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Gail Tverberg: The world’s weird self-organizing economy

Gail Tverberg: The world’s weird self-organizing economy thumbnail

Why is it so difficult to make accurate long-term economic forecasts for the world economy? There are many separate countries involved, each with a self-organizing economy made up of businesses, consumers, governments, and laws. These individual economies together create a single world economy, which again is self-organizing.

Self-organizing economies don’t work in a convenient linear pattern–in other words, in a way that makes it possible to make valid straight line predictions from the past. Instead, they work in ways that don’t match up well with standard projection techniques.

How do we forecast what lies ahead? Today, some economists believe that the economy of the United States is in danger of overheating. Others believe that Italy and the United Kingdom are facing dire problems, and that these problems could adversely affect the world economy. The world economy should be our highest concern because each country is dependent on a combination of imported and exported goods. The forecasting question becomes, “How will divergent economic results affect the world’s economy?”

I am not an economist; I am a retired actuary. I have spent years making forecasts within the insurance industry. These forecasts were financial in nature, so I have had hands-on experience with how various parts of the financial system work. I was one of the people who correctly forecast the Great Recession. I also wrote the frequently cited academic article, Oil Supply Limits and the Continuing Financial Crisis, which points out the connection between the Great Recession and oil limits.

Today’s indications seem to suggest that an even more major recession than the Great Recession may strike in the not too distant future. Why should this be the case? Am I imagining problems where none exist?

The next ten sections provide an introduction to how the world’s self-organizing economy seems to operate.

[1] The economy is one of many self-organized systems that grow. All are governed by the laws of physics. All use energy in their operation.

There are many other self-organizing systems that grow. One such system is the sun. Some forecasts indicate that it will keep expanding in size and brightness for about the next five billion years. Eventually, it is expected to collapse under its own weight.

Hurricanes are a type of self-organizing system that grows. Hurricanes grow over warm ocean waters. If they travel over land for a short time, they can sometimes shrink back a bit and grow again once they have an adequate source of heat-energy from warm water. Eventually, they collapse.

Plants and animals also represent self-organizing systems that grow. Some plants grow throughout their lifetimes; others stabilize in size after reaching maturity. Animals continue to require food (a form of energy) even after they stabilize at their mature size.

We can’t use the typical patterns of these other growing self-organized systems to conclude much about the future path of the world’s economic growth because individual patterns are quite different. However, we notice that cutting off the energy supply used by any of these systems (for example, moving a hurricane permanently over land or starving a human) will lead to the demise of that system.

We also know that lack of food is not the only reason why humans die. Based on this observation, it is a reasonable conclusion that having enough energy available is not a sufficient condition to guarantee that the world economy will continue to operate as in the past. For example, a blocked shipping channel, such as at the Strait of Hormuz, could pose a significant problem for the world economy. This would be analogous to a blocked artery in a human.

[2] The use of energy products is hidden deeply within the economy. As a result, many people overlook their significance. They are also difficult for researchers to measure. 

It is easy to see that gasoline provides the energy supply needed for our cars, and that electricity provides the power needed to clean our clothes. What is missing? The answer seems to be, “Everything that makes humans different from wild animals is something that was made possible by the use of supplemental energy in addition to the energy from food.”

All goods and services require the use of energy. While some of this energy use is easy to see, other portions are well hidden. Energy used in manufacturing and transport is most visible; energy used in services tends to be hidden.

Governments are major users of energy, both for their own programs and for directing energy use to others. Retirees get the benefit of goods and services made with energy products through pension checks issued by governments; researchers get the benefit of goods and services made with energy products through research grants they receive. Wars require energy.

Medical treatments are possible because of the availability of medicines and equipment made with energy products. Schools and books, as well as free time to study in schools (rather than working in the field), are possible because of energy consumption. Jobs of all kinds require the use of energy.

One thing we don’t often consider is that if energy supplies are growing sufficiently, they permit an expanding population. In fact, expanding population seems to be the single largest use of growth in energy consumption (Figure 1). Growing energy consumption also seems to be associated with prosperity.

Figure 1. World energy consumption growth for ten-year periods (ended at dates shown) divided between population growth (based on Angus Maddison estimates) and total energy consumption growth, based on the author’s review of BP Statistical Review of World Energy 2011 data and estimates from Energy Transitions: History, Requirements and Prospects by Vaclav Smil.

[3] Prices of energy services need to be low relative to overall costs of the economy. Falling energy costs relative to overall GDP tend to encourage economic growth.

Most economists expect energy prices to represent a large share of GDP costs, if energy is truly important. The statement above says the opposite. There are at least two reasons why low energy prices, and energy prices that are truly falling when inflation and productivity changes are considered, are helpful.

First, tools (broadly defined) used to leverage the labor of human workers often require considerable energy to manufacture and operate. Examples of such tools include computers, machines used in manufacturing, vehicles, and roads for these vehicles to drive on. The lower the cost to purchase and operate these tools, relative to the benefit of the tools, the more likely employers are to purchase them. If energy costs tend to fall over time, it becomes progressively easier to add more tools to leverage the labor of employees. Thus, employees become increasingly productive over time, raising the economy’s output of goods and services. For a similar reason, rising energy costs, if not offset by efficiency gains, present a barrier to economic growth.

Second, if the cost of energy production is low, it is easy to tax energy producers and thereby capture some of the benefit of their energy for the rest of the economy. If there is truly a “net energy” benefit to the economy, this is one way it gets transferred to the rest of the economy.

[4] There is indeed an energy problem, but it is not quite the same one that Peak Oilers have been concerned about.

The energy problem that Peak Oilers write about is the possibility that as easy-to-extract oil supplies deplete, oil production will reach a peak in production and begin to decline. Once decline sets in, they expect that oil prices will rise, partly because of the higher cost of production and partly because of scarcity. With these higher prices, they expect that producers will be able to extract at least a portion of the remaining oil resources. They also expect that higher prices will allow portions of the remaining natural gas and coal resources to be extracted. With higher prices, expanded use of renewable energy is expected to become feasible. All of these energy sources are expected to keep the economy operating at some level.

There are several problems with this story. First, it tends to encourage people to look for high oil prices as a sign of an oil shortage. This is not the correct indication to look for. Prior to 1970, oil prices averaged less than $20 per barrel. Comparing pre-1970 prices to today’s oil prices, current prices are already very high, at $75 per barrel. The idea that oil prices can keep rising indefinitely assumes that there is no affordability limit. Furthermore, a loss of energy consumption can be expected to reduce demand (because of its impact on jobs, productivity, and wages) at the same time that it reduces supply. If both supply and demand are affected, we don’t know which way prices will move.

Second, my analysis suggests that part of the story is that total energy consumption is very important, including oil, coal, natural gas, nuclear, and various forms of electricity. All of the attention given to oil has drawn attention away from the economy’s need for a range of energy types to keep devices of all types operating. Deciding to reduce coal usage because of pollution issues, or deciding to shut down nuclear because it is aging, has an equally adverse impact on the economy as reducing oil supply, unless the shortfall can be made up with other energy products of precisely the type needed by current devices.

Third, my analysis suggests that energy consumption per capita needs to rise for the economy to function in the way that we expect it to function. If world energy consumption per capita is too flat, we can expect to see many of the symptoms that the world has been experiencing recently: more radical leaders, less cooperation among leaders, slowing economic growth and increasing debt problems. In fact, wars are possible, as are collapses of governments (as with the Soviet Union central government in 1991). The current situation seems to be more parallel to the 1920 to 1940 flat period than it does to the 1980 to 2000 flat period.

Finally, with low energy prices rather than high quite possibly being much of the problem, there is a significant chance that oil and other production will decline because producers do not make enough profit for reinvestment and because oil exporting countries cannot collect enough taxes to fund the many subsidies that citizens expect. This makes for a steeper energy decline than forecast by Peak Oilers; it also reduces the possibility that high-priced renewables will be helpful.

[5] Part of the world’s energy problem is a distribution problem; the world becomes divided into haves and have-nots in many ways. It is this distribution problem that tends to push the world economy toward collapse. 

There are many parts to this distribution problem. One is the distribution of goods and services (created using energy) by country. Over time, this tends to change, especially as commodity prices change. Oil exporters are favored when oil prices are high; oil importers are favored when oil prices are low. The relative values of currencies can change quickly, as commodity prices change.

Another part of this distribution problem is growing wage and wealth disparity, as more technology is added. If there is too much wage disparity, low-paid workers often cannot afford adequate food, homes, and transportation for their families. Their lack of demand for goods made with energy products (because of their low wages) tends to work through the system as low commodity prices. This happens because (a) there are so many of these workers and (b) these workers tend to purchase a disproportionate share of goods and services that are highly energy-dependent.

[6] Debt-like promises play a major role in making the economy operate.

Taking out a loan allows an individual or business to purchase goods without saving for the purchase in advance. To some extent, taking out a loan moves up moves up the timing of purchases. At times, it even permits purchases that otherwise would not be possible. For example, if a young person tries to decide between (a) working at a low wage until he has saved up enough to afford to go to college and (b) taking out a loan and going to school now, so his wages would be higher in future years, his optimal choice will often be scenario (b). The time would likely never come when the low-paid individual could save up enough wages to afford to go to college. If the young person strongly desires high wages, his optimal strategy would be to take the loan and hope that his future wages will be high enough to repay it.

If the goal of the economy is to produce an ever-increasing amount of goods and services, growing debt can very much help this growth. This happens because with more debt, more individuals and businesses can afford* to buy the goods and services that they want now. In a sense, debt acts like a promise of the future energy needed to make future goods and services with which the loan can be repaid. Thus, adding debt acts a somewhat like adding energy to the economy.

Because of the way debt works, the economy behaves much like a bicycle, with growing debt pulling the system forward. If the economy is growing too slowly, the tendency is to add more debt. This solution works if a rapidly growing supply of cheap-to-produce energy is available; the additional debt can be used to create a growing supply of affordable goods and services. If energy costs are high, the goods and services produced tend to be unaffordable.

Figure 2. The author’s view of the analogy of a speeding upright bicycle and a speeding economy.

A bicycle needs to operate at a fast enough speed (about 7.5 feet per second), or it will fall over. Similarly, the world economy needs to grow fast enough, or it will not be able to meet its obligations, including repayment of debt with interest. If the economy grows too slowly, debt defaults are likely to grow, pulling the economy down.

[7] It looks like it should be possible to work around energy problems with improved technology, but experience suggests that this approach represents only a temporary “fix.”

There are two issues that make improved technology less of a solution than it appears to be. The first is diminishing returns. For example, if a business faces a choice between (a) paying a worker to perform a process and (b) adding a machine to that can perform the same process, the business will tend to make the changes that seem to provide the largest cost savings first. At some point, as more technology is added, capital costs can be expected to become excessive relative to the human labor that might be saved. The issue of the diminishing returns to added complexity (which includes growing technology) was pointed out by Joseph Tainter in The Collapse of Complex Societies.

The second reason why added technology tends to be only a temporary solution is because it tends to lead to wage disparity. Wage disparity has a tendency to grow because of the greater specialization and larger organizations needed to coordinate the ever-larger projects. The reduced purchasing power of those at the bottom of the hierarchy can eventually bring an economy down because it can lead to commodity prices that are below the level needed to maintain the extraction of fossil fuels. Fossil fuels are required to maintain today’s economy.

[8] Renewable energy has been vastly oversold as a solution. What is needed is an ever-increasing quantity of inexpensive energy in forms that match the energy needs of current devices. 

The wind and solar story is far different from the story presented in the press. Essentially, wind and solar are extensions of today’s fossil fuel system. The evidence that they are truly beneficial to the economy is shaky at best. We know that if energy sources are truly transferring significant “net energy” to the system, they generally can afford to pay high taxes. The fact that wind and solar require subsidies raises questions regarding whether standard calculations are providing accurate guidance. The press rarely mentions the high tax revenue that high oil prices make possible, worldwide. Tax revenues largely support many oil exporting countries.

Furthermore, the share of the world’s energy supply that wind and solar provide is very low: 1.9% and 0.7%, respectively. They are shown in the almost invisible blue and orange lines at the very top of Figure 3. Fossil fuels contributed 85% of total energy supply in 2017.

Figure 3. World energy consumption divided between fossil fuels and non-fossil fuel energy sources, based on data from BP Statistical Review of World Energy 2018.

[9] The world economy becomes very fragile as energy limits approach.

Energy limits seem to be affordable energy limits. Oil prices need to be high enough for exporting countries to obtain adequate tax revenue. In addition, oil producers need prices that are high enough so that they can make the necessary reinvestment, as fields deplete. At the same time, energy prices need to be low enough for consumers to afford goods and services made with energy products.

Much of developed world’s infrastructure was built when oil prices were less than $20 per barrel, in inflation-adjusted terms. A rising price of oil will lead to a higher cost of replacing roads and pipelines. If these were built using $20 per barrel oil, even a current price of $40 per barrel would represent a significant cost increase. The world has experienced high oil prices for sufficiently long that we have collectively forgotten how low oil prices were between 1900 and 1970.

Most people know that the earth holds a huge quantity of energy resources. The problem is extracting these resources in a way that is both affordable to consumers and sufficiently high-priced for producers. Falling long-term interest rates between 1981 and 2002 allowed the world economy to tolerate somewhat higher oil and other energy prices than it otherwise could because these falling interest rates permitted ever-lower monthly payments for a given loan amount. For example, if interest rates on a $300,000 mortgage would fall from 5% to 4% on a 25-year mortgage, monthly payments would decrease from $1,753 to $1,584. The lower interest rates would allow more people to buy homes of with a given size of mortgage. Indirectly, the lower mortgage rates would permit additional new homes to be built and would allow more inflation in home prices. These benefits would at least partially offset the adverse impact of high energy prices.

Since the natural decline in long term interest rates stopped in 2002, the world economy has become increasingly fragile; the Great Recession took place in 2007-2009, when oil prices spiked and long-term interest rates were already low by historical standards. It was only when United States’ program of quantitative easing (QE) was put in place that long-term interest rates could fall to even lower levels, helping the economy hide the problem of high energy prices a little longer.

The artificially low interest rates made possible by QE have problems of their own. They tend to inflate asset prices, including both real estate prices and stock market prices. Thus, they tend to create bubbles, which are prone to collapse if interest rates rise. Artificially low interest rates also tend to encourage investment in schemes with very low profit potential. Artificially low interest rates also encourage cross-border investments to try to take advantage of interest rate differences. If interest rate relativities change, the money that quickly would enter a county can almost as quickly leave the country, causing major fluctuations in currency relativities.

Regulators do not understand the role that physics plays in making the economy operate as it does. They assume that they, alone, have the power to make the economy behave as does. They do not understand how important falling interest rates are in creating growing demand for goods and services. The economy, since 1981, has spent most of its time with falling interest rates; the most recent part of this decline in long-term interest rates has been made possible by QE. These falling interest rates have played a major role in disguising the world’s long-term problem of rising energy costs. These rising energy costs are taking place primarily because the cheapest-to-extract resources were produced first; the resources that are left are have higher costs associated with them, for a variety of reasons, such as being farther away from the user, deeper, or needing more advanced extraction techniques. These issues have not been sufficiently offset by improved technology to keep extraction costs low.

US regulators now want to raise interest rates by raising short term interest rate and by selling QE securities. They don’t understand that they are playing with fire. They feel that they will have more power if they can raise interest rates now, they will have the flexibility to lower them later if the economy should later slow excessively. They don’t understand how much of the world’s economy may really be a bubble, created by the decline in interest rates since 1981.

[10] The adverse economic outcome we should be concerned about is collapse, as encountered by prior civilizations when their economies hit limits. 

The stories in the press have been so focused on oil “running out” and finding alternatives to oil that few have stopped to ask whether this is really the correct story. Instead of creating a new story, it might have been better to look more closely at history. Based on the historical record, collapse seems to have be associated with situations where populations have outgrown their resource bases. In other words, collapse can be considered an energy consumption per capita problem. The oil problem (and other fuel problem) we are facing today can be viewed as an energy consumption per capita problem, as well.

We know from research that has been done by Peter Turchin, Joseph Tainter, and others how collapse has played out in the past. The situation is different this time, however, because the world economy is very interconnected. Oil consumption depends on electricity consumption, and vice versa. Our financial system is also extraordinarily important. For these reasons, a collapse may occur more quickly than in the past.

Differences Between My View and the Standard View

One of the big differences between the way I see the economy and the standard view of the economy is the answer to the question of “Who is in charge?” The standard view is that politicians and economists are in charge. They have all of the answers. The dire collapse outcomes that afflicted early civilizations could not possibly affect us. We are too smart. We know how to adjust interest rates correctly. We can even make QE available to lower long-term interest rates. We can also add more technology and other complexity than has ever been added in the past.

The answer I see to the question, “Who is in charge?” is, “The laws of physics are in charge.” Politicians play a fairly minor role in directing the fate of economies. If there is not enough energy available of the type needed (inexpensive and matching the current infrastructure), the economy may very well collapse. It is nature and the laws of physics that call most of the shots.

Another big difference between my view and the standard view is the observation that a decrease in oil supply (or total energy supply) affects both the supply and demand of energy. Because both supply and demand are affected, we don’t know which direction oil and other energy prices will move. They may move erratically, as interest rates are adjusted by regulators. A more complex model is needed.

Climate change becomes less of an issue in my view of the future, for several reasons. First, humans don’t really have very much control over the direction of the economy, so talking about anthropogenic climate change doesn’t make a whole lot of sense. The laws of physics that allowed human population to rise are also allowing climate change to happen. Second, we seem to be limited in our ability to use renewables to fix the situation. Furthermore, the possibility of collapse in the near future makes the various scenarios that hypothesize the use of large amounts of fossil fuels over many years in the future seem very unrealistic. Perhaps efforts to fix climate change should be focused in new directions, such as planting trees.

Help from Others

The subject matter of this post requires the knowledge of information from a wide range of academic areas. I could not have figured out all of this information on my own. I have been fortunate to have been able to learn from of a wide range of experts. Quite a number of academic groups have seen may articles, and invited me to speak at their conferences. In particular, I have had a long-term involvement with the BioPhysical Economics organization and have spoken at many of their conferences. I have learned much from Dr. Charles Hall, although at times I don’t 100% agree with him.

I have also learned from the many commenters on OurFiniteWorld.com. They form a self-organizing system of people from a wide range of backgrounds. Earlier, my involvement at TheOilDrum.com as “Gail the Actuary” allowed me to get acquainted with a range of researchers, looking at different aspect of the energy problem.

In future posts, I intend to expand further on the ideas presented in this post.

*Here I am using the term afford loosely. What borrowers can actually afford is the current required monthly payments.

 Our Finite World  by Gail Tverberg



64 Comments on "Gail Tverberg: The world’s weird self-organizing economy"

  1. MASTERMIND on Thu, 12th Jul 2018 6:42 pm 

    I would love to see clogg, madkat, and greg go over to gail’s blog and spew their nonsense..They would get their shit tossed so fast by me and fast eddy..

  2. Makati1 on Thu, 12th Jul 2018 7:12 pm 

    MM, you make the Mad Hatter in Alice in Wonderland look like Einstein. lol

    BTW: Gail is writing for $$$. Nothing more. A waste of time to go there and read anytime.

  3. MASTERMIND on Thu, 12th Jul 2018 7:30 pm 

    Madkat

    Gail doesn’t write for any money..She is retired and she doesn’t even allow any advertisements on her blog..

    Another baseless claim..I think your dementia is kicking in full throttle now..

  4. Makati1 on Thu, 12th Jul 2018 8:04 pm 

    MM: Sure she writes for money. One can never have too much. And, she benefit$ from her tour$, besides the fact that her writings are just opinions, not facts. How does she get tour$ if not through her constant writing? It’s all a ‘job’ for her. She is NOT retired if she is still active in her endeavors for $$$.

    Opinion: “a view, judgment, or appraisal formed in the mind about a particular matter.” M-W

    What I post here is my ‘opinion’ of events with refs to back up my assertions. I formed my ‘opinion’ by reading tens of thousands of ‘opinions’ and observing the real world 24/7/365. That requires some original thought, foreign to some here like MM and Davy.

  5. DMyers on Thu, 12th Jul 2018 8:13 pm 

    Basically Gail is saying the world is fucked and headed for collapse. That’s not a message that draws patrons, but I’m good if she’s making a little something from Peak Prosperity and Automatic Earth.

  6. jawagord on Thu, 12th Jul 2018 8:40 pm 

    I wanted to read this article to see what sort of peak oil redux Gail would weave into her analysis but I just couldn’t get past the first piece of stupidity knowing there would be 9 more to go.

    [1] The economy is one of many self-organized systems that grow. All are governed by the laws of physics.

    Shades of ETP!

  7. MASTERMIND on Thu, 12th Jul 2018 8:43 pm 

    Madkat

    She doesn’t get paid for anything..You say that about all the science papers i posted as well..You just make up lies because you know the facts speak for themselves..You just attack the messenger..You judge an argument on its merits.

    You would know these things if you were educated..

  8. GregT on Thu, 12th Jul 2018 10:48 pm 

    “I would love to see clogg, madkat, and greg go over to gail’s blog and spew their nonsense..They would get their shit tossed so fast by me and fast eddy..”

    I have been talking about collapse for much longer than you, fast eddy, or Gail have been MM.

    Economic collapse does not equal to global mass extinction, the long term continuation of MIS most certainly does.

  9. MASTERMIND on Thu, 12th Jul 2018 11:23 pm 

    cloggs great mustard race that is going to defeat the globalist

    https://i.redd.it/72wmm36kdi911.jpg

  10. Cloggie on Thu, 12th Jul 2018 11:47 pm 

    Richard is growing a mustache lately:

    https://www.youtube.com/watch?v=EFagvNq6-QM

    Wonder where he has picked that up from?

    Hmmm…

  11. Antius on Fri, 13th Jul 2018 4:24 am 

    An interesting article produced by Gail. I have extracted some important statement in the text below:

    “The energy problem that Peak Oilers write about is the possibility that as easy-to-extract oil supplies deplete, oil production will reach a peak in production and begin to decline…

    There are several problems with this story. First, it tends to encourage people to look for high oil prices as a sign of an oil shortage. This is not the correct indication to look for. Prior to 1970, oil prices averaged less than $20 per barrel. Comparing pre-1970 prices to today’s oil prices, current prices are already very high, at $75 per barrel. The idea that oil prices can keep rising indefinitely assumes that there is no affordability limit. Furthermore, a loss of energy consumption can be expected to reduce demand (because of its impact on jobs, productivity, and wages) at the same time that it reduces supply. If both supply and demand are affected, we don’t know which way prices will move.

    Finally, with low energy prices rather than high quite possibly being much of the problem, there is a significant chance that oil and other production will decline because producers do not make enough profit for reinvestment and because oil exporting countries cannot collect enough taxes to fund the many subsidies that citizens expect. This makes for a steeper energy decline than forecast by Peak Oilers; it also reduces the possibility that high-priced renewables will be helpful.”

    In other words, in situations where oil shortages are leading to economic damage, price ceases to be a reliable indicator of abundance, because economic dislocation destroys demand and reduces the price that consumers can afford to pay. In this way, low oil prices are often a sign of affordability issues stemming from depletion and destruction of wealth generating activities and are not an indicator of abundance. This is likely true of other energy sources as well. This has been continuously misunderstood by economists, who invariably view low price as a sign of abundance. For luxury resources it is, but for resources that are essential for economic output, it doesn’t work that way.

    This makes it very difficult to mitigate the energy depletion problem with more expensive substitutes like renewable energy. To mitigate the problem, we need cheap energy.

  12. Makati1 on Fri, 13th Jul 2018 4:34 am 

    America’s suicide…

    “America’s Addictions
    Opioids, Donald Trump, and War”

    http://www.tomdispatch.com/post/176444/tomgram%3A_engelhardt%2C_overdosing_in_twenty-first-century_america/#more

    Slip slidin’…

  13. Antius on Fri, 13th Jul 2018 5:03 am 

    “America’s suicide…“America’s Addictions Opioids, Donald Trump, and War””

    Makati, you are like a ghoul, feeding on human death and misery.

    There is nothing to celebrate in the death and destruction of so many little people, who never had much of a chance in life. The Globalist Semite Neo-Cons in Washington bear the heavy responsibility for having destroyed the American nation and it’s people. I pray that the bastards face justice and the Donald brings them the ruin they so rightly deserve.

  14. Makati1 on Fri, 13th Jul 2018 6:43 am 

    Antius, reality is a bitch. and the real world is full of pain these days. I don’t celebrate death but I will celebrate when the Us is brought down so millions of innocents around the world do NOT die in the future from the Us’ wars of choice. It has to be financially unable to man 800 plus bases and 12 carrier fleets. To keep half a million troops in foreign lands. To be limited to the 5% of the world’s resources instead of today’s 20+%. THAT is what I am cheering for. Maybe it is time Americans feel the pain they have brought to most of the world.

    So far, Trump seems to be doing their will, destroying America. I keep telling people that the Great Leveling is part of the Neocon plan to bring the Us down to the level of the rest of the world. The One World thingy cannot happen until after that is accomplished. There can be no one country able to dominate the others. Think about that.

  15. MASTERMIND on Fri, 13th Jul 2018 6:52 am 

    Madkat

    Humans, wolves, and chimps kill other members of their own kind for numerous reasons all the time..if it wasn’t the US doing it, someone else would..You are ignorant of biology..

    and you take pleasure in seeing others suffer..You are sick and disgusting person.

  16. Makati1 on Fri, 13th Jul 2018 6:57 am 

    You are just plain ignorant, MM. Not to mention suicidal and delusional. You have no more idea of the real world than my cat. Come to think of it, he has a more realistic picture. Zombies and canniness again? You really need help.

  17. Davy on Fri, 13th Jul 2018 8:34 am 

    “Antius, reality is a bitch. and the real world is full of pain these days. I don’t celebrate death”

    Antius is right, you are disgusting 3rd world. You use your excuses for celebrating death. You like when people die. When a natural disaster comes you are all over it. People like you deserve to be dead. In your case it is just a few years away.

  18. Davy on Fri, 13th Jul 2018 8:36 am 

    3rd world has a cat. what diD you name it “TIGER” lol

  19. GregT on Fri, 13th Jul 2018 9:06 am 

    “Antius is right”

    Antius said:

    “The Globalist Semite Neo-Cons in Washington bear the heavy responsibility for having destroyed the American nation and it’s people. I pray that the bastards face justice and the Donald brings them the ruin they so rightly deserve.”

    Completely agree. The sooner the Empire is brought down the better, not only for the world, but also for the American people.

    Antius is right.

  20. Antius on Fri, 13th Jul 2018 9:10 am 

    “Even more strikingly, the rate at which China has been borrowing over the last decade has averaged RMB 19tn annually. GDP has averaged RMB 60tn over the same period. So, on average, China borrows close to 32% of GDP each year.

    Nobody else comes anywhere near. America typically borrows 5.8% of GDP annually. That’s more than twice the rate of the most optimistic interpretation of growth, so it’s not sustainable, and highlights how much “growth” has been nothing more than the simple spending of borrowed money. But it’s nowhere near the 31.8% of GDP borrowed annually by China since 2007. The global equivalent is 9%, but that, of course, is heavily skewed by China.

    It has been suggested that China is throttling back on its propensity to pile up debt. There’s limited truth in this, in that China borrowed “only” 30% of GDP last year, compared with 38% in 2016 and 35% in 2015. But the numbers continue to look bizarre, unsustainable, and – potentially – lethal.

    As we’ve seen, the sheer rate at which China borrows looks reckless in the extreme. But ‘reckless’ isn’t an adjective that many would apply to the government in Beijing. Why, then, has China seemingly turned into a debt-junkie?”

    https://surplusenergyeconomics.wordpress.com/2018/07/02/130-grand-bargains-dangerous-choices/

    Futures Fade Gains As Yuan Tumbles On Latest Chinese Data
    https://www.zerohedge.com/news/2018-07-13/futures-fade-gains-yuan-tumbles-latest-chinese-data

    China’s Trillion-Dollar Sovereign Wealth Fund Wants Permission To BTFD In Chinese Stocks, Bonds
    https://www.zerohedge.com/news/2018-07-13/chinas-trillion-dollar-sovereign-wealth-fund-wants-permission-btfd-chinese-stocks

    Slip slidin, Makati 😉

    Then again, the whole world is slip sliding. No one seems to be doing well these days. Even the Germans are facing problems. The Japanese are bust. The Chinese will collapse if growth so much as slows to normal western levels. The world is very much facing an uncontrolled contraction, as surplus energy diminishes and other resources deplete at the same time. We face increasing energy costs at the same time as energy surplus is declining. What the Germans used to call a pincer movement.

  21. GregT on Fri, 13th Jul 2018 9:13 am 

    I might add, however, that I’m still not entirely convinced as to who The Donald is really working for. It appears more likely to me, that Trump is bringing down the American people, rather than the Empire.

  22. MASTERMIND on Fri, 13th Jul 2018 9:34 am 

    Who gives a fuck what Trump does? Who gives a fuck who he is working for? The global economy is going to start running out of oil in a few years, and the price is going to shoot to the moon..And the global economy is going to collapse into atomic dust (as it was in the beginning)..

    https://imgur.com/a/pYxKa

  23. Makati1 on Fri, 13th Jul 2018 9:34 am 

    Antius, I see China surviving whatever happens. They know what their situation is better than any Western “news” reporter. They also plan many years in advance. I take anything about China with a grain of salt. Usually it is Us propaganda.

    It is the West, and the Us in particular, that will crash and burn. The US is dependent on the rest of the world for most of its necessities. China provides most of them directly or indirectly. And China holds a big chunk of Us debt in USTs. It is not good to bad mouth your banker. The US will never learn.

  24. MASTERMIND on Fri, 13th Jul 2018 9:36 am 

    Madkat

    You are ignorant of history..Just a self serving old geezer..Wishing others will feel the pain that you feel every day..

  25. MASTERMIND on Fri, 13th Jul 2018 9:38 am 

    Madakt

    By 2030 OECD GDP per capital will be zero..And that will cause an economic collapse..So even if we don’t run out of oil in a few year (not likely)..The global economy is history soon anyways….

    Source: World Bank
    https://data.worldbank.org/indicator/NY.GDP.PCAP.KD.ZG?locati

  26. Makati1 on Fri, 13th Jul 2018 9:53 am 

    BTW: The US National Debt is about 100% of GDP.

    China’s National debt is about 46% of GDP.

  27. Davy on Fri, 13th Jul 2018 10:09 am 

    Thanks, Antius, for commenting the obvious. It is apparent the whole world is “slip slidin” China included.

  28. GregT on Fri, 13th Jul 2018 10:09 am 

    “The global economy is going to start running out of oil in a few years, and the price is going to shoot to the moon..And the global economy is going to collapse into atomic dust (as it was in the beginning)..”

    The real problem isn’t the price of oil per se. Gasoline has far more real value than even $10/ gallon. The real underlying problem is fiat money, created out of thin air, with interest attached. A ponzi based system that was never sustainable, that will ultimately collapse in on itself.

    The central bankers are bringing the world to it’s knees.

    Ordo ab chao.

  29. Davy on Fri, 13th Jul 2018 10:18 am 

    “The real problem isn’t the price of oil per se. Gasoline has far more real value than even $10/ gallon.”
    BS, gasoline value is relative to the economy it is used in. Water is worth its weight in gold on a lifeboat in the middle of the ocean.

    “The real underlying problem is fiat money, created out of thin air, with interest attached.”
    Nonsense, there is nothing wrong with fiat money. Fiat money has worked well for years. The problem is human behavior.

  30. MASTERMIND on Fri, 13th Jul 2018 10:20 am 

    The world is being brought down by the limits to growth..Which is nobody’s fault..its just the way shit turned out..And by the time people figured out the route we were on it was too late to change course..

    but everyone needs their boogey man and scapegoats..

  31. GregT on Fri, 13th Jul 2018 10:20 am 

    “The greatest shortcoming of the human race is our inability to understand the exponential function.”

    – Albert Bartlett (RIP)

  32. MASTERMIND on Fri, 13th Jul 2018 10:21 am 

    Davy

    You are the worst piece of shit on this fucking board..At least clogg and Greg are honest that they are Nazi fascist..You try to pretend you are this open and tolerant, peaceful liberal..but you are not..You are just like them..You just know how to hide better..

  33. GregT on Fri, 13th Jul 2018 10:26 am 

    “The world is being brought down by the limits to growth..”

    And that growth is necessary why?

    Mankind survived on this planet for hundreds of thousands of years without any appreciable growth, and even during periods of decline.

  34. GregT on Fri, 13th Jul 2018 10:29 am 

    “Nonsense, there is nothing wrong with fiat money.”

    Other than the fact that it requires infinite exponential growth, which is both a physical and mathematical impossibility in a finite environment, no problems with fiat money whatsoever.

  35. Davy on Fri, 13th Jul 2018 10:30 am 

    It is an honor mm. I smell victory. The smell is from your smoldering intellectual anxiety from being routinely crushed. You are a dumb kid with no future I can understand why you act like you do here.

  36. The last drop on Fri, 13th Jul 2018 10:31 am 

    Lol Trevberg been spewing the same line for YEARS now and amazing she’s able to continue dishing out the same article over and over again!
    She’s convinced herself she is right.
    Nevermind, she uses censorship in her comment section and the buffoonery of her pet stooge, Fast Eddy, to badger any other view.
    It’s an one dimensional repeat blog.
    Funny she still has any readership

  37. Davy on Fri, 13th Jul 2018 10:33 am 

    “Other than the fact that it requires infinite exponential growth, which is both a physical and mathematical impossibility in a finite environment, no problems with fiat money whatsoever.”

    No it doesn’t, fiat money does not have to have growth. Just because the way our civilization uses fiat money may require long term growth does not mean that exponential growth is part of its definition.

  38. GregT on Fri, 13th Jul 2018 10:39 am 

    Money loaned with interest attached requires growth Davy. It isn’t exactly rocket science buddy.

  39. MASTERMIND on Fri, 13th Jul 2018 10:49 am 

    Greg

    Without growth the economy goes into a deflationary downward spiral..

  40. GregT on Fri, 13th Jul 2018 10:53 am 

    “I smell victory. The smell is from your smoldering intellectual anxiety from being routinely crushed.”

    What you are smelling is more than likely the onset of myocardial infarction, caused by high blood pressure due to your inability to keep your emotional instabilities under check.

    You really should spend more quality time with your goat, and get rid of that cellphone. It isn’t helping you any.

  41. MASTERMIND on Fri, 13th Jul 2018 10:53 am 

    Davy

    I post scholarly references…You post zerohedge articles written by a fictitious movie actor..

    I bet you project yourself onto the Tyler Durden imagine and feel very proud about yourself..

    LMFAO!

  42. MASTERMIND on Fri, 13th Jul 2018 10:58 am 

    Updated Pink Floyd “Pig” cover

    https://i.redd.it/gwzpresf0n911.jpg

    LMFAO!

  43. GregT on Fri, 13th Jul 2018 11:00 am 

    “Without growth the economy goes into a deflationary downward spiral..”

    Or hyperinflation. It all depends on the central bankers’ policies. They’ve done a pretty good job with extend and pretend so far.

  44. MASTERMIND on Fri, 13th Jul 2018 11:09 am 

    Racist in #Chicago drops the n-bomb on brotha minding his business and catches the Blue Line to FadeTown. #PunchANazi2018

    https://twitter.com/theori/status/1017581577079910402

  45. Davy on Fri, 13th Jul 2018 11:10 am 

    “Money loaned with interest attached requires growth Davy. It isn’t exactly rocket science buddy.”

    Where did I say growth was an issue? You are the one off in wonderland talking infinite growth. You have problems with embellishing definitions to fit your agenda. There is nothing wrong with fiat money properly employed.

  46. MASTERMIND on Fri, 13th Jul 2018 11:17 am 

    Federal grand jury indicts 12 Russians for 2016 presidential election hacking offences

    https://www.rt.com/usa/432985-jury-indicts-12-russians/?utm_source=browser&utm_medium=push_notifications&utm_campaign=push_notifications

    I knew the election was hacked.This is why all the polls were wrong..Including the exit polls..Fucking Putin that mother fucker is going down hard..I hope they shove a knife up his fucking ass like Godofi

    Where the fuck is the false flag already and the nuclear strike on Putins mcmansion?

    Hurry the fuck up deep state..Get it done..

  47. GregT on Fri, 13th Jul 2018 11:23 am 

    “There is nothing wrong with fiat money properly employed.”

    There has never been one example throughout history of a fiat monetary system that was ‘properly employed’.

    Now you’re just being silly. Arguing for the sake of arguing. Get your emotions under check son.

  48. Davy on Fri, 13th Jul 2018 11:32 am 

    Gregster, google the definition of fiat currency and get back to me. There is nothing in it about interest and growth.

  49. MASTERMIND on Fri, 13th Jul 2018 11:36 am 

    Trump baby blimp flies in London – watch live

    https://www.youtube.com/watch?v=10x49T4oAzY&feature=youtu.be

  50. GregT on Fri, 13th Jul 2018 11:36 am 

    My original comment Davy:

    “The real underlying problem is fiat money, created out of thin air, with interest attached.”

    You are arguing for the sake of arguing, and letting your emotions get in the way of rational thought, as per usual.

    Ditch the cellphone, your condition continues to deteriorate.

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