Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on November 27, 2018

Bookmark and Share

Richard Heinberg: Foreword to Oil, Power and War

Richard Heinberg: Foreword to Oil, Power and War thumbnail

Come and listen to my story ’bout a man named Jed
A poor mountaineer barely kep’ his fam’ly fed
And then one day he was shootin’ at some food
And up through the ground come a-bubblin’ crude.
Oil, that is. Black gold. Texas tea.

Well the first thing you know old Jed’s a millionaire.
The kinfolk said, “Jed, move away from there.”
They said, “Californy is the place you ought to be,”
So they loaded up the truck and they moved to Beverly.
Hills, that is. Swimming pools. Movie stars.

(Paul Henning)

Perhaps the most instantly recallable verse on the subject of petroleum, the theme-song lyric to the hit 1960s television series “The Beverly Hillbillies” tells a tale of sudden wealth. It is a perfect touchstone for the real story of humanity’s experience with liquid hydrocarbons.

In the real story, riches consisted both of the billions accumulated by the great magnates of the petroleum industry—including John D. Rockefeller, J. Paul Getty, H. L. Hunt, and Charles and David Koch—and also the quickly growing economic output of industrial civilization once it came to be fueled by oil. This novel source of energy spawned entire new industries—notably the automotive, aviation, and plastics industries—while revolutionizing existing ones (agriculture, forestry, fishing, shipping, manufacturing, lubricants, chemicals, paints, dyes, cosmetics, road paving, and pharmaceuticals). It propelled humanity into an age of mobility and rising expectations.

But sudden acquisition of wealth is just the initial theme in both narratives—that of “The Beverly Hillbillies” and that of the modern industrial world. The saga of Jed Clampett and his family is a comedy in which city slickers try to siphon off some of the Clampetts’ fortune. While Jed, Granny, Ellie May, and Jethro always manage to get the better of the various grifters and hangers-on they encounter, we suspect that their affluence may be transitory and that the final episode may see the Clampetts return to shooting squirrels in order to fill Granny’s soup pot.

Similarly, the real story of oil is of fortunes lost, betrayal, war, espionage, and intrigue. In the end, inevitably, the story of oil is a story of depletion. Petroleum is a non-renewable resource, a precious substance that took tens of millions of years to form and that is gone in a comparative instant as we extract and burn it. For many decades, oil-hungry explorers, using ever-improving technology, have been searching for ever-deteriorating prospects as the low-hanging fruit of planet Earth’s primordial oil bounty gradually dwindle. Oil wells have been shut in, oilfields exhausted, and oil companies bankrupted by the simple, inexorable reality of depletion.

It is impossible to understand the political and economic history of the past 150 years without taking account of a central character in the drama—oil, the magical wealth-generating substance, a product of ancient sunlight and tens of millions of years of slow geological processes, whose tragic fate is to be dug up and combusted once and for all, leaving renewed poverty in its wake. With Oil, Power and War, Matthieu Auzanneau has produced what I believe is the new definitive work on oil and its historic significance, supplanting even Daniel Yergin’s renowned The Prize, for reasons I’ll describe below.

The importance of oil’s role in shaping the modern world cannot be overstated. Prior to the advent of fossil fuels, firewood was humanity’s main fuel. But forests could be cut to the last tree (many were), and wood was bulky. Coal offered some economic advantages over wood. But it was oil—liquid and therefore easier to transport; more energy-dense; and simpler to store—that turbocharged the modern industrial age following the development of the first commercial wells around the year 1860.

John D. Rockefeller’s cutthroat, monopolist business model shaped the early industry, which was devoted mostly to the production of kerosene for lamp oil (gasoline was then considered a waste product and often discarded into streams or rivers). But roughly forty years later, when Henry Ford developed the automobile assembly line, demand for black gold was suddenly as explosive as gasoline itself.

Speaking of explosions, the role of petroleum in the two World Wars and the armament industry in general deserves not just a footnote in history books, but serious and detailed treatment—such as it receives in this worthy volume. Herein we learn how Imperial Japan and Nazi Germany literally ran out of gas while the Allies rode to victory in planes, ships, and tanks burning refined U.S. crude. Berlin could be cut off from supplies in Baku or North Africa, and Tokyo’s tanker route from Borneo could be blockaded—but no one could interrupt the American war machine’s access to Texas tea.

In the pages to follow, we learn about the origin of the decades-long U.S. alliance with Saudi Arabia, the development of OPEC, the triumph of the petrodollar, and the reasons for both the Algerian independence movement and the Iranian revolution of 1979. Auzanneau traces the post-war growth of the global economy and the development of consumerism, globalization, and car culture. He recounts how the population explosion and the Green Revolution in agriculture reshaped demographics and politics globally—and explains why both depended on petroleum. We learn why Nixon cut the U.S. dollar’s tether to gold standard just a year after U.S. oil production started to decline, and how the American economy began to rely increasingly on debt. The story of oil takes ever more fascinating turns—with the fall of the Soviet Union after its oil production hit a snag; with soaring petroleum prices in 2008 coinciding with the onset of the Global Financial Crisis; and with wars in Iraq, Syria, and Yemen erupting as global conventional oil output flatlined.

As I alluded to above, comparisons will inevitably be drawn between Oil, Power and War and Daniel Yergin’s Pulitzer-winning The Prize, published in 1990. It may be helpful therefore to point out four of the most significant ways this work differs from Yergin’s celebrated tour de force.

  1. The most obvious difference between the two books is simply one of timeframe. The Prize’s narrative stops in the 1980s, while Oil, Power and War also covers the following critical decades, which encompass the dissolution of the Soviet Union, the first Gulf War, 9/11, the U.S. invasions of Afghanistan and Iraq, the global financial crisis of 2008, and major shifts within the petroleum industry as it relies ever less on conventional crude, and ever more on unconventional resources such as bitumen (Canada’s oil sands), tight oil, and deepwater oil.
  2. More importantly, unlike Daniel Yergin, Matthieu Auzanneau displays a keen understanding of the central role of energy in society and the economy, and therefore of oil’s pivotal significance in the unprecedented economic growth that occurred during the 20th century. All manifestations of human power, whether economic, military, or political, are physically grounded in energy. Power, after all, is energy over time (one watt equals one joule per second). Therefore a recounting of political, economic, and military history—even one that concerns itself with the history of the oil industry—will fail to successfully trace the sources, routes, and consequences of power if it is not based on a sound understanding of how energy works. In order to appreciate oil’s role in recent history, we must begin by understanding it as a concentrated, cheap, and portable store of energy. Yergin understands that oil is a valuable commodity, but The Prize never quite manages to explain why it is valuable, or why it is so closely linked with military, economic, and political power. Because Auzanneau begins his Introduction with an explanation of oil’s energetic qualities, the reader is far better prepared to understand the historic human power plays centered on this remarkable substance.
  3. Yergin unfailingly tells the story of oil from the perspective of the winners—the major oil companies, the oil barons, and the Anglo-American elites who have shaped global economic and political realities for the past century and more. Auzanneau brings an outsider’s perspective, one that is far more critical of, for example, U.S. political interference in Iran in the early 1950s. While Yergin repeats the usual explanation for the 1970s oil crises (greedy Arabs and Iranians), Auzanneau digs deeper and shows why falling U.S. oil production provided a motive for American policy makers to quietly convince their Arab client states to hike prices so as to enable U.S.-based oil companies to earn higher profits. Yergin acts essentially as a cheerleader for the oil industry; Auzanneau is a journalist who is aware of the enormous ecological and social consequences of our dependency on petroleum.
  4. Finally, unlike Yergin and other historians of the oil industry, Auzanneau frames his tale of petroleum as a life cycle, with Germination followed by Spring, Summer, and Autumn. There is a beginning and a flourishing, but there is also an end. This framing is extremely helpful, given the fact that the world is no longer in the spring or summer of the oil era. We take petroleum for granted, but it’s time to start imagining a world, and daily life, without it.

Taken together, these distinctions indeed make Oil, Power and War the definitive work on the history of oil—no small achievement, but a judgment well earned.

*          *          *

Over the past decade, worrisome signs of global oil depletion have been obscured by the unabashed enthusiasm of energy analysts regarding growing production in the U.S. from low-permeability source rocks. Termed “light tight oil,” this new resource has been unleashed through application of the technologies of hydrofracturing (“fracking”) and horizontal drilling. Total U.S. liquid fuels production has now surpassed its previous peak in 1970, and well-regarded agencies such as the Energy Information Administration are forecasting continued tight oil abundance through mid-century.

Auzanneau titles his discussion of this phenomenon (in Chapter 30), “Nonconventional petroleum to the rescue?”—and frames it as a question for good reason: Skeptics of tight oil hyper-optimism point out that most production so far has been unprofitable. The industry has managed to stay in the game only due to low interest rates (most companies are heavily in debt) and investor hype. Since source rocks lack permeability, individual oil wells deplete very quickly—with production in each well declining on the order of 70 to 90 percent in the first three years. That means that relentless, expensive drilling is needed in order to release the oil that’s there. Thus the tight oil industry can only be profitable if oil prices are very high—high enough, perhaps, to hobble the economy—and if drilling is concentrated in the small core areas within each of the productive regions. But these “sweet spots” are being exhausted rapidly. Further, with tight oil the energy returned on the energy invested in drilling and completion is far less than was the case with American petroleum in its heyday.

It takes energy to fell a tree, drill an oil well, or manufacture a solar panel. We depend on the energy payback from those activities to run society. In the miraculous years of the late 20th century, oil delivered an averaged 50:1 energy payback. It was this, more than anything else, that made rapid economic growth possible, especially for the nations that were home to the world’s largest oil reserves and extraction companies. As the world relies ever less on conventional oil and ever more on tight oil, bitumen, and deepwater oil, the overall energy payback of the oil industry is declining rapidly. And this erosion of energy return is being reflected in higher overall levels of debt in the oil industry and lower overall financial profitability.

Meanwhile the industry is spending ever less on exploration—for two reasons. First, there is less money available for that purpose, due to declining financial profitability; second, there seems comparatively little oil left to be found: recent years have seen new oil discoveries dwindle to the lowest level since the 1940s. The world is not about to run out of oil. But the industry that drove society in the 20th century to the heights of human economic and technological progress is failing in the 21st century.

Today some analysts speak of “peak oil demand.” The assumption behind the phrase is that electric cars will soon reduce our need for oil, even as abundance of supply is assured by fracking. But the world is still highly dependent on crude oil. We have installed increasing numbers of solar panels and wind turbines, but the transition to renewables is going far too slowly either to avert catastrophic climate change, or to fully replace petroleum before depletion forces an economic crisis. While we may soon see more electric cars on the road, trucking, shipping, and aviation will be much harder to electrify. We haven’t really learned yet how to make the industrial world work without oil. The simple reality is that the best days of the oil business, and the oil-fueled industrial way of life, are behind us. And we are not ready for what comes next.

How could a story so essential to our understanding of the present and recent past be so poorly understood by such huge swathes of the general public? Oil, Power and War helps enormously by offering us a sweeping yet also detailed view of how we got to this juncture. Where we go from here, as always, is up to us.

Richard Heinberg
Senior Fellow, Post Carbon Institute
Spring, 2018

Richard Heinberg



110 Comments on "Richard Heinberg: Foreword to Oil, Power and War"

  1. makati1 on Wed, 28th Nov 2018 9:09 pm 

    Talking about yourself again MOB? Projecting YOUR life as mine? Doesn’t work. You know nothing about my life here except what I tell you. The rest is your childish jealousy of someone who has lived a long life and is now enjoying the rewards of hard work and intelligent investments, including very good health.

    I didn’t indulge in unprotected sex, drugs, alcohol or tobacco so I have a healthy body and mind even at 74. I AM going to outlive you and Davy and enjoy every minute.

  2. JuanP on Wed, 28th Nov 2018 9:36 pm 

    More delirious rantings completely disconnected from reality from Davy. I can’t stop laughing thinking of all the things he imagines I do. Davy, the fact that you are here every day at all hours, steal identities, and have multiple personalities doesn’t mean that I do. I am just JuanP, no identity problems or multiple personalities here, buddy. ROFLMFAO!

  3. Cloggie on Wed, 28th Nov 2018 10:56 pm 

    “Mob, your obsession with Russia and Putin is totally insane. Can you explain to me why you hate Putin and Russia so much? Were you ever wronged by a Russian? Is it just brainwashing? I am not picking on you; I really want to know what’s behind that.”

    He won’t tell you, so I will.

    Mob is a kike. Kikes think that they are “God’s Choosen people”, way superior above everybody else and that they are entitled to own the entire planet. And since the world is not going to present itself on a silver platter to them, they are for centuries now, busy to attempt to conquer the world.

    Their main weapon to achieve that are white protestant people, mostly Anglos, that is British, Canadians, Australians and most of all Americans, people like empire dave. The reason why Protestants are their water carriers is historic… the Protestants in their battle to survive against the Catholics during the Reformation needed “freedom of religeon” and the Jews understood that they could piggy-back on the Reformation and finally could make their mark in the modern world.

    Although Cromwell had already opened the door to the Jews, after they had been thrown out of England centuries before, it was the Dutch invasion of Britain and Northern Ireland of 1689 that really advanced Jewish rise in power in Britain, its empire and the modern world. The Jews had financed the operation on the condition that if it would succeed, which is what it did, they would be allowed the establish and run an English central bank. THAT was the beginning of “Anglo-Zionism”, the fatal alliance between Jews and Protestant English speakers.

    From Britain they jumped with the British (and Dutch) into North-America and by the end of the 19th century they began to get the country under control, by buying up the media, conquering Wallstreet and most of all, their masterstroke, the establishment of the Fed, ostensibly a “national bank”, in reality a privately, mostly Jewish-owned, banking cartel. In America, money printing-lending-creation is in their hands, giving them unprecedented power.

    At the same time, in Russia, in 1917, the Jews managed to use the defeat of the czar to organize a communist revolution there and after a civil war of 5 years they got that country under their murdetous control.

    In America by 1933 they already controlled the Roosevelt government and as a first act of government they set up diplomatic relations with the mass-murdering Soviets and began to plot for the destruction of the European world, that wasn’t so easy to subjugate as Russian and American easy meat.

    Key factor for their eventual success was the half-American traitor and world’s first neocon Winston Churchill. He was in the pay of international Jewry and was instructed to bring England into war with Germany, which is what he did and it was clear in advance that Americans and Soviets would finish the job.

    By 1945, the Jews controlled the entire white race.

    Or was it? Between 1938 and 1953 Stalin quietly began to undermine Jewish power in the USSR, by opting for national Bolshevism instead of globalist communism, succeded and THAT was the only reason why former allies USA and USSR became embroiled in a Cold War, which the US won and by 1991, US-Jewish oligarchs had Russia under control again.

    That lasted until 2000, until a Vladimir Putin appeared on the scene and now I can answer Juan’s question of why the mobster hates Putin and Russia so much:

    ***they are derailling international Jewry centuries-old program of global conquest***

    Here is a CNN hitpiece against Putin:

    https://youtu.be/ZZ-Kwr0VFUE

    Almost all the hatefull actors in the video are Jews. Ugly, little leftist monsters, just like our kosher mobster friend.

    They and their Anglos are now cornered and ready for the slaughter by Russians, Chinese and continental Europeans in WW3/CW2.

    Hope this helps.

  4. deadly on Wed, 28th Nov 2018 10:57 pm 

    The commercial development of petroleum did one thing that is an ecological triumph, it saved a lot of whales from being burned in lamps so people could see after dark.

    Good old Pennsylvania crude saved the whales from extinction.

    Saving whales trumps all the power and war and money and continued fubar that humans manage to accomplish at an astounding rate.

    You have to look on the bright side of things, even if oil kills off people right and left when they are in the wrong place at the wrong time, at least oil gave the whales a serious break.

    The hunt was over, peak whale oil was averted, i.e. hunted to extinction, when crude oil replaced whale oil.

    The whales can’t thank crude oil enough.

    Oil isn’t all that bad.

  5. I AM THE MOB on Wed, 28th Nov 2018 11:31 pm 

    Clogg

    I am not Jewish..I have told this a million times..I was born in Monticello Indiana..Look i up and see if there is any jews there..Trust me there isn’t..

    You are just a paranoid whack job who sees jews everywhere..

  6. I AM THE MOB on Wed, 28th Nov 2018 11:34 pm 

    Mak

    You are what happens after several decades of involuntary celibacy..And old washed up crank..I hope I never become what you are..

    Why did your wife dump you? couldn’t get it up anymore? Little guy?

    LMFAO!

  7. makati1 on Thu, 29th Nov 2018 12:19 am 

    Insanity run in your family MOB? You are Showing signs of extreme delusion and lack of rational thought. It is after midnight in your neighborhood. Shouldn’t you be sleeping so you can get up and get to the unemployment office early? Oh, that’s right, you are a loser. Then, maybe the line at the soup kitchen would be more your style.

    You profess to know all about my life but you have none of your own and never will. Your immature rebuttals are pathetic. You and Davy are so alike it is scary. Maybe he is your daddy? Better check with your mom. LMAO!

  8. boney joe on Thu, 29th Nov 2018 12:42 am 

    “There is certainly a lot of dirt in American politics and I doubt the Dems would come out looking any better on the whole sexual abuse thing. This link is from 2008 and gives a long list of Dem paedos.”

    Anus- as usual, you failed to read the article. There are now multiple persons who have stepped forward, not a single person. And for you to suggest that the media is “hiding” Democratic instances of same is “about as low and disingenuous as you can get.”

    You and your kind are disgusting hypocrites.

  9. boney joe on Thu, 29th Nov 2018 12:48 am 

    Anus-

    For someone who claims to have a scientific mind, for you to rely on what you wish to be true about the opposition, tells me your about as scientific as my left foot. Legitimate scientists make statements based upon facts and evidence.

  10. boney joe on Thu, 29th Nov 2018 12:58 am 

    In memoriam….

    “The Dems will be toast in the Midterms.” ~~Anus

    Nate Silver at the independent Politics 538 site wrote,
    “There shouldn’t be much question about whether 2018 was a wave election. Of course it was a wave. Democratic candidates received as many votes this year (63 million) as the 63 million that President Trump received in 2016, when he won the Electoral College (but lost the popular vote). There isn’t any precedent for the opposition party at the midterm equaling the president’s vote total. The closest thing to an exception is 1970. “The resistance” turned out voters in astonishing numbers, performing well in both traditional swing states in the Midwest — including the states (Wisconsin, Michigan and Pennsylvania) that essentially lost Hillary Clinton the presidential election in 2016 — and new-fangled swing states such as Arizona and Texas. Turnout among young voters was high by the standards of a midterm, and voters aged 18 to 29 chose Democratic candidates for the House by 35 points, a record margin for the youth vote in the exit-poll era. The Hispanic share of the electorate increased to 11 percent from 8 percent in the previous midterm.

    This year’s results do serve as a warning to Trump in one important sense: His base alone will not be enough to win a second term. ”

    The Cons increased their Senate majority by 2 seats, big deal. 3 of the 4 states you cite are Red states, big deal. It’s because Republican voters are concentrated in rural, agrarian states, the GOP had a big advantage in the Senate. Nevertheless, Democrats managed to outperform how their states leaned politically in almost every single race — including in the 10 states with a Democratic incumbent that President Trump won in 2016. And there were four contests where Democratic incumbents fared 20 points or better than their state’s political baseline — and three of them won. This helped Democrats hold onto seats in two heavily Republican states — West Virginia and Montana.

    About the future.
    Problem No. 1 is that Republicans lost among swing voters: Independent voters went for Democrats by a 12-point margin, and voters who voted for a third-party candidate in 2016 went to Democrats by 13 points.
    Problem No. 2, The Republicon base is smaller than the Democratic one.

    Why are intelligence and education (in addition to others) excellent predictors of party affiliation? The better educated the individual, the more likely the person is a Democrat. The higher a person’s IQ, the more likely the individual is a Democrat.

  11. Cloggie on Thu, 29th Nov 2018 1:39 am 

    “I am not Jewish..”

    Normal white folk, even if on the left, do not gloat about the demise of white people. You do. “Scottish ancestry” my foot.

    “If it looks like a jew, swims like a jew, and quacks like a jew, then it probably is a jew.”

  12. Davy on Thu, 29th Nov 2018 3:52 am 

    “I don’t celebrate holidays.”
    Well, that says a lot about your community spirit..you have none.

    Billy, for whining about me and put downs who is calling who out. You must believe in double standards are something. It is ok for you to do it but when the shor is on the other foot lol you whine. Bellow is for calling me out:

    “I live one 365 days of the year in the land of eternal summer.”
    I love the change of season. The winter is wonderful with the cold brisk air. I cut wood and feed the wood stove. The animals appreciate me even more when I make sure they have food and water. I would never want to live 365 days in the same climate. Do you get the point billy, not everyone is like you.

    “I did my 50 years of servitude to the capitalist system.”
    You must have had stupid unrewarding jobs because my life has been about growth and learning. It is now very rewarding with my permaculture farm and doomstead.

    “Now I enjoy my investments and my secure, safe, happy life here. I don’t have the IRS/NSA/DHS/etc watching and recording everything I do or say like you do.”
    LOL, your investments are the social security check. You think you are safe. Nobody is safe anywhere especially you being far away from family in a third world country, alone. If you don’t look for trouble you should be OK but I guess you must be up to no good being so paranoid.

    “ I enjoy true freedom, something that is gone forever in America.”
    Sure you do and sure it is…lol you are so friggin dramatic

    “You keep wishing my death but I am going to outlive you and enjoy every minute of it. “
    You sure are obsessed with dying.

    “You and delusional Davy have no life or you would not be on here 24/7/365.”
    You are here constantly too hypocrite.

    “No one will listen to your bullshit in real life so you are forced to come here and try to impress us with your ignorance, immaturity and arrogance. Hint: It is not working! LOL”
    You do or you would ignore me.

  13. Davy on Thu, 29th Nov 2018 4:01 am 

    “More delirious rantings completely disconnected from reality from Davy”
    Juan, what people care about is contributions and you don’t contribute you take away. You steal space for your petty battles and agenda cheerleading.

    “you are here every day at all hours, steal identities, and have multiple personalities doesn’t mean that I do.”
    Sorry, I am here on and off through the day. I am just Davy and this is why you hate me. I put you in your place daily. I answer your lies and anti-American exaggerations.

    “ I am just JuanP, no identity problems or multiple personalities here, buddy. ROFLMFAO!”
    You are boney juan and steal my identity when you get loony. I guess it is a way you deal with your depression. You attack others and tell us how much you hate America the land that supports you.

  14. Davy on Thu, 29th Nov 2018 4:04 am 

    “I didn’t indulge in unprotected sex, drugs, alcohol or tobacco so I have a healthy body and mind even at 74. I AM going to outlive you and Davy and enjoy every minute.”

    Liar, you have said on this board you drink scotch and beer. What is the obsession about living you have? Something’s not right with you are you terrified of dying?

  15. Davy on Thu, 29th Nov 2018 4:06 am 

    “Normal white folk, even if on the left, do not gloat about the demise of white people. You do. “Scottish ancestry” my foot.”

    I have to agree neder but I would also say it works both ways and your extremist hatred of Jews. I can see hating some things about Jews but your hatred is for all Jews even the innocent ones. I can see you feeding children to death camps.

  16. Davy on Thu, 29th Nov 2018 4:13 am 

    This is good news, Democrats ae waking up to the fact Clinton is a loser. I still don’t see anything worth voting for out of them and 2020 is drawing close.

    “Clintons Face Empty Seats As Trump-Trashing Speaking Tour Kicks Off With A Coughing Fit”
    https://tinyurl.com/ybvf2hon

    “Having seen donations to their ‘foundation’ collapse by 90% since they failed in their bid to regain The White House, The Clintons decided a 13-city paid speaking tour was in order to scrape together some coin. Unfortunately, as the image above shows, the supposed-power-couple’s draw is starting to fade as the Daily Mail reports that just 3,300 tickets were sold in the Scotiabank Arena, which holds 19,800. As President Trump tours the nation in front of 10s of thousands of fans, The Clintons faced 83% empty seats in the Canadian hockey arena as it seems fewer and fewer North Americans want to hear their whining scapegoatery.”

  17. Davy on Thu, 29th Nov 2018 4:35 am 

    China, the world, and the Eurodollar.

    “They Warned Us” – We Haven’t Seen Anything Like This Since The Darkest Days Of 2015/16”
    https://tinyurl.com/yaslxys3

    “There are two facts as they pertain to China in 2018. The first is the nation’s clear monetary trouble. The second is why it has (re)emerged.”

    “Without foreign assets, eurodollars, flowing onto its balance sheet on the asset side the central bank can only restrict growth on the money (liability) side. Factoring the cash needs for the central government, the result has been an increasing squeeze on the RMB base. This includes, ominously, actual cash in circulation.”

    “This fills out the picture of October’s liquidations inside as well as outside of China. It is most certainly a deflationary squeeze, and one whose origin we know too well. The only positive we can take from the PBOC’s participation is how it gives us a very good sense of what is going on in the global currency shadows. This is one of the few major statistics that shed light on what is otherwise almost totally hidden. And you needn’t possess any advanced training in derivatives, wholesale funding, or cross border flow accounting to understand what’s going on here. It isn’t debatable, nor is there any ambiguity. China has a huge monetary problem on its hands, and one that is denominated in dollars but often has nothing whatsoever to do with the United States except for that one quirk.”

    “It is the combination of those two things which has left us with one lost decade and beginning a second staring into yet another downturn. The world needs (euro)dollars (short) but the global banking system no longer produces them in sufficient quantity (shortage). So long as both parts remain true, false dawn reflations are the best we are going to see.”

    “The big downside, of course, is the entire global economy bears the brunt of what those numbers show. Again.”

  18. Antius on Thu, 29th Nov 2018 4:54 am 

    “I didn’t indulge in unprotected sex, drugs, alcohol or tobacco so I have a healthy body and mind even at 74. I AM going to outlive you and Davy and enjoy every minute.”

    What’s wrong with unprotected sex? That is how babies (and families) are made. You talk about it as if it was a universally bad thing, but its merit depends entirely on circumstance of course. No one should advocate teenage sex behind the bike sheds, but sex in marriage is a healthy necessity for the continuance of civilisation. Maybe Makati should have done a bit more of that one.

    Also, I would question whether alcohol is a universally bad thing. In moderation, it has a net benefit on human life expectancy and is highly enjoyable, especially when shared amongst friends. ‘Drugs’ is a rather broad term covering lots of things that should be considered separately. No one in their right mind would take cocaine or heroin, but caffeine and marijuana can be beneficial to health in moderation and neither is associated with violence. Tobacco is indeed an unmitigated evil, which has never done a good thing for anyone. It has caused many millions of early deaths from heart disease, emphysema and cancer. Food addiction, especially sugar, is missing from your list. Through obesity and resultant complications, it ruins and prematurely ends many lives. Again, all good things become evil without moderation.

  19. Davy on Thu, 29th Nov 2018 4:56 am 

    Chinese debt and Eurodollar problems

    “Chinese Companies’ Dollar Debts Reach Tipping Point”
    https://tinyurl.com/ybeuq7nc

    “Domestic debt has long been an issue for the Chinese economy. But one particular corner of the debt market—dollar-denominated debt issued by Chinese companies—looks increasingly in danger of collapse. Several factors are contributing to the rising risk of default. Rising interest rates, a declining Chinese currency, the ongoing U.S.–China trade dispute, and fast-approaching maturities are causing experts to sound the alarm.”

    “There’s $3 trillion in outstanding dollar-denominated debt issued by Chinese companies, Daiwa estimates; most was issued by subsidiaries of Chinese companies in Singapore or Hong Kong. So why did China Inc. issue so much dollar debt? For one, it’s become difficult in recent years for Chinese private companies to issue onshore debt, due to Beijing’s crackdown on leverage. In addition, issuing dollar-denominated debt opens up a whole new group of buyers—foreign investors. Offshore dollar debt also offered companies lower yields than onshore yuan debt. Lastly, dollar-denominated debt is simply easier to use to fund foreign-asset purchases and bypasses Beijing’s capital-flow restrictions.”

    “A strengthening dollar on its own isn’t an issue, but foreign exchange headwinds have become another pain point for Chinese companies already facing mounting domestic debt. The problem is especially acute for Chinese property developers, which have gorged on debt—both in dollars and yuan—in recent years. But the industry is facing a high so-called “maturity wall,” or debt becoming due, in 2019.”

    “In past years, property developers were able to tap into funding through the shadow banking industry. But recent crackdowns by Beijing have eliminated most options there.”

  20. boney joe on Thu, 29th Nov 2018 5:06 am 

    ” I still don’t see anything worth voting for out of them and 2020 is drawing close.”

    You said the same shit in 2018 like it really made a difference, except to help the Dems. If Davy represents the face of today’s Republicon, I’m voting straight ticket Democratic.

    Thanks for the help, numbnuts.

  21. boney joe on Thu, 29th Nov 2018 5:14 am 

    “No one in their right mind would take cocaine or heroin.”

    This statement demonstrates just how little you know about drugs. So tell me why no one in their right mind would try cocaine? I can’t wait to hear this.

    It’s people like you who render drug education a joke. A kid tries coke and big deal. It’s not physically addicting. The after-effects from booze and the effects of booze are far, far worse. After this point, you have lost all credibility.

  22. Antius on Thu, 29th Nov 2018 5:41 am 

    The latest article from Gail. It basically reiterates much of what she has said previously.

    https://ourfiniteworld.com/2018/11/28/low-oil-prices-an-indication-of-major-problems-ahead/

    Global oil prices do not reflect global production costs, because there is a limit to what consumers can afford to pay. In fact, increasing wage disparity is pushing down the affordability of energy products for large segments of the population. This problem has been steadily worsening since the 1970s. We have been living in the peak oil dynamic for about as long as most people have been alive. Resources of all kinds are experiencing deflation, not inflation, and the world appears to be heading towards a rerun of the Great Recession, which will be substantially worse than the last one, due to hugely inflated debt levels.

    This is particularly troubling, because most non-fossil energy replacements are more expensive than the fossil fuels that we expect them to replace. Green energy advocates are fond of electric vehicles as the green energy replacement for ICE cars. But affordability is a persistent problem. At $60/barrel, oil would appear to be too expensive for many consumers. One barrel of oil contains about 6GJ of energy. So $60/bl translates into an energy cost of $0.01/MJ. If burned in an IC engine with an efficiency of 30%, the cost of mechanical power from oil is $0.033/MJ or a little under $0.12/kWh. That is about the same cost as electricity. Unfortunately, the electric vehicle costs a lot more and has recurring battery costs. The only reason electric appears cheaper than gasoline is the high tax that is lobbied on liquid fuels used on the road in most countries. If users cannot afford oil at $60, then it is unlikely that they will afford electric cars long term, when governments start taxing them as road fuel revenues dry up.

    Electric cars are popular, because they appear to allow an existing way of life to transition to less limiting energy sources. But affordability problems suggest that it would be more beneficial to consider options that reduce the underlying energy intensity of the economy. That suggests more travel by rail, bus, bike and foot, and less travel by car.

  23. Antius on Thu, 29th Nov 2018 5:45 am 

    “This statement demonstrates just how little you know about drugs. So tell me why no one in their right mind would try cocaine? I can’t wait to hear this.”

    Because it causes long-term cardiovascular damage Boney Joe.

    A friend of mine died in his mid thirties from heart failure some years back having taken coke in his teens. He had been clean for many years and had a responsible job and was thinking of starting a family. But the damage was done.

  24. Davy on Thu, 29th Nov 2018 5:51 am 

    “You said the same shit in 2018 like it really made a difference, except to help the Dems. If Davy represents the face of today’s Republicon, I’m voting straight ticket Democratic.”

    What is strange boney juan is you are juan and you hate Americans liberal and conservative alike. You are a joke and playing games. I outed you in July, fool. But since you are playing this imaginary game then let’s describe your imaginary personality. Boney Juan is the worst of what Democrats have to offer. Antius made that point well also yesterday. You are a narrow minded individual that is only contributing polarizing unimportant political trash. Dirty Juan does this because he enjoys stirring things up. He doesn’t really believe this stuff. It is merely discontent oriented.

    I am a moderate and centrist. I have voted both ways. I am against extremism especially the extremist hate of billy, dirty juan, and neder. What happens here on this board is extreme polarization. This is well covered psychology in regards to social media and blogs. People trend to extremes and extremist force extreme positions. If you fight extremism the extremist mark you as extreme. I believe in a variety of things. Mostly I am about being real green. I would like to know how that jives with Republicans, it doesn’t. I am against mass migration and identity politics of the Democrats. I am a mix on economic issues. Most of all I am preaching a “lite” doom and “lite” prep. I am a realist in regards to decline and growth. I acknowledge both but see the trend toward decline. I am against racism but acknowledge the damage intermingling has done to traditional cultures who are now threatened. Yet I acknowledge white destruction of non-white cultures where our board racist neder considers this a form of deliverance IOW it is OK for whites to do it but not the other way around.

  25. Davy on Thu, 29th Nov 2018 5:58 am 

    “This statement demonstrates just how little you know about drugs. So tell me why no one in their right mind would try cocaine? I can’t wait to hear this.”
    Boney juan, cocaine is extremely addictive is one great reason to avoid it stupid.

    “It’s people like you who render drug education a joke. A kid tries coke and big deal. It’s not physically addicting.”
    So boney juan we have it. You are likely doing coke by defending it so simplistically. That would explain the depression and the lunatic outburst here with strange excessive attacks, identity theft, and puppeteering.

    “The after-effects from booze and the effects of booze are far, far worse. After this point, you have lost all credibility.”
    BS, they are both dangerous for addictive personalities both physical and mental but alcohol is part of the culture and controlled. It is a traditional part of western culture for thousands of years. Coca leaves are fine but not cocaine. Get the out of your costume dirty juan and be a man

  26. I AM THE MOB on Thu, 29th Nov 2018 6:43 am 

    All I Want for Christmas..

    https://i.redd.it/512pbrnpc7121.jpg

  27. I AM THE MOB on Thu, 29th Nov 2018 6:51 am 

    Clogg

    My mom’s ancestors are from Germany..The Pennsylvania “dutch”..And my dad’s are from Scotland and England..The town I was born in was 100 percent white..

    You just hate jews because you are jealous and power hungry..

    Sorry low IQ conservatives aren’t bright enough to control the levers of power..And that is why they don’t..

  28. DerHundistLos on Thu, 29th Nov 2018 7:30 am 

    @ I AM THE MOB

    My youngest son is good friends with the members of Nine Inch Nails. When the band was in town during a tour in the 1990s, my son invited the band to spend the night at our house. I was quite impressed with these fine young men. They have a liberal point of view and quite adroitly argue their support for the Democratic party. Upstanding young men.

    As you may have guessed, all of my boys are liberal Democrats and I could not be more proud as a father. The oldest graduated from Reed College, second from Dartmouth, third from University of Richmond, and fourth from Amherst.

  29. JuanP on Thu, 29th Nov 2018 7:36 am 

    Delusional Davy “What is strange boney juan is you are juan and you hate Americans liberal and conservative alike. You are a joke and playing games. I outed you in July, fool. But since you are playing this imaginary game then let’s describe your imaginary personality. Boney Juan is the worst of what Democrats have to offer. Antius made that point well also yesterday. You are a narrow minded individual that is only contributing polarizing unimportant political trash. Dirty Juan does this because he enjoys stirring things up. He doesn’t really believe this stuff. It is merely discontent oriented.
    I am a moderate and centrist. I have voted both ways. I am against extremism especially the extremist hate of billy, dirty juan, and neder. What happens here on this board is extreme polarization. This is well covered psychology in regards to social media and blogs. People trend to extremes and extremist force extreme positions. If you fight extremism the extremist mark you as extreme. I believe in a variety of things. Mostly I am about being real green. I would like to know how that jives with Republicans, it doesn’t. I am against mass migration and identity politics of the Democrats. I am a mix on economic issues. Most of all I am preaching a “lite” doom and “lite” prep. I am a realist in regards to decline and growth. I acknowledge both but see the trend toward decline. I am against racism but acknowledge the damage intermingling has done to traditional cultures who are now threatened. Yet I acknowledge white destruction of non-white cultures where our board racist neder considers this a form of deliverance IOW it is OK for whites to do it but not the other way around.”
    One more time I come back here to find the Exceptionalist fighting his own shadows! LOL!

  30. JuanP on Thu, 29th Nov 2018 7:43 am 

    Cloggie on Wed, 28th Nov 2018 10:56 pm

    Well done, Cloggie! That was a quite impressive essay you wrote there. While I profess my ignorance of the subject, I find nothing implausible or ridiculous in your comment. I think your version of history is closer to the truth than the current narrative is. It makes sense; the current narrative is completely incoherent.

  31. boney joe on Thu, 29th Nov 2018 7:44 am 

    “I am a moderate and centrist.” Sure, DavyTurd, that’s why you peddle fake conspiracy theories one after the other. What a lying sack of shit.

    If you and your dumb fuck sidekick Davy were right, there would be tens of millions of coke addicts on the streets trying to fix. So where are they all, DavyTurd?

    It’s Republicon stupidity that once again sunk the US through misguided drug education, mandatory drug sentences, the War on Drugs, and a host of other dumb legislation.

    Great documentary on TV titled “Enemies: The President, Justice & The FBI” about the Reagan administration’s trading of arms to the Revolutionary Guard of Iran in exchange for releasing the hostages and to fund illegal wars.

    More Republicon hypocrisy.

  32. boney joe on Thu, 29th Nov 2018 7:47 am 

    DavyTurd playing games with other people’s identity.

    JuanP on Thu, 29th Nov 2018 7:36 am

  33. Davy on Thu, 29th Nov 2018 8:48 am 

    Pure dirty Juan in action above no additions needed. He does too fine a job themselves …. dirty Juan and his multiple personalities with zero contribution. He kissed neder’s Nazi ass is all he did besides his games. Dirty Juan is an airhead pretending to deserve respect.

  34. I AM THE MOB on Thu, 29th Nov 2018 9:11 am 

    Unfavourability rating of Vladimir Putin in European countries (2017)

    https://i.redd.it/vn9sqznb99121.png

    Source:
    https://en.wikipedia.org/wiki/Public_image_of_Vladimir_Putin#Ratings_and_polls

  35. Sissyfuss on Thu, 29th Nov 2018 9:25 am 

    BJ,if you’re going to talk about cocaine’s benign effects then include crack which is cocaine and of which hundreds of thousands of addicts roam the world in useless lifestyles whose soul purpose is to secure the next fix in hopes that this high will be as perfect as the first one was. And the latest research on alcohol suggests that while there may be some benefits in cardiovascular terms even moderate consumption results in reduced brain volume, ie, it makes you dumber. All drugs contain some form of a trap, and don’t think TPTB aren’t aware of that. They use it to their full advantage.

  36. Duncan Idaho on Thu, 29th Nov 2018 9:41 am 

    “All drugs contain some form of a trap, and don’t think TPTB aren’t aware of that. ”

    All human societies, with the exception of pre contact eskimos and a few Pacific Islanders on small remote islands, use drugs.

    It appears to be solidly imbedded into the human condition.

  37. I AM THE MOB on Thu, 29th Nov 2018 9:47 am 

    Keep those Afghan poppy fields popping!

  38. boney joe on Thu, 29th Nov 2018 8:22 pm 

    Cocaine is not crack, stupid.

    Your solution via the 40 year long War on Drugs has been a miserable failure, and the myths that your side perpetuates only serves to contribute to the disaster. Eventually, the costs to society of building and maintaining ever more prisons coupled with the $30 billion spent anual on the DEA coupled with government corruption via asset forfeiture laws that give the police the right to steal assets from innocent people, and the deaths of the old generation that got us into this mess will cause a change in policy resulting in decriminalization. It’s just a matter of time, whether you like it or not, honey buns.

  39. Dionisio on Thu, 29th Nov 2018 8:34 pm 

    Any one celibate in the Philippines is that way by choice.

  40. I AM THE MOB on Thu, 29th Nov 2018 9:14 pm 

    I bet Mak and Clogg dicks are disturbingly small..

  41. makati1 on Thu, 29th Nov 2018 9:17 pm 

    Dionisio, you are totally correct. My lady dentist tried to hook me up with her sister the first time I went to her office. Ditto for many other contacts here. Celibacy is definitely voluntary, not forced. ^_^

  42. makati1 on Thu, 29th Nov 2018 9:19 pm 

    There is that 9 year old MOB again. Maybe he thinks his putdowns actually work? Delusional on all points. LOL

  43. I AM THE MOB on Thu, 29th Nov 2018 9:46 pm 

    Mak

    You are voluntary celibate? Sounds like something a faggot would say..Not a grown man..No wonder your wife ditched you..

  44. boney joe on Thu, 29th Nov 2018 10:35 pm 

    Mak-

    Thank you for the link to Twilight of the American Century. It’s an amazing treasure of information on a variety of prescient topics.

  45. makati1 on Thu, 29th Nov 2018 11:41 pm 

    Nine year old MOB is regressing to infancy.

    Cannot handle reality so he invents a fantasy world to live in.

    Pretends that other people have the problems he has so he feels good about himself and not alone.

    Needs psychiatric help. Maybe he and Davy could get a room together at the funny farm? LOL

  46. Cloggie on Fri, 30th Nov 2018 1:26 am 

    Needs psychiatric help

    Yeah, or something more profound, something irreversible, something terminal. After all, the mobster said he wanted to die for his neo-Bolshevik ideals.

    Please do.

  47. Эй, братья, пожалуйста, ударьте антиамериканскую собаку, которую я сделал из гранитного форума on Fri, 30th Nov 2018 2:21 am 

    good news putin blocked ukraine is like sudatenland. there will soon only PBB no M

  48. Cloggie on Fri, 30th Nov 2018 4:19 am 

    Pepe Escobar on the latest posse in Crimea:

    http://thesaker.is/drama-in-the-kerch-strait-teasing-the-russian-bear/

    Germany already made it clear they have zero intent to help Poroshenko in his all too obvious escalation attempt, which is bad news for our mobster neocon and his sherpa’s tard and empire dave.

  49. Davy on Fri, 30th Nov 2018 4:27 am 

    “Your solution via the 40 year long War on Drugs has been a miserable failure”

    Boney Juan, he didn’t talk about a solution. He is saying cocaine is a dangerous drug. It is addictive and ruins lives. This is well known and documented. The reason you are defending it is because you are a user? I mean come on, defence after defence out of you is pointing to a strong attachment.

  50. Davy on Fri, 30th Nov 2018 4:35 am 

    “Poroshenko in his all too obvious escalation attempt, which is bad news for our mobster neocon and his sherpa’s tard and empire dave.”

    neder, I am very upset with this likely deep state staged event. It might have been done to derail the Trump/Putin meeting at G20. It is just another example of event after event to keep relations sour. These events follow a pattern and are really not very sophisticated. They are dangerous and represent a will to conflict.

Leave a Reply

Your email address will not be published. Required fields are marked *