Denial is Proportional to the Unpleasantness of the Reality

screaming girl with tightly shut eyes

More evidence that intelligence and education do not reduce reality denial, and that the strength of denial is proportional to the unpleasantness of the reality, as Varki’s Mind Over Reality Transition theory predicts.

Two hundred scientists were recently surveyed on their perceptions of global risks.

https://futureearth.org/initiatives/other-initiatives/grp/the-report/

Top risks by likelihood:
1. Extreme weather
2. Biodiversity loss
3. Water crises
4. Climate change
5. Urban planning
6. Man-made disasters
7. Involuntary migration
8. Food crises
9. Asset bubbles
10. Illicit trade

Top risks by impact:
1. Extreme weather
2. Climate change
3. Water crises
4. Biodiversity loss
5. Food crises
6. Man-made disasters
7. Urban planning
8. Natural disasters
9. Involuntary migration
10. Interstate conflict

Notice that depletion of affordable fossil energy does not make their list.

Notice also that fossil energy scarcity will worsen every single one of the risks they are worried about, except maybe climate change, and a good argument can be made that oil scarcity will in fact worsen climate change because we will probably burn anything and everything to survive.

Notice also that all actions (except rapid population reduction) to mitigate any of the risks the scientists are worried about requires surplus wealth that only abundant affordable fossil energy can generate.

Notice also that depletion of affordable fossil energy is a problem today for every country in the world, not a vague future risk, nor a risk for future generations, nor a risk that effects only a subset of less fortunate countries. Affordable fossil energy depletion is at the core of global social unrest caused by growing wealth inequality and falling standards of living, unsustainable runaway government debt that threatens monetary stability, and a dangerous asset bubble that threatens a collapse rather than a decline.

Notice also that fossil energy depletion (and climate change) is the only risk that we can’t do anything about, except make do with less, and rapidly reduce our population.

Notice also that most scientists believe we can keep our lifestyles and reduce the threat of their top risk, climate change, by switching from fossil energy to renewable energy, which is a thermodynamic impossibility.

Notice also that fossil energy depletion is the only risk that has 100% certainty.

The only reality more certain and more unpleasant than fossil energy depletion is our mortality, which I’ve previously discussed.

That’s why fossil energy depletion is not on the risk list of our best and brightest.

The strength and ubiquity of human reality denial is amazing!

h/t Alex Smith @ Radio Ecoshock

P.S.  This talk by engineer Jean-Marc Jancovici, which I posted a couple years ago here, is one of the best explanations of why everything I said above about the depletion of affordable fossil energy is true. In 90 minutes Jancovici demolishes pretty much everything the idiot professions of economics and central banking believe.

On the Avengers and Denial

Thanos

I finally got around to watching the top grossing movies of 2018 and 2019, Avengers: Infinity War ($2.1 billion) and Avengers: Endgame ($2.8 billion).

This type of movie, with extreme fantasy super heroes and over the top special effects, is not my cup of tea, but I decided to watch them to get some insight into what our culture is thinking.

The bad guy, Thanos, understands that the universe is in overshoot which will soon cause extreme suffering from wars and starvation, so he acquires a technology to humanely vaporize 50% of life, without causing any suffering, so that the remaining 50% can live in peace and plenty, with new found awareness to constrain their populations going forward.

The good guys, played by the largest and most expensive collection of movie stars ever assembled, think Thanos’ plan is evil, and spend the next 5 hours of multi-million dollar special effects to thwart his plan.

In the end the good guys “win” by vaporizing Thanos and his thousands (millions?) of evil helpers. The outcome for civilization is vague but it seems technology solved the overshoot problem by providing more stuff so everyone had plenty. There was no tying up of loose ends to explain why Thanos’ all powerful technology could not have done the same.

Sadly, two of the heroes are killed in the final fight, but we are promptly and explicitly informed that their spirits live on, and that they know their sacrifices were not in vain.

I skimmed a few fan forums that debate the plot and motives of Thanos. As you might expect there was lots of heat and noise.

Fortunately, one of our most respected and well known scientists, Neil deGrasse Tyson, stepped up with a tweet to comfort the world that brilliant physicists think we’ll be just fine as long as we push on to Mars:

It’s a reasonable assumption that popular movies reflect the current zeitgeist of our culture and I observed the following:

  • The fact that the Avengers explicitly discussed the perils of overshoot suggests that many people must be thinking, at least subconsciously, about our predicament.
  • Which role was assigned to the bad guys, and which to the good guys, demonstrates how exactly wrong our culture is about reality.
  • The movie’s finale demonstrated once again how strongly our species denies death.
  • Neil deGrasse Tyson demonstrates that our best and brightest deny reality as strongly as the common man.

 

In a similar vein, a top grossing movie of 2014, Kingsman: The Secret Service, is a Tarantino’ish version of James Bond whose bad guy understands that the only way to address climate change is to rapidly reduce the population. The wrong guys win again in this movie.

 

The 2013 TV show Utopia, was cancelled after only 2 seasons, perhaps because it had a little too much reality.

Endgame

Interest Rate Response

I don’t read ZeroHedge much anymore because they don’t understand and/or deny the relationships between energy, overshoot, and the economy.

Today the US Fed lowered the interest rate so I had a peak at ZeroHedge to see what the knuckleheads were saying. It seems we’re approaching a Minsky Moment.

https://www.zerohedge.com/news/2019-07-31/endgame-starting-2024-all-us-debt-issuance-will-be-used-pay-only-interest-debt

Endgame: Starting In 2024, All US Debt Issuance Will Be Used To Pay Only For Interest On Debt

As we first pointed out back in March, when looking at the US ‘income statement’, most concerning by far is that for the first four months of fiscal year 2019, interest payments on the U.S. national debt hit $221 billion, 9% more than in the same five-month period last year, with the rate of increase breathtaking (see chart below). As a reminder, according to the Treasury’s conservative budget estimates, interest on the U.S. public debt is on track to reach a record $591 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to almost 3% of estimated GDP, the highest percentage since 2011. In fact, as of June 30, US interest had already surpassed $600 billion.

In short: in the stylized cycle of the US “Minsky Moment”, the US will enter the penultimate, Ponzi Finance,phase – the one in which all the new debt issuance is used to fund only interest on the debt – some time around in 2024.

From that point on, every incremental increase in interest rates, which will eventually happen simply due to rising inflation expectations, will merely accelerate the ponzi process, whereby even more debt is sold just to fund the rising interest on the debt, requiring even more debt issuance, and so on, until finally the “Minsky Moment” arrives.

At that point, while we don’t know yet what the next reserve currency – either fiat, hard or digital – after the US dollar will be, we urge readers to own a whole lot of it.

In case you don’t understand any of this, let me simplify:

We are using more debt to fix too much debt, and not one of our leaders understands that fossil energy depletion is why we have to borrow $3 $4 of debt to generate $1 of growth, nor that doing so is a really bad idea.

Removing the Safety Valves

Pressure Cooker

Something big has recently changed in our culture.

We no longer accept any unpleasant reality, no matter the costs of denying it, nor the benefits it might return in the long run.

For example, parents who do not permit their children to play unsupervised for fear of a scuff. And school teachers who no longer fail anyone and mark all students as above average. And high schools that fly their students to Europe rather than make them sweat on the West Coast trail. And universities that have dumbed-down their curriculums. And citizens who refuse to accept election results and blame fictional demons rather than questioning their own beliefs. And environmentalists who promote green growth rather than austerity and population reduction.

Recessions function like the safety valves on a pressure cooker that prevent a dangerous explosion. Recessions used to be viewed as a normal event that purged malinvestments and poor performers thus allowing healthy re-growth in the next cycle.

Today we are unwilling to accept any downturn. As soon as the markets start to drop the central banks step in to prop them up. Extraordinary measures have become ordinary. The absurd has become normal.

We’ve removed most of the safety valves and the pressure is building. Soon the pressure will be so high that we’ll be forced to remove the last safety valve and start handing out printed money to citizens, thus risking a repeat of the Weimar event and its terrible consequences.

It’s not like we need to abandon capitalism and free markets. To the contrary, all we need to do is let markets function the way we pretend they function.

I understand all the thermodynamic reasons that we might not want to let a recession take root, but I ask you, how is delaying the inevitable going to make things better? It’s not. It’s going to make things much worse.

Our only choices are do we want to fall from a higher elevation later, or climb down from a lower elevation sooner?

Where are the adults?

The Fed Stops Pretending by Peter D. Schiff

The elephant in the room that no one wants to acknowledge is that the “unconventional” policies that were introduced to fight a “once in a century” crisis are now the conventional policies of choice to combat the normal fluctuations of the business cycle. But zero percent interest rates and quantitative easing only worked a decade ago because people thought they were temporary. If they knew that the policies were permanent, the dollar may have plummeted and the resulting inflation may well have overwhelmed any benefits the stimulation delivered. But the naïve belief that the Fed could reverse course, unwind its bloated balance sheet and normalize interest rates, kept the game going and kept the dollar strong. Now that the illusion may about to be shattered, the dollar may not survive the next round of enhanced QE and ZIRP.

QE4 will have to be larger than the three earlier rounds combined, as the annual Federal budget deficits could exceed 3 trillion. However, while China, Russia, and many emerging market nations were eager buyers of Treasuries during those initial rounds, they may likely be sellers of Treasuries during the next round. That means none of the inflation created to finance QE would be exported. So the big price increases next time may take place in the supermarket rather than the stock market. Americans would finally be forced to deal with the adverse effects of inflation that we have been spared for the past 10 years. It’s not going to be pretty.

https://www.fxstreet.com/analysis/the-fed-stops-pretending-201906100556

Hat tip to Panopticon for his excellent daily posts on the economy and climate.

https://climateandeconomy.com/2019/06/10/10th-june-2019-todays-round-up-of-economic-news/