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Olduvai III: Catacylsm
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The Coming Financial Crisis of 2021

Economist Steve Keen predicts that even if the covid-19 health crisis subsides next year, a brewing financial crisis on par with the 2008 Great Recession is in the making.

He sees the pandemic as having delivered an “unprecedented shock” to the global economy, and the response from authorities as nothing less than a “catastrophe”.

With tens of millions of households having lost their income this year, personal savings becoming exhausted, government support programs on their way to drying up, and lots more company layoffs/bankruptcies/closures ahead — Steve expects a punishing recession to arrive in full force in 2021.

And on a larger scale, he sees modern neoclassical economics — which ignores the importance of natural resources and the health of our ecosystems — as completely unsuited for the reality in which we live today. He warns that if we don’t adapt a more informed approach to managing the global economy, we will only continue to make the mess we’re in worse:

Frederick Soddy’s Debt Dynamics

Frederick Soddy’s Debt Dynamics

In the field of ecological economics, Frederick Soddy looms large. Born in 1877, Soddy became a chemist and eventually won a Nobel prize for work on radioactive decay. Then he turned his attention to economics.

Between 1921 and 1934, Soddy wrote four books that looked at how money relates to the physical economy. For his ground-breaking work, Soddy was rewarded with deafening silence. Here’s how ecological economist Eric Zencey puts it:

… Soddy carried on a quixotic campaign for a radical restructuring of global monetary relationships. He was roundly dismissed as a crank.

Although ignored during his life, Soddy’s work would become a central part of ecological economics. Let’s have a look at Soddy’s thinking.

Wealth vs. virtual wealth

Like a good natural scientist, Soddy insisted that human society is constrained by the laws of physics. Humans survive, he noted, by consuming natural resources. Exhaust these resources and we’re done for.

Think of humans (and our economy), says Soddy, like a machine. We transform energy into physical work. Like all machines, we’re bound by the laws of thermodynamics, which say that you can’t get something for nothing. Energy output requires energy input. That means humans are forever dependent on natural resources.

Now comes the problem. Our biophysical stock of resources — what Soddy called ‘wealth’ — is bound by the laws of thermodynamics. But money — which Soddy called ‘virtual wealth’ — is bound only by the laws of mathematics. Money can grow forever. Natural resource extraction cannot. This mismatch, Soddy claimed, is the root of most economic problems.

Cows and virtual cows

Here’s an example of Soddy’s thinking. Suppose that Alice is a would-be cattle farmer. She inherited some land and wants to use it to farm cattle. The problem is she has no money.

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

Can the World Get Along Without Natural Resources?

Can the World Get Along Without Natural Resources?

If it is very easy to substitute other factors for natural resources, then there is in principle no “problem”. The world can, in effect, get along without natural resources.– Robert Solow, 1974

In the distant future, aliens come to Earth. They find a planet devoid of life. Looking closer, the aliens see that life on Earth was once abundant, but was wiped out by a mass extinction. Curiously, this event was driven not by geological disaster, but by one of the extinct species itself. In an orgy of consumption, an odd little animal put the planet under enough stress to drive itself —and the rest life — extinct.

Then comes a startling discovering. Preserved in the sediment lies a document written by a member of the doomed species. What secrets does it contain? The aliens work for years to translate it, hoping that it offers a clue about what drove the species to overconsume. And indeed it does. The document heralds a remarkable delusion: “The world can, in effect, get along without natural resources.

What a naive animal, the aliens conclude. While sucking the planet dry, the animal proclaimed its independence from natural resources. No wonder it went extinct.✹ ✹ ✹

Let’s hope this future is apocryphal. If, in the distant future, aliens do visit the Earth, I hope they find a planet teeming with life. Maybe they’ll even find an industrious, upright-walking animal that has learned to live sustainably.

If this bright future does come to pass, it will be because we’ve manage to shed our delusions. Contrary to the proclamations of neoclassical economists (like Robert Solow), the world cannot get along without natural resources. That this fact needs stating is a testament to the shallowness of economic theory.

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Human over-consumption causes far more biodiversity loss than climate change

Human over-consumption causes far more biodiversity loss than climate change

Preface.  Human ancestors began reducing biodiversity 4 million years ago, when large carnivores in Africa began disappearing, probably due to our ancestors stealing food predators had caught, starving them to death and eventually driving some of them extinct (Faurby, S., et al. 2020. Brain expansion in early hominins predicts carnivore extinctions in East Africa. Ecology Letters.)


2016-8-13. Climate change isn’t the biggest danger to Earth’s wildlife, our thirst for natural resources is even more damaging

2016-8-10 “Biodiversity: The ravages of guns, nets, and bulldozers” Nature)

Even though climate change is going to have a very powerful impact on plants and wildlife world-wide, climate change has also become a scape-goat, with a “growing tendency for media reports about threats to biodiversity to focus on climate change.”

But scientists have found that over-exploitation, including logging, hunting, fishing and the gathering of plants is the biggest single killer of biodiversity, directly impacting 72% of the 8,688 species listed as threatened or near-threatened by the IUCN. Agricultural activity comes second, affecting 62% of those species, followed by urban development at 35% and pollution at 22%.  Species such as the African cheetah and Asia’s hairy-noes otter are among the 5,407 species that find themselves threatened by agricultural practices, while illegal hunting impacts several populations such as the Sumatran rhino and African elephant.

Climate change on the other hand comes in on a surprising, if somewhat unimpressive, 7th place in the 11 threats identified by the team. Even when you combine all its effects, it currently threatens just 19% of the species on the list, the team reports. Species such as the hooded seal, which the team reports has seen a population decline of 90% in the northeastern Atlantic Arctic over the past few decades as a result of declining ice cover, are part of the 1,688 species directly impacted by climate change.

Human Consumption of Natural Resources Exceeds an Annual 100 Billion Tonnes.

Human Consumption of Natural Resources Exceeds an Annual 100 Billion Tonnes.

In 1969, the late Professor Albert Bartlett famously delivered a lecture, entitled “Arithmetic, Population and Energy”, which begins with the observation that, “The greatest shortcoming of the human race is our inability to understand the exponential function.” The truth of this is profound and irrefutable, as is further compounded by Bartlett’s averment, as the first law of sustainability, that “You cannot sustain population growth and/or growth in the rates of consumption of resources”. Nonetheless, exponential growth has continued, unabated, over the past half century, as is attested by an increase in the consumption of natural resources from 27 billion tonnes in 1970, to 92 billion tonnes in 2017, which corresponds to around 12 tonnes/year for every person on Earth. If recycled material is also included, the total rises to 100.6 billion tonnes, and hence 13 tonnes for every breathing human on the planet, and significantly, the proportion being recycled has fallen from 9.1% to 8.6% in the past two years. This rate of material consumption is expected to rise to between 170 and 184 billion tonnes by 2050, on the basis of a BAU, “take-make-waste” economic model, which equates to more than 18 tonnes per person, given an expected population of 9.8 billion by then

Over the entire 1970-2017 period, a compound annual growth rate (CAGR) for resource consumption of 2.6% may be deduced, and hence we may infer that, by 2021, total annual demand for virgin natural resources will have exceeded 100 billion tonnes. The breakdown of this tally into individual components is interesting, and for 2017 amounts to: 24.06 billion tonnes [Gigatonnes (Gt)] of biomass, 43.83 Gt of non-metallic minerals, 15.05 Gt of fossil fuels, and 9.12 Gt of metallic ores; when these figures are compared with those for 1970 (9.00 Gt biomass, 9.20 Gt of non-metallic minerals, 6.21 Gt of fossil fuels, 2.58 Gt of metallic minerals), some patterns begin to emerge. Thus, the corresponding (2017/1970) ratios are: 2.67 (biomass), 4.76 (non-metallic minerals), 2.42 (fossil fuels), 3.53 (metallic ores).

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

America’s Collapse: #2 in a series

America’s Collapse: #2 in a series

An Economy Based on Plunder

Capitalists have claimed responsibility for America’s past economic success.  Let’s begin by setting the record straight. American success had little to do with capitalism. This is not to say that the US would have had more success with something like Soviet central planning.

Prior to 1900 when the frontier was closed, America’s success was a multi-century long success based on the plunder of a pristine environment and abundant natural resources. Individuals and companies were capitalized simply by occupying the land and using the resources present.

As the population grew and resources were depleted, the per capita resource endowment declined.

America got a second wind from World War I, which devastated European powers and permitted the emergence of the US as a budding world power.  World War II finished off Europe and put economic and financial supremacy in Washington’s hands.  The US dollar seized the world reserve currency role from the British pound, enabling the US to pay its bills by printing money.  The world currency role of the dollar, more than nuclear weapons, has been the source of American power. Russia has equal or greater nuclear weapons power, but it is the dollar not the ruble that is the currency in which international payments are settled. 

The world currency role made the US the financial hegemon.  This power together with the IMF and  World Bank enabled the US to plunder foreign resources the way vanishing American resources had been plundered.  

We can conclude that plunder of natural resources and the ability to externalize much of the cost have been  major contributors right through the present day to the success of American capitalism.  Michael Hudson has described the plunder process in his many books and articles (for example, http://www.unz.com/mhudson/u-s-economic-warfare-and-likely-foreign-defenses/ ), as has John Perkins in Confessions of an Economic Hit Man.

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

MIT Computer Model Predicts Dramatic Drop In Quality Of Life Around 2020 And The “End Of Civilization” Around 2040

MIT Computer Model Predicts Dramatic Drop In Quality Of Life Around 2020 And The “End Of Civilization” Around 2040

Is humanity approaching a major turning point?  A computer model that was originally developed in 1973 by a group of scientists at MIT is warning that things are about to dramatically change.  If the computer predictions are accurate, our standard of living will start to decline dramatically around the year 2020, and we will witness the “end of civilization” around the year 2040.  Of course this is not the first time ominous predictions such as this have been made about our future.  For years, experts have been warning that we are heading for severe shortages of water, food and oil as our limited natural resources begin to run out.  For years, experts have been warning that our economic model is not sustainable and that we are heading for a historic collapse.  For years, experts have been warning about the alarming increase in seismic activity all over the planet and about the proliferation of weapons of mass destruction.  Society is crumbling all around us, and the elements for a “perfect storm” are definitely coming together.

So maybe this computer model is on to something.

The name of the computer program is “World One”, and it was originally created by Jay Forrester

The prediction came from a programme nicknamed World One, which was developed by a team of MIT researchers and processed by Australia’s largest computer.

It was originally devised by computer pioneer Jay Forrester, after he was tasked by the Club of Rome to develop a model of global sustainability.

However, the shocking result of the computer calculations showed that the level of pollution and population would cause a global collapse by 2040.

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The Seneca Paradox: If mineral depletion is a problem, how is it that we don’t see its effects?

The Seneca Paradox: If mineral depletion is a problem, how is it that we don’t see its effects?

The recent workshop held in Oxford, “Strategic Minerals in a Low Carbon Future” saw a very interesting debate on resource availability in which two opposite views emerged: one says that the gradual depletion of natural resources is a serious problem, already affecting the economy, the other that depletion is irrelevant or, at best, a marginal problem that can be solved by technological progress. The debate is ongoing, but the apparent lack of relevance of depletion in the current economic situation may be just an illusion generated by the “Seneca Effect.”  It is an insidious kind of effect that hides future risks behind an apparently safe and robust growth. 

The story of the Club of Rome starts with the issue of natural resources, mineral ones in particular. In the 1960s, it had become clear to the Club’s founder, Aurelio Peccei, that the world’s resources were not infinite. The question was how that was to affect humankind. It was the origin of the first and the best-known report to the Club of Rome, “The Limits to Growth,” published in 1972.

The 1972 report already provided answers to the question of the relevance of depletion. It turned out that resource scarcity would limit the growth of the world’s economy and, eventually, lead to a decline. This conclusion was often misunderstood as meaning that humankind would soon “run out” of oil, gas, or some other resource; but that was never stated in the report and it never was the point. The problem is not, and never was, running out of anything. It is that the gradual depletion of mineral ores makes extraction more expensive and that’s a burden on society that we cannot ignore.
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Money v Fiat

Money v Fiat

QUESTION: Why do you do not see that money must be backed by something tangible?


ANSWER: That is a barter perspective which is so antiquated you are blind to reality. Your proposition is only gold has value and you yourself are worthless. This idea of fiat money is just out of line with reality. The traditional definition of a fiat currency such as a paper currency has no worth unless backed by something with a defined tangible commodity value is preposterous. That is still a derivative of barter. Paper currency that is not backed by something of tangible value is by no means worthless. China invented paper money during the 13th century and never issued gold coins. You are confusing money with politicians.

This traditional definition of a fiat currency is primitive. A currency is backed by the productive capacity of its people like a share in a corporation. If this were not true then Germany, Japan, and China would never have been able to rise from the ashes with no gold. Obviously, it was the productive ability of their people absent gold. Under Socialism, a currency is also backed by the taxpayers being shaken down to pay the interest on the debt. That is very tangible for you go to prison ig you do not obey their command.


The Wealth of a Nation is not its gold, land, or natural resources for it still takes labor to bring any commodity to market. The Wealth of a Nation is its people. Look at Germany. Its productive capacity was the highest in Europe and it rightly rose to the top. Africa and places in South America where the people are not educated as a whole or productive from an international trade perspective, have been unable to rise to the top at any point in their history.


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The Grand Finale: “World War III Will Be A Fight Over Basic Human Needs – Food and Other Commodities”

The Grand Finale: “World War III Will Be A Fight Over Basic Human Needs – Food and Other Commodities”


As political tensions heat up it is becoming clear that the world’s super powers are vying for control of resources like oil, water, metals and food. And though developed nations have thus far avoided any significant clashes with each other, the proxy wars being waged in the middle east and Europe are a slow burning fuse that will soon lead to widespread military confrontation.

Throughout human history one key factor has been behind every major war: a battle for resources. As the following documentary from Future Money Trends warns, this time will be no different:

“The Pentagon told Fortune Magazine that World War III will be a fight over basic human needs – food and other commodities.”

(Watch this video at Youtube)

Natural resource wars are brewing and becoming an increasing threat, and may be the grand finale to an already intensified currency war among the world’s top economies.

Most wars in human history are a fight over natural resources.

… Credit is ever expanding, but the resources we pull out of the ground are finite.

The culmination of economic, financial and monetary crisis will be a grand finale unlikely any seen in the history of the world. War is coming. The time to prepare is now.

Breaking: Trans-Pacific Partnership Ignores Climate, Asks Countries to Volunteer to Protect the Environment

Breaking: Trans-Pacific Partnership Ignores Climate, Asks Countries to Volunteer to Protect the Environment

In March, the White House was touting the Trans-Pacific Partnership (TPP) on its blog stating:

Through TPP, the Obama administration is doubling down on its commitment to use every tool possible to address the most pressing environmental challenges.”

Reviewing the environment section of the just-released TPP, one thing becomes quite clear. Climate change is not considered one of the “most pressing environmental challenges.”

In the summary of the environmental section posted by the US government it doesn’t mention the climate but does mention the “energy revolution” under the heading of “Transition to a Low-Emissions Economy”.

TPP countries recognize that the world is in the midst of an energy revolution. The agreement includes commitments to cooperate to address issues such as energy efficiency; the development of cost-effective, green technologies; and alternative, clean and renewable energy sources.

And when it comes to Multilateral Environmental Agreements (MEAs) the language promises “reinforcements” to these commitments even though they “may lack binding enforcement regimes.”

TPP countries are signatories to many MEAs covering a wide range of environmental issues. However, these agreements may lack binding enforcement regimes. By requiring MEA implementation, TPP provides valuable reinforcements to these commitments.

And, of course, there is the part about encouraging companies to volunteer to protect the environment.

The Environment chapter includes commitments to encourage companies to voluntarily adopt corporate social responsibility policies, and to use mechanisms, such as public-private partnerships, to help to protect the environment and natural resources.

So, it appears that the TPP doesn’t consider climate change an important issue but as the world continues its “energy revolution” that countries can volunteer to protect the environment.

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

Canadian Miners on the Road to Accountability

Canadian Miners on the Road to Accountability

There was a time not that long ago when Canadian mining companies could feasibly commit all sorts of human rights abuses abroad, trampling the rights of local impoverished communities and overstepping their remit as a foreign firm extracting natural resources.

Numerous allegations against these mining firms have cropped up all over the world, but there are a few cases which have continually drawn the attention of activists and law enforcement bodies alike.

Hudbay Minerals previously ran the Fenix ferro-nickel project in Guatemala until September 2011. But locals allege – and have brought forward multiple lawsuits – that Hudbay security guards gang-raped several local indigenous women and shot and killed indigenous leader Adolfo Ich Chaman in 2009 after he tried to calm a protest at the mining site.

Hudbay has refuted these claims for years, but in July 2013, the Superior Court of Ontario ruled that these suits – the three lawsuits in total which have been filed – can be heard in an Ontario court.

Though Hudbay dropped its opposition to having the case heard in Ontario in February 2013, the trial has yet to be held.

Another Canadian miner, Centerra Gold, is accused of dubious activities in Kyrgyzstan, where its main Kumtor gold mine is located. The local population in the Kyrgyz mountains has been against the development of the mine for years, protesting against everything from the sullying of the water from the mine’s tailing ponds to the lack of available jobs for local inhabitants.


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In Defense of the Commons

In Defense of the Commons

“Enclosures have appropriately been called a revolution of the rich against the poor.”

Karl Polanyi, The Great Transformation. 1944. (p. 35)         

Shared access, reliance, use and governance of natural resources is a common form of tenure in the world, North and South, rural and urban.  The specific rules and institutions that govern common property are very diverse, developed by communities groups on their own direct experience and reflecting their priorities. Where well managed, such systems have proven capable of preserving the long term health of the resources and sustained benefits to the community relying on them.  Common spaces are under increasing threat – their resources are grabbed for private interests, mined and degraded for short term gains. A critical factor in this is the weakening of common property management systems, undermined as the paradigms of privatisation and market commodification have dominated policy development. Networks and movements of the poor around the world are reacting to the destruction of their natural resources, and standing up in defence of the commons and the common property systems which sustain them.  This article identifies some of the threats to the commons and highlights the resistance of local people.    

Imagen 1

The commons refer to forms of wealth that belong to all of us and that must be actively protected and managed for the good of all.  Commons can be natural, such as air, water, land, forests and biodiversity; social and institutional, such as public goods, spaces and services; political, such as collectively held notions of democracy, justice and governance; and intellectual and cultural, such as general knowledge, everyday technology, shared music and scientific truths.

– See more at: http://commonstransition.org/in-defense-of-the-commons/#sthash.M2tM7XzW.dpuf


The Fifth Wave (Part I)

The Fifth Wave (Part I)

[Chapter 25 of The Age of the Consequences]

“All things alike do their work, and then we see them subside. When they have reached their bloom, each returns to its origin . . . This reversion is an eternal law. To know that law is wisdom.” —Lao-Tsu

The First Wave

In the fall of 1909, twenty-two-year-old Aldo Leopold rode away from the ranger station in Springerville, Arizona, on his inaugural assignment with the newly created United States Forest Service. For this Midwesterner, an avid hunter freshly graduated from the prestigious Yale School of Forestry, the mountainous wilderness that stretched out before him must have felt both thrilling and portentous. In fact, events over the ensuing weeks, including his role in the killing of two timber wolves—immortalized nearly forty years later in his essay “Thinking Like a Mountain,” from A Sand County Almanac—would influence Leopold’s lifelong conservation philosophy in important ways. The deep thinking would come later, however. In 1909, Leopold’s primary goal was to be a good forester, which is why he chose to participate in a radical experiment at the time: the control and conservation of natural resources by the federal government.

aldo-leopold-with-horse                    Aldo Leopold as a new Forest Service ranger in the Southwest

Beginning in 1783, the policy of the federal government encouraged the disposal of public lands to private citizens and commercial interests including retired soldiers, homesteaders, railroad conglomerates, mining interests, and anyone else willing to fulfill America’s much-trumpeted manifest destiny. However, this policy began to change in 1872, when President Ulysses Grant signed a bill creating the world’s first national park—Yellowstone—launching the U.S. government down a new path: retention and protection of some federal land on behalf of all Americans.


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Resource Dependence Could Prove Fatal For Canadian Economy

Resource Dependence Could Prove Fatal For Canadian Economy

Low oil prices are threatening the health of Canada’s oil and gas sector, which in turn, is causing turmoil in Canada’s economy as a whole.

The fall in oil prices are forcing billions of dollars in spending reductions for Canada’s oil and gas industry. In February, Royal Dutch Shell shelved plans for a tar sands project in Alberta that would have produced 200,000 barrels per day. Last year, Petronas put off plans to build a massive LNG export terminal on Canada’s west coast. Moody’s recently predicted that very few of the 18 proposed LNG projects in Canada will be constructed. Most will be cancelled. The oil industry is expected to lose 37 percent of its revenues in 2015, or a fall of CAD$43 billion.

That is bad news for Canada’s oil and gas sector. But even worse, Canada’s overdependence on oil and gas will threaten its broader economy now that the sector has gone bust. The severe drop in oil prices has made the Canadian dollar one of the worst performing currencies in the world over the past year. The loonie used to trade at parity to the U.S. dollar, and even appreciated to a stronger level a few years ago, but now a Canadian dollar only gets you less than 80 U.S. cents.

Related: Top 12 Media Myths On Oil Prices

While a weaker currency has complicating effects on the economy (it will also boost exports, for example), on balance low oil prices have been an unmitigated disaster for Canada’s economy.


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Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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