What Comes After "Collapse"?

[Heineken]

As far as population goes I expect the USA population to drop to somewhere below 200 million and the world population to drop by half in the next thirty years at which point I will do my part towards relieving the population problem by checking out. Remember that there is as much oil under the second half of the curve as there was on the front side so there will be plenty of oil in thirty years for a population half what it is today. The cost per gallon though will be another ball of wax altogether.

OK. I belong to the school that believes most of the second half will never be extracted. Effectively, most of it won't be available, ever. Remember that extraction will require large, financially viable, well-supplied companies and an organized, orderly, relatively prosperous market---things that are probably going bye-bye. But you're right that a much smaller population will offset some of this.

[radon]

If the dollar where to ever lose it's reserve currency status (I don't know that it will) it would be the end of the US as the lone superpower and possibly even the break-up of the US...

I am no expert in the US history, but it seems that the US fared really well as a united state long before the dollar became the reserve currency, and even before oil gained its today's preeminent status as the source of energy.

[Cloud9]

The difference between now and the 19th century is that our population is much larger, more diverse and less skilled at living close to the land.

[Cog]

Like Cloud9 has alluded to, you can't remove oil from the equation and keep 310 million Americans living at anything close to what they understand as BAU.

[Pops]

Great replies for Saturday morning.

I think that like a stale beer, the financial foam will slowly evaporate along with cheap oil and abundant commodities in general. The main feature will be an economy increasingly starved for credit, the uncertainty of risk making money either too expensive or just downright unavailable. That's the collapse part and could take years or decades to play out. It might go with a bang or a whimper or both though I kinda lean toward whimper.

Unfortunately, things look exactly like that today. I don't say that as proof but in the way of trying to be aware that current situation might cloud my guess about the future. But, one of my first comments here was 'How long to prepare before the cost of preparing is too high?" Is that where we are now?

For example, we have big plans to raise the CAFE mileage standards in the US, yet the average age of the fleet is the oldest ever. Maybe we'll bounce back but forecasts were good at the beginning of 'both '10 and '11 yet last year disposable income was flat, debt at all time highs, real estate continuing to fall and labor income - the kind you actually work for - was anemic:

IN the eight decades before the recent recession, there was never a period when as much as 9 percent of American gross domestic product went to companies in the form of after-tax profits. Now the figure is over 10 percent.
During the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy. Now the figure is below 44 percent.

So, the bumpy plateau ride shakes the beer till the froth evaporates - then the decline.
The main difference between now and then... well, there really isn't much difference aside from degree. Declining actual production (or is it declining already?) will make prices stay exactly at the point of economic stall speed.

The same lack of credit availability as we have now will make change nearly impossible for a majority. Assets with any value (housing, cropland) will be bought up by investors fleeing 1's & 0's - again, exactly like the FedGov is planning to do right now by privatizing bad REOs via public subsidies. Plastic chachka consumerism of course goes by the way as do more and more jobs and more and more savings and 99'ers' assets.

On the up side, manufacturing will return from wherever it's gone for lots of stuff, the downside of course is there won't be much demand for stuff. Globally, labor costs will continue to become more equal and of course transport continue to be more expensive. Carbon and other tariffs may be implemented earlier in the name of climate change and later, protectionism.

One thing I'll point out is globalized trade might collapse faster than I previously thought. I saw a shipping index the other day showing rates from China are surprisingly low, this leads me to believe that shipping companies will operate at a loss as long as the can until they can't, when the rates then rise to a profitable level the trade goes poof. Here is the Harper index of container shipping prices:



Bulk shipping of raw materials like Iron ore are plunging as well.

Even though Bunker fuel prices are at record high average levels:




Anyway, we won't be buying $10 Lattes or $2 waters any more and coffee makers that cost $10 now will cost $30 or $40 but at least we'll be making them ourselves. Local and regional manufacturing industries will slowly reemerge, the speed depending on how fast transportation, labor and infrastructure costs change.

Pre-car cities will essentially do the same things they did then, subdivisions will become more self contained as casual travel diminishes and they become essentially small towns - and small towns will revive, simply because driving to Wallys, soccer, school, malls, etc, 20 miles away just won't make sense so cheap properties beyond 30 miles out will again make small town business viable.

The biggest change then will be the economies of scale enabled by nearly free transportation and unlimited energy availability will be eliminated. Competition then will no longer be entirely about scale. As mobility decreases, credit evaporates and labor demand falls, just regular trades will return. How many loaves of bread would you need to sell to support yourself in such a situation? Obviously far fewer than you would now since now you must compete with pricing discounts available to a baker that measures daily ingredient input in tons.


Anyway, I have no idea of what the time frame is, I'm sure we're closer to decline than we were 5 or 6 years ago. Perhaps we are four years into the collapse already, or maybe we are on the cusp of another 20 year boom-cycle fueled by natural gas and fracking cheap oil.


After all things looked pretty scary in 1982 as I remember...

[SilentRunning]

In 2030, after President Bieber declared war on China over the remaining resources of the planet, large swathes of the Northern Hemisphere were rendered uninhabitable after the American/Russian/Chinese/Iranian/Pakistani/French/Indian/British/Israeli/Saudi/Nigerian/Venezuelan/North Korean nuclear exchanges.

A few areas of the Southern Hemisphere remain semi-inhabitable with only high radiation level, and a population of 5 million humanoid mutants eek out a hunter/gatherer existence living off the giant rat/giant cockroach herds.

[Pops]

If you have nothing to add then don't.

[vtsnowedin]

[OK. I belong to the school that believes most of the second half will never be extracted. Effectively, most of it won't be available, ever. Remember that extraction will require large, financially viable, well-supplied companies and an organized, orderly, relatively prosperous market---things that are probably going bye-bye. But you're right that a much smaller population will offset some of this.

But the curve is a production curve not an oil in place curve so it already has all the problems you point out factored in. I expect the desire to win wars will produce oil "at any price" and the result will create a final line /result very close to the standard bell curve.

[Cloud9]

The one thing that absolutely scares the hell out of me is the push for state and local government revenues. I can shut off the water and I can shut off the electric but I cannot shut down the tax man. As local governments scramble to sustain their version of status quo they are going to continue to push for taxes. When the pension plans go and social security implodes what do us old geezers do?

[vtsnowedin]

The one thing that absolutely scares the hell out of me is the push for state and local government revenues. I can shut off the water and I can shut off the electric but I cannot shut down the tax man. As local governments scramble to sustain their version of status quo they are going to continue to push for taxes. When the pension plans go and social security implodes what do us old geezers do?

I hear you but I don't have any neat answers to your question. Perhaps grow potatoes etc. and live on a subsistence level which may well be far above the average post peak, post collapse. As to taxes you can avoid most of them if your income is gone and even the property tax will fade away as the value of land and houses drops with the cash available to buy them. The municipal employees and bureaucrats that live off these taxes may be some of the first to riot as their teat is yanked away from them. Might have to s---t some of them to set the rest on the right course.

[Heineken]

[OK. I belong to the school that believes most of the second half will never be extracted. Effectively, most of it won't be available, ever. Remember that extraction will require large, financially viable, well-supplied companies and an organized, orderly, relatively prosperous market---things that are probably going bye-bye. But you're right that a much smaller population will offset some of this.

But the curve is a production curve not an oil in place curve so it already has all the problems you point out factored in.

Really? I doubt that, Vt. I doubt that Exxon's or Hubbert's production curve looks anything like one that we might construct---one that factors in rapid or even sudden collapse. In any case all such curves are just estimates that could far miss the mark.

A bell curve is way too orderly. Looks nice on paper, though.

[SeaGypsy]

The shaken beer metaphor is definitely a keeper, thanks Pops!

[vtsnowedin]

[OK. I belong to the school that believes most of the second half will never be extracted. Effectively, most of it won't be available, ever. Remember that extraction will require large, financially viable, well-supplied companies and an organized, orderly, relatively prosperous market---things that are probably going bye-bye. But you're right that a much smaller population will offset some of this.

But the curve is a production curve not an oil in place curve so it already has all the problems you point out factored in.

Really? I doubt that, Vt. I doubt that Exxon's or Hubbert's production curve looks anything like one that we might construct---one that factors in rapid or even sudden collapse. In any case all such curves are just estimates that could far miss the mark.

A bell curve is way too orderly. Looks nice on paper, though.

Time will tell.
Of course day to day and month to month will be far from a smooth curve with such things as KSA shutting in large amounts of easily recoverable oil for "future generations" but decade on decade I doubt actual production will be far from what is predicted. Look at Norway's' production for an example. Collapse will of course make things more difficult but at the same time make recovered oil that much more desirable and high priced.

[Pops]

I think about that too Henie. I said once that it won't all be extracted because the people that might afford it won't need it and those that need it won't be able to afford it.

But your point also ties in with the idea of a shrinking credit pool due to a shrinking economy and increased risk. And oh yeah, that won't be new either:

Lenders have frozen a $1 billion credit line at Petroplus, Europe’s biggest independent oil refiner, which speaks for 4.4 percent of the region’s total capacity. The loss-making Swiss group relies on the borrowing facility to buy crude, and may be forced to close production within days if it can’t find a new source of funds.

[Tanada]

After Collapse comes survival, if you die then your opinion won't matter a whole lot will it? After survival comes rebuilding, but that is dependent on a myriad of factors beyond your control. Everything from invasion by some hypothetical foreign power intent on reaping resources to replace bad debt right down to your local gang of thugs looking to take over your local community. Most of that will have been sorted out by the survivors before they can even dream of rebuilding, and the things they will have done to survive will make them different people than 99% of us are today. Hard times make people tough or dead. I predict that most of those hard people after the survival phase will be too tired and too focused on making it through another year to worry a whole lot about rebuilding. Hence I predict a significant dark age before things are running gently enough for rebuilding to be actively pursued. The western Roman Empire did not fall in a day, it was more like a century, but it stayed fallen for hundreds of years. The eastern Roman Empire did not fall until the Crusades and takeover by the Seljuk Turks over a thousand years after the west had fallen and partially recovered. Which one any of us will be living in in 50 years is nothing but a guess, some places will be stable and stagnant while others will be lawless and violent. Good luck to you all being in the stable spots and not the lawless ones.

[AgentR11]

Hmm, after, well as a matter of disclosure, I expect to be dead, or at best be a vague form of entertainment for any grandkids by the time "after" comes along... And if they're any rougher than my daughter, I'll be dead shortly after that starts anyway!

But that said, what does "after" look like? The US on 1 mbpd is no lightweight, but it also doesn't have a lot of room for Peggy to drive 20 miles to her secretarial job. The freight trains and 18 wheelers can run their usual routes, but costs are higher. The ag tractors run, but maybe Bob doesn't take the F250 into town for a Cheeseburger.

So, if we exclude the ZombiePocolyptico for the moment, an economy can run ok here, but casually commuting long distances, or regularly traveling between cities just isn't possible. Coal and NG are likely to provide adequate power for electricity, and coupled with a very conservative 1 mbpd estimate for out year, liquid fuel production; there's no reason for us to starve. Driving or flying to go skiing could easily be the new trip to Tahiti scale vacation.

I think we'll see this happening in the following detectable sequence:

The civilian employment ratio will gradually fall from its already current low levels.
Occasional recessions will spike unemployment past 10%.
Unemployment will come back down by moving people from "unemployed" to "not participating" as their benefits expire.
Extended families will reform as the unemployable come to understand their worthlessness to the economy.

Eventually, I'd expect to see a 35% civilian employment ratio, with few if any non-productive positions in existence.

Basically, localization is the answer, but only in an unplanned sense. No one will need to be told; that which is local will simply start to cost much, much less than that which has to be shipped. Driving 50 miles to get something will be understood as the excessive luxury that it really is, and many will be priced out of it, just as many are priced out of flying a private jet from Houston to Denver for a commute today. Cost is the adaptation signal, it is not the problem, it is the answer.

[Loki]

I don't think “collapse” is the right term for what we in the developed world will be facing in the next decade or two. “Decline” is a better description, I think.

Agent has it about right, though he didn't use the P-word. Poverty. THAT'S what decline will mean for most Americans, Europeans, et al. Die-off in our lifetimes is improbable. Poverty is bad enough, I don't think it's useful to worry about extreme possibilities.

If you want to know what “post-collapse” America looks like, look at the Third World.

[Loki]

Here's something I posted a few months ago (updated a bit) about what economic decline will look like for most Americans:

--Economic malaise (stagflation) for next several years, then rapid decline to Great Depression or worse with no end in sight—1930s-level depression within 5 years (10 at the most), even worse by the 2020s

--30-50%+ unemployment, rapid decline of the middle class to working poor (if they're lucky)—current working poor decline to shantytown status or worse

--Employment becomes more informal and precarious (odd jobs, part-time, under the table, bartering, etc.)

--Multi-family / extended family living situations become the norm

--Even more radical polarization of wealth in US society, most rich stay rich, middle class dissipates to near nothing, ranks of poor explode

--Shantytowns spring up around the country, growing year by year

--Food becomes a much more significant expense, especially for the newly impoverished, supplies are far more irregular, dependence on food banks much greater, national waistline shrinks

--Air travel again becomes a luxury for the wealthy only

--There are still cars on the road, but they're older and usually packed with paying passengers

--Bare grocery and other store shelves, marked decline in availability of imported goods, collapse of regular supply chains, regular shortages of some consumer goods

--Open air gray markets and bartering become a regular part of life, people rely on swap meets, Craigslist, and backyard gardens more than Walmart

--Possible fedgov rationing of essentials + associated hoarding and blackmarket activity

--Equivalent of $10+/gal gasoline/diesel/propane, if you can get it (twice that on the black market, which some times may be the only place to get it)

--Electricity becomes more expensive, and supply becomes more unstable, regular brownouts and rolling blackouts as economy declines

--Real estate market declines to next to nil, abandonment of commercial and residential property in some areas (perhaps most markedly in suburbs)

--Massive currency devaluation (hyperinflation?), which may mean less reliance on cash transactions for day-to-day living

[Thralen]

I think a Crash is most appropriate after some length of decline. At some point all the people on food stamps and/or unemployment/welfare will realize that what they are getting is not going to stretch to cover what they need. Not want, but need. Hence the length of decline as they get rid of the crap they waste their bennies on sometimes nowadays. But when millions of people decide that they cannot stay fed on what they are getting, they'll blame the .gov for the lack. The .gov will not have the money to increase those benefits to the levels the recipients believe they should get.

If the .gov continues to raise the deficit and debt by printing more to give to them, then we crash from the rest of the world refusing to deal with us any more (loss of USD reserve status and loss of trade). If they don't raise the benefits, then people riot, loot stores, etc... At that point internal crash is imminent. Either by shattering laws and bringing in the military to subdue the riots or letting them go on at which point the areas that have had riots in them become uninhabitable.

I've mentioned before I always believe the worst of people as a mass unit (mob or other large gathering). I can easily see mobs building due to the situations mentioned or many, many others.

After the fact, and in my opinion that fact will include a large percentage of die-off in the USA, people will start trying to get it together again. If, and only if, the .gov is reformed to be smaller and less of a leech on the taxpayer then it may well be possible to get a functional society going again in the USA. If the government attempts to bleed those putting things back together for taxes and the like then the effort will probably be doomed and some dark times (if not dark ages) will be visiting us here. If, by some miracle, the .gov allows the people to rebuild then things may well be fine for a couple of generations until they/we forget again.

Lots more details but that is the overview I see, beginning to rear its ugly head in another 1-3 years.

Thralen

[Loki]

After the fact, and in my opinion that fact will include a large percentage of die-off in the USA, people will start trying to get it together again. If, and only if, the .gov is reformed to be smaller and less of a leech on the taxpayer then it may well be possible to get a functional society going again in the USA.

The federal government is not the all-powerful demon god that right-wing propagandists pretend it is. At this point it seems to be primarily an appendage of Wall Street. Contrary to the pronouncements of “conservative” demagogues, government is not the average American's primary problem. The economic aristocracy is.

I think the aristocracy will likely finalize its cooptation of the federal government within the decade. In a desperate attempt to maintain their wealth the aristocracy will institute harsh austerity measures for the masses. We the peasants will probably respond by rolling over and accepting our lot. Or maybe we'll break out the pitchforks and guillotines. Either way it won't be much fun for anyone....