#164. A bolt from the grey


Where the purely biological prognosis for the Wuhan coronavirus is concerned, there’s at least a ton of speculation for every pinch of fact, and there would be no merit at all in adding to that speculation here. One of the few things that can be said about this with any confidence at all is that somehow, sometime, the epidemic will end.

The expectation then will be that, in the purely economic and financial spheres, what the economic and financial consensus likes to call “normality” will be restored.

As people and businesses go back to work, as the flow of goods and services resumes, and as ravaged supply lines are repaired, the economy will be expected to stage a full recovery. People wary of travelling will, we’ll be told, start boarding aircraft again, and even the cruise liner industry might start to shrug off the tag of “floating petri-dishes”.

Capital markets, too, will be expected to bounce back, even if takes a long time to restore them to their full pomp, hubris and folly. Investors will be expected to go back to wasting their money propping up “cash-burners” again, and queueing up to get a piece of the latest moonbeam IPO.

But the reality, from a surplus energy perspective, is that this definition of “normality” is highly unlikely to be restored. In economic terms, the relentless rise in the energy cost of energy (ECoE) had already started making people poorer, long before the name ‘Wuhan’ had any connotation beyond the geographical.

It cannot be stressed too strongly that global trade in goods had already turned down, as had sales of everything from cars and smartphones to chips and components. Financial stresses had already become severe, and investors had already started to view cash-burning and over-hyped sectors with new caution.

Nasty though it is in purely human terms, and real though its economically disruptive effects undoubtedly are, the coronavirus didn’t strike out of cloudless economic skies.

Rather, it’s been a bolt from the grey.

It’s too soon to say whether the epidemic will act as a catalyst for a full-blown financial crash but, if it does, the authorities will have tough decisions to make, and we can only hope that the disastrous mistakes made during the 2008 global financial crisis (GFC) will not be repeated.

In the sound and fury of that crisis, the imbecility of ‘monetary adventurism’ was piled on top of the prior folly of ‘credit adventurism’. The blithe assumption was made that, left to its own devices – and, of course, bailed out by taxpayers from the consequences of its previous failures – ‘de-regulated’ finance could get back to driving economic progress.

Back in 2008, the ‘global’ crisis was presented as something that somehow had happened out of the blue, without human agency, and that ‘nobody could have known’ that a credit-driven bubble was going to end in a bust. The reality, though, was that we’d been using $2 of new debt to buy each $1 of highly dubious “growth”.

Since then, and whilst reported “growth” has become even more cosmetic and insubstantial, the debt cost of each dollar of it has risen to over $3. Along the way, the worsening imbalance between asset prices, on the one hand, and all forms of income, on the other, has inflicted enormous damage. This imbalance has blown huge holes in pension and other saving provision, has prevented the proper functioning of markets in pricing risk, has stripped the economy of “creative destruction” and has saddled us with far too much of the speculative and the outright exploitative.

Siren voices to the contrary, spending borrowed money has never been a cure-all for a process of “secular stagnation” driven by a structural deterioration in an economy in which the prior spurt in prosperity delivered by fossil fuels was coming to an end, and had started to go into reverse.

Nobody would envy the choices that are going to imposed on governments and central banks if – or, to be realistic about it, when – the 2008 crisis is repeated, but this time in the much larger and more menacing shape that has always been a virtual inevitability.

But the analogy that can most usefully be made here might be one which compares 1945 with 1918. After the first “war to end all wars”, the rallying-cry was “business as usual”, but no equivalent delusion could persuade the people of 1945 that there were merits in re-creating the inter-war world, be it the financial the excesses of the 1920s or the mass misery of the Great Depression.

This time, a similar catharsis might – just might – persuade us to start taking a realistic view of the economy, not as a monetary construct capable of perpetual growth through financial manipulation, but as an energy system whose prior ability to make us more prosperous has gone into reverse.




47 thoughts on “#164. A bolt from the grey

  1. Tim,

    Sitting on my driveway are two cars, 9 & 12 years old, yet apart from the damage small children have done to the upholstery & the air con in the oldest having given up the ghost they just keep plodding on.

    In the early 80’s when I started learning to drive, they would have been mechanically & physically knackered, if they were running at all.

    Might I suggest that one up side of modern life is that ‘Stuff’ seems to last an awful lot longer than it did, hence the declines in certain forms of manufacturing?

    • I think it’s more of a mixed picture. The build quality of cars has improved (not least by stopping the use of already-rusty steel in the manufacturing process), but there’s been an increasing tendency to towards the throwaway, not least so that, if something wears out quickly, the customer has to buy another one.

      My first ipod, for instance, lasted for six years, my second for three and my third (and last) for less than two.

  2. Thanks Tim. If the dumb money for unprofitable energy dries up, I expect governments will be forced to nationalize the industry to keep some diesel flowing for the combines and trucks. How long do you think governments can keep unprofitable energy businesses running since energy is the foundation for tax receipts? Is inflation the only possible outcome?

    • Speaking of energy generally, when ECoE was, say, 2%, the remaining 98% of energy value was surplus energy, used for powering all activities other than the supply of energy itself.

      As I see it, both system design and our expectations are still rooted in that era, even though ECoEs are now over 8%, and that 98% surplus from energy has shrunk to 92%.This means that we’re having to do without other things in order to maintain the supply of energy to the system.

      There are two main ways of managing this. One is that we start doing without things we’ve expected in the past – but nobody likes that, or recognises the need for it. The other is to create money, even though the ultimate effect of doing so will be value-destructive.

      The private sector supply of energy is trapped within this incomprehension. If we put up fuel prices, for instance, consumers complain – but, if we don’t, suppliers cease to be viable. This is true of renewables, too – in the UK, for instance, the electricity customer pays £185 per year in climate change levy, which funds slightly more than half of annual investment in RE.

      What I suspect happens from here is a partial retreat. One possible example is that I think we’ve reached “peak travel” – car sales are falling worldwide, for example. The virus event may be blamed for a downtrend in travel that I think was already looming – without this impact, we might instead have seen people less willing, or less able, to use credit to finance holidays.

      These are complex topics, and working through them is being made harder by the virus epidemic.

    • The scope for “value destruction” is something that I was working on before the virus event.

      Some kind of cascade effect is likely, with falling asset values exposing debt secured against assets, whilst falling prosperity makes servicing debt ever harder.

      The scope for contagion under such a scenario is enormous, and so, too, is the risk that the authorities might try gimmicks in preference to reset.

      One of the biggest exposures out there is the gap in pension adequacy – for 8 countries alone, a WEF report suggested this gap was $67tn in 2015, and would rise to $427tn (real) by 2050.

  3. Built in obsolesence. My mother had a wringer/washer, hand cranked, that lasted at least 15 years. One would be lucky today to get a modern-day washing machine to last 5 years without having to get replacement parts, etc. if available. Currently, if customers have bought Aldi or Bunnings electrical/mechanical products, usually made in China, they certainly don’t perform as advertised or endure.

  4. I thought that the ECoE was higher than your quoted figure, I seem to recall reading that in the early days of oil extraction the ratio was around 1 barrel of oil financing 100 barrels, whereas today it’s nearer 1:4 with the ratio slowly but inevitably reducing to parity.

  5. Here is an item that I recommend to everyone. In it, a former pilot uses sophisticated equipment to monitor microparticles under various conditions.

    In summary, he found:

    – On a beach, 2,400 particles per cu centimetre

    – In his kitchen, about 3,900

    – On a commuter train, about 3,700

    – On a busy street in central London, about 18,000

    – On an airliner, on the runway with engines shut down, also about 18,000

    – On an airliner in flight, between 50,000 and 97,800

    I’d like to have known what the readings would have been on, say, a cross-Channel ferry.

    • I had been press ganged as a stoker in the Merchant Navy (Its a long story & as Dr Morgan will no doubt point out, the correct term is Shanghied for civilians)

      Anyway we were heading for Swansea and I was up on deck, where a small boy started asking me various questions about the ship, before pointing at the smoke and asking if it was ‘environmentally Friendly, and why it was smoking. Answer, 1. No, 2. The engine designer had broken the fundamental rule of bolting and bolyed more than two components together, this meant that the engine wasnt as rigid as it should be which in turn mucked up the timing, but thats another story…………….

    • I think that, for merchant seafarers, the old term is “crimped”, with “shanghaied” referring to non-sailors taken prisoner or hostage.

      I was talking to some RFA guys who told me how they’d go up into the upper tier of the hangar “as a quiet place for a fag” – obviously hadn’t heard of avgas! In fairness, RFA sailors are amongst the nicest I’ve ever met.

  6. Thanks for new post Tim – Jeremy Warner is talking a lot of sense in the Telegraph about bring production back locally made feasible by automation to keep costs down.

    Extract :

    Whether or not Covid-19 turns out to be the “big one”, what it has done is highlight the risks both of unfettered international travel and over-reliance on global supply chains. There is probably no turning back the clock on the first of these phenomena, but on the second there very much is. Already acute concern over security of supply coincides with technological advances in automation, which in turn reduce the incentives to offshore production to low labour-cost economies, and make possible a radical reimagining of the way the global economy works.

    Renationalisation of supply, renewed localisation of production, and a decoupling of major economies from one another, these are likely to be the lasting effects of the virus. For China, it is a particularly unhappy irony: the country that has benefited so much from globalisation has given birth to the virus that may start to kill it off.

    • Personally, I think the virus has brought forward the point of “peak travel”. I’d hazard a guess that those poor folks stuck in Tenerife for perhaps another fortnight of quarantine, quite possibly followed by another two weeks of it when they get back, will take their holidays in Blackpool or Bournemouth next year….

      I can’t buy the automation point. Machines, too, depend on global supply chains for spares, and interdependency is huge, beyond the scale of re-engineering except over a very long time. Taking spares (and components) from China as an example, there are no other suppliers ready to step into the breach at the huge scale involved.

      To be sure, though, globalisation is already in retreat, and this process is likely to accelerate. Politics is helping to drive this along.

  7. Tim my iPod had been going strong since 2011 although it’s only used when I drive having been connected to my car’s infotainment system.

    My Samsung 46 inch HD TV is now 9 years old but cost £1500 in 2011. The picture quality still compares with new sets – perhaps it has more robust components.

    My biggest gripe is mobile phones where you can’t replace the battery except at huge expense

  8. Some interesting observations from Damien Klassen at Nucleus Wealth as to how this could lead to GFC2.

    What is quite unbelievable is the claim by Martin Lakos that in 2019 the world economy was stronger that it had been for ten years and that there was a substantial buffer to ride out the economic effects of this global pandemic. What the hell did he think the repo crisis last year was all about when the FED Was pumping billions of liquidity into the system every day? The markets have completely disconnected from economic realities for years now.

    If you look on Amazon there is already evidence of huge supply chain issues. As stocks in UK and EU warehouses are running out there are lengthy quoted restocking period stretching to April and May. I would advise against anyone buying anything that is not available for immediate delivery. There are many companies who are going to see serious supply chain shocks and many of them are not even aware that their current UK or EU suppliers might be China dependent further down the chain. With JIT stock management all of these will hit serious supply issues and they will go out of business before any bounce back or v-shaped recovery could take place. How does Martin Lakos possibly think that the ability for business to physically produce and trade is somehow not a structural issue?

    As this pandemic spreads, it will require people to self isolate for long periods of time and most people can’t work from home. Businesses will have to curtail or cease operation for extended periods etc and this might be required in waves as the situation shift from periods of control to slipping out of control or when we see mutations in the virus. In this situation many businesses will go bankrupt yet this is absolutely no reflection on their business. In times like this the government will have to step in with MMT to be able to pay wages of self isolating staff and keep otherwise viable companies afloat in huge numbers. I really can’t see any other means of achieving this other than MMT. Anyone who takes the data out of China about this virus is a fool. Italy and South Korea are far better indicators of how it spreads and how dangerous it is and the stats are not pretty. Case fatality rates in Italy are possible running at 22% once we adjust for the latency between confirmed diagnosis and fatality and in SK they are around 6.4%. This potentially puts nCov as being at least 64 times as deadly as regular flu and once health care systems are overwhelmed this will increase further. The NHS are claiming to be prepared yet its not so long ago that Boris Johnson was being berated for a boy in a corridor in a system that could not cope with normal demands.

    • Any suggestion that the world economy was “strong” in 2019 is nonsense – perhaps based on counting the recorded “growth” whilst ignoring the credit that was driving it. As I’ve mentioned, sales in numerous catregories were falling pretty quickly even before the virus came along.

    • Simon

      As Tim says things were going soft even before C-19 turned up. With interest rates at rock bottom the prospects of the discovery of the delights of MMT were already looking good but, as you say, with C- 19 adding to the pot MMT becomes a definite prospect.

    • Indeed so.

      In the very short term, though, this is like watching a horse race, with a very definite interest in the result.

      The ‘runners and riders’:

      1. Best outcome – the Fed and other CBs realise that you can’t fix a virus with QE and rate cuts, and do nothing.

      2. Worse outcome – the CBs try to act, and fail. This would destroy any belief in CB ominpotence, and crash the markets

      3. Worst outcome – CBs act, and succeed. Then we get a few more months of madness, enough to ensure that the subsequent crash has maximum knock-on consequences.

  9. MMT = More Money Today. 😉 As Dr. Morgan has explained for years, money isn’t energy. All this will accomplish is price inflation of whatever is in greatest demand with limited supply.

    • Anyone who’s been working in the City of London or Wall Street during a market crash (or in both, as in my case) knows how frenetic the atmosphere becomes – also, it’s somewhat ‘blanket’ and indiscriminate, meaning that good stocks tend to get marked down as much the trash.

      Moreover, the amount of selling that actually happens is low, because there are few if any buyers around, at least until the dust starts to settle. Sure, clients are yelling down the phones to you to “sell!”, but you can’t execute. Then you’re likely to get a “dead cat bounce” (false and temporary recovery), and the pros liken trying to ‘buy the dip’ as “catching a falling knife”.

      This experience makes me pretty relaxed about what’s happened so far, and I do detect one sign which might be quite encouraging. So far, the Dow and the NASDAQ have both fallen by about 11% over a week. If the Fed was going to try to stop this happening, my assumption is that the ‘plunge protection team’ would have acted by now. This suggests that they either (a) haven’t tried, or (b) have tried, and failed.

      In terms of the restoration of equilibrium, markets are functioning as they should.

      The problem, as I see it, is that assets are over-priced in relation to the economy. Simplifying a bit, asset pricing tends to be the inverse of the cost of money, so the same prolonged ultra-cheap monetary policy which has given us debt-created fake “growth” (and soaring debt and risk) has also driven asset prices upwards.

      This in turn means a huge disequilibrium between prices and incomes (the latter including dividends and coupons as well as wages). These are consequences of the policies adopted in 2008-09, then kept in place for much, much too long.

      This relates to your remark because I’m hoping that the authorities don’t, or can’t, reflate asset markets. The last thing we need now is to even more of the manipulation that has inflicted so much damage since the GFC. Right back then, some of the brightest people I know were calling for a “reset” to be allowed to happen, i.e. to allow market forces to function. What we got instead was appalling.

      I’m not getting unduly panicked about this aspect of things. We really need to hope that nobody tries to “know better than the market”. When they try that, it has a bad outcome of they fail, and a worse outcome if they succeed.

      Obviously, this is a theme that I’m working on right now.

    • I fully agree, Tim. But it is likely that the PPT and the Fed will attempt to repeat the process. This time the $US might begin to lose some status. Then the tug of war will begin.

    • Thanks Steve.

      It’s likely that my next article will look at this sort of issue. My hope is that the PPT doesn’t succeed in stopping market adjustment. The USD might be seen as a safe haven, relatively speaking – “the prettiest horse in the knackers’ yard”, so to speak.

    • I think you’re missing the point Peter. This is not a question of economic stimulus it is a question of survival. In a city in lockdown there is no demand for anything other than very basic staples. Discretionary spending will disappear from the economy as incomes will be greatly reduced. Even with restricted supply there will be no accompanying price inflation as people will hunker down and simply stop spending. How are prices to increase if there is no demand? All we are talking about is making enough money available to business and workers to survive on an absolute bare minimum income stream.

      There is a suggestion that cases in China have peaked and that the virus will abate from now. If we believe the stats infection growth has slowed but this is in a country in which cities are in lockdown. Wuhan was locked down on the 23rd of January. Since that time the published confirmed cases from Hubei for nCov went from 444 to 65,596 cases yesterday. The population of Wuhan is 11 million meaning that the total number of infections declared for all of Hubei is just 0.5% of Wuhan’s population. If we believe those statistics we cannot assume that 99.5% of Wuhan’s non infected population have magically developed immunity to this virus. Lockdown has not stopped the spread of the virus and as soon as the lockdown ends it will just resurface again as it regains momentum in the 99.5% of the people yet to be unexposed. If China were under reporting the data by a factor of 10 that would still only be 5% of the Wuhan population that had been infected leaving plenty of spare capacity for further outbreaks.

    • (Steve, not Peter)

      “This is not a question of economic stimulus it is a question of survival. In a city in lockdown there is no demand for anything other than very basic staples. Discretionary spending will disappear from the economy as incomes will be greatly reduced. Even with restricted supply there will be no accompanying price inflation as people will hunker down and simply stop spending. How are prices to increase if there is no demand? All we are talking about is making enough money available to business and workers to survive on an absolute bare minimum income stream.”

      Demand for essentials like food, water, medicine, energy…won’t decrease unless population decreases. Unemployment is at all time lows in most parts of the world. If a lockdown means no retail stores are open, then governments must deliver essentials. Unemployment insurance provides sufficient money to buy essentials. And welfare payments do as well. If supplies of essentials are crimped, then a loaf of bread or a dozen eggs might inflate to twice the normal price.

      As far as declining discretionary spending goes, I seek shrinkage of mining, processing, manufacturing, pollution, biodiversity loss, so bring it on. The debt based economy needs a purge. Creative destruction is an old economic term. And let share prices return to reality. The bubble is still way overblown.

    • PPT, central banks, have a tough choice to make; when they shoot now, and Corona 2.0 arrives, they’re stuck with only an empty barrel to hit with.

    • There are rumours, perhaps well-informed, that the Fed and other central banks will discuss on Sunday how to respond.

      By far the best thing they can do is nothing. If they try to push markets back up, and fail, then their credibility will be shot, and there will be a full-blown crash.

  10. Doing more with less. Financialised capitalism is not very good at it. It is a question of adapting the Pricing of Markets in a token which reflects the resources available and their alternative potentials.
    The “opportunity cost of Energy invested” as opposed to the energy cost of energy invested.

  11. A Few Thoughts About Coronavirus and A New Economy
    As for the Cronavirus, here is an interesting article from Scientic American.

    But let’s follow up on the suggestion that the coronavirus may have been the pin that pricked the bubble. Can we suggest any general ideas which might give us some insight into life after the bubble? And let’s assume that the life after the bubble is significantly different…it’s not micro adjustments.

    Jeremy England, a physicist, has proposed a thermodynamic reason why life emerges in an open system (as opposed to a closed system):

    I’ll just note that what England proposes is pretty close to what Professor Adrian Bejan has been saying for more than 20 years…
    “He (England) is making me think that the distinction between living and nonliving matter is not sharp,” said Carl Franck, a biological physicist at Cornell University, in an email. “I’m particularly impressed by this notion when one considers systems as small as chemical circuits involving a few biomolecules.”

    Bejan defines life as ‘movement’ which is purposefully seeking to gain more ‘access’…speed, reach, volume, etc. Life includes both river systems and humans.

    Please note that these physics explanations all start with energy…which is where our favorite blogger starts in explaining the economy. My suggestion is this:

    It is pretty clear to me that a decline in available energy will lead to a restructuring of the economy. However, the way down may not be identical to the way up. If we revert to, for example, the amount of energy available in 1960, we won’t necessarily get an economy which looks like 1960. For example, I was working in a computer room on the night shift in 1960 and we really had no idea that computers would proliferate the way they have. And we now know a lot more about subjects such as biology and the chemistry of enzymes than we did in 1960. In 1960 we would not have anticipated that a large local hospital would be running adds on Google saying “Eat fish, fruits, and veggies…OR get heart disease”. But it is not all roses either…the proliferation of Bernays and Ogilvy methods of creating propaganda and advertising greatly increase our vulnerability.

    Pop Quiz: Why did peasants in 1800 in France keep a pet pig living in the house? Answer: The pig generated valuable compost from waste material. Long before Ellen MacArthur started promoting a circular economy.

    How many people would come up with that explanation today, and how in the world could we reformulate the London metropolitan area to use pigs instead of huge waste collection trucks and the purchase of fertilizers made with fossil fuels?

    According to a recent study, about 60 percent of economists are still convinced that the economy is a magical, money driven system virtually divorced from physical reality.

    Is anyone smart enough and persuasive enough to figure out what we really ought to be doing, and get people to actually do it? I am doubtful on both counts. So my conclusion is that the best that governments can do is to let people see and feel reality as we experience it…and do what they need to do to adjust. The government is making things far worse by blowing various bubbles. And governments need to move in the direction of Libertarianism so that people are free to adjust with a minimum of red tape.

    Don Stewart

    • Re the govt(s) reducing their control and manipulation: perhaps you forget that the bulk of top world leaders are greedy, egotistical power mongers, and are primarily focussed on retaining their positions. For them to “let go” towards a smaller govt and libertarian society seems far fetched to me.

  12. it does seem to me that the recovery from 2008 never reached the levels of prosperity prior to 2008,
    after the corona virus has passed over I suspect that whatever recovery transpires will again never reach the current levels of prosperity,
    it seems as if this is indicative of the jagged steps of a downward decline to a level of realistic sustainability,
    aren’t we in what Jim Kunstler dubbed ‘the long emergency’?

    you’ve commented on usury before, I went and read about it and it’s historical perspective,
    a part of de-growth, a period of sustained contraction, seems to demand an end to usurious practices,
    should future capital investments be decided upon based on the utility of the project proposed instead of the profitability of the project and it’s ability to repay the capital plus interest?

    I send all participants in this blog my best wishes for their physical and ‘spiritual’ health in these troubling times,
    a depressed spirit can have an impact on ones immune systems ability to fight disease,
    don’t let the bastards get you down!
    the objective of life is to succeed in waking up each successive day,
    everything else is secondary,
    each morning as you awake celebrate this victory, smile and laugh!
    you’ve already ‘won the day’ and you’ve not even got out of bed yet!
    you have been granted another day to witness the joy’s and follies of our peculiar species!

    with fond regards,


    • “Demand for essentials like food, water, medicine, energy…won’t decrease unless population decreases.”

      So ideally Steve how many people would you like to see die from this virus.? Tims’s band of merry men is starting to look very dark when conversation drifts round to eugenics and over population and no-one bats an eye lid. I must admit given your age your complacency on this issue is quite surprising but quite noble if you are prepared to sacrifice yourself to save the world.

    • Straw man. Not what I’d like. What is likely! I’m a realist. Mortality is likely to rise globally from myriad causes as ECoE rises, as population densities rise (over half are urban dwellers now), as antibiotic resistance increases, as nutritional qualities of diets decrease, etc. Rational population control is desirable, but Homo rapacious-superstitious seems incapable of managing that very well. Most opt for post birth mortality instead.

  13. Excellent article Tim. Over the past decade, my income has more than doubled on paper. And yet my purchasing power has barely stood still. Until 10 years ago, I could afford foreign holidays every year. Now they are things I do every 3-4 years. Peak travel arrived for me around the point of the last economic crisis.

    On a completely different topic, the article below is interesting in its description of Anglo domination of the US. Though I wonder how much of it I should believe. If Anglos are dominating the world to the extent that this article suggests, why aren’t we doing better out of it? Where the hell is my cut?

  14. I see that Luxembourg has made public transport free.

    I doubt the UK could afford to make public transport free but they could do worse than look at pricing and availability

  15. We will subsidize ourselves into oblivion. Our financial overlords probably know this doesn’t work, but they sure as hell are going to try it. There are no leaders, only politicians. The Corona outbreak could be the tipping point that blows up the currency. Excel sheets at Worldbank, IMF and CB’s turn red as we speak, ever less room to manoever shit into the green again. To me, it is a truly beautiful deleveraging.

    • I might add, we all underestimate the interconnectedness of our current globalized system. Myself included. We can change the way we deal with money, currency, but that will also change the political landscape.

      The masses don’t even know what money is, how it works, and how it can stop working. Currently there’s a perception of future solutions and growth among the masses. So they vote that way. As soon as critical mass is breached, they will vote differently, or worse, won’t be able to vote at all; disguised as a government of national unity in its early stages.

      Interconnected is the rope around the neck. The current financial system is the backbone of illusions. Take it away, and reality sets in. My dear ladies and gents, no one wants to look reality in the eyes.

      Sometimes i take a sneak peak. The eyes of a predator. Cold, full focus. The deer knows.

      Soon humanity meets her natural enemy; humans.

    • Well, there are leaders, just never in politics -or very rarely.

      Different personality type and skill-set.

      It calls to mind the old saying:

      ‘A Sufi never calls himself a Sufi: if he does, he’s a fake’.

      Same with those who attend every ‘summit of global leaders’…..

  16. From the article:

    “…start taking a realistic view of the economy, not as a monetary construct capable of perpetual growth through financial manipulation, but as an energy system whose prior ability to make us more prosperous has gone into reverse.”

    And from your comment:

    “…both system design and our expectations are still rooted in that era, even though ECoEs are now over 8%, and that 98% surplus from energy has shrunk to 92%.”

    Thanks for the article. The highlighted points are my main ‘takeaway’. Since an understanding of them is, I believe, critical for managing frustration, and setting realistic personal goals over the coming years.

    Many I interact with are not taking a realistic view of the economy, and are trying to design systems (careers, workplaces, investment strategies) in an attempt to fulfil unrealistic expectations.

    As mentioned previously, we might not be able to change the wider system, to better manage “The Long Descent”. But we can at minimum adjust and manage our own expectations,.and those of our dependents, to be more realistic. This is one of the few actions we can do as individuals, in response to the situation.

    Personally I have found these realisations to be emotionally liberating. When you finally accept them, you can go with the flow, and mentally move on to what comes next, rather than fight this unwinnable uphill battle in an attempt to meet yesterdays expectations.

    • Thanks Kevin, much appreciated.

      I must admit to a certain amount of ‘virus paralysis’ in myself, mainly because this is all very immediate and unpredictable, whereas my ‘normal’ work is more logical, analytical and, I’d like to think, fundamentals-based.

      What I’m aiming to do in the next few days is produce a more in-depth analysis of these issues.

    • Worth reading Francis Bacon’s wise essay on ‘Fortune’: basically, keep observing and adapting – when you imagine you have it all tied up, the goddess Fortune will play you a trick or two.

      Of course, he probably didn’t foresee dying as a result of experimenting with frozen chicken in Highgate Hill. 🙂

      ‘There is nothing constant except change’ will be a good motto with which to go forward.

      Career plans and life-goals? Oh dear….

      ‘Migzarad’ -‘This will pass and change’.

      Everything: some of the mutations will be agreeable, others not so much.

  17. “presented as something that somehow had happened out of the blue, without human agency, and that ‘*nobody* could have known’ “.
    This presentation is flatly false, and it’s stunning that TPTB continue to push it.
    Any number of folks, most famously (in Econ circles) Roubini, not only could’ve, but DID know what was coming.

    That none of these prescient folks are household names, speaks volumes about the MSM’s determination to sweep turds under rugs.

  18. Actually there is no need for any further worry.

    Apparently Boris is going into King Canute mode and will be ordering the virus to go back outside Parliament at 2pm.

    I hope it’s televised.

  19. Pingback: #168. Polly and the sandwich-man | Surplus Energy Economics

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