#153. One for the sceptics


We need to be rather careful about the term “opinion is divided”.

When English league champions Manchester City were drawn to play fourth-tier minnows Newport County in the F.A. Cup, the opinions of football-watchers over the expected outcome probably were “divided” – but only in the sense that, whilst 99% expected the giants to win, only 1% hoped (in vain, as it turned out) for a miracle.

The same caution should apply to any claim that informed opinion is “divided” over the threat to the environment. Even if you’re not convinced by the concept of climate change, or of human activity as one of its main causes, you’d struggle to dismiss species extinction, water supply exhaustion, land degradation, desertification, melting glaciers or simple pollution as figments of the imagination.

We don’t, after all, have to assume that absolutely everything ever stated by ‘the establishment’ or the mainstream media is a pack of porky-pies, even if quite a lot of it is.

There’s one point, though, which really does need to be addressed. This is the widespread assumption that environmental and economic objectives are opposed, and that tackling environmental imperatives will have an economic “cost”.

This is a wholly false dichotomy. Far from ensuring ‘business as usual’, continued reliance on fossil fuel energy would have devastating economic consequences. As is explained here, the world economy is already suffering from these effects, and these have prompted the adoption of successively riskier forms of financial manipulation in a failed effort to sustain economic ‘normality’.

If you take just one point from this discussion, it should be that a transition to sustainable forms of energy is every bit as important from an economic as from an environmental imperative.

“What if?” A contrarian hypothesis

To explain this, what follows begins from a hypothetical basis that ‘there’s no truth in the story of man-made climate damage’.

Just for the moment, I’d like you to suspend your disbelief – as, writing this, I’ve had to suspend mine – and adopt the starting position that human activity, and in particular our use of energy, isn’t threatening the planet.

If they were of this persuasion, what conclusions might be reached by decision-makers in government and business?

It’s probable that, stripped of the environmental imperative, the case for transitioning our supplies of energy, away from fossil fuels and towards renewable sources such as solar and wind power, would either be dismissed altogether, or watered down to the point of irrelevance.

Even as things stand, efforts to transition to sustainable sources of energy are faltering.

Once persuaded that we could do so safely, there would be considerable support – reinforced by the human traits of self-interest, conservatism and inertia – for taking a “business as usual” approach, in which oil, gas and coal remained, as they are now, the source of fourth-fifths of the energy that we consume.

From this start-point, a great deal of inconvenience could be prevented. We wouldn’t need to change our practices, or our way of life. We could carry on travelling in gasoline- or diesel-powered vehicles. Holidaying abroad would remain an activity with a future. We needn’t expend huge sums in plastering our countryside with wind turbines and solar panels. We’d be likely to abandon vastly-expensive, technically unproven plans to switch over almost entirely to EVs (electric vehicles), confining them instead to marginal urban use. By heading off the need for drastic increases in power supply, this in turn would make it easier for industry to keep on coming up with new products and processes (like drones and robotics) which call for increases in our use of electricity.

In short, in a purely hypothetical situation in which it could be proved that the environmental activists were wrong, there’d be a huge collective sigh of relief, from government, business and the general public alike. Few people, after all, really like change and disruption.

The energy reality of the economy

What has to be emphasized – indeed, it cannot be stressed too strongly – is that, even if it were environmentally safe to carry on relying on fossil fuels, doing so could be expected to cripple the economy within, at most, twenty-five years.

Indeed, the process of economic deterioration is already well under way.

That this is not generally understood results primarily from the mistaken view that the economy is ‘a financial system’.

It has long been traditional for us to think of the economy in this way. This, in part, is a legacy of the founders of economics, men like Adam Smith, David Ricardo and James Mill. They established what are called the “laws” of economics from a financial perspective. They demonstrated the way in which the pricing process determines supply and demand. Specifically, they contended that, if there’s a shortage of something, the solution is to raise its price, thereby encouraging increased supply. All of their work, then, was expressed in the notation of money.

We should be in no doubt that these founding fathers of economic interpretation have bequeathed us invaluable lessons, of which none is more important than the role of free, fair and uncluttered competition in promoting economic progress. The successors to the early pioneers have added new economic interpretations, of course, but almost all of these are money-based theories, which perpetuate the idea that the economy is a financial system.

But the founders of classical economics lived in a world totally different to that of today. Smith died in 1790, Ricardo in 1823, and Mill in 1836, and even Mill’s son, John Stuart passed away in 1873, which was 99 years before the publication of The Limits To Growth. In their era, there was little or no reason for anyone (other than the maverick Thomas Malthus) to think about physical limitations, still less of the environmental issues that have entered our consciousness over the last twenty-five years or so.

They were right to state that higher prices can stimulate the supply of shoes or beer – but no increase in price can conjure forth new, giant and low-cost oil fields where these do not exist.

There can be few, if any, other matters of twenty-first-century importance which are tackled on the basis of eighteenth-century precepts. Neither, logically considered, is there any reason for clinging on to monetary interpretations of the economy.

If, as in fig. 1, we look at the relationship between, on the one hand, global population numbers (and related economic activity), and, on the other, the use of energy, we can see an unanswerable case for linking the two. It’s no coincidence at all that the exponential upturn in the world’s population took off at the same time that, thanks to James Watt’s 1776  invention of the first effective heat-engine, we learned how to harness the vast energy potential contained in fossil fuels.

Not just the size of the world economy, but its prosperity and complexity, too, are products of the Prometheus unleashed by Watt and his fellow inventors.

Fig. 1.

Population and energy

Moreover, observation surely tells us that literally everything that constitutes the ‘real’ economy of goods and services relies entirely on energy. Without energy supplies, the economy would grind to a halt, and the society built on it would disintegrate.

After all, if you were adrift in a lifeboat in mid-Atlantic, and a passing aircraft dropped you a huge pile of banknotes, but no water or food, you’d soon realize that money has no intrinsic worth, but commands value only in terms of the things for which it can be exchanged.

Money, then, acts simply as a claim on the products of an economy which, itself, is an energy system.

The cost component

Anyone who understands the energy basis of the economy knows that the supply of energy is never cost-free, though the relevant measure of cost needs to be stated in energy rather than financial terms. Drilling a well, digging a mine, building a refinery or laying a pipeline requires the use of energy inputs, as, for that matter, does installing a wind-turbine or a solar panel, or constructing an electricity distribution grid.

This divides the aggregate of available energy into two streams – the energy which has to be consumed in providing a continuity of energy supply, and the remaining (“surplus”) energy which powers all other economic activity.

The cost component is known here as the Energy Cost of Energy (ECoE). This is the critical determinant of the ability of surplus energy to drive economic activity. Low ECoEs provide a large surplus on which to build prosperity, but rising ECoEs erode this surplus, making us poorer.

Further investigation reveals that, where fossil fuels are concerned, four factors determine the level of ECoE.

One of these is geographic reach – by extending its operations from its origins in Pennsylvania to places as far afield as the Middle East and Alaska, the oil industry lowered ECoE by finding new, low-cost sources of supply.

A second is economies of scale – a plant handling 300,000 b/d (barrels per day) of oil is a lot more cost-efficient than one handling only 30,000 b/d.

Now, though, the maturity of the oil, gas and coal industries is such that the benefits of scale and reach have arrived at their limits. This is where the third factor steps in to determine ECoE – and that factor is depletion.

What depletion means is that the lowest-cost sources of any energy resource are used first, leaving costlier alternatives for later.

The crux of our current predicament is that ‘later’ has now arrived. There are no new huge, low-cost sources of oil, gas or coal waiting to be developed.

From here on, ECoEs rise.

To be sure, advances in technology can mitigate the rise in ECoEs, but technology is limited by the physical properties of the resource. Advances in techniques have reduced the cost of shale liquids extraction to levels well below the past cost of extracting those same resources, but have not turned America’s tight sands into the economic equivalent of Saudi Arabia’s al Ghawar, or other giant discoveries of the past.

Physics does tend to have the last word.

Unravelling economic trends

Once we understand the processes involved, we can see recent economic history in a wholly new way. The narrative since the late 1990s can be summarised, very briefly, as follows.

According to SEEDS – the Surplus Energy Economics Data System – world trend ECoE rose from 2.9% in 1990 to 4.1% in 2000. This increase was more than enough to stop Western prosperity growth in its tracks.

Unfortunately, a policy establishment accustomed to seeing all economic developments in purely financial terms was at a loss to explain this phenomenon, though it did give it a name – “secular stagnation”.

Predictably, in the absence of an understanding of the energy basis of the economy, recourse was made to financial policies in order to ‘fix’ this slowdown in growth.

The first such initiative was credit adventurism. It involved making debt easier to obtain than ever before. This approach was congenial to a contemporary mind-set which saw ‘deregulation’ as a cure for all ills.

The results, of course, were predictable enough. Expressed in PPP-converted dollars at constant 2018 values, the world economy grew by 36% between 2000 and 2008, adding $26.8 trillion to recorded GDP. Unfortunately, though, debt escalated by $61.5tn over the same period, meaning that $2.30 had been borrowed for each $1 of “growth”. At the same time, risk proliferated, and became progressively more opaque. Excessive debt and diffuse risk led directly to the 2008 global financial crisis (GFC).

With depressing inevitability, the authorities once again responded financially, this time adding monetary adventurism to the credit variety that had created the GFC. In defiance of a minority who favoured letting market forces work through to their natural conclusions (and who probably were right), the authorities opted for ZIRP (zero interest rate policy). They implemented it by slashing policy rates to all-but-zero, simultaneously driving market rates down by using newly-created money to buy up the prices of bonds.

This policy bailed out reckless borrowers and rescued imprudent lenders, but did so at a horrendous price. Since 2008, we’ve been adding debt at the rate of $3.10 for each $1 of “growth”. The proper functioning of the market economy has been crippled by the distortions of monetary manipulation. The essential regenerative process of ‘creative destruction’ has been stopped in its tracks by policies which have allowed ‘zombie’ companies to stay afloat. Asset prices have soared to stratospheric levels, supported by a tide of debt which can never be repaid, and can be serviced only on the assumption of perpetual injections of negatively-priced credit. The collapse in returns on invested capital has blown a gigantic hole in pension provision. As the Federal Reserve is in the process of discovering, no route exists for a restoration of monetary normality. We are, in short, stuck with monetary adventurism until it reaches its point of termination.

The relentless rise of ECoE   

Back in the real economy, meanwhile, ECoEs keep rising. SEEDS calculates that global trend ECoE has risen from 4.1% in 2000, and 5.6% in 2008 (the year of the GFC), to 8.1% now. Critically, the upwards trajectory of ECoE has become exponential, with each incremental increase bigger than the one before.

As this trend has progressed, prosperity has turned downwards, initially in the advanced economies of the West.

To understand this process, we need first to look behind GDP figures which have been inflated by the simple spending of borrowed money. In the decade since 2008, an increase of $34tn in world GDP has been accompanied by a $106tn surge in debt. What this means is that most of the reported “growth” in GDP has been bogus. Rates of apparent “growth” would slump to, at best, 1.5% if we stopped pouring in new credit, and would go into reverse if we ever tried to deleverage the world’s balance sheet.

Once we’ve established the underlying rate of growth – as a “clean” measure of GDP which excludes the effects of credit injection – we can apply ECoE to see what’s really been happening to prosperity.

In the West, people have been getting poorer over an extended period. Prosperity per capita has fallen by 7.2% in the United States since 2005, and by 11.3% in Britain since 2003. Deterioration in most Euro Area economies has been happening for even longer. Not even resource-rich countries like Canada or Australia have been exempt. As an aside, this process of impoverishment, often exacerbated by taxation, can be linked directly to the rise of insurgent political movements sometimes labelled “populist”.

The process which links rising ECoE to falling prosperity is illustrated in figs. 2 and 3. In America, prosperity per person turned down when ECoE hit 5.5%, whereas the weaker British economy started to deteriorate at an ECoE of just 3.4%.

Fig. 2 & 3.

EcoE & prosp US UK

World average prosperity per capita has declined only marginally since 2007, essentially because deterioration in the West has been offset by continued progress in the emerging market (EM) economies. This, though, is nearing its point of inflexion, with clear evidence now showing that the Chinese economy, in particular, is in very big trouble.

As you’d expect, these trends in underlying prosperity have started showing up in ‘real world’ indicators, with trade in goods, and sales of everything from cars and smartphones to computer chips and industrial components, now turning down. As the economy of “stuff” weakens, a logical consequence is likely to be a deterioration in demand for the energy and other commodities used in the supply of “stuff”.

Simply stated, the economy has now started to shrink, and there are limits to how long we can hide this from ourselves by spending ever larger amounts of borrowed money.

Safe to continue?

Let’s revert now to our hypothetical situation in which, unconcerned about the environment, we remain resolutely committed to an economy powered by fossil fuels.

The critical question becomes that of what then happens to the economy moving forwards.

Unfortunately, the ECoEs of fossil fuels will keep rising. SEEDS puts the combined ECoE of fossil fuels today at 10.7%, a far cry from the level in 2008 (6.5%), let alone 1998 (4.2%). Projections show fossil fuel ECoEs hitting 12.5% by 2024, and 14.5% by 2030.

For context, SEEDS studies indicate that, in the advanced economies of the West, prosperity turns down once ECoEs reach a range between 3.5% and 5.5%. Because of their lesser complexity, EM countries enjoy greater ability to cope with rising ECoEs, but even they have their limits. SEEDS analysis identifies an ECoE band of between 8% and 10% within which EM prosperity turns down. Sure enough, China’s current travails coincide with an ECoE which hit 8.7% last year, and is projected to rise from 9.0% in 2019 to 10.0% by 2025. A similar climacteric looms for South Korea  (see figs. 4 & 5).

Figs. 4 & 5

EcoE & prosp CH KOR

In short, then, continued reliance on fossil fuels would condemn the world economy to levels of ECoE which would destroy prosperity.

Hidden behind increasingly desperate (and dangerous) financial manipulation, the world as a whole has been getting poorer since ECoE hit 5.5% in 2007. As more of the EM economies hit the “downturn zone” (ECoEs of 8-10%), the so-far-gradual impoverishment of the average person worldwide can be expected to accelerate.

After that, various adverse consequences start to impact the system. The financial structure cannot be expected to cope with much more of the strain induced by denial-driven manipulation. The political and geopolitical consequences of worsening prosperity, exacerbated perhaps by competition for resources, can be left to the imagination. Economic systems dependent on high rates of capacity utilization can be expected to fail.

This, then, is the grim outlook for a world continuing to rely on fossil fuels. Even if this continued reliance on oil, gas and coal won’t destroy the environment, it can be expected, with very high levels of probability, to wreck the economy.

Even as things stand today, the energy industries seem almost to have stopped trying to keep up. Capital investment in energy, stated at constant 2018 values, was 20% lower last year (at $1.59tn) than it was back in 2014 ($2tn), and is not remotely sufficient to provide continuity of supply. Even shale investment only keeps going courtesy of investors and lenders who are prepared to support “cash-burning” companies.

Critically, what this means is that the supposed conflict between environmental imperatives, on the one hand, and economic (“cost”) considerations, on the other, is a wholly false dichotomy.

For the economy, no less than for the environment, there is a compelling case for transition. But the implications of the future trend in ECoEs go a lot further than that.

As the ECoEs of fossil fuels have risen inexorably, those of renewable alternatives have fallen steadily. It is projected by SEEDS that these will intersect within the next two to three years, after which renewables will be “cheaper” (in ECoE terms) than their fossil alternatives.

At this point, it would be comforting to assume that, as the ECoEs of renewables keep falling, and the extent of their use increases, we can make a relatively painless transition.

Unfortunately, there are at least three factors which make any such assumption dangerously complacent.

First, we need to guard against the extrapolatory fallacy which says that, because the ECoE of renewables has declined by x% over y number of years, it will fall by a further x% over the next y. The problem with this is that it ignores the limits imposed by the laws of physics.

Second, renewable sources of energy remain substantially derivative of fossil fuels inputs. At present, we can only construct wind turbines, solar panels and their associated infrastructure by using energy sourced from fossil fuels.  Until and unless this can be overcome, sources termed ‘renewable’ might better be described as ‘secondary applications of primary energy from fossil fuels’.

Third, and perhaps most disturbing of all, there can be no assurance that the ECoE of a renewables-based energy system can ever be low enough to sustain prosperity. Back in the ‘golden age’ of prosperity growth (in the decades immediately following 1945), global ECoE was between 1% and 2%. With renewables, the best that we can hope for might be an ECoE stable at perhaps 8%, far above the levels at which prosperity deteriorates in the West, and ceases growing in the emerging economies.

Policy, reality and the false dichotomy

These cautions do not, it must be stressed, undermine the case for transitioning from fossil fuels to renewables. After all, once we understand the energy processes which drive the economy, we know where continued dependency on ever-costlier fossil fuels would lead.

There can, of course, be no guarantees around a successful transition to renewable forms of energy. The slogan “sustainable development” has been adopted by the policy establishment because it seems to promise the public that we can tackle environmental risk without inflicting economic hardship, or even significant inconvenience.

It is, therefore, far more a matter of assumption than of verifiable practicality.

Even within the limited scope of declared plans for “sustainable development”, efforts at transition are faltering. Here are some examples of this disturbing insufficiency of effort:

–   According to the International Energy Agency (IEA), additions of new renewable generating capacity have stalled, with 177 GW added last year, unchanged from 2017. Moreover, the IEA has stated that additions last year needed to be at least 300 GW to stay on track with objectives set out in the Paris Agreement on climate change.

–   The IEA has also said that capital investment in renewables, expressed at constant values, was lower last year (at $304bn) than it was back in 2011 ($314bn). Even allowing for reductions in unit cost, this reinforces the observation that renewables capacity simply isn’t growing rapidly enough.

–   In 2018, output of electricity generated from renewable sources increased by 314 TWH (terawatt hours), but total energy consumption grew by 938 TWH, with 457 TWH of that increase – a bigger increment than delivered by renewables – sourced from fossil fuels.

The latter observation is perhaps the most worrying of all. Far from replacing the use of fossil fuels in electricity supply, additional output from renewables is failing even to keep pace with growth in demand. Where power generation is concerned, this has worrying implications for our ability to transition road transport to EVs without having to burn a lot more oil, gas and coal in order to do so.

The deceleration in the rate at which renewables capacity and output are being added seems to be linked to decreases in subsidies. These, though affordable enough at very low rates of take-up, have been scaled back as the magnitude of the challenge has increased.

This calls for a thoroughgoing review of energy policy, and it seems bizarre that a system which can provide financial support for the banking system cannot do the same for the far more important matter of energy. Even within the fossil fuels arena, the continued growth of American shale production has relied on cheap capital, channelled into loss-making shale producers by optimistic investors and seemingly-complacent lenders.

We need to understand that, when an individual pays for electricity, or puts fuel in a car’s tank, this represents only a small fraction of what he or she spends on energy. The vast majority of energy expenditure isn’t undertaken as direct purchasing by the consumer, but is embedded in literally all of his or her outlays on goods and services. The scope for direct purchasing is determined by the scale of embedded use.

As prosperity deteriorates, then, the ability of the consumer to purchase energy is reduced. There is every likelihood that energy suppliers could find themselves trapped between the Scylla of rising costs and the Charybdis of impoverished customers.

We should, accordingly, be prepared for the failure of a system which relies almost entirely on commercial enterprise for the supply of energy. Far from prices soaring in response to tightening supplies, it’s likely that the impoverishment of consumers keeps prices below costs, resulting in a shrinkage of energy supply as part of a broader deterioration in economic activity.

As the situation develops, we may need to think outside the “comfort zone” of current policy parameters. For instance, the promise that the public can exchange their current vehicles for EVs may prove not to be capable of fulfilment, forcing us to evaluate alternatives, including electric trams and rail.

For now, though, one imperative predominates. It is that we must stop believing in the false dichotomy in which the environmental need for a transition to renewables is “moderated” by wholly false considerations of “cost”.

Simply put, we’re likely to pay a quite extraordinarily high price for a continuation of the assumption that the economy, demonstrably an energy system, is characterised by, and can be managed using, purely financial interpretation.

= = = = =

SEEDS environment report July 2019



579 thoughts on “#153. One for the sceptics

  1. Clueless American
    I listened to the first half of Boris’ speech outside 10 Downing Street. It sounded very much like a ‘populist’ US politician…level up educational funding, refinance the national health service, more police on the beat, etc. Yet I also saw a headline, but didn’t read the article, that ‘finally we have a true Conservative government’.

    Should I try to understand what is going on, or just crawl back into the nasty space of US politics and remain clueless?
    Don Stewart

    • Clueless II
      And as I heard Boris talk about ‘freedom’ from the EU, it occurred to me that the EU rules are supposed to strictly limit fiscal deficits. Outside the EU, Britain can run any deficits that the market and money printing can support. (Shades of Italy?). Maybe that is one reason Boris may look with favor on a hard Brexit?

      Don Stewart

    • British politics has been dominated by “sound bites” and “spin” since the 1990s.

      In the US, politics has been characterized by marketing ever since Bob Newhart lampooned it with “Madison Avenue vs Abe Lincoln”, circa 1960. But this has been equally true of UK politics for the best part of a generation.

      Today, the biggest differences favour the US, with its separation of powers and its constitutional guarantee of free speech,

    • SEEDS calculates that prosperity per capita in the UK is falling at between 0.7% and 1.0% annually, a rate that, as elsewhere, could accelerate. This economy has to carry a financial system that is more than 11x GDP.

      Given that, I can see why Mr Johnson might prefer to promise a ‘golden age’, completed with battery-powered aeroplanes.

      As for the environment, worldwide, replacing fossil fuels over ten years would require adding an average of 1,174 mmtoe of renewables output each year.

      The actual addition in 2018 was 71 mmtoe – and only 14 mmtoe of that came from wind and solar power, where most of the growth will have to come from.

    • I doubt transatlantic planes will ever be battery powered but perhaps say 100 seater planes will be used for European journeys if we can get a battery energy density increase of 6 times.

      Whateve happens cheap flying around the World will end as

  2. @Dr. Morgan
    Relative to ECoE, or EROEI, and the replacement or supplementation of fossil fuel electricity with wind and solar, you might be interested in looking at Gail Tverberg’s calculation of ‘how much cost does the utility avoid (basically fuel) when a homeowner installs solar panels?’. These are near the end of the Q and As attached to her current post.

    Her point is that as long as one wants to maintain an ‘always on’ grid, the fixed costs remain fixed. The only variable cost is the fuel. ‘Net metering’ and similar schemes ignore the fixed costs. I am not sure about Germany’s methods, but in here may lie a clue as to how Germany gets some of the highest electricity rates in the world…they are trying to maintain two parallel systems, tied together with complex mechanisms.

    Don Stewart

    • That’s correct. My focus in my next piece is likely to be on the implications of this situation.

      Because utilities are unable to pass on these higher costs to consumers, Feed-in Tariffs have been scaled back, or dropped altogether.

      Because that subsidy has been withdrawn, additions of renewables capacity have stalled, and capital investment is falling.

      For reference, transitioning US power supply away from FFs would cost $35,000 per household, according to an authoritative recent report. That, of course, is just power generation (last year, 645 mmtoe), not all US uses of FFs (1,939 mmtoe).

      It seems that we support the aim of transition, until someone tells us what it will cost. Transitioning the US power system would cost, in real terms, 29x the Apollo programme. Extend it to all US FF use and that multiple rises to 88x the space programme. The global equivalent of that latter is 537x.

      And this is at a time when 59% of Americans are said to be ‘living paycheck to paycheck’…….

    • Tim if so many Americans (As in England and many other places)
      are living from paycheck to paycheck that must mean we’ve long past passed the point that we could afford the transition.

      If the World plc can only afford to pay many individuals x amount of resources and no more – which could represent savings ie unused resources- then it must mean tbat we cannot allocate enough existing rescorces to the transition without creating huge amounts of real poverty- at least until ecomonies adjust.

      Mind you I could be completely wrong

    • Just wanted to point out that “living from paycheck to paycheck that must mean we’ve long past passed the point that we could afford the transition.” is true with a few caveats :

      1. It assumes that the transition is done under BAU conditions, i.e. market based ressource allocation.
      2. No redistributive measure to alleviate the costs to the 3 bottom quintiles. I.e. high levels of income/wealth inequality kept at their levels.

      An other thing often neglected is the sheer amount of energy and ressources spent on faff and useless gadgets/services. But this is pretty much taboo even in the left side of the aisle, because that would put in question most of the post-War societal organisation.

      Which is just an other way to say that what lies ahead will be as transformative as the great depression or WW2. Which is a way of saying that it is unthinkable for mainstream politics, and that we will cheer along with the “Growth in our time” Chamberlains for as long as possible.

    • Yes I did make assumptions and the only way will be centralised resource allocation – which will only happen when it’s too late

  3. Essay at Automatic Earth
    A guest essay today at The Automatic Earth. I will note just this paragraph, which relates to my comments above about the fragility of the shale oil and gas situation…Don Stewart

    Furthermore, the entanglement of the military-industrial complex, the petrodollar reserve currency system and the omni-bubble generated by quantitative easing has left the Empire systemically fragile. Particularly, the bubble in non-conventional fuels precipitated by QE, depressed oil prices with scaled down exploration, R&D and maintenance makes the possibility of a self-reinforcing collapse in the American energy and financial systems extremely plausible. It is a Gordian knot which war with Persia would leave in fetters.

  4. Regarding energy efficient air travel, airships using hydrogen lifting gas could be made far more energy efficient than jet aircraft. But it means trading fuel for speed – crossing the oceans at 80mph instead of 550. Unfortunately, slower speed means fewer passenger miles delivered per hour and poorer utilisation of a capital investment. Unless airships are much cheaper to build than a jet of similar capacity, then they will struggle to compete economically even if fuel is expensive.

  5. Complexity and Seeing Light at the End of the Tunnel
    First, nothing guarantees that Earth can support 10 billion humans under any circumstances. Get over it and get on with business.

    Second, it is clear that viruses control bacteria, archaea, and fungi, and that the bacteria and archaea and fungi have a strong influence on the rest of chain up to and including humans. See this 2 hour talk by Christine Jones which explores global issues from the perspective of agriculture and food:

    The presentation was delivered at a farmer oriented meeting in Nebraska a few weeks ago.

    I want to call your attention to a few things:
    *In 1946 farmers in Canada earned about 15 billion dollars on 25 billion dollars of sales. Over the last 32 years, since industrial agriculture has become dominant, farmers produced 1.35 trillion in products but spent 1.32 trillion for industrial inputs. ‘Today, the majority of Canadian farmers are supported by off-farm income, taxpayer funded support systems, asset sales, and borrowed money.’ And, I would add, while doing enormous damage.
    *Viruses are by far the dominant collection of DNA and RNA on earth. Humans account for about 0.01 percent. Viruses use quorum sensing to cause changes in gene expression in bacteria, archaea, and fungi, which through the mechanism of quorum sensing changes gene expression in all the ‘higher’ levels up to and including humans.

    Now I will offer this hypothesis: The Good Life consists of influencing quorum sensing at the level of viruses and higher levels in ways that are beneficial to humans. Mostly industrial processes have destroyed natural quorum sensing. This has not occurred because of human cussedness, but instead is a reflection of profound ignorance and the search for short term comfort and feel-good chemicals.

    I think the takeaways are:
    *The thermodynamic balance that we project when we look at the energy in a barrel of oil or a ton of coal does not reflect the tenuous at best, and disastrous in many realities, results of our use of fossil fuels.
    *We urgently need to ditch all the MAGA, Development Goals, Green New Deals, Rising Stock Prices, and so forth and look seriously at the Science.

    We should not elect anyone who cannot demonstrate that they can produce food in their yard which is both nutritious and regenerative.

    Don Stewart

  6. Automatic Earth; The Brains Behind Brexit
    An excellent article today in Automatic Earth about the new world of politics.

    I suppose it is still ‘democracy’, but it ain’t nothin like a New England town meeting. At any rate, Boris has hired the same squad.

    Don Stewart

  7. I hoped it was my eyesight but closer inspection makes it clear it wasn’t

    China’s military spending has gone up from $27.8bn in 1996 to $225bn in 2016 according to Cap X

    I was hoping it had gone down to 22.5bn.

    Surely they can’t keep this up.

  8. Thank you again for another engaging read Dr Morgan.

    My initial thought is that linking trend EcoE with prosperity is a BIG claim I’d like more proof please :). EcoE could be the driver here or it’s role could be marginal. How did you untangle all the other factors ?

    If pushed I could plot a graph of per capita prosperity versus many metrics that could correlate. For example we know that average IQ has been shown to correlate well with per capita GDP. IQ’s have been dropping in developed countries since the 70’s.
    Or i could plot a graph of the average hours spent surfing the net versus per capita prosperity and form a theory that wasting time on social media is preventing us doing more productive things…
    Of course such a correlation wouldn’t be absolute proof of a link.
    I recognise you have invested heavily in this but with the greatest respect, has that made you susceptible to conformational bias?

    Then there are the changes that have occurred since the millennium that are difficult to quantify but can’t be ignored. The doctrine of political correctness (the elevation of the politically correct over the factually correct truth) has been universally accepted. My point is this misguided journey into the sort of bad governance that would shame a banana republic has been hugely costly. I’m thinking of costly wars, attacks on the family and special status of married couples, open door to outsiders that may not share our customs and beliefs. The drive to eradicate perceived notions of ‘poverty’ and ‘unfairness’ that simply didn’t exist a few decades ago.

    Of course this environment has fostered the religion of climate change. Two points id like to make.

    The scientists relying on tree ring data and ice cores to convince us that we are experiencing unprecedented weather patterns is totally unhinged. Secondly the impact of CO2 is relatively tiny. Oh and a third point is that scientists that don’t stick to the climate change script get frozen out.
    The BBC are keen to tell us we have just had the hottest day….then slip in that it was almost as hot back in 1945 before climate change was even invented. ..
    This article sums it up very neatly Id urge readers to look at it with an open mind. Sorry for the long winded post!

    • What one might call the ‘theory’ tying prosperity to ECoE follows a chain of logic where each link can be tested.

      First, the connection between energy and economic activity. It’s impossible to name any product (good or service) that can be supplied without energy.

      We know that the cessation of energy supply would cause economic activity to cease.

      Additionally, we have historical evidence – the vast take-off in population numbers, and the economic activity (and especially the food supply) that supports them, occurred at the same time that we started using fossil fuels.

      Then, ECoE itself.

      We know that energy is consumed in any process which accesses energy for our use. We know that materials (steel, plastics, etc) used in energy access cannot themselves be supplied without the use of energy, and we know that processes (putting these things together) also depend on energy.

      Where fossil fuels (4/5ths of current energy supply) are concerned, the effects of depletion are observable – oil fields newly brought on stream are smaller, technically more difficult, more remote and of lower quality than the ones that they replace.

      This, I’d submit, is a chain of logic in which each link is demonstrable.

    • On climate change, few people are more sceptical than me about the ‘official’ or ‘consensus’ interpretation of anything.

      But I accept it, bearing in mind the following:

      – The overwhelming majority of scientific opinion supports the case. This is the science of hard facts, not a social science. This opinion isn’t split 55/45, say, but probably about 99/1.

      – Glacier melting is visible

      – So is species loss

      – and pollution

    • Click to access con-in-consensus.pdf

      What can we take away from all this? First, lots of people get called “climate experts” and
      contribute to the appearance of consensus, without necessarily being knowledgeable about core
      issues. A consensus among the misinformed is not worth much.
      Second, it is obvious that the “97%” mantra is untrue. The underlying issues are so complex it is
      ludicrous to expect unanimity. The near 50/50 split among AMS members on the role of
      greenhouse gases is a much more accurate picture of the situation. The phoney claim of 97%
      the consensus is mere political rhetoric aimed at stifling debate and intimidating people into silence.

      The Glacier Position is Half a dozen of one and six of the other.

      On Species Loss, again this is an ill-defined domain and whilst one accepts the damage done by deforestation and monoculture Agriculture, and concern for Say the Bees, these are unrelated to the AGW CO2 hypothesis which is the Contents of the #WrongKindofGreen Trojan horse of misanthropic Green fascism.
      Pollution is Bad , of course it is, CO2 is not pollution and also the CO2 Emissions policy focus lets polluters off the hook this is the basis of Clive Spashes, Brave new world paper.

      Click to access 2010_Spash_Brave_New_World_NPE1.pdf

    • One thing that you have omitted is that although there have been past periods of warming and ice ages these have been 1000s – millions of years apart.

      Don’t you think it’s a big coincidence that the current period of warming coincides with industrialisation given the time frame we’re talking about.

      Given the huge timeframes of the Earth it’s statistically unlikely that we’d have a warming period that exactly matches a tiny period of our industrial activity

      Also the rate of change is far faster that any in history.

      Of course we could argue about this indefinitely but I am totally convinced that we are to blame and not cycles in the Earth’s climate.

    • Agreed.

      Where climate change itself is concerned, it’s up to each of us whether we believe in it, and in human activity as a significant contributory factor. I do believe this.

      The point of this article, though, is this. Just say you don’t believe in climate change, or our role in causing it. So what do you do? Carry on relying on fossil fuels? Doing that will, beyond all doubt in my opinion, destroy the economy. We’re already having to engage in truly freakish financial behaviour to kid ourselves that the economy is “growing”.

      Therefore, continued reliance on fossil fuels look to me a lose-lose combination.

    • Correction. ‘A tiny period of our industrial activity’ should read ‘The tiny period of our industrial activity’

      My laptop is broken and I’m having to type everything into a mobile phone which has proved problematical in terms of grsmmar and spelling.

      Climate wise at least we’ve got some cool rain today and the temp is down from 37c were I live to a wonderful 19c.

      One more thing I see that Boris is backing a high-speed Leeds to Manchester line and maybe putting the brakes on HS2.

      I can’t see the point of a new line built for speed as the distance between the two cities is only about 45 miles.

      Perhaps a normal speed line that could also accommodate freight might be a better idea.

  9. @ewaf88 I do not claim to know definitively regarding human contribuitoon? O am however convinced of the arguments that CO2 has been cynically put in the frame and much more heinous Human activity and indeed other large influencers of Climate have been ignored.

    I suspect the CO2 Narratives are all along related to what is known as #TheCarbonCurrencyEndGame.

    Debt-based money has caused many more deaths than CLimate change, the Green Lobby is largely silent on matters such as War and the Military-Industrial Complex .

    Political Economy is Making people who think differently or believe different things to agree on ways of acting, Its a point Roger L Pelke Junior makes in this Talk.

    remember Walter Lippman on politics the
    goal is not to get everyone to think
    alike the goal is to get people who
    think differently to act alike

    • To these resources I would simply add Patrick Moore’s excellent lecture about CO2:

    • Sorry but anyone who thinks that dumping plastic waste isn’t a problem- again doesn’t see the unlikely coincidence of the current warming coming along at the same time as man’s industrial activity and is constantly saying he us 100% correct cannot be trusted.

      One for a psychiatrists couch I feel
      rather than proper informed debate.


    • Donald (ewaf88),

      You could have chosen to engage in “a proper informed debate on the man’s facts regarding CO2 but instead you chose the ad hominem route.

      Given a long enough list of anyone’s opinions or their personal history, it isn’t difficult to consign them into the dustbin of irrelevance. I get this sort of thing all the time from people on what used to be broadly called “the progressive left”. Quote anyone they disagree with and they will not simply disagree or say why they will disagree; they will instead preform a character assassination of the person quoted in an attempt to justify why they shouldn’t even have to consider the opinion.

      Me: Judith Curry notes that W.

      Leftist: Don’t listen to JC. She’s is bought and paid for by Big Oil

      Me: Pat Buchanan said X:

      Leftist: Why should I take seriously anything a man who wrote speeches for Nixon says?

      Me: Paul Craig Roberts has some interesting observations on Y.

      Leftist: PCR is a shill, a liar and a POS!

      Monkton has a new paper out on Z.

      Leftist: He’s a demented, swivel-eyed Loon!

      After the hundred and first time, normal, decent, fair-minded rational people just give up trying to communicate with “progressive leftists” and devote themselves instead to protecting the children from being contaminated by their vile and disgusting poison.

  10. I can understand people scrutinising global warming and climate change, any hypothesis should be scrutinised to see if it stands up,

    one shouldn’t obsess too much over computer modelling, the modelling isn’t saying climate change is happening, it’s just trying to extrapolate a prediction of what climate change will be like, I agree with a lot of the criticism of the models, their lack of sufficient data sources, the consistency of the data etc. but they’re only trying to forecast the future effects, it’s not a diagnosis, it’s prediction for forward planning,

    it’s extremely difficult stuff to do, weather forecasts break down once you go forward a few days because the magnitude of potential variables grow exponentially,

    the data that’s really got my attention is the ice core samples, they go back 800,000 years and at no time in that past have CO2 levels been anything like what they are now,

    apparently they’ve tried using deep ocean sediment cores to go back even further and they think the last time CO2 levels were this high the sea level was 100 metres higher and mega sharks were swimming about the oceans, we’re talking 5-15 million years ago, long before humans as we know them today appeared,

    the CO2 level graph from the ice cores also ties up very well with human population expansion and the levels of use of traditional energy sources, wood, coal, oil, gas,

    also it’s estimated that during the last few thousand years, as human civilisations have formed and risen, we, as a species, have cleared about half the tree cover of the planet,

    a must read is David R Montgomery: Dirt, The Erosion of Civilisations, University of California Press.

    he shows how all of the great civilisations in the past have sabotaged themselves through unsustainable agricultural practices, soil erosion, over irrigation leading to increased salt levels in the soil, deforestation, desertification,

    much of the mediterranean basin, the Levant, Middle East, North Africa, Persia and Mesopotamia are rocky and dusty today, the tree cover is gone, the top soil has washed off the hill sides and accrued in the valleys or been washed into the sea, this is historical man made climate change, sufficient to cause the collapse of complex civilisations in the past,

    with Notre Dame, they say that there just aren’t trees around old enough and big enough anymore for replacement roof timbers, they came from primeval forest which are now long gone,

    you only have to look at the speed the dust bowl developed in the USA in the early 20th century, a combination of ‘make a quick buck’ agricultural practices coupled with the mechanisation of agriculture created a situation where the top soil turned to dust and literally blew away in a matter of years,

    FDR initiated the planting of millions of trees as the Great Shelter Belt, the dust had been reaching New York on occasion it had got so bad,

    all this takes tens of thousands of years to recover naturally, if ever.

    man made climate change has been demonstrably happening for thousands of years, the thing is that with the advent of the industrial revolution, mechanisation, population expansion etc. it’s really accelerated dramatically in the last century,

    I believe the climate is changing and the rate of change is accelerating, where it will lead in the future is difficult to predict but it doesn’t look good to me,

    no one can predict the future because it hasn’t happened yet, the future, good, bad or indifferent is in our hands, a badly run business will go bankrupt, a badly managed planet will end up barren,

    as a species, in all respects, through indifference to the consequences of our actions we are collectively pulling the rug out from below our feet and are most likely to end up on our arses.

    • Hi Matt,

      Here is a CO2 flux infographic,

      I have previously linked also to Rocket Scientist Journal, Aquitall of CO2. but here it is again,


      Regarding our Human families propensity to foul our own nest, this is not disputed, what is disputed is that CO2 constitutes fouling the nest, That Warming per se is Harmful, and finally the arguments of Bjorn Lomberg, (who accepts the first two premises but goes on to advocate Adaptation and Critical path prioritisation) That adaptation is more achievable and resource-efficient than Emissions focussed Carbon Centric policies.

      I personally reject the first two premises but Agree that Lombergs approach of critical path prioritisation is wholly sensible. I am also not altogether sceptical of the CO2 as metric or proxy for Energy input availability, I prefer Freeberg’s, Quanta ( Plank Constant measure), but I am up for the discussion as to what is the most adoptable and adaptable measure?

      Finally, even if there is no peak oil, ( I think there is by the way) as a cornucopian I personally believe that where resources allow for the production of further abundant energy that can only be a good thing where the energy is harnessed for peacefull and benign ends. Sadly War is a huge objective of much of modern ( ( “Western civilisation”) ( It would be a good idea, (Ghandi).))
      This is where Seeds and Dr Morgans work is so important, it actually bases investment resource allocation decisions into a falsifiable framework, the current monetary system is very far removed from any analogous coupling to real-world economic resources.

  11. well fossil fuels are finite, they were laid down at an earlier point in the planets lifecycle, maybe if you got rid of humans and waited another 50 million years new deposits would be laid down and matured but we have to consider them finite on our human timescale,

    this is why I find the shale and fracking in the USA so mind boggling, they’re scrambling to exploit the dregs of the barrel when it’s a one off treasure they should be jealously hoarding and using most wisely,

    I believe a lot of the natural gas is flared off, it’s all quite crazy,

    and it’s indisputable that CO2 levels have risen sharply since the industrial revolution, it does make the atmosphere more insulative, this was pointed out back in the 1890’s,

    it isn’t just burning fossil fuels that’s increasing CO2, it’s deforestation and land degradation too,

    I think of the planet as a organic chemical battery, over 4.5 billion years life has evolved and turned simple minerals and elements into complex chains and molecules using sunlight as a catalyst, over vast periods of time the sunlight has been captured by ‘life’ and bonded into a quite extraordinary amount of different compounds, charging up the energy potential of the planet,

    for a million years hominids and latterly humans, in modest numbers, could just take energy from the bounty of nature at will without having much effect,

    with the industrial revolution you saw a sudden expansion of the human population and also a sharp rise in their energy consumption per capita,
    at the same time you saw rapid intensification of ecosystem destruction,

    whales had been around since God was a boy but in a matter of decades we had the manpower and technology to hunt them to near extinction,
    whale oil declined and petroleum products took their place,

    the one man in 1860 (when there were finally 1 billion souls alive) with an axe would cut down a tree,
    today, with approaching 8 billion that one man with an axe becomes 8 people with chainsaws,

    and yes, warming might actually be extending this current interglacial period and staving off the start of the next ice age, but warming coupled with unchecked deforestation, land degradation and desertification whilst the global population continues to increase is a recipe for disaster, if we let land dry out and die it’s a major undertaking to bring it back to life, especially if the top soil has been blown away.
    once the aquifers have been pumped dry and the glaciers have melted we’ll be moisture harvesting from the atmosphere like Luke Skywalker on Tatouine!

    the problem is increased entropy, we are too numerous and to technologically equipped for the planet to cope with a free for all, when it’s ‘every man for himself’, as a species we are currently discarging the planetary organic battery of captured sunlight quicker than the ecosystems can recharge it via photosynthesis from the sun,

    CO2 in itself is benign, the additional carbon we’ve extracted from the planets crust and released into the ecosystem could be considered potential wealth if it was utilised to grow lumber and crops on every square inch of land possible,

    if we reclaimed and farmed all the degraded land on the planet we’d need every drop of CO2, we’d be swimming in lumber and agricultural produce,

    if we grew so many trees and crops we dropped CO2 levels to pre industrial levels we could simply burn stuff to maintain the balance!

    the fact that we’re not putting this extra CO2 to good use is the problem, it is insulating the planet and having a warming effect on top of whatever solar variations may be also occuring,

    in fact, the dust and particulates also released into the atmosphere are causing global dimming and this could quite possibly be holding back some of the global warming, oh and also making solar panels less productive!

    after 9/11 when they grounded all planes in the USA the sky did actually become clearer, it was observed and noted,

    it’s ok to be a cornucopian if you’re prepared to roll up your sleeves and do the work to create the cornucopia,
    unfortunately if 8 billion people sit back and let our struggling planet do all the work whilst sabotaging it’s efforts at every turn we’re going to end up in a mess,

    we need to get a lot of people out of the cities and back on the land, get people growing food and lumber not exchanging bits of paper, you can’t eat banknotes or turn them into bio fuel.

    frankly.. all we need do is plant a few trillion trees on all the degraded and marginal land in the next decade and stop people cutting them down or letting goats and sheep chew them up when they’re tiny and we fix pretty much everything,


  12. Shale Oil and Financial Collapse
    I previously mentioned that the fragility of shale oil and gas production makes the energy situation in the US much more at risk than the usual complacent population wisdom. Gail Tverberg has some similar concerns, contained in a comment on a Seeking Alpha article….Don Stewart

    I very much agree with the issues raised. I think that the resulting breakdown (which might not be US-started) could be a whole lot worse than 2008. It will be very much connected with peak fossil fuels, because the deleveraging that occurs will bring fossil fuel prices down lower.

    • Apple is actually stupid
      popular wisdom, not population wisdom.
      Apple’s spell checker certainly does increase my production of errors.
      Don Stewart

    • I’ve just read Gail’s post (And seen your reply).

      She explains things very clearly but I somehow feel the people who run the UK Trasury would dismiss it.

      Not because they’re not bright enough but because what she says is outside what they’ve learnt at University so would be unable to see past all the rigid theory that’s hardwired itself into their thinking.

    • Interesting to see that Robert Rapier has called out a second Peak in US oil production may be happening now here: https://www.forbes.com/sites/rrapier/2019/07/28/a-new-u-s-oil-production-peak-looks-imminent/#7885b12a5ad3
      However, it is couched in the terms of that age old dispute that was so endemic at The Oil Drum: namely Inflationary v Deflationary. The evidence in since the demise of said site would clearly favour the Deflationary corner.
      WRT the fragility of Shale Oil and Gas producers, we have already passed the first major red flag. The major red flags being:
      1) Investors* cease funding
      2) Capex is significantly curtailed; projects shelved
      3) Investors head for the exit en masse as debts become too onerous
      * Investors includes *ankers
      Nick Cunningham has pointed out that there has been a drying up of issuances of bonds as investors are turning their backs: https://wolfstreet.com/2019/06/08/a-gusher-of-red-ink-for-us-shale/

      The next financial crash – which is, in fact, just a continuation of the 2008 crash as nothing has been done to remove systemic risk – may or may not start with the shale sector. It will, however, be a crippling blow to the US

    • US shale is indeed in big trouble, but is so important that subsidy might well be considered, not necessarily from taxpayers but perhaps by supplying cheap capital.

      Agreed, shale could trigger GFC II – but, right now, GFC-watchers would be better employed keeping an eye on China’s credit-driven boom, and the fate of GBP…..

  13. Optics
    Sorry to bore the British in the crowd, but here is a little about American politics.
    *Several large auto companies reached agreement with the State of California on mileage target for the years ahead. Trump, of course, killed the existing standards and has thought about rescinding California’s permission to adopt standards. Why are the auto companies playing ball with California? I think there are two reasons. One is that they believe that we really are at Peak Oil, and we need to move toward electric cars. That likely won’t happen without legislation…either by a big state like California or else the federal government. Trump has upset a careful compromise that was reached after years of negotiation between Obama and the auto companies.
    *The auto companies want most of all to be survivors. A free-for-all such as Trump seems to want may leave few survivors as companies spend great sums pursuing plans which ultimately turn out to be losers. Legislation reduces uncertainty.
    *Some companies see profit opportunities. But the profits will be a lot larger if the government defines the path ahead with some specificity.

    And here is the guy who has done many services for the Republicans in terms of making retrogressive policies sound like American Pie and Motherhood:

    My prediction is that what we will see is a big outpouring of taxpayer subsidized corporate initiatives smacking of Green Washing…adorned with free enterprise slogans and ‘America has saved the world once again.’

    Probably as far as one can reasonably get from Morgan, Patzek, Kunstler, and Tverberg. And retro-tech is nowhere to be seen.

    Don Stewart

    • On governments and the environment, just some observations:

      – Replacing all fossil fuels use over ten years would require spending, ballpark number, on average, $8,000bn annually. Investment last year was only $309bn. So far this year, it’s down by 14%.

      – It would also require adding an average of 1,140 mmtoe of new renewables output each year. Last year’s addition was only 71 mmtoe, of which just 14 came from wind + solar.

      – Governments promise “sustainable development”, based on an assumption of “decoupling” the economy from energy, which the new EEB report demonstrates to be not possible.

      – The UK, for example, is banning the sale of gasoline- and diesel-powered cars from 2040. It is not, for instance, planning to limit engine sizes to, say, 1.5 litres, or mandating all-hybrid model ranges, both of which could be done within five years, max..

      – Britain is also planning a new high speed railway, latest cost estimate of which is £86bn, and adding a third runway at Heathrow.

      – Either all these governments are idiots, or all are engaged in “green-wash”.

    • And of course there’s major deforestation going on while the Amazon could change from a CO2 sink to a producer if it burns.

      The new Brazilian president is doing everything he can to ensure this happens

    • Dr. Tim and anyone else, do you really think it is physically possible to replace all fossil fuel use with an alternative energy system when the construction and installation of the alternative depends on continued fossil fuel use? Could we reach a point where the alternative energy system could power its own continuation?

      We know that energy from the sun and the wind is free, but the infrastructure that allows their energy to be turned into electricity and distributed has to be manufactured and maintained using substantial amounts of energy and physical resources and it has to be replaced when it wears out.

  14. ‘Green wash’ is the new – and very superficial – orthodoxy, I’m afraid, all quite senseless.

    Wreck the Green Belt with a development and , if you tick the right boxes, low and behold, it’s Green! And Sustainable!

    And whatever we do in little old Europe, the rest of the world is going to Hell in a handcart and will take us with it, as in Brazil.

  15. Pollution of This Very Serious Blog
    This will be an excursion into the ridiculous. For which I should apologize, but it is late and I am tired.

    Word arrived today that Greta Thunberg will travel to New York for the United Nations meeting on Climate Change, and to hear the excuses of all those countries who signed up in Paris to do something, which they are not doing.

    So, what is new??? Greta will go by sailboat. She had vainly sought some commercial or tramp steamer way to get to NYC, but nothing worked. So, being the young lady that she is, someone with a racing yacht offered to ferry her from Europe to NYC. Now picture the ‘photo ops’ in a few weeks. The TV crews can go out to boring JFK airport in Queens and photograph the arriving hordes of UN delegates in cramped and crowded and noisy airport terminals, and skipping customs because they have diplomatic immunity….

    OR, they can go to the Battery at the foot of Manhattan and see this sleek yacht approach and tie up to the ancient stones where, perhaps, the Dutch originally tied up. Greta gets off the boat by gangplank and walks up Broadway to the Customs House, presents her Swedish passport, and humbly begs admission to the Land of the Free and the Home of the Brave.

    Will Donald Trump be there to welcome her? She says, ‘I probably have nothing to say to Trump…He doesn’t believe the best scientists in the United States…why should he pay attention to a poorly educated girl from Sweden?’

    I will give the girl credit for creating stories. It is just a shame that the stories, from all the participants in this charade, have so little connection to reality.

    Don Stewart

    • Hi Roger,
      that article about hemp proved quite thought provoking,

      historically it has been a very useful crop and currently it would serve as a substitute in a lot of areas,

      but more tellingly the article hints at the machinations of vested interests that caused it to be sidelined in the 20th century,

      banning the growing of hemp in 1937 typifies the adage:

      Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. Ernest Benn

      I find the restrictions on harvesting rainwater in some US states equally baffling.

      finding simple solutions is actually quite easy, overcoming vested interests seems to be the major obstacle.

    • If so, they deserve our gratitude.

      The official line seems to have been concocted entirely by spin-doctors:

      – ‘ We’re going to save the planet, and it won’t cost you anything, or put you to any inconvenience’

      – ‘We’ll ban ICE car sales from 2040 (but we won’t limit engine sizes, or mandate that all cars must be hybrids, now)’

      – ‘We’ll replace the current vehicle fleet with EVs, and won’t need to reduce the number of cars that you have’

      – ‘Your future holidays in the sun will not be jeopardized, but you’ll be flying there in a battery-powered aeroplane’

      – ‘We need a new runway………’

    • http://www.wrongkindofgreen.org/2019/01/17/the-manufacturing-of-greta-thunberg-for-consent-the-political-economy-of-the-non-profit-industrial-complex/
      The Manufacturing of Greta Thunberg – for Consent has been written in six acts. [ACT I • ACT II • ACT III • ACT IV • ACT V • ACT VI] [Addenda: I]

      In ACT I, I disclose that Greta Thunberg, the current child prodigy and face of the youth movement to combat climate change, serves as a special youth advisor and trustee to the burgeoning mainstream tech start-up, We Don’t Have Time. I then explore the ambitions behind the tech company We Don’t Have Time.

      Regarding the Sailing Yacht,



      The Malizia Ocean Challenge campaign has already been collecting scientific data about the oceans’ CO2 concentration and has been sensitising school children for marine as well as climate protection. Onboard the IMOCA 60 yacht “Malizia”, Boris Herrmann will compete as first-ever German in the solo nonstop race around the world, the Vendée Globe, and in 2021/22 participate with a German-international mixed crew in The Ocean Race around the globe.

      “Sensitizing School Children for Maine as well as Climate protection”

      Any question that Greta is a Sockpuppet for Elite Banking Crony Capitalist interests should be scotched by a simple glance at the sponsored of the Ocean-Going Racing Team.

      In all matters, Climate change, its one rule for the super-rich and another for the rest of us.

      One is reminded again by Calvins Dictum,

      ´´The people must always be kept in poverty in order that they remain obedient´´.

    • If Greta is a “poorly educated” as she says she is, why does she think she’s capable of judging who are “the best scientists in the United States”?

      After two weeks of seasickness crossing the Atlantic in a racing yacht, it will be interesting to see if she is well enough to walk up a gangplank.

    • A friend of mine here in England was threatened by his water supplier for using water butts

      They claimed he was diverting ‘their’ water and therefore was breaking the law

      When it went to court the magistrate through it out and made the water company pay restitution

      I think it’s a continuation of the stealing of the commons mentality (what was once a communal asset is hived off to private owners and then rented back to the public for a profit)

      That is the planned future everything owned by the few and everyone else renting off them

      And they wonder why ordinary folk are angry

    • In a long-ago episode of Boon (the series starring Michael Elphick as Ken Boon and David Daker as Harry Crawford), Ken gets charged for water that he pumps from a stream to irrigate his smallholding, again on the grounds that all water within its ‘catchment area’ belongs to the privatized utility. I’m pleased (and rather surprised) to hear that the courts ruled in your friend’s favour.

      In passing, some water companies in the UK are, I understand, introducing flouride into water supplies.

      This might enable kiddies to keep on eating sweets without getting cavities in their teeth.

      The downside, though, is that it’s likely to cause a big increase in hypothyroidism.

    • The water where my mother lives is undrinkable.

      It tastes of disinfectant and ruins tea and coffee.

      She is forced to buy bottled water with all its harm to the environment.


    • Timing is everything.

      I really think that Greta and the whole storry started as a usual grassroot thing. But IMO soon enough, the Davos gents realized that the message was actually getting traction, and was potentially problematic. Since then it’s been a show of allowing dissent in a controlled way. What she is saying is actually more acurate than 99% of the media content. What really interesting is that all the opposition media to her was also really coordinated in the different right wing outlets in serveral languages. You could see the same conspiracy theories and lines in german, french and english pop up less than a week appart. Smells like war in the billionaire’s heaven to me.

      I can’t help it but I have that weird feeling that when the bubble pops, and things start to go to crap, the message will be used to push for an aggressive “New Deal” type of thing to put the economy back on track.

      If the capital missalocation is not too high, and the monetary largesse kept under control to some extent, it might actually produce something positive.

      More positive than debt-fueled shale-oil shemes, anyway.

      Tinfoil hat off.

  16. A question for Tim if I may,

    In your experience Tim over the years, how long does it take between a drop in the value of a currency and the end consumer to notice increases in the retail prices of imported goods in the shops?

    • Depending, of course, on the magnitude of the fall, probably three to six months, according to the lag in import contracts and the length of the supply chain. If you’re about to set off on holiday to the continent, for instance, your hotel will already have been paid for, and the same applies to the fuel that will fly you there. Your next trip to Greece, though, will cost you more.

      In the modern “globalized” economy, though, there are other implications to consider. Overseas investors witness an immediate slump in the value of their investments, whilst the local currency equivalent of debts denominated in other currencies rises, again with immediate effect.

      There are plenty of ironies here.

      First, whilst the immediate cause of the GBP slump is the prospect of a “no-deal Brexit”, the UK’s new negotiating stance seems far likelier than Mrs May’s to get the EU to face economic facts.

      Second, if I decided to avoid GBP, it would have less to do with “Brexit” than with long-term economic mismanagement, plus huge exposure to the next GFC.

      Third, if a “no deal Brexit” is a good reason for shorting GBP, it’s an equally good reason for shorting EUR.

    • As an aside, in Weimar Germany women picked up their husbands paychecks in cash during lunchtime so the money could be spent on the same day.

  17. With total UK financial assets of at least £23bn, any severe fall in the value of GBP seems certain to affect the global financial system.

  18. Over at The Automatic Earth, Ilargi has a meditation on nuclear power: https://www.theautomaticearth.com/2019/07/nuclear-energy-the-ultimate-hubris/
    It ends with this stark assessment: “One more time: you can not run an economy on an energy source that generates economic losses. It is NOT an option. Our present economies have been made possible by fossil energy sources that gave us 10-100 times more energy than we put in to extract them. Those days are over. Please adjust your lifestyles accordingly.”
    The nuclear option is not compatible with ” Free Market Neoliberal Capitalism” – which, to be brutally honest, more closely resembles Corporate Socialism – as it sucks in capital at a phenomenal rate with no returns for a considerable period time if ever at all. (Does this remind you of Shale Oil/Gas?)
    It is an “All or Nothing” approach that will almost certainly leave us with Nothing.
    The big nuclear renaissance is just a mirage. Olikiluoto 3 still has yet to generate 1MW of electricity even though construction began in 2005! Then there is the end of life decommissioning to undertake – what to do with all that high level radioactive waste.
    Not a pleasant thought as Western “Civilization” begins its descent

    • Indeed so. The European Environmental Bureau has just comprehensively debunked the idea that we can “decouple” the economy from energy use.

      This means that “sustainable development” – the mantra of virtually every government on the planet – is a fiction.

      The next article here is likely to concentrate on this issue.

    • I can’t see any transition working without a “Facteur 4” / “2000W Society” angle of attack. It might have been possible if the transition had been pushed in earnest in the 70’s/80’s, but we are now to damn late into the party.

      Nuclear : Olikiluoto 3 is pretty much a pilot plant, so I would not judge costs on it. Still, nuclear is expensive for sure, but it uses less ressources* per MW than solar for example. I would keep in mind that the only case of an electric sector decarbonation at a national level is France with it’s massive nuclear buildup with about 3-4 plants per year for 15 years.

      *There is only so much copper, Li and rare earth lying around. This too, is a limitation.

      Decoupling is a fool’s errand. We will have to do with less.

    • This report seems very low quality, but it’s central thesis is true: thermal neutron reactors are a technological dead end for numerous reasons, including costs.
      However, thermal neutron reactors are not the only reactor types available. Clearly, more research is needed, and research is ongoing. Just not in the EU.

    • Jackson, it is not just Olikiluoto 3 that is struggling – the Flamanville reactor is now a decade behind schedule: https://www.energylivenews.com/2019/07/29/edf-confirms-further-delay-at-flamanville-nuclear-plant/
      The argument that the UK could have decarbonised with a nuclear build out in the 70s and 80s does not take into account the political position taken by the Thatcher regime. Up until then the UK went for its indigenous Advanced Gas Cooled reactor that was problematic to say the least. Before that there were the Magnox reactors. Thatcher wanted to build 10 P\WR – of the same type that France uses for its nuclear energy. Only one was completed – Sizewell B. The reasoning behind this was that the coal miners helped bring down Ted Heath’s Government in 1974 – UK Coal however, was a by now loss making enterprise that had long passed its peak (1913 in fact) .
      The one thing that counted against Thatcher’s nuclear drive was her ideologically driven “Free Market” mantra and that it should be Private Finance that should drive this change. With North Sea Oil and Gas coming on stream gas became the cheaper option and therefore won out. Now that gas is dwindling away and we have to ship it in from Qatar.
      I cannot see a major nuclear build out in the West because of increasing costs, and increasingly complexity. The plans are always for large scale plants that represent a top-down approach, whilst the option of smaller scale modular reactors are ignored – as everything fragments, will this continue?

    • The UK’s energy policy has long been pretty shambolic though, in fairness, much the same can be said of other countries too. It was said to me, of a pro-nuclear former Chairman of the CEGB, that “all xxxx wants is to glow in the dark”.

      The biggest mistakes, in my view, were made over gas. Privatized RECs, whose margins on power sales were restricted by regulators, could get around this limitation on profits by building gas-fired CoGen plants, then selling the power to themselves. Meanwhile, ‘quick-buck’ policy led to consent being given to export gas. Between them, these mistakes accelerated the depletion of UK gas reserves, which had never been huge.

  19. Breaking News!

    Greta Thunberg has decided upon reflection that she will no longer sail across the Atlantic But will Walk across instead.
    She said, ” I am told that walking on Water, is likely within my powers given my ability to see CO2, which no one else is able to do, New York, New York So good it deserves a Second Coming.”

    “If my critics saw me walking over the Thames they would say it was because I couldn’t swim”. Margaret Thatcher
    Read more at https://www.brainyquote.com/quotes/margaret_thatcher_127087

    • In other news, the Pope visited Mar-a-Lago last weekend to play golf with President Trump. During the game, a strong breeze blew the pontif’s mitre off his head and carried out into Lake Worth Lagoon, where it came to rest and floated on the water like a resting swan.

      While the Pope cursed and patted his bald head in disbelief, an unfazed POTUS walked across the fairway and out into the lagoon, tiptoeing lightly just above the wave tops until he came to the place where the hat was floating. He picked it up, and then walked back toward the shore and the pontif without so much as getting his shoes wet.

      The next day, the incredible story was all over the front page headlines in huge block capitals:


  20. The most hopeful sign, now, re Brexit, is perhaps the weakening of the German economy: they couldn’t possibly be happy at the thought of the UK really tanking at so delicate a juncture.

    If Boris doesn’t get a modified deal in this context, I give up all hope for rationality.

    • If I was German, what would worry me most wouldn’t be the economic slowdown at home, but the extremity of risk in several of its Euro Area partners!

  21. This is a reader’s comment from the Telegraph yesterday on an article about interest rates. His name is Leo and I’ve mentioned this site to him.

    On Thursday 1 August 2019, the Bank of England Monetary Policy Committee are due to announce their interest rate decision and publish their Inflation Report. There have been news reports recently indicating a degree of ‘softening up’ (of the news) before justification for a possible rise in the base rate. eg the announcement last week that the public wage freeze will be lifted. But, conversely, news reports that the Federal Reserve may well cut interest rates on Wednesday – the ECB maintained interest rates of around zero% last week.

    I believe now would be an appropriate time to consider the real losers under the ultra low interest rate / quantitative easing policies of the last decade. These losers include:
    1) Savers receiving negative interest rates resulting in falling demand and people generally losing the savings habit, creating long term problems.
    2) Savers being pushed into chasing yield ie purchasing risky assets and creating long term imbalances in the economy eg BTL housing/BITCOIN.
    3) Businesses that have been forced into competing against zombie companies (*A) – viable businesses are, in effect, subsidising market failures.
    4) Zombie companies being able to survive and prosper without innovation, resulting in declining productivity
    5) Asset bubbles such as housing, particularly BTL, preventing younger people from purchasing their own property (*B)
    6) High house prices, as a result of ultra low interest rates, help to buy etc distort personal financial planning. Home ownership is a form of pension in that it implies current deferment of spending in favour of some future benefit – something being denied to a whole generation.
    7) The Global Financial Crisis was substantially a result of a poor regulatory regime – have we learned from this? No. Refer to the decline in car ownership where now most car sales are leases. The GFC of 2007-8 caused by credit excess is now being fought with credit excess…
    8) Lose lending regimes have encouraged short term, high cost loans and a willingness/perceived necessity to live, day to day, relying on the oxymoron that is ‘cheap credit’.
    9) Undoubtedly the extended period of credit excess has impacted on some more than others (*C)

    10) Artificially low interest rates have encouraged businesses to buy back shares, by diverting funds that should be invested (in the company) – artificially increasing share prices to the benefit of Directors.
    11) The very banks that were market failures at the time of the GFC are now more powerful than ever. Profits have been privatised, losses socialised.

    Although the interest rate policies of last decade have been described, by a largely uncritical media, as ‘ultra low interest rate / QE ‘ the actuality is far from benign.

    Financial repression is a government policy where interest rates are deliberately held below the rate of inflation – the benefit to the government is that the real cost of borrowed money becomes negative. The best known example was after the second world war- the UK’s savers had bought war bonds to fund the fighting of the war – successive post war governments allowed inflation to rise in order to ‘inflate away’ savers loans to the state. Bit of a kick in the teeth for patriotic savers – but then perhaps it could be justified in that the loss for many citizens was greater than mere money?

    10 years ago, with the introduction of artificially low interest rates and QE, the State sunk to a new low. Financial Repression was introduced to bail out the Government’s and the BoE’s ‘friends’ in the city. All those corrupt and broken banks: Corporate Financial Repression.

    How does this hurt the public?

    It’s the reason why the best rate of interest you get on your hard earned savings is 1/3 the rate of inflation. And why your employer’s pension fund is in in deficit.

    And why ‘savers’ have responded to ‘financial coercion’ by being pushed into risk assets in order to ‘preserve’ the real value of their savings.

    And why you (or your children) have been unable to purchase a home of your/their own.

    Corporate Financial Repression – privatising corporate profits after socialising corporate loses.

    So now you know.

    (*A) Zombie companies are business (and individuals) who would have ‘gone to the wall’ under natural interest rates but exist only because of cheap liquidity. The long term effect is that because they are being subsidised by ‘savers’ successful companies who are not being given room to prosper.
    (*B) The decline of home ownership is a worrying long term trend. When current renters ‘retire’ who will pay their rents? It is likely that the burden of providing homes for future generations of retirees will fall on future taxpayers. Whereas in the past, increasing home ownership was effectively reducing future State dependency. Home owners were motivated by being able to pass on their wealth to their children.

    • Looks like Michael Hudson has been singing from the same hymn sheet: https://www.nakedcapitalism.com/2019/07/michael-hudson-the-coming-savings-writedowns.html
      I would also add into the equation the demographic time bomb. Pension funds need a yield of around 8% per year to fulfil its obligations without adversely impacting on its capital (I think that’s what is required nowadays – it has been a long time since I worked in Pensions). The larger Pension funds also invested in Commercial property, fine wines – anything they thought they could make money on. Some of these options are proving dead ends now and with more people reaching retirement age the demand for funds is ever increasing. This problem manifested itself with the Woodford Fund debacle when Kent County Council asked for £250 million back. Woodford didn’t have the dosh so the fund froze.
      George Carlin got that right – your pension will vanish the moment you go to collect it…

    • All very unsettling regarding pensions. £250m was a lot to place with one person.

      This is an article from the FT about Kent’s problems.

      Financial Times
      SIGN IN
      Woodford Investment Management
      Kent’s pension advisers criticised over role in Woodford saga
      Questions raised why council fund did not have a segregated mandate and pulled cash in one go

      Neil Woodford met Kent’s trustee board in November to discuss the fund’s underperformance © Alamy/Richard Cannon/FT Composite

      July 20, 2019 10:00 am by Owen Walker
      Two of the most influential pension scheme advisers have been criticised over their role in run-up to the demise of Neil Woodford’s investment empire.

      Mercer and Hymans Robertson, part of a group of specialist consultants that holds the keys to the £1.6tn in UK retirees’ savings pots, advised Kent Pension Fund at three critical points in its long relationship with Britain’s best-known stockpicker.

      Last month, that decision making process culminated in Kent asking for the return of £263m, that, in effect, forced Mr Woodford to suspend trading in his flagship Equity Income fund. This “gating” trapped hundreds of thousands of investors and sparked the scandal of the decade for the British fund management industry.

      The spotlight is now on the advice that Mercer and Hymans Robertson gave Kent’s trustee board of local government officials and retired council workers, and how clear they were about the likely consequences of actions taken by the trustees.

      “There are questions about each of the decisions Kent made. Put them all together and there is a pattern here,” said John Ralfe, an independent pensions consultant and former parliamentary select committee adviser.

      Kent’s association with Mr Woodford dates to 2007 when the pension fund, then advised by Hymans Robertson, invested £237m in the Income product he ran at Invesco Perpetual. This was a significant commitment for Kent, worth a tenth of the scheme’s entire portfolio.

      £317m Peak value of Kent Pension Fund’s allocation to Woodford IM
      When institutional investors make large allocations to investment managers, these are often structured as so-called segregated mandates: the money is run in the same style as the manager’s main fund but kept in a separate pot. Pension funds usually pay more for this set-up but retain a say in how the fund is managed and, crucially, have greater flexibility over withdrawals, especially in times of stress.

      Mr Ralfe said it was surprising Kent did not invest through a segregated mandate. “If you constitute a material part of a fund you can negotiate your own fee and should expect special treatment,” he said.

      Kent stuck with Invesco for several years as Mr Woodford comfortably beat his benchmark. By February 2014, Kent’s initial investment in Mr Woodford’s fund had grown to £530m, with the fund returning 20.1 per cent the previous year, above the 16.8 per cent return for his benchmark.

      It was then that Mr Woodford left Invesco to go it alone. The Kent trustees followed suit, giving the new Woodford Investment Management £216m to manage. Again, the investment was made directly into the fund and, again, the consultant was Hymans Robertson.

      This time the allocation was about 5 per cent of Kent’s total pot. Other institutional investors — such as St James’s Place, Quilter, Omnis and Abu Dhabi Investment Authority — structured their relationship with Woodford IM as segregated mandates, which meant they could reallocate the funds to different managers when they decided to switch.

      Richard Butcher, managing director of PTL, a pension trustee service, said it was not unusual for a pension fund to invest in pooled funds; the main advantage over a segregated mandate is lower fees.

      “Pension funds will consider the exposure to risk and return, price, fund structure, liquidity and risk of the fund closing when deciding to go into a pooled fund. Liquidity is generally a smaller concern compared to other considerations,” he said.

      Initially, Kent’s decision to stick with Mr Woodford paid off. The Equity Income fund returned 2.7 per cent in its first year compared with a 3.9 per cent loss for its benchmark. Yet even in this period of strong performance, there were signs the relationship would not last. In November 2015, Nick Vickers, head of financial services at Kent county council, wrote a report for the pension board outlining the ramifications of a UK government plan to merge local authority schemes.

      £10m Amount withdrawn each day from the Woodford Equity Income fund in late May
      Mr Vickers warned Kent that it was the only UK local authority pension fund invested with Woodford IM and that the relationship would probably not survive Kent being pooled with other schemes. “Given the style of investing it is unlikely that Woodford would be selected to manage a UK equity pool and so we could potentially be forced to end the mandate,” he wrote.

      Kent’s allocation to Woodford IM reached a peak value of £317m in January 2017, at which point Mr Woodford started to underperform his benchmark significantly. Other institutional clients abandoned ship but Kent stuck with its longstanding stockpicker.

      Last November Mr Woodford and Will Deer, Woodford IM’s head of institutional relationships, who was made redundant this month, were asked to meet Kent’s trustee board to discuss the fund’s underperformance. The board quizzed them on the scale of redemptions from Equity Income, which was rapidly shrinking, as well as their outlook for Brexit and how the portfolio would respond.

      On May 31, Kent’s patience snapped. After a series of Financial Times reports on the Equity Income fund’s pace of decline — £10m a day was being withdrawn — trustees voted unanimously to pull their £263m allocation to Woodford IM. The investment represented about 7 per cent of the Equity Income fund.

      By then, the board had replaced Hymans Robertson with Mercer, the world’s largest human resources consultancy, which came on board sometime in 2018.

      Kent had options on how to reclaim its money. It could take it back in a series of withdrawals over a set time; it could also ask for an “in-specie transfer”, where Woodford would hand a bucket of assets from the fund in proportion to Kent’s investment, rather than selling and redeeming in cash.

      John Ralfe, independent pensions consultant: ‘Pension advice is sometimes quite bland and the decision is ultimately made by trustees’ © Charlie Bibby/FT
      Kent chose a third option, which ultimately forced the fund into lockdown: it requested its entire investment in one go.

      Mr Ralfe said it was unlikely Kent would have been advised to ask for an in-specie transfer, which would have left it with a collection of unquoted and hard-to-trade assets.

      He said, though, that the scheme and its advisers would have known of Woodford IM’s problems for a year or more and that it should have started withdrawing its money earlier rather than requesting a lump sum.

      “Why leave it to the last minute? That doesn’t make sense,” he said, adding that the scheme might have been advised to redeem the investment earlier but that the message did not have enough force.

      “Pension advice is sometimes quite bland and the decision is ultimately made by trustees,” he said.

      Hymans Robertson and Mercer declined to comment for this article, citing policies of not discussing client decisions. Kent declined to comment on the discussions it had with its adviser or with Woodford IM over the structure of its investment

    • Back in GFC I, local authorities were amongst the biggest losers when the Icelandic banks collapsed. I knew of nobody in the City who lost any money in that event. When something (like high interest rates) looks too good to be true, it’s usually because it is.

    • Didn’t Gordon Brown bail them all out in the end.

      I still find it worrying that highly paid investment managers/ advisors still fall for rates that look suspiciously high.

      Looking at UK equity fund managers for the last year only 28 out 205 are actually making any money after inflation.

      That must say something

  22. Another question Tim, if you don’t mind.

    I frequently see people from banks and financial company research departments quoted in the news as saying that “X” currency is undervalued or over valued etc. In simple terms, if that’s possible, how do you “value” a currency?

    If they can see that it’s over valued why can’t others and why does it stay over/under valued and not correct quickly, if they can see that it’s under/over valued and are consequently able to profit others should be able to too and so the identified anomaly should surly correct.

    I assume different companies do that in different ways or they’d all get the same answer but there must be a general mechanism that gets taught to economist at university. I’m trying to get myself up to speed for the potential failure of currencies that you say we may face in GFCII

    Thanks for you thoughts.

    • The simple answer is to look at PPP data. These ‘purchasing power parity’ numbers are based on the price of the same thing in different countries.

      Taking Russia as an example, the average market value of the RUB last year was $0.02, or 62 RUB = $1. But the PPP rate was 0.041, or RUB 24.25 per $1. On the former, Russia’s GDP converts to $1,6 trillion, but the PPP equivalent is $4,2 tn, obviously a much more realistic number. The Russian economy doesn’t shrink because FX traders don’t happen to like the rouble. Likewise, the UK economy didn’t shrink in size by 15-20% in the days immediately following the result of the “Brexit” vote, when GBP slumped.

      On this basis, the projected 2019 PPP valuation of GBP is $1.43, well above its current market price.

      Please be clear that I’m not saying that GBP (which one wag has tagged “Great British Peso”) is “worth” $1.43, simply telling you what its PPP projection is. The point, though, is that FX traders have opinions about what currencies are worth, but these opinions are based at least as much on interpretations and expectations as they are on fundamentals.

  23. Living on a Solar Budget

    Dr. Morgan has promised us a comprehensive article on the necessity to begin to live on a solar budget. This will be a amateurish review of one reason to think that solar may be much better than most of us realize.

    Despite the enormous amounts of fossil fuel energy we harvest each year, solar is much larger. Most of the solar, of course, is not directly usable for human purposes…we need the solar to warm the planet so it doesn’t become an iceberg in cold space. But Evolution has created remarkable creatures which use solar energy much more intelligently than humans…the microbes. For an introduction, I suggest you look at Bonnie Bassler’s TED talk. You will learn how the bacteria, probably the first living things on Earth, use signaling and quorum sensing to work together to achieve goals which affect human prosperity for good or ill. One immediate result of her lab’s research may be replacements for the antibiotics which are currently failing.

    For a considerably broader view of the subject, I suggest, as I have suggested before, taking a look at the long presentation by Christine Jones:

    Christine’s focus is on the symbiotic relationship between plants, bacteria, fungi, sunshine, water, and ‘higher’ creatures such as the soil food web and eventually humans. At the present time, humans see fossil fuels as our primary source of food, fiber, and energy.


    We know, if we can use our eyes and brains, that the current system based on fossil fuels is not working. For example, I sent this note to the members of my Community Garden yesterday:

    “I recently sent you the results of a BRIX meter reading of a winter squash leaf in my garden at home (28), a reading from a southern pea grown as a cover crop but with edible leaves grown in a container (16), and some dark green organic lettuce purchased at Weaver Street Market (3). Today my wife and I made a trip to Asheboro, and I got to examine the people going in and out of a store in Asheboro. The people were in poor shape…I saw a lot of motorized wheel chairs. When I got home, I ran across these statistics which may give us some hints about what has gone wrong. In 1900 most people died from communicable diseases. Very few died from chronic diseases. Communicable diseases have been sharply reduced since 1900 through science, but chronic diseases have become epidemic. Half of our children now have a chronic disease. Here are the food statistics, in terms of average consumption per person per year:

    Calories 2100 to 2757 (also note that people are more sedentary now than they were in 1900, so would need less calories)
    Sugar 5 pounds to 190 pounds
    Oils and Fats 4 pounds to 74 pounds
    Cheese 2 pounds to 30 pounds
    Meat 140 pounds to 210 pounds
    Soft Drinks 0 to 53 gallons

    But homegrown fruits and vegetables were very different
    131 pounds to 11 pounds

    Considering that my not-very-scientific sample showed that we also went from nutritious fruits and vegetables to not-very-nutritious fruits and vegetables made all our health problems worse. So….the annual rent on your BCG plots is one of the world’s great bargains.”

    The focus on pounds of food rather than the nutrient density of food has led us to create ‘empty calories’…which is arguably the reason, along with gross overconsumption, I saw so many sick people yesterday going into that store. And why Heart Disease, Cancer, Diabetes, and Alzheimer’s are bankrupting ‘advanced’ economies.

    Perhaps we ‘advanced’ by marching in the wrong direction???

    While it is clear to me that someone who applies what we already know how to do in a small garden can make a lot of progress, it is not clear to me whether the techniques explained by Bassler can be applied to huge swathes of monocrops. One of the reasons that the store-bought lettuce is so inferior to simply harvesting some of the leaves from the southern peas grown without much work or attention, is that the lettuce has been bred for characteristics valuable to a corporation which has an ignorant customer base, a resource mining corporate philosophy, and a lot of ground and days in transit between harvest and consumption.

    My guess is that the way forward is either individual solar panels operating DC appliances when the sun shines, or small community installations using DC appliances, with very local production of water-heavy fruits and vegetables coupled with long distance transport of dried goods such as seeds and nuts (including grains). My guess is also that local production of fiber, including a lot of biochar, will be essential to supplement the carbon sequestration provided by the microbial system but also to produce a wide variety of services useful to humans.

    I will not hazard a guess as to whether 10 billion people could be fed with such a local/solar system. If it is the feasible way forward, we will either adopt it or collapse.

    Don Stewart

    • One thing I’d add to this is that energy transition is too big, and too all-embracing, for government departments to cope with, and can’t be solved by private enterprise because the scope of the latter is too restricted, and too short-term in nature.

      The United States wisely tasked NASA, a specialist, well-funded organization, with the space programme. My “just for fun” comparator is that the cost of transition will be the present-equivalent cost of the Apollo programme multiplied by 537. Last year’s worldwide capital spend on renewables was Apollo x 2.

      Taking the UK as an example, it’s not been difficult for government to commit to stopping all sales of ICE vehicles from 2040. But nearer term, really effective measures are harder.

      Here are two ideas I’ve suggested in the past:

      – Limit the size of all new cars’ engines to 1.5 litres

      – Mandate all-hybrid model ranges

      Both could happen within five years, and both would have a meaningful impact, now, on emissions and pollution. But neither, so far as I’m aware, has even been entertained by government, in the UK or elsewhere.

    • If all those sick-looking people actually walked everywhere briskly -impossible I know in many places due to urban Design-by-Car – they would be immeasurably better in health, mind, and perhaps have a taste for better foodstuffs, too.

      I know that if sit around too much, my hand somehow reaches out for sweet stuff, biscuits, cakes, etc which I have been foolish enough to buy: but after lots of exercise and manual work, I want a good solid meal cooked from whole fresh ingredients. (I actually must learn to make my own cakes and biscuits, or find a suitably-skilled wife or something).

      At the moment, I am looking at the hundreds of golden globes glowing on my old apple tree and can’t wait to sink my teeth into the first apples of the year.

      As the Sufi said: ‘He who tastes, knows…….’

  24. From a nutritional point of view, the rations of WW2 would surely be extremely inadequate if replicated with the factory-farmed produce of today. Rather a depressing thought as rationing is almost certainly coming.

  25. Greenwashing.

    A wonderful example here, from the village magazine: noting that the people who want to foist the ‘eco-friendly’ £200 million guided busway project on us (ridiculous, because we can certainly get the buses and traffic running smoothly in peak hours without a special concrete busway through the Green Belt, and at a fraction of the cost) are promising lots of lovely tree planting along the route (which is very green and pleasant as it is) – one of the ‘ many exciting environmental benefits’ of the project – observes ‘Couldn’t we have the trees without the busway, if they are so desirable?’ Quite.

    Central govt. is pushing this scheme, and a condition of funding is that if all the money isn’t spent, no more will be forthcoming to ‘develop’ the region. How will success be judged? An increase in GDP tax revenues from the region. …..

    Irrational pseudo-Green policy, further environmental destruction and concrete-pouring, throwing borrowed money at it and treating us like idiots into the bargain: the shape of the future, I fear will be mal-investment and irrational decrees such as this.

  26. An interesting program last night on BBC 4 TV outlined the property of graphine for electrical storage. It was presented by Jim Alkalili, a well respected scientist. The program “Revolutions: Ideas That Changed The World” explained that electrical vehicles in future could use graphine as a rechargeable power source.

    • Hi just watched it. I hope they can fully develope the Graphene battery powered car.

      Sounds wonderful that the car itself can be part manufactured from this wonder material meaning it becomes the battery without having to carry one around.

      This of course could have huge implications for trucks and even airliners.

      Pity we didn’t invest more in proven fission reactors 10 years ago here in the UK.

  27. Systems Thinking (where has it gone?)
    I buy wine from Dry Farms Wine in California. They import low-alcohol, ‘natural’ wines full of microbes, polyphenols, etc., from small farms in Europe. Today, their email is about ‘Lessons from the Mediterranean’, and the place of wine consumption in communities where people routinely live to a healthy old age. You will also find, in small letters at the end of the email, ‘alcohol is a neurotoxin, and moderation is essential’. Our ancestors knew nothing about fragments of DNA governing gene expression, nothing about modest amounts of alcohol (probably they could only afford to make modest amounts), nothing about the essential role of global dominance by viruses and the secondary dominance of microbes and the only tertiary existence of what we look around us and identify as ‘life’. They somehow knew that gathering in the evening for a glass of wine with good friends and family was a good thing to do after a day’s work.

    So, a dose of ethyl alcohol delivered to a dish of gut bacteria is poisonous. Alcohol is made by fermentation. Our ancestors fermented cabbage and milk and many other foods in order to preserve it. They fermented grapes because grapes had sufficiently high sugar to produce wine. Determining whether your grapes had sufficient sugar to produce the alcoholic content necessary for wine produced the technology of BRIX meters. Now we can use BRIX meters to measure, in a rough way, the nutritional value of green leaves which would never make wine. A ‘natural’ wine is a nutrient dense grape crushed with microbes from the air and fermented. So when we drink a ‘natural’ wine, we are getting a large dose of all those living critters that Christine Jones describes. Some of those critter are known to actually protect our gut lining and our brains. We also know that gathering in the evening (originally around a campfire) is an excellent antidote to dementia and general degeneration.

    So is wine a good thing or a bad thing? Reductionist science is still pretty much stuck in the realm of petri dishes. We need to take a systems look at the issue. My guess is that we will conclude that our Mediterranean ancestors who lived to be healthy centenarians were living a pretty good life. But if you look at the noise which comes from governments, corporations, the media, and internet doctors, it is hard to find any of them who are taking a systems analysis seriously, and very hard for ordinary people to separate the signal from the noise.

    One of the Blue Zones is Sardinia, an Italian island in the Mediterranean. Someone who studied it said that the people there do not appear to be very happy. They don’t eat particularly ‘healthy’, and they don’t meditate or do yoga or go to gyms. But the island is very hilly. To get anywhere, people have to walk up hills. Exercise, by generating short term challenges to the body, takes care of a lot of problems. We are still Babes in the Woods in terms of figuring everything out. If you are of the proper mindset, try to channel Donella Meadows.

    Don Stewart

  28. Tim regarding efficient cars obviously big car manufacturers in the US clearly didn’t like the newly introduced Prius in 2007 so their auto industry trade group commissioned a report which found that when you took into account the manufacturing process the so called green Toyota was less green than a Hummer.

    Thankfully the report was discredited after a proper analysis showed that a Prius does save energy overall after being compared to a normal car.

    There are some small cars with new engines which are incredibly economical in real World driving.

    The Suzuki Swift with a 1.0 gets
    63.3 mpg while their Celerio gets 64mpg.
    However small cars are not for all but this latest crop is getting nearly double the mpg of similar cars from the 70s and 80s

    • My favourite is the Brabus-engined version of the Smart Roadster Coupe, sadly discontinued in 2006-07. I’ve owned two of them at different times.

      Top speed is electronically limited to 200kph (124 mph). 0-60mph isn’t anything to write home about, but acceleration is maximized between 40 and 80mph, where it’s blistering. Driven “sensibly” (not that anybody would) it can return well over 40mpg. It’s engine size is just 698cc!

      They also built one with twinned engines, still only 1.4 litres, but said to be capable of burning off almost any production car on the road.

    • That sounds like a lovely car. I can’t say I was fond of my first car in 1986 (A 1.0 Metro which became poorly with rust) but I did love my 1988 1.0 Citroen AX.

      It was a revelation after the Metro – lovely to drive – incredibly economical and showed just how far behind GB manufacturing had fallen (the partnership with Honda being one of the exceptions)

  29. Another move today in the slow-motion (for now) collapse in fiat currencies. An article over at Zerohedge reports that UBS will begin charging large depositors (>2M CHF) minus 0.75% per annum to hold their deposits, to pay for and offset the negative interest rate costs that UBS incurs to the ECB. If other European banks follow suit, my guess is that we can expect more European deposits to be placed in U.S. treasuries and maybe some small portion in, horror of horrors, gold. The minus 0.75% p/a bank hit otherwise incurred would likely more than cover the annual storage and custodian costs.

    The evidence keeps mounting that money cannot earn money anymore. How far can we go before the idea and confidence that it is a “store of value” is completely undermined?

  30. A Few Thoughts About Gail Tverberg’s Current Post
    Gail goes headfirst against the notion of renewable mandates.

    I see us between a rock and a hard place. First, I expect Dr. Morgan to tell us that continued use of fossil fuels to keep the current complex system operating isn’t going to work. Second, the issue of load leveling and batteries for backup is an assumption, but not necessarily the way forward.

    I need to do a short digression. Gail has convinced herself that her stick model of an economy which has to grow and cannot shrink is the only real world. But I look at a different very complex model: the brain. What happens in dementia and Alzheimer’s? The brain begins to lose neural connections. A CAT scan reveals something like a swiss cheese. There are functional holes. But the brain is a very resilient biological system which is adept at rewiring. For example, if someone has a stroke, the brain will wire around the damaged area and the person may continue to function reasonably well. The final collapse into Alzheimer’s happens when the brain, in a pretty short period of time, can simply no longer wire around the holes.

    The degradation can be halted and sometimes reversed if the patient adopts an anti-Alzheimer’s lifestyle, as is described in The Alzheimer’s Solution, by Dean and Ayesha Sherzai. Both are MDs, and Dean also has a PhD in behavior change.

    If we adopt a ‘damaged brain like’ strategy, we give up on the hopeless project of maintaining the current system using current levels of fossil fuel use…much less growing the system. Such a strategy leads us in a direction which won’t please any financial analyst, but may keep the patient alive.

    Let me give a very specific example. Food in the Temperate Zone is mostly produced in about 100 days when temperatures and rainfall and sunshine are most favorable. (Similar situations occur in tropical areas with wet and dry seasons). Therefore, we can plainly see that the ability to harvest and store food during the 100 days of plenty is crucial. Feeding animals which are subsequently slaughtered is one strategy. Fermenting to preserve vegetables is another strategy. But here I will give the example of drying the green leaves in order to provide high nutrient density food during the other 265 days. Solar dryers are quite possible, and one can find diagrams for them on the internet (my daughter built one). But, in my experience, the best solution is an electricity powered dryer with a small fan. How can one be built? Let’s suppose that there is enough industrial capacity still operational to produce the dryers (pretty low tech) and the fan. Then the dryer can be operated on DC power coming from a solar panel mounted in the yard or the neighborhood. All the complications of fitting intermittent power into the grid are avoided. It also means that the dryer cannot be operated when it is raining, but that can be worked around.

    If the DC system has been built, it can do quite a few valuable things, such as cooking grains in an Instant Pot- like DC pressure cooker. A whole lot better than a 3 Stone Fire. If firewood is used, we now know how to use it a lot more efficiently than Europeans ever understood. If we are clever, we can cook and also produce useful heat and possibly gases and certainly biochar for fiber and food and carbon sequestration…see Bates and Draper’s book Burn: Using Fire to Cool the Earth.

    My basic disagreement with Gail is her assumption that collapse or full speed ahead are the only choices. We are as biological as the brain…we just need to display some wisdom and cleverness. But exactly how things might work out is not known, because we have thought so little about the real issues.

    One of the most severe seasonal food environments that I know about was the fiords in Norway. Those who lived on the south side of a fiord running east and west got no sun at all for long periods in the winter. Their solution was dairy cows, which could be walked from winter quarters at sea level to the high meadows which got sun long before the main farm house down on the fiord. Huts were built for human shelter up on the high meadows. During the long Arctic evenings in the summer, the people down at sea level walked up to the camp and partied. People cut hay and hauled it on their backs to barns at sea level, to feed their animals through the winter. The food storage basically was the dairy products preserved for the winter: think cheese. Necessity is the mother of invention.

    Don Stewart

    • I think that the Roman empire collapse can provide some level of insight :

      Part of the infrastructure, when useful was used and maintained for a long time (e.g. roads).

      On the other extreme stuff like ceramics production was so concentrated that for a long time high quality pots where unavailabe, and what could be made was low quality because the skill was mostly lost at a local level.

      Then there is the whole potential in infrastructure conversion and cannibalisation. Amphitheatre and circus where either convertred to housing or exploited as quarries.

      The most important question is : what part if the energy and resource flow is dedicated to vital services. IMO it’s quite lower than we think, so there is a lot of wiggle room to be gained by trimming the fat.

      This means that a society with some amount of wisdom (I know, dream on…) could keep working for a long while.

      Modern dark ages is not Mad Max. Its North Korea.

  31. The lesson of history is that human beings tend not to do the wise and clever things that they might, all things being equal, have done. (Why the need for spiritual teachers otherwise? How else to explain the horrors, cruelties and sheer destructiveness of the past – and present?)

    All things are never equal; wisdom is more than uncommon; and what is clever usually has the most dire unintended, long-term consequences which invariably defy mitigation.

    This is not to deny a capacity for wise foresight in Hom. Sap.: my favourite example, quoted before, being the ancient woodland in England which was maintained in a state of viable productivity due to the harvesting programme devised by an abbot in the 13th century.

    And there are, of course, examples of small societies and cultures well-adapted to the environment in which they found themselves- mostly below the civilised level of complexity.

    But that is the exception, and a densely-populated, complex society, with high technology employing highly replicable destructive metal and synthetic tools – machinery – clearly militates against such wisdom and adaptation.

    Civilisation is an imposition on the ecosystem, not enfolded within it.

    Another example: a group of farmers protested against industrialised agriculture in the 1950’s in England, drawing attention to the inevitable soil degradation, compaction, erosion, poisoning, etc; at the very beginning of the process the result was quite clear to them. Result? Nothing. Onwards, full speed ahead to destruction. Vested interests, and the structure of our economy, went against them.

    Panning out to take a wider view, just consider our record as a species since the invention of complex societies based on mining, agriculture and dense settlements: moving on from one exploitable source of energy (wood, coal, gas, oil, nuclear) to another, degrading soils and the environment in general, destruction rippling out from our cities (themselves often unpleasant and dangerous to live in due to over-crowding and consequent high mortality from infectious disease) to the maximum extent possible, before inevitable collapse.

    I am far from being pessimistic by nature, and I certainly enjoy the more refined fruits of civilisation, but one cannot overestimate the unwisdom of mankind, above all when caught -as we are – in the meshes of a complex financial and industrial system created over centuries.

    • Hi some very good points. Its very sad that we’re now enchroching on possibly the last few tribes in the Amazon who have had no real contact with ‘civilisation’.

      As you will have noted from some of my previous posts I’m deeply upset about the acceleration of the destruction if the Amazon.

      And what for? Poor quality grazing land so Americans can stuff themselves full of burgers and get even more obese.

      If Mankind is still here in 100 years time the Amazon will all be tarmaced over.

      Sorry to have a rant.

  32. To give a specific example of the way in which financial structures incentivise mal-adaptation.

    It is apparent to the meanest intellect that the wisest long-term use of the farmland surrounding this city which is, on this side of town, all within 20- 60 minutes walk of the historic centre, would be to convert it from industrialised mono-agriculture to efficient market gardens, such as surrounded London in the 18th century before suburban expansion. Also to improve the quality of the soils still farmed, plant productive woodland generously, etc.

    What a legacy that would be for any future human settlement!

    Instead, the University, desperate to make the money for an endowment sufficient to allow independence from government funding and political interference, eager to make money from hi-tech investors, and also attract graduate students and survive in a highly competitive global university market, has become a property speculator, and is concreting it all over as fast as possible with shoddy building (very ugly too) both residential and commercial: all enabled by ZIRP.

    All that land will be removed forever from true productivity to sustain life, human or otherwise. It of course ties in with the guided busway I mentioned before, to be funded by central government on a ‘Use this money to pour concrete or else’ basis.

    The least wise option becomes, in the context of what is already in place, the only sensible one from a narrowly defined investment focus.

  33. Well Tim no chance of getting back to normality with the Fed cutting its rate and the BOE putting ours on hold.

    You’d have thought the penny would have dropped by now but clearly not.

    • The shadows spread from Mordor over the fair and flourishing land…..

      Didn’t Kyle Bass say ‘Once an economy is in the tractor beam of ZIRP, it can’t escape’?

      Error piled upon error, until…..

    • Rock and a hard place stuff for Mr Carney, really. Cutting rates at a time when your currency is already weak is not a great idea, and the current level does give him wiggle-room if “Brexit” turns really nasty, A cut now could panic markets.

      Meanwhile, with the Fed falling into line, NO major CB is now trying to restore monetary normality – and that, more than a decade on from the “temporary” and “emergency” monetary expedients of 2008-09, tells you how grim things really are…………..

    • Well, full throttle consumption was a stupid thing to do in the first place. I believe they are almost in panic mode. As soon as atm withdrawal restrictions are in place we know its endgame time. All regions now try to maintain employment in my opinion, until currency devaluations raises eyebrows upto their necks.

    • QE, ZIRP, NIRP after how many adrenaline shots into the heart do we recognized the patient as dead ?

      50yrs bonds in the negative. This is complete madness. But yeah, let’s pull the last control rods out. Surely, something will happen then…

      Subsidizing zombie companies and cash burners by screwing pension funds and savers is sooo clever. This can only end in tears.

    • A good analogy – the financial system is completely out of control, like a runaway nuclear reactor. Not one CB of any size now aims to restore interest rate normality – an admission in itself.

  34. As part of the work for the next project, I’m starting to get a handle on the capital investment required for transition – the range, out to 2050, seems to be $95tn to $110tn, with the latter needed if we’re to cut GG emissions from where they are now.

    • Spread over 30 years Tim – that’s $523 per year for everyone on Earth. Of course not everyone is working…….

      Perhaps if we’d started 30 years ago and encouraged everyone to have small families.

    • Another way to think of it is as 719 Apollo programmes, as the equivalent cost today of putting a man on the Moon was $153bn.

      The cost of converting US power generation – not the rest of FF energy use, just power – has been put at $35,000 per household. Even for a wealthy country like America, that is a daunting number.

    • And we’re not even close to starting.

      I think we’ve missed the boat.

      Say if we’d started in 1988 when there was plenty of oil we could have afforded the transition- but not now

  35. Post-Carbon Institute in the US is offering a free webinar with David Hughes. David’s subject is ‘How Long Will Shale Last?’ While I got an email with click through registration, I think this will work for you:

    WHAT: Free Webinar with J. David Hughes
    WHEN: August 14, 2019
    TIME: 10:00 am PDT / 1:00 pm EDT
    WHERE: Online
    HOST: Halt the Harm Network
    RESOURCE: How Long Will the Shale Revolution Last?

  36. CapX stated that Us spending on video games has doubled since 2010 to $35bn yearly

    I wonder if this is a pointer to the future.

    As surplus energy decreases we might be forced to spend more and more time at home so may chose to immerse ourselves in a virtual World to experience things we no longer can in the real World.

    • Low-tech solution for that: my elderly mother refuses to get new spectacles, as she ‘prefers it out of focus, it’s all so awful anyway.’

  37. US Politics
    I think this is a pretty accurate assessment of the disconnect of US politics from reality. If Boris really want GB to join with the US, some of you may want to get alarmed….Don Stewart
    View at Medium.com

  38. There’s a gigantic push for electronic payments as we speak. In my banking app, from ING, one of the biggest banks in the Netherlands, i can automatically switch to Apple pay. I got a t-Mobile phone contract for one of my family members today, while activating the phone (older iPhone) i had to fill in my choice of payment; iDeal, by phone, creditcard etc.

    Is this providers searching for yield or is this a push for more control over payments to be used when things go ‘south’?

    I think phone companies and providers aim for our payments information, but, it freaks me out sometimes. I don’t like big brother at my backdoor, especially not with a hammer, nails and lots of timber.

    • I think it’s best to have ‘one directional’ engagement.

      What I mean by that is that one can use the net to learn things, not to be ‘learned about’. If ever asked about, say, your gender, age or interests, make up false answers.

      I gave up my smartphone years ago, because, for anyone who works with computers as much as I do, their slowness and lack of functionality is irritating. Even then I avoided apps, out of a mistrust which I think has been justified by events. I don’t buy anything Apple any more anyway, because each one I’ve had has had a shorter life than the one before it.

    • Thanks doc. Agreed, typing from my 10 yr old iPad. Indeed, Apple stuff isn’t what it used to be. Good points, learn from the web, don’t get sucked into it. The Matrix tries very hard though.

  39. Max and Stacey; JP Morgan; China

    In the first part of the interview, Stacey discusses in some detail a new report from JP Morgan to its clients with 20 million dollars or more. Dollar hegemony at risk…clients should diversify away from the US. What role will gold and bitcoin play?

    In the second half, we get the news of a new Chinese city in Pakistan with half a million people. Pakistan is welcoming Chinese investment. Will the US start a war over China’s global expansion?

    Don Stewart

    • Above got posted prematurely. This discussion is surreal in view of the ‘over-extended China’ theme.
      Don Stewart

    • As a prominent Neanderthal mentioned;

      The influence on meat goes beyond the cooking.

  40. The Daily Telegraph has made a great play today on how people will vote depending on the outcome of Brexit.

    Effectively it said that the Conservatives would only get a majority if the UK leaves without a deal on the 31st October.

    However they only polled 0.0043% of those eligible to vote (2004 people) and didn’t give any indication of demographics.

    To me this sample is far too small to be significant even if each person lived in a different part of the UK and was a different age and class.

    Polls are never reliable and to write a whole article saying in effect ‘this is what will happen’ is a bit daft

    • Indeed so. Polling has seemed to become progressively less effective, failing to predict either Mr Trump’s victory or the “Brexit” vote. My preference, of course, is to follow prosperity indicators.

    • I think you could be onto a ‘winner’ Tim.

      At the very least the COMRES poll in the Telegraph should have done a control poll with a similar sample.

      If the 2004 people were across all demographics then perhaps do 10 polls across all – compare the results and produce a variance analysis.

  41. Focus Urgently Needed
    I have previously tried to define ‘prosperity’ as being a result of influencing microbes to behave in ways that lead to thriving humans. For some visual evidence, see this article. Cookie cutter industrial solutions usually don’t work very well. We use lowest common denominator, destructive practices which are almost guaranteed to be thermodynamic losers. In a world of rising ECoE, we urgently need to turn our thinking around.

    And here is a brief excerpt from a soil scientist talking about our history:
    “In his retirement, Justus von Liebig, the father of chemical agriculture, realized he was wrong in thinking plants depended on solubility. Rudolf Steiner took up the challenge of correcting Liebig’s errors in his agriculture course. Time passed, and Ehrenfried Pfeiffer, who worked closely with Steiner in his agricultural research, immigrated to the United States after World War II and set up testing laboratories in Spring Valley, New York. He conducted extensive total testing of soils and found that most soils contained large quantities of nitrogen, phosphorus, and potassium that didn’t show up on soluble tests. These were the very elements being applied in large quantities to agricultural crops, though soils continued to decline in fertility.

    In many cases, soil biology, given encouragement and sufficient trace elements, would provide access to the insoluble but available nutrients stored in the humic fraction of the soil. However, fertilizer industries using soluble testing as a sales tool and selling farmers minerals they already had in abundance were unstoppable. They perpetuated Liebig’s errors and financed ongoing research into solubility-based agriculture, building a momentum that relegated Liebig’s final wish to obscurity.”

    Somehow, against all odds, humans at this time are challenged to rethink the basics of how we produce food. As I have stated before, and in round numbers:

    Today we use 10 dietary calories of energy to put 1 calorie of food on the table. And we are unhealthy when we eat it.

    We need to use 10 dietary calories of energy to produce 15 calories of food on the table…a 15:1 ratio of improvement. And the food should promote health, not disease.

    I cannot imagine Donald Trump or any of the Democrat candidates stating the challenge in these terms. It is time for a Reality Check.

    Don Stewart

    • Very interesting about Liebig.

      As to soil, there’s an excellent scene in the series ‘Vikings’.

      King Alfred shows the Norse invaders who have cut a deal with him the land they will get to farm.

      The Norse king kneels down, takes the soil in his hands, and getting up says:

      ”Look, real wealth! ‘

      And turning to Alfred:

      ‘You think we are just barbarians. But we will show you, KIng Alfred, that we are serious people’. ie farmers.

      And what good farmers they did make in their parts of England over the centuries!

      But not industrial ones.

  42. Blue Ocean Arctic
    While the Trump administration (and other countries) are busy extolling the benefits of an ice-free Arctic, the results are likely to be disastrous for humans. Here is a link to Paul Beckwith’s first video in a series which will explain why. He is using a paper published by reputable researchers at respected institutions, including NASA.


    An ice free arctic is equivalent to a 57 point increase in CO2, or 25 years of emissions at the current rate. So if you thought we had 15 years to turn the ship, think again. My guess from just studying the daily charts which show fragmenting sea ice everywhere, we are already on track to an ice free Arctic.

    I do want to call attention to the ‘May impact’. If the ocean is not frozen in May, then the magnitude of the impact is vastly increased. The reason is that in May the sun is strong, but if there is ice, most of the energy is reflected back into space. If the ocean is blue and not covered by clouds, then most of the energy is absorbed and warms the planet. If you garden, you know that plants grow rapidly in May, and slowly in October…although the temperatures may be about the same in both months. Temperature lags behind the solar insolation. A good part of gardening and farming is involved in trying to get the benefit of the spring sunshine more rapidly than in traditional agriculture.

    Don Stewart

    • One more thing to think about
      Just looking at the parts per million of CO2 as compared to the geologic record indicates that the seas should be perhaps 20 meters higher than they actually are today. But those statistics reflect very slow changes (by human standards), when the system had enough time to react and reach an equilibrium.

      Suppose that the warming is equivalent to 57 points of CO2, and happens over, let’s say, 10 years… but the actual amount of CO2 doesn’t increase that rapidly. Then what we will have is very rapid melting of certainly Greenland and most likely the west Antarctic ice sheet. beyond what the incremental CO2 would lead us to believe. Leading to rapid sea level rise with vast numbers of people being uprooted and harbor infrastructure becoming useless.

      With the distinct possibility that a Blue Arctic can shift the center of jet stream circulation to Greenland (away from the North Pole) and lead to cold weather in Europe and the northeastern part of North America. (Remember that it is the Gulf Stream that prevents Europe from having the climate of Labrador.)

      I’m not smart enough to model that. But you get the idea what to look for.
      Don Stewart

  43. I’m not that great with numbers but it looks to me that if the human race needs to plant a trillion trees to counteract the CO2 we’ve collectively released over the last 100yrs it seems to work out at roughly 125-150 trees per person,
    it seems really do-able and rather inexpensive compared to anything else I heard suggested,
    I don’t understand why tree planting isn’t a top priority?

  44. @Matt
    From an article about the disastrous Paradise Fire in California:
    “What was once sparse is now densely packed with pine, fir, cedar, and manzanita. A forest that supported 64 trees an acre in pre-settlement times now boasted 160 trees an acre. The modern eye sees this mountain-to-mountain vegetation as proof of the forest’s good health. Like the border-to-border almond trees in the valley below, vigor would appear to be nature at its most eloquent. But that is not what nature intended. “The landscapes of today may look attractively lush,” Gruell writes, “but the thickening forest threatens us with several problems.”

    So Nature designed the Sierra in California as a grassland with trees scattered across it…not the dense forest that a human fire-suppression concept makes it into. When the Russian and Alaskan government forestry bodies tried to explain that fire is a natural part of the cycle, they were quickly downed out by a sea of anguished voices bleating about carbon dioxide released.

    We are between a rock and a hard place, compounded by ignorance.
    *Forests do not create deep soils. Grasslands create deep soils. For example, the Great Plains in the US with soils 6 feet deep and a bison heard roughly equal to the number of cattle there today. Tremendous amounts of carbon in that soil…some of it labile (rapidly being oxidized) and some of it in stable humic forms. With the bison emitting methane, of course.
    *In a dense forest, most of the carbon is not in the soil, but in the physical tree. But if the tree is located in a dense grove on land that is fire-prone, we will have a forest fire problem. If the dense forest that exists today was a result of fire suppression policies by governments and private owners, then the fire suppression efforts both require money and energy to suppress the fires, and also result in periodic disasters such as the recent fires in California.
    *If we try to let some of the ‘at risk’ forested areas revert to a more savannah area with scattered trees in a grassland, we will create some airborne carbon as the trees burn (either in natural fires or in stoves) and the herbivores who thrive in grasslands will create methane.

    Do you see the problem? We have allowed CO2 to rise to dangerous levels and are trying to skate on the very thin ice. Compounding the problem is that we haver a shortage of low ECoE energy with which to manhandle the forest. Not to speak of all the humans who have built houses in the dense forests which should not be dense and loudly clamor for the government to ‘do something’.

    The Australian Aborigines managed the entire continent of Australia with fire for many generations. It was extremely productive. But they did not invest in the infrastructure that we build nowadays. They had little infrastructure, and they were experts in setting low intensity fires which maintained the ‘scattered trees in a grassland’ that we can see in early European paintings of Australia at the time of first European contact. We know that the Europeans did two things:
    *They turned central Australia into a desert.
    *They created industrial age settlements in places which are now under constant threat from fire.

    What I have just explained is anathema to all concerned, except to the Alaskan and Russian government agencies whose voices are being drowned out. We will see more ‘call out the army’ efforts…which deplete our shrinking fossil fuel supplies.

    Another Rock and Hard Place.

    Don Stewart

    • Hi Don,
      I agree brush fires are part of the natural cycle, if they happen annually they clear the low brush, grass, scrub in the undercanopy but pass quick enough not to kill the well established trees,

      I’ve seen aerial photo’s of a brush fire line passing through well spaced woodland and the tall tree’s are still green and unburnt,

      some seeds even need the heat of a brushfire to trigger their germination,


      the terrible bush fires you see in Australia, California, Southern Europe do seem to be worst where the undercanopy has become a mass of tinder dry scrub that burns so ferociously it ignites the tall, well established trees as well.

      in temperate zones I don’t know why every river, road, field etc doesn’t have a tree line along it, you see pics of industrial agriculture and it’s flat land for as far as the eye can see and not a tree in sight,

      in northern France apparently they’ve been cutting down the trees that Napoleon had planted alongside the roads so his armies could march in the shade, the reason being they’re a danger to people who skid off the road, seems pretty idiotic too me, I loved those tree lined roads.

      as for drylands, you’re right, it’s mostly grass with very deep roots and clumps of trees in depressions where water tends to collect,

      I saw a youtube vid of a rancher that restored a place he’d bought, he had some of that prairie grass dug up to show how incredibly deep the roots go, kill that stuff off and you’re only one good drought from a dustbowl scenario,

      I’ve been watching ‘Rawhide’ in B/W online recently, I kinda like the stories but what fascinates me is the landscape and also the technology & equip they use,

      the same goes for ‘Wagon Train’ in some of the opening montages there seem to be brief pieces of archive footage intermingled, scenes from the last wagon trains that were late enough to be captured in moving picture format,

      it’s all a world only 100-150 years ago but it’s utterly different to today, it could actually be a glimpse of the not so distant future too as technological progress slips into reverse!

      my grandmother said she remembered them building around Hollywood, she said it was still dirt roads, virgin ground being cleared,
      now when you fly NY to LAX the approach to Los Angeles at night really illustrates the degree of urban sprawl, all done in only 100 years,


  45. https://www.theguardian.com/business/2014/jan/17/foreigners-buy-uk-farmland-estates

    Growing fears rural land is becoming magnet for the ‘rewilding dream’

    Lauren Dean

    There is growing fear that rural areas across the UK have become a magnet for people with money who are buying into the ‘rewilding dream’.

    The sham of ‘Sustainable Development’ is what’s really behind the unhinged plan by elite academics from England to try and claim 10,000 hectares of Welsh land and 28,000 hectares of Welsh sea
    22nd February 2019 The Sovereigner Opinion 3 comments
    By Gruffydd Meredith

    The Narratives of CO2 and Environmental problems with flooding and Forest Fires much has to do with deliberate “neglect”, in the interests of an Urbanisation and re-wilding agenda, this is driven by the UN Agendas 21 and Agenda 30.

    Climate Collapse Agendas are generating a Narrative of fear and Senisitisng young minds to authoritarian Tax Farming of a dumbed-down population.

    “Sensitizing School Children for Maine as well as Climate protection”

    Any question that Greta is a Sockpuppet for Elite Banking Crony Capitalist interests should be scotched by a simple glance at the sponsored of the Ocean-Going Racing Team.

    In all matters, Climate change, its one rule for the super-rich and another for the rest of us.

    One is again reminded of Calvins Dictum,

    ´´The people must always be kept in poverty in order that they remain obedient´´.

  46. As Ghandi might have said: ‘Human foresight? That would be a good idea, we should try it someday.’

    I’m restoring a book on Western Australia from the 1830’s, and it speaks with great respect of the Aborigines, their quick-wittedness and general intelligence; unfortunate that we seem always to find ourselves appreciating what has been lost.

  47. Pingback: Whaley Bridge Damn, The UN, Wilding, Somerset Levels and IPFSA. The Religion of Climate Pornography #FeralMonbiot #ReWilding #Flooding #ForestFires  #Agenda21 #Agenda2030 #SustainableDevelopmentGoals #FascistUNAgendas #UNMisanthropy #EUMisanthropy #Globa

    • I feel that the Eagles song “The Last Resort” (1976) nailed this, and the whole of their “Long Run” album (1980) drove the nail home.

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