Orlov: How To Time Collapses
Over the past half a decade I’ve made a number of detailed predictions about collapse: how it is likely to unfold, what its various manifestations are likely to be, and how it will affect various groups and categories of people. But I have remained purposefully vague about the timing of collapse and its various stages, being careful to always append “give or take half a decade” to my dire prognostications. I wasn’t withholding information or being coy; I really had no way of calculating when collapse will happen—until five days ago, when, out of the blue, I received the following email from Ugo Bardi:
Hi Dmitry,
You may be interested in this post of mine.
Starting from this post, I’m trying to draw a parallel between the collapse of the Soviet Union and the impending collapse of Italy. There are, as always, similarities and differences. In particular, the Soviet Union collapsed almost immediately after that oil production flattened out and started declining. On the contrary, the Italian government survives despite a loss of 36% in oil consumption.
My impression is that it is all related to different taxation methods. I understand that the Soviet tax system was based mainly on commodity taxes and on taxes on production. When production stalled, people had nothing to buy and the government had nothing to tax because most people owned nothing and had little or no savings in banks. So, the government had no choice but to fold over and disappear.
Instead, the Italian system is based largely on income tax and property tax. The government is losing revenues on commodity taxes (e.g. on gasoline) but it can compensate with property taxes. Italians, on the average, are “rich,” in the sense that they have savings in banks and most of them own their homes. So, the government can tax their properties and their savings. As long as Italians still have something taxable, then the government will survive. It will disappear only when it has managed to strip citizens completely of everything they have.
Do you agree with this interpretation? (BTW, Italy as a state may be even more culturally diverse than the old Soviet Union was.)
Ugo
I wrote back:
Hi Ugo,
Very interesting article. Yes, the entire southern tier of the EU is in some early stage of collapse, but so far it hadn’t occurred to me to draw parallels between it and USSR. Now that you mention it, the parallel is obvious: it is financial collapse triggered by something having to do with oil, but with polarities reversed, and delayed by a period of wealth destruction.
In the case of USSR, taxation wasn’t really a source of government revenue. The national economy was based on government ownership of everything, central planning and budgets, and a system of assigning ministerial contracts to enterprises owned by the ministries. The external economy was a matter of exporting hydrocarbons in exchange for foreign currency, which was used to buy grain—mostly feed grain for cattle, without which the population would become protein-deprived and malnourished. Over the so-called “stagnation” period of the 1980s the Soviet economy became hollowed out because of several trends. Too much spending on defense was one of them. Another was that investment in capital goods (machinery, plant and equipment) reached the point of diminishing returns, which is very difficult to characterize but not so difficult to observe. Lastly, Solzhenitsyn and the dissident movement had done irreparable damage to Soviet prestige, destroying morale. The coup de grace, when it came, consisted of two pieces. One was the inability to expand oil production given the state of Soviet oil extraction technology of the era. The other was the fall in oil prices, down to $10/bbl at one point, because North Sea and Alaska both went on stream, and the Saudis pumped as much oil as they could based on a tacit agreement with the US to depress oil prices and thus crush the Soviets. In this they largely succeeded. The USSR became heavily indebted to the West, and, at the very end, needed Western credit to keep the lights on in the Kremlin. One of the final scenes featured Gorbachev on the phone with [West Germany’s Chancellor] Helmut Kohl asking him to ask the Americans to release some funds.
Now, I can see parallels to this in what is happening now in the US and in the EU, but with all the polarities reversed: here oil flows in and money flows out, and the coup de grace [will be] high oil prices rather than low. Instead of failures of central planning, which failed to allocate production effectively, we have failures of the globalized market, where production is effectively globalized but consumption is ineffectively localized among the wealthy and the formerly wealthy, and has to be fueled by credit. Instead of diminishing returns from deployment of capital goods, we have diminishing returns from deployment of capital itself, where a unit of new debt now produces much less than a unit of economic growth. The damage to reputation and morale is mostly on the US side of the Atlantic, where in place of Solzhenitsyn and the dissident movement we have Abu Ghraib [scandal], [Wikileaks’ Julian] Assange and [Edward] Snowden. With the EU, most of the damage has to do with [the] experience of economic disparities between the rich core and the increasingly impoverished periphery, and the recent move in Ukraine to walk away from the EU, and the ensuing Western-financed mayhem in Kiev, show that the bloom is off the EU rose as well. The runaway military spending is likewise mostly a US issue, although epic failures in Afghanistan, Libya and Syria, in which the EU is complicit, are likely to have some effect as well.
Comparing USSR to Italy is difficult because of the disparity of scale: 1/5 of the planet’s dry surface versus a smallish peninsula; an economy that slowly decayed in isolation versus an integral part of the EU; a country where the choice is between burning hydrocarbons or dying of exposure versus one where the choice is between riding a scooter or taking the bus; a country with a ravaged agricultural sector unable to grow enough protein calories versus a nation of foodies where corner groceries make worthy subjects for oil paintings. But I think that when it comes to the actual collapse, when it finally comes, there will still be identifiable similarities. Financial collapse always comes first: all sorts of financial arrangements unravel as the center becomes unable to float the periphery, and in response the periphery starts to withhold economic cooperation. The result is a breakdown in supply chains, shutdown of production, and, shortly thereafter, shutdown of commerce. In the case of the USSR, this unfolded in 1989-91 as the various republics and regions refused to cooperate with Moscow. I suspect that this will also happen in the EU, at some point. But I think that you are exactly right that whereas the average Soviet citizen could not be fleeced, Italy, and much of the EU, still have plenty of fat sheep that the government can shear to keep things running. Thus we are looking at a few more years of steady decline before the lights start going out. This, then, is the key distinction: the USSR collapsed promptly because it was already skin and bones, whereas the US and the EU still have plenty of subcutaneous fat to burn through. But they are, in fact, burning through it. And so, the conclusion is, collapse will come, but here it will take a little longer.
-Dmitry
Ugo responded:
I agree with you, of course. It makes perfect sense to me and it is the main point I was making: the Soviet government couldn’t tax Soviet citizens too much because they owned very little.
…
The Italian government instead has some luck in the sense that Italians have some savings and most of them own their homes. So, the government is progressively strangling their citizens to squeeze out of them all that they have—while they still have something.
The last round of tax increases in Italy is targeting homes and it is really, really hurting, especially the poor. You can be poor here, and still own a house that you inherited from your parents. Now the government asks you to pay as if that house were revenue! That is truly evil. People who don’t have the money to pay this property tax can only indebt themselves with banks (or worse). Eventually, they’ll have to sell their homes or give them to the bank (or to the Mafia)—the result is disaster for everybody, including for the banks, and even the government. But the whole thing has a perverse logic. It has the advantage that it generates some immediate cash which is badly needed, then the hell with the future.
The [next] phase will be to target bank accounts. Then, when there will be nothing left, the government will decamp and say bye to everybody. Hell, what a planet I landed in…..
All the best,
Ugo
And so here is the outline of the method for calculating the timing of collapses:
1. Find out when the collapse clock starts running by looking for a significant drop in energy consumption
2. Calculate how long the clock is going to run by dividing the total wealth of the citizenry by the economic shortfall of the shrinking economy
For any industrial economy the collapse clock starts running as soon as the consumption of fossil hydrocarbons starts dropping appreciably. It is sometimes difficult to tell whether this has already happened if the country in question is still a major hydrocarbon producer. Gross production numbers can still be holding steady or even seem to go up a bit, but once you subtract all the energy that is being expended on energy production itself, and on the unprofitable mitigation of its many undesirable consequences, you might be able see a decline sooner rather than later. Notably, the net energy yield, or EROEI, is very low for all the newer unconventional sources that have been trumpeted as panaceas in recent years, such as ones that require hydrofracturing and drilling in deep water, tar sands and so on. (The so-called “renewables,” such as wind, solar and biofuels, are an even bigger joke, because all of them with the exception of hydroelectric plants have net energy that is too low to sustain an industrial economy, plus they all depend on technologies that are “nonrenewable” unless the country maintains a vast industrial base which happens to run on fossil fuels.) And so the drop in net energy consumption is clear for Italy, which produces 7% of the oil it consumes and imports the rest, whereas the picture is somewhat less clear for the US, which still manages to supply around a third of its oil.
Since all industrial economies literally run on fossil fuels, lower energy consumption immediately translates into a lower level of economic activity and a shrinking economy. The gap between the expectations of economic growth that are dialed into all of the financial arrangements, and the reality of economic decline driven by lower energy availability, has to be plugged with the population’s savings. There are a number of ways of expropriating wealth, generally proceeding from various kinds of stealth taxation measures, to more overt measures, to outright expropriation. Taking the US as the example (since I am most familiar with it) the expropriation cascade is proceeding as follows:
1. Central bank policy of zeroing out of interest rates on savings combined with massive money-printing. This forces money into speculative markets (stocks, real estate, etc.) creating huge financial bubbles; when these bubbles pop, savings are said to be destroyed, but in reality that money has already been spent by the government or used to fill the private coffers of those closely associated with the government.
2. Government policy of canceling retirements or short-changing retirees. The federal government has worked hard to make its official measure of inflation all but meaningless so that it can justify its policy of making cost of living adjustments to social security payments that are far less than the the real increases in the cost of living. Another federal expropriation scheme is via guaranteed student loans, which cannot be discharged through bankruptcy, and which have created an entire class of indentured servants. At the more local level, state and municipal governments are curtailing or canceling retirement programs by virtue of going bankrupt.
3. Ever more onerous reporting requirements for financial transactions, especially for those who try to leave the country and expatriate their savings. All foreign bank accounts must now be reported, and people who work abroad are now forced to file voluminous annual reports that cost thousands of dollars to prepare. Those who decide to repudiate their US citizenship are made to pay a hefty exit tax. Nevertheless, record numbers of US citizens have been doing just that. Just having a US passport often makes it impossible to set up accounts in foreign financial institutions, which have little desire to comply with US demands for financial disclosure.
These are the measures that are already in place. Looking at what’s been tried before, here and elsewhere, we can see what other measures are in the works. Among them:
1. So-called “bail-ins” where insolvent financial institutions are rescued by confiscating depositor funds. We can expect the script to be similar to what happened in Cyprus: politically connected depositors get word ahead of time and yank out their money forthwith; everybody else gets shorn.
2. Limits on bank withdrawals. You might still “have” money in the bank, but that’s the only place you can “have” it. The semantics of the verb “to have” can be quite tricky, you see…
3. Ever-increasing taxes on property resulting in property confiscation. It works like this: government prints money and hands it out to its friends; its friends use it to temporarily bid up property values; property taxes go up to a point where the property owners can’t pay them; owners lose their properties. A staggering 63% of real estate purchases in Florida last December were cash purchases.
4. Various kinds of sudden, new, super-complex regulations, noncompliance with which results in very large fines. In turn, nonpayment of these fines results in forfeiture of assets. The US has some very curious laws according to which inanimate objects such as cars, boats and houses can be charged with a crime, seized and auctioned off. We can expect lots more of such property grabs in the future.
5. Gold confiscation, which happened once in the US already, so there is a precedent for it. Yes, I know that this will make a number of people upset, but I am yet to hear a convincing argument for why the US government would not resort to gold confiscation when that turns out to be one of the few remaining cards it can play.
This list is by no means comprehensive. If you feel that I have missed something major, please submit a comment, and I will consider it for inclusion.
Now, it would be nice if all of these measures worked like clockwork, always producing the right amount of wealth confiscation to levitate the government, and the financial scheme on which it is based, for a little while longer. Alas, as with most things, something is bound to go wrong at some point, most likely when you least expect it. And it seems like a dead certainty that something will in fact go wrong well before every last American citizen is relieved of every bit of their accumulated wealth and is living peacefully in a roadside ditch, wearing an attractive loincloth and a stylish mudpack for a hat, quietly perfecting a nouvelle cuisine that features snails au jus and dandelion salad au chaume. Maybe you can imagine it, but I can’t. Beyond a certain point, I can only imagine reports of widespread “public disturbances” followed by “breakdown of law and order.”
Still, I hope that this framework will allow us to set an upper bound for how long collapse can be deferred for any given country. Once hydrocarbon consumption drops appreciably, the clock starts running. Then it is possible to estimate how long the clock can theoretically run by dividing the remaining net worth of the population by the size of the hole in the economy created by falling energy consumption.
But after that things get messy. Some countries will hollow themselves out quite peaceably, and go softly into the night, while others will explode and fast-forward though the financial-commercial-political collapse sequence. And so perhaps the most useful thing to know is whether the collapse clock is already running for any given country, because if it is already running, then it becomes a fool’s game to wait around for the inevitable outcome.
One reasonable approach is to get another passport and quietly relocate to another country. It is important that this country be one for which the collapse clock is not running and won’t be for a long time yet. Ideally this would be a financially secure, politically stable, energy independent, militarily invincible, underpopulated, non-extradition country which will be among the last to be severely disrupted by climate change and where you could have lunch with Edward Snowden. But this approach doesn’t appeal to everyone, and I understand that.
And so another approach is to adapt to what’s coming while remaining in the US, or in any other country for which the collapse clock is running, by making yourself, and your wealth, should you have any,
illegible. Here is a very nice article by one smart cookie by the name of Venkatesh Rao on
the concept of illegibility. And
here is his very nice primer on being an illegible person. This kind of illegibility has nothing to do with bad handwriting; it is about hiding in plain sight. Please read these as homework, because I will have more to say on this topic in the near future. And I would love to see a list of countries for which the collapse clock is running, along with first-order estimates for how long it could possibly run for each one, based on their population’s net worth and the country’s economic shortfall. But since this post has just gone over 3000 words, I am leaving this as an exercise for the reader.
club orlov
Davy, Hermann, MO on Tue, 4th Feb 2014 12:57 pm
I love these articles because I am a student of collapse. I am watching the financial markets closely at the moment because I am looking for the same thing Ugo Bardi speaks about. My Italian girlfriend will verify what he is talking about. The other problem with Italy is corruption which is a further time clock for collapse. I would add a read from David Korowics who covers systematic risk in several articles that covers stress to economies from peak oil and financial crisis. People truly are hiding from the truth. Yet, I also would say for those of you who still need a few years to prepare if and when the truth becomes widespread we could lose all confidence then market liquidity. Confidence is liquidity. When this happens in a complex system where our survival is in a delocalized local meaning our food, energy, and consumables are subject to just-in-time and complicated distribution. This spells disaster to our social fabric which is already a mess. We have a couple of weeks until society breaks down and the reboot leaves us at a significantly lower standard of living. Starvation and food shortages become the primary issue. Social fabric breaks down not when you can’t get your Iphone but when you can’t get bread, medicine, and fuel. I am again a broken record with the “do everything possible now” to avoid a hard landing so we can better navigate the 1st step down. It will most likely happen around 2020 or sooner. 2020 is the point where the energy card is played. The financial card is being played currently. It is hard to predict how it will play out. Who knows about the unknown unknown “Black Swans” that may be lurking? We are at the cusp of decent so prepare my friends
Makati1 on Tue, 4th Feb 2014 1:21 pm
Davy, I agree on your timeline. I think 2020 is the max BAU can last and likely one or more of those swans will land before then. There are so many, you can hardly see the sun. Perhaps they will all land at once as many large flocks do.
paulo1 on Tue, 4th Feb 2014 4:04 pm
2020 might be the time for widespread acknowledgement, but surely the descent has already started.
re: “The other problem with Italy is corruption which is a further time clock for collapse.”
Insurance companies write the playbook and rules for ObamaCare. That seems like corruption. 20,000? lobbyists instruct the bought and paid for politicians…surely is corrupt. The MIC, limits to reporting by corporate concentration in the media industry, bail-in legislation, unfair tax code, must all indicate corruption. NSA? NSA collusion with providers smells of corruption to me.
And then there is the propoganda wars. American exceptionalism is always there…the inherent belief that ‘we are different’ simply because we are Americans.
My sister and her family are American. One brother is a French citizen. I became a Canadian 41 years ago when I turned 19 and was able to do so. My other brother also became a Canadian citizen and relinquished his US passport after Iraq. He last voted (for Obama) in 2008. We have never looked back. If I dare to broach anything negative about US politics or society my sister is not able to hear it let alone understand. She can’t get past the idea that the US is something other than what she has been told, (and this is someone who cut her teeth on Viet Nam protests.) I have tried over the past 10 years to get her to better prepare and divorce herself from the car culture, but she cannot do it because it is impossible for her to comprehend that living any other way is simply unnecessary. “Why would she”, she asked.
Maybe she will understand by 2020. Who knows?
Paulo
Northwest Resident on Tue, 4th Feb 2014 4:19 pm
I don’t know why people like to call them “black swans”. They look like buzzards to me — a sky full of them, swirling around like those vicious winged predators out of the “Pitch Black” movie, waiting for their moment to descend and feast on the rotted remains of human civilization. I personally think that 2020 is too far out — how many hundreds of trillions of digital dollars in debt can exist before it all just becomes such a big joke that we laugh ourselves to death. With debt to GDP ratios today of what — 200% in Japan’s case and 120% or so in America’s case — and it is growing exponentially in countries across the globe:
Public debt as a percent of GDP in OECD countries as a whole went from hovering around 70% throughout the 1990s to almost 110% in 2012. It is now projected to grow to 112.5% of GDP by 2014
In six years from now countries will be unable to pay the interest on their debt, much less pay it off. In fact, I read that by the end of this year, America will have already reached that point where even with zero percent interest, tax revenue will be insufficient to pay off the accumulated interest on debt. Then what happens? Squeeze the remaining gainfully employed for more taxes — suck one last batch of blood from them before the ultimate collapse? I seriously doubt that we’ll get through another couple of years, much less six more years, without financial collapse. And as Orlov points out in this article, financial collapse always comes first. The black buzzards are swarming and they’ll be swooping on us, soon, and you can bet your ass on it.
J-Gav on Tue, 4th Feb 2014 4:41 pm
I agree with Dmitry (and Nicole Foss and others) that financial collapse will likely be the first shoe to drop. If it’s severe enough, a big social and political mess won’t be too far behind.
As for the timing, I guess Davy and Makati would consider me an optimist but I reckon it’s the financial/economic crunch that will come by 2020, not societal collapse, which I believe will come later. Because I think the elites have grown quite adept at kicking the can down the road (since that’s all they’ve been doing for decades.) I expect them to invent some new stop-gap “solution,” for which, after The TARPS, QE, etc they’ll find some catchy new name in order to hoodwink the people – maybe: “Standing on your head in the corner and spitting wooden nickels while kicking the can down the road” or some such thing … In any case, the s§ee-it won’t hit the fan in the same volumes or at the same velocity in all countries so it could well be a very confusing scenario for the average observer.
Davy, Hermann, MO on Tue, 4th Feb 2014 4:58 pm
J-Gav on Tue, 4th Feb 2014 4:41 pm
“I guess Davy and Makati would consider me an optimist but I reckon it’s the financial/economic crunch that will come by 2020, not societal collapse, which I believe will come later”
Man, I hope you are right J-Gav. Every year I can get a little more done the better!
Makati1 on Tue, 4th Feb 2014 1:21 pm
“There are so many, you can hardly see the sun. Perhaps they will all land at once as many large flocks do.”
J-Gav what Makati1 says makes me nervous about optimism I want so much to have!
paulo1 on Tue, 4th Feb 2014 4:04 pm
“2020 might be the time for widespread acknowledgement, but surely the descent has already started.”
Definitely the case in my mind that decent has started. It is just hard to see with all the noise society generates. All the propaganda, corruption, and mindless distractions!
Northwest Resident on Tue, 4th Feb 2014 4:19 pm
“I don’t know why people like to call them “black swans”. They look like buzzards to me — a sky full of them, swirling around like those vicious winged predators out of the “Pitch Black”
Wow, another vivid picture for my mind!
ghung on Tue, 4th Feb 2014 5:01 pm
Another metric (and response) to consider is the number of people making other arrangements, pre-collapse. This article is of particular interest to me since I spent the summer of 1974 studying in the USSR, mainly Moscow and ‘Leningrad’ (short visit to Kiev), after a couple of weeks in Italy, Austria and Hungary.
Of course, in ‘free Europe’, all of the stores were open and well stocked. Once in Russia, obtaining goods generally meant putting on my best jeans and walking through the nearest park. The ‘free’ (black) marketers would show up in due time, offering all sorts of bargains that were simply not available in the state-owned stores. Trade, barter, or foreign currency were all gladly considered. I wore a pair of tennis shorts under my jeans, just in case I needed to get back to the hotel without my pants. The alternative economy was thriving at the same time that folks were queueing up for a bit of fresh chicken at the state store.
It’s not only the wealthy who bypass or exit the formal economy when the formal economy isn’t serving the interests of the population. Indeed, many folks decide early on that it isn’t in their best interest to continue to service the formal economy.
I suppose it gets to be a chicken/egg argument: Do folks make other arrangements because main stream economics is failing them, or do economies fail because an increasing number of consumers are failing to willingly support the official economy? Either way, it’s a death spiral for business as usual. I’m getting a lot of informal bids for my services since 2008.
Anyone want to trade a good goat for some used PV equipment, let me know.
Davy, Hermann, MO on Tue, 4th Feb 2014 5:41 pm
ghung on Tue, 4th Feb 2014 5:01 pm
I wore a pair of tennis shorts under my jeans, just in case I needed to get back to the hotel without my pants.
LOL, man, what if they wanted the tennis shorts too!!!
Northwest Resident on Tue, 4th Feb 2014 6:06 pm
ghung — Very interesting to learn that you spent some time in the former USSR. I actually lived in Moscow and Leningrad (St. Petersburg) in my own apartments during three separate visits for a total of over one year “on the ground”. It was an amazing experience. But my time in Russia was after the collapse, after Gorbachev in fact — in the 1990’s. Lots of great experiences, many dangerous ones, and ultimately a big waste of time except for the memories.
andya on Tue, 4th Feb 2014 7:12 pm
2020 is too pessimistic jmo. There is far more fat to burnt off yet. It’s been 6 years and counting, for the PIIGS. Life goes on, boring world we live in.
DC on Tue, 4th Feb 2014 7:20 pm
Things will be as bad as they possibly can be for ‘us’ in large part because NO alternative economic arrangement or system has been allowed to exist, outside of fossil-fueled corporate mass-consumption. Note I said ‘consumption’, since as we all know here, we dont really produce much anymore. And what we DO produce, weve automated to the max, or use illegal aliens to staff. Of course, there is always the ‘grey economy’ (aka crime), but even the criminal sector is really nothing more than an extension of the formal corporate approved economy.
Since any kind of economic actively other than the official corporate approved and state sanctioned economy is the only one thats ‘allowed’ to operate in the open, all other forms of un-approved actively are subject to various forms of harassment. In my province there actually are various shades of unapproved economy in operation, for a long time actually.
We have the underground economy. Which is mostly contractors and ‘under the table’ work. But under the table still survives only at the good graces of the ‘real economy’ its not a ‘stand-alone’ arrangement.
Then we have the ‘Grey Market’ Covers a wide range of grey to barely legal stuff. Tax evasion, migrant labor and so on. The grey market is probably larger here than most people realize, but its still far from being anything like a formal economy. More quasi-criminal than anything. Grey market might have some useful elements like farmers selling real food for cash-buts it pretty small scale.
Then there is the plain old criminal economy. Largely built around the drug trade, marijana mostly. Some entire towns and regions have become rather well-known for their plentiful indoor and outdoor grow-ops. Unfortunately, while drugs may offer short-term, and easy profits-the drug trade is not going seamlessly take over day to day operations as formal economies wither either.
Long story short, the lack of economic resilience is what will do us in. The problem we face isnt so much that the withering of the fossil-fuel economy is such such an unmitigated tragedy. Well, it is, but largely because our elites made it that way. People are now couple of generations removed form anything other than a wage-tax-drive-sit in front of tv-consume economy. We literally know nothing else. Anything that could compete with corporate profits has been ruthlessly driven underground, or out of existence going on decades now. That is what will hurt us most going forward. People can and will adjust,they’ll have to, but out overall lack of ability to even conceive of anything other than the current arrangement is going to be our biggest stumbling block by far.
ghung on Tue, 4th Feb 2014 7:23 pm
NR: ….”ultimately a big waste of time except for the memories.”
Going abroad has never been a waste of time for me as long as I remembered eyes and ears wide open; mouth shut…. and memories are priceless. The problem with many Americans is that they’ve ‘been nowhere, done nuthin’, or didn’t learn anything when they went there. It goes to thinking you’ve got it all figured out. Avoiding the label “Ugly American” was an education in itself.
Northwest Resident on Tue, 4th Feb 2014 7:31 pm
ghung — I was thinking of the business ventures I invested my savings and years into. Result: $0 — actually, quite a bit in the negative. That’s what I meant by “big waste of time.” Otherwise, it was a fantastic experience — the memories, the adventure, the ability to personally experience “being Russian”. Maybe you’ve read “Slaughterhouse-Five” by Kurt Vonnegut — the main character’s “life after death” consisted of him constantly popping back into scenes and experiences of his previous life, to relive them, to re-experience them. I often think that if that is why “afterlife” truly is, then I definitely have some great experiences in Russia that I’ll be looking forward to reliving.
GregT on Tue, 4th Feb 2014 8:39 pm
” In my province there actually are various shades of unapproved economy in operation, for a long time actually.”
But DC, they all contribute to GDP, as does the criminal justice system, incarceration, drug rehab, policing, and mental health.
It’s no wonder that the numbers look so good. 🙂
Davy, Hermann, MO on Tue, 4th Feb 2014 8:42 pm
DC on Tue, 4th Feb 2014 7:20 pm
People are now couple of generations removed form anything other than a wage-tax-drive-sit in front of tv-consume economy. We literally know nothing else. Anything that could compete with corporate profits has been ruthlessly driven underground, or out of existence going on decades now. That is what will hurt us most going forward. People can and will adjust,they’ll have to, but out overall lack of ability to even conceive of anything other than the current arrangement is going to be our biggest stumbling block by far.
Amen DC, our populations have been dumbed down and we have lost many generations of skills that allowed survival pre fossil fuels. If this was not bad enough but we no longer have the resources. We have pooped on the climate, soils, water, and all our fellow creatures that we depend upon. So, I have often spoke about carrying capacity of 1 billion pre fossil fuels. I can’t see how that is still possible after the rape and pillage. I would say a quarter of that carrying capacity is possible. 250 million souls what a change from 9 billion we are supposed to be heading for.
Ted on Tue, 4th Feb 2014 8:42 pm
2020 seems way too late but I hope I am wrong. Gail the Actuary has predicted 2016…I think we see a stair step down where people start to say uh oh something is going on…
Northwest Resident on Tue, 4th Feb 2014 9:09 pm
Ted — The Joint Operating Environment of 2010 clearly predicts 2015 as the year when we experience significant shortfalls in oil. I think the military strategic experts were telegraphing a message to us non-military types based on inside information with that prediction. Other notables including former German and U.K. energy ministers have in various articles and videos also mentioned the year 2015. I read a convincing (to me) article that by the end of this year, America will not have enough tax revenue to pay interest on the national debt. There is a Lt. Colonel in the Air Force making the rounds, including the Billionaire Club meeting in Davos, and he’s talking up 2015 as the year we run into energy-related problems of significant proportion. As a side note, how many of us seriously think that this charade called the global economy can go on much longer before it collapses into the pile of lies that it was built on? I’m sticking with 2015. If 2015 isn’t exactly when that “collapse” occurs, then I’ll eat my hat! (the one I got a few years ago at the ski lodge in Vail, Colorado).
Davy, Hermann, MO on Tue, 4th Feb 2014 9:54 pm
Northwest Resident on Tue, 4th Feb 2014 9:09 pm
I’m sticking with 2015. If 2015 isn’t exactly when that “collapse” occurs, then I’ll eat my hat!
I think we have a few years with fossil fuels. If you study the sane number coming out from mainly geologist and oil service consultants we see a gently bouncing supply with relatively few active variables. These variables tend to remain consistent. This is because we are talking huge capital investments and once they get moving a business plan is in effect driving an exploration and production plan. The time frame on these projects make them predictable. There are huge amounts of product in storage or in transport. We have a relatively good handle on the resource from a worldwide geological effort. Oil is a global commodity so much is known about it globally. Sure we have the phony numbers but most of these fake numbers have been deciphered. I am speaking of Opec reserves. Even with the excessive optimism from EIA and USGS we still can discount this and message the numbers. These number are pointing to 2020 vacinity.
I think 2015 could be the year if the financial crisis gets out of control. The global financial system is the Wild West. We have all the nasty aspects of business. We are increasingly finding the worst of human nature surfacing in finance. Finance is a cancer consuming its host. It is robing us of our basic necessities. The system is out of control. It is self-organizing and its MO is greed. We can no longer control it. Its organizations are too big to fail. The leaders are untouchable and manage this by the revolving door of patronage and influence. We get back to a species that has grown too large too quick and we understand why finance is dysfunctional. The problem is it is essential to a highly complex, just in time, global support system. Finance is psychology and human nature so lacks concrete rationality. With everything said above we can honestly say there is no way to tell how long this system, that is little more than a Ponzi scheme, can last. Greed, patronage, manipulation, corruption, and theft can last for some time. Yet, it can end tomorrow and with it our social fabric. I postulate these nasty things will last as long as the 10% will tolerate the 1%. When the 10% gets the hammer they have the education, population, and resources to force a change. The problem is any change to this system will likely bring the whole thing down.
Northwest Resident on Tue, 4th Feb 2014 10:10 pm
All excellent points, Davy. From my perspective, I hope we do drag things out for another couple of years because that will give me a chance to perfect and improve my “plan”. And I realize that others are thinking they need more time too — and I would like to see them fully prepared to meet the challenges and make it to the other side of the bottleneck. But, having said all that, I just personally don’t believe the good ship “Global Economy” is going to stay afloat until 2020. It will never be a matter of not having enough physical oil, but a matter of not having enough financing/credit and economic structural support to extract and deliver that oil. I’m sure you agree that the entire world economy is on very thin ice — any small crack can open a wide chasm into which everything falls like getting sucked into a black hole. There are a long list of events which could intrude on even our best laid plans in the best of times and wreak havoc on the world economy — but which at this fragile moment would wipe everything out in a single blow. Very few people seem to agree with me or see it the way I do — but that’s okay, because I remember a lot of times in my past where I stuck to my “gut instinct” and to what I believed against all opposition and ended up being proven right in the long run. 2015 – 2016 – 2017 – whatever. That shit is coming down the pipeline and just exactly when it arrives, none of us know. The smart thing to do is to prepare as if it were going to go down tomorrow, then spend any days thereafter as if they were gifts, because from my point of view, they are.
GregT on Tue, 4th Feb 2014 10:17 pm
NWR,
I certainly hope you are wrong, not just because I would like to see you eat that hat, but I could really use a couple more years to prepare, at the least.
Seriously though, I have also read many reports and articles pointing to the same timeline. I do think, however, they’ll figure out a way to drag the remains around for a bit longer. There’s still quite a bit of ‘wealth’ and ‘power’ left to re-distribute.
I’m still guessing 2025 to 2030 for the plug to be pulled, before that happens I see another big war.
Davy, Hermann, MO on Tue, 4th Feb 2014 10:29 pm
NR, if we do have that 2015 collapse you may get hungry enough to eat your hat. The Lewis and Clark Expedition ate their moccasins. I hope your hat is not toxic
Northwest Resident on Tue, 4th Feb 2014 10:34 pm
GregT — Of course you could be right. But I really don’t see a big war coming. Reason why: There’s too little left to be gained by investing epic amounts of energy and blood and human misery into. So, you start a big war and waste all the rest of the world’s reasonably accessible oil/energy on winning that war, and maybe launch a few nukes and take a couple of nuke hits. What’s the point? I think that even the most greedy and power hungry are able to look around and see that there isn’t many scraps left on the table worth fighting over. Now they’re all just focused on holding onto what they already have, trying to figure out who gets what, and which “eaters” are useful and self-sustaining and which ones aren’t. That’s what I think — based on no proof or evidence whatsoever.
Northwest Resident on Tue, 4th Feb 2014 10:36 pm
Davy — That’s specifically why I put my Vale Ski Lodge hat on the table along with my ultimatum. Made from all natural ingredients in the USA — no sweat stains to speak of, and it feels softer than my other hats. A little ketchup and salt and I’m good to go.
GregT on Tue, 4th Feb 2014 10:51 pm
NWR,
You could very well be right. I guess at this point in time, it’s all just speculation. Where we’re headed is pretty clear, only a matter of how long and what happens till we get there. We most certainly do live in interesting times, far more interesting than I ever could have imagined.
Have you thought about cooking the hat, or are you planning on eating it raw?
Northwest Resident on Tue, 4th Feb 2014 11:00 pm
GregT — My preference would be to sauté it with garlic, onions and peppers. Then add ketchup and salt for the finishing touches. You know, high class all the way.
I like that character played by Steve Buscemi in the move “Armageddon”, where he says something like, “We’ve got front row seats to the end of the world!” — and means it. Yes, interesting times, that is for sure.
But you know, lurking beneath the surface is fear and uncertainty and utter terror. It is all fine and fun to joke about it now. But at some point, it will start coming down, and that’s when the fun and joking around will come to an end.
I kind of feel like a soldier on the cusp of a major military venture where combat is a certainty and the chances of survival are slim to none. Only by sheer luck, fate, skill and preparedness combined will I make it out of the coming battles alive. But I feel like there is an inevitability to all of this, that this is where I’m meant to be, this is the fight that is in front of me and there is no turning back. So, I’m like, let’s get this fucking show on the road. But yeah, there is still more time that can be put into preparation, so let’s use that time wisely. I’m sure you will, and I hope others reading these posts will also become so inspired. The fools will never get it — they will be zombies for the meat grinder. But I imagine there are a lot of real smart and worthy people out there who, like me just eight or nine short months ago, just haven’t “gotten the clue” yet. They need to, and fast.
J-Gav on Wed, 5th Feb 2014 12:09 am
Even those you have “gotten the clue” don’t necessarily have the means to get out of the various traps they’re in. There are lots of different situations out there.
HARM on Wed, 5th Feb 2014 12:54 am
From Ugo Bardi:
“The last round of tax increases in Italy is targeting homes and it is really, really hurting, especially the poor. You can be poor here, and still own a house that you inherited from your parents. Now the government asks you to pay as if that house were revenue! That is truly evil. People who don’t have the money to pay this property tax can only indebt themselves with banks (or worse).”
We’ve had property tax here in the U.S. for… practically forever. It can occasionally be a burden for some low income people, but it’s hardly the most “evil” tax on the planet. It’s actually a lot whole *less* regressive than sales or even income tax.
Why? Because poor people on the whole own very little property. And what real estate they do own tends to have a very low assesed value, ergo low property tax bill.
The rich and super-rich, OTH, tend to won a LOT of very expensive real estate, and pay a whole lot more in property tax –as they should.
At the end of the day, taxes, like death, are inevitable. Someone’s got to pay it so you can have water, electricity, police, courts, public schools, roads, bridges, healthcare, police, fire department, old age pensions, homeless shelters, etc.
Calling a steeply progressive tax like poroperty tax “evil” is just agitprop and completely misses the point that tax is part of the price to be paid for living in a relatively prosperous first world society vs. a libertarian “paradise” like, say Somalia.
action on Wed, 5th Feb 2014 12:56 am
The first thing I’m going to eat when this collapses is all the dogs that bark nonstop in my neighborhood. Total collapse by 2020 is out of the question in my opinion. People will just keepgetting poorer, with the already poor suffering the first. It will get more and more police state to control these people. People with good jobs, such as in the energy industry, will continue to get by. Losing poor people will actually help, except for the police state thing. Then, and I’m just throwing this number out there, after 20 years the once well off will have nothing left and all out collapse will ensue. I just think 2020 is a little premature. Bravo for this article though, way to try and figure out a timeline and the collapses predictors. Luckily I’m too young to have built anything yet so I’ve got nothing to lose, except my car, bed, and the clothing on my back. Anyways, the government will definitely protect itself at the expense of the citizens, its just a matter of being able to afford it.
GregT on Wed, 5th Feb 2014 1:45 am
action,
You may recall, that I pointed this out to you before. In many ways, you are at an advantage. You don’t have things to tie you down, you have your youth, and hopefully your health. You are already far ahead of most, simply for the fact that you have an understanding about what is occurring. One of the biggest hurdles for many people to overcome, is simply the shock involved. Many people in the past, when faced with these kinds of situations completely give up, or worse, they give up their lives.
So keep your head up, if anyone can make it through this, it will be people like you, and people like you are our future.
Oh, and when you’re finished eating all of the dogs in your neighbourhood, you’re welcome to do the same with the dogs in mine. If I don’t get em first. 🙂
GregT on Wed, 5th Feb 2014 1:52 am
NWR,
But you know, lurking beneath the surface is fear and uncertainty and utter terror. It is all fine and fun to joke about it now. But at some point, it will start coming down, and that’s when the fun and joking around will come to an end.
You’re preaching to the choir. If anyone is living this, it would be me, and I don’t find anything funny about it at all. That being said, a little bit of comic relief is always good for morale.
Northwest Resident on Wed, 5th Feb 2014 4:09 am
GregT — I’m on board with the humor whenever possible and as appropriate — or, even when it isn’t appropriate.
action on Wed, 5th Feb 2014 5:55 pm
Thanks Greg
Davy, Hermann, MO on Thu, 6th Feb 2014 12:53 am
I kind of feel like a soldier on the cusp of a major military venture where combat is a certainty and the chances of survival are slim to none.
NR, I know what you mean. It is a lonely battle too. The majority of the people around me may listen to my words but there is little conviction or seriousness for the challenges ahead. I am more laid back about it today then I was in 2007/2008. I was a bit militant then about things. I guess it was going through that near miss that changed me. I made some big changes and the collapse was averted. Yet, it was a great learning experience. We must admit that 2007/2008 was a close one. There is no reason why things did not collapse. The global economy was close to shutting down. We got lucky or did we. Maybe we would have been better off collapsing then. The reboot may have been easier then it will be in a few years.
energyskeptic on Thu, 6th Feb 2014 1:29 am
Northwest resident. I highly recommend you see the short movie “Werner Herzog Eats his shoe” a short documentary film directed by Les Blank in 1980 which depicts director Werner Herzog living up to his promise that he would eat his shoe if Errol Morris ever completed the film Gates of Heaven.
I’m so fascinated by all the hovering buzzard factors leading to collapse I am trying to catalog them at energyskeptic.com More and more I see the great potential of a fast crash, and just finished “secular cycles” where Turchin tries to find patterns to the rise and fall of nations using scientific evidence – I was struck by how fast collapse / depression is, almost always 20 years or so, and we are clearly on the verge based on the patterns of past nations. I have a book review of “Secular cycles” at energyskeptic (and amazon) as well that I am still modifying.