Kelly’s Last Stand …

The universe is a monstrous thing populated by demons, where nothing perishes but everything is perpetually diminished … virtues are deceptions … honesty is a paradox … nothing is what it seems: the human enterprise labors tirelessly at its own extinction in an ironic attempt to ‘improve’ itself. (All of) this is the manifestation of the universe’s malevolent design. Our endeavors are a part of the greater whole, most of which we cannot see or hope to understand. Individuals are blind and dumb … our wit would save us but it vanishes when we need it the most …

America is clinically depressed … the holidays make people crazy. The world is crazy and sad: it is afraid, the way for humans to manage fear has always been to lie to themselves … this is what courage is, a peculiar kind of lie.



The human race is confronted with gigantic resource imbalances and excess consumption: the public ignores the problem or denies it, preferring to watch television. We don’t know how to discuss it so we don’t try:

‘Fairytale of New York’ by Jeremy Finer and Shane MacGowan


It was Christmas eve babe
In the drunk tank
An old man said to me: won’t see another one
And then he sang a song
The rare Old Mountain Dew


Honesty is found in a song imagining two pieces of human wreckage wheezing through Christmas in a drunk tank …


I turned my face away and dreamed about you.
Got on a lucky one
Came in eighteen to one …


Nobody earns a living, everyone gambles, just like on Wall Street …


I´ve got a feeling
This year´s for me and you.
So happy Christmas,
I love you baby
I can see a better time
Where all our dreams come true.


Enter the ad men …


They got cars big as bars
They got rivers of gold …


Don’t they always? Here comes the truth …


But the wind goes right through you
It´s no place for the old …


… they end up in the tank!


When you first took my hand on a cold Christmas eve
You promised me Broadway was waiting for me
You were handsome — you were pretty —
Queen of New York City when the band finished playing they yelled out for more,
Sinatra was swinging all the drunks they were singing.
We kissed on a corner,
Then danced through the night.

And the boys from the NYPD choir were singing Galway Bay
And the bells were ringing out for Christmas day.


So it goes, the improbable chemical-fueled combination of ecstasy and infatuation that lasts for an instant then vanishes forever … as rare in iron-bound Mordor as a diamond necklace in the sewer. Humans turn their entire lives for a chance at these instants, these unforeseen moments … gambling everything in the chase or in fruitless attempts to buy ecstasy in a store. By this process the world is destroyed.


You´re a bum you´re a punk,
— You´re an old slut on junk
Lying there almost dead on a drip in that bed …
— You scumbag you maggot
You cheap lousy faggot
Happy Christmas your arse I pray god it´s our last.


We can’t discuss our self-inflicted misery but we can write songs about it. How the message is delivered matters more than what it is. Shane MacGowan should write about the unraveling of the world, about climate change and Peak Oil, about financial collapse … the rest of us would sing along in bars on St. Patrick’s Day …

John Hussman discusses interest rates, debts and the insanity of it all:


Since 2009, both the stock market and the broad U.S. economy have been dependent on perpetual support from massive federal deficits and unprecedented money creation. Meanwhile, Wall Street is content to ignore the extent of this support, and looks on every movement of the economy as a sign of intrinsic health – which is a lot like admiring the graceful flight of a dead parrot swinging by a string from the ceiling fan.


Our economy is fundamentally string!


A quick look at how the deleveraging of the U.S. economy is going – total credit market debt has now reached $55 trillion, including government, corporate and household sectors, representing 3.5 times GDP (down only slightly from the 3.8 multiple observed at the recession trough of early 2009). To put this in perspective, every 100 basis point change in interest rates on maturing and refinanced debt now implies a redistribution of income between borrowers and lenders on the order of $500 billion annually. The Fed has worked tirelessly to ensure that borrowing is as cheap as possible – the risk being that any departure from that would give every interest rate change of one percent an annual economic effect the same size as the “fiscal cliff.”

TCMDO 122612

Figure 1: total government and private sector debt in credit market @ $55 trillion — this amount does not include off-balance sheet credit, shadow banking or forex/currency claims which are an order of magnitude greater. The Fed offers a willingness to push down credit costs … to do so it must be prepared to lend indefinitely.

This is more madness, the Fed works against itself!

Optimally: the private sector offers unsecured loans to firms as a matter of faith. The expectation is for general increase in the amount of credit/economic growth and serviceable cash flow. Growth’s ‘utility’ is the ability of the firms to borrow over time and to use these loans to refinance prior loans as they become due. Unsecured loans exceed the worth of collateral by ten-times or (much) more. The central bank does little but manage the flows of currency and foreign exchange.

Currently: the private sector has lent stupendous amounts to firms, this represents most of the blue line in the chart. Collateral is worthless or worth very little. Leverage is now 100x or more. The borrowers are unable repay because they do not earn anything and never have. The lenders are over-leveraged/insolvent and borrowers are unable to borrow any longer. There is no more growth, it was all fake anyway.

Remedy: the central bank lends to private sector banks, taking their impaired collateral onto its own balance sheet at ‘face price’ which provides the banks a temporary reprieve from insolvency. The bank bailout is done with a straight face ‘to end unemployment’! There is no economic growth because there is no credit expansion … central banks cannot expand the credit base by offering unsecured loans. This remedy has been applied in Japan since 1990 and has failed. The more central bank credit is offered, the less private sector credit … the central banks’ actions are self-defeating. The Fed lends to push down rates: the lowering of rates reduces private sector profits as well as incentives to lend! As with the petroleum biz … rates that are profitable to the bankers are unaffordable to borrowers.

The ‘More Stupid’ remedy: the central bank targets nominal GDP (NGDP), lending in excess of collateral or accepting fraudulent collateral as security for loans in an attempt to create credit expansion by itself.

Outcome of the ‘More Stupid’ remedy: the offending central bank becomes instantly insolvent just like all the private sector lenders and for the same reason. There is a ‘run on the banks’ as depositors remove deposits: currency is the only real collateral for the Mount Everest of claims laid against it.

Insanity is contagious: watch all the central banks attempt nominal GDP targeting at the same time! No central banker wants to be blamed for a recession: all the bankers are easing as much as possible.



The Federal Reserve under Bernanke is like a bad doctor facing a patient with a broken femur. Being both unable and unwilling to restructure the broken bone, he announces that he will keep shoving aspirin down the patient’s throat until the bone heals. Despite virtually no relationship between the injury and the treatment, that femur might eventually heal enough on its own to allow the patient to hobble out of bed. But by then, the patient will need to be treated for liver failure. What’s even more bizarre is that everybody quietly knows this, but as he shoves another handful of aspirin down the patient’s throat, nobody proposes restructuring the broken bone, and they instead stand around helplessly saying “well, ya gotta do somethin’ don’t ya?”

I continue to believe that most of the economic impact of policy changes in the past few years can be traced to a) the abandonment of accounting transparency by changing FASB rules, which allowed banks to suspend mark-to-market accounting and effectively relieved them of capital requirements, and; b) the U.S. guarantee of bad mortgage debt extended by Fannie and Freddie. Both of those policy changes will impose enormous costs over the long-term, but they did allow the financial system to abandon the immediate need to actually restructure bad debts.


He leaves out energy costs, but no matter. The central banks have to cease lending at some point … it’s pointless … the patient is dead … As Hussman suggests, the only workable remedy is for the private sector to delever/write off bad loans.

At the same time, perhaps the establishment can begin allow those at the bottom of the economic food chain to earn. This requires less credit not more. Credit allows those with access to it to pretend to outperform those without … who are consequently exposed to ruinous competition. By borrowing, the government competes with its own citizens: by doing so it gives cause to those who would purposefully become dependent upon the government and thereby destroy it …

Speaking of energy, from the New York Times, Alan Riley counts his natural gas chickens right now!


The shale energy revolution is likely to shift the tectonic plates of global power in ways that are largely beneficial to the West and reinforce U.S. power and influence during the first half of this century. Yet most public discussion of shale’s potential either focuses on the alleged environmental dangers of frakking or on how shale will affect the market price of natural gas. Both discussions blind policy makers to the true scale of the shale revolution.

The real impact stems from its effect on the oil market. Shale gas offers the means to vastly increase the supply of fossil fuels for transportation, which will cut into the rising demand for oil — fueled in part by China’s economic growth — that has dominated energy policy making over the last decade.

There are two major factors in play here. First, the same shale extraction technology of horizontal drilling and hydraulic fracturing can be employed whether the rocks are oil-bearing or gas-bearing. We have already seen over half a million barrels of oil a day flowing from the Bakken field in North Dakota. The recent Harvard-based Belfer Center report — “Oil: The Next Revolution” — suggests that shale oil could be providing America with as much as 6 million barrels a day by 2020. The United States imported only 11 million barrels of crude oil a day in 2011. Given the potential for offshore and conventional domestic oil production, this would suggest that by 2020 America could be near energy independence in oil.


Then again, perhaps not … Maugeri’s report and others- similar have been holed below the waterline in the NY Times and elsewhere. What isn’t discussed is how broke Americans are to pay for the extra billions of barrels of frakked crude. It sez here — declining real wages — they can’t.

Real Wages 122812

Figure 2: Wages have fallen in real terms for over fifty years! More costly fuel against declining wages = unaffordable. Credit flows toward the fuel extraction- and finance industries away from workers, who cannot buy products … houses, automobiles, service ‘goods’ … or the fuel needed to run them. As business operating margins shrink and the bosses take more for themselves worker pay falls further, impacting sales in a vicious cycle.

As an expedient, the government borrows in the workers’ place. Because the workers are unproductive in the sense they cannot- and will not earn, the government must borrow exponentially greater amounts, and do so indefinitely … None of the energy promoters are able to explain how energy ‘production’ without paying customers is supposed to work.



The second factor is the potential to use natural gas for transportation. Some analysts suggest that this will only be a realistic prospect for fleet and long-haul road transportation. But they are overlooking the immense advantage that natural gas has as a transportation fuel in America and Europe, which have both developed a natural gas infrastructure in urban areas that takes piped natural gas into homes, offices and supermarkets. Once gas is cheap and widely available, it is possible to consider dealing with the “last mile” problem of providing home refueling kits so consumers can fill up natural-gas powered cars in their own garages.


Riley is a professor of energy law at The City Law School at City University London. Riley sees gas fueling the cars in the immediate future … despite uncertainties about the gas supply. Meanwhile, there is no sign of a generalized shift by the auto industry toward producing natural gas powered vehicles or the means to adapt the current fleet to natural gas use. With more than 270 million vehicles in US service alone, such a switch-over would be very costly and time consuming.

Meanwhile, there are questions about how much gas will be available over time. If fuel is affordable, there are insufficient returns for drillers. A recent New York Times article calls the natural gas frakking enterprise a “Ponzi Scheme”. Drillers cannot earn by selling fuel, they must borrow from Wall Street.


China has even greater incentives to develop its shale gas resources. According to the U.S. Energy Department’s Energy Information Administration, the country’s recoverable resources are larger than those of the United States at 36 trillion cubic meters. The main geostrategic reason for Beijing to develop shale gas for transportation is that the U.S. Navy controls the Pacific and most Chinese oil arrives by tanker. Large scale use of natural gas for transportation would protect China from much of the effect of a U.S. blockade.


It is good to learn from the Times the US is planning to blockade China … The only remedy that will actually work is to get cars off the road. They cost too much. One way or the other the cars are gone, so are the roads. Once gone we will discover we really didn’t need them, that they ruined our lives, instead.

Blue Triangle

Figure 3, from BP’s 2010 World Energy Outlook with data from the International Energy Agency: the ‘Blue Triangle of Death’, oil fields — presumably large, conventional deposits — that have not been discovered that are needed to make up for declines elsewhere. The shortfall indicated here is about 30 million barrels per day by 2035.

Blue Triangle 2

Figure 4, here is the Mother of All Oil Shortfall Graphs by EIA’s Glen Sweetnam (2009) by way of Kurt Cobb. He points out that any gains from tight oil formations will be overtaken by ongoing declines in conventional fields. Sweetnam calls for 40+ million barrel shortfall by 2030.


Figure 5: Petrobras in 2010 calculated a man-sized shortfall in production of sixty to seventy million barrels per day — or more — by 2030! The marginal increases from frakking and even Iraq will not change the outcome significantly. Says Cobb:


… many people will say that we already have a large new resource of tight oil (often mistakenly referred to as shale oil) which can be extracted through hydraulic fracturing or fracking. But even if the optimists are correct — and there can be no guarantee that they will be — this source of oil will only add 3 to 4 million barrels of daily production. What Sweetnam’s chart tells us is that we must find and bring into production the equivalent of five new Saudi Arabias between now and 2030 in order to meet expected demand even if the volume of tight oil reaches its maximum projected output.


Maybe Shane MacGowan can write a song …

“Kelly’s Last Stand” … about delusional central bankers, government officials and fracking shills looking for a miracle.


I could have been someone
— Well so could anyone
You took my dreams from me
When I first found you.
— I kept them with me babe
I put them with my own.
Can´t make it out alone
I´ve built my dreams around you …

And the boys of the NYPD choir’s still singing Galway Bay
And the bells are ringing out
For Christmas day.

132 thoughts on “Kelly’s Last Stand …

  1. The Dork of Cork.

    Its really strange that Kirsty MacColl is dead and Shane MacGowan is alive and kicking.
    Back in 1986 nobody would believe that he could reach into 2013.

    I guess the lesson learned is that the powers that be can keep this wage arbitrage zombie going for another few years (maybe).

    I tend to agree with Fofoa that this madness started in the 20s under the $ / petro inflation (really 1914).
    All of our narrow gauge lines that survived the civil war were replaced by buses starting in the 30s.

    What he does not get is that the $ could eat everything alive as it goes into deflation.

    Trying to stop my countrymen putting their last few bob into road maintenance when they could save some bits and pieces in a focused manner seems a lost cause.
    But they seem programmed……..its like talking to a wall.

    We need to run the roads capital down just as we did to rail in the 30s ,redirecting what little surplus into stuff that can be saved for little energy inputs.

  2. dolph

    There is something that the Anglo Americans don’t want to admit, and it’s that their power structure, as successful as it is, was fraudulent from the beginning.

    The fraud is this: the attempt to be “first among equals.” To expand lending and business activity the world over in an attempt to save everyone, but in the end tower over it all, control it, and act like Gods on Earth.

    The catch is of course that the more you empower other people, the more they have the capacity to resist and ultimately usurp your rule.

    We now live in a world of 7 billion people all connected to the same worldwide system that promises them riches if only they “work hard” and “innovate.” Well, convince 2 billion Indians and Chinese of that and consequences will be felt. The message undermines itself as surely as energy consumption does. The whole world could speak English, and that same world could find the real wealth of British and American people decline precipitously.

    And witness the sorry spectacle of the United Kingdom having fits of apoplexy over the immigration issue…and this an island nation, the most crowded in Europe! A country that, prior to the latter half of the 20th century, had no major internal migration for 1000 years. In fact it used to be the opposite…this is a place that once peopled the entire North American content, and Australia, and sent countless others abroad to manage its Empire.

    Now it’s America’s turn for success to become failure. So, America is “successful” because immigrants from around the world want to come here? Well, it will get everything that it asks for… the destruction of the country itself, because a country cannot consist of people from around the world magically assimilating and working together for a common good. America can pretend all it wants…but you cannot have a country of Mexicans and Latin Americans and Chinese and Indians and Vietnamese and “whites” and blacks and Jews who somehow come together to sort out their differences and create a utopia.

    It’s unnatural and thereby deserves to fail. The problems with Americana go way beyond energy, and if we are honest we will admit it.

    1. eeyores enigma

      dolph – you are not wrong.


      “Since 2009, both the stock market and the broad U.S. economy have been dependent on perpetual support from massive federal deficits and unprecedented money creation.”

      This is a little off.

      The entire AMERICAN WAY OF LIFE has been SUBSIDIZED since the end of WW2. There is nothing, not one industry that could have made it to this point without subsidy, either direct or circuitous.

      Remove the FINANCIALIZATION and it all comes to a screaming halt. Or more perhaps relevant, without all the financialization pushed subsidization of the developed world where would we be?


      Without sprinkling sugar on it where would the petri dish of yeast be?

      Would all of that black death, aka fossil fuel, have been extracted and burnt?

      Without a fulcrum a lever is just a stick.



  3. James

    The default setting for most people is all limbic; God, guns, beer, ballgames, sex, competition, a good time, a good time, a good time and some enjoyment thrown in, seasoned with a little fear. I’m sure that the prefrontal cortex could be removed from many without observable differences in behavior. None of them will experience their own systemic death, but many will experience the systemic death of systemic man. The first will be a matter of God’s will and medical conditions and is usually of rather short duration with “hope” ever present. The death of systemic man will last much longer as the technological body falls apart around them and its conduits stop delivering sustenance without chance of reprieve. Under these conditions of duress the hungry and enraged limbics will fail to understand the impotence of government in remedying their deprivation.

    Unfortunately, an understanding of how complex adaptive systems come into existence, grow, decline, die, and in some cases are perpetuated, is completely lacking in government. All of those Harvard, Yale, Stanford, MIT and Oxford educators might as well be speaking in tongues for all of the good they have done or will do. For authority figures to unravel and acknowledge reality would shatter several thousand years worth of fantastical limbic accretion and leave the helpless and frightened core of the brain standing naked and helpless, and like an animal cornered into reality, it will be ready to lash out at the least provocation and eviscerate the purveyors of truth. Crazy? Some of them, but most are simply unable to adapt completely to the demands of an increasingly systematic existence and adapting to the sudden loss of that systematic organization should stress most beyond the breaking point. Technological whiplash will be fatal in many instances.

    1. Jb

      “adapting to the sudden loss of that systematic organization should stress most beyond the breaking point.Technological whiplash will be fatal in many instances.”

      Agreed. Managing / manipulating the implosion would seem to be of the utmost importance. Fast or slow? Greer vs. Orlov.

  4. The Dork of Cork.

    Meanwhile to keep the French in Business – just across the border the Spanish must stop all activity that does not keep the cars going.

    The French had plans to relink this old rail route (closed in 1970) – now Spain must become another Greece to feed the bank credit monster as that seems the only mechanism to create money tokens in Europe.

    1. Reverse Engineer

      Good article CFFP! I’m going to cross post it on the Diner along with Steve’s.

      So far no interest perking on your charts inside the Diner, but this may perk up the Diners.


  5. Ellen Anderson

    Example of the bottom of the food chain that is not allowed to earn: very small farmers who could support themselves and a few neighbors if they could sell a little of their milk and cheese and a few chickens or some meat. In order to comply with the laws protecting industrial agriculture they must borrow to build expensive dairies and slaughter houses. Beyond being inhumane and concentrating waste, the small scale producers can’t make enough money to pay the interest and they loose everything. Plenty of medium sized farmers with big USDA loans but no government subsidies are going to go ‘splat’ when it costs them an arm and a leg to drive 50 miles to farmer’s markets.

    1. steve from virginia Post author

      The system is made up of cartels, government protects these cartels at all cost.

      – Walmart,

      – More from Grist,

      A bit off topic: there is a revolution underway right now … in how we approach food production. The clever folks realize the petro-model is kaput and a different version is needed … fast. The new approach is similar to the ‘Old MacDonald’ pig-cow-chicken-corn type of thing but different at the same time … trending toward permaculture/horticulture, away from tractors, subsidies, etc.

      1. Ellen Anderson

        One of the farms Rebecca mentions in the Grist article is a neighbor of mine. They are in a grandfathered dairy barn so they didn’t have to take on debt to build a fancy dairy to milk cows. But they are just renting that place so – who knows? There is a lot of good work being done by organic farmers, urban farmers, perma-culturists etc. but I think you need to take it one step further down – to the household level. That is the real bottom of the food chain. For example, if I milk one goat each day, I have enough milk for my family and perhaps one or two more. If I invite my neighbors over for dinner and give them a glass of raw milk no problem. But, if I send them out the door with a bottle and take a few dollars for it the FBI shows up!
        If we are right about what will be happening to most people, and the industrial food system falls apart then lots of people will need to grow more than veggies. They will need fat and protein. The D of C will know that anyone with a good sized back yard could grow enough potatoes to feed his own family as well as his chickens and dogs and some neighbors. Goats are really easy to keep with a bit of practice as well.
        The government needs to get better at looking the other way so us peasants can get ready. We are no threat to the industrial food system really. They are their own worst enemy.

    2. Jb


      This year I gave gifts purchased from my local farmer: Hunks of frozen organic meat are not easy to wrap, let me tell you (kidding of course). I don’t know if they turn a profit or not, or if they have jobs in town to make ends meet, but I enjoy supporting them. Orlov is correct: local alternatives to industrialized systems cannot compete on a cost basis until the industrial sized business models fail. In the meantime, I too worry about the small farmers holding onto their land, the crabbers their boats, etc.

      1. Ellen Anderson

        That looks like a nice place, JB – good choice. We gave a frozen chicken to a friend and, yes, wrapping is a problem as is defrosting during transport!
        I will never be able to slaughter a pig though I am willing to eat my neighbor’s pigs so I guess that is a bit hypocritical. But I think that the most humane and safest thing to do is to have slaughter take place on a small scale right on the farm. Animals don’t like driving around in carz any more than we do. (The exception would be our does who know that a truck ride ends up in the neighbor’s buck barn.)

      2. Jb


        I completely agree with your assessment on ‘taking it down to the household level.’ One of our neighbors, to whom I give eggs when we have a surplus, approached us recently with an offer to ‘sponsor’ two more chickens in our coop. Their reason was that our eggs are better than what they can buy anywhere for any price. I think our coop can handle two more and our hens are getting old anyway. Feed keeps getting more and more expensive though.

        A Happy New Year to you all and a big, warm ‘thank you’ to Steve for keeping the lights on.

  6. Pingback: Kelly’s Last Stand… | Doomstead Diner

  7. The Dork of Cork.

    EDF will extend the life of 2 British 1970s era advanced gas cool reactors.

    As I said Steve they will just continue to run these possibly until something happens – they have no choice.
    The British could have built at the very least a dozen 1990s era Sizewell B type PWRs when it had the expertise …………it built just one before retiring the crew to pay financial types.

    You are witnessing the failure of the extreme neo liberal British energy policy as now fully corporate technicians endeavour to keep its previous nation state investments going.
    Many of Its 1990s era private investment dash for nat gas stations have been stood down.

    This also means the wind energy investments are almost useless.

  8. enicar666

    The Locals get a whiff of the truth, and the negotiations begin….

    I’ve Paid My Share

    I am Joe Average Citizen. I have paid into Social Security and Medicare since the 1960s. I have never collected a single day of unemployment insurance in my life. Social Security and Medicare are not entitlements; they are annuities that I have paid into for more than 44 years. I find it offensive that politicians tell me that I do not deserve to collect what I have paid for.

    It is obvious that the government has mismanaged my annuities, which I did not have a choice to join. Changes are necessary. These changes must be well thought out, not knee-jerk reactions, such as what Scott Walker and his cronies did in Wisconsin in 2011. A couple of my thoughts are: increase withholding of both Social Security and Medicare beginning immediately. A progressive delay of benefits starting in 20 years where minimum age for Medicare shall match the minimum age for full Social Security. Increasing Medicare percentage of coverage for people who wait past their minimum rate. The longer you wait for your benefit, the less co-pay required.

    As an aging baby boomer, I realize that I am in a population bump, yet this bump has paid more than its fair share of taxes since 1966. Now it is our turn to collect. People don’t want to give us what we deserve. This is just plain wrong.

    A Racine Resident.

    1. enicar666

      Millennials are starting to wake up….

      Generation Screwed

      Earlier today I wrote about a surprising poll result showing strong support among younger Americans for tax cuts for all income levels, noting that this could be because of how hard younger Americans have been hit during the national recession.

      Add to this sad economic reality the debt load younger Americans will carry into middle age and older, and I’m not just talking about the student loan crisis which, thanks to the government-inflated higher education bubble, has become a larger portion of household debt than credit cards.

      The fiscal burden younger Americans are going to, increasingly, be asked to carry for entitlement behemoths like Social Security and Medicare are staggering and will only get worse as older generations retire and leave the work force.

      This is the moral hazard entitlement programs, and the previous generations which supported them, have created for America’s youth. Older voters created vast government programs to provide them with entitlements and passed the bill on to following generations.

      Well those generations are here, and the bill may be too large to pay.

      The accompanying cartoon shows Boomers riding in a golf cart reminding the unemployed Millenials shackled by student debt to get jobs because the Boomers need to get paid….

      Meanwhile: Obamacare Has ‘Thrown Our Seniors Under the Bus’

      One overriding question that seems to be at the heart of any health care delivery system with limited resources is balancing the obligations between helping young people to become older verses helping older people to become older indefinitely.

      The sacred unmentionable is mentioned!

  9. The Dork of Cork.

    The dramatic effect of the Jap Nuke crisis is feeding into the entire global LNG market.

    You can see this when you look at UK energy trends.

    Japan is outbidding Europe for LNG
    Even sov UK.
    The UK imported most of its LNG from Qatar & sometimes from Norway.

    Dec 2011 (third quarter) UK energy trends publication.

    “The UK started large scale commercial imports of
    LNG in Q3 2005. While LNG imports accounted for
    a significant proportion of all UK imports in 2006,
    they fell sharply in 2007 and 2008. The trend was
    reversed again in 2009 with LNG imports increasing
    virtually every quarter to reach a peak in Q2 2011 at
    81.5TWh. Imports of LNG accounted for nearly half
    of the UK imports in Q3 2011.
    Total imports in Q3 2011 increased by 34 per cent
    compared to the same quarter a year ago.
    Total exports increased slightly over the same
    period, up 5 per cent.
    The UK imported 58TWh of LNG from Qatar in Q3
    s imports in Q3 2011 compared to 38 per cent in Q3
    The UK imported 48TWh and 14TWh via pipelines
    from Norway and the Netherlands, accounting for 39
    per cent and 11 per cent respectively of the UK total gas imports”

    see chart 4.5

    Now Japan is bidding for LNG as far as Norway.

    The above report contrasts with the dec 2012 report (third quarter)

    “Total imports in Q3 2012 decreased by 22.9 per
    cent compared to the same quarter a year ago.
    The main bulk of this decrease was with imports of
    Liquefied Natural Gas (LNG). LNG imports
    decreased sharply by 42.1 per cent falling from 60
    TWh in Q3 2011 to 35 TWh in Q3 2012. LNG
    imports accounted for 37.0 per cent of total imports
    in Q3 2012 compared with 49.3 per cent a year ago.
    Pipeline imports also decreased but to a lesser
    extent – from 62 TWh in Q3 2011 to 59 TWh in the
    latest quarter. The majority of this was with imports
    from the Netherlands due to planned maintenance
    work at the Dutch Balgzand terminal in September.
    However, Norwegian pipeline imports were also
    impacted by planned maintenance work at St
    Fergus associated gas terminal in September.
    Total exports also decreased by 16.2 per cent in Q3
    2012. This was largely due to Bacton – Zeebrugge
    interconnector switching from export to import mode
    during September of this year. Energy Trends table
    4.3 – Natural Gas imports and exports.
    As mentioned above there was a sharp decrease with
    LNG imports. The majority of LNG imports are
    sourced from Qatar which were lower by 42.4 per cent
    in Q3 2012 compared with the same quarter in 2011.
    The fall in LNG imports is likely to be a combination of
    factors, such as the decline in UK gas demand and
    the strong competition for LNG in the global market,
    especially Japan following the closure of their nuclear
    facilities in 2011.
    Pipeline imports from the Netherlands were 24.2 per
    cent lower in the recent quarter compared with the
    previous year falling from 13.6 TWh in Q3 2011 to
    10.3 TWh In Q3 2012.
    A complete country breakdown for pipeline and LNG
    imports are provided in Energy Trends table 4.4 –
    Supplementary information on the origin of UK gas”

    If the US were to export LNG less US coal would be available to export………..
    We are really dealing with a catastrophic energy situation. , a crisis caused by a lack of nation state redundancy in world energy systems which was & is used to increase short term profits.

    The Banks have created this global barbell economy with Nat Gas consumption in the west (now collapsing in Europe) linked to coal consumption in China linked via Marine Bunker fuel.
    However Japan is now sucking imports from as far away as Norway with I believe one LNG ship even travelling the Arctic route with the help of a icebreaker.

  10. The Dork of Cork.

    Great link from the FT

    “And the other thing to note is this. In the BIS model, each currency-issuing nation has a public savings bank – government – and a public fractional reserve lending bank – the central bank. The fractional reserve lending bank acts as lender of last resort for the savings bank – hence debt monetization. And it is itself backed by government, because as a last resort government would use tax income to recapitalise the central bank. There are two massive assumptions underlying this: firstly, that central bank insolvency is never an issue because it can always meet its liabilities by creating money, and secondly, that populations can always be taxed sufficiently to meet all government liabilities including (if necessary) central bank recapitalisation. I don’t propose to discuss either here, though I have serious reservations in particular about unlimited taxation: people can only be taxed to the extent that they are willing and able to pay that tax. And the whole thing looks dangerously circular to me. I can’t help feeling that if the world is really so dependent on safe assets remaining safe there may be a need for a supra-national monetary backstop”

    Or perhaps, more accurately, welcome to the World Central Government. For if governments are banks, and are backstopped by banks, and exist primarily to serve banks and investors, then who is it who really runs this show?”

    1. steve from virginia Post author

      I went over this a year ago:

      Risk free means never having to say, ‘I’m broke!’

      Being able to borrow in one’s own currency means the country’s debt instruments are ‘risk free’ or the equivalent to cash. Risk-free means a country can create good collateral out of thin air. The good collateral means an establishment holding it is also risk-free. All else being equal, a country’s debt is risk-free because it can service or repay its debts with self-created money. The European Union as a collective cannot do this, it cannot create currency or risk-free debt. The austerity bloc is an attempt to make a virtue out of this failure but concords in and of themselves are not risk free and the collateral the individual states offer is rapidly losing worth. This leaves Europe with little to offer the market beside central bank gold or foreign exchange reserves which are now dependent on the good graces of Ben Bernanke. The EU cannot expand its money supply when it’s desperately necessary to do so.

      1. The Dork of Cork.

        Yes Sterling is looking attractive to hold for a Irishman.

        There was a recent BIS report of British banks stuffing money into Germany perhaps helping to create a run on Italy for example.
        But Spain is so sad – it has seen such huge rail investments yet is now suffering from Chronic overcapacity.
        All it needs is Spanish tokens……….

        Even in Majorca of all places. – (pop 0.869m) / capital Palma (pop 0.404m)
        Although the main investments came both during and after the crisis began.
        Their vulnerability to outside oil dependent capital flows (in the case of Majorca tourism) is obvious.
        With the nearest fast ferry Barcelona I think ( I was on it back in 2004)

        Palma Metro has seen 312 Million euro invested – reopening in 2008 after some problems.
        Some of its remaining metre gauge line of 50 miles~ has been electrified as recently as Y2011 for 30 million
        Indeed the Spanish model in particular of truly massive rail investment within a non sov framework is a epic disaster movie of chronic over capacity.
        And a great warning signal for all that wish to enter the dreaded euro torture chamber.

        Euro Master –
        “Your function is to bail out the core
        Your function is to bail out the core
        Your function is to bail out the core
        Your function………………………….”

        Conduit economy – “but there is no core.”
        “Its a black hole”
        ” I do not wish to cross the event horizon”

        Euro master –
        “Your function is to bail out the core
        Your function is to bail out the core
        Your function is to bail out the core”

        Conduit economy -”Yes Master”

  11. The Dork of Cork.

    Another Cracker.
    1995 –
    “One of the things I had to model was cash, and cash-like instruments. And as I did so, I became more and more concerned about the unreality of the entire financial system. I saw the house of cards forming – and I saw the abyss upon which it is built, the black hole from which it draws its energy. At the time, I didn’t know what was in the black hole. But now I do. That black hole, I know now, is the real economy……………

    Not only is finance a looking-glass world, it is a world of impossible contradictions. At the same time as unconventional monetary policies are raising prices to enable the black hole to continue to produce the amount of money the financial system needs, the fear of inflation drives fiscal actors to cut spending and raise taxes, reducing real incomes and seriously constraining activity in the real economy, resulting in price cuts in non-essential goods and a falling money supply. The arguments used by economists to justify such behaviour in a recessionary environment are among the most convoluted I have ever seen. It seems that the economics profession has an ivory tower all of its own, in which it develops theories such as “expansionary fiscal contraction” that have nothing to do with economic reality and everything to do with trying to resolve the distortions in our financial image of the economy.

    The house of cards is bigger and more fragile than it has ever been, and it draws more and more money from the black hole to keep it alive. But the black hole is shrinking”

    1. steve from virginia Post author

      Frances Coppola is very smart … she’s in good company, another ‘non-economist’ like James Howard Kunstler, Art Berman, Gail Tverberg, Charles Hall, etc. who gets it/is getting it.

      … ‘It’ being the savage monstrosity we have created for ourselves so that we might be comfortable and think highly of ourselves at the same time.

      1. Phlogiston Água de Beber

        Ms. Coppola and the others you listed are indeed quite smart. The full list is getting to be long enough to be unwieldy. I’m sure it was simple modesty that kept Steve Ludlum off the list.

        I’m at best about half smart, but I have become somewhat adept at feeding off the smart among us. And sometimes a weird thought just pops into my head. One of those times was just a few days before Xmas and I’ve been letting it percolate. Here is how I now see ‘it’.

        The “savage monstrosity”, which is our creation, did not suddenly arise, unbidden, out of a void. It is merely the current iteration of savage monstrosities, some more and some less savage, created by our revered ancestors. I have chosen to call them synthetic realities because they amount to overlaying natural reality with realities, born of human cleverness, that are more to our liking. Are we awesome or what?

        Unfortunately, synthetic reality seems always to run aground on some largely ignored feature of natural reality (sort of like the drilling rig Kulluk on a grander scale). If it hasn’t already been torpedoed by a conflicting synthetic reality. Think Moors, most of whom were Iberian natives, run out of Iberia by greedy Catholics.

        You might think that being synthetic reality could be adjusted at will to change course and avoid those rocks. Alas, the people in the wheelhouse are as likely to steer towards as away from disaster. I think this musical remonstration For the Love of Money speaks to it because in fact money does usually change people. With enough of it, you may get an invitation to the wheelhouse. FWIW, the nature of the money is irrelevant. Rome managed to collapse quite nicely doing industrial scale trade and commerce intermediated by precious metal coinage. Archeologists say that money practically disappeared from much of the post-collapse Western Empire. Many Europeans apparently went back to living somewhere near natural reality. Since they chose not to stay there, you might think that perhaps they didn’t like it that much. I am inclined to think that our next reality will also be as synthetic as we can make it. Probably savage and monstrous too.

  12. The Dork of Cork.

    Registrations of new cars in France fell in 2012 to below 1.9 million, the lowest since 1997.
    French brands in the home market are not doing good.

    PSA Peugeot Citroën registrations fell by 17.5% and Renault (Renault and Dacia) of 22.1%. The decline of foreign brands is less marked (-6.7%). ”

    Its the Franc or physical economy collapse in my book.
    It seems the claims on wealth is more important – see above papers.

    For their part Irish new car regs are down 10,000 + or 11.55%

    I know you don’t like Cars Steve but the non sov nature of Euroland is getting silly – they are just transfering oil to Asia and North America.
    If they were burning diesel on useful fixed capital formation it would be something but for the must part they are not either.

    1. The Dork of Cork.


      You like this
      Ever here of this strange concept – “Industrial co-localization”

      It produces nothing net.
      Its more labour extraction of value.
      The Euro is a expression of pure evil.

      The wastage of present intact resources to build more junk is simply fantastic.
      Because the Euro is a capital tokens rather then a money token it must build more and more stuff.

      It is much like a Shark – it must keep swimming and hunting.
      If not it becomes organic rain for the various bottom feeders.

      Spain is collapsing simply because it cannot produce any national tokens to use its previous massive investments.

      Now France is leaving its southern neighbour which it shares a very long border with to rot in a debt stew while it engages in a manic effort to sell stuff to its former colonies in Africa…………

      1. The Dork of Cork.

        Another great line – “we are using sustainable concrete”

        OK we did the Spain thingy ……whats next ?

        Morocco here we come……………

        Anybody see a general pattern here ?

        Give them modern toys in exchange for debt……..

        When the country has lost all redundancy you pull the rug from under it.

        Its the Ceausescu gambit played over and over again.

        This is where Irish “austerity” or surplus is ending up.

        Its money without a political input.
        So therefore we don’t use money.
        We use capital tokens.

        The $ post 1922 was the first modern global (petro) currency.
        The Euro is their perfected abomination.

        Ask yourself why the core snake of the 70s did the wage deflation thingy………so that it could export oil inflation elsewhere…..i.e. to Ireland , Spain etc.
        These societies are now completely destroyed……….its time to move on to greener pastures.

        The dangers of now fully privatized money is seen all around us.

    1. steve from virginia Post author

      Hmmm … the mysteries of WordPress. I’m working on it. I have to make more changes … all very complex.

      Thanks for your patience!

  13. Ellen Anderson

    Check out Part IV of Michael Hudson’s latest on today’s Naked Capitalism. Steve – do you think he gets the resource/waste part of the problem?
    Lowering the taxes on productive farm/forest land was the only thing that saved farmers from having to sell their land into the finance (and population) fueled real estate boom. And forcing people to cut trees in order to keep their status lead to a lot of inadvisable clear cutting. If towns were forced to raise revenue by taxing land (as they should rather than houses since the latter depreciate) then there would be many unintended consequences. Hmmm?

    1. steve from virginia Post author

      I’ve been following along with Hudson’s series. I generally agree to some level … however, he is still a conventional industrial economist trying to figure out a way to make the status quo work ‘better’ (which it cannot).

      To answer yr inquiry ‘backward’ the biggest obstacle to agriculture development/relocalization has been real estate speculation. Areas close to cities/towns are held for (inevitable) conversion to tract housing and retail use, the cost makes any alternative prohibitive. Once developed, the next area farther away is held for speculation. Land is closely held for long periods as the rewards for doing so can be outsized.

      I really think the largest component of our crisis right now is land (mis)use and (absence of) planning. The idea is there must not be any planning (let the market decide, the developers make all plans). The fallback is any planning must center around (automotive) convenience. The final fallback is to do nothing until one or the other of the two approaches can be deployed.

      Hudson insists the problem is a shift away from governments harvesting money by taxation to banks harvesting money by collecting interest payments. The supposition is that governments serve interests besides business tycoons: there is no evidence of this. Even in non-finance regimes such as the Baltic states during Communist periods, the rewards are allocated toward elites, the system managers. The only difference is the capitalists allocate by credit-driven cost and repayment while the Communists use planning committees. Otherwise, most of the current industrial systems are the same: they devour capital by mis-representing its worth.

  14. steve from virginia Post author

    Paul Kingsnorth @ Orion:

    The Unabomber meets the pseudo-environmentalists. Una should have sent a package to Lloyd Blankfein …

    Ruminations by Gail Zawacki as the wheels fall off the circus wagon:

    Chartfest from J P Morgan:

    A convenient roundup of resource horror stories from 2012:

    You cannot accuse Economic Undertow of skimping on value!

    1. Jb

      Paul Kingsnorth’s piece was a nice follow up to his previous one on ‘withdrawing.’ I have done the same, refusing to give any more credence to the promoters of illusions and false hopes.

      Funny, I must have missed the chart on decline rates for fracked wells in JPM’s report. The story of ‘energy independence’ is now a national security issue. Backing down from it will be like saying ‘gold isn’t a tradition anymore, so hand it over….or else.’ Time to manufacture a crisis.

      1. steve from virginia Post author

        JB … they were going to put that chart in there but with all those other very important charts they didn’t have room for it … they promise to include it in their next report, however!

        I still can’t figure out how ‘fooling yourself’ became a national security priority. It’s like the now-famous ‘platinum coin’ strategy which is making the rounds … meaning that ‘very serious people’ in high places in Washington are thinking about … using a couple of platinum coins to retire/service a part of our country’s debts.

        Why stop with a few coins? Why not make a couple thousand of them, then we could all be rich!


      2. The Dork of Cork.

        Are these not metalbacks Steve ?

        Whats the difference between the above proposal and Greenbacks in the great scheme of things ?

      3. steve from virginia Post author

        The proposal is that the ‘demand coins’ are a form of temporary bridge ‘loan’ until the Treasury can borrow ‘normally’.

        As such, the idea is more like the Treasury’s ‘extraordinary measures’ (borrowing from Federal Retirees trust fund) rather than a real note issue … which would be perceived as a form of repudiation (which it would be).

        Everything that surrounds the debt management is a matter of rules subject to a condition … credit is no longer productive.

        Rules can be changed at any time — and have been. Changing them is self-defeating if the lenders (finance) believe their prerogatives have been extinguished. At that point they MIGHT stop lending … and the Treasury would have a bit of a problem.

        Meanwhile, no matter what form the rules take … the credit process will not work, it will not allow increases in output.

      4. The Dork of Cork.

        Thanks Steve

        So yee lads across the pond can continue to eat the oil pies I suppose.
        Thats nice.

      5. Jb

        Presumably, the ‘end of the energy supply gang plank,’ is in 2015.

        ‘Energy independence’ is being used to backstop the dollar. Clever how JPM finishes their report with this idea: “If handled the right way, energy independence and entitlement policy could prolong the status of the US$ as the world’s reserve.”

        Increasingly blatant efforts will be made to keep the Conduits open as we inch our way to the end of the plank.

      6. Jb

        @DoC: I don’t know if adding more roads, rails, bridges, trams, trolleys or buses makes any sense at all. How are we going to maintain them once we go off the energy plank? Even if the public transport is free or almost free, will there be enough of a tax base to keep them running (subsidized)? And especially if the fuel source to run these things are carbon based.

        Kevin Anderson over there at the Tyndall Centre is talking about planning a reduction in our carbon footprint many times greater than we saw in Russia after the collapse of the USSR. I agree, but I don’t think it’s going to happen for reasons we have discussed here.

      7. Ed

        Michael Lind used to like to say something that he claimed was a saying used amongst German general staff officers at the beginning of the last century, along the lines of “the situation in Berlin is serious but not hopeless; the situation in Vienna is hopeless but not serious.

      8. The Dork of Cork.

        The key is the rate of flow…………

        even if 10% of the road traffic goes on rail & bus – will the system cope ?

        even if 90% of the road traffic disappears ?

        The model is the UK which is losing the North Sea at 10 -15% depletion a year now – its 19th century investments is finding it hard to manage the new flow.

        Of course if the system fails we are in the wet socks with no fire situation.
        But thats a very different but very nasty ball game.
        The key to maintaining economic management is channeling the flow rate.
        The eurozone has of course lost the plot.

  15. The Dork of Cork.

    That was a nice onion article

    I get what he is saying

    “Mowing with a scythe shuts down the jabbering brain for a little while, or at least the rational part of it, leaving only the primitive part, the intuitive reptile consciousness, working fully. Using a scythe properly is a meditation: your body in tune with the tool, your tool in tune with the land. You concentrate without thinking, you follow the lay of the ground with the face of your blade, you are aware of the keenness of its edge, you can hear the birds, see things moving through the grass ahead of you. Everything is connected to everything else, and if it isn’t, it doesn’t work. Your blade tip jams into the ground, you blunt the edge on a molehill you didn’t notice, you pull a muscle in your back, you slice your finger as you’re honing. Focus—relaxed focus—is the key to mowing well.”

    For me backpacking (sometimes in Scotland) for 3 months is the limit and in Winter you don’t see people for may days if you pick the correct routes.(I think my record was a week)

    But again for me it must be broken up by trips back to civilzation every week at least ………not only for supplies of course but the nice bits of civilization.

    I got that distaste for the nasty bits of civilization many times – for me its almost always ski stations & Golf courses……………industrial landscapes don’t really upset my Karma that much.
    Its private leisure “activities” in formerly pristine or at least public access areas.

    Anyway civilization is not all bad…………the Beer is better now then it ever was ,there is toblerone bars……..good quality tinned or packaged meat which will not kill you like in the 19th century , clean water etc etc.

    1. Ellen Anderson

      I ordered a scythe from the company in Maine whose motto is that Albert Schweitzer saying “….All work that is worth anything is done in faith.” The clumsy scythes you can get in your local hardware store won’t do the trick.
      Anyway, I could not stop scything. It was absolutely addictive (and I am one whose additions run to peanut butter and martinis.) So, I ruined two blades and my right shoulder. This was a couple of years ago and the shoulder has recovered. So now I am reminded that I must send the blades back to Maine and then, perhaps, get a right-handed scythe so I can distribute the work more evenly.

    1. enicar666

      Tallinn has become the first European capital to offer free public transport across its bus and tram network.
      Officials say it is an attempt to make the Estonian capital one of the greenest in Europe and the decision was backed by the majority of citizens in a referendum last year. But critics have said the move is politically motivated and a poor use of public funds

      Imagine here in America, Wisconsin in particular, where union public employees act as a political bloc and vote in their candidate who promises to give them a raise every year! No wonder you can’t have a hot dog stand and make a profit. FIRST I must sell two for the Mayor, one for the school district, one for the County, one for the Governor, one for Obama, one for Congress, one for Social Security, one for Medicare, One for “self employment tax”, one for the public utility….. and some others, and I still haven’t sold one for myself…. I forgot why I went in business for myself in the first place. Forget work – I’ll become a drunk and watch TV!

      BTW I also watched the Heni commercial. In Germany the USAF had Red-Star Heni’s at .50 in the vending machine at the barracks!

      1. The Dork of Cork.


        I Know nothing about the economy or society other then a few Baltic people I met in Ireland – sometimes its hard to tell if they are Estonian , Latvian , Lithunian or Russian.

        I do know Tallinn is where the Finns go to get drunk and stuff.

        But they are in the Euro now – free transport is not such a good idea when you depend on tax for your revenue……

        What about all those cars not paying tax ?

        In a rational sov economy I would be in favour of very low rather then free public transport for various reasons.

      2. Ellen Anderson

        Without the industrial economy and everyone needing to move around constantly there will be a lot less demand for transport of all kinds. I think that is what JB is suggesting. Commerce, including agriculture, will require transport as it always has but trams and buses are creatures of the industrial economy. All of these people rushing about going to offices are mostly exchanging information not real things.
        We should be thinking about avoiding past mistakes in case we are among the ones who have to help pick up the pieces later on. I am probably too old to fall into that category but I hope that younger people reading this and the few other really helpful blogs are beginning to reach some conclusions. Here is what I think about sometimes:
        Transportation and land use are closely correlated. This has been obvious since the government began selling off land along railroad lines. People’s living arrangements follow roads and railroad lines now as they used to follow rivers. So you can’t think about one without the other.
        Gore used to refer to the internet as the “information superhighway.” But, of course, it is more than anything else a creation of the fossil fuel age. It works to facilitate the exchange of information but not of real things. For the latter we need FedEx. (We are trying to use the net in my town to set up informal networks to save car trips. Of course it is way too energy intensive in its present form to hope that it will be useful in the future. But a lot of the travel needs are really information exchange needs and could be eliminated.)
        Currently people are scattered all over the place because they can drive to work or telecommute. They should all start thinking about what will happen to them if they can’t turn on the lights and the car (or if it becomes really expensive to do so.) Anyone living on an acre or so should be able to grow quite a bit of food. But they will need to start planning ahead so they are competent.
        Steve noted in an earlier post that there is a lack of planning for land. He is correct that there is no good planning. Actually, there is plenty of planning taking the form of planning for railroads and highways.
        Stimulating real estate development has always been a feature of transportation planning. Transportation planning IS land use planning. Land speculators look at government transportation plans and run out to buy the land while it is cheap.
        Our society/government is run by morons who don’t understand science. They are either bought off or bamboozled by greedy speculators and developers who don’t care. This appears to be true at all levels of government. The boards of health don’t understand biology, the departments of agriculture don’t understand soils or sustainable practices, etc. etc.
        One more off-topic complaint: who is this guy Gordon who thinks that indoor plumbing was “invented” and is “new technology” to be compared to computers and iphones? Indoor plumbing is a luxury enjoyed by many rich societies going back to the Romans and beyond. If you give me a choice I will happily take my laptop out to a well run privy!

      3. The Dork of Cork.

        “Without the industrial economy”

        That is a extreme position in my view.

        Its very possible – but its not want you want right now given the scale of the population etc etc.

        As long as we live in a post 1800~ world people will need to shop ,work & do stuff rather then till the soil.

        Can this be done without cars ?
        The wartime and post war period of Norway may point the way.

        “The fuel shortage during World War II made trolleybuses extremely popular, since Norway had an abundance of cheap electricity.

        The ridership reached its peak in 1959 with more than ten million passengers per year on the two routes. In 1960 the sale of cars in Norway was deregulated, resulting in fewer public transport riders”

        Many people just don’t grasp the scale of car use – if only a fraction moves to public transport then without investment these systems will be overpowered.

        Indeed some working class bus routes in my city is getting busier and busier as these people are the first to dump cars over and above middle class routes. (as long as social welfare is maintained)

        Empty buses & car filled streets near Cork city main bus station back in dec 2011…

  16. The Dork of Cork.

    Scottish huts are nearly always good crack (I backpack with a good bottle of scotch to keep that nasty wet cold out)
    In that part of Scotland the sea lochs can go very deep inland so you can supplement your diet with sea mussels & even mackerel in the summer if you have a fishing rod enabling you to stay out twice as long as initially you imagined

    However the lake outside that hut is freshwater – so therefore cold and deep with little nutrient mix and therefore with only a few tiny trout around the edges.

    Hunting with rifle is only for the bankers I am afraid………….

    You also must carry a weeks Gruel (porridge), 1.2 KG of toblerone bars (3) ,packet soups , tea bags , and all the other bits of civilization that you NEED.

    The deepest lake in the British isles.

    1. Jb

      Thanks, DoC. We are thinking (dreaming) of visiting the UK in June…

      My thought regarding adding more buses, trams, etc. is that this is simply a waste of further resources, ie: stop digging the hole. There has been and always will be the need for transport, but with thousands of UK households plunging into energy poverty (TAE’s article) how will they afford it? How will public/private partnerships pay to keep the systems running if the tax base collapses? Can they borrow from financiers abroad if the local economy switches to alternate currencies? This is the end result of austerity in Greece, Argentina, etc. This is what happens in cities like Detroit where miles of city street lights go off one night and don’t come back on.

      I don’t understand how complex industrial societies can maintain their systems (let alone continue to grow) if the end user can no longer afford it. Borrowing has worked for a while, but it appears we are at the end of the plank.

      1. The Dork of Cork.

        You could be surprised about UK car use – it has overtaken French car consumption to be the number 2 (Germany no 1.)and was the only large growing car market in Europe during 2012.
        If they brought in Norwegian post war anti car legislation at this moment of time the railways would not be able to soak up even a tiny increase in passenger numbers relative to car traffic.

        PS if going to Scotland in June Beware……..
        The Scottish tourist board will not mention this nasty beast. – the females are man eaters

        July & August are the worst months but June(especially late June) can be pretty nasty
        Its hard to describe how bad it can get – you must experience it first hand I guess.
        The best repellent is “Avon skin so soft” but you will smell like a girl (by then you will probably not care)

      2. The Dork of Cork.

        PS – if you are going to Scotland in early June – you should head for the Eigg festival.
        It normally around the second weekend in June.

        Simply take the west highland railway line from Glasgow Queen street station to its terminus at the fishing village of Malliag.
        There is a regular ferry (every second day at least to Eigg)
        Take a tent (you can camp on the beech for free) as roofs could be hard to find that weekend.

        Check out this website for dates (upcoming events)

        If the crack is not good you can always get the ferry from Eigg to Rhum or back to Malliag which also has a fishing boat ferry to Inverie village (which although is not a island has no road leading to civilization) – you must walk out of there man.

  17. Jo Wray


    What a fact-free rant.

    Feb. 2012 Gov. Walker (a republican), blows up Wisconsin’s
    deficit by gifting Wisconsin’s businesses with over
    200 million in tax breaks in his budget.

    To help balance the big hole in the budget, Wisconsin state public employees agree to wage and benefit cuts that average 8 – 10 % for each year of the two year budget. (Fiscal Years 2012 -2014)

    In fiscal years 2010 – 2012, under Governor Jim Doyle,
    (a democrat), state public employees agree to furloughs that amount to a 3.8% salary cut for each year of the two year budget.

    You can go back and look at the years 2000 – 2010
    (I’ve got other things to do)
    and you will see plenty of years with salary increases of
    ZERO for state public employees.

    Geez buddy, apparently you enjoy puking on public employees but man, check in with reality.

    As for your comment,
    “You can’t open a hot dog stand and make a profit.”
    Well, maybe it’s just you.

    With 2 seconds of reflection I came up with these:

    Ian’s Pizza/Madison – just opened up 2rd restaurant
    and three other spin-off businesses in the last 5 years.
    Roman Candle/Madison – 3 restaurants in last five years.

    New Glarus Breweries – gangbusters sales.

    These three enterprises came to mind because they had all participated in White House conferences on the importance of small businesses providing health care to their employees.

    All three provide health care to their full-time employees.

    Put down the beer and stop watching TV.
    You can have a hot dog stand and make a profit.

    1. enicar666

      Tell me where these businesses are in 5 years.

      What did they borrow to open? What are their margins? What volume of business do they require?

      Check out the Wisconsin Delinquent Taxpayer list – I’ve got the link by alphabet – I was looking at my former place of residence – Kenosha, and seeing how many I knew. Be sure to look at Racine – and check out your area.

      Wisconsin DOR Delinquent Taxpayers by City.

      What do all of those businesses have in common? They are SERVICE – not manufacturing. What are they dependent upon? People with jobs and DISCRETIONARY INCOME. Sure, a few of these businesses ALWAYS thrive. HOWEVER, Wisconsin has lots LOTS of these businesses.

      OF Course, our very own Chartist Friend has already described his belief that a Country that Manufactures nothing is nothing. As you peruse the list of closed businesses – notice how many restaurants and local breweries there are. A few survive at the expense of the many.

      Your extraordinary claims require extraordinary proof – These *NEW* Businesses aren’t that extraordinary proof that supports your position.

      BTW – Thanks California Investors!

      Golden Guernsey has ceased operations, and the future of the company is unknown. On Twitter, a person told Patch he is a distributor out of the plant. Armed guards shut down the plant on Saturday. “We have to move everything outta there. Locked up tight all that milk going to waste lots of ppl out of a job now,” tweeted @thetrimshow The company abruptly shut its doors on Saturday, leaving more than 100 employees wondering about their future. “No milk haulers were allowed in and no trucks left for deliveries,” emailed one employee who asked to not be named.

      Dean Foods was ordered to sell the plant by the Wisconsin Department of Justice in order to settle an antitrust lawsuit because Dean Foods owned about 60 percent of milk processing plants in the state. The plant was sold in September 2011 to OpenGate Capital, an investment firm that planned to continue operations of the dairy processing facility.

      Thanks OBAMA!

      I wonder how many people this will throw out of work…. how many more bars, restaurants, and businesses will close…..


      1. steve from virginia Post author

        It’s not Obama’s fault, he has no idea what is going on. This is what happens post-energy constraints. Instead of ‘having it all’ you have less.

        Less … less … less.

        The problem is peeps still believe they can return collectively to ‘more’ as it was 20 years ago. You’d think after 20 years people would start to figure but they reflexively cannot. It runs against the ‘progress narrative’ and what they see on television. The more ambitious will try and some will succeed over the longer term.

    1. Ellen Anderson

      If atmospheric lead reduction leads to lower crime rates how come we are locking up more people than we did back in the 60s and 70s? The fact that a lot of the petty thieves who used to assault their neighbors, knock over old ladies and steal their purses are also the petty drug dealers who are locked up in our massive prison system may also account for the reduction in crime.
      I am all for reducing lead pollution and if this helps convince people to do – fine. But I am not convinced.
      The prison/industrial complex is one big jobs program and people are willing to pay for it. If they ever lose their enthusiasm look out below!

  18. The Dork of Cork.

    A Swedish solution to local atmospheric pollution but what about elec. grid and battery disposal ?

    see video.

    It could work for some routes where you also have cheap electricity such as in Norway.
    It is just a hybrid bus with extra battery cells and pantograph. (it has a backup diesel engine)

    I imagine elec operation is best in heavy traffic / city centre preventing wasteful idle use of a diesel engine.

    Again capital costs come into the equation…………
    Post war Norwegian anti car legislation is probably needed to free up capital.

  19. The Dork of Cork.

    Also the monetary system must change so that the driver not doing anything for 10 minutes on one end and another 10 minutes on the other is not seen as a waste……..

    Low cost airline like operations would see labour doing nothing for 20 minutes each trip as a waste……….

  20. The Dork of Cork.

    Stoneleigh on the second British dash for Gas ?

    The British are more likely to call on favours from Canada then do this I should think but who knows.
    All of the British isles is in a desperate energy situation because of neo – liberal investment decisions taken many years ago.

    Anyway refer to the dramatic changes in British energy trends in my other references with many gas power stations now turned off this year as expensive LNG shipments is replaced by Coal burning 24/7

  21. tip

    followed that grist article down a linkhole and found this comment that seemed to fit nicely in the undertow:

    “We are firmly in the “boiling frog” syndrome. It’s not hot enough yet for us to jump out of the pot, so we slowly cook away. Meanwhile, those who do jump out find that it’s very lonely on the outside, to the point of wanting to jump back in”

    seems she’s having a tough time being one of the early adopters.

    1. Ellen Anderson

      Thanks for the reference. JMG is apparently not posting at the Resilience site.

      I don’t think that this is an example of boiling frogs. This is an example of the fact that you can’t make a living farming if you have a mortgage – or, for that matter, if you have a big real estate tax bill. The price of land and housing far far exceed the return that can be earned by producing anything on the land. The government artificially keeps the price of food low and the price of labor high. They subsidize the big farmers otherwise those guys couldn’t make ends meet either. That being said, I think it is still better to be a few years early than a day late. But you have to have money to do this and somebody has to keep a job in the FIRE economy until it crashes.
      At this point small farming is a luxurious lifestyle choice. And hard work too. Still, there are quite a few people around with some cash and looking to buy a small farm or piece of land with decent soils. But the key word here is CASH. People who go into debt to do this are going to lose their land to the banks.

    2. Jb

      Alternatives to the current system will work when there is no system.

      The Mighty Orlov tells us this and it is good.

      In the meantime, Ellen A. and N. Foss are correct: cash is king and get/stay out of debt.

  22. The Dork of Cork.

    Impressive corporate helicopter ride showing the path of the tramway de Besancon.

    Already major work is ongoing but the band like structure and density of the city along the riverbank is shown in stark relief.

    “Besancon plans to build an east-west tramway line including a short branch to the main station for completion in 2015. With 120,000 inhabitants, Besancon will be one of the smallest French city with a new tramway system. Nonetheless, comparable ridership to other French systems is expected because of the band structure of the city.”

    I don’t think this could be repeated in most American towns given their sprawl like nature – be thankful for the almighty $.

  23. The Dork of Cork.

    How Roman society really worked.

    Before the money men took over the gaff people had enough disposal money for tappa like fast food / bars.
    If people did not have enough disposal income for bars the city life broke down…..
    as their apartments were too small for meal making.…atch?v=Zyz0kM25uoc
    14.30m – 17.00m (Smell of activity , smell of money , smell of the shit)

    40.00 – 42.00m

    The money supply must be fluid, it cannot be a hard currency if you want physical systems to be preserved.

  24. Sandor

    Just returned from northwest coastal Costa Rica, where I walked everywhere and inhaled dust and gas fumes from all the quads and 4-wheel drive motor vehicles on the unpaved bumpy roads. Costa Rica would fare better than most in an oil crunch as they are an agrarian society, where much of the populations still farms. The genetic memory is still accustomed to getting around on ox-carts. And you can see the stars.

    Back in NYC, the lights are on in thousands of empty office buildings late at night. The disease of restlessness. Of course, I had to hop a plane, burn jet fuel and some taxi gasoline to get there and back. Just about the entire trip was made possible by burning fossil fuels, including the delivery of precious tropical fruits to the neighborhood. And phosphorus for food will probably turn out to be an even bigger issue in the future than petroleum and stranded cars.

    Leveraged cartel markets are intent on driving us off a resource cliff. Read the Philip K Dick story ‘Captive Market.’ It explains the basic dynamic (any PKD is worth reading). There is no desire to discuss population controls (eg paying poor women to sterilize themselves, making a second child too expensive to bear by rigging the tax code, or handing out free birth control to everyone over 13). I don’t see any way to gain a foothold in the mainstream discourse. The only policy response is to mumble and wait for a disaster.

    On the plus side, we live on an amazingly beautiful planet. What could make preservation of the environment condicio sine qua non?

    1. enicar666

      Xanax is some great stuff. My girlfriend is an RN and scores it from work – first it helped me to avoid withdrawal symptoms when I would quit alcohol (I’d go on/off) – then I learned to enjoy an alcoholic buzz with moderate doses. She got concerned – because it kills you when mixed with alcohol, so she cut me off – and now I am off both – but Xanax is great stuff. Every day is great and wonderful and you sleep well.

      She uses it occassionally – to help get to sleep and take away stress. Psycho-tropic drugs work!

    1. enicar666

      Joseph Farrell. Good stuff. Are you also into the UFO Stuff?

      Secret Space Program – a collection of videos with , I believe, a high likely hood of being true.

  25. The Dork of Cork.

    Second molotov attack on a French tram – this time in Mulhouse……….

    These vehicles may represent the state in some peoples eyes – and given their fixed route are very vulnerable to attack.
    Post offices (the state) in Corsica for example are built like mini forts as they are a focus of separatist attention.

    France is beginning to cook.

  26. The Dork of Cork.

    The transport company(in Mulhouse) has decided to temporarily suspend the service stops Nation and Coteaux evening from 19:30 after the incident Saturday night in the area of ​​Coteaux.
    Saturday night, a dozen people had attacked a tram train in the area of Coteaux, throwing projectiles and Molotov cocktails. Following this incident, a special meeting of the HSC Solea was organized. The decision was made ​​to stop at least until January 14, tram and bus lines in the area. Stops and stops Nation Coteaux are no longer served in the evening from 19:30. A meeting was held on Wednesday between union representatives, members of the management of the transport company and Jean Rottner, the UMP mayor of the city, trying to find solutions. But it was not successful. A new official meeting is set for Monday. Manuel Valls, the Minister of the Interior, is meanwhile expected tomorrow in Mulhouse, said Jean Rottner.

    Meanwhile Besancon tramway now state they will be operational 6 months ahead of Schedule.

    Me thinks the system is in full scale panic mode.

  27. steve from virginia Post author

    Sorry kids, I’m sick as a dog … from my balloon head issues foul-smelling greenish slime instead of insightful, entertaining word-play.

    I hope to be feeling better next week … In the meantime I’m reading Keynes’ “Economic Consequences of Peace”, where he relates his time in Paris after World War One and the (insufficient, short-sighted) efforts that led to the Treaty of Versailles.

    I read it once a long time ago, of all Keynes’ work it is the most accessible, has the least ‘economic jargon’ to it. Keynes is horrified by the politicians, particularly Clemenceau and Wilson.

    Believe it or not, many of the resource/population/real-capital/real-output issues we discuss here (and avoid discussing elsewhere) are Keynes’ peripheral subject. He wasn’t ‘rigorous’ in the sense of MIT/Club of Rome and their ‘Limits to Growth’ but the seed was there. He was observing the period of massive economic (and population) growth that occurred during the last of the 19th century and the beginning of the 20th.

    I wanted to read it after making my way through Philip Pilkingon’s (well-deserved) hit job on hack-ish Friedrich Hayek. For some reason, reading about Hayek pushed me to read Keynes instead … and take note of his ‘sensible humanity':

    Institutionalized cruelty is both the foundation of modernity and its fatal flaw: business as war by other means.

    1. Phlogiston Água de Beber

      As it happens, I came to the blog immediately after watching a documentary on the Roman industrial scale abuse and slaughter of dangerous and exotic animals in their entertainment industry. Part of which was execution of defenseless criminals by big cats. But the main ‘sport’ was execution of not totally defenseless animals by Beast Fighters. Of course, the predator animals were also given opportunity to kill grazers.

      It seems that in order to qualify to be somebody in the empire, even the emperor, you had to spend enormous sums of money to put on these games. If for some reason the event had to be cancelled or proved not to be very impressive, you were on the way out.

      My point is that institutional cruelty is not just an attribute of modernity. I can’t at the moment think of any civilization that has not incorporated it in some form or other. I do agree that it is a fatal flaw. The Romans drove most of their favored animals to extinction within the boundaries of the empire and probably beyond. The animal trade reached all the way to India. The lands thus cleared of wild animals were opened to agriculture, which I think may have contributed greatly to the current desertified condition of MENA. In our own time, we seem to be set on making that a trivial loss in comparison.

      The speaking actor in the documentary quotes Seneca as having said something like “men are interested in one of two things, entertainment or philosophy.” My response is that cruelty seems to be very entertaining and apparently it is always possible to construct a philosophy that can justify it.

      Thanks, for the link to Pilkington. I think I’m going to enjoy his work.

  28. The Dork of Cork.

    Sorry its more then that………………….
    See chart 8
    German exposure to peripheral Europe
    Change from Q1 2008 to Q2 2012

    They reduced their exposure to Ireland by -82.54 billion euros
    Which is more then much larger Italy !! -71.04
    And almost as much as Spain – 92.25
    In comparison Greek exposure reduced by -23.46
    Portugal -12.32

    One thing that has been happening for some years is the reduction of claims on the periphery
    by banks in core Europe. For instance, the stock of German banks’ claims on peripheral
    Europe has fallen by roughly one half since their pre-Lehman peak, from just under €600
    billion to €300 billion.

    The Germans just love us to bits.

  29. The Dork of Cork.

    What the British based banks are up to is interesting.

    “While UK banks were cutting their exposure in the periphery in an effort to square their books
    and reduce their redenomination risk, they were increasing their net local positioning in
    Germany. In the first quarter of 2012, UK banks increased their claims on the German public
    sector, which includes both claims on the government and on the Bundesbank, by almost €100
    billion. Significantly, the claims on the German public sector were booked mostly by their
    offices in Germany. The preference for locally booked claims may reflect fears that, in any redenomination, cross-border claims might be treated differently.
    UK banks stand out among
    banks from outside the euro area, as well as from within the euro area (Graph 10).
    The scale of the increase in claims on the German public sector is an order of magnitude
    larger than the scale of decrease in net local claims of UK banks in the Iberian peninsula.
    While it is instructive to think of banks in a single group reducing their net claims on Spain and
    increasing their net claims on Germany, this seems to be something else. Whatever the
    motivations of the shift of euros by UK and other banks into claims on the German public
    sector, the shift has resulted in an extraordinary development. In particular, banks in Germany,
    including offices of foreign banks, have flipped from providing euros to banks in the rest of the
    world to absorbing euros from banks in the rest of the world, as shown in Allen and Moessner
    (2012) and in Graph 11. Banks in Germany include both German-owned and foreign-owned
    banks, and the counterparties outside Germany include both affiliated and unaffiliated banks.
    This is an extraordinary development for a creditor country – that its banks become net
    recipients of home-currency funding from banks in the rest of the world. While there has been
    much discussion of retail investors shifting their deposits into banks in Germany, the bank-to bank channel shows a shift of hundreds of billions of euros. “

    1. Ellen Anderson

      So sorry about your flu or whatever it is. I broke down and got a shot this year.
      Chicken soup and garlic tea for you, Steve. Put garlic in the soup too.
      The Archdruid Report is good this am – can’t say it will cheer you up though.

    1. steve from virginia Post author

      Ireland benefits from tax arbitrage w/ the rest of the Euro-zone: it’s a BAU arrangement for the Irish in the BAU endgame. An increasingly hard euro (due to deflation) means cheaper fuel for Ireland. Meanwhile, people cannot afford the euro.

      England is simply falling into the (net energy) pit.

      A cheap pound and the country won’t afford petro imports, the only export trade the Brits will have is emigrants out of the country. Maybe they can sell the Queen.

      1. The Dork of Cork.

        Blackadder (from Y2000) sums up the UKs problems

        “If we are to reestablish our position in the world…………we must invade France.

        Or we could just wait for the Euro to drop some more and simply buy the place”

        Dork – but what will they do with it once its bought ?
        Drink more wine I guess.

  30. The Dork of Cork.

    The keep it simple stupid local stuff will be stripped for these high speed projects that may not reach capacity when the real shit hits the fan.

    French market towns & villages can be rail connected for a tiny fraction of the cost while employing far more people per capital unit.

    In this case 13 million~ vs the 7.8 billion ~ of the Tours Bordeaux thingy.

    350,000 people are carried on this little line (mainly schoolchildren) per year.

  31. The Dork of Cork.

    Stoneleigh on scale.

    “Operating at a local scale to build local supply chains and resilience is far more compatible with the human psyche. At times when social organization has expanded to the point where it dwarfs individual actions, and may control them either directly or indirectly, individuals are disempowered by scale. Many feel they have no control over the critical factors of their own lives, which often leads to psychological disturbances such as depression, at present widely addressed with medication. Increasing scale can reduce both empowerment and civic engagement, as it fosters the perception that one can achieve nothing through individual action.

    The increasing complexity that accompanies scaling up also occupies time, money and individual energies, leaving little in the way of personal resources to contribute to the public sphere. Of course for the few in positions of control, scale translates into leveraging power, which can effectively become a drug in its own right, but for the masses it is much less conducive to functioning effectively and meaningfully. For a while the masses can be bought off with bread and circuses, and, for some, with aspirations to achieving a position of power and leverage themselves.”

  32. enicar666

    Imagine IF Women bought cars!

    LIFE, May 5, 1967

    Want a lift? Get a new car!

    You’ll blossom out!

    … someone forgot to tell the women that blossoming out was code for an Obesity epedemic!

    1. enicar666

      It appears that the other Nations on Earth and in the Galaxy can relax for a while as American Imperialist Expansion is thwarted:

      The White House has rejected a petition to build a Death Star – a huge battle-station armed with a superlaser as seen in the Star Wars films.

      Targeted assassinations with acceptable collateral damage using remote-control Drones is enough to satisfy the current White House occupant.

  33. enicar666

    DOC -I like this BBC stuff –

    Happy Daze are here again!!

    Cheery carmakers flock to Detroit

    Car sales are soaring, carmakers are hiring thousands of workers, and memories of the recent bankruptcies of two of Detroit’s “big three” companies already seem like distant memories – even though fewer than four years have passed since the crisis.

    Some 14.5 million cars and light trucks were sold in the US last year, a whopping 13.4% rise on 2011, and as such 2012 was the best year in terms of sales since 2007.

    GM predicts that sales will top 15 million in 2013 and perhaps even reach 15.5 million.

    Steely Dan – Josie

    1. enicar666

      This is a break through Video Straight out the Streets of Racine, Wi.

      Hogg Money Mook – Skittlez video AkA Donk Ryders

      Yeah – “Something is wrong with this picture – it’s all SWPL’s. You need to diversify!

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