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The End Of Stimulus? (And The Start Of The Crash?)

What the most important chart in the world is predicting
Friday, May 25, 2018, 7:29 PM

Back in January of 2016 we saw what appeared to be, and in my opinion should have been, the end of the Everything Bubble blown by the word's central banking cartel.

The carnage started in the emerging markets. Highly-leveraged positions and carry trades began to unwind. That's a fancy way of saying that all the big, sophisticated investors -- who were busy borrowing heavily in countries with cheap money (the US, Japan, and Europe) and using that debt to speculate in markets offering higher yields (junk debt, emerging markets, stocks, etc.) -- began to reverse their trades.

It quickly devolved into a “Sell everything!” scramble. We saw the dollar spike and stocks fall -- with emerging markets taking the full brunt of the carnage as their stock markets rapidly fell into bear territory, their currencies fell, and their bonds were destroyed.

Until...

Very early one morning in February of 2016 everything U-turned and rocketed higher. Suddenly and magically, the panic was over. This wasn’t the invisible hand of the market at work; it was the very-visible hand of central bank intervention. 

With the benefit of hindsight, we now have a clear picture of what happened. The central banks huddled together, a bold (desperate?) plan was hatched, and key printing presses around the world were sent into overdrive.  In the months to follow, the European Central Bank (ECB) and the Bank of Japan (BoJ) went on a record-breaking money printing spree:

(Source)

The red arrows in the charts above mark this moment when the “markets” were saved.

Or, more specifically, when the portfolios the ultra-wealthy were "saved", as the assets within were boosted higher (yet again) by the central banks printing money from thin air:

(Source)

Addicted To Money Printing

So what caused the weakness in early 2016 that spooked the system so much? The central banks themselves.

After many years of force-feeding stimulus into the global economy to create a "recovery", the central banks have become increasingly concerned that asset prices have become too dependent on said stimulus. So in late 2015, the banks took their feet off of their monetary gas pedals for a bit to see what might happen.

They were hoping that the markets could be gradually weaned off of their stimulus dependence with few ill effects. They wanted to engineer a "soft landing", where if priced declined, they'd come down gradually and not too much.

That didn't happen.

Instead, the cheap-money-addicted markets instantly started expressing massive withdrawal complications.

To re-acquaint you with how quickly things were devolving back then, these are news headlines pulled from an article I wrote back in the middle of January 2016:

Sound familiar at all?  It should. These sound exactly like the headlines in the news today, here in May of 2018.

We are still paying the price from 2008, when the central banks committed a massive error by not allowing the markets and their bad debts to actually clear. Yes, it would have been acutely painful; but we would have been through the worst within a year or two and in the process restored the system to a much healthier and sustainable state.

Instead, the bad actors were protected (and rewarded!) and the root fundamental problems were literally 'papered over', left to continue to fester unobserved ever since. Similarly in early 2016, the central banks once again committed the same sin by rescuing everything with another wall of fresh, thin-air money.

To drive home how much, below is a chart showing the yearly change in world central bank balance sheets. The relative ‘area under the curve’ of each major period of money printing gives us a sense of the scale.  To help you eyeball it, I’ve placed similar-sized orange rectangles in each area.  Key to note is that central money printing has been increasing -- not decreasing -- the further out we've gotten from the Great Financial Crisis:

(Source)

If we've been in "recovery" for years now, as the central banks have been touting, then why has 2016-2108 seen the most stimulus ever injected into the system?

History has taught us that we should trust our leaders' actions far more than their words. And their actions at this time indicate panic.

What is it that has them so worried?  We should all ponder that question long and hard.  I’m convinced that they know as well as we do that, once the over-inflated ““markets”” created by the central banks can no longer be sustained at their current nose-bleed heights, the damage will be extraordinary and unstoppable.    

The End Of Stimulus? (And The Start Of The Crash?)

The pain of the 2008 crash will seem like a mere flesh wound compared to the devastation the next deflationary wave will wreak. 

Of course, the central banks have no interest in seeing that happen and will, once more, do all they can to "rescue" the markets.  

But will they act in time?  More to the point, given all of their very public commitments to raising rates and reducing their balance sheets, will they allow a market correction to happen in the near term? (presumably, so they can ride to the rescue soon after as "saviors")

Politically, the prospect of showering even more wealth on the 0.001% is going to be a tough sell. This is especially true in Europe -- in Italy, Greece and Spain where the populace is suffering mightily already and is in no mood to further enrich the ultra-wealthy.

So it would seem that the central banks, at least publicly, have to stick to their stated plans to reduce their levels of money printing/balance sheet expansion. 

As of right now, they are on track to end worldwide simulus in early 2019, when their collective net change in assets will dip below $0 for the first time in many years:

(Source)

Given the importance of central bank purchases and market interventions, the above chart is probably the most important one in existence for divining where financial asset prices are headed.

If global monthly stimulus indeed drops to $0, then Watch out below!

Who know if the future will plays out anything like the projections given above? The central banks have proven weak-kneed at every tiny moment of market wobbliness.  To date, they've chosen to print and print and then print some more at every opportunity where the "“markets”" might have corrected.  

But we all know that this charade cannot continue forever.  Sooner or later it has to stop.  Given the blow-ups we're now seeing in the emerging markets, there’s clearly serious trouble brewing somewhere in the system.

In Part 2: The Breaking Point Is Upon Us we provide plenty of data to support that claim.

The currencies and bonds of five countries are now in the danger zone, and many more teeter on the edge. My analysis is that the central banks will resort to their usual money printing to resolve the issue, but for reasons I explain in Part 2, these efforts will fail at some point in the next year -- and spectacularly so.

When today's Everything Bubble bursts, the effect will be nothing short of catastrophic as 50 years of excessive debt accumulation suddenly deflates.

Given the dangers involved, you should expect the central banks to 'go nuclear' in their deflation-fighting efforts by sending “money to main street” -- likely in the form of a universal basic income, or a check from the Treasury refunding your last 3 years of tax payments, or maybe even an electronic deposit directly from the Federal Reserve into your bank account.

That's when the inevitable fiat currency crisis will begin in earnest. At that time you’ll need to run, not walk, to buy anything with intrinsic value that can't be inflated away -- before your currency becomes worthless.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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42 Comments

cowtown2011's picture
cowtown2011
Status: Bronze Member (Offline)
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Posts: 47
Status Quo

Who knows, maybe they can kick the can down the road another 5 years. It's hard to perdict and as a result I've stayed invested as least partially in this market. As Yogi Berra once said "It's tough to make predictions, especially about the future". I agree on many fronts to the analysis but when this will break is anyones guess. It could be a quite a while. 

Rodster's picture
Rodster
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UBI or GBI it's all the same

It's interesting that Chris mentions UBI because in a recent Jim Rickards blog he also predicts you will hear a lot more about UBI or GBI )Government Basic Income in the oming months even though Finland scraped that program after 2 years. https://www.silverdoctors.com/headlines/world-news/jim-rickards-alkdfjalskdfjalksdjf/

Steve St. Angelo from the http:srsroccoreport.com in his most recent blog talks about the coming finanical meltdown from the massive govt debt but he makes a correlation that the coming meltdown is all driven by EROI aka energy. https://srsroccoreport.com/global-financial-breakdown-continues-economic-growth-chokes-on-massive-debt-increases/

phoenixl's picture
phoenixl
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UBI/GBI

I have wondered how UBI/GBI could work without places like grocery stores responding by raising their prices. Electronics and cars might not raise their prices because they would just be glad people are buying their products again, but since everyone HAS to buy food, wouldn't food purveyors raise their prices if some kind of federal price controls weren't put on certain items?

MKI's picture
MKI
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Status Quo

cowtown: Who knows, maybe they can kick the can down the road another 5 years. It's hard to perdict and as a result I've stayed invested as least partially in this market.

Cowtown, I fully agree. If anything, we've seen the elites willing to do anything since 2008. No limits, No fear.

Chris likes to say the FED can't "print prosperity"? Very true. But they sure can print MY prosperity and have been dutifully doing so for over 10 years (thanks Helecopter Ben & Old Yellen!).

I honestly could see this scam lasting my whole life (with a 2008-style crash thrown in each decade just to keep the working man from playing). It's even low risk when investing in high dividend-paying blue-chips with 25 year track records (hell, they own both political parties) with the % based on the DOW yield...then plow 10% of yearly profits into physical metal. When this "everything bubble" finally pops & stocks go south? Still way, way ahead. What's not to like?

robie robinson's picture
robie robinson
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Come on..

...and. bring those I’ll gotten gains and buy food, fuel, friends, first aid, firearms... don’t set oneself apart from the proletariat lest your head roll.

got the solar hay in, the garden still need Kelsey’s attn. She is due in July. Her third draft foal. If the rain holds and one techno kid is about will post a vid/pic. I am amazed how you self reliant folk have so much time to write/ type. Am glad

Uncletommy's picture
Uncletommy
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Your prosperity isn't the only one doing well!

As long as you're one of the lucky ones on the winning team, I would have to agree with you,MKI. However, there is quite a difference between business(the people that make money) and industry(the people who make stuff)! What it does for the working "schmuck" on Main St. is another thing:

http://money.cnn.com/2018/02/16/investing/stock-buybacks-tax-law-bonuses/index.html

You may be reading the trends correctly, unfortunately:

I honestly could see this scam lasting my whole life (with a 2008-style crash thrown in each decade just to keep the working man from playing).

sand_puppy's picture
sand_puppy
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Posts: 1861
Grim Pictures From Brazil

A nationwide trucking strike in Brazil entered day six on Saturday, as blocked roads have prevented critical food and supplies from reaching their destinations.

Brazilian export group ABPA said that over 150 poultry and pork processing plants had indefinitely suspended production, while Brazil's sugar industry - the world's largest - is slowly halting cane harvest operations as their machines run out of fuel.

The military has been called out to clear hundreds of trucks parked in the roadways, blocking traffic.

Talk about a cascading collapse.

Local food production and stored food sounds important right about now.....

 

cmartenson's picture
cmartenson
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Brazil's Trucking Strike...

Yep, SP, that's a real-world test of what happens when the trucks stop running.

We did interview Alice Friedemann on that exact topic a while back, and here's what she had to say:

Within a week, in roughly this order, grocery stores would be out of dairy and other items that are delivered many times a day. And by the week, the shelves would be empty.

Hospitals, pharmacies, factories, and many other businesses also get several deliveries a day, and they’d be running out of stuff the first day.

And the second day, there’s be panic and hoarding. And restaurants, pharmacies would close. ATM’s would be out of money. Construction would stop. There’d be increasing layoffs. Increasing enormous amounts of trash not getting picked up, 685,000 tons a day. Service stations would be closed. Very few people would be working. And the livestock would start to be hungry from lack of feed deliveries.

Then within two weeks, clean water supplies would run out. Within four weeks to eight weeks, there wouldn’t be coal delivered to power plants and electricity would start shutting down. And when that happened, about a quarter of our pipelines use electricity, and so natural gas plants wouldn’t be fed natural gas and they’d start shutting down.

It’s a big interdependent system. That’s part of the problem. It’s like Liebig’s Law of the Minimum. A plant needs about 20 different elements to grow, and you take one away and the plant can grow less or stop growing. 

That sounds more or less in line with what Brazil is experiencing:

Empty stores, shuttered gas stations as Brazil truckers' strike continues

May 26, 2018

A truckers' strike in Brazil left a patchwork of empty gas stations and barren supermarket shelves Saturday as drivers appeared unmoved by the government's threats to use force or fine people who didn't comply.

Police forces conducted operations to clear blocked roads, and military vehicles provided escorts for trucks carrying emergency fuel to police stations and army facilities in Rio de Janeiro and Sao Paulo.

The impact was being felt all over.

"There's no food, no fuel," said Joao Roberto, an Uber driver in Rio de Janeiro who was parked at an empty gas station.

Perishable fruits and vegetables all but disappeared from local supermarket shelves. At several Hortifruti chain stories in Rio de Janeiro on Saturday, staff filled vegetable crispers and shelves with soda cans and bags of rice.

A popular Saturday farmers market, normally teeming with fruits and vegetables along several blocks, only had a fraction of its goods. Many vendors at the market were charging double, saying they had to pay more to buy what they could.

"This strike is killing us," said Manuel Reis, a watermelon vendor who sold about 880 pounds of the fruit on Saturday, about half of his usual.

Many gas stations nationwide have run out of diesel and gasoline, and local managers say they don't know when to expect more deliveries.

Bus and metro services in several Brazilian cities were reduced and several flights, mostly domestic, were canceled for a third straight day on Saturday.

This is a good real-world example for people who have a difficult time grasping systems thinking.  When everything is interconnected, the impacts are widespread and rapidly move beyond being an inconvenience.

If the strike goes into a second week, real damage will occur as power stations begin to shut down for lack of fuel, and heavy industry has to cease operations for lack of fuel, electricity, and raw and intermediate goods. 

Nope, nothing linear about complex systems.  

I'm not sure why the Brazilian politicians are not caving to the truckers demands, but I can imagine they are being read the same riot act language by the international banksters that the Icelandic politicians were read.

Those banksters need their interest payments and the people of the country be damned.  Preserve those federal tax flows!  Those are ours!!

Snydeman's picture
Snydeman
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Well, I’m certain this will

Well, I’m certain this will help. Erdogan asks Turks to prop up the lira: https://www.google.com/amp/s/www.aljazeera.com/amp/news/2018/05/erdogan-asks-turks-prop-lira-currency-volatility-180526143404023.html

 

Or, if I were in Turkey, I would see this as the biggest sign to get OUT of my own nation’s currency.

Rodster's picture
Rodster
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Leonado's Stick Toy

That's the illustration I always call to mind, which Gail Tverberg likes to use a lot. Gail, defines it as a "networked economy" and your example of what's happening in Brazil reinforces the point. Gail also says that it goes even further as that networked economy engulfs the entire global economic system. That's why when a little country like Greece threatened the EU with defaulting on it's loans the global markets felt it, panicked and responded in a negative way.

MKI's picture
MKI
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Grim Brazil

CM: Many gas stations nationwide have run out of diesel and gasoline, and local managers say they don't know when to expect more deliveries.

What's very funny? Brazil is the 9th largest oil producer in the world!

Meanwhile...Japan has no meaningful oil (I think they are 43)...were bombed to a pulp only 70 years ago...yet their trains run on time. Hmm.

Summary: people are one's greatest resource. Eliminate fossel fuels completely from the earth and I'm confident Japan would be livng quite well...and Brazil would still be a basket case.

cmartenson's picture
cmartenson
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Uninspiring confidence
MKI wrote:

Summary: people are one's greatest resource. Eliminate fossel fuels completely from the earth and I'm confident Japan would be livng quite well...and Brazil would still be a basket case.

Your confidence is fact-free and therefore uninspiring.

Fact #1:  You do realize that 12 calories of fossil fuels are embedded in each calorie we eat?

Fact #2:  And you should be aware that Japan only has a 40% self-sufficiency rating on food production?  They have to import the rest using...wait for it...fossil fuels to grow, harvest, desicate/refrigerate, transport and finally to cook the food.

Fact #3: Japan only has 0.03 hectares of arable land per capita.  For reference, North America clocks in at 0.55.  

Please inform us, in linear fashion, how you combine those three facts?  How would the people of Tokyo be fed?  How would you propose to boost the 40% self-sufficiency rating to 100%?  Do you know of any country that is 100% feeding its population on 0.03 hectares?  How about sustainably?

As usual MKI, your inability and/or unwillingness to use facts runs counter to this website's stated policies, culture and mission.  

Your personal anecdotes and unbacked opinions do not add constructively to the conversation here.  Speaking for myself, your confidence in Japan's ability to get along just fine without fossil fuels is pointless and useless to the conversation that's unfolding.  

A belief held without the benefit of being backed by facts is entirely devoid of usefulness if the purpose is to inform, sway or constructively debate, which is, of course, the point of this site. 

So either respond to the three facts I've laid out, intelligently, or bring your own, or don't bother with a response. 

If you insist on continuing with fact-free commentary and unsupported beliefs, in other words not adhering to the site rules you clicked on and agreed to, your posting priviledges will be removed.     

 

Rodster's picture
Rodster
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Fukushima

And if there's no fossil fuels what would Japan do with the gift that keeps on giving? That NPP is still not under control, seven years later and they have used all types of means/technology that are based around fossil fuels.

Uncletommy's picture
Uncletommy
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Silent Spring or Autumn of our lives?

“Why should we tolerate a diet of weak poisons, a home in insipid surroundings, a circle of acquaintances who are not quite our enemies, the noise of motors with just enough relief to prevent insanity? Who would want to live in a world which is just not quite fatal?” 

― Rachel CarsonSilent Spring

Mots's picture
Mots
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Posts: 196
MKI is right and is backed by fact

MKI I agree with your statement: people are one's greatest resource        

Also you state that  Eliminate fossel fuels completely from the earth and I'm confident Japan would be livng quite well.

Your statement is already proven by history and I dont see the point of having to answer questions about calories of fossil fuel to move food from farms to people, particularly since small farms located next to and in some cases inside big cities is a fact in Japan.  The distance traveled from farm to mouth is 10-100 shorter than in America even now, and would be even more favorable if they stopped importing cheap food from America.

It is a fact that for over 200 years (1650-1850) about 30 million Japanese in a land about the size of California but mostly uninhabitable due to mountains, lived sustainably, recycled everything, imported nothing, burned no fossil fuel, and developed a civilization much cleaner and orderly than that of Europe at the time.  Even to this day, about 40% of their food comes from their own farms, which are all small and not run by giant corporations but instead by small farmers (my wife is one).  Yet there is so much fallow land and the technology of growing food has advanced so much since the 1850s that I am sure the small farms which are run by the "greatest resource" as you call it, can increase again to handle a collapse.  Already I see some young farmers moving into this area.   CM demands that you provide facts about arable land per person or something like that but from personal experience (I live in the countryside) I know for a fact that the amount of food produced in Japan could quickly double just by bringing old farms back into production again.  I dont know where or how I could verify such fact, but can see it with my own eyes.  (I myself am working old land as a new olive grove and there is so much fallow land that anyone can make a farm without paying rent for the land).

Facts: They had multiple currency collapses during their sustainable period and went on without everyone freaking out and killing each other.  They are aware that they need another currency collapse.  Fact: Having lost a major war, had two large cities atom bombed, their main city and capital region incinerated by fire etc. they are humble and can deal with the future, in part by reliving the past sustainable period.  Fact: Already every household separates and recycles burnable waste, glass bottles, PET bottles, aluminum cans, steel, (and recently: polystyrene). I know that they are burning a lot of coal now to keep up their American inspired lifestyle, but that can change immediately if needed.  When fukushima occured, everyone immediately stopped using much of their energy cancelled all festivals country wide for a year (albeit for spiritual reasons), office buildings turned off half of elevators, half of lights, all lights off during lunch (people slept at their desks), people took staggered vacations to minimize energy fluctuations etc........ I dont have time to go into it, but I have personally witnessed extreme personal deprivations for the good or convenience of others, and this is in time of peace........

Unfortunately their population has exploded to over 125 million but Fact: that problem is being addressed (already decreasing) much to the chagrin of the bankers and the western press.  We need to keep in mind that all of our reality about other places is brought to us by a biased media that seeks exponential growth and for which the Japanese history and culture is anathema and is constantly condemned and denigrated.  One needs to seek out reports from those who live in other cultures (such as Black Pigeon, who lives in Tokyo).

 The narcisstic American media assumes that a "good life" is modeled after American "values," which generally means selfish consumption of resources. But it is a fact that before America even existed, a high population density, highly organized culture with arts music etc. existed as a closed society without environmental footprint in Japan.

"Black Pigeon Speaks" has made a short video on this topic which expresses his view that because "people are ones greatest resource" as you correctly put it, Japan will be the number one country again.  

see https://www.youtube.com/watch?v=bxFSFWZmtZs

on reflection, I think that a major problem here is that a totally different culture is being evaluated and judged from the viewpoint of Narcisstic American Exceptionalism.  Notions such as a historical (rear-looking) determination of calories to move food are trumped by the reality of existing land and farms near and inside cities and new ways to order and distribute food, combined with a cultural trait of immediate change as needed, which is inconceivable to an American and therefore not considered as part of the "equation."  Physically the land and technology exists for 100 % food sufficiency and the people are very capable of immediately reorganizing their efforts.  Westerners were surprised by how fast the Japanese accomodated defeat after WWII and rose to new challenges.

It seems like you hit a nerve regarding CM warning about banishing you from the site for stating an opinion that disagrees with his.  I dont see anyone challenging his assumptions, but that is the route I would follow.  So much here is based on assumptions that can be challenged........ I dont have time for this.  

Mots

 

Grover's picture
Grover
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Tongue In Cheek
MKI wrote:

Summary: people are one's greatest resource. Eliminate fossel fuels completely from the earth and I'm confident Japan would be livng quite well...and Brazil would still be a basket case.

cmartenson's picture
cmartenson
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Never bring emotions to a fact fight?

Mots - you are usually more level headed than this, so let me guess that your own beliefs are on the line.

Piece by piece:

Mots wrote:

MKI I agree with your statement: people are one's greatest resource        

This seems to be confusing correlation with causation.  If I were to speculate, what you meant to say was "culture is the greatest resource." 

If it were simply a matter of more people then Quito Ecuador would be more prosperous than Sendai Japan.  

Clearly that's not the case, and I can cite hundreds of mega-examples to make that point.  So people are not the greatest resource.  Care to restate your 100% support for the idea that people are one's greatest resource?

Next:

Also you state that  Eliminate fossel fuels completely from the earth and I'm confident Japan would be livng quite well.

Your statement is already proven by history and I dont see the point of having to answer questions about calories of fossil fuel to move food from farms to people, particularly since small farms located next to and in some cases inside big cities is a fact in Japan. 

Proven by history?  How?  Not even close, and I am surprised at you for this statement given your engineering background.

Let's see what you cite?

It is a fact that for over 200 years (1650-1850) about 30 million Japanese in a land about the size of California but mostly uninhabitable due to mountains, lived sustainably, recycled everything, imported nothing, burned no fossil fuel, and developed a civilization much cleaner and orderly than that of Europe at the time. 

....Uh....Mots...time to back away from the punch bowl?...I simply cannot believe you are using a time period from 1650 to 1850 as your frame of reference to support the idea that Japan is now, or could easily be self-sufficient, and sustainably.

Seriously?  Can I cite USA population to food or oil resources from 1850 to make any sort of relevant case to today?  Of course not.  

I never thought any long-time member of this site would use such a period to make any particular claims about the year 2018 and beyond.  I'm...stumped.

But to take on your "argument" at face value, Japan is 4x the population of 1850, lives in highly concentrated cities, and practically nobody in those cities knows thing one about growing food at all let alone at scale and sustainably.

Even to this day, about 40% of their food comes from their own farms, which are all small and not run by giant corporations but instead by small farmers (my wife is one). 

Yes.  Exactly.  40%.  

Yet there is so much fallow land and the technology of growing food has advanced so much since the 1850s that I am sure the small farms which are run by the "greatest resource" as you call it, can increase again to handle a collapse.  Already I see some young farmers moving into this area.   CM demands that you provide facts about arable land per person [C.M. yes I do] or something like that but from personal experience (I live in the countryside) I know for a fact that the amount of food produced in Japan could quickly double just by bringing old farms back into production again.  I dont know where or how I could verify such fact, but can see it with my own eyes. 

Ah.  Yes.  You are drawn to MKI's anecdote without evidence form of "logic."  Again,...I'm just stumped.  C'mon Mots, time scale and cost.  What about skills and knowhow?  What about nutrient (re)cycling and distribution?

These are facts you could marshal towards your argument if you wished.

Facts: They had multiple currency collapses during their sustainable period and went on without everyone freaking out and killing each other.  They are aware that they need another currency collapse.  Fact: Having lost a major war, had two large cities atom bombed, their main city and capital region incinerated by fire etc. they are humble and can deal with the future, in part by reliving the past sustainable period.  Fact: Already every household separates and recycles burnable waste, glass bottles, PET bottles, aluminum cans, steel, (and recently: polystyrene). I know that they are burning a lot of coal now to keep up their American inspired lifestyle, but that can change immediately if needed. 

Now you are arguing that Japan has a useful and resilient culture.  I could agree with that.  But I completely disagree with the idea that, if necessary, Japan could change their big city ways immediately if necessary.  

The truth is Japan imports 60% of its food.  That in turn depends on Japan's currency having value.  If the yen tanks in another currency collapse (almost a certainty at some point) then how, pray tell, will Japan pay for all that imported food?

Also, recycling is more valuable as a virtue signalling effort than a sign of anything important.  Recycling polystyrene is pretty much irrelevant in the scheme of things.  

When fukushima occured, everyone immediately stopped using much of their energy cancelled all festivals country wide for a year (albeit for spiritual reasons), office buildings turned off half of elevators, half of lights, all lights off during lunch (people slept at their desks), people took staggered vacations to minimize energy fluctuations etc........ I dont have time to go into it, but I have personally witnessed extreme personal deprivations for the good or convenience of others, and this is in time of peace........

Yes, an enviable culture.  Way better than the USA in most places by far.  But let's never confuse what a culture would do if given ample resources with what it can do given restricted resources.

Unfortunately their population has exploded to over 125 million but Fact: that problem is being addressed (already decreasing) much to the chagrin of the bankers and the western press. 

Yes, the population is decreasing, but at what rate?  How long to get back to 1850's level of 30 million?  From what I've seen that might not happen until after the year 2100 at current rates.  What happens if there's a perpetual fossil fuel emergency beginning in the year 2030?  

 The narcisstic American media assumes that a "good life" is modeled after American "values," which generally means selfish consumption of resources. But it is a fact that before America even existed, a high population density, highly organized culture with arts music etc. existed as a closed society without environmental footprint in Japan.

I think you're painting with too broad of a brush here.  The issue is not the narcissistic American media, but the use of simple facts and straightforward logic to make a point.

I will happily and readily concede that Japan has an enviable culture.  It's people, however, are the same as people anywhere.  Some are smart, some are dumb and the rest are average.  In a pinch people figure out the best way to move forward.  It's what we do.

But let's never confuse people with resources.  People consume resources.  Given ample resources people and the right culture are, indeed, a resource.  People without resources are competitive Mf'ers.  Almost the opposite of a resource.

No amount of awesome culture can overcome a starvation level of resources.  I would have thought that was obvious and self-evident.

So, Mots, seems a nerve has been touched, and I look forward to a calmer and more organized line of thought if or when you have the inclination.

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MKI
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Your confidence is fact-free and therefore uninspiring.

CM: Your list of facts make no point to respond to. My point: Japan is the worlds 5th largest economy with very little natural resources. Why? They have very smart, hardworking people. Hence, people, not resources, are key to living the good life. You haven't addressed this point at all. You just ignored it.

But to answer your questions:

Do I realize there are 12 calories of fossil fuels in each calorie we eat

Yes. The reason is...wait for it...because we can! Because they are so cheap. Once they get more expensive (like, say, whale oil did) we will start to conserve and replace. Are you suggesting we cannot cut that number down to 1 calorie yet still live a good life? Because I have no doubt that we can. But even if we can't, that will be well outside of our lifetimes. I'm not ego-driven enough to think I can make that kind of prediction about our future.

How would the people of Tokyo be fed?

Japan is involved in a world-wide trading network. It's silly to assume any nation would wish to manufacture all their own cars PLUS create all their own energy PLUS grow all their own food. That's crazy. Rather, humans trade back and forth based upon supply and demand and what is easiest; we did this even in the stone age. Your implied idea, that all wealth is generated strictly from natural resources, is simply not so, as my emperical evidence (not mere antidotes) about Japan clearly demonstrates. A huge amount of wealth is just living smarter.

How would you propose to boost the 40% self-sufficiency rating to 100%? 

I don't propose they do. But, judging from their history of wealth generation, I have no doubt they could do so if they had to.

Do you know of any country that is 100% feeding its population on 0.03 hectares?  How about sustainably?

Again, you create a false dilemma. I don't propose they do so (although again, I have no doubt they could survive in a pinch). Rather, they will generate wealth in other ways, and trade that wealth for they need.

As usual MKI, your inability and/or unwillingness to use facts runs counter to this website's stated policies, culture and mission.Your personal anecdotes and unbacked opinions do not add constructively to the conversation here.  Speaking for myself, your confidence in Japan's ability to get along just fine without fossil fuels is pointless and useless to the conversation that's unfolding. A belief held without the benefit of being backed by facts is entirely devoid of usefulness if the purpose is to inform, sway or constructively debate, which is, of course, the point of this site.

Methinks you are touchy to your ideas being challenged and not open minded to new ideas. If you can't see the point I'm making, how Japan avoids resource-driven wealth creation yet still lives quite well while resource-heavy nations don't, and what this means, I really can't help you. I'm not the first person to make this point, a point backed up by nearly all of human history to date. People merely adjust their consumption to what is easiest, and shift their lifestyles accordingly.

However, since you feel my opinions lack value, I won't return.

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Snydeman
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Japanese history.

I’d love to know where some people get their wealth of knowledge concerning the history of Japan and its supposedly peaceful, harmonious, or balanced ways. Cite some valid academic journals or books on the subject, please. Tokugawa Japan was hardly a paradise, and hardly harmonious. It was definitely far more technologically behind modern-day Japan, as well as most civilizations of that time period as well.

/shrugs

MK1, I’ve seen Chris get challenged before, with verifiable and sourced facts using sound reason and logic. I’ve also seen him back off things when contrary evidence is presented. I’ve never seen him do so when presented with logic based on assertion, emotion, or anecdote, all three of which you toss about on a constant basis.

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Mots
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no time for this

lol, seems like I touched a nerve

I wish that I had time to address each of the raised issues, much less respond to the character assasination,  but here are some final thoughts prompted by the attack on my posting

the amount of farmland in Japan under cultivation could easily double if needed (this is an observation, since I live in the countryside and have had at least 5 years to physically look at farmland over a wide area). 

The question was posed: What about nutrient (re)cycling and distribution?

answer: the rich top soil in Japan (and Asia generally as far as I know, and in contrast to the US situation) has been increasing for centuries without fossil fuel.  We take seaweed (high K and P) and put it on our gardens.  Works for me and my neighbors.  A comment: human waste after brief detoxification has been recycled as fertilizer for many years in fields both IN (yes, inside) and around large cities.  This may be a reason for continuously increasing rich top soil in the absence of a big fossil fuel input.

The world is much more complicated than merely measuring "how many calories of energy are PRESENTLY used now to eat, " particularly when decisions are made based on what is easiest at the time. In fact, the number of calories fuel to move food vs food calories can be cut in half with a few purchase contracts virtually instantaneously based on cost competition, as there is a thriving market in food, and in the case of Japan, a tremendous amount of very local food is available if the price rose (for example due to difficulty in transportation from the US).  This elasticity is not presented in the economics science.  Without taking in account the real world, such economic "science" fails.  There are so many problems with the assumptions here, and I have other challenges to my time and energy.  No one is rewarding me for my time and I am very busy.  Any thoughtful person can consider alternatives to high transportation of food and this is already a thing (look up "slow food") in America.  

When making a snap judgement about a civiliation or country and broadly saying that it "cant" do something, it is entirely appropriate to point out that the civilization or country has ALREADY done that thing, and thus can do it again.  Taking the American Way of doing and assuming that Japanese are the same (farming practices for example) leads into a brick wall.  

The character assasination and denigration of my comments based on an overly simplistic analysis (calories to move food in 2017 vs energy content of food without considering alternatives) is not helping anyone and is demeaning. 

A large number of issues are presented and each could benefit from hours of analysis and writing.  I merely point out basic facts that are overlooked and which could drastically change the superficial analysis provided (ie how many calories to move food vs food content!!!). 

The amount of worked farmland could double instantly. 

Farms are all very small and worked not by large combines. 

Farms are not far away. 

Topsoil inputs are non-fossil fueled and topsoil has drastically increased.  (again dont assume that what America does is done everywhere else)

Japanese have a culture of rapid change in behavior to these kinds of problems. Is this factored into the alleged economic science presented at this web site?  Economists cannot see these basic facts.  Isnt this the real reason for the back and forth between CM the economic science guy with (calories transit vs calories food content) and Mots (5 years living in the farming culture of which CM is making definitive authoritarian conclusions) about?....

 

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Snydeman
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The average Japanese citizen

Mots-

 

sounds like you and your neighbors would do just fine. Does the average city-dwelling Japanese citizen have the know/how to convert themselves into a farmer in a quick pinch? Will they simply come to your farms in the event of a crash and politely wait for you to dole out extra food to them? Judging by the histories of Japan I’ve read, they are humans too and will react in quite predictable ways during a rapid collapse. Will Japan be more resilient in the long run? Probably. But just because the Japanese of previous ages could do it doesn’t mean the Japanese today can. 

 

I agree that Americans are probably more screwed though, but that’s just my gut speaking.

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Mark_BC
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MKI wrote: Japan is the
MKI wrote:

Japan is the worlds 5th largest economy with very little natural resources. Why? They have very smart, hardworking people. Hence, people, not resources, are key to living the good life. You haven't addressed this point at all. You just ignored it.

That's not really true. While Japan does not have a lot of natuiral resources like fossil fuels, it consumes a lot via imports. Japan has access to the rest of the world's resources, and it can import these because it is good at manufacturing those resources into final products. That's generally what economists tell us is "good" about globalization. One country can focus on what it does best -- say for example r&p'ing the environment and exporting its surplus natual resources to other countries. Another country is better at doing high-tech things with those resources like making cars or computers. With "free trade" between countries, this country-by-country specialization has created a world of widely different economies.

So while it's true that Japan's relative success over the last half century is directly attributable to its people (or as CM more correclty points out, it's culture), this only works if the rest of the world has 1) the raw materials to trade with Japan to make this manufacturing possible, and 2) the means to buy those final manufactured goods from Japan.

Once the world runs out of surplus raw natural resources, Japan would be in a much different situation. Would Japanese be able to survive by going back to the land medieval-style, as Mots and MKI confidently state?

Well, since the typical criticism of MKI, which I agree with, is that he puts out grand statements about how we will continue living the good life for a long long time because of the virtues of people and Treknology, and proclaims that his statements are backed by real data, but then never seems able to provide that data despite repeated requests to do so, I would request the following:

  1. What is the average caloric intake of a person. Provide references.
  2. What is the average food production per hectare of land in Japan's climate (in both raw kg/ha and also final calories of consumable food/ha), using fossil fuels as inputs to agriculture (via fertilizers and machinery). Provide references.
  3. What is the average food production per hectare of land in Japan's climate (in both raw kg/ha and also final calories of consumable food/ha) using the best agricultural practices otherwise available, without the use of fossil fuel inputs, on a long term basis, to estimate what is "sustainable". This is the interesting one because to the best of my research, there has essentially been zero advancements made in food production over the last century on land that does not have the benefit of fertilizers added, conrary to what MKI states. Why would anyone invest in this kind of agricultural development when fertilizers are ubiquitous? Instead, all of those advancements made in agricultural production have been in developing crop varieties that can utilize additional N inputs.
  4. What is the realistic arable area of Japan.
  5. Bring all these numbers together and relate it to the population of Japan.

Until I see these numbers backed by reputable references, I won't believe it, becuase my numbers show the contrary. I'm really hoping that you can do this, MKI, since you seem to have so much raw data at your fingertips. If not, I'll be forced to do it.

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Mots
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simply come to your farms in the event of a crash and politely

Snyde man

even now there is no dole culture here. People keep account if even mentally of who helps. And yes, the people of today are just as resilient and helpful as long ago.  After the Kobe earthquake people qued (sp) in front of wrecked convenience store fronts and someone inside carefully wrote down the items that each person needed and took, to be paid for later.  Many people would like to farm even now but the low prices created by American mining practices do not allow that.  And yes, there is much room in the countryside for millions of people to move there.  

We tend to forget what the American mining experience has done to distort agriculture around the world.  Americans mine topsoil, mine oil, mine water, mine fertilizer/minerals and combine the mined stuffs to make very cheap food to export and drive people off the farms in other countries.  meanwhile, American water tables in central plains/Texas etc. are falling drastically, topsoil is vanishing, cheap fertilizer is running out.  When finally the American agribusiness hits the wall, us farmers in other countries can resume and double down on our more resilient farming practices. The short term profit based farming in America is based on low cost topsoil depletion, mined oil and water and unfairly outcompetes on price due to the topsoil, oil and mined water used.  THIS is primarily an American problem. We do NOT do this in Japan.  

Although only 40% of Japanese calories are locally grown that 40% is fairly close to resilient, coming from small individual operated farms not far away without using up topsoil, mining water and lower fuel costs.  In this respect, Japan is already much closer to adapting to a world where oil and water are no longer mined to grow food.  To the extent petrol is used, alternatives generally can reduce to the extent price rises (of course, this is one of the basic tenets of economics I think, but maybe the economics scientist wants to comment on this point).  Is it possible or expected that as fossil fuel runs out alternative methods and energies are used, particularly in small area scattered farms where solar electric can be applied without having to replace gigantic combines in thousand acre fields?  I regularly use solar electric for rototilling but will not be able to compete with a mining based US agribusiness until that agribusiness fails due to lack of petrol etc.

People outside N America, and especially in Asia, and most particularly in Japan, act and think very differently than Americans.  I dont agree with CM that people everywhere react the same way to sudden deprivations or that his alleged science of economics can predict how people will eat based on a simple formula of calories used to move food last year vs food calorie content, and that someone who does not focus on this ridiculously simple arithmetic should be banned from conversation.   There are so many flawed assumptions in this economic science, such as a marketplace that quickly shifts to producers near to home once transport costs increase enough.  This subject is not addressed by a simple writing.

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Mark_BC
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OK so here are some basic

OK so here are some basic numbers for discussion. If anyone disagrees with any of them they are welcome to provide alternative references.

  • Average biological production of temperate forest: ~ 5000 Cal/m2/yr. Reference
  • Sustainable production of biomass that can be harvested and removed from the site for food consumption: 2000 Cal/m2/yr. Reference: I don't have one yet but this seems a reasonable amount assuming they take care of the land and send some of that material back onto the farmland afterwards as compost. Generally the "stover" ratio is 50%, meaning that of the crops that are grown, only 50% is actually edible food; the rest is inedible stalks and roots that are left behind.
  • Proportion of food that is wasted in processing before going in our mouths: 50%.
  • Therefore, the amount of final food product available per kg/year in this idealized simplistic analysis: 1000 Cal/m2/yr.
  • Number of people in Japan: 126 million.
  • Proportion of meat in Japanese diet: I will assume 25% which is typical for modern societies. I have this data to back it up, just not quickly at my fingertips.
  • Trophic efficiency factor in meat production: 10. It is typically 6-10. I will assume 10.
  • Calories eaten per person per day: 2500. This will be 625 Cal meat and 1825 Cal plant. I will now apply the trophic efficency factor to meat and sum them up: 1825 + 10*625 = 8075 Cal/day/person.
  • Total food required per person per year: 3 million Calories.
  • Multiply by the agricultural inefficiencies in the first few bullets to get total Calories required from the farm: 3,000,000 *(5000/1000) = 15,000,000 Cal/person/year.
  • Land area required to support average Japanese diet: 15 million / 5000 = 3000 m2 (or, 0.3 hectares)
  • Total land area required to support all Japanese: 38,000 km2.
  • Land Area of Japan: 378,000 km2.
  • % of land area this agriculture represents: 10%.
  • % of land area that is arable: 12% Source.

Well this all seems pretty tight to me. 12% of Japan is arable but they would need 10% of it to grow their food, and my estimate is pretty generous since I allowed for no biomass use of the land which would become much more important when fossil fuels run out.

I also didn't account for fisheries. Japan accounts for a huge 15% of the global catch. This is not sustainable.

Overall, I don't think it's possible that the population could be sustained when fossil fuels run out.

But IMO it will be a long time before fossil fuels run out to the extent that agricultural production would be affected since it is so important. But in the meantime, if there is some other economic catastrophe that happens that prevents Japan from importing food or fishing the far reaches of the oceans, I think Japan would have a very hard time feeding itself. They might be able to do it, but would need to be highly organized and dedicated.

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Snydeman
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It’s late

Here on the east coast, so I don’t have energy or brainpower for a full-fledged response, but I will ask this simple question: What happened the last time an industrial, import dependent Japan was starved of the necessary resources to run its modern society?

 

You can be damned sure the Koreans, Chinese, etc know the answer to that question. Are you willing to guarantee that when shit hits the fan, Japan will simply float into a new non-industrial mode, sans violence, militarism, internal conflict and external expansion? I’m not.

 

 

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Yoxa
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Crop waste
Quote:

 the rest is inedible stalks and roots that are left behind

Savvy animal husbandry could create additional value from such crop waste. Cows love cornstalks, chickens will eat all sorts of scraps, etc. etc..

Compost your kitchen and garden waste ... but run it through the chickens first!

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Thanks for doing the math, Mark
Mark_BC wrote:

 

  • Multiply by the agricultural inefficiencies in the first few bullets to get total Calories required from the farm: 3,000,000 *(5000/1000) = 15,000,000 Cal/person/year.
  • Land area required to support average Japanese diet: 15 million / 5000 = 3000 m2 (or, 0.3 hectares)
  • Total land area required to support all Japanese: 38,000 km2.
  • Land Area of Japan: 378,000 km2.
  • % of land area this agriculture represents: 10%.
  • % of land area that is arable: 12% Source.

Mark, awesome use of logic and data.

I have not gone through all of the assumptions, but just checking some of the math...I think there's one significant decimal point that got dropped..

(0.3) hectares X 127,000,000 people = 38,100,000

Hectares per km2 = 100

Therefore the:

  • Total land area required to support all Japanese: 381,000 km2.

Which is more than the land area of Japan.

Also, the data I provided earlier showed 0.03 arable hectares/capita in Japan....which fits rather nicely with the final (adjusted) derivation you came up with.  

In theory, the minimum required to sustain a person is 0.07 hectares:

The minimum amount of agricultural land necessary for sustainable food security, with a diversified diet similar to those of North America and Western Europe (hence including meat), is 0.5 of a hectare per person. This does not allow for any land degradation such as soil erosion, and it assumes adequate water supplies. Very few populous countries have more than an average of 0.25 of a hectare.

It is realistic to suppose that the absolute minimum of arable land to support one person is a mere 0.07 of a hectare–and this assumes a largely vegetarian diet, no land degradation or water shortages, virtually no post-harvest waste, and farmers who know precisely when and how to plant, fertilize, irrigate, etc. [FAO, 1993]

In practice it will be a larger number than 0.07 hectares (a garden patch roughly 87 feet on a side) because, on average, people will be inept at it for several generations until all the details are worked out (see that final list of assumptions in the above quote).  For us folks saddled with the imperial system, that's 0.19 acres.

[NoteI'm a pretty good gardener but I seriously doubt I could sustainably feed a family of 5 on an acre...time to up my game?]

A "diversified diet" (meaning one with meat and fun things like blueberries) bumps that up to 0.5 hectares per person.  Somewhere between those two extremes is where a country in crisis will end up.  Mark's derived 0.3 hectare figure seems like a reasonable near-term compromise/target for a temperate climate with ample rainfall.

By these measures, as given, Japan is anywhere from 57% overpopulated at the 0.07 hectare/capita end of the spectrum to 94% overpopulated at the 0.5 hectare/capita figure.

Assuming the oceans can provide sustainably (a big if these days), as you rightly point out then Japan can supplement its land-based nutrition and support a (slightly?  significantly?) larger population.

Alternatively, we might note that compared to 1850 the oceans are virtually strip mined bare while agricultural practices and plant varieties have been enhanced dramatically.  So the see-saw tips both ways, but I'd assume that the agricultural side has improved far more than the oceans have lost out...so I might assume that Japan could carry the 1850 population of 30 million plus some factor (once all the land was safely back in optimum production).  So...40 million?  50?

At any rate, these calculations are the reason that I've steered clear from most islands, desert areas, and subtropical/tropical climates that do not support soil formation.  The carrying capacities of these areas as compared to current population is a quite dismal ratio.

It's something to consider...

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robie robinson
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Remedievalization

If a country produces 40% of its food, then 60% gotsta go.

there is an old book that’s quite applicable, “5 acres and Independence “.

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Snydeman
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Mots wrote:even now there
Mots wrote:

even now there is no dole culture here. People keep account if even mentally of who helps. And yes, the people of today are just as resilient and helpful as long ago.  After the Kobe earthquake people qued (sp) in front of wrecked convenience store fronts and someone inside carefully wrote down the items that each person needed and took, to be paid for later.  Many people would like to farm even now but the low prices created by American mining practices do not allow that.  And yes, there is much room in the countryside for millions of people to move there.  

I think you tend to forget instances where Americans have done the same sorts of things. Yes, there were looters in New Orleans, as well as Houston, after those areas were devastated by natural disaster, but equally (if not moreso) true were the communities of people who didn't even know one another who came together to help one another out. Community, it seems, and the spirit that goes along with it, is also another human norm. If anything, the various tragedies that have befallen many American communities have shown us that capitalism and the "me, me" economic system haven't completely stamped out what is an essential human instinct: to work together to overcome adversity. The Japanese clearly have this, as well as a stronger sense of social obligation and obedience to authority that Americans might not have, but the question of whether those traits will be maintained in a true collapse is speculation in either direction. The Japanese have experienced internal strife many times in their history before, and slaughtering one another (the Ashikaga and pre-Tokugawa era of warring states spring to mind) isn't something they've never done before, so the idea that Japanese society could head that way again isn't too hard of a stretch. This is especially true when one considers that "collapse" encompasses more than just food: medicines, air conditioning, patterns of work which many are not prepared for, absence of central authority, return of diseases we've long since forgotten how to deal with...these are just a few of the other things the Japanese and others will face when economic collapse arrives. I could come up with a more comprehensive list, but I've not had my coffee yet.

 

Mots wrote:

We tend to forget what the American mining experience has done to distort agriculture around the world.  Americans mine topsoil, mine oil, mine water, mine fertilizer/minerals and combine the mined stuffs to make very cheap food to export and drive people off the farms in other countries.  meanwhile, American water tables in central plains/Texas etc. are falling drastically, topsoil is vanishing, cheap fertilizer is running out.  When finally the American agribusiness hits the wall, us farmers in other countries can resume and double down on our more resilient farming practices. The short term profit based farming in America is based on low cost topsoil depletion, mined oil and water and unfairly outcompetes on price due to the topsoil, oil and mined water used.  THIS is primarily an American problem. We do NOT do this in Japan.  

Ok, if I may summarize what I think your main point is: The Japanese agricultural sector has been utilizing more sustainable methods of farming than the US, and therefore will not "crash" as hard, or require as difficult a transition to more traditional forms of farming as the U.S. will. Is that an accurate synopsis of your core point?

 

If I'm not putting words in your mouth here, then let me say that I don't disagree. U.S. large-scale agricultural practices probably do mean that we will experience a much harder "crash" than people in Japan will. It follows, logically, that if dependence on fossil-fuel-based agriculture is the primary flaw in today's agricultural systems around the world, then yes, nations which are more reliant on large-scale machine-driven agriculture will have a much harder transtion off of it. No argument from me there. But if you look back at pre-industrial Japan, the numbers don't support the idea that Japan could support over 100 million Japanese without the support of modern industrial systems in place.

 

I think what Chris is getting at is that the current population of Japan isn't sustainable (especially those 30 million or so in Tokyo, to mention but one large Japanese city) even with the savvy and smart techniques of farming you are describing, and he's approaching the issue with math whereas you are clarifying with experiential evidence that supports the notion that not all collapses will proceed along the same trajectory. I see no reason both statements can't be true. 

 

Mots wrote:

 Is it possible or expected that as fossil fuel runs out alternative methods and energies are used, particularly in small area scattered farms where solar electric can be applied without having to replace gigantic combines in thousand acre fields?  I regularly use solar electric for rototilling but will not be able to compete with a mining based US agribusiness until that agribusiness fails due to lack of petrol etc.

Possible? Sure. Feasible over the long-run of a collapse scenario? More doubtful. Remember that solar panels have a shelf-life, and are extremely depedent on modern industrial processes for production. The same goes for most every form of renewable energy I can think of. Also, having a renewable energy source in a nation that has been losing its access to energy sources also makes one a target, either of roving bands or of the government seeking to harness every last drop of energy production it can, "in the interests of the people," of course.

Mots wrote:

People outside N America, and especially in Asia, and most particularly in Japan, act and think very differently than Americans.  I dont agree with CM that people everywhere react the same way to sudden deprivations or that his alleged science of economics can predict how people will eat based on a simple formula of calories used to move food last year vs food calorie content, and that someone who does not focus on this ridiculously simple arithmetic should be banned from conversation.   There are so many flawed assumptions in this economic science, such as a marketplace that quickly shifts to producers near to home once transport costs increase enough.  This subject is not addressed by a simple writing.

I think you give the Japanese a lot of credit, which makes sense if you've made Nippon your home. I don't disagree that the Japanese (and others) may have different cultural norms and assumptions - I've taught students from all over Asia, and the truth of that is easy enough to see - but I'm less certain with your implied notion that in a collapse people don't follow certain basic psychological patterns. Nothing I've seen in the science of psychology seems to indicate that, at the most fundamental level, homo-sapiens are dissimilar in how they operate. Recent Japanese and East Asian history shows us, for instance, just how violent and brutal Japan is capable of acting in a resource-stretched environment. The Comfort Women system, Unit 731, the Rape of Nanking - the latter two Japan still refuses to officially acknowledge, despite overwhelming evidence gathered by the Japanese themselves to the contrary - show that Japan is just as willing to use force if push comes to shove. There are some things that are indeed cultural, and others that are simply human. Teasing out which is which during a collapse, while we are still living in an age of plenty, strikes me as a fool's game for all involved. Math and data, on the other hand, are simply what they are.

 

Now, if you are saying Japanese are more community-oriented and look out for their neighbors, that may indeed be true. If that is the case, collapse there would come at less devastating a cost to human life than it likely will here. But there will be loss on a fairly horrific scale, even in east Asia (especially South Korea and China, but also Japan), and that's where the math is handy in helping us figure out roughly what that scale might be.

 

As for banning MK1, I'm generally not in support of wielding the ban stick either. He has a history of running counter to PeakProsperity's "rules of engagement" a few times in the recent past, however, so please don't take what he's said here as his only potential transgression of our community norms. I'm being diplomatic when I say it this nicely, too.

 

Ultimately, though, I think your basic notion that not all cultures will collapse the same has strong merit, and it is true that the math will only take us so far and show us so much. Just don't discount it either, I would caution.

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Uncletommy
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Posts: 557
Japanese resilience?

http://www.calgary.ca.emb-japan.go.jp/itpr_ja/00_000422.html

JACOS was the first Japanese-owned company to work and invest in the oilsands, starting in 1978. The SAGD operation uses heated water to melt bitumen underground so it can be piped to the surface. 



This project is a joint venture between JACOS, which is owned by a consortium of Japanese companies, and Calgary-based Nexen.

Giving "cultural" credit where credit is due is fine, but we can't ignore the facts. There is, really, no such thing as a free lunch!

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Doug
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Posts: 3152
somewhere in the middle (muddle?)

After doing a little surfing, the truth seems to fall somewhere in the middle, as is usual.

I picked a few sources to focus my search;

http://www.worldometers.info/world-population/japan-population/

https://en.wikipedia.org/wiki/Demography_of_Japan

https://tradingeconomics.com/japan/arable-land-percent-of-land-area-wb-d...

https://www.japanfs.org/en/news/archives/news_id027771.html

First, population in Japan has been decreasing at an increasing rate since about 2010.  In 2018 the population is changing at about a -.23% rate.  In 2010 the population was something over 128,000,000.  It's now a little over 127,000,000.  Projections based on current trends suggest that the population in 2050 will be around 108,000,000.  That's about a 15% drop in 40 years.  Of course, over 90% of that population is urban, placing greater emphasis on urban gardening and agriculture to feed the population.  I'm curious how much of the urban land used for agricultural and gardening purposes is added to the governmental stats for arable and agricultural land.  The potential for growing food in urban areas is huge and developing rapidly.

Of course, a key factor that accompanies population decline is that the aging population increases as a proportion of the whole.  In Japan the over 65 population has increased from 4.7% in 1935 to 27.8% in 2017.  The 0-14 age demo unsurprisingly decreased from 36.9% to 12.3% last year.  There is an interesting aspect to the aging population that surprised me.  The 15-64 demo (the productive years) stayed relatively stable, changing from 58.5% to 59.9% during the same period.  I'm not quite sure how that plays out over time, but it doesn't appear catastrophic.  I assume the death rate will rise as the older demo ages even more.  Also, I'm sure that planned population policies, which Japan seems to adapt well to, could ameliorate those changes to some degree.

As pointed out above Japan has a little over .033 ha of arable land per capita.  However, with the projected population decline, that should increase to over .035 ha per capita by 2050 and continue to increase thereafter assuming the absolute arable land remains stable. 

After noodling over the numbers for a little while, I tend to agree with Chris's numbers for population overshoot.  But, there is another factor here.  Approximately 67% of Japan is forest covered.  That is very high compared to most of the world which averages about 29%.  The US has about 33% forest cover.  40% of Japan's forest is in plantation conifers.  The rest is old growth and regenerated natural forest.  The absolute amount of forested land has remained unchanged for 30 years.  Japan has experience in converting forestland to arable land.  They did so on a large scale after WWII.  They could do so again if needed.  If completely clear cut and converted, Japan's forests could add about .2 ha percapita to food production.  Of course, clear cutting all the forests is unthinkable, but some fraction could be added to the agricultural land that would add to the food production of current agricultural land.

According to the stats at the arable land link, Japan has about 4,496,000 ha in agriculture, somewhat more than Mark found.  They identified arabIe land as covering 4,201,000 ha.  I found an interesting distinction between agricultural land and arable land.

Quote:

Agricultural land refers to the share of land area that is arable, under permanent crops, and under permanent pastures. Arable land includes land defined by the FAO as land under temporary crops (double-cropped areas are counted once), temporary meadows for mowing or for pasture, land under market or kitchen gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is excluded. Land under permanent crops is land cultivated with crops that occupy the land for long periods and need not be replanted after each harvest, such as cocoa, coffee, and rubber. This category includes land under flowering shrubs, fruit trees, nut trees, and vines, but excludes land under trees grown for wood or timber. Permanent pasture is land used for five or more years for forage, including natural and cultivated crops. 

I found support for Chris's claim that .07 ha is the minimum arable land needed to support one human on a largely vegetarian diet.  I would be curious to know how that changes in places like Japan where fish make up a large portion of the diet.  There must be some sustainable level of fish production and mining (to use the appropriate term for taking of natural resources) that would lower the ha of arable land needed to support a person.

I think the bottom line is that if a national effort were undertaken, some increases in food production and population decline could come close to avoiding wide spread starvation.  It seems Japan is uniquely conditioned to undertaking such national efforts and they appear to have many of the skills necessary for maximizing concentrated food production.  But, if they hope to avoid widespread food shortages they probably need to start soon and work hard at all the above.  I can't imagine they will avoid all shortages and sail through a world wide catastrophe unscathed, but I suspect  they will do better than most nations.  They can probably avoid much of the social unrest that will affect the rest of us as well.

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Doug wrote: I think the
Doug wrote:

I think the bottom line is that if a national effort were undertaken, some increases in food production and population decline could come close to avoiding wide spread starvation.  It seems Japan is uniquely conditioned to undertaking such national efforts and they appear to have many of the skills necessary for maximizing concentrated food production.  But, if they hope to avoid widespread food shortages they probably need to start soon and work hard at all the above.  I can't imagine they will avoid all shortages and sail through a world wide catastrophe unscathed, but I suspect  they will do better than most nations.  They can probably avoid much of the social unrest that will affect the rest of us as well.

Agreed, but the government hasn't yet acknowledged that economic growth during demographic decline is an unwise policy approach, so hopium I am not willing to expend here.

 

 

 

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Energy in, energy out of Japan

"Japan is the worlds 5th largest economy with very little natural resources. "

Indeed, Japan's economic model is to buy in fossil fuel resources, convert that into products that other Nations want to buy, then sell them at a profit. The profit enables them to buy in 60% of their food which in turn supports a population of 126 million.

All predicated on fossil fuel imports. Without fossil fuel imports their economic model collapses, as does their ability to feed their current population size.

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Food for thought.

"5 acres and Independence ".

5 acres is roughly 2 hectares. That means 5 acres would need to feed 60 people in Japan (@ 0.033 ha per capita, currently available).

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Food for thought.

"5 acres and Independence ".

5 acres is roughly 2 hectares. That means 5 acres would need to feed 60 people in Japan (@ 0.033 ha per capita, currently available).

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0.07 ha per capita. By my

0.07 ha per capita. By my calculations this is a strip of land of 700 m². (100m x 1m or 50m x 2m for example)

From my preliminary reading, this is far lower than the amount of land per capita in Britain during the middle ages.

I need to research this further myself.

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Branching out the Argument & Vertical Math

Couldn't help but think of permaculture following down this argument

 "Modern" food production will never feed Japan (or the rest of the world) 

Permaculture is part of the answer not only because it needs little input (outside the sun) but because it converts one acre to many in up to seven layers of perennial, nutritionally diverse, pesticide free edibles

it's not the answer to everything...but it definitely beats the current game  

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Japanese Observations

But I completely disagree with the idea that, if necessary, Japan could change their big city ways immediately if necessary.

I agree. I happen to frequently use a bus line that transports Japanese women who attend Mukogawa Fort Wright Institute to shopping areas that contain stores like Nordstroms, Walmart, Trader Joes, etc. While the women are here to ostensibly be exposed to an international culture and expand their English language ability, my observation after a couple of years of riding the bus with hundreds of them is that they are here to consume American products. They almost always have their hands full of packages on their return trip to the campus. I have yet to find one that is conversant in English. A transition to a scarce resource world will not be easy for them.

On the other hand, I just got some new neighbors. A couple and their three late teen/early 20's kids. They brought 6 vehicles with them. (I wonder how long it will take them to figure out that my wife and I have none.) Most of them smoke. However, they appear to be hard workers and I would rather have them as neighbors in the decline than most people I know.

 

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phantom wealth = access to resources

The discussion of Japan's cultural resilience as a core resource is of interest to me, as we have many Japanese friends and have some first-hand and academic knowledge of Japan geography, culture and economy.   What I keep returning to is a simple dynamic: phantom wealth = access to resources. So when a currency collapses, as in Venezuela currently (and many additional examples throughout history) and the phantom wealth evaporates, this doesn't just impoverish households, it limits the nation's purchasing power to whatever it can export of its primary surplus (output - all inputs and external costs) and reduces its ability to invest surplus capital in new production.

To follow this line of thinking, if Japan have high-value output it can trade for resources, that would be a plus. To the degree that output is dependent on fossil fuels / imported energy, that would be a minus.

To the degree the US will likely produce enough oil and natural gas to fuel its (fossil-fuel dependent) agricultural output  (soybeans and grain), it will likely have a surplus of what will likely be in very short supply globally--easily transportable, stable-over-time high calorie food.

A vital group of young people in both Japan and the US are "going back to the land" and acquiring the skills needed to pursue permaculture/traditional sustainable agriculture. This is a big plus for both societies.

I would also note that China has a leg up when the phantom wealth evaporates globally--many of its city dwellers came from a village that they can always return to.  In many cases, Grandpa and Grandma are still working the land in the village while all the younger people left to make their fortunes in factories and other urban jobs.

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2 References about sustainable farming

The book "Just Enough" describes how Japan functioned in self-imposed isolated for over 2 centuries. Not only did they reforest the country after previous environmental catastrophe, but also increased population by 2.5x during this timeframe. It is very relevant to the thought-process required to consider lifestyles and social systems in a post fossil-fuel world:

https://www.amazon.com/Just-Enough-Lessons-Living-Traditional/dp/4770030746

The other is a classic text book "Farmers of Forty Centuries". Written around 1900 by a former American official of the USDA, who travelled extensively through China, Korea and Japan to learn how food production was so effective without artifical fertilizer.

https://www.amazon.com/Farmers-Forty-Centuries-Organic-Farming/dp/048643...

Oh, and a bonus reference - I'm assuming you're truly passionate about this here - Do a Permaculuture Design Course! and be amazed at the possibilities of doing things much more efficiently.

Then work out how you think the world will end and what you will do to prepare and prosper. It's an eye-opening, life-changing and fun journey!

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i <3 Alice Friedman

I would love to hear her on the podcast again!

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Why are interest rates being raised and balance sheets reduced?

I've only seen answers to this like "we need to be able to lower interest rates if we have another recession".  Or "our economy is overheating".  These make no sense to me.  Raising interest rates causes recessions (and stock market corrections).  The inflation and employment numbers are completely made up, so therefore the fact that we are seeing "reported" increases in both, is most likely a justification for raising interest rates.

Brandon Smith's (http://www.alt-market.com/) view makes the most sense to me.  i.e. the USA's Central Bank is merely a subsidiary of a larger entity - a global "elite".  Therefore crashing the US stock market is a step in instituting a global currency to replace the $US as the world's reserve currency.  A crashing stock market, and a falling dollar would (will) be a perfect opportunity for bail-outs and resetting to use an International Monetary Fund currency (Special Drawing Rights), followed by a global crypto-currency.  

This is the only scenario that I can see which could best explain why the FED's are raising interest rates (and reducing their balance sheet) to crash the US stock market.  To set the stage for a global currency reset.  Following that, the US (under the new IMF SDR currency) would become analogous to Greece under the Euro.  Laden with debt, and reduced to a state of extreme austerity.  Similarly the nations like China, with productive economies would become analogous to Germany under the Euro.  

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