The Week That Was in Doom 5/12/2013
From the Keyboard of Surly1
Originally published on the Doomstead Diner on May 12, 2013
Discuss this article here in the Diner Forum.
Plenty of doom and doom-related happenings on the domestic and international front this week, so let’s go right to the videotape:
Across the pond in Greece, where Question Mark and the Austerians are administering the same sort of save-the-rich economic policies that plutocrats like Pete Peterson so dearly wants to bring to the FSA, youth unemployment has reached a staggering 60 per cent.
While the overall unemployment rate rose to 27 percent, according to statistics service data released on Thursday, joblessness among those aged between 15 and 24 jumped to 64.2 percent in February from 59.3 percent in January. Youth unemployment was 54.1 percent in March 2012.
“It is by far the highest youth unemployment rate in the euro zone, highlighting the difficulties young people face in entering the labor market despite government incentives to create jobs,” said economist Nikos Magginas at National Bank.
Athens has lowered the minimum monthly wage for those under 25 years by 32 percent to about 500 euros to entice hiring.
Note that last succulent little datapoint, and keep it in your pocket when the solons in DC look up from Benghazi! BENGHAZI!! BENGHAZI!!!!!!!!! long enough to recommend a lowering of the minimum wage, or pass a bill to eliminate overtime wage payments.
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As our friend Joe P. posted earlier in the week, researchers have once again discovered the glaringly obvious, a link between racism and stupidity. Whouda thunk it?
Findings taken from numerous research projects strongly indicate that prejudice, racism and intolerance are more likely to be present in individuals with greater cognitive rigidity, less cognitive flexibility and lower integrative complexity.
Despite their important implications for interpersonal behaviors and relations, cognitive abilities have been largely ignored as explanations of prejudice.We proposed and tested mediation models in which lower cognitive ability predicts greater prejudice, an effect mediated through the endorsement of right-wing ideologies (social conservatism, right-wing authoritarianism) and low levels of contact with out-groups. In an analysis of two large-scale, nationally representative United Kingdom data sets (N = 15,874), we found that lower general intelligence (g) in childhood predicts greater racism in adulthood, and this effect was largely mediated via conservative ideology.
A secondary analysis of a U.S. data set confirmed a predictive effect of poor abstract-reasoning skills on antihomosexual prejudice, a relation partially mediated by both authoritarianism and low levels of intergroup contact. All analyses controlled for education and socioeconomic status.
Original here. This is well known by those in power, who have thoughtfully provided these people their own reality-free 24-hour Cable News Network.
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“If voting changed anything they would make it illegal”
–Emma Goldman
Although I am a pretty political creature, I tend to eschew politics on the Diner blog. The reasons for that are that there is a time and place for everything, and secondly, I share the apparent presupposition of most Diners that electoral politics is a sham and dumb show conducted every four years to keep we muppets amused. With that in mind as background, I proudly ginned up the following segue, citing as additional evidence of mass stupidity the reelection of Terry Sanford in South Carolina this week. South Carolina has been the crazy uncle living in the attic of American politics ever since, oh, say 1859. But it never trotted out its stuff more aggressively than it did this week, and elevating the serial philanderer, trespasser, liar, adulterer, and misuser of state funds to noble office. Proof positive that debating cardboard cutouts of Nancy Pelosi in. the absence of having anything to say for yourself is really all you need to be elected in South Carolina. This person says it best, the unvarnished, unpolished, wholly unedited letter from a mad-as-shit South Carolinian:
Dear Fellow South Carolinians of the First District,
What the fuck are you people thinking? Mark Sanford, really? Way to keep us in the running, as the shitass craziest state of the nation. One more fuck-up like this and we’ll surpass even Florida — home of child killers, cannibals and roach eaters! The “Palmetto State”, my ass. I think the “Facepalm State” is becoming increasingly more accurate here.
I have to hand it to you though–go big or go home, right? On the same ballot where you elected Mark Sanford, that two-timing turd, you also voted–by a majority of 65%, no less–to protect the sanctity of marriage from scary gay people. Why shart quietly when you can shit the whole bed, am I right? The irony is intoxicating and it makes me puke.
We all know that South Carolina is a conservative bastion–no Democrat has won here in 30 years. Elizabeth Colbert Busch had the qualifications, ran a strong campaign and was leading Sanford in the polls late into the campaign. Realizing that Sanford couldn’t beat Colbert Busch, one-on-one, he had to invoke the name of that Satanist Minx, Nancy Pelosi as the straw man to gain traction. And with all of the cognitive skills of Pavlov’s dogs, you clownfuckers fell for it.
Where is the outrage of 1998, when the Clinton administration was nearly tanked over a blow job? And who was leading the charge in the furor against Clinton’s infidelity back then? None other than fucking white Grimace, himself, Newt Gingrich–you know, that other adulterous goat diddler that you elected as Republican presidential nominee last year.
So what gives, South Carolina? Is this insanity a cry for help or is it, more likely, a stunt for more attention? Were we paying too much attention to Mississippi again? You’re like the pretty blonde with the dazzling smile that boils the pet rabbit at the first hint of rejection.
And don’t pretend like this recent spate of cray-cray is a fluke, either. We also have you to thank for Joe “You lie!” Wilson, and racist hypocrite Strom Thurmond who fathered a child with his parents’ 16 year old black housekeeper. “There’s not enough troops in the army to force the Southern people to break down segregation and admit the Nigra race into our theaters, into our swimming pools, into our homes, and into our churches” But you’re totally down with porking them ain’t ya, eh, Strom?
There is much to love about South Carolina: the food, the gentility of its people, the mellifluous accent, and we can certainly appreciate colorful characters. We dig eccentricity! But hypocrisy is unbecoming, and so is stupidity in the face of facts.
Too bad Congressman-elect Sanford won’t be able to luxuriate in the after-glow of his win. He’ll be tied up in court defending the charge of trespassing onto his ex-wife’s property. I wonder if he’ll repay the state of South Carolina the money he used for his Argentinian booty call. Surely he will because he’s all about “family values” and responsible government spending.
I just snorted mint julep through my nose! You know what, First District? All y’all can kiss my motherfucking ass– that’s right, all y’all ignorant motherfuckers!!
XXXX XXXXXXX
A Formerly Proud South Carolinian
A truly well done rant. Wish I had said that.
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As the journalists would say, “add stupidity.” We offer up this article on the overreach of law enforcement. Free Lilly-May Allen!!!
A girl aged ten was told by police that she could be arrested for causing criminal damage – over a game of hopscotch.
Lilly-May Allen was playing with a friend on a grid she had chalked on the pavement in front of her home when a marked police van pulled up.
An officer warned the girls that using chalk on the pavement was criminal damage and they could be arrested for it, before driving off.
But the girls did not understand what they had done wrong and Lilly-May is now reluctant to play outside, according to her father.
After Lilly-May told her parents about the incident, they called the police to clarify the law, but officers refused to confirm whether drawing a hopscotch grid in chalk on the pavement was an offence – even though it washes away in the rain.
The girl’s father, Bob Allen, 51, who runs his own karaoke business, said: ‘The policeman said to her that what she had done was criminal damage and she could be arrested. He then drove off.
‘She didn’t come into the house for a while and didn’t tell us straight away because she thought I was going to tell her off for being naughty.
‘She couldn’t even remember what the policeman had told her it was – only criminal something.’
He added: ‘She is only ten and didn’t know what she had done wrong.
‘I rang up the police and asked if chalking up a hopscotch grid was an offence and they wouldn’t say yes or no and said it was a grey area.
‘I’m angry and upset and if it was against the law then the policeman should have knocked on our door and said something.’
Mr Allen, who lives in a three-bedroom semi-detached home in Ramsgate, Kent, said the incident on Monday had knocked his daughter’s confidence about playing outside.
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As as long as we’re piling on the gobshites in what is rapidly becoming the “stupidity” edition of The Week That Was in Doom, let us turn to that gift which keeps on giving, Sen. James Imhofe (R-Saturn):
“The Obama Administration’s cover up of Benghazi is the greatest conspiracy of all time, even greater than the Protocols of the Elders of Zion, which happens to be totally true by the way.”
All this in a week where the Heritage Foundation managed to put out a factually laughable report attributing trillions of dollars to the future costs of immigration. The fact that the report was a tissue of bad assumptions lashed together by a proven bigot seemed to be no impediment.
James DeMint resigned from the Senate (as a representative of South Carolina) some months ago — so he could get a big pay raise to be the head of the conservative Heritage Foundation.
What better place to be rewarded with seven-figures at a think tank, when this is your big thought:
DeMint said if someone is openly homosexual, they shouldn’t be teaching in the classroom and he holds the same position on an unmarried woman who’s sleeping with her boyfriend — she shouldn’t be in the classroom.
Classy.
Naturally as head of the Heritage Foundation, DeMint used his first big project — critiquing immigration reform to keep those big “ideas” flowing.
One of the co-authors of the Heritage Study claming immigration reform would add $6.3 trillion to the deficit, Jason Richwine, advocated barring immigrants from entering the United States based on their IQ in 2009.
Really getting their Confederate Dollars’ worth the Heritage Foundation.
Rising Hegemon has this one covered:
Yesterday I posted about how former Senator, freak, and current Heritage Foundation President Jim DeMint managed to put out a factually laughable immigrant bashing report put together in large part by a bigot.
But the bigot, Jason Redwine, is so much, so very much more:
The Heritage Foundation’s Jason Richwine, who co-authored the think tank’s study claiming immigration reform will cost trillions of dollars, contributed two articles to a “nationalist” website about Hispanic incarceration rates, Yahoo News reported Thursday. Richwine came under fire after the Washington Post reported Wednesday that his Harvard dissertation argued Hispanics have lower IQs than Caucasians and that the United States should screen immigrants based on their IQ scores.
Meanwhile in reality, which is NOT a whiter shade of pale:
A record seven-in-ten (69%) Hispanic high school graduates in the class of 2012 enrolled in college that fall, two percentage points higher than the rate (67%) among their white counterparts, according to a Pew Research Center analysis of new data from the U.S. Census Bureau.
Looks like it is time for resign again Jim DeMint.
South Carolina again. Caveat emptor.
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Mmmmmmm… tastes like chicken . . . with arsenic.
In other doom-related news this week, the Center for Food Safety has caught the FDA admitting that chicken meat contains arsenic. Skip the chicken when taking mom to Sunday afternoon dinner for Mother’s Day today.
Attorneys at Center for Food Safety (CFS) filed a lawsuit on behalf of CFS, the Institute for Agriculture and Trade Policy (IATP) and seven other U.S. food safety, agriculture, public health and environmental groups to compel the Food and Drug Administration (FDA) to respond to the groups’ three year-old petition which calls for immediate withdrawal of FDA’s approval of arsenic-containing compounds as feed additives for food animals. Filed the same day Consumer Reports released an alarming study on antibiotic resistance in turkey, the lawsuit highlights yet another gaping hole in FDA oversight of animal feed additives.
Arsenic is commonly added to poultry feed for the FDA-approved purposes of inducing faster weight gain on less feed, and creating the perceived appearance of a healthy color in meat from chickens, turkeys and hogs. Yet new studies increasingly link these practices to serious human health problems.
. . .
“FDA leadership is asleep at the switch, if not turning a blind eye to public health,” said David Wallinga, MD, a physician with the IATP. “Seven years ago, IATP blew the whistle on FDA’s indifference to arsenic being needlessly fed to chickens and turkeys. More than a decade ago, we sounded the alarm on how FDA let the routine feeding of drugs to chickens and turkeys help ensure that Americans would eat meat often contaminated with bacteria resistant to multiple antibiotics. We are filing suit because nothing much has changed.”
Some years ago I read a biography of Rasputin, who reportedly dosed himself with arsenic every day as a preventative against assassination. Rasputin was astute enough to realize that his proximity to the Czarina placed him in mortal danger from opportunists in the Czar’s court. In the fullness of time, they did indeed assassinate Rasputin, but he shrugged off the initial doses of poison like after dinner brandy. Disposing of Rasputin required the assassins to shoot him multiple times, wrap him in chains and throw his body into the river. I offer this anecdote in the hopes that regular dosings of arsenic will have a similar salutary effect for those of us who dine regularly at the Doomsday Diner. Bon appetit!
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Elsewhere, in a thoughtful and detailed look at the excesses of the FSA Security State, Peter Van Buren writing for Tom dispatch describes appalling detail just how deep the Washington rabbit hole really goes with respect to whistleblowers. A truly Kafkaesque tale.
Robert MacLean is a former air marshal fired for an act of whistle-blowing. He has continued to fight over seven long years for what once would have passed as simple justice: getting his job back. His is an all-too-twenty-first-century story of the extraordinary lengths to which the U.S. government is willing to go to thwart whistle-blowers.
First, the government retroactively classified a previously unclassified text message to justify firing MacLean. Then it invoked arcane civil service procedures, including an “interlocutory appeal” to thwart him and, in the process, enjoyed the approval of various courts and bureaucratic boards apparently willing to stamp as “legal” anything the government could make up in its own interest.
And yet here’s the miracle at the heart of this tale: MacLean refused to quit, when ordinary mortals would have thrown in the towel. Now, with a recent semi-victory, he may not only have given himself a shot at getting his old job back, but also create a precedent for future federal whistle-blowers. In the post-9/11 world, people like Robert MacLean show us how deep the Washington rabbit hole really goes.
The Whistle Is Blown
MacLean joined the Federal Air Marshal Service (FAMS) in 2001 after stints with the Air Force and the Border Patrol. In July 2003, all marshals received a briefing about a possible hijacking plot. Soon after, the Transportation Safety Administration (TSA), which oversees FAMS, sent an unencrypted, open-air text message to the cell phones of the marshals cancelling several months of missions for cost-cutting reasons. MacLean became concerned that cancelling missions during a hijacking alert might create a dangerous situation for the flying public. He complained to his supervisor and to the Department of Homeland Security’s inspector general, but each responded that nothing could be done.
It was then that he decided to blow the whistle, hoping that public pressure might force the TSA to reinstate the marshals’ flights. So MacLean talked to a reporter, who broadcast a story criticizing the TSA’s decision and, after 11 members of Congress joined in the criticism, it reversed itself. At this point, MacLean had not been identified as the source of the leak and so carried on with his job.
A year later, he appeared on TV in disguise, criticizing the TSA dress code and its special boarding policies, which he believed allowed marshals to be easily identified by other passengers. This time, the TSA recognized his voice and began an investigation that revealed he had also released the 2003 text message. He was fired in April 2006. Although the agency had not labeled that message as “sensitive security information” (SSI) when it was sent in 2003, in August 2006, months after MacLean’s firing, it issued a retroactive order stating that the text’s content was indeed SSI.
A Whistleblower’s Catch-22
That disclosing the contents of an unclassified message could get someone fired for disclosing classified information is the sort of topsy-turvy situation which could only exist in the post-9/11 world of the American national security state.
The full story will reward the reader. Suffice it to say that at the same time Guantanamo now holds “86 prisoners who have been carefully vetted by the U.S. military, the FBI, the CIA, and so on, and found to have done nothing for which they could be charged or should be imprisoned and who have been cleared for release– there is no place to release them to, especially since the majority of them are Yemenis and President Obama has imposed a moratorium on transferring any prisoner to Yemen.”
Thus indefinite detention, which is constitutionally prohibited, and which should properly be anathema to the American justice system, is the legal legacy we are leaving our children and grandchildren. That relatively few Americans are aware of or care about this should be startling. “No charges, no trials, but never getting out of prison: that would once have been associated with the practices of a totalitarian state.”
“At the same time no one, not George W. Bush, Dick Cheney, Donald Rumsfeld, Condoleezza Rice, or other top officials involved in setting up such a global system of injustice, sweeping up the innocent with the guilty, and subjecting them to horrors without end (including now force-feeding) will ever be brought to justice in an American court, nor will anyone involved in the system of rendition, torture, or abuse.” The Obama legacy will be that of having institutionalized the worst anti-constitutional excesses of the Bush years, and having sold them with a charming, intelligent brown face. Had John McCain as President tried to do the same thing, liberals and fellow travelers would have stopped this country in its tracks. In 2008 people went to the ballot box to elect Obama as a repudiation of the Cheney-Bush regime. Upon leaving offoce Obama will not only have institutionalized the incursions of the Bill of Rights to which we most objected, but also having insured that no accountability will ever be visited upon the neocons who let us into a pointless, illegal, and immoral war.
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And then Carl Herman, or whoever posts things up over at the estimable Washington’s Blog, wraps it all up in a ball for us in a post sure to appeal to doomers of all stripes with Why America Fell So Far … So Fast.
An excerpt:
All Empires Crash Soon After They Reach Their Peak
Thomas Jefferson said, “Dissent is the highest form of patriotism.” And because I love my country, I frequently criticize America’s shortcomings in the hopes of making her better.
But the truth is that the United States is not unusual … it is just like all other empires which have hit their peak and then quickly crashed.
. . .
The indications are always the same:
- The financialization of the economy, moving from manufacturing to speculation;
- Very high levels of debt;
- Extreme economic inequality;
– And costly military overreaching.
. . .
PhD economist MarcFaber states:
How [am I] so sure about this final collapse?
Of all the questions I have about the future, this is the easiest one to answer. Once a society becomes successful it becomes arrogant, righteous, overconfident, corrupt, and decadent … overspends … costly wars … wealth inequity and social tensions increase; and society enters a secular decline.
[Quoting 18th century Scottish historian Alexander Fraser Tytler:] The average life span of the world’s greatest civilizations has been 200 years progressing from “bondage to spiritual faith … to great courage … to liberty … to abundance … to selfishness … to complacency … to apathy … to dependence and … back into bondage”
[Where is America in the cycle?] It is most unlikely that Western societies, and especially the U.S., will be an exception to this typical “society cycle.” … The U.S. is somewhere between the phase where it moves “from complacency to apathy” and “from apathy to dependence.”
In other words, America’s rapid fall is not really that novel after all.
This article also cites Jared Diamond’s excellent book “Collapse”, whose conclusions I will not discuss here, is that will be the subject of another post that I had been planning for quite some time. The article over on Washington’s blog is quite good. Don’t miss it.
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Closer to home, Tamerlan Tsarniev has reportedly been interred at a burial site in a Muslim cemetery outside of Richmond Virginia. You might well think the dead are dead, let them rest in peace, whatever their transgressions in this life.
All the graves in the Doswell, VA cemetery were covered with reddish-brown mulch except for two that appeared newly dug, neither with any kind of marking and one of them presumably Tsarnaev’s.
The Virginia woman whose actions led to Boston Marathon bombing suspect Tamerlan Tsarnaev being buried about 30 miles north of her Richmond home said the angry backlash from local officials, some cemetery neighbors and online critics has been unpleasant, but she has no regrets.
“I can’t pretend it’s not difficult to be reviled and maligned,” Martha Mullen told The Associated Press in a telephone interview Friday. “But any time you can reach across the divide and work with people that are not like you, that’s what God calls us to do.”
Some of my neighbors think otherwise. A so-called “friend” opened up a thread on his Facebook page in criticism that allowed the butt-picking-finger-sniffing contingent to reveal its howling id. Stunning. As HL Mencken once observed, “No one ever went broke underestimating the intelligence of the American public.” The reflexive hysteria even manifests itself on the local Craigslist site. I found myself yesterday shopping for an old beater truck, which I could use to haul mulch for Contrary. Under the “rants and raves” section I found these offerings from my esteemed fellow citizens:
- That piece of shit deserves to be dug up and tossed in a trash pile like every other man, woman, and child that worships islam
- Now that we know he’s buried so close to here (a 2 hour drive), I know what I will do. I’m gonna eat me a big slab of pork baby back ribs and a laxative. Then I’m gonna drive up there, drop my pants and shit my bowels on his grave.
- people they brought that pig shit that bombed Boston to Virginia and secretly buried him on OUR SOIL!!!!!!!!
I say we start a petition to have him and every other muslim UNBURIED and thrown in the trash dump of any state EXCEPT Virginia
Muslims are pissed cause he wasn’t buried in the place he died in? fuck islam, fuck muslims, I’m pissed cause that pig shit is buried here in Va.- its our new slogan Welcome to Virginia where we will handle other states garbage
All above (sic).
In closing, I offer you this piece of wisdom: never think it can’t get worse. It can, and will. Your neighbors will insist.
Reaching Limits in a Finite World
Off the keyboard of Gail Tverberg
Published on Our Finite World on May 6, 2013
Discuss this article at the Epicurean Delights Smorgasbord inside the Diner
We don’t usually think about it, but we live in a finite world. In other words, in theory we can count precisely how many atoms make up the earth. We can also theoretically count how many humans live on earth and how many of any other species live on earth at a particular point in time.
At some point, in a finite world, we start reaching limits. There are now about seven billion people in the world. We could probably add some more, but how many? What is it that limits our ability to add more people to the world we live in today?
Too Much Population “Morphs” to an Energy and Financial Limit
One obvious guess as to what might limit world population is the amount fresh water that is available. If we don’t have enough fresh water available, we can’t continue to expand population.
The amount of fresh water that is available can be changed, though, by adding desalination plants. There are many other ways of getting fresh water. To give an extreme example, the amount of fresh water available could be increased by melting ice in Antarctica and importing it by ship. Either of these solutions would require energy in an appropriate form—either to run the desalination plant, or to melt the ice and transport it by ship. Thus the fresh water shortage, at least for the foreseeable future, can be worked around if there is sufficient energy available of the right type.
The other not-so-minor detail is that the cost of desalination or of importing melted ice from Antarctica needs to be inexpensive enough that users of fresh water can afford it. In order for this to be the case, the cost of the appropriate type of energy must be extremely inexpensive.
We can think of other kinds of limits to population growth as well. For example, carbon dioxide limits. In theory, there are ways around carbon dioxide limits. For example, assuming current research projects are successful, we can build carbon capture and storage facilities and change our electricity generating plants so that the carbon dioxide that is emitted can be captured and stored underground.
Here, too, there are energy limits and cost limits. Carbon has a molecular weight of 12, while carbon dioxide has a molecular weight of 44. Because of this, if we create carbon dioxide from coal, the carbon dioxide we produce is much heavier and bulkier than the coal that we burned to make the electricity. It will take a lot of energy to store this gas underground in a suitable place. Thus, we have another problem that can be handled, if there is enough cheap energy of the right type available.
Almost any kind of obstacle to increased human population that we can think of has an energy-based work-around. Will people be so crowded that disease transmission will be a problem? There are workarounds: better water treatment plants and sewer treatment plants, especially in the poorer parts of the world; more immunizations; more and better hospitals; antibiotics for all those who need them. These solutions also require energy, as well as other inputs (which indirectly require energy as well). The difficulty is making them affordable for the people who need them.
If the problem is not enough food, perhaps because of degraded soil, there are energy-based workarounds as well. Food can be imported from a distance. More fertilizers and soil amendments (either made using fossil fuels, or transported using fossil fuels) may be used. Irrigation, which uses either diesel fuel or electricity to pump water may be used to pump water to too dry areas, to increase food production per acre. In some cases, artificial soil can be created, and plants grown in a green house—again requiring much energy. The issue again gets to be whether consumers can afford the food produced using this more energy-intensive procedure.
The Problem With Degraded Resource Supplies
Degraded resource supplies occasionally run out—for example, an aquifer may run dry. A more common situation, though, is that resources become progressively more expensive to extract as we approach limits. We tend to extract the easiest to extract (and thus cheapest-to extract) resources first. These resources are the highest quality ones, in the easiest to access locations. We then move on to more expensive to extract resources. A similar pattern applies to many types of resources, including ore used in making metals, oil, gas, coal, and uranium.
When we analyze resources of a given type, say uranium, we find that there are always more resources available. The problem is that they are increasingly expensive to extract because the ore is of lower concentration, or is located in a harder to reach area, or there is some other problem involved.
We have illustrated this situation in Figure 1, as a triangle with a dotted line at the bottom, because of the uncertain cut-off regarding how much is available. The cut-off is really a price cut-off. At some point, the resource becomes too expensive for customers to afford products made with it.
FIGURE 1 – Triangle of Available Resources
Figure 1. Triangle of available resources, with dotted line indicating uncertain financial cut-off.A company starts from the top of this triangle, extracting whatever resource is involved. A company can “see” a little way ahead, as it looks down toward the bottom of the triangle. The company will report reserves which are continually increasing because the width of the triangle keeps getting wider, even though these reserves are of lower quality and can only be extracted in a more energy-intensive way. The question then becomes whether customers can really afford products made with these expensive-to-extract resources.
The Broader Energy Picture
Energy is pretty amazing. Energy is what allows work of any kind to be done, from making a clay pot by hand, to baking a cake, to creating a carbon capture and storage facility. Humans by themselves are able to produce some energy, because of the food we eat. But we are also able to leverage the energy that our own bodies produce with energy from other sources, such as from burning biomass. We learned to burn biomass a very long time ago, over 1,000,000 year ago.
If humans were like other large primates, there would be only 100,000 or 200,000 of us, rather than 7 billion of us. We would live in an area to which we are biologically adapted, most likely a very warm part of Africa. Humans’ population is much higher, because once we learned to control fire, we were able to settle areas of the world that would otherwise be too cold or dry to live in, and we were able to increase population densities through energy-related techniques we developed.
One thing we learned to do was cook part of our food supply. This had many advantages. Unlike apes, we no longer needed to spend literally half of our day chewing. This freed up time for other activities, like tool-making, hunting, and clothing making. It also allowed the human body to evolve in a way that allowed a bigger brain and smaller digestive organs. Gradually we used our improved brain to develop other techniques such as making heat-tempered stone tools, which were sharper than other stone tools, and teaching dogs to help us with hunting for food. All of these approaches to using external energy allowed humans to leverage our own puny energy supply from food with energy supply from other sources and gain an advantage over other animals.
Human prosperity was able to increase and population was able to grow as we learned to use increasing amounts of energy from outside sources. Energy sources we gained control over included domesticated plants and animals, facilitating agriculture. World population by the year 1 C. E. reached 200 million, or over 1,000 times the population level before the leveraging impact of external energy supplies began enabling greater human world population.
Fossil fuel (coal, oil and natural gas) use became common after about 1800 C. E., and population grew very quickly. In fact, when population is graphed, it looks like it went straight up starting when fossil fuels were added.
FIGURE 2 – World Population
Figure 2. World population based on data from “Atlas of World History,” McEvedy and Jones, Penguin Reference Books, 1978 and Wikipedia-World Population.Use of fossil fuels did not grow by themselves. Their use was facilitated by the development of improved technology, which provided the vehicle for their use. Increased debt also facilitated fossil fuel use, because it allowed potential buyers to afford the new products being developed, and provided companies doing energy extraction funds for their work.
Our ability to do physical work using human labor is quite limited. For example, if we want to dig a well for water, the depth that humans can dig without the assistance of a machine intended for this purpose is only about 20 feet. With mechanical drilling equipment, typically powered by oil, we can quickly and cheaply dig a well many hundreds of feet deep.
As another example, if we want to transport goods a long distance without external energy, we can only push a cart at the speed at which we can walk. Oil or another other modern fuel allows inexpensive long-distance transport of goods.
Adding energy use changes costs. There is a two-way tug on costs:
1. Costs are typically reduced when fossil fuel energy or electricity from any source can be substituted for human energy. This allows greater leverage of the energy of the remaining humans doing the “work”.
2. Costs tend to increase, as the cost of the energy source in (1) increases. Such an increase in costs occurs as we approach limits of a finite world, partly because extraction is from more depleted resources (farther down in the resource triangle shown in Figure 1), and partly because we reach increased problems with pollution, such as the BP Deepwater Horizon well blowout in 2010. The cost of mitigating pollution problems also adds to energy costs.
Up until about the year 2000, this tug of war had a favorable outcome. An increased amount of fossil fuel energy was substituted for human energy, leading to lower costs. As mentioned previously, improved technology and additional debt enabling this substitution played a role as well.
In recent years, the tug of war has started to go the other direction. The cost, particularly for oil energy, has tended to rise far more rapidly than costs in general (Figure 3). This has produced many dislocations within the economy, making countries that use a lot of oil less competitive in the world marketplace and reducing economic growth rates, especially among countries no longer able to complete. The higher cost of oil products reduces disposable income of citizen, leading to recession and to deficit spending by governments.
FIGURE 3 – World Oil Price in Current $
Figure 3. Brent-equivalent oil price in current $, based on data from BP 2012 Statistical Review of World Energy.In future years, we can expect that two way tug on costs will increasingly be lead to higher costs, because of greater impact of limits of a finite world. This will tend to send economies increasingly into recession.
Our financial system has been built assuming that economic growth will continue indefinitely. There is significant risk that the recessionary influences of high oil costs will bring down the current economy. We know from a recent analysis by Peter Turchin and Sergey Nefedov (Secular Cycles, Princeton University Press, 2009) that historically, when civilizations collapsed, they did so for financial reasons, as the cost of government became too great for citizens to fund with tax revenue. There would seem to be a significant risk that today’s economy will reach the same end.
Why didn’t others recognize this issue?
Reaching limits of a finite world is a subject that does not easily fit into any one subject area, so the subject tends to be missed by researchers concentrating on one field of study.
The closest fit came in the analysis The Limits to Growth (Donella Meadows et al, Universe books, 1972). This analysis came very close, but did not quite hit the nail on the head because it missed the connection of debt to limits to growth. (The model was of course not expected to be complete.) More recent analyses along this line to miss the debt connection as well, pushing the likely date of collapse forward.
There is much confusion about the question of what limits, such as oil limits, mean. Many people believe that rising oil reserves (which are a given when the problem is ever-more expensive to extract oil, as illustrated in Figure 1) mean that our oil problems are solved. Our problem is not a lack of oil reserves; our problem is that the selling price needs to keep rising, to cover the rising costs of extraction and to cover government dependence on tax revenues. This increase in selling price makes oil ever less affordable, which is our real problem.
Even when oil price drops, this is not necessarily a good sign. It may mean that some oil extraction companies will no longer be able to afford to add new wells, because production will not be sufficiently profitable at the new lower price. It may also mean that some oil exporting nations will
not be able to get enough tax revenue from oil operations to fund programs (food subsidies, for example) that prevent revolt.
Reaching limits in a finite world is a scary issue. The book Limits to Growth was not well received when it was published. Governments have tried their best to avoid the issue. No president or prime minister wants to announce, “We have a problem that we have no way to solve.”
Why might I be able to shed light on the real impact of finite world limits?
My background is as a casualty actuary, doing financial forecasting for insurance companies. Thus, I started with somewhat of a financial background, but did not have the usual “brainwashing” that comes when a person has studied the economy from the perspective of today’s economists. My background gave me a great deal of experience hunting for publicly available databases, making graphs, doing analyses, and explaining the results to lay audience.
I got interested in the issue of oil limits and what impact they might have when read the book, The Empty Tank: Oil, Gas, Hot Air, and the Coming Global Financial Catastrophe (Jeremy Leggett, Random House, 2005). His view comes from the “peak oil” view, which is close to my view, but not quite the same.
When I read Leggett’s book, it hit a responsive chord because I had had first hand experience with the impact that high oil prices had on insurance companies in the 1973-1974 period. In 1973, I was the actuary for a small insurance company that ultimately went bankrupt, at least partly because of the indirect impact of higher oil prices. Reporting to the president of the company, I got to see up close what kind of havoc high oil prices could cause in the financial world.
After I read Leggett’s book, I started researching the issue on my own. I wrote an article for insurance executives in early 2006 and an article for actuaries in early 2007. In March 2007, I decided to take early retirement, and work on the issue full time.
I set up my blog site, OurFiniteWorld.com in March 2007. I soon was asked to help with the website TheOilDrum.com, where I wrote under the name, “Gail the Actuary,” and made many contacts with others interested in the issue of limited oil supply.
To make a long story short, over the past several years, I have made many contacts with researchers who have discovered at least part of the story of oil limits and energy limits. Through my blog posts, I also received much valuable input, including suggestions from readers regarding academic books that might be helpful.
My work is now being published in the academic world as well. I wrote a paper, “Oil Supply Limits and the Continuing Financial Crisis,” published in the journal Energy in January 2012. It has so far been cited by 10. I was also a co-author of “An analysis of China’s coal supply and its impact on China’s future economic growth” (Energy Policy, June 2013). My most recent publication is an article called, “Financial Issues Affecting Energy Security” in the soon-to-be published book, Energy Security and Development–The Changing Global Context, (B. S. Reddy and S. Ulgiati Eds., Cambridge Scholars Publishing, 2013).
Fear and the 3-day Food Supply
Off the keyboard of Toby Hemenway
Published originally on Pattern Literacy
Discuss this article at the Epicurean Delights Smorgasbord inside the Diner
One of the scary factoids in circulation these days is the revelation that grocery stores hold only a three- or four-day supply of food. People wield this statistic to argue that our food system is appallingly insecure and in grave danger of failure. We’re only a few days from starvation, goes the frightening story, and we’re liable one day to find our supermarket shelves empty and the populace in panic.
To accept this forecast uncritically, though, means ignoring how complex systems work. We can scare ourselves by selectively focusing on a small piece of a larger picture and behaving as if that tiny bit were the whole story. It’s a natural tendency: Any organism interested in surviving needs to focus on what’s going wrong much more than what’s going right. But in this case, believing the tale of empty shelves may distract us from more urgent problems.
Storing large amounts of grains and other foods in cities is an ancient strategy, and it hasn’t protected against famine. Many European cities and walled towns kept grain supplies designed to carry them through hard times, yet, according to historian Fernand Braudel, famine remained a regular visitor. Continent-wide, famines that killed 10% or more of the population struck Europe 13 times in the 16th century, 11 times in the 17th, and 16 times in the 18th century. Local famines were far more common, yet most towns had large granaries. With a little thought, we can see why storing food in public granaries isn’t an effective strategy. How much food would a city of 50,000 need to store to get through months of utter crop failure? The math is brutal: the town would be almost knee deep in grain. And, more urgently, during a food panic, how many pounds of grain being handed to you by the state would make you calm down? Five? Ten? That’s only a couple of day’s supply for a small family. During a food panic, I suspect the government would need to hand out 20 to 50 pounds of grain per family every few days to calm a frightened populace. And during a panic, even the largest food storages are emptied quickly. The enemy here is fear, not the food system. In my book, anyone shouting “Run to the stores and buy as much food as you can!” deserves a special place in hell.
Storing more than a few days supply of food within a city makes little sense for a number of reasons. It requires dedicated storage buildings in cities—where space is most expensive. We’d need security forces to protect the food, a bureaucracy to run the logistics, and all that food must be cycled in and out for freshness. Plus, imagine a half million or more hungry people all converging on central granaries expecting to be fed. The logistical problems are enormous: think FEMA or TSA, and you can see why it’s the wrong level to operate at. A much more sensible place for emergency food storage is at the household level. If you are worried about food shortages, get your own stash and store as much as makes you comfortable. In designing a solution to a problem, it’s critical to intervene at the proper level, and here, the household is a far more effective level than the state.
Another reason for not instituting centralized food warehouses is that food systems are based much more on flow than they are on storage, and they usually have been. Claiming that our strategy for food delivery is precarious is not thinking in terms of dynamic whole systems, in which flows are far greater than storage—though both are important. Imagine someone panicking because they suddenly realized that their yard’s soil only contains enough water for four days of plant growth. That may be true, but we know also that water is constantly flowing in—storage is only one bit of the picture. Moisture is being pulled upward through the soil, rain is likely before long, plus we have the water line from the street, household graywater, and all the other ways that the tiny bit of water on that land is being renewed continuously. Yes, it’s possible that all the water delivery systems could break down simultaneously, just as the whole food system could, but that entails large-scale network failures—the utterly perfect storm—that would likely send signals well in advance and affect much more than water or food.
If we don’t look at flows, and don’t think in terms of whole systems, we can make ourselves very scared about the complex systems surrounding us. I call this tendency “drawing the box too small.” If we draw a boundary at, say, the city limits of Chicago and measure how much food is available within it, we can get frightened at how little there is: a few days supply. But that’s not really Chicago’s whole food supply, is it? If we enlarge the boundary to, say, what can be delivered to the city within an hour’s drive, suddenly that food supply contains all the farms and gardens, warehouses, cold-storage units, processing plants, feedlots, ships anchored in Lake Michigan full of grain, distribution centers, rail depots, and other sources of food within a 50-mile radius. That’s a lot more than a four-day supply. Then, enlarge the box to a day’s drive and the food supply will last for weeks. And if we increase the box to include the entire nation or continent—which is still only a part of our food system—we now have an essentially infinite supply of food, renewed every growing season, since the US is still a net food producer.
What makes think that something as unnatural as city limits is the boundary of a city’s food supply? And what kind of catastrophe would limit a city to the food within it? Obviously, a local disaster such as a hurricane or earthquake could do this, but it also could destroy any food grown or stored there, or start a panic that depletes even the largest supply. (Or takes martial law to protect it and draconian rules to distribute it. I’d rather store my own.) Even Hurricane Katrina didn’t prevent food from reaching New Orleans before many people went hungry. Perhaps a rupture of the transportation system would do it. But what would cause this? Rapid destruction of large parts of the highway or rail system is unlikely except in war or national strike (and striking workers and their families need to eat, too). These networks are highly distributed and redundant: There are many routes to any city. A major and sudden fuel shortage might do it, but I suspect that we’d quickly see rationing and redistribution of fuel away from many non-food uses, since governments know that hungry people start revolts. And actual transportation of food only uses 4% of the total energy in the food system (Weber and Matthews, Env. Sci. Technology, 2008, 42: 3508), so a fuel shortage would have less effect on moving food into cities, and more on the production and processing of food, which is a slower process that would unwind over weeks and months, not days.
There’s a lot wrong with our food system, but its “just in time” nature is not one of the flaws. We need to ask why the idea of four days of food on grocery shelves scares us, and why it makes us believe we have a precarious food system. Cities have always drawn from the surrounding countryside for their food. Why is it hard to trust that the current food system will continue to deliver food into cities? I suspect that part of our fear is that the size and number of components of the food systems is so vast that we can’t easily grasp how it works or believe that something that complex can continue to function long. It’s like worrying that your circulatory system—with its billions of red blood cells, pulsing lung tissue, ornately branching veins and arteries, and complicated gas exchange network—will fail and you won’t be able to get oxygen into your blood. It makes me dizzy just to think about it. Fortunately, complex adaptive systems such as our bodies and our food supply continue to function without our conscious control; they are highly networked and on many levels.
The long-term storage for our food supply is on the land, widely distributed, where it belongs. The food system has many tiers, and the “food stored in cities” level is a minor component. The system encompasses many levels of intermediate food storage components such as farms, cooperative grain-storage towers, processing plants, warehouses, shipping in transit, and distribution centers, each holding or supplying a significant percentage of our food supply and operating over a timeframe of weeks and months. It is a system in which flow makes up more of the capacity than storage. With a perishable good such as food, that’s as it should be. Having more than a few day’s supply of food stored at the end of the chain, in cities, would be a misallocation of resources away from the sources that generate the food and direct its constant stream toward the user. It’s smart for residents to store emergency food in their home, in whatever quantity makes them feel safe. But an expensive revamping of our food system to build collective infrastructure for urban food storage makes little sense when flow is the key element of any food system.
Our food system has many flaws. We need more locally grown food. The current system is far too dependent on fossil fuels, is concentrated in too few seed varieties and a handful of corporations, is subsidized toward unhealthy and unwise products, and wastes prodigious quantities of water and nutrients. But an absence of giant state-run granaries is not one of its failings. In a complex system, flows are at least as important as storages, and is the appropriate place to focus. A secure food system stems far more from the flow of food and the existence of many levels of nearby and faraway storages than from the amount of food on grocery shelves. To claim that our just-in-time system is precarious is drawing the box far too small, and ignores the flow-based nature of the complex, constantly readjusting systems that we depend on.
Why Malthus got his Forecast Wrong
Off the Keyboard of Gail Tverberg
Published on December 12, 2012 on Our Finite World
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Most of us have heard that Thomas Malthus made a forecast in 1798 that the world would run short of food, and that great famine would result. But most of us don’t understand why he was wrong. This issue is relevant today, as we grapple with the issues of world hunger and of oil consumption that is not growing as rapidly as consumers would like–certainly it is not keeping oil prices down to historic levels.
What Malthus Didn’t Anticipate
Malthus was writing immediately before fossil fuel use started to ramp up.
Figure 1. World Energy Consumption by Source, Based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects and together with BP Statistical Data on 1965 and subsequentThe availability of coal allowed more and better metal products (such as metal plows, barbed wire fences, and trains for long distance transport). These and other inventions allowed the number of farmers to decrease at the same time the amount of food produced (per farmer and in total) rose. On a per capita basis, energy consumption rose (Figure 2) allowing farmers and others more efficient ways of growing crops and manufacturing goods.
Figure 2. Per capita world energy consumption, calculated by dividing world energy consumption (based on Vaclav Smil estimates from Energy Transitions: History, Requirements and Prospects together with BP Statistical Data for 1965 and subsequent) by population estimates, based on Angus Maddison data.If it hadn’t been for the fossil fuel ramp up, starting first with coal, Malthus might in fact have been right. As it was, population was able to ramp up quickly after the addition of fossil fuels.
Figure 3. World Population, based on Angus Maddison estimates, interpolated where necessary.A person can see that there was a particularly steep rise in population, right after World War II, in the 1950s and 1960s (Figure 3). This is when oil consumption mushroomed (Figure 2, above), and when oil enabled better transport of crops to market, use of tractors and other farm equipment, and medical advances such as antibiotics.
It is likely that increased consumer and business debt following World War II (Figure 4) also played a role in the post-World War II ramp up.
Figure 4. US Debt excluding Federal Debt as Ratio to GDP, based on Z1 Debt data of the Federal Reserve and GDP from the US Bureau of Economic Analysis.The reason I say that debt likely played a role in this ramp is because at the end of World War II, people were, on average, pretty poor. The United States had recently been through the Depression. Many were soldiers coming back from war, without jobs. Without a ramp up in factory work and related employment, many would be unemployed. A ramp up in debt fixed several problems at once:
- Allowed low-paid workers funds to buy new products, such as cars, that used oil
- Allowed entrepreneurs funds to set up factories
- Allowed pipelines to be built, and other support for ramped up oil extraction
- Provided jobs for many coming home from the war effort
The debt ramp up, and the resulting increase in oil production, raised living standards. Figure 2 shows that the increase in per capita energy consumption was far greater in the 1950 to 1970 period when oil production was ramped up than in the coal ramp-up between 1840 and 1920. The long coal ramp-up period does not appear to have been accompanied by such a big ramp-up in debt.
Tentative Conclusion
A tentative conclusion might be that as long as we can keep ramping up availability of energy products and debt, Malthus’s views are not very relevant.
Of course, things aren’t looking as benign today. World oil production has been close to flat since about 2005 (Figure 5).
Figure 5. World crude oil production (including condensate) based primarily on US Energy Information Administration data, with trend lines fitted by the author.The world has been able to increase production of other fuels to compensate so far. Unfortunately, the big increase is in coal (Figures 1 and 2). This mostly relates to growth in the economies of Asian countries, which are large users of coal.
The cost of oil has more than tripled in the last ten years. The higher cost of oil is a problem, because it leads to recession, unemployment, and governmental debt problems in oil-importing countries. See my posts High-Priced Fuel Syndrome, Understanding Our Oil-Related Fiscal Cliff, and The Close Tie Between Energy Consumption, Employment, and Recession.
Continued increase in debt now seems to be running into limits. Federal government debt is in the news every day, and non-government debt seems to be contracting relative to GDP, based on Figure 4.
Looking Ahead
I am not sure that we can conclude that we are headed for catastrophe the day after tomorrow, but the graphs give a person reason to pause to think about the situation.
The reason I write posts is to try to pull together the big picture. If we only look at the latest new item forecasting huge increases in tight oil production or talking about 200 years of natural gas, it is easy to reach the conclusion that all of our problems are past. If we look at the big picture, they clearly are not.
Debt problems are closely related to high oil prices in recent years. Debt problems are today’s issue, and they are not being considered in the huge oil and gas forecasts we see everywhere. The new tight oil and the new shale gas resources likely will need to be financed by increasing amounts of debt, so there is a direct connection with debt. There is also an indirect connection, through governmental debt problems, higher taxes, and the likely resulting recession (leading to lower oil prices, perhaps too low to sustain the high cost of extraction).
Also, it is interesting that the supposedly huge increases in US oil supply don’t really translate to any discernible bump in world oil supply in Figure 5.
We know that the world is finite, and that in some way, at some point in the future, easily extractable supplies of many types of resources will run short. We also know that pollution (at least the way humans define pollution) can be expected to become an increasing problem, as an increasing number of humans inhabit the earth, and as we pull increasingly “dilute” resources from the ground.
Based on earth’s long-term history, and on the experience of other finite systems, it is clear that at some point, perhaps hundreds or thousands of years from now, the earth will cycle to a new state–a new climate with different dominant species. It may turn out that these new species are plants, rather than animals. The new dominant species will likely ones that can benefit from our waste. Humans would of course like to push this possibility back as long as we can.
At this point, my goal is to pull together a view of the big picture, in a way that other analysts usually miss. The picture may not be pretty, but we at least need to understand what the issues are. Is the shift in the cycle very close at hand? If so, what should our response be?
Food
Off the keyboard of Monsta666
Discuss this article at the Environment Table inside the Diner
This article should form the final connection between the Water article written by RE
and the Peak Oil Primer written by myself earlier
this week. As I like to stress to many people the connection between the vital
commodities of food, water and oil are numerous. What is more these commodities
cannot be easily substituted and in the case of water and food there are no
alternatives if we wish for humans to survive on this planet. A man has got to
eat and drink!
The means of acquiring food have changed throughout the
ages with much of these changes coming as result of increased pressures from
population growth. As we know when man first climbed out of the trees his main
means of procuring food came from either gathering food or hunting wild game.
While this simple method is the most sustainable and leaves the smallest
footprint on the environment this method of food extraction also supports the
least people in any given area. As a result of this paradigms limitations it was
not long before man’s population had increased to such a degree that he soon
began hunting at an unsustainable rate. This excessive hunting resulted in the
extinction of numerous species particularly the larger fauna roaming the plains
at the time. In effect man had reached the natural carrying capacity of the land
following the hunter gather paradigm. As the population continued to rise
despite this fact it created social stresses and the number of conflicts between
humans increased as there were more disputes over the remaining food resources.
It was around this time that agriculture was developed. This change did
not come because agriculture was superior to the hunter-gatherer paradigm as
commonly depicted in literature but rather this change came about due to
necessity as agriculture could support denser human populations. In other words
this move was not a move of inspiration and a sign of man progressing and taking
a step towards civilisation rather this was a move of desperation on the part of
mankind to support increasing populations. Indeed archaeological evidence
supports this assertion for early farmers were not only six inches (15cm)
shorter than their hunter gatherer counterparts but they also suffered from a
greater range of diseases due to closer contact with more people and animals.
Other negative aspects came from the fact that the early farmer’s diet was less
varied as his diet consisted of a small range of crops as opposed to the varied
diets of his ancestors. This lack of variety in the diet would result in
increasing incidents of malnutrition. [1] To many people of the time these lower
standards of living would be seen as a step backwards.
In addition to these negative aspects
described above agriculture also placed greater stress on the natural
environment as more land was needed to be cleared to grow the said crops thus
displacing more animals and even deforestation if forests were cleared to
acquire crop land. Once the land is cleared for farming the land itself is put
under major stress as every year the farmland is ploughed and replanted
resulting in the loss of some topsoil. If enough topsoil is lost then it can
mean the land is no longer suitable for growing crops and it will make the area
more prone to desertification. The removal of topsoil is also largely
irreversible as it can take 500 years to regain one inch of topsoil
back. What is more by planting only a small range of crops the
habitat contained less diversity and therefore became less resilient to changes
in the environment. Moreover this lack of diversity also meant the soils that
were used to grow crops would degrade in quality if it was not carefully managed
through crop rotation and natural fertilizers such as manure.
The
biggest issue that resulted from agriculture however is that it places large
demands on water resources in the area as crops need large amounts of water to
grow. For example one kilogram of wheat corn requires 880-2200 litres of water
while a kilo of corn requires 880 litres. [2]
Seeing as these two crops are one of the most widely grown crops in the US it
easy to see how dependant agriculture is on rich water sources. If we consider
meats then water demand increases by an order of magnitude so if we wanted to
produce a kilo of beef we would need around 10-20,000 litres of water. [3]. This large demand for water was one of the
main reasons why many early cities formed around rivers as these regions were
most suitable for growing crops.
As populations expanded and the demand for food increased the water
demanded also increased since food production is so dependent on water. This
continual increase in water demand lead to innovations such as the irrigation
which can allow more marginal lands to produce food or allow existing fields to
increase yields of crops. Such methods however are not without their
disadvantages however as over use of irrigation can lead to reduce water flows
to rivers, saline, reduced water tables (a particular concern for deep water
aquifers) and water pollution. Another side issue with over intensive farming
methods is it can lead to desertification of regions if the farm land is not
managed properly. It is said
that Mesopotamia (the region encompassing modern day Turkey, Syria and Iraq)
used to contain the most fertile lands on the planet but due to over irrigation
and exploitation of these lands the region gradually turned into a desert. This
loss of land played a significant part in the collapse of civilisations such as
Greece, Carthage and the Roman Empire. [4]
For the most part
despite the listed disadvantages the agriculture paradigm did deliver in feeding
its population provided the farms were properly managed and were not
overexploited. This allowed human population too slowly but steadily rise as
more and more land was devoted to growing crops. Innovations in farming
equipment, better crop varieties (for example the introduction of potato as a
stable crop in the 16th century) and improvements in irrigation allowed
incremental increases in yields during this time facilitating further population
growth.
The real turning point started around the advent of industrial
revolution particularly after 1900 when the rate of population growth began to
accelerate in earnest due to improvements in sanitation and medicine that
lowered the death rates in various countries. This issue became more acute and
noticeable during the world war periods particularly in World War II when not
only had the population exceeded two billion by that point but food production
was effected by the on-going wars. As a result of these factors rationing took
place in many countries and for the first time many nations were no longer
self-sufficient in meeting its local food demands. This food insecurity resulted
in various governments placing a greater priority in increasing food production
to ensure they were no longer dependant on food imports and had to endure the
accompanying swings in food price from the world food market.
The
main way this food security became assured was by deploying more farm machinery,
pesticides, synthetic nitrogen/potassium and phosphate fertilizers as well as
improved crop varieties. All these factors lead to huge increases in crop yields
and was later called the Green Revolution. Once this development, which began
in Mexico in 1943 by Norman Borlaug with the help of the Rockefeller Foundation
was discovered the practice was quickly adopted by other nations. [5] As the name implies the green revolution had a
large effect on many countries particularly the developing countries (not Africa
however) such as India which during the 1960s was in the brink of mass
starvation. Not only did the green revolution make India and other nations
self-sufficient and not dependent on food imports it also allowed lower food
prices which facilitated not only population growth but enabled greater economic
growth due to reduced living costs.
Like all new technologies these
innovations in farming came with their own disadvantages. The chief problem
about sustaining the green revolution is the fact that much of the inputs
necessary for this form of farming are non-renewable. For example synthetic
nitrogen fertilizers come from either natural gas or coal which is not only
non-renewable but the processes to make this fertilizer are energy intensive.
Meanwhile potassium and phosphorus based fertilizers come from potash and
phosphate rock respectively which have to be mined thus they are subject to peak production
rates which in the case of phosphate is likely to come around
2030.[6] The pesticides used in farms are derivatives
from oil.
The other big issue with the green revolution is the number of
environmental issues it imposes on the area. Modern farming practices reduce
biodiversity to an even greater degree than traditional farming methods. This is
because one of the main ways of achieving the higher yields is to use specially
selected breeds that only really thrive under the artificial conditions of
inorganic fertilizers and pesticides. As a result the number of viable species
used in farms has significantly declined making them less resilient to changes
in environment (which is a bigger concern if one considers the impacts of global
warming). It should be also noted that these new strains of crop do not perform
better than traditional crop varieties if no artificial fertilizers or
pesticides are applied. Another problematic aspect of these modern practices
comes from the fact that over time fields that use phosphate type fertilizers
will gradually sterilise the soil thus making farmers dependant on using only
artificial fertilizers to keep growing crops on their fields. Finally these new
farming practices have done little to reduce the increased demand for water. As
food yields have increased so has water consumption.
There
are also large economic implications; first of all such methods are less labour
intensive and more capital intensive meaning that not only is less labour needed
but the demand for credit will increase as more capital investments become
necessary to start a farming operation. Since richer farmers have easier access
to credit it means they can gain a bigger competitive advantage to poorer
farmers thus increasing existing inequalities which will eventually lead to
further consolidation of the farming industry which can further exacerbate the
issue of decreased diversity in crop inventories.
Another issue that can
extend from this last point is the fact that oil becomes more extensively used
as it is needed to fuel the farm machinery and due to the larger fields that can
be deployed using modern farming methods the amount of oil consumed is that much
greater. If were to include processing and distribution in food in this equation
the use of oil is increased further. It is this increased oil dependence that
has made food prices strongly correlate with oil prices as oil is used in all
stages of food production, processing and distribution.
These
factors have meant that while industrialised farming has resulted in increased
efficiently in terms of crop yields per acre it has become less efficient in
terms of energy consumption. [7]
What is more like most things the gains
made from the green revolution have suffered from diminishing returns for
example the period between 1950-1984 global food production increased by 250%
yet the increase between 1984 and the present is only 40%. More important
however is the fact that for the past 60 years increases in global food
production have consistently surpassed population however this trend is unlikely
to continue much longer as production increases are barely keeping up with
population growth.
Considering
how it is expected that the population will reach 9.1 billion by 2050[8] with food and water demand increasing by 70%[9] and 55%[10] respectively it seems questionable whether
these targets can be achieved. These already ambitious targets seem even more
daunting if one considers the fact that we are already extracting water at
non-sustainable rates. This unsustainable water extraction comes about from the
fact that many water tables across the globe are falling and once these water
reservoirs are depleted then the source of water can only be extracted by its
natural recharge rate. More worrying is the fact that many deep water aquifers
are not rechargeable at all from rainfall. These aquifers, sometimes dubbed
“fossil water” for the fact they only charge at very slow rates spanning
hundreds of years is a serious issue in India, China and perhaps most notably
the US which is depleting the Ogallala aquifer; one of the biggest deep aquifers
in the world.
Another significant issue is that of peak oil. Seeing as
modern agriculture is so heavily dependent on oil a decline in total oil
production is very likely to lead in a reduction in total FOOD
production which will result first in higher food and eventually shortages.
However it is likely the globe will face problems even before peak oil arrives
due to fact that as oil production increases stops rising at the same rate as
population growth then prices of oil will raise which will eventually lead to
higher food prices. Once food prices get high enough the probability of a food
riot increases considerably. It should not be forgotten that during the big oil
spike in 2008 when oil reached $147 a barrel there was a large number of food
riots. When high food prices struck again in 2011 the world witnessed the Arab
Springs which was a revolution that started because of mass youth unemployment
and high food prices.
Other
exacerbating issues in delivering these targets will come from global warming
which is likely to lead to more extreme weather patterns that can adversely
affect crop yields. The recent drought 2012 in the US is one of the worst
droughts in the US for 50 years and has decimated many crops and livestock in
the region. Considering that the US is the biggest food exporter in the world
(and indirectly water exporter) then it is likely that food prices will be
considerably higher in 2013. If these droughts are a sign of things to come then
it is very possible that we may actually see a peak in global food production in
the coming decade particularly if these changing weather patterns occur
simultaneously with declining global oil production AND water
production.
References:
[1]
= People Grew Shorter Growing Crops (Discover
News)
[2] = The USGS Water
Science School (U.S Geological Survey)
[3] = Reducing the impact of humanity’s water footprint
(WWF)
[4] = Ecology of desert systems, p.277
[5] = The Nobel Peace Prize 1970 Norman Borlaug
[6] = Peak Phosphorus (Wikipedia)
[7] = Why Our Food is So Dependent on Oil (Energy
Bulletin)
[8] = World
population to reach 9.1 billion in 2050 (UN)
[9] = Global agriculture towards 2050 (Food And Agricultural
Organization of the United Nations)
[10] = Global Water Forum
Hungry For The Holidays
Off the keyboard of Michael Snyder
Published on Economic Collapse on November 26, 2012
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20 Facts About Hunger In America That Will Blow Your Mind
All over America there are millions of people that will be missing meals and going hungry this holiday season. Even as much of the country indulges in the yearly ritual of unbridled consumerism that we refer to as “the holiday season”, more families in the United States than ever before will be dealing with not having enough food to eat. Food stamp use is at an all-time high. Demand at food banks is at an all-time high. They keep telling us that we are in an “economic recovery” and yet the middle class continues to shrink and the number of Americans living in poverty just continues to grow. We are witnessing unprecedented hunger in America, and this especially seems tragic during the holidays. Much of the country is partying as if the good times will never stop, but families that are living from one meal to the next are facing a completely different reality. How do you tell your children that there isn’t going to be any food to eat for dinner? How do you explain to them that other families have plenty to eat but you don’t? Sadly, many food banks are overstretched at this point. All over the nation, food pantries have actually had to turn people away because of the overwhelming demand. And more Americans used food stamps to buy their Thanksgiving dinners this year than ever before. This is a problem that is not going away any time soon, and when the next major economic downturn strikes the problem of hunger in America is going to get even worse.
For many Americans, hunger has become a way of life. Families that don’t have enough money are often faced with some absolutely heartbreaking choices. Just check out what one Maine official that works with the Emergency Food Assistance Program recently had to say…
“One in six people in Maine don’t know where their next meal is coming from, or skip a meal so their kids can eat, or have to choose between paying for prescriptions and food, or fuel for your car and food,” Hall said. “What’s amazing is that food is always the first thing to go from your budget. It’s staggering, the choices people have to make.”
Food banks all over the country try their best to do what they can, especially during the holidays, but it is often not enough. In fact, some food banks ran out of turkeys well in advance of Thanksgiving this year…
Three days in advance of Thanksgiving, the Pear Street Cupboard and Café in Framingham, Massachusetts, is out of turkeys. According to organizers, “requests for help are up 400 percent over last year.”
But it isn’t just during the holidays that food banks are having problems keeping up with demand. The truth is that many food banks find themselves out of food and having to turn away hungry families all throughout the year. The following is from a recent Reuters article…
Overall, food pantries and soup kitchens reported a 5 percent spike in demand in 2012, according to the survey. More than half of providers said they were forced to turn away clients, reduce portion sizes, or limit their hours.
In Staten Island, all of the agencies that respond to hunger reported not having enough food to meet demand, while in the Bronx that was true for 80 percent of agencies. In Queens and Brooklyn, more than 60 percent of agencies did not have enough food to meet the needs of the populations they serve.
If you are able, please support your local food bank. The needs are great and they are only going to get greater.
The following are 20 facts about hunger in America that will blow your mind…
#1 According to one calculation, the number of Americans on food stamps now exceeds the combined populations of “Alaska, Arkansas, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Iowa, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Vermont, West Virginia, and Wyoming.”
#2 In October 2008, 30.8 million Americans were on food stamps. By August 2012 that number had risen to 47.1 million Americans.
#3 Right now, one out of every seven Americans is on food stamps and one out of every four American children is on food stamps.
#4 It is projected that half of all American children will be on food stamps at least once before they turn 18 years of age.
#5 According to new numbers that were just released by the U.S. Census Bureau, the number of Americans living in poverty increased to a new all-time record high of 49.7 million last year.
#6 The number of Americans living in poverty has increased by about 6 million over the past four years.
#7 Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.
#8 According to the U.S. Census Bureau, the poverty rate for children living in the United States is about 22 percent.
#9 Overall, approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.
#10 In the United States today, close to 100 million Americans are considered to be either “poor” or “near poor”.
#11 One university study estimates that child poverty costs the U.S. economy 500 billion dollars each year.
#12 Households that are led by a single mother have a 31.6 percent poverty rate.
#13 In 2010, 42 percent of all single mothers in the United States were on food stamps.
#14 According to the National Center for Children in Poverty, 36.4 percent of all children in Philadelphia are living in poverty, 40.1 percent of all children in Atlanta are living in poverty, 52.6 percent of all children in Cleveland are living in poverty and 53.6 percent of all children in Detroit are living in poverty.
#15 Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
#16 Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.
#17 There are 314 counties in the United States where at least 30 percent of the children are facing food insecurity.
#18 More than 20 million U.S. children rely on school meal programs to keep from going hungry.
#19 Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government. And that does not even count Social Security or Medicare.
#20 According to the Natural Resources Defense Council, approximately 40 percent of all food in America “is routinely thrown away by consumers at home, discarded or unserved at restaurants or left unharvested on farms.”
Thanksgiving Memories
Off the keyboard of RE
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Initially my Title for this article was “Thanksgiving Memories in the Age of Oil“, but I elected to simplifty it down to Thanksgiving Memories to make the Permalink more simple, and besides it is obvious my memories of the Thanksgiving Holiday are all Oil Age memories.
If you care to believe all the legends told about the FIRST Thanksgiving, obviously they don’t match up with the Food Fest of the ones engaged in during the Age of Oil. A few Starving Folks in the Plymouth Colony get together with some Natives who actually HAVE some food, they eat a decent meal all are Thankful for as Winter sets in, but nevertheless as Winter Progresses there in Plymouth numerous people go to the Great Beyond due to Starvation issues. Not as many as the first Winter, but quite a few, then refilled with more escaping Eurotrash the following spring. No record really of how many Natives also went to the Great Beyond, but we do know the Plymouth folks got absolutely devastated in Numbers until the colony finally got established some and built up to around 7000 or so over time.
Regardless of, or perhaps BECAUSE of the huge percentage Die Off of original colonists at Plymouth, “Thanksgiving” ended up being one of our BIG FSofA Holidays, matched in significance only by Christmas and perhaps the 4th of July Independence Day celebration. In both the cases of Christmas and Thanksgiving, over the course of the Age of Oil, both have morphed into celebrations of Conspicuous Consumption on an Ungodly scale. In the case of Christmas, all about gobs of TOYS for young’uns and adults alike, “will I get my I-phone or my Porche in the Driveway with a big Bow on it?” Other Holidays like Halloween and Mother’s Day and Valentine’s Day have also been heavily commercialized in the Age of Oil, but still the Majors of Thanksgiving and Christmas dominate here.
Thanksgiving in the Age of Oil isn’t about Presents of Toys like Christmas, it is about EATING a LOT of Food! How much can you stuff yourself with as you go to 2 or 3 different Relatives houses to have 2PM Meal at Aunt Sadie’s McMansion, a 4PM meal at Granma’s House and a 6PM meal at the Boss’ Mansion served up Buffett style? It doesn’t end just Thursday Night either, somebody you couldn’t make it over to on Thursday holds a Friday banquet, you vomit it all up Saturday and Sunday Morning your Church puts out ANOTHER Buffet for you to stuff your face with!
The Homeless and Impoverished are not left hanging on Thanksgiving either.. Every Salvation Army Post serves up Turkey Slices and Canned Corn and Cranberry Sauce on Thanksgiving. Plenty-o-food for EVERYBODY on Thanksgiving, FREE of Charge here in the Land of Good & Plenty! If you just have a couple of friends still employed, they will Invite you over for Thanksgiving, even co-workers you barely know will invite you over to Consume Mass Quantities of Food with them! In fact being a Hermit like myself who because of the work I do I know lots of people, I get dozens of people who feel sorry for the fact I don’t have family to Conspicuously Consume food with and who ALL invite me over! LOL. Politlely declining these invitations first because a Turkey Microwaveable is about enough for me and second because hanging with a bunch of Family I don’t really know from Adam is not great fun is quite difficult to do. LOL. I do usually get roped into at least two of these face-stuffing fests though with somebody.
The Mass Consumption of Food on Thanksgiving first hit me after we returned from Brazil in the late 60s, but didn’t REALLY hit home until my Mom got the HOUSE as part of the Divorce Settlement with Dad the Pigman. MOST of my relatives at this time lived in Rented Apartments, rather small places that couldn’t accomodate the WHOLE family. MY HOUSE had a big Living Room and Dining Room, and we came back from Brazil with some amazing Furniture, including a Hand Carved Jacaranda (Brazilian Hardwood) table that was 8′ long and 3′ wide. You could lay out a pretty massive Buffett on this table.
Everybody brought over a Dish of some sort to contribute to the Buffet, each of which usually could serve about 8 peoople. since they toted along some Kids and others who did not bring a dish, usually it ended up with about 4X as much as anybody could possibly eat, even the Biggest Pigs, and there were a few amazing ones in the Family. LOL. So AFTER the Big Meal, the next big challenge was distributing out the Leftovers to everybody, and this in t he days before you had GLAD Containers in every size range. Mainly you wrapped up the stuff in Foil or Wax Paper, or loaded stuff onto the original Plate or Bowl the person brought with them to the Food Fest.
The Mass Consumers in my family did not just bring over Food of course, they brought over plenty-o-Wine,Beer and Hard Liquor also, and there were a good number of the folks who considered this a great opportunity to get totally shit-faced DRUNK. Most famous among them was my Uncle Jessie, a WWII hero who pulled half a dozen men out of a burning Tank and had his hands burned up pretty bad and lived after that the rest of his life on Disability, Drinking and Gambling on Horses at the OTB Betting parlors in Brooklyn. Fortunately Jessie was a pretty Jovial Drunk, and usually did not cause too much problems other than figuring out where to put him when he finally passed out.
As “Hosts” for the Thanksgiving Food Consumption Fest, our Contibution to the Buffet was the TURKEY! So it was always a BIG ONE in those days, 20 pounders at least. My Mom was a SPECTACULARLY bad cook, so after the first year when the Turkey was WAY over-done, I took over the Turkey cooking job, monitoring the oven and experimeting with different basting techniques to end up with a nice JUICY Turkey at the end of it. I was about 11 or 12 I guess when I first took on this job, it was my first major Cooking Assignment. The first year actually came out OK, a DEFINITE improvement over the DISASTER Turkey my mom cooked the year before, but it still took another couple of years to get this right.
The other BIG Part of the turkey Job was the CARVING, and this I took EXCEPTIONAL PRIDE in doing well. Unlike the dude in the above photo, No Electric Carving Knife at the time in the RE household, but we did have some pretty good steel Cutlery we 
came back from Brazil with. Not sure if it was forged in Brasil,but it was some mighty good steel and lasted right up until Mom went to the Great Beyond . I think my sister has the knives in her kitchen now.
The first year I wasn’t too good with the carving, but I practiced on Chickens during the following year and by the third year my Turkey Platters looked pretty much like the one at the left here.
The Huge Family Feasts with ALL the relatives (Mom’s side Only, not Dad the Pigman’s) lasted probably right though my marriage, after that one of mom’s sisters died, the other went into a Nursing Home and their kids stopped coming and started doing their own Thanksgivings.
I remember one of the Turkey Day dinners with the Ex very well, we lived up in Larchmont sharing a house with a couple of other 20-somethings, and hadda drive down the Bronx River Parkway to the Whitestone Bridge to get over to Queens. Our car was a 1970s era Volkswagen Beetle, plenty-o-rust and a super stiff clutch. There was a massive Traffic Jam on the highway, stop and go starting a good 5 miles away from the bridge. My leg started cramping up so bad from clutching after an hour I hadda let the ex drive.
Once the big family Dinners died off and after my divorce was when I went out OTR as a long haul Trucker, and most Thanksgivings I was able to get off the road and hang with family, though I recall at least one I missed where I had T-G Dinner at a Truckstop. I think it was the Flying J, which had the best Buffets , although Petro had some good ones also.
It was during that time Mom retired and joined my Sister out in Springfield, and for another decade or so my sister did the Big Dinner at her McMansion there, with assorted Friends & Misfits she gathered up over her years living there, along with my Nephew and later his wife and kids.
During this period, she was responsible for the Turkey Cooking, but any years I did make it back to Springfield I always still got the Carving Job. Since I was no longer Cooking, I felt responsible for bringing SOME Mass Quantity Food to the Table as my contribution, so I started Reserving and buying the fabulously expensive (forHam) Honey Baked Hams from the HBH store. You don’t even have to Carve these yourself, they have a machine that does a cool Spiral Cut around the Hambone. I would always buy the BIGGEST one, cost like $60-70 I recall at the time. No idea what they run now.
My Brother-in-Law the Tool & Die man always got a Turkey from the Job, that was the Big Benny of his Non-Union Job as Mr. Fixit of every Tool & Die Machine known to man and designer of innumerable Molds over the years. He designed the original Pizza Hut pizza pans. He is actually still employed in this Bizness, even though so much manufacturing has left the shores of the FSofA. The company he works for now got the contract to make fittings for the building going up on the old WTC site, so likely will stay in Biz until he retires. No pension though, always a Non-Union job and I don’t think he ever started a 401K. So his Pension is Social Security, for as long as it lasts. My sister has been employed by the State of Missouri and has a State Pension due her along with SS, again for as long as that lasts. Then they were the benficiaries of Inheritance also from my BIL’s side and my Mom, though she did not get showered with Grandpa’s Booze Bucks, he was old school and handed it all off Patrilinearly to me, skipping my Dad because he couldn’t stand him. LOL.
Since moving to Alaska, I haven’t made it back for a Turkey Day to Springfield, most of my trips back there have been over the Chrstmas-New Years holiday, at least while Mom was still alive. I won’t be making it back there this year though during Christmas.
So the last few years I have mostly been the Old Hermit who some family feels sorry for and invites over for Dinner. Also have had to do work related Buffets, though not this year since I broke off with the fellow I originally came up here to work with and now am involved in another similar start-up. Not nearly as developed though so we are not yet doing the big Biz Buffet thing with the clientele. I make small talk usually, though there are quite a few Doomers here now so in the last couple of years Doom is up for discussion. The guy I am visiting with tomorrow is now CONVINCED Doom is Imminent because Obama-sama got re-elected. LOL. He HATES Obama.
Anyhow, the various pictures I yanked up off Google here are very representative of almost all the T-G Gluttony Extravaganzas I have attended over the last half-century here in the Land of Good & Plenty. Nobody I ever knew anywhere in the FSofA went Hungry on Thankgsgiving, though I am sure in Appalachia and other enclaves of Poverty some likely did. At the same time, all through those years, millions of people have gone Hungry in other places, while probably at least 25% if not more of the food consumed in these dinners ends up in the trash or in the compost pile for some gardener types who actually do their own composting.
My biggest pet peeve all through the years with the Waste was the Carcass after Carving, along with the bag of Giblets stuffed into the abdominal cavity of the nicely plucked and eviscerated Butterball Turkey. Almost nobody uses this stuff here in the FSofA, it goes straight into the garbage once all the nice Meat is carved off the bones. However, no matter HOW good a carving job you do, there is tons of good food left on the bones, and INSIDE the bones too.
When I was in Brazil, our Cook never threw out this stuff, she took all the bones and stuff left on our plates and threw it all in a Huge Pot which she simmerred for a few hours after we ate and made Soup to take home to her family in the Favelas. My Grandma also who DID face Starvation during the Great Depression could never let Chicken Bones go to waste, she also made Chicken Soup out of leftover chicken bones and giblets. I picked up this habit during my years Turkey cooking, and actually got to the point where I would ask friends and neighbors to save their Carcasses, which I would collect up on Friday and Boil and make several gallons of Turkey Broth to make Turkey soup with. I would then strain the broth, put it into containers and freeze it, and each week make a new batch of Turkey Soup, with fresh Carrots and Celery, Basil, Parsley, Dill and Rosemary and then add sometimes Dumplings, sometimes Wanton and sometimes Matzoh Balls to finish out the soup.
It remains to be seen how long this Festival of Gluttony continues on here in the FSofA. Back in 2008, I figured that one was the LAST one, but here we are in 2012 heading into another one tomorrow. At this point, despite the Fiscal Cliff and the Eurotrash going down the toilet and the Drought which took down the Corn Harvest by some inexactly known amount, I suspect another Face Stuffing next year too. I don’t know exactly when this will end, I only know it will end in the not too distant future.
Meanwhile, those of us who go out tomorrow and munch down on plate fulls of Turkey, Honey Baked Ham, Prime Rib, Sweet Potatoes, Stuffing, Green Bean Casseroles, Cranberry Sauce, Bottles of CA Mondavi Vineyards Wine, Bottles of Sam Adams Boston Lager and Bottles of 12 Year Old Single Malt Glenlivet Scotch Whisky can all say we are fellow Travellers on the Hypocrisy Tain with William Hunter Duncan. Even the Impoverished here attending Salvation Army dinners ride that train with us, because what all of us are doing is consuming WAY more of the resources of the earth then we really need to, and way more than is our Fair Share also. What goes into the trash tomorrow night probably could feed double to triple the population of the FSofA, near 1B people I am sure. Thousands of children will die tomorrow of Manutrition, millions more will go Hungry tomorrow. Not because the Food is not available, it most surely is right now. It occurs because the distribtuion system of the wealth of the world is so vastly skewed, and because taking back the control of this earth from those who sewed it up early is so hard to do.
All very hard to digest of course, but as you digest your Turkey Dinner tomorrow, remember it and live with it. It is part of your Complicity, part of your Hypocrisy in living in the Land of Good & Plenty as a Beneficiary of the Age of Oil.
RE
The Thin Line Between Global Collapse and Faith
Off the keyboards of Ashvin Pandurangi & JT
Published on Picturing Christ on October 3, 2012
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I am pleased to present my first guest post here on Picturing Christ – an article by reader “JT”. His article focuses on one of the most basic questions that inspired me to start this blog in the first place – how do we truly respond to the systemic trials and tribulations that humanity faces in the upcoming decades? There are many blogs and websites dedicated to documenting these predicaments and offering advice on how to prepare for them.
Some of them even venture into questions of spirituality and faith from time to time. My own writings at The Automatic Earth over the last few months regularly touched on these issues. However, I recently started to feel like the constant divide between our Earthly predicaments and my spirituality was much too forced and arbitrary. I had the sense that there was a fundamental flaw in the process of offering insights and advice when they were artificially divorced from spiritual truths.
So, with that in mind, I was very glad to hear that fellow Christian and reader of PC also felt the same way, and decided to put those concerns into writing. As Christians, we cannot hesitate to rely on the word of God when it comes to all spheres of our lives. The fact that we may be talking about economics, finance, geopolitics, energy and environmental issues, psychology, etc. shouldn’t make a bit of difference. All of these issues are inextricably woven into the underlying philosophies of spirituality and faith, and, specifically, the God of the Bible and His word.
We are now living in a world where the structures that have come to dominate human civilization are crumbling. Financial contagion from the global banking crisis has spread to all regions of the world and is destroying economic growth. Tensions between Western nations and those in both the Near and Far East are growing, with several theaters of war already firmly established. Our total reliance on fossil fuels and industrial processes for global economic activity has destroyed our natural ecosystems and warmed our atmosphere to extremely dangerous levels, while also depleting those resources and creating the potential for systemic environmental, economic, political and social collapse.
So, before getting to JT’s excellent article, I would like to offer my own personal (yet brief) opinion on these grave matters of collapse and faith. The trying circumstances and events that confront all of us in the years ahead are exactly those which require us to remain resolute in the unconditional truth and morality of our faith. Jesus tells us that there will come a time in which “many will fall away and betray one another and hate one another… and because lawlessness will be increased, the love of many will grow cold“. (Matthew 24:10, 12).
I believe that whether we are actually living in that specific time or not is irrelevant, because the underlying lesson applies to all times of tribulation before the second return of Christ. And there is no doubt in my mind that severe tribulations have already started to descend upon us, and that they will only grow more imminent and threatening to humanity over time. Therefore, we must always remember to be on guard and ensure that we are NOT the ones who are falling away from God’s truth, the ones hating each other or the ones watching our love for our fellow humans grow cold.
If our understanding and fear of systemic collapse ever begins to lead us towards such a mindset, then, regardless of whether we are physically prepared for Earthly concerns or not, we must immediately re-orient ourselves back towards our faith in Christ.
That being said, here is JT:
THE THIN LINE BETWEEN GLOBAL COLLAPSE AND FAITH
Having first read Ashvin’s writings on The Automatic Earth, I believe that many who are reading this article may be walking a path similar to mine and dealing with the same issues related to systemic collapse. I would like to pose a question to you all that has occupied my thoughts for some time – can Christians also be “preppers”? Can we honestly say that we are following Christ while we are also preparing for the collapse of the world systems around us?
There is one particular evening that I will never forget. My wife, I and another couple were having dinner, and we all considered ourselves to be committed, born again Christians. The topic of preparedness eventually came up in conversation. This was many years ago, before the financial disasters entered mainstream awareness and before peak oil was a serious concern. Many of our Christian brothers and sisters were already storing food, learning how to garden and how to recreate some of the lost arts and crafts, such as grinding grains, canning, shoe-making and tailoring.
At this time my wife and I still had young children, and we lived in a relatively wealthy suburb outside of Boston. While I was raised in a comfortable middle class home, my wife grew up in a world where a bowl of oatmeal or tomato soup was often your main meal of the day. She understood deprivation and what happens when things stop functioning well in society. Even so, her parents had taught her to always rely on God to get her through any situation. The discussion of preparing for disaster or social upheaval always made her uncomfortable.
At some time during the dinner, my friend announced that, in addition to food storage and other steps of preparation, he had purchased a gun to defend himself and his family in the event that the economic and sociopolitical situation became chaotic and violent. After hearing this revelation, my wife became incredibly agitated. She spit out her words with a force that surprised me:
“So does that mean you will shoot me and my children when we come to you begging for food? Where in the Gospels do you find that??”
My friend quickly tried to regroup, “Of course I wouldn’t shoot you or the kids. You are part of our extended family. We would share and make do.”
My wife was not to be consoled. “So we get to stand behind the barricade and watch you shoot down other starving women and children?”
Needless to say, dinner was over for that night. We have still remained friends, but the topic of preparedness is resolutely avoided when all of us are together. As I have become more aware of the issues of peak oil, as well as the immense fragility of our economic systems, the question has once again returned. As a devout Christian, should I focus on preparing for potential disaster or should I just rely on God?
Scripture does not seem to directly answer the question. The clear meaning of Matthew 6:34 is that we should not worry about tomorrow at the expense of today. So is preparing for a radically different future the same thing as “worrying”? More importantly, is prepping an attempt to rely upon our own devices rather than God? Does Matthew 6:34 prohibit us from acting on the knowledge that things are changing, and not for the better?
It becomes an even more puzzling issue when you consider the parable of the foolish bridesmaids described in Matthew. Jesus was clearly chiding them for their lack of preparation when he described the wise bridesmaids responding to the foolish who asked for their lamp oil – “since there will not be enough for us and for you, go rather to the dealers and buy for yourselves” (Matthew 25:9).
Yet, this parable was referring to the fact that we must have a certain level of awareness and preparation if we are going to enter the Kingdom of God when Christ returns. Jesus was mainly referring to a need for spiritual preparation, rather than a strictly physical process of preparation. There is no doubt that the last days will be characterized by much physical hardship, but it is critical to remember that we must always choose spiritual salvation and integrity over physical survival, if we are ever put in a position where such a choice between the two must be made.
The miracle of Jesus multiplying the five barley loaves and the two fish also tells us that Jesus has things under control and He will provide the necessary resources for us when we lack them. However, even He used the fish and loaves of a boy who had prepared for the day’s journey (John 6:9-11). And, once again, these miracles primarily point to the spiritual provisions of God in times of need, rather than physical ones (even though He may often provide us with both). So, after wrestling with this subject for several years, I have come to a formulation in my mind as to what I need to do and how I need to handle the issue of preparedness.
I have no issue with acquiring knowledge about the predicaments we face and what potential outcomes are likely to come. Knowledge is an invaluable tool, just like a hammer or a rope. It can be used for both good and evil. I believe that Christ wants us to be knowledgeable – to capture all knowledge that we can and to put it to use for God, His people and His Kingdom. Therefore, I have no problem with learning all that I can about these issues or trying to educate others about them as well. As we learn in the Bible, “an intelligent heart acquires knowledge, and the ear of the wise seeks knowledge” (Proverbs 18:15).
It is not wrong to be prepared, either. Hurricane Katrina, for example, showed me how our government cannot handle a single hurricane that was predicted to arrive many days before and impacted only one major metropolitan area. Therefore, it is clear that we will be on our own with all sorts of calamities, especially those which happen simultaneously and feed off of each other, and especially when our governments are even more strained financially. To have food, water, medicine set aside is to be prudent, as is to have a plan of action to secure our safety and the safety of others.
God told Joseph to store up the grain in the seven years of plenty so that the people of Egypt would have enough in the years of famine (Genesis 41:47-49), and Joseph was blessed for heeding God’s wisdom. We have a responsibility to be able to care of ourselves, our children, our parents, our communities and perhaps even strangers. This responsibility lasts every day of our lives – not just when disaster strikes. Saving and storing some of the surplus God has given us is actually a part of this daily duty. We are to be good stewards of the abundance that He has blessed us with, and we can pray that our blessings continue as they did with Joseph.
In stark contrast to that charitable nature, God has called very few (if any) of us to emulate Rambo or the Terminator, even in the face of extreme threats or adversity. Our Christian life, being only one part of the whole body of Christ, is necessarily a community life. Wherever we find ourselves, it is our duty to look at the needs of those around us and to work together to fill those needs. Part of our preparation needs to be the strengthening of bonds with our Christian brothers and sisters so we can carry each other through difficult times, rather than alienating them or treating them as hostile competitors.
Our own individual or family preparations should not overcome the rest of our lives. We should take prudent steps to care for ourselves, family and neighbors, but we cannot allow ourselves to become obsessed with those preparations. The acts of worship, work, education, community development, charitable works, etc., are all important and cannot be set aside to collect more stuff or to spend all of our time “getting ready” for collapse. As Jesus makes clear, we cannot ignore the present in the hope of having secured the future.
Jesus commands us to share our abundance and our skills with the less fortunate among us (Matthew 25:44-45). This command applies regardless of whether we are living in a pre-collapse or post-collapse environment. Does this mean we have to open our pantry to the desperate masses, so that we are completely wiped out and our families are left to die? I don’t think so. Does it mean we have to be alert and open to the needs of others around us and attempt to ease their suffering whenever we have reasonable opportunities to do so? Yes.
What is the limit of our charity? How far do we have to go? I don’t know, and I doubt there are any absolute answers. Each situation will present itself differently and, ultimately, we must above all seek to do God’s will (not our own) in each individual case. We need to be open to the idea that God may want us to share even when we are unsure if there is enough for ourselves and our family. There is no doubt that serving God will sometimes call for radical departures from our “normal” sense of what’s appropriate.
Another important question is whether Christians should use force to protect themselves, their families and their property? This is a very difficult issue for me. I do not own a gun. Several years ago, I would have unequivocally and judgmentally stated that Christians should not own guns; that Christians should never resort to violence. I would have said to rely on God, and He will save you. Recently, I have moved away from that absolute position.
There are instances in the Bible when God calls upon the strong to protect the weak, and we can all imagine circumstances when only physical force will stop the perpetration of hideous evil against us or those close to us. The Bible clearly states that “whoever shed’s man’s blood, by man shall his blood be shed” (Genesis 9:6), which implies that those people whose actions threaten or lead to imminent death of others have removed themselves from God’s protection and have subjected themselves to the proportional justice of man.
I have come to see that Christians, just like anyone else, may be required to defend themselves and those who God has placed under their protection. At the same time, though, I believe that the use of force on another human being should be avoided if there is any possibility of doing so. Such force should only be used after very careful and prayerful consideration of the alternatives. The Bible repeatedly tells us that we should never be quick to “repay evil with evil” (1 Peter 3:9, Romans 12:17), and that we should always rely on our prayers to seek out God’s guidance and His will.
Therefore, physical force should be used in the smallest amount required in any given situation. Overcoming our enemies by wounding or killing them is never something about which we should be proud or about which we should gloat, but rather a course of action that we should mourn and regret with every bone in our body and all of our hearts. God is truly in control of everything, and once we have taken prudent steps to secure the basic well-being of ourselves, our families and our neighbors, we must rely on God to take care of the rest.
We have to remember the loaves of bread and the fish that Jesus provided to the masses. We have to be like the widow confronted by a creditor who wished to take her two sons away for the debts owed by her husband. All she possessed was a small jar of oil, but she trusted in God’s prophet, Elisha, and her oil was multiplied greatly by God so that she could pay off the debts and live off of the surplus (2 Kings 4:1-7). Many Christians may look on these events as irrelevant ancient history, but God is still very active in the world today. Many people find themselves buried in debt today, just as the widow was then, and God’s grace towards His children remains the same.
Therefore, be not afraid. The most important part of Christian prepping is to realize that God has not abandoned us. To paraphrase Saint Paul – governments will fail, pensions and 401K’s will fail, banks and commerce will fail, electricity and running water will fail, our political and social institutions will fail, but God’s love will never fail us (1 Corinthians 13:8-10). We must carry the joy of knowing Christ into the future. No matter what the future brings, He will be there with us. We need to find peace and we need to quiet our anxieties with this knowledge. We need to let this knowledge make us joyful and loving in the face of trials and tribulations.
The thoughts contained in this article are my own. They are a reflection of my own struggles to follow Jesus in a world gone mad. I claim no special knowledge or understanding of scripture or God’s will. No one should feel that I am telling them that they have to do things exactly the way I do, or believe exactly as I believe. Please do not feel judged by any of these words. God has given each of us a conscience and, if it be His will, He will put the Holy Spirit into our hearts and minds to show us what he wants for and from each of us as individuals. We each have our own walk of faith to follow.
God may be telling some of you to build a fortress and stock it with weapons and supplies to last a lifetime. To others, He may be telling them to renounce all of their worldly possessions and, like Saint Francis of Assisi, approach the world as naked as the moment they were born. He may be telling them to rely solely on God to clothe them, just as He did with Adam and Eve after the Fall (Genesis 3:21), and to fulfill their needs. Either way, I pray that my thoughts can be of some assistance to those who have the same burning questions.
And I recommend that everyone solemnly pray to Jesus and listen very carefully for His answers. Since we were all created as unique beings, those answers will no doubt be unique for each of us. I hope that I will receive comments and feedback from those who are reading this. God knows that I have much more to learn and that your comments will perhaps open my eyes to perspectives that I have not yet considered, and will help me ask even more questions that I have yet to formulate.
We are brothers and sisters in this journey. Please be gentle with me and with each other in your comments and replies. It saddens me to see the vitriol and petty remarks that many commentators dump on each other in some of the blogs that I follow. There are many people who are mean and judgmental just for the sake of building up their prideful images of themselves and stroking their egos. However, as followers of Christ, our goal should be to abandon our egos and our pride, and to do everything we can to support each other and build each other up.
Peace and Hope,
JT
F7 Print Button in Lock Up
Discuss this article inside the Diner
For those hoping for a rapid response from CBs to the gathering storm here, at least according to the MSM a massive coordinated Global Printfest does not seem in the cards, at least for next week. At the same time, without a massive intervention here, it is hard to see how the Spanish will survive through to the end of next week either.
Super Mario Dragon, head of the ECB is getting more strident in his calls for Eurobonds and a Transfer Union with full fiscal and monetary integration, with all the concomitant loss of National Sovereignty and elimination of Democratic political control that implies. HUGE pressure now on the Krauts to pick up the Tab for the cascading debt Tsunami surrounding them, but of course in reality the Krauts can’t afford to pick everybody’s tab here either.
So, a EZ breakup now seems pretty inevitable, and as usual it is the timeline question which is the most tricky. The Greeks are in such Dire Straits now that if they don’t pull out and at least TRY issuing Drachma the only thing that will keep anything moving around that economy at all is Barter systems. Same with the Spics, they have to try the Peseta route.
So it is time for a Thought Experiment here about exactly how such a fracture back into multiple currencies in Eurotrashland would be handled on an International Trade level, administered of course by the BIS in Switzerland.
They probably do have Legacy Software they used back in the day to track all these currencies, but of course also back then there was a market for the debt each of these countries sold as well. The big problem here is that even with a Debt Jubilee of all the current MOUNTAINS of debt, there isn’t a market for NEW debt either! If you actually have some money, why would you lend it to anybody when there is no reasonable expectation you would ever be paid back for it? The funniest one in this regard are the investors currently buying Kraut debt, who actually are PAYING the Krauts for the priviledge of holding their debt! LOL. This on the theory of course that it is better to only trickle away your money than to risk losing it all at once. This situation is an anomaly however, and would not apply to any other nation in the EZ than Krautland once they move to separate currencies.
So then the question is, could these countries issue NON-DEBT money that would function to buy stuff at least inside their own borders? Possibly and it would certainly be an interesting experiment, but even if they do that they will still need to try to earn some FOREX, namely Dollars right now that still will buy them some Oil. Or they could try the Nazi trick of doing Direct barter of something they produce which an OPEC nation needs for their Oil, which generally speaking is mostly Food of course.
However, run that idea out in the case of Spain for instance. They have good arable land there and can certainly grow more food than say the Iranians can on their patch of desert. Even if the Spics have surplus food to barter with the Towel Heads though, can they grow ENOUGH to both feed their own population AND trade with the Iranians for enough Oil to run their Carz? This of course returns us to the Choice Steve presents all the time on EU, is do you feed the Carz or feed the People?
So you say, “But the Nazis did it! They produced Railroad Cars and got Raw materials from the Argentinians!” Indeed they did, but of course at the time the Nazis had one of the few industrial apparati necessary for producing railroad cars AND there was a ton of excess Oil out there for them to do that with. The Spics don’t have industrial apparatus to build anything the Towel Heads want that the Chinese can’t build cheaper. So bartering Finished Goods with the Towel Heads won’t work for the Spics.
On the Grand Scale across the EU this is pretty much true for everybody except the Krauts, who still do produce some finished goods the Towel Heads want. However, since the price of their Oil is going up, it costs a lot more for the Krauts to produce the finished goods, so they have to raise the prices on them high enough to make some Value Added profit from burning said Oil. As they raise those prices, the Towel Heads then cannot afford to buy the BMWs unless of course they divert some of their Oil revenue from buying Food to buying BMWs. Again the choice is between feeding the Carz or feeding the Peoples.
When the market drops off the map for the BMWs, the Krauts of course also will be in the same situation as the Spics and everybody else in Eurotrashland. They also will have only Food to trade for Oil. Once you take away the advantage in production that Industrialization powered by cheap energy has, just about everybody can produce inside their own society the finished goods that they need. They don’t NEED to trade for them. Trade only results when various cultures all have surplus and so begin to produce non-essential items other people also in surplus covet for one reason or another.
In the situation we find ourselves in NOW, after years of resource depletion and expanding population overshoot is that in fact nobody really is in surplus anymore and the vast pool of stored thermodynamic energy to prduce so much suplus is petering out here. Not disappearing overnight, but rapidly becoming to expensive to burn for the purpose of driving Carz around willy nilly or even making Iphones that nobody REALLY needs, they just WANT them. The monetary system implosion is just a representation of the fact that there is not surplus and there is not a future expectation of ROI by buying anybody’s debt. You won’t be paid back, so why invest in anything or loan money to anyone? If you HAVE money or control over resources, you keep them for yourself and try not to LOSE them or have them taken from you. Both of which get more difficult all the time of course, both on the Micro level of the Individual and the Macro Level of the Nation State. Far as the OPEC Nations are concerned, at this point their problem is that since Industrialized nations cannot afford to BUY their Oil from them anymore, now they are trying to STEAL it instead, using the Big Ass Military. For the Individual, the issue is that since their is no Growth, instead of trying to sieve profit off a growing economy, those in control are STEALING the money through Taxation to bailout TBTF Banks, reneging on Pension Plan agreements and selling Trash for Cash like Facepalm to INCREDIBLY stupid Investors who just are ASKING to be bilked and deserve the fate they got for that stupidity. Always a SUCKER out there of course. I don’t feel sorry for any of those people, but for the people who have Pension Plans they have no control over who Invested in such trash, I do feel sympathy. Their money and their futures are being stolen from under them from gimmicks like this, and they have no control over that. The money from doing these deals is being pocketed here by a few very BIG Thieves at the top, and it is time now to STOP this theft once and for all time, by whatever means is necessary to do so.
RE
Central Banks to hold fire… for now
By Richard Hubbard
LONDON | Sat Jun 2, 2012 7:39am EDT
(Reuters) – The intensifying euro zone crisis and uncertain global growth outlook have raised hopes for a policy response from major central banks but, while it could be a close call, they are likely to resist pressure to act in the coming week.
The European Central Bank, the Bank of England and the Reserve Bank of Australia are all due to meet as data emerges on the euro zone’s service sector, and the manufacturing and trade performances of the big German and U.S. economies.
The main focus will be Wednesday’s ECB meeting, and whether dramatic selling of peripheral European government debt by investors in May and a flight into safe-haven U.S. Treasuries and German government bonds will prompt it to act.
One reason to doubt a major shift in policy is that, even after U.S. Treasury 10-year notes hit yields not seen in more than two centuries of record keeping, and investors began paying the German government for the right to hold its debt, the move across all markets may not warrant it.
“The stresses appear not yet to be big enough across all asset classes for the policymakers to react,” said Richard Batty, global investment strategist at Standard Life Investments.
“It all seems to be playing out in investor’s appetite for triple-A government bonds and for the dollar, but there doesn’t seem to be the volatility or sharp falls in equity markets or other stresses in the system, such as the funding market.”
In Europe, the spread between three-month Libor rates and overnight rates, seen as a measure of health of the banking system, has been stable throughout May – mainly due to the more than one trillion euros of cheap funds injected into the system by the ECB in December and February.
And while May was a bad month for equity markets everywhere and Spain and Italy in particular, the widely watched Dow Jones .DXY and S&P 500 .SPX indexes remain in positive territory for the year to date.
Those gains were under threat on Friday, however, as disappointing May U.S. jobs data sparked heavy selling, sending the MSCI world equity index .MIWD00000PUS back to where it started the year.
The VIX index .VIX, often referred to as the market’s fear gauge stood at 25 points, in line with its levels of last December but well below the 48 points seen at the height of last year’s market turmoil in August and September.
POLITICAL MOVES
A heavy calendar of events throughout June which could help determine how the euro zone crisis unfolds may also encourage Europe’s key monetary policymakers to hold fire.
Greek elections are due on June 17, following a first round of French parliamentary elections on June 10. The heads of the G20 group of nations will hold a summit on June 18 and 19, while Europe’s leaders gather at the end of the month to decide their next response to the crisis.
But pressure is growing for action from the ECB to calm acute nervousness about a potential Greek exit from the currency bloc, and fears that the cost to Spain of saving its fragile banks will mean the country itself has to be rescued.
“The ECB is currently the only institution that can credibly counter a collective loss of confidence on the scale we’re now witnessing,” said Nicholas Spiro, Managing Director at debt consultancy Spiro Sovereign Strategy.
Spanish bond yields have surged in the past week to near their highest level since the launch of the euro, raising questions about the country’s ability to fund itself over the longer term without outside help.
Spain will provide a big test of investor sentiment when it auctions more government bonds on Thursday as its 10-year bond yields hover around 6.5 percent – close to the 7 percent level at which other indebted countries have been forced to seek aid.
The latest Reuters poll of economists found most still expected the ECB to resist pressure to cut interest rates before the end of next year, but that majority has shrunk from previous polls as gloomy economic data rolls in. Just 11 of the 73 respondents expected the bank to cut rates on June 6.
The Bank of England is also expected to resist calls to pump more money into the depressed UK economy when it meets on June 7, according to a separate Reuters poll, although it found there was an even chance the central bank would restart the printing presses at some point in future. POLL3
A slim majority of economists expect Australia’s central bank to keep interest rates unchanged on Tuesday, but this is an even closer call as a growing number of banks, including the nation’s top four, are calling for a cut. AURATE1
Meanwhile, the U.S. Federal Reserve Board’s mid-month policy meeting and the end of its current easing policy, known as ‘Operation Twist’, could also bring changes.
“With dark clouds gathering over the global economy and the euro area crisis intensifying, the ‘Great Monetary Easing Part 2′ looks set to accelerate again as many major central banks around the globe are gearing up for more action in the next month or two,” said Manoj Pradhan of Morgan Stanley.
Theory of Everything: Part I
Discuss this article at the Economics Table of the Diner
Frostbite Falls Daily Rant-4/25/2011
Posted originally on TBP on 25th April 2011 by Reverse Engineer in Economy
Tonight’s topic is a tough one. The bickering regarding precisely how the monetary system will collapse framed around Inflation and Deflation is getting us precisely NOWHERE. The reason for this I think is because it is mostly ex-post facto analysis of the money supply and asset values, and this bogs you down in conflicting numbers, many of which are not even certain to be valid given how the data is manipulated these days. So what I am going to try to do in this post is look at precisely how fiat money accrues value and how that attaches to physical resources, energy and labor to create an economic system. It’s a Theory of Everything kind of post, and I have no idea how its going to come out here as I begin. My objective in developing a TOE here is to try to get a better idea of how the folks in current control over the monetary system will behave as the system disintegrates. I am trying to figure this out, and I do not have an absolute answer, but writing about it helps me to frame the questions, and responses I get help me refine it. I am just “thinking out loud” as I go, and no besides everything I remember I haven’t done ANY research for this post. Its a thought experiment.
Now, I am using “disintegrates” with respect to the economic system not in the colloquial meaning of being hit by a Phaser blast and vanishing, but in a more pure concept of dis-Integration, where to be integrated means to be connected. The problem we are faced with at the moment is that Money is becoming less and less connected to Real Value. This is not simply because a lot of it is being “printed” by the various CBs around the world, but rather because it is becoming further disconnected from the value creation mechanism of the money itself. Lots of freely floating money in the market certainly should devalue it, but competing against that is what causes fiat to have any value at all, which is Interest. If you create more money but at the same time make that money more expensive in terms of interest, the money will retain value with respect to whatever it is buying. So the freshly printed money the Greeks need right now is still actually worth something because the interest rates they have to pay for it are skyrocketing upwards.
In the Fiat system as it has been pursued since around 1692, CBs have had a virtually unlimited ability to create money. Money is a great Lubricant for trade, it allows you to rise above a pure barter exchange mechanism utilizing a portable store of value. Whatever that store of value is has to be recognized as such all across the trading markets, which these days are global and interconnected via computers. It wasn’t always that way though, certainly not in 1692, at that time it was all Paper that had to hold value across the world. How do you go about making a piece of paper a valuable instrument of monetary transaction across societies? To do it, you need to have Banking Houses established in different societies which all recognize the paper as holding value. A note written by the House of Medici in Venice has to be recognized in the Mongol Empire as “Good as Gold”, so that when the Note arrives by Camel train with Marco Polo, the Credits it represents actually buy real goods for Ghenghis Khan, so he can buy more Saddles for the Mongol Horde and expand his Raping and Pillaging Empire a bit further. Needless to say, if you actually have control over the trade routes and have warehouses stocked with real goods those credits can buy, the Paper has very real value.
It is of course very important for anyone running such a monetary system based on Notes they create that they in fact do maintain real value to buy goods and services. It is not generally in the interest of a Bankster to create worthless notes, because once those notes stop functioning to buy goods and services, the Bankster is outta biz. It should be noted here that the TBTF banking houses which grew out of this era have NEVER allowed their notes to go completely worthless, although any number of small countries have been in some way shut out of the system and seen this occur. Argentina, Weimar Germany, and Zimbabwe are all examples of small countries who got shut out of the credit system periodically and saw their currencies completely lose value. All paper currencies amount to is a Note of Zero Duration with no coupon attached issued by the Central Bank of a local Goobermint. Long as it is respected internationally, it holds value to buy goods and services. When it is not, Hyperinflation results. As Jesse points out on Café Americain, Deflation, Hyperinflation and Stagflation are all possible outcomes for a collapsing monetary system, your main problem is to figure out how the politics will evolve to force a given choice.
As the Global system of trade grew in size and complexity, a mechanism needed to be created to both perpetually increase the Money Supply to match the growing population AND to insure that the notes they created would retain their value. How do you do that? You do it through the Bond Market, which essentially attaches all the Value a given society can create through its Labor and Natural resources to a Bond of the perceived value of those assets. So if a given country has a lot of Coal in the ground and Laborers to dig up the coal, you issue out a Loan in the form of a Bond to start money circulating to pay the laborers to dig up the coal, and attach an interest rate to that loan to in theory compensate for the risk involved in getting the project going. As long as you have new projects and new ways to use labor and natural resources to keep expanding, you can keep expanding the money supply and keep sieving back interest on the money you create, and of course if you have a monopoly on this money creation you get fabulously wealthy in the process.
The primary Debtors to attach here in this process are the Sovereigns, since they have the power to Tax the entire population on some portion of their productive enterprise. So for the most part, Sovereign nations have always been the biggest debtors. (This begs the question of why Sovereigns that can issue their own money have to go in debt to get it. That question is a whole other rant. Part II coming soon to a Theatre Near You.) However, through the Capitalist era, its also been possible to Loan large sums of money to individual Entrepreneurs and Corporations to build large scale projects, and then in addition to that the advent of “Home Ownership” in the post WWII years allowed large scale loaning of money in aggregate on the retail level to individuals. All 3 of these classes of Debtors accumulated a very large Debt through the post WWII years to finance further expansion of this system. It is this debt overhang now that is causing so much worldwide havoc with the monetary system, and it is not just in the FSofA. Every last country connected up to this banking system is in precisely the same pickle, even what appear to be net creditors like China. This because the savings they accumulated is mostly irredeemable debt. It is irredeemable debt that cannot be serviced anymore, because the growth necessary to service it simply is not happening. The lowest level debtors, J6P Home “Owners” are the ones being hit first here, because J6P is not getting ANY kind of Bailout. Stuff like HAMP is just smoke and mirrors to bail out the TBTF Banks, not J6P. The Sovereigns are being Bailed out, but the peripheral ones are seeing their Interest Rates rise to compensate for the risk that they won’t pay off and to maintain the value in the money they are being issued through the loans. The least affected so far are the TBTF Banks, which are being issued money at near ZIRP to speculate in the markets which they are not accountable for, it’s other Low Hanging Fruit who will eventually lose their shirts. Long as that speculation continues, regardless of whether these companies actually turn a profit the managers and executives can pay themselves quite well and the wheels keep turning on the bus.
The thing to remember here is that the CBs cannot keep issuing money in perpetuity, because if they do so the money will go worthless and no longer measure the value of what it is supposed to be buying. As the Sovereigns become increasingly unable to Tax enough money to pay their bonds, they will fail and I do not see it as likely that after anything bigger than about Portugal you will see the CBs bailing out Sovereigns. To do so, they would have to create valueless money, and that is not in their interest to do so.
Now, it is unclear as to whether Sir Isaac Newton as Master of the Mint back in 1692 really understood all the implications of a velocity based money supply of perpetual growth, but IMHO by the 1970s when Local Peak Oil was reached here in the FSofA and when all the bad Loans to South America made by my Dad and other apparatchiks of the system in the name of Chase Manhattan, JP Morgan et al went South, the folks running this system were quite aware of the flaws and that it had a limited lifespan. The last 40 years have been spent manipulating the system to consolidate ownership and further capture the political process, quite successfully. However, the whole ball of wax is now up between a Rock and a Hard Place GLOBALLY, which is why the idea Capital will take off and run for cover outside our own borders is IMHO ridiculous. There just isn’t anywhere to run now, all the sovereigns are in the deep doo doo, so the idea you can pull value from any of them through taxation is ludicrous. People are going to rapidly be moving to subsistence level almost everywhere, there is not going to be surplus to sieve anywhere. If the surplus does not EXIST, no financial instrument can make it exist. Of course, people can be starved out of existence to reduce demand, but they do not go quietly into that Good Night either. So this requires military action which draws down your own surplus, such as it might still exist. See the Roman Empire to understand this problem.
This still does not answer the question of how our Goobermint and Da Fed will behave as the debt default moves up the chain to the Too Big to Bail. This besides nation-states like Spain includes our own States like CA, IL, NJ, TX et al. They cannot issue high interest bonds to rollover the debt they already cannot afford to service, but with low interest there is no incentive for anyone to buy this debt. No incentive for anyone except Da Goobermint, which wishes to perpetuate itself. So the TBTF Banks will offload sovereign bonds on Da Fed, which serves as the “Bad Bank” upon which to dump all your losing bets. The large Banking Houses will consolidate down to just holding and trading about anything perceived as an asset holding real value, commodities for the most part. Regardless of the numerical denomination, with respect to each other these commodities will more or less move in tandem in perceive value, though it is likely in this scenario that PMs will crash with margin calls across other commodities Put it this way, if you are a Sovereign Nation holding a few tons of Gold and you need to buy Rice to feed the population, you are going to put that Gold up for sale at whatever the market will bear, elsewise your people are likely to Riot and string you up by the Gonads.
At this point, you have major banking houses owning large quantities of “stuff” everybody needs at a relatively high dollar denominated value. There are two roads possible, one is to issue money on the retail level to J6P to be able to buy the stuff at these high prices. In a country where most of the population is employed through Goobermint Trade Unions, you could just start indexing and raising the salaries to meet the rising costs of the commodities, but that isn’t the model the FSofA is working under. Rather what you see at the moment here is wage depression, more unemployment and further loss of purchasing power amongst the people who would buy the commodities for end use.
The most sensitive commodity here in the FSofA would be refined gasoline for private automobiles. As the price continues to rise here, it has to force people to start conserving and cutting back on usage. This would force inventories to rise as long as the supply chain is still producing the same amounts, but it may not be doing that. Libya for instance is not contributing its share to the supply chain at the moment. However, what is produced will move in the direction where the most people still have money to pay for it, and that would be toward the western nations with some percentage of the population still solvent. Less wealthy countries will begin to see shortages.
It is unclear how high a price the remaining solvent people in the FSofA can tolerate for gas before it forces too many people out of the market to maintain the distribution chain. I’m going to make a WAG it could go to $10/gallon at some stage before there is a complete collapse of distribution, but even a perpetuated period at the $5 range will have a devastating effect on commerce and GDP.
Similar effect here with Food, which as a percentage of the budget of even the lowest paid of the still employed here is relatively low, compared to countries where people subsist on $2/day. I think most Amerikans could withstand a doubling of food prices as long as they are still employed, simply by buying cheaper foods. As long as the SNAP card program keeps the unemployed fed, again we can see a steady rise in these prices that is compensated for by a forced economic rationing.
The problem is much larger and more immediate in the poorer countries of the world, and this is the most destabilizing aspect of the spin down. Again unclear is exactly how many places we can try to police to keep the Oil moving out of the M.E., so this can force a breaking point to occur much faster than just the economics.
In no scenario I can imagine would it behoove our Goobermint or Da Fed to keep issuing essentially free money to the States and Municipal Goobermints. So like Meredith Whitney, I see a period coming of Defaults through these entities, with less and less money circulating through their economies, which means ever falling tax receipts to fund their local Goobermints. This doesn’t mean an overnight failure of the monetary system, but it will put many places in a grinding down phase of increasing poverty which will be very difficult, complete with the kind of social dislocation you see now in places like Greece and Portugal, getting worse as time goes by.
Is this Inflation or Deflation? You could look at it either way, since core commodities will be increasing in price but real wages and purchasing power will be decreasing. Far as Hyperinflation goes, that is another phenomenon altogether, more Political in nature than economic. A given currency has to be more or less abandoned by the BIS and the country cut off from the international trade system to get a hyperinflation rolling. It does not seem likely that the BIS will abandon the Dollar as a currency unless and until there is a workable alternative to it, and there isn’t one on the Horizon at the moment. There will thus be political pressure both internally here and internationally to withdraw credit issuance by Da Fed, which Da Fed is looking for ways to do ever so gently so as not to rock the boat too much, but at this point it is a very unstable boat and very sensitive to perturbation of any kind. The effect remains possible of a virtually instant Lock Up in the financial markets if too much liquidity is withdrawn from the market, because without that liquidity a few margin calls can cause a cascade selling event on the markets with no bottom in sight. The Doomer in me waits impatiently for that day, because it would be a sight to behold indeed. It would make the Flash Crashes we have seen as Coming Attractions look like Chump Change. Credit where credit is due however, Helicopter Ben and the other Geniuses running the Super Computers for the PPT have demonstrated they have the ability to freeze, re-capitalize and manipulate these markets at will, so such an instantaneous crash may never happen. I have been regularly wrong in looking at the collapse at the gross market level because I underestimated just how smart these folks really are and how much control they actually do have over the markets. They cannot stop the eventual recognition though that the system is globally bankrupt, several times over actually.
To conclude this portion of the argument, I don’t think that examining the prices ex-post facto is the best way to understand how the collapse will proceed. In essence what we are looking at is a failure of the Credit-Debit model of the Bond Market at the Sovereign level. Because of the simultaneous geometric growth in population size and the tandem consumption of resources upon which to build those large populations, the ability of Sovereigns to tax out their populations to pay off on Bonds predicated on growth has for all intents and purposes disappeared. Without that ability, what gives money any value at all? Fiat money is a debt instrument, a Note of Zero Duration based on future production that isn’t coming down the pipe. So the fiat system will collapse as a result, though it can be a long grinding collapse because all production does not cease instantly everywhere.
Far as utilizing PMs as money, they do not represent Debt on future production but rather are the result of past production, the effort to dig up and smelt the relatively rare metal and then coin it. What value they actually hold depends upon exactly what there is available to buy with them, and whether it is in surplus or not. Anything still in surplus you will be able to buy with very little Gold; anything not in surplus you may not be able to buy with all the Gold in your basement safe. What you are dependent on here is the overall ability of your society to produce a surplus of food to feed the population, at its most basic level. Here in the FSofA, as long as some portion of the Oil Conduit keeps moving and we can as a society produce a surplus of food, the PMs will hold some value, but trading with them will likely become difficult and dangerous, and the Goobermint confiscation of such things becomes ever more likely if they gain any traction as a trading mechanism. I do not think they will gain such traction in most places, so I think the value of these metals will fall with respect to more necessary items.
In the medium term as a result, I see fewer Dollars being available to J6P to buy STUFF, which thus will continue to keep the Dollar valuable to J6P through its scarcity. I just do not see it likely that Helicopter Ben and TPTB will start sprinkling down higher wages and free money to J6P. In this environment, prices can rise as commodities become more scarce and Profit margins disappear on production, but as long as the Dollars are scarce to the consumer of the end products, you cannot support a Hyperinflationary event. The abandonment of the Dollar on the international level of trade by the BIS would cause a Hyperinflation, but there isn’t a readily available alternative to it right now so such an abandonment does not seem immediately likely.
However it does play itself out on the monetary level, inflation or deflation, the primary problem you are going to have is decreasing availability of the products of industrialized society. No matter how much Gold you have, if you want to buy a Plasma TV you won’t be able to do so, because the Plasma TV factories will shut down. Not ENOUGH people will have Gold to buy Plasma TVs to make running such a factory model profitable. You probably won’t miss a Plasma TV all that much, but when the profit margins in producing food along the industrial model disappear, this you will miss VERY much. It is as we approach that stage of the Spin Down that how you position yourself will become very important, because no group of people anywhere ever goes Quietly into the Good Night of Starvation. The industrial model of food production will be replaced on the local level in areas that can produce food for their populations. Farmland that is dependent on water pumped up from deep aquifers utilizing the thermodynamic energy of Oil will no longer produce, so these are not good long term areas for survival.
You cannot know how the climate might change in the future, but where you settle yourself must most certainly right NOW have enough Water dropping down as rainfall or sluicing down from mountains during the spring thaw. Water is NUMERO UNO in picking your hole. After the water, the condition of the local soil for supporting agriculture is the next bet you make, unless you are near a Coast where there is still good fisherie not contaminated by Radioactive Cesium and Iodine effluent from Fuk-U-Shima Nukes or Spilled Oil from BP’s Macondo Well in the GOM. After the water and food are covered, the next one to consider is Energy resources. The best places have all of these things, but of course in the future they will be popular places every last Zombie out there wants to migrate to. No guarantees you or your progeny will be able to keep or “own” the land you live on because you bought it with 10 pieces of Silver from the last Goobermint to run the show in that neighborhood. Your only Property Rights are what you can Protect and Defend, and nobody can do that effectively alone. So pick a place somewhere on the face of the earth with the Water and the Food resources and Good People you affiliate with well, and make yourself ready to defend that little patch of land. Because when this monetary system crashes and when the industrial model goes the way of the Dinosaur which they both inevitably MUST, that is all you will have left. If it is not enough to support you and your Tribe, you too will go the way of the Dinosaur.
See You on the Other Side.
RE