Daily Digest

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Daily Digest 1/20 - Hidden Suburban Poverty, Life After An Economic Collapse

Tuesday, January 20, 2015, 1:02 PM

Economy

Suburban Poverty, Hidden on Tree-Lined Streets (jdargis)

It is amazing how life can be turned upside down in such a short period of time. We were confident in our decision to have a large family. We never expected my husband’s six-figure salary to disappear. Instead, quicker than you can say the word “downsizing,” it was gone. A long year of unemployment depleted all our savings, as well as the money put away for retirement. My husband took a new position with a huge pay cut, and freelance writing doesn’t pay the bills. Sure, most families can get through this scenario once. It is much harder when unemployment strikes three times in a short period of time.

March of the Squirrels (thc0655)

...Normal growth has not returned. It’s not going to return, either, because it was only “normal” in an era when cheap abundant fossil fuels greased the wheels of every kind of economic activity. As I noted in a blog post here back in 2007, the inevitable consequence of soaring oil prices is what economists call demand destruction: less formally, the process by which people who can’t afford oil stop using it, bringing the price back down. Since what’s driving the price of oil up isn’t merely market factors, but the hard geological realities of depletion, not everyone who got forced out of the market when the price was high can get back into it when the price is low—gas at $2 a gallon doesn’t matter if your job scavenging abandoned houses doesn’t pay enough for you to cover the costs of a car, and let’s not even talk about how much longer the local government can afford to maintain streets in driveable condition.

Life After An Economic Collapse: The Same... Only Worse (pinecarr)

As the economy suffers, so does the infrastructure. Everything from roads, power lines, sewers, flood prevention, traffic signaling, buildings, parks, bridges, it all requires constant maintenance. This is of course very expensive, and one of the more obvious signs of bad economic times is bad infrastructure all around. Anyone that ever traveled to the 3rd world has probably seen it: There’s not much urban coherence, everything seems to be just thrown together without consultation and a total lack of planning. Power, TV and phone cables hang over your head in all directions. Just like power fails each summer, communications aren’t very reliable either. Public buildings are in particularly poor shape. Ironically enough, this is the University of Buenos Aires, where I studied Architecture.

In State of the Union Address, Obama Is to Move Past Hardship and Reset Goals (jdargis)

Republicans cast Mr. Obama’s slow-motion rollout of his State of the Union agenda in recent weeks as the desperate flailing of a lame-duck president who has not come to grips with the electorate’s decision in November or the fact that the opposition now controls the Senate as well as the House. In defying reality, they said, he simply wants to return to the tax-and-spending ways of the past.

A Solemn Pause (sand_puppy, pinecarr)

In short, enjoy the $2.50-a-gallon fill-ups while you can, grasshoppers, because when the current crop of fast-depleting shale oil wells dries up, that will be all she wrote. When all those bonds held up on their skyhook derivative hedges go south, there will be no more financing available for the entire shale oil project. No more high-yield bonds will be issued because the previous issues defaulted. Very few new wells (if any) will be drilled. American oil production will not return to its secondary highs (after the 1970 all-time high) of 2014-15. The wish of American energy independence will be steaming over the horizon on the garbage barge of broken promises. And all, that, of course, is only one part of the story, because there is the social and political fallout to follow.

Crushing The U.S. Energy Export Dream (Evan K.)

Exporting crude oil and natural gas from the United States are among the dumbest energy ideas of all time. Exporting gas is dumb. Exporting oil is dumber. The U.S. imports almost half of the crude oil that we use. We import 7.5 million barrels per day. The chart below shows the EIA prediction that production will slowly fall and imports will rise (AEO 2014) after 2016. This means that the U.S. will never be self-sufficient in oil. Not even close.

We’ve crossed four of the nine boundaries supposedly separating us from planetary destruction (jdargis)

This month the same team of researchers—30 individuals from 19 academic institutions, in collaboration with the Stockholm Resilience Centre—published an update saying that a fourth boundary has been crossed, the one about “change in land use,” also known as deforestation. Too much vegetation has been cleared for agricultural use.

The Case For Eating Older Animals (jdargis)

Danforth argues that only older animals have had the time to do the work and eat the foods that make them really taste like what they are. Beef from a four- or five-year-old, grass-fed cow will have a distinctly beefy flavor, unlike the comparatively bland flavor of meat from a younger, feedlot-finished cow that is fattened as quickly as possible on a diet of corn, regardless of the fact that its stomach is not designed to digest such a high-starch grain.

Gold & Silver

Click to read the PM Daily Market Commentary: 1/16/15

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

8 Comments

saxplayer00o1's picture
saxplayer00o1
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Arthur Robey's picture
Arthur Robey
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Commentary.

China's gross domestic product grew 7.4% last year

Thanks Sax.

So the doubling time for China's economy is only 10 ten years? Oh, the Horror! Actually I don't believe a word of it. So in ten years China's economy is going to be twice as big. Twice as much oil, steel, coal?

On a more positive note I heard of an organization that encourages small time investors to put their money into renewables rather than the bank and their non interest, or the shonky stock market. They operate a rating agency for the different schemes and offer associated services that would be beyond the pocket of the little guy.

I see that OB has decided to help the middle class in America that has been "left behind" in the latest surge in the economy. My lips twist into a wry smile- Nice choice of words, script writer.

KugsCheese's picture
KugsCheese
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Ireland

Ireland is not fixed.  All the IMF with the help of the FED did was extend and pretend.

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jonesb.mta
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Website

Chris, Adam, or whoever thank you for not using Flash Player. I have more years in computers than I like to remember (I'm 72) and Flash Player is one of the worst programs I've ever seen, constant problems and I wish all websites would get rid of it.

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pinecarr
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Hard-hitting Archdruid article, thc0655!

I like to think of myself as one who prefers the unvarnished truth, but it sure can be nasty medicine!  All the same, excellent article, thc0655.

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pyranablade
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March of the Squirrels

The Archdruid starts off talking about how energy was a debate topic back when he was in high school and one team won using the argument that we could cage squirrels and harness their energy. They only won, of course, because none of their opponents were prepared to argue against it. The argument became know as the squirrel case.

 

The fact remains that in the absence of subsidies from fossil fuels, renewables won’t support the absurdly extravagant energy consumption that props up what passes for an ordinary middle class lifestyle in the industrial world these days.

 
That’s the pterodactyl in the ointment, the awkward detail that most people even in the greenest of green circles don’t want to discuss. Force the issue into a conversation, and one of the more common responses you’ll get is the exasperated outburst “But there has to be something.” Now of course this simply isn’t true; no law of nature, no special providence, no parade of marching squirrels assures us that we can go ahead and use as much energy as we want in the serene assurance that more will always be waiting for us. It’s hard to think of a more absurd delusion, and the fact that a great many people making such claims insist on their superior rationality and pragmatism just adds icing to the cake.
 
Let’s go ahead and say it in so many words: there doesn’t have to be a replacement for fossil fuels. In point of fact, there’s good reason to think that no such replacement exists anywhere in the small corner of the universe accessible to us, and once fossil fuels are gone, the rest of human history will be spent in a world that doesn’t have the kind of lavish energy resources we’re used to having.
 
In some of his talks our own leader, Chris Martenson, weasels out of saying explicitly that we aren't going to develop some other technology that will allow business as usual to continue. Of course, I understand why he does it: he's experienced so much forceful denial that he has to weasel out of that one point just to make his own important message heard.
Christopher H's picture
Christopher H
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Suburban Poverty

Five years ago, my wife and I were in a similar boat to the author of the piece on suburban poverty.  Not that we were "officially" in poverty, mind you.  Rather, we were slowly sinking as we struggled like hell to stay afloat after my transition into a teaching career didn't work out as I had hoped/planned.  And I think there's a key takeaway when looking at the "invisibility" of suburban poverty.

The reason that it's largely invisible is that when middle class or upper middle class people find themselves in that boat, they will do whatever it takes to keep up appearances.  They will drain their bank accounts dry just trying to make the mortgage payments on the underwater house that they can no longer afford.  They will keep their kids in all the same activities as long as they possibly can.  They will present the facade of normalcy to all those around them, even as their lives are eroding under their feet... until they can no longer do so.  In a lot of ways, that's what we did -- and it almost wrecked us.

Now, I was lucky in that I was able to return to a career in engineering and our financial picture improved beyond anything I could have imagined five years ago.  But there are two major lessons I took away from that whole experience.  The first was to live WAY below our means in order to hedge against setbacks in the future.  The second was that appearances don't matter.  Definitely not as much as keeping your family intact, for certain.  I think that this is a lesson that more middle class and upper middle class families will learn in the near future, and not all of them will be fortunate enough to get a do-over like we were.

Christopher H's picture
Christopher H
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March of the Squirrels

Did anyone else out there feel the hairs stand up on the back of their necks when they read this paragraph from JMG's most recent post?

Those of my readers who still have a steady income and a home they expect to be able to keep would still be well advised to doublecheck their insulation and weatherstripping, install solar water heating and other homescale renewable energy technologies, and turn the back lawn into a vegetable garden with room for a chicken coop, if by any chance they haven’t taken these sensible steps already.  A great many of my readers don’t have such options, and at this point, it may be a long time before such options are readily available again. This is crunch time, folks; unless I’m very much mistaken, we’re on the brink of a historical inflection point like the ones in 1789 and 1914, one of the watersheds of time after which nothing will ever be the same again.

JMG has never been one to making predictions.  I've been reading him for... well, since around when his blog started, and I don't ever remember him making a single statement like this.  For him to go out on a rhetorical limb like this, I must admit that I'm feeling some unease -- and definitely glad we committed to doing the chicken flock finally this spring.

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