More gnashing of teeth

7 02 2017

The Über-Lie

By Richard Heinberg, Post Carbon Institute

heinbergNevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration…It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

This is an excellent article from Richard Heinberg, the writer who sent me on my current life voyage all those years ago. Hot on the heels of my attempt yesterday of explaining where global politics are heading, Richard (whom I met years ago and even had a meal with…) does a better job than I could ever possibly muster.  Enjoy……

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Our new American president is famous for spinning whoppers. Falsehoods, fabrications, distortions, deceptions—they’re all in a day’s work. The result is an increasingly adversarial relationship between the administration and the press, which may in fact be the point of the exercise: as conservative commentators Scott McKay suggests in The American Spectator, “The hacks covering Trump are as lazy as they are partisan, so feeding them . . . manufactured controversies over [the size of] inaugural crowds is a guaranteed way of keeping them occupied while things of real substance are done.”

But are some matters of real substance (such as last week’s ban on entry by residents of seven Muslim-dominated nations) themselves being used to hide even deeper and more significant shifts in power and governance? Steve “I want to bring everything crashing down” Bannon, who has proclaimed himself an enemy of Washington’s political class, is a member of a small cabal (also including Trump, Stephen Miller, Reince Priebus, and Jared Kushner) that appears to be consolidating nearly complete federal governmental power, drafting executive orders, and formulating political strategy—all without paper trail or oversight of any kind. The more outrage and confusion they create, the more effective is their smokescreen for the dismantling of governmental norms and institutions.

There’s no point downplaying the seriousness of what is up. Some commentators are describing it as a coup d’etat in progress; there is definitely the potential for blood in the streets at some point.

Nevertheless, even as political events spiral toward (perhaps intended) chaos, I wish once again, as I’ve done countless times before, to point to a lie even bigger than the ones being served up by the new administration—one that predates the new presidency, but whose deconstruction is essential for understanding the dawning Trumpocene era. I’m referring to a lie that is leading us toward not just political violence but, potentially, much worse. It is an untruth that’s both durable and bipartisan; one that the business community, nearly all professional economists, and politicians around the globe reiterate ceaselessly. It is the lie that human society can continue growing its population and consumption levels indefinitely on our finite planet, and never suffer consequences.

Yes, this lie has been debunked periodically, starting decades ago. A discussion about planetary limits erupted into prominence in the 1970s and faded, yet has never really gone away. But now those limits are becoming less and less theoretical, more and more real. I would argue that the emergence of the Trump administration is a symptom of that shift from forecast to actuality.

Consider population. There were one billion of us on Planet Earth in 1800. Now there are 7.5 billion, all needing jobs, housing, food, and clothing. From time immemorial there were natural population checks—disease and famine. Bad things. But during the last century or so we defeated those population checks. Famines became rare and lots of diseases can now be cured. Modern agriculture grows food in astounding quantities. That’s all good (for people anyway—for ecosystems, not so much). But the result is that human population has grown with unprecedented speed.

Some say this is not a problem, because the rate of population growth is slowing: that rate was two percent per year in the 1960s; now it’s one percent. Yet because one percent of 7.5 billion is more than two percent of 3 billion (which was the world population in 1960), the actual number of people we’re now adding annually is the highest ever: over eighty million—the equivalent of Tokyo, New York, Mexico City, and London added together. Much of that population growth is occurring in countries that are already having a hard time taking care of their people. The result? Failed states, political unrest, and rivers of refugees.

Per capita consumption of just about everything also grew during past decades, and political and economic systems came to depend upon economic growth to provide returns on investments, expanding tax revenues, and positive poll numbers for politicians. Nearly all of that consumption growth depended on fossil fuels to provide energy for raw materials extraction, manufacturing, and transport. But fossil fuels are finite and by now we’ve used the best of them. We are not making the transition to alternative energy sources fast enough to avert crisis (if it is even possible for alternative energy sources to maintain current levels of production and transport). At the same time, we have depleted other essential resources, including topsoil, forests, minerals, and fish. As we extract and use resources, we create pollution—including greenhouse gasses, which cause climate change.

Depletion and pollution eventually act as a brake on further economic growth even in the wealthiest nations. Then, as the engine of the economy slows, workers find their incomes leveling off and declining—a phenomenon also related to the globalization of production, which elites have pursued in order to maximize profits.

Declining wages have resulted in the upwelling of anti-immigrant and anti-globalization sentiments among a large swath of the American populace, and those sentiments have in turn served up Donald Trump. Here we are. It’s perfectly understandable that people are angry and want change. Why not vote for a vain huckster who promises to “Make America Great Again”? However, unless we deal with deeper biophysical problems (population, consumption, depletion, and pollution), as well as the policies that elites have used to forestall the effects of economic contraction for themselves (globalization, financialization, automation, a massive increase in debt, and a resulting spike in economic inequality), America certainly won’t be “great again”; instead, we’ll just proceed through the five stages of collapse helpfully identified by Dmitry Orlov.

Rather than coming to grips with our society’s fundamental biophysical contradictions, we have clung to the convenient lies that markets will always provide, and that there are plenty of resources for as many humans as we can ever possibly want to crowd onto this little planet. And if people are struggling, that must be the fault of [insert preferred boogeyman or group here]. No doubt many people will continue adhering to these lies even as the evidence around us increasingly shows that modern industrial society has already entered a trajectory of decline.

While Trump is a symptom of both the end of economic growth and of the denial of that new reality, events didn’t have to flow in his direction. Liberals could have taken up the issues of declining wages and globalization (as Bernie Sanders did) and even immigration reform. For example, Colin Hines, former head of Greenpeace’s International Economics Unit and author of Localization: A Global Manifesto, has just released a new book, Progressive Protectionism, in which he argues that “We must make the progressive case for controlling our borders, and restricting not just migration but the free movement of goods, services and capital where it threatens environment, wellbeing and social cohesion.”

But instead of well-thought out policies tackling the extremely complex issues of global trade, immigration, and living wages, we have hastily written executive orders that upend the lives of innocents. Two teams (liberal and conservative) are lined up on the national playing field, with positions on all significant issues divvied up between them. As the heat of tempers rises, our options are narrowed to choosing which team to cheer for; there is no time to question our own team’s issues. That’s just one of the downsides of increasing political polarization—which Trump is exacerbating dramatically.

Just as Team Trump covers its actions with a smokescreen of controversial falsehoods, our society hides its biggest lie of all—the lie of guaranteed, unending economic growth—behind a camouflage of political controversies. Even in relatively calm times, the über-lie was watertight: almost no one questioned it. Like all lies, it served to divert attention from an unwanted truth—the truth of our collective vulnerability to depletion, pollution, and the law of diminishing returns. Now that truth is more hidden than ever.

Our new government shows nothing but contempt for environmentalists and it plans to exit Paris climate agreement. Denial reigns! Chaos threatens! So why bother bringing up the obscured reality of limits to growth now, when immediate crises demand instant action? It’s objectively too late to restrain population and consumption growth so as to avert what ecologists of the 1970s called a “hard landing.” Now we’ve fully embarked on the age of consequences, and there are fires to put out. Yes, the times have moved on, but the truth is still the truth, and I would argue that it’s only by understanding the biophysical wellsprings of change that can we successfully adapt, and recognize whatever opportunities come our way as the pace of contraction accelerates to the point that decline can no longer successfully be hidden by the elite’s strategies.

Perhaps Donald Trump succeeded because his promises spoke to what civilizations in decline tend to want to hear. It could be argued that the pluralistic, secular, cosmopolitan, tolerant, constitutional democratic nation state is a political arrangement appropriate for a growing economy buoyed by pervasive optimism. (On a scale much smaller than contemporary America, ancient Greece and Rome during their early expansionary periods provided examples of this kind of political-social arrangement). As societies contract, people turn fearful, angry, and pessimistic—and fear, anger, and pessimism fairly dripped from Trump’s inaugural address. In periods of decline, strongmen tend to arise promising to restore past glories and to defeat domestic and foreign enemies. Repressive kleptocracies are the rule rather than the exception.

If that’s what we see developing around us and we want something different, we will have to propose economic, political, and social forms that are appropriate to the biophysical realities increasingly confronting us—and that embody or promote cultural values that we wish to promote or preserve. Look for good historic examples. Imagine new strategies. What program will speak to people’s actual needs and concerns at this moment in history? Promising a return to an economy and way of life that characterized a past moment is pointless, and it may propel demagogues to power. But there is always a range of possible responses to the reality of the present. What’s needed is a new hard-nosed sort of optimism (based on an honest acknowledgment of previously denied truths) as an alternative to the lies of divisive bullies who take advantage of the elites’ failures in order to promote their own patently greedy interests. What that actually means in concrete terms I hope to propose in more detail in future essays.





This is bigger…….

17 01 2016

That was big………  but this is bigger.

Whilst I admit to not hearing it for some time, the MSM has been spreading its usual nonsense in the form of “the fundamentals” [of the economy] are spot on, there’s nothing to worry about. Which I’ve been calling for years as crap, and now there’s a chart that explains everything regarding why I feel this way.

chart says it all

(Richard Koo: The ‘struggle between markets and central banks has only just begun’, Business Insider)

Why is the economy barely growing after seven years of zero rates and easy money? Why are wages and incomes sagging when stock and bond prices have gone through the roof? Why are stocks experiencing such extreme volatility when the Fed increased rates by a mere quarter of a percent?

It’s the policy, stupid. And here’s the chart that explains exactly what the policy is.

What this chart clearly shows is that the monumental increase in money printing had almost zero effect on lending, nor did it trigger the credit expansion the Fed were hoping for…… In other words, the Fed’s insane pump-priming of the economy experiment (aka– QE) both failed to stimulate growth and put the economy back on the so called ‘path to recovery’ we’ve been told was on, but everyone else has been saying for years never happened. For all intents and purposes, the policy was a complete flop.

Mind you, had it worked, I think we would have seen massive inflation. Basically, the fundamentals went AWOL way back in 2008. And no one wants to admit to it.lifestyle_banksy-500x332

The latest news from the US is that Walmart are closing 269 stores, which will probably leave some small towns with nowhere to buy anything,  and thousands of people out of work. If you need signs that economic collapse is now well underway, look no further than that little curler…..

The upside is that we might even see CO2 emissions starting to fall.





China, Oil and Markets: It’s All One Story

8 01 2016

$2.5 trillion was lost in global equities in three days this year even before the Thursday China trading stop and ongoing oil price decline. Must be easily over $3 trillion by now. And counting: European markets look awful, and so do futures.

Or so says Raul Illargi. I just had to copy paste this item before going out in the fields, this stuff scares the pants off me…… you can read the whole thing and more over at the Automatic Earth.

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If there’s one thing to take away from this year’s developments in markets and economies so far, it’s that they are all linked, they’re all part of the same thing. If you can’t see that, you’re not going to understand what’s happening.

Looking at falling oil prices as a separate thread is not much use, and neither is doing the same with Chinese stocks, or the yuan, or the millions of Americans who are one paycheck away from poverty, for that matter. It’s all one story.

And the take-away from that, in turn, is that focusing too much on ‘narrow’ conditions in your particular part of the globe has only limited value. We’re very much all in this together. In the UK today, it matters very little what George Osborne says or does, or Mark Carney, because they don’t shape the future of the economy.

The same goes for all finance ministers and central bank governors across the planet, Yellen, Draghi, Koruda, the lot: the influence they exert on their own economies, which was always limited from the start, is running into the boundaries imposed by global developments.

Even if central bankers could ever have ‘lifted’ anything at all (a big question mark), their power to do so is rapidly diminishing. The constraints global developments place on their powers will now be exposed -even more. And of course they’ll try to deny and ignore that, as naked emperors are wont to do.

And with the exposure of the limits to their abilities to make markets and economies do what they want, come the limitations of the mainstream financial press to make their long-promoted recovery narratives appear valid. Before we know it, we might have functioning markets back.

Oil -both Brent and WTI- have breached the $32 handle, and are very openly flirting with the $20s. China’s stock market trading was halted for a second time this year, just 14 minutes after the opening. This came about after the PBoC announced another ‘official’ devaluation of the yuan by 0.5% (stealth devaluation has been a daily occurrence for a while).

$2.5 trillion was lost in global equities in three days this year even before the Thursday China trading stop and ongoing oil price decline. Must be easily over $3 trillion by now. And counting: European markets look awful, and so do futures.

For the first time in years, markets begin to seem to reflect actual economic activity. That is to say, industrial production, factory orders, exports, imports and services sectors are falling both in China and the US. Many of these have been falling for a prolonged period of time.

In fact, Reuters quotes a Sydney trader as saying: The Chinese economy actually contracted in December. Given what I’ve written in the past year and change about China, that can hardly be a surprise anymore.

What we are looking at is debt deflation, in which virtual ‘wealth’ is being wiped out at a fast pace, and it’s taken some real wealth with it for good measure. It’s not going to be one straight line down, for instance because there are a lot of parties out there who need to cover bets they carry from last year, but it’s getting very hard to see what can stop the plunge this time. Volatility will be a popular term again.

The Fed could lose its last remaining shred of credibility through QE4,5,6 and a 180º turn on the rate hike, but it would lose that last shred for sure. Draghi’s ECB could start buying ever more paper, but they would have a hard time finding sufficient amounts of anything to buy that’s worth anywhere near the written value.

The PBoC can’t really do QE after the $25 trillion post-2008 credit pump, and the yuan devaluation today achieved the opposite of what it was intended for. The BoJ is being severely hampered by the rising yen. We’ll see crazy stuff from the global Oracles, for sure, but in reality they never had anything but expensive band-aids to offer, and they have nothing better now.

Ultimately, if China is a Ponzi (and $25 trillion in credit spent on overcapacity strongly suggests so), then the entire world economy is one. I would very much argue so, and have for years. And we all know what inevitably happens with Ponzi’s.

Economists like to think in cycles, in which things will simply bounce back at some point, but a lot of this stuff will not come back, not for a very long time. I’ve said it before: Kondratieff is also a cycle.

We’re watching the initial stages (though a lot has already vanished behind all sorts of curtains) of a massive ‘wealth’ destruction, a very loud POOF!, ‘wealth’ which can so easily be destroyed because most of it was never real, just inflated soap. It’s time to move to cash if you haven’t already, and if you have enough, perhaps a bit of gold, silver or bitcoin, but do remember those are not risk-free.

It’s tempting to see this as a China problem, but first of all there is no China problem that will not of necessity also gravely affect the west , and second of all when you read, just to name an example, that America’s new jobs pay 23% less than the jobs they replaced, it’s just plain silly to believe that the economy is doing well, let alone recovering.

Which is why a majority of Americans are living paycheck to paycheck, and don’t have enough savings even for a $500 car repair bill. All Ponzi’s burst, they can’t be tapered, and this one we have now is going down in epic fashion because there are no major economies left that are not overburdened by debt.

It’s also tempting, certainly for economists, to see money that’s lost in one ‘investment’ to automatically shift to another, but that’s not what’s happening. Much of it simply evaporates. That’s why investment funds where already in a huge high-yield bind last year, and why you should really worry about your pension fund.

Do prepare for rising taxes and services cuts: governments suffer along with everyone, and because they’re slow and lagging, probably even more so. And governments think they deserve to have their hands in your pockets. Prepare for mass lay-offs too. The consumption model is being broken and dismantled as we speak.

 





It’s all happening…..

25 08 2015

Things have been quiet on the DTM front since moving out of Mon Abri.  Having inherited my mother’s smart phone, I have actually mastered (well, kind of…) the art of mobile internet, but I draw the line at writing blog posts on those small screens.  We are still waiting for an internet connection at my MiL’s place, and hopefully it will arrive before I leave for Tasmania on the 5th of September, and I am typing this at the Noosa Library where the net is actually very fast.

deadbullIt looks like we sold just in time and getting out of debt when we did was a bonus.  But now I worry our money might devalue before I have a chance to spend it all. It certainly looks like the Chinese bull has been slain, and the red ink is flowing – or is that red LED’s in this new modern world of algorithmic trading by digital means? Our treasurer is lying through his teeth – as usual – telling the world and anyone stupid enough to listen, that ‘the fundamentals’ are just fine, when in fact they are thoroughly broken.  Even the young lady making market announcements on ABC TV’s morning news admitted it was her job to say this was a mere correction and not a crash…..  I kid you not!

I even heard some ‘expert’ pronounce that China’s official growth  figures of 7% were way overblown, and were more likely to be between 0 and 4%.  Zero?  Yep, that’s what she said….

Chinese state and private debt currently total about 300% of GDP. If you think that the GDP number they publish is too high, the debt percentage goes even higher. China has a lot of debt any way you look at it, and much of it is dollar-denominated, hence the recent devaluation of their currency which seems to have triggered this current crash.

The best article I have read about this whole affair came from The Automatic Earth:

Central banks will come up with more, much more, ‘stimulus’, but what China teaches us today is that we’re woefully close to the moment when central banks will lose the faith and trust of everyone. After injecting tens of billions of dollars in markets, which thereby ceased to function, the global economy is in a bigger mess than it was prior to QE. The whole thing is one big bubble now, and we know what invariably happens to those.

More QE is not an answer. And there is no other answer left either. Those tens of trillions will need to vanish from the global economy before any market can be returned to a functioning one, and by that time of course asset prices will be fraction of what they are now. It may not happen today, but that doesn’t matter: what’s important to know is that it WILL happen.

And if you keep being out there trying to outsmart a non-functioning market, you’ll get burned as badly as the millions of Chinese grandmas who already lost 20%+ so far just this month. And that’s just on their share holdings; Chinese property ‘markets’ will be at least as badly burned.

 nails it here in my opinion…..

China’s leaders, and its people, have walked eyes wide open into an ugly albeit nigh perfect trap. They’ve all started to believe that borrowing more could make them richer. Outstanding credit across the entire society has reached idiotic proportions. We can get somewhat of a glance at what levels debt have reached in Steve Keen’s Is This The Great Crash Of China?, in which he argues that a crash is inevitable, simply given those levels.

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The main advice we’ve always given with regards to debt deleveraging stands: get out of debt.

Meanwhile, the western financial press, which has been reporting on non-functioning markets for years as if they actually were still functioning, is worrying about a potential Fed rate hike, telling its readers and listeners that the US central bank ‘looks set to make a dangerous mistake’. But the real ‘mistake’ was made a long time ago.

And then there’s oil…….  trading at under $38 as I type.  Who would have believed this a couple of years ago?  And petrol is still as dear as it was when oil hit $147 in 2008.  I guess if the oil companies can’t make a profit at the front end, they have to recoup their losses at the bowser….

On a completely different tack, I have been working on Mon Abri MkII, and have probably come up with a final design, subject to Glenda’s approval……  I’ve even made a model of it:

housemodel

The rear and internal walls will all be made of core filled concrete blocks for thermal mass. I expect that the rear wall – which is 3.2m high – will be backfilled with as much as 2.5m of earth moved from cutting the flat pad for the slab floor……

The ‘missing bits’ at the front (North facing side) are literally all double glazing, and I may even triple glaze the bits in the peak that light the triangular wedge at the back. Starting in the middle, which is the living space, the low wall is under the kitchen windows.  The blank wall is the pantry/store room which is a replica of the one I built in Cooran, complete with hot water storage tank; the ‘new AGA’ will be against the right hand wall of this room, connected to the hot water tank. To the left of that is a bathroom, and to the left of that will be a bedroom.  The other end of the house is a mirror image, sans the pantry….

With all that thermal mass and heavy insulation, I expect this house to never drop below 18 degrees, even when it snows outside, as it would have done recently when Tasmania experienced low level snow three times in a fortnight!

Now all I need is a draftsman to finalise my plans……….  any takers?

Eleven more sleeps, and I’m off to the deep South…… and not too late either, it’s already getting almost too warm for me already up here in the sub tropics.





Three Evils of Capitalism

24 02 2015

Reblogged from https://leftymathprof.wordpress.com/3evils/

(Read the essay, or watch the 14 minute video version here in this little box, or on its Youtube page, or full-screen.)

Poverty and war have tormented us for ages, but they won’t for much longer; soon we will be forced to choose between harmony and extinction. Any compromise between those two extremes is nearing an end, because information and ecocide are both growing toward tipping points. And the new vision we need for survival is uncomplicated but also unfamiliar, especially regarding economics.

When people blame the problems of the world on “unregulated capitalism” or “predatory capitalism,” they are implying that capitalism itself is a good and healthy thing. They are implying that we have merely strayed from its sound principles into corruption, a superficial problem that can be cleaned up through reform. But these reformists are mistaken. They have not seen the world as it is; they have not understood what the principles really are. The evils of inequality, externalities, and alienation are inherent in any market economy. To halt the torment and destruction, we’ll have to learn how to share. That didn’t work in some previous attempts, but that just means we’ll have to try doing it differently; the reasons for doing it are still valid. Forcing it on people won’t work, so a change in law won’t be enough; we need a change in culture.

The problem is not “unregulated capitalism.” Writing regulations more carefully will not save us. Satan’s army of lawyers can find him a loophole whenever he wants to escape one of his contracts. And our plutocracy simply disregards its contracts — just look at all of the US government’s violations of its own laws. Money erodes its way through regulations as surely as water finds a way downhill. Any separation between government and big business, between regulators and regulated, is illusory: They share a revolving door, and sometimes a bed. The only way to avoid rule by the wealthy class is to not have a wealthy class.

And fighting against one Monsanto or Halliburton at a time is futile. It’s like Hercules fighting the Hydra: Each time he cut off one head, two more grew in its place. We must look deeper, to what Monsanto’s poisons and Halliburton’s wars have in common.

When Neo awakened from The Matrix, physical reality changed for him, but that film was only a metaphor. When we awaken from the propaganda all around us, physical objects are not changed, but their significance is changed, and our history and expectations are vastly changed.

The old world is dying; we must move on to the new world being born. How will we make the great change? I don’t know the details of that. But it has already begun; you can see it in the peaceful demonstrators being beaten by police. Awareness and understanding are spreading, and our foremost tactic must be to spread them further. When enough people see what is really going on, we will unite, and we will find a way to change things, and the violence will end.

1st evil:   INEQUALITY (3:30 in video)

The data in Thomas Piketty’s recent book shows that increasing economic inequality is a normal trend in capitalism, not an aberration. The problem is deeper than debt-based currency or any other particular method of exploitation and theft. It is inherent in all market economies, even barter economies: Market transactions increase inequality, because they favor whichever participant is in the stronger bargaining position. The only way to not have a wealthy class is by not having a market — that is, by sharing.

Increasing inequality is simplified in the board game Monopoly, which always ends with all the players but one totally impoverished. That’s the outcome even if no one cheats, so the problem is in the principles, not in “corruption.”

The recent study by Gilens and Page shows quantitatively that the USA is a plutocracy, not a democracy. Just a few people now own our homes, workplaces, debts, government, mass communications media, everything. Privately owned workplaces are little dictatorships; that’s why we hate Mondays. Progress brings higher productivity, but its benefits are pocketed by the owners of the workplaces; for the rest of us, progress means layoffs, not leisure.

Psychopaths seek positions of power over others, and even people who are not already psychopaths become corrupted by power if they acquire it; strong evidence of that was given by the Stanford Prison Experiment. We see cruelty wherever the opportunity for it arises — in prison guards, police, soldiers, workplace managers, business tycoons, dictators, or even democratically elected politicians — though in that last case, they cover it up by conducting much of their work in secret and lying about the rest. All these bullies proclaim, and perhaps believe, that they are deserving and that their victims are not.

Clearly, we should reorganize our society so that there are no concentrations of power. That requires not only replacing markets with sharing, but also replacing authoritarian hierarchical government with peer-to-peer networking. This is why I’m an anarcho-commie, which means share and don’t hit, the first two things we all learned in kindergarten.

2nd evil:   EXTERNALITIES (6:17 in video)

Any market transaction is negotiated by a buyer and a seller, but it may affect other parties besides those two. Such effects are outside the considerations of the negotiations, and so they are called externalities. During the crash of 2008, Wall Street traders often reassured one another with the acronym “IBGYBG,” which stood for “I’ll be gone, you’ll be gone.”

Externalities are more due to indifference than outright malice, and so you might think their effects would be random — sometimes harmful and sometimes beneficial — but it doesn’t work that way. The proverbial “bull in a china shop” is not motivated by malice, but he is never beneficial.

Market prices are far from true costs, because they leave out the externalities. Thus the market is not at all the “wise and efficient” allocator of resources claimed by its worshipers. Conventional textbooks gloss over this topic, as though it were something minor, but in fact externalities are enormous: War, poverty, and ecocide are inevitable consequences of any market economy. And by the way, the ecocide is a lot worse than most people realize; feedback loops are about to send us over a climate cliff.

A living whale is an awesome creature, but it has no monetary value. The parts of a recently killed whale are worth a million dollars in quick profit to someone who doesn’t care about the consequences elsewhere. That’s why the whales are disappearing. And that’s why the ecosystem is disappearing too, though it’s larger, more abstract, and harder to see.

You might think that the few people in power would get together and conspire to save the planet that they have seized for their own. But that’s not how they’re behaving.

For instance, a few years ago, the Arctic began melting rapidly. That’s one of the climate feedback loops, and it should have been a wakeup call to stop using fossil fuels before they kill everyone. But instead the plutocrats said, “oh goody, now it will be so much easier to extract fossil fuels from the Arctic!”

The market compels its biggest players to compete against each other in offering quick profits to investors, without regard to consequences. Any big players who find scruples will fall behind in the competition, and will be replaced. We need to overthrow not just the big players, but the entire system.

3rd evil:   ALIENATION   (9:06 in video)

The problem is not just in our rulers. It’s in all of us, in our culture, in the so-called “American dream“: You keep your stuff in your house, I keep my stuff in my house, and God help the guy who doesn’t have a house, because no one else can help him, in our present socioeconomic system. We get the illusion that my well being doesn’t depend on yours, and I don’t need to care about you, and in fact I can’t afford to care about you. We blame the less fortunate for their bad luck, because that’s easier than facing up to the fact that we might be next, that the system is unjust, and that we don’t know how to fix it. We may try to be kind, because that’s human nature, but that’s swimming upstream against the current of separateness.

How blind are we to our own culture? Compare it with physics. An apple’s mass, volume, and colour are objective and measurable traits, independent of any observer. The “owner” of the apple is merely a story that we agree upon, one that can be changed by whoever controls the courts. And yet it has become impossible for us to imagine an apple without an owner.

Our possessions separate us psychologically, and that in turn legitimizes our material separateness. Apathy and alienation seem inevitable and normal. We are forced to compete against each other for survival; friendships become commodities and strategic alliances. We’re distrustful, and our anxiety about lack of security is medically harmful. The wealthy are harmfully stressed too, by their desire to stay ahead, and by their lack of the things that money can’t buy. Lacking meaning, purpose, and direction in our lives, we turn to drugs and entertainments. We see ourselves alone and helpless, and few of us realize that everyone else is alone in much the same way.

No wonder random shootings have become commonplace in our shopping malls. The only thing that can make us safe is a change to a culture in which everyone cares about everyone else and no one gets left behind. But that kind of caring will require sharing. To shelter the homeless and to end the prevalence of sh*t jobs, we’ll have to restructure the entire economy, and we’ll have to change how we feel about one another.

We’ve been told — and some of us have believed it — that it’s human nature to be greedy, selfish, and lazy. We’ve been told that humans work only for private gain, and work well only in competition. We’ve been told that our culture and behaviour can’t change. But none of that is true.

The Fall from Grace was 10,000 years ago, with the invention of the word “mine,” and we’ve lived in its shadow ever since. But throughout the 200,000 years before that, we lived cooperatively, without rulers, sharing everything of importance, and that’s still our deeper nature, our genetic heritage. You can see the cooperation at any traffic merge.

“Half full” and “half empty” are optimistic and pessimistic observations of the same glass. But human nature is not just what we observe. It’s what we choose and aspire to be. Even if the reformists were right — that it is possible to make selfishness viable — why would anyone want to? Right now our culture encourages our worst behaviour; let’s replace it with a culture that brings out our better side.

I’m hoping for a miracle. That doesn’t necessarily involve supernatural intervention; Charles Eisenstein defined a “miracle” to be simply an event that most people believe impossible until it happens. The miracle I’m hoping for — and actually, I believe it is possible, even if a lot of people don’t — is that some good ideas will spread very quickly, and people everywhere will begin sharing and cooperating. That’s the only thing that might still save us from the rapidly accelerating ecocide. Can we shed our cynicism, and see with new eyes, and give each other the inspiration we need?





On Broken Energy Markets

24 12 2014

euan_mearns_sep2013

Euan Mearns

This is a guest post by Euan Mearns, orginally posted at Energy Matters.

Euan: A few comenters have mentioned peak oil recently. I am cautious about making forecasts and predictions and prefer instead to observe and document the data as the peak oil story unfolds. I have in fact published a couple of charts recently illustrating aspects of peak oil, one showing a possible peak in the rest of the world that excludes N America and OPEC (Figure 1). The other showing the undulating plateau in conventional crude + condensate that has persisted since 2005 (Figure 2). In my last post on oil price scenarios two of those showed global oil production capacity 1 to 2 Mbpd lower in 2016 than 2014. If that comes to fruition, will we have passed peak oil but does it matter?

Figure 1 Global oil production has been split into three geo-political categories: 1) USA and Canada, 2) OPEC and 3) the Rest of the World (RoW). RoW production bears the hallmarks of having peaked in the period 2005 to 2010 and this has consequences for oil prices, demand and prosperity in parts of the world, especially the OECD. Most of the growth in oil supply has been in the USA and Canada where the market has been flooded with expensive oil. Data are crude oil + condensate + natural gas liquids (C+C+NGL) and exclude biofuels and refinery gains that are included by the IEA in their total liquids number.

The current “low oil price crisis” is providing a clear and new perspective on the nature of the peak oil problem. If low price does indeed destroy high cost production capacity then this will raise the question if the high cost sources can ever be brought back? IF low price kills the shale industry can it come back from the dead?

Figure 2 Conventional crude oil + condensate production has been on an undulating plateau just over 73 million barrels per day (Mbpd) since May 2005, that is for almost 10 years and despite record high oil prices! Note that chart is not zero scaled in order to amplify details. Click chart for large version.

The response of the oil price to scarcity in the period 2002 to 2008 was for it to shoot up. And the response of the energy industries to scarcity and high price was to develop high cost sources of energy – shale oil and gas and renewables. The longevity and permanence of these new initiatives has always been dependent upon our ability and willingness to pay. Of course, most of us who have cars continued to use them but have perhaps subliminally modified our behaviour through driving less or buying more fuel efficient vehicles. OECD oil consumption has at any rate been in decline and robust economic growth has been elusive. Is this due to the peak oil story unfolding?

The global finance and energy system is unfortunately rather more complex than that. The creation and expansion of debt is of course central to creating demand for oil and other energy sources. Without QE the global economy may have died in 2009 and demand for oil with it. Gail Tverberg produced an interesting chart that may illustrate this point (Figure 3). However, back in 2008 / 09 OPEC trimmed 4 Mbpd from their production and this equally explains why the price rebounded so strongly then. The end of QE3 may have contributed to the recent fall in demand, but the price has fallen so precipitously because OPEC has not compensated by reducing production.

Figure 3 QE appears to have impacted demand for oil and may have created the lines of credit enabling energy companies to produce high cost gas and oil at a loss. But the oil price has been equally controlled by OPEC controlling supply. Chart by Gail Tverberg.

The big picture is made even more complex by climate concern and a growing raft of energy policies in Europe and the USA designed to reduce CO2 emissions while singularly failing to do so meaningfully. And so at a time when clear engineering thinking was required on how to tackle the potential impacts on society of energy scarcity in the global economy we got instead ‘Green Thinking’. Future generations will look back on this era with bewilderment.

Against this backdrop, I will now move on to the main topic of this post which is the concept of broken markets and Hubbert’s peak. For those who do not know, Hubbert’s peak is peak oil by another name and while wise guys may want to invent a multitude of definitions I will stick to the simple definition of the month or year when global oil production reached a maximum volume or mass and thereafter went into inexorable decline. The impact of this on Mankind is normally expected to be negative since oil is the lifeblood of the global economy. The reason for this happening could be because we discovered something better than oil that substituted oil out of existence (that wouldn’t be bad) or because of scarcity oil became too expensive to produce (perhaps where we are now) or because Greens in government like Ed Davey and Barack Obama set out to undermine the fossil fuel industries which just a few years ago I would have found impossible to believe. We live in interesting times.

The world economy as we know it runs on fossil fuels and in particular a relatively small number of truly gigantic fossil fuel reserves such as the Ghawar oil field in Saudi Arabia, the Black Thunder coal field in Wyoming and the Groningen gas field in The Netherlands. Both Ghawar and Groningen are showing signs of age, along with the hundreds of other super giant fossil fuel deposits. The stored energy in these deposits flows out at enormous rate and at little financial or energy cost. It is these vast energy supplies and surpluses that provide the global economy with economic surplus. It is indeed the lifeblood. But the world has run out of these super giant deposits to exploit and we are finding it increasingly difficult to find large enough numbers of their smaller cousins to keep the wheels of the global economy well oiled ;-)

The focus has thus turned to low grade resource plays. The resource plays offer near infinite amounts of energy but require large amounts of effort to gather that energy. The ERoEI is lower than what went before, perhaps much lower, but for so long as the energy return is positive, we have indeed learned that Man’s inventiveness and commitment can exploit these resources. One of the main questions I want to pose here is, is it possible for these resource plays to participate in the global economic system as it has existed for many decades that has become known to us as capitalism?

The first example of broken energy markets I want to look at is wind power. Both onshore and in particular offshore wind are expensive forms of intermittent electricity. Wind advocates will argue that the intermittency does not matter and will point gleefully to the low electricity prices achieved when the wind blows strongly across Europe resulting in over-supply that dumps the price. Wait a minute though, high cost and low price is a toxic mix that does not jive with capitalism. The more wind resource installed on the system the greater the size the unusable surplus and economic penalty becomes.

Why have the wind producers not gone out of business? It’s because the markets are rigged such the wind producers are given priority to market and receive a guaranteed price. This is a monopoly! The consumers don’t benefit because they have to pay the guaranteed price to the wind monopoly. The losses end up in the hands of the traditional generators who see their prices dumped and need to chew on the losses whilst providing the invaluable balancing services for free.

Providing back up services for when the wind doesn’t blow is another problem newly addressed in the UK with the new “capacity market”. The government is calling this a ‘market’ while it is in fact a component part of the wind monopoly. Companies are being paid to maintain generating capacity on stand by to cover periods when the wind doesn’t blow. Again the consumer has to foot the bill. One day quite soon, UK and other European governments are going to have to explain to their electorates why they have distorted the electricity market so badly, delivering a monopoly to wind producers, destroying the traditional market participants with the bill being met by the consumer who receives zero benefits. This can only be explained if it is underlain by rampant corruption or sheer stupidity.

The second example of a broken energy market I want to explore is the US shale industry. This shares certain characteristics with the wind industry in that it is a high cost but potentially very large resource. But the mechanism for integration of this resource into the market is rather different. The problem with shale gas is that over-supply has resulted in the US gas price being dumped below the level where many shale operators can make a profit. Consumers in this case benefit through getting both secure and low priced gas. But the shale operators have reportedly racked up large losses that have been covered by expanding debt. These losses may yet come home to roost with the consumer if debt defaults result in a new credit crunch where the debts are socialised via government bailouts of the banking sector.

If it were possible to produce shale gas at $1 / million btus then everyone would be happy. Consumers would be getting secure and cheap energy and producers would be making handsome profits to distribute to shareholders. That is how capitalism is supposed to work. The system as it has operated seems broken.

US Light tight oil (LTO) production appears now to have created the same problem for the liquids plays where the entrance of expensive liquids in the market have contributed to the crash in the oil price. This has created risks for the LTO operators. It remains to be seen if the LTO sector sees mass insolvencies and default on loans that may socialise these losses. The introduction of high cost LTO has also undermined the whole of the higher cost component of the conventional oil sector. If LTO could be produced in large quantities for $20 / bbl then there would be no problem since this source would go on to substitute for the higher cost conventional sources of supply. But with costs closer to $60-$80 this is not going to happen. The conundrum for capitalism is the introduction of large quantities of higher cost energy to the system.

At this point I have to admit that nuclear power may be subject to similar limitations. It is difficult to view the Hinkley Point new nuclear build in the UK as a triumph for the consumer or the country. A better way to manage such enormous capital expenditure on vital infrastructure is via the state. The costs may eventually be socialised to the tax payer, but at least the energy is reliable and amongst the safest forms of power generation ever developed and the taxation system distributes costs in an equitable way.

A form of society could undoubtedly exist powered by nuclear, wind and shale gas. But it would be a society supported by the state with far larger numbers working in the energy industries than now, producing lower surpluses, the energy production part perhaps running at a perennial loss. Those losses have to be covered by either higher price or via the taxation system. Either way, the brave new world that awaits us will be characterised as the time of less that will be in stark contrast to the time of plenty many of us enjoyed during the 20th Century.





Something fishy and the clairvoyant

16 05 2014

Steve Harrison

Steve Harrison

More from Steve the potter.. he never ceases to amaze me! I love his scrounging ways and how he makes things last, even his food…. the ultimate self sufficient potter…

 

 

 

 

 

I am at the fish market and see that filleted salmon frames are only $4. They appear to have a lot of meat still on them, so I decide to give it a try. It’s a big fish, or at least it was. It’s still a long frame.

Protein is the most expensive part of any meal for us. Good quality meat or fish costs upwards of $30 per kilo. Of course there are cheaper alternatives, but I refuse to eat sausages. I’m trying to limit my fat and salt intake and stay reasonably healthy, so I want to buy lean meat. Anyway, I only buy red meat once a month and I want to be able to feel good about what I’m eating when I do eat it.

Last month it was lamb shanks, cheap, flavoursome and when cooked slowly in red wine and reduced stock, the meat just falls off the bone and is quite delicious. I also buy chicken once a month as well. Some times its the whole bird. ‘The Lovely,’ skins it and boils it and from this she makes a great stock and the meat is separated and used for a number of meals. I’m not religious, so I also buy pork occasionally. Sometimes it’s the belly flap, boiled in our own cider and later, roasted to get that great crackling. This is a once a year treat. At other times I buy minced lean pork and we make gyoza, pork, garlic and vegetable dumplings, in the Japanese style. Sometimes pan fried in our own homemade stock or otherwise steamed.

For the most part though, we prefer fish as our major source of protein and we eat it 2 or 3 times a week, two days I fast and the other days we eat vegetarian directly from the vegetable garden, with or without tofu. I’m not a vegetarian, certainly not a vegan. I’m an omnivore, but within limits. For 35 years we kept ducks and chickens. They are such good company and a lot of fun to watch and interact with. We ate them on a regular basis. That is why we kept them. I feel that the only way in which I can justify eating meat is if I kill it myself. Only then do you realise the significance of what you are doing and fully appreciate the meal. I never found it easy. I always had to steal myself for the act. It’s all about living in reality. Taking responsibility for your actions. Being independent and self reliant.

I don’t wish harm on any other living thing in general. But I’m not a Buddhist either. I think that if I take responsibility for the meat that I eat then, I’ve earned the meal.

One of the cheapest fish at the market here is the local coastal Leather Jacket, usually at or around $5 to $9 per kilo. It’s a lovely fish, firm and tasty meat, but it can’t be filleted. It must be cooked whole, so people seem to avoid it. I love it. I have no trouble in steaming it or pan fry/steaming it. I really like it, but you can’t eat it all the time. The small local blackfish are also good value too. Always economical, as the fillets are too small for most peoples taste. I also like to buy sardines or garfish when they are in season and appear in the market. However they only appear intermittently.

So tonight it’s going to be ’empty’ salmon bone fish cakes. I simmer the frame for a while, leave it to cool and then separate the meat from the bones. The bones are then returned to the ‘soup’ and boiled again to make a stock. I plan to make fishcakes with our own potatoes and with a hint of wasabe fresh from the garden.

Now wasabe is an interesting vegetable/herb/condiment plant. It is supposed to only grow in the high clear environment of the Japanese mountains, washed by regular misty rain and growing in among the rocks and stones of fast flowing mountain streams, never allowed to dry out, always moist and well watered, growing in the shaded environment of the deep rocky ravines.

Here in Australia, there is a small producer in Tasmania, down south in the clear mountain environment where all the stringent conditions of cool dampness prevail. We once saw a small tray of fresh wasabe roots for sale in the green grocers. They had had a power failure and all the fridges and coolers were broken down over the weekend, so everything was on sale or being thrown out. We grabbed the tray of wasabe. Our initial thinking was the grate it up to make our own wasabe paste, and we did do this with part of it, but I thought, why don’t we give it a try in the garden, it’s already sprouting from it’s warm weekend spent wrapped in plastic on the tray.

We planted it out in our hot dry exposed summer garden, but we did give it some shade cover, by cutting bracken ferns and sticking them all around to create some dappled shade. We also gave it a disproportionate share of the cloudy dam water from the hose when we were watering. Now three years on we have a small tough little patch of wasabe permanently in the veggie patch. It couldn’t be farther from its home or desired environment, but it lives on, even if it isn’t thriving.

I get to make 10 good sized fish cakes from my efforts. We eat half for dinner leaving some for tomorrow. Served with garden vegetables, they go down a treat. Two main meals and two litres of stock for a risotto another day. All very good value for $4.