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"Tipping Points" paper (Overnight Armageddon)

Discuss research and forecasts regarding hydrocarbon depletion.

Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sat 04 Dec 2010, 22:39:25

Whitefang,

I don't have a clue what the hell you are going on about.

Perhaps a few more modifiers/verbs/nouns/etc. and some ol' time grammar would enable the debate for us more aged folks.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sat 04 Dec 2010, 22:45:28

Cloud9 wrote:Once again, I am going to relate this short story. During the run up to Y2K, I bought fifty pounds of rice, one hundred pounds of corn, a generator and a drum of gasoline. As we all know, the world did not end. My extended family ate the rice. I fed the corn to the compost bin, burned the gasoline and left the generator in the plastic wrap.

When the 04 hurricanes came over the top of my house, I was the only person in the neighborhood that had a generator.

Bottom line: preparations are not disaster specific. The can goods you have may do nothing more than feed you through a bout of unemployment or add to the bounty of the food bank in your area. Not to prepare puts your fate in the hands of others.

I just bought a set of wood gas plans from Mother Earth News. Am I going to build a gas generator? Not this week, but when the time comes, I don’t want to have to reinvent the wheel.


Similar. In 1998 and 1999 our neighborhood had serious power outages. For y2k we bought a china diesel generator, and water bladders. Empty bladders are still in basement and diesel is hooked up. Only time I had to run it was in a snow storm for about 12 hours without power. But, our house has forced hot air heat and a 200 or so gallon oil tank. If power were to go out in the winter we could freeze up in a day real easy. Having the generator I can keep the house from freezing for maybe a week or so with a full tank and power to run the fan/blower/igniter.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sat 04 Dec 2010, 23:01:02

I just finished reading the paper. I don't know that there is anything earth shattering in it, to me it was all kinda old hat. It was a nice summary and did put things together fairly well. I think it could be edited down to about 20 pages if one put his mind to it.

The idea that our society is based on trust is not entirely new. Richard Wright talked about this explicitly in "Non-Zero Sum." I think that this is a very powerful idea and the paper hinted at some greater consequences of this thought in saying how we are self organizing. I believe that this is true to a large extent.

I postulate that if one were to look at human civilization from a distant, disinterested, point of view you would view a colony species not unlike (leaf cutter) ants (or termite colonies) where various sub-types are meant to be workers, or farmers, or queens, or their attendants, etc. The whole colony works together to build something that is greater than the whole and where individuals will sacrifice their own life for the life of the colony. It is fairly obvious in the way that we glorify self sacrifice be it military or civilian. We are easily stirred by the national anthem or even our football team colors. We select individuals within our group to promote to some specialized status, such a queen. To take the analogy a bit further, and riffing off the idea of "hubs", make some individuals extremely well connected so that they can facilitate the flow of capital and keep the machine going. This is somewhat supported by the idea of "6 degrees of separation" where, once it was actually researched they found that there are a few "hub" individuals who are widely connected to a huge group of folks and, that by networking these few "hubs" the world can be interconnected quite rapidly, within six degrees.

But this also points out how important these few individuals are and how, if trust in them is lost, they can be stripped of their status (think French revolution) and thus bring down the entire complex system.

Another writer who talks about this kind of thing is Laurence Gonzales who wrote "Everyday Survival." In that he discusses the idea of interconnected complexity or "critical coupling" where a complex system has tipping points that are not evident to anyone but which can bring the entire system down.

I think the article is a good and cogent survey that adds by making a cohesive argument based on existing evidence.

It is also scary as hell to read that someone else has the same nightmares as I do.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Subjectivist » Sun 19 Nov 2017, 13:42:50

Pops wrote:This was discussed at TOD earlier this year, I just got around to reading the full paper:
Tipping Points: Near-Term Systemic Implications of a Peak in Global Oil Production

This is the Overnight Armageddon Scenario updated with lessons from the Great Recession.

The credit crisis exemplifies society's difficulties in the timely management of risks outside our experience or immediate concerns, even when such risks are well signposted. We have passed or are close to passing the peak of global oil production. Our civilisation is structurally unstable to an energy withdrawal. There is a high probability that our integrated and globalised civilisation is on the cusp of a fast and near-term collapse.



Basically the paper outlines the case for a "fast-crash" scenario centered around a collapse in monetary confidence due to peak oil:
The world economy functions on credit, which requires growth to sustain. Once it becomes generally accepted that energy growth and so economic growth have ceased, banks, bondholders, shareholders, etc will realize they will not be repaid their principle (let alone their profits) and world trade will collapse as the "haves" attempt to change their imaginary (soon to be nonexistent) assets into tangibles.

Which brings in the second major topic; the de-localized and globally interdependent economy. Simply put, there is no local economy without global trade since few local businesses today produce anything which isn't, in whole or part, sold into or sourced from the global economy. Once faith in world credit markets evaporate, so will "local" business large and small.

Leading to the final element (in my summary anyway) which is the dependance of the critical on the trivial. We talk here a lot about wasteful consumerism supporting lots of real jobs and this is the same idea applied to the greater infrastructure, i.e.: trivial Facebook (and PO.com) use enables the economy of scale that allows banks, business - infrastructures of all kinds, to function over the internet. Just one other example, cheap chip manufacture for games and refrigerators and cellphones enables cheap, readily available parts for all manner of critical infrastructure; electrical grid, military hardware, etc. The loss of the trivial greatly impacts on the critical.

---
The idea of our self-organized, infinitely interconnected, energy/growth/credit dependent global economy tripping over it's own complexity is my personal default doom scenario. I work hard to keep my optimism up by encouraging self-reliance, localizing and "de-growth" and a variety of fixes - which, unfortunately, are the main targets of the paper:
They [cornucopians and optimists like me] have made suggestions including changing the debt based money system; pricing environmental externalities; reducing the working day; consuming less, controling population, increasing the lifetime of goods. In the context of the current financial crisis they often include some control on financial speculation.


There are way too many authors who spend time arguing their predictions for the future. The best part of this paper in my opinion is the author spends most of his effort outlining possible connections instead of justifying conclusions or selling his version of mitigation.


So anyway at least take a look at the summary, and read the entire paper (50pgs) if you have time and tell us what you think. I'll try to bump this thread now and then so take your time.

Of course, feel free to pull your usual opinion out of your butt without expending any effort but be advised, this thread is about the ramifications of the end of energy/economic growth, therefore "there will be no energy shortage" is off topic and will be deleted.


I do wish the fast crash crowd would focus on more realistic papers like this, that are reasoned out. Even if the conclusions fail to hold up it isn’t just cherry plucked out of nothing and provided as the one whole truth that answers everything.
II Chronicles 7:14 if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby ROCKMAN » Sun 19 Nov 2017, 13:54:26

sub - Since you've read the paper does it see a "tipping point" when we reach global PO? And if so what specifically tips us over the edge?
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby ROCKMAN » Sun 19 Nov 2017, 13:56:58

dup
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby GHung » Sun 19 Nov 2017, 14:20:39

Since so many here conveniently ignore debt levels, or think it doesn't matter, I will point out that central banks have pumped $trillions into the global economy ( at ZIRP/NIRP rates); about $7 trillion in the US alone, since this paper was published. Assuming that its conclusions are still valid may not be very useful.

Then, again, this unprecedented run up in global debt may make the paper's conclusions more likely.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby onlooker » Sun 19 Nov 2017, 14:29:23

I think one study that was done some years back that contends that credit market problems can initiate a "financial system supply cross contagion "is very interesting
It is in pdf form as:
A study in Global systemic collapse
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Outcast_Searcher » Sun 19 Nov 2017, 18:31:06

GHung wrote:Since so many here conveniently ignore debt levels, or think it doesn't matter, I will point out that central banks have pumped $trillions into the global economy ( at ZIRP/NIRP rates); about $7 trillion in the US alone, since this paper was published. Assuming that its conclusions are still valid may not be very useful.

Then, again, this unprecedented run up in global debt may make the paper's conclusions more likely.

Let's assume the worst and that for some reason, real soon now, the world wakes up to this cash infusion and panics.

The worst I see happening is relatively high inflation and interest rates compared to what we've seen recently, and a global recession due to lack of confidence.

So first, that's not even close to doom, much less "overnight armageddon".

Second, why now? Investors (including me, BTW) were quite worried about the possibility of 70's style (or worse) inflation in places like the US.

Meanwhile, the more economic growth occurs and time is allowed to pass, at least in places like the US where they're not actively injecting such money, and if anything, are contemplating reversing some of that, the risk should be lessening.

...

That doesn't mean that there's no risk from the mess. I wouldn't want to be caught owning lots of long term bonds at anywhere near current interest rates if/when this thing unwinds, and interest rates potentially go up several (or more) points. That's a game that would seem rife with risk to end in tears for the longs.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sun 19 Nov 2017, 18:42:15

Interest rates go up, then the economy comes down. With high interest rates no one want to borrow. Lots of folks who made loans will not get paid back. Confidence crumbles, a cashier economy ensues. Trade grinds to a halt.

China has lots to sell, cheap, but no buyers. USA defaults on its debts to China.

Remember that there are only about five food exporters of note. When trade collapses food becomes scarce and expensive.

It may not be armegeddon in the USA but other places may look a lot like it.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby onlooker » Sun 19 Nov 2017, 18:53:04

If you have time Newf, check out that Korowicz paper in pdf format I referred to above, it deals with what you are saying
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sun 19 Nov 2017, 19:57:30

Love this bit.....

In section IV two reasons for a looming globally destabilising financial shock are broadly outlined. The first is the outcome of decades of credit expansion and growing global imbalances. The most perplexing thing so far in this crisis is that there has been neither the anticipation of, nor the preparation for, a worsening of the crisis by those with most responsibility for dealing with the consequences. The inbuilt dynamics of credit expansion, debt deflation and the structure of the monetary and banking system make further deterioration inevitable. The break-up of the Eurozone, as has been emphasised elsewhere,
would be a devastating shock, and one for which we have scant preparation. This is not to cast blame, merely to reflect on society’s inability to manage novel risks that threaten the foundations of their welfare.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sun 19 Nov 2017, 20:14:52

I allways find it disconcerting when some “expert” agrees with one of my more pessimistic view points. This below is EXACTLY what I have been going on about for a while. It’s all about faith and trust, ruin that and we have collapse.

And yet there is no pillar of the economy more all-encompassing than the financial and monetary system: it links almost every good and service in the world. The fabric underpinning the exchange of real goods and services is enabled by money, credit, and financial intermediation. Money and credit have no intrinsic value. We swap a piece of paper or entries in a computer for the real labours and skills of billions of strangers across the world. This works if they too believe that those digits can be exchanged elsewhere for real things or services at a later time. What is implicit in such trust is faith in monetary access, stability and bank intermediation.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Sun 19 Nov 2017, 22:35:25

Onlooker,

Thanks, just finished it. A bit wordy but generally a good read.

I would have appreciated more helpful hints about where to put your money. Maybe he doesn’t have any?
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby onlooker » Sun 19 Nov 2017, 23:59:29

Newf, I actually have read only a portion of the whole. But yes it is scary because it makes sense. In fact this "perfect" storm may be brewing now with the Petro dollar and its continuous fall from grace. At some point could a chain reaction ensue whereby one large entity abruptly dumps its dollar holdings or refuses to accept them as payment and so the chain reaction begins and the credit markets seize up or simply "faith" in the currency evaporates overnight halting many commercial transactions around the world spontaneously.

Maybe. I am a firm believer in having emergency provisions available to last at least a week for a possible "host of eventualities
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby GHung » Mon 20 Nov 2017, 00:15:51

Maybe. I am a firm believer in having emergency provisions available to last at least a week for a possible "host of eventualities.


Is that whole week or just a work week? 8O You''l need at least a year's worth of toilet paper. Ask Any Venezuelan.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby onlooker » Mon 20 Nov 2017, 00:21:29

If I need at least 1 years worth of toilet paper, I am sure I will be using something other than toilet paper LMAO. HAHA
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Newfie » Mon 20 Nov 2017, 09:05:06

While I don’t adhere to it myself Mormons are supposed to keep a years supply as an article of faith. We generally have a few weeks if not a few months, although it’s a constant struggle finding space.

I thought the argument about the petrondollar was weak. I think the simple concept of “trust” is more of an issue, but this is quibbling. Another interesting read about JIT and the complexity of modern life is “Door to Door”.
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Re: "Tipping Points" paper (Overnight Armageddon)

Unread postby Ibon » Mon 20 Nov 2017, 09:19:39

onlooker wrote:If I need at least 1 years worth of toilet paper, I am sure I will be using something other than toilet paper LMAO. HAHA


water like a few billion of our planets inhabitants use. I haven't used toilet paper in years. every bathroom in our lodge has bum squirters.
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