Damn the Brexit……..

27 06 2016

The consternation caused by the so called Brexit is truly astonishing. I’ve been watching the debate over whether Britain should stay or leave with disdain really, the entire show is going down the plug hole one way or another regardless. Though now it appears that Brexit may speed the process up. The Matrix has displayed amazing amounts of financial resilience with its never ending machinations, so who knows, they may still invent a way to avoid the plug hole for a few more months.

The more interesting aspect of this is how absolutely nobody in the mainstream media ‘gets it’. Much of the alternative media does though… Raul Ilargi from the Automatic Earth writes “Cameron, Osborne, Corbyn, they have all failed to connect with their people. This is not some recent development. Nor is it a British phenomenon, support for traditional parties is crumbling away everywhere in the western world.”

While the MSM concentrates on racism as a central reason for Brexit, exploding world population and overshoot don’t get a look in. Personally, I think that deep down, people everywhere are finally starting to feel that ‘something’s wrong’, and that certainly ‘the system is no longer working’, and that quite likely it’s our masters’ fault.  And not too soon either…..

John Pilger writes:

The majority vote by Britons to leave the European Union was an act of raw democracy. Millions of ordinary people refused to be bullied, intimidated and dismissed with open contempt by their presumed betters in the major parties, the leaders of the business and banking oligarchy and the media.

This was, in great part, a vote by those angered and demoralised by the sheer arrogance of the apologists for the “remain” campaign and the dismemberment of a socially just civil life in Britain. The last bastion of the historic reforms of 1945, the National Health Service, has been so subverted by Tory and Labour-supported privateers it is fighting for its life.

I do of course wonder if Pilger himself understands that as we enter the world of Limits to Growth, it becomes inevitable that the resources needed to feed the growth monster that supports the NHS in the UK (and Medicare here) are running out, and that the inevitable ‘end of abundance’ horizon is fast approaching. Nor that there are no solutions to fixing this problem, we will  sooner or later be on our own, and anyone not prepared for this is in for a very rude shock… which is of course most people.

Here in Australia, with less than one week to go before we elect our next ‘government’, the ruling party appears quite worried about minor parties and independents winning seats, starting a scare campaign reasoning that such voting would cause chaos without them in power….. as if chaos wasn’t already here! I voted in Tasmania before coming up to Queensland, and put the majors last in the house of reps, and put no numbers at all next to their candidates at all on the Senate ballot paper….. and boy did it feel good.  I wonder how many people will wake up to the fact that by numbering twelve boxes below the line they can actually get rid of the Laborals and retake power of their country, even if at this stage they still don’t know how to regain control over their destiny.

Pilger then further writes:

Immigration was exploited in the campaign with consummate cynicism, not only by populist politicians from the lunar right, but by Labour politicians drawing on their own venerable tradition of promoting and nurturing racism, a symptom of corruption not at the bottom but at the top. The reason millions of refugees have fled the Middle East – first Iraq, now Syria – are the invasions and imperial mayhem of Britain, the United States, France, the European Union and NATO. Before that, there was the willful destruction of Yugoslavia. Before that, there was the theft of Palestine and the imposition of Israel.

The pith helmets may have long gone, but the blood has never dried. A nineteenth century contempt for countries and peoples, depending on their degree of colonial usefulness, remains a centrepiece of modern “globalisation”, with its perverse socialism for the rich and capitalism for the poor: its freedom for capital and denial of freedom to labour; its perfidious politicians and politicised civil servants.

He is absolutely correct of course, but still no mention of Limits to Growth, how climate change and peak oil totally stuffed Syria, and will soon cause Egypt to join the melée.

Raul gets it – as you’d expect:

The overwhelming underlying principle that we see at work here is that centralization is dead, because the economy has perished. Or at least the growth of the economy has, which is the same in a system that relies on perpetual growth to ‘function’.

But that is something we can be sure no politician or bureaucrat or economist is willing to acknowledge. They’re all going to continue to claim that their specific theories and plans are capable of regenerating the growth the system depends on. Only to see them fail.

It’s high time for something completely different, because we’re in a dead end street. If the Brexit vote shows us one thing, it’s that. But that is not what people -wish to- see.

Unfortunately, the kinds of wholesale changes needed now hardly ever take place in a peaceful manner. I guess that’s my main preoccupation right now.

Has the revolution begun in Britain? Now that would be ironic, beating the French to it…. of course the UK government could easily ignore the result, as the Greeks did, but then again, as Raul said, that would end in tears and possibly blood. Does the future offer us any other outcomes than blood and tears?

Pass the Hopium……..

brexit

Brexit….  a still life!

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Global Economic Red Alert revisited

9 07 2015

Hot on the heels of publishing Global Economic Red Alert, this pops up over on ZeroHedge, an article from Phoenix Capital Research which gets a guernsey in this morning’s post too….

Greece is Just the First of MANY Countries That Will Be Going Belly-Up

Red-Alert-Button-460x306ALL of the so called, “economic recovery” that began in 2009 has been based on the Central Banks’ abilities to rein in the collapse.

The first round of interventions (2007-early 2009) was performed in the name of saving the system. The second round (2010-2012) was done because it was generally believed that the first round hadn’t completed the task of getting the world back to recovery.

However, from 2012 onward, everything changed. At that point the Central Banks went “all in” on the Keynesian lunacy that they’d been employing since 2008. We no longer had QE plans with definitive deadlines. Instead phrases like “open-ended” and doing “whatever it takes” began to emanate from Central Bankers’ mouths.

However, the insanity was in fact greater than this. It is one thing to bluff your way through the weakest recovery in 80+ years with empty promises; but it’s another thing entirely to roll the dice on your entire country’s solvency just to see what happens.

In 2013, the Bank of Japan launched a single QE program equal to 25% of Japan’s GDP. This was unheard of in the history of the world. Never before had a country spent so much money relative to its size so rapidly… and with so little results: a few quarters of increased economic growth while household spending collapsed and misery rose alongside inflation.

This was the beginning of the end. Japan nearly broke its bond market launching this program (the circuit breakers tripped multiple times in that first week). However it wasn’t until late 2014 that things truly became completely and utterly broken.

We are, of course, referring to the Bank of Japan’s decision to increase its already far too big QE program, not because doing so would benefit the country, but because it would bring economists’ forecast inline with governor Kuroda’s intended inflation numbers.

This was the “Rubicon” moment: the instant at which Central Banks gave up pretending that their actions or policies were aimed at anything resembling public good or stability. It was now about forcing reality to match Central Bankers’ theories and forecasts. If reality didn’t react as intended, it wasn’t because the theories were misguided… it was because Central Bankers simply hadn’t left the paperweight on the “print” button long enough.

At this point the current financial system was irrevocably broken. We simply had yet to feel it.

That is, until, January 2015, when the Swiss National Bank lost control, breaking a promise, and a currency peg, losing an amount of money equal to somewhere between 10% and 15% of Swiss GDP in a single day, and showing, once and for all, that there are problems so big that even the ability to print money can’t fix them.

This process is now accelerating in Europe where a country that comprises less than 2% of the EU’s total GDP (Greece) has managed to be FIVE-YEAR problem that cannot be resolved through more debt or money printing.

The ECB and EU have tried everything to kick the Greek “can” down the road. History has shown us time and again that Central Banks first attempt to deal with a debt problem by printing money… but eventually the debt default/haircut has to occur.

This process has now begun in Greece. The fact the markets are imploding should give you an idea of how fragile the system is. One can only imagine what will happen when a larger player such as Spain or France or even Japan goes belly up.

The Big Crisis, the one in which entire countries go bust, has begun. It will not unfold in a matter of weeks; these sorts of things take months to complete. But it has begun.





“It couldn’t happen here”

6 07 2015

This fantastic article explaining the Greek Tragedy unfolding today comes from Tim Morgan’s terrific surplus energy economics blog.  All followers of DTM should follow this one too….

 GREECE AND THE WHITE SWANS

It has become customary for investors and commentators to worry about unforeseeable “black swan events”. They might be better advised to note the number of perfectly normal, eminently visible white swans  that are circling over us right now. The idea that what has happened in Greece is some kind of freak event that “couldn’t happen here” is simply nonsense.

It could happen here, and, indeed, it probably will.

In a 1968 episode of the radio comedy Round the Horne, a misunderstanding takes place between the Emperor Nero (Kenneth Williams) and a messenger (Hugh Paddick). The messenger arrives with urgent news of Greece – but it turns out to be grease, and it has all been stolen.

It’s a terrible pun, of course, but in today’s context it’s also a terrible fact. Pretty much however you look at it, the wealth and prosperity of Greece have gone. Apportioning blame for this state of affairs, though not wholly pointless, is less important than looking at what might happen next, and at where it might happen.

In my previous article, I looked at whether the Greek crisis was the forerunner of a broader crash, which I’m convinced that it is. Here I take this theme somewhat further, looking at the dynamics of collapse, and at what warning signs we might be able to detect ahead of the event.

Though (at time of writing) we still await the outcome of the referendum called by Alexis Tsipras, it is clear that the choice before the electorate is between bad and worse. Though the most recent offer from creditors is no longer on the table, it’s pretty clear that it will be (in some shape or form) if the Greeks vote to succumb. If they vote no, however, Greece is likely to be a failed state, certainly within weeks and possibly within days. What does this really mean?

An economy in ruins

In the absence of emergency liquidity from the European Central Bank (ECB), the Greek banking system has all but ceased to function. Individuals can draw up to €60 per day from their accounts, but even this may stop within days, as there is reckoned to be only €500m of liquidity in the system (which is less than €50 per Greek citizen). Once this liquidity runs out, no-one will have any money to spend. In reality, that point has now been reached.

Already, the government cannot pay pensions or public sector salaries, but the biggest problem of the lot is that businesses cannot pay their suppliers. This means that the supply chain has snapped.

Once that happens, an economy is dead in the water.

Meanwhile, latest research from the International Monetary Fund (IMF) shows that, over the coming three years, Greece will need further loans of €50bn, in addition to the currently-suspended €7.2bn final tranche of the current bailout programme. Even this estimate looks optimistic, as it assumes Greek compliance with the agreement with its creditors, only modest shrinkage in real GDP, and the availability of funds at extremely favourable rates of interest. As a creditor, of course, the IMF might be scare-mongering, but I doubt it – the calculations used in the report look pretty solid.

Please note – especially when looking at other potential crises – is that what really matters isn’t aggregate debt (of €330bn) but the smaller, but critical, €57bn liquidity imperative.

The choice facing Greece is thus between immediate economic collapse or a long period convalescing in what amounts to a secure hospital, with bars on the doors and guards at the gate.

As of the most recent (2012) census, the Greek population was 10.8 million, so further loans of €57bn equate to almost €5,300 for each man, woman and child in the country, just to keep things ticking over. For comparison, per capita GDP is of the order of €15,000. As a rough equivalent, we are talking about Britain’s 63 million citizens needing to borrow about £560bn just to keep going until the end of 2018.

As we shall see, that figure is well worth bearing in mind.

The anatomy of collapse

The immediate issue, however, is that Greece is at the point of collapse.
You might think that the problem is simply a financial one, and that the “real economy” of goods and services should continue to function even if Greece has debts that it cannot repay.

The reality, however, is that the entire economy is already ceasing to function. With Greek banks effectively bust, money cannot circulate in the economy – workers and pensioners cannot be paid, and neither can suppliers, so there will be nothing in the shops even if you happen to have stored some Euro banknotes in a safe or a mattress.

(In parenthesis, I am amused by the British authorities’ brilliant advice to those holidaying in Greece, which is that everything should be fine if they take enough cash with them. I will be interested to see how far that cash gets them when there is nothing in the shops, no food or staff in restaurants, bars or hotels, and no petrol in buses or taxis. But I digress).

In his book The Five Stages of Collapse, Dmitri Orlov explains that finance will collapse first because it is a house of cards predicated on the assumption of perpetual growth. He also demonstrates, mathematically, that the cost of debt service will always outgrow the economy – something that we can all observe by looking at the ratios of debt to GDP across the world over the last three decades.

What happens next, Orlov explains, is that the collapse of finance is followed by the collapse of commerce. What Greece is showing us, however, is that these collapses are virtually simultaneous. If the banking system ceases to function, so do all commercial transactions, because the supply chain is severed in real time. How, without cash, can Greek businesses pay their staff, pay their suppliers or receive payment from customers? How, without tax income, can the state pay salaries or pensions? Would you, as a supplier, provide goods to a customer who you know has no access to money? Would you supply drugs to a hospital which cannot pay you for them? And, as a foreign supplier, would you export food or energy to a bankrupt customer?

Three sources of false comfort

Of course, there are three reflections that might comfort outsiders that what has happened in Greece “cannot happen here”.

First, there is the patronising belief that the Greeks have somehow behaved extremely stupidly.

Second, there is the observation that Greek debt, at some €330bn, is pretty small stuff in the global scale of things.

Third, of course, we can comfort ourselves that a Eurozone with a GDP of about €15 trillion ought to be able to cope with debt of this magnitude.

If you did draw comfort from these observations, you would be wrong on all three counts.

To be sure, Greeks and their governments have behaved fecklessly, but are we really much different? The Greeks may have been poor men living like rich ones, but walk down any seemingly-prosperous street in Britain or America and ask yourself quite how much debt is represented by the smart houses and expensive cars that you see there. The days when possessions indicated affluence are long gone, and the far greater likelihood today is that possessions indicate indebtedness. Look, next, at how much debt the British and American governments have, how much they are still adding to their debt piles, and how much they have taken on in off-balance-sheet obligations such as public sector pension promises.

If you tot that lot up, and, even before you include unprecedented levels of household debt, you will realise quite how hypocritical it is when Britons or Americans accuse Greeks of fecklessness. In Britain, for example, I confidently expect the Chancellor to find more money for the National Health Service (NHS) whilst further cutting already-inadequate defence expenditures at the outset of what the Prime Minister himself has called an “existential” war.

Feckless is as feckless does.

The second source of comfort – which is the modest scale of Greek debt – is also gravely misplaced. As Zac Tate has explained in an excellent article at CapX, the global banking system is owed $17 by China for each $1 owed by Greece, largely because Chinese household debt has soared from 60% to 200% of GDP in just five years. That, as Tate explains, is a vastly larger debt increase than the subprime madness that crippled the American financial system and triggered the 2008 banking crisis.

Within the Chinese debt mountain, it seems that somewhere between $2 and $3 trillion is already mired in “problem loans”, even before excess debt starts to exert its inevitable downwards pressure on broader debt viability. Again, the scale of British and American debt should reinforce what the Chinese numbers are telling us about the true scale of the problem.

The third comforting illusion – which is that Greece can probably be rescued by someone – is true, but only of Greece. The Eurozone or the IMF might be able to bail out Greece, but no institution exists capable of rescuing, say, America, Britain or China. For the world’s really big debt junkies, there will be no Seventh Cavalry riding to the rescue, not even with General Custer in charge.

The caravan of collapse moves on

As Richard Vague has pointed out, the ramping up of debt in China parallels the situation in Japan in 1991 and the United States in 2007. Far from being an unpredictable, “black swan” event, the crashes that followed in Japan and America were eminently predictable, flagged well in advance (for anyone willing to see the warning signals) in the rapid rise of household debt.

Earlier, I commented that the Greek scale of illiquidity – the need to find €57bn just to keep the system ticking over – equated to about £560bn in the context of the British population and GDP. Actually, this sum is exceeded by property debt downside in the UK. So, in terms of where such a cataclysmic loss could actually show up, we surely need look no further than the bloated housing market, where a one-third fall in paper values would easily wipe that much and more off the balance sheets of mortgage lenders.

Housing values have been ramped up by the stimulus of ZIRP (zero interest rate policy) which was itself taken on to cope with the previous asset bubble crisis. Therefore, even the most modest rise in interest rates could torpedo property values and, by setting off a full-blown crisis in the banking system, could cripple the economy, causing liquidity to dry up almost overnight.

That such a thing could happen is itself made more likely by ZIRP because, whilst making reckless property borrowing affordable, ZIRP has also ushered in the contradiction of a supposedly “capitalist” economic system operating without returns on capital.

So we need to stop worrying about “black swans”, taking note instead of the white ones.

We also need to stop thinking that Greece is some kind of “strange bird” experiencing something that “couldn’t happen here”.

Rather, Greece is the canary in the coal mine.





Is there a solar revolution? Time for data, not adjectives

26 06 2015

twitter

Robert Wilson

Reblogged from Robert Wilson’s site, Carbon Counter

In reality solar power’s heavily subsidized growth is nowhere close to being the revolutionary force some of its advocates claim it already is. It is also not growing exponentially, as anyone could see if they checked the meaning of the term exponential growth and actual statistics for year on year growth rates.

Globally, solar grew by 93% in 2011, 60% in 2012, 39% in 2013, and 38% in 2014. Meanwhile, in the countries with the most developed solar sectors, absolute growth has in fact slowed.

Germany added 7.5 and 7.6 GW of new capacity in 2011 and 2012 respectively. In 2013 and 2014 the figures had gone down to 3.3 and 1.9 GW. The same goes for Italy, where new capacity additions went from 9.3 to 0.38 GW between 2011 and 2014.

In fact, the current growth of European solar is not even vaguely exponential. Instead, growth is declining overall. In 2011, 22.4 GW was added throughout Europe; in 2012 17.4 GW was added, in 2013 10.4 GW was added, and in 2014 7.2 GW was added. Absolute growth of solar capacity in Europe is now one third of what it what it was in 2011.

Anyone confidently predicting continued exponential growth of solar will have a hard time accounting for the actual decline in growth in Europe.

Growth of solar can be put in further perspective by comparing the annual growth (in TWh) with the total electricity consumption of a country. Let’s imagine that in a single year a country went from 0 to 1% of electricity generation being from solar panels. That would mean it would take roughly 100 years to get to 100% solar.

Obvious caveat: we don’t know what to do when the sun goes down, but you get the thrust.

So, how quickly is solar growing globally? Below is a chart showing the top 25 countries in terms of solar growth last year. Growth is measured by comparing absolute growth of solar (in TWh) with total electricity generation (in TWh).

Top20growth_elec

Number 1 is Greece. Now, exactly why heavily indebted Greece is number one in the growth of a heavily subsidized source of energy generation can be debated, but the fact remains.

Most importantly, no major economy is above 1%. At current rates of solar additions they are all many many decades away from solar power taking over. And remember: many of these countries, e.g. Germany, are now seeing reduced rates of absolute solar additions.

Growth in solar energy in China now attracts a lot of optimistic headlines. However, the increase in solar energy last year represented only 0.2% of total electricity generation. In other words, if China kept increasing solar’s share at that rate it would take half a millennium to get to 100% solar electricity. Keep this in mind when you see misguided headlines about solar power having a major influence on Chinese air pollution.

Focusing on electricity generation alone of course is problematic. The underlying reason to switch to solar power is climate change. And the majority of fossil fuels are not used for generating electricity, but for heating, flying, shipping, making steel, and so on. What we really should look at is total energy consumption.

The growth of solar is much slower in terms of total primary energy consumption. Growth in solar in 2015 was less than 0.5% of total primary energy consumption in all major economies.

Top20growth_primThese numbers should make it clear how far we are away from a solar revolution. The figure for China and the US is 0.1%. If China and the US added solar at a rate ten times greater than they are today, then, it would take them a century to get to 100% solar.

In Germany, where a supposed solar revolution has occurred, the figure was 0.29%. 100% solar is a mere three centuries away in that high latitude, cloudy country……. where the sun still goes down.





George Monbiot on Money

19 02 2015

George-Monbiot-LUnlike the vast majority of journalists, George Monbiot does his own research rather than repeat parrot fashion what others in his trade throw at the sheeples as ‘news’.  It’s a pity he hasn’t included resource depletion in the pot as a problem for growth and therefore debt servicing, but there are enough new concepts in this to make it a most worthwhile read.  Lifted from the Guardian.

 

A maverick currency scheme from the 1930s could save the Greek economy

Compare the terms demanded of the Greek government to those offered to the banks. Eurozone ministers now insist upon unconditional surrender: a national abasement that makes a mockery of democracy. But when the banks were bailed out, governments magicked up the necessary money almost unconditionally. They shyly requested a few token reforms, then looked away when the bankers disregarded them.

The German government, now crushing the life out of southern Europe, merely tickled its own banks. As the New York Times reported, though the corrupt German banking system “required a bailout bigger than the one American banks received”, “there is little appetite for change in Germany because the banking system is so deeply intertwined with its politics, serving as a rich source of patronage and financing for local projects”.

When the Greeks complain that they have been reduced to colonial subjects, they are right, but the colonial masters are not the northern members of the eurozone. They are the private banks. The governments that seem determined to destroy a sovereign state for its impudence are merely the intermediaries of power.

None of this is to deny the corruption and fiscal promiscuity of previous Greek administrations. But while the banks have got away with far worse, the bullies of the eurozone insist on extracting every last drop of blood from people who had no role in their governments’ deceptions.

Greece is stuffed: or so almost everyone asserts. Perhaps. Or perhaps there are possibilities we have scarcely begun to examine. I should warn you that no one in their right mind would take financial advice from me.  (Or, for that matter, from most financial advisers) I seek only to suggest that there may be some possibilities of hope among the ruins.

One of these radical ideas was proposed a few months ago by Martin Wolf in the Financial Times. He suggests stripping private banks of their remarkable power to create money out of thin air. Simply by issuing credit, they spawn between 95% and 97% of the money supply. If the state were to assert a monopoly on money creation, governments could increase their supply without increasing debt. Seigniorage (the difference between the cost of producing money and its value) would accrue to the state, adding billions of pounds to national coffers. The banks would be reduced to the servants, not the masters, of the economy.

An entirely different approach is proposed by Ann Pettifor, in Just Money. She argues that governments have failed to understand what money is. It should not be seen as a commodity, she says, but as a social relationship based on trust. Unusually for a radical critic of finance, she sees the creation of money by private banks as “a great civilisational advance”, freeing nations from the usurers who once monopolised and restricted wealth.

The supply of money is, in effect, unlimited: as long as there is sufficient productive activity to absorb it there is no obvious restraint on the amount of money that can be issued. So when governments and central bankers tell you that the money has run out, Pettifor argues, they are either deceiving us or deceiving themselves. What holds back economic activity is an unnecessary and artificial restriction of the medium of exchange.

Banking’s great civilisational advance has been all but destroyed through deregulation, whose result is a new system of usury, speculation and exploitation. Private banks borrow cheap and lend dear, forcing us to work ever longer hours and to inflict ever more damage on the natural world to service our debts. Pettifor suggests that governments should reassert control over interest rates at every level of lending.

But perhaps the biggest transformation could happen at the local level. Greece already has set up some local currencies that have kept money circulating in several towns and cities as it cannot be siphoned away. (There are similar systems in Britain, such as the Bristol Pound). But strangely they do not make use of the thrilling, transformative system that almost saved Europe from fascism; the currency developed by the economist Silvio Gesell called stamp scrip. It is explained in Bernard Lietaer’s magnificent book The Future of Money.

In its original form, stamp scrip was a piece of paper on which a number of boxes were printed. The note would lose its validity unless a stamp costing 1% of its value was stuck in one of the boxes every month. In other words, the currency lost value over time, so there was no incentive to hoard it. Stamp scrip projects took off across Germany and Austria after national currencies collapsed in the early 1930s. In 1932, for example, the Austrian town of Wörgl was almost broke, unable to finance public works or to support its destitute population, until the mayor heard of Gesell’s proposal.

This little pot of money kept circulating, enabling Wörgl to repave the streets, rebuild the water system

He put up the town’s tiny remaining fund as collateral against the same value of stamp scrip, and used it to pay for a building project. The workers then passed on the currency as quickly as they could. Like the magic pudding, this little pot of money kept circulating, enabling Wörgl to repave the streets, rebuild the water system, construct houses, a bridge and even a ski jump. In the 13 months of the experiment, the 5,500 scrip schillings in circulation were spent 416 times, creating between 12 and 14 times as much employment as the standard currency would have done. Unemployment vanished, and the stamp fees paid for a soup kitchen feeding 220 families.

The governments of Germany and Austria, profoundly threatened by the success of these projects, shut them down and employment collapsed once more. When the US economist Irving Fisher examined these experiments he concluded that “the correct application of stamp scrip would solve the depression crisis in the US in three weeks!”. Roosevelt’s government, aware that such currencies could invoke a massive loss of federal power, promptly banned it.

Could these ideas be useful to Greece? Could they be of relevance in other parts of Europe? Even perhaps in Scotland, where the currency issue was unimaginatively fudged before the referendum? I don’t know. But if Greece leaves the eurozone, it could open up a world of possibility to which other nations have closed their minds.

Twitter: @georgemonbiot. A fully referenced version of this article can be found at Monbiot.com





Solidarity, not Austerity

27 01 2015

https://damnthematrix.files.wordpress.com/2015/01/91395-tae2b25402betr.png?w=199&h=149

Raul and Nicole

I suppose it’s fair to assume that most of my readers already follow Nicole Foss’ old website, the Automatic Earth, which is now largely operated by as I can’t recall when was the last time Nicole wrote anything there, busy as she is speaking all over the place and moving to NZ etc….  If you’ve already read this, my apologies….. but Ilargi has written some sublime posts on the unfolding European catastrophe of late, and now that SYRIZA has in fact been elected, this gem had to be reproduced, because I see the current revolution in Greece as the very beginning of the end for the oligarchs, who apparently are even running scared about their future now!  Enjoy……

In what universe is it a good thing to have over half of the young people in entire countries without work, without prospects, without a future? And then when they stand up and complain, threaten them with worse? How can that possibly be the best we can do? And how much worse would you like to make it? If a flood of suicides and miscarriages, plummeting birth rates and doctors turning tricks is not bad enough yet, what would be?

If you live in Germany or Finland, and it were indeed true that maintaining your present lifestyle depends on squeezing the population of Greece into utter misery, what would your response be? F##k ‘em? You know what, even if that were so, your nations have entered into a union with Greece (and Spain, and Portugal et al), and that means you can’t only reap the riches on your side and leave them with the bitter fruit. That would make that union pointless, even toxic. You understand that, right?

Greece is still an utterly corrupt country. Brussels knows this, but it has kept supporting a government that supports the corrupt elite, tried to steer the Greeks away from voting SYRIZA. Why? How much does Brussels like corrupt elites, exactly? The EU, and its richer member nations, want Greece to cut even more, given the suicides, miscarriages, plummeting birth rates and doctors turning tricks. How blind is that? Again, how much worse does it have to get?

Does the EU have any moral values at all? And if not, why are you, if you live in the EU, part of it? Because you don’t have any, either? And if you do, where’s your voice? There are people suffering and dying who are part of a union that you are part of. That makes you an accomplice. You can’t hide from that just because your media choose to ignore your reality from you.

And it doesn’t stop there. It’s not just a lack of morals. The powers that be within the EU deliberately unleashed shock therapy on Greece – helped along by Goldman Sachs and the IMF, granted -. All supra-national organizations tend towards zero moral values. It’s inherent in their structures. We have NATO, IMF, World Bank, EU, and there’s many more. It’s about the lack of accountability, and the attraction that very lack has for certain characters. Flies and honey.

So that’s where I would tend to differ from people like Alexis Tsipras and Yanis Varoufakis, the man seen as SYRIZA’s new finance minister, and also the man who last night very graciously, in the midst of what must have been a wild festive night in Athens, responded to my congratulations email, saying he knows what Dr Evil Brussels is capable of. I don’t see trying to appease Brussels as a successful long term move, and I think Athens should simply say thanks, but no, thanks. But I’m a writer in a glass tower, and they have to face the music, I know.

But let’s get a proper perspective on this. And for that, first let’s get back to Steve Keen (you now he’s a personal friend of The Automatic Earth). Here’s what I think is important. His piece last week lays the foundation for SYRIZA’s negotiations with the EU better than anything could. Steve blames the EU outright for the situation Greece is in. Let’s see them break down the case he makes. And then talk.

It’s All The Greeks’ Fault

Politically paralyzed Washington talked austerity, but never actually imposed it. So who was more successful: the deliberate, policy-driven EU attempt to reduce government debt, or the “muddle through” USA? [..]muddle through was a hands-down winner: the USA’s government debt to GDP ratio has stabilized at 90% of GDP, while Spain’s has sailed past 100%. The USA’s macroeconomic performance has also been far better than Spain’s under the EU’s policy of austerity.

[..] simply on the data, the prima facie case is that all of Spain’s problems – and by inference, most of Greece’s – are due to austerity, rather than Spain’s (or Greece’s) own failings. On the data alone, the EU should “Cry Uncle”, concede Greece’s point, stop imposing austerity, and talk debt-writeoffs – especially since the Greeks can argue that at least part of its excessive public debt ratio is due to the failure of the EU’s austerity policies to reduce it.

[..] why did austerity in Europe fail to reduce the government debt ratio, while muddle-through has stabilized it in the USA? .. the key factor that I consider and mainstream economists ignore—the level and rate of change of private debt. The first clue this gives us is that the EU’s pre-crisis poster-boy, Spain, had the greatest growth in private debt of the three—far exceeding the USA’s. Its peak debt level was also much higher—225% of GDP in mid-2010 versus 170% of GDP for the USA in 2009

[..] the factor that Greece and Spain have in common is that the private sector is reducing its debt level drastically – in Spain’s case by over 20% per year. The USA, on the other hand, ended its private sector deleveraging way back in 2012. Today, Americans are increasing their private debt levels at a rate of about 5% of GDP per year—well below the peak levels prior to the crisis, but roughly in line with the rate of growth of nominal GDP.

[..] the conclusion is that Greece’s crisis is the EU’s fault, and the EU should “pay” via the debt write-offs that Syriza wants – and then some.

That’s not the attitude Berlin and Brussels go into the talks with Tsipras and Varoufakis with. They instead claim Greece owes them €240 billion, and nobody ever talks about what EU crap cost the PIIGS. But Steve is not a push-over. He made Paul Krugman look like a little girl a few years ago, when the latter chose to volunteer, and attack Steve on the issue, that – in a few words – banks have no role in credit creation.

Back to Yanis. The right wing Daily Telegraph, of all places, ran a piece today just about fully – and somewhat strangely – endorsing our left wing Greek economist. Ain’t life a party?

Yanis Varoufakis: Greece’s Future Finance Minister Is No Extremist

Syriza, a hard left party, that outrightly rejects EU-imposed austerity, has given Greek politics its greatest electoral shake-up in at least 40 years.

Hold, wait, don’t let’s ignore that 40 years ago is when Greece ended a military dictatorship. Which had been endorsed by, you know, NATO, US … So “greatest electoral shake-up” is a bit of a stretch. To say the least. There was nothing electoral about Greece pre-1975.

You might expect the frontrunner for the role of finance minister to be a radical zealot, who could throw Greece into the fire He is not. Yanis Varoufakis, the man tipped to be at the core of whatever coalition Syriza forges, is obviously a man of the left. Yet through his career, he has drawn on some of the most passionate advocates of free markets. While consulting at computer games company Valve, Mr Varoufakis cited nobel-prize winner Friedrich Hayek and classical liberal Adam Smith, in order to bring capitalism to places it had never touched.

[..] while Greece’s future minister is a fan of markets in many contexts, it is apparent that he remains a leftist, and one committed to the euro project. Speaking to the BBC on Monday, he said that it would “take an eight or nine year old” to understand the constraints which had bound Greece up since it “tragically” went bankrupt in 2010. “Europe in its infinite wisdom decided to deal with this bankruptcy by loading the largest loan in human history on the weakest of shoulders, the Greek taxpayer,” he said.

“What we’ve been having ever since is a kind of fiscal waterboarding that have turned this nation into a debt colony,” he added. Greece’s public debt to GDP now stands at an eye watering 175%, largely the result of output having fallen off a cliff in the past few years. Stringent austerity measures have not helped, but instead likely contributed.

That last line, from a right wing paper? That’s the same thing Steve Keen said. Even the Telegraph says Brussels is to blame.

It will likely be Mr Varoufakis’ job to make the best of an impossible situation. The first thing he will seek to tackle is Greece’s humanitarian crisis. “It is preposterous that in 2015 we have people that had jobs, and homes, and some of them had shops until a couple of years ago, that are now sleeping rough”, he told Channel 4. The party may now go after multinationals and wealthy individuals that it believes do not pay their way.

[..]The single currency project has fallen under heavy criticism. The economies that formed it were poorly harmonised, and no amount of cobbling together could make the end result appear coherent. Michael Cembalest, of JP Morgan, calculated in 2012 that a union made up of all countries beginning with the letter “M” would have been more workable. The same would be true of all former countries of the Ottoman Empire circa 1800, or of a reconstituted Union of Soviet Socialist Republics, he found.

That’s just brilliant, great comparisons. Got to love that. And again, it reinforces my idea that the EU should simply be demolished, and Greece should not try and stay within eurozone parameters. It may look useful now, but down the line the euro has no future. There’s too much debt to go around. But for SYRIZA, I know, that is not the most practical stance to take right now. The demise of the euro will come in and of itself, and their immediate attention needs to go to Greece, not to some toxic politics game. Good on ‘em. But the fact remains. The euro’s done. And SYRIZA, whether it likes it or not, is very much an early warning sign of that.

[..] A disorderly break up would almost certainly result in a merciless devaluation of whatever currency Greece launched, and in turn a default on debt obligations. The country would likely be locked out of the capital markets, unable to raise new funds. As an economy, Greece has only just begun to see output growth return. GDP still remains more than 26% below the country’s pre-crisis peak. A fresh default is not the lifeline that Greece needs.

Instead, it will be up to a Syriza-led government to negotiate some sort of debt relief, whether that be in the form of a restructuring, a deal to provide leeway on repayment timings, or all out forgiveness. It will be up to Mr Varoufakis – if he is selected as finance minister – and newly sworn in Prime Minister Alex Tspiras to ensure that this can be achieved without Greece getting pushed out of the currency bloc in the process.

And whaddaya know, Steve Keen finishes it off too. Complete with history lessons, a take-and-shake down of failed economic policies, and a condemnation of the neo-liberal politics that wrecked Greek society so much they voted SYRIZA. It’s not rocket politics…

Dawn Of A New Politics In Europe?

About 40 years ago, one of Maggie Thatcher’s chief advisors remarked that he wouldn’t be satisfied when the Conservative Party was in government: he would only be happy when there were two conservative parties vying for office. He got his wish of course. The UK Labour Party of the 1950s that espoused socialism gave way to Tony Blair’s New Labour, and the same shift occurred worldwide, as justified disillusionment about socialism as it was actually practised—as opposed to the fantasies about socialism dreamed up by 19th century revolutionaries—set in.

Parties to the left of the political centre—the Democrats in the USA, Labour in the UK, even the Socialist Party that currently governs France—followed essentially the same economic theories and policies as their conservative rivals.

Differences in economic policy, which were once sharp Left-anti-market/Right-pro-market divides, became shades of grey on the pro-market side. Both sides of politics accepted the empirical fact that market systems worked better than state-run systems. The differences came down to assertions over who was better at conducting a pro-market economic agenda, plus disputes over the extent of the government’s role in the cases where a market failure could be identified.

So how do we interpret the success of Syriza in the Greek elections on Sunday, when this avowedly anti-austerity, left-wing party toppled the left-Neoliberal Pasok and right-Neoliberal New Democracy parties that, between them, had ruled Greece for the previous 4 decades? Is it a return to the pro-market/anti-market divides of the 1950s? No—or rather, it doesn’t have to be.

It can instead be a realisation that, though an actual market economy is indeed superior to an actual centrally planned one, the model of the market that both sides of politics accepted was wrong. That model—known as Neoliberalism in political circles, and Neoclassical Economics in the economic ones in which I move—exalts capitalism for a range of characteristics it doesn’t actually have, while ignoring characteristics that it does have which are the real sources of both capitalism’s vitality and its problems.

Capitalism’s paramount virtues, as espoused by the Neoliberal model of capitalism, are stability and efficiency. But ironically, the real virtue of capitalism is its creative instability—and that necessarily involves waste rather than efficiency. This creative instability is the real reason it defeated socialism, while simultaneously one of the key reasons socialism failed was because of its emphasis upon stability and efficiency.

[..] real-world capitalism trounced real-world socialism because of its real-world strength—the creative instability of the market that means to survive, firms must innovate—and not because of the Neoliberal model that politicians of both the Left and the Right fell for after the collapse of socialism.

Neoliberalism prospered in politics for the next 40 years, not because of what it got right about the economy (which is very little), but because of what it ignored—the capacity of the finance sector to blow a bubble that expanded for almost 40 years, until it burst in 2007. The Neoliberal model’s emphasis on making the government sector as small as possible could work while an expanding finance sector generated the money needed to fuel economic prosperity. When that bubble burst, leaving a huge overhang of private debt in its wake, Neoliberalism led not to prosperity but to a second Great Depression.

The Greeks rejected that false model of capitalism on Sunday—not capitalism itself. The new Syriza-led Government will have to contend with countries where politicians are still beholden to that false model, which will make their task more difficult than it is already. But Syriza’s victory may show that the days of Neoliberalism are numbered. Until Sunday, any party espousing anything other than Neoliberalism as its core economic policy could be slaughtered in campaigning by pointing out that its policies were rejected by economic authorities like the IMF and the OECD.

Syriza’s opponents did precisely that in Greece—and Syriza’s lead over them increased. This is the real takeaway from the Greek elections: a new politics that supports capitalism but rejects Neoliberalism is possible.

All Europeans, and Americans too, must now support SYRIZA. It’s not only the only hope for Greece, it is that for the entire EU. SYRIZA breaks the mold. Greeks themselves would be terribly stupid to start taking their money out of their accounts and precipitating bank runs. That’s what the EU wants you to do, create mayhem and discredit the younger generation that took over this weekend.

It’s going to be a bitter fight. The entrenched powers, guaranteed, won’t give up without bloodshed. SYRIZA stands for defeating a model, not just a government. Most of Europe today is in the hands of technocrats and their ilk, it’s all technocrats and their little helpers. And it’s no just that, it’s that the neo-liberal Brussels crowd used Athens as a test case, in the exact same way Milton Friedman and his Chicago School used the likes of Videla and Pinochet to make their point, and tens of thousands got murdered in the process.

It’s important that we all, European or not, grasp how lacking in morality the entire system prevalent in the west, including the EU, has become. This shows in East Ukraine, where sheer propaganda has shaped opinions for at least a full year now. It’s not about what is real, it’s about what ‘leaders’ would like you to think and believe. And this same immorality has conquered Greece too; there may be no guns, but there are plenty victims.

The EU is a disgrace, a predatory beast unleashed upon all corners of Europe that resist central control and, well, debt slavery really, if you live on the wrong side of the tracks.

SYRIZA may be the last chance Europe has to right its wrongs, before fighting in the streets becomes an everyday reality. Before we get there, and I don’t know that we can prevent it, hear Steve Keen: it’s not the Greeks that screwed up, it’s the EU. But they would never ever admit to that.





ADVICE FOR SUSTAINABILITY ACTIVISTS IN 2015

12 01 2015

Below is Geoff Chia’s article “advice for sustainability activists in 2015”. Feel free to forward this email to everyone ad infinitum. Maybe not a lot new from this source, but it sure is more informative than mainstream rubbish.

After writing this article, Geoffrey discovered this interview with Thomas Lewis, a journalist with many decades experience investigating and reporting environmental issues, who came to the same conclusion:
https://soundcloud.com/doomstead-diner/collapse-cafe-thomas-lewis

Here is a podcast by financial guru Richard Martin http://thewakeupcall.podbean.com/e/spreading-fear-or-providing-information-122214/

He sounds the alarm about the fraudulent and precarious nature of the global financial system. In particular he explains the bogus nature of the shale oil derivatives and associated junk bonds (collapse of which may well trigger the next, more catastrophic GFC). He is an expert in financial matters but unfortunately does not understand peak oil.

You may need to read the following a few times to fully comprehend the various machinations taking place today:

Current low oil prices are a result of demand destruction (slowing of growth in China + recession/depression everywhere else in the world), combined with the Saudis insanely continuing to pump their oil at full throttle (they are well down the slope past peak oil, but they still have the largest reserves in the world). Such Saudi behaviour defies logic in a rational market, but the political motives are clear (which the Saudis devised in conjunction with John Kerry in September last year) http://www.counterpunch.org/2014/12/16/the-oil-coup/

Predatory low oil pricing is now decimating the Iranian and Russian economies* and could even cause them to crash, an outcome greatly desired by the US who so far have been singularly impotent in forcing either regime to toe the US line. As for the Sunni Saudis, they regard Shia Iran as their heretical enemy and Russia as a godless Satan. This strategy, if drawn out, will also cause collateral damage to the US shale oil industry, however that was doomed anyway from the start. http://www.theguardian.com/business/economics-blog/2014/nov/09/us-iran-russia-oil-prices-shale In the short term, Bakken/Eagle Ford will continue pumping like crazy, even if no profit is made, as they are riding on the momentum from old investments (which will never see a long term return**). They need to maintain the illusion of ongoing viability, despite their lousy EROEI, to prop up their share prices and recruit more suckers investors. Furthermore Obama, as directed by his masters (the usual wunch of bankers) has now removed legal protection of public savings from oil derivative fraud (akin to the US government previously repealing Glass-Steagall) which means that if the oil derivatives collapse, the “too big to fail” banks will once again be bailed out by public funds obtained from taxes on the dying middle class and more quantitative easing (AKA printing funny money). Savings accounts will not be safe. Anyone else, everywhere else, who has been stupid enough to invest in the US sharemarket (perhaps your superannuation fund managers?) can kiss their investments goodbye.

What would you do if you were Russian or Iranian? Grit your teeth and ride things out till the oil price inevitably rises again and you can once more make a profit, then trade your oil in currency other than the US dollar (or use barter arrangements eg X barrels of oil for Y number of Chinese solar PV panels). Elimination of the greenback petrodollar is guaranteed to cause the collapse of the US economy. If Iran and Russia are however blocked in their attempts to recover from their own economic collapse and escape the petrodollar, they can always resort to the “continuation of policy by other means” to paraphrase von Clausewitz. If my country is imploding and the Saudis are to blame, I may as well lob a missile into Riyadh, as I have nothing to lose. And so the great game continues.

Meanwhile the dumb sheeple are blissfully pumping cheap oil at the bowsers to fill their monstrous SUVs but have no clue as to what is going on. What was Mr T’s famous catchphrase again?

Brand New Year, same old dirty tricks. Hope you have a happy one anyway.

*Iranian and Russian breakeven oil production costs are substantially higher than Saudi costs. Low oil prices cause the Iran and Russia economies to bleed money. Saudis can even price their oil below Saudi production costs for a while, due to their huge financial reserves.

**big players such as Shell and Sumitomo were well aware of the bogus accounting of shale oil returns, which is why they pulled out. Other players were captured by hubris and irrational exuberance akin to tulip mania. Money flooded into shale oil junk bonds as a result of the US Reserve Bank’s ZIRP, but the chickens will be coming to home to roost soon.

ADVICE FOR SUSTAINABILITY ACTIVISTS IN 2015

RATIONALE

  1. First and foremost, it is essential to understand and accept that the massive die-off of the majority of humanity (indeed, the majority of all species) is guaranteed and inevitable over the next few decades, no matter what you or anyone else does, even if all anthropogenic greenhouse gas emissions were to cease immediately. Get over it. Stop wasting your precious time and energy trying to influence National1 or International policies. Even if you succeed in turning society around right now, we are well past the point that it will make any difference whatsoever. Runaway destruction of our ecosystems has spiralled out of control and we have already fallen off the cliff. In 2012, I myself abandoned the conceit and delusion that I could “save the world”, when the scientific evidence for the irreversible decompensation of our global ecosphere became overwhelming and indisputable. The mainstream media paint a false picture to the sheeple to keep them subdued and distracted, to avoid provoking mass panic. This article is meant for intelligent people capable of objective, reality-based thinking. The only thing you can do now that will make any difference, is that which lies within your own individual control. It is to determine your own personal fate.

  2. A small proportion of the population will be able to survive, even thrive, during and after the coming collapse. Who will they be? Those who prepare now and plan ahead will have the best chance. You must therefore seize your opportunity while there is still time, before the complete meltdown of this fraudulently propped-up global financial scam wipes out your bank balance, before economic collapse triggers the eruption of extremists in your neighbourhood (just as the Great Depression led to Nazism, the Greek implosion to Golden Dawn and the Syrian collapse to ISIS) and before all your options are lost. It is imperative you discuss with and advise people about the measures needed now, so that the tiny handful who are receptive to this message can mitigate against future hardships and horrors. If you fail to take action now and remain inert and paralysed like a stunned mullet, you are passively submitting to the slings and arrows of outrageous fortune and will very likely die horribly.

  3. It is not selfish to try to save yourself and your loved ones, while the rest of humanity perish. There is nothing noble about you going down in flames alongside the clueless sheeple and those denialists who reviled you in the past for being “alarmist”. Indeed it will be stupid and pointless for you to join them. They had their chance, refused to listen and will reap what they sowed. The people we should mourn are those who have historically contributed little to this global catastrophe, but who will suffer the most eg subsistence farmers in Bangladesh or Africa.

  4. The actions you must take to survive the great unravelling of industrial civilisation actually correspond exactly with the ethical actions you should take anyway to set a good example to others. The best way to convince others is not by words, but by deeds. To serve as a role model, to practice what you preach. There is no point campaigning to shut down coal fired power stations unless you first show others how they can live well without using coal fired power. Your actions will consist of drastically reducing your ecological footprint, liberating yourself from a corrupt, rapacious and destructive capitalist system and pursuing a meaningful and joyful life in a cooperative community. Talk less and do more.

  5. Do not get bogged down by the proponents of near term human extinction. They are a nihilistic cult with nothing to offer but inertia, hopelessness, misery and despair, despite their attempts to put a positive spin on suicide. Even if NTHE ultimately does occur, it still remains eminently worthwhile at this time for you to aim for the best quality, longest duration lifespan you can possibly achieve. For the patient with terminal cancer, the ethical physician must endeavour to minimise their suffering and maximise the quality and duration of their remaining life. As long as you are not in excruciating pain or in unremitting distress, your survival instinct will dictate that you keep on keeping on. Humanity’s best strategy to avoid extinction is not by attempting to preserve the cities nor prolong industrial civilisation (which is precisely what is destroying our living planet) but by establishing a multitude of self sufficient off-grid communities all around the world. All it takes to avoid NTHE is for just one community to succeed in the long term. By saving yourself you could well be saving humanity as a species.

ACTIONS YOU NEED TO TAKE NOW (IF NOT YESTERDAY) :

  1. Try to expand your social network. Seek out like minded individuals you can trust, who are interested in pursuing an ethical sustainable lifestyle.
  2. Withdraw your money from the Ponzi scheme known as the Sharemarket. Get rid of debt. Convert your cyberwealth into assets of real world value. Lack of finances is not necessarily an impediment to escaping the corrupt mainstream establishment. Practical knowledge, experience and abilities (carpentry, metalwork, plumbing, electrical, agricultural skills etc) will be in great demand, however simply possessing good common sense, physical health and a willingness to learn and contribute are the most important assets, which you can offer to homestead planners who will be keen to snap you up. The most precious commodities of the future will not be gold, silver or diamonds (which the wise will regard with disdain) but the qualities of trustworthiness, reliability and diligence. These are the riches of the future which will bind individuals and communities together.

  3. Purchase suitable land in a remote2 location with reliable fresh water supplies, as little affected by the future projections of climate change as possible, on which to establish your permaculture homestead.

  4. Construct one or more large lockup sheds (with attached large rainwater tanks), in which you can store agricultural tools, fertiliser, water purifying equipment, emergency food supplies and other essential startup items. One or more containers placed there will also be useful, if you can arrange that. When you ultimately empty out your large shed of its contents, it can be used as multipurpose building eg workshop, community hall etc.

  5. It may be necessary to erect a permaculture enclosure to protect your crops from being consumed by the local wildlife.

  6. Participants must construct their dwellings. These must be designed to be off-grid ie. completely independent of centrally controlled electrical, water and sewage utilities. Time, money and ethical considerations may preclude the construction of conventional concrete and steel buildings. Restrictive and backward codes of the local council may prevent you from building cheap, innovative dwellings such as Earthships (which are labour intensive and take a long time to build anyway). One way to bypass these obstacles is to construct tiny houses on wheels3. They cost less than 20% of a standard house, can be built to passive solar principles (and incorporate the essential wood stove/heater) and can provide all your usual creature comforts and amenities (even a home movie theatre) albeit in a smaller space. Furthermore they can be custom built by you right now, right where you live, then towed to your homestead later. Timing of the move is crucial and must obviously be done before the collapse of the current infrastructure leads to fuel scarcity and blockade of the highways. If time becomes very short, you can purchase a standard caravan immediately, although they are generally designed to be plugged into the grid and will not be ideal to live in long term (although much better than a tent).

  7. Security issues for your community may be the most fraught and difficult to work out. In the USA where guns proliferate, paranoia leads to the accumulation of weapons and fearful continuous surveillance. My advice to Americans is to move to Alaska, Washington State or Oregon. Even better if you can, is to emigrate to NZ, Canada or southern Chile (the latter only if you are a fluent Spanish speaker) which probably has the best long term prospects of all. In Oz, I personally favour remoteness, obscurity and good relations with your neighbours as the best means of protection4. Dogs on your property may help, but avoid aggressive breeds which may be a danger to children.

  8. The above steps will not guarantee you a good outcome (nothing can) but will dramatically increase your chances of achieving a good outcome. At the very least, engaging in hopeful activity in the company of other good people will shield you from despair. Even if things don’t ultimately work out, at least you will go down fighting and in control of your own destiny, rather than be a passive lamb to the slaughter. Apart from good planning, the main factors which will determine whether your community succeeds or fails in the long term will be the quality of your participants5, your framework of governance6 and a good deal of luck.

Geoffrey Chia, January 2015

Footnotes:

  1. Unless you live in NZ, which may be the only country in the world with any hope of saving the majority of its population. This is based on its favourable location and soils, low population density, high level of renewable energy infrastructure including electric railways and my belief (although I could be mistaken) that the majority of Kiwis are not certifiably insane (unlike the rest of the world where the inmates have taken over the asylum).

  2. Well away from large cities which will be the “killing fields of the future”. Small towns in agricultural areas may potentially be viable.

  3. Lara Nobel, a graduate architect now completing a building qualification, will be presenting this topic at the Queensland Skeptics meeting in Brisbane in March 2015. There is a wealth of information about tiny houses on the web.

  4. In the future time of petroleum scarcity, the “marauding hordes” will not be able to invade you en masse if your homestead is more than one fuel tank away from a major city and they do not know your location. Good neighbours can provide advance notice if random dodgy strangers are seen making their way on foot through the countryside. As survivors, they will be resourceful. If they also turn out to be decent and hardworking, let them share in your homestead chores with a view to eventually joining up.

  5. Every member must contribute. Psychopaths must be expelled. People steeped in non-evidence based bullshit (eg belief in homeopathy or that the MMR vaccine causes autism) must be excluded, because their forcefully held nonsensical and harmful ideologies will obstruct sensible decision making initiatives. People steeped in superstition eg belief in God, gods or ghosts must be excluded, because their delusions will distort rational thinking of impressionable young people and may pose a future risk of turning your community into a cult. The reason why this global human experiment is failing is because of idiocracy, ie. rule by idiots, who must be excluded from your community. The only hope for humanity is for sapient people to survive and populate future generations.

  6. The basic principle being that decisions must be made on the basis of evidence, reason and fairness to confer the greatest amount of good to the greatest number of people in your community on a long term basis.

Geoffrey Chia is a Cardiologist/Physician based in Brisbane, Australia, who convened the group “Doctors and Scientists for Sustainability and Social Justice” from 2006 to 2013