was modified 3 months, 2 weeks ago by  jal.
February 13, 2016 at 12:14 am #26743

TheTrivium4TW

“The one aim of these financiers is world control by the creation of inextinguishable debt.” ~Henry Ford

>>There’s one reason for the delay only: central bank hubris.<<
Absolutely false. The main purpose of the this delay was for the Debt-Money Monopoly (DMM) and its corporate assets to loot the American people out of trillions in debt-denominated dollars and offload trillions in DMM corporate debt to the the American broke American people, all while using propaganda in order to create the false pretense of hubris such that the average person won’t be able to figure out is was 100% malice. The echo chamber serves the interests of the DMM false narratives spewed into it.

<<And now the entire shebang is falling to bits.<<
Not at all. Nothing unexpected has happened. The DMM has fully secured trillions in debt-receipts (the money face of two-faced money), created through issuing trillions in inextinguishable debt to the nescient and ignorant masses, while offloading trillions of its debts the immonetarate (monetary illiterate) masses.

QE represented the quantitative easing of DMM oligarch debts while simultaneously looting trillions more from a society suffering from monetary illiteracy.

JP Morgan said that every man has two reasons for doing a thing: The good reason and the real reason. Until humanity can spare some brain cells to question the DMM “good reason” propaganda, we are doomed. Even Eisenhower warned us.

Let me be clear, debt-money is the most sophisticated, the most human degrading, and the most deadly weapon every wielded against mankind. More people have died of debt-money induced poverty than almost any other cause. Wars are financed and controlled by Debt-Money Monopolists, in part to slay the host country to inextinguishable debt.

But, alas, so few have ears to hear.

It’s just all one big blunder that the Fed’s controllers end up with all the monetary wealth and effective jack-boot monetary control of planet Earth while everyone else ends up in poverty with inextinguishable debt. It was all one accident because the jack-booted world controllers were “stupid,” right? They just didn’t get it, right?

But all the face ripped Muppets now ruled by Debt-Money Monopolists jack-boots are sooooo smart. No, most people are galactic chumps being played for unevolved fools who can’t even figure out the enemy when their own historian and Presidential mentor PUTS IT DOWN IN BLACK AND WHITE FOR ANYONE TO READ…

“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert by secret agreements arrived at in frequent private meetings and conferences.”
— Quote from Caroll Quigley’s Tragedy and Hope, Chapter 19

“The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.”
~Lord Acton

The nescient and ignorant will be ruled over by authoritarian government because there never has been an ignorant and free populace. The price of ignorance and apathy is the freedom of your society – always has been and always will.

“Most people prefer to believe that their leaders are just and fair, even in the face of evidence to the contrary, because once a citizen acknowledges that the government under which he lives is lying and corrupt, the citizen has to choose what he or she will do about it. To take action in the face of corrupt government entails risks of harm to life and loved ones. To choose to do nothing is to surrender one’s self-image of standing for principles. Most people do not have the courage to face that choice. Hence, most propaganda is not designed to fool the critical thinker but only to give moral cowards an excuse not to think at all.”
~Michael Rivero

Anyone who thinks the middle class face-ripping and ruining Federal Reserve is stupid or arrogant is simply projecting. They are evil and malevolent. Now, it would truly be hubris on Janet Yellen’s part TO TELL THE PEOPLE THE TRUTH, but she won’t do that PRECISELY BECAUSE SHE DOESN’T HAVE THE WILL TO DO SO. She absolutely HATES ordinary people, which is why she’s murdering them via the installment plan of fraudulent debt-money induced poverty.

February 13, 2016 at 12:37 am #26744

TheTrivium4TW

Hi jal, capitalism doesn’t exist. How can something that doesn’t exist “live” on? It can’t. The false Debt-Money Monopolist scapegoat to be blamed for the damage done by their fraudulent debt-money monetary system is the phantom boogey-man “capitalism.”
Capitalism CAN’T EXIST when a small cabal of PRIVATE INDIVIDUALS retain the knowledge and power of a nation’s monetary system (in this case, all the world except those nations currently under threat of being bombed to have a debt-money central bank implemented) and have the ability to wield it to finance and control politicians and government.
This is nothing new, it has been going on for 100s of years.

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
― Napoléon Bonaparte

Orwell fully understood the power of an elite to dupe the masses via their use of false language. It is the responsibility of every citizen who doesn’t want to be lead into the pit of debt-money induced poverty to use correct language such that the criminals are exposed.

You don’t live in a capitalist system, you live in a Debt-Money Monopolist Fascist System. An equivalent term would be Debt-Money Monopolist Oligarchy. This is the absolute observable truth, hence, most people will not have a clue what I’m saying.

The mind control appears to be too “thick.”

“We’ll Know Our Disinformation Program Is Complete When Everything the American Public Believes Is False.”
~William Casey, Debt-Money Monopolist financed CIA Director

BTW, read this apparent mia culpa (or mock piece of the ignorant American people) by Debt-Money Monopolist fascist implementer J. Edna Hoover… but make the following change:

“Swap Debt-Money Monopolist Fascism” for “communism” and it is a direct hit.

https://www.metabunk.org/debunked-a-conspiracy-so-monstrous-he-cannot-believe-it-exists-hoover.t330/

By the way, the FINANCING of of the totalitarian system misrepresented as “communism” also emanated from the Debt-Money Monopolists. The DMM Fascists actually HATE AND DESPISE the true meaning of socialism and communism. The country that best fit the ideals of socialism in the word, Libya, was razed to the ground by DMM Fascist vassal governments via their use of terrorist al Qaeda proxy armies they funded and armed (no, NOT the US as a whole, but the DMM Fascists with the POWER to control the actions of government).
Libya: the West and al-Qaeda on the same side
http://www.telegraph.co.uk/news/worldnews/africaandindianocean/libya/8391632/Libya-the-West-and-al-Qaeda-on-the-same-side.html

Al-Qaeda’s Specter in Syria
http://www.cfr.org/syria/al-qaedas-specter-syria/p28782
“The influx of jihadis brings discipline, religious fervor, battle experience from Iraq, funding from Sunni sympathizers in the Gulf, and most importantly, deadly results. In short, the FSA needs al-Qaeda now.”

Youtube “CFR hillary clinton” and then, in a second search, replace hillary clinton with dick cheney. Yup, Hillary Clinton and Dick Cheney hang at the same CFR club that promotes al Qaeda as a very useful asset to overthrow the closest thing to socialism on Earth and replacing it with a terrorist hell-hole.

“Front Organizations Established in Key Countries

At the end of the war of 1914, it became clear that the organization of this system had to be greatly extended. Once again the task was entrusted to Lionel Curtis who established, in England and each dominion, a front organization to the existing local Round Table Group. This front organization, called the Royal Institute of International Affairs, had as its nucleus in each area the existing submerged Round Table Group.

In New York it was known as the Council on Foreign Relations, and was a front for J. P. Morgan and Company in association with the very small American Round Table Group. The American organizers were dominated by the large number of Morgan “experts,” including Lamont and Beer, who had gone to the Paris Peace Conference and there became close friends with the similar group of English “experts” which had been recruited by the Milner group.

J. P. Morgan and Company Were the Center of the Round Table Group in America

On this basis, which was originally financial and goes back to George Peabody, there grew up in the twentieth century a power structure between London and New York which penetrated deeply into university life, the press, and the practice of foreign policy. In England the center was the Round Table Group, while in the United States it was J. P. Morgan and Company or its local branches in Boston, Philadelphia, and Cleveland.”
Professor Carroll Quigley, Tragedy and Hope (Debt-Money Monopolist historian and DMM controlled Presidential mentor/controller to William Jefferson Clinton)

February 13, 2016 at 4:07 am #26745

jal

Hi TheTrivium4TW.
Its good of you to identify the poopers in our society. 😉

http://www.bbc.com/earth/story/20150513-these-animals-use-public-toilets

Many animals use shared latrines, purposely weeing and pooing in the same place. The strange thing is, it’s not just to keep their homes clean.

  • This reply was modified 3 months, 2 weeks ago by  jal.
February 13, 2016 at 5:10 am #26747

Chris M

Trivium,

I too was going to write how I don’t believe it is incompetence on the part of the central bankers in regards to the policies they enact and the institutions they create. As you say, it is pure malice on the part of the greedy, power hungry people that have put the central banks systems in place. I would go so far as to say they want the system to implode, so that, once again, they can ride in on their white horses and create the next bigger, more global debt racket institutions for the ignorant masses (aka debt slaves).

It gets tiring to hear that these people don’t know what they are doing. It is similar to when people say that Barack Obama doesn’t know what he is doing. Horse hockey! He knows exactly what he is doing.

Furthermore, it was downright disgusting to watch Rep. Sean Duffy give Janet Yellen a hard time at her dog and pony show this week. As if Janet Yellen and the Debt Money Monopoly command center is going to heed anybody in Congress. B.S. theater, I call it.

Remember, debt is slavery. Debt is death. True freedom is everlasting life.

February 13, 2016 at 5:12 am #26748

Ken Barrows

I’ll agree that debt is slavery. However, most of the human race cannot live any other way now. What will we do?

February 13, 2016 at 6:30 am #26749

Nassim

“Are Americans Too Insouciant To Survive? — Paul Craig Roberts”

http://www.paulcraigroberts.org/2016/02/11/are-americans-too-insouciant-to-survive-paul-craig-roberts/

Good question IMHO.

February 13, 2016 at 8:16 am #26750

TheTrivium4TW

>>I’ll agree that debt is slavery. However, most of the human race cannot live any other way now. What will we do?<<

You and I can only warn the selfish masses who will, as a whole, do absolutely nothing of substance different. Because of this, the DMM Fascists will have their way with us and you or I can do is to help individuals gain the knowledge to help themselves and, frankly, stew in the failings of a planet full of vain narcissists that can’t be bothered with caring about other people in any real, sustained way. That, in a nutshell, is the problem with humanity, from the very top to the very bottom. We don’t care about others EQUAL to ourselves.

And yes, the DMM are knowingly malevolent and they prey upon the naivety of the masses… people they’ve schooled and molded to worship authority and abhor being an outcast to those trained to worship authority… Debt-Money Monopolist Fascist financed authority.

For those Biblical scholars, the Revelations imagery of a wealthy, finely dress woman Beast controlling woman riding the governmental Beast system basically is a perfect fit for the reality of the DMM Fascists perched upon and controlling the governmental Beast systems of nearly all nations. Remember, the Beast controlling woman has illicit relations with all nations at some point (and she’s already almost there…).

February 13, 2016 at 2:21 pm #26759

George P

It is true that evil is the main drive of the masters of the debt game, but it is wrong to assume that they have unlimited potential and power and some kind of supernatural ability to manipulate the chaos around us into their liking. They simply can’t control the forces of History at hand here. They are not godlike, omnipotent and infallible, simply because they are evil psychopathic control freaks with lots of power.

The opposite is true: They have started something that they cannot finish, ie globalization through global wealth grab and debt slavery. Which is a defensive strategy really, for it forces them against the vast majority of the people. This way they have no control of the end game. This is evident in many indicators (black swan events), if you look closely. Oil, metal, semi-precious earths and precious earths peak everything; China; manufacturing collapse, which turned into the financialization of everything; big time market collapse; Europe’s immigration problem; Russia as opposition; the collapse of the EU itself; 1/3 loss of wealth of the big TBTF banks; the world deflationary collapse under way and the burst of the high king of all bubbles, His Royal Highness, King Derivatives the Mighty. Their power slips between the cracks in the system and what remains is pose and pretense.

We can’t really go biblical and predict that this is the workings of a demonic cabal that controls everything, just because we are trying to make sense of a terrible systemic collapse. This may be what they would like us to believe, but it cannot be so. In reality, they have already lost. What we are seeing is desperation and an internal power struggle between various branches of the deep states around the world, various bankers and other cabals, where bureaucrat fights bureaucrat and ultra rich billionaire fights ultra rich billionaire for power and a pretense of control. In a few years the 1% has turned into 0.0001% and still counting. How much concentration of wealth can a viable economic system endure before collapsing? We have exceeded that point some time now and a non viable system cannot be viable for long.

Despite the popular narrative, chaos is something that cannot be manipulated by empires, using some kind of chaos math and wishful thinking. The recent chaotic policies by the US in the MENA have led to stupid carnage, bitter defeats and loss of control. You see, the math that describe chaos are statistics, which automatically means that it is false and big lies. So no real control can come out it, for it is not a precise science. This is something that no bureaucrat can really understand, or won’t accept simply because his career depends on it. So, stupid sh!t are now the norm and all-powerful bureaucrats can’t control or shape the future, no matter how hard they try.

I would suggest that we, the children in the Western world, should start focusing to our local communities and slowly start to grow our food, gain access to clean water, create the necessary security capabilities and invest in rebuilding pre-Facebook social ties, instead on focusing on the supposed absolute omnipotent power that the old status quo elites used to have and try to abuse in the time of their triumph, which is really their final failure. It is a fact of History that no old elite can transform into a new elite, no matter how much fiat money, gold or goons they have. The goons always end up murdering them to get the loot. The elites always pay the ultimate price in times of big historical social turmoil by losing their head, no matter how disconnected they are from the rest. Real social power comes from societies, from social contracts, not from secret banker power center deals or fake money ponzi schemes. This is evident now that the gears of History have started to shift once more.

February 13, 2016 at 2:25 pm #26760

alan2102

Ilargi: “Makes us wonder all the time what people thought when they saw China used as much cement in 2011-2013 as the US did in the entire 20th century. Did anyone think that would continue for decades, even grow perhaps?”

No, of course no one thought that. Why would anyone think that? Who would need to continue to pour that much concrete, decade after decade? NO ONE. Because concrete lasts a long time. You pour it once, and it lasts a half-century or full century, perhaps longer. The Chinese are buidling a modern civilization. That requires a f**k-ton of concrete. But it is a one-off thing, largely.

“How much cement or steel can one country need, even if it’s that large?”

ENOUGH TO FORM THE PHYSICAL INFRASTRUCTURE OF A MODERN CIVILIZATION FOR 1.4 BILLION PEOPLE, similar to the physical infrastructure of a modern civilization for ~300 million people that now exists in the U.S. And once it is laid down, it lasts for a loooooong time, as you can see by sticking your head out the door and looking up and down the street.

They did what needed to be done, albeit with warts/mistakes along the way. Surely there would have been no mistakes if you, Raul, had been president of the PRC. Too bad that opportunity was missed.

February 13, 2016 at 2:36 pm #26761

V. Arnold

I would suggest, those who think one cannot live without debt, lack imagination, objectivity, and perspective.
One has to transcend everything one has been taught which would include a ruling government as the final authority.
Usians are still free to travel (for how long is the question), but few even see that as an option. It’s still a big world out there and you cannot, in your wildest dreams, even imagine the possibilities…pity…

  • This reply was modified 3 months, 2 weeks ago by  V. Arnold.
February 13, 2016 at 9:11 pm #26767

regionswork

Facebook Post to my page: Cooperation Industry Earth –

“This status report from The Automatic Earth’s Raúl Ilargi Meijer.

If you’ve not spent some time trying to understand the nature of debt based money and banking, this will be somewhat confusing. Much truth is present, but study is required. Reading: “Debt: The first 5,000 years” by David Graeber is a good start – but it is a long read. Easy credit leads to bad decisions. Payoff of debt can be delayed by refinancing, and the related fees make a good income stream for the banking industry, but without repayment of debt there is no renewal of credit worthiness. Debts mount up to the point that they can not be paid. “Forgive us our debts as we forgive our debtors” in the Lord’s Prayer was probably about real debt and not sin. Predatory debt has been in human civilization that long and it has been the true religious authorities that had to fight usury, the rich controlling the poor through debt. Very often, they did not want the debt repaid – so the terms were intended to get a family’s land and/or daughters. The Egyptians were more fair because they knew without the farmers, in the event of war, they’d have no army. Easy credit – unpayable debt”.

Did the Chinese play us – use their 5,000 year history to get the gold and infrastructure for another 1000 years? Are they getting even for the Opium Wars and related colonization? We are only going to survive and advance as the Greater Community of Humanity. War – stealing the fire from others – just doesn’t lead to net benefit. Until that primitive notion is dispelled, we will manage to hobble our evolution and diminish the life supporting capacity of the planet. Other intelligent races may be watching, wondering – how to get control of this real estate. President Reagan warned of this. True or not, it is a perspective that is needed.

February 13, 2016 at 10:09 pm #26768

Professorlocknload

I have every confidence that Central Bank policy can remain irrational much longer than markets and market participants can remain solvent.

On the death of Capitalism, it died in 1913.

And yes, destruction of the currency is the inevitable end result of this “Extraordinary Popular Delusion.”

Get “real” or go down with the ship.

February 14, 2016 at 1:57 am #26771

Nicole Foss

Alan, China didn’t do what needed to be done, they did what the elite who run the state owned enterprises could most profit from, even if it proved to be a massive exercise in negative added value, which it did for the most part. This was a grotesque waste of perfectly good resources to build useless infrastructure there was no demand for, and no use for, probably ever in its lifetime. Remember that bubble infrastructure is typically badly built as quickly as possible, in order to profit and move on to the next project. That stuff would be raining down concrete blocks (riddled with concrete cancer in 2 or 3 decades) on to the heads of those beneath, if there were any heads beneath. There aren’t now, and probably never will be though. This is nothing more than the largest waste of resources in human history, all fueled with bad debt for the benefit of the very few at the expense of the many. It’s happened many times before, but never on this scale. It couldn’t have without cheap energy. Since we’ll never have cheap energy like this again, it’ll never happen again, thankfully.

February 14, 2016 at 6:57 am #26786

alan2102

regionswork: “Did the Chinese play us…to get the gold and infrastructure for another 1000 years? Are they getting even for the Opium Wars and related colonization?”

Yes and yes. The SOBs outsmarted and outworked us. Their debt problems are MUCH less important than Ilargi would claim, for the exact reasons that you site: gold, and infrastructure. They have huge debts, BUT THEY HAVE MORE-HUGE ASSETS. That used to be the case with us, too, a few decades ago. My how time flies.

February 14, 2016 at 8:07 am #26787

alan2102

Nicole: “Alan, China didn’t do what needed to be done, they did what the elite who run the state owned enterprises could most profit from”

Both. It was both what needed to be done (roughly speaking) AND what elites could profit from. To see only the latter is to adopt a cynical and unrealistic attitude — which is unfortunately the norm at TAE. It is that attitude that sees ONLY debts or liabilities, NEVER assets. It is a terribly skewed way to view the world, and it dooms much of your analysis to be wrong for decades to come.

“even if it proved to be a massive exercise in negative added value, which it did for the most part.”

What “negative added value” are you talking about?

“This was a grotesque waste of perfectly good resources to build useless infrastructure there was no demand for, and no use for, probably ever in its lifetime.”

Nicole, this assertion of yours is wildly out of touch with reality. China is a rapidly urbanizing nation and it requires vast new infrastructure to allow this urbanization. There is HUGE demand and use for the infrastructure they’ve built. The whole “ghost cities” story is rubbish. The “ghost cities”, after a decade or so, FILL UP. The buildings, roads, airports, dams, rail lines, and much more, across the country, are filled with people and activity. It is a rapidly-growing, vibrant civilization. How you and Ilargi can remain blind to this is a mystery to me.

“Remember that bubble infrastructure is typically badly built as quickly as possible, in order to profit and move on to the next project. That stuff would be raining down concrete blocks (riddled with concrete cancer in 2 or 3 decades) on to the heads of those beneath, if there were any heads beneath.”

More wild assertions based on nothing. The Chinese have become experts at building things fast, it is true. And corners get cut, which on rare occasion results in a headline-grabbing collapse or failure. But for every collapse or failure, there are a THOUSAND structures standing and giving good service to the throngs of people who live and work in them. The evidence for this is as follows: Guangzhou, Shenzhen, Dongguan, Chengdu, Shenyang, Hangzhou, Chongqing, Wuhan, and dozens of others.

Here, take a look:
https://www.google.com/search?biw=833&bih=490&tbm=isch&sa=1&q=china+cities&oq=china+cities

“This is nothing more than the largest waste of resources in human history, all fueled with bad debt for the benefit of the very few at the expense of the many.”

Tell that to the billion or so who have been lifted out of poverty! The global poverty rate has fallen off a cliff over the last 25 years, and most of the gains were in China. The world still has a huge inequality problem, and a huge waste problem, but the nature and specifics of it have changed dramatically.

I have numerous misgivings about the way in which China has developed itself. But no way would I disparage what they’ve done as “the largest waste of resources in history”! The opposite is closer to the truth. It is the largest good use of resources in history — albeit with too much waste, which could have and should have been prevented.

“It’s happened many times before, but never on this scale. It couldn’t have without cheap energy. Since we’ll never have cheap energy like this again, it’ll never happen again, thankfully.”

“Thankfully”?! You mean it is a bad thing for the world to develop itself and raise its population out of poverty? Surely you are not serious.

And don’t look now, but cheap renewable energy is coming on like gangbusters, and nothing can stop it. THANKFULLY. Within this decade, it will no longer make economic sense to build anything BUT renewable capacity. Renewables already make up a large proportion of new capacity, and this is so because of the compelling economics. Renewables are beating fossil fuels and nukes even WITH the huge FF/nuke subsidies intact.

  • This reply was modified 3 months, 2 weeks ago by  alan2102.
February 14, 2016 at 9:45 am #26792

alan2102

Nicole: vis:
http://www.theautomaticearth.com/forums/topic/renewable-energy-the-vision-and-a-dose-of-reality-2/page/3/#post-26789

February 14, 2016 at 6:21 pm #26803

seychelles

The key to decarbonizing our economy is to build a new energy system that does not rely on carbon-based fuels. Scientific studies show that that can be done, it can be done soon and it does not require nuclear power.”
Pure scientism.
Anybody who has ever looked carefully at new real estate construction during a boom knows that there is an inverse relationship between quality and price. Like all human endeavor, things turn rapidly to s*it when the focus on quick bucks becomes unreasonably intense. Experience strongly suggests that, as Nicole asserts, most of the new construction will have limited longevity, unless “things are different this time.”
What the Chinese should have done is leave the rural population where it was, living in relative harmony and more directly connected with nature, rather than concentrate them in urban megacenters (with hopes for more), converting carbon into biologically unusable forms and making garbage consumer goods that consumers will soon no longer want or be able to afford.

February 14, 2016 at 9:10 pm #26804

alan2102

Seychelles: the problem with “[rural] living in relative harmony and more directly connected with nature” is that it has, historically, come freighted with chronic poverty, chronic malnutrition, chronic infection and infestation, and low life-expectancy. That was the condition of the Chinese peasantry at the time of the revolution. Maybe it is possible to correct those problems without mass urbanization. I’m inclined to agree that things should have been done differently. Mao was more insistent on supporting and empowering the peasants right where they were, than his successors. He was probably right. But so much has happened since then, both good and bad, that it is futile to go back and play “what if” (they had done things the way I think they should have). They did what they did, and it has been fabulously successful in many ways. As I said, the huge decline in the rate of poverty, globally, is largely due to the vast improvements for the majority in China. That is a spectacular accomplishment. Would some of those people have been better off back on the farm? Maybe. Somewhat. I don’t know. A great many of them would not be better off because they would have DIED; many others would have remained desperately impoverished for a long time. Longer than with the urbanization? Hard to say. Answering such questions would require true scholarship for a period of many months, studying the whole of modern China. I’m not really up to it, and I doubt if anyone else in attendance here is, either.

“most of the new construction will have limited longevity”

Go read about their cities. Look at pictures. Get some idea what you are talking about. Their buildings are not falling down. Their infrastructure is in great shape, and getting better every year (while ours crumbles). They have the largest, most beautiful and efficient airports, train stations, and other public facilities of anywhere on the planet. None of these things are falling down. They function just fine. Vague fears about “limited longevity” have no basis in fact, unless you are talking about the alarmingly deteriorating infrastructure situation in the U.S. That’s the “limited longevity” that you should be thinking about.

February 15, 2016 at 12:41 am #26807

Nicole Foss

Alan, people have been temporarily lifted out of poverty at the expense of crowding them into megacities and depriving them of their connection to the means to provide for themselves once the ponzi economy inevitably crashes, not to mention comprehensively destroying the environment upon which they all depend, and creating a situation where every young person unable to find a job to support even themselves in a few years will also be expected to support four grandparents. The older cohort, with no means of support, is going to die in droves in the not too distant future. Granted the Chinese are capable of building beautiful and durable things, but that’s not what they do when they build ghost cities. Those will never fill up. No one will be able to afford them. There is no means of earning a living anywhere in near vicinity. The whole environment of these cities is entirely artificial and pointless. They will eventually fall down without ever having served a purpose beyond enriching the owners of the state owned enterprises that built them. Just look at overbuilt Japanese bubble infrastructure. It’s already falling down after 25 years (their bubble peaked in 1989).

The Chinese economy is a gigantic ponzi scheme resting on the shifting sands of bad debt. Its crash is going to be one for the record books, then the stream of migrants will dwarf anything seen so far. The land people might have gone back to will be poisoned, parched and useless for generations, so they’ll look elsewhere. A gender ratio as skewed as theirs is going to lead to conflict, either at home or abroad, or both. It is a disaster waiting to happen, pure and simple.

February 15, 2016 at 8:05 am #26813

Raúl Ilargi Meijer

Greer destructs renewables quite well. So we don’t have to do it again.

Renewables: The Next Fracking? (JMG)

February 15, 2016 at 8:40 pm #26836

alan2102

Ilargi: “Greer destructs renewables quite well.”

No, he does not do any such thing. Most of the article is not even about modern renewables. And when he does get around to renewables, there’s no substance, just a few ignorant factoids; e.g. solar’s “dismal net energy returns” (the opposite is true — VERY true — and it is a major driving force of the shift). He misses the most fundamental lesson of the last 5-10 years: renewables are succeeding, massively, not in spite of low EROEI or poor economics, but BECAUSE OF HIGH EROEI AND GREAT ECONOMICS, which get better by the year, as fossil fuels become worse and worse.

He also makes numerous wild claims, inconsistent with reality (e.g. “soaring” cancer rates near solar panel factories).

The guy has obviously not done his homework. But then, I don’t expect him to. He is in too deep with his “collapse of modernity” idea. He MUST ignorantly deny, because there is no face-saving way out for him. He had bought heavily into the peak oil collapse/apocalypse story (I remember his posts on energyresources and elsewhere, early 2000s), and maybe still does; he might be in denial on that one just like the rest of the peak oil crowd.

Poor guy. So intelligent, yet…

Oh yes, he also makes some very good points and observations, e.g. “the point that nearly everyone in the debate is trying to evade is that the collection of extravagant energy-wasting habits that pass for a normal middle class lifestyle these days”. Yo.

  • This reply was modified 3 months, 2 weeks ago by  alan2102.
February 15, 2016 at 9:04 pm #26844

alan2102

Nicole: “temporarily lifted out of poverty”

“Temporary” has been decades, so far. We’ll see.

Nicole: “at the expense of crowding them into megacities and depriving them of their connection to the means to provide for themselves”

I have some sympathy for this point of view. Urbanization is a complex phenomenon with both bright sides and dark sides. I’ve so far been incompletely convinced by the portrayals of both sides (those celebrating urbanization, and those denouncing it). They both have good points.

The case FOR urbanization is made well by Stewart Brand — a guy about whom I have grave misgivings, but nevertheless he does make good points about the practical reality that exists today:

youtube.com/watch?v=OvHjQdc3oNo
What squatter cities can teach us | Stewart Brand

In a nutshell, per Brand (with a few of my additions):

Life in the country:
– dull, backbreaking, impoverished, restricted, exposed, dangerous, static [plus: disease, short life expectancy, illiteracy, no/fewer rights for women, etc. –alan2102]

Life in the city:
– exciting, less grueling, better paid, free, private, safe, upwardly mobile [plus: education, health care, wide variety of services options, cultural options and diversity, hugely improved sexual/intimacy options, intellectual stimulation, etc. –alan2102]

The other side is of course the imperialistic *aspects* of urbanization, and the way in which it reflects social injustices (land grabs, etc., even going back to the enclosures). For this point of view, in sharp counterpoint to Brand and his ilk, by a staunch Maoist, including a rousing defense of Mao’s communism and the revolution’s accomplishments, see here:
http://revcom.us/a/320/nicholas-kristofs-ode-to-imperialism-what-kind-of-world-is-he-celebrating-en.html

continued, next post…

February 15, 2016 at 9:10 pm #26848

alan2102

…continued from last:

You’re probably a Maoist at heart, Nicole, and I am more with you than against you in that. I agree that China in the Mao era was laudably for and (to an extent) BY the peasantry; rural life improved tremendously. That should have been continued, rather than forsaking it to go on the urban hyper-development path on which they went. Surely some sort of hybrid development path would have made much more sense.

I would further agree that the whole world should have had a communist revolution in the early part of the 20th century. Society should have reorganized itself along socialistic lines, following sane programs of conservative, environmentally-sensitive development. None of the wars and injustices and outrages of the intervening decades should have happened. And so on.

I deeply wish that all that were true. But it is NOT true. What happened DID happen. And here we are. We have to come to terms with it.

Barring global communist (or other capitalism-transforming) revolution, things are as they are. The reality for a great many people is that the city offers much more opportunity and advantage than the countryside and villages. In the context of things as they are, rather than as we would wish them to be, urbanization is good. Further, even if I were to imagine that the world is as we wish it to be, there are still numerous things about urban life that are highly attractive and beneficial. Just the cultural and intellectual stimulation alone is huge, and unmatchable in a rural village. In an ideal world, the city would continue to have great attractions, however much the rural situation had improved, just because the concentrated nature of the city makes a world of options possible that could not exist in a low-density environment.

Nicole: “comprehensively destroying the environment upon which they all depend”

China’s environmental problems are grave. But their remedial efforts are also heroic and ongoing — and greatly exceed any remediation of similar environmental problems at comparable points in our (U.S.) development. Everything must be viewed in perspective. And, it is difficult to view this issue in perspective because of the biased, anti-China/anti-Eurasian orientation of most of our information sources.

Nicole: “Granted the Chinese are capable of building beautiful and durable things, but that’s not what they do when they build ghost cities. Those will never fill up. No one will be able to afford them.”

February 15, 2016 at 9:28 pm #26853

alan2102

Nicole: “Granted the Chinese are capable of building beautiful and durable things, but that’s not what they do when they build ghost cities. Those will never fill up. No one will be able to afford them.”

Nicole, there are no “ghost cities”. That was a creation of a highly-biased Western press. There are largely-empty cities which are filling up. Many of them HAVE filled up. This is documented fact. The demand is enormous. From your remarks on this I conclude that you’ve not looked into the matter at all, and instead are reflecting an impression from the numerous lurid tabloid-type scary-headlined stories that appear in the Western media.

Nicole: “Just look at overbuilt Japanese bubble infrastructure. It’s already falling down after 25 years (their bubble peaked in 1989).”

What are you talking about? Japan has invested heavily — and wisely — in infrastructure upgrades for the past couple decades. This was a very good investment. It is not “falling down”! On the contrary, it is beautiful, durable and functional. As I said up thread, what’s falling down, or at serious risk, is OUR (U.S.) infrastructure, not theirs!

As for your concerns about Chinese debt, you might want to broaden your reading and thinking. Start here:
inpraiseofchina . com /2015/09/chinas-debt-is-exaggerated.html
September 2015
China’s Debt is Exaggerated

  • This reply was modified 3 months, 2 weeks ago by  alan2102.
February 15, 2016 at 9:45 pm #26859

alan2102

After 45 minutes of extremely frustrating attempts and re-attempts to post the foregoing 3-part message, I finally realized that there was something about that last link (inpraiseofchina) that the TAE software did not like, causing it to discard my whole post. Only by adding extra spaces was I able to get it to post. The spaces must of course be removed in order for the link to work.

February 16, 2016 at 9:11 pm #26881

Cory

Alan, while I do not agree with everything you say, I appreciate your thoroughly vetted and persistent response to Nicole. Years ago at the old blog if anyone were to challenge her assertions, you would have been assailed by any number of surrogates who mostly nodded along with whatever she said. It was a stunning exercise in groupthink, and probably one of the reasons the efforts by TPTB to mitigate the effects of the crisis were so heavily discounted.

Its refreshing to see an alternative viewpoint here. Sadly, it is too late for the many people in the 2008-2011 time period who would have benefited from it.

Ann

February 18, 2016 at 5:48 pm #26937

alan2102

Cory/Ann: Thanks for your post, and your support. I well remember the old blog days. I remember being so rash and intemperate as to post a few critical remarks — which were immediately shouted-down by several voices. Whatever happened to all those people? Did they get tired of waiting for the zombie apocalypse, and drifted away? This is what happens to neomalthusian/doomer cults, it seems. Remember the peak oil community? Once robust and growing; now smashed and irrelevant. Of course that is not to say that peak oil is not an ultimate geological reality; it is. But the peak oil community was energized not by geological facts, but by wild extrapolations FROM some geological facts, unaccompanied by due caution on account of the fact that facts change (can you say “dramatic advances in horizontal drilling”, or “price of renewables collapsing to and below grid parity”?). I am as aware of these problems as anyone, having been part of that PO community at one time, now long ago. About the time TAE was getting rolling (2006? 2007?) I was beginning to have my first doubts about the dogmas — peak oil (as though it were clearly predictable), “carrying capacity” (as though it were something fixed!), “overpopulation” (i.e. its ugly and monstrous Malthusian associations), the likelihood of catastrophic collapse, and so on. It has been a long, interesting intellectual journey. The reason I show up now and then at TAE, DD, etc., is to help others (silent lurkers) up the same learning-curve that I’ve traversed. Almost like my duty. :-)

  • This reply was modified 3 months, 1 week ago by  alan2102.
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