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Why The Coming Oil Crunch Will Shock The World

And why we need a new energy strategy -- fast
Friday, July 6, 2018, 6:42 PM

My years working in corporate strategy taught me that every strategic framework, no matter how complex (some I worked on were hundreds of pages long), boils down to just two things:

  1. Where do you want to go? (Vision)
  2. How are you going to get there? (Resources)

Vision is the easier one by far. You just dream up a grand idea about where you want the company to be at some target future date. Yes, there’s work in assuring that everybody on the management team truly shares and believes in the vision, but that’s a pretty stratightforward sales job for the CEO.

By the way, this same process applies at the individual level, too, for anyone who wants to achieve a major goal by some point in the future. The easy part of the strategy is deciding you want to be thinner, healthier, richer, or more famous.

But the much harder part, for companies and individuals alike, is figuring out 'How to get there'. There are always fewer resources than one would prefer.

Corporate strategists always wish for more employees to implement the vision, with better training with better skills. Budgets and useful data are always scarcer than desired, as well.

Similar constraints apply to us individuals. Who couldn't use more motivation, time and money to pursue their goals?

Put together, the right Vision coupled to a reasonably mapped set of Resources can deliver amazing results. Think of the Apollo Moon missions. You have to know where you're going and how you're going to get there to succeed. That’s pretty straightforward, right?

So, it should be little surprise that the opposite, a lack of Vision and/or Resources, leads to underperformance -- and, eventually, decline. Think Kodak or Xerox. Or third-generation family wealth that has dwindled away to nothing. In a changing world, refusing to change with it is a losing strategy.

A great strategy aligns people’s interests and motivations with the available resources. More importantly, it provides a meaningful framework for action, one that gives a sense of purpose that will motivate everyone through difficult or trying times.

The grand goal of defeating the Nazis provided sufficient motivation for people to buy war bonds, scrimp on consumption, plant victory gardens, and go without nylon. A large part of our national resources were dedicated to the larger strategy of winning the war. Because of the strategy everyone shared, practically nobody complained of this repurposing as a 'time of sacrifice’ or as an imposed burden.

Given the right framework and the means to achieve it, people will literally crawl through mud in freezing temperatures -- and find it deeply satisfying. But given zero context or insufficient resources, people quickly become demoralized or rebellious (just observe how quickly most folks get royally pissed off at having to sit on the tarmac for a few extra minutes before their airplane takes off.)

Strategy matters. A lot.

A Nation Adrift, A World In Denial

Here's why I'm harping so much on strategy: the US is operating without a viable one.

We neither have a compelling Vision of where we want to go, nor any sense of the Resources required to change with the many transitions underway around us.

The current ‘strategy' (if we can be so generous as to call it that), is nothing more than "business-as-usual" (BAU).

The US is assuming it is always going to have more cars and trucks on the road this year than last year, more goods sold, a larger economy, more jobs, and the world’s most powerful military. That’s the BAU model. And it has largely worked for the past century.

But it can't work going forward. And the longer we pursue it, the more of our future prosperity we ruin.

Why? Because the future of everything is dependent on energy. More specifically: net energy.

Having a powerful military consumes a tremendous annual quantity of energy. The US military eats up 100 million barrels of oil each year. By itself, America's Department of Defense is the 34th largest consumer of oil in the world.

In total, the US consumes over 7 billion barrels of oil each year. And that represents only 37% of the nearly 100 quadrillion of BTUs of America's annual energy consumption (the rest coming from natural gas, coal, and other sources). For comparisons sake, the rest of the world consumes another 450 quadrillion BTUs.

And world energy demand just keeps on insatiably growing year over year. The (notoriously conservative) EIA predicts it will jump by 28% over the next two decades.

Will our energy production be able to keep up? As I've been warning for years, it will be very challenged to do so -- or, to do so at prices anywhere near as low as today's.

Putting Our Plight Into Concrete Terms

Putting those staggering figures aside for a moment, let's focus on one -- just one! -- of the crises ahead of us when it comes to our future energy needs.

The nations of the world have made the truly regrettable decision to build so much of their infrastructure using concrete reinforced with steel (re-bar, mesh, etc.). As I've explained in detail in previous articles, because the steel rusts over time, the concrete is busy being destroyed from the inside out -- something we can detect easily enough by the cracks and spalling (sheets flaking off) so readily apparent on every bridge that’s more than a couple of decades old.

This has created a ticking time bomb. The world's crumbling concrete buildings, bridges and roadways will have to be entirely replaced in just 40 to 100 years of their original construction dates. Where will all of the energy come from for that?

Also, note that China has poured more steel-reinforced concrete over just the past few years than the US did in the entire 20th century(!). All of this, too, will need to be replaced later this century.

Given that the sand required for all of the world's *current* concrete projects is now in very short supply, where all the sand will come from for all that future concrete and cement work? Who ever thought we could run out of sand?

But such are the unpleasant surprises that crop up during the late stages when running an exponential economic paradigm (i.e., "Growth forever!").

Fooling Oursevles

And it certainly doesn't help that we're remaining willfully blind to our situation.

It’s probably safe to say that the majority of the population in the US is confident that the "shale revolution" has assured America's energy security for a long time to come. Heck, the governor of Texas recently tweeted this to the world:

This is wrong on so many levels.

Yes, Texas produces oil and natural gas. But the US is still a net oil importer to the tune of about 3 million barrels per day. The US is not independent with respect to oil. And it won’t be until it produces another 3 million barrels per day (and that's making the generous assumption that consumption remains flat).

Further, to claim that the US will NEVER AGAIN depend on foreign oil is beyond bizarre. As I've been explaining for years, shale fields deplete and decline ferociously. Even the hyper-bullish EIA thinks that the shale fields will peak out in 2025 (I think earlier) and then go into permanent decline.

In my world, NEVER AGAIN is a lot farther out into the future than 2025. But Mr. Abbott has apparently ingested one too many petroleum sales pitches and received a terribly inaccurate impression about the true state of the US' energy predicament.

Much more likely is that US shale production does not EVER exceed US consumption before peaking out. So it would be more accurate to tweet the US is now and will ALWAYS AND FOREVER be dependent on foreign oil.

Finally, even if the US were a net oil exporter (highly unlikely), we’d still be tied to the world price for oil. Should foreign cartels decide to limit production and spike the price, that would still effect the US. So we still wouldn't be "independent" of their influence.

But sadly, Mr. Abbott speaks for the nation in that tweet. We're "swimming in energy" and need not have any worries. The drum of our chest-thumping will scare them away.

In other word:, there’s no strategy beyond BAU.

There's no acknowledgement of the challenges we face in the coming decades, of declining net energy per capita. Of greater competition between the developed and developing nations for the remaining BTUs. 

There's no compelling Vision to marshal the public towards what fits the realities of the future. We could, and should, be working on solutions for entering a "post-growth" era with grace. Or at a minimum, aggressively using today's Resources to create a new energy infrastructure that plans for the inevitable decline of fossil fuels.

We could be doing so much better than this.

Getting Our Priorities Straight

What if we started by embracing these three facts?

  1. Fossil fuels have provided a supernova of surplus energy. One that has enabled literally everything and everyone you see around you to spring into existence.
  2. Fossil fuels are a very recent discovery for humans (barely 150-years-old). Half of our consumption of them has happened in just the last 25 years alone (due to exponentially increasing use).
  3. Fossil fuels will not last forever. They are finite and will someday peak and then decline, representing a once-in-a-species bonanza never to be repeated.

It's beyond dispute that fossil fuels are 4/5ths of the current total global energy mix, that our use and dependence on them has grown exponentially over time, and that they are a non-renewable resource.

Among the fossil fuels, oil is, by far, the most critically-important to sustaining both our current level of technology and the human population. It's how we move virtually everything from point A to point B and it’s a critical element for food production and distribution. It also remains absolutely essential to the manufacture and installation of alt-energy systems, like wind and solar.

Given the three facts above, it only makes sense that a responsible global society should have a credible and very publicly-stated energy strategy providing a road map for weaning itself from fossil fuels before they become prohibitively expensive/scarce.

But since we don't have one, the alternative path we're taking is to sleepwalk into the future with no plan for feeding 9 billion people or re-building a crumbled global infrastructure -- let alone facing the additional challenges of running out of critical minerals, dealing with destroyed ecosystems, and being unable to field the necessary fuel and economic complexity to install a brand-new energy infrastructure measuring in the hundreds of quadrillions of BTUs. This BAU path will be marked by the three D’s: despair, demoralization, and death. (Is it any wonder that young people aren't as inspired by BAU as their parents' generation?)

So if instead we want a future that’s prosperous, regenerative and abundant, then we have to begin doing things very differently from BAU. And fast. (The best time to have started on this was decades ago.)

For example, if we decide we want electric transportation powered by wind and solar to be anything more than a meaningless tiny percentage of the total BTU mix, then we’re going to have to use a lot of fossil fuels to make that happen. It takes an enormous amount of fossil fuels to manufacture, install, maintain and repair/replace every single alt-energy component.

The question then becomes: Where do we want to be when that future arrives? If we want to have livable cities and towns with nearby greenbelts and an alt-energy infrastructure delivering clean energy sustainably forever into the future, then an enormous amount of planning and building is going to be required to get anywhere near close to that.

It all comes back to strategy. We need a compelling Vision of this future to inspire society, and then dedicate the appropriate Resources to make it happen.

With an appropriate energy strategy that matches reality, we can engineer a reasonably bright future. Without one, we’ll just pursue BAU until it literally destroys us as well as the ecosystems we depend on.

A New Energy Strategy

So here’s one way to go about doing that.

First, identify all the energy demands that absolutely have to happen just to maintain systemic integrity. The DoD has needs, the current fleets of emergency vehicles and school busses have needs, as does maintaining the existing stock of bridges, roads, and buildings. This exercise will reveal to all that simply maintaining 'the way things are' is extraordinarily energy-expensive. But it has to be done if we want to avoid economic collapse and massive joblessness. It also bears mentioning that the energy required to keep things going is energy that cannot be dedicated to building the new future. It’s a sunk-cost of prior decisions.

Second, make a credible list of energy needs for building the future we want. How many solar panels will that be? How many wind farms? How many miles of electrified train track? How many fully-electric vehicles will have to be built? How many charging stations with the nationwide road system need? What sorts of improvements and modifications to existing cities and towns will have to be made? This is the Vision. It answers the question Where are we going?

Of course, these sorts of new activities and building projects will be very energy expensive. If we want them to happen, then we have to consciously budget an appropriate amount of energy to accomplish the Vision.

Next, develop the very best possible estimate of total economically recoverable fossil fuels. Do this by finally measuring the full-cycle energy returned on energy invested (EROEI) for the remaining deposits. After all, we’re going to build out the future with the surplus energy extraced, not the gross (surplus = Total BTUs extracted - BTUs expended during extraction). This estimate will represent the total principal balance of our national energy bank account.

Last, calculate if there will be any energy left over. If so, save it for future generations. They'll have their own sets of needs and desires that we can't possibly know today. (Sadly, I'm willing to wager that there won’t be any excess fossil energy to pass along).

A Sample Scenario

By way of example, suppose that the US undergoes a thorough, exhaustive, peer-reviewed and thoroughly debated examination of all known remaining fossil fuel resources – coal, natural gas and oil – using the very best and well-funded EROEI methodologies (yet to be developed, by the way). If we arbitrarily say that there are “100 units” of net energy left, we might discover this:

  • 25 units will be required to simply maintain the economic system so it doesn’t crash and can support the build-out of the new Vision for the future.
  • 60 units will be required to build that future out.
  • 15 units are not yet assigned. We might decide to leave those to future generations because that would be conscientious and prudent. Or perhaps we discover that they shouldn’t be burned because of the environmental impact.

Results such as these yield important insights.

First, we’d understand that if we accidentally burned through, say, 45 units blindly pursuing BAU, that would steal 25 units from building out the future we want.

Next, we'd realize better that our chances of manifesting the Vision are improved by limiting the amount we spend on maintenance. That insight would help to spur better decisions around conservation and efficiencies -- such as not driving 6,000 pound private SUV/Truck vehicles to transport a single passenger to a desk job, or building homes with inadequate insulation to save a few thousand dollars on the front end of a 100-year capital investment.

Finally, we’d appreciate how our energy resources are finite and limited, and that how we choose to utilize them is quite possibly the single most important decision society can possibly make. Leaving the fate of our precious energy resources to the short-term interests of the markets and politicians would suddenly look too risky and nonsensical. We'd agitate for greater stewardship of them.

Were I in charge, the most well-funded institution in the land would be the Energy Institute. Our very best and brightest minds would be heavily incentivized to work there, applying their considerable gifts at science and mathematics towards matching our energy resources with our shared national goals. Gone would be the days of our top talent working for Wall Street and private money funds to move electronic abstractions of wealth hither and yon, skimming money while creating absolutely nothing of lasting value for their country or the world.

The Coming Oil Crunch Will Shock The World

However, we both know that no such strategic energy plan is forthcoming. There’s no strategy in the US (or Japan or Europe or China, or anywhere) that aligns finite resources with a well-defined, sustainable vision of the future.

BAU rules the roost.

It’s so powerfully embedded that Ford Motor Company recently decided to scrap selling sedans and small cars in America. It will only manufacture SUVs, trucks and commercial vehicles. You know when Ford will no longer make cars, they've got to have really chugged the shale oil Kool-Aid to make that decision.

Concrete is still poured with steel rebar every day. New homes and commercial buildings are built with expected lifetimes of only several decades and little attention to insulation. And the Federal Reserve focuses with manic precision on assuring that the credit markets continue to grow exponentially.

Each of these and a million other activities consumes finite, irreplaceable energy at the expense of a sustainable future. At some point, perhaps already passed us, that goal becomes no longer possible.

My point is we don’t know where that line in the sand is. We haven’t done the work, made the plans, and performed the necessary visioning to know one way or the other.

But what we can be sure of is that BAU is headed in the wrong direction and it has no long term future. One way or the other, endless growth on a finite planet will run its course and end. The only remaining question left to answer is: How painful will the reckoning be?

None of us know what will finally break the largest and most destructive credit cycle ever unleashed on the world (thanks central banks!) but we all know that The Everything Bubble has a bitter end. All self-destructive delusions do.

Our analysis concludes that the hard-stop for this credit bubble is resource-based. And I predict it will be a sudden spike in the price of oil that will be the pin that the central bank enabled bubbles absolutely cannot grow beyond.

They will encounter this pin and burst.

There will be plenty of time for tears and regrets then. But right now? You need to get ready.

In Part 2: How The Coming Oil Shock Will Impact Absolutely Everything we go deep into the data showing why a global oil supply shortfall is unavoidable by or before 2020. That's less than two years away.

If gas prices at today's $70/barrel price bother you, you ain't seen nothing yet. The spike in oil's price that will result from the coming crunch will shock the world.

As an increase in the price of oil feeds into the cost of everything, it acts like an interest rate increase in terms of depressing economic growth. If we haven't already entered one yet, this coming shock will absolutely throw the global economy into recession. And if we're already in one when it hits, heaven help us.

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

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45 Comments

Kevin Cobley's picture
Kevin Cobley
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US OIl production and consumption

US Oil Production June 2018   10.54Mbpd

US annual consumption of OIl  18.92Mbpd

The gap 8.38Mbpd is made up of Imports, Refinery Contribution, Biofuels.

Imports 2017  7.9Mbpd

ejhr's picture
ejhr
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The coming oil crunch

This article is pretty good and it's rare to read someone considering the energy future. Tim Morgan on  "Surplus Energy Economics" is on board but few others.

I only have one point to insert here and that is the monetary sovereignty of the US federal government makes it different from every other source of funding budgets etc. Finding the money for any project which is conceived by the federal government can be budgeted for! The US government is self funding. It cannot unintentionally go bankrupt as it can always use its power to create dollars to buy any and every debt it can conceive. AS LONG AS RESOURCES ARE AVAILABLE.

The fiscal space right now is vast [$trillions] so if there is any time left to take steps to mitigate the future crunch then lack of money will not be an impediment. So,... Make plans NOW.

 

JJP's picture
JJP
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Coming Oil Crunch

Thanks for the timely "level check" .Conscience awakened!

JJP

pgp's picture
pgp
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Institutionalism is the obstacle.

Great article as usual.  But as we also know the problem is human nature.  Political history demonstrates that the institutions (social, political and cultural) that form in large societies are the slowest to adapt and change, inevitably to the detriment of the societies they "serve"   The BAU thinking exemplifies this process exactly.  After all, If it worked in the past it must work forever.

Clearly, If you can fix that institutional intractability then you can begin to reverse the damage humanity inflicts on the world currently. 

It sems hopeless however because to do so is to fight human instinct.  Especially the instinct for denial, particularly when it is reinforced by a lack of higher learning.  For a demonstration of how difficult it is to break institutionalism just ask anyone to question the US constitution or suggest that the full suffrage democratic system we laud over needs to be revamped.  Watch as tempers flare over the mere suggestion that there could be imperfection in our belief systems.
 

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Olduvai.ca
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Black Swan Approaching

The fallout from an oil shock will be a Black Swan event for many, many people. From those who (for some reason) trust the-powers-that-be and their soothing propaganda to those who truly believe that oil is in infinite supply or that some future technology will save us all. 

I'm quickly approaching the point where I am questioning whether it's truly worth even attempting to convince others of the impending perils. Espeically those that believe in faeries and unicorns (or are just caught up in any one of the many distractions in a world in delcine). 99% of the time people have already made up their mind and cognitive dissoance being the powerful influencer of beliefs it is cause them to ignore or brush off the concerns as pessimistic conspiracy theorising. It truly is frustrating. 

Overshoot and collapse seem inevitable and all one can truly do, I suppose, is prepare oneself or small group of like-minded people. One's 'energy' is likely better used in this preparation than in trying to convince the masses that a storm is approaching...

John Roberts's picture
John Roberts
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Too late

Chris Lots of good points but there is no viable solution  in order to transition you would need to increase FF consumption by 60 percent. The math doesn’t work. The energy required to create a renewable power system would crash the present system. This is without considering the increased cost of mitigation of pollution. The system will crack in the next two years and it’ll take 6 to regenerate the soil. No matter what people do  There are no choices left  

 

robie robinson's picture
robie robinson
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It doesn’t take

6 yrs. to regenerate soil here abouts. 3 to 4 at the most, however, you will have to have animals. Horses and cattle for labor, fertility, and eventual protein are a must. Won’t work that fast if you follow a landgrant university model. We’ve converted 500 acres from row crops to pasture, not at once but over 15 yrs paddock by sward till today. The current owner planted 350 acres of est. mixed grass pasture, vibrant fertile soil back into GMO beans, he will have a banner year. We have reduced our land holdings to 180 acres as that is the most maintainable by horse and ox power along with the effort of 1/2 dozen family workers or so. I’ve been at this last effort 30yrs or when...

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themccarthyfarm
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Why do I hear that population is going to stop growing?

I will echo the sentiment of others, this was another great article.  Chris mentioned feeding 9 billion people.  That number is thrown around a lot these days.  It seems to be general knowledge that the worlds population is going to stop growing somewhere between 9 and 10 billion in the next 35 years.  

Where does that come from?

Have humans suddenly come to the conclusion that 9.5 billion is the "oh so right" number or is it because the people who calculate this kind of stuff have realized there is no way to feed and shelter any more than that?

Even if the population doesn't surpass 8 billion but China’s somehow brings their per capita consumption to even half that of a typical American what will that mean for the amount of energy required in the future?  What about raising India’s standard of living?

I think John Roberts is right, there is no viable solution to keeping things the way they are.  We are not going to come up with the energy to run a civilization anything like the one we have now.  The world is going to have less people, consume much less stuff, have less to eat, use less energy and physically work much harder.  

I guess we could start practicing for a world with much less but I don’t really see that as being very popular.

 

 

robie robinson's picture
robie robinson
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Saw a printed

quote, I believe by JHKuntzler, “Collapse now, avoid the rush” 

thc0655's picture
thc0655
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Here's what our near BAU future may look like

You have a great hypothetical plan, Chris, IF YOU WERE KING.  It's not going to happen of course in a democratic republic because people are wilfully blind and insist on BAU (anything else is just too huge to comprehend and too emotionally disturbing for 90% of people to cope with).  The inescapable conclusion is that we're going to hit The Wall. We should keep trying to warn people but that's just so our consciences are clear when we hit The Wall.  We should each be personally preparing for the future we imagine we're going to face.  So here's one person's view of what we're going to experience, and he didn't have to go far to come up with it:

https://forwardobserver.com/what-could-collapse-look-like-lets-look-at-a-country-currently-in-free-fall/

So what could our collapse look like at a local level? Let’s look no further than Mexico, our southern neighbor in absolute free fall, for some ideas. Here are a few things we’ve observed over the past year:

  • Mexico just elected a Leftist populist leader who railed against the incumbent president over 1) widespread corruption, 2) rising crime, 3) the inability to deal with the cartels, and 4) a lack of economic growth.
  • Drug cartels run Mexico. Underneath the positions of de jure power (the president, the congress, state governors, mayors, etc.) are echelons of de facto power. When we talk about collapse, this is the collapse of the Mexican government which lost political control over large swathes of their country. Do you remember the scene in Captain Philips, where the Somali pirate is holding the AK-47 and says, “Look at me. I am de captain now”? That’s the relationship between irregular forces in de facto authority/control over an area, and the government with de jure authority. And for much of Mexico, that’s the relationship between cartels, militias, and their federal government. That’s a great example of collapse.
  • The Associated Press last week reported about a rise in “mass crime” in Mexico: “'[S]ocialized’ or ‘mass’ crimes are spreading in Mexico as entire communities empty freight trains of merchandise or steal hundreds of thousands of gallons of fuel from pipelines.” That’s reminiscent of U.S. flash mobs where, oftentimes, dozens of black teenagers will loot convenience stories (Wal-Marts have also been targets) and authorities are basically powerless to a) prevent it and b) catch all the thieves. Back to the situation in Mexico, the AP cites a research fellow at Columbia University: “The logic of the people [engaged in mass theft] is that they see politicians and officials stealing big time … and they see themselves as having the same right to steal as the big-time politicians.” He continues: “You begin to create an ethical code in which, ‘If the upper-class people can steal and get away with it, we can steal, too, with complete justification.’” That’s a society in collapse.
  • In May, two supermarkets refused to pay an extortion fee for a local cartel and paid a price, anyway. Gunmen broke locks on the two supermarkets and allowed the locals to loot the stores. “Police didn’t show up for hours” and the supermarket owners were virtually powerless in preventing the mass looting. This is happening across the country. That’s a society in outright collapse. That’s an outright “failure of civility”.
  • Earlier this year, train robbers were blocking tracks an average of six times per day, where “thieves open up grain hoppers or freight cars and people swoop in en masse as police or soldiers stand by outnumbered and overwhelmed.”
  • There’s a CBC article from March 2017 that claims “Mexican cartel earns more from mining and logging than drugs”. Instead of producing and trafficking methamphetamine for their primary source of income, the cartel is mining, transporting and selling iron ore and clear cutting forests for lumber. Where are the authorities to stop the illegal mining and logging? Virtually no where to be found. “I’ve never looked at them as drug-trafficking organizations,” Logan said of Mexico’s cartels. Says one expert: “[The cartels are] multinational corporations that will react to market pressures and do what they have to do to stay in business.”
  • In 2017, Mexico experienced a record number of homicides, numbering nearly 30,000, and the country is on track to make a new homicide record in 2018. There have been over 200,000 murders since 2007. There’s no control over the lawlessness. [source]

We often think of places like Somalia and Afghanistan as failed states yet we overlook our southern neighbor and fail to realize just how bad the situation is there. And I think we should consider it as a model for U.S. collapse. (The word “ungovernable” comes to mind, which incidentally is a rallying cry of the anti-Trump resistance.)

And on top of those scenarios, we also should realize that things in Mexico are as "good" as they are because the world economic system is still working and the "glow" of US wealth helps massively in keeping the sinking Mexican state afloat. We buy all their drugs, after all, and their people in the US send home to Mexico billions of dollars.  How much worse will it be when there's the inevitable energy shock; no one can afford cocaine, heroine and marijuana; and the world economic system is in tatters? Not pretty.

"Welcome to the Hunger Games. And may the odds be ever in your favor."

Time2help's picture
Time2help
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450 ppm...500 ppm...550 ppm...

Uncletommy's picture
Uncletommy
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"STREEK!!!!"

As Wolfgang has suggested, (from an Amazon review):

Ours has become a world defined by declining growth, oligarchic rule, a shrinking public sphere, institutional corruption and international anarchy, and no cure to these ills is at hand.

However, he does say that we will make a valiant attempt to avoid the inevitable by, "Hoping, coping, doping and shopping." When shopping becomes a thing of the past, we will be left with only hoping and coping. However, legal pot will be available in Canada sometime in October.

I share Mr. Robinson's sentiments. He has it right:

"Always stick close to the land. That way it won't hurt so bad when you fall!"

awelch's picture
awelch
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Thanks for the warning

I personally feel overwhelmed. I am reading 'Prosper' and it is helping, but not findished yet. I can't help but wish there was one geographic location we could all go to, and get on with the business of creating a sustainable society. While there are not enough fossil fuels to transition the entire world to a fully renewable energy paradigm, there is enough for some of us to do so. I'd suggest we all move to Monte Vista Colorado, BYOSP (bring your own solar panels). Just like in Atlas Shrugged.

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travissidelinger
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It's already too late

Even if we went all in building a new sustainable energy future, that future would have to include a much lower energy and resource consuption per capita. The resulting deflationary cycle would collapse our current system, because it's built on debt. Our system must, or it collapses.

What worked during WWII will not work now because there is too much debt. Plus, they were on a gold standard back then.

Currently I can look out my window every Wednesday and see bin after bin of our society's glutinous ways dragged to the curb only to be discarded and forgotten. Yes, when the trash stops we will finally have the sustainability we so badly need. But what then? All the economic activity that was generated in producing that trash kept the system at "equilibrium".

I put equilibrium in quotes because we do not have an equilibrium system. We have a complex dynamic system that we attempt to manage like and equilibrium system. I digress. Back to my point.

If we take away a large chunk of that waistfulness, then the debt that is tided it would needed to be transitioned to new sustainable debt. We are essentially considering the entire automotive industry's debt would need transitioned to say, bicycle debt. Ya! Not happening.

Please convince we otherwise, but I see no way "forward" that do not involve a deflastionary collapse, and the reduction in population to those who would not thrive in a world with significantly reduced energy/resource consuption. Volunteers anyone?

Thus, there are many other destructive methods of collasping we will probably "choose" instead.

Jenergy's picture
Jenergy
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Not all BAU

I have followed peak prosperity, read the Crash Course and Prosper as well as much of the writings published by the Post Carbon Institute.  I have also attended conferences about net energy.  As somebody who works for government in an agency that deals with energy and energy policy BAU is not the objective.  There are signifcant efforts to shift our energy system and most importantly reduce energy use.   Of course Martenson is correct that more needs to be done at a much faster pace while not misleading the public about the prospects of continuing the consumer society they are used to.  And this is the problem.  Government is a reflection of the people.  While goverment has some ability to lead and move the needle, there is always the anchor of the public's general perception and understanding of and willingness to deal with long term problems or prediciments.  For exmple the goal of electifying transportation as a means to reduce the burning of fossil fuels has much benefit even when looking at a full lifecycle analysis compared with the standard internal combustion engine.  But long term we may need to be thinking of electric bikes and trains as it is arguable that the individual auto is not sustainable as a future mode of transportation in an energy constrained world.  But for any government that is a big jump.  Even having the disucssion about impementing a major behavioral shift is a challenge.  At this point it is important to keep building the movement and look for ways to move off the BAU track whether that be through education of the public, subtle policy shifts, reinforcing behavior trends etc.  It would also help for those with knowledge to counter mixed messsaging.  For example, the impact of a governmental report that indicates the potential for high oil prices and econmics shocks can be diluted with an announcement from Ford that they will only make SUVs or that air lines are purchasing 100s of new jets in expectation of mass increases in air travel.  It is hard for the public to reconcile the two positions so the tendency is to "believe" Ford or American Airlines that all is well. 

thatchmo's picture
thatchmo
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Posts: 476
who's in charge?

Jenergy, I always appreciate it when "insiders" from any given arena chime in on these posts.  Thanks for your input!  But, I don't expect TPTB-governemnt- to provide any timely solutions.  Some dude named Mohandas said it best:  "When the people lead, the leaders will follow".  I'm going long bicycle tires....Aloha, Steve.

ps- just came across this: "Earth provides enough to satisfy every man's needs, but not every man's greed."  MKG

Geedard's picture
Geedard
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Posts: 82
@ Jenergy

Thanks for your post and insider view. Much appreciated  

A question: what is your agency Plan B, Plan C and Plan D? Please could you offer some insight to that?

I would be hugely interested to hear if the backup plans are plans for viable alternatives...or plans for chaos and collapse. 

Olduvai.ca's picture
Olduvai.ca
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Posts: 21
Collapse Now and avoid the rush...

This is actually the title of a John Michael Greer book: https://www.amazon.ca/Collapse-Now-Avoid-Rush-Archdruid/dp/0692389458/ref=sr_1_1?ie=UTF8&qid=1531060696&sr=8-1&keywords=john+michael+greer+collapse+now

 

Matt Holbert's picture
Matt Holbert
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Posts: 147
I stocked up on bicycle tire

I stocked up on bicycle tire patch kits several years ago. Dozens and dozens of bicycle tire patch kits.

As an aside and partly a response to Jenergy, I am happy to say that it is possible to live in the suburbs without a combustion or electric vehicle. I'm with travissidelinger. It's already too late.

Mark_BC's picture
Mark_BC
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Jenergy wrote: As somebody
Jenergy wrote:

As somebody who works for government in an agency that deals with energy and energy policy BAU is not the objective.  There are signifcant efforts to shift our energy system and most importantly reduce energy use.

It seems that the shale oil patch has been propped up for several years despite being unprofitable and the result has been a significant spike in oil production to allay the fears of the masses of declining oil.

Also, somehow Tesla has stayed afloat and made a dent in the auto market despite continually losing money.

The explanation for both is that investors pile into these companies like a ponzi shccme, funded by the money printing that has gone on since 2008. The money has to go somewhere and it props up asset prices of anything financial, and these companies act like financial assets. In what appears to violate the laws of economics for a short while, these companies operate using investor funds rather than genuine profit.

I don't understand the specifics of how this money works and where it comes from, but is it possible that the "hedge funds" or "investors" propping up shale oil and Tesla are actually just arms of the Fed?

Is it possible that the "Fed", or "government", whatever you want to call it, do actually understand the situation and realize that we need to bring out electric transportation, and they chose Tesla to do this? While financially Tesla has been a disaster, it is unarguable that they have done amazing things for the progression of EV's. And because we are still an oil based economy, they prop up the shale oil industry to provide us another decade of breathing room whie the electric transportation plan is underway?

Is it possible that those at the top do understand the predicament, and shale oil and Tesla are the (albeit, failed, and decades too late) attempt to move us in the right direction?

I don't know, just wondering what others think.

Pipyman's picture
Pipyman
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Posts: 64
Nope

John Michael Greer

 

Stabu's picture
Stabu
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Posts: 110
How Deluded We Are

I still regularly read through news papers and blogs by European intellectuals and decision makers from Germany and northwards both because I'm originally from there and because the German speaking, Benelux and Scandinavian media and politicians have been more honest with their populations than their Anglo or Southern European counterparts. Unfortunately, I have concluded from my reading that we have very little hope left. Whenever oil is discussed it's at best discussed in terms of the European country in question using too much of it in order to meet the Paris Agreement targets, but never in terms of that the supply of this stuff could be constrained due to lack of availability. At times the articles can even go as far as to say that almost every step/part in every supply chain is dependent on oil, but it's never mentioned how urgent it is to change this situation (even if it were only to meet the Paris Agreement targets).

What seems to be the greatest problem for all these countries is the lack of population growth or even a population collapse. Immigration is touted as a solution despite the fact that immigrants in there (unlike here in the US) integrate really poorly, because their welfare systems are simply far too generous and the reason the countries want more people is primarily to stop the welfare states from collapsing under the weight of the aging population. Some fringe/local politicians are now suggesting radical solutions in the margins such as banning some forms of contraceptives, moving the minimum age for sterilization up from whatever it is to as much as 40, just to halt the population drop. It's totally impossible for anyone over there to see that the massive welfare state is in itself a problem that makes the system more fragile.

Meanwhile in the US the situation is hardly better, since we can't even get our politicians understand realities let alone being honest about them. The most recent development is electing Alexandria Ocasio-Cortez, a hard-left socialist, to US congress at a time when more government programs are exactly the thing we can't afford that would make an already fragile system even more so...

robie robinson's picture
robie robinson
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Posts: 1221
Too much time

Spent farming to research the origin of..collapse now avoid the rush,,,I want to thank those with more time for correcting me and let them know that I will feed them for their company when they realize the long emergency. I do appreciate the correction that I. Elieved was correct at the time. You folk got it going on. I am a fan of The Archdruid and mistakenly gave the New York curmudgeon credit for his axiom.

aggrivated's picture
aggrivated
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Posts: 573
bicycle repair

It's nice to have air in your tires. Be sure and renew the rubber cement. Those tubes are metal, but that stuff dries out over time.  In the end, we will be like the Dutch under WWII German occupation--using cloth wrapped around the tireless wheels to be able to ride quietly in the night and smuggle things so your family will survive.

Mark_BC's picture
Mark_BC
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Stabu wrote:The most recent
Stabu wrote:

The most recent development is electing Alexandria Ocasio-Cortez, a hard-left socialist, to US congress at a time when more government programs are exactly the thing we can't afford that would make an already fragile system even more so...

In all my years in the alternative economics community, and after all the government spending-bashing I've heard over that time, ironically I have not once heard a genuine explanation for what all the people in the private sector are going to do for jobs when the economy stops growing and there are resulting mass layoffs, other than somehow be supported through government programs. When the economy stops growing, the private sector as a whole won't be making real profits (minus true inflation) anymore. I have also yet to hear an explanation of how the private sector wil continue to fuction in a zero or negative net profit environment.

I actually take the opposite view: when SHTF we will NEED government programs, and this need will continue indefinitely afterwards. I'm not a big supporter of governments handing out money for nothing so I envision something different where the government would employ people to clean up the environment and take care of the genuinely needy, and provide better education. These things are essential for a sustainable environment and society but there is no incentive for the private sector to do any of this if there's no profit in it. Basically, government funding is needed because it is less "efficient" than the private sector; although others would say that the government is plenty enough efficient and it is the private sector that cuts corners by wrecking the environment and mistreating workers in order to cut costs. The truth is probably somewhere in the middle. But the "less efficient" government sector of the economy is required to offset the "efficient" private secctor which has seen astronomical gains in worker productivity over the last decades due to automation which throws people out of work.

Government funding would come from taxing the elites.

If there is a new model for how the private sector can 1) provide jobs for the population in a zero or negative growth economy, and 2) take care of the environment and the needy without being forced to by government regulation or incentive program, all while the majority of the population is relegated to debt slavery with the upper 1% owning most of the real assets like land (unlike in the 1930's depression) I'd love to hear it!

thatchmo's picture
thatchmo
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Posts: 476
Those Dutch....

Cloth on bicycle wheels?  Guess I'll go long textiles as well.  Or maybe spinning looms....;^)  Aloha, Steve

Michael_Rudmin's picture
Michael_Rudmin
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Posts: 929
Yeah, actually I was thinking that bike tires thing past

So, if tires are a thing of the past, if they become too expensive for normal use, what are the alternatives? Possibly some combination of radial and circumferential wood or bamboo fiber, in a hot-melt hoof glue matrix?

Put in some metal fiber and make it rigid, and you'd have good efficency, too.

I could see a mounting in which you have a narrower tire that mounts into the rim loosely, and then wrap/glue cord in on both sides to transfer the pinch inwards. so it's removable, but not easily.

travissidelinger's picture
travissidelinger
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Posts: 39
But wait, there's more!

https://oilprice.com/Energy/Energy-General/Is-This-The-Oil-Tech-Breakthr...

Interesting read.  By 2020 we'll have an additional "5000" bbl/day.  Just pencil in a few more zeros and there will be nothing to worry about.

 

 

Uncletommy's picture
Uncletommy
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Posts: 635
And more is what we want, right?

Technology will be the boon for great times ahead. To think I will now be able to contribute to my grandchildren's future with warmer temperatures, more carbon in the atmosphere, more leisure for them, less wild spaces for them to explore and technology to manufacture hi-tech algae/veggie-burgers and plastic "do-dads". 

We have lost touch with the natural processes that have allowed life to flourish on this planet. Yet we continue to want it all and expect it. I believe one contributor to this forum has already referred to this, but it bears repeating:

Grover's picture
Grover
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Posts: 879
Us VS Them
Mark_BC wrote:

Government funding would come from taxing the elites.

Mark,

I'm curious about your definition of "elites." Is it only the upper 1% on the wealth scale? How much wealth do they actually own? What kind of tax rate would your plan need from these wealthy "elites" in order to fund all the "feel good" government programs to employ the displaced workers when a recession/depression strikes?

What happens when that money has been taxed and squandered? Will the government then focus on the top 10%? How long will that keep them happy? What happens then - attack the next 10%? Eventually, they'll be coming for your money. Are you going to be as interested in this proposal when all those who previously had more wealth than you have been impoverished and you are one of the remaining elites with more than a few nickels to rub together? What happens then?

I really don't know much about Canadian history. In the US, FDR tried a similar solution with all his alphabet agencies. His intent was to end the depression, but I believe he actually prolonged it. It took the bloody attack on Pearl Harbor to draw us into WWII. That moment forged the crystal clear vision that mobilized America. It got us out of the depression but at a tremendous cost of human lives and treasure.

FDR's Social Security program is bankrupting us. To be fair, it has been enhanced so many times by subsequent politicians that it really isn't the same program he envisioned. Shouldn't he have known that it would continue to grow well beyond his presidency? What makes you think the same sort of progression won't happen with your proposal?

I really don't know what will happen to all the displaced workers. I can envision some really ugly scenarios, but that doesn't mean any of those will actually occur. The poor will suffer first. If you're smart, you'll see that as a canary in the coal mine.

I agree with many of the posters who said it is too late to fix it. We should have embarked on this journey decades ago. Jimmy Carter tried to get the ball rolling. He was "rewarded" for his prudence by being a one-term President. Ronald Reagan undid most of what Carter did to prepare us for the inevitable end of petroleum.

Now, we have more than 3 billion more humans on the planet, we're deeply in debt, the environment is crumbling, resources are diminishing, much of the discovered petroleum has been pumped, and governments have made far too many promises than can be possibly fulfilled. Yet, you think another government program is the answer.

Grover

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davefairtex
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tesla explained

Here's a thought. 

Let's say you ran "the global elite" (c.f. http://simpsons.wikia.com/wiki/Stonecutters) and you saw a future of less, just like we do.  You knew that your trusty managers who run the place and do your bidding would still want the trappings of a first world civilization, without being subject to the whims of the supply of oil from far-off lands.  Well, you really need to have someone produce a really sexy vehicle that would be both a status symbol, as well as something that would insulate your manager-class from the perils of Peak Oil.

I mean, you know that rationing (for consumers - not for military, safety, farming, or transport) will eventually happen.  You want your managers to be able to ignore the chaos and drive every single day, thus inviting the envy of everyone else - assuring that everyone would want to become one of this select club.

So - you make sure Tesla gets funded, which 5 years later, drives the other manufacturers to create and market a bunch of new EV luxury cars, 2 years before shale starts tipping over.

And you've cloaked this all in the patina of global climate change.  Your managers are the ultimate in responsible citizens - saving the planet - by driving these electric cars.  They get a hot performance car, and they're able to Signal Virtue, all at the same time!

Meanwhile, you yourself will be able to get one of the many flying cars that are nearing production.

It's good to be da King!

Well - that, or maybe Tesla is just one of those "story" stocks with way too many fanboys that are happy to pour money into shares of a company they happen to like.

richcabot's picture
richcabot
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Posts: 226
Investment scam?

Reading this oilprice article is like hearing a boiler room investment telemarketers's pitch. 

"With licensing its technology, all Petroteq has to do is sit back and let the fees roll in."

DennisC's picture
DennisC
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Posts: 342
Saw this today

Your post reminded me of this lead-in sentence from a ZH article I saw today.

NY Socialist candidate wants to solve problems with the same tools that created them...

https://www.zerohedge.com/news/2018-07-10/schmid-what-democratic-socialists-dont-get

Petey1's picture
Petey1
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Posts: 69
Looks like we are saved

http://www.heraldtribune.com/zz/news/20180711/us-soon-to-leapfrog-saudis-russia-as-top-oil-producer

Let's all go buy big Ford F-250s to get the groceries.

fated's picture
fated
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Posts: 65
'Concrete is still poured with steel rebar every day. '

Yup. Been watching that occur all week, tonnes of concrete being poured onto the construction site across the street from me. And a pre-fab concrete building erected. Gallons of fuel burned daily with all the diggers, dozers and vehicles working on site. Many of the contractors driving daily from towns 200 km away to get to work.

BAU at it's finest - It's a new petrol station (owned by one of the countries largest supermarket chains - money talks).angry

Did myself and surrounding neighbours put in objections to the development - Sure

Could we see better and safer uses for the site - Sure

Were we listened to - No way in hell. Local council's rejection decision was overturned by VCAT (State civil administrative tribunual) because the area's planning scheme was too outdated to reflect current assessed lifestyle needs - council not having done their job correctly be regularly updating planning schemes. Local councilors only quashed the original application because we all attended council/s monthly meeting to protest, making them look bad.

And what's ironic is that:

this is a low socioeconomic town where many residents are unemployed, can't afford to own cars, or may own a car but can't afford to pay their rego and insurance. Petrol drive offs are so common servos have installed CCTV a few years back.

two other servos in town have closed in recent years, and this brand is known for having the most expensive fuel, but '''"make it cheap""" by conning their shoppers with a fuel discount docket.

when the traffic was counted in pre-planning, families in the area made 4 passes a day over that stretch or road taking kids to school. since then that school is closed so traffic has reduced.

I am already waiting for the day it goes out of business leaving a derelict and contaminated site the owners walk away from without penalty.

Short term thinking at it's finest.

 

marti61's picture
marti61
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Posts: 4
degrowth

You may want to check out Lean Logic by David Fleming, especially page 185 onward re: degrowth and how to work thru that- the importance of 'non-productive work', ie Art, Music in a degrowth and finally steady state no-growth economy. Also, The New Peasantries by Jan van der Ploeg for visions of a positive future, in the sense of society working together. Havn't seen that articulated in the MSM or politically for sure. Just more Us and Them.

 

Grover's picture
Grover
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Posts: 879
Canary in the Coalmine
Mark_BC wrote:

In all my years in the alternative economics community, and after all the government spending-bashing I've heard over that time, ironically I have not once heard a genuine explanation for what all the people in the private sector are going to do for jobs when the economy stops growing and there are resulting mass layoffs, other than somehow be supported through government programs. When the economy stops growing, the private sector as a whole won't be making real profits (minus true inflation) anymore. I have also yet to hear an explanation of how the private sector wil continue to fuction in a zero or negative net profit environment.

I actually take the opposite view: when SHTF we will NEED government programs, and this need will continue indefinitely afterwards. I'm not a big supporter of governments handing out money for nothing so I envision something different where the government would employ people to clean up the environment and take care of the genuinely needy, and provide better education. These things are essential for a sustainable environment and society but there is no incentive for the private sector to do any of this if there's no profit in it. Basically, government funding is needed because it is less "efficient" than the private sector; although others would say that the government is plenty enough efficient and it is the private sector that cuts corners by wrecking the environment and mistreating workers in order to cut costs. The truth is probably somewhere in the middle. But the "less efficient" government sector of the economy is required to offset the "efficient" private secctor which has seen astronomical gains in worker productivity over the last decades due to automation which throws people out of work.

Government funding would come from taxing the elites.

If there is a new model for how the private sector can 1) provide jobs for the population in a zero or negative growth economy, and 2) take care of the environment and the needy without being forced to by government regulation or incentive program, all while the majority of the population is relegated to debt slavery with the upper 1% owning most of the real assets like land (unlike in the 1930's depression) I'd love to hear it!

Mark,

I've been pleasantly surprised by your posts the last couple of months. I've even gone so far as to click the "thumbs up" button a few times - especially when it was in line with my thinking. I didn't know if you had a change of heart or continued to see government as the savior of mankind. Your last post has confirmed that it was just a flash in the pan. Too bad.

You may think that I'm just against all forms of government. Nothing could be further from the truth. I think government has its place. I also think that we, the citizens, have a duty to keep government from expanding into areas that it doesn't belong. Frankly, I want a government that can provide defense against foreign attacks. By the same token, I don't want the defensive aspect to turn into an offensive aspect. That's what happens when it gets too big. Prima facie example is the US DOD that polices the world and keeps lesser nations in compliance with US interests.

On the other end of the spectrum, welfare of all forms including unemployment insurance is best handled by charitable agencies. You mentioned "genuinely needy." I'm not sure how to describe that term in government language. How can a cumbersome document include all the needy while excluding the unneedy? Those who know how to game the government's system get rewarded. Charities are much more adept at performing such intricate decisions. They can pick and choose based on unwritten intrinsics. If they appear to support too many unneedy, the contributors to the charity withhold support.

Since I'm more familiar with Illinois' problems, I'll use them as an example of what's wrong with too much government. Illinois has a unique mix of cultures - there is Chicago and there is the rest of the State. Due to the unbalanced population, Chicago controls the political direction the State goes. Chicago loves unions. The rest of the State doesn't love them as much. Those in the farm communities deplore them.

Public unions are allowed to donate to political campaigns. They naturally support any candidate that offers to give them the most money for the least amount of work. Politicians love a solid voter base they can count upon. They also like to minimize the amount of taxes they need to get from the private sector in order to appease the public unions. They magically found that promising higher pensions pushes the true cost of employment into the future. Politicians get the credit for keeping current taxes at lower levels while giving the union more in the long run. Once the bill arrives, some other politician will need to make (and get the blame for) adjustments to the budget.

Here's a chart I found on JSMineset.com that shows how out of skew the situation has become:

It should be obvious to anyone who looks at this chart that the pension promises will never be able to be kept. The Illinois constitution prevents the State from defaulting on these promises. That means that the taxes will have to increase to cover these unfunded liabilities. Eventually, the increase in taxes will drive the private sector out of the State. Without the private sector to fund it, government can't exist. Just like with a parasite that draws blood from the host, if it takes too much, the host dies.

What will happen to all those pension promises when Illinois has to go into bankruptcy or has to dissolve itself? There's an old axiom that all loans get repaid - either by the borrower or the lender. In Illinois pensioners' case, when the State no longer has the funds to pay, the pensioners will pay by default. Of course, that won't happen until the legislators bleed the rest of the taxpayers dry. Once they default on the pension promises, they know their gig is over. This is a prime example of why we need to limit a government's desire to do "good deeds."

You mentioned your solution is to just tax the elites. What happens when they figure there's a better deal elsewhere with lower tax rates? If you make it bad enough, they have the wisdom to know it will never get better. They also have the resources to move and begin again in a more favorable taxation climate. There go your tax donkeys! Then, what will the poor displaced workers do? Wouldn't it be better to not extend an eventually broken promise to them?

The business world is changing with automation and a diminished amount of energy (in the future) to drive the economy. At first, energy prices will rise to balance supply and demand until the rise causes a recession/depression. A recession reduces taxes that a government can collect while increasing the outgo. Higher energy prices will incite oil companies to produce more, but there's a time lag. As we know, it costs more and more to get the last few drops out of the ground. What happens if the price the oil companies need in order to produce oil exceeds the price consumers are able to economically pay? If either side loses money for very long, the deal doesn't happen ... and the economy suffers.

I really wish you would think this through before saying something pithy like "tax the elites." Tuck your bleeding heart strings back where they belong and use your brain instead.

Grover

[Note to all those living in Illinois. If that chart doesn't scare the hell out of you, you deserve your fate. Illinois is a zombie. It is beyond hope. Sell and get the hell out of there while there are still fools to sell to. When you leave and move to another State, leave the idiotic Chicago voter mindset behind - in Illinois.]

chipshot's picture
chipshot
Status: Bronze Member (Offline)
Joined: Mar 15 2010
Posts: 62
Humanity is Like the Coyote that Ran Past the Cliff Edge

Financially, environmentally, and energy-wise, we've probably passed the point of no return.  Like the coyote chasing the road runner, we've gone passed the edge of the cliff, and now we wait for the fall and landing  (when most of the consequences occur).

Even IF there are solutions and enough time to address these issues, there is little reason to believe we actually will.  But I'm glad there are people such as Adam and Chris soounding alarms and pushing for action.

sand_puppy's picture
sand_puppy
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Posts: 2039
Lecture on "the end"

Doug Rushkoff, a futurist, was asked to give a lecture on "the future of technology" and paid a fee that equaled half his anual salary as a professor.    But instead of a packed lecture hall as he expected, 5 very wealthy individuals came in to question him.

Survival of the Richest:  The wealthy are plotting to leave us behind

Last year, I got invited to a super-deluxe private resort to deliver a keynote speech to what I assumed would be a hundred or so investment bankers. It was by far the largest fee I had ever been offered for a talk — about half my annual professor’s salary — all to deliver some insight on the subject of “the future of technology.”

...After I arrived, I was ushered into what I thought was the green room. But instead of being wired with a microphone or taken to a stage, I just sat there at a plain round table as my audience was brought to me: five super-wealthy guys — yes, all men — from the upper echelon of the hedge fund world. After a bit of small talk, I realized they had no interest in the information I had prepared about the future of technology. They had come with questions of their own.

...Slowly but surely, however, they edged into their real topics of concern.

Which region will be less impacted by the coming climate crisis: New Zealand or Alaska? Is Google really building Ray Kurzweil a home for his brain, and will his consciousness live through the transition, or will it die and be reborn as a whole new one? Finally, the CEO of a brokerage house explained that he had nearly completed building his own underground bunker system and asked, “How do I maintain authority over my security force after *the event*?”

This single question occupied us for the rest of the hour. They knew armed guards would be required to protect their compounds from the angry mobs. But how would they pay the guards once money was worthless? What would stop the guards from choosing their own leader? The billionaires considered using special combination locks on the food supply that only they knew. Or making guards wear disciplinary collars of some kind in return for their survival. Or maybe building robots to serve as guards and workers....

 

That’s when it hit me: At least as far as these gentlemen were concerned, this was a talk about the future of technology. Taking their cue from Elon Musk colonizing Mars, Peter Thiel reversing the aging process, or Sam Altman and Ray Kurzweil uploading their minds into supercomputers, they were preparing for a digital future that had a whole lot less to do with making the world a better place than it did with transcending the human condition altogether and insulating themselves from a very real and present danger of climate change, rising sea levels, mass migrations, global pandemics, nativist panic, and resource depletion. For them, the future of technology is really about just one thing: escape. 

 

thc0655's picture
thc0655
Status: Diamond Member (Offline)
Joined: Apr 27 2010
Posts: 1715
The dumbest smart guys in the room

Sand-Puppy, I've been following the reactions to those dumb smartest guys in the room on some of the prepper blogs I keep up with.  Boy, are they self-deluded! They apparently understand very little to nothing about what people are really like, especially when circumstances create a dog-eat-dog environment.  For instance, after The Crash there won't be anymore Pax Americana so New Zealand will become nothing more than a suburb of Red China since the US won't be able to project power that far away to keep China in check.  Why do you think they're militarizing all those reefs in the South China Sea?  They intend to own everything it touches one day.  

Anyway, the whole question the billionaires asked about how to keep control over their private security forces reveals just how mentally unprepared they really are, in spite of seeing The Crash coming in advance (like us) and having nearly unlimited resources.  I'm afraid very few people in the civilized world, regardless of wealth, are psychologically or emotionally prepared for living in a dog-eat-dog world.  The blogger below tries to clue them in, but I doubt they'd listen.  But WE can listen, and perhaps adjust accordingly, though I imagine even for us here at PP.com that is a bridge too far.  It's just too alien to most people's experience and too awful to contemplate.

http://raconteurreport.blogspot.com/2018/07/survival-of-richest-not-so-much.html

"Hired security force"??

Idiot savants.

Money ╪ Brains.



The term for a hired security force after "The Event", is mercenaries.

Power at that point will flow from the barrel of a gun.

And if you're holding onto the combination to the food locker, they'll all be pointed at you.

Not at your head, though. They'll start about three feet lower.



Some billionaire bozo thinks he's going to "maintain control" by withholding the combination to the food locker will find out what "enhanced interrogation" does to jog his memory, one body part at a time.



They'll probably start with his family, just for S&G.



Either way, the suddenly-superfluous rich yokels will be sacrificed by their hired security, if they haven't got a band around them with much stronger bonds of loyalty than merely taking scraps from the billionaires' tables.

Those idiots are merrily marching into the land of Unknown Unknowns: they don't know what they don't know.

And the animals there are higher than billionaires on the food chain.



Hitchcock made a great movie called Lifeboat. It should be required viewing,  Along with films like The Wild GeeseThe Grey,  and The Edge, with freewheeling discussion afterwards, to anyone who thinks they're ready for "The Event" just because they've stocked a distant shelter to which they hope to flee, and think they'll end up running their mercenaries like they do their boardrooms. Besides "because the writers wrote it that way", the reason Anthony Hopkins and Liam Neeson maintained leadership control over their respective groups was because they both brought knowledge and skills to the group that the group didn't have. If all you're bringing is stuff, somebody who can't see the need for you once that day arrives will get rid of you, and your stuff will become his stuff. 



When Scrooge McDick arrives at his chosen ark of safety, he'll be made hostage by the exact security force he's put in place, five seconds after the gates close. The womenfolk in the party will be considered "entertainment". Once they've yielded what they each have to offer, they'll either be killed (if they're lucky), or else enslaved. Welcome to the real world since, oh, forever.



Bonds of common interest and blood will be what matters, and even those will be trumped by those with necessary and irreplaceable knowledge and skills, not who has the most toys. I believe Mosby's term is "frith"...

Here's Part II:

http://raconteurreport.blogspot.com/2018/07/once-more-harder.html

Let's be clear about a few things.



1) In any situation where a billionaire is decamping to their retreat bunker, and depending for their continued existence on their little mercenary band,

The "rules" as you understand them no longer apply. 



In short, in such a situation, "private security" is neither.

People in charge beforehand, by virtue of money, laws, and stuff, won't be so when the nature of all those things changes fundamentally.

This is like trying to fly in space, when there's no more air for lift or maneuvering: it isn't going to go well when using wings and propellers is your whole plan, because it used to work ten minutes ago.




2) History is replete with lessons. One of them is that "leaders" earned those positions. By feats of arms. When warfare is a constant, as it has been for most of human history and at most times, those who win, lead. Someone thrust into the position who knows how to wave his arms, but not take a hill, is going to last leading people who know the latter for about as long as it takes anybody hungrier and less genteel to decide to pull off a coup. As several hundred former dictators can attest worldwide, going back to at least Julius Caesar. 



Billionaires who became so without ever getting their nails dirty are going to be cupcakes in a box in front of grizzly bears, come "The Event." Kings and conquerors were the most brutal, bloodthirsty bastards in the pack, and the most brutal packs begat the commensurately most brutal practitioners, who literally cleaved people's skulls with swords at bad-breath distance to achieve and maintain their positions. Boardroom battles and hostile takeovers by people who've never hefted anything more ferocious than a pen or a cell phone are like watching Chihuahuas fight stuffed animals by contrast.

"Welcome to the Hunger Games. And may the odds be ever in your favor."

cmartenson's picture
cmartenson
Status: Diamond Member (Offline)
Joined: Jun 7 2007
Posts: 5975
Billionaires in trouble

The angst on display in SP's spot about the worried billionaires reveals an important truth that the billionaires have not yet quite admitted to themselves.

They have no special skills or utility.

At least in the future world they know is coming.  They are very valuable people here where their fake, skimmed money has real value, but the future?  Nope.  None of their vaunted money-shuffling skills have any particular utility.

So the real question is "what will be valuable in the future?"  Once you figure that out, you can try to stockpile it and maintain your control over that, or be the producer of future items and/or services of value.

Knowing how to grow potatoes, ferment and then distill them may be 100,000x more valuable than knowing how to structure an LBO to shaft existing shareholders and pensioners out of all of their paper wealth.

I think this is a legitimate concern.

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1329
First people have to take time to do a little math
Mark_BC wrote:

Government funding would come from taxing the elites.

HAHAHAHA, need to put a little math to that.

Oldy but goody:

 https://www.youtube.com/watch?v=ktA6I4-qoa0

So if we look at wealth of the top 400 in 2016, it was 2.7 trillion.  Let's see that funds the current federal buget of 6.89T for FY2018 for less than 1/2 year.  Then what?   And exactly how are they gonna get that wealth, it means those assets have to be liquidated to someone, who?

 

 

Stabu's picture
Stabu
Status: Silver Member (Online)
Joined: Nov 7 2011
Posts: 110
Re: Concrete is still poured with steel rebar every day.
fated wrote:

Yup. Been watching that occur all week, tonnes of concrete being poured onto the construction site across the street from me. And a pre-fab concrete building erected. Gallons of fuel burned daily with all the diggers, dozers and vehicles working on site. Many of the contractors driving daily from towns 200 km away to get to work.

BAU at it's finest - It's a new petrol station (owned by one of the countries largest supermarket chains - money talks).

I live in a small town with two gas stations. One of them was old, built in the early 1980's I figured. The pumps were a bit slow and were awkward to operate if you've gotten used to the newes pumps. Still, the drive to the station was made of asphalt and there was a thin concrete slab (no rebar, I later found out) as a gas pumping platform. A few years back either the state, the town or the franchise owner decided that the official/corporate regulations were not met so they went ahead and dag out the old pumps, the old slab, the old driveway and replaced it with 4 feet of concrete with rebar in it, new pumps and a new driveway. I'm not against infrastructure investments, but this was total overkill, since the old pumps were still in fine working order. Furthermore, I too do wonder if this system will have gas to deliver for more than 10-15 years, while it was built to sustain 40 years and the platform is sturdy enough to support a 40 ton tank (none of which exists in my town or nearby towns).

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5693
billionaires = caesar

And I'm not talking about Julius, I'm talking about the group that came afterwards.

Once things got chaotic, the key problem was always: "how to control the Praetorian Guard."  Check the list, see just how many of them were marked "assassinated by the Praetorian Guard", and/or "murdered by his own troops", "the army", "on orders of", etc.

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

I'm not sure they ever worked out the trick of controlling the guard.

My guess is, the guys who lasted the longest had the real respect and loyalty of the people around them.  I don't think there is any substitute for that.

We can also draw on "Rules for Rulers".  If you hand out enough treasure, and you have two or three guards commanders that hate each other so much so that they can't possibly work together, it might work out all right too.  But I'm guessing that's a tough one to get right.

I'd rather be just a guy on a team.  Caesar tends not to die in his sleep.

thc0655's picture
thc0655
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Joined: Apr 27 2010
Posts: 1715
Al Gore's going to be shocked too

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