You know you are in trouble when…

Examples of denial are both profound and unacknowledged.

The short-term solution to our problems is the long-term cause of our problems: economic growth

The long-term solution to our problems is the short-term cause of our problems: reduced consumption

All political parties in all countries and almost all citizens, including the few citizens that understand our predicament, reject our best course of action: austerity

Most citizens have no idea how fortunate they are to be alive at this point in history: A Guide to Being Human in the 21st Century

The only problems society does not acknowledge, or discuss, or act on, are the only problems that matter: species extinction, limits to growth, debt, peak oil, overshoot, resource depletion, climate change, sea level rise, fisheries collapse & ocean acidification, nitrogen imbalance & tree decline 

There is evidence that feedback loops are taking over and causing some problems to go exponential: climate change, CO2 emissions, ice loss, sea level rise, debt

The previous year’s worst case predictions are tending to become this year’s most likely prediction: sea level rise

Actions that improve the long-term worsen the short-term: air pollution masks 0.5C of warming, austerity and debt reduction, renewable energy, population reduction 

The only possible permanent solution is rejected by the belief systems of 90+% of citizens: population reduction

The only possible permanent solution is too slow to avoid the worst problems: population reduction laws

Countries fortunate to have a low birth rate often cancel their good fortune with immigration: Canada

Citizens have wildly different beliefs about our predicament: there is no problem; there is a problem but it’s not caused by humans; I don’t want to think about it; technology will save us; it’s in the hands of God; I’ve already done enough; someone else needs to do something first; my actions won’t make a difference; someone else will consume whatever I give up; it’s too late to do anything

Despite wildly different beliefs about our predicament, there is one thing that almost everyone agrees on: I don’t want to change my behavior

The few people who understand the severity of our problems do not set good examples in their personal lives: leaders, climate scientists, environmentalists

The quality of our leaders is declining because those people with high intelligence, wisdom, and integrity do not want to be in charge of our predicament, and because citizens are feeling the impact of overshoot, do not understand what is going on, and are angry: Trump and Clinton

The leader of the free world denies science and issues daily, jaw-dropping, cringe-inducing tweets: Trump

The one world leader that did understand the problem and spoke out was rejected by the citizens and no longer speaks out: Jimmy Carter

We do not acknowledge that the world’s economic problems began with the peaking of a key non-renewable resource: conventional oil

Low energy prices have led citizens to believe we have a glut of fossil energy when in fact: all types of energy have peaked

Citizens believe the exact opposite of reality: technology creates wealth and energy rather than energy creates wealth and technology

Every country has similar economic problems and not one leader anywhere in the world connects the dots and publicly acknowledges the root cause, even after they leave office: energy extraction cost + debt

We do not discuss or act on economic history research that shows countries always get into serious trouble when they permit an important ratio to exceed a threshold we long passed: debt to GDP

Bankers, the creators of money, do not understand the one thing that creators of money should understand: thermodynamics of wealth

The professionals with the most influence on public policy use models that violate the most trusted laws of physics: economists

The scientific theory that explains the relationship between the economy, energy, and climate is ignored by everyone that should understand it: Tim Garrett

The people who deserve the most respect and admiration get the least: scientists

The people who deserve the least respect and admiration get the most: celebrities

All types of non-fossil energy do not provide a substitute for the only energy we can’t live without: diesel for trucks, trains, ships, tractors, and combines, and mining machines; plus natural gas for fertilizer

People who think the shale revolution will make America prosperous and energy independent ignore one thing: facts

Intelligent people who understand the climate change threat, like James Hansen and Bill Gates, and who want business as usual to continue, know that nuclear energy is the only option: peak uranium

If climate deniers continue to win elections and try to maintain the existing electric grid they’ll find that strategy may not work for long: peak coal

Citizens most vulnerable to a fragile global supply chain with only a few days of inventory experience the strongest illusion of abundance and security: inhabitants of rich cities

Most citizens are not even vaguely aware of the invention that enabled their existence and created about 50% of the nitrogen in their bodies: Haber-Bosch conversion of natural gas to fertilizer

Well meaning environmentalists demand that we stop subsidizing fossil energy companies without understanding the source of all that they cherish in modern civilization: fossil energy

Well meaning environmentalists demand that we stop subsidizing fossil energy companies without realizing that many fossil energy companies are going bankrupt: ExxonMobil

A solution frequently advocated makes things worse by accelerating growth and decreasing system resilience: efficiency

The best solution for removing CO2 from the atmosphere is being harmed by the same activity that creates CO2: planting more trees which are then injured or killed by ground level ozone

All climate science models that do not predict disaster now depend on an unproven technology that we probably can’t afford and other species definitely can’t afford: BECCS (bio-energy with carbon capture and storage)

We have not acted to prevent a predictable and very dangerous side effect of trying to maintain business-as-usual with low interest rates: increasing wealth gap

We still enjoy historically vast surplus wealth that could be deployed to improve our future lives but we are squandering it: military, airports, highways, new cars, high rises, etc.

Earth with its diverse complex life and a highly intelligent species is extraordinarily rare, precious, and worth fighting to protect, yet we dream of other barren homes: colonizing Mars

The tool that could be used to unite citizens in common purpose and useful action is instead being used to create tribes that reinforce preexisting beliefs: internet

Many people are hurting and lashing out in anger because they do not understand the cause of their pain: Brexit, Trump, Syria, Venezuela, etc.

The few sources of information that understand and communicate the truth are under threat: fake news

Few people study or heed the best predictor of the future: history

None of our schools teach skills useful and relevant to our future: growing food and other forms of lower complexity life skills

The thing that enabled the evolution of our high intelligence and its ability to understand and act on problems is the same thing that causes our problems and prevents us from acting on them: denial of reality

The theory that best explains our existence and our self-destructive behavior is ignored by everyone, including those people seeking to understand our problems: Varki and Brower’s denial of reality theory

Readers are encouraged to submit additions to the list.

By James Howard Kunstler: Forecast 2017: The Wheels Finally Come Off

Here is Kunstler’s year-end summary and predictions for 2017.

Kunstler does an amazing job of weaving many complex threads into an interesting, coherent, and (I believe) true story.

Long time students of overshoot won’t find any new ideas here but it’s an excellent refresher for experts, and a great place to start for newbies.

This year’s predictions are specific and very short-term so we won’t have long to wait to see if he’s right. If he is wrong, it will likely be in timing rather than outcomes.

Highly recommended.

http://kunstler.com/clusterfuck-nation/forecast-2017-wheels-finally-come-off/

“There is no other endeavor in which men and women of enormous intellectual power have shown total disregard for higher-order reasoning than monetary policy.” — David Collum

By Ludlum and Kunstler: Obama’s Legacy

It’s likely Trump will be really bad, but he’s going to have to work hard to be worse than Obama.

Steve Ludlum and James Howard Kunstler recently wrote nice summaries of Obama’s legacy. I’ve posted them to remind myself in the future just how bad Obama really was. Or perhaps how little power a president actually has.

 

In fact, almost every ‘crime’ the oafish Trump is being accused of in advance has been committed already by preceding administrations including Obama’s, starting illegal wars, snooping on citizens, raping the environment, cozying up to bankers, bankers, bankers and more bankers.

Don’t forget Obama’s ‘drone war’, suspension of habeas corpus, arbitrary imprisonment and torture in secret prisons. These programs took form under Bush but Obama did nothing to end them or much to rein them in.

It’s okay as long as ‘our guy’ does it: it wasn’t Trump who ringed Russia with military bases, missiles and combat formations, it wasn’t Trump who sent spies and provocateurs to destabilize Ukraine or attack Russian clients Syria and Libya from the air. It wasn’t Trump who is engaged in questionable wars in multiple countries across the globe all aimed at driving energy- and resource consumption to the world’s largest energy hog. It isn’t Trump who made al-Qaeda into a defacto ally of the Pentagon and the CIA, who gave the militants arms and training, who enabled the rise of Turkish neo-Ottoman ambition alongside Saudi Salafism and state terror. It was Obama who did all these things and more, following in the footsteps of American presidents going back to Truman.

http://www.economic-undertow.com/2016/12/23/king-trump-the-irrelevant/

 

I didn’t vote for Hillary or Donald Trump (I wrote-in David Stockman). I’m not happy to see Donald Trump become president. But I’ve had enough of Mr. Obama. He put up a good front. He seemed congenial and intelligent. But in the end, he appears to be a kind of stooge for the darker forces in America’s overgrown bureaucratic Deep State racketeering operation. Washington truly is a swamp that needs to be drained. Barack Obama was not one of the alligators in it, but he was some kind of bird with elegant plumage that sang a song of greeting at every sunrise to the reptiles who stirred in the mud. And now he is flying away.

http://kunstler.com/clusterfuck-nation/exit-hope-change/

By Chris Martenson: Get Ready… Change Is Upon Us

I’ve read quite a few good commentaries on the election of Trump but this piece by Chris Martenson is the best as it points to many of the other good articles, and ties them together with a coherent story based on human behavior, economics, and thermodynamics.

I agree with everything that Chris said and have only three points to add.

First, it is true that most cities voted for Clinton and most rural areas voted for Trump. But another more illuminating way to describe this divide is the center vs. the periphery. As the total wealth of a country decreases, the remaining wealth shifts to the centers because that’s where the power is. The result is a widening wealth gap and increasing social unrest.

Second, the total wealth of all countries in the world will decrease a lot over the next decade due to falling net energy. There is nothing that can be done to avoid this. What can be done are policies from enlightened and brave leadership to prevent a widening wealth gap. It remains to be seen if Trump will be enlightened and brave.

Third, in case you haven’t noticed, interest rates are starting to rise. It’s a REALLY big deal if they continue to rise because they will negatively impact just about everything, including Trump’s plan for infrastructure investment. This sets up an interesting natural experiment as central banks know that rising interest rates will implode the system and so will do everything in their power to prevent rates from rising. Many people think central banks have total control of interest rates. I think not. Soon we will know the truth.

https://www.peakprosperity.com/blog/103343/get-ready-change-upon-us

The political upheaval of Donald Trump is best understood through the lens of economic erosion suffered by the vast majority of people.  If a democracy is measured in how well it serves the interests of the majority, the United States is not a democracy at all.

Of course, nearly everyone already knows this. But it’s been all but unspeakable in polite circles to say so.

Now, it is finally becoming okay to voice.

Bailing in the Wrong Direction

European banks are in trouble because some of the money they loaned out will not be repaid because growth is no longer possible.

Expect the wise new rules that require bank owners and customers to bail out banks to be changed so that governments once again can bail out the banks.

Large sums of money in excess of $100,000,000,000 will probably be required.

No government has any savings. All of the bailout money will have to be borrowed on behalf of taxpayers.

Governments cannot repay the debt they already have, let alone another $100,000,000,000+.

Money borrowed by a government that does not have the means to repay it is printed money.

This means we are choosing to destroy the value of future money rather than have less money today.

This will prove to be a serious mistake.

On the Wealth of Citizens: An EU Perspective

The UK voted to leave the EU yesterday.

What’s really going on?

In an industrialized world with abundant resources citizens typically prosper in economies of all sizes.

As populations rise faster than finite resources, the growth rate of per-capita resources slows and eventually must decline. Over time it becomes more difficult to increase the wealth of citizens. In a resource constrained world there are two methods available to grow the wealth of citizens: efficiency and debt.

The first method available to grow the wealth of citizens is to increase the efficiency of producing and using resources. We have done an excellent job of improving efficiency:

  • We optimized the type of energy we use for each application such as using coal and hydro instead of oil to generate electricity, and using oil instead of coal or horses for transportation.
  • We learned how to squeeze oil from sand and rock, how to drill for oil in mile deep oceans, and how to mine coal from the surface with giant machines.
  • We optimized our machines such as switching to lighter fuel-efficient cars, using heat pumps, and abandoning supersonic air travel.
  • We learned how to convert oil and natural gas into cheap and durable materials like plastic.
  • We used electronics and computers to more efficiently control just about everything.
  • We optimized communication with the internet and cell phones.
  • We reduced waste such as insulating our homes.
  • We recycled energy intensive materials such as aluminum cans.
  • We optimized the productivity of our arable land with Haber-Bosch factories that convert natural gas into nitrogen fertilizer, by replacing horses and rain with diesel powered tractors and pumped irrigation, and by growing mono-crops.
  • We optimized the cost of calories by manufacturing high-fructose corn syrup and vegetable oils, and by operating concentrated animal feeding operations.
  • We optimized the harvest of our oceans with powerful ships that net and scrape everything.
  • We optimized the efficiency of global trade with agreements between many countries.
  • We optimized manufacturing by moving it to locations with the lowest labor and energy costs, and the fewest pollution regulations.
  • We optimized shipping with standard containers and ships and trucks to carry them.
  • We optimized distribution to consumers with Walmart and Amazon.

The laws of thermodynamics and the cost of technology and transport mandate a limit to efficiency gains. We are approaching the limits to efficiency improvement.

The second method available to grow the wealth of citizens is to borrow resources from the future. This amazing trick is done with debt. Cash and credit behave the same when spent. Credit however commits us to produce wealth in the future to repay it. This future wealth represents yet to be produced resources. Hence debt’s magic of letting us spend future resources now.

We started using debt in the 80’s to support the wealth of citizens and total debt has grown exponentially since. There are limits to how much debt can be carried by a citizen or government. Money available for living equals income minus interest payments plus any change in debt plus any change in savings.

The combination of stagnating or falling income due to declining per-capita resources and/or rising interest payments eventually imposes a limit on the total debt an individual or government can carry. There are three methods for extending this limit on debt.

The first method for extending debt is to increase the size of economic organizations. Size matters to debt. The larger an economy is the more internal and external resources it can control, the more taxes it can collect, the larger military it can afford, the more confidence and fear it can inspire, and as a consequence, the more credit it can generate. A good example is the USA and the privileges it enjoys from having the world’s reserve currency.

As the wealth of citizens became increasingly dependent on debt there was pressure to increase the size of economic organizations. This in large part explains the formation of the EU. The majority of European countries were keen to join the EU because it promised them access to more debt. Imagine, for example, how much debt and purchasing power an independent Italy with its own currency could have compared to today as a member of the EU.

The second method for extending debt is to reduce the interest rate. We have steadily reduced the interest rate since the early 90’s. We reached the limit of 0% shortly after the 2008 crisis and the interest rate has remained at 0% for an unprecedented 90 months. Some countries are experimenting with negative interest rates however it seems unlikely that this technique will work without dramatic and improbable changes to the rules of money and banking.

The third and final method for extending debt is to print and give money to citizens and/or governments. Most countries have not yet used this method because it reduces confidence in a currency and risks hyperinflation that destroys wealth and can cause war as happened with Germany after WWI. There will be a strong temptation to try this method in the future because it can work well for a period of time. For example, it took 10 years for hyperinflation to take hold after money printing started in Zimbabwe. A politician forced to choose between riots now and hyperinflation 10 years later might well choose to print money.

As an aside, I leave the reader with a question to ponder about the dark side of debt. What will happen if the depletion of finite resources and climate change prevents us from producing the future resources our debts commit us to? The answer to this question explains why I frequently call for reduced public debt.

In summary, a resource constrained world has two methods for supporting the wealth of citizens, efficiency and debt, and as explained above, we are already at fundamental limits for both efficiency and debt.

What must happen next, and what is already starting to happen, is that the wealth of citizens will decrease. This will create social unrest, and given our genetic denial and the difficulty of understanding our complex world, citizens will seek someone to blame.

Yesterday UK citizens blamed the EU. Because most UK citizens do not understand the underlying forces that are causing their hardship they probably have made things worse for themselves, at least in the short-term. Longer term, when there is insufficient affordable oil to support long distance trade, all communities will have to re-localize to survive.

Other independence movements within Europe are building momentum for similar reasons. A primary message of Donald Trump is that “others” are to blame for the hardship of US citizens.

A recurring theme on this blog is that some form of civilization collapse is inevitable and not too many years away. If the majority of citizens do not understand and/or deny what is going on the collapse will be much worse than it needs to be.

We still have sufficient resources to prepare a softer landing zone.

The first step is an adult conversation about what’s really going on.

A Deadly Recipe: One Part Ignorance, One Part Denial

I’ve been paying a little more attention these days to what the main stream media thinks is going on.

They report on government data that says the economy has recovered from the 2008 crisis. They also report on the rise of Trump that indicates many citizens are struggling and angry.

They know that incomes have stagnated while life’s expenses continue to rise but they have no clue what is causing this.

They don’t even have an intelligent theory.

On other important matters obvious to anyone that cares to look such as the climate spiraling out of control, the 6th great extinction of species, and human overshoot starting to bite in some of the weaker countries, they say nothing.

It’s quite amazing.

It seems likely we will collapse with most people having no idea what is causing their pain.

One part ignorance and one part genetic denial is a deadly recipe for war and civil unrest.