Post on 26-Nov-2015
description
Douglas Smith
Zeus
T U E S D A Y , F E B R U A R Y 0 4 , 2 0 1 4
How To Time CollapsesOver the past half a decade I've made a
number of detailed predictions about
collapse: how it is likely to unfold, what
its various manifestations are likely to
be, and how it will affect various groups
and categories of people. But I have
remained purposefully vague about the
timing of collapse and its various
stages, being careful to always append
give or take half a decade to my dire
prognostications. I wasn't withholding
information or being coy; I really had no
way of calculating when collapse will
happenuntil five days ago, when, out
of the blue, I received the following email from Ugo Bardi:
Hi Dmitry,
You may be interested in this post of mine.
Starting from this post, I'm trying to draw a parallel betweenthe collapse of the Soviet Union and the impending collapse ofItaly. There are, as always, similarities and differences. Inparticular, the Soviet Union collapsed almost immediatelyafter that oil production flattened out and started declining.On the contrary, the Italian government survives despite a lossof 36% in oil consumption.
My impression is that it is all related to different taxationmethods. I understand that the Soviet tax system was basedmainly on commodity taxes and on taxes on production. Whenproduction stalled, people had nothing to buy and thegovernment had nothing to tax because most people ownednothing and had little or no savings in banks. So, thegovernment had no choice but to fold over and disappear.
Instead, the Italian system is based largely on income tax andproperty tax. The government is losing revenues on commoditytaxes (e.g. on gasoline) but it can compensate with property
Pay With Bitcoin
C O N T A C T
If you want to contact me directly,my address is my first name - dot -my last name, at gmail.com. Nospam, please.
A B S O L U T E L Y P O S I T I V EE S S A Y S
Kindle Edition
H O L D Y O U R A P P L A U S E !
Share 6 More Next Blog Create Blog Sign In
C L U B O R L O VP U B L I S H E D O N T U E S D A Y S
taxes. Italians, on the average, are rich, in the sense thatthey have savings in banks and most of them own their homes.So, the government can tax their properties and their savings.As long as Italians still have something taxable, then thegovernment will survive. It will disappear only when it hasmanaged to strip citizens completely of everything they have.
Do you agree with this interpretation? (BTW, Italy as a statemay be even more culturally diverse than the old Soviet Unionwas.)
Ugo
I wrote back:
Hi Ugo,
Very interesting article. Yes, the entire southern tier of the EUis in some early stage of collapse, but so far it hadn't occurredto me to draw parallels between it and USSR. Now that youmention it, the parallel is obvious: it is financial collapsetriggered by something having to do with oil, but withpolarities reversed, and delayed by a period of wealthdestruction.
In the case of USSR, taxation wasn't really a source ofgovernment revenue. The national economy was based ongovernment ownership of everything, central planning andbudgets, and a system of assigning ministerial contracts toenterprises owned by the ministries. The external economywas a matter of exporting hydrocarbons in exchange forforeign currency, which was used to buy grainmostly feedgrain for cattle, without which the population would becomeprotein-deprived and malnourished. Over the so-calledstagnation period of the 1980s the Soviet economy becamehollowed out because of several trends. Too much spending ondefense was one of them. Another was that investment incapital goods (machinery, plant and equipment) reached thepoint of diminishing returns, which is very difficult tocharacterize but not so difficult to observe. Lastly,Solzhenitsyn and the dissident movement had done irreparabledamage to Soviet prestige, destroying morale. The coup degrace, when it came, consisted of two pieces. One was theinability to expand oil production given the state of Soviet oilextraction technology of the era. The other was the fall in oilprices, down to $10/bbl at one point, because North Sea andAlaska both went on stream, and the Saudis pumped as muchoil as they could based on a tacit agreement with the US todepress oil prices and thus crush the Soviets. In this theylargely succeeded. The USSR became heavily indebted to theWest, and, at the very end, needed Western credit to keep thelights on in the Kremlin. One of the final scenes featuredGorbachev on the phone with [West Germany's Chancellor]Helmut Kohl asking him to ask the Americans to release somefunds.
Kindle Edition
A B S O L U M E N T P O S I T I FE S S A I S
dition Kindle
R E I N V E N T I N G C O L L A P S E : T H ES O V I E T E X P E R I E N C E A N DA M E R I C A N P R O S P E C T S
Paper or Kindle
Now, I can see parallels to this in what is happening now in theUS and in the EU, but with all the polarities reversed: here oilflows in and money flows out, and the coup de grace [will be]high oil prices rather than low. Instead of failures of centralplanning, which failed to allocate production effectively, wehave failures of the globalized market, where production iseffectively globalized but consumption is ineffectivelylocalized among the wealthy and the formerly wealthy, andhas to be fueled by credit. Instead of diminishing returns fromdeployment of capital goods, we have diminishing returns fromdeployment of capital itself, where a unit of new debt nowproduces much less than a unit of economic growth. Thedamage to reputation and morale is mostly on the US side ofthe Atlantic, where in place of Solzhenitsyn and the dissidentmovement we have Abu Ghraib [scandal], [Wikileaks' Julian]Assange and [Edward] Snowden. With the EU, most of thedamage has to do with [the] experience of economicdisparities between the rich core and the increasinglyimpoverished periphery, and the recent move in Ukraine towalk away from the EU, and the ensuing Western-financedmayhem in Kiev, show that the bloom is off the EU rose aswell. The runaway military spending is likewise mostly a USissue, although epic failures in Afghanistan, Libya and Syria, inwhich the EU is complicit, are likely to have some effect aswell.
Comparing USSR to Italy is difficult because of the disparity ofscale: 1/5 of the planet's dry surface versus a smallishpeninsula; an economy that slowly decayed in isolation versusan integral part of the EU; a country where the choice isbetween burning hydrocarbons or dying of exposure versus onewhere the choice is between riding a scooter or taking thebus; a country with a ravaged agricultural sector unable togrow enough protein calories versus a nation of foodies wherecorner groceries make worthy subjects for oil paintings. But Ithink that when it comes to the actual collapse, when it finallycomes, there will still be identifiable similarities. Financialcollapse always comes first: all sorts of financial arrangementsunravel as the center becomes unable to float the periphery,and in response the periphery starts to withhold economiccooperation. The result is a breakdown in supply chains,shutdown of production, and, shortly thereafter, shutdown ofcommerce. In the case of the USSR, this unfolded in 1989-91 asthe various republics and regions refused to cooperate withMoscow. I suspect that this will also happen in the EU, at somepoint. But I think that you are exactly right that whereas theaverage Soviet citizen could not be fleeced, Italy, and much ofthe EU, still have plenty of fat sheep that the government canshear to keep things running. Thus we are looking at a fewmore years of steady decline before the lights start going out.This, then, is the key distinction: the USSR collapsed promptlybecause it was already skin and bones, whereas the US and theEU still have plenty of subcutaneous fat to burn through. Butthey are, in fact, burning through it. And so, the conclusion is,collapse will come, but here it will take a little longer.
T H E F I V E S T A G E S O F C O L L A P S E
Please order from the publisher orAmazon (if you are a cheapskate)
B L O G A R C H I V E
! 2014 (7)
! February (1)
How To Time Collapses
" January (6)
" 2013 (77)
" 2012 (63)
" 2011 (59)
" 2010 (42)
" 2009 (52)
" 2008 (47)
" 2007 (3)
" 2006 (1)
C L U B O R L O V H O N O R A R Y M E M B E R S
Sharon Astyk
Catherine Austin Fitts
Carolyn Baker
Ugo Bardi
Albert Bates
Jay Hanson
Ray Jason
-Dmitry
Ugo responded:
I agree with you, of course. It makes perfect sense to me andit is the main point I was making: the Soviet governmentcouldn't tax Soviet citizens too much because they owned verylittle.
...
The Italian government instead has some luck in the sense thatItalians have some savings and most of them own their homes.So, the government is progressively strangling their citizens tosqueeze out of them all that they havewhile they still havesomething.
The last round of tax increases in Italy is targeting homes andit is really, really hurting, especially the poor. You can be poorhere, and still own a house that you inherited from yourparents. Now the government asks you to pay as if that housewere revenue! That is truly evil. People who don't have themoney to pay this property tax can only indebt themselveswith banks (or worse). Eventually, they'll have to sell theirhomes or give them to the bank (or to the Mafia)the result isdisaster for everybody, including for the banks, and even thegovernment. But the whole thing has a perverse logic. It hasthe advantage that it generates some immediate cash which isbadly needed, then the hell with the future.
The [next] phase will be to target bank accounts. Then, whenthere will be nothing left, the government will decamp andsay bye to everybody. Hell, what a planet I landed in.....
All the best,
Ugo
And so here is the outline of the method for calculating the timing of
collapses:
1. Find out when the collapse clock starts running by looking for a
significant drop in energy consumption
2. Calculate how long the clock is going to run by dividing the total
wealth of the citizenry by the economic shortfall of the shrinking
economy
For any industrial economy the collapse clock starts running as soon
as the consumption of fossil hydrocarbons starts dropping
Sandy Krolick
James Howard Kunstler
KMO
Jan Lundberg
Kathy McMahon
Michael Ruppert
Charles Hugh Smith
Closing the Collapse Gap
Tow that barge, lift that bale, clickthat ad!
A R T I C L E S
Post-Soviet Lessons for a Post-American Century
Leons post-sovitiques pour unsicle post-amricain
Lecciones post-soviticas para unsiglo post-americano
Lies Ps-Soviticas para um SculoPs-Americano
appreciably. It is sometimes difficult to tell whether this has already
happened if the country in question is still a major hydrocarbon
producer. Gross production numbers can still be holding steady or
even seem to go up a bit, but once you subtract all the energy that is
being expended on energy production itself, and on the unprofitable
mitigation of its many undesirable consequences, you might be able
see a decline sooner rather than later. Notably, the net energy yield,
or EROEI, is very low for all the newer unconventional sources that
have been trumpeted as panaceas in recent years, such as ones that
require hydrofracturing and drilling in deep water, tar sands and so
on. (The so-called renewables, such as wind, solar and biofuels,
are an even bigger joke, because all of them with the exception of
hydroelectric plants have net energy that is too low to sustain an
industrial economy, plus they all depend on technologies that are
nonrenewable unless the country maintains a vast industrial base
which happens to run on fossil fuels.) And so the drop in net energy
consumption is clear for Italy, which produces 7% of the oil it
consumes and imports the rest, whereas the picture is somewhat less
clear for the US, which still manages to supply around a third of its
oil.
Since all industrial economies literally run on fossil fuels, lower
energy consumption immediately translates into a lower level of
economic activity and a shrinking economy. The gap between the
expectations of economic growth that are dialed into all of the
financial arrangements, and the reality of economic decline driven by
lower energy availability, has to be plugged with the population's
savings. There are a number of ways of expropriating wealth,
generally proceeding from various kinds of stealth taxation measures,
to more overt measures, to outright expropriation. Taking the US as
the example (since I am most familiar with it) the expropriation
cascade is proceeding as follows:
1. Central bank policy of zeroing out of interest rates on savings
combined with massive money-printing. This forces money into
speculative markets (stocks, real estate, etc.) creating huge financial
bubbles; when these bubbles pop, savings are said to be destroyed,
but in reality that money has already been spent by the government
or used to fill the private coffers of those closely associated with the
government.
2. Government policy of canceling retirements or short-changing
retirees. The federal government has worked hard to make its official
measure of inflation all but meaningless so that it can justify its
policy of making cost of living adjustments to social security
!"#$ %#&'() *+,,&-%& (.*/)
The New Yorker: The Dystopians byBen McGrath
Thriving in an Age of Collapse
Our Village
The New Age of Sail
Das neue Zeitalter des Segelns
The Despotism of the Image
F E E D J I T
payments that are far less than the the real increases in the cost of
living. Another federal expropriation scheme is via guaranteed
student loans, which cannot be discharged through bankruptcy, and
which have created an entire class of indentured servants. At the
more local level, state and municipal governments are curtailing or
canceling retirement programs by virtue of going bankrupt.
3. Ever more onerous reporting requirements for financial
transactions, especially for those who try to leave the country and
expatriate their savings. All foreign bank accounts must now be
reported, and people who work abroad are now forced to file
voluminous annual reports that cost thousands of dollars to prepare.
Those who decide to repudiate their US citizenship are made to pay a
hefty exit tax. Nevertheless, record numbers of US citizens have been
doing just that. Just having a US passport often makes it impossible
to set up accounts in foreign financial institutions, which have little
desire to comply with US demands for financial disclosure.
These are the measures that are already in place. Looking at what's
been tried before, here and elsewhere, we can see what other
measures are in the works. Among them:
1. So-called bail-ins where insolvent financial institutions are
rescued by confiscating depositor funds. We can expect the script to
be similar to what happened in Cyprus: politically connected
depositors get word ahead of time and yank out their money
forthwith; everybody else gets shorn.
2. Limits on bank withdrawals. You might still have money in the
bank, but that's the only place you can have it. The semantics of
the verb to have can be quite tricky, you see...
3. Ever-increasing taxes on property resulting in property
confiscation. It works like this: government prints money and hands it
out to its friends; its friends use it to temporarily bid up property
values; property taxes go up to a point where the property owners
can't pay them; owners lose their properties. A staggering 63% of real
estate purchases in Florida last December were cash purchases.
4. Various kinds of sudden, new, super-complex regulations,
noncompliance with which results in very large fines. In turn,
nonpayment of these fines results in forfeiture of assets. The US has
some very curious laws according to which inanimate objects such as
cars, boats and houses can be charged with a crime, seized and
auctioned off. We can expect lots more of such property grabs in the
future.
Live Traffic Feed
Real-time view Menu
A visitor from Tripoli, Libyaviewed ClubOrlov: GrandpaOrlov's Vodka Recipe 30secs agoA visitor from High Point,United States viewedClubOrlov: How To TimeCollapses 4 mins agoA visitor from United Statesviewed ClubOrlov 5 minsagoA visitor from Portland,United States viewedClubOrlov 7 mins agoA visitor from Portland,United States viewedClubOrlov 9 mins agoA visitor from United Statesviewed ClubOrlov: How ToTime Collapses 9 mins agoA visitor from PortCharlotte, United Statesviewed ClubOrlov 11 minsagoA visitor from Saint Paul,United States viewedClubOrlov: How To TimeCollapses 14 mins ago
5. Gold confiscation, which happened once in the US already, so
there is a precedent for it. Yes, I know that this will make a number
of people upset, but I am yet to hear a convincing argument for why
the US government would not resort to gold confiscation when that
turns out to be one of the few remaining cards it can play.
This list is by no means comprehensive. If you feel that I have missed
something major, please submit a comment, and I will consider it for
inclusion.
Now, it would be nice if all of these measures worked like clockwork,
always producing the right amount of wealth confiscation to levitate
the government, and the financial scheme on which it is based, for a
little while longer. Alas, as with most things, something is bound to
go wrong at some point, most likely when you least expect it. And it
seems like a dead certainty that something will in fact go wrong well
before every last American citizen is relieved of every bit of their
accumulated wealth and is living peacefully in a roadside ditch,
wearing an attractive loincloth and a stylish mudpack for a hat,
quietly perfecting a nouvelle cuisine that features snails au jus and
dandelion salad au chaume. Maybe you can imagine it, but I can't.
Beyond a certain point, I can only imagine reports of widespread
public disturbances followed by breakdown of law and order.
Still, I hope that this framework will allow us to set an upper bound
for how long collapse can be deferred for any given country. Once
hydrocarbon consumption drops appreciably, the clock starts running.
Then it is possible to estimate how long the clock can theoretically
run by dividing the remaining net worth of the population by the size
of the hole in the economy created by falling energy consumption.
But after that things get messy. Some countries will hollow
themselves out quite peaceably, and go softly into the night, while
others will explode and fast-forward though the financial-
commercial-political collapse sequence. And so perhaps the most
useful thing to know is whether the collapse clock is already running
for any given country, because if it is already running, then it
becomes a fool's game to wait around for the inevitable outcome.
One reasonable approach is to get another passport and quietly
relocate to another country. It is important that this country be one
for which the collapse clock is not running and won't be for a long
time yet. Ideally this would be a financially secure, politically stable,
energy independent, militarily invincible, underpopulated, non-
extradition country which will be among the last to be severely
disrupted by climate change and where you could have lunch with
Edward Snowden. But this approach doesn't appeal to everyone, and I
understand that.
And so another approach is to adapt to what's coming while remaining
in the US, or in any other country for which the collapse clock is
running, by making yourself, and your wealth, should you have any,
illegible. Here is a very nice article by one smart cookie by the nameof Venkatesh Rao on the concept of illegibility. And here is his very
nice primer on being an illegible person. This kind of illegibility has
nothing to do with bad handwriting; it is about hiding in plain sight.
Please read these as homework, because I will have more to say on
this topic in the near future. And I would love to see a list of
countries for which the collapse clock is running, along with first-
order estimates for how long it could possibly run for each one, based
on their population's net worth and the country's economic shortfall.
But since this post has just gone over 3000 words, I am leaving this as
an exercise for the reader.
2 0 C O M M E N T S :
+6 Recommend this on Google
Mark Sebela said...
I read the 5 stages and it was excellent. I borrowed it from
the library, cause I'm unemployed and frugal. I had to wait 2
months as there were 21 other frugal people ahead of me. I'm
curious as to your thoughts on how basic infrastructure
(roads, rail, bridges, etc) will effect the future and what role,
if any, did it play in the collapse of the USSR?
TUESDAY, FEBRUARY 4, 2014 AT 2:17:00 AM EST
Shawn Aune said...
One of you needs to CC Gail Tverberg.
:)
TUESDAY, FEBRUARY 4, 2014 AT 9:41:00 AM EST
GHung said...
Another metric (and response) to consider is the number of
people making other arrangements, pre-collapse. This article
is of particular interest to me since I spent the summer of
1974 studying in the USSR, mainly Moscow and 'Leningrad'
(short visit to Kiev), after a couple of weeks in Italy, Austria
and Hungary.
Of course, in 'free Europe', all of the stores were open and
well stocked. Once in Russia, obtaining goods generally meant
putting on my best jeans and walking through the nearest
park. The 'free' (black) marketers would show up in due time,
offering all sorts of bargains that were simply not available in
the state-owned stores. Trade, barter, or foreign currency
were all gladly considered. I wore a pair of tennis shorts
under my jeans, just in case I needed to get back to the hotel
without my pants. The alternative economy was thriving at
the same time that folks were queueing up for a bit of fresh
chicken at the state store.
It's not only the wealthy who bypass or exit the formal
economy when the formal economy isn't serving the interests
of the population. Indeed, many folks decide early on that it
isn't in their best interest to continue to service the formal
economy.
I suppose it gets to be a chicken/egg argument: Do folks make
other arrangements because main stream economics is failing
them, or do economies fail because an increasing number of
consumers are failing to willingly support the official
economy? Either way, it's a death spiral for business as usual.
I'm getting a lot of informal bids for my services since 2008.
Anyone want to trade a good goat for some used PV
equipment, let me know.
TUESDAY, FEBRUARY 4, 2014 AT 10:53:00 AM EST
Max said...
Excellent post!
TUESDAY, FEBRUARY 4, 2014 AT 11:55:00 AM EST
Stanislav Datskovskiy said...
Outright confiscation of real estate is less lucrative than it
seems at first glance, given as buyers for the stolen homes
will not materialize out of thin air. (Bureaucrats occasionally
expropriate lands for their personal pleasure, but this is not
the usual scenario.)
Confiscation of cash (whether by turning paid-up home
owners into de-facto renters via ruinous taxation, or by
levying bank accounts) will remain an attractive proposition
while the resulting plunder continues to have some buying
power.
Everybody's favourite: forcible confiscation of gold - may be
avoidable, but only for the simple reason that desperate
people are certain to willingly trade their gold (diamonds,
bitcoin, spare organs, you pick) for so much as a promise of
food, security, safe passage to some far-away place, etc.
TUESDAY, FEBRUARY 4, 2014 AT 12:10:00 PM EST
Andy Brown said...
I've been noting for a while that transition people or peak oil
folks need to educate themselves about their local
technologies of expropriation. Because if they turn out to be
right about what turns out to have value in the future, they
often don't seem particularly well equipped to hang on to
that once the future gets here. I don't mean roaming mobs,
though such things happen. You're much more likely to be
relieved of your property by your town council. All I would
add to your list would be to encourage people to take an
anthropological look at how their local unpopular minorities
are kept under the thumb of the powers that be. There you'll
find a toolkit for popular injustice and guerrilla economic
warfare that should give you a sense of how you'll be treated
as you make the transition from comfortably poor to
destitute. And by all means, get yourself a voice on the town
council, if they're still cheap where you live.
TUESDAY, FEBRUARY 4, 2014 AT 12:26:00 PM EST
Reverse Developer said...
Excellent work! Wish Cyrillic characters were legible for me...
I do not disagree with your analysis of collapse timing. But I
will offer an alternate outcome for US that depends upon
greater cooperation, education, organization and restraint
than we are probably capable of.
The solution depends upon understanding that it is not
quantitative easing per se that hastens our demise. It is as
you say, diversion of hastily printed $ into ponzi 'skillsets' that
add nothing to our cultural resilience and transition socio-
economic structures.
Consider that loss of cheap energy is the catalyst of this
collapse. That energy embodied in money is draining off.
Thus, more money is needed. If we must work 10x harder to
sustain ourselves without oil then don't we need 10X the
money supply? This only seems inflationary because the
increased money supply is not directed at a program of
transition: educating on and reverse developing for gradual
transition to localized closed loop energy and subsistence
technologies. In short, we are all resource managers now.
The rub, again, is that it is so difficult to maintain social
cohesion while everyone is in different stages of accepting
collapse: raging, grieving bargaining...
It is the only 'civilized' way out. Thus we will most likely be
revealed for the horrible infants we are, savage beings,
pretending nationhood while engaging in extreme ego
gratification. The potency oil bestowed, we misused. It might
have been used as a step upwards towards more concious
progress. Adversity may yet be such an opportunity, but the
odds do not look good.
TUESDAY, FEBRUARY 4, 2014 AT 12:50:00 PM EST
skinnermichael said...
I think here in Britain the alarm on the collapse clock has
already chimed, it's just that the sound has been drowned out
by people hysterically mimicking the noises coming from
across the Atlantic ocean. Btw I fancy opting for the Orlov
option of a flat bottomed boat, except in my case it will be a
canal barge.
TUESDAY, FEBRUARY 4, 2014 AT 12:55:00 PM EST
Glenn said...
It's currently kind of tricky to make a living as a migrant,
unless one is content with parasitic jobs, and the rent is high,
which doesn't help anything much. Most nomadic cultures did
not couch surf.
Get back to me in about a hundred years, there will be plenty
of migrant farm jobs available, which is a useful occupation.
They exist now, of course, but in _relatively_ small numbers.
Once we've run through all the chemicals and liquid fuel,
farm work will be much more labour intensive again, but still
seasonal. Workers will move with the seasons, planting in the
spring, harvesting in the fall.
TUESDAY, FEBRUARY 4, 2014 AT 1:46:00 PM EST
miia said...
Interesting. Here in Finland, one of EU's supposedly safe core
countries, total energy consumption peaked in 2006 and fossil
fuel consumption in 2003. Finnish households also happen to
be among the poorest in the euro area when measured in net
worth, probably due to high taxes, relatively low purchasing
power and the welfare state (no need to save money). Of
course Finnish households tend to be small but this can hardly
be seen as a good thing when it comes to resilience. I wonder
how much time we have left. (ECB's study on European
households' net worth can be found at
http://www.ecb.europa.eu/pub/pdf/other/ecbsp2en.pdf.)
TUESDAY, FEBRUARY 4, 2014 AT 2:28:00 PM EST
Ravi Uppal said...
My first posting but I am regular reader and have both your
books plus a fan . I lived in Hungary from 1992 thru 2009
.From the boom to the bust .Some observations :
1. As Ugo says nothing to tax .Exactly the same in Hungary
.Payroll taxes are about now 50% and cannot go up further .
2.Property tax increase just as you described . The property
prices in Budapest have fallen by over 50%(taxes up by
50%)and the there are no buyers and no renters .The market
is dead . Hungary does not need to build industrial or
warehousing buildings for the next 20 years . The problem is
that persons(workers) who received properties in
compensation for their dues for getting fired in the the
privatization of early 90'S are now unable to pay the property
taxes on these property .The rent from these use to help
them survive along with the meagre pension,but now no rent
and astronomical property taxes have killed them .I was in
Budapest in July 2013 and was astonished to see the sign
"Property acquired by Budapest municipality due to failure of
tax payment".I very much agree with both Ugo and you that
the govt is going to skin till you are dead .Both of you hit the
bull's eye on this833
TUESDAY, FEBRUARY 4, 2014 AT 4:09:00 PM EST
k-dog said...
I think timing a U.S. collapse is a bit more difficult than you
present. As hydrocarbon costs increase in the U.S. the
American people will have to be squeezed to make up the
difference and when they cant be squeezed any more the
party gets raided and the orders come down to turn off the
music and everyone go home. That there is nowhere to go is
irrelevant and that defines collapse. To postpone collapse
different countries can be squeezed in different ways to make
up for the loss of fossil fuels and the picture gets
complicated. I think the idea needs to be restated in simpler
terms before returning to the U.S. question.
Cheap fossil fuels feed an economy like food feeds an animal.
With cheap fossil fuels gone a countries economy like any
animal will starve. But an animal can keep going for a while
by living off fat cells. In the American economy the citizens
are the fat cells and the American Body will deplete its
citizens of nutrition and only when it as finished doing so will
it die. By figuring out how long it will take for the American
economic body to use up its fat cells collapse can be timed.
The American situation is complicated as we are not a
homogeneous society. We are diverse. Essentially America is a
country composed of many different kinds of fat cells. Some
kinds of our fat cell citizens are already used up. The poor
have already been pretty much depleted with some
ethnicities suffering more than others. To them America has
already collapsed. But currently they are subsidized by
middle class fat cells which are now being used up but who
still have a nutrition remaining. Collapse cant happen until
the affluent fat cells actually feel the pinch and that has not
happened yet. America has a lot of those kinds of cells. As
those cells control media they can keep the American animal
standing up for quite a while through deception. Most other
fat cells will already be dead and the American animal will
from outside appearances continue to look healthy until
affluent fat cells begin to be consumed. Only then will the
American animal begin to shake and twitch.
When the affluent fat cells have robbed all the other fat cells
of nutrition then and only then will it be possible to time an
American collapse.
And America has a lot of fat to use up.
WEDNESDAY, FEBRUARY 5, 2014 AT 2:41:00 AM EST
WEDNESDAY, FEBRUARY 5, 2014 AT 2:41:00 AM EST
josh keiler said...
Hi Dmitry (and Kollapsniks) - do you think that moving into
crypto-currencies (ie. bitcoin, etc.) would be a smart idea to
avoid government interference (short-term), or do you think
since they depend on a pervasive, functional internet and
thus require high energy inputs that they are essentially
useless (long-term). Thanks.
WEDNESDAY, FEBRUARY 5, 2014 AT 6:35:00 PM EST
deflationista said...
this is an excellent article, dmitry...
jim kunstler touched on italy in his weekly blog: "Automobile
use in Italy is back to 1970s levels of annual miles-driven.
Thats quite a drop."
the clock is ticking....
WEDNESDAY, FEBRUARY 5, 2014 AT 8:18:00 PM EST
Mark Ferrara said...
Thank you Dimitri for all your great work! This is my first
comment.
What about Japan? As I understand it, they should be the first
to go according to some sources. (like Kyle Bass)
THURSDAY, FEBRUARY 6, 2014 AT 11:26:00 AM EST
Kristopher Dalton said...
Nice post and interesting read , but it still seems like you
have no way of predicting coming collapse.
THURSDAY, FEBRUARY 6, 2014 AT 2:30:00 PM EST
Mack's Track's by tom said...
Great article. I believe that you are correct about the USA. It
will go fast. Something will go wrong somewhere. USA
operates on a complicated system. One little thing goes
wrong somewhere and the whole enchilada will fall. On
another note have you heard of this fellow in Moab Utah
named Daniel Suelo? He gave up money 12 years
ago.http://youtu.be/EvU46JpFlXw
THURSDAY, FEBRUARY 6, 2014 AT 3:29:00 PM EST
xxancroft said...
Thank you Dmitry and Ugo for a great collaboration with some
good take home inklings. Scary thing about the pieces of the
puzzle coming together is that it signifies that the world is in
the flux of a changing transition state where the true state of
affairs are crystalizing (or vapourizing) for all to see . . . and
when a threshold number start to see . . . then the world is
suddenly a different place for everyone.
THURSDAY, FEBRUARY 6, 2014 AT 4:53:00 PM EST
clive mossmoon said...
@ Mark
You may be interested in this analysis.
http://www.godlikeproductions.com/forum1/message223176
7/pg1
According to Saddletramp's latest, the two weeks the 10 year
note spent over 3% broke the derivatives markets, triggering
massive margins calls which is what you see playing out in the
so-called emerging markets. He is a former banker with a
friend at the Dallas Fed. Definitely worth your time.
It looks like the banks are (finally) bringin 'er down.
FRIDAY, FEBRUARY 7, 2014 AT 12:30:00 AM EST
Amy La Gato said...
Mr. Orlov:
Re:
"1. Find out when the collapse clock starts running by looking
for a significant drop in energy consumption."
According to the EIA, US Oil Consumption has been on a
almost steady decline since 2005
(when it peaked) at 20,802,1615.
US Oil usage went down to 18, 771,4000 in 2009, ticked up
again to 19,180,126 and has since declined to 18,490,2136 in
2012.
There have been other drops in US Oil consumption from 1980
to 1983 and from 1989 to 1991, after each previous drop the
consumption rate soon reverted to an upward trend. The
bounce back from the drop in consumption in 2005 to 2009
was short lived and the decline in usage has sunk further than
the 2009 drop.
A more cornucopian view at RealClearEnergydotOrg is found
article in November of 2013 titled "U.S. Oil Consumption Falls
Off Cliff"
They cited three reasons for this decline, better gas mileage,
and more use of natural gas in heating and transportation.
This is whistling past the grave yard in my opinion. The
increase in the production and use of NatGas has been mostly
at the expense of the use of coal and not petroleum. 95% of
transportation fuels is petroleum based.
In yet another semi cornucopian article touting the glories of
NatGas and the glories of fracking Earth magazine recently
wrote that
"As has been the case since 1950, petroleum was the most-
consumed fuel in 2011, at 35.3 quads. Use of petroleum,
which includes crude oil as well as natural gas plant liquids,
has fallen recently from its peak historical level of 40.4 quads
in 2005. Natural gas, which had been consumed in roughly
equal amounts to coal for several years, accounts for almost
25 quads compared to coal's 20 quads in 2011. Natural gas and
renewable energy were the only fuel sources whose
consumption increased in 2011."
According to the US EIA as of 2011 the US used 5.1 less quads
of petroleum than in 2005. While not all of this was for
transportation, the vast majority f it was. The use of NatGas
for transportation went from 23 billion cubic feet in 2005 to
30 in 2011, to an average of 33 in 2013
(http://www.eia.gov/totalenergy/data/monthly/pdf/sec4_5.
pdf)
To reiterate, in 2011 the US used about 10 Billion more cubic
feet of NatGas for transportation while using 4.1 quads of BTU
less oil. To offset 4.1 quads of BTU the US would have had to
Older Post
Post a Comment
Home
Subscribe to: Post Comments (Atom)
use about 4 Trillion more cubic feet of NatGas as 1 trillion
(1,000,000,000,000) cubic feet (1Tcf) = 1.027 quadrillion Btu.
Which means that NatGas accounts for only 0.0025 of the
quads of BTU that have not been used.
In an economic system based on growth, one where the use of
oil would be increasing, the use of new technologies,
renewable and NatGas, does not explain a drop in
consumption of almost 2.5 million barrels of oil a day since
2005.
I would call that "a significant drop in energy consumption."
http://www.realclearenergy.org/charticles/2013/11/13/us_o
il_consumptiono_falls_off_cliff_107338.html
http://www.earthmagazine.org/article/highlights-2012-
outlook-natural-gas
www.eia.gov/countries/country-data.cfm?fips=US#pet
http://www.eia.gov/todayinenergy/detail.cfm?id=9210
FRIDAY, FEBRUARY 7, 2014 AT 10:07:00 AM EST
Revealed: Shocking Infowww.youtube.com
Closed-door talks at NYSE about timeline for next market crash.
Some of the Wealthiestwww.youtube.comAmerican families are preparing for a stock market collapse.Learnmore.