https://srsroccoreport.com/death-of-the-u-s-dollar-reserve-currency-picking-up-speed/
DEATH OF THE U.S. DOLLAR RESERVE CURRENCY… Picking Up Speed
The Death of the U.S. Dollar as the world’s reserve currency will have a profoundly negative impact on the lives of most Americans. Unfortunately, 99% of the population has no clue. The only reason 1% of U.S. citizens understand what is going on, is because the Mainstream media and financial networks have distorted the truth and the reality of our present situation.
What happened in the markets today was a perfect example. Zerohedge published an article today titled, ‘Traders’ Panic-Buy Stocks, Shrug Off Nuclear Armaggedon, Debt Ceiling, & Biblical Flood Fears, and stating the following:
For a few brief hours overnight – until the bell rang at 0930ET on the NYSE – investors were anxious about North Korea’s most provocative yet missile launch, the terrible flooding disaster in Texas, and lest we forget, the looming debt ceiling debacle. But all of that was instantly forgotten as the machines took control and lifted stocks higher practically all day on a sea of USDJPY-ignited momentum.
Looking at the chart above, we can see that when fear came into the markets during the North Korea missile incident and then the opening of the European markets (shown in the two red boxes), the Dow Jones Index fell as well as the USDJPY, while gold and the U.S. Treasurys increased.
However, after the U.S. markets opened, MAGICALLY everything reversed because the nuclear threat with N. Korea, Biblical flooding in Texas and the upcoming debt ceiling issue no longer mattered. Those of us in the Alternative Media find this quite hilarious that nothing negatively impacts the financial markets anymore. Some have laughed while saying, “If a nuclear bomb had taken out New York City, the stock market would probably go up.” While I doubt that would happen, it is becoming a real joke to watch the financial markets today.
I wrote about the insanity in the markets today and how it has negatively impacted the value of the precious metals in my recent article, The Reason Why Gold & Silver Have Frustrated Investors Since 2011. In the article I posted the chart below, by a Deutsche Bank analyst Aleksandar Kocic, on why the Markets Broke In 2012:
The description of the indicator above may be a bit difficult to understand so that I will simplify it. The BLUE LINE represents the “Economic Uncertainty Policy” (EPU index) shown by the frequency of articles in ten leading US newspapers that contain three of the target terms: economy, uncertainty; and one or more of Congress, deficit, Federal Reserve, legislation, regulation or White House in the mainstream media. The BLACK LINE is the VIX index, the volatility index (S&P 500). Economic uncertainty printed in articles in the Mainstream Media should correspond with the volatility indicator of the markets (the VIX).
And, this is what precisely took place from 1996 to 2011. The blue and black lines moved up and down in tandem. However, after 2011, something changed. According to Kocic:
Intuitively, when VIX is in tune with EPU, the market is acknowledging the levels of risk through the prices. However, when VIX is low and EPU high, markets are complacent – they are underpricing risk.
After 2011, the two measures of risk decouple with VIX consistently low despite growing uncertainty. The breakdown is structural, and it is visible across all market sectors, not only equities.
What Kocic is saying is that the market has become highly complacent and is severely underpricing risk.
This is exactly what happened today. Not only do we have a threat of a Nuclear incident with N. Korea, but Houston is dealing with epic flooding from 4-5 feet of rain, while the U.S. Government is about to hit a wall with the debt ceiling issue. Those three factors would have caused the markets to sell off considerably 5-10 years ago. Again, according to the chart above, it doesn’t seem to matter how much negative news there is in the economy, the markets have to continue higher or remain elevated, or else the entire house of cards comes down.
The U.S. Dollar As The World’s Reserve Currency Is Under Serious Pressure
According to Clive Maund’s article, DOLLAR update as LOSS OF RESERVE CURRENCY STATUS LOOMS... if the U.S. Dollar breaches its support level, then it could go into freefall:
While I don’t pay a lot of attention to technical analysis, many traders do. Clive Maund states in his article that the U.S. Dollar is due for a bounce because it is oversold. But, once the bounce is over, we could see the Dollar decline considerably as the U.S. Government has to deal with the debt ceiling issue.
When the U.S. Dollar is no longer the reserve currency of the world, Americans will be forced to live on a lot less. We won’t be able to exchange worthless U.S. Treasury paper for oil, metals, commodities, goods or services anymore. We will need to trade GOODS for GOODS, not PAPER for GOODS.
We still import 6-7 million barrels per oil per day to run our economy. We provide ious for a lot of that oil. Last year, the U.S. trade deficit was $502 billion. A portion of that trade deficit was for oil. Without the 6-7 million barrels per day of oil we import, our economy would shrink by one-third for starters.
The only way the U.S. economy can continue moving along is via the U.S. Dollar being the world’s reserve currency. When the U.S. Dollar is no longer the world’s reserve currency, it will be difficult to pay for oil with worthless U.S. Treasuries. Of course, the Fed and U.S. Treasury may speed up the printing press to make up for our ongoing trade deficits, but that would likely erode the value of the Dollar.
The Death of the U.S. Dollar will be the end of America as we know it. Unfortunately, a tiny percentage of those in the Alternative Media Community realize this, while 99% are completely oblivious.
Wednesday, August 30, 2017
Monday, August 28, 2017
SC148-13
https://www.truthdig.com/articles/antifa-mirrors-alt-right/
How ‘Antifa’ Mirrors the ‘Alt-Right’
Behind the rhetoric of the “alt-right” about white nativism and protecting American traditions, history and Christian values is the lust for violence. Behind the rhetoric of antifa, the Black Bloc and the so-called “alt-left” about capitalism, racism, state repression and corporate power is the same lust for violence.
The two opposing groups, largely made up of people who have been cast aside by the cruelty of corporate capitalism, have embraced holy war. Their lives, battered by economic misery and social marginalization, have suddenly been filled with meaning. They hold themselves up as the vanguard of the oppressed. They arrogate to themselves the right to use force to silence those they define as the enemy. They sanctify anger. They are infected with the dark, adrenaline-driven urge for confrontation that arises among the disenfranchised when a democracy ceases to function. They are separated, as Sigmund Freud wrote of those who engage in fratricide, by the “narcissism of minor differences.” They mirror each other, not only ideologically but also physically—armed and dressed in black, the color of fascism and the color of death.
It was inevitable that we would reach this point. The corporate state has seized and corrupted all democratic institutions, including the two main political parties, to serve the interests of corporate power and maximize global corporate profits. There is no justice in the courts. There is no possibility for reform in the legislative bodies. The executive branch is a dysfunctional mess headed by a narcissistic kleptocrat, con artist and pathological liar. Money has replaced the vote. The consent of the governed is a joke. Our most basic constitutional rights, including the rights to privacy and due process, have been taken from us by judicial fiat. The economically marginalized, now a majority of the country, have been rendered invisible by a corporate media dominated by highly paid courtiers spewing out meaningless political and celebrity gossip and trivia as if it were news. The corporate state, unimpeded, is pillaging and looting the carcass of the country and government, along with the natural world, for the personal gain of the 1 percent. It daily locks away in cages the poor, especially poor people of color, discarding the vulnerable as human refuse.
A government that is paralyzed and unable and unwilling to address the rudimentary needs of its citizens, as I saw in the former Yugoslavia and as history has shown with the Weimar Republic and czarist Russia, eventually empowers violent extremists. Economic and social marginalization is the lifeblood of extremist groups. Without it they wither and die. Extremism, as the social critic Christopher Lasch wrote, is “a refuge from the terrors of inner life.”
Germany’s Nazi stormtroopers had their counterparts in that nation’s communist Alliance of Red Front Fighters. The far-right anti-communist death squad Alliance of Argentina had its counterpart in the guerrilla group the People’s Revolutionary Army during the “Dirty War.” The Farabundo Marti National Liberation Front (FMLN) rebels during the war I covered in El Salvador had their counterparts in the right-wing death squads, whose eventual demise seriously impeded the FMLN’s ability to recruit. The Serbian nationalists, or Chetniks, in Yugoslavia had their counterparts in the Croatian nationalists, or Ustaše. The killing by one side justifies the killing by the other. And the killing is always sanctified in the name of each side’s martyrs.
The violence by antifa—short for anti-fascist or anti-fascist action—in Charlottesville, Va., saw a surge in interest and support for the movement, especially after the murder of Heather Heyer. The Black Bloc was applauded by some of the counterprotesters in Boston during an alt-right rally there Aug. 19. In Charlottesville, antifa activists filled the vacuum left by a passive police force, holding off neo-Nazi thugs who threatened Cornel West and clergy who were protesting against the white nationalist event. This was a propaganda coup for antifa, which seeks to portray its use of violence as legitimate self-defense. Protecting West and the clergy members from physical assault was admirable. But this single act no more legitimizes antifa violence than the turkeys, Christmas gifts and Fourth of July fireworks that John Gotti gave to his neighbors legitimized the violence of the Gambino crime family. Antifa, like the alt-right, is the product of a diseased society.
The white racists and neo-Nazis may be unsavory, but they too are victims. They too lost jobs and often live in poverty in deindustrialized wastelands. They too often are plagued by debt, foreclosures, bank repossessions and inability to repay student loans. They too often suffer from evictions, opioid addictions, domestic violence and despair. They too sometimes face bankruptcy because of medical bills. They too have seen social services gutted, public education degraded and privatized and the infrastructure around them decay. They too often suffer from police abuse and mass incarceration. They too are often in despair and suffer from hopelessness. And they too have the right to free speech, however repugnant their views.
Street clashes do not distress the ruling elites. These clashes divide the underclass. They divert activists from threatening the actual structures of power. They give the corporate state the ammunition to impose harsher forms of control and expand the powers of internal security. When antifa assumes the right to curtail free speech it becomes a weapon in the hands of its enemies to take that freedom away from everyone, especially the anti-capitalists.
The focus on street violence diverts activists from the far less glamorous building of relationships and alternative institutions and community organizing that alone will make effective resistance possible. We will defeat the corporate state only when we take back and empower our communities, as is happening with Cooperation Jackson, a grass-roots cooperative movement in Jackson, Miss. As long as acts of resistance are forms of personal catharsis, the corporate state is secure. Indeed, the corporate state welcomes this violence because violence is a language it can speak with a proficiency and ruthlessness that none of these groups can match.
“Politics isn’t made of individuals,” Sophia Burns writes in “Catharsis Is Counter-Revolutionary.” “It’s made of classes. Political change doesn’t come from feeling individually validated. It comes from collective action and organization within the working class. That means creating new institutions that meet our needs and defend against oppression.”
The protests by the radical left now sweeping America, as Aviva Chomsky points out, are too often little more than self-advertisements for moral purity. They are products of a social media culture in which each of us is the star of his or her own life movie. They are infected with the American belief in regeneration through violence and the cult of the gun. They represent a clash between the bankruptcy of identity politics, which produced, as Dr. West has said, a president who was “a black mascot for Wall Street,” and the bankruptcy of a white, Christianized fascism that produced Donald Trump, Steve Bannon and Jefferson Beauregard Sessions.
“Rather than organizing for change, individuals seek to enact a statement about their own righteousness,” Chomsky writes in “How (Not) to Challenge Racist Violence.” “They may boycott certain products, refuse to eat certain foods, or they may show up to marches or rallies whose only purpose is to demonstrate the moral superiority of the participants. White people may loudly claim that they recognize their privilege or declare themselves allies of people of color or other marginalized groups. People may declare their communities ‘no place for hate.’ Or they may show up at counter-marches to ‘stand up’ to white nationalists or neo-Nazis. All of these types of ‘activism’ emphasize self-improvement or self-expression rather than seeking concrete change in society or policy. They are deeply, and deliberately, apolitical in the sense that they do not seek to address issues of power, resources, decision making, or how to bring about change.”
The corporate state seeks to discredit and shut down the anti-capitalist left. Its natural allies are the neo-Nazis and the Christian fascists. The alt-right is bankrolled, after all, by the most retrograde forces in American capitalism. It has huge media platforms. It has placed its ideologues and sympathizers in positions of power, including in law enforcement and the military. And it has carried out acts of domestic terrorism that dwarf anything carried out by the left. White supremacists were responsible for 49 homicides in 26 attacks in the United States from 2006 to 2016, far more than those committed by members of any other extremist group, according to a report issued in May by the FBI and the Department of Homeland Security. There is no moral equivalency between antifa and the alt-right. But by brawling in the streets antifa allows the corporate state, which is terrified of a popular anti-capitalist uprising, to use the false argument of moral equivalency to criminalize the work of all anti-capitalists.
As the Southern Poverty Law Center states categorically in its pamphlet “Ten Ways to Fight Hate,” “Do not attend a hate rally.”
“Find another outlet for anger and frustration and for people’s desire to do something,” it recommends. “Hold a unity rally or parade to draw media attention away from hate. Hate has a First Amendment right. Courts have routinely upheld the constitutional right of the Ku Klux Klan and other hate groups to hold rallies and say whatever they want. Communities can restrict group movements to avoid conflicts with other citizens, but hate rallies will continue. Your efforts should focus on channeling people away from hate rallies.”
The Nazis were as unsavory to the German political and economic elites as Donald Trump is to most Americans who hold power or influence. But the German elites chose to work with the fascists, whom they naively thought they could control, rather than risk a destruction of capitalism. Street brawls, actively sought out by the Nazis, always furthered the interests of the fascists, who promised to restore law and order and protect traditional values. The violence contributed to their mystique and the yearning among the public for a strongman who would impose stability.
Historian Laurie Marhoefer writes:
Violent confrontations with antifascists gave the Nazis a chance to paint themselves as the victims of a pugnacious, lawless left. They seized it.
It worked. We know now that many Germans supported the fascists because they were terrified of leftist violence in the streets. Germans opened their morning newspapers and saw reports of clashes like the one in Wedding [a Berlin neighborhood]. It looked like a bloody tide of civil war was rising in their cities. Voters and opposition politicians alike came to believe the government needed special police powers to stop violent leftists. Dictatorship grew attractive. The fact that the Nazis themselves were fomenting the violence didn’t seem to matter.
One of Hitler’s biggest steps to dictatorial power was to gain emergency police powers, which he claimed he needed to suppress leftist violence.
What took place in Charlottesville, like what took place in February when antifa and Black Bloc protesters thwarted UC Berkeley’s attempt to host the crypto-fascist Milo Yiannopoulos, was political theater. It was about giving self-styled radicals a stage. It was about elevating their self-image. It was about appearing heroic. It was about replacing personal alienation with comradeship and solidarity. Most important, it was about the ability to project fear. This newfound power is exciting and intoxicating. It is also very dangerous. Many of those in Charlottesville on the left and the right were carrying weapons. A neo-Nazi fired a round from a pistol in the direction of a counterprotester. The neo-Nazis often carried AR-15 rifles and wore quasi-military uniforms and helmets that made them blend in with police and state security. There could easily have been a bloodbath. A march held in Sacramento, Calif., in June 2016 by the neo-Nazi Traditionalist Worker Party to protest attacks at Trump rallies ended with a number of people stabbed. Police accused counterprotesters of initiating the violence. It is a short series of steps from bats and ax handles to knives to guns.
The conflict will not end until the followers of the alt-right and the anti-capitalist left are given a living wage and a voice in how we are governed. Take away a person’s dignity, agency and self-esteem and this is what you get. As political power devolves into a more naked form of corporate totalitarianism, as unemployment and underemployment expand, so will extremist groups. They will attract more sympathy and support as the wider population realizes, correctly, that Americans have been stripped of all ability to influence the decisions that affect their lives, lives that are getting steadily worse.
The ecocide by the fossil fuel and animal agriculture industries alone makes revolt a moral imperative. The question is how to make it succeed. Taking to the street to fight fascists ensures our defeat. Antifa violence, as Noam Chomsky has pointed out, is a “major gift to the right, including the militant right.” It fuels the right wing’s paranoid rants about the white race being persecuted and under attack. And it strips anti-capitalists of their moral capital.
Many in the feckless and bankrupt liberal class, deeply complicit in the corporate assault on the country and embracing the dead end of identity politics, will seek to regain credibility by defending the violence by groups such as antifa. Natasha Lennard, for example, in The Nation calls the “video of neo-Nazi Richard Spencer getting punched in the face” an act of “kinetic beauty.” She writes “if we recognize fascism in Trump’s ascendance, our response must be anti-fascist in nature. The history of anti-fascist action is not one of polite protest, nor failed appeals to reasoned debate with racists, but direct, aggressive confrontation.”
This violence-as-beauty rhetoric is at the core of these movements. It saturates the vocabulary of the right-wing corporate oligarchs, including Donald Trump. Talk like this poisons national discourse. It dehumanizes whole segments of the population. It shuts out those who speak with nuance and compassion, especially when they attempt to explain the motives and conditions of opponents. It thrusts the society into a binary and demented universe of them and us. It elevates violence to the highest aesthetic. It eschews self-criticism and self-reflection. It is the prelude to widespread suffering and death. And that, I fear, is where we are headed.
How ‘Antifa’ Mirrors the ‘Alt-Right’
Behind the rhetoric of the “alt-right” about white nativism and protecting American traditions, history and Christian values is the lust for violence. Behind the rhetoric of antifa, the Black Bloc and the so-called “alt-left” about capitalism, racism, state repression and corporate power is the same lust for violence.
The two opposing groups, largely made up of people who have been cast aside by the cruelty of corporate capitalism, have embraced holy war. Their lives, battered by economic misery and social marginalization, have suddenly been filled with meaning. They hold themselves up as the vanguard of the oppressed. They arrogate to themselves the right to use force to silence those they define as the enemy. They sanctify anger. They are infected with the dark, adrenaline-driven urge for confrontation that arises among the disenfranchised when a democracy ceases to function. They are separated, as Sigmund Freud wrote of those who engage in fratricide, by the “narcissism of minor differences.” They mirror each other, not only ideologically but also physically—armed and dressed in black, the color of fascism and the color of death.
It was inevitable that we would reach this point. The corporate state has seized and corrupted all democratic institutions, including the two main political parties, to serve the interests of corporate power and maximize global corporate profits. There is no justice in the courts. There is no possibility for reform in the legislative bodies. The executive branch is a dysfunctional mess headed by a narcissistic kleptocrat, con artist and pathological liar. Money has replaced the vote. The consent of the governed is a joke. Our most basic constitutional rights, including the rights to privacy and due process, have been taken from us by judicial fiat. The economically marginalized, now a majority of the country, have been rendered invisible by a corporate media dominated by highly paid courtiers spewing out meaningless political and celebrity gossip and trivia as if it were news. The corporate state, unimpeded, is pillaging and looting the carcass of the country and government, along with the natural world, for the personal gain of the 1 percent. It daily locks away in cages the poor, especially poor people of color, discarding the vulnerable as human refuse.
A government that is paralyzed and unable and unwilling to address the rudimentary needs of its citizens, as I saw in the former Yugoslavia and as history has shown with the Weimar Republic and czarist Russia, eventually empowers violent extremists. Economic and social marginalization is the lifeblood of extremist groups. Without it they wither and die. Extremism, as the social critic Christopher Lasch wrote, is “a refuge from the terrors of inner life.”
Germany’s Nazi stormtroopers had their counterparts in that nation’s communist Alliance of Red Front Fighters. The far-right anti-communist death squad Alliance of Argentina had its counterpart in the guerrilla group the People’s Revolutionary Army during the “Dirty War.” The Farabundo Marti National Liberation Front (FMLN) rebels during the war I covered in El Salvador had their counterparts in the right-wing death squads, whose eventual demise seriously impeded the FMLN’s ability to recruit. The Serbian nationalists, or Chetniks, in Yugoslavia had their counterparts in the Croatian nationalists, or Ustaše. The killing by one side justifies the killing by the other. And the killing is always sanctified in the name of each side’s martyrs.
The violence by antifa—short for anti-fascist or anti-fascist action—in Charlottesville, Va., saw a surge in interest and support for the movement, especially after the murder of Heather Heyer. The Black Bloc was applauded by some of the counterprotesters in Boston during an alt-right rally there Aug. 19. In Charlottesville, antifa activists filled the vacuum left by a passive police force, holding off neo-Nazi thugs who threatened Cornel West and clergy who were protesting against the white nationalist event. This was a propaganda coup for antifa, which seeks to portray its use of violence as legitimate self-defense. Protecting West and the clergy members from physical assault was admirable. But this single act no more legitimizes antifa violence than the turkeys, Christmas gifts and Fourth of July fireworks that John Gotti gave to his neighbors legitimized the violence of the Gambino crime family. Antifa, like the alt-right, is the product of a diseased society.
The white racists and neo-Nazis may be unsavory, but they too are victims. They too lost jobs and often live in poverty in deindustrialized wastelands. They too often are plagued by debt, foreclosures, bank repossessions and inability to repay student loans. They too often suffer from evictions, opioid addictions, domestic violence and despair. They too sometimes face bankruptcy because of medical bills. They too have seen social services gutted, public education degraded and privatized and the infrastructure around them decay. They too often suffer from police abuse and mass incarceration. They too are often in despair and suffer from hopelessness. And they too have the right to free speech, however repugnant their views.
Street clashes do not distress the ruling elites. These clashes divide the underclass. They divert activists from threatening the actual structures of power. They give the corporate state the ammunition to impose harsher forms of control and expand the powers of internal security. When antifa assumes the right to curtail free speech it becomes a weapon in the hands of its enemies to take that freedom away from everyone, especially the anti-capitalists.
The focus on street violence diverts activists from the far less glamorous building of relationships and alternative institutions and community organizing that alone will make effective resistance possible. We will defeat the corporate state only when we take back and empower our communities, as is happening with Cooperation Jackson, a grass-roots cooperative movement in Jackson, Miss. As long as acts of resistance are forms of personal catharsis, the corporate state is secure. Indeed, the corporate state welcomes this violence because violence is a language it can speak with a proficiency and ruthlessness that none of these groups can match.
“Politics isn’t made of individuals,” Sophia Burns writes in “Catharsis Is Counter-Revolutionary.” “It’s made of classes. Political change doesn’t come from feeling individually validated. It comes from collective action and organization within the working class. That means creating new institutions that meet our needs and defend against oppression.”
The protests by the radical left now sweeping America, as Aviva Chomsky points out, are too often little more than self-advertisements for moral purity. They are products of a social media culture in which each of us is the star of his or her own life movie. They are infected with the American belief in regeneration through violence and the cult of the gun. They represent a clash between the bankruptcy of identity politics, which produced, as Dr. West has said, a president who was “a black mascot for Wall Street,” and the bankruptcy of a white, Christianized fascism that produced Donald Trump, Steve Bannon and Jefferson Beauregard Sessions.
“Rather than organizing for change, individuals seek to enact a statement about their own righteousness,” Chomsky writes in “How (Not) to Challenge Racist Violence.” “They may boycott certain products, refuse to eat certain foods, or they may show up to marches or rallies whose only purpose is to demonstrate the moral superiority of the participants. White people may loudly claim that they recognize their privilege or declare themselves allies of people of color or other marginalized groups. People may declare their communities ‘no place for hate.’ Or they may show up at counter-marches to ‘stand up’ to white nationalists or neo-Nazis. All of these types of ‘activism’ emphasize self-improvement or self-expression rather than seeking concrete change in society or policy. They are deeply, and deliberately, apolitical in the sense that they do not seek to address issues of power, resources, decision making, or how to bring about change.”
The corporate state seeks to discredit and shut down the anti-capitalist left. Its natural allies are the neo-Nazis and the Christian fascists. The alt-right is bankrolled, after all, by the most retrograde forces in American capitalism. It has huge media platforms. It has placed its ideologues and sympathizers in positions of power, including in law enforcement and the military. And it has carried out acts of domestic terrorism that dwarf anything carried out by the left. White supremacists were responsible for 49 homicides in 26 attacks in the United States from 2006 to 2016, far more than those committed by members of any other extremist group, according to a report issued in May by the FBI and the Department of Homeland Security. There is no moral equivalency between antifa and the alt-right. But by brawling in the streets antifa allows the corporate state, which is terrified of a popular anti-capitalist uprising, to use the false argument of moral equivalency to criminalize the work of all anti-capitalists.
As the Southern Poverty Law Center states categorically in its pamphlet “Ten Ways to Fight Hate,” “Do not attend a hate rally.”
“Find another outlet for anger and frustration and for people’s desire to do something,” it recommends. “Hold a unity rally or parade to draw media attention away from hate. Hate has a First Amendment right. Courts have routinely upheld the constitutional right of the Ku Klux Klan and other hate groups to hold rallies and say whatever they want. Communities can restrict group movements to avoid conflicts with other citizens, but hate rallies will continue. Your efforts should focus on channeling people away from hate rallies.”
The Nazis were as unsavory to the German political and economic elites as Donald Trump is to most Americans who hold power or influence. But the German elites chose to work with the fascists, whom they naively thought they could control, rather than risk a destruction of capitalism. Street brawls, actively sought out by the Nazis, always furthered the interests of the fascists, who promised to restore law and order and protect traditional values. The violence contributed to their mystique and the yearning among the public for a strongman who would impose stability.
Historian Laurie Marhoefer writes:
Violent confrontations with antifascists gave the Nazis a chance to paint themselves as the victims of a pugnacious, lawless left. They seized it.
It worked. We know now that many Germans supported the fascists because they were terrified of leftist violence in the streets. Germans opened their morning newspapers and saw reports of clashes like the one in Wedding [a Berlin neighborhood]. It looked like a bloody tide of civil war was rising in their cities. Voters and opposition politicians alike came to believe the government needed special police powers to stop violent leftists. Dictatorship grew attractive. The fact that the Nazis themselves were fomenting the violence didn’t seem to matter.
One of Hitler’s biggest steps to dictatorial power was to gain emergency police powers, which he claimed he needed to suppress leftist violence.
What took place in Charlottesville, like what took place in February when antifa and Black Bloc protesters thwarted UC Berkeley’s attempt to host the crypto-fascist Milo Yiannopoulos, was political theater. It was about giving self-styled radicals a stage. It was about elevating their self-image. It was about appearing heroic. It was about replacing personal alienation with comradeship and solidarity. Most important, it was about the ability to project fear. This newfound power is exciting and intoxicating. It is also very dangerous. Many of those in Charlottesville on the left and the right were carrying weapons. A neo-Nazi fired a round from a pistol in the direction of a counterprotester. The neo-Nazis often carried AR-15 rifles and wore quasi-military uniforms and helmets that made them blend in with police and state security. There could easily have been a bloodbath. A march held in Sacramento, Calif., in June 2016 by the neo-Nazi Traditionalist Worker Party to protest attacks at Trump rallies ended with a number of people stabbed. Police accused counterprotesters of initiating the violence. It is a short series of steps from bats and ax handles to knives to guns.
The conflict will not end until the followers of the alt-right and the anti-capitalist left are given a living wage and a voice in how we are governed. Take away a person’s dignity, agency and self-esteem and this is what you get. As political power devolves into a more naked form of corporate totalitarianism, as unemployment and underemployment expand, so will extremist groups. They will attract more sympathy and support as the wider population realizes, correctly, that Americans have been stripped of all ability to influence the decisions that affect their lives, lives that are getting steadily worse.
The ecocide by the fossil fuel and animal agriculture industries alone makes revolt a moral imperative. The question is how to make it succeed. Taking to the street to fight fascists ensures our defeat. Antifa violence, as Noam Chomsky has pointed out, is a “major gift to the right, including the militant right.” It fuels the right wing’s paranoid rants about the white race being persecuted and under attack. And it strips anti-capitalists of their moral capital.
Many in the feckless and bankrupt liberal class, deeply complicit in the corporate assault on the country and embracing the dead end of identity politics, will seek to regain credibility by defending the violence by groups such as antifa. Natasha Lennard, for example, in The Nation calls the “video of neo-Nazi Richard Spencer getting punched in the face” an act of “kinetic beauty.” She writes “if we recognize fascism in Trump’s ascendance, our response must be anti-fascist in nature. The history of anti-fascist action is not one of polite protest, nor failed appeals to reasoned debate with racists, but direct, aggressive confrontation.”
This violence-as-beauty rhetoric is at the core of these movements. It saturates the vocabulary of the right-wing corporate oligarchs, including Donald Trump. Talk like this poisons national discourse. It dehumanizes whole segments of the population. It shuts out those who speak with nuance and compassion, especially when they attempt to explain the motives and conditions of opponents. It thrusts the society into a binary and demented universe of them and us. It elevates violence to the highest aesthetic. It eschews self-criticism and self-reflection. It is the prelude to widespread suffering and death. And that, I fear, is where we are headed.
Sunday, August 27, 2017
SC148-12
http://resourceinsights.blogspot.com/2017/08/arctic-riches-most-insane-discussion.html
Arctic riches: A most insane discussion
As climate change rips away the icy armor of the Arctic, nations surrounding the North Pole and companies eager to exploit the area's mineral wealth--particularly oil and natural gas--are growing giddy with anticipation.
So reports the Associated Press, though the AP is by no means the first to report this story. The slow-motion battle over the increasingly accessible resources of the Arctic is certainly a story. But the prevailing version of that story lacks the proper context, one that is hard to provide since the implications of global climate change are vast and difficult to grasp.
First and foremost, burning additional oil and natural gas made available by receding Arctic ice is nothing short of insane. But in a world that believes that adapting to climate change is merely an engineering problem, this type of talk persists.
Readers of the AP piece are told that those wishing to exploit the Arctic will have to build the necessary infrastructure to service the mining, fishing and tourism interests that want a piece of these boreal riches. (Yes, you read that right: tourism!)
But if development of the Arctic proceeds, it will be a sign that we are doing far too little to abate the very causes of warming that make such development thinkable. That would imply increasingly rapid climate change, something that will almost surely destabilize a world which wants to exploit the Arctic.
In a world plagued with agricultural areas devastated by flood and drought, coastal cities drenched by rising seas, mass migrations from newly uninhabitable areas, spreading tropical diseases, water shortages, and unimaginably long periods of intense summer heat, it is hard to imagine that nations and private companies will be able to provide the systematic focus on Arctic development needed to extract its wealth.
In short, the exploitation of the Arctic implies stability elsewhere; but a continuous rise in Arctic temperatures which will make such exploitation increasingly feasible implies the opposite.
We as a global society cannot seem to see the world in any other frame than that of imperial expansion with the Arctic as the next land to conquer--no matter what. (Outer space also continues to occupy our fantasies as a "next land to conquer.")
The unfreezing of the Arctic may itself be one of the most dangerous drivers of climate change. The ice--which has prevented those currently salivating over Arctic riches from getting at them--not only keeps the Earth cool by reflecting light back into space; it also keeps untold gigatons of methane sequestered in the tundra and deep ocean. Once in the atmosphere methane traps far more heat than carbon dioxide.
Geologic history suggests that it is possible that a methane release from a melting Arctic would be non-linear (read: sudden and big). Such an event is often referred to as a methane burp. In the geologic past methane burps have been broadly fatal to all things living and may have led to one of the world's six great extinction events. (The sixth extinction is currently in progress without so far the benefit of a methane burp.)
It turns out that what development of the Arctic implies is so catastrophic that it is hard to understand why we are even discussing it. I am reminded of an old New Yorker magazine cartoon depicting a speaker at a business conference concluding his talk as follows: "And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit."
Most people don't really understand that a melted Arctic will almost certainly accompany the end of the world as we know it, both in nature and in society. Any profits gained as a result will be as monstrous as those mentioned in the New Yorker cartoon.
Arctic riches: A most insane discussion
As climate change rips away the icy armor of the Arctic, nations surrounding the North Pole and companies eager to exploit the area's mineral wealth--particularly oil and natural gas--are growing giddy with anticipation.
So reports the Associated Press, though the AP is by no means the first to report this story. The slow-motion battle over the increasingly accessible resources of the Arctic is certainly a story. But the prevailing version of that story lacks the proper context, one that is hard to provide since the implications of global climate change are vast and difficult to grasp.
First and foremost, burning additional oil and natural gas made available by receding Arctic ice is nothing short of insane. But in a world that believes that adapting to climate change is merely an engineering problem, this type of talk persists.
Readers of the AP piece are told that those wishing to exploit the Arctic will have to build the necessary infrastructure to service the mining, fishing and tourism interests that want a piece of these boreal riches. (Yes, you read that right: tourism!)
But if development of the Arctic proceeds, it will be a sign that we are doing far too little to abate the very causes of warming that make such development thinkable. That would imply increasingly rapid climate change, something that will almost surely destabilize a world which wants to exploit the Arctic.
In a world plagued with agricultural areas devastated by flood and drought, coastal cities drenched by rising seas, mass migrations from newly uninhabitable areas, spreading tropical diseases, water shortages, and unimaginably long periods of intense summer heat, it is hard to imagine that nations and private companies will be able to provide the systematic focus on Arctic development needed to extract its wealth.
In short, the exploitation of the Arctic implies stability elsewhere; but a continuous rise in Arctic temperatures which will make such exploitation increasingly feasible implies the opposite.
We as a global society cannot seem to see the world in any other frame than that of imperial expansion with the Arctic as the next land to conquer--no matter what. (Outer space also continues to occupy our fantasies as a "next land to conquer.")
The unfreezing of the Arctic may itself be one of the most dangerous drivers of climate change. The ice--which has prevented those currently salivating over Arctic riches from getting at them--not only keeps the Earth cool by reflecting light back into space; it also keeps untold gigatons of methane sequestered in the tundra and deep ocean. Once in the atmosphere methane traps far more heat than carbon dioxide.
Geologic history suggests that it is possible that a methane release from a melting Arctic would be non-linear (read: sudden and big). Such an event is often referred to as a methane burp. In the geologic past methane burps have been broadly fatal to all things living and may have led to one of the world's six great extinction events. (The sixth extinction is currently in progress without so far the benefit of a methane burp.)
It turns out that what development of the Arctic implies is so catastrophic that it is hard to understand why we are even discussing it. I am reminded of an old New Yorker magazine cartoon depicting a speaker at a business conference concluding his talk as follows: "And so, while the end-of-the-world scenario will be rife with unimaginable horrors, we believe that the pre-end period will be filled with unprecedented opportunities for profit."
Most people don't really understand that a melted Arctic will almost certainly accompany the end of the world as we know it, both in nature and in society. Any profits gained as a result will be as monstrous as those mentioned in the New Yorker cartoon.
SC148-11
http://www.informationclearinghouse.info/47678.htm
No Wonder US Forces in Morale Crisis
The spate of deadly US Navy collisions is a symptom of a wider morale crisis among American military forces. Part of the reason is that American troops are simply exhausted from being abused by political masters in Washington.
“Over-stretch” is one way of putting it. American forces continue to be assigned in overseas wars and operations around the globe with no end in sight. And for no credible purpose either.
This is not just a Navy problem. It affects all other branches of the US military: Army, Air Force, the Marines and National Guard.
When President Donald Trump announced his brazen U-turn sending more American troops back to Afghanistan, the move had the backing of the Pentagon’s top brass. No doubt stock prices for US arms manufacturers spiked.
But what about ordinary American soldiers? One can imagine renewed Afghan missions are not welcome, given that the US has been fighting its longest war – 16 years – in that country known as the "Graveyard of Empires."
Any army is only as good as the morale among soldiers. Morale depends on having a respected leadership and a credible just cause. In America’s case, there are neither of these attributes, therefore it is no surprise that morale diminishes, as does fighting effectiveness. Look at the appalling record of US military defeats or failures.
The fatal collision of a US Navy guided-missile destroyer this week with an oil tanker near Singapore – in which 10 missing American crew are feared dead – was the fourth major accident involving the Pacific 7th Fleet this year alone. The admiral of the fleet has been dismissed from his command post.
Several military commentators are pointing to low morale among rank-and-file Navy members, from being forced to spend longer periods at sea on deployment, with little training and demanding work hours.
As a report in military.com noted: "Operational demand around the globe… means less time at home for rest and training; crews are therefore operating with greater stress and exhaustion levels."
The report quotes Congressman Rob Wittman, of the House Armed Services Committee, saying: "I believe that there are even more basic causes for this systematic operational failure of our fleet including a demanding operational tempo, limited training opportunities and inadequate funding to support basic needs."
But here’s the paramount issue that is not mentioned. Why are US forces being increasingly despatched to Asia-Pacific?
Of course, it is to do with US imperial objectives of confronting China over its alleged expanding influence in that region. The ramped-up tensions with North Korea are also connected to the US aim of curtailing China.
When we say the "US aim" we mean precisely the ruling class and their imperial designs. What ordinary Americans get out of this strategic "Asian Pivot" is far from certain. Combine dubious mission with dubious leadership, long months away from home under wearying conditions, and is it any wonder that morale of crew members sinks?
The problem is much bigger than the US Navy and the Asia-Pacific. The American military must be the most internally conflicted force there is. The surge in wars ever since the September 11 terror incidents in 2001 was supposed to be about "defeating terrorism."
All too often, however, that official purpose has been distorted to serve ulterior objectives, such as regime change. How must American troops, navy and air men feel when they realize that their own commanders and intelligence agencies are supporting the same terrorists that the rank-and-file soldiers are supposed to be combating?
American troops no doubt know what’s going down on the ground. They will know that the Pentagon and CIA are arming and training terrorist death squads in Syria, Iraq, and, yes, Afghanistan.
Russia’s foreign ministry reported this month that foreign jihadist fighters are being flown by “unidentified” helicopters to various parts of Afghanistan. Some Taliban units have been identified driving US Humvee military vehicles. This covert duplicity all sounds like a repeat of America’s dirty wars in Syria and Iraq, where thousands of American troops were killed or maimed for life.
Over the past century, American forces have been involved in dozens of wars around the world. A case can be made that the First and Second World Wars were a just cause for the Americans. But all the other conflicts have been simply wars of aggression, carried out for some ulterior nefarious purpose. The official pretexts for these wars are always shown eventually to be fraudulent, whether it was fighting Soviet expansionism as in Korea and Vietnam, or fighting terrorism as in Iraq and Afghanistan. Or, the biggest fraud of all, to protect human rights as in Libya and Syria.
The history of crimes and lies is catching up with American imperialism. Its never-ending need for wars around the world is no longer tenable. The US is not pursuing some noble crusade. It never has been. It is a warmongering state that is addicted to wars of conquest in order to satisfy the economic lust of its elites.
It’s easy for armchair generals like Donald Trump and his Joint Chiefs of Staff to threaten nuclear war against North Korea. But nobody of a sane mind could possibly accept this criminal recklessness.
In a recent media commentary, a former US nuclear missile launch officer, Bruce Blair, said that no-one among serving officers believes that Trump has any right to launch a pre-emptive strike on North Korea.
“Nuking another country just because it seeks to acquire nuclear weapons enjoys virtually zero support from US nuclear troops,” wrote the former missile launch officer.
The inference is that there is widespread distrust of the American leadership and its motives. That again leads back to the issue of morale crisis among America’s military forces, across all sectors.
A military force is only capable if it has the will to fight a clearly identified enemy, whom it views as a threat to their country and compatriots.
For decades the American military has been abused with official lies and debased to conduct heinous crimes against humanity. But increasingly it seems the only enemy the US armed forces are up against are the rulers in Washington, with their imperialist schemes of world domination.
More than 80 years ago, the most decorated American soldier, Marine Corps Major General Smedley Butler (1881-1940), came to the stark conclusion that "war is a racket" – at least American wars are. Butler described his 34 years of service fighting wars in the Philippines, South America, the Caribbean, and China as being "a racketeer, a gangster for capitalism."
One might conjecture that this realization is dawning on more and more serving US personnel. Their operations, sacrifices and violence against others is not for any just cause. This realization inevitably leads to flagging morale among ordinary servicemen, whether they are riding in a Humvee in the Middle East, installing missile systems in NATO countries on Russia’s border, or sailing ships that threaten nuclear war with North Korea and China.
Sooner or later, the lousy paycheck and missing family at home no longer makes sense or morality. To hell with it, as Smedley Butler declared.
No Wonder US Forces in Morale Crisis
The spate of deadly US Navy collisions is a symptom of a wider morale crisis among American military forces. Part of the reason is that American troops are simply exhausted from being abused by political masters in Washington.
“Over-stretch” is one way of putting it. American forces continue to be assigned in overseas wars and operations around the globe with no end in sight. And for no credible purpose either.
This is not just a Navy problem. It affects all other branches of the US military: Army, Air Force, the Marines and National Guard.
When President Donald Trump announced his brazen U-turn sending more American troops back to Afghanistan, the move had the backing of the Pentagon’s top brass. No doubt stock prices for US arms manufacturers spiked.
But what about ordinary American soldiers? One can imagine renewed Afghan missions are not welcome, given that the US has been fighting its longest war – 16 years – in that country known as the "Graveyard of Empires."
Any army is only as good as the morale among soldiers. Morale depends on having a respected leadership and a credible just cause. In America’s case, there are neither of these attributes, therefore it is no surprise that morale diminishes, as does fighting effectiveness. Look at the appalling record of US military defeats or failures.
The fatal collision of a US Navy guided-missile destroyer this week with an oil tanker near Singapore – in which 10 missing American crew are feared dead – was the fourth major accident involving the Pacific 7th Fleet this year alone. The admiral of the fleet has been dismissed from his command post.
Several military commentators are pointing to low morale among rank-and-file Navy members, from being forced to spend longer periods at sea on deployment, with little training and demanding work hours.
As a report in military.com noted: "Operational demand around the globe… means less time at home for rest and training; crews are therefore operating with greater stress and exhaustion levels."
The report quotes Congressman Rob Wittman, of the House Armed Services Committee, saying: "I believe that there are even more basic causes for this systematic operational failure of our fleet including a demanding operational tempo, limited training opportunities and inadequate funding to support basic needs."
But here’s the paramount issue that is not mentioned. Why are US forces being increasingly despatched to Asia-Pacific?
Of course, it is to do with US imperial objectives of confronting China over its alleged expanding influence in that region. The ramped-up tensions with North Korea are also connected to the US aim of curtailing China.
When we say the "US aim" we mean precisely the ruling class and their imperial designs. What ordinary Americans get out of this strategic "Asian Pivot" is far from certain. Combine dubious mission with dubious leadership, long months away from home under wearying conditions, and is it any wonder that morale of crew members sinks?
The problem is much bigger than the US Navy and the Asia-Pacific. The American military must be the most internally conflicted force there is. The surge in wars ever since the September 11 terror incidents in 2001 was supposed to be about "defeating terrorism."
All too often, however, that official purpose has been distorted to serve ulterior objectives, such as regime change. How must American troops, navy and air men feel when they realize that their own commanders and intelligence agencies are supporting the same terrorists that the rank-and-file soldiers are supposed to be combating?
American troops no doubt know what’s going down on the ground. They will know that the Pentagon and CIA are arming and training terrorist death squads in Syria, Iraq, and, yes, Afghanistan.
Russia’s foreign ministry reported this month that foreign jihadist fighters are being flown by “unidentified” helicopters to various parts of Afghanistan. Some Taliban units have been identified driving US Humvee military vehicles. This covert duplicity all sounds like a repeat of America’s dirty wars in Syria and Iraq, where thousands of American troops were killed or maimed for life.
Over the past century, American forces have been involved in dozens of wars around the world. A case can be made that the First and Second World Wars were a just cause for the Americans. But all the other conflicts have been simply wars of aggression, carried out for some ulterior nefarious purpose. The official pretexts for these wars are always shown eventually to be fraudulent, whether it was fighting Soviet expansionism as in Korea and Vietnam, or fighting terrorism as in Iraq and Afghanistan. Or, the biggest fraud of all, to protect human rights as in Libya and Syria.
The history of crimes and lies is catching up with American imperialism. Its never-ending need for wars around the world is no longer tenable. The US is not pursuing some noble crusade. It never has been. It is a warmongering state that is addicted to wars of conquest in order to satisfy the economic lust of its elites.
It’s easy for armchair generals like Donald Trump and his Joint Chiefs of Staff to threaten nuclear war against North Korea. But nobody of a sane mind could possibly accept this criminal recklessness.
In a recent media commentary, a former US nuclear missile launch officer, Bruce Blair, said that no-one among serving officers believes that Trump has any right to launch a pre-emptive strike on North Korea.
“Nuking another country just because it seeks to acquire nuclear weapons enjoys virtually zero support from US nuclear troops,” wrote the former missile launch officer.
The inference is that there is widespread distrust of the American leadership and its motives. That again leads back to the issue of morale crisis among America’s military forces, across all sectors.
A military force is only capable if it has the will to fight a clearly identified enemy, whom it views as a threat to their country and compatriots.
For decades the American military has been abused with official lies and debased to conduct heinous crimes against humanity. But increasingly it seems the only enemy the US armed forces are up against are the rulers in Washington, with their imperialist schemes of world domination.
More than 80 years ago, the most decorated American soldier, Marine Corps Major General Smedley Butler (1881-1940), came to the stark conclusion that "war is a racket" – at least American wars are. Butler described his 34 years of service fighting wars in the Philippines, South America, the Caribbean, and China as being "a racketeer, a gangster for capitalism."
One might conjecture that this realization is dawning on more and more serving US personnel. Their operations, sacrifices and violence against others is not for any just cause. This realization inevitably leads to flagging morale among ordinary servicemen, whether they are riding in a Humvee in the Middle East, installing missile systems in NATO countries on Russia’s border, or sailing ships that threaten nuclear war with North Korea and China.
Sooner or later, the lousy paycheck and missing family at home no longer makes sense or morality. To hell with it, as Smedley Butler declared.
Friday, August 25, 2017
SC148-10
https://www.peakprosperity.com/blog/110440/why-shale-oil-miracle-becoming-debacle
Why The Shale Oil "Miracle" Is Becoming A "Debacle"
Dispelling the magical thinking behind the hype
Energy is everything.
This is an amazingly important concept. Yet it's almost universally overlooked.
Sometimes it’s hard to appreciate the magical role energy plays in our daily lives because most of what we experience is a derivative of it. The connection is hidden from direct view. Because of this, most people utterly fail to detect or appreciate the priceless and irreplaceable role of high net-energy fuel sources (such as oil and gas) to our modern lifestyle.
With high net-energy, society enjoys increasing complexity and technological advances. It's what enables us to pursue massive goals like desalinating billions of gallons of seawater, or going to Mars. But without high net-energy fuel sources, our capabilities quickly regress to those of decades -- or even centuries -- past.
Which is why understanding where we truly are in the 'net-energy story' is so incredibly important. Is the US on the cusp of being "energy independent" from here on out? Is the "shale miracle" ushering in a glorious new 'boom' era that will vault America to unprecedented prosperity?
No. The central point of this report is that the US is deluding itself when it comes to energy abundance (generally) and oil (specifically).
Yet that's not what we hear from the cheerleaders in the industry or in our media. From them, we hear a silver-tongued narrative of coming riches -- a narrative that contains some truth, some myth, and a lot of fantasy.
It’s those last two parts -- the myths and fantasies -- that are going to seriously hurt many investors, as well cause a lot of extremely poor policy and investment decisions.
The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of "miracle".
How do I know that? Because, collectively, US shale companies have lost cash in every year of their existence. The burned through cash when oil was $100 -- and again when it was $90, $80, $70, $60, $50, $40, and $30 a barrel. They burned through cash in 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016.
You don’t have to be a finance guru to appreciate or understand that any industry that persistently burns through cash is a bad deal. Especially one whose prime product – shale wells – principally deplete (-85%) in roughly three years. If you’ve been in business for 9 years drilling wells that mostly run out in 3 years, and you haven’t managed to produce positive cash flow at any point along the way, then it's time to admit that your business model simply doesn’t work.
As even The Economist magazine recently noted:
The [US shale] industry has also lifted productivity. Drilling is faster, more selective and more accurate, and leakage rates are lower. Wells are being designed to penetrate multiple layers of oil that are stacked on top of each other.
But the fact that the industry makes huge accounting losses has not changed. It has burned up cash whether the oil price was at $100, as in 2014, or at about $50, as it was during the past three months.
The biggest 60 firms in aggregate have used up $9bn per quarter on average for the past five years.
As a result the industry has barely improved its finances despite raising $70bn of equity since 2014. Much of the new money got swallowed up by losses, so total debt remains high, at just over $200bn.
Let’s run that math. Five years is 20 quarters. That times $9 billion/quarter is $180 billion dollars in cumulative operating losses. This begins to give us a sense of the magnitude of losses investors will face when the music finally stops.
Or we could note the $200 billion of total debt outstanding for the industry. Hmmmm…with WTIC oil at $47/barrel, a typical wellhead price (that the operators actually receive being less than WTIC, always) might be closer to $40. $200 billion divided by $40 means that 5 billion barrels of future wellhead production is required just to pay back the debt!
If the industry decided to use the next 5 billion barrels coming out of the ground to debt reduction (it never would decide this, but bear with me for the sake of this intellectual exercise), we'd also need to include the time value of money (and actual production rates over time) and observe that the debt carries an interest rate of 5% to 8% (depending on the company). Taking that into consideration, then the next 6 billion barrels would be required to satisfy the debt, plus interest payments!
Oh, right. And then there's the issue of repaying the $70 billion of equity raised since 2014. With some sort of return, if possible, of course.
I hope you see the same staggering disconnect in these numbers I do. Which is why, without have to go too far out on a limb, I’ll state that massive losses are coming to the (bag)holders of all this debt and equity.
So why care? Because you need to understand these details in order to position yourself properly for the future. The implications are enormous.
The Danger Behind Myths and Fantasies
Once you become aware of the magical thinking involved, you then have a chance of knowing why the future is going to be very difficult for the shale industry, its investors, and then the nation(s) depending on its oil production.
Hey, sometimes myths and fantasies are harmless to hold. Like dreaming that someday you’ll be a major rock star.
But some can be incredibly damaging because they lead to poor life choices and decision-making. Like emptying your bank account to bet on the Powerball lottery, where your chances of winning are 292,201,338 to one. Or committing your nation to a ground war in Asia thinking you can "win".
The promise of US shale oil is a very dangerous siren song. It was so carefully marketed to gullible investors that even Obama’s speechwriter and fact checkers got swept along. This is from Obama’s State of the Union speech from 2014:
Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.
What does “energy independence” mean? It turns out, this crowd-pleasing phrase is a fantasy that lacks any useful grounding in reality. What those who claim "energy independence" are doing are lumping all forms and sources of energy into a single bucket, and then asking if the size of that bucket matches our current demand.
This is an inappropriate and dangerously misguided way to look at things is because the various types and sources of energy are not interchangeable. They don't function the same way. They generally can't be substituted for each other. And they don't cost the same.
For example, your automobile might run on gasoline which costs $2.50 a gallon. Suppose instead you could buy coal cheaper than gasoline on a BTU basis; is that any help to you as an auto driver? Would you suddenly put crushed coal into your gas tank instead of gasoline? No, of course not.
What if you had a micro hydro plant operating in your backyard and could extract a more Kilowatt hours of electricity from it each week than you needed. Would that make you “energy independent?”
Not if you drive a car that requires gasoline. Or cook on a gas-powered stove. Or heat your house with an oil-burning furnace.
The same is true for the US (or any country). A country is not "energy independent" unless it can meet all of its national energy demands with enough BTUs in each of the needed fuel types. Just looking at oil alone, the US still imports millions of barrels per day -- even with the "shale miracle". I'll get into this more deeply in just a moment.
But first, back to the myth of "energy independence". The EIA itself has been a major proponent of this useless data glob as seen in their most recent 2017 Annual Energy Outlook:
So, when the US lumps all of its various sources of energy into one spot – including hydropower, wind, solar, coal, oil and natural gas – nothing useful emerges from that method. We cannot know from it if we will have too much or too little of any one type of energy, or how much we’d be under or over budget in selling the surplus of one and buying to cover the deficit of another.
The delusion has only gotten worse under Trump. The useless and misleading clumping of energy into a single bucket has morphed into an even larger error; one shared by many otherwise intelligent "experts".
See if you can spot the error (I bolded it so you shouldn’t have too much trouble):
Trump Hails 'Energy Revolution' as Exports Surge
June 27, 2017
WASHINGTON (AP) — President Donald Trump on Tuesday hailed an energy revolution marked by surging U.S. exports of oil and natural gas.
Trump cited a series of steps the administration has taken to boost energy production and remove government regulations that he argues prevent the United States from achieving "energy dominance" in the global market.
"Together, we are going to start a new energy revolution — one that celebrates American production on American soil," Trump said in a statement, adding that the U.S. is on the brink of becoming a net exporter of oil, gas and other energy resources.
It is a massive error to state that the US “is on the brink of becoming a net exporter of oil.” While I can see how that conclusion follows logically from all the disinformation provided about “energy independence” and the hype spouted by Wall Street and the shale companies -- it’s totally false.
The US is NOT on the brink of becoming a net oil exporter. And it almost certainly never will be.
Here’s the data:
The above chart tells us that, to become a net exporter, the US would have to both hold demand steady (i.e. not increase consumption at all) while also boosting production by nearly 5 million barrels a day (mbd). That is, the entire current output of the shale “revolution” would have to be replicated, because current total shale oil output in the US is around 5 mbd
But it would actually be harder than that. As already mentioned, shale wells have ferocious decline rates; so an additional 5 million barrels per day would require adding to new production aggressively each year to offset this ongoing extreme loss of production.
Well, before another shale 'miracle' comes roaring out of the gate we’d need two things: enough new places to drill and more massive injections of capital. Both are suspect at this point.
One analyst doing a superior job looking at the details is Rune Livkern of Fractional Flow, who made this excellent chart estimating that in the Bakken play, one of the best-performing shale basin darlings of the entire “revolution,” the cumulative negative cash flow between 2009 and 2016 (a full 7 years of history) totaled some -$32 billion in losses:
Now why do shale oil operators keep burn cash in every time period? Especially given the hype that they're constantly becoming better and more efficient at drilling. Better productivity should mean better profitability, especially when you have the big operators like Pioneer Natural Resources (PXD) constantly saying things like this (from their last investors conference call):
"Our break-even oil price is $20 a barrel," Frank Hopkins, Pioneer’s senior vice-president, told an industry conference in London this week. "Even in a $40 world, in a $50 world, we are making good returns.
A company breaking even at $20 should be rolling in cash with oil at $45. But they aren’t.
Here’s the cash flow chart from PXD.
Ouch. What explains the huge gap between the company’s own statements and its actual performance? How can the entire industry be doing so poorly?
This mystery is solved by some basic research showing that as the price of oil moves up or down, so too do the breakeven prices:
Dr. Anas Alhaji, an economist and oil industry consultant based in Texas, along with Al Rajhi Capital, compiled the breakeven points for the largest shale producers between 2014 and the start of 2017. When placed alongside a graph of the spot price of WTI oil from the end of three quarters prior, it appears the breakeven points for shale are actually a function of the past price of oil itself.
This indicates that because shale costs are not fixed or even stable, the industry will likely struggle to achieve consistent profit unless the labor market and vendor markets are transformed.
Essentially, shale should struggle to achieve sustained profitability, no matter the price of oil.
Here’s the chart produced by that study. It’s plain ugly for shale investors, for a couple of reasons:
First, the blue line is the weighted average breakeven cost to produce oil from shale wells. Second the orange line is the WTI price of oil -- it's usually below the blue line.
Keep in mind: the WTI price is always higher than the price the operators actually receive at the well head for their produced oil because of shipping and other costs.
So mystery solved. Costs higher than revenues = Losses.
This chart says “These companies do not make money doing what they do.” The companies' own financial filings say the same thing. There’s no real mystery here. These companies are losing money and they have been for years....
Why The Shale Oil "Miracle" Is Becoming A "Debacle"
Dispelling the magical thinking behind the hype
Energy is everything.
This is an amazingly important concept. Yet it's almost universally overlooked.
Sometimes it’s hard to appreciate the magical role energy plays in our daily lives because most of what we experience is a derivative of it. The connection is hidden from direct view. Because of this, most people utterly fail to detect or appreciate the priceless and irreplaceable role of high net-energy fuel sources (such as oil and gas) to our modern lifestyle.
With high net-energy, society enjoys increasing complexity and technological advances. It's what enables us to pursue massive goals like desalinating billions of gallons of seawater, or going to Mars. But without high net-energy fuel sources, our capabilities quickly regress to those of decades -- or even centuries -- past.
Which is why understanding where we truly are in the 'net-energy story' is so incredibly important. Is the US on the cusp of being "energy independent" from here on out? Is the "shale miracle" ushering in a glorious new 'boom' era that will vault America to unprecedented prosperity?
No. The central point of this report is that the US is deluding itself when it comes to energy abundance (generally) and oil (specifically).
Yet that's not what we hear from the cheerleaders in the industry or in our media. From them, we hear a silver-tongued narrative of coming riches -- a narrative that contains some truth, some myth, and a lot of fantasy.
It’s those last two parts -- the myths and fantasies -- that are going to seriously hurt many investors, as well cause a lot of extremely poor policy and investment decisions.
The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of "miracle".
How do I know that? Because, collectively, US shale companies have lost cash in every year of their existence. The burned through cash when oil was $100 -- and again when it was $90, $80, $70, $60, $50, $40, and $30 a barrel. They burned through cash in 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016.
You don’t have to be a finance guru to appreciate or understand that any industry that persistently burns through cash is a bad deal. Especially one whose prime product – shale wells – principally deplete (-85%) in roughly three years. If you’ve been in business for 9 years drilling wells that mostly run out in 3 years, and you haven’t managed to produce positive cash flow at any point along the way, then it's time to admit that your business model simply doesn’t work.
As even The Economist magazine recently noted:
The [US shale] industry has also lifted productivity. Drilling is faster, more selective and more accurate, and leakage rates are lower. Wells are being designed to penetrate multiple layers of oil that are stacked on top of each other.
But the fact that the industry makes huge accounting losses has not changed. It has burned up cash whether the oil price was at $100, as in 2014, or at about $50, as it was during the past three months.
The biggest 60 firms in aggregate have used up $9bn per quarter on average for the past five years.
As a result the industry has barely improved its finances despite raising $70bn of equity since 2014. Much of the new money got swallowed up by losses, so total debt remains high, at just over $200bn.
Let’s run that math. Five years is 20 quarters. That times $9 billion/quarter is $180 billion dollars in cumulative operating losses. This begins to give us a sense of the magnitude of losses investors will face when the music finally stops.
Or we could note the $200 billion of total debt outstanding for the industry. Hmmmm…with WTIC oil at $47/barrel, a typical wellhead price (that the operators actually receive being less than WTIC, always) might be closer to $40. $200 billion divided by $40 means that 5 billion barrels of future wellhead production is required just to pay back the debt!
If the industry decided to use the next 5 billion barrels coming out of the ground to debt reduction (it never would decide this, but bear with me for the sake of this intellectual exercise), we'd also need to include the time value of money (and actual production rates over time) and observe that the debt carries an interest rate of 5% to 8% (depending on the company). Taking that into consideration, then the next 6 billion barrels would be required to satisfy the debt, plus interest payments!
Oh, right. And then there's the issue of repaying the $70 billion of equity raised since 2014. With some sort of return, if possible, of course.
I hope you see the same staggering disconnect in these numbers I do. Which is why, without have to go too far out on a limb, I’ll state that massive losses are coming to the (bag)holders of all this debt and equity.
So why care? Because you need to understand these details in order to position yourself properly for the future. The implications are enormous.
The Danger Behind Myths and Fantasies
Once you become aware of the magical thinking involved, you then have a chance of knowing why the future is going to be very difficult for the shale industry, its investors, and then the nation(s) depending on its oil production.
Hey, sometimes myths and fantasies are harmless to hold. Like dreaming that someday you’ll be a major rock star.
But some can be incredibly damaging because they lead to poor life choices and decision-making. Like emptying your bank account to bet on the Powerball lottery, where your chances of winning are 292,201,338 to one. Or committing your nation to a ground war in Asia thinking you can "win".
The promise of US shale oil is a very dangerous siren song. It was so carefully marketed to gullible investors that even Obama’s speechwriter and fact checkers got swept along. This is from Obama’s State of the Union speech from 2014:
Now, one of the biggest factors in bringing more jobs back is our commitment to American energy. The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.
What does “energy independence” mean? It turns out, this crowd-pleasing phrase is a fantasy that lacks any useful grounding in reality. What those who claim "energy independence" are doing are lumping all forms and sources of energy into a single bucket, and then asking if the size of that bucket matches our current demand.
This is an inappropriate and dangerously misguided way to look at things is because the various types and sources of energy are not interchangeable. They don't function the same way. They generally can't be substituted for each other. And they don't cost the same.
For example, your automobile might run on gasoline which costs $2.50 a gallon. Suppose instead you could buy coal cheaper than gasoline on a BTU basis; is that any help to you as an auto driver? Would you suddenly put crushed coal into your gas tank instead of gasoline? No, of course not.
What if you had a micro hydro plant operating in your backyard and could extract a more Kilowatt hours of electricity from it each week than you needed. Would that make you “energy independent?”
Not if you drive a car that requires gasoline. Or cook on a gas-powered stove. Or heat your house with an oil-burning furnace.
The same is true for the US (or any country). A country is not "energy independent" unless it can meet all of its national energy demands with enough BTUs in each of the needed fuel types. Just looking at oil alone, the US still imports millions of barrels per day -- even with the "shale miracle". I'll get into this more deeply in just a moment.
But first, back to the myth of "energy independence". The EIA itself has been a major proponent of this useless data glob as seen in their most recent 2017 Annual Energy Outlook:
So, when the US lumps all of its various sources of energy into one spot – including hydropower, wind, solar, coal, oil and natural gas – nothing useful emerges from that method. We cannot know from it if we will have too much or too little of any one type of energy, or how much we’d be under or over budget in selling the surplus of one and buying to cover the deficit of another.
The delusion has only gotten worse under Trump. The useless and misleading clumping of energy into a single bucket has morphed into an even larger error; one shared by many otherwise intelligent "experts".
See if you can spot the error (I bolded it so you shouldn’t have too much trouble):
Trump Hails 'Energy Revolution' as Exports Surge
June 27, 2017
WASHINGTON (AP) — President Donald Trump on Tuesday hailed an energy revolution marked by surging U.S. exports of oil and natural gas.
Trump cited a series of steps the administration has taken to boost energy production and remove government regulations that he argues prevent the United States from achieving "energy dominance" in the global market.
"Together, we are going to start a new energy revolution — one that celebrates American production on American soil," Trump said in a statement, adding that the U.S. is on the brink of becoming a net exporter of oil, gas and other energy resources.
It is a massive error to state that the US “is on the brink of becoming a net exporter of oil.” While I can see how that conclusion follows logically from all the disinformation provided about “energy independence” and the hype spouted by Wall Street and the shale companies -- it’s totally false.
The US is NOT on the brink of becoming a net oil exporter. And it almost certainly never will be.
Here’s the data:
The above chart tells us that, to become a net exporter, the US would have to both hold demand steady (i.e. not increase consumption at all) while also boosting production by nearly 5 million barrels a day (mbd). That is, the entire current output of the shale “revolution” would have to be replicated, because current total shale oil output in the US is around 5 mbd
But it would actually be harder than that. As already mentioned, shale wells have ferocious decline rates; so an additional 5 million barrels per day would require adding to new production aggressively each year to offset this ongoing extreme loss of production.
Well, before another shale 'miracle' comes roaring out of the gate we’d need two things: enough new places to drill and more massive injections of capital. Both are suspect at this point.
One analyst doing a superior job looking at the details is Rune Livkern of Fractional Flow, who made this excellent chart estimating that in the Bakken play, one of the best-performing shale basin darlings of the entire “revolution,” the cumulative negative cash flow between 2009 and 2016 (a full 7 years of history) totaled some -$32 billion in losses:
Now why do shale oil operators keep burn cash in every time period? Especially given the hype that they're constantly becoming better and more efficient at drilling. Better productivity should mean better profitability, especially when you have the big operators like Pioneer Natural Resources (PXD) constantly saying things like this (from their last investors conference call):
"Our break-even oil price is $20 a barrel," Frank Hopkins, Pioneer’s senior vice-president, told an industry conference in London this week. "Even in a $40 world, in a $50 world, we are making good returns.
A company breaking even at $20 should be rolling in cash with oil at $45. But they aren’t.
Here’s the cash flow chart from PXD.
Ouch. What explains the huge gap between the company’s own statements and its actual performance? How can the entire industry be doing so poorly?
This mystery is solved by some basic research showing that as the price of oil moves up or down, so too do the breakeven prices:
Dr. Anas Alhaji, an economist and oil industry consultant based in Texas, along with Al Rajhi Capital, compiled the breakeven points for the largest shale producers between 2014 and the start of 2017. When placed alongside a graph of the spot price of WTI oil from the end of three quarters prior, it appears the breakeven points for shale are actually a function of the past price of oil itself.
This indicates that because shale costs are not fixed or even stable, the industry will likely struggle to achieve consistent profit unless the labor market and vendor markets are transformed.
Essentially, shale should struggle to achieve sustained profitability, no matter the price of oil.
Here’s the chart produced by that study. It’s plain ugly for shale investors, for a couple of reasons:
First, the blue line is the weighted average breakeven cost to produce oil from shale wells. Second the orange line is the WTI price of oil -- it's usually below the blue line.
Keep in mind: the WTI price is always higher than the price the operators actually receive at the well head for their produced oil because of shipping and other costs.
So mystery solved. Costs higher than revenues = Losses.
This chart says “These companies do not make money doing what they do.” The companies' own financial filings say the same thing. There’s no real mystery here. These companies are losing money and they have been for years....
SC148-9
http://www.oftwominds.com/blog.html
Next Stop, Recession: The Financial Meteor Storm Is Headed Our Way
Business-cycle recessions are not just inevitable, they are necessary to flush bad debt and marginal investments/projects from the system.
The next recession--which I suggested yesterday has just begun--will be more than a business-cycle downturn; it will be a devastating meteor storm that destroys huge chunks of the economy while leaving other sectors virtually untouched.
The dynamic that's about to play out is simple: wages for the bottom 95% have gone nowhere for 17 years, while costs have soared far above official inflation for everyone exposed to real-world costs.
We have filled the widening gap between stagnant household income and rising expenses with debt. This stop-gap works for a while, but eventually the cost of servicing debt consumes the entire budget, leaving little to nothing to save or invest.
Absent savings and incentives for productive investment, productivity falters once productivity falters, wealth is no longer being generated or distributed widely.
After eight long years of filling the widening gap with borrowed money, the jig is up: the returns on adding debt have diminished to zero, and the financialization games that were supposed to be temporary emergency measures are now permanent.
Like a field exposed to toxins for 8 long years, all this permanent monetary and fiscal stimulus has weakened the productive economy while causing the most destructive weeds to flourish.
When credit expansion stops, the effect is like a meteor storm: marginal borrowers and lenders crater, and every sector that depends on marginal borrowers and lenders for sales and profits also craters.
Those sectors that are heavily in debt and dependent on marginal borrowers for sales implode once sales slump. As these enterprises default, all the lenders who issued this commercial debt also blow up.
Every node of the economy that is heavily indebted and dependent on marginal borrowers for sales, profits and taxes will be struck by a financial meteor. Every sector that avoided debt and sales funded by debt will escape with only light damage.
Here's total credit in the U.S.: up from $26 trillion 2000 to $66 trillion today. The $12 trillion increase since 2009 required trillions in monetary and fiscal stimulus and hundreds of billions of dollars in savings diverted to the banks via zero-interest rate policy (ZIRP).
While explode higher, wages for the bottom 95% stagnated. Only the top 5% of households experienced any real (inflation-adjusted) income expansion.
Wage Stagnation in Nine Charts (Economic Policy Institute)
U.S. Household Incomes: A 49-Year Perspective
Meanwhile, the engine of real income/wealth expansion, productivity, has faltered:
Many of those about to be vaporized did not grasp the fragility of the "prosperity" they assumed was both solid and permanent. The difference between earned income and sales derived from earned income and debt-based income and debt-based sales is about to become painfully clear: the coming financial meteor strike will vaporize debt-based activity and leave whatever isn't dependent on debt relatively unscathed.
Next Stop, Recession: The Financial Meteor Storm Is Headed Our Way
Business-cycle recessions are not just inevitable, they are necessary to flush bad debt and marginal investments/projects from the system.
The next recession--which I suggested yesterday has just begun--will be more than a business-cycle downturn; it will be a devastating meteor storm that destroys huge chunks of the economy while leaving other sectors virtually untouched.
The dynamic that's about to play out is simple: wages for the bottom 95% have gone nowhere for 17 years, while costs have soared far above official inflation for everyone exposed to real-world costs.
We have filled the widening gap between stagnant household income and rising expenses with debt. This stop-gap works for a while, but eventually the cost of servicing debt consumes the entire budget, leaving little to nothing to save or invest.
Absent savings and incentives for productive investment, productivity falters once productivity falters, wealth is no longer being generated or distributed widely.
After eight long years of filling the widening gap with borrowed money, the jig is up: the returns on adding debt have diminished to zero, and the financialization games that were supposed to be temporary emergency measures are now permanent.
Like a field exposed to toxins for 8 long years, all this permanent monetary and fiscal stimulus has weakened the productive economy while causing the most destructive weeds to flourish.
When credit expansion stops, the effect is like a meteor storm: marginal borrowers and lenders crater, and every sector that depends on marginal borrowers and lenders for sales and profits also craters.
Those sectors that are heavily in debt and dependent on marginal borrowers for sales implode once sales slump. As these enterprises default, all the lenders who issued this commercial debt also blow up.
Every node of the economy that is heavily indebted and dependent on marginal borrowers for sales, profits and taxes will be struck by a financial meteor. Every sector that avoided debt and sales funded by debt will escape with only light damage.
Here's total credit in the U.S.: up from $26 trillion 2000 to $66 trillion today. The $12 trillion increase since 2009 required trillions in monetary and fiscal stimulus and hundreds of billions of dollars in savings diverted to the banks via zero-interest rate policy (ZIRP).
While explode higher, wages for the bottom 95% stagnated. Only the top 5% of households experienced any real (inflation-adjusted) income expansion.
Wage Stagnation in Nine Charts (Economic Policy Institute)
U.S. Household Incomes: A 49-Year Perspective
Meanwhile, the engine of real income/wealth expansion, productivity, has faltered:
Many of those about to be vaporized did not grasp the fragility of the "prosperity" they assumed was both solid and permanent. The difference between earned income and sales derived from earned income and debt-based income and debt-based sales is about to become painfully clear: the coming financial meteor strike will vaporize debt-based activity and leave whatever isn't dependent on debt relatively unscathed.
Wednesday, August 23, 2017
SC148-8
http://www.informationclearinghouse.info/47663.htm
Trump’s Betrayal is Complete as Military-industrial Complex Rises to Power
If one moment stands out as the clearest signal yet of US President Trump turning his back on supporters, it was his announcement this week to re-escalate American military intervention in Afghanistan.
His signature campaign promise of putting “America First” and ending the folly of overseas wars launched by previous administrations was shredded on prime time television when he gave orders for thousands of more US troops to be sent to Afghanistan. The already 16-year war in that country – America’s longest – will now go on indefinitely longer.
The Huffington Post headlined: “Trump’s vague new Afghanistan strategy continues an endless war.”
'No rapid exit': Trump's dramatic switch on Afghanistan strategy https://t.co/VZRGA2ycwE
— RT America (@RT_America) August 22, 2017
Not only that, but this president is refusing to give any public information on force numbers or timescale. America’s overseas wars are not just expanding under Trump; they are going secret and unaccountable.
This surge in militarism is precisely what candidate Trump said he would not do when he campaigned for votes among blue-collar workers in the Rust Belt states, vowing instead to channel US economic resources to revive “forgotten” communities at home. Recall his blustering inauguration speech on January 20 when he bemoaned the “American Carnage,” at home and abroad.
As the Huffington Post writes: “When Obama was still in office and overseeing a massive troop presence in Afghanistan, Trump repeatedly bashed the operation as a waste of money and called for a quick withdrawal from the country.”
‘US will never leave Afghanistan and they have never had plans to do so’ - Russian senator https://t.co/phWhNu4SE3pic.twitter.com/3UQhiHrIhP
— RT (@RT_com) August 22, 2017
How’s that for a U-turn? This is at a time when support among Trump’s voter base in the Rust Belt states has plummeted. There is weakness in the heartland, reported NBC, because workers fear Trump is reneging on past commitments to revitalize their livelihoods. Their concern is that this president is too interested in giving tax breaks to corporations and kowtowing to the Pentagon.
Ironically, Donald Trump likes to portray himself as an “alpha-male” who is his own boss. It is abundantly clear now that Trump is a mere manikin who sits in the White House taking orders from his generals.
When Trump ousted Stephen Bannon, his staunchest ally in the White House, it was under the orders of the military figures who are now dominant in his administration. Trump’s chief of staff, former Marine General John Kelly, wanted Bannon out because of his contrarian views.
When Bannon gave a surprise interview last week contradicting the militarist policy on North Korea that was the last straw. Bannon said there was no military option in solving the North Korea standoff, which flew in the face of what the Pentagon has been advising Trump, with “all options on the table.” Only days later, he was kicked out.
Americans did not elect Donald #Trump to expand foreign military intervention (Op-Edge) https://t.co/D4i6Htyqlz
— RT (@RT_com) August 21, 2017
Bannon has now returned to edit Breitbart News, the nationalistic website which has in the past served as a media booster for Trump. Following the announcement on Afghanistan, Breitbart News declared: “Trump reverses course” and blasted his speech a “flip-flop,” as reported by Politico.
Bannon had been a vigorous counsel to Trump against overseas militarism and in particular about Afghanistan. He is thought to have been the primary influence behind Trump’s economic nationalism of America First.
It is no coincidence that Trump decided to get rid of Bannon while huddled with military generals and intelligence chiefs at Camp David last weekend. Then three days after his departure from the White House, Trump delivers his U-turn on re-escalating the military involvement in South Asia, exactly as the Pentagon top brass had been urging.
With little or no policy achievements so far, Trump is emerging as a blowhard who is all too willing to toe the line to survive – even if that means stabbing his supposed allies in the back. This is a president who has a big mouth and big ego, and not much else. All the promises to his voter base are being seen to be cruel hoaxes, perpetrated by one who is always denouncing others over hoaxes.
The rise of the generals in Trump’s administration, alongside a weak-kneed figurehead president, should surely be cause for concern for its sinister constitutional implications. But disturbingly, the drift toward a military government in the US hardly causes a public ruffle; indeed, it is actually welcomed by prominent news media.
In an editorial last weekend condemning “The Failing Trump Presidency,” the New York Times seems to be oblivious in its endorsement of military control over the White House.
It states: “One measure of the despair caused by Mr. Trump’s behavior is that we find ourselves strangely comforted by things that in any normal presidency would be cause for concern… Americans accustomed constitutionally and politically to civilian leadership now find themselves relying on three current and former generals — John Kelly, the new White House chief of staff; H. R. McMaster, the national security adviser; and Jim Mattis, the secretary of defense — to stop Mr. Trump from going completely off the rails.”
Last week, too, when the five Joint Chiefs of Staff roundly rebuked Trump over his ambiguous comments on racial violence, the US media widely saw that intervention by the Pentagon as a welcome “disciplining” of the president.
It’s a sobering reality-check on how the supposed radical, populist president who promised to return governing power to the ordinary citizens is now firmly in the vice of a corporate-military cabal.
Look at Trump’s cabinet. Apart from the three generals, Kelly, McMaster and Mattis, the other key posts are run by an ex-oil CEO, Rex Tillerson at the State Department, and former Wall Street executives, Steven Mnuchin as Treasury Secretary, Gary Cohn as national economic adviser, and Wilbur Ross as Commerce Secretary.
This combination of military and industrial corporatism at the executive level of government is a definition of a fascist state. Combine that with a malleable megalomaniac who is willing to betray his allies and voter base, and that makes for a dangerous cabal.
Trump’s readiness to go to war in Venezuela, North Korea, and Iran and to give license to the Pentagon to step up its air force slaughter in Iraq, Syria, and Yemen are all signals of how far this presidency has degenerated.
But it is Trump’s brazen backtracking on Afghanistan that most transparently shows his unscrupulous character and just how much the Pentagon has taken control over this presidency.
'We are making clear to the #Taliban that they will not win on the battlefield' - Tillerson https://t.co/DOKURRVb8y
— RT America (@RT_America) August 22, 2017
Last November, the American people voted for a radical change, one that would deliver economic revival and jobs at home, while implementing more peaceful foreign relations.
Today, Americans have got the opposite of what they were calling for when they elected President Trump. The implications are blatant and disconcerting. American democracy no longer exists, if it ever did. The will of the people has been subverted by the will of the military-industrial complex. Trump is but a pathetic puppet who is taking orders from the generals and his oligarchic friends in Wall Street.
The so-called “exceptional nation” – the one that never tires of proclaiming its lofty democratic virtues to the rest of the world – has degenerated into a military-corporatist state. Trump’s betrayal is complete and stands out as one of the biggest cons in modern political history.
Trump’s Betrayal is Complete as Military-industrial Complex Rises to Power
If one moment stands out as the clearest signal yet of US President Trump turning his back on supporters, it was his announcement this week to re-escalate American military intervention in Afghanistan.
His signature campaign promise of putting “America First” and ending the folly of overseas wars launched by previous administrations was shredded on prime time television when he gave orders for thousands of more US troops to be sent to Afghanistan. The already 16-year war in that country – America’s longest – will now go on indefinitely longer.
The Huffington Post headlined: “Trump’s vague new Afghanistan strategy continues an endless war.”
'No rapid exit': Trump's dramatic switch on Afghanistan strategy https://t.co/VZRGA2ycwE
— RT America (@RT_America) August 22, 2017
Not only that, but this president is refusing to give any public information on force numbers or timescale. America’s overseas wars are not just expanding under Trump; they are going secret and unaccountable.
This surge in militarism is precisely what candidate Trump said he would not do when he campaigned for votes among blue-collar workers in the Rust Belt states, vowing instead to channel US economic resources to revive “forgotten” communities at home. Recall his blustering inauguration speech on January 20 when he bemoaned the “American Carnage,” at home and abroad.
As the Huffington Post writes: “When Obama was still in office and overseeing a massive troop presence in Afghanistan, Trump repeatedly bashed the operation as a waste of money and called for a quick withdrawal from the country.”
‘US will never leave Afghanistan and they have never had plans to do so’ - Russian senator https://t.co/phWhNu4SE3pic.twitter.com/3UQhiHrIhP
— RT (@RT_com) August 22, 2017
How’s that for a U-turn? This is at a time when support among Trump’s voter base in the Rust Belt states has plummeted. There is weakness in the heartland, reported NBC, because workers fear Trump is reneging on past commitments to revitalize their livelihoods. Their concern is that this president is too interested in giving tax breaks to corporations and kowtowing to the Pentagon.
Ironically, Donald Trump likes to portray himself as an “alpha-male” who is his own boss. It is abundantly clear now that Trump is a mere manikin who sits in the White House taking orders from his generals.
When Trump ousted Stephen Bannon, his staunchest ally in the White House, it was under the orders of the military figures who are now dominant in his administration. Trump’s chief of staff, former Marine General John Kelly, wanted Bannon out because of his contrarian views.
When Bannon gave a surprise interview last week contradicting the militarist policy on North Korea that was the last straw. Bannon said there was no military option in solving the North Korea standoff, which flew in the face of what the Pentagon has been advising Trump, with “all options on the table.” Only days later, he was kicked out.
Americans did not elect Donald #Trump to expand foreign military intervention (Op-Edge) https://t.co/D4i6Htyqlz
— RT (@RT_com) August 21, 2017
Bannon has now returned to edit Breitbart News, the nationalistic website which has in the past served as a media booster for Trump. Following the announcement on Afghanistan, Breitbart News declared: “Trump reverses course” and blasted his speech a “flip-flop,” as reported by Politico.
Bannon had been a vigorous counsel to Trump against overseas militarism and in particular about Afghanistan. He is thought to have been the primary influence behind Trump’s economic nationalism of America First.
It is no coincidence that Trump decided to get rid of Bannon while huddled with military generals and intelligence chiefs at Camp David last weekend. Then three days after his departure from the White House, Trump delivers his U-turn on re-escalating the military involvement in South Asia, exactly as the Pentagon top brass had been urging.
With little or no policy achievements so far, Trump is emerging as a blowhard who is all too willing to toe the line to survive – even if that means stabbing his supposed allies in the back. This is a president who has a big mouth and big ego, and not much else. All the promises to his voter base are being seen to be cruel hoaxes, perpetrated by one who is always denouncing others over hoaxes.
The rise of the generals in Trump’s administration, alongside a weak-kneed figurehead president, should surely be cause for concern for its sinister constitutional implications. But disturbingly, the drift toward a military government in the US hardly causes a public ruffle; indeed, it is actually welcomed by prominent news media.
In an editorial last weekend condemning “The Failing Trump Presidency,” the New York Times seems to be oblivious in its endorsement of military control over the White House.
It states: “One measure of the despair caused by Mr. Trump’s behavior is that we find ourselves strangely comforted by things that in any normal presidency would be cause for concern… Americans accustomed constitutionally and politically to civilian leadership now find themselves relying on three current and former generals — John Kelly, the new White House chief of staff; H. R. McMaster, the national security adviser; and Jim Mattis, the secretary of defense — to stop Mr. Trump from going completely off the rails.”
Last week, too, when the five Joint Chiefs of Staff roundly rebuked Trump over his ambiguous comments on racial violence, the US media widely saw that intervention by the Pentagon as a welcome “disciplining” of the president.
It’s a sobering reality-check on how the supposed radical, populist president who promised to return governing power to the ordinary citizens is now firmly in the vice of a corporate-military cabal.
Look at Trump’s cabinet. Apart from the three generals, Kelly, McMaster and Mattis, the other key posts are run by an ex-oil CEO, Rex Tillerson at the State Department, and former Wall Street executives, Steven Mnuchin as Treasury Secretary, Gary Cohn as national economic adviser, and Wilbur Ross as Commerce Secretary.
This combination of military and industrial corporatism at the executive level of government is a definition of a fascist state. Combine that with a malleable megalomaniac who is willing to betray his allies and voter base, and that makes for a dangerous cabal.
Trump’s readiness to go to war in Venezuela, North Korea, and Iran and to give license to the Pentagon to step up its air force slaughter in Iraq, Syria, and Yemen are all signals of how far this presidency has degenerated.
But it is Trump’s brazen backtracking on Afghanistan that most transparently shows his unscrupulous character and just how much the Pentagon has taken control over this presidency.
'We are making clear to the #Taliban that they will not win on the battlefield' - Tillerson https://t.co/DOKURRVb8y
— RT America (@RT_America) August 22, 2017
Last November, the American people voted for a radical change, one that would deliver economic revival and jobs at home, while implementing more peaceful foreign relations.
Today, Americans have got the opposite of what they were calling for when they elected President Trump. The implications are blatant and disconcerting. American democracy no longer exists, if it ever did. The will of the people has been subverted by the will of the military-industrial complex. Trump is but a pathetic puppet who is taking orders from the generals and his oligarchic friends in Wall Street.
The so-called “exceptional nation” – the one that never tires of proclaiming its lofty democratic virtues to the rest of the world – has degenerated into a military-corporatist state. Trump’s betrayal is complete and stands out as one of the biggest cons in modern political history.
Monday, August 21, 2017
SC148-7
http://kunstler.com/clusterfuck-nation/diminishing-returns/
Diminishing Returns
These two words are the hinge that is swinging American life — and the advanced techno-industrial world, for that matter — toward darkness. They represent an infection in the critical operations of daily life, like a metabolic disease, driving us into disorder and failure. And they are so omnipresent that we’ve failed to even notice the growing failure all around us.
Mostly, these diminishing returns are the results of our over-investments in making complex systems more complex, for instance the replacement of the 37-page Glass-Steagall Act that regulated American banking, with the 848 page Dodd-Frank Act, which was only an outline for over 22,000 pages of subsequent regulatory content — all of it cooked up by banking lobbyists, and none of which replaced the single most important rule in Glass-Steagall, which required the separation of commercial banking from trafficking in securities. Dodd-Frank was a colossal act of misdirection of the public’s attention, an impenetrable smokescreen of legal blather in the service of racketeering.
For Wall Street, Dodd-Frank aggravated the conditions that allow stock indexes to only move in one direction, up, for nine years. During the same period, the American economy of real people and real stuff only went steadily down, including the number of people out of the work force, the incomes of those who still had jobs, the number of people with full-time jobs, the number of people who were able to buy food without government help, or pay for a place to live, or send a kid to college.
When that morbid tension finally snaps, as it must, it won’t only be the Hedge Funders of the Hamptons who get hurt. It will be the entire global financial system, especially currencies (dollars, Euros, Yen, Pounds, Renminbi) that undergo a swift and dire re-pricing, and all the other things of this world priced in them. And when that happens, the world will awake to a new reality of steeply reduced possibilities for supporting 7-plus billion people.
The same over-investments in complexity have produced the racketeering colossus of so-called health care (formerly “medicine”), in case you’re wondering why the waiting room of your doctor’s office now looks exactly like the motor vehicle bureau. Meanwhile, it’s safe to say that the citizens of this land have never been so uniformly unhealthy, even as they’re being swindled and blackmailed by their “providers.” The eventual result will be a chaotic process of simplification, as giant hospital corporations, insurance companies, and overgrown doctors’ practices collapse, and the braver practitioners coalesce into something resembling Third World clinics.
We’re still struggling to even apprehend the damage being done to people by cell phones — and I’m not even referring to whatever microwaves actually do to brain cells. Many find it amusing to see whole streets and campus byways filled with young people staring into their phones. Whatever they’re gaining in endorphin hits from “being connected” is undermined by the immense losses they’re suffering in real social skills and the sinister effects of behavioral conditioning by the programmers of web-based social networks. These failures are being expressed in new social phenomena like flash mobs and the manipulation of college students into Maoist thought police — and these are only the most visible manifestations. A more insidious outcome will be a whole generation’s failure to develop a sense of personal agency in a long emergency of civilization that will require exactly that aptitude for survival.
Among the more popular and idiotic strains of diminishing returns is the crusade to replace gasoline-powered cars with electric-powered vehicles. And for what? To promote the illusion that we can continue to be car-dependent and live in suburbia. Neither of those wishful notions is supported by reality. Both of them will soon yield to the fundamental crisis of capital scarcity. In the meantime, hardly anyone is interested in the one thing that would produce a better outcome for Americans: a return to walkable communities scaled to economic reality.
The convulsions over President Trump’s vivid clowning are just a symptom of the concealed rot eating away at the foundations of American life. What they demonstrate most of all is the failure of this society’s sensory organs — the news media — to ascertain what is actually happening to us. And the recognition of that failure accounts for the current state of the media’s disrepute, even if its critics are doing a poor job of articulating it.
Diminishing Returns
These two words are the hinge that is swinging American life — and the advanced techno-industrial world, for that matter — toward darkness. They represent an infection in the critical operations of daily life, like a metabolic disease, driving us into disorder and failure. And they are so omnipresent that we’ve failed to even notice the growing failure all around us.
Mostly, these diminishing returns are the results of our over-investments in making complex systems more complex, for instance the replacement of the 37-page Glass-Steagall Act that regulated American banking, with the 848 page Dodd-Frank Act, which was only an outline for over 22,000 pages of subsequent regulatory content — all of it cooked up by banking lobbyists, and none of which replaced the single most important rule in Glass-Steagall, which required the separation of commercial banking from trafficking in securities. Dodd-Frank was a colossal act of misdirection of the public’s attention, an impenetrable smokescreen of legal blather in the service of racketeering.
For Wall Street, Dodd-Frank aggravated the conditions that allow stock indexes to only move in one direction, up, for nine years. During the same period, the American economy of real people and real stuff only went steadily down, including the number of people out of the work force, the incomes of those who still had jobs, the number of people with full-time jobs, the number of people who were able to buy food without government help, or pay for a place to live, or send a kid to college.
When that morbid tension finally snaps, as it must, it won’t only be the Hedge Funders of the Hamptons who get hurt. It will be the entire global financial system, especially currencies (dollars, Euros, Yen, Pounds, Renminbi) that undergo a swift and dire re-pricing, and all the other things of this world priced in them. And when that happens, the world will awake to a new reality of steeply reduced possibilities for supporting 7-plus billion people.
The same over-investments in complexity have produced the racketeering colossus of so-called health care (formerly “medicine”), in case you’re wondering why the waiting room of your doctor’s office now looks exactly like the motor vehicle bureau. Meanwhile, it’s safe to say that the citizens of this land have never been so uniformly unhealthy, even as they’re being swindled and blackmailed by their “providers.” The eventual result will be a chaotic process of simplification, as giant hospital corporations, insurance companies, and overgrown doctors’ practices collapse, and the braver practitioners coalesce into something resembling Third World clinics.
We’re still struggling to even apprehend the damage being done to people by cell phones — and I’m not even referring to whatever microwaves actually do to brain cells. Many find it amusing to see whole streets and campus byways filled with young people staring into their phones. Whatever they’re gaining in endorphin hits from “being connected” is undermined by the immense losses they’re suffering in real social skills and the sinister effects of behavioral conditioning by the programmers of web-based social networks. These failures are being expressed in new social phenomena like flash mobs and the manipulation of college students into Maoist thought police — and these are only the most visible manifestations. A more insidious outcome will be a whole generation’s failure to develop a sense of personal agency in a long emergency of civilization that will require exactly that aptitude for survival.
Among the more popular and idiotic strains of diminishing returns is the crusade to replace gasoline-powered cars with electric-powered vehicles. And for what? To promote the illusion that we can continue to be car-dependent and live in suburbia. Neither of those wishful notions is supported by reality. Both of them will soon yield to the fundamental crisis of capital scarcity. In the meantime, hardly anyone is interested in the one thing that would produce a better outcome for Americans: a return to walkable communities scaled to economic reality.
The convulsions over President Trump’s vivid clowning are just a symptom of the concealed rot eating away at the foundations of American life. What they demonstrate most of all is the failure of this society’s sensory organs — the news media — to ascertain what is actually happening to us. And the recognition of that failure accounts for the current state of the media’s disrepute, even if its critics are doing a poor job of articulating it.
Saturday, August 19, 2017
SC148-6
https://srsroccoreport.com/the-falling-eroi-kills-westinghouse-2-u-s-nuclear-reactors-construction-halted/
THE FALLING EROI KILLS WESTINGHOUSE: 2 U.S. Nuclear Reactors Construction Halted
Yes… it’s true. Two state of the art nuclear power projects bankrupted the mighty Westinghouse Electric Corporation, a company founded in 1886. Actually, this is old news as Westinghouse filed for bankruptcy back in March 2017. However, the breaking news is that the Westinghouse bankruptcy has now forced two utility companies to stop construction on two nuclear power reactors in South Carolina. (photo: courtesy of 12 News, Augusta, Ga)
While many factors will be attributed to the halting of these two nuclear power reactors, such as rising costs, construction delays, decreasing electricity demand and the bankruptcy of Westinghouse, the real reason is the FALLING EROI – Energy Returned On Investment.
As a refresher for newer readers, the falling EROI means that it’s taking more and more energy inputs to produce less and less net energy for the market. For example, in 1970 the U.S. EROI of its oil and gas industry was 30/1. Thus, the burning of one oil barrel worth of energy produced 30 oil barrels to the market. Today, shale oil production comes in at a whopping 5/1 EROI, six times less that the profitable energy in 1970.
Moreover, those who have been following my analysis on energy, understand that the falling EROI of oil and natural gas are gutting the entire global economy. Even though nuclear power generation doesn’t come from burning oil and natural gas, the construction of the reactors most certainly consumes a massive amount of fossil fuels. Actually, it takes a great deal of the burning of coal, natural gas and oil to produce nuclear, solar and wind power plants.
This was especially true for the construction of Westinghouse’s two nuclear power plant projects, the Vogtle Plant in George and the V.C. Summer plant in South Carolina.
Two Nuclear Power Plant Projects That Bankrupted Westinghouse
The Vogtle Nuclear Plant (Units 3 & 4), located near Waynesboro, Georgia, started construction with the new Westinghouse AP1000 nuclear reactors in 2013. Here is a picture of Vogtle Plant under construction last year.
Vogtle Nuclear Plant (Units 3 & 4) – Georgia
(photo: courtesy of High Flyer at SRS Watch)
As you can see, Vogtle 3 & 4 are the extension of the original Units 1 & 2 that were commissioned in 1987. Originally, the Vogtle 3 & 4 were to cost $14 billion and be operational by 2016 (Plant #3) and 2017 (Plant #4). However, the total costs are now estimated to reach $29 billion for the Vogtle Plant, and it won’t be operational until at least 2022. (source: Reuters article).
While work at the Vogtle Plant in Georgia still continues, construction has been halted at the V.C Summer Plant in South Carolina. According to the EIA, on July 31st the South Carolina Electric & Gas Company (SCE & G) and South Carolina Public Service Authority (Santee Cooper) halted construction on the two new nuclear reactors at the V.C. Summer Plant.
The V.C Summer Plant (Units 2 & 3), like the Vogtle Plant, are an extension of an existing older nuclear plant called V.C. Summer Plant 1. The original cost to build V.C. Summer 2 & 3 were estimated at $9.8 billion, plus a transmission facility and interest costs. However, schedule delays and cost overruns have also seriously impacted the V.C. Summer Nuclear Plant project.
According to the article, Vogtle, Summer nuclear plants face bleak outlook after Westinghouse bankruptcy, the two South Carolina utility companies stated they would need an additional $11.4 billion to finish the project that won’t be ready for operation until late 2021 or early 2022. Thus, the total cost would be $25 billion for the V.C. Summer 2 & 3 and would be more than double their original projected cost. Here is a picture of the V.C. Summer Plant under construction in May, 2017.
V.C. Summer Nuclear Plant (Units 2 & 3) – South Carolina
(photo: courtesy of High Flyer at SRS Watch)
As we can see, both of these nuclear power plants in Georgia and South Carolina will cost more than double their original price tag and will take more than twice as long to complete. Unfortunately, SCE & G and Santee Cooper finally had to shut down work on V.C. Summer Plant, because they did not receive any response from the Trump Administration for financial assistance.
It will be interesting to see how long the Vogtle Nuclear Plant in Georgia is able to continue construction as they are in the same financial mess as the V.C. Summer Plant. However, the utility Southern Company in Georgia is waiting until the end of August to announce if they will stay with the Vogtle Plant or walk away.
The Falling EROI Is Killing The Nuclear Energy Industry
I have read several articles on both of these nuclear power projects and some are criticizing that the reason for the shut down of the V.C. Summer Plant in South Carolina was due incompetent contractors not being able to do the job at the projected cost and timeline. Not only is this completely hilarious, it’s also false.
Why? Because the Vogtle Plant In Georgia is experiencing the same issues of huge cost overruns and long time delays. Furthermore, the supposed experts on nuclear energy, the French, are also dealing with serious problems with building new plants. According to the article, Nuclear industry prices itself out of power market, demands taxpayers keep it afloat:
The nuclear industry has essentially priced itself out of the market for new power plants, at least in market-based economies. Even the nuclear-friendly French — who get more than three fourths their power from nukes — can’t build an affordable, on-schedule next generation nuclear plant in their own country.
So, the entire global nuclear industry is experiencing the same difficulties in bringing on these new generation III+ nuclear reactors (AP1000 & EPR). Moreover, the Chinese Government also wants to build many of these new generation III+ reactors, but approved no new projects last year due to the construction delays and cost overruns of these new nuclear reactors in the U.S. and Europe.
While the bankruptcy of Westinghouse and the halting of construction at V.C Summer Plant have taken place in just the past six months, an industry expert made this warning about the Vogtle Plant, two years ago (quoted from the article above):
The Georgia debacle should not shock anyone. Bloomberg explained two years ago that “even as sympathetic an observer as John Rowe [former chair of the U.S.’s largest nuclear utility] warns that the new units at Vogtle will be uneconomical when — or if — they’re completed.”
To many Americans, John Rowe’s opinion of the future nuclear power industry might come as a real shocker, but if you understand the Falling EROI, it isn’t. Again, many factors will be blamed on why nuclear is no longer a commercially viable energy source. However the real cause is that the ENERGY INPUT is too great a cost for the ENERGY OUTPUT supplied to the market.
Lastly, the quote from the article, Nuclear Power Is In Crisis As Cost Overruns Cripple Industry Giants, sums it up nicely:
Four global nuclear industry giants ‒ French utilities Électricité de France (EDF) and Areva, US-based Westinghouse and Japanese conglomerate Toshiba ‒ face crippling debts and possible bankruptcy because of their investments in nuclear power.
The French government is selling assets so it can prop up its heavily indebted nuclear utilities. EDF plans to sell $13.8 billion of assets to rein in its $51.8 billion debt, and to sack up to 7,000 staff. Areva has accumulated losses of over $14 billion over the past five years.
French EPR reactors under construction in France and Finland are three times over budget ‒ the combined cost overruns for the two reactors amount to about $17.5 billion. Bloomberg noted in April 2015 that Areva’s EPR export ambitions are “in tatters“, and now Areva itself is in tatters.
The four big industrial giants, powerhouses of our high-tech energy future, are now mere shadows of their former selves. There is no pulling out of this BLACK HOLE. Oh no… nuclear power is dead for good, even though it will limp along for a while. Furthermore, I have read analysis that more than half of the nuclear power plants in the United States are not profitable… LOL.
Conclusion & Final Remarks
Evidence shows that the new generation nuclear power plants are suffering from massive cost overruns as well as long time delays. The first two new nuclear plants to be built in the U.S. in the past 30 years, have seen their projected costs more than double while their date for completion have been pushed back by 4-5 years. Unfortunately, if the U.S. Government doesn’t step in with $20+ billion in financial aid, both of these nuclear plants may never be completed.
That being said, it’s just not the U.S. Nuclear Industry that is experiencing serious trouble in completing its two new nuclear power plants. Europe is also stuck with new nuclear plant projects whose costs are running amuck and will likely not be economical going forward.
The DEATH of the Nuclear Industry is due to the Falling EROI- Energy Returned On Investment…. PERIOD.
While the Collapse of the Roman Empire was blamed by several factors, such as economic decline, reliance on slavery, government corruption, over taxation, debasement of the silver currency, poisoning of drinking water by the use of lead pipes, moral decline, the barbarian invasions and so on and so forth… those were mere symptoms. Again, the ROOT CAUSE for the collapse of the Ancient Roman Empire was its falling EROI.
Lastly, those who believe that Thorium Reactors are better and will be the ENERGY SAVIOR of our future, this is delusional thinking at best. I am sorry to be so blunt… but there it is. Thorium reactor technology is still decades from reaching commercial status… if ever. Unfortunately, we have run just run out the clock.
THE FALLING EROI KILLS WESTINGHOUSE: 2 U.S. Nuclear Reactors Construction Halted
Yes… it’s true. Two state of the art nuclear power projects bankrupted the mighty Westinghouse Electric Corporation, a company founded in 1886. Actually, this is old news as Westinghouse filed for bankruptcy back in March 2017. However, the breaking news is that the Westinghouse bankruptcy has now forced two utility companies to stop construction on two nuclear power reactors in South Carolina. (photo: courtesy of 12 News, Augusta, Ga)
While many factors will be attributed to the halting of these two nuclear power reactors, such as rising costs, construction delays, decreasing electricity demand and the bankruptcy of Westinghouse, the real reason is the FALLING EROI – Energy Returned On Investment.
As a refresher for newer readers, the falling EROI means that it’s taking more and more energy inputs to produce less and less net energy for the market. For example, in 1970 the U.S. EROI of its oil and gas industry was 30/1. Thus, the burning of one oil barrel worth of energy produced 30 oil barrels to the market. Today, shale oil production comes in at a whopping 5/1 EROI, six times less that the profitable energy in 1970.
Moreover, those who have been following my analysis on energy, understand that the falling EROI of oil and natural gas are gutting the entire global economy. Even though nuclear power generation doesn’t come from burning oil and natural gas, the construction of the reactors most certainly consumes a massive amount of fossil fuels. Actually, it takes a great deal of the burning of coal, natural gas and oil to produce nuclear, solar and wind power plants.
This was especially true for the construction of Westinghouse’s two nuclear power plant projects, the Vogtle Plant in George and the V.C. Summer plant in South Carolina.
Two Nuclear Power Plant Projects That Bankrupted Westinghouse
The Vogtle Nuclear Plant (Units 3 & 4), located near Waynesboro, Georgia, started construction with the new Westinghouse AP1000 nuclear reactors in 2013. Here is a picture of Vogtle Plant under construction last year.
Vogtle Nuclear Plant (Units 3 & 4) – Georgia
(photo: courtesy of High Flyer at SRS Watch)
As you can see, Vogtle 3 & 4 are the extension of the original Units 1 & 2 that were commissioned in 1987. Originally, the Vogtle 3 & 4 were to cost $14 billion and be operational by 2016 (Plant #3) and 2017 (Plant #4). However, the total costs are now estimated to reach $29 billion for the Vogtle Plant, and it won’t be operational until at least 2022. (source: Reuters article).
While work at the Vogtle Plant in Georgia still continues, construction has been halted at the V.C Summer Plant in South Carolina. According to the EIA, on July 31st the South Carolina Electric & Gas Company (SCE & G) and South Carolina Public Service Authority (Santee Cooper) halted construction on the two new nuclear reactors at the V.C. Summer Plant.
The V.C Summer Plant (Units 2 & 3), like the Vogtle Plant, are an extension of an existing older nuclear plant called V.C. Summer Plant 1. The original cost to build V.C. Summer 2 & 3 were estimated at $9.8 billion, plus a transmission facility and interest costs. However, schedule delays and cost overruns have also seriously impacted the V.C. Summer Nuclear Plant project.
According to the article, Vogtle, Summer nuclear plants face bleak outlook after Westinghouse bankruptcy, the two South Carolina utility companies stated they would need an additional $11.4 billion to finish the project that won’t be ready for operation until late 2021 or early 2022. Thus, the total cost would be $25 billion for the V.C. Summer 2 & 3 and would be more than double their original projected cost. Here is a picture of the V.C. Summer Plant under construction in May, 2017.
V.C. Summer Nuclear Plant (Units 2 & 3) – South Carolina
(photo: courtesy of High Flyer at SRS Watch)
As we can see, both of these nuclear power plants in Georgia and South Carolina will cost more than double their original price tag and will take more than twice as long to complete. Unfortunately, SCE & G and Santee Cooper finally had to shut down work on V.C. Summer Plant, because they did not receive any response from the Trump Administration for financial assistance.
It will be interesting to see how long the Vogtle Nuclear Plant in Georgia is able to continue construction as they are in the same financial mess as the V.C. Summer Plant. However, the utility Southern Company in Georgia is waiting until the end of August to announce if they will stay with the Vogtle Plant or walk away.
The Falling EROI Is Killing The Nuclear Energy Industry
I have read several articles on both of these nuclear power projects and some are criticizing that the reason for the shut down of the V.C. Summer Plant in South Carolina was due incompetent contractors not being able to do the job at the projected cost and timeline. Not only is this completely hilarious, it’s also false.
Why? Because the Vogtle Plant In Georgia is experiencing the same issues of huge cost overruns and long time delays. Furthermore, the supposed experts on nuclear energy, the French, are also dealing with serious problems with building new plants. According to the article, Nuclear industry prices itself out of power market, demands taxpayers keep it afloat:
The nuclear industry has essentially priced itself out of the market for new power plants, at least in market-based economies. Even the nuclear-friendly French — who get more than three fourths their power from nukes — can’t build an affordable, on-schedule next generation nuclear plant in their own country.
So, the entire global nuclear industry is experiencing the same difficulties in bringing on these new generation III+ nuclear reactors (AP1000 & EPR). Moreover, the Chinese Government also wants to build many of these new generation III+ reactors, but approved no new projects last year due to the construction delays and cost overruns of these new nuclear reactors in the U.S. and Europe.
While the bankruptcy of Westinghouse and the halting of construction at V.C Summer Plant have taken place in just the past six months, an industry expert made this warning about the Vogtle Plant, two years ago (quoted from the article above):
The Georgia debacle should not shock anyone. Bloomberg explained two years ago that “even as sympathetic an observer as John Rowe [former chair of the U.S.’s largest nuclear utility] warns that the new units at Vogtle will be uneconomical when — or if — they’re completed.”
To many Americans, John Rowe’s opinion of the future nuclear power industry might come as a real shocker, but if you understand the Falling EROI, it isn’t. Again, many factors will be blamed on why nuclear is no longer a commercially viable energy source. However the real cause is that the ENERGY INPUT is too great a cost for the ENERGY OUTPUT supplied to the market.
Lastly, the quote from the article, Nuclear Power Is In Crisis As Cost Overruns Cripple Industry Giants, sums it up nicely:
Four global nuclear industry giants ‒ French utilities Électricité de France (EDF) and Areva, US-based Westinghouse and Japanese conglomerate Toshiba ‒ face crippling debts and possible bankruptcy because of their investments in nuclear power.
The French government is selling assets so it can prop up its heavily indebted nuclear utilities. EDF plans to sell $13.8 billion of assets to rein in its $51.8 billion debt, and to sack up to 7,000 staff. Areva has accumulated losses of over $14 billion over the past five years.
French EPR reactors under construction in France and Finland are three times over budget ‒ the combined cost overruns for the two reactors amount to about $17.5 billion. Bloomberg noted in April 2015 that Areva’s EPR export ambitions are “in tatters“, and now Areva itself is in tatters.
The four big industrial giants, powerhouses of our high-tech energy future, are now mere shadows of their former selves. There is no pulling out of this BLACK HOLE. Oh no… nuclear power is dead for good, even though it will limp along for a while. Furthermore, I have read analysis that more than half of the nuclear power plants in the United States are not profitable… LOL.
Conclusion & Final Remarks
Evidence shows that the new generation nuclear power plants are suffering from massive cost overruns as well as long time delays. The first two new nuclear plants to be built in the U.S. in the past 30 years, have seen their projected costs more than double while their date for completion have been pushed back by 4-5 years. Unfortunately, if the U.S. Government doesn’t step in with $20+ billion in financial aid, both of these nuclear plants may never be completed.
That being said, it’s just not the U.S. Nuclear Industry that is experiencing serious trouble in completing its two new nuclear power plants. Europe is also stuck with new nuclear plant projects whose costs are running amuck and will likely not be economical going forward.
The DEATH of the Nuclear Industry is due to the Falling EROI- Energy Returned On Investment…. PERIOD.
While the Collapse of the Roman Empire was blamed by several factors, such as economic decline, reliance on slavery, government corruption, over taxation, debasement of the silver currency, poisoning of drinking water by the use of lead pipes, moral decline, the barbarian invasions and so on and so forth… those were mere symptoms. Again, the ROOT CAUSE for the collapse of the Ancient Roman Empire was its falling EROI.
Lastly, those who believe that Thorium Reactors are better and will be the ENERGY SAVIOR of our future, this is delusional thinking at best. I am sorry to be so blunt… but there it is. Thorium reactor technology is still decades from reaching commercial status… if ever. Unfortunately, we have run just run out the clock.
Friday, August 18, 2017
SC148-5
http://kunstler.com/clusterfuck-nation/total-eclipse/
Total Eclipse
First they came for the statues….
What do you know, long about Wednesday, August 16, 2017, House Minority Leader Nancy Pelosi (D-Cal) discovered that the United States Capitol building was infested with statues of Confederate dignitaries. Thirty years walking those marbled halls and she just noticed? Her startled announcement perked up Senator Cory Booker (D- NJ) who has been navigating those same halls only a few years. He quickly introduced a bill to blackball the offending statues. And, of course, the congressional black caucus also enjoyed a mass epiphany on the bronze and stone delegation of white devils.
I’d like to hear to hear an argument as to why the Washington Monument should remain dedicated to that vicious slave-driver and rebellious soldier, and indeed the name of the city that is the federal seat of government. Or the District of Columbia (after Columbus, who initiated the genocide of Native Americans). Or America, cribbed out of Amerigo Vespucci, the wicked Florentine cartographer who ascertained that the place called Brazil today was not the east coast of Asia but actually a New World — and so all our troubles began!
Well, there has been a lot of idle chatter the past half-century about the root causes of this-and-that, and it seems that we have located one at last. I expect that scientific studies out of our best universities will soon confirm that occult transmissions from the statue of Jefferson Davis (a double-devil named after an earlier devil) are responsible for the murder rate in Chicago.
Just as empires tend to build their most grandiose monuments prior to collapse, our tottering empire is concocting the most monumentally ludicrous delusions before it slides down the laundry chute of history. It’s as if the Marx Brothers colluded with Alfred Hitchcock to dream up a melodramatic climax to the American Century that would be the most ridiculous and embarrassing to our posterity.
In the meantime, many citizens await Monday’s spectacle of a total solar eclipse in parts of the country. They apparently don’t realize that another eclipse has been underway for months: the total eclipse of reality across the entire landscape of the USA. Now that has been an event to behold, not just some twenty-minute freak of astronomy. What’s being blacked out is the perilously fragile condition of the financial system — a great groaning Rube Goldberg contraption of accounting fraud, grift, statistical deceit, and racketeering that pretends to support the day-to-day activities of our national life.
For months, the recognition of this oncoming financial monster has been blocked by the hallucination of gremlins from the Kremlin infiltrating the recent presidential election. But just as that mirage was dissolving, along comes the treacherous invasion of the Confederate statues. It begins to look like the final piece of the puzzle in the Deep State’s quest to eject Donald Trump from the oval office. His response to the deadly statue situation (“…why not Washington and Jefferson…?”) was deemed so obtuse and unfeeling that even the rodents of his own nominal Republican Party want to jump his ship of state.
So, the set-up could not be more perfect! The country will now get down to the business of a months-long 25th Amendment circle-jerk at the very moment that the financial system flies apart. The damage from the financial clusterfuck will be much more real, and much worse, than anything that might be spun out of the anti-statue crusade hogging the headlines today. It will be interesting to see whether the old legacy media even reports on it as it happens, or whether they will cook up new and more bizarre entertainments to distract the public from what might be the ultimate swindling of a lifetime.
Total Eclipse
First they came for the statues….
What do you know, long about Wednesday, August 16, 2017, House Minority Leader Nancy Pelosi (D-Cal) discovered that the United States Capitol building was infested with statues of Confederate dignitaries. Thirty years walking those marbled halls and she just noticed? Her startled announcement perked up Senator Cory Booker (D- NJ) who has been navigating those same halls only a few years. He quickly introduced a bill to blackball the offending statues. And, of course, the congressional black caucus also enjoyed a mass epiphany on the bronze and stone delegation of white devils.
I’d like to hear to hear an argument as to why the Washington Monument should remain dedicated to that vicious slave-driver and rebellious soldier, and indeed the name of the city that is the federal seat of government. Or the District of Columbia (after Columbus, who initiated the genocide of Native Americans). Or America, cribbed out of Amerigo Vespucci, the wicked Florentine cartographer who ascertained that the place called Brazil today was not the east coast of Asia but actually a New World — and so all our troubles began!
Well, there has been a lot of idle chatter the past half-century about the root causes of this-and-that, and it seems that we have located one at last. I expect that scientific studies out of our best universities will soon confirm that occult transmissions from the statue of Jefferson Davis (a double-devil named after an earlier devil) are responsible for the murder rate in Chicago.
Just as empires tend to build their most grandiose monuments prior to collapse, our tottering empire is concocting the most monumentally ludicrous delusions before it slides down the laundry chute of history. It’s as if the Marx Brothers colluded with Alfred Hitchcock to dream up a melodramatic climax to the American Century that would be the most ridiculous and embarrassing to our posterity.
In the meantime, many citizens await Monday’s spectacle of a total solar eclipse in parts of the country. They apparently don’t realize that another eclipse has been underway for months: the total eclipse of reality across the entire landscape of the USA. Now that has been an event to behold, not just some twenty-minute freak of astronomy. What’s being blacked out is the perilously fragile condition of the financial system — a great groaning Rube Goldberg contraption of accounting fraud, grift, statistical deceit, and racketeering that pretends to support the day-to-day activities of our national life.
For months, the recognition of this oncoming financial monster has been blocked by the hallucination of gremlins from the Kremlin infiltrating the recent presidential election. But just as that mirage was dissolving, along comes the treacherous invasion of the Confederate statues. It begins to look like the final piece of the puzzle in the Deep State’s quest to eject Donald Trump from the oval office. His response to the deadly statue situation (“…why not Washington and Jefferson…?”) was deemed so obtuse and unfeeling that even the rodents of his own nominal Republican Party want to jump his ship of state.
So, the set-up could not be more perfect! The country will now get down to the business of a months-long 25th Amendment circle-jerk at the very moment that the financial system flies apart. The damage from the financial clusterfuck will be much more real, and much worse, than anything that might be spun out of the anti-statue crusade hogging the headlines today. It will be interesting to see whether the old legacy media even reports on it as it happens, or whether they will cook up new and more bizarre entertainments to distract the public from what might be the ultimate swindling of a lifetime.
Wednesday, August 16, 2017
SC148-4
http://www.informationclearinghouse.info/47610.htm
US Failure, Blame China
America’s chronic trade deficit with the rest of the world is testimony to a failed US economy. In reality, the US has no-one else to blame but itself for such an historic failure.
But in typical chauvinist fashion, the Trump administration has found a handy scapegoat by blaming China — its top bilateral trading partner. President Donald Trump this week ordered a probe into alleged trade malpractices by China, including claims of intellectual property theft and unfair subsidies.
These supposed grievances against China formed a major part of his election campaign last year, when the tycoon-turned-politician would whip up supporters in rustbelt states with emotive claims about how China was "raping our economy".
Now Trump says he is making good on his electoral promises to "get tough on China". On announcing the trade crackdown this week, the president said: "We will uphold our values, we will defend our workers, and we will protect the innovations, creations and inventions that power our magnificent country."
China has warned that if Trump follows through on threats to impose trade tariffs on Chinese exports the move will ignite a trade war, which will inflict serious damage on both economies and the rest of the world.
Trump's nationalistic depiction of trade problems with China is also feeding into the rise of xenophobic and racist politics in the US. The president has come under pressure to disavow white supremacist groups, like the KKK, after deadly protests in Virginia last weekend.
However, his jingoistic rhetoric of blaming foreigners for America's social and economic woes is a toxic embrace of demagoguery that will fuel reactionary rightwing sentiments.
Trump has an odious habit of blaming everyone else for America's contemporary problems. In his nasty transactional worldview, all other nations are taking advantage of "virtuous America".
Thus, Mexico is stampeding "our border"; the Iranian nuclear deal is "the worst ever"; the Trans-Pacific Partnership was "ripping America off"; the Paris Climate Accord was another "bad deal" harming American enterprise; the Europeans need to cough up for NATO; the Germans are flooding US car markets; and so on and so on.
The New York former real estate mogul fancies himself as a business genius. (One wonders how he would have fared if he hadn't inherited a million dollars from his rich daddy to get him started.)
In any case, Trump sounds more like a spoilt brat than an ingenious entrepreneur. His penchant is to blame everyone for failure and to offer quack solutions.
On the alleged China trade disputes, it may sound good to some people among Trump's voter base to harangue China over alleged intellectual property infringements and technology theft. But vilifying China for America's economic and social decline is a dangerous deception.
Trump castigates China for somehow being responsible for the US trade deficit with that country — about $350 billion in 2016. He asserts that the surplus of Chinese exports into the US is because China is stealing American technology and copyrights and flooding the market with fake goods.
But what Trump conveniently omits to say is that the US had a total trade deficit with the rest of the world in 2016 amounting to $740 billion, according to its own government figures. After China, the US trade arrears with the European Union was nearly $150 billion.
Does that mean that the Europeans are also stealing American intellectual property and cheating the US economy with unfair practices?
No. It just means that the US economy has withered away to the point where it depends on the rest of the world for imports. The American manufacturing base has been wiped out. This import dependency and chronic trade imbalance in the US has been going on since at the least the late 1980s. For the past three decades, the US trade deficit has been relentlessly expanding, up from about $100 billion in 1990 to the present figure of $740 billion.
For Donald Trump to try to blame China for America's abysmal decline is the kind of trick pulled by a con artist. It may play well with people who have prejudices about foreigners and delusional notions of American "exceptionalism" — but such a depiction is nonetheless downright false.
The truth is that it's not foreign nations who are to blame for America's social and economic malaise, it is Americans themselves. Specifically, we are talking about corporate America and oligarchs like Trump who shut down American factories wholesale and ruthlessly downsized workforces in order to set up businesses in cheap-labor countries like China.
Trump and his daughter Ivanka are owners of global retail businesses whose cosmetics and clothing are manufactured in China and exported to the US, thereby contributing to their country's trade deficit.
The historic failure of the American economy is the story of how capitalism is eventually bound to fail. The insatiable pursuit of financial profit as the sole objective leads inevitably to the gutting of one's own country and compatriots if it means that profits can be maximized elsewhere.
For over 30 years, American workers and communities have been decimated by capitalists like Trump and other oligarchs who had no conscience about betraying their compatriots to make big bucks somewhere overseas.
The predatory process of offshoring American jobs to places like China is why the US economy and society has been bled dry. For Trump to blame China for this predation of Americans by corporate America is bitterly ironic.
Here's the doubly odious thing too. In his quack remedy for American economic ills, Trump seems now willing to ignite a trade war with China.
At a time when the world is already convulsed with security tensions between the US and China, Russia, North Korea, Venezuela, Syria, Ukraine, among other nations, it really is the height of recklessness by the Trump White House to escalate tensions even further with a spurious trade war.
Already recriminations between Beijing and Washington are fraught over military jousting over disputed territory in the South China Sea. A trade war will only exacerbate hostilities further.
China has given notice that if Trump goes down the perilous path of a trade war, it will not sit idly by. If China were to redirect its exports to other parts of the globe in retaliation, or dump its huge American dollar holdings, the impact on the US economy will be severe. Inflation of consumer goods would soar, thereby hurting millions of low-income Americans even further.
How reprehensible is that? Trump and his family fortune are the embodiment of how American workers ended up being impoverished under decades of rapacious corporate America. Now selling the American workers a fraudulent explanation for their poverty — by scapegoating China and starting a trade war — Trump is only adding to their misery.
In real-estate scams, it's known as "fleecing the customer twice". Something that Donald J Trump would know all about.
US Failure, Blame China
America’s chronic trade deficit with the rest of the world is testimony to a failed US economy. In reality, the US has no-one else to blame but itself for such an historic failure.
But in typical chauvinist fashion, the Trump administration has found a handy scapegoat by blaming China — its top bilateral trading partner. President Donald Trump this week ordered a probe into alleged trade malpractices by China, including claims of intellectual property theft and unfair subsidies.
These supposed grievances against China formed a major part of his election campaign last year, when the tycoon-turned-politician would whip up supporters in rustbelt states with emotive claims about how China was "raping our economy".
Now Trump says he is making good on his electoral promises to "get tough on China". On announcing the trade crackdown this week, the president said: "We will uphold our values, we will defend our workers, and we will protect the innovations, creations and inventions that power our magnificent country."
China has warned that if Trump follows through on threats to impose trade tariffs on Chinese exports the move will ignite a trade war, which will inflict serious damage on both economies and the rest of the world.
Trump's nationalistic depiction of trade problems with China is also feeding into the rise of xenophobic and racist politics in the US. The president has come under pressure to disavow white supremacist groups, like the KKK, after deadly protests in Virginia last weekend.
However, his jingoistic rhetoric of blaming foreigners for America's social and economic woes is a toxic embrace of demagoguery that will fuel reactionary rightwing sentiments.
Trump has an odious habit of blaming everyone else for America's contemporary problems. In his nasty transactional worldview, all other nations are taking advantage of "virtuous America".
Thus, Mexico is stampeding "our border"; the Iranian nuclear deal is "the worst ever"; the Trans-Pacific Partnership was "ripping America off"; the Paris Climate Accord was another "bad deal" harming American enterprise; the Europeans need to cough up for NATO; the Germans are flooding US car markets; and so on and so on.
The New York former real estate mogul fancies himself as a business genius. (One wonders how he would have fared if he hadn't inherited a million dollars from his rich daddy to get him started.)
In any case, Trump sounds more like a spoilt brat than an ingenious entrepreneur. His penchant is to blame everyone for failure and to offer quack solutions.
On the alleged China trade disputes, it may sound good to some people among Trump's voter base to harangue China over alleged intellectual property infringements and technology theft. But vilifying China for America's economic and social decline is a dangerous deception.
Trump castigates China for somehow being responsible for the US trade deficit with that country — about $350 billion in 2016. He asserts that the surplus of Chinese exports into the US is because China is stealing American technology and copyrights and flooding the market with fake goods.
But what Trump conveniently omits to say is that the US had a total trade deficit with the rest of the world in 2016 amounting to $740 billion, according to its own government figures. After China, the US trade arrears with the European Union was nearly $150 billion.
Does that mean that the Europeans are also stealing American intellectual property and cheating the US economy with unfair practices?
No. It just means that the US economy has withered away to the point where it depends on the rest of the world for imports. The American manufacturing base has been wiped out. This import dependency and chronic trade imbalance in the US has been going on since at the least the late 1980s. For the past three decades, the US trade deficit has been relentlessly expanding, up from about $100 billion in 1990 to the present figure of $740 billion.
For Donald Trump to try to blame China for America's abysmal decline is the kind of trick pulled by a con artist. It may play well with people who have prejudices about foreigners and delusional notions of American "exceptionalism" — but such a depiction is nonetheless downright false.
The truth is that it's not foreign nations who are to blame for America's social and economic malaise, it is Americans themselves. Specifically, we are talking about corporate America and oligarchs like Trump who shut down American factories wholesale and ruthlessly downsized workforces in order to set up businesses in cheap-labor countries like China.
Trump and his daughter Ivanka are owners of global retail businesses whose cosmetics and clothing are manufactured in China and exported to the US, thereby contributing to their country's trade deficit.
The historic failure of the American economy is the story of how capitalism is eventually bound to fail. The insatiable pursuit of financial profit as the sole objective leads inevitably to the gutting of one's own country and compatriots if it means that profits can be maximized elsewhere.
For over 30 years, American workers and communities have been decimated by capitalists like Trump and other oligarchs who had no conscience about betraying their compatriots to make big bucks somewhere overseas.
The predatory process of offshoring American jobs to places like China is why the US economy and society has been bled dry. For Trump to blame China for this predation of Americans by corporate America is bitterly ironic.
Here's the doubly odious thing too. In his quack remedy for American economic ills, Trump seems now willing to ignite a trade war with China.
At a time when the world is already convulsed with security tensions between the US and China, Russia, North Korea, Venezuela, Syria, Ukraine, among other nations, it really is the height of recklessness by the Trump White House to escalate tensions even further with a spurious trade war.
Already recriminations between Beijing and Washington are fraught over military jousting over disputed territory in the South China Sea. A trade war will only exacerbate hostilities further.
China has given notice that if Trump goes down the perilous path of a trade war, it will not sit idly by. If China were to redirect its exports to other parts of the globe in retaliation, or dump its huge American dollar holdings, the impact on the US economy will be severe. Inflation of consumer goods would soar, thereby hurting millions of low-income Americans even further.
How reprehensible is that? Trump and his family fortune are the embodiment of how American workers ended up being impoverished under decades of rapacious corporate America. Now selling the American workers a fraudulent explanation for their poverty — by scapegoating China and starting a trade war — Trump is only adding to their misery.
In real-estate scams, it's known as "fleecing the customer twice". Something that Donald J Trump would know all about.
SC148-3
http://www.oftwominds.com/blog.html
Why We're Doomed: Our Economy's Toxic Inequality
Why are we doomed? Those consuming over-amped "news" feeds may be tempted to answer the culture wars, nuclear war with North Korea or the Trump Presidency.
The one guaranteed source of doom is our broken financial system, which is visible in this chart of income inequality from the New York Times: Our Broken Economy, in One Simple Chart.
While the essay's title is our broken economy, the source of this toxic concentration of income, wealth and power in the top 1/10th of 1% is more specifically our broken financial system.
What few observers understand is rapidly accelerating inequality is the only possible output of a fully financialized economy. Various do-gooders on the left and right propose schemes to cap this extraordinary rise in the concentration of income, wealth and power, for example, increasing taxes on the super-rich and lowering taxes on the working poor and middle class, but these are band-aids applied to a metastasizing tumor: financialization, which commoditizes labor, goods, services and financial instruments and funnels the income and wealth to the very apex of the wealth-power pyramid.
Take a moment to ponder what this chart is telling us about our financial system and economy. 35+ years ago, lower income households enjoyed the highest rates of income growth; the higher the income, the lower the rate of income growth.
This trend hasn't just reversed; virtually all the income gains are now concentrated in the top 1/100th of 1%, which has pulled away from the top 1%, the top 5% and the top 10%, as well as from the bottom 90%.
The fundamental driver of this profoundly destabilizing dynamic is the disconnect of finance from the real-world economy.
The roots of this disconnect are debt: when we borrow from future earnings and energy production to fund consumption today, we are using finance to ramp up our consumption of real-world goods and services.
In small doses, this use of finance to increase consumption of real-world goods and services is beneficial: economies with access to credit can rapidly boost expansion in ways that economies with little credit cannot.
But the process of financialization is not benign. Financialization turns evertything into a commodity that can be traded and leveraged as a financial entity that is no longer firmly connected to the real world.
The process of financialization requires expertise in the financial game, and it places a premium on immense flows of capital and opaque processes: for example, the bundling of debt such as mortgages or student loans into instruments that can be sold and traded.
These instruments can then become the foundation of an entirely new layer of instruments that can be sold and traded. This pyramiding of debt-based "assets" spreads risk throughout the economy while aggregating the gains into the hands of the very few with access to the capital and expertise needed to pass the risk and assets off onto others while keeping the gains.
Profit flows to what's scarce, and in a financialized economy, goods and services have become commodities, i.e. they are rarely scarce, because somewhere in the global economy new supplies can be brought online.
What's scarce in a financialized economy is specialized knowledge of financial games such as tax avoidance, arbitrage, packaging collateralized debt obligations and so on.
Though the billionaires who have actually launched real-world businesses get the media attention--Bill Gates, Jeff Bezos, Steve Jobs, et al.--relatively few of the top 1/10th of 1% actually created a real-world business; most are owners of capital with annual incomes of $10 million to $100 million that are finance-generated.
This is only possible in a financialized economy in which finance has become increasingly detached from the real-world economy.
Those with the capital and skills to reap billions in profits from servicing and packaging student loan debt have no interest in whether the education being purchased with the loans has any utility to the indebted students, as their profits flow not from the real world but from the debt itself.
This is how we've ended up with an economy characterized by profound dysfunction in the real world of higher education, healthcare, etc., and immense fortunes being earned by a few at the top of the pyramid from the financialized games that have little to no connection to the real-world economy.
Anyone who thinks our toxic financial system is stable is delusional. If history is any guide (and recall that Human Nature hasn't changed in the 5,000 uears of recorded history), this sort of accelerating income/wealth/ power inequality is profoundly destabilizing--economically, politically and socially.
All the domestic headline crises--culture wars, opioid epidemic, etc.--are not causes of discord: they are symptoms of the inevitable consequences of a toxic financial system that has broken our economy, our system of governance and our society.
Why We're Doomed: Our Economy's Toxic Inequality
Why are we doomed? Those consuming over-amped "news" feeds may be tempted to answer the culture wars, nuclear war with North Korea or the Trump Presidency.
The one guaranteed source of doom is our broken financial system, which is visible in this chart of income inequality from the New York Times: Our Broken Economy, in One Simple Chart.
While the essay's title is our broken economy, the source of this toxic concentration of income, wealth and power in the top 1/10th of 1% is more specifically our broken financial system.
What few observers understand is rapidly accelerating inequality is the only possible output of a fully financialized economy. Various do-gooders on the left and right propose schemes to cap this extraordinary rise in the concentration of income, wealth and power, for example, increasing taxes on the super-rich and lowering taxes on the working poor and middle class, but these are band-aids applied to a metastasizing tumor: financialization, which commoditizes labor, goods, services and financial instruments and funnels the income and wealth to the very apex of the wealth-power pyramid.
Take a moment to ponder what this chart is telling us about our financial system and economy. 35+ years ago, lower income households enjoyed the highest rates of income growth; the higher the income, the lower the rate of income growth.
This trend hasn't just reversed; virtually all the income gains are now concentrated in the top 1/100th of 1%, which has pulled away from the top 1%, the top 5% and the top 10%, as well as from the bottom 90%.
The fundamental driver of this profoundly destabilizing dynamic is the disconnect of finance from the real-world economy.
The roots of this disconnect are debt: when we borrow from future earnings and energy production to fund consumption today, we are using finance to ramp up our consumption of real-world goods and services.
In small doses, this use of finance to increase consumption of real-world goods and services is beneficial: economies with access to credit can rapidly boost expansion in ways that economies with little credit cannot.
But the process of financialization is not benign. Financialization turns evertything into a commodity that can be traded and leveraged as a financial entity that is no longer firmly connected to the real world.
The process of financialization requires expertise in the financial game, and it places a premium on immense flows of capital and opaque processes: for example, the bundling of debt such as mortgages or student loans into instruments that can be sold and traded.
These instruments can then become the foundation of an entirely new layer of instruments that can be sold and traded. This pyramiding of debt-based "assets" spreads risk throughout the economy while aggregating the gains into the hands of the very few with access to the capital and expertise needed to pass the risk and assets off onto others while keeping the gains.
Profit flows to what's scarce, and in a financialized economy, goods and services have become commodities, i.e. they are rarely scarce, because somewhere in the global economy new supplies can be brought online.
What's scarce in a financialized economy is specialized knowledge of financial games such as tax avoidance, arbitrage, packaging collateralized debt obligations and so on.
Though the billionaires who have actually launched real-world businesses get the media attention--Bill Gates, Jeff Bezos, Steve Jobs, et al.--relatively few of the top 1/10th of 1% actually created a real-world business; most are owners of capital with annual incomes of $10 million to $100 million that are finance-generated.
This is only possible in a financialized economy in which finance has become increasingly detached from the real-world economy.
Those with the capital and skills to reap billions in profits from servicing and packaging student loan debt have no interest in whether the education being purchased with the loans has any utility to the indebted students, as their profits flow not from the real world but from the debt itself.
This is how we've ended up with an economy characterized by profound dysfunction in the real world of higher education, healthcare, etc., and immense fortunes being earned by a few at the top of the pyramid from the financialized games that have little to no connection to the real-world economy.
Anyone who thinks our toxic financial system is stable is delusional. If history is any guide (and recall that Human Nature hasn't changed in the 5,000 uears of recorded history), this sort of accelerating income/wealth/ power inequality is profoundly destabilizing--economically, politically and socially.
All the domestic headline crises--culture wars, opioid epidemic, etc.--are not causes of discord: they are symptoms of the inevitable consequences of a toxic financial system that has broken our economy, our system of governance and our society.
Saturday, August 12, 2017
SC148-2
http://peakoil.com/business/twilight-of-the-oil-economy
Twilight of the Oil Economy
.........
Links to various info in one comment to this article,
" Conventional Oil Peaked in 2006 –IEA
http://imgur.com/a/hccu9
New Oil discoveries by scientists have been declining since 1965 and last year was the lowest in history -IEA
http://imgur.com/a/W60yn
International Energy Agency Chief warns of world oil shortages by 2020 as discoveries fall to record lows
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Saudi Aramco CEO believes world oil shortage coming despite U.S. shale boom
http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html
UAE warns of world oil shortages ahead by 2020 due to industry spending cuts
http://www.arabianindustry.com/oil-gas/news/2016/nov/6/more-spending-cuts-as-uae-predicts-oil-shortages-5531344/
HSBC Global Bank warns 80% of the worlds conventional fields are declining and world oil shortages by 2020
https://www.research.hsbc.com/R/24/vzchQwb
UBS Global Bank warns of industry slowdown and world Oil Shortages by 2020
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/12136886/Oil-slowdown-to-trigger-supply-crisis-by-2020-warns-bank.html
German Army (leaked) Peak Oil study concludes world oil shortages would collapse the world economy & governments/democracies
http://www.spiegel.de/international/germany/peak-oil-and-the-german-government-military-study-warns-of-a-potentially-drastic-oil-crisis-a-715138.html "
Twilight of the Oil Economy
.........
Links to various info in one comment to this article,
" Conventional Oil Peaked in 2006 –IEA
http://imgur.com/a/hccu9
New Oil discoveries by scientists have been declining since 1965 and last year was the lowest in history -IEA
http://imgur.com/a/W60yn
International Energy Agency Chief warns of world oil shortages by 2020 as discoveries fall to record lows
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Saudi Aramco CEO believes world oil shortage coming despite U.S. shale boom
http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html
UAE warns of world oil shortages ahead by 2020 due to industry spending cuts
http://www.arabianindustry.com/oil-gas/news/2016/nov/6/more-spending-cuts-as-uae-predicts-oil-shortages-5531344/
HSBC Global Bank warns 80% of the worlds conventional fields are declining and world oil shortages by 2020
https://www.research.hsbc.com/R/24/vzchQwb
UBS Global Bank warns of industry slowdown and world Oil Shortages by 2020
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/12136886/Oil-slowdown-to-trigger-supply-crisis-by-2020-warns-bank.html
German Army (leaked) Peak Oil study concludes world oil shortages would collapse the world economy & governments/democracies
http://www.spiegel.de/international/germany/peak-oil-and-the-german-government-military-study-warns-of-a-potentially-drastic-oil-crisis-a-715138.html "
SC148-1
http://peakoil.com/consumption/chris-martenson-signs-of-distress
Chris Martenson: Signs Of Distress
The world is edging closer to the final moments after which everything will be forever changed. Grand delusions, perpetuated over decades, will finally hit the limits of reality and collapse in on themselves.
We’re over-budget and have eaten deeply into the principal balances of all of our main trust accounts. We are ecologically overdrawn, financially insolvent, monetarily out past the Twilight Zone, consuming fossil fuels (as in literally eating them), and adding 80,000,000 net souls to the planet’s surface — each year! — without regard to the consequences.
Someday there will be hell to pay financially, economically, and ecologically as there simply isn’t any way to maintain these overdrafts forever. Reality does not renegotiate. Its deal terms aren’t compromisable.
For those who have the neural plasticity to actually see what’s happening around us, the changes are already here, blatant and frightening. Younger folks, with their fresher eyes and fewer ties to the past, can see them a lot easier than their elders.
The prosperity enjoyed by the past few generations — especially the Baby Boomers — was stolen from future generations. All the while, they pretended as if their borrowing-heavy standards of living were the result of sheer genius and intelligence; like trust fund babies who mistake being born on third base for hitting a triple.
Young people have sussed this out; and are now pulling back from many of the principal occupations of their forebears — like marriage, babies and buying homes and cars. This perplexes older folks, who are beginning to find themselves increasingly at odds with the generations following after them.
Humans can be very very smart, but the flip-side of our ingenuity is our capacity for self-delusion. We’ve very consistently preferred to look past our faults. That can work for a while, but eventually an incomplete view will lead to a complete disaster. For example: depleting our topsoils today to grow more eventually leads to a collapse of our food system tomorrow. Similarly, increasing societal complexity ultimately drains the resources out of an empire, until it withers and fails. Such is what we can learn from history. Each of these examples is rooted in the self-delusion that today’s actions don’t have real consequences.
Monetary printing experiments like those currently being run by the world’s central banks are the ultimate form of self-delusion. Money is the most potent form of social communication, underlying all contracts and agreements. Violate those and literally everything falls apart, as we are seeing happen in real-time in Venezuela right now.
Money printing and its other historical debasement equivalents, serve to cover up (barely) critical signals. Derelict ideas that should die a quick death, instead, persist. Mis-priced money leads mal-investment (e.g., Italian junk debt selling with the same yield as ten year US Treasury debt!!). Extremely unfair redistributions of wealth from the bottom to the top result. Every. Single. Time. This time is no different.
If you cannot see this madness in the chart below, I strongly suggest you keep staring at it until you can. It shows the exploding balance sheet of the central bank of ‘the floating retirement colony’ known as Japan:
The Japanese money printers have gone hog-wild over the past decade. And they’ve had company. The other major central banks of the wold have been printing $trillions and $trillions, too, over the same time period. What will the repercussions be? The world is about to find out.
But it’s actually far worse than that. For those who can bear to look, the signs of illness are as startlingly obvious as gangrene on a necrotic limb. Species are going extinct at an unprecedented rate. Glaciers are fast disappearing. Frogs and insect populations are mysteriously collapsing. Massive destruction of the landscape as we chase the last low-EROEI fuels remaining (tar sands, and shale wells). Miles-deep mining efforts. Enormous human migrations away from economically and ecologically ruined areas (see: the MENA region).
But the average citizen remains largely blind and/or numb to these. Again, much of this has to do with self-delusion that broken signals enable. People worry less as long as the stock markets are showing higher values, which is precisely why we don’t trust them anymore – they have become the most important signaling devices for The Powers That Be. They are far too important to leave to the vagaries of investors, and must be rescued/controlled/manipulated so that the “right” outcomes can be achieved.
If we’re lucky when these financial delusions finally break, we’ll hopefully avoid a global war. That’s the usual route by which the politicians and bankers seek to avoid having to be held accountable for the colossal mistakes they made in the past. They drag everyone to in a manufactured confrontation, whooping up the populace into a fever pitch by inventing hobgoblins — exactly as has recently happened in the US with the recent rash of Russia-phobia; a case study in how easily public perception can be manipulated (as well as proof-positive that critical thinking skills are no longer requirements for today’s journalists).
But if we’re unlucky, war may destroy much of what we take for granted and hold dear. Living standards will drop. The veil covering today’s massive financial deception will be yanked off, revealing the shriveled, cold promises of past decades as being wholly incapable of meeting their obligation to fund millions of promised retirements.
And if we’re really unlucky, that war could involve some horrendous new weapons that could cripple our nation’s electrical grid (e.g., EMP, cyber attack). In which case, all of our individual attention and effort in the northern hemisphere will focus down to one simple task: surviving the first winter....
....In ways conscious and subconscious, we’re becoming aware of the signs of growing instability around us. Like a flock of sheep catching the scent of an unseen predator, right now we’re collectively becoming increasingly nervous and stressed....
Chris Martenson: Signs Of Distress
The world is edging closer to the final moments after which everything will be forever changed. Grand delusions, perpetuated over decades, will finally hit the limits of reality and collapse in on themselves.
We’re over-budget and have eaten deeply into the principal balances of all of our main trust accounts. We are ecologically overdrawn, financially insolvent, monetarily out past the Twilight Zone, consuming fossil fuels (as in literally eating them), and adding 80,000,000 net souls to the planet’s surface — each year! — without regard to the consequences.
Someday there will be hell to pay financially, economically, and ecologically as there simply isn’t any way to maintain these overdrafts forever. Reality does not renegotiate. Its deal terms aren’t compromisable.
For those who have the neural plasticity to actually see what’s happening around us, the changes are already here, blatant and frightening. Younger folks, with their fresher eyes and fewer ties to the past, can see them a lot easier than their elders.
The prosperity enjoyed by the past few generations — especially the Baby Boomers — was stolen from future generations. All the while, they pretended as if their borrowing-heavy standards of living were the result of sheer genius and intelligence; like trust fund babies who mistake being born on third base for hitting a triple.
Young people have sussed this out; and are now pulling back from many of the principal occupations of their forebears — like marriage, babies and buying homes and cars. This perplexes older folks, who are beginning to find themselves increasingly at odds with the generations following after them.
Humans can be very very smart, but the flip-side of our ingenuity is our capacity for self-delusion. We’ve very consistently preferred to look past our faults. That can work for a while, but eventually an incomplete view will lead to a complete disaster. For example: depleting our topsoils today to grow more eventually leads to a collapse of our food system tomorrow. Similarly, increasing societal complexity ultimately drains the resources out of an empire, until it withers and fails. Such is what we can learn from history. Each of these examples is rooted in the self-delusion that today’s actions don’t have real consequences.
Monetary printing experiments like those currently being run by the world’s central banks are the ultimate form of self-delusion. Money is the most potent form of social communication, underlying all contracts and agreements. Violate those and literally everything falls apart, as we are seeing happen in real-time in Venezuela right now.
Money printing and its other historical debasement equivalents, serve to cover up (barely) critical signals. Derelict ideas that should die a quick death, instead, persist. Mis-priced money leads mal-investment (e.g., Italian junk debt selling with the same yield as ten year US Treasury debt!!). Extremely unfair redistributions of wealth from the bottom to the top result. Every. Single. Time. This time is no different.
If you cannot see this madness in the chart below, I strongly suggest you keep staring at it until you can. It shows the exploding balance sheet of the central bank of ‘the floating retirement colony’ known as Japan:
The Japanese money printers have gone hog-wild over the past decade. And they’ve had company. The other major central banks of the wold have been printing $trillions and $trillions, too, over the same time period. What will the repercussions be? The world is about to find out.
But it’s actually far worse than that. For those who can bear to look, the signs of illness are as startlingly obvious as gangrene on a necrotic limb. Species are going extinct at an unprecedented rate. Glaciers are fast disappearing. Frogs and insect populations are mysteriously collapsing. Massive destruction of the landscape as we chase the last low-EROEI fuels remaining (tar sands, and shale wells). Miles-deep mining efforts. Enormous human migrations away from economically and ecologically ruined areas (see: the MENA region).
But the average citizen remains largely blind and/or numb to these. Again, much of this has to do with self-delusion that broken signals enable. People worry less as long as the stock markets are showing higher values, which is precisely why we don’t trust them anymore – they have become the most important signaling devices for The Powers That Be. They are far too important to leave to the vagaries of investors, and must be rescued/controlled/manipulated so that the “right” outcomes can be achieved.
If we’re lucky when these financial delusions finally break, we’ll hopefully avoid a global war. That’s the usual route by which the politicians and bankers seek to avoid having to be held accountable for the colossal mistakes they made in the past. They drag everyone to in a manufactured confrontation, whooping up the populace into a fever pitch by inventing hobgoblins — exactly as has recently happened in the US with the recent rash of Russia-phobia; a case study in how easily public perception can be manipulated (as well as proof-positive that critical thinking skills are no longer requirements for today’s journalists).
But if we’re unlucky, war may destroy much of what we take for granted and hold dear. Living standards will drop. The veil covering today’s massive financial deception will be yanked off, revealing the shriveled, cold promises of past decades as being wholly incapable of meeting their obligation to fund millions of promised retirements.
And if we’re really unlucky, that war could involve some horrendous new weapons that could cripple our nation’s electrical grid (e.g., EMP, cyber attack). In which case, all of our individual attention and effort in the northern hemisphere will focus down to one simple task: surviving the first winter....
....In ways conscious and subconscious, we’re becoming aware of the signs of growing instability around us. Like a flock of sheep catching the scent of an unseen predator, right now we’re collectively becoming increasingly nervous and stressed....
Friday, August 11, 2017
SC147-15
http://kunstler.com/clusterfuck-nation/battle-of-the-behemoths/
Battle of the Behemoths
As the empire deliquesces into a fetid slurry of economic failure, we stand ankle deep in the rising swamp waters witnessing the futile battle of the giants, Walmart and Amazon.
Neil Howe, co-author of The Fourth Turning, wrote this week that “[t]he Amazon-Walmart rivalry will determine the future of retail.” Well, it seems that way, perhaps, and I understand why a lot of people would imagine it, but I would draw some different conclusions. What we’re seeing is more like the battle between Godzilla and King Kong, two freaks of nature produced by a toxic culture, fixing to finish each other off.
The condition that will flavor events going forward is scale. Everything organized at the giant scale is going to fail. We have made all the systems of daily life too large and they will not function in the long emergency (and the fourth turning), an age characterized by universal contraction. This is true of corporations, institutions, schools, hospitals, farms, governments, virtually all organized enterprise. Retail is currently just the most visible example at the moment, since it is a commercial battleground that doesn’t enjoy public subsidies. The organisms on that field are exquisitely sensitive to economic reality, and the salient reality these days is the impoverishment of their customers, the former middle class.
This has been a sensational year for retail failure so far with a record number of brick-and-mortar store closings. But it is hardly due solely to Internet shopping. The nation was vastly over-stored by big chain operations. Their replication was based on a suicidal business model that demanded constant expansion, and was nourished by a regime of ultra-low interest rates promulgated by the Federal Reserve (and its cheerleaders in the academic econ departments). The goal of the business model was to enrich the executives and shareholders as rapidly as possible, not to build sustainable enterprise. As the companies march off the cliff of bankruptcy, these individuals will be left with enormous fortunes — and the American landscape will be left with empty, flat-roofed, throwaway buildings unsuited to adaptive re-use. Eventually, the empty Walmarts will be among them.
Just about everybody yakking in the public arena assumes that commerce will just migrate to the web. Think again. What you’re seeing now is a very short term aberration, the terminal expression of the cheap oil economy that is fumbling to a close. Apart from Amazon’s failure so far to ever show a corporate profit, Internet shopping requires every purchase to make a journey in a truck to the customer. In theory, it might not seem all that different from the Monkey Ward model of a hundred years ago. But things have changed in this land.
We made the unfortunate decision to suburbanize the nation, and now we’re stuck with the results: a living arrangement that can’t be serviced or maintained going forward, a living arrangement with no future. This includes the home delivery of every product under sun to every farflung housing subdivision from Rancho Cucamonga to Hackensack. Of course, the Big Box model, like Walmart, has also recruited every householder in his or her SUV into the company’s distribution network, and that’s going to become a big problem, too, as the beleaguered middle-class finds itself incrementally foreclosed from Happy Motoring and sinking into conditions of overt peonage.
The actual destination of retail in America is to be severely downscaled and reorganized locally. Main Street will be the new mall, and it will be a whole lot less glitzy than the failed gallerias of yore, but it will represent a range of activities that will put a lot of people back to work at the community level. It will necessarily entail the rebuilding of local and regional wholesale networks and means of distribution that don’t require trucking.
If you think we’re just going to switch the trucking industry over to electric vehicles or engines that run on bio-fuels, hydrogen, compressed air, or natural gas, you will be disappointed. Ain’t going to happen. We’re going to have to come up with something else, starting with the basic idea of the walkable community. This implies that we’re going to have to revive the existing towns and small cities that fit that description. And it also implies that a great deal of American suburbia will have to be abandoned. The capital will not be there to reform it. In any case, commerce later on in this century is not going to be anything like the Blue Light Special orgy of recent decades. And the transition will get underway with a speed that will make your head spin.
Battle of the Behemoths
As the empire deliquesces into a fetid slurry of economic failure, we stand ankle deep in the rising swamp waters witnessing the futile battle of the giants, Walmart and Amazon.
Neil Howe, co-author of The Fourth Turning, wrote this week that “[t]he Amazon-Walmart rivalry will determine the future of retail.” Well, it seems that way, perhaps, and I understand why a lot of people would imagine it, but I would draw some different conclusions. What we’re seeing is more like the battle between Godzilla and King Kong, two freaks of nature produced by a toxic culture, fixing to finish each other off.
The condition that will flavor events going forward is scale. Everything organized at the giant scale is going to fail. We have made all the systems of daily life too large and they will not function in the long emergency (and the fourth turning), an age characterized by universal contraction. This is true of corporations, institutions, schools, hospitals, farms, governments, virtually all organized enterprise. Retail is currently just the most visible example at the moment, since it is a commercial battleground that doesn’t enjoy public subsidies. The organisms on that field are exquisitely sensitive to economic reality, and the salient reality these days is the impoverishment of their customers, the former middle class.
This has been a sensational year for retail failure so far with a record number of brick-and-mortar store closings. But it is hardly due solely to Internet shopping. The nation was vastly over-stored by big chain operations. Their replication was based on a suicidal business model that demanded constant expansion, and was nourished by a regime of ultra-low interest rates promulgated by the Federal Reserve (and its cheerleaders in the academic econ departments). The goal of the business model was to enrich the executives and shareholders as rapidly as possible, not to build sustainable enterprise. As the companies march off the cliff of bankruptcy, these individuals will be left with enormous fortunes — and the American landscape will be left with empty, flat-roofed, throwaway buildings unsuited to adaptive re-use. Eventually, the empty Walmarts will be among them.
Just about everybody yakking in the public arena assumes that commerce will just migrate to the web. Think again. What you’re seeing now is a very short term aberration, the terminal expression of the cheap oil economy that is fumbling to a close. Apart from Amazon’s failure so far to ever show a corporate profit, Internet shopping requires every purchase to make a journey in a truck to the customer. In theory, it might not seem all that different from the Monkey Ward model of a hundred years ago. But things have changed in this land.
We made the unfortunate decision to suburbanize the nation, and now we’re stuck with the results: a living arrangement that can’t be serviced or maintained going forward, a living arrangement with no future. This includes the home delivery of every product under sun to every farflung housing subdivision from Rancho Cucamonga to Hackensack. Of course, the Big Box model, like Walmart, has also recruited every householder in his or her SUV into the company’s distribution network, and that’s going to become a big problem, too, as the beleaguered middle-class finds itself incrementally foreclosed from Happy Motoring and sinking into conditions of overt peonage.
The actual destination of retail in America is to be severely downscaled and reorganized locally. Main Street will be the new mall, and it will be a whole lot less glitzy than the failed gallerias of yore, but it will represent a range of activities that will put a lot of people back to work at the community level. It will necessarily entail the rebuilding of local and regional wholesale networks and means of distribution that don’t require trucking.
If you think we’re just going to switch the trucking industry over to electric vehicles or engines that run on bio-fuels, hydrogen, compressed air, or natural gas, you will be disappointed. Ain’t going to happen. We’re going to have to come up with something else, starting with the basic idea of the walkable community. This implies that we’re going to have to revive the existing towns and small cities that fit that description. And it also implies that a great deal of American suburbia will have to be abandoned. The capital will not be there to reform it. In any case, commerce later on in this century is not going to be anything like the Blue Light Special orgy of recent decades. And the transition will get underway with a speed that will make your head spin.
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