Dr. Diablo
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Careful not to miss what’s going on worldwide in the hyper-focus on Greece. A lot gets slipped in that way.
Here’s one: https://globaleconomicanalysis.blogspot.com/2015/02/australia-coming-apart-at-seams.html
Australia quickly going dysfunctional. And no wonder: look at their commodity base and unparalleled housing bubble.
And of course, who cares what’s going on in Ukraine? 15 were killed in a French deli, so why bother with 1,500 recently murdered in Donbass? NATO weapons showing up, NATO mercenaries, NATO heavy artillery shells, approved NATO “trainers” by the hundreds (as per Vietnam), White House “considering” heavy offensive support, meaning humvees, APCs, anti-tank, anti-air, large artillery, etc. Nothing to see here.
Hey, Russia crippled a top US Aegis destroyer in the Black Sea for 40 minutes and made bombing runs on England with armed nuclear bombers. What’s the worst that could happen? Nothing. Because nothing bad will ever happen to us, right?
Climate scientists caught fabricating evidence again. And again, and again. Anybody want to guess which direction?
“Giss was showing temperatures to have risen faster than almost anywhere else: a large chunk of South America stretching from Brazil to Paraguay.
Noting that weather stations there were thin on the ground, he decided to focus on three rural stations covering a huge area of Paraguay. Giss showed it as having recorded, between 1950 and 2014, a particularly steep temperature rise of more than 1.5C: twice the accepted global increase for the whole of the 20th century.
But when Homewood was then able to check Giss’s figures against the original data from which they were derived, he found that they had been altered. Far from the new graph showing any rise, it showed temperatures in fact having declined over those 65 years by a full degree. When he did the same for the other two stations, he found the same. In each case, the original data showed not a rise but a decline.”
Looking at this example, found it was a worldwide practice to fabricate evidence, in Australia, Russia, etc. Centuries-long small cooling were transformed into dramatic heating, etc.
How long do we have to put up with this? And how long will we overlook it’s a massive cash-grab, taxing the very air we breathe? Can someone call a spade a spade here?
–“…yet the alternative to austerity is money, and the money has to come from somewhere.”–
No, no no no no! These deadly mouth-breathing idiots: wealth is not money you goofballs! The “money” doesn’t have to come from anywhere. You don’t even need “money”. What you need are commerce and trade. That is, to get off your duff and “work.”Suppose the Greeks took a holiday in 1999, locked up the house and flew off on a spaceship. They return in 2015 only to find their kids have trashed the place. What do they need to put their house back in order? Money? For what? To hire Macedonians or Bulgarians to bag the trash? No. They would pick it up and repair it themselves. So for what would they need money? What they need is to apply the astonishing pool of idle workers to the astonishing pile of work. So…what exactly has been keeping 50% of all Greeks apart from the overwhelming body of work that needs doing? I want you to really, deeply think about this. They’re lazy? Bored? Misinformed? Lack bus tickets? What is it?
You see if you take money out of the equation, the solution gets simple and becomes obvious. So how is it when you add money back into the equation it freezes up again? It is because the “money” — or type of money and/or system they’re using now may be the problem and not the solution? Work it out for yourself. Is it?
If the Greeks landed on a fully electrified, populated, constructed land, stocked with ports, railroads, shipbuilders, natural gas fields and so on, they’d say “Holy wow! We’re rich! Rich I tells ye!” And yet somehow they’re poor. Their cooperation system is broken, and somehow seems to be delivering all their wealth to people outside the country. How odd.
If there were no money–at all–in Greece or anywhere, it would be invented instantly. Most times and places in history prove this. They don’t need to “get” it from anywhere. THEY are the money. The money is an IDEA, that lives in their HEADS. Money is a PROMISE. You can use whatever you like a placeholder, cows, salt, iron rods, promissory notes on a warehouse, but it’s irrelevant. The only thing that matters is that they have wealth, of some sort, anywhere, by the act of being alive, and can “monetize” that into promises that members of that society can cooperate, organize, and exchange amongst themselves.
Having to “get” the money from someone illustrates clearly that whoever you need to petition to “get” the money is who is really in charge. And also entirely unnecessary for commerce, for their daily life, for their ability to pick up a hammer and shovel and do work. If they are unnecessary, yet extract energy, then are they best defined as a parasite? Think for yourself. Are they?To make this more concrete, my preference for commercial “money” is the self-liquidating gold promissory note, although in concept you could use anything as the placeholder/backing commodity. You extend credit 90 days backed by real goods–at the first level, the gold or commodity, and if the 90-day contract is fulfilled, by the copper you mined, the shirts you stitched, or whatever real commercial goods you needed the money for in the first place. Once the real goods exist, you sell them to the next level and close the note, and so on from the cotton fields up through the spinners, weavers, sewers, saleclerks and so on. Eventually, the end user buys them from wages that were themselves paid from self-liquidating promissory notes, closes the books, and it starts all over again. It’s not a “money” system, like a pile of gold is, it’s a transmission system. An energy-information transmission system, directing commercial actors to what is selling, what is not, what needs to go faster or slower, and closing contracts on failures before they get too far past 90 days. But note: you don’t need “money” to make it work. Start with one gold coin, split into milligrams, and you have the backing items, the spark you need. The rest is simply a system of commercial promises that REFER to the backing collateral. Capisce?
Hard for us to believe, but there is this thing called “cash” and “work” which can be used to build an economy in lieu of “debt.” What this writer is saying is that Greece can only borrow their “money” from someone, and are helpless little children, unable to fix or do anything without permission of “debt” and “money” from the debt/money issuer. False! If they wish to, the Greeks can kick out that bad idea and fix their country themselves, for their own pleasure and enjoyment. Oh wait–they can’t? So…what’s stopping them?
US and UK are stronger and escaping the trap, says the aptly named Carney? You’re hilarious. Quit your day job.
We heard similar things in the NE U.S. and while parasites and winter were hitting the colonies pretty hard, backyard bees overall weren’t doing all that much worse than usual. Looking at the alarmist crisis of bees going extinct and how we’z all gonna die!!!! without the humble honeybee, it seems that it’s largely the commercial colonies that were hit so hard. Question: why?
Two things come to mind: one, the bees are placed in the epicenter of poison: the herbicides and pesticides used for farming. Wild bees don’t, or have more alternatives that are less poisoned. Second, and far more interesting is that backyard bees don’t travel south on trucks all winter. Why does this matter? Well, there happens to be a pesticide that targets the honeybees’ closest relative: termites. It works by causing the termites to lose their sense of direction back the mound. Funny, that’s exactly what “Colony Collapse Disorder” is! What a coincidence! Of course Monsanto assures us this is entirely unrelated and they’re not responsible for hundred-billion$$$ in damages to I dunno, life itself on this planet, and I’m sure you believe their scientists just as I do. However, in the U.S. it is only bees that winter in the south that could–theoretically–pick up the pesticide, leaving the backyard bees up north unaffected. The ones that live in termite country year-round, well…
For Europe, I’m sure the near-total use and reliance on poison farming, coupled with concentrated breeding of bees away from their wild roots have nothing to do with the loss of bees. Probably sunspots or something.
Either way, goes to show that when you create poisons, someone has to stand over the barrel, and when you dump billions of tons of poison, well, it doesn’t stay neatly in one place in the ecosystem. Oh no. You may think you’re poisoning the other guy, but that other guy is ultimately yourself.
Buy off experts, governments, whoever and create an artificial rigging mechanism. Drop rates artificially. False rates that inevitably lead to population taking on unsafe debt. Answer above, why do they do it? Because if you don’t take on debt-to-grow, your competitors will and run you over or buy you. This leads to no sound, wise actors remaining, they have been impoverished and discredited, leaving the reckless fools you want and are easy to cow and manipulate. Then, no need to hurry: soak up the inflation wealth-transfer for 30-40 years, rake in artificial sales of your product called “debt”, and wait for the inevitable. When it inevitably turns, you hold all the world’s assets as collateral, for loans which were massively over-issued from thin air and mathematically cannot be paid.
Again, in answer above, why be in a hurry? If you collect all at once, they get mad and stop you. Foreclosures may be slow, but when the rigging mechanism–the Fed and Congress–have your back, you can repossess slowly, methodically, at any speed the society will tolerate. Ultimately you still repossess every asset in the nation/world, but slower and safer, setting (rigging) your own prices because you set both the supply and the demand by controlling money supply, rates, and release of assets to the market. No, they don’t want your house. They want your life. Indentured servitude for life, your focus and energy being owned and directed by them. If that can be done with thugs and debtor’s prison, great. If not, then slowly by controlling all the market forces in one’s life. So long as your life and attention is owned by them, who cares how it happens?
Same with accounts (asset claims) disappearing, but loans (debt) remaining. Exactly as the 1930 Depression–funny thing, huh, that they can somehow lose your account but remember your loan balance? By golly, how does that happen? Is it magic? Yes, if the debts were too high, they’d lose because they’d write them off, but they’ve calculated how many would need to be written off and still profit. So long as more pay than default, it’s still a big win. That’s why assets are lost in 30 minutes, (like Swiss peg) and debts grind on and on, attempting to collect for decades, even though both should in theory follow more or less the same legal rules. Over time, more debt can be clawed back with more threats. Eventually, it’s not worth it, they’ve got all they can economically extract (like Greece), then they change approach to write off, be conciliatory, and encourage you to participate in the system of fraud, theft, cons, and extortion again.
And they do. …Only for about 5,000 years.
I’ve relieved I have the Pope’s blessing to punch people who insult me. As Christ’s representative on earth, I would expect no less.
Now excuse me, I have some house calls to make…
Yes, I bet measuring tidal levels down to the .1mm exactitude back-engineered to 1910 IS “fiendishly difficult.” So difficult as to be lost in statistical noise. I’d be astonished if they could measure within an inch with certainty back that far. Can we go back to real science please, with things we can actually know and measure? Because if you stretch science on the rack hard enough, it’ll tell you anything.
I have to disagree. What if oil were $1/bbl, or free? Since GDP is known to be in effect an energy proxy, free energy would allow the least possible friction on GDP/economic activity. That is, any time a species comes into an energy windfall, it’s a good thing: they grow, populate, build things, yada yada.
If not, then surely we should try the opposite: have the LEAST possible amount of energy available for a species, which would be best and most prosperous for them. …But of course not. Energy is life.
That said, we can now focus on the reason oil falling NOW is a bad thing: debt. Any time there is a boom, or humans BELIEVE in a boom, however (un)credible (Tulips, Mississippi Bubble, etc) they create and accept larger promises from each other, believing those promises to be reasonable. In our social context, they ‘extend debt’. Many trillions now in the U.S. oil patch, probably larger than the U.S. real estate bubble. Those high debts can only be repaid with high prices. Otherwise, somebody will not keep their promises and default, and consolidate, and some creditor takes a multi-billion dollar haircut, and then loses the faith of HIS creditors, then THOSE creditors have others reduce the promises (debt) available to them, and so on.
And it’s THIS that causes “Deflation”, not nominal prices, not “money”, but confidence, as indicated by the willingness of participants to extend promises to each other. It’s a contraction of CREDIT, not money. Even today, money actually doesn’t expand all that quickly compared to credit. And in our system, “money” is hardly even relevant, only credit. Printed currency is now some 0.001% of “money,” while banks are free to extend credit more or less regardless of their reserves. In a system without moorings to an even slightly solid medium-of-trade, credit becomes the only thing that matters. And since it rests on confidence, it can reverse on social perceptions alone, in an instant. Falling oil prices can create that perception.
The solution to this is both simple and elegant: erase all those promises that will not be repaid and stop LYING. The assets are re-distributed to different and remaining players, BUT ALL THE REAL ASSETS REMAIN. The railroads, the oil wells, the factories, the grid. NOTHING IS DESTROYED. That’s why it’s so easy, as in 1921, to have a panic and restart the system with so little disruption. The only thing that is destroyed is the ILLUSION of wealth or money which, like gold on the Mississippi shores, NEVER EXISTED IN THE FIRST PLACE.
That is also why it never happens in practice: it takes a moral people to voluntarily give up the illusion of wealth that makes them rich and influential to others. Instead, they will use that (illusionary) influence to prevent the truth from coming out, and thereby extend their power at the expense of, well, anyone. That’s why we cannot have real news, real statistics, real discussions: the minute you begin, their power wanes, and their power to maintain their power wanes, then reality takes hold and they take a haircut. Fraudulent, phony assets are written off, and the comparative rich fall in worth and value a great deal, while the comparative poor only fall a little bit, equalizing the wealth gap. That’s also why is MUST happen. Illusions can go on a long time but not forever. The truth will out.
But the point is that it has nothing to do with the oil price. Low oil prices ARE good…for an economy at least. What we have is a DEBT problem. The debt is predicated on a high oil price, so all that DEBT is repudiated and collapses with low oil prices, taking a lot of the (illusionary) financial sector with them. …And a lot of rich people get poor, and their power collapses to become equivalent to ours again.
And I think that’s a good thing.
I find it hard to see how producing more energy can be a problem. In a way, yes, it’s expensive. But that’s measured as if it’s conventional. You could think of it as producing its base power as expensive, but producing the extra gale-force power as a freebate. Looked at this way, what you need are systems that absorb and/or utilize massive amounts of intermittent power. This is hardly unusual. The old windmill era, c.1600-1800 in non-stable wind areas (ie, England, not Netherlands) would yes, sit around and not do any work until there was wind. Then you’d hustle to grind your wheat, saw your boards, pound your rags all at once in long shifts as weather permitted. Then go idle again. That’s life in the green, ecological, earth-centered world. Welcome to party. But that’s a GOOD thing, not a bad thing. Unless you really WANT to continue burning the last remaining coal reserves and risking nuclear emissions just for your technological convenience.
I don’t think we want that, so changing our habits, the very way we think about and do work is one of those compromises. Used to be all the logs we cut and waited for the rivers to thaw. All the wheat was stored and waiting for the mills half the season, in transport, for canals to thaw and fill, or water to flow after summer dry or winter freeze. This ain’t unusual, folks. It just costs some money. In extra storage, elevators, that in fact create resilience, not the 3-day supply chain everyone frets about.
So yes, it’ll take time, and it’ll take money, and more even will take change. You could make power dead-free in wind areas during surplus hours. That should cause the localities to take advantage of the power, for instance adding electric baseboard heat, or intermittent industrial work, compressed-air storage, aluminium smelters, I don’t know. …But they would. This is best idea, as one of the obstacles wind power is that basically the local people have to look at and deal with them, but get screwed concerning power. So if they have all the trouble, but no price-benefit, why WOULDN’T they oppose projects? Whereas with power, they could become a renaissance craftsman area.
You could of course go centralized, big-scale too and pump water, melt salt, or split water, but those are large, expensive, centralized projects ripe for more boondoggles. Still, once you’ve paid, you’d be a fool not to, especially as the alternative is to melt down the UK grid with oversupply. Pumping lochs is only one option, and it may be a bad one. Free power could mean freezing ice, heating water, lifting train cars up a slope, filling a tidal estuary, or who knows?
In essence, Scotland bought a lot of future electricity up-front, with an open contract concerning supply. Since you already bought the oversupply, the only rational thing to do is figure out how to capitalize on it.
Free power is a benefit, never a liability. Not everything that happens is a problem. Even on doomer sites.
Stir the pot…
Audio on Global Warming.
https://kingworldnews.com/lord-christopher-monckton-broadcast-interview-available-now/
Believe or no, the outcome of these particular treaties and responses is power/money grabbing, which would be a big step toward totalitarianism. And hey, let’s not solve a problem with a bigger problem, eh?
Great comment on process engineering.
A lot of people don’t appreciate the also-vital structure of assembly, delivery, and human habit, which is every bit as important and hard to create smoothly as product design or finance. Reminds me of “I, Pencil”, by Reed
https://www.econlib.org/library/Essays/rdPncl1.htmlMr. Swanson, you are correct. The example was Venus, not Mars.
Your example of Tambora and Kuwae are just what I was looking for as the perfect example of rapid homeostasis. Naturally, the word “rapid” is relative to planetary scale, but here we have a dramatic, astounding influx of CO2 and ash, blocking out the sun not just measurably, but visibly crushing crops and climate on earth worldwide. And then? In a year, five, ten, gone like it never was. In geological terms, that’s as close to immediate as you’re going to get. Question is, where did it go? What happened to allow the earth to recover so fast? Again, the change did not tip infinitely to cold or to hot. Yet we claim to know the tipping point?
This leads to my single point neither you nor Jonabark want to pick up, which is that we cannot know with adequate certainty many of the things which pop science is pretending to. Real science may understand its own limitations, but this is lost in translation to the public. Is admitting we don’t know things with adequate certainty now ‘denial’? It would seem more of an ‘admittal’. Admitting we don’t have the foundation to state with certainty where the geological tipping points are from within an infinitely complex feedback system and a very poor data set of previous examples just seems common sense. Again, the math alone, even with a very good but imperfect data set would tell you this.
Okay, hate to do this, but let’s trot out the canard of the science itself: there remain many books of the “New Ice Age” scare of the 1970’s. They were certain we were headed to an Ice Age, even though the 1940s were arguably colder than the 1970’s and the temperature had been rising overall since the Medieval ‘Little Ice Age’–and note that’s way before humans were burning fossil fuels, or indeed fuels of any size. The Little Ice Age, if anything, may have caused areas of Europe to de-populate in disease and crop failure, and re-forest themselves. Nevertheless it got WARMER, not cooler with reforestation and lack of wood-fuel burning. Okay, back to the point: so after the 1970’s ‘New Ice Age’ was discredited, climate went dormant for a while until the “Global Warming” science books. Okay, fine, that can certainly be true. But 10 years since it hasn’t gotten warmer, which in geological terms neither proves nor disproves anthropogenic CO2-based warming (although since CO2 burning at this point is astronomic, like 1 cubic mile per year in oil alone https://en.wikipedia.org/wiki/Cubic_mile_of_oil and the model suggests temps ought to rising sharply). And now, I see Warming re-branded to Climate “Change”, and starting this year new pop science on how we’re going back into a cooling!
I mean, seriously, this is my point. The breathless certainty that the world was cooling, then warming, then cooling — within the same generation of scientists! — is amazing to me. Fine, science is like that: we add new things, re-think things, yes! But what we DON’T do is seeing directions flip-flop every 15 years then believe ourselves absolutely, positively SURE we’re right this time. It doesn’t matter if Global Warming is real, or CO2 based, or anthropogenic, or reversible, or if it’s a natural variation, or will be easily subsumed by natural homeostasis, or if caused by microwave weather engineering as some suggest. The point is that we can’t be so gol-darned sure, although I’m sure we’d all like to be and it’s frustrating to admit that what we don’t know is a lot.
That’s my point. We don’t know a lot, and we know a lot less than we think we do. Follow history of science, then human belief back as far as it goes and you’ll see a litany of what we don’t know and/or mis-thought. It’s humbling.
But I’m sure we’re all much smarter than those guys and finally, this time WE KNOW FOR SURE. Exactly. Precisely. Where all the tipping points are. Honest.
You’re insane. Clearly we do not have working climate models. After 1+ decade of Global Warming-to-infinity rhetoric, there has been no warming for 10 years and now Global Warming scientists are with a straight face and I kid you not, advocating Global Cooling and in Ice Age as a sign of…Global Warming. (What??)
Aside from this overwhelming failure to predict the climate even over decades, and the inability to model basic functions, like water vapor, they can claim to accurately predict the exact temperature and exact PPM that would cause a tipping point climactic change!
Have these scientists not heard of Significant Digits, where you round off the numbers appropriate to your measurements, not to introduce a false appearance of accuracy? Even if the theory is totally sound, it is entirely unscientific at this point to pretend to know the exact PPM and degree change. Where is their accurate data set? The last times the climate tipped up or down, no humans were recording the change and process with any accuracy. The levels of inference just to wrest out accurate CO2 estimates from previous Ice Ages are themselves tenuous and astounding marvels of scientific inquiry–but you can’t then attribute perfect accuracy to them either, as we cannot cross-check them. So we have a cross-tested data set of…zero? That’s a lot of inference to assume a level of exactly 2c — not 3c, not 7c, is the exact point.
Furthermore, by the nature of the math of chaos–or the math of systems with large numbers of variables–the tipping point can change wildly, radically, with tiny alterations in input measurements. So wildly that something huge that happens NOW, might indeed not happen in any reasonable time frame with a small adjustment in just a few input variables. That’s a ground ripe for data-fixing.
Third, and this is just a footnote compared to the systemic, paradigm-breaking objections above, is that he does not issue a statement of timescale, or of homeostatic adjustment. That is, if the temperature were to change 4c in an hour, and stay that way for 1,000 years, it would indeed be more likely to be disruptive than if the temperature rose 1c every 250 years. Indeed, the most likely thing, from all geological and ecological theory that we have, is that an attempted rise in temperature and CO2 on the scale of 1,000 years would be absorbed by the earth (plant life + oceans) and never happen, as the earth is a living organism that absorbs incredible inputs (like volcanic dust and gasses) and still adjusts to near-homeostasis. That’s why the last time the earth went into an Ice Age, it didn’t just get infinitely colder until it resembled Neptune. And last time it got warmer, it didn’t get infinitely warmer until it resembled Mars. Why, and what exact speed it takes to upset the balance is subject to debate, but I’m quite sure no one knows. Anyone claiming to is a fool, and no offense, but those who believe such mind-altering levels of false accuracy are credulous ninnypants. Thought about for 10 minutes with a napkin and a dull pencil you could see we couldn’t possibly know this, or when, or how, even if the theory given is completely and unalterably true.
In short, you’re insane.
Luckily, as the article outlines, we don’t need to know, because nobody’s doing or going to do the slightest thing to alter it anyway. We will rely on the earth’s natural homeostasis, or we won’t, but men at this time are not going to voluntarily change, and in my opinion, they won’t have to. Peak Oil, peak resources, and collapse will solve it all for them.
Fantasy debt:asset ratio again, Huck? Really?
The U.S. is far to the right? I was thinking too far to the left, as in the State controls all. But that’s the point, isn’t it, that they’re really the same? As in the political spectrum is actually a circle, where left and right meet in the their extreme and agree wholeheartedly on statist tyranny. https://4.bp.blogspot.com/-8CvqdHz9j-Q/Uelk-siEHKI/AAAAAAAAra8/gJYNRP9RMic/s1600/continuumsociallast.PNG Too far to the left IS too far the right, and vice versa.
The only group that is opposed to left, right, and extreme, is the party of liberty, of which there is no representation whatsoever, which was also your point. But at least we can understand the problem accurately, by naming it among ourselves consistently, as a first step to taking measures of remedy.
Unfortunately, that means we’re still before Step 1, decades behind the curve. But we can start.
I see a lot of straight-line extrapolation around. First oil was going to $200 because the line said “up.” Now it’s going to $20 because the line says “down,” yet neither predicted the reversals at all. Simple math: if oil projects aren’t profitable at $60, then over time oil will rise back to $60, or $80, or whatever the breakeven line is, regardless of the economy. Because as the man says, what other means can you move 4 men and their luggage 10 miles at 50mph for .25 litres of gas?
In the meantime, however, prices will wildly undershoot (and already have), shutting off production–many times permanently, by stranding small, less profitable tail-ends of the fields–then once the fields have been ruined more than they had to be due to the financial, “bubble” mismanagement, the production wall will suddenly strike and raise prices far OVER what they need to be. …That’s what happens when you have a broken price mechanism, either in central planning, fraud, or bubble finance, none of which are capitalism. So I don’t doubt we’ll get back up there in price soon enough. And in a stable structure, probably the price ceiling would be getting progressively lower due to a fraying economy and poor wages. However, I expect the system will fracture and be re-written this time, and not take the straight-line projection, just as it didn’t the last two or more times.
Economy? 5% GDP??? I nearly banged my head on the steering wheel hearing these feckless idiots on NPR. Wtf do they live? K street? Reality check: 20% of Millennials live in poverty. More than that in Britain and Europe where 20% of ALL people live in poverty. Near 50% of 25-year-olds live at home. And these guys have the gall to say unemployment is super-low, the economy hasn’t been this hot in over 10 years? Friends, we have reached a “reality-free zone.” They may not have thought it would be this bad, but clearly the facts are being synthesized from thin air to support the pre-determined narrative: that is, to raise rates. Any excuse will do, they no longer care about reality.
But funny thing: even when you no longer care about or include gravity in your calculations, it still exists.
Russia can tolerate low prices. China can tolerate low input costs. Europe can stand a lower cost of living. But there’s one nation that can’t tolerate low oil prices, a multi-trillion industry to be cut in half, the dollar to spiral up, and deflation to take hold, and that’s the United States. It looks like it can with the dollar rising, but it can’t–that is exactly the Depression-era scenario where gold (i.e. money) was scared out of the whole world and fled to the U.S. for safety, killing the economy and markets alike. Ultimately, Roosevelt had to default, revalue gold, and re-set the Monopoly board as the bad economy destroyed the REAL financial market, i.e. bonds. Cities defaulted, states defaulted, and without wages or economic motion, companies REALLY defaulted, taking the banks with them. The Dow was merely a sideshow. So Huck Finn, deflation in a fiat system—this one’s for you.
It may look like the U.S. is raiding the emerging world by raising the dollar–and they are for now–but this is a temporary distance in a predetermined destination. Like Roosevelt, the dollar will be defaulted on via a rules change or the pain will never end. One other thing: by leaving the dollar standard–just as the nations left the gold standard in 1930–the now 100+ BRICS nations will recover first. Addendum to that, when the U.S. dollar is no longer the reserve currency, the U.S. will be valued on its trade and industry. And the U.S. has become a hollow shell of graft, fraud, waste, and mis-reporting, with 20% of GDP probably Wall St. paper ginning, and 20% more in health care waste, with the real nation perhaps no larger than Brazil or Russia.
That’s a long way down, friends.
How on earth would you accurately value either the assets or the debt? Systemic derivatives alone are over $1.4 quadrillion, however, the earth and its ecosystem are…invaluable. Priceless.
So is it exactly 5x debt, not 3x or 6x or 50x? Can you provide your methodology?
There are many ways to run the economy–large, centralized projects run by the state is just one of them, and I would argue, one of the worst. By the evidence given here, wind, shale, nuclear–all run by or greatly interfered with by the state–are riddled with graft, fraud, safety violations, and basic engineering inefficiencies so massive that otherwise good ideas are barely energy positive (if at all, see Ethanol, or all-in costs to fracking groundwater). With such a track record, why on God’s earth would you promote the State as a solution to anything?
The other way to run the economy would be to abandon huge, centralized, capital-intensive projects in favor of small-scale, localized solutions. 1/5 of electricity is wasted in transmission. Another 1/5 is wasted in vampire loads like TVs and cell charging cubes. Clearly, you could close 20% of all power generators today. The easy, low-cost answer is efficiency coupled with production so localized it is basically generate-in-place. We have this: it’s called a off-grid photovoltaic system. Is the cost-per-watt high? Yes. But yes only until you realize the astronomical subsidies the rest of the energy system is pulling out of the taxpayers. What were the numbers yesterday? Near trillion a year, worldwide? Re-allocating that dead-loss system would more or less pay for the generate-in-place system while the challenge of generating enough power would focus attention on lowering consumption to rational levels.
But that isn’t the point, is it? Clearly the point of the system is not to provide energy or a higher quality of life to citizens but to concentrate profits, and more importantly, control. No one profits from efficiency. No one profits from independence. So because power and control are our sole fascinations, they are not promoted, although rational, healthy people would see them as self-evident. We all know the other system is better, healthier, and more sustainable. That’s why we can’t have it, and existing powers of the states, corporations, and oligarchs will fight tooth and nail right down to the collapse of society to defend their wealth and power. Which is only to be expected, really. I’m only pointing out that the solution is cheap, easy, and obvious, requiring nothing but a change in mind and focus–the money and tech are there. But I’m not holding my breath for it.
And as long as otherwise smart people promote only large-scale, centralized power-and-control projects, we can’t even have the discussion.
Not sure, when I wrote it I was surprised to discover you could declare war on an abstract, or maybe even a method if you’re crazy enough to try, the problem was that the effect was ever-less successful. So a people as an abstract is no better. All of them everywhere? The Race? The nation? Who owns passports? Those who are in the resistance? Who knows? The point is it’s all UNSUCCESSFUL, poor prosecutions of war.
Not to be a killjoy, but nouns are the ONLY thing you can declare war on. Nouns such as “France”, “Russia” or “Nazi Germany.” You could even declare war (although less-successfully) on abstract nouns like “murder,” “poverty,” or “discontent.”
What you CAN’T declare war on is a METHOD. “Terrorism” for example, is a method. So is the cavalry charge. But if someone is your enemy, it doesn’t do much to declare their method of attack illegal does it? You already vowed to murder them. Like, say, if Kentucky riflemen are shooting at the bright red “X” of your Regulars? If you’re already at war with them for other reasons, the method of combat used is really beside the point, nor if you stopped using that method would the war miraculously end, for the root difference of culture and outlook would remain. Gripes about method are just sour grapes for when you adolescently hoped your enemy would attack you where you are strong instead of where you were weak. Newsflash: in the adult world, that never happens.
A noun is a person, place, or thing.
Is this the same record warmth (in Europe) that they were caught fabricating only a few months ago in the world temperature map? Because here in North America it’s been getting seriously cold and the weather is finally returning from the abnormality since 1990 back into the long-term normal: far colder, far wetter, a nd far more stable. Not as cold as 1940 yet, but heading there steadily. This is what you would expect now that temperatures haven’t risen in over 10 years– and that’s according to the offical numbers.
Except that in an economy where everything is a lie, I don’t believe a word of it.
Consumers are apparently so confident Christmas shopping is down 11%? When gas has plunged 25%? So confident they continue to leave the stock market in droves as they cash out retirements to survive? So confident housing sales are remain low and are turning down? So confident in the job market that the participation rate continues to fall month after month, year after year, and hasn’t been this low since 1978? So confident that 1 in 5 Americans must have forgotten their situation is so fragile they’re on food stamps?
No, somehow I’m guessing that the government may–just may–be bending the numbers a teeny little bit.
It’s all about the narrative now: the narrative demands that interest rates rise, so some sort of facts needs to appear to justify what has already been decided. Is deciding your course ahead of time, regardless of or in defiance of the facts, considered insanity or stupidity?
In any case, the one thing it isn’t, is reality. There’s no need to comment on facts or on news that are so eggregiously, so transparently false. Next time, ask the ConCon board to call zip codes outside of K Street.
And there goes the financial collapse caused by low oil prices. …Right after the one caused by high oil prices.
Easy money leads to financial speculation and systemic instability. Can we stop now?
I have to strenuously disagree. Lower prices are a GOOD thing. They are an especially good thing for the common man. This is why we attempt to make things, like telephones, ever cheaper and better so ever-more can afford them. This is exactly the same for oil, only more so as it’s a basic input.
Price–in general here, and in theory–is simplistically a numeric measure of energy input. Do more harder stuff and the price rises. More steps, more people involved who need to eat, more time eating while coming up with that genius invention, all that. But oil is a basic energy input, like sunlight on a wheat field, lower that (accounting for EIEIO), and prices everywhere drop. This is a GOOD thing.
Even looking at it from GDP standpoint, (where less $ in oil = lower GDP measured in dollar terms, although the same wheels are turning) you would simply be TRANSFERRING the $ spent from the oil patch to retail sales (for example). That’s why they call low oil prices a de facto tax rebate. The same dollars are spent, because–let’s get real here–the whole POINT of money is to buy things with it. Excluding some sudden penchant for savings, ALL money is spent. They also spend it on tools to make widgets, or on the widgets themselves, but again, to be real, the point of updating your widget machine is to have more, cheaper widgets to use. In that way, we talk about how awful the U.S. is in having 70% consumer spending, not business investment, but ultimately ALL investment is created exclusively and only to make end-products. Point being, lower oil prices is only a SHIFT of focus, of attention, of energy, AWAY from oil and into everything else. In theory, the net GDP stays the same (or even increases, as above)
That said, okay, I understand that the oil patch is ultra-leveraged and sudden re-contact with economic reality will damage the financial markets. Damaging financial markets can hurt the real (leveraged) economy. It will lower (or shift) tax revenues, and it will be disruptive to the physical economy, including the job market, as all those assets slosh from one side of the ship to the other like a loose cannon on the deck. Yes. That part bad.
Nevertheless, isn’t returning to economic reality a GOOD thing? Doesn’t economic health come from accurately measuring and deploying limited resources? So isn’t the popping of any bubble the first essential step toward health? Of course it is. The only bad part of this is that the bubble mis-deployed resources in the first place. That is the part that causes the present–and temporary–disruption. Which is precisely why you don’t want bubbles, nor the easy money that encourages them.
But leaving illusion and returning to economic reality leaves you more likely to efficiently deploy whatever remains. The short-term adjustment is disruptive, yes. And to real human lives and fortunes. Which is why it should be a firm lesson against easy money ever after. But long-term the end of bubbles is the return to health, and that’s as true in the oil sector as anywhere else.
Oil prices crashing and low? Net GOOD thing, not bad.
It cannot be bad for oil prices to both rise AND fall. …Unless you want to retract all your essays on why a high price was bad? I didn’t think so.
I believe he means filtering lithium out of seawater, which is an ancient canard used to beat down the gold industry. Since it isn’t a matter of getting the element, but the PRICE at which it can be done, it’s going to remain like oil shale: “The energy of the future…and always will be.” (i.e. always 10 years away) There are a lot of variables, but basically if you’re not filtering seawater for even gold at $1900 (no project was proposed as viable in the entire runup, from $1400 to $1900, nor now) then very likely, filtering lithium at $4500/ton or $0.13/Troy ounce isn’t going to be a money-maker. A lot of technologies are like that, particularly green ones. Either the cost is not there, or the scale is not there.
Fascinating exchange. Solid hospitality to guests.
It seems to me a lot of magical math going on here, which may be right or wrong but is nevertheless magical. It’s this very type of genius math that sank LTCM in an afternoon. Why? As Diogenes rightly points out, there is a liquidity problem. This has been the Achilles heel of derivatives models so long that it is no longer an accident but a conscious decision to wildly overvalue assets, and so pretend to be richer, therefore wielding more control over others. The problem that not even a fraction of people can sell in any market–and sell to whom?–is just one of the problems with this model. The idea of correctly valuing the earth, all its assets, all potential, and in addition, all its stocks, bonds, and promises, is positively ludicrous. Potty in the first regard. How would you do such a thing? Because a box of nails in one shop is sold at fair value? A company or two appear to be correctly priced in a few 1st world, “solvent” countries? What about Spain’s “fair value”? One day it was solvent, with a golden future of Euro-retirees and farms that sell profitably to Russia, the next day, neither has any value, the price drops 90%, and they’re all bought by Chinese firms? Presently Apple Computer is worth more than the entire Russian Bourse. So one company that makes phones for rich kids is worth more than every mine, mill, field, and weapons manufacturer in Russia? …Somehow, I don’t think so. So…therefore, where are your fair values? Efficient markets? Markets where you can measure, within an order of magnitude, what the paper is “worth”, and the assets behind the paper are “worth”? Don’t you know what things are “worth” depend overwhelming on the minds of men which change very rapidly?
Were your thesis within 99% of being true, it would be utterly impossible for the U.S. market to be “worth” 400 in 1929, and 200 6 months later. Yet this happens almost continually in some market or other. LTCM said this wouldn’t happen for 6 sigma—roughly never happened since the Neanderthals roamed—yet in historic fact happens about every 10 years. You can’t know abstract value of things because there is none: the “value” of things is an IDEA that lives only in the minds and expectations of men. Those change instantly, as is proven almost every day. Being familiar with lithium, you should be familiar with the wild fluctuations in value in RE Metals, and particularly their companies, but even something as universal as oil easily moves from $120 to $40 in a few weeks. Math of “Value” doesn’t really account for this.
Even IF you could account for value, a nation is not a corporation. It is an entirely different system with a different structure, different goals, responsibilities, different assets, different fields of motion. You could as well say an elephant and a lobster are both animals and give veterinary advice on them, but it would be ill-advised. Therefore, debt-ratios of a nation or a world are not in any way comparable to those of a company, household, or person. Nations have defaulted or been destroyed with low debts, and survived what seemed impossibly high debts. The reasons are expansive and complex, but certainly more than one ratio is involved.
Whether TAE is right or wrong is hard to say. We are all right and wrong in all our arguments to some extent: but you haven’t made anything like a solid case here, and being polite and respectful is one way to be heard long enough to perhaps make one’s full case.
Go on: but you’re going to need to do better than show a chart that says you can liquidate the entire inventory and manufacturing base of China or America, at full value, in a crisis where there are no buyers, to convince me that is fact.
Appreciate the much deserved passion here, and we Yanks like straight talking, but there’s a lot of wrong to go around here.
Matthew clearly has no solid paradigm to talk from, just a bag of clap-trap phrases picked up from pop news and Liberal Arts economics classes. That leads to him not seeing or understanding, and to such logical ends as “50% youth unemployment and 20% drop in GDP = deflation not hurting anything.” Wow.
However, in contrast to Matthew, you know better and do have an organized paradigm, be it right or wrong. However your paradigm also seems to be going all over the place. I’m assuming Deflation still = lower money supply, but not even sure about that, and not sure how lower prices wouldn’t be the biggest help to people whose income has been slashed. Because Price Deflation is one of the only bright lights in a Depression, and aside from wages, is the one thing Central Bankers want to declare war on, so the common people can have NO relief, not even in one small arena.
Deflation is part of a systems analysis, and depends on the system. Generally, it occurs when economic actors (not even banks, although they can be) extend too many loans. It is not the “money” supply, necessarily, that expands. Under a gold standard, the gold increased at a very modest level, it was the credit supply–equivalent to our present shadow banking system–that rose. Later, that was codified into bank notes which were more or less public money and currency, like the U.S. system in the 1800s. But you cannot stop humans from making promises to each other! That is essentially what this expanded loan/promise/credit supply is. And in the normal course of things, somebody, somewhere along the interlocking web of promises, is not going to be able to pay. When they can’t pay, their creditor is crunched and needs to cut back for a while. If you have an ecosystem of promises, this will at some threshold lead to the next upstream creditor cutting back too until there is a tipping point where the system as a whole has cut back, because we are ALL both creditors and debtors. As part of the system, we all extend and are owed promises.
And this is a GOOD thing. “Normal” systems have to move in both directions. Seasons rise and fall, organisms breathe in AND out, and fortunes wax AND wane. No one likes winter–we would all like endless summer, but that’s not what life is. Compare this to exponential growth, at any %, no matter how small. Clearly NO system, EVER, can expand without contracting, because as you yourself say, they are contained on a finite earth.
The question then is, “how long should we expand in eternal summer?” This is what ever-larger nations, then later Central Banks, attempt to do: keep summer going artificially, against the cycles of reality and physics, breathe only in, never out, until they have 5, 10, 50 winters backlogged, the system cracks, and 50 minor, easily endured downslides occur all at once. …But you see, they occur to our CHILDREN, while we got 50 summers for ourselves, so who gives a f*ck, right? Isn’t that awesome we lived the beautiful life so they could die in a ditch in the third world war? Works for me!
Anyway, point being ONCE YOU TAKE THE SUMMERS, there is, as VonMises says “no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner…” by choice, or later, by force. No means. None. In any of history’s wide examples. So the only thing we can do is to allow the waxing and waning of credit to proceed normally, very moderately and very close to a center point, and never, EVER allow central banks or anyone to expand it unnaturally, for any reason whatsoever. Because there is NO MEANS of avoiding the collapse of a boom. None.
This is essentially what the trouble in Greece, Spain, and worldwide really is. Now clearly we can make things better or worse on ourselves. For one thing, the faster the endangered credit can be wiped out (like the US in 1921) the faster the system can recover. Also, the less the damage is “adjusted” to save the financialists and harm the productive, the workers, the less damage it will do. And perhaps we can just take our hangover like men and not start a world war? That’d be great too. But we’re not doing any of those things. Preventing write-offs, bankruptcies, and protecting the wealthiest, dumbest, most reckless financiers from their own leverage at the expense of workers and taxpayers is making the winter as bad as possible, rewarding the vile, and extending the damage for decades, ruining whole generations of young men and women who die homeless, childless, and in poverty or war. But hey, if they’re not me, who cares, right?
So deflation may not necessarily be a “good” thing, just a winter may not be, but it is a normal thing that MUST happen to avoid the infinite exponential curve. MUST happen. But if we don’t recklessly expand, like we just did, for multiple decades, as we (or you) have, you’d hardly notice, and life would be relatively stable and pleasant, as it generally was under the self-limiting gold standard. Once you create a boom however, there is NO MEANS by which to escape the inevitable collapse. Like a hangover, you can just take it like a man, make the best of it, and not, for example, rape and kill your fellow men because of it. But the rich killing the poor to remain rich is what history shows. Every time. Let’s not go there.
Thoughts?
Thank you for a great, straightforward, cogent article.
In rough terms, “inflation”, or what they call “expansion” under a debt/money model, is simply an increase in the number of promises in circulation. Debt means you promise to deliver something in the future. More debt=more promises.
Deflation, or lack or expansion/actual contraction means the number of promises starts to decline. That’s deleveraging. So…problem? Why not just let them decline? Well, if the number of promises declines, collateral is removed from the system, collateral that backs some multiple of other promises. So those promises disappear. In addition to promises disappearing by being paid–what Abe and Benanke don’t want to allow citizens to do–eventually you have someone who simply defaults and doesn’t pay at all. Then their $200k house, or whatever the collateral is, gets marked to it’s forclosure price, $80k. The $120k loss of collateral value is then multiplied by 30:1 leverage for a theoretical $3,600,000 loss.
This default on promises leads to the next guy owed to default on HIS promises until the number of promises declines to a more realistic level, generally way, way down from the peak. Historically 90% down as measured by most stock declines.
Again, all the “money” is the system is debt, or promises. Which from the state of the energy production, infrastructure, and manufacturing, can NEVER be fulfilled. Or, as Greenspan admitted in 2005, “we may have already committed more fiscal resources to the baby boom generation in its retirement years than our economy has the capacity to deliver,” https://www.nytimes.com/2005/03/03/politics/03deficit.html?pagewanted=print&position=
Conclusion: the promises, this DEBT, can and will not be paid. And because the problem is debt, it cannot be cured by debt, whether deficit spending, “bailouts” (which are usually loans and/or extensions, as per Greece) or otherwise. Because our money IS debt, unbacked fiat worldwide, it cannot be inflated away–or at least under the current system. Nations COULD create a system of firing the central banks, taking over the presses and printing national (not debt-backed) currencies and handing them directly to workers as Wiemar did, but the present system isn’t built that way, and there’s been no movement to change that. That means the level of promises will contract through default, which is “Deflation.” Money supply = Debt supply, and both contract in unison.There is one other option: the system is failing because most collateral is already been financialized and levered into the system. That’s why there’s a world-wide scramble for anything that might be secure collateral. And in a Deflation, “real goods”, that is, raw materials, markets, factories may not retain value, as consumption–therefore demand and sales–are slashed. Prices of iron, copper, oil, malls, may already indicate this. So fleeing into hard assets is a mixed bag.
BUT–if the system wished to–and it may not wish to–it COULD decide that gold, a completely useless object for which there is no end consumption, would be worth multiples of the present price. With its value arbitrarily decided higher by the nations/banks who can find no other imaginary collateral with which to back existing leverage (thus having no other choice to save themselves) then the system is re-collateralized.
How high? History has been through this many times before. 10-20% of the system backed by “real” collateral will do–even as the price of that “real” collateral is totally “un-real”-ly and “arbitrarily” re-set to a number also detached from reality (as per mining costs, for example). I don’t claim to understand it, but historically that’s what humans do. They need collateral, and it’s not like they can just decide OIL will be $3,000/bbl, or wheat is $100/bu, or houses, or 16′ sailboats, or winter hats. They either don’t serve, or would completely dis-order the economy of trade and commerce for real goods. So they choose collateral that no one “uses” or “consumes” and therefore the change in price doesn’t lead to mass deprivation. Then the “price” of the currencies all adjust to compensate, and it’s rough but not fatal. In a messy way, that’s what Roosevelt did by confiscating and repricing gold. Price inflation in the U.S. started the day after. –But then he did wipe out mountains of banks and their liabilities at the same time. https://www.gold-eagle.com/article/puncturing-deflation-myths-part-1-inflation-during-great-depression Gold is, or has historically been the contact point, the doorway, between imaginary “financial” reality of human promises and the world of real goods. Time and again that door is bolted shut by different powers, only to be forced open again to serve its purpose of re-establishing balance between financial and economic reality.
So the debt problem can be re-set several ways. As we hear, the BRICS would like to re-value gold and carry on with having real ecoomies, real trade, and real human progress. The U.S., not so much. But then, since when has any nation or power center ever VOLUNTARILY re-set their economy to give up power? And yet it happens. Over and over again.
I guess we’ll see.
The Silents? They were a minority generation, same as the “X-ers”. That is to say, being a decided minority, they had no political effect. Now it was their good fortune to be born at just the right time, but the real influence was felt from the War Generation and the Boomers. But let’s go on with the premise here. All these generations: War Generation, Silents, and Boomers made a single, unanimous policy choice: to screw the h*** out their kids with debt and social programs. The War Generation signed up to the Ponzi, but at that time it was little more than welfare money enough to keep you off the streets with so few recipients it was easily paid. As time went on though, all three generations kept adding self-benefits and raising drawbridges and moats to those after them, accruing all national GDP to themselves. Measurably so, as statistics easily show. Even now, the only age group to gain jobs or raise income is the 55+ group. Taken from where? Every group below 55, right down to newborns saddled with $1m apiece in new debt—owed to their parents. Good work if you can get it.
Boomers, being late in the chain letter are the first to fall, as the Dow-n-House Ponzi collapsed for them, and being accustomed to endless growth and paper riches spent above their means from the day of their first allowance (also provable in statistics).
But I look at it this way: who left the earth a scorched ruin for their children, so entirely, completely, and unimaginably destroyed that places like Detroit, Flint, or Utica https://gizmodo.com/tracking-detroits-decay-through-google-street-view-1586631393 can only be compared with a nuclear holocaust or post-war Desden? The War Generation? To some extent, yes, but they also created a lot of the former America, as well as pulling back from the brink of madness with various START treaties, negotiations over Iraq I, failed report cards on Iraq II, and so on. The Silents? Yes, they climbed on, but as before, they had so little representation and so little weight that I think you’ll find the majority of Congress and Presidents composed of WarG + Boomers. So who does that leave? Boomers, whose idyllic childhoods are the stuff of “Christmas Story” legends, “Leave it to Beaver”, “Andy and Opie” and other unimaginable realities of a thing called “pleasant”, “order,” and “prosperity” to those of us following after. So if that’s what they inherited, sexism, racism, cold war and all, what did they leave?
A nation with ever-increasing poverty, divorce, rape, child molesting and disappearances, sex slavery, violent crime, environmental and economic devastation, near-total removal of jobs and manufacturing, quasi-fascism of a measurably violent, arbitrary police state, between $15 and $200 Trillion in debt, millions killed in undeclared, unsupported wars, near-total dependence on debt and fraud to have GDP even APPEAR plausible. (perhaps as much as 40% of GDP is mis-measured or simply financial paper-ginning)
And left to their children? Besides growing up in a deadly, impoverished, molesting-ready world of drugs, porn, theft, violence and neglect? No jobs—the young are the least employed of any age group, far beyond the long-term norms. No money: not just for unemployment, but the long-term all-in tax rate, (faux-healthcare, income tax, nuisance fees, business fees in raising prices, fees hidden in rents) student loans, and various grifts and grafts like 0% interest for banks and 19% for credit cards, and houses many times too expensive for incomes. And lies, lies, lies: obeying the social rules, getting a degree in debt-slavery, to rules about how to get a job, all the variations of the “social contract” about what their parents and grandparents said they needed to succeed has been denied them. In surveys, there is a clear response that the young feel they will a) never have a paying job, b) never own a house, and therefore c) never get married or start a family. Ever. The lack of household formation is astounding, and met with indignance: “How dare the young not buy out my house at a 500% gain? Suck it up, Buttercup! I don’t care if you don’t have a job, you whiny slackers.”
Please explain to me how this holocaust will turn out okay for them? Their lives are ALREADY being destroyed, one day, one year, and one city at a time. Even a nuclear exchange with the USSR complete with neutron bombs could not have created the devastation we see today because in a nuclear war, at least we would attempt to restore and rebuild. We have none of this. It’s like the Star Trek episode where the planet walks their own (young) people into the disintegration machines and blows up their own cities because some computer simulation said they should. To save “culture” and all.
Okay, now let’s look at the flip side: if you’re a Boomer or Silent and made your money by being lucky or rather, by tipping the playing field sharply toward yourself and away from everyone else (i.e. your children) what should you do about it? Write an open check against a retirement already fading? Give it back? Join them in poverty? I don’t think so, and not just because they most clearly haven’t cared about anybody but themselves until now. Fact is, redistributing your wealth, whether ill or fair-got, isn’t going to help.
The real solution is to re-level the playing field from here and allow prosperity and balance to restore itself. That is: be moral. Shut down the grift and graft, the theft, near-total absense of law, stop the violence, extortion, and murder of anyone not-me.
But that isn’t really going to happen, because if they wanted it to happen—even a little–it would have already. If they had a lick of morality in the last 30 years, we wouldn’t have got here in the first place. So here’s what’s really going to happen: the frauds will end because that’s what frauds do. When that happens, their illusionary paper wealth they raped their children for will vanish. With two workers per retiree, there will be no Social Security, no redistribution of wealth from the poor to the rich—or at least in that category, not because they won’t do it but because it’s mathematically impossible. Because each child, living in the basement and working at Taco Bell, cannot support their parents in playing golf at their 2nd home for 20 years. But surprisingly and generously, the Millennials will not let them starve either. They will simply have the share in the poverty we all have now that the rest of the nation already experiences with the near-nuclear exchange of economic warfare.
That’s what happens when you throw a 40-year house party until the furniture is burnt and the roof falls in. You end up incapacitated on the floor and eventually your children inherit the dilapidated heap that was once a grand mansion. They build a fire in the corner like wild Indians, and replace the tiny bit of roof they can afford, and catch rabbits on the side–a scene straight out of “Atlas Shrugged”. But no amount of additional fantasy can change that. Once the house, the infrastructure, the nation, with all its wealth and laws, is destroyed, it is. And we all start from here. All that remains is for the paper fantasy to fall so we can share the experience, instead of sentencing one group of people to slavery, and another to indulgence.
Wait–you can’t have it both ways: if the oil price goes UP that’s bad for the economy, but if it goes DOWN, it’s bad for the (Japanese) economy too? Seriously? So all events at all times are bad for the economy and nothing’s good? Then you know you’re reading a doomer site.
High oil prices have a variety of effects, one of which is a “tax” on consumer spending, but also has(had) the effect of sharply increasing demand for US Dollars, and increases price inflation, but not economic motion even measured in faulty dollars, because without higher wages, the money spent on oil is simply borrowed from some other part of the budget. Side-effect of making shale oil appear functional. Emphasis on “appear”.
But low(er) oil prices do have the opposite effect: they would increase other retail spending, in Japan or elsewhere. –Except that consumers have apparently tried to pay off debt instead, which Abe doesn’t want to allow. Why? Because the banks are a cartel, and the “product” of that cartel is debt. If debt declines, or even stalls, they are no longer selling “product.” This is compounded by how each asset is valued in order to become collateral for further borrowing, i.e. “Leverage.” 20:1 leverage gone through several iterations might be 200:1 leverage systemically. Then a 0.5% drop in value of the collateral — that is to say, “deflation”, or “price deflation” — leads to a run on the system and its collapse. I doubt they are blind to this.
This is why asset values cannot fall and debt cannot be reduced. But it’s not a measure of the oil prices: it’s a measure of how any and all inputs to the system are ratcheted into a one-way bet through collateralization and financialization.
Dropping oil prices? Consumers paying debt? It just changes the system: it’s not better or worse. Lower prices always help the consumer–that is to say the little people, the unimportant masses, the ones we don’t care about; while decreasing the wealth of the financialized wealthy. That’s why booms cause income equality and Depressions cure them. Sadly. So obviously the whole system–created by and for the wealthy–is going to fight tooth and nail to defend their wealth rather than let it return to the pockets of the productive, the workers, and cure the mind-bending income disparity. On the downside, unfortunately, because of that leverage and collateralization that sort of “fix” is likely to happen suddenly and disruptively, for the common people as much as anyone.
So short-term it might be “bad”, but long-term it would clear the economy, restore markets, and restore prosperity to the masses.
On the other hand, long-term, what we are doing now is far more acutely “bad”, because it causes a collapsing economy, broken markets, income and power disparity, and therefore poverty, misery, and mass death.
I would argue what we have now is far worse than what we’d have in an honest market, but because it’s slower, we accept worldwide destruction and mass murder. So if low oil prices are “bad” in both conditions, but different timescales, maybe it’s also “good” in both conditions, but different timescales?
But let’s be honest about which is which when we talk about it. A thing and its opposite cannot be the same.
How many decades do we have to see the same trick played before we stop pretending? Pretending “Oh how could they have knowed?” as Raleigh says.
The Euro was simple: they wanted to concentrate and centralize POWER, and saw a nice bite would be Europe. But how to get that more power? Europe was doing pretty good since the war. You need a PREMISE, a plausible idea people can get behind, because sure as heck, they aren’t going to get behind your bare-faced plan of taking their national power and handing to a cabal of unelected bureaucrats. (Not kidding here, the EU is about as far from a democracy as the former Soviet Union was, fake elections, “appointments” and all)
No. So clearly, you need to come up with a way to force the camel’s nose under the tent. A common currency is that way. Then you need bonds. Then, as Armstrong says, if you can’t get the taxation/government/common bond system passed because people are against your power grab, you force it into being in broken form (sans referendums, particularly when all the real referendums are voted down flat), and wait for the inevitable crisis that allows the power grab you wanted all along.
And so we’re here. EU/ECB–disturbingly the same thing–and Draghi start printing money outside mandate to hold the pig together. Then claim power over the U.K. to make their rules and tax them when they fall a little short or are mad. Then establish international bank oversight, as violent extortion over the nations–more than they already claimed over their budgets–the right to dispose their leaders at will (Italy, Greece), already retaining the right to ignore the will of any nation or leader any time, for any reason, and all based on an end-run Treaty, not even a vote? …need I go on?
And this was all just an “ill thought-out accident”? Really? When are we going to stop playing pattycake with these guys that are KILLING? MILLIONS of PEOPLE? Millions in suicide, poverty, crime, and despair? And we’re going to pretend–again and again and again–that it’s an accident nobody saw coming?
Please. We need to call things by their true name and stop pretending if we’re going to get out of this thing with only the few million deaths we’ve already had. Can we start that now?
We certainly seem to have kings enough today, just on private yachts and not thrones.
This why you wouldn’t have a “jubilee,” heavens no! Because the little people owe the big people. The right people are owed and the unimportant people owe them: that won’t change. You think after 200 years banks suddenly forgot all about prudent lending one day in 1996 by pure accident? No. More debt means more sale of the Important People’s product: debt. And like Mexico, when the US Peso goes down all the currency will drop, but all the debt will be revalued. UP. Into the new currency. So you may have a 1/3 decline, another 1/3 decline, then another 1/3 decline a year or two later to finally equalize balance-of-payments, leading to the correct valuation of the country and currency. This is what happened in the Great Depression as well except they somehow “Lost” your savings accounts, but “remembered” all about your mortgage owed. Same basic mechanics.
You borrowed $120k, and still owe it. No harm right, except that the economy’s tight? that’s 3x your average $40k income–you can chart it honestly by measuring number of hours worked. …But not if the debt owed is $120k, but income falls with the devaluation of the US Peso to $20k/year and your $120k remains, that doubles your effective debt. –Measured by the hours of your life.
But it doesn’t have to be that way: they can also unilaterally invent that debt is owed in “New Republic Dollars”, which happen to be worth 2x the old FRN dollars, your income stays at $40k “Green, Domestic Dollars” and the debt rises to $240k. …The same, and all perfectly fair, you see. Because “The Market” or something, la-dee-da.
Worldwide, who owes whom? They sit down–as nations have done many times (the Washington Agreement comes to mind)–and decide that the US$ will drop 30%, China rises 40%, Japan -10%, Russia +60%, Italy -30%, and so on. Then peg their currencies to make it so, in the same simularicum of free market currency trading we have today. Or we could just go to a real standard, a gold/oil/trade backed Yuan/Ruble/BRIC, and let the currencies adjust the same numbers but without the bother of market-rigging by Central Banks.
Point is, this IS a debt jubilee. For some. It stops the fiat exponential increase to infinity. It’s a debt/currency reset. Either at the negotiating table (most likely), or by the market itself (unlikely). But one thing you can sure of is that it will NOT be a debt forgiveness by the strong to help the weak. Quite the opposite. And whoever is defaulted on will be out for blood…if only they retain enough power to seek for it.
It’s a currency reset. White papers existed in 1970, before the US even left the gold standard, that say they knew how long fiat systems last, what they would do before, during, and after the fiat system, and why in the last years of the system-to-scuttle, it made sense to steal everything that wasn’t tied down. It was all going to collapse anyway; it must, on the 40-year mark: so why wouldn’t you?
See the recent interview by Greg Hunter (ex-mainstream media) with Paul Craig Roberts. https://usawatchdog.com/ Roberts has not only been a vocal critic of how America has gotten fatally off-track, but was also Editor of the Washington Post, and in this interview outlines how even back in his day (no later than the 80’s) it was already assumed that U.S. reporters were CIA assets. In addition, his posture to Mr. hunter was, “You didn’t know?” So that puts Hunter and the population, what, 40 years behind the belief curve on this?
Dmitry Orlov had an insightful essay this week on what he calls the “senility of the ruling elite.” https://cluborlov.blogspot.com/2014/10/how-to-start-war-and-lose-empire.html
This parallels Ilargi on how, regardless of what happens, to the West, it’s as if it never happened. Regardless of how failed a policy or idea might be, it is never changed. Regardless of the facts established as consensus on, say, MH17 or Syrian gas, or bailout stimulus, there is no adjustment to reality. Perhaps they believe, as Karl Rove said, “We’re an empire now, and we create reality.” https://en.wikipedia.org/wiki/Reality-based_community
Or as King John famously said (the one from Robin Hood and the Magna Carta) “The Law is in my mouth.” Or put another way, they actually believe: “Whatever I just thought, it must be true!”And so they continue to live and see the world as if it is 1930. Or 1960. Or whatever. The same way the senile believe the persons before them are now their long-dead brother, young husband, or child from 50 years before. Every day is the same day. The world never changes. Behavior never changes. There is a near-total disconnect from reality, broken only by confusion, anger, and false feelings of betrayal.
These are also the symptoms or definition of a Psychotic.
Either way, it is not promising for clear, accurate, rapid response to the challenges of our time.
The whole point has been missed. How can anyone be lonely at all with a general population density of the “lonely” areas, such as Great Britain?
It’s because when you go out the door, you don’t find people who “correlate” with you, think what you think, believe what you believe, who are your kin and kind, and pull in the same direction you do. And why? Because, as per T.V., they are all carefully trained not to be their natural selves, to be relaxed and have natural responses to natural events, to be “human”. So when everyone around you is inhuman, no longer your emotional species, how could one be anything but lonely?
But this is simply an act of very effective social engineering. Or advertising, if you prefer. Otherwise, wouldn’t you and your mates just go down to the bowling green for a game, or play trumps at the dining table, or volunteer at the local charity? You have that power, and it’s your club–you can do whatever you like to identify yourself and collect with the like-minded, which Britain, to say nothing of the world, must be chock-full of.
So…what are we really saying here? We’re too feckless, inept, frightened, and incapable to go out our front doors and down the street to do something we find even slightly interesting?
And let’s say that is so: how long do you think society itself can persist under such conditions? It’s a self-curing problem. Either they reform or the Mongol hordes come in and fix it for you.
“Antarctic Sea Ice Growth Baffles Scientists” https://www.nbcnews.com/science/environment/antarctic-sea-ice-growth-baffles-scientists-n223796
Highest since 1979. This is what happens when you start from your conclusion instead of from the facts. Okay, to be fair, science actually starts from a “Hypothesis” against which are run experiments which prove or disprove that hypothesis. That is more or less the definition of “science.” However, one is not “baffled” when evidence does not support a hypothesis; when that occurs, such a hypothesis is said to be “disproven” or “unsupported”, and science goes back to asking another question that can be empirically tested.
However, in that virtually every climate model has failed to predict the evidence which, after 10-20 years we have collected to compare it to, it’s fairly clear that at the very least the climatological models are total crap–which is no surprise, since they fail to properly account for the largest component of warming, cooling, and weather–water vapor and cloud formation–because that process remains too complex to capture properly.
But this isn’t even a climate model. This is straightforward, measurable, empirical evidence. Which remains wrong. How discredited does a theory have to be before we can begin to ask unpopular questions about it again? And if we can’t ask questions about it, is what we’re doing even “science”? Or is what we’re measuring merely “popular opinion”?
Anyone else hear about Crucell’s Ebola vaccine from back in 2006? It’s a company Bill Gates was involved in. So despite the news, apparently THEY think there’s a vaccine or they wouldn’t have patented it with Phase I clinical trials. What a profit-maker there, huh?
At the same time, doesn’t it seem like the people the US have brought back and given the “special treatment” seem to have all recovered? So does this mean we have a cure, either in trial or in total? Or is it not as dangerous as they claim, or…what?
Reports were also that in Dallas, vomit was cleaned off the street, ambulance, etc with no protection as no one was informed. Where are these people, and did they contract it? (n.b. we probably wouldn’t know yet) If not, interesting vector that it a) infects some in whole-body suits and b) doesn’t infect others who are violently exposed. Just watching. Interesting questions.
The U.S. will never default on bonds? Hahahahahahahahaha.
They most certain WILL default on their bonds, and their entire currency system, because, mathematically, the MUST default. Not only can it not be repaid in fact, but a debt-based fiat money system requires debt-money/money-debt to ever increase at an ever-increasing rate. That is to say, doubling the supply while the time period is halved, halved, and halved again. Ever hear about doubling rice on a chessboard or a drop of water in a football stadium? How high is the water 1 minute before you drown? Chart shows money supply doubling every 10 years, then 5, then 2-1/2, then 1 year…and here we are now. This was known in 1971 when they got off the vestiges of the gold standard, and knew that in 40-odd years the system would need to be re-invented again, hopefully to inescapable world-wide digital currency. The Bancor, as Keynes called it, the IMF’s SDR as they call it now. But…best laid plans of mice and all that: it may not go off 100% now.
What isn’t in dispute is that, they will have to default on the bonds by re-setting, re-inventing the currency and the entire monetary system because even the dumbest people will not have confidence in a system that doubles the monetary base every 6 hours, which is mathematically not that far away. So you close up that game of Monopoly, put the money away and put all little houses and hotels back in the bank, and start a new game, same as the old one.
What I agree with Raul is that the U.S. will be the LAST currency to go under. Money withdraws to the core, but the U.S. is not the world, nor can it stand against 150 now-raided, bankrupt, desperate, angry BRICS nations, anymore than Napoleon or Augustus could. The U.S. cannot be the world economy. When the world goes down, the U.S. eventually will too, and then even the US$ will fail and start over in the new game. Of Monopoly, aptly named. But it was all known and planned long ago.
Where are you going with this? It is true that virtually any change humans make have bad effects on the environment, even if it’s no more than just existing by multiplying, eating things, and taking up space. Yet as a part of Nature — not a-part from it — we must and have the right all living creatures have to exist and fill our place in the environment.
Understanding the broad brush of what you’re saying, I guess I’m asking what your solutions are. Or if, as suggested, there ARE no solutions and the human race will rise and crash like yeast in a vat, to whom are you issuing a warning?
The purpose of yelling “Fire!” when there is a fire in a theatre is to encourage the patrons to exit safely. If we cannot exit safely, or you can’t or won’t inform them of the exits, shouldn’t you either quietly escape alone or let the patrons enjoy the movie and die unexpectedly in peace?
Yelling “Fire!” without offering visible exits is really no help at all.
It’s always illuminating to see WHICH atrocity we care about at any given time. The flavor du jour is ISIS, of course, whereas what happens in Africa is never important enough to bother with–unless like last year in Sudan, oil is found there and China is edging in on it. Basically, if psychopaths EVER claim to care about ANY human deaths, you have to ask yourself why this one, this time, and not the ones they themselves wantonly cause. (2,400 dead by drone, including over 200 children, anyone? More killed by cancer from airport x-rays than were killed in 9-11? 100,000 or more to be killed by health effects of Corexit in the Gulf? Deaths in an abandoned Detroit from crime and poverty?)
So you can be sure, if deaths are in the news, and we are “shocked” and “appalled”, that it’s been carefully placed for geopolitical staging and advantage. We’re not here for your health. We don’t care about your life. Only directing your focus to OUR ends, our wealth and power.
I sympathize with your position on Conservatives, but I disagree that’s what it’s about.
In essence, Conservatives believe that people should take care of each other on a private, local, individual level, but don’t. Progressives believe people should be taken care of at the Public, National, Group level, but this has never once been successful and in fact leads to great evil.
So both both are the politics of utter failure, just in different ways.
Do Conservatives believe in growth? Depends on the definition. Clearly, going back through most permutations of the word, the answer is yes, but slower. Their attitude is that the way things are is good and was developed for a reason, so we should be careful about changing it. The Progressive view is that the way things are is bad and should be changed immediately, sometimes even if we have to burn everything down. But as per growth, apparently even Conservatives believe in it, since according to the general view, they are the industrialists, and therefore make and force enormous changes on society and have been the definition of “Growth” (i.e. Industrial Revolution) for 300 years. I’m not as familiar with the Progressive line going way back, but generally growth collapses with them for when they focus on social justice and social changes, there are internal wars, and capital flees uncertainty by hiding or moving abroad. The French Revolution, USSR, or modern France come to mind, as Capital and “Growth” now flees to Singapore and Hong Kong.
So in some ways, does this make them the opposite of their intent? By this theory, is it true that Conservatives have pulled the canal-ropes that changed the world unrecognizably (i.e. AntiConservatively), while under Progressives things stagnate in fact extending the injustices they hoped to remedy? I don’t know. Also you have to contrast social Conservatism with economic Conservatism–they flop back and forth over time. In any case, the present Environmental movement is entirely merged with the Progressives, and they are clearly anti-growth, by EIEO green-energy fact, if not by direct intent.
This may be a good or a bad thing, depending how you feel about the need to limit growth, energy use, and prepare for future energy limits or transformations, but in any case, that’s how it stands around the world at present: Energy companies, Consumer corporations, etc, all the Status Quo, seem very oriented to the Conservative view and are 100% Pro-Growth –limitless, exponential growth– while the Progressives are about further regulation, oversight, Green Energy, and cutting back sharply, even dangerously on growth, as with the promotion of CO2 taxes, emissions limits, laws steering society, and so on.
It’s an interesting subject, but I disagree. In addition, just as Republicans were responsible for Emancipation and Civil Rights (now forgot and role-reversed) it was actually Conservatives and their industry that created the unparalleled wealth of the modern world. …By disrupting society, by creating factories, by putting people out of jobs, because the lowered prices and increased access to goods ultimately overwhelmed the lower wages and social repression they were trying to enforce. Ironically, they defeat themselves. The opposite happens with Progressives, for as they increase power in order to suppress industry, goods get more expensive, jobs are cut, the economy stagnates (as in modern France) and the concentrated central power of government actually enhances the opportunities for insiders to widen the divide between rich and poor, grabbing the now expansive power of government as the tool.
But then, human history is rife with irony.
We might do better to note that a major difference between Capitalism and Communism is that neither scales properly. That is to say, on the Macro level, Communism doesn’t work; while at the Micro/personal level, Capitalism doesn’t work. That is to say: there is nothing more Communistic than the behavior of a family between husbands and wives, parents and children. Everyone shares no matter whose income it is, and that is the only thing that ever worked. At the same time, such sharing between groups of men numbering 300 and above, and especially Nations, is a complete failure and only voluntary trade works, because the members involved can’t be vetted beforehand or punished afterward for crooked dealing like a family, churchmember, or villager can.
This is very similar to the divide between Conservatives and Progressives. Progressives want the world to be a family, which it isn’t; while Conservatives treat family and community to behave as coldly as a business contract, which it can’t.
Just some thoughts from the Doctor.
@Nooboob there’s so many things here I wouldn’t know where to start.
“humans and our livestock occupy 97% of all land-air vertebrate biomass”
Does this seem seat-of-the-pants probable to you? Have you ever been north of Toronto, or Moscow, on that swath up to the Arctic circle? Whether this is calculated by square miles or by mammalian biomass, I sorely doubt this can be true. Here in the U.S., there may be a plurality of acres in agricultural production, but I’m sure somewhere else in that list they discuss the scandal of ag land subsidies for acres kept idle. In addition, most of the acres in agricultural use are ALSO occupied by deer, rabbits, groundhogs, feral pigs, and other vertebrates–one does not displace the other. Much. Deep virgin forests are in fact TERRIBLE for vertibrates. Granted, I’m only familiar with North America, but I’d suspect something similar is true in Africa, Siberia, and the Argentine plain. Seat of the pants: No. Way.
“Ocean acidification doubles by 2050.” Fun with statistics. That is, starting from a low level a double may be meaningless. Because if it starts at the acidity of, say vinegar, I sorely doubt that it will be the acidity of battery acid in 40 years. Can you credit this idea, or do the stats really suggest a 0.5% acidity increase that’s made to sound big? This has NEVER happened since the violent beginning, and simply ignores any and all known or possible self-regulating mechanisms, which are very numerous.
“50% of Human Sperm Counts gone since 1950.” You mean 50% are completely sterile or average counts are down 50%? And which locations? Because according to the argument I’m presuming you’re making with the big list, this is one of those self-regulating feedback mechanisms whereby the system is correcting itself and does not straight-line-to-infinity, which in galactic history has never happened anywhere. All things run in cycles, or spirals, and have a predictable affinity to self-correction and self-order.
► 2 million children were killed in the Congo for our conflict minerals.
► 1 million children were killed in Iraq for our cheap oil.According to your argument again, this is a GOOD thing. If humans are causing damage, and their population should or will drop, how can these deaths not be positive? The only other alternative is that they should all live and consume resources. Again, you’re remarking on the self-regulating mechanism and calling it bad here, while implying it’s good in the other list items. Which is it?
“We are on track to lock in 6°C earth temp rise in just 13 years.”
I take this one up all the time but after 15 years of low or no additional increases, what evidence can you present that after say, 15 years of single-digit gains, a 15 year hiatus of no increases, that we will very suddenly jump to a very, VERY high temperature? You have a mechanism? Sunspots? Flares? Because in that timeframe it would have to be an excessively visible, very-short-term single event. Even Man-made CO2 won’t do it in that timeframe. Especially with Peak Oil a fact since 2005.
But let’s presume that might be the case: so what? Plants prosper most at 1000ppm CO2 and higher world temperatures. Earth’s largest landmass is stranded in the arctic rim and would presumably increase arable land. This might be inconvenient for some, but prosper others, like most events do. Unless the only good outcome is that climate/temperature remain exactly as it was in 1995 for the remainder of the planet’s life. Why should it? It’s been both far warmer and far cooler for 10,000 years at a time and nothing especially bad happened. Things changed. We stop glacial and climactic change now? How? We’re still fleas on the back of the elephant, nowhere near up to the task of stopping all climate on earth.
“30,000 birds per year will die” from concentrated solar plants
Seat of the pants, what size pile of birds is that? 4x4x4cm x 30,000/yr = 1,920,000cc/yr Sounds like you’ve created a massive resource for valuable compost collection. Not only to point out it’s probably 1/10th if not 1/100th of this number, it also shows little understanding of ecosystem science. Within parameters, populations are mostly dependent on food source, and the population will perpetually recover as long as food exists. So, yes, tragedy for those birds, but population would be largely unaffected. Cross-check? Cars devastate insect populations yet there remain no lack of bugs even near highway corridors. Same for deer, only less so. I see the same error for fresh water numbers as water is treated as “consumed” but doesn’t vanish from the system when used, just moves through the hydro-cycle.
In any case, what’s your solution if this is a problem? No green energy? Nuclear energy? Coal energy? Caves? Not everything can be a problem, all the time, at once. Instead, all things have their plusses and minuses. I’m in favor of distributed energy production and less consumption, but citing bad science won’t encourage this.
…And so on through the list. Don’t believe everything you read on the internet. Especially from partisan sources like industry or environmentalists.
There may not be enough resources for everyone to live like Al Gore, but there is probably still enough for everyone to live like a Zen monk, or a Native American traditionalist. Can we start there and skip the scare stuff? It’s much more useful and gives everyone who adopts it a better life experience.
