Jul 072014
 July 7, 2014  Posted by at 5:53 pm Finance Tagged with: , ,

Russell Lee Fun with fountain at 4th of July picnic, Vale, OR July 1941

There is not one single person I’ve learned more from than Jay Hanson, back when I was even younger than I am now. Jay is not the greatest writer in the world, his talent is that he has the right kind of unrelenting curiosity, needed to dig deep into the reasons we put ourselves where we do (it’s hardwired). This curiosity made put together the best library of information on ourselves and the world we live in that one can ever hope to find, at dieoff.org, much of it not published anywhere else. I took a month off 15 years ago and read it all back to back. The dieoff library was – mostly – finished by then. So it was a nice surprise to have someone send me the following piece, which is recent. It may look bleak and dark to you, but the challenge is to find where you think Jay goes wrong, and what you know better. That will not be easy, Jay’s a mighty smart puppy. I guess the essence is this: our brains are our destiny. That this leads to things we don’t like to acknowledge is something we will need to deal with. Walking away from it is neither a solution nor the best way to use the one part of us that may help find a solution. Which is also our brain.

Overshoot Loop:

Evolution Under The Maximum Power Principle

Jay Hanson: I have been forced to review the key lessons that I have learned concerning human nature and collapse over the last 20 years. Our collective behavior is the problem that must be overcome before anything can be done to mitigate the coming global social collapse. The single most-important lesson for me was that we cannot re-wire (literally, because thought is physical) our basic political agendas through reading or discussion alone. Moreover, since our thoughts are subject to physical law, we do not have the free-will to either think or behave autonomously.

We swim in “politics” like fish swim in water; it’s everywhere, but we can’t see it!

We are “political” animals from birth until death. Everything we do or say can be seen as part of lifelong political agendas. Despite decades of scientific warnings, we continue to destroy our life-support system because that behavior is part of our inherited (DNA/RNA) hard wiring. We use scientific warnings, like all inter-animal communications, for cementing group identity and for elevating one’s own status (politics).

Only physical hardship can force us to rewire our mental agendas. I am certainly not the first to make the observation, but now, after 20 years of study and debate, I am totally certain. The net energy principle guarantees that our global supply lines will collapse. The rush to social collapse cannot be stopped no matter what is written or said. Humans have never been able to intentionally-avoid collapse because fundamental system-wide change is only possible after the collapse begins.

What about survivors? Within a couple of generations, all lessons learned from the collapse will be lost, and people will revert to genetic baselines. I wish it weren’t so, but all my experience screams “it’s hopeless.” Nevertheless, all we can do is the best we can and carry on…

I am thankful for the Internet where I can find others bright enough to discuss these complex ideas and help me to understand them.

Today, when one observes the many severe environmental and social problems, it appears that we are rushing towards extinction and are powerless to stop it. Why can’t we save ourselves? To answer that question we only need to integrate three of the key influences on our behavior: biological evolution, overshoot, and a proposed fourth law of thermodynamics called the “Maximum Power Principle”(MPP). The MPP states that biological systems will organize to increase power[1] generation, by degrading more energy, whenever systemic constraints allow it[2].

Biological evolution is a change in the properties of populations of organisms that transcend the lifetime of a single individual. Individual organisms do not evolve. The changes in populations that are considered evolutionary are those that are inheritable via the genetic (DNA/RNA) material from one generation to the next.

Natural selection is one of the basic mechanisms of evolution, along with mutation, migration, and genetic drift. Selection favors individuals who succeed at generating more power and reproducing more copies of themselves than their competitors.


Energy is a key aspect of overshoot because available energy is always limited by the energy required to utilize it.

Since natural selection occurs under thermodynamic laws, individual and group behaviors are biased by the MPP to generate maximum power, which requires over-reproduction and/or over-consumption of resources[3] whenever system constraints allow it. Individuals and families will form social groups to generate more power by degrading more energy. Differential power generation and accumulation result in a hierarchical group structure.

Overshoot eventually leads to decreasing power attainable for the group with lower-ranking members suffering first. Low-rank members will form subgroups and coalitions to demand a greater share of power from higher-ranking individuals who will resist by forming their own coalitions to maintain it. Meanwhile, social conflict will intensify as available power continues to fall.

Eventually, members of the weakest group (high or low rank) are forced to “disperse.”[4] Those members of the weak group who do not disperse are killed,[5] enslaved, or in modern times imprisoned. By most estimates, 10 to 20 percent of Stone-Age people died at the hands of other humans. The process of overshoot, followed by forced dispersal, may be seen as a sort of repetitive pumping action—a collective behavioral loop—that drove humans into every inhabitable niche.

Here is a synopsis of the behavioral loop described above:

Step 1. Individual and group behaviors are biased by the MPP to generate maximum power, which requires over-reproduction and/or over-consumption of natural resources (overshoot), whenever systemic constraints allow it. Individuals and families will form social groups to generate more power by degrading more energy. Differential power generation and accumulation result in a hierarchical group structure.

Step 2. Energy is always limited, so overshoot eventually leads to decreasing power available to the group, with lower-ranking members suffering first.

Step 3. Diminishing power availability creates divisive subgroups within the original group. Low-rank members will form subgroups and coalitions to demand a greater share of power from higher-ranking individuals, who will resist by forming their own coalitions to maintain power.

Step 4. Violent social strife eventually occurs among subgroups who demand a greater share of the remaining power.

Step 5. The weakest subgroups (high or low rank) are either forced to disperse to a new territory, are killed, enslaved, or imprisoned.

Step 6. Go back to step 1.

The above loop was repeated countless thousands of times during the millions of years that we were evolving[6]. This behavior is entrained in our genetic material and will be repeated until we go extinct. Carrying capacity will decline [7] with each future iteration of the overshoot loop, and this will cause human numbers to decline until they reach levels not seen since the Pleistocene.

Current models used to predict the end of the biosphere suggest that sometime between 0.5 billion to 1.5 billion years from now, land life as we know it will end on Earth due to the combination of CO2 starvation and increasing heat. It is this decisive end that biologists and planetary geologists have targeted for attention. However, all of their graphs reveal an equally disturbing finding: that global productivity will plummet from our time onward, and indeed, it already has been doing so for the last 300 million years.[8]

It’s impossible to know the details of how our rush to extinction will play itself out, but we do know that it is going to be hell for those who are unlucky to be alive at the time.

• To those who followed Columbus and Cortez, the New World truly seemed incredible because of the natural endowments. The land often announced itself with a heavy scent miles out into the ocean. Giovanni da Verrazano in 1524 smelled the cedars of the East Coast a hundred leagues out. The men of Henry Hudson’s Half Moon were temporarily disarmed by the fragrance of the New Jersey shore, while ships running farther up the coast occasionally swam through large beds of floating flowers. Wherever they came inland they found a rich riot of color and sound, of game and luxuriant vegetation. Had they been other than they were, they might have written a new mythology here. As it was, they took inventory. Frederick Jackson Turner

• Genocide is as human as art or prayer. John Gray

Kai su, teknon. Julius Caesar

[1] Power is energy utilization for a purpose; proportional to forces x flows = work rate + entropy produced (Maximum Power and Maximum Entropy Production: Finalities in Nature, by S. N. Salthe, 2010). A surplus resource is stored power. Energy is a key aspect of overshoot because available energy is always limited by the energy required to utilize it.

[2] Originally formulated by Lotka and further developed by Odum and Pinkerton, the MPP states that biological systems capture and use energy to build and maintain structures and gradients, which allow additional capture and utilization of energy. One of the great strengths of the MPP is that it directly relates energetics to fitness; organisms maximize fitness by maximizing power. With greater power, there is greater opportunity to allocate energy to reproduction and survival, and therefore, an organism that captures and utilizes more energy than another organism in a population will have a fitness advantage (The maximum power principle predicts the outcomes of two-species competition experiments, by John P. DeLong, 2008).

[3] The best way to survive in such a milieu is not to live in ecological balance with slow growth, but to grow rapidly and be able to fend off competitors as well as take resources from others.

Not only are human societies never alone, but regardless of how well they control their own population or act ecologically, they cannot control their neighbors behavior. Each society must confront the real possibility that its neighbors will not live in ecological balance but will grow its numbers and attempt to take the resources from nearby groups. Not only have societies always lived in a changing environment, but they always have neighbors. The best way to survive in such a milieu is not to live in ecological balance with slow growth, but to grow rapidly and be able to fend off competitors as well as take resources from others.

To see how this most human dynamic works, imagine an extremely simple world with only two societies and no unoccupied land. Under normal conditions, neither group would have much motivation to take resources from the other. People may be somewhat hungry, but not hungry enough to risk getting killed in order to eat a little better. A few members of either group may die indirectly from food shortages—via disease or infant mortality, for example—but from an individual s perspective, he or she is much more likely to be killed trying to take food from the neighbors than from the usual provisioning shortfalls. Such a constant world would never last for long. Populations would grow and human activity would degrade the land or resources, reducing their abundance. Even if, by sheer luck, all things remained equal, it must be remembered that the climate would never be constant: Times of food stress occur because of changes in the weather, especially over the course of several generations. When a very bad year or series of years occurs, the willingness to risk a fight increases because the likelihood of starving goes up.

If one group is much bigger, better organized, or has better fighters among its members and the group faces starvation, the motivation to take over the territory of its neighbor is high, because it is very likely to succeed. Since human groups are never identical, there will always be some groups for whom warfare as a solution is a rational choice in any food crisis, because they are likely to succeed in getting more resources by warring on their neighbors.

Now comes the most important part of this overly simplified story: The group with the larger population always has an advantage in any competition over resources, whatever those resources may be. Over the course of human history, one side rarely has better weapons or tactics for any length of time, and most such warfare between smaller societies is attritional. With equal skills and weapons, each side would be expected to kill an equal number of its opponents. Over time, the larger group will finally overwhelm the smaller one. This advantage of size is well recognized by humans all over the world, and they go to great lengths to keep their numbers comparable to their potential enemies. This is observed anthropologically by the universal desire to have many allies, and the common tactic of smaller groups inviting other societies to join them, even in times of food stress.

Assume for a moment that by some miracle one of our two groups is full of farsighted, ecological geniuses. They are able to keep their population in check and, moreover, keep it far enough below the carrying capacity that minor changes in the weather, or even longer-term changes in the climate, do not result in food stress. If they need to consume only half of what is available each year, even if there is a terrible year, this group will probably come through the hardship just fine. More important, when a few good years come along, these masterfully ecological people will/not/grow rapidly, because to do so would mean that they would have trouble when the good times end. Think of them as the ecological equivalent of the industrious ants.

The second group, on the other hand, is just the opposite—it consists of ecological dimwits. They have no wonderful processes available to control their population. They are forever on the edge of the carrying capacity, they reproduce with abandon, and they frequently suffer food shortages and the inevitable consequences. Think of this bunch as the ecological equivalent of the carefree grasshoppers. When the good years come, they have more children and grow their population rapidly. Twenty years later, they have doubled their numbers and quickly run out of food at the first minor change in the weather. Of course, had this been a group of “noble savages who eschewed warfare, they would have starved to death and only a much smaller and more sustainable group survived. This is not a bunch of noble savages; these are ecological dimwits and they attack their good neighbors in order to save their own skins. Since they now outnumber their good neighbors two to one, the dimwits prevail after heavy attrition on both sides. The “good” ants turn out to be dead ants, and the “bad” grasshoppers inherit the earth. The moral of this fable is that if any group can get itself into ecological balance and stabilize its population even in the face of environmental change, it will be tremendously disadvantaged against societies that do not behave that way. The long-term successful society, in a world with many different societies, will be the one that grows when it can and fights when it runs out of resources. It is useless to live an ecologically sustainable existence in the “Garden of Eden unless the neighbors do so as well. Only one nonconservationist society in an entire region can begin a process of conflict and expansion by the “grasshoppers” at the expense of the Eden-dwelling “ants”. This smacks of a Darwinian competition—survival of the fittest—between societies. Note that the “fittest” of our two groups was not the more ecological, it was the one that grew faster. The idea of such Darwinian competition is unpalatable to many, especially when the “bad” folks appear to be the winners.[pp. 73-75] (Constant Battles: Why we Fight, by Steven A. LeBlanc, St. Martin, 2004)

The Slaughter Bench of History, by Ian Morris, THE ATLANTIC, April 11, 2014

[4] “Dispersal” is important in biology. Many amazing biological devices have evolved to ensure it, such as the production of fruits and nectar by plants and the provision of tasty protuberances called elaiosomes by seeds to attract insects. Often a species will produce two forms:

(1) a maintenance phenotype (the outcome of genes and the structures they produce interacting with a specific environment) that is adapted to the environment in which it is born,

and (2) a dispersal phenotype that is programmed to move to a new area and that often has the capacity to adapt to a new environment.

According to the present theory, humans have developed two dispersal phenotypes in the forms of the prophet and the follower. The coordinated action of these two phenotypes would serve to disperse us over the available habitat. This dispersal must have been aided by the major climatic changes over the past few million years in which vast areas of potential human habitat have repeatedly become available because of melting of ice sheets.

The dispersal phenotypes might have evolved through selection at the individual level, since the reproductive advantage of colonizing a new habitat would have been enormous. They would also promote selection between groups. This is important because selection at the group level can achieve results not possible at the level of selection between individuals. One result of the dispersal phenotype includes ethnocentrism (the tendency to favor one’s own ethnic group over another) and the tendency to use “ethnic cleansing.” The other result, as previously noted, is selection for cooperation, self-sacrifice, and a devotion to group rather than individual goals. Factors that promote selection at the group level are rapid splitting of groups, small size of daughter groups, heterogeneity (differences) of culture between groups, and reduction in gene flow between groups. These factors are all promoted by the breaking away of prophet-led groups with new belief systems.

One of the problems of selection at the group level is that of free-riders. These are people who take more than their share and contribute to the common good of the group less than their proper share. Selection at the group level gives free-riders their free ride. They potentially could increase until they destroy the cooperative fabric of the group.

However, the psychology of the free-rider, which is one of self-aggrandizement and neglect of group goals, is not likely to be indoctrinated with the mazeway of the group. Nor is it likely to be converted to the new belief system of the prophet. Therefore, theoretically one would predict that cults and New Religious Movements should be relatively free of free-riders. Such an absence of free-riders would further enhance selection at the group level. Moreover, this is a testable theoretical proposition.

Cult followers have been studied and found to be high on schizotypal traits, such as abnormal experiences and beliefs. They have not yet been tested for the sort of selfish attitudes and behavior that characterize free-riders. If a large cohort of people were tested for some measure of selfishness, it is predicted that those who subsequently joined cults would be low on such a measure. Predictions could also be made about future cult leaders. They would be likely to be ambitious males who were not at the top of the social hierarchy of their original group. If part of why human groups split in general is to give more reproductive opportunities to males in the new group, it can also be predicted that leaders of new religious movements would be males of reproductive age. Female cult leaders are not likely to be more fertile as a result of having many sexual partners, but their sons might be in an advantageous position for increased reproduction.

Conclusion: The biobehavioral science of ethology is about the movement of individuals. We have seen that change of belief system has been responsible for massive movements of individuals over the face of the earth. Religious belief systems appear to have manifest advantages both for the groups that espouse them and the individuals who share them. It is still controversial whether belief systems are adaptations or by-products of other evolutionary adaptive processes. Regardless of the answer to this question, the capacity for change of belief system, both that seen in the prophet and also that seen in the follower, may be adaptations because they have fostered the alternative life history strategies of dispersal from the natal habitat.

Moreover, change of belief system, when it is successful in the formation of a new social group and transfer of that group to a “promised land,” accelerates many of the parameters that have been thought in the past to be too slow for significant selection at the group level, such as eliminating free-riders, rapid group splitting, heterogeneity between groups and reduction of gene transfer between groups. Natural selection at the group level would also favor the evolution of the capacity for change of belief system, so that during the past few million years we may have seen a positive feedback system leading to enhanced cult formation and accelerated splitting of groups. This may have contributed to the rapid development of language and culture in our lineage. (The Biology of Religious Behavior, Edited by Jay R. Feierman, pp. 184-186)

[5] The results of the study are striking, according to Robbins Schug, because violence and disease increased through time, with the highest rates found as the human population was abandoning the cities. However, an even more interesting result is that individuals who were excluded from the city’s formal cemeteries had the highest rates of violence and disease. (Violence, Infectious Disease and Climate Change Contributed to Indus Civilization Collapse , Science Daily, January 17, 2014)

[6] My discussion will revolve around two basic propositions regarding long-term human population history: 1) the near-zero growth rates that have prevailed through much of prehistory are likely due to long-term averaging across periods of relatively rapid local population growth interrupted by infrequent crashes caused by density-dependent and density-independent factors; and 2) broad changes in population growth rates across subsistence modes in prehistory are probably best explained in terms of changes in mortality due to the dampening or buffering of crashes rather than significant increases in fertility (Subsistence strategies and early human population history: an evolutionary ecological perspective, by James L. Boone, 2002).

[7] Sustainable Engineering: Resource Load Carrying Capacity and K≠phase Technology, by Peter Hartley, 1993

[8] pp. 118-119, The Medea Hypothesis: Is Life on Earth Ultimately Self-destructive? by Peter Ward, 2009

Never trust a central banker.

Central Banks End Era Of Clear Promises, Return To ‘Artful’ Policy (Reuters)

The world’s major central banks are returning to a more opaque and artful approach to policymaking, ending a crisis-era experiment with explicit promises that they found risked their credibility and did not substitute for action. From Washington to London to Tokyo, the global shift from transparency to flexibility underscores the challenges central bankers face as they test the limits of what monetary policy can achieve. The return to a more traditional policymaking approach and nuanced statements will challenge the communication skills of central bankers who have been chastened in the last year after some too-specific messages confused and disrupted financial markets. Complicating things on the world stage, the U.S. Federal Reserve and the Bank of England are looking to telegraph plans and conditions for raising interest rates, while the European Central Bank and the Bank of Japan are heading the other way.

“Central banking used to be an art,” said a senior official of a G7 central bank. “It became less so once, globally, but with what’s happened at the Fed and the BoE, it may be back to being an art.” Both the Fed and BoE had promised to hold interest rates near zero until their jobless rates had fallen to a particular level. However, unemployment in the United States and Britain fell much more quickly than economists expected and both central banks scrambled to replace their suddenly outdated “forward guidance”. “Too much transparency may sometimes be counter-productive. The balance is always tricky,” the official said, requesting anonymity.

Read more …

Draghi’s $1.4 Trillion Shot: Silver Bullet or Misfire? (Bloomberg)

Mario Draghi’s plan to end the euro area’s lending drought risks missing the target. While the European Central Bank president says a program to hand as much as €1 trillion ($1.4 trillion) to banks has built-in incentives to spur lending to the real economy, analysts from Barclays to Commerzbank have doubts on how well it will work. In fact, the measure allows banks to borrow cheaply from the ECB even without increasing credit supply. Draghi has identified weak lending as an obstacle to the euro area’s recovery and is committed to reversing a slump that has eroded more than €600 billion in loans to companies and households since 2009. The risk is that if the latest plan fails, the currency bloc slips closer to deflation and to the need for more radical action such as quantitative easing.

“It’s not the silver bullet,” said Philippe Gudin, chief European economist at Barclays in Paris. “Every incentive for banks to lend is a good thing, but I wouldn’t say I’m reassured that credit will pick up.” The ECB’s latest plan differs from its previous liquidity measures in the way it tries to nudge banks into lending more to the real economy. In contrast, three-year loans issued in late 2011 and early 2012 were used largely to buy higher-yielding government bonds, a practice known as the carry trade. Targeted longer-term refinancing operations will offer banks an initial total of as much as €400 billion this year that they can hold until 2016 with no strings attached. They can keep it another two years if they meet specific new lending targets set by the ECB, and they can borrow more funds starting in March if they exceed those thresholds. At his monthly press conference on July 3, Draghi said the total take-up could be €1 trillion.

Read more …

” … more repo trades are going uncompleted, or failing, because it’s either too difficult or expensive for the borrower to obtain and deliver Treasuries.”

Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar (Bloomberg)

In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise. The Federal Reserve’s bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That’s causing such trades to go uncompleted at some of the highest rates since the financial crisis. Disruptions in so-called repos, which Wall Street’s biggest banks rely on for their day-to-day financing needs, are another unintended consequence of extraordinary central-bank policies that pulled the economy out of the worst financial crisis since the Great Depression. They also belie the stability projected by bond yields at about record lows.

“You have a little bit of a perfect storm here,” said Stanley Sun, a New York-based interest-rate strategist at Nomura, one of the 22 primary dealers that bid at Treasury auctions, in a telephone interview June 30. A smoothly functioning repo market is vital to the health of markets. The fall of Bear Stearns, which was taken over by JPMorgan in 2008 after an emergency bailout orchestrated by the Fed, and collapse of Lehman Brothers, whose bankruptcy in September of that year plunged markets into a crisis, was hastened after they lost access to such financing. In a typical repo, a dealer needing short-term cash often borrows money from another dealer, a hedge fund or a money-market fund, putting up Treasuries as collateral. The cash lender can then use the securities to complete other trades, such as to close out short positions where it needs to deliver bonds.

Negative rates happen when certain Treasuries are in such high demand or short supply that lenders of cash are actually paying collateral providers interest so they can obtain the needed securities. Traders said that is a big reason why repo rates on desired Treasuries have recently gotten as low as negative 3%. Now, more repo trades are going uncompleted, or failing, because it’s either too difficult or expensive for the borrower to obtain and deliver Treasuries. Such failures to deliver Treasuries have averaged $65.6 billion a week this year, reaching as much as $197.6 billion in the week ended June 18, Fed data show.

Read more …

Early warning sign?

Sweden’s Stunning Rate Cut Seen Forcing Norges Bank to Act (Bloomberg)

Sweden’s surprise interest-rate cut last week will probably prompt a Norges Bank response to shield the economy from a strengthening currency, according to DNB, Norway’s biggest lender. Policy makers in Oslo now have to contend with record low rates in Sweden and in the euro area, the nation’s top trading partners, after the Riksbank lowered its benchmark to 0.25% on July 3, matching an all-time low. The European Central Bank reduced borrowing costs a month earlier, with both pledging to keep policy loose for a long time.

“It increases the pressure on Norges Bank to be more expansive in their monetary policy either by cutting or by keeping the rate low for longer,” Kjersti Haugland, an analyst at DNB, said in a July 4 interview. The central bank in western Europe’s largest oil producer signaled last month that it may also lower rates as it seeks to strike a balance between supporting growth and limiting krone strength. Policy makers kept the deposit rate at 1.5% on June 19, and pushed back the timing of tightening until the end of 2015, from a previous estimate of mid-year. Norges Bank said then that a further weakening of the economy may warrant a rate cut as it seeks to protect Scandinavia’s richest nation from a drop in oil investment.

Read more …

Why Trading Volume Is Tumbling, In 5 Charts (MarketWatch)

Where have all the traders gone? That’s been a common refrain in the last few years for many market watchers. These folks worry that lower trading volumes for U.S. stocks might indicate a disturbing lack of confidence in the market, even as stock prices march higher and the Dow Jones Industrial Average cracks 17,000. “There seems to be no excitement in the market anymore,” said Peter Cardillo, chief market economist at Rockwell Global Capital. There certainly are far fewer shares trading hands than a few years ago, as shown in this chart. Average daily trading volume, tallied by month, was just 5.8 billion shares in May, less than half of the peak of 12.3 billion shares during the financial crisis. Financial pros point to other charts and statistics that shed light on the trend — and might even make you less fearful about the volume decline. Read on for five explanations.

Read more …

Bubbling under the surface?!

Defensive Trading Comes Undone in $2 Trillion S&P 500 Rally (Bloomberg)

For the third straight year, rotating into defensive industries is proving to be a losing strategy in the U.S. equity market. Chip companies led by Micron Technology Inc. and consumer shares such as Netflix Inc. are driving gains since equities bottomed on April 11, replacing soapmakers and utilities that rallied as the economy slowed. The gains reflect projections that these cyclical stocks will deliver some of the strongest earnings growth in the Standard & Poor’s 500 Index this year, based on analyst estimates compiled by Bloomberg. The fleeting advance in defensive equities sounded a false alarm at the start of a year once again as the outlook for the U.S. economy improved.

While gross domestic product contracted 2.9% in the first quarter, the latest data on personal spending, manufacturing and inflation have exceeded analyst forecasts. Almost $2 trillion has been added to share values since April amid gains that pushed transportation stocks, industrials and small-cap shares to records. “We, like much of the industry, have been positioned, waiting and expecting some kind of pullback, and we got the pullback in the first quarter,” Chris Bouffard, who helps oversee $9 billion as chief investment officer at the Mutual Fund Store in Overland Park, Kansas, said July 2. “A lot of people were thinking, ‘oh, this might be the big one.’ Since then, the playbook resumed. We marched to new highs.”

Read more …

Is this where the cracks in the Truman dome will start to show?

European Banks Are In Trouble (Zero Hedge)

With Austrian bank contagion impacting European stocks on Friday, we thought it worth a look at the ‘recovering-out-of-the-crisis-all-is-well-and-stress-tests-will-prove-it’ European banks. It appears, having bid with both hands and feet for Europe’s peripheral debt – thus solidifying the very sovereign-financial-system linkages that were the cause of the European crisis contagion – Europe’s banks had the jam stolen from their donuts when Mario Draghi did not unveil a massive bond-buying scheme (by which they could offload their modestly haircut collateral at 100c on the euro, raise cash, take profits, and all live happily ever after). A TLTRO is no use to the banks who now know even the first sign of one dumping his domestic bonds will cause this illiquid monstrosity to collapse under its own weight. It is clear – as the following chart shows – that investors are quickly coming to that realization and exiting European bonds in a hurry. Since Draghi failed to unveil QE, European banks have collapsed to one-year lows relative to world banks…

Of course, some knife-catching Bill-Miller-ite will come to the rescue, buying-the-dip – but as BNP’s Ian Richards notes,

“The prospect of supporting material credit growth and better earnings revisions in the banking sector is further down the line than the market had hoped.”

Read more …

What, they want a stronger Euro?

France Hits Out At Dollar Dominance In International Transactions (FT)

France’s political and business establishment has hit out against the hegemony of the dollar in international transactions after U.S. authorities fined BNP Paribas $9 billion for helping countries avoid sanctions. Michel Sapin, the French finance minister, called for a “rebalancing” of the currencies used for global payments, saying the BNP Paribas case should “make us realize the necessity of using a variety of currencies”. He said, in an interview with the Financial Times on the sidelines of a weekend economics conference: “We [Europeans] are selling to ourselves in dollars, for instance when we sell planes. Is that necessary? I don’t think so. I think a rebalancing is possible and necessary, not just regarding the euro but also for the big currencies of the emerging countries, which account for more and more of global trade.”

Christophe de Margerie, the chief executive of Total, France’s biggest company by market capitalization, said he saw no reason for oil purchases to be made in dollars, even if the benchmark price in dollars was likely to remain. “The price of a barrel of oil is quoted in dollars,” he said. “A refinery can take that price and using the euro-dollar exchange rate on any given day, agree to make the payment in euros.” One chief executive of a CAC 40 industrial group said he supported Mr Sapin’s push. “Companies like ours are in a bind because we sell a lot in dollars but we do not always want to deal with all the US rules and regulations,” he said.

Read more …

No more pump?

China’s New Economy Stocks Selling Off With the Old (Bloomberg)

Last year’s most-profitable bets on the Chinese economy have turned into money losers in 2014 as policy makers send mixed signals on which industries will lead the country’s expansion. After surging at least 20% for the biggest gains in China’s stock market last year, gauges of technology, health-care and consumer shares have all lost more than 6%. The companies, tied to what analysts have dubbed China’s “new economy,” are now falling in tandem with “old economy” stocks in state sectors such as commodities and finance that fueled growth in the last decade. All 10 industries in the CSI 300 Index sank in the first half, the broadest losses in four years.

The declines suggest investors may be doubting China’s commitment to fostering a shift toward technology and services, putting at risk returns on smaller companies that have been the best in the past two years and the biggest among initial public offerings. While President Xi Jinping said in May the nation must adapt to a “new normal” pace of growth, in which innovation plays an increasing role, the government has also sped up state spending and eased credit curbs as the weakening property market puts its 7.5% expansion target at risk. “The market is now pricing in the risk that China won’t make a successful transition,” Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co., which oversees about $120 million, said by phone on July 4. The shift “will be much more difficult.”

Read more …

Starting to get messy now. Who does what, and what does it cost?

PBOC Wades Into Fiscal Waters as China Boosts Stimulus (Bloomberg)

China’s central bank is seeking to support economic growth with unconventional tools that Credit Suisse and Everbright Securities say look more like fiscal policy. The People’s Bank of China this year started a 100 billion yuan ($16 billion) quota for relending earmarked for agriculture and small businesses. It offered another 300 billion yuan for low-income housing, China Business News said. Governor Zhou Xiaochuan is trying to carry out Communist Party orders to protect this year’s 7.5% economic-growth target without resorting to nationwide stimulus that stokes debt dangers.

While selective tools such as relending can bypass riskier industries including property, JPMorgan Chase & Co. says they lack transparency and contrast with the PBOC’s efforts to shift to market- from state-directed credit. “The central bank has invaded the field of fiscal policy,” said Xu Gao, chief economist at Everbright Securities in Beijing, who previously worked for the World Bank. “Fiscal policy hasn’t done its job – money that should have been spent wasn’t and projects that should have been financed weren’t, so the PBOC has had to inject liquidity.”

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Not exactly perfect.

German Industrial Output Falls Third Month In A Row (Bloomberg)

German industrial output dropped for a third month in May amid signs Europe’s largest economy is taking a breather. Production, adjusted for seasonal swings, fell 1.8% from April, when it declined a revised 0.3%, the Economy Ministry in Berlin said today. Economists forecast output to remain unchanged, according to the median of 35 estimates in a Bloomberg News survey. Production rose 1.3% in May from the previous year when adjusted for working days. While Germany’s economic trend points “upward significantly,” growth probably slowed in the three months through June, the Bundesbank has said. Factory orders fell more than economists expected in May, Ifo business confidence dropped to a six-month low in June, and unemployment rose for a second month.

“There was a little dent in the second quarter,” said Jens-Oliver Niklasch, a fixed-income strategist at Landesbank Baden-Wuerttemberg in Stuttgart. “But generally speaking, the German economy is in quite good shape and there’s no reason for concern as growth rates will remain solid.” Manufacturing fell 1.6%, with intermediate-goods production dropping 3% and consumer-goods output down 3.5%, today’s report showed. Investment-goods production rose 0.3% and energy output was up 1%, while construction slumped 4.9%.

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Germany’s AAA status is no longer enough guarantee?!

Germany Seeks Savings With First Collateral on Rate Swaps (Bloomberg)

Germany’s debt management agency is set to pledge collateral against some of its derivatives trades for the first time in a sign even Europe’s safest borrowers see scope to cut transaction costs with guarantees. The Federal Finance Agency, which manages the Finance Ministry’s budget and short-term liquidity funding, plans to increase savings on the interest-rate swaps it currently uses by offering collateral on as much as €8 billion ($10.9 billion) of the trades as early as next year, agency spokesman Joerg Mueller said July 5 by phone. The agency may at the same time opt to use a central derivative clearing house in London and appoint a company such as Eurex Clearing to settle the transactions, he said.

While Europe’s benchmark issuer has leaned on its AAA credit rating to avoid posting collateral on its debt in the past, buyers of one-way collateralized swaps and regulators are demanding more guarantees to limit risk. German lawmakers, in a revised 2014 budget on June 27, approved the backstops that can be transacted from next year. “The market would seem to be moving somewhat toward two-way contracts since the debt crisis, creating the bonus of added stability,” said Vincent Chaigneau, global head of rates and foreign-exchange strategy at Societe Generale in Paris, in a telephone interview on July 2. “The assumption is that Germany aims to pay less by posting collateral than not.”

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Yeah, right.

Stiglitz: I’m ‘Very Uncomfortable’ With Current Stock Levels (CNBC)

Nobel prize-winning economist Joseph Stiglitz said on Monday he is “very uncomfortable” with current stock market levels, arguing they do not equal a strong economic recovery in the United States. The Dow breached 17,000 points on Thursday before the U.S. markets closed for the long July 4 weekend. The jump came after the U.S. government reported the economy created a better-than-expected 288,000 jobs in June and the unemployment rate fell to 6.1%. “The reason the stock market is high, in part, is that interest rates are low, wages are low and the emerging markets are still growing much faster than the U.S. economy, let alone Europe,” Stiglitz said. He pointed to the fact that many U.S.-listed multinationals are increasingly getting a large chunk of their profits from emerging markets.

“These very strong stock market prices are in a sense a symptom of the weak economy, not a symptom that we are about to have a strong recovery to our real economy,” he said. Stiglitz, a professor of economics at Columbia University, said the recent stock market gains are not a sign that we are witnessing a recovery. Instead, we would see the continuation of a “North Atlantic malaise”, he said. “Remember, labor force participation is at very, very low levels, much lower than before the crisis. Real wage increases have been very weak, well below what they should be if we were having a robust recovery,” Stiglitz said. “There are lots if indicators that suggest this is a weak recovery.”

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Yeah, yeah.

ECB: We’re Aware Of Asset Bubble Risk (WSJ)

European Central Bank executive board member Benoit Coeure says the bank’s current monetary policy of interest rates close to zero for a long period increases the risk of asset price bubbles. Mr. Coeure said the International Bank of Settlements is right to point at the risk that cheap money may generate exuberant rises in some asset prices in the euro zone posing a systemic crisis risk when eventually bursting. The International Bank of Settlements added to its warnings a call for interest-rate hikes though Mr. Coeure said the ECB wouldn’t answer any asset price bubble with higher rates.

“We are totally aware of this risk. We will have to deal with it and we are ready to deal with it with the other tools we have at our disposal,” Mr. Coeure said during a lecture in Aix-en-Provence where he attended the annual Rencontres Economiques business conference. Mr. Coeure’s comments echo what ECB’s chairman Mario Draghi said earlier this week that the best way to deal with financial instability should be in the priority use of new macroprudential tools and not monetary policy, such as changes in banking regulations, tightening the lending standards that commercial banks use, for instance. Mr. Coeure added the ECB’s commitment to keep its benchmark interest rate close to zero for a long period will eventually likely lead to a divergence with monetary policies in the U.S. and in the U.K.

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Super-Typhoon Neoguri Approaches Japan’s Okinawa Islands (Guardian)

Super-typhoon Neoguri is approaching Japan’s Okinawa islands, bringing strong winds and torrential rains. Gusts of up to 270km per hour (160 miles per hour) are expected to slam into the southernmost subtropical island chain early Tuesday, and may reach mainland Japan by Wednesday. The storm could be one of the worst in decades, the national weather agency said. The typhoon was located some 600km (370 miles) south of Okinawa’s main island at 3am GMT on Monday, moving north/north-west at 25km (16 miles) per hour. The meteorological agency forecast that Neoguri, whose name means raccoon in Korean, would dump up to 80mm (three inches) of rain an hour on Okinawa as it pounded the archipelago.

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No comment.

In NSA-Intercepted Data, Ordinary Citizens Far Outnumber Targets (WaPo)

Ordinary Internet users, American and non-American alike, far outnumber legally targeted foreigners in the communications intercepted by the National Security Agency from U.S. digital networks, according to a four-month investigation by The Washington Post. Nine of 10 account holders found in a large cache of intercepted conversations, which former NSA contractor Edward Snowden provided in full to The Post, were not the intended surveillance targets but were caught in a net the agency had cast for somebody else. Many of them were Americans. Nearly half of the surveillance files, a strikingly high proportion, contained names, e-mail addresses or other details that the NSA marked as belonging to U.S. citizens or residents.

NSA analysts masked, or “minimized,” more than 65,000 such references to protect Americans’ privacy, but The Post found nearly 900 additional e-mail addresses, unmasked in the files, that could be strongly linked to U.S. citizens or U.S.residents. The surveillance files highlight a policy dilemma that has been aired only abstractly in public. There are discoveries of considerable intelligence value in the intercepted messages – and collateral harm to privacy on a scale that the Obama administration has not been willing to address. Among the most valuable contents – which The Post will not describe in detail, to avoid interfering with ongoing operations – are fresh revelations about a secret overseas nuclear project, double-dealing by an ostensible ally, a military calamity that befell an unfriendly power, and the identities of aggressive intruders into U.S. computer networks.

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There’s supposed to be huge gas reserves there, and they come up with zilch?

Shell/Aramco Saudi Arabia Gas Comes Up Empty (Telegraph)

Royal Dutch Shell has admitted that its search for gas in Saudi Arabia has been a decade-long wild goose chase, dashing any hopes of gaining a prized upstream foothold in the kingdom. “We haven’t had a very successful exploration campaign,” Andrew Brown, director of upstream international business at Shell, told The Sunday Telegraph in an interview. “We aren’t conducting any operations there [at Rub al-Khali desert] at the moment.” Mr Brown declined to specify whether the failure of exploration in the desert – where sand dunes can tower 1,000ft high and temperatures can hit 122F – would force it to shutdown the South Rub al-Khali Company (SRAK), its joint venture with state-owned producer Saudi Aramco.

The announcement on its activities in the Rub al-Khali comes as Shell – Britain’s most valuable company by market value – aggressively cuts costs. In January, Shell said it aimed to raise about $15bn (£8.7bn) from asset sales and cut capital spending to $37bn this year from $46bn in 2013. No work has taken place in the area since the company said it had stopped drilling in February. Exploration has been plagued by delays and the cost of working in such an environment.

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Not unimportant.

Sea Levels To Rise Faster With Accelerating Antarctic Winds, Ice Melt (SMH)

Sea levels may rise much faster than predicted because climate models have failed to account for the disruptive effects of stronger westerly winds, Australian-led research has found. Recent studies of Antarctica have suggested the giant glaciers of West Antarctica may have begun an irreversible melting that will raise sea levels by as much as 3 metres over 200-500 years. That estimate, though, may prove optimistic because models had failed to account for how strengthening westerly winds in the Southern Ocean would start to impinge coastal easterlies, upsetting a delicate balance of warm and cold waters close to the Antarctic ice sheets, said Paul Spence, an oceanographer at the University of NSW’s Climate Change Research Centre. “It’s the first time that I looked at my science and thought, ‘Oh my god, that is very concerning’!”, he said. “You hope it’s wrong and you hope it doesn’t happen.

“If you were buying land in Australia and wanting to pass it down to your kids or your grandchildren, I suggest it’s a couple of metres above sea-level,” Dr Spence said. The research, published in Geophysical Research Letters, found that the coastal temperature structure was more sensitive to global warming, particularly the changes to winds, than previously identified. “The dynamic barrier between cold and warm water relaxes, and this relatively warm water just offshore floods into the ice-shelf regions, increasing the temperatures by 4 degrees under the ice shelf,” he said. “If you look at how sensitive the coastal ocean is to these changing winds, you could put a lot more heat under these ice shelves than people have previously thought,” Dr Spence said. A study released earlier this year by UNSW’s Matt England – also an author on this new research – found westerly winds in the Southern Ocean had quickened 10-15%over the past 50 years, and shifted 2 to 5 degrees closer to the South Pole.

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Home Forums Debt Rattle Jul 7 2014: Overshoot Loop

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    Russell Lee Fun with fountain at 4th of July picnic, Vale, OR July 1941 There is not one single person I’ve learned more from than Jay Hanson, back wh
    [See the full post at: Debt Rattle Jul 7 2014: Overshoot Loop]

    Dr. Diablo

    You guys are crazy and I’d absolutely love to take this on if only I had time.

    Verrazano smelled the cedars 100 leagues out? New Jersey was the “Garden State” of resources? Really? Yes, really. There are reports going back the Vikings about the shores being black with seals and the rivers choked with fish. And it’s not exaggeration: they actually, provably were.

    And guess what? People lived there. It wasn’t empty, it wasn’t abandoned, it was filled with humans from sea to shining sea. Humans on every mile from New Jersey to Catalinas Islands. So…your point is, humans destroy habitat until they all die off? Or are you entirely neglecting that it was insane, rapacious EUROPEANS who destroyed the New World once they had destroyed the old. Because those are very different statements, different perspectives.

    Don’t give me this “human density was low” or “Agriculture blah blah” either: it was the HUMANS living there who MADE it a paradise. Whites only THOUGHT it was abandoned because they were too blitheringly stupid to see that it takes generations of tremendous knowledge and care to create the abundance they saw. Timed burnings to create the maximum berry and nut growth, careful fishing only in season by tradition, harvesting rare, slow-growing plant colonies to insure their maximum diversity and survival. It was their garden, a HUMAN garden, specifically created wholesale by human design that caused the luxurious abundance Hudson and the other idiots thought was accidental. Want proof? Go look at your “virgin” forest, unaffected by man. It chokes itself, plant diversity and animal populations decline until there is darkness only a few species can tolerate.

    But surely, this was due to hunter-gather lifestyles. Wrong. Ohio mound people, Iroquois and Cherokee lived in towns larger, more advanced, and more prosperous than, say, Scotland in 1770. Somehow they didn’t overrun their environment.

    But this was due to lack of tools: given the chance, all humans will destroy themselves. Wrong. As I stated the other day, by Sullivan’s March in the Revolutionary War, the Iroquois had wide possession of axes, pots, firearms for over 150-200 years. That is, they’d had white tools for as long as the United States has been a country. Yet the environmental destruction–outside of the beaver runs and rival tribes–was pretty much a zero. They were living what was basically in “white” towns of log cabins, dooryard gardens, 1,000 acre fields, without the scorched-earth policy this author takes for granted. Perhaps they were not human? …Much has been made of THAT point.

    Surely the population was savage, life was “nasty, brutish, and short” and infant mortality from privation kept the population down. Wrong. Living standards and quality of life were so high Natives kidnapped by whites ran back as soon as they could while whites–particularly women– refused to return to their people. Birth control and planned families were well-known, population was kept –voluntarily– below overshoot. Impossible? Inhuman? What history have you been studying to come to these conclusions, my friend? World history? Or just a limited part of that history?

    The data here is hand-picked to support his evolutionary conclusion. Tell me: how on earth could we possibly know that 20% of humans were killed in war? Are you kidding me about the number of Stone Age bodies we can deduce that from? And considering it’s a male-exclusive job, you’re telling me 40% of men died in war? Okay, so compare to known accounts of the inter-Indian wars: an Iroquois war party of 20 men walk for 2 months—one way– to go attack the Cherokee. They eventually engage and 1 or 2 guys die. A year. This was not uncommon in the stasis period after whites but before the Holocaust, all across North America. By our standards, that’s not even a war, that’s like the number of swimming accidents. How on earth do we get from known iron age accounts–like Scottish Highlands, Viking raids, Indian war parties–to 20-40% human deaths from war?

    Point: this is definitively, absolutely, overwhelmingly NOT human behavior. This is YOUR cultural behavior. From a specific culture that spread out like army ants, destroying all before it. For 10,000 years, even through most of the age of agriculture, there was nothing really like it. It’s only this ONE human pattern that requires war, ONE human pattern that creates this devastation, and ONE area this comes from. Africa, Australia, North and South America, heck, mostly even China and Japan, you don’t get this scorched-earth, survival-of-the-fittest stuff. Even in Europe before the Babylonian system comes out of Greece and Rome you don’t see it.

    So don’t make it a human thing. It’s not. It’s a learned, societal, cultural thing. It’s a human-transmitted suicidal insanity. And unfortunately, we’re right here in the middle of it, in the middle of the time it’s run out of other people to kill and other resources to plunder. Nevertheless, it is emphatically NOT human behavior. It’s learned behavior, it can change, and it’s a CHOICE we’re making.

    So stop making it. We have the template. Use it. Stop.

    Point? This author sees nothing but blackness in the human heart and for the human future. That is an illusion that will cause him to make erroneous choices. Those choices have consequences. Without hope, sometimes desperate, murderous, suicidal ones. Perhaps he feels that it is fatalistically inevitable that he will have to kill his neighbors or his neighbor’s children to survive. I couldn’t say. And so it would be instead of working together with them for our prosperity. Haven’t we had enough of that, enough war, enough of lies? Stop. Let’s focus on the good things, the things people can do so they have no excuses not to do what is good, what is pure, what is right. Think on these things. And stop doing evil. Stop.


    If one could only put a “timeline” through the endless loop, not depicting it like a clock face, and are we at 12 o’clock, or say 3:45? Or maybe 16:30 on a 24 hour clock? Round and round like “Groundhog Day.”

    Circular vs. Linear?

    Problem>Solution>Problem…. Rather than, New Problem>New Solution etc.

    Sometime in the not too distant future, the cogs will be found to be humming right along, using hardly a drop of oil. Just as modes of transportation today are moving along now with nary a single bale of hay.

    When the time is right, and the old way becomes uncomfortable enough, a new solution will appear. This is only a chuck hole on a Linear path into the unknown.

    Not saying we won’t go through periods of Luddite domination, like now, delaying progress. But not many textiles are hand woven these days, in spite of a clique of radicals who certainly had all the answers, attempting to seize control of the power of the State to try and prove their misconceptions were’t mistaken.

    Final thought. Spent the day yesterday on the blue Pacific in a small boat. Swell was running around 10 feet at 12 seconds. I thought to myself, how effortlessly this water lifts and drops this 2 tons of mass. And it does so every 12 seconds. Imagine the cyclical power generated by all the swells over two thirds of the worlds surface? Now imagine the more ‘secular’ power generated by the tides lifting and lowering all this by 5 or 6 feet, twice a day?

    Therein lies a New Solution, as soon as we inevitably escape the “geological-time-split-second-that-is oil-formation-and-consumption” loop. Just a matter of refining some logistics.

    Gonna happen, like it or not.

    Speed up, step aside, but get the hell out of the way.


    Cultural or social behavior is human behavior because human are social. How we act and organize as groups with hierarchies is universal.

    Pre European invasion North America was stone age,pre technical, no mathematics, no written word, and perhaps would have remained such for thousands of more years, in theory. In practice the stone age ended in places and technical societies then wiped out most tribal ones easily. Human genetics determined the ability to harness energy and technology but did not guarantee those would happen. When they did happen human social organizational determined they would sweep stone age cultures aside.

    Now in such a short summary there are probably books full of semantic quibbles to be had and maybe the whole genetic thing in the article is over reach as is the idea of any sort of determinism. Who can however quibble with the human will to power and those who have it rise to power within groups and nations. Especially now as the modern business corporation has risen as the new dominant human organizational model and it has moved from strength to more strength and the organization man has rendered the individual marginal,at best. The genetic/cultural thing is interesting but beside the point functionally.


    Hi Ilargi

    What an important topic this is! I think it’s key to whether humankind will go through a population bottleneck due to collapse of resources. That would include a lot of human suffering as well as environmental degradation.

    What I take as the most important factor in human group competion and also in resource pressure is population size within groups.

    Groups more likely to succeed will be bigger groups who have maximised their reproduction by using resources at an unsustainable rate just as Hansen has suggested above. Lots of ethnic and religious groups encourage birth rates above replacement and I think that that is part of the reason they are successful (i.e. They are groups that are around today).

    A theoretical solution to overshoot is to limit population growth to less than replacement levels and to use less energy per capita. This may not be possible to do by persuasion. It has been tried by coersion in order to prevent overshoot (one child policy in China).

    The reasons that it might not be possible to persuade populations to multilaterally stop breeding is that groups which would not abide by a central agreement would gain by it. Also, maximum breeding is codified into some religions as something God wants you do, so some people would find such a suggestion at odds with their religious imperative.

    If it is important to bring down fertility to replacement levels in general, and I think (as a humanist intersted in minimising suffering) that it is, then some strategies might be:

    * Reduce religiousity in society (or at least the parts that affect family size)
    * Better living conditions – they tend to bring down family sizes (eventually)
    * Decouple finance from growth of population – Don’t encourage pop. growth to solve economic problems
    * Reduce ability to move resources – Groups can’t take each other’s resources if they can’t access them – that means reversing globalisation and the reducing the ability to accumulate wealth.
    * Empower women in general and birth control in particular. I believe (I need to research it) that if given more equal power, women often choose to limit the number of children they have. Isn’t Bill Gates interested in this one?

    I think these things might help reduce the effect of the Maximum Power Principle in human civilisation.

    If it all sounds a bit high and mighty, prescriptive and centralised, then I don’t know what to say. I don’t like thinking this way, I believe in decentralised systems really, but this is IMO the very biggest problem human civilisation had and we dam well need to discuss it fully. It’s a long emergency.

    I don’t mind for being flamed for these forthright prescriptions, we need to discuss it as a species.



    Good article. I’ll have to mull it over some more before I comment. I’m still thinking about yesterday’s articles.

    Re Stephen Roach: “Over the past decade, Chinese subsidiaries of Western multinationals accounted for more than 60% of the cumulative rise in China’s exports.

    In other words, the export miracle was sparked not by state-sponsored Chinese companies but by offshore efficiency solutions crafted in the West. This led to the economic equivalent of a personal identity crisis: Who is China — them or us?”

    Why, it is “us”, otherwise it wouldn’t be happening. It’s always “us”. China would never have developed like they did (in such a short amount of time) without a great deal of help from their friends in the West. The corporations got what they wanted, and the Chinese Party elite got something too: filthy rich. A match made in Heaven! Both sold their own countries out; opposite ends of the same snake.

    Perhaps the corporate gravy train is ending? China goes after pharmaceutical company for bribes and corruption:

    “IT READS like a plot from white-collar crime fiction. New twists in the corruption saga enveloping GlaxoSmithKline (GSK) keep adding to the British drug giant’s troubles in China.”



    “The world’s major central banks are returning to a more opaque and artful approach to policymaking, ending a crisis-era experiment with explicit promises that they found risked their credibility and did not substitute for action.”

    Artful, like the Artful Dodger, picking your pockets without you even knowing. More opaque? What a surprise!

    “Secrecy is the freedom tyrants dream of” – Bill Moyers


    Dr Diablo: Outstanding reply to this “human nature” bilge — bilge that, I am ashamed to say, took ME in at one time, also. Like Ilargi, I took “a month off” (more, actually) 15 years ago to read dieoff.com and related stuff, and was most impressed. But the difference between me and the average dieoff.com maven (including Hanson himself) was that I did not stop reading and thinking and, of greatest import, I did not stop exposing myself to new and challenging ideas, including ESPECIALLY ideas that ran contrary to the ones that I had accepted as probably (or even “certainly”) correct. As I result I came to understand that the Hansonian view of most things, though offering some (rather meager) value, is dreadfully narrow, often misleading, often outright false, and at times downright evil in effect.

    Ilargi: “[Hanson’s] talent is that he has the right kind of unrelenting curiosity, needed to dig deep into the reasons we put ourselves where we do (it’s hardwired). This curiosity made put together the best library of information on ourselves and the world we live in that one can ever hope to find”. This says a great deal about the quality of your thinking and level of your research. It is shockingly ignorant and foolish to call Hanson’s narrow, prejudicial little collection of nihilistic, neo-Malthusian, vulgar Darwinistic and laughably genetic deterministic screeds “the best library of information on ourselves and the world we live in that one can ever hope to find”. Or, if that is the best library in the world, then we live in hell on a retarded earth.


    Hi Alan

    What did you learn in the 15 years since reading dioff.com? You don’t make that clear. I really want him to be wrong! I didn’t quite get what I needed from Dr Diablo’s post.



    Rapier: “Who can however quibble with the human will to power and those who have it rise to power within groups and nations.”

    I don’t think anyone quibbles with the existence within humans of something characterizable as a “will to power”; but that is not the issue. The issue is a will to power *uber alles*, or without any competing or checking values or tendencies, and ruthlessness. Add to that a social/cultural environment that gives outsize rewards to such brazen “will to power” type behavior, and that metes out punishments large and small to the meek. But all of that kind of stuff escapes the radar of guys Hanson. Too complex for them, I would wager. No clear-cut answers.

    An amusing thing is that even when Hanson is (partially or slightly) right, he does not understand HOW he is right. For example, there really is a ruthless and will-to-power-uber-alles personality type — the psychopath — which is to some extent genetically determined, or for which there is at least genetic predisposition, in about 5% of the population. Hanson seems to think this personality type, or important elements of it, is characteristic of ALL HUMANS, which is preposterous. It is about 5% of humans. What to do about it is a serious matter which should be the subject of wide discussion. Too bad Hanson was/is not smart or aware enough to be part of that discussion. Psychopathy is a very serious issue and it is indeed responsible for much of the abuse and mayhem, on all levels, that Hanson (as well as many others) decries.

    Because 5% of humans are affected with this does not mean we have to give up on humanity, as the misanthrope Hanson would have us do, any more than a schizophrenia rate of 3% or an OCD rate of 6% would suggest that we give up on humanity. Rather, it means that we have a serious collective social problem that requires deliberation and appropriate, sensitive action.

    Hanson is just an ignorant old fool, and is probably by now becoming demented. Fortunately, he has a very tiny audience and thus has little impact. Otherwise I would be more concerned.

    John Day

    Dr Diablo, Carbon waste life form, alan2012, and Ilargi,

    “Where’s the flaw?”.
    Initial assumptions always have to be scrutinized.
    Comments point to diversity, which is not addressed in the essay.
    North America had been ravaged by disease, with massive population loss, when many Europeans arrived; South America, too. “Clovis Civilization” did have advanced agriculture, and the early waves of humans to the Americas also did kill off the large land mammals that had not evolved along with humans, and were unwary.
    There are implications for learning as a culture(s) over time.
    The argument about the high reproduction and aggressive strategy winning out is a “yang” argument. It goes together with patriarchy, patriarchal-god religions, and males controlling both female fertility and the decisions regarding aggression/war.
    If history contains long periods of both yang (male) and yin (female) social organizations, there is a certain recognition-bias evidenced here for the periods where yin is overrun by yang.
    We do know that when women control their own reproduction, birth rates fall to or below replacement, in modern societies. Could something like this have been the case in pre-Columbian American societies? “Yes”, of course, it could. Looking at the traditions of menstrual houses, where women spent their menstrual periods together, gives a clue. Women who live together tend to coordinate their cycles. If they spend time separate from men, there is a powerful organizing principle at work in the yin realm. We need to look at the development of female traits, not merely male traits.
    Male bias alert in this essay!
    The “prophet” and “follower” are interesting postulates, but don’t necessarily really look at the myriad of human dispersal patterns. The Polynesian expansion cast out people in boats when population exceeded the carrying capacity of an archipelago. Skills of finding land by the flight of birds, movement of waves, and reading stars, as well as fat stores and upper body strength for rowing were paramount. There are biases for intelligence(s), strength, fat stores, and physical endurance in pioneers.
    We should not get stuck on “prophet” and “follower”. There are so many variants in hard times, and so many cults get killed-off, so there is negative selection there (David Koresh, Branch Davidians exemplify).
    I suspect that periods of cooperation and competition amplify, and even develop through building successful trait-complexes, a wide variety of wiring templates that we can be born with.
    Vastly important here is that these templates are FLUID. We develop our brains as growing and branching patterns, based on how we interact with our environments as children. More complex “enriched” environments create more branching and complexity.
    Fear and pain can make very powerful pathways in a brain, edging out complexity to favor simple survival against threat.
    Anger and fear acutely drop IQ by 30 points. Complexities dissolve, replaced by simple drives to action.
    You may have experienced such immediate clarity. I have. It gets all messed up later, as complications of actions arise.
    Those of us who visit this site have already self-selected for complexity of analysis. We are in a certain 5% of population who have that constitution.
    One trait that we value, which is not addressed in the essay, is the drive to precognition as a survival advantage.
    It seems that precognition can involve many different individual abilities, and certainly groups of them would help much more, if they reached a critical mass in the brain, able to drive actions by complex reasoning and inspiration, as opposed to brainstem-level drives to dominate through sex, violence and control of people, animals and resources.
    At particular points in history, where population booms are followed by sharp “selection event” contractions, we must accept that the selection process will bring the kind of complexity that makes simple analysis fail, much as bond and equity markets fail to respond to fundamental analysis. There are too many variables at work. Simplified analysis is incorrect analysis. Seeing what happens is the final arbiter.
    I vote for more power to yin traits of networking and consensus, insight, and prescience.
    I see so much in life among real human groups, and half of it in this analysis.


    Carbon: You can start with “human nature”, and Hanson’s pathetically impoverished view of it. All you really have to do is read widely on the subject, outside the walled garden of dieoff.com. Nothing special.

    I learned a LOT from following discussions for the better part of 10 years on energyresources, evolutionary-psychology, and other yahoo groups, in which a lot of very smart people participated. I saved hundreds of notable posts, and followed up on hundreds of references to articles and books. I have scores of disk files stuffed with material. I suppose some day maybe I will try to organize it all into a coherent intellectual journey/litany or something that might be helpful to others. Very long story short: past about 2007 or so it dawned on me (blockhead that I am; it should have happened much earlier) that Hansonism was largely a crock of shit, although a crock of shit with a few minor bits and pieces of value, here and there.

    There are numerous angles to this whole story. We’re talking about core philosophical principles, philosophy of science and epistemology; evolutionary and general psychology; anthropology and human history (including much that is debatable); demographics, and demographics vis a vis agricultural and other technology and energy resources; human culture and social psychology; technology; and more! A comprehensive answer to your question would be impossible without writing a book.

    Just one thing I will quickly mention: I followed Hanson’s initially quite alarming warnings about alternative energy sources and their (claimed) hopeless inadequacy in the face of peak oil. What appeared in 1999 to be convincing arguments of his now appear outright laughable. He is being disproven by events on a yearly basis, and with dramatically accelerating speed. TAE has of course swallowed the Hansonian (and Big Oil-ian) anti-alternative-energy koolaid. But if there were ever a time to back off from that position and shut the fuck up about it, it is right now! The next few years will be decisive, as on the current trajectory alternative energies will be doing exactly what Hanson said was impossible: powering, in some contexts, with minimal or possibly even no fossil inputs, their own production. Of course it will take a while for “some contexts” to become “most contexts”. What would you expect? You can’t turn the Queen Mary around inside of one mile. Fossil fuel-based infrastructure has had a one-century head start; it might take 10-20 years to get things reversed. Anyway, events are racing ahead and leaving the naysayers in increasingly dense fogs of dust. It should be fun to watch this unfold.

    In closing, I’ll leave you with a portion of one post to energyresources from Larry Crowell, a physicist. It was a response to Jay, and a good post, which set me to thinking. It was posts like these, combined with other reading, and thinking, that led me to conclude that Emperor Jay was wearing no clothes, so to say. And btw this post was just approaching matters from ONE angle; there are several others. For example, it became evident that Jay’s thinking as regards “human nature” and Darwinism was to a large extent just a re-hash of late 19th-century bullshit, long discredited, but recently resurrected by a small circle of reactionaries who more or less wanted to believe certain stuff for political reasons (or so it would seem). The whole thing just stinks, as you will learn as you plumb deeper.

    Anyway, here’s Larry, on another angle:

    clipped from: https://groups.yahoo.com/group/EnergyResources

    Date: Mon, 26 Apr 2004 14:12:24 -0600
    From: “L. B. Crowell” <lcrowell@swcp.com>
    Subject: RE: Re: Jay’s question on the Fed


    I am suspicious of ideas that attempt to reduce human behavior, societies, and how we should manage ourselves to some strict set of putative scientific rules, or statements trumpeted as such. Such ideas have been promulgated before and they are invariably judged later as complete pseudoscientific rubbish. The ideologies of both Nazi Germany and the Soviet Union were based on ideas that at the time were regarded as the pinnacle of scientific understanding of humanity. Needless to say both of these systems were the height of ghastliness. To be honest over the past couple of years I have seen much of your thinking on these matters as having evolved into a latter day form of the same crap that has been stated before.

    Science is really a very restrictive subject that deals with either basic foundations of reality or the universe, or it is concerned with a particular subject that is amenable to experimentation. An example of the first is Einstein’s general theory of relativity, and an example of the second is the interaction of a transposon that codes for a tyrosine kinase in some chromosomal region. I can look out on a nice spring day and see a thunderhead cloud building up and say, yes the phase transistion of water vapor to liquid is producing latent heat that is the driving power for building up this cloud. I can say many things, but I also admit that what I see is so complex as to utterly befuddle any predictive capacity. Look at the flow of a small river and see the splashes, eddies, and how water falls over rocks. I can say, Ahh yes the Navier-Stokes equation tells me that there is a continuity of flow,” but I also have to be honest and admit there is utterly no general predictive hydrodynamic theory for how this stream is flowing. And yet nature is such that this stream flows exactly how it should.

    Frankly I think for anyone to say they have some scientific understanding for human behavior and societies with the predictive capacity you claim, along with the bones of other such wags from the past, is the height of arrogance. To be honest human beings are simply too complex to make the sort of concrete statements that you make. You tend to use terms such as “algorithm” in describing the trajectory of human events, which is to suggest that the outcome of the human condition is determined according to some finite set of rules. The problem is that the universe actually does not work that way. For instance, the outcome of all possible quantum measurements results in a set of symbol strings that are not reducible to some set of data compressions rules, and so this problem can’t be reduced to any finite set of axioms a’la Turing’s halting problem and Godel’s theorems on the incompleteness of axiomatic systems. If this is the case with all possible outcomes for a simple “spin up-down” quantum system, then how in the devil can anybody say they have some comprehensive set of rules for human behavior?

    The universe has an entropy of about 10^{100}GeV/K, and this means that the cosmological horizon has permitted a vast number of combinations or combinatorial probabilities. Take a look at the Shannon-Khinchin theorem for information theory and entropy. We are one of those outcomes, and in some sense we are the “Hitchhiker’s Guide to the Galaxy” Infinite Improbability Drive. So here we are, vastly complex on this even more vastly complex planet, and the whole thing came about through a near infinitesimal probability. Stephen Jay Gould stated something similar about “rewinding” the clock of evolution and how that would in priciple lead to vastly different outcomes. To say that one has some predictive theory on where all of this is going is the zenith of complete absurdism.

    Lawrence B. Crowell


    Wow, such well thought out replies to my post and others,
    I am going to talk to you separately;

    John: It’s good to see calm analysis which is perhaps more detached from value judgement than mine is.

    I’d like to think of myself as a yin type of a man, I value empathy, support and co-operation and I am not afraid of complexity or ambiguity, so thinking like Hanson (Let me spell his name right this time) isn’t my primary mode.

    I am just trying to think of mechanisms which might play out another way then sawtooth population growth and all of it’s attached suffering and environmental damage which result from applying the maximum Power Principle to competing groups of humans.

    I can see that you are saying that the way things play out in a complex world is hard to predict with incomplete models (all models of the open systems are incomplete of course).

    For example, I can’t quite explain why the population growth has slowed to zero in most of the western hemisphere. It’s a sign that I might be unduly pessimistic, but the people in this area could be outcompeted by another growing group and the population competition would return and cause the dieoff.

    Maybe the growth stall in multiple groups in the western hemisphere represents a phase change in human thinking which will move to other groups, most people want to live like the Western hemisphere after all. I just can’t see it right now. It’s that MPP as a principle hold across most competing species in nature that makes me disbelieve that we can avoid it ultimately.

    Please note that I am not holding up the western hemisphere as a model of correct living in any way, just that it currently isn’t, for whatever reason, a fast growing population

    You have me thinking!



    Alan, first post (to Rapier)

    I don’t like the ad-hominems towards Hanson, I think they detract from your argument, but I have said some pretty harsh things on this forum about people who you would call psychopaths because I have gotten angry and exasperated.

    The 5% psychopaths: If your most dangerous 5% get in positions where they can force debt based collapse and servitude on others, and bend the resources of society to their own narrow will, then they have a disproportionate effect on the directon of society compared to the rest.
    It’s like the Maximum Power Principle operating in monetary terms within a society. They outcompete competitors and make them financially extinct, which could in the future translate to actually dead for some people. So they matter more than 5% in practice.



    Hi Alan (post to me)

    I think Alt energy has come a very long way in the past few years. I care a lot about it and drove about locally for years in home made electric cars, mainly to make a point that it could be done. (I got to drive Nicole to a talk in one of them)
    My electricity provider uses part of the money I give them to fund wind power, which I approve of, even though currently they may need to be backed by fossil fuels. I hope that the same infrastructure may be backed by energy stores or “negawatts” (i.e. energy savings, demand side pricing etc.)

    Still, I believe that Ilargi found an ariticle recently that said that China had used as much cement in 2 years as the USA has historically. That kind of profligacy, misallocated resources and unwarranted growth dwarfs all Alt. energy efforts by a super wide margin. We are burning more coal than ever. Whether you believe in Anthropogenic Global Warming or not, the pollution and resource destruction is bigger than ever. We are peeing in the wind until the direction of growth changes.

    So I am not as sanguine as you or L.B.Crowell are about our prospects.

    IMO It’s all down to whether we crash financially, and how we do, not efficiency gains or Alt. energy



    I haven’t given up on humanity at all, that’s why I am here arguing. I just want to talk about what we are up against. (That all sounds very yang doesn’t it)


    Charles Alban

    pretty depressing. but all is not lost. we can behave more responsibly. we had a system that endured for millenia. it was the worldwide vedic system. the whole world spoke sanskrit and followed the same religious philosophy. all this was wiped out by the christians, and the muslims. but fortunately we still have a lot of the information contained within the voluminous vedic literature. if sufficient scholars take the time to become conversant with the material and interpret it in a way that modern people can use, we can save the day.
    it means a completely non-materialistic way of life, and a properly ordered society with learned priests and properly trained administrators who put their service to the people above their self-interest. this is the well-ordered, prosperous and peaceful society the romans encountered when they invaded the british isles, administered by the druidic priests and the well-trained warrior kings. it’s really just a matter of proper training and education.
    also a return to a tribal, clan-type lifestyle where groups of people undertake to take care of themselves, without being reliant on governments, similar to the Amish in modern times. the Romans had a legal structure called a “gens,” which was in effect a legal tribe. a group of 100 people, nominally related but not necessarily, shared the same last name, and were responsible for their own internal affairs, like diety worship, education of their children, and so on. the concept of gay marriage could be extended to include say 100 people, all legally “married” to each other and mutually self-responsible.


    Carbon – “The 5% psychopaths: If your most dangerous 5% get in positions where they can force debt based collapse and servitude on others, and bend the resources of society to their own narrow will, then they have a disproportionate effect on the directon of society compared to the rest.
    It’s like the Maximum Power Principle operating in monetary terms within a society. They outcompete competitors and make them financially extinct, which could in the future translate to actually dead for some people. So they matter more than 5% in practice.”

    And if they have a very good propaganda arm (media) and an advanced military/surveillance machine on their side, they matter 100%. They dictate the play. You don’t set up these things if you’re not a little paranoid about losing your power. We all notice the rope getting tighter and tighter.

    You might say, “Well, that’s not everybody,” but would that be correct? Nature will always seek balance, and sometimes that balance is 75/25 or 90/10. From my observations of families, organizations, societies, it is seldom happy, happy fair. There are almost always dominant players. Psychopaths understand more than others the “motivations” people have: oh, this person is dependent, this one has a fear of failure, this one wants to be seen as intelligent, passive, etc. That is why they get to the top: they see what we don’t even see about ourselves.

    How many benevolent leaders have there really been? If you come from a family with a benevolent leader, you are one lucky son of a gun. In small groups, when the actual survival of the group depends on everybody pitching in, when resources are plentiful, I can see it succeeding. There is a common goal: survival.

    You never know what you really want until you know what you don’t want. Maybe psychopaths were put on earth to open our eyes to what we “could” have, but I don’t think the majority of the population will see this until they feel a great amount of pain.

    It will take pain to open their eyes, and then, if there happens to be a benevolent leader who survives the attacks he will surely encounter and can lead, maybe there is a chance for us. What psychopaths want (power/control) will have to be removed from society, and spirituality take its place. Watch the churches fill up when that happens.

    Diogenes Shrugged

    So many misconceptions and faulty rationales both in the article and in the comments that I’m overwhelmed trying to decide where to begin complaining. All the generalizations about mankind, collective action, re-education, “us” and “we” make me feel as if I’ve been witness to a bunch of seventh-graders brainstorming a path to Communist utopia.

    Let’s add 2 plus 2 together, shall we?

    The reason why mankind fucks up everything he touches is described in less than one minute here between 9:15 and 10:10:

    To paraphrase Mr. Binney, it is the struggle for money to build EMPIRE that provides the central objective behind collectives themselves. Think about that, because it’s not just true for the NSA. It’s true for all collectives, including corporations, religions, unions and media.

    You already personally belong to a collective that’s well along in its plans to solve all the world’s problems you speak of. You know, the one described in fifteen seconds between 1:45 and 2:00:

    So rejoice! Your collective has the situation well in hand! All the esoteric sociological, philosophical, economic and pseudo-scientific problems you’re contemplating will soon be solved. The solution? The same solution every major EMPIRE eventually resorts to – – in four minutes between 32:00 and 36:00 here:


    It might not resemble your favorite pipe-dream solution, but it’s broadly the solution that’s GOING to be implemented. Think you can change that now? Not a chance in hell.

    US Police Have Killed Over 5,000 Civilians Since 9/11

    Finally, climate isn’t the problem, but if it concerns you, carbon dioxide levels will begin falling soon after the coming wars, genocides and die-offs. You can patriotically speed the whole process along by turning in your guns, ratting on your neighbors and family members, and being on time for your appointed vaccinations, chip implant and interview.

    Two plus two equals four. For obvious reasons, power positions in empires always end up being occupied by liars, thieves and monsters. I hope that helps.

    Diogenes Shrugged

    Sorry. Very frustrating. The links worked for me, but not in practice here. The top two videos in my comment above are shown below for cut-and-paste, if anybody’s interested. Omit the dashes before the www.



    John Day

    @Carbon Waste Life Form,
    Thanks for the kind remarks.

    It’s hard to model sociopaths without looking at the whole game-change that happened when hunter gatherers were overrun with hierachical societies with priests and generals.
    Those priests, generals and psychopaths may be seen as the “free-riders” in the essay, and they make the farmers and artisans work harder, generally whipping them through fear and the “alienation of labor from capital”, where workers focus on one job, creating one of the many things they need to live , and rely on the system set up by free-riders for the rest of their needs.
    Sociopaths didn’t exist as a subspecies or separate breed in hunter-gatherer groups, where everybody was versatile and multi-talented. They are specialists. Their numbers are poorly represented in expansions, and they try to avoid collapses like the plague, because they cannot survive without free-riding.
    Ordinary workers can be taught to live under sociopathic rules, as we now see in this late stage of the Kondratiev Wave we are in, approaching collapse, from lost productivity, and increased free-rider drag.
    Be versatile. Be cooperative. Be fair. Be networked. Grow a garden. Ride a bike, and think about your lot without utility services. It’s a lot, but I think we approach another “selection event”.
    Be prescient, friends!


    Carbon: “If your most dangerous 5% get in positions where they can force debt based collapse and servitude on others, and bend the resources of society to their own narrow will, then they have a disproportionate effect on the directon of society compared to the rest.”

    I agree! And this is what has happened. And it could UNhappen. We’re not powerless. We’re just being told we are powerless. The important thing to remember is that the culprits can be identified; it is not “in our [i.e. ALL OF OUR] genes”, as Hanson would have it.

    And btw, insulting people is not ad hominem unless it is used entirely in lieu of argument. Ad hominem is the spewing of insults, exclusively, unaccompanied by any argument.


    Carbon: “I believe that Ilargi found an ariticle recently that said that China had used as much cement in 2 years as the USA has historically. That kind of profligacy, misallocated resources and unwarranted growth dwarfs all Alt. energy efforts by a super wide margin.”

    Why is it “profligacy”? Why is it “misallocated” and “unwarranted”? I mean, maybe it is, but what evidence or argument do you have for those ideas? If you don’t have an argument, then your statements are as though ad hominem (though in this case not “to the man” but “to the investment” — “ad investmentum”? 🙂 )

    It is worth mentioning that concrete is for the most part a one-off expenditure. It is true that China has used enormous quantities of concrete in recent years. It is also true that they will not need to use more than a small fraction of that same quantity over the next century (or actually forever). Why? Because concrete lasts a LONG TIME. The same thing happened in the U.S. Huge quantities of concrete were used during the robust infrastructure and other buildout years, but then it fell off steeply and will never have to be repeated at that level, just much smaller amounts for maintenance.

    Further, the building spree in China has a very sound long-term economic basis. The Chinese are, wisely, looking to invest in real assets and divest themselves of intrinsically risky and indeed certain-to-decline or collapse paper assets, particularly dollar-denominated ones. Hence they are rapidly and massively accumulating gold, silver and various strategic metals/materials and their sources, and building out infrastructure and residential and industrial facilities at an incredible rate. These things are very sound investments in the future, especially relative to the inherently unstable and in fact doomed paper bullshit peddled by the Western shysters. The entire ridiculous bloated paper/derivative/debt-bubble/etc. “economy” of the world could collapse tomorrow, and the Chinese would still have all that physical stuff with which to rebuild. It would not be easy, of course. NOTHING would be easy under those conditions. But physical economy is physical economy; it does not just disappear, the way electronic “assets” disappear (in the blink of an eye).

    By the way, I’m not defending everything that the Chinese have done. They’ve been guilty of excesses, certainly. Some of their development could be described as “misallocation”, no doubt. (How could it be otherwise in that overall context, really?) But that word would have to be used judiciously, with respect to SPECIFIC developments or aspects of specific developments, not just a general characterization of the whole of what they’ve done.

    Carbon: “So I am not as sanguine as you or L.B.Crowell are about our prospects.”

    I don’t know that Larry and I are “sanguine”. But we are, appropriately, UNSURE, quite unlike Emperor Hanson.


    Diogenes: Alex Jones! I love that guy. And I’m sure the Bilderbergers are going to take my guns away and stuff my ass into a railroad car bound for the FEMA deathcamps any day now, so it really doesn’t matter anymore.


    John Day – very interesting re hunter/gatherers and sociopaths, also priests/generals/sociopaths being the “free-riders”. Thanks for your advice re being versatile.

    E. Swanson

    I followed Jay Hanson when he was posting his thoughts on sci.environment, starting back in 1996. I still have about 60 posts which I archived before he moved most of his writings to his web site. I like to think I contributed to the evolution of his thinking, as I has already found “The Limits to Growth” and other later ecological writings, such as Howard Odum, as well as the concepts of Net Energy form work after the 1973 OPEC Oil Embargo.

    From a physics point of view, “power” is the rate of use of energy. That definition may well apply to the use of the word “power” in a political context in that the group which can deliver the energy at a point at the greatest rate will prevail against others which can not. Before the rise of the industrial west, most energy was taken from the natural environment thru crop production and animals which could be fed by plants, which meant that the more land which one controlled, the greater the supply of energy available in the form of food, which thus allowed one to deliver more “power” to maintain one’s status. All that changed with the discovery of ways to recover and utilize fossil fuels, so that now one nation can exert power levels which will exterminate entire cities in one blow from half a world away.

    But, we don’t “make” energy, we can only convert it from one form to another and all such conversions necessarily result in less energy out than that which was initially available. As the fossil fuels become harder to recover from the Earth, the net energy available will decline even faster. As the fossil fuels are ultimately finite, there will come a time when there won’t be enough to satisfy the basic needs of humanity and the economic growth which depends on ever more resources will stop and then enter decline. We now appear to be at the point at which geology is telling us that the Age of Oil is rapidly drawing to a close and the cheap oil is already gone. One interesting aspect of the situation was revealed in the latest IPCC report, which claimed that half of humanity’s CO2 addition to the atmosphere since 1750 has occurred (roughly) over the past 40 years or so, i.e., since the OPEC Embargo.

    What ever the future brings, it’s going to happen rather quickly and our social organizations may well fail to cope with the changes, especially given the typical inertia in any organization. Worse, there are those who will actively oppose any attempts to solve the foundational problems, such as those in the Climate Change Denialist camp. All the commentary in addition to that which Jay provided just drives me deeper into thinking that die-off is inevitable. I do not, however, expect that this will be a global affair, but that certain nations will fail catastrophically because they are closest to the edge from an ecological point of view. The turmoil in the Middle East may be a symptom, with Egypt becoming an oil importing nation or Syria and Iraq, with the newly proclaimed Islamic State . A failure of the monsoon could push India and/or Pakistan over the edge into chaos and dog-eat-dog killing. A nuclear war between those two nations might also kill the rest of us thru the resulting Nuclear Winter.

    Time for my occasional beer and popcorn break…


    minor further note:

    Carbon: “I can’t quite explain why the population growth has slowed to zero in most of the western hemisphere.”

    Or, I presume, why it is slowing rapidly everywhere else, too, except subsaharan Africa and a few other places? You’ll note that this is the opposite of what the neomalthusian/peakists maintain; to wit, that plenitude (of food and everything else) gives rise to rapid population growth which, in turn, rapidly overruns resources, resulting in mass starvation, dieoff, etc. The opposite is happening: relative plenitude is giving rise to drastically falling fertility, and with that, falling rate of population growth (which will plateau and probably go negative in about 30 years on the current trajectory). Oh well. The Malthusians might get something right one of these days, after being consistently wrong for two centuries and running.

    And, as I’ve pointed out in detail elsewhere, it does not require Western levels of plenitude (like income of $50,000/year) for this effect. More like $5,000/year. The demographic transition has taken place in huge populations like China and (mostly) India at what are still rather miserably-low per capita GDPs, by Western standards. In other words, it is not necessary to make people filthy rich, like in the U.S., for this wonderful effect on fertility and population to take place; it is only necessary to bring people out of dirt poverty.

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