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The gas price crisis – in a hole, stop digging, here’s how to climb out…

Does it seem odd that in a gas price crisis, there are people arguing we should dig ourselves deeper into the grip of that particular fuel? We’ve been here before – and it never ends well. A poorly regulated banking system crashes and its defenders say that even less rules are needed to recover. Or, house prices go through the roof and instead of controlling property speculation, more money is poured into the market without building more homes.

In the grip of yet another fossil fuel price crisis, there are already voices saying that we need more of what got us into the mess in order to escape it. It’s like thinking, ‘my head hurts because I knocked it, if I hit it even harder the second knock will take away the pain of the first.’ When it comes to the energy issue, some seem incapable of even imagining a situation in which economies stop hitting themselves on the head with further fossil fuel addiction.

And, that’s a shame, because there’s an abundance of evidence of the ability to shift rapidly to much less economically and ecologically painful energy systems.

Collaborating with UK research body Nesta, the Rapid Transition Alliance looked at several cases of successful escape pathways from dependence on gas, with all its pollution and price volatility.

The first flush of transition

Gas is still a very common fuel used for heating homes, being literally plumbed into our daily lives. The idea that this could change quickly is hard to grasp. But it’s easy to forget how recently and radically home life has changed in many European homes. Only two generations ago, one in four homes in England and Wales still lacked an indoor shower, bath or toilet. In just over two decades, that number fell to 1%.

…click on the above link to read the rest of the article…

How winter could worsen the global energy crisis. 

How winter could worsen the global energy crisis. 

A red light on the dashboard

A red light on the dashboard

On New Year’s Eve 2006-7, something unexpected happened.  For most of the previous two decades, most of the pubs where I live had operated a system where they gave tickets to regular drinkers in order to limit the number of people seeking entry.  This was a problem because one couldn’t secure tickets for guests.  And since my relatives only stayed over for the holidays, it left us to seek out the few pubs that did not operate a ticket policy.  And in most years, these pubs would be packed to the rafters.

When we set out in the last couple of hours of 2006, we fully expected the same crowds as the year before.  So did the pubs, apparently, because they had hired security to control entry – something that was common for British nightclubs but rare for pubs.  What none of us had anticipated though, was that the pubs would be almost empty!  Nor was it just one or two pubs.  Everywhere we went it was the same story.  Indeed, on one occasion the security staff hired to keep the masses out tried hard to encourage us to come in.  Quite simply, tens of thousands of people who had previously gone to pubs to celebrate New Year, stayed at home in 2006.

To me it was a warning sign that something unpleasant and dramatic was about to happen to the economy.  It wasn’t that the beer had risen in price – although supermarket beer had long been cheaper than pub beer.  It was an indicator of something much more profound.  Coming on the heels of rising fuel prices and the central bank decision to begin jacking up interest rates, it was a signal that people’s standard of living had been impacted to the point that discretionary spending was being seriously curtailed.

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Chokepoint democracy: Workers capitalize on global system weak spots

Chokepoint democracy: Workers capitalize on global system weak spots

In his book Carbon Democracy Timothy Mitchell attempts to explain the rising and falling political power of the working class in terms of the evolution of the world’s energy system. The first fossil fuel, coal, required hoards of men (and it was almost exclusively men) to bring it to the surface, get it to market, and bring it to its final users.

Since coal was the largest fossil fuel energy source for human societies from the early days of the Industrial Revolution until the 1950s and its extraction employed a large number of workers who over time unionized, strikes among coal workers severely impacted energy supplies. Those strikes riveted the attention of the authorities and the public as the health and economic well-being of society was at stake.

The rise of oil as the world’s dominate energy source changed all that. Oil required many fewer workers to bring it out of the ground and distribute it. Oil production utilizes pumps and pipelines instead of people to move fuel. The decline of the power of coal miners followed in the wake of oil’s rise. Oil did not similarly empower workers because so much of the system to extract and refine it runs automatically and can often be overseen temporarily by a few management personnel in the event of a strike or work stoppage.

Fast forward to today and we see for the first time in a very long time, workers in a variety of industries are showing renewed political and economic power as a variety of causes have created a labor shortage. Strikes are spreading across the United States and include workers in (not surprisingly) health care, manufacturing (farm implements, food), food service, public transit, building trades, and coal mining…

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UNLOCKED: The Curious Case of Rising Fuel Prices and Shrinking Inflation

UNLOCKED: The Curious Case of Rising Fuel Prices and Shrinking Inflation

On Friday, April 26, 2019, the market was stunned with a much stronger than expected 3.2% rate of first-quarter economic growth. Wall Street expectations were clearly off the mark, ranging from 1.3-2.3%. The media took this as a sign the economy is roaring. To wit, a headline from the Washington Post started “US Economy Feels Like the 1990s.”

Upon first seeing the GDP report, we immediately looked with suspicion at the surprisingly low GDP price deflator.  The GDP price deflator is an inflation measure used to normalize GDP so that prior periods are comparable to each other without the effects of inflation. 

The Bureau of Economic Analysis (BEA) reports nominal and real GDP. Real GDP is the closely followed number that is reported by the media and quoted by the Fed and politicians. Since the GDP price deflator is subtracted from the nominal GDP number, the larger the deflator, the smaller the difference between real and nominal GDP.  

The BEA reported that the first quarter GDP price deflator was 0.9%, well below expectations of 1.7%. Had the deflator met expectations, the real GDP number would have been about 2.4%, still high but closer to the upper range of economists’ expectations. 

Fueling the Deflator

Like Wall Street, we were expecting a deflator that was in line or possibly higher than its recent average. The average deflator over the last two years is 2.05%, and it is running slightly higher at 2.125% over the last four quarters. Our expectation for an average or above average deflator in Q1 2019 were in large part driven by oil prices which rose by 32% over the entire first quarter. Due to the price move and the contribution of crude oil effects on inflation, oil prices should have had an unusually high impact on inflation measures in the first quarter of 2019. 

 …click on the above link to read the rest of the article…

Protests Erupt As Zimbabwe Now Has The Most Expensive Gasoline In The World

Zimbabwe is once again at the brink of economic collapse, making a mockery of President Emmerson Mnangagwa’s claim that the country is open for business.

As Bloomberg reports,  many shops and factories have shut their doors because of a lack of customers and those that continue to trade are open to haggling over prices to secure hard currency. At an appliance shop in the capital, Harare, a salesman whispers that a Whirlpool Corp. washing machine priced at about $5,000 if paid for electronically will sell for $1,500 in cash, while at a nearby electrical warehouse, a $600 invoice is whittled down to $145 for payment in dollar bills.

But, as OilPrice.com’s Tsvetana Paraskova reports, Zimbabwe is on a three-day nationwide strike and protests are erupting in the streets after the government of the southern African country doubled fuel prices, making gasoline sold in Zimbabwe the most expensive gasoline in the world.  

Zimbabwe is in the midst of an economic crisis and a shortage of foreign exchange, which has led to fuel and bread shortages, and many companies have stopped working because they can’t import raw materials.

Following hyperinflation in 2009, Zimbabwe abolished its own currency and has been using the U.S. dollar and South African rand instead.

But the economic crisis and foreign currency shortages has prompted the government to say over the weekend that it would introduce a new currency of its own in the next 12 months.

However, the policy that really sparked protests and calls for a national stay-away was the sharp increase of fuel prices over the weekend.

According to Zimbabwe’s President Emmerson Mnangagwa – who succeeded the president of 38 years Robert Mugabe in November 2017 – the doubling of the fuel prices would help ease fuel shortages

…click on the above link to read the rest of the article…

Diesel Protests in France Turn Violent

Emmanuel Macron blames Marine Le Pen for French protests that turned violent. She wasn’t there.

People from across France came to Paris to let the president know how they feel about the taxes in general and the tax on diesel.

​Police Use Tear Gas as Thousands in Paris Defy Protest Ban

The WSJ reports Police Use Tear Gas as Thousands in Paris Defy Protest Ban.

Violence erupted Saturday between police and several thousand demonstrators who defied a protest ban and marched down the famous Parisian avenue Champs Elysées, as the country’s interior minister blamed the far-right for the unrest in the French capital.

On the Champs Elysées, some protesters sang the national anthem and waved French flags, while others carried signs urging the president to resign. Some threw stones at police, who responded by firing tear gas and water cannons. At least 130 people were detained across the nation on Saturday, including 42 in Paris, Interior Minister Christophe Castaner said.

Mr. Castaner blamed Marine Le Pen, head of the far-right party National Rally, for urging protesters to head to the Champs Elysées despite an official ban on demonstrations on the avenue.

“What justifies the fact that French people can’t protest on the Champs Elysées when many other gatherings (World Cup, New Year’s Eve…) happened there?” Ms. Le Pen tweeted on Friday. Ms. Le Pen didn’t attend the protests.

Can’t Afford to Eat

‘People are in the red. They can’t afford to eat’

Idir Ghanes, 42, Unemployed computer technician from Paris: We are here to protest against the government because of the rise in taxes [in general], not just petrol taxes, which is the straw that broke the camel’s back.

…click on the above link to read the rest of the article…

“Champs Elysees Burning”: French Police Fire Tear Gas, Water Cannon As Massive Fuel Protests Turn Violent

French police used tear gas and a water cannon against protesters in the Champs Elysées, in the center of Paris, as “yellow vest” activists flooded the streets.

Originally formed to protest rising fuel prices, the “yellow vest” protesters have evolved into a wider demonstration against President Emmanuel Macron’s government in recent weeks.

BREAKING: Massive riots are currently taking place in central Paris, as protesters protest rising fuel prices. Fireworks have been confirmed thrown at police officers. Multiple officers have been injured. One protester has died since the protests started:

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BREAKING UPDATE: Situation At the Champs Élysée in central Paris is getting out of control as protests against rising fuel prices are continuing. Multiple people have been injured and there’s reportedly a lot of damage:
🎥 @RemyBuisine

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Over 3,000 police officers have been reportedly mobilized to control the approximately 8,000 protesters – some of them masked, according to CNN. During the tense standoff with police, law enforcement officials were pelted with bottles before opening up with the tear gas and water cannon.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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