The idea that a sovereign nation can never run into trouble financially because it can create its own currency is certainly the dominant narrative amongst government and ‘mainstream’ economists/bankers. After all, who benefits the most from this storyline?
But is it in fact true?
Scratching below the surface of this ‘experiment’ suggests it is not.
If printing one’s own money were a panacea, then nations like Venezuela, Zimbabwe, or the German Weimar Republic (and countless other nations throughout history) would never have experienced the hyperinflation and/or currency debasement that they have. They would be the richest nations ever to have existed.
One could counter that this is because they had to use their debased currency to import goods. True, but if one is debauching one’s currency through exponential ‘printing’, then this may be true for any nation dependent upon imports, which almost every nation is in our globalised, industrial world.
The solution that nations have rested upon given this reality is that the central banks collude to all print at relatively the same rate, so currencies don’t fall/rise too drastically compared to their trading partners.
Fine, but what does endless money/credit creation due to the purchasing power of this fiat currency created from thin air?
Previous trials in this approach indicate that it totally debases/debauches the currency, significantly reducing the ‘wealth’ of the people holding/using it because of the inflation that it creates.
Here’s what John Maynard Keynes had to say about this: “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
And while it’s interesting to note ‘official inflation’ is subdued, the manipulation that goes into creating this gauge of price inflation makes the official number meaningless to people’s real-world experience (look up hedonic adjustments to get a sense of how manipulated these numbers are; and then compare your experience in price increases to official numbers — my family’s utilities, food, health, housing, transportation, insurance, education, etc. expenses far, far outpace ‘official’ inflation; by several times).
Then there’s the whole issue of continuing to chase the infinite growth chalice and pulling substantial growth forward through debt/money creation. We live on a finite planet despite hopium narratives to the contrary and all this push for growth does is get us further and further into overshoot by quickening our exploitation of finite resources.
There is no consideration whatsoever of the limits imposed upon us. There is only more growth to try and address our dilemmas that are created by us pursuing growth in the first place.
Despite the story that these policies are being used to solve our problems and help people, the reality is that they are very much probably doing the exact opposite.
In fact, a good argument could be made that the ‘all in’ aspect of this is further evidence that the planet is reaching the endgame of overshooting our natural carrying capacity and the fallout is quickening towards its obvious conclusion: collapse of the complex systems we have come to depend upon.
To paraphrase Canadian economist Jeff Rubin in his book Why Your World is About to Get a Whole Lot Smaller: things are going local and simpler, whether we want them to or not.
My comment posted on The Tyee in response to an article highlighting the increased occurrence of earthquakes as a result of hydraulic fracturing by the oil and gas industry in an area of British Columbia, Canada, and imperilling local infrastructure and construction of a large hydroelectric dam.
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Until and unless there is a complete dismantling and dismemberment of the current sociopolitical and socioeconomic systems in place globally, these type of situations and associated abuses of people and the planet will continue will little disruption.
I realise that a significant majority of people believe democracy, technology, and human ingenuity can save us from ourselves but this is highly unlikely (impossible?). We are so far down the rabbit’s hole that such magical thinking is likely common so as to reduce our cognitive dissonance en masse (and compounded by the constant propaganda thrown at us). It does nothing to resolve our dilemmas; in fact, it might actually hamper ‘solutions’ by avoiding more effective pathways and harvesting our finite resources even faster.
I truly believe we need to move quickly through Kubler-Ross’s stages of grief, getting past the denial and bargaining (for this is what is happening as more and more people come to realise we are pursuing unsustainable and suicidal ways, but don’t want to face the uncomfortable and negative consequences that are becoming increasingly obvious; they engage in magical thinking to convince themselves we’re okay with just a tweak here or a tweak there).
We need to come to accept that our chasing the infinite growth chalice must stop, and that all the ‘baubles’ promised from this pursuit by the sociopathic ‘leaders’ that profit from their control of the wealth-generating and -extraction systems that arise from this economic/political quest of growth are not worth the journey over the cliff ahead.
If we do not choose to stop this insanity now, we can be assured that nature will do it for us and we are not going to enjoy the choices nature makes for us to reset things to some sort of balance. The collapse that accompanies overshoot is never ‘fun’ for the species experiencing it.
And we have a species that will be fighting over the scarce resources remaining with the most destructive weaponry in human history. In fact, this fight has been going on for some decades (one could argue it’s been going on since humans first ‘arrived’ on the planet) and seems to be intensifying quickly (and has little to do with the left/right political spectrum disagreements, but a result of diminishing returns on our exploitation of resources). If we should have learned anything from the spread of Covid-19, is that exponential growth moves much faster than we imagine and can overwhelm a system in no time.
While it is very likely (guaranteed?) that our sociopathic ruling class will not stop this insanity (for it is their revenue stream and base of power), it is up to each and every one of us to remove ourselves as much as is possible from the Matrix and all the components of it that supports the unsustainable systems we are enmeshed in.
The journey will not be easy nor straightforward, but if we reach a tipping point of world citizens that reject the systems imposed upon us by the ‘elite’ we may just have a chance…maybe.
Howard T. Odum: co-originator of Maximum Power Principle
Today’s guest post by Preston Howard discusses an issue central to our overshoot predicament that is often ignored: The Maximum Power Principle (MPP). The MPP states that life optimizes for maximize power, not maximum efficiency, and implies that life does not look forward in time to consider the consequences of maximizing power today.
While preparing an initial report for Florida’s first Area of Critical State Concern1 in 1972, I had the immense good fortune to spend time with Howard T. Odum, an environmental engineering scientist who directed the Wetlands Center at the University of Florida. The area of state concern was the Big Cypress Preserve adjacent to the Florida Everglades. Dr Odum and several of his graduate students had ongoing studies in the area. In informal conversations, Dr Odum explained the Maximum Power Principle as described below. I believe it presents Humanity’s current situation better than anything I have seen about global warming, overshoot, or climate collapse. However, to my knowledge no one has mentioned it in any serious article except Gail Tverberg in her articles about resource consumption.
To understand the Maximum Power Principle2, let us imagine a square island, barren of any vegetation. As happened many times in Florida, suppose our island was created by fill where a shipping channel had been deepened. Situated close to the seaport, someone intended to build something on the new island, but permitting requirements and other administrative delays where taking “forever.” (These details provide a “context” for the discussion.)
The barren island does not remain barren for long, as plants soon begin to grow on it. The solar energy that bathes the island provides abundant energy for the early pioneer plants…
Feeding the Growth Monster: Fiat Currency and Technology
My response to an ongoing discussion regarding debt-/credit-based fiat currency and it’s impact on our pursuing the infinite growth chalice.
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Yes, credit-/debt-based fiat is certainly one of the most significant causes of our pursuing the infinite growth chalice. Not the only one, but one of the main ones, certainly. And having ‘sound’ money that was not created and distributed by private interests may help, but there are no guarantees especially if it were in the hands of the political class who, much as they do now, would very likely use such ‘power’ to ‘buy’ votes, ‘pay off’ supporters, and fund boondoggles.
I honestly don’t know if there is any ‘solution’ to this monetary conundrum. In the words of Men Without Hats in their song ‘Unsatisfaction’: I’m never satisfied when the answers could be real. I may not know what’s right but I know this can’t be it.
Regardless of what change occurs with our monetary system, I’ve reached the conclusion that if we don’t begin pursuing degrowth strategies as of, like yesterday, we are destined to experience the collapse that always accompanies overshoot.
We are well into the diminishing returns fiasco that archaeologist Joseph Tainter outlines in his monograph Collapse of Complex Societies, and sets the stage for sociopolitical (and economic) collapse; and it is likely no amount of ‘tinkering’ in our business-as-usual trajectory is going to prevent collapse/decline at this point.
All of our debates are probably quite academic and moot at this point. Making one’s local community/neighbourhood/family as self-sufficient/-reliant as possible may be the only way to ensure some of us make it through the other side of the inevitable transition since our society’s collapse will be unlike every other one in pre/history as virtually none of us have the skills/knowledge to survive without modern society’s energy-intensive technology and long-distance supply chains.
This is one of the main motivations for me to transition our yard towards food production rather than monoculture grass and begun helping family and neighbours do the same.
We have painted ourselves into a corner from which there is unlikely any escape route and we are beginning, quite vociferously and violently in some cases, to fight over a shrinking economic pie.
Arguments over how to ‘fix’ things abound (the ruling class has latched onto infinite money printing to ‘paper’ over things, much like the Romans did when they began clipping coins during their decline) but most of these are not ‘fixes’ to our unsustainable trajectory but part and parcel of our attempts to reduce the cognitive dissonance that arises from realising we cannot continue business as usual but the path we need to follow is ‘unthinkable’ for it would mean sacrificing almost everything we hold dear in ‘modern’ society.
Most of us want to believe that technology and human ingenuity will ‘save’ us (thus arguments from academics/educators about focusing more resources into education, not realising that there isn’t the time nor agreement over ‘solutions’ for education to play a role) but it is most likely that our efforts at greater and greater technological ‘solutions’ are just expediting our journey over the cliff since technology speeds the exploitation of finite resources, much as money printing does, and creates a host of negative consequences we conveniently ignore.
If people believe the world is in chaos now, just wait a few years…
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NOTE: Beginning to post these thoughts of mine here. I began a couple of years ago posting them on Medium but have found that the subscription practices there are somewhat restrictive. I will attempt to post one per day until I am caught up…and then will be posting in both locations.
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Today’s Contemplation: Collapse Cometh
August 8, 2020
Palace of Knossos, 1993 (Crete, Greece) Photo by author
Mythical Narratives Everywhere to Avoid Reality
As I approach my 7th decade on this planet, I have reached the conclusion that we all interpret the world through mythical narratives; some of our own creation, many (most?) others ‘imposed’ upon us. The ruling class of society conditions us in numerous ways to accept stories that, for the most part, support and prolong their position of power and control.
From hereditary chieftains/monarchs to ‘democratic’ leadership, the ‘elite’ of society maintain a hold over the ‘tribe’ so as to ensure their revenue streams and wealth (some would argue this is a parasitic arrangement since this class returns little in the way of productive value to the system). They use the various tools at their disposal (e.g., education system, media, etc.) to inculcate/predispose us to accepting this arrangement and continuing to control and expand the wealth-generating/extraction systems that arise from everyday human economic interactions.
Power and wealth is concentrated significantly at the top of the pyramid; yet we are constantly exposed to narratives that we not only have agency, but that the ‘elite’ put our needs at the forefront of their policies and decision-making. I strongly believe these are false and propagated to influence/manipulate our thinking and beliefs.
Just like our financial institutions (especially the big banks) who knowingly engage in criminal activity and then receive raps on the wrist with minimal fines when caught (making their brazen thievery well worth it), the ruling class is more than willing to break ‘rules/laws’ (in fact, I would argue they are constantly doing so) because the ‘price’ for doing so is negligible (with the occasional sacrifice made to appease the masses).
I don’t believe there is a ‘solution’ to any of this (unlike most who do because, you know, hope — and reduction of cognitive dissonance) aside from complete sociopolitical collapse — which I would argue will eventually happen as it has for every complex society that has preceded ours. My response to this has been to accept it, and try and remove myself from the Matrix as much as is possible and prepare accordingly.
The world is not as we have been conditioned to believe by the narrative managers who weave the various storylines (read Edward Bernays book Propaganda for interesting insight on this). Awareness of this is a first step towards a better understanding of how messed up this world truly is and, possibly, doing something for your family/community to make it more resilient as the system inevitably declines/collapses.
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John: “What alternative to carbon-based fuels do you suggest, if not solar? Since the WPP is engaging in the process of policy development, we need one for transitioning away from carbon-based fuels. Any ideas?”
Mark:”First, to set the stage…”
“Chicago…
Atlanta…
Denver…
Just contemplate the energy needed to power these scenes on a single night … and these are just three of the ‘smaller’ cities. How many solar panels would it take?
Here’s Mumbai…
Hey, maybe we better go nuclear … and really accelerate the insanity.
Nobody was a bigger fan of solar and wind energy than me, when I first learned about them. It made so much sense — hell, the planet is bathed in solar energy every day and wind blows and tides come and go. What’s not to like?
Well the gap between promise and reality, panels and watts, rooftop collectors and industrial waste, the disaster of precious mineral extraction, battery and panel recycling limitations and the human rights abuses the technology depends upon turns out to be huge.
The silence by the starry-eyed Green Deal left on the devastating human rights issue of “clean” energy is a sickening example of western liberal privilege. You can find lots of information on the issue, here’s a recent piece from Democracy Now!: “Cobalt Red”: Smartphones & Electric Cars Rely on Toxic Mineral Mined in Congo by Children…
The fact is, our urbanized high density industrial civilization rose and rides on easy availability of plentiful cheap, high density, high polluting energy. Without it we are stuck in the mud. The availability of the traditional energy sources are dwindling and all the pollution from 250 years of cheap high density dirty energy is choking us off.
Crude prices will likely get a fresh boost this week, as stockpiles at the key US storage hub in Cushing, Oklahoma, risk collapsing to the lowest level (aka “tank-bottoms”) in almost a decade.
Such a move would embolden those aiming for a return of $100 oil by year-end.
Cushing storage tanks
Cushing matters. Being the delivery point for the WTI futures contract, the rise and fall of the holdings is among the market’s most closely followed trends. So far in 3Q, inventories have slumped by ~47% to 22.9m barrels. That’s the lowest since July 2022 and that’s not far away from the 2014 lows.
If that comes to pass, it’d highlight the scramble for near-term supplies as the global market tightens up.
Estimates come on Tuesday, followed by the official print the next day.
Rystad: in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent.
The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions.
In the hunt for new resources, exploration companies are prioritizing the offshore sector.
Spending on conventional oil and gas exploration is rebounding and expected to top $50 billion this year, the highest since 2019, but operators are still waiting for the results they had hoped for. Rystad Energy research shows that despite the rising investments, discovered volumes are falling to new lows.
Our estimates show that in the first half of 2023, explorers found 2.6 billion barrels of oil equivalent (boe), 42% lower than the first half of 2022 total of 4.5 billion boe. Fifty-five discoveries have been made, compared to 80 in the first six months of last year. This means discoveries in 2023 have averaged 47 million boe, lower than the 56 million boe per discovery for the same period in 2022.
The exploration and production (E&P) industry is in a transitionary period, with many companies exercising increased caution and shifting their strategies to target more profitable and geologically better-understood regions. This strategic shift and the failure of several critical high-potential wells are contributing to the precipitous drop.
In the hunt for new resources, exploration companies are prioritizing the offshore sector, trying to capitalize on underexplored or frontier areas to unlock new volumes through high-risk, higher-cost offshore developments. The offshore industry accounted for about 95% of exploration spending this year to date but only about two-thirds of discovered volumes.
“Upstream companies are facing a period of uncertainty. They are eager to capitalize on the increased demand for fossil fuels and find additional resources, but recent results have been lackluster…
The proposed Energy Bill has been criticized as an attack on freedom and home ownership
U.K. businesses and homeowners could be jailed for up to a year or fined £15,000 for non-compliance with new energy efficiency regulations proposed by the Conservative government, which have been described by critics as a “massive expansion of the state and its power over our lives.”
The Energy Bill, which returned to parliament for its third reading this week, outlines several new requirements homeowners must adhere to in relation to Net Zero, the government’s commitment to being carbon neutral by 2050.
For the first time, individuals face criminal charges for failing to comply with measures designed to reduce the country’s carbon footprint.
One such draconian regulation states that household appliances such as fridges, washing machines, and heat pumps must be fitted with smart functions that can be controlled by “any persons carrying out load control,” namely the National Grid, which oversees the majority of electricity transmission and distribution in Britain.
The vast majority of households in the country will not currently comply with the new measures outlined in the bill, meaning homeowners will be compelled to pay out significant sums to transform properties and make them “energy-efficient” or potentially face criminal charges for so-called “non-compliance.”
The bill has angered a number of backbench Conservative MPs who have threatened to rebel against the legislation, with some claiming it is the latest installment in the government’s “cult-like” obsession with Net Zero.
“We cannot impoverish our country to meet some, well, I’d like to call it in some cases almost cultish policy until we can afford it. Until it works, that’s when I think we should adopt all these policies,” said Richard Drax, the Conservative MP for South Dorset.
For millions of years us, humans, were part of Nature. We were born in the wild, lived in the wild, died in the wild. We ate what we found, drank the waters of rivers and streams, breathed air purified by trees. Just like any other mammalian species on Earth. The false belief, that we’ve somehow moved above and beyond that thanks to our ingenuity is just a fantasy. Or rather: pure unadulterated hogwash. We still eat plants and animals feeding on grass and seeds. We still drink the waters of rivers and streams. We still breathe air purified by trees. The only difference is, that today there is a massive blob of buildings, roads, machines, mines and supermarkets — now weighing more than all things living — placed between us and Nature.
All technology did, in its narrowest technical sense, is that it has enabled us to extract raw materials, clear-cut forests, harvest fish and food beyond all sustainable levels. Sustainability in its original sense means: an ability for something to go on unabated forever (or at least long enough not to matter). All I’m writing about on this blog since its inception, is that nothing — not a single thing — we do and call ‘civilization’ today can go on for much too long, let alone forever.
Extracting resources (especially by mining) destroys ecosystems, takes a lot of energy and precious fresh water, poisons rivers and the soil, and ultimately depletes the very resource it is going after. It is a self-destructing and thus a self-limiting activity. Mining is by definition unsustainable. Now, the problem is, that everything we call civilization today from buildings to roads, from agriculture to distributing food, from machines to electricity starts with extracting resources from the ground. No exceptions.
Renewable energy, energy efficiency and conservation offer numerous advantages over fossil fuels beyond climate benefits.
As the world breaks heat records, our biggest roadblock is fossil fuel companies, and their influence. Credit: Chris LeBoutillier / Unsplash
On July 6, the world’s average temperature was the hottest ever recorded, at 17.23 C. That beat the previous highs on… July 3 and 4! June was the hottest month ever, but July is shaping up to be even hotter. Experts expect more records to break over the next while, as an El Niño weather pattern combines with record emissions to drive up temperatures.
“We have never seen anything like this before,” Carlo Buontempo, director of Europe’s Copernicus Climate Change Service, told the Washington Post, noting that “we are in uncharted territory.” Temperatures are hotter than they’ve been in 125,000 years!
People worldwide are feeling the effects, with scorching heat from Africa to Europe, across China and the southern U.S. Records are even breaking in Antarctica, where warming drove sea ice to 17 per cent below the 1991-2020 June average. In Canada, May was the hottest month ever, until June recorded even higher temperatures. We see the results in air congested with wildfire smoke.
Heat and humidity are already causing an increasing number of direct deaths, along with numerous other negative impacts — floods, droughts, wildfires, refugee crises, water shortages, biodiversity loss and more.
How bad does it have to get before the world wakes up?
Unless we reject the widespread power and influence of the fossil fuel industry in all aspects of our lives, we could reach the point of no return before we employ the many available and emerging solutions.
For many years, there has been a theory that imports of oil would become a problem before there was an overall shortage of fossil fuels. In fact, when I look at the data, it seems to be clear that oil imports are already constrained.
Figure 1. Interregional trade of fossil fuels based on data of the 2023 Statistical Review of World Energy by the Energy Institute.
As I look at the data, it appears to me that coal and natural gas imports are becoming constrained, as well. There was evidence of this constrained supply in the spiking prices for these fuels in Europe in late 2021 and early 2022, starting well before the Ukraine conflict began.
Oil, coal, and natural gas are different enough from each other that we should expect somewhat different patterns. Oil is inexpensive to transport. It is especially important for the production of food and for transportation. Prices tend to be worldwide prices.
Coal and natural gas are both more expensive to transport than oil. They tend to be used in industry, in the heating and cooling of buildings, and in electricity production. Their prices tend to be local prices, rather than the worldwide price we expect for oil. Prices for importers of these fuels can jump very high if there are shortages.
In this post, I first look at the trends in the overall supply of these fuels, since a big part of the import problem is fossil fuel supply not growing quickly enough to keep pace with world population growth. I also give more background how the three fossil fuels differ.
You may not have noticed, but earlier this month we passed Earth overshoot day, when humanity’s demands for ecological resources and services exceeded what our planet can regenerate annually.
Many economists criticising the developing degrowth movement fail to appreciate this critical point of Earth’s biophysical limits.
Ecologists on the other hand see the human economy as a subset of the biosphere. Their perspective highlights the urgency with which we need to reduce our demands on the biosphere to avoid a disastrous ecological collapse, with consequences for us and all other species.
Many degrowth scholars (as well as critics) focus on features of capitalism as the cause of this ecological overshoot. But while capitalism may be problematic, many civilisations destroyed ecosystems to the point of collapse long before it became our dominant economic model.
Capitalism, powered by the availability of cheap and abundant fossil energy, has indeed resulted in unprecedented and global biosphere disruption. But the direct cause remains the excessive volume and speed with which resources are extracted and wastes returned to the environment.
From an ecologist’s perspective, degrowth is inevitable on our current trajectory.
Carrying capacity
Ecology tells us that many species overshoot their environment’s carrying capacity if they have temporary access to an unusually high level of resources. Overshoot declines when those resources return to more stable levels. This often involves large-scale starvation and die-offs as populations adjust.
Access to fossil fuels has allowed us to temporarily overshoot biophysical limits. This lifted our population and demands on the biosphere past the level it can safely absorb. Barring a planned reduction of those biosphere demands, we will experience the same “adjustments” as other species.
A compilation of writers focused on the nexus of limits to growth, energy, and ecological overshoot.
With a Foreword and Afterword by Michael Dowd, authors include: Max Wilbert; Tim Watkins; Mike Stasse; Dr. Bill Rees; Dr. Tim Morgan; Rob Mielcarski; Dr. Simon Michaux; Erik Michaels; Just Collapse’s Tristan Sykes & Dr. Kate Booth; Kevin Hester; Alice Friedemann; David Casey; and, Steve Bull.
The document is not a guided narrative towards a singular or overarching message; except, perhaps, that we are in a predicament of our own making with a far more chaotic future ahead of us than most imagine–and most certainly than what mainstream media/politics would have us believe.
Click here to access the document as a PDF file, free to download.
Our modern technological civilization was born out of fossil fuels. Coal. Oil. Natural gas. To this very day most of our industry, transportation and agriculture is still powered by these incredibly dense, portable, storable sources of energy. There is a fly in the ointment though: the burning of these ancient accumulations of carbon comes with releasing a lot of CO2 into the atmosphere. So far so good, however, I still regularly stumble upon commentators (and commenters) who question whether all this burning of fossil fuels is the cause of climate change (if it is changing at all). According to some this is a recent “woke” theory emerging from backroom discussions of the World Economic Forum, in order to make us all obedient and to deprive hard working people of the great gift of fossil energy. Well, let’s have a look at the history of the topic, to see if it’s based on actual measurement data and science in its classical sense or its indeed just a recent scare. Who knows, we might even gain some insight into some of the conspiracy theories while we’re at it.
Upuntil the late 1980’s the state of our climate didn’t seemed to be too much of a concern. One could even believe that we were headed towards another ice age without being labelled a climate change denier. Fossil fuels were deemed to be a universal good and very few thought that their use could put an end to human history. This state of blissful ignorance didn’t mean that there were no ominous warnings given beforehand. After all who could recall all the scientific studies made a hundred years earlier…?
