#159. The perils of equilibria


Putting together what might turn out to be the last article published here this year has been one of two main items on my agenda. (I’m hoping to slip a third, pre-Christmas article into the list but, should this not happen, please accept my premature good wishes for the season).

In back-to-front order, the second ‘agenda item’ is a much-updated guide to the principles of Surplus Energy Economics, and to the latest – SEEDS 20 Pro – version of the model. The Surplus Energy Economics Data System has now evolved into a very powerful analytical tool, and I plan to make even greater use of it to inform discussions here in the future.

You can download at the end of this discussion, or from the Resources, page a summarised statistical guide to selected EM economies, whose prospects are one of the issues discussed here.

Two disequilibria

The aim here is to set out two of the trends that I suspect are going to ‘go critical’ in the year ahead.

The first of the two narrative-shaping issues that I’m anticipating for 2020 is a marked slowdown in the emerging market (EM) economies.

We can say what we like about the advanced economies (AEs), where monetary adventurism seeks to disguise (since it cannot reverse) an economic stagnation that has morphed into a gradual (but perceptible) deterioration in prosperity.

But, all along, we’ve known that our trading partners in the EM countries have been “doing stuff” – churning out widgets, building infrastructure, ‘going for growth’, and doing a quite remarkable job of improving the economic lot of their citizens.

This positive trend is, in my analysis, starting to top-out and then go into reverse. Even ‘conventional’ numbers are now starting to reveal what SEEDS has been anticipating for quite some time. The cresting and impending reversal of the wave of prosperity growth in countries like China and India – and the consequent financial strains – are likely to inform much of the economic narrative going forward.

The implications of what I’ll “the EM crest” will be profound.

We will no longer be able to say that ‘the Western economies may be stagnating, but the emerging nations are driving the global economy forward’. Their less complex, less ECoE-sensitive economies now face the self-same issues that have plagued the West ever since the onset of ‘secular stagnation’ from the late 1990s.

The second critical issue is financial disequilibrium, and the ‘devil or the deep blue sea’ choice that it poses.

Here’s an example of what this ‘disequilibrium’ means. In nominal terms, the value of equities around the World increased by 139% in a decade (2008-18) in which nominal World GDP expanded by 33%. Applying inflation to both reduces the numbers, of course, but it leaves the relationship unchanged. What’s true of equities is also true, to a greater or lesser extent, of the prices of other assets, including bonds and property.

What matters here is the relationship between asset prices and incomes, with ‘incomes’ embracing everything from wages and pensions to dividends, corporate earnings and coupons from bonds.

This divergence is, of course, a direct result of monetary policy. But the effect has been to stretch the relationship to a point from which either surging inflation (by driving up nominal incomes), or a crash in asset prices, is a necessary element of a return to equilibrium.

We may have to choose between these, with inflation the price that might need to be paid to prevent a collapse in asset markets.

Our industrious friends

A critical issue in the near-term is likely to be the discrediting of the increasingly fallacious assumption that, whilst much of the “growth” (and, indeed, of the economic activity) reported in the West is cosmetic, emerging market (EM) economies really can go on, indefinitely,  producing more “stuff” each year, so a big part of the World remains genuinely more and more productive.

Westerners, the logic runs, might increasingly be making their living by using a ‘churn’ of newly-created money to sell each other ever-pricier assets and ever more low-value incremental services, but the citizens of Asia, in particular, remain diligent producers of everything from cars and smartphones to chips and components.

This, unfortunately, is a narrative whose validity is eroding rapidly. China’s pursuit of volume (driven by the imperative of providing employment to a growing urban workforce) has driven the country into a worsening financial morass, whilst a former Indian finance minister has warned of “the death of demand” in his country.

Figures amply demonstrate the development of these adverse trends, not just in China and India but in other members of the EM-14 group that is monitored by SEEDS.

On the principle that a picture is worth a thousand words, here are SEEDS charts showing that, whilst Western prosperity is already in established decline, something very similar is looming for the EM-14 economies. Of these, some – including Brazil, Mexico, South Africa and Turkey – have already started getting poorer, and many others are nearing the point of inflexion.

159 prosperity

And, as the next pair of charts shows, you don’t need SEEDS interpretation to tell you that the divergence between GDP and debt in the EM countries doesn’t augur well.

159 EM divregence

What’s starting to happen to the EM economies has profound, global implications. Perhaps most significantly, the dawning recognition that the World’s economic ‘engine’ is no longer firing on all cylinders is likely to puncture complacency about global economic “growth”.

When this happens, a chain reaction is likely to set in. With the concept of ‘perpetual growth’ discredited, what happens to the valuations of companies whose shares are supposedly priced on their own ‘growth potential’?

More important still, what does this mean for a structure of debt (and broader obligations) predicated on the assumption that “growth” will enable borrowers to meet their obligations?

In short, removing ‘perpetual assured growth’ from the financial calculus will equate to whipping out the ace of diamonds from the bottom tier of a house of cards.

Timing and equilibrium

This brings me to my second theme, which is the relationship between assets and income.

Just like ratios of debt to prosperity – and, indeed, mainly because of cheap debt – this relationship has moved dramatically out of kilter.

The market values of paper assets put this imbalance into context.

Globally, data from SIFMA shows that the combined nominal value of stocks and bonds increased by 68% between 2008 and 2018, whilst recorded GDP – itself a highly questionable benchmark, given the effects of spending borrowed money – expanded by a nominal 33%.

Equities, which were valued at 79% of American GDP in 2008 after that year’s slump, rose to 148% by the end of 2018, the equivalent global percentages being 69% and 124%.

For the United States, a ‘normal’ ratio of stock market capitalisation to GDP has, historically, been around 100% (1:1), so the current ratio (about 1.5:1) is undoubtedly extreme.

Prices of other assets, such as residential and commercial property, have similarly outstripped growth in recorded GDP.

Whilst this isn’t the place to examine the mechanisms that have been in play, it’s clear that monetary policy has pushed asset prices upwards, driving a wedge between asset values and earnings.

This equation holds true right across the system, typified by the following relationships:

– The prices of bonds have outstripped increases in the coupons paid to their owners.

– Share values have risen much more sharply either than corporate earnings or dividends paid to stockholders.

– The wages of individuals have grown very much more slowly than the values of the houses (or other assets) that they either own or aspire to own.

This in turn means that people (a) have benefited if they were fortunate enough (which often means old enough) to have owned assets before this process began, but (b) have lost out if they were either less fortunate (and, in general, were too young) when monetary adventurism came into play.

The critical point going forward is the inevitability of a return to equilibrium, meaning that the relationship between incomes and asset values must revert back towards past norms.

You see, if equilibrium isn’t restored – if incomes don’t rise, and prices don’t fall – markets cease to function. Property markets run out of ‘first-time buyers’; equity markets run out of private or institutional new participants; and bond markets run out of people wishing to park some of their surplus incomes in such instruments.

To be sure, markets might be kept elevated artifically, even in a state of stasis, without new money being put into them from the earnings of first-time buyers and new investors. But the only way to replace these new income streams would be to print enough new money to cover the gap – and doing that would destroy fiat currencies.

This means either that incomes – be they wages, bond coupons or equity dividends – must rise, or that asset prices must fall.

In a World in which growth – even as it’s reckoned officially – is both subdued and weakening, the only way in which nominal incomes can rise is if inflation takes off, doing for wages (and the cost of living) what it’s already done for asset prices.

With inflation expectations currently low, you might conclude, from this, that asset prices must succumb to a ‘correction’, which is the polite word for a crash.

But that ‘ain’t necessarily so, Joe’. It’s abundantly clear that the authorities are going to do their level best to prevent a crash from happening. It seems increasingly apparent that, as Saxo Bank has argued so persuasively, the Fed’s number one priority now is the prevention of a stock market collapse.

Additionally, of course, and for reasons which presumably make political sense (because they make no economic or social sense whatsoever), many governments around the World favour high property prices.

The linkage here is that the only way in which the authorities can prevent an asset price slump is ‘more of the same’ – the injection of ever greater amounts of new money at ever lower cost. This is highly likely to prove inflationary, for reasons which we can discuss on a later occasion.

My conclusions on this are in two parts.

First, the authorities will indeed do ‘whatever it takes’ to stop an asset price collapse (and they might reckon, too, that the ‘soft default’ implicit in very high inflation is the only route down from the pinnacle of the debt mountain).

My second conclusion is that it won’t work. Investors, uncomfortably aware that only the Fed and ‘unconventional’ monetary policy stand between them and huge losses, might run for the exits.

They know, of course, that when everyone rushes in a panic for the door labelled ‘out’, that door has a habit of getting smaller.

There’s an irony here, and a critical connection.

The irony concerns the Fed, the President and the stock market. Opinions about Mr Trump tend to be very polarised, but even his admirers have expressed a lot of scepticism about his assertion that a strong stock market somehow demonstrates the vibrancy of the American economy.

So it would indeed be ironic if the Fed – in throwing everything and the kitchen sink into stopping a market crash – found itself acting on the very same precept.

The connection, of course, is that equity markets, just like bonds and other forms of debt, are entirely predicated on a belief in perpetual growth. If, as I suspect, trends in the EM economies are set to destroy this ‘growth belief’, we may experience what happens when passengers in the bus of inflated markets find out that the engine has just expired.

EM 14 December 7th 2019

315 thoughts on “#159. The perils of equilibria

  1. An interesting observation by a pundit yesterday. By the time of the next election in 2024 – if your name wasn’t Tony Blair it’ll be 50 years since a Labour leader was elected to PM (not counting Brown of course who wasn’t elected)

    A damning record.

  2. Well, we can all switch off for a bit while Labour tears itself into pieces. All predictable and therefore not worth following in detail.

    But might we – turning to more weighty, global, matters – not be barking up the wrong tree here?

    The President of the EU assured us this week that ‘Green(and clean) growth’ is still possible, growth that ‘gives back’. Lagarde, at the ECB, says she will be supporting this.

    I fear they don’t understand the basic functioning of a highly urbanised,, high-population industrial civilisation, which is based on nothing if not mining, the reduction and conversion of finite energy gradients, the erosion of soils (like nearly previous agrarian economies) and the massive production of pollutants – that indeed is what it ‘gives back’…..

    The game is, surely, nearly over, and Green industries are not salvation.

    Nor do they grasp that we have by all indications reached the era of non-growth, and most probably a collapse in complexity in the near to medium-term.

    ‘Green growth’ and the massive pivot around unproven, and improbable, new ‘clean’ technologies recall the war-winning ‘secret weapon’ that Germans expected to be unveiled by Hitler as late as April 1945, despite all the experience of 4 years of defeat, lies and delusions.

    Meanwhile, as they moved among the among the bombed-out wreckage, they could hear Goebbels assuring them of how wonderful it would all be when re-built to the revolutionary masterplan…..

    I’m inclined to tune out from all this gibberish, can we expect any sense from our self-appointed ‘leaders’ on this issue?

  3. Re:
    “The Lie will be perpetuated until reality kicks in, and even then TPTB will insist it’s only a temporary blip and that there will be Jam tomorrow.
    The decline may well be gradual, but accompanied with some steep drops.
    We are not going back to the 1970’s.
    We are going back to the 1930’s. ( but with sporadic Internet !)”

    This is not just to Johan. It is to most who have been commenting along with our gracious host. While I agree that the trends point this way, certainty is not in my make-up. There is a well known statement attributed to Niels Bohr, Yogi Berra, and others which needs to be kept in mind:

    “Prediction is difficult, especially about the future.”

    Intervening unexpected variables can alter projections. A global pandemic or famine might reduce population by 15-20%. A tactical nuclear exchange could kill many and cause a cooling of climate. Luck of time and place would determine who is most affected. Fusion energy “could” surprise, changing the energy scenario. I’m not betting on these or other unknowns, and prudence (The Precautionary Principle) is rational. Perhaps it is my skeptical nature, but I resist joining certainty cults.

    Cheers on the Downslope,


    • I’m remaining optimistic but would not want to be in a future where the only food available consisted of Brussel sprouts – Cabbage – Cauliflower – Garlic and Onions.

      I know I’d be one of the first to perish.

    • @ewaf88
      The future is more likely to look like this:
      *Brussel sprouts, cabbage, cauliflower, garlic, and onions are likely to be grown in your yard or community garden…because they provide the essential ingredients for biochemical reactions which keep you healthy…and because they are 90 percent water and thus perishable and also hard to transport.
      *Calorie dense and dry foods such as grains and legumes, which supply most of your calories, are more easily transported and will be supplied by farms not necessarily very close to you. They adapt readily to slow vessels navigating water.
      *Intermediate crops such as tubers are likely to come from farms on the outskirts of town.
      *Beef cattle will likely disappear. We won’t be able to afford the luxury of feeding grains to cows to fatten them. The consumption of beef prior to the 20th century was relatively rare. Hogs MAY survive on garbage from the cities, but I think it more likely that the restoration of productivity to the soils will require recycling almost all urban garbage. Chickens dispersed through urban landscapes are more likely.
      *I think dairy will disappear, except on small farms. Milk will be a luxury for urbanites.

      There will be radical changes in food storage and preparation. In the tropics and temperate zone kitchen gardens, the emphasis will be on growing ‘just in time’ so that the storage of perishables is minimized. Cooking may be done by solar stoves, either reflective ovens or photovoltaic appliances. The appliances will work a lot better, if we can get the photovoltaics cheap enough. For example, every home may have a DC rice cooker powered by a couple of panels. On days when there is just not enough sunshine, people will get by on raw foods…which is a currently a trendy practice among the rich, but fat, population.

      Don Stewart

    • “Prediction is difficult, especially about the future.”

      An apt quotation, Steven. Thank you.
      But what I was alluding to was something that is predictable. ie Human nature.
      In managing decline, it is one aspect which is being ignored, but it is something that we all know something about and it will be relevant in coming events.
      Dr. Tim’s data shows us that collapse from BAU is inevitable, but not necessarily imminent. Looking at the future, we know what resources are going to be available, and we can calculate roughly what kind of population and lifestyle that these resources can support.
      What cannot be predicted, as you accurately point out, is the process of decline, and yet, it is this process of decline that interests me the most.
      Quite simply because of my basic selfishness i.e. my human nature. I want to know how this collapse is going to play out, and how it is going to affect me and my loved ones.
      Unfortunately, this is not for us to know, but what we can do is explore various scenarios, and try to extrapolate from what we do know. We can also include human nature, both the good side and the bad.
      I am not making, and have not made, any predictions as such, but what I am hoping for is some input from others as to how they see things playing out, in order that we can try to prepare ourselves.
      We all know that Black Swan events can and do happen, but that should not prevent us from studying events and trying to join dots.
      For all we know, the Black Swans might not show up.

    • Yes, Tim, I saw it this morning on ZH but also commented to my wife that BBC had ignored it. Interesting how we are given ‘selected’ news – I have complained to BBC more than once but always fobbed off. I tend to use RT and Aljazeera for ‘real’ news.

    • There was a piece about it in the US version of Reuters. I checked UK, and hunted for it. This version says nothing about violence.

      BREXITDECEMBER 13, 2019 / 2:31 PM / UPDATED 14 HOURS AGO
      ‘Not my prime minister’, protesters march in London against Johnson
      1 MIN READ

      LONDON (Reuters) – Several hundred noisy protesters marched through central London on Friday to protest against Britain’s election result, chanting “Boris Johnson: Not My Prime Minister” and “Boris, Boris, Boris: Out, Out, Out”.

      The protesters, brandishing signs that read “Defy Tory (Conservative) Rule” and “Refugees Welcome”, walked at speed from outside Johnson’s Downing Street residence to Trafalgar Square and on to the theatre district, blocking traffic and drawing a heavy police presence.

      Johnson’s Conservatives won Thursday’s election by a large margin. On Friday he called for “closure” over the Brexit divisions that have riven the United Kingdom for the past three and a half years.

      Reporting by Johnny Cotton; writing by Kate Holton; Editing by Gareth Jones
      Our Standards:The Thomson Reuters Trust Principles.

    • I can corroborate that, Austrian Peter.
      Recent large-scale independence marches with tens of thousands of people in all large Scottish cities have taken place over the last year, and yet it is difficult to find any mention of them on the BBC. These events were regularly reported on by both RT and ARD ( in Germany ).
      And then the English population are surprised that the SNP sweep the board at an election !
      I no longer visit the BBC website to read what is there, I go to look at what is not being reported on.

    • During the campaign, Mr Johnson mused on reconsidering the BBC licence fee.

      Something certainly needs to be done about the BBC, though that’s not necessarily the best solution, and risks “throwing the baby out with the bathwater”.

      The problem is that the BBC has become a propagandist for a narrow “liberal” agenda. This is self-perpetuating, and hard to fix. Its ‘news’ reports increasingly take the form either of celebration or of lamentation.

      It’s also strangely dated. British people moving to Spain (etc) are “ex-pats”, but somebody moving from India to Britain is an “immigrant”. We must call Bombay ‘Mumbai’, but it’s fine to go on calling Mallorca “Majorca” (yet the latter, unlike the former, is spelled in the same alphabet).

    • The one good thing about the BBC is that you’re not bombarded with adverts.

      Some business models are based on being able to view Ad free content.

      On YouTube you are literally being bullied to pay for their Ad free content with advertisements appearing everywhere even cutting people off in mid sentence..

      I’ve almost been battered into submission.

    • “We must call Bombay ‘Mumbai’, but it’s fine to go on calling Mallorca “Majorca””. I’ve always found it odd that we must, as you say, call Bombay, “Mumbai”, Peking, “Beijing” etc or we hurt the inhabitants feelings. Yet we call Deutschland, Germany, and the French call London, Londres and England, Angleterre, etc, etc, but that is acceptable.

      It seems to me that someone (I don’t know who) is saying that fellow Europeans and other Westerners are clever enough to accept that different names for places is not a problem, but “third worlders” are not so bright. Now that really is condescending.

      When I lived in Portugal the Portuguese called the city Lisbon when talking English and Lisboa when talking Portuguese. It did not seem to be a problem for anyone.

    • It’s even stranger here – our administrative capital is called ‘Mahon’ when speaking to English people, also ‘Mahon’ when talking to Spaniards, but locally ‘Mao’ (Menorquin).

      Also, I notice that changing ‘Bombay’ doesn’t change ‘Bollywood’. Curioser and curiouser…..

  4. What is health and how do we get it?

    This is one of the most subversive podcasts I have heard recently. It is consistent with the thinking I previously referred to from Nora Bateson and the Plan B people. It looks at the futility of modern Western culture. It also suggests ways that real people are stepping back from the false prophets. Please note that the ability to grow food is an essential skill…which we are not teaching to children. Of course, in order to grow food we have to grow soil and the soil food web…not get a PhD in poisons.

    Don Stewart

    • Here’s one for you Don. Syrian Arab nomad and his wife.

      Abdul: ‘Health was so much better in the past.’

      Mrs Abdul: ‘There’s always been sickness!’

      Abdul: ‘Yes, I know; what I mean is you either lived or you died, none of this drawn-out lingering on medicines. We had the cauterizing iron, that was good for lots of illnesses, but now they won’t treat you at the hospital if they find out you’ve used one…’

      Such a relative matter. And if you think life and death come from Allah and are fated, you will worry so much less.

      Interestingly, he observed that one tribe specialized in medicinal herbs, but they all left en masse for Saudi Arabia, where they grew very rich.

  5. More Subversion
    First 4 minutes of this video:

    Message: Science can validate but cannot persuade.
    Don Stewart

  6. When considering predictions, and whether collapse is imminent or not, it as as well to bear in mind that we are already in the middle of the collapse of our civilization, which will be many decades in duration.

    This is what it is.

    One can sense a certain acceleration,though, and our abuse of the ecosystem – mining, pollution, and destruction of good soils – remains unrelenting and ever foolish.

    Rummaging in the guts of things like a Roman priest, one is inclined to say; ‘Don’t make many long-term plans’.

    But that has always been the wisest approach anyway: trying to tie up all the ends and foresee every eventuality is generally ‘most unlucky’, as Francis Bacon observed.

    • I have to agree, though with a heavy heart.

      We’re going through a period in which growth in prosperity (a) decelerates, and (b) goes into reverse. We’ve not even handled (a), so our chances of tackling (b) don’t look good. Environmental issues are part of the same equation.

      As a society, we are resolute in our refusal to recognise this watershed. We refuse to face the reality, even though understanding the economy as an energy system isn’t exactly difficult. We’ve opted instead for denial, diversions and internal squabbling.

      The demonstrations against Mr Johnson are a case in point (as would have been any demonstrations against Mr Corbyn, had he won). Set against issues like deteriorating prosperity, environmental and ecological threats, worsening hardship in the poorest parts of the World, and a financial system nearing tipping-point, objections to Mr Johnson (or anyone else) are of very little relevance.

    • This situation puts me in mind of a sinking ship:

      “The ship is about to sink! Get into that lifeboat!”
      “But that lifeboat is red! I insist on a blue one!”


      “The ship is about to sink! Get into that lifeboat!”
      “But I can’t go yet! I’ve got to go below for my iPhone!”

  7. On the vegetables theme, The Great Onion Crisis in India is fascinating (and no joke to the poor who are also suffering in the down-turn): and the comment of the Finance minister, seeking to ignore it, that ‘I come from a family that has little to do with onions’ is delightful. Does he think onions are common vulgar things? I do hope he does eat some, or his goose is cooked…..

  8. A bit naughty of me but here is an intelligent article from the Financial Times – the copy and paste saves paying for it for non subscribers :

    Four implications of Boris Johnson’s victory
    This was a vote against Corbyn rather than for Johnson, says a German political commentator

    December 14, 2019 2:04 pm by Tony Barber
    The significance of the Conservative party’s triumph in the UK’s general election is fourfold.

    First, the UK will have to find a new place on the international stage outside the EU, which it will leave by the end of next month at the latest.

    Prime Minister Boris Johnson’s task will be complicated by increasing tensions in the US-European security and economic relationship, rising Great Power rivalries around the globe and an eroding post-1945 world order.

    Second, pressures on the UK’s unity will pile up. Scottish Nationalists, buoyed by their overwhelming victory in Scotland, will redouble their efforts to gain independence.

    Already precarious power-sharing arrangements in Northern Ireland will come under more strain because of the advance of nationalist political forces in this election at the expense of unionism.

    Third, the Conservatives will struggle to heal the social, cultural and geographical cleavages in England itself, where they have rapidly evolved because of Brexit into a party whose membership and voter base leans strongly towards English nationalism.

    Their comprehensive victory will not conceal for long the splits between affluent cities and areas of deprivation; between old and young; and between liberal progressives and people with conservative social values who despise political correctness.

    Fourth, the government will embark on a project of constitutional change, by strengthening the executive — already very powerful in the UK’s system, when a party has a commanding parliamentary majority — and curbing the powers of the Supreme Court.

    But they will find it hard to reinvigorate the UK economy because of fiscal constraints and low growth related to Brexit, poor productivity levels and world trade frictions.

    These four developments will unfold against a backdrop of demoralising crisis on the British political left, a crisis for which Jeremy Corbyn and other dogmatic extremists in the Labour party leadership bear heavy responsibility.

    Jens-Peter Marquardt, a German political commentator, says: “This was a vote against Corbyn rather than for Johnson. The Brits had a chance to prevent their political and economic decline. They didn’t take it.”

    It is a sobering thought that, by the time this Conservative government’s five-year term ends in 2024, Labour will have won only three of 11 elections over the previous half-century.

    Those victories were chalked up by the centrist Tony Blair. Never since the Labour party’s birth at the start of the 20th century has it won an election on a platform of sectarian socialism.

    Yet Mr Corbyn and his entourage do not care. According to their Marxist worldview, all they need to do is wait for the inevitable self-destruction of capitalism and then collect the prize of power.

    This blindness condemned Labour to a richly deserved defeat, as did the party’s unforgivable reluctance to tackle its internal problem of anti-Semitism.

    As far as UK-EU relations are concerned, it cannot be repeated too often that, as Professor Chris Grey observes, “Brexit is not an event but a process”.

    Mr Johnson can be expected to do his best to honour the Conservatives’ campaign promise not to extend the period of transition out of EU membership beyond next December.

    This will be impossible to achieve without going for a hard Brexit that would involve modest alignment with EU rules and standards and therefore less smooth access to European markets.

    However, negotiators in Brussels are determined to ensure that the UK accepts a “level playing field” in the post-Brexit relationship, an arrangement that would impede Mr Johnson’s ambitions for radical divergence from EU norms.

    The prime minister will face difficult choices of which he has so far made no mention to the British public. To the extent that he compromises with Brussels, he will risk angering anti-EU ideologues on the Conservative hard right, for whom no Brexit will ever be pure enough.

    Over the past 30 years these ideologues have destroyed four prime ministers: Margaret Thatcher, John Major, David Cameron and Theresa May. The rest of the country was dragged into furious arguments not of its own making as the Conservatives fought their internal wars over Europe.

    Now Mr Johnson can claim to have broken the vicious cycle. But he has done so at the cost of reshaping the Conservatives into a party that will have its work cut out to hold the UK together.

    • I disagree, of course, that “low growth [is] related to Brexit, poor productivity levels and world trade frictions”.

      Growth in the Euro Area is, if anything, worse than in Britain. Productivity, ultimately, is a function of output divided by the number of working hours used to produce it. World trade conflicts are not the causes of economic deceleration, but are caused by the political pressures created by deteriorating prosperity.

      This aside, this article makes sense, except for two things – it underestimates Mr Johnson, and it underestimates the importance of his huge majority.

      It also thinks that Labour’s best option is to abandon “socialism” and replace Mr Corbyn with a centrist.

      I agree that they might well do that – a party suffering a heavy defeat is likely to make the wrong choice. But anything smacking of “a return to Blairism” will leave non-London ‘ordinary’ people feeling ignored, and put Labour into long years in the wilderness.

    • Quite so, Tim, I couldn’t agree more. We need a vigorous and vibrant opposition to moderate the Tories amazing majority. I think of Maggie’s years culminating in the over-reach of the Poll Tax and her demise. Power corrupts, total power creates chaos.

    • Yes it’s amazing that they still haven’t put energy into the equation.

      Poor Boris he could be the PM when GFC 2 arrives. Not the best thing to have on your CV

    • We have to be very wary about immediate reactions to political changes. Tony Blair and David Cameron both inspired high hopes when they came into office, after all.

      This said, there’s reason for qualified optimism about Mr Johnson. First, “Brexit” itself will soon be out of the way, though the road beyond it will be paved with negotiations and hazards. Second, he has a big majority. Third, he’s got rid of a lot of die-hard “remain” fanatics. The “hard Brexit” group are still there, but are largely neutered, both by the size of the majority and by the authority that Mr Johnson’s success bestows on him.

      I think Mr Johnson is a pretty bright man. He surely realises that out-reach to ‘former Labour voters in the North’ is an imperative, which hopefully means a less metroplitan agenda. He’s quite likely to shake up the civil service, and do something about the BBC. He must also know, too, something of the reality of the economy, both at home and globally.

      One ousted Labour MP has said – I paraphrase – that nobody involved in crafting Labour’s “Brexit” strategy should be considered for the leadership, and that seems like common sense. I hope Labour doesn’t drift back into some kind of centrist miasma, but positions itself as a ‘working class party’, thereby providing effective and constructive opposition.

  9. Cross Currents
    My wife has a hand loom. Yesterday she began weaving a baby blanket. It’s not that we are preparing for a blessed event…it’s for poor children born in the University hospital whose mothers cannot afford a blanket for their child.

    If you think about all the ironies of the situation, it perhaps gives some clue as to the disconnects in the real world:
    *A new study shows that the top 10 percent have increased their wealth by tens of trillions since 2009, while the remainder have lost wealth. The bottom half have negative wealth, as they owe more than they own. Yet many babies do not have blankets to protect them on the way home from the State hospital.
    *Why does a woman who can’t afford a blanket for her baby get pregnant to begin with? And that question takes us deeply into the dynamics between men and women and people doing the best they can in a hard world.
    *How do hospital workers, most of whom are poorly paid, steel themselves against sending a baby out into the cold with no blanket?
    *Why is it that the desire to help takes the form of making something by hand, when countless near slaves in southeast Asia can crank them out on machines by the container ship load?
    *How is it that these very poor babies will not be exposed to toxic chemicals in the blanket, while their slightly richer cousins will be?
    *The Science clearly demonstrates that the epigenetic patterns formed by the baby born into such abject poverty are likely to be dysfunctional….’until the seventh generation’….yet we do little or nothing.

    One can go on with an exploration of all the absurdities. How to intervene in the system, either at a personal level or the level of politics, eludes us.

    Don Stewart

    • Well, when a woman wants a baby it’s an unstoppable force. They’ll disregard not only poverty but also the utter unsuitability of the father.

      Very kind of your wife: I hope the recipients will be suitably appreciative!

  10. Some interesting information here re geopolitics and demographics of Canada.
    It would seem to challenge some of the Scared cows of The Rules Based international order and its adherents as well as some of the Tropes and Hobby horses of the other Lot, who ever the other lot are?

    • Civilisational dementia?

      The gods send mad those whom they wish to destroy?

      Wherever one looks, one finds little sense at the governmental level these days.

      Pursuing population growth made some sense in the age of abundant resources, global imperial struggle and mass conscript armies armed with simple weapons, but certainly not now.

      Well each state will go to Hell in its own way, nothing can be done about it; wisdom is to recognise that fact.

  11. Labour in the UK, if it is to survive at all, perhaps needs to return to the original ideological base of the party, which was addressing poverty and exploitative work contracts, not the imposition of highly ideological radical Leftism.

    That carried Labour to power in 1945, when even the middle classes saw the justice of it after the mass suffering of the 1930’s.

    Marx got it right when he said that the British on the whole were ‘doing too well to be revolutionary’ – and it’s not really a British thing.

    But what is felt to be fair play (not being done over by your employer) and justice (keeping what you have earned if you have put your back into it and it was earned honestly) are British, and especially decent working-class, virtues. Not to mention moderation and compromise.

    The Corbyn manifesto sinned against this established mind-set. They signally failed to understand the working class whom they pretended to be championing – quite apart from the Brexit issue.

    People like Corbyn have never done an honest day’s work, but a lot of sitting around talking nonsense with like-minded ideologues, so they tend to go very astray (just the same in my step-mother’s radical Left nationalist party in Spain).

    Anyway, we can now get on and enjoy this rather embarrassing figure at No 10: how soon will he fall flat on his face?

    It’s all mere theatre next to the implacable physical realities which are bearing down on our civilisation.

  12. We can also enjoy the developing Boris Derangement Syndrome which seems to be afflicting a traumatised radical Left, and Guardian columnists in particular. One would think that Adolf, or even Satan, had moved into No.10! Yanks, please pity us……..

  13. The Guardian article on Boris’s visit to Blair’s old constituency is worth a read (apart from the’Boris is Satan’ stuff).

    Solid working class rejecting class-war Leftism…..

    • From its foundation, Labour was supposed to be the party of “the working class”, and would win elections if it still was.

      But it’s become a party of ‘metropolitan trendies’, pursuing a whole lot of agendas which, whatever their individual merits, dilute the focus away from working class, bread-and-butter issues where the votes actually are.

      Parties which have suffered heavy defeats tend to be punch-drunk. That makes them likely to make the wrong choices, which I expect Labour will do, when they pick their next leader.

      They need someone who is non-London, non-trendy, preferably with a union background, interested in what used to be called “the class struggle” rather than more esoteric issues.

      Labour’s problems include “a predominance of the defeated” in its higher ranks. Best advice would be “forget Brexit, you’ve lost, and accept Boris, because you’ve lost on that issue as well. Look instead for the issues most important to ‘ordinary’ people with bills to pay”.

    • The problem with Labour is that the UK is – and has been for some time now – a post industrial country and that the traditional industries that it relied upon – miners, shipbuilders, etc are essentially dead. Anything that still is industrial – such as car manufacturing are non-UK owned.
      It is floundering to all and sundry to make a coherent strategy work and has ended up falling between two stalls. .
      The old politics of left and right that were based on an abundance of cheap energy are becoming irrelevant. It is the centre – an irrational belief of infinite growth on a finite planet – that is the root cause. However, confronting this fact would be political suicide even though this is the logical thing to do. Denial is not a river in Egypt..

  14. Repo Crisis
    I’m not sure I’m thinking correctly about this. But on the issue of the Fed running out of ammo.

    The real economy of the US has been running down for many decades, accumulating trade deficits with the rest of the world. Some economist long ago pointed out that if a country wants to have a reserve currency, they have to run a trade deficit so that the rest of the world will have some of the reserve currency to hoard. It might be that the rest of the world no longer wants to hold dollars. Max and Stacey talk in those terms quite a lot…sanctions and wars and tariffs and interference in local politics and being generally erratic in behavior prompt the rest of the world to ‘de-dollarize’. So possibility #1 is that the world no longer wants to accumulate dollars.

    Option #2 is that the US government is bankrupt. As in…people would rather gamble in shale oil than hold US debt. The trillion dollar fiscal deficits in the midst of an ‘unbelievable boom’ might lead people to that conclusion. And Trump loudly demanding negative interest rates would add fuel to that fire.

    Option #3 is that some very big banks are bankrupt. I’m not an expert on bank finance, but it seems to me that banks CAN print money with a few keystrokes, but eventually trades have to be settled in something like real dollars. In effect, the bank is betting that the company or individual they loan the money to will be able to repay in real dollars. If the company or individual cannot pay in real dollars, then the bank suffers a loss of real dollars. If real dollars are shrinking, then banks are likely to go bankrupt. Dollars shrink when the economy shrinks. Dr. Morgan’s definition of shrinking prosperity is pretty close to a definition of an economy shrinking. So highly leveraged and diversified companies such as banks are good candidates for bankruptcy.

    If Option #2 is the best explanation, then repealing the Trump tax cuts might alleviate the problems. As discussed elsewhere, the tenth of one percent have plenty of fiat dollars to tax away….but, of course, they also control the US government. So good luck with that one.

    Options 1 and 2 seem to me much harder, or impossible, for the Fed to deal with.

    Don Stewart

    • Actually, I think the financial system has entered end-game.

      By my reckoning, the Fed has been injecting a monthly $150bn of “not QE” since mid-September. Annualised, this monthly rate is insane. It proves, amongst other things, that QE and ZIRP have fixed absolutely nothing. Money injection has become addictive, and, if wasn’t the Repo market, it would be something else.

    • I have seen reports suggesting that since the Fed began its “non QE” printing spree, the daily offerings have been two times over subscribed. Or, for every imaginary dollar created on a computer screen, the bank involved would like two more, please. How much further can this be kicked down the road?

    • According to one report this morning, the Fed is likely to inject $100bn of “not QE” today, within some $500bn in the coming thirty days. I buy in to the idea that the Fed is trying to get itself in front of what is happening, rather than playing catch-up. That makes this “anticipatory” rather than “reactive” QE.

      That begs the question ‘what is the Fed acting in anticipation of?’

    • “That begs the question ‘what is the Fed acting in anticipation of?”

      The end of month ‘turn’ as discussed on ZH and it is hedge funds and REIT s that are going to be the catalyst if liquidity is not provided beforehand. – IMHO

  15. Roulette Wheel Analogy
    Let’s suppose that we have a crooked roulette wheel with players at the table. Around them are arrayed punters (bankers). The crookedness of the wheel is that it is designed to produce more winners than losers (e.g., increasing energy). Then the bankers can loan money to the players (corporations) who are actually placing bets and, as a group, get paid back in fees and interest. Some of the players will still lose, while others will win big, but the banks will mostly prosper as they practice the arts of Wall Street finance that they learned in university.

    But now suppose that some evil person (God?) rejiggers the wheel to produce more losers than winners (energy starts becoming scarce). The players learn the hard way that losing is more likely than winning. The losers cannot repay what the banks loaned them. Bank capital begins to disappear and eventually they can no longer finance the game.

    Way in the background, a Central Bank could simply print up some Monopoly money and give it to the bankers. But everyone will soon enough figure out that the Monopoly money isn’t real and can’t be turned into goods and services. The Government, which has the guns, can force people to take it, but Repression has its costs and very frequently results in the Repressors decorating lamp-posts.

    Alternatively, the bankers could begin to actually scrutinize the loans and eliminate all of the ones which seem shaky. They become, once again, the conservative small town bankers of yore. Everything shrinks.

    The explanation can be applied to the general economy, or the banking industry specifically, or to the federal government (with the proviso that the feds have the guns…we are dealing with a Mafia.)

    Don Stewart

    • Fascinating link. Clearly these drug kingpins don’t need anymore money so why don’t they just retire.

      Power and influence I guess and the happy thought that you can afford waste at least 10% of it and still have more that you can ever spend.

    • Just read the link Don – shame on big Pharma.

      I’ve looked pictures if the Shackler family – all smiles despite their greed and – after the fine – down to their last $10bn poor little lambs.

      But what has caused so many to be in pain – well I did read that one reason is the side effects of obseity. Hmmm so back to corn syrup being pumped into everything back in the 70s.


    • @ewaf88
      There are more explanations than we can list here, much less discuss. A young woman who works at my food co-op went back to UNC and graduated with a degree in biology. She got a job in a local lab and told me she would soon be leaving the co-op for greener pastures. Well…she’s still here. I asked her “why?”. The bottom line is that our co-op is committed to the local “living wage”, and the biology labs are not. She can make more money as a cashier at the co-op. While the career opportunities might be better at the labs, she and her husband cannot afford the loss of income NOW.
      Don Stewart

  16. @ewaf88
    What if the cash and gold that are quietly disappearing are going into the bunkers of the billionaires in, for example, New Zealand and South Dakota? Or the money havens in the Crown Colonies around the globe?

    Don Stewart

    • Well cash would be rendered worthless if there was hyper-inflation but Gold would certainly become a currency of sorts although your life could be ended very abruptly if you were a small player found to have any.

      You’re quite right about a dystopian future where many seek solace in drugs.

      Cocaine taking is rife here in the UK – a lot of the demand comes from the Middle and Upper classes who don’t care about the misery and violence that goes on in the supply chains..

      Going back to my earlier reply – why would you want another billion if you’re already worth several billion already.

      Just power and greed?


    • Without going into detail, buying a bunker won’t work – even if the mobs don’t burn away the “natural features” (aka vegetation) on which all bunkers rely to conceal inlets and outlets, the occupants can be expected to go stir-crazy (that is, develop “cabin fever”) very quickly. With money worthless in practical terms – ‘there are no shops in a bunker’ – what’s to stop the employees becoming the bosses?

      Storing cash would be pointless, and holding gold not much better.

    • You remind me of my time in the War Office in the early 60s – we had ‘cabin fever’ to deal with when monitoring falling H Bombs at SHAPE! The youngsters know nothing about this and sadly they are scheduled to repeat it.

  17. @ewaf88
    My understanding is that Big Pharma is making lots of money on opioids. As ‘legal’ sources of opioids like the doctors and pharmacies in West Virginia who wrote and filled enormous numbers of prescriptions were shut down, the Mexican drug cartels naturally stepped in to meet the demand.

    The real, unspoken tragedy is that so many people are hurting and think they need to take refuge in opioids. The idea that people in a dystopian future would soak themselves in drugs, or that the governments would encourage drug use, doesn’t seem so far-fetched anymore.

    But I’m no expert on this subject. Clearly with so many people dying, a lot of money is changing hands, and much of it in cash.

    Don Stewart

    • After the big Argentine crisis, very cheap drugs became the resort of many poor young people, who when they matured became very violent criminals, careless of human life.

      On the whole it’s better if the addicts kill themselves rather than others, but on the way there they may do a great deal of harm to the innocent.

      Apparently, in the UK, gangs are now fighting fierce turf-wars, as the price of drugs has dropped significantly and they have to get their slice of s shrinking revenue pie, hence the wave of shootings and stabbings that we see in the news. Maybe this is playing out everywhere?

    • In the 1850s, a woman told a Royal Commission investigating alcoholism that gin was “the quickest way out of Manchester” – plus ca change….

    • Well as I’ve pointed out if the recreational users had any moral compass they would stop using these drugs.

      Ok if demand slumped say by 90% then these criminals would probably try to move into other firms of crime.

      I hope our Boris does invest in the police

  18. @ewaf88
    Our old friend the Maximum Power Principle can be invoked to explain the fentanyl debacle. Many hundreds of years ago the natives in the Andes discovered that chewing coca could relieve the symptoms of carrying heavy loads in high mountains. Fast forward to a fossil fuel powered economy and the coca leaves could be processed into a powder…cocaine. And Fentanyl laced with cocaine became a super-predator. So the evolutionarily ancient Endocannabinoid pain management system has been superseded by what clever humans, powered by fossil fuels, can achieve. And US drug companies learned to make synthetics with 50 times the power of opium. Opium itself is no slouch, and led to the Opium wars in China where the European and American powers forced China to permit legal use of Opium as a way to keep the populace sedated.

    Meanwhile, the Big Food companies were learning, using food science, how to use fossil fuels to make hyper-rewarding processed foods which are very cheap to manufacture. Which result in the most dangerous medical condition in the world: hypertension…as well as obesity and insulin resistance.

    The list of celebrities killed by drugs is impressive. It’s also impressive that Trump, at his inaugural banquet, asked for two scoops of ice cream.

    Don Stewart

    • Don – what was the point about Trump having two scoops of ice cream . (Was it the greed of having two scoops instead of one? Sorry to say I often have three)

      Sorry I’m being a bit slow this morning after a bad night’s sleep.

      It seems with fast foods and opium there’s always ways of making money – get them fat and then help them with their pain.

      Pretty horrific.


    • @ewaf88
      The only point was to understand how the confluence of the Maximum Power Principle plus science and industry plus capitalism work all the way from food to drugs. From gangs in the street to imperial palaces.
      Don Stewart

  19. @ewaf88
    Ice cream and Trump. I should have mentioned that ice cream is the ideal deadly combination of fat, sugar, and salt. The only natural analog is breast milk. Adults in the wild never eat anything like breast milk. So…the Maximum Power Principle in operation once again. Grow as rapidly as practical using natural foods makes sense for a baby. Growing as rapidly as possible using whatever foods chemistry can produce and capitalism mass market is a prescription for all the ills we see around us. Witness Trump’s blimp shape and the fact that 90 percent of Americans are fat. We even have, for epigenetic reasons, people who are thin with too much fat around their organs. The ‘skinny fat’.

    Bill Clinton was fat until he discovered Dr. Dean Ornish (for the second time around). Last picture I saw, he is still at a healthy weight.

    Don Stewart

    • Well I am horrified about the amount of deaths caused by obesity and painkillers.

      Prevention better than cure rings loudly – yet most advertising in the US is for sugary foods.

      I’ve got to sat that the 50% reduced salt and sugar Heinz tomato ketchup is far nicer than the original version


    • @ewaf88
      In 1896 the Dept of Agriculture tested chickens and found 2 percent fat. At that time, of course, chickens roamed around barnyards scratching for their food. They were semi-wild. Wild animals are low in fat…they have to be to survive.

      Enter Scientific Agriculture and some chickens for sale in your local supermarket are 70 percent fat. Is the public still eating a chicken? Yet the dividing lines in the debates are about “vegan vs. carnivores”, etc. An industrial chicken is about the same as palm oil from clear-cuts in Indonesia.

      So, as a society, we are very far from being adults.

      Don Stewart

  20. Don,
    Re: Going back to my earlier reply – why would you want another billion if you’re already worth several billion already. Just power and greed?


    • I Have posted the summary of the Critique of your “Sytems Paper”, Feedback And Dis-Equilibrium In Human Overpopulation by Steven B. Kurtz. I will be streaming premieres of both the animated presentation of your paper and the animated presentation of my response on Grub Street Journals New Vimeo Platform this Friday. All Details may be found on my Blog. A Password Protected Version of both animated presentations will be available in about another Hour.

    • Loved the video – thanks.

      Well we’re coming up to Christmas and what I do is eat reduced meals for the week before and the nothing at all on Christmas Eve to get ready for the orgy of calories on Christmas day.


  21. @ewaf88
    I should also add that the sugary breakfasts are yet another compelling proof that the Maximum Power Principle is active almost everywhere one looks. Those calories are flooding the vascular system with enough energy to cause epidemics of insulin resistance, diabetes, vascular diseases, and later on dementia and Alzheimer’s.
    Don Stewart

    • Don,
      re: chickens

      I grow chickens and other animals for slaughter and I think it is very unlikely that many chickens are 70% fat today. That would be a horrendous waste of resources for the producers. People are after chicken flesh and it is very easy to determine the difference when you cut them open. I notice very little difference between mine and store bought. Maybe what the difference is that store bought chickens have much more water in them, I wouldn’t be surprised if it was 70% more. Also due to intensive genetic breeding the size of the chicken (especially the breast meat) is considerably larger. The growth rate is also more than twice as fast – even without the use of hormones ( I don’t use them and a chicken is fully grown in 12 weeks.


  22. Returning to the recent failure of organised Labour to achieve much representation at the recent election, I agree that one of the first causes is that we are post-industrial.
    Another is that we may be nostalgic – “because we already had it better”.

    This suggests two new avenues for policy development. First would be rethinking Land, with Land Value Tax (for local use) to start with, and more progressive policies to bring local land use under local control as energy constraints emerge to limit fossil-fuel inputs in transport and agriculture. We could call this “The people’s land.”

    The other might well be to tax the energy costs of Communication. The internet has seemingly vaporised transaction costs; the need to revalue the real and local suggests that the rents currently abstracted by the tech giants be redistributed in a way that supports the localisation inherent in energy constraint. Transactions could be taxed, but discounted on a scale proportional to distance, encouraging local communication and data serving.
    We could dub this “Taking back control”!

    • ‘Localism’ has, like ‘Green’, ‘clean’ and ‘eco-friendly’ become very distorted in meaning.

      For instance, I’ve pointed out here that the best use of the land surrounding a city like Cambridge would be organic market gardens, combined with a policy to restore the soils and hedgerows of all farmland: planning for a lower-energy,necessarily more localised, future.

      Declining net energy should mean that sort of model coming under consideration; and we might also look at legally compelling tenants and owners to maintain kitchen gardens or small orchards – again an old and effective model.Local and national food resilience both enhanced.

      Instead, we get massive high-density housing developments based on cheap debt, with old farmland lost forever (despite vigorous local protest) and the University prides itself on ‘local sourcing’ of supplies for the College kitchens which involves trucking the stuff in from many dozens of miles away, ‘local’ being the whole East Anglian region!

      Now, that is certainly better than beans from Kenya, but……

      Parallel to changes in land-use could be an adjustment in taxation, but I suggest the lesson of history is that taxation models tend to outlive their relevance and persist unreasonably as circumstances change.

      Just look at the punishment of the high street and suffocation of true local enterprise with Business Rates!

    • Can we have less about British politics as well please? GB is only a small group of islands with less than 1% of the world’s population after all, so not that relevant in the big picture, no matter how close to home for some of the the audience…..

    • I agree, though there are some issues on which the UK does ‘have disproportionate significance in some of the subjects we discuss here.

      Most obviously, the UK has huge exposure to the global financial system, an exposure only exceeded, proportionately, by Ireland, obviously a much smaller economy, and with the back-up of EA membership. This could make the UK a ‘canary in the coal mine’ of a future financial crisis.

      Second, the UK economy has been spectacularly and divisively mismanaged, especially during the period when the official political ‘Left’ adopted the same neoliberal policies as its centre-right opponents.

      I agree with you about UK politics, which is “one of those jokes that’s only funny if you know the people involved”.

  23. Dave Pollard on Sensemaking, Memes, Institutions, Collapse

    One of the items which caught my attention is the notion that cancer is cells which have broken out of the restrictions that a healthy body imposes in terms of sensemaking for the common good. Cancer is a collapse of the drive toward sense making. Is the frantic money printing and explosion of financial wealth among the tenth of one percent a form of cancer, as the financial system has lost the ability to make sense? Is one of the primary drivers now the mis-information that we have to keep feeding the cancer?

    My short version summary: scarcity drives the retreat into meme-land and away from sense making based in reality. The complex system collapses, lots of damage done. Eventually, recovery as the components begin to adhere again…but maybe without humans next time.

    Don Stewart

    • The UK as a canary in the mine is a compelling image: all the sins of the advanced economies, and a huge financial hub.

      As for analogies with health, we all know that one can look pretty hale and hearty while a cancer is growing, until a threshold has been breached, pain is felt and organs fail – similarly, I have sometimes felt like Death from the effects of air pollution, but somehow presented a picture of rosy good health in the mirror….

      As with many cancers, the damage from ‘credit and monetary adventurism’ went unnoticed for a good while, and the surface of life has been bright, glossy and positive-seeming, except for the marginalised.

      Now, it’s becoming impossible to deny – globally, it seems, and the weakening of the whole system (even greater debt over-load than in 2008) is patently clear.

      As for the prognosis, I have sympathy with the great painter Turner, who, after being told that he was ‘breaking up’ as they put it then, asked his doctor to ‘go down and have a sherry, and then tell me what you think’.

      The sherry didn’t change the prognosis……

  24. Pingback: The Over Population Hypothethisis Roger Lewis’s Critical Analysis of the “Sytems Paper”, Feedback And Dis-Equilibrium In Human Overpopulation by Steven B. Kurtz. – Not The Grub Street Journal

    • As I responded to Roger, these animations are childish and extremely difficult to analyze. They stimulate gut reactions. My text has been on-line for nearly 20 years in various places, and is still found on two sites, one being Countercurrents. Roger kindly sent me (after I requested it) the text of his “rebuttal” which I am about to read. That is the only sensible way to critique a paper. Cartoons with robot talk don’t cut it.

    • Roger,

      Can you do this elsewhere please? Perhaps by private e-mail correspondence? It gets a little tiring having to wade through the shameless self-promotion.


    • Hello, all is dust. The discourse is the discourse, I have been very quiet on the Chat here. What makes it Shameless Self-promotion? The arguments are the arguments. They are not diminished by an accusation of self-promotion.
      Regarding promotion, I have made this Blog a lot more discoverable in search engines with the backlinks which I have made to it. The Backlinks promote this Blog which I am pleased about, as for accusations of self-promotion, Bar Humbug!

  25. China
    China imported an unprecedented 11.18 mmb/d of oil in November…exceeding the maximum US imports set back in 2005. Simultaneously, we get word that Huawei now manufactures phones with no chips sourced in the US.

    So what is happening? It seems that the US is no longer a bottleneck supplier to Huawei, which makes Trump’s plan to choke them with tariffs and embargoes a failure…at least for now.

    And what about the imports? Are they a sign of weakness because their domestic supplies are obviously inadequate, or are they merely indicative of China’s ability to hoover up the world supply? Germany has been an industrial powerhouse without producing any significant amount of oil.

    But the astronomical rise in debt seems to me to signal that all is not well. If we look at it from an ECoE perspective, then it seems to me that a lot of the money that China is paying for oil is being used dysfunctionally. If they buy from Saudi, they are supporting a profligate royal family. If they buy from Iraq, they are supporting a dysfunctional mess. Buying from Russia is probably the least damaging, because the Russians will use the money to buy something from China. So buying oil rather than producing it entails some leakage out of the cycle of productive money. But I can’t put numbers on it to gauge significance.
    Don Stewart

    • I just wish that all the energy China imports was used to produce robust goods that don’t need energy to replace them in just a few years.

      However if the World did produce robust goods that lasted for at least a decade what would happen to the workforce.

      I see China has relaxed its one child per family rule. It was cruel but we could have many more mouths to feed on the coming decades.


  26. Sketchy data from China
    From looking at some sketchy oil demand data, it looks like China is accounting for around 60 percent of the increase in the global demand for oil. The OECD countries in aggregate are still declining. This raises the question in my mind, which I raised some time ago: is it possible that oil demand Per Capita will tend to equalize across countries. If so, demand Per Capita in the US has to fall and demand in Africa has to increase. China is still much less than the US, particularly on a consumption basis (as opposed to country where the oil was used to make stuff). So if China has a functional government and much of Africa is dysfunctional, then China could still continue to account for much of the growth in GDP and also oil and total energy usage. If the US and Europe experience a currency collapse, then the adjustment would switch from gradual to depression?

    The success of Huawei in prospering despite the US throwing sand in the gears might be a sign that China cannot be stopped without destroying the US economy in the attempt. Apple was prohibited from doing business with Hauwei, and now Hauwei has no Apple components in its product, and the US withdraws its ban. Too late? Irreversible damage? I also heard a report from South America that China is signing lots of contracts for soybeans. Is it too late to regain agricultural exports?
    Don Stewart

  27. As was noted during my energy systems group discussions – one of our members proposed that Corbyn had triggered the immune response of the system. It stands to reason that any discourse on (successful) energy transitions would have to avoid this also. IMO, first of all the narrative needs to change before we change behaviours. Having the political establish lecture the poor on how “polluting” they are is simply futile.

    • I like to recall the wise saying of Renoir (the son of a humble tailor who began painting crockery) which bears on the social and emotional aspect of energy issues:

      ‘People have heads, feet and hands, and don’t really want to use them’.

      Industrial civilization and the internal combustion engine made this sublime inactivity a way of life available to nearly all.

      Historically, pre-fossil fuels, the less you used any of the aforementioned organs and limbs, the higher your social status and chances of reproduction.

      The educated lawyer (brain) was higher than the woodsman (hands) but the highest of all was the aristocrat who ‘knew only how to use a sword and make a bow’, and until the French Revolution the nobles deliberately wrote with a bad hand to demonstrate this.

      I’ve just spent a few hours happily splitting wood by hand (axe and sledge hammer) for my fire: most people I know put this down to extreme eccentricity.

      We’re leaving an age in which even the lowest urban social class of the industrial economies had, for some 60 years, automobiles to move their lazy and ever fatter bums from A to B, for no real economic reason: coming off that is not going to be done willingly……

    • What complicates this is the ignorance (which I think is genuine) of those making the exhortations.

      Calls for urgent action are, in my opinion, fully justified.

      But the proposed solutions aren’t workable, because there’s a critical piece missing from the equation. That missing piece is degrowth.

      Two points encapsulate this.

      First, it simply isn’t possible to decouple economic activity from the use of energy. The weight of evidence linking energy use with economic output is overwhelming. A prominent environmental group has said that the literature promoting decoupling is “a haystack without a needle”.

      But neither is a full or seamless transition to renewables feasible. Even if were, building the requisite RE capacity would require enormous use of FF energy, necessarily diverted from other economic activity.

      What’s missing, beyond a full understanding of the energy/economy/environment linkage, is a realization that tackling the environmental and ecological challenges requires recognition of degrowth.

      The irony is that degrowth is already happening. If growth remained reliable and robust, would we have had 10+ years of QE and ZIRP/NIRP, and would the Fed be in the process of injecting $1000bn of new liquidity into the system?

  28. But to be fair, in some places -as for instance the US – the interests of the industrialists meant that the working class have to have an automobile to get to work due to the lack of decent and safe public transport infrastructure. What a trap!

    Now, to turn on the workers and call them filthy polluters, but give them no viable alternative is madness.

    • If we’re going to meet the environmental challenge, we need fundamental re-design. This includes how and where we work, where we live, and how (and how much) we travel.

      No-one is prepared to tackle this in anything other than an ultra-long-term, ‘knock it into the long grass’ sort of way.

      There’s no reason, in theory, why we shouldn’t impose maximum car engine sizes, and mandate all-hybrid model slates. We could be promoting the use of buses. We could agree, internationally, to put excise duties on jet fuel. We could impose a per-mile tax on air tickets.

      But we’re not doing any of this.

    • Exactly my thoughts Tim, there is so much that can be done quickly and effectively. There is lack of political will and the understanding about our energy situation. When it affects the £ in a person’s pocket you can’t re-train the salary-man to believe in the present dire circumstances.

      First there are data – unorganised and random numbers and letters/symbols
      Second there is information – organised data
      Third there is knowledge – the effective understanding of information
      Fourth there is wisdom – the prudent application of knowledge

      Our leaders will need to go through this process before we will see progress IMHO. They are stuck at information at present.

    • I’ll go with restricted cc for ICE. Follow F1’s lead – 1,600cc + hybrid with energy recovery under braking. Perhaps tuned down as far as BHP is concerned though!

      No-one really needs, apart from farmers, a massive pick-up truck or SUV anyway. I’m quite happy pottering around in my 10-year old 1,200 cc Renault Clio.

      The merger of Fiat/PSA is strongly driven by all of this disruptive technology (and debt of course).

  29. Fighting patriarchy and empowering women to control their pregnancies and births is often left out of the discussion. David Attenborough, Jane Goodall, David Suzuki are among the patrons of Population Institute Canada. The first two are also patrons of Population Matters(UK) We’ve doubled in 50 years, tripled in 75, and quadrupled in 100. No wonder we’re destroying the planet!

  30. Dmitry Orlov on NotQE
    Dmitry, in his post for Patreon subscribers, develops the projection that the Fed will have to monetize 6 trillion in federal government debt in 2020. He also develops the fact that the Treasury debt that has been acquired recently is majority long term (more than 1 year)…which cast doubt on the notion that what we have is a short term problem.

    He includes a quote from Boris Yeltsin telling the Russian people that ‘everything is accounted for’ 3 days before the Ruble was severely devalued and economic hardship ensued.

    Don Stewart

    • That sounds right to me.

      As I understand it, the Fed will have injected $1tn by late January, starting from the ‘Repo crisis’ in September. Of that, some $600bn will have been added to the Fed’s balance sheet (“not QE”), with the other $400bn supposedly “short term” market management (though I really can’t see them withdrawing it, so it’ll end up as an addition to assets).

      This means that, after a long period of gradual downwards “run off”, the Fed’s balance sheet has started growing again, at rates comparable to 2008-09.

      Back then, though, the Fed was responding to a known problem. This time, it’s either (a) anticipating an impending problem, or (b) responding to a problem that already exists, but is not known to outsiders.

      Both of these – reversal of gradual balance sheet shrinkage, and anticipatory or ‘for undisclosed reasons’ intervention – seem like a turning-point.

    • @Dr. Morgan
      Dmitry thinks the US has lost its Reserve Currency status. People no longer want to hold Treasuries.

      To give one trivial example. Everyone knows that Trump seized control of the oil fields in Syria, remarking that it is the only thing in the country that interests him.

      So now Mexico has discovered the largest lithium deposits in the world. I see speculation in the Mexican press that Trump will use the drug cartels as an excuse to move troops into Mexico to control the lithium…particularly since the Chinese are investing.

      If I were a self-respecting foreign government, I would not want to be subjected to the whims of Washington if I could possibly avoid it. The thing that scares me the most, as an American, is that anti-foreign government riders are attached to appropriation bills by votes of 433 to 2 and the like. I think Washington is acutely aware that official loss of the Reserve Currency is going to make a cushy Washington job collecting patronage from lobbyists into a job from hell.

      Don Stewart

    • For the USD to lose reserve currency status, there would need to be an alternative. Two former candidates – RMB and EUR – are not credible alternatives, if indeed they ever really were. JPY is being monetised, the BoJ owns more than half JGBs outstanding, and there’s no real market in JGBs, and arguably not really much of one in JPY.

      That leaves the SDR idea, which doesn’t translate well from theory into practice.

      This, I think, makes the dollar “the worst option, except for all the others”, and “the prettiest horse in the knacker’s yard”. The dollar’s relative importance may well decline, but reserve status doesn’t look likely to end anytime soon.

      The most potent real threat remains the pricing of oil in non-USD currencies – the “petro-prop” is still vital to the USD.

    • Agreed Tim, well covered. My own postulation is for a global virtual current, perhaps a crypto, for use in international trade only and for each state to use their own domestic internal currency with an FX market or even a currency board.

      This would reflect how the well-tried ECU we used for trade in the EEC before the euro was introduced in 1999 and it work very well.

    • A global virtual currency to replace the dollar would still be disastrous to the US standard of living. ANYTHING that interferes with the ability of the US government to simply print money which other people more or less have to honor would be disastrous. How long the current system can survive is beyond my pay grade.

      Don Stewart

    • “For the USD to lose reserve currency status, there would need to be an alternative.”

      The alternative is the collapse of the international trade… just like the previous time, no?

      Until recently I expected the WW3 to start by 2030 or so, but considering the way that events are unfolding I was probably too optimistic…

  31. @Peter” My own postulation is for a global virtual current, perhaps a crypto, for use in international trade only and for each state to use their own domestic internal currency with an FX market or even a currency board.”

    There has been talk for some years of China and Russia establishing a gold-backed currency. I suspect it is a gold bug rumor. But some CBs (incl those 2) have been buying gold aggressively the past few years if one can believe their government statistics.

    • We already have a virtual currency, it’s called the Dollar. It’s just not “crypto,” for whatever that’s worth.
      When something fails, re-name it. Problem solved.

    • Yes, it’s encouraging to read this sort of interpretation, and remarkable that decision-makers still don’t get it.

      I hope you won’t mind me adding that, here, we can put numbers on it using SEEDS. Here’s France, at constant 2018 values:

      Prosperity per capita:
      2008: EUR 28,954
      2018: EUR 27,508 (-5.0%)
      Tax per capita:
      2008: EUR 17,288
      2018: EUR 19,454
      Discretionary prosperity per capita:
      2008: EUR 11,666
      2018: EUR 8,055 (-31%)
      Debt per capita:
      2008: EUR 80,476
      2018: EUR 108,791 (+35%)

    • Many thanks, Tim – just the ticket. Would you be kind enough to report the same for UK please? I would like to add it to my book, with your kind permission and acknowledgement.

    • Well, SEEDS is not something that French politicians know about, but here’s the numbers from IAEA on France.

      Energy consumption per capita (in gigajoules):
      2000 – 114
      2017 – 95.7
      Electricity consumption per capita (in kilowatts-hour):
      2010 – 7255
      2017 – 6614

      The knowledge of basic physics (that even the politicians must have studied at some point in their lives) suggests that “work” requires transfer of “energy”; if you have less energy, you will perform less work. And what is “economy” if not “work” (in physical sense – application of forces to materia)?

      In theory, you can transfer more energy from declining source (improving energy conversion efficiency) and compensate that way, but in practice that doesn’t seem happening in France, or elsewhere.

      And granted, these numbers disregard the effect of imports and exports (of non-energy goods, even though these goods require energy to create). It looks like even if French imports increased, it wasn’t enough to placate the French workers & peasants. The IAEA numbers also don’t take into account ECOE.

    • Thanks, very well put.

      There’s a widespread misunderstanding about the relationship between energy, work and output. For policymakers, “work” means human labour, which is one reason why they measure productivity on this basis. But human physical labour is a lot less than 1% of the energy used in the modern economy. The human role is the direction of exogenous energy, not the input of the energy itself through labour.

      I’m sometimes baffled by the current French administration. Some, at least, of what we discuss here this must be obvious. If worsening the economic position of working people boosted prosperity, Ghana would be richer than Germany. Wages are the basis of demand, after all. So the idea that you can make an economy more “competitive” by reducing wages (or their equivalent) is an absurdity.

      Mr Macron now has about 70-80% of the population agreeing with the aims of the gilets jaunes, and a clear majority supporting the unions’ aims, if not necessarily their methods. He seems to go out of his way to antagonize people, as with his huge tax cuts for the very richest. His commission to investigate popular grievances was headed, initially, by a political insider paid more per month than many “ordinary” people take home in a year.

      The pension system in France does need reform, and costs roughly twice its UK equivalent (14% of GDP vs 7%). But he’s going about it in ways seemingly designed to provoke popular opposition. On this – and on a number of other things – I just don’t see what his plan is, if any. (He’s even given his party the daftest label in Western politics since “Forza Italia!”).

    • “But human physical labour is a lot less than 1% of the energy used in the modern economy. ”

      Some back-of-envelope calculations…

      According to Wikipedia, “over an 8-hour work shift, an average, healthy, well-fed and motivated manual laborer may sustain an output of around 75 watts of power”. That seems about right to me, but for ease of calculations, let’s assume a super-proletarian who works 10 hours a day without holydays or vacations with 100 watts power output.

      That will make it 3.6 megajoules per day (100 * 60 * 60 * 10), or 1.314 gigajoules in a year (3.6 * 10^6 * 365 / 10^9). That’s pretty weak compared to 95.7 gigajoules total energy consumption per capita, of which 23.81 are electricity consumption (6614 * 1000 * 60 * 60 / 10^9).

      Human beings are indeed weak, even if they could work so hard, which they can’t anyway…

    • The classic illustration is to put one gallon of gasoline in a car, drive it until the fuel runs out, then pay someone to push it back to where you started.

      75 watts per person/hour is about right, and ignore downtimes for the purposes of calculation. If you work out the number of hours equivalent to the quantity of energy in the gallon, you’ll have a number which you can multiply by, say, $10 or $15 per hour to illustrate the work done by gasoline. Comparing this with the pump price gives you an idea of the leverage in the system!

      This is a simple calculation – it ignores the quantity of nutritional energy required for the person pushing, and the embedded energy in the car itself, and the equipment that delivered the gallon of fuel.

      Even so, it explains why dividing GDP by the number of person-hours worked and calling it “productivity” makes no sense.

      More to the point, it helps explain why a country with cheap labour, like Ghana, isn’t more prosperous than Germany, though wages are far higher.

      The “low labour = prosperous economy” is so ridiculous that I doubt any sane person believes it. Therefore, it’s a view loaded by political position.

    • Another illustration is to calculate the power used in a typical home, then convert it to numbers of people pedalling exercise bikes hooked up to dynamos.

  32. It Seem To Me:
    *Dr. Morgan’s excellent data on the existential financial crisis stemming from energy issues
    *Rob Mielcarski’s current blog
    with what I see as speculation about what may be hard-wired into humans
    *Winner take all politics (e.g., 50.1 percent can pursue insane political policies such as winning nuclear wars or creating colonies on Mars)
    *Jancovici and Garrett developing their static model of the energy/ economy nexus and the delusional nature of the UN Development goals

    that we need to take another look at how humans really work. I suggest that Daniel Kahneman talking about the role of memory and the role of actual current experience and the difference between happiness and satisfaction become important. Briefly, people who are ‘in the moment’ are likely to be pretty content (as in paraplegics being as happy as fit as a fiddle athletes). The movies made in Britain and the US during and immediately after WWII sometimes refer to ‘the best years of our lives’….when they most assuredly were NOT talking about the ‘easiest years of our lives’.

    I suspect that human nature is far more malleable than the static models assume. All too frequently static models assume that ‘it’s in our genes’, when science tells us that ‘it’s all in our epigenome’. A pregnant mother’s life experience can imprint changes on her unborn child’s epigenome. And that epigenome can change in response to the environment. (The GrowBaby initiative in changing outcomes for infants is evidence.)

    One of the greatest political challenges is to simply provide the legal and economic avenues by which people can adjust to the new energy reality instead of becoming ever more mired in the failed experiment in ever greater energy consumption. A little remembered initiative during the New Deal was the construction of what we might now label ‘eco-villages’ for both black and white Americans. The effect was to provide a way to live which was more like a historical village and less like the failing industrialism of the early 1930s. Creating such opportunities in 2020 and beyond would require overturning the Supreme Court’s interpretations of the Constitution as almost entirely about property rights…given that a handful of people now control almost all of the (fiat) assets. To some extent, it requires recovering Thomas Jefferson’s notion of an independent yeoman farmer community…rather than Alexander Hamilton’s notion of people bound to each other by debt and taxes. (We should remember that Hamilton persuaded George Washington to militarily attack and hang the peasants living independently in Appalachia.)

    I do not wish to be overly optimistic. Overturning the repressive Hamiltonian regime in Washington through a ‘peasant revolt’ seems like purely a pipe dream. A straw in the wind is Bernie Sanders’ attack on the military appropriations bill currently making its way through Congress with bi-lateral support. Expanding even further an already bloated military budget while also targeting Germany for having the effrontery to buy natural gas from Russia. My congressman explaining his vote for impeachment as a response to Putin’s spinning of fables about the bad behavior of the Biden family. He is also all in on the notion that the drug industry can solve all our addiction problems in terms of food and sedentary living and digital distraction.

    In short:
    *Humans are more resilient that many people think they are.
    *There are fewer genetic barriers than we think there are.
    *But people have to be brought face to face with reality (e.g., the troops on the beach at Dunkirk)
    *Government needs to provide an escape valve (e.g., personal bankruptcy and joining an eco-village for a clean start)
    *Government needs to defund ‘more drugs’ and emphasize ‘personal responsibility’
    *Government needs to insure ecological stability…not take beach vacations in Hawaii while Sydney is choking
    *Kahneman’s lessons from psychology need to be learned in the bones…not just intellectual manipulation of concepts or interesting experiments with ‘rat heavens’ rather than water laced with cocaine.

    Don Stewart

  33. Human vs. Fossil Fuels
    In Mielcarski’s blog, referenced above, one can click on Janovici’s talk and get some precise calculations related to legs (our most powerful appendages) and arms. What is left out of these kinds of calculations is photosynthesis. There is roughly 10X solar energy striking Earth as we are burning in fossil fuels. Much of the solar energy is, or could be, intercepted by plants. If, for example, plants were really efficient at photosynthesis, then our energy worries would look a lot different. Nevertheless, making better use of photosynthesis, through breeding plants or reclaiming deserts or better water management or the use of silvopasture, or better use of wood (as in Albert Bates’ magic carbon machines) can make a difference between abject poverty and starvation and being able to live like humans once did. How many people could live on the enhanced carbon capture is a subject of dispute. Some estimate 12 billion, some 500 million. It is clear that the world is now generating way more dietary calories than are healthful. It is not clear that synthetic nitrogen and artificial fertilizers are essential. But it is obvious that energy conservation would be vital, and the current economy and social structure could not be maintained.
    Don Stewart

  34. Well Australia doesn’t appear to care much about climate change despite Sydney being immersed in smog and record temps today.

    The Galilee field could potentially produce 27 billion tons of coal.

  35. Airy-Fairy or Bedrock Truth?
    3 very recent tweets from Nora Bateson, a practitioner of the arts of dealing with complex adaptive systems:

    Here’s the thing about system change: relationships are upstream of structures. If the structures are changed before the relationships change – – the pull of relational habit will morph structural change to serve those relational processes.

    What would you really want someone to promise you? True love forever? No. Ever increasing wealth & comfort? No. Those rigid promises require compromising other contexts of life. -that they would respond to life’s twists & turns with all of the integrity they could muster. Yes.

    Bacterial wealth can be seen as living systems health. Material wealth is probably a dead end.

    My thoughts:
    *Yes, 99 percent of our effort seems to be devoted to changing structures SO THAT RELATIONSHIPS WON’T HAVE TO CHANGE.
    *As someone watching my grandchildren enter an adult world which will probably change radically, I struggle to figure out how to give advice and experiences which ‘do no harm’
    *Humans act as if we are the Lords of the Universe. We are not. Which explains the shock of contemplating life without fossil fuels…and the denial.

    Don Stewart

  36. Very interesting episode of the Keiser Report, over on RT.com today.
    Still down in Argentina, Max continues his interview with Nick Giambruno of caseyresearch.com .
    The very last sentence of the interview is quite profound.
    Discussing the process of world de-dollarisation, Nick says, ” It’s all about energy, look at how energy is priced . . . ”

    I think that Nick must have found your website, Dr. Tim.

    PS. Thank you for sharing your knowledge and your insights with us, during the past year.
    Have a Merry Christmas.

  37. Nord Stream 2: Trump approves sanctions on Russia gas pipeline

    The Medium is the message?
    Gas Wars, Pipelines, Silk Road
    It’s not the Energy Substantially but the Means of Exchange, I.e petrodollar Hegemony.
    A debt-based PetroDollar has been the most powerful Geo-Political and Soft Power Tool of the Rules-Based International Order for a century or So.
    The Paradigm Shift being witnessed in front of our eyes but not seen for what it is is a move to a Carbon Trading based Unit of Currency. This is a proxy for energy usage as so much energy is generated by burning carbon. It is though the social control and governance mechanism embedded within the Debt Based currency and Taxation system which the “Masters of The Universe” are interested in maintaining.
    It is Debt-based money at Interest that drives the need for Growth as the system does not reverse it only works one way.

    • @Roger Lewis
      I suppose Germany will now realize the futility of being an American colony. Russia needs to trade oil and gas with Germany in return for manufactured goods. Same as Russia and China. All three are smart enough to see that having to go through the New York Fed is a noose around their necks. But will Germany be willing to stand on its own feet? Will China succumb to the lure of the American market? Being a slave and having no choice is sometimes more appealing than freedom.
      Don Stewart

  38. The Median Isn’t the Message

    by Stephen Jay Gould
    Consider the standard example of stretching the truth with numbers—a case quite relevant to my story. Statistics recognizes different measures of an “average,” or central tendency. The mean is our usual concept of an overall average—add up the items and divide them by the number of sharers (100 candy bars collected for five kids next Halloween will yield 20 for each in a just world). The median, a different measure of central tendency, is the half-way point. If I line up five kids by height, the median child is shorter than two and taller than the other two (who might have trouble getting their mean share of the candy). A politician in power might say with pride, “The mean income of our citizens is $15,000 per year.” The leader of the opposition might retort, “But half our citizens make less than $10,000 per year.” Both are right, but neither cites a statistic with impassive objectivity. The first invokes a mean, the second a median. (Means are higher than medians in such cases because one millionaire may outweigh hundreds of poor people in setting a mean, but he can balance only one mendicant in calculating a median).


    This wonderful piece from back in 1991 is very useful on Lies Damned Lies, statistics and the Dilettante tendency in Spinning doomster narratives.
    I discovered it today playing with various online academic citation tools


    I am working on a fully annotated rebuttal promised earlier in the thread.


  39. Re the reference of Sheldrake’s work which R.L. used when attacking science in his response to my 20 year old paper…from Wikipedia, :

    Alfred Rupert Sheldrake (born 28 June 1942) is an English author,[3] and researcher in the field of parapsychology,[4] who proposed the concept of morphic resonance, a conjecture which lacks mainstream acceptance and has been characterised as pseudoscience.[5][6] He worked as a biochemist at Cambridge University from 1967 to 1973[3] and as principal plant physiologist at the International Crops Research Institute for the Semi-Arid Tropics in India until 1978.[7]

    Sheldrake’s morphic resonance posits that “memory is inherent in nature”[3][8] and that “natural systems… inherit a collective memory from all previous things of their kind.”[8] Sheldrake proposes that it is also responsible for “telepathy-type interconnections between organisms.”[9][10] His advocacy of the idea offers idiosyncratic explanations of standard subjects in biology such as development, inheritance, and memory.

    Morphic resonance is not accepted by the scientific community and Sheldrake’s proposals relating to it have been widely criticised. Critics cite a lack of evidence for morphic resonance and inconsistencies between its tenets and data from genetics, embryology, neuroscience, and biochemistry. They also express concern that popular attention paid to Sheldrake’s books and public appearances undermines the public’s understanding of science.[a]

    Other work by Sheldrake encompasses paranormal subjects such as precognition, empirical research into telepathy and the psychic staring effect.[10][27] Sheldrake’s ideas, while lacking scientific acceptance, have found support in the New Age movement from individuals such as Deepak Chopra.[28][29][30]

    • Thanks Steve, very instructive comment. My life-time experience tells me that there is something in what your man says. The problem with ‘science’ is that it is reductive; they try to explain ‘time’ by dismantling the watch.

      I have studied science myself to ‘A’ level but ended up as an accountant: “we know the price of everything, but the value of nothing” and the profession is as much in the dark as economics IMHO. The big ‘4’ auditors have been proven corrupt to the core – and why not? – he who pays the piper chooses the tune.

      So I think there is much for all of us to learn in nature and the universe. Perhaps ‘science’ will be able to explain the origin of DNA/RNA eventually, but I doubt it, lets get Quantum Theory sorted first and maybe even Fusion.

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