We’re all going to have to be a lot more resilient in the future.
The "long emergency", as James Howard Kunstler puts it, is now upon us.
If ever there was a wake-up call from Mother Nature, it's been the weather events over the past 12 months.
Last year, the triplet Hurricanes Harvey, Maria, and Irma resulted in thousands of deaths (mainly in Puerto Rico) and tens of $billions in destruction.
This year has seen a rash of 120° F (50° C) summer days, droughts, current monster storms like Typhoon Mangkhut and Hurricane Florence -- as well as numerous 100/500/1,000-year floods spread across the globe.
And that's just so far.
It remains nearly impossible to connect climate change directly to any particular weather event. But taken together, it’s becoming increasingly difficult to dismiss the scientific claim that the quantity of heat trapped in the earth’s weather systems impacts the amount of water that now falls (or refuses to fall) from the sky and the high-temperature heat waves that now shatter records with such regularity that once-rare extreme conditions are now becoming routine.
Our “new normal” is quickly diverging from the natural conditions most of us have grown up with. Permafrost isn’t "permanent " anymore -- it melts. The Arctic now can be ice-free. In a growing number of regions in the US, you can leave a screenless window open on an August evening (with the lights on!), and remain unmolested by the swarms of insects that used to prowl the night.
All of these symptoms are connected by a root cause: our society's relentless addiction to growth. And while we do our best here at PeakProsperity.com to continually raise awareness of this existential threat, the rest of the media completely ignores it.
Virtually no major news outlet is talking about how our voracious consumption of ever-more natural resources is fast exhausting and poisoning the Earth's capacity to support human life. But Serena William’s latest court meltdown? That's splashed everwhere...
Which is why the vast majority of people have no clue what's actually happening. And a disturbing portion insist on remaining that way, being led around by the media, wasting their effort, focus and time on the irrelevant.
People are convinced that salvation lies with one political party or another, in the election of one candidate or the defeat of another, when the sad truth is all major political parties are on exactly the same side when it comes to promoting endless growth or waging war. In the US there's simply no alternative political party at this point.
Addicted To Growth
Yes, we’ve been beating this drum for a long time -- over a decade now. But we persist beacuse this critical message is being blunted by very powerful forces that are mainly interested in preserving the status quo.
All the machinery of monetary, political, propagnda and military power is aligned in the quest to keep things headed in precisely the same direction they're already going. Those who control the system today are personally benefitting too much, and so fight change with all their might.
That said, while the new religion embraced by society is Technology, I find it ironic that the very same scientific process that brings us wondrous innovations is simply ignored or dismissed out-of-hand when it return answers that run counter to our pursuit of endless economic growth and consumer comfort.
Here's a recent report that does exactly that. It's by scientists commissioned by the UN who took a look at things along the same line of thinking that we've outlined in the Crash Course. They conclude, as we did over ten years ago, that our unsustainable economic trajectory is almost out of runway.
But have you heard of this report before now? I highly doubt it. It's not a message "they" want the masses to hear.
This is how UN scientists are preparing for the end of capitalism
Sept 12, 2018
Capitalism as we know it is over. So suggests a new report commissioned by a group of scientists appointed by the UN secretary general. The main reason? We’re transitioning rapidly to a radically different global economy, due to our increasingly unsustainable exploitation of the planet’s environmental resources and the shift to less efficient energy sources.
Climate change and species extinctions are accelerating even as societies are experiencing rising inequality, unemployment, slow economic growth, rising debt levels, and impotent governments.
Contrary to the way policymakers usually think about these problems these are not really separate crises at all.
These crises are part of the same fundamental transition. The new era is haracterized by inefficient fossil fuel production and escalating costs of climate change. Conventional capitalist economic thinking can no longer explain, predict or solve the workings of the global economy in this new age.
“We live in an era of turmoil and profound change in the energetic and material underpinnings of economies. The era of cheap energy is coming to an end,” says the paper.
Conventional economic models, the Finnish scientists note, “almost completely disregard the energetic and material dimensions of the economy.”
(Source)
Hallelujah! I really do hope these scientists get as much traction as possible with their message. But my experience tells me their warning will go unheeded.
And it’s not even a hard one to digest intellectually: Every organism can grow into its available energy supply, but no further.
A plant grown in dim light will not be as large or as healthy as one grown in full sunlight. The amount of sugar in a vat determines the maximum number of yeast cells produced. The abundance of fish in the waters surrounding a sea bird rookery will determine the fate of the nesting colony’s population.
Humans are no exception.
All of life is the study of energy flows and transformations. Where conventional economists have gone off the rails is in assuming there will always be sufficient inputs from the natural world to power the economy. That at a high enough price, there always will be more of everything.
And in their defense, up until very recently, that has largely been true. But no longer.
Talk to any oil company operator and ask them how easy it is to find oil these days. Or ask a farmer how quickly crop yields would plummet if N-P-K inputs derived from fossil fuels were not added back each and every year to his topsoil. Or talk to a veteran cod fisherman about the 95% collapse in catch size over the past several decades.
Reality-based systems have limits. And we're hitting them all over the planet.
It’s The Money, Stupid
Debt-based fiat money, like any monetary system, enforces some behaviors and punishes others.
Specifically, debt-based fiat money demands a regime of constant, perpetual growth. As any mathematician will tell you, anything that grows constantly accumulates exponentially.
So each year, there’s exponentially more debt in the system than the year before. If not, our high-leveraged system begins collapsing, as threatened in 2008:
As long as you can have endless growth, the system of money we have in place today is perfectly fine. But if you can't, then once growth peters out, the entire system crashes into nothingness. There’s no in-between territory.
We could choose to have a different monetary system. We could embrace a 'sound money' system, where money can't be conjured out of thin air, at no cost, the way it is today. Instead, it's in limited supply.
Under a sound money system, you either produce more than you consume or you face the consequences (rising interest rates, economic contraction, etc.). No ramping up the printing press to defer the reckoning off to a future date, which will also make it more intense when it eventually arrives.
Wars cannot be financed on the backs of future generations as yet unborn. Either you rally the populace to pay more in taxes to fund a military campaign, or you ramp down the war machine.
Sound money won’t fix everything. But it would be a great step in the right direction.
There are many other indictments against debt-based fiat money, including its proclivity to concentrate wealth into the hands of fewer and fewer winners, with everyone else in debt to that oligarchy (a process already well underway). Given these, busying ourselves with trying to refine our current monetary model is a waste of precious time.
As long as debt-based fiat money pins us between the harsh dichotomy of either growing exponentially or collapsing, there’s no amount of tweaking, (de)regulating, or rule modifying that’s going to make the slightest bit of difference.
We need a full-blown replacement.
You see, money is at the root of it all.
Every large, hierarchical assembly of people throughout history has had an organizing principle that kept everyone in line. Where once it was “royal blood” or “direct access to the god(s)”, today it's money. That’s what keeps everyone in line and in their place. (Those interested in understanding this dynamic more deeply should read our foundational report on this topic)
But what happens when your organizing principle that keeps everyone in line marches them towards a cliff?
You need to either change it or perish. As the above article on the UN study continues:
Most observers, then, have no idea of the current biophysical realities – that the driving force of the transition to postcapitalism is the end of the age that made endless growth capitalism possible in the first place: the age of abundant, cheap energy.
And so we have moved into a new, unpredictable and unprecedented space in which the conventional economic toolbox has no answers. As slow economic growth simmers along, central banks have resorted to negative interest rates and buying up huge quantities of public debt to keep our economies rolling. But what happens after these measures are exhausted? Governments and bankers are running out of options.
Capitalist markets will not be capable of facilitating the required changes – governments will need to step up, and institutions will need to actively shape markets to fit the goals of human survival. Right now, the prospects for this look slim. But the new paper argues that either way, change is coming.
I too, will argue that -- like it or not -- change is on the way. However, I would go further than the authors and note that any system, whatever its premise and however it's run, will fail if it's predicated upon an unsustainable idea.
And our system's unsustainable idea is debt-based fiat money.
It's flawed and it's failing. Yet nobody in power can envision a solution because the answer cuts too deeply across our entire social, political and geopolitical constructions. Each is based on infinite growth and has enshrined power based on what we call "money".
Changing the model is just too unpalatable to those who currently benefit most from the current system. Blinded by their spoils, they simply can't realize that if/when the system breaks down, they'll find mob justice offers an even worse outcome.
How To Move Forward
Help is NOT on the way. Not from our leaders, and quite frankly, not from ourselves. Too many people are not going to proactively reject society's pursuit of growth and start embracing having less stuff in their lives.
Materially reducing carbon emissions into the atmosphere would require enormous hits to the economy, lost jobs and quite possible a reduction in total global population. Nobody in politics will go anywhere remotely near that conversation.
And yet the changes are coming. In many cases, they're already here.
As I type, Hurricane Florence is stalled at the coastline of North Carolina, dramatically increasing the rainfall it is dumping there and exacerbating the flooding damage.
Is global warming to blame for the specific steering currents that brought about this path? Maybe; maybe not. But we can easily make the case that the warmer air and warmer seas of recent years result in more energy that increases hurricane intensity.
We can also easily make the case that the damage inflicted by Florence and future storms to come will be compounded by the extremely short-sighted building practices designed to maximize property values and real estate development. Wetlands and dunes that evolved to absorb storm surge have been bulldozed and paved over in the pursuit of profits. Are the resulting flooding damages worth those extra dollars (and lost ecosystems)?
Shale oil is being pumped out of the ground as fast as possible, surprisingly with no profits to be seen (collectively, the shale oil industry has been a massive loss-making enterprise so far). Drillers have to pump to simply keep the debt and equity that’s already in play in motion. Shale holes aren't being drilled and fracked because it makes sense, or because it's the right thing to do at this moment in time; but simply because all of that money printed by the Federal Reserve had to go somewhere and do something. And right now, it's flooding into the oil patch.
Any sane person should sit back, scan the ratio of mess-to-benefit provided by shale oil and shout: Stop! But apparently we “need” the jobs, the money, the oil Right Now!
That’s the nature of debt-based money. It enforces the Right Now! mentality at the expense of long-term thinking. Or even any thinking.
So changes are coming. There will be an enormous mess when this third central bank inspired credit bubble bursts and this will be the last one of this size. After this burst, there won’t be any getting around the fact that letting a few banksters fiddle with the price of money in an attempt get more borrowing to fuel even more spending was a terrible, horrible, no good idea.
Meanwhile -- as people are marveled by our shiny rising stock prices, complete with $trillion-dollar companies and price-to-earnings ratios at nosebleed highs -- the weather gets worse, more species disappear, and more people fall into lifelong debt servitude. And the hard conversations that we desperately need to be having aren't happening at all.
So, what can you do about it?
Attend to your own business. Develop resilience to become better prepared for what is surely to come. Don’t fall for the current bogus narrative. Stand fast to what you know to be true and right. Tend your garden, build your wealth, and let go of old ways.
OK, so how to do this?
In Part 2: The Easy Way To Secure A Better Future For Yourself, we highlight the specific collapse risk indicators to watch most closely, and reveal the best path for successfully adopting the behaviors that will serve you (and your loved ones) best through the next crisis.
We call this path the "easy way", not because it's simple to pursue -- but because it offers a means of avoiding the painful and very *hard* route folks who delay taking prudent action today will be utlimately forced to take.
Click here to read Part 2 of this report (free executive summary, enrollment required for full access)
This is a companion discussion topic for the original entry at https://peakprosperity.com/bad-money/
The stronger the discharge from the ionosphere the greater the coriolis effect, in effect creating a stronger hurricane. The hurricane moves across the Atlantic ocean, sometimes gaining energy due to atmospheric conditions and the Suns condition, sometimes losing energy. If it makes it to the eastern coast of America, the storm that has traveled some 8000 miles loses energy before travelling another mere 2300 miles to the west coast. Why is this?
This marked the effective end of Bretton Woods and the beginning of the US dollar as the world's reserve currency, "petro-dollar".
After this, the US lost control of gold price as it more accurately reflected true inflation. This continued over the next decade's stagflation until the US dollar was firmly entrenched as the world's reserve currency by raising rates to 18% in 1980, with the dollar at that point supported not by gold, but by the expanding American international military empire whcih basically told the rest of the world that they had to use dollars for oil, and also supported by the debt of every American and US government. Effectively, it took America 10 years to transition from a gold backed currency to a debt and military backed fiat petrocurrency.
Critical to the establishment of the US dollar was the London Gold Pool's efforts to manage the price of gold to 1) hide the massive increase of dollars this new role of the dollar would create, and 2) destroy sentiment in the gold sector to keep investors in the dollar instead, away from demanding delivery of the precious remaining physical gold supplies. This was the real beginning of the subverted paper suppression of the gold price (as opposed to the blatant pegging and convertibility to the dollar of previous decades) which was done to shift demand for gold into non-physical places to alleviate demand for physical. This has intensified up until today where gold price now has zero correlation with physical demand (and, as in pre-1970, gold is again moving against trade deficits -- China is buying it all).
After 1980, since the dollar was now a debt-backed fiat currency required for all international transactions, the US was forced to begin running massive perpetual trade deficits to supply the world with the dollars it needed.
One of the big components of this trade deficit, which dramatically picked up after 1980, was oil. The US hit Peak Oil in 1970 and oil imports which had begun in the 1940's really picked up after 1970, no doubt related to all the stagflation of that decade. After 1980 was a dip in the oil imports presumably due to the recession caused by high rates, and then after this imports were off to the races up until today.
Of course as a backdrop to all this was the 30 year bull run in treasuries as interest rates were continually dropped from 1980 to 2015 or so. This was required to stimulate GDP, government deficits, trade deficits, and support the ever-expanding debt universe of the international reseve currency; and of course, to keep investors in treasuries as their value went up with the continually decreasing rate. The short term recession this caused in 1980 was a small price to pay for establishing the US dollar.
If I ever get the time it would be interesting to put all of those above charts on one. The causation / correlation would be undeniable.