When This Runs Short, Watch Out!

Video Description

There's one thing that I think might cause a breakdown in the system of money and halt the economic expansion in its tracks. Come to learn about the critical importance of Net Energy, stay for the prediction about how an oil shortage within the next year could cause the gross experiment in money printing to come to a grinding halt.






Since this video is entirely public with no "Part 2," to continue the discussion behind the paywall, join Tuesday's private discussion here.

This is a companion discussion topic for the original entry at https://peakprosperity.com/when-this-runs-short-watch-out/

Ah yes, the old Oil Drum, I miss it.
These things are a long time coming, but they come. I position myself for my Next Incarnation.
Here is the Wrong Way, it pulls upon my bank account. Is it the panacea? Obviously not! But it has a 100km range.
Don’t like it? Prefer your V8 pickup? There are no pills for nostalgia.

Just wanted to say thanks to Chris for the COVID heads up last year or two years ago, pandemic time moves different. Nice to have your voice back. I haven’t doomed this hard since the LATOC days leading to the ‘08 crash. Alarm bells going off all over the place.

He did the Kunstler cast recently.
This is the sort of interview that if I was mentioning Chris to someone and they said, “Who the hell is Chris Martenson?” this would be a good interview to send their way.
Jim is a fun interviewer and gives Chris a lot of space to show why he’s a great information scout.
And on that note, I would like to request that when Chris does “outside” interviews we get some notification or better yet just a link on the site to those interviews.

Watching “Planet of the Humans” for the first time. Amazing. There are multiple “Crash Course” moments in it - the realization that our civilization (and the hoax of green energy) is just based on fossil fuels.

I am going to use the hoax of photovoltaics until the wheels fall off.
Sheer desperation is going to loosen the grip of Big Dolla from the throat of warm fusion and all associated miracles.
But it’s going to take time. Meanwhile, photovoltaics are going to turn my wheels.
Edit: unless the Electric Universe model is correct, and the sun is about go micronova. Then, if it moves, it is food.

CH4 (methane) is one of the building blocks of the amino acids that make up our very bodies. Its incredible how naive people are about the things they demonize. I guess that’s how you get a population to take an unproven vaccine…

We will all live in highrises like termites. It will be crowded. On the other hand party, party, party. New people to meet, more social get-togethers where humans can crack a brew with new friends and work on the CH4. I red about something called the Great Restart, the other day and think everybody should read about it and support it. Its the way of the futur and you cant fight progress.
We dont need oil because neccessary is the mother of intention.

While the weather clears, let us look at something that may make the oil problems moot.
Here is a recent discovery that supports the Electric Universe model.
This lends credence to ­Ben’s prognostication that the Next end of the world is upon us. (Is this actionable? Ben certainly thinks so. He has retreated to high ground.)
But the destruction of the Edifice of Kludges that is modern physics could also be our salvation.
The issue becomes, “How do we get this information to the other side of the disturbance?”.
The last lot tried to warn us by building a pyramid and pointing a tunnel at Sirius, the only star that does not precess with the Great Year.
“Solve this riddle”, said the Sphinx, “and you live; Fail and you die”
The riddle has been solved just as doom looms.

How is it that very smart people don’t or won’t understand peak oil?
We have had 13 years here on the ranch to become ready for what is upon us, far too many of my friends and family thought I was nuts when I pulled stakes and left Phoenix after 50 years. To me it just seems like a math problem and I am just not that good at math!
I am fascinated as to why little ol me would take action and why my really smart friends haven’t. Is it denial? I did take me about three months of research before I had my oh shit moment. As Chris points out, every bit of thinking and every decision I have made since then has been guided by that sudden realization.
Are we ready? That is really an unknown. Adapt and change is out moto. Our path has led us to a market garden model of agriculture with very little in the way of fossil fuel inputs, that path blessed us with our community that has supported it.
I feel a conviction of service, what ever cosmic force led us here seems to have set us up to feed as many as we can.
This last 13 years has been a time of very hard work and rich relationships, I have never felt more alive and connected.
Even looking into the chasm of peak oil, it’s just not that hard to feel grateful for what we have and where we live.

Will be interesting to see how this affects Brazil, since they run their cars on Ethanol.
Those empty 5 gallon gasoline containers in the garage … maybe it’s time to fill them.
Since PROFIT is the key organizing parameter for a quasi-Capitalist economy … would be interesting to see all the publicly held companies answer one simple question -
What happens to their profits when gasoline is $5 a gallon ?
What happens to their profits when gasoline is $8 a gallon ?
I know the attitude at a lot of new-tech companies is that they “won’t be affected” and that “there will be enough for us”.
When will oil prices affect people’s ability & desire to buy advertising from Google or Youtube or Facebook ?
One data point for sustainable fuels … if you run a diesel powered Expeller to extract sunflower oil from sunflower seeds, about 1/3 of your output is used to power the Expeller.
That doesn’t include all the energy to queue up tons of sunflower seed heads next to the machine.
Also doesn’t include the energy needed to arrange buckets of raw oil in the sun, to de-water them.
And the buckets are High Density Polyethylene - which sunlight degrades. So the oil presser would need to switch to metal containers in the longer run.
Personally I am interested in fuel supplements such as Gorse oil. I looked around and found -1- grad paper at an Oregon college, where they studied the practice of extracting highly flammable sap from plants like Gorse and Scotch Broom.
The US economy is ADDICTED to electricity.
The EROEI for nuclear is discussed here …
eroei nuclear - Google Search
Energy Return on Investment - World Nuclear Association
A resurgence of Nuclear seems inevitable. Maybe even Thorium.
That and little things, like me burning blackberry bushes to generate steam.
And the little details like safe storage of nuclear residues … not so much.

I remember a few years ago we had a discussion here regarding oil price…net oil return…and the economy. How these drops in economic output were linked to the cost of oil.
So when oil price is low the economy ramps up production…we have a “boom”. Then the increased demand for oil pushes prices up which puts the breaks on growth. Essentially the economy is in a constant state of trying to grow but hitting the wall of a finite resource.
That explanation makes alot of sense to me. Of course we cant discount the very real possibility of new oil discovery which would change the game completely…or some new technological discovery that would allow us to grow on much less fossil fuel. Dont forget the infamous book written by the MIT science guys in the 1970’s “limits to growth” which predicted we’d run out of arable farm land to feed the world around 2000. Turns out we’ve been able to produce much more on much less which changed the entire paradigm.
This is the problem with science and prediction, we can only perceive so many variables. The conscious human mind perceives 3 dimensions but reality may exist in 10 dimensions…or 20…or possibly an unlimited number of dimensions which our minds cannot even conceive of.
Bottomline, I dont know whats going to happen, I think the peak oil argument makes sense but I take it with a grain of salt. The goal is preparedness so how do I prepare for the unknown and the possibility of peak oil?
I work toward self sufficiency. I gauge oil shortages as a real possibility so I heat with wood, I have some back-up hand tools with which I could run my farm at a low output if necessary. I have the following “preps” in place;

  1. Hand saws to replace my chainsaw [ I love silky saws ]
  2. A couple of scythes with replacement blades and sharpening tools. This would allow me to make small batches of hay with which I could maintain a cow and calf, maybe a few sheep too.
  3. A simple pump for my well [ no power, no water ]
  4. a 240 gallon diesel storage tank [ this would allow me, ‘theoretically’, to use my tractors for 2-3 years during a shortage. In reality the odds that nothing would break down on the tractor or that parts would be available in such a world seems unlikely…but, hey, its worth a try ].
  5. A drafty “cob” type horse. We have a thick bodied “cob” style horse. I work with her on pulling now and then. For pulling logs out of the woods, plowing gardens, or just about anything, horses like this would become invaluable. In fact its hard to even find drafty breeds anymore. Ideally, at some point I’d like to get some horse drawn haying equipment and do small batches with her.
  6. Community. In a way this is now our weak point as we have moved very recently to a new homestead. I spent 11 years building “capital” with good neighbors and thats all lost now. It starts with a hello, a willingness to listen, and a generous spirit…at least I know that much.
  7. Spirituality. This is the key stone to resilience and it is my opinion that nobody can overcome real hardship without a strong faith in a higher power. In fact I’d go so far as to say that a person of strong faith can still persevere in ABSENCE of all or most of the other things. This is the most important element of resilience and sadly the one least discussed, least understood, and least valued.
    If you dont believe that there is a purpose for you and yours, some plan by some benevolent universal force… the pressures of going against the grain to survive will break your spirit. Look at the people lining up to get vaxxed by a drug they know nothing about…even those who say they dont want it cannot withstand the social pressures and they cave. Well in a life or death situation, multiply those pressures by 10.
    If you look into the study called “blue zones” where they focus on the longest lived people, their habits and traits, they find certain things in common in all of them.
  8. They live close to the earth [ grow a portion of their own food, work outdoors etc ]
  9. Strong family and community ties
  10. Strong faith in a higher power
    Those are the keys to survival on many levels.

Brushhog said - “Turns out we’ve been able to produce much more on much less which changed the entire paradigm.”
Oh but we haven’t. We have compromised the full spectrum of nutrition of food stocks for both humans and animals and introduced deadly toxins throughout the process together which has generated an exponential increase in chronic disease and infertility. spelling the extinction of humans within a generation even without peak oil, climate change, or anything else. Other than that everything is peachy.
This is a prime example of human hubris, believing we can do things better than nature. Since you believe that I take it you are fully vaxed?

There will be many problems resulting from shortages and escalating prices, but most concerning to me is how people react. I don’t think it will be pretty. People are more likely to view one another as competition and enemies, than as allies to work in cooperation with.

  1. “To summarize. In an amazingly short period of time, the world has made an irreversible bet on green energy sources - solar, wind, and biofuels - being able to shoulder much of its energy burden. This is a transition without a track record and a very spotty roadmap of implementation. Time will tell if this bet will pay off. If my judgment is correct, we won’t have long to find out.”

I wonder if some of the inaction and refusal to see situations happen relate to this. I am not at any way trained in this type of thing but having been in quite a few dangerous situations over the years and being a people watcher at heart I’d see people acting in ways that I would say fit this.

Re: the CEOs of the Big Oil companies, I suspect that not only do they attend WEF / Davos, but they actually set the agenda. And conceal their true intent by using puppets to push phony green agendas.

So the plan is: invade Iran. Invade Venezuela. Glaciers melting means now they can drill under the Arctic Sea. IOW, do whatever it takes to keep the monopoly going; do not allow the production of energy / electricity (or food) to be decentralized.

"Oh but we haven't. We have compromised the full spectrum of nutrition of food stocks for both humans and animals and introduced deadly toxins throughout the process together which has generated an exponential increase in chronic disease and infertility. spelling the extinction of humans within a generation even without peak oil, climate change, or anything else. Other than that everything is peachy."
My point was that they failed to predict it. The prediction from the science "in" crowd..."MIT" the gold standard of the modern, scientific intelligentsia predicted famine...shortages....the inability to feed the population. They were wrong. That was my point regarding predictions based on known variables using a scientific method. It usually doesnt work. Why? Because the number of variables, how they all interact, and etc is not known and cannot be calculated accurately by any known method. Predicting the "extinction" of humanity "within a generation"? You should help yourself to a big chunk of humble pie when making those kinds of predictions.  
"This is a prime example of human hubris, believing we can do things better than nature. Since you believe that I take it you are fully vaxed?"
The hubris is in believing that "we" and nature exist independently and that somehow we can manage and predict nature...[even our own ]. History has shown, empirically, that we cannot.

My instincts tell me that the pending oil crisis is the foundational reason for the plandemic. Oil price increases as suggested will create a crisis of unimaginable scale, resulting in a ‘global spring’. Social unrest everywhere will begin and escalate rapidly. People are already well primed with fear. Shortages and hyperinflation, especially for food, will push most over the edge into panic mode. That panic will spread like wildfire. People will find themselves desperate, in survival mode. What that looks like will depend on where they live.
The oligarchs know this, have anticipated this, have been readying for this for a long time. They knew we would hit the wall of finite resources. They kept the illusion going as long as they could, the latest being fracking and shale oil. They succeeded in keeping us lulled into a [false] sense of all is well in the world, party on people!
They are electing to cull the population via the virus/vaccines, rather than let this happen on its own, knowing what is likely to happen in the near term if they do not do something drastic. Perhaps they do have an altruistic side after all? Although I still believe there is also a eugenics rationale involved.

There is no coincidence in my mind that the pandemic is happening as the fracking illusion popped. Gail Tverberg has valid insights re the oil supply side of things. https://ourfiniteworld.com/2021/05/27/dont-expect-the-world-economy-to-resume-its-prior-growth-pattern-after-covid-19/ an excerpt from this last link:
[b] Create a “fear of the coronavirus” story, and use it to keep people inside and away from traveling as much as possible. Emphasize the possibility of mutations. If people cut back on traveling, it saves oil. If they cut back on eating out and large celebrations such as weddings, it reduces food wastage. If a pandemic takes place, politicians can use it as an excuse to mitigate problems of many kinds:
  • Reduce the need for imported oil, by keeping citizens at home
  • Keep factories closed, without disclosing that the factories could not really operate at full capacity because of inadequate orders or missing raw materials
  • Use shutdowns to keep order in areas disrupted by uprisings related to low wages
  • Hide the problem of many failing stores and businesses behind a new “temporary” problem
  • Give the politician a new sense of control with new rules related to the epidemic
It is disturbing that back in 2010, the Rockefeller Foundation was looking at using pandemics to control people when the foundation was examining possible workarounds for too large a population relative to resources.
Canadian Matthew Ehret, who I follow extensively, has great insights as well: https://orientalreview.org/2019/07/31/the-genocidal-roots-of-the-green-new-deal-the-limits-to-growth-and-the-unchaining-of-prometheus/
When I step back and look at it all in totality, I think that the elites are doing several things to mitigate the oil endgame which is now manifesting for real: massive depopulation via the vaccines, control of the masses via emergency declarations that override democratic rule enabling indiscriminate lock downs and other measures to control us, further lock downs related to resource depletion but saying it is related to climate, and finally, the shift to transhumanism. If you doubt this last part, take a look at this publication from the Government of Canada:
Brushog is correct in saying that spirituality is a necessary key part of survival strategy. Developing a 'deep pantry' of mental, emotional and spiritual resilience will be just as important as the farming and food stores. After all, the farm will not function, the gardens will not grow, and the food will not get processed and consumed if we become mentally unhinged and unable to cope.
There is no question in my mind that we are approaching the climax of this Fourth Turning. Those of us who have advanced knowledge of possible scenarios and choose to act on that information now have a better chance of getting through what lay ahead than those who are living in blissful ignorance.

Here is my thinking. According to Richard Werner “money” (credit) is created by the banks (https://www.youtube.com/watch?v=u8j51XZegsk) and according to Jeff Snider & Emil Kolanowski the Fed doesn’t print money, but does an asset swap and the resulting reserves on the banks balance sheet are better thought of as something like laundry tokens, great if your a laundromat, but not so useful for the general economy. (https://alhambrapartners.com/2021/06/18/eurodollar-universitys-making-sense-episode-82-part-1-federal-reserve-is-not-a-central-bank/). Thus in order to create “money” in our current economy banks have to make loans and again accord to Snider most of this occurs in the offshore unregulated Eurodollar system (estimated through TIC data), because, well, it is unregulated and as Bill Black indicates bankers incentive to make a loan is from the fees they collect not so much with what will happen to the loan or the bank. (https://www.ted.com/talks/william_black_how_to_rob_a_bank_from_the_inside_that_is). After 2008 crises, which was a crises in the value of collateral backing up the “dollars” (credit) created in the eurodollar system, even though regulators eliminated the mark to market requirement so banks could value the collateral at what ever they needed it to be, the trust was lost and surprise, surprise, surprise, bankers don't trust each others valuation of their collateral and now rush back to the most liquid collateral, on the run treasuries, whenever there is any sort of stress on the system. In fact there is currently so much demand for treasuries that the Fed has to offer reverse repo to keep short term treasury rates going negative and blowing up the Money market funds. (https://www.sgtreport.com/2021/06/with-reverse-repos-the-fed-is-now-trying-to-clean-up-its-own-mess/). Remember higher demand lower yields. Then there is the actual economy, while dramatically improved from last year, small businesses, which provide most of the income growth are still getting killed and we are nowhere near back to “normal”, which back in 2019 was not looking that good to begin with. So why the higher prices? I believe most is do to just in time supply chains failing and a cascading effect throughout the economy especially here in the US where we’ve outsourced just about everything we can. Speculators seeing this have jumped in driving up prices and making the situation worse. Then there is the shut downs forcing everyone into monopolies as they were the only ones allowed to operate. Just like credit cards offering you that cash back, we all know it is ultimately coming out of our pocket, but except in a few cases such as gas where you can buy it for 10% less with cash, they have a monopoly with no alternatives. The same is true for the “free” shipping and great deals you get on Amazon while it charges the sellers 25% fees. That is only possible with a monopoly and it comes out of your pocket via higher prices, because sellers are forced to sell through the platform. The same holds true for education, healthcare, etc. Hell, Mat Stoller even indicates it applies all the way to things such as cheerleading where Bain Capital has a monopoly (https://mattstoller.substack.com/p/how-a-cheerleading-monopolist-played). As we know from the failure of Bill Gates monopolies to improve Ag (https://vandanashivamovie.com/) with ~70% of food being produced by small farms or the SolarWinds security debacle (https://mattstoller.substack.com/p/how-to-get-rich-sabotaging-nuclear), economies of scale haven’t played out so well and the actual rate of production growth is down thus putting more stress on the system by not producing sufficient collateral to back up all that credit growth.

Now there is no doubt that oil is the key to running our system and we are, as Chris clearly demonstrates, at a turning point where supply will no longer meet demand at least if the economy keeps growing. I believe in the middle of last year Art Berman predicted that because of lack of investment (people tired of loosing money) that oil would get to around $80 at this point. Gail Tverberg estimates it will take $120 oil to make the offline production profitable and that it is unrealistic to expect alternatives to fill the gap (https://ourfiniteworld.com/). Nate Hagen points out that because industries have leveraged cheap oil to allow their inefficient processes to produce inexpensive products, think industrial Ag, that they are extremely sensitive to rises in prices, thus our economy can’t operate for long at oil prices higher than they currently are. (https://www.postcarbon.org/energy-money-and-technology-from-the-lens-of-the-superorganism/). So Gail postulates that rather than a steady increase in oil prices due to insufficient supply, we will get an unstable system which wildly fluctuates between the extremes, which depend on how well the industry can absorb the shocks at the moment. I suspect currently not all the well, so I’m not betting on the oil price rising much more, though if I was, I would be looking at Art Berman’s models for conformation. While definitely not an economist, I suspect expectations have gotten over the tips of their skis on this one and that we will see short term, the market and commodities face plant as bond yields and a strengthening dollar imply. The dollar will continue its downward trajectory overall, but relative to other world currencies I think at the moment it has gone too far because compared to the rate it was being created in the Eurodollar system its growth rate has been curtailed for lack of trusted collateral and no matter what the Wizard (Fed) says they are not really in control, though they can, with the help of the treasury and the companies that actually control the market Blackrock, Vangard & State St (https://www.thinkadvisor.com/2020/11/30/group-aims-to-limit-power-of-blackrock-vanguard-state-street/a0 influence asset prices and thus (collateral values) liquidity in the market. Love to see what people who understand the economy much better than I think.