Over the last few weeks, a number of regular readers of
The Archdruid Report have asked me what I think about the recent plunge in the price of oil and the apparent end of the fracking bubble. That interest seems to be fairly widespread, and has attracted many of the usual narratives; the blogosphere is full of claims that the Saudis crashed the price of oil to break the US fracking industry, or that Obama got the Saudis to crash the price of oil to punish the Russians, or what have you.
I suspect, for my part, that what’s going on is considerably more important. To start with, oil isn’t the only thing that’s in steep decline. Many other major commodities—coal, iron ore, and copper among them—have registered comparable declines over the course of the last few months. I have no doubt that the Saudi government has its own reasons for keeping their own oil production at full tilt even though the price is crashing, but they don’t control the price of those other commodities, or the pace of commercial shipping—another thing that has dropped steeply in recent months.
What’s going on, rather, is something that a number of us in the peak oil scene have been warning about for a while now. Since most of the world’s economies run on petroleum products, the steep oil prices of the last few years have taken a hefty bite out of all economic activities. The consequences of that were papered over for a while by frantic central bank activities, but they’ve finally begun to come home to roost in what’s politely called “demand destruction”—in less opaque terms, the process by which those who can no longer afford goods or services stop buying them.
That, in turn, reminded me of the last time prolonged demand destruction collided with a boom in high-priced oil production, and sent me chasing after a book I read almost three decades ago. A few days ago, accordingly, the excellent interlibrary loan service we have here in Maryland brought me a hefty 1985 hardback by financial journalist Philip Zweig, with the engaging title Belly Up: The Collapse of the Penn Square Bank. Some of my readers may never have heard of the Penn Square Bank; others may be scratching their heads, trying to figure out why the name sounds vaguely familiar. Those of my readers who belong to either category may want to listen up, because the same story seems to be repeating itself right now on an even larger scale.
The tale begins in the middle years of the 1970s, when oil prices shot up to unprecedented levels, and reserves of oil and natural gas that hadn’t been profitable before suddenly looked like winning bets. The deep strata of Oklahoma’s Anadarko basin were ground zero for what many people thought was a new era in natural gas production, especially when a handful of deep wells started bringing in impressive volumes of gas. The only missing ingredient was cash, and plenty of it, to pay for the drilling and hardware. That’s where the Penn Square Bank came into the picture.
The Penn Square Bank was founded in 1960. At that time, as a consequence of hard-earned suspicions about big banks dating back to the Populist era, Oklahoma state banking laws prohibited banks from owning more than one branch, and so there were hundreds of little one-branch banks scattered across the state, making a modest return from home mortgages, auto loans, and the like. That’s what Penn Square was; it had been organized by the developer of the Penn Square shopping mall, in the northern suburbs of Oklahoma City, to provide an additional draw to retailers and customers. There it sat, in between a tobacconist and Shelley’s Tall Girl’s Shop, doing ordinary retail banking, until 1975.
In that year it was bought by a group of investors headed by B.P. “Beep” Jennings, an Oklahoma City banker who had been passed over for promotion at one of the big banks in town. Jennings pretty clearly wanted to prove that he could run with the big dogs; he was an excellent salesman, but not particularly talented at the number-crunching details that make for long-term success in banking, and he proceeded to demonstrate his strengths and weaknesses in an unforgettable manner. He took the little shopping mall bank and transformed it into a big player in the Oklahoma oil and gas market, which was poised—or so a chorus of industry voices insisted—on the brink of one of history’s great energy booms.
Now of course this involved certain difficulties, which had to be overcome. A small shopping center bank doesn’t necessarily have the financial resources to become a big player in a major oil and gas market, for example. Fortunately for Beep Jennings, one of the grand innovations that has made modern banking what it is today had already occurred; by his time, loans were no longer seen as money that was collected from depositors and loaned out to qualified borrowers, in the expectation that it would be repaid with interest. Rather, loans were (and are) assets, which could (and can) be sold, for cash, to other banks. This is what Penn Square did, and since their loans charged a competitive interest rate and thus promised competitive profits, they were eagerly snapped up by Chase Manhattan, Continental Illinois, Seattle First, and a great many other large and allegedly sophisticated banks. So Penn Square Bank started issuing loans to Oklahoma oil and gas entrepreneurs, a flotilla of other banks around the country proceeded to fund those loans, and to all intents and purposes, the energy boom began.
At least that’s what it looked like. There was a great deal of drilling going on, certainly; the economists insisted that the price of oil and gas would just keep on rising; the local and national media promptly started featuring giddily enthusiastic stories about the stunning upside opportunities in the booming Oklahoma oil and gas business. What’s more, Oklahoma oil and gas entrepreneurs were spending money like nobody’s business, and not just on drilling leases, steel pipe, and the other hardware of the trade. Lear jets, vacation condos in fashionable resorts, and such lower-priced symbols of nouveau richesse as overpriced alligator-hide cowboy boots were much in evidence; so was the kind of high-rolling crassness that only the Sunbelt seems to inspire. Habitués of the Oklahoma oilie scene used to reminisce about one party where one of the attendees stood at the door with a stack of crisp $100 bills in his hand and asked every woman who entered how much she wanted for her clothes: every stitch, then and there, piled up in the entry. Prices varied, but apparently none of them turned down the offer.
It’s only fair to admit that there were a few small clouds marring the otherwise sunny vistas of the late 1970s Oklahoma oil scene. One of them was the difficulty the banks buying loans from Penn Square—the so-called “upstream” banks—had in getting Penn Square to forward all the necessary documents on those loans. Since their banks were making loads of money off the transactions, the people in charge at the upstream banks were unwilling to make a fuss about it, and so their processing staff just had to put up with such minor little paperwork problems as missing or contradictory statements concerning collateral, payments of interest and principal, and so on.
Mind you, some of the people in charge at those upstream banks seem to have had distinctly personal reasons for not wanting to make a fuss about those minor little paperwork problems. They were getting very large loans from Penn Square on very good terms, entering into partnerships with Penn Square’s favorite oilmen, and in at least some cases attending the clothing-optional parties just mentioned. No one else in the upstream banks seems to have been rude enough to ask too many questions about these activities; those who wondered aloud about them were told, hey, that’s just the way Oklahoma oilmen do business, and after all, the banks were making loads of money off the boom.
All in all, the future looked golden just then. In 1979, the Iranian revolution drove the price of oil up even further; in 1980, Jimmy Carter’s troubled presidency—with its indecisive but significant support for alternative energy and, God help us all, conservation—was steamrollered by Reagan’s massively funded and media-backed candidacy. As the new president took office in January of 1981, promising “morning in America,” the Penn Square bankers, their upstream counterparts, their clients in the Oklahoma oil and gas industry, and everyone else associated with the boom felt confident that happy days were there to stay. After all, the economists insisted that the price of oil and gas would just keep rising for decades to come, the most business-friendly and environment-hostile administration in living memory was comfortably ensconced in the White House; and investors were literally begging to be allowed to get a foot in the door in the Oklahoma boom. What could possibly go wrong?
Then, in 1981, without any fuss at all, the price of oil and natural gas peaked and began to decline.
In retrospect, it’s not difficult to see what happened, though a lot of people since then have put a lot of effort into leaving the lessons of those years unlearnt. Energy is so central to a modern economy that when the price of energy goes up, every other sector of the economy ends up taking a hit. The rising price of energy functions, in effect, as a hidden tax on all economic activity outside the energy sector, and sends imbalances cascading through every part of the economy. As a result, other economic sectors cut their expenditures on energy as far as they can, either by conservation measures or by such tried and true processes as shedding jobs, cutting production, or going out of business. All this had predictable effects on the price of oil and gas, even though very few people predicted them.
As oil and gas prices slumped, investors started backing away from fossil fuel investments, including the Oklahoma boom. Upstream banks, in turn, started to have second thoughts about the spectacular sums of money they’d poured into Penn Square Bank loans. For the first time since the boom began, hard questions—the sort of questions that, in theory, investors and bankers are supposed to ask as a matter of course when people ask them for money—finally got asked. That’s when the problems began in earnest, because a great many of those questions didn’t have any good answers.
It took until July 5, 1982 for the boom to turn definitively into a bust. That’s the day that federal bank regulators, after several years of inconclusive fumbling and a month or so of increasing panic, finally shut down the Penn Square Bank. What they discovered, as they dug through the mass of fragmentary, inaccurate, and nonexistent paperwork, was that Penn Square had basically been lending money to anybody in the oil and gas industry who wanted some, without taking the trouble to find out if the borrowers would ever be able to repay it. When payments became a problem, Penn Square obligingly loaned out the money to make their payments, and dealt with loans that went bad by loaning deadbeat borrowers even more money, so they could clear their debts and maintain their lifestyles.
The oil and gas boom had in fact been nothing of the kind, as a good many of the firms that had been out there producing oil and gas had been losing money all along. Rather, it was a Ponzi scheme facilitated by delusional lending practices. All those Lear jets, vacation condos, alligator-skin cowboy boots, heaps of slightly used women’s clothing, and the rest of it? They were paid for by money from investors and upstream banks, some of it via the Penn Square Bank, the rest from other banks and investors. The vast majority of the money was long gone; the resulting crash brought half a dozen major banks to their knees, and plunged Oklahoma and the rest of the US oil belt into a savage recession that gripped the region for most of a decade.
That was the story chronicled in Zweig’s book, which I reread over a few quiet evenings last week. Do any of the details seem familiar to you? If not, dear reader, you need to get out more.
As far as I know, the fracking bubble that’s now well into its denouement didn’t have a single ineptly run bank at its center, as the Oklahoma oil and gas bubble did. Most of the other details of that earlier fiasco, though, were present and accounted for. Sky-high fuel prices, check; reserves unprofitable at earlier prices that suddenly looked like a winning deal, check; a media frenzy that oversold the upside and completely ignored the possibility of a downside, check; vast torrents of money and credit from banks and investors too dazzled by the thought of easy riches to ask the obvious questions, check; a flurry of drilling companies that lost money every single quarter but managed to stay in business by heaping up mountains of unpayable debt, check. Pretty much every square on the bingo card marked “ecoomic debacle” has been filled in with a pen dipped in fracking fluid.
Now of course a debacle of the Penn Square variety requires at least one other thing, which is a banking industry so fixated on this quarter’s profits that it can lose track of the minor little fact that lending money to people who can’t pay it back isn’t a business strategy with a long shelf life. I hope none of my readers are under the illusion that this is lacking just now. With interest rates stuck around zero and people and institutions that live off their investments frantically hunting for what used to count as a normal rate of return, the same culture of short-term thinking and financial idiocy that ran the global economy into the ground in the 2008 real estate crash remains firmly in place, glued there by the refusal of the Obama administration and its equivalents elsewhere to prosecute even the most egregious cases of fraud and malfeasance.
Now that the downturn in oil prices is under way, and panic selling of energy-related junk bonds and lower grades of unconventional crude oil has begun in earnest, it seems likely that we’ll learn just how profitable the fracking fad of the last few years actually was. My working guess, which is admittedly an outsider’s view based on limited data and historical parallels, is that it was a money-losing operation from the beginning, and looked prosperous—as the Oklahoma boom did—only because it attracted a flood of investment money from people and institutions who were swept up in the craze. If I’m right, the spike in domestic US oil production due to fracking was never more than an artifact of fiscal irresponsibility in the first place, and could not have been sustained no matter what. Still, we’ll see.
The more immediate question is just how much damage the turmoil now under way will do to a US and global economy that have never recovered from the body blow inflicted on them by the real estate bubble that burst in 2008. Much depends on exactly who sunk how much money into fracking-related investments, and just how catastrophically those investments come unraveled. It’s possible that the result could be just a common or garden variety recession; it’s possible that it could be quite a bit more. When the tide goes out, as Warren Buffet has commented, you find out who’s been swimming naked, and just how far the resulting lack of coverage will extend is a question of no small importance.
At least three economic sectors outside the fossil fuel industry, as I see it, stand to suffer even if all we get is an ordinary downturn. The first, of course, is the financial sector. A vast amount of money was loaned to the fracking industry; another vast amount—I don’t propose to guess how it compares to the first one—was accounted for by issuing junk bonds, and there was also plenty of ingenious financial architecture of the sort common in the housing boom. Those are going to lose most or all of their value in the months and years ahead. No doubt the US government will bail out its pals in the really big banks again, but there’s likely to be a great deal of turmoil anyway, and midsized and smaller players may crash and burn in a big way. One way or another, it promises to be entertaining.
The second sector I expect to take a hit is the renewable energy sector. In the 1980s, as prices of oil and natural gas plunged, they took most of the then-burgeoning solar and wind industries with them. There were major cultural shifts at the same time that helped feed the abandonment of renewable energy, but the sheer impact of cheap oil and natural gas needs to be taken into account. If, as seems likely, we can expect several years of lowerr energy prices, and several years of the kind of economic downdraft that makes access to credit for renewable-energy projects a real challenge, a great many firms in the green sector will struggle for survival, and some won’t make it.
Those renewable-energy firms that pull through will find a substantial demand for their services further down the road, once the recent talk about Saudi America finds its proper home in the museum of popular delusions next to perpetual motion machines and Piltdown Man, and the US has to face a future without the imaginary hundred-year reserve of fracked natural gas politicians were gabbling about not that long ago. Still, it’s going to take some nimble footwork to get there; my guess is that those firms that get ready to do without government subsidies and tax credits, and look for ways to sell low-cost homescale systems in an era of disintegrating energy infrastructure, will do much better than those that cling to the hope of government subsidies and big corporate contracts.
The third sector I expect to land hard this time around is the academic sector. Yes, I know, it’s not fashionable to talk of the nation’s colleges and universities as an economic sector, but let’s please be real; in today’s economy, the academic industry functions mostly as a sales office for predatory loans, which are pushed on unwary consumers using deceptive marketing practices. The vast majority of people who are attending US universities these days, after all, will not prosper as a result; in fact, they will never recover financially from the burden of their student loans, since the modest average increase in income that will come to those graduates who actually manage to find jobs will be dwarfed by the monthly debt service they’ll have to pay for decades after graduation.
One of the core reasons why the academic industry has become so vulnerable to a crash is that most colleges and universities rely on income from their investments to pay their operating expenses, and income from investments has taken a double hit in the last decade. First, the collapse of interest rates to near-zero (and in some cases, below-zero) levels has hammered returns across the spectrum of investment vehicles. As a result, colleges and universities have increasingly put their money into risky investments that promise what used to be ordinary returns, and this drove the second half of the equation; in the wake of the 2008 real estate crash, many colleges and universities suffered massive losses of endowment funds, and most of these losses have never been made good.
Did the nation’s colleges and universities stay clear of the fracking bubble? That would have required, I think, far more prudence and independent thinking than the academic industry has shown of late. Those institutions that had the common sense to get out of fossil fuels for ecological reasons may end up reaping a surprising benefit; the rest, well, here again we’ll have to wait and see. My working guess, which is once again an outsider’s guess based on limited data and historical parallels, is that a great many institutions tried to bail themselves out from the impact of the real estate bust by doubling down on fracking. If that’s what happened, the looming crisis in American higher education—a crisis driven partly by the predatory loan practices mentioned earlier, partly by the jawdropping inflation in the price of a college education in recent decades, and partly by rampant overbuilding of academic programs—will be hitting shortly, and some very big names in the academic industry may not survive the impact.
186 comments:
12/17/14, 5:53 PM
John Michael Greer said...
12/17/14, 5:58 PM
Sixbears said...
I'm not going to get much of a financial bounce from lower oil prices as I've greatly cut back on how much I use.
Have you seen that many people are now buying big SUVs like low fuel prices will stay low forever? They won't stay low for the life of an average car loan.
This really gets the clock running. Now that the process is well underway we only have so many months to get our business in order.
I've no illusion that the problems won't affect me. As it is, much of my retirement income comes from a source that never fully recovered from the collapse of the tech bubble.
Of course, few of us live in isolation from the rest of humanity. There will be plenty of suffering all around before this is done.
We'll be lucky to avoid another world war.
12/17/14, 6:03 PM
Tom Bannister said...
https://www.youtube.com/watch?v=ZnHmskwqCCQ
If you haven't heard the tune, you'll see what I mean ;-)
12/17/14, 6:08 PM
Doctor Westchester said...
Thanks for this insightful analysis! Many bloggers in the alternative economic analysis scene have now noticed the bursting fracking bubble and have written posts describing details of the bust that for me and many of your other readers are quite old hat.
I'm most interested in how this bust will influence how people will perceive our future in regards to our energy situation and the story of perennial growth. I recognize that for most adults it is likely to have no effect at all in their beliefs, and the greatest change will occur in our children's perceptions as observed realities and the stories we tell ourselves undeniably diverge. It will sad and interesting to see what changes in perception and stories will occur in the oncoming years.
12/17/14, 6:27 PM
Merle Langlois said...
JMG the way you spell it out for us is glorious. The way you combine hard facts with a human nature revealed through history is glorious. See ya.
12/17/14, 6:30 PM
The Geographist said...
At any rate, I'm afraid my home province is about to get clobbered worse than it has at any point in my memory. I can only hope that this might at last lance the insane housing bubble we've got here as a side effect - If I were so inclined, I think I could have made good money developing a concept for a TV show called "It's worth WHAT?" featuring American's reactions to Canadian real estate prices!
12/17/14, 6:39 PM
Kathleen Quinn said...
But I can’t tell you how many times in more recent years I have had to justify our family’s approach to our kids’ higher education: figure out what you want to do, the figure out who can best teach you what you need to know, learn it, then go do it. But first, get a trade. But that word--“trade”—it has such a powerful effect on members of the educated middle class. Never mind that most folks of reasonable intelligence can get themselves a great liberal arts education with nothing but a library card. Never mind that the tradesfolks I know make a bundle, and work when they want to, and write their own ticket. Insisting that my kids take up a trade, even if only to subsidize the rest of their education, makes me some sort of class traitor. Maybe I’ll have more company in this category, in the near future.
(As for the fracking bubble, we’ve had good news here in New York State today—the governor is to ban fracking, after years of dithering. Of course, to balance it out, we’ll add more casinos. Two steps forward, one step back I guess.)
Thanks for another good one!
12/17/14, 6:41 PM
magicalthyme said...
I know I'm going ahead with re-insulating part of my roof where the old insulation fell apart.
Next year hopefully will be heat pumps for me, along with additional interior storm windows. And expanding the garden.
Disconnecting from the system as much as I can, when I can, where I can.
Mary
12/17/14, 6:49 PM
matt m said...
In other words, understanding is not the problem - it's a more fundamental aspect of human behavior that drives us to discount the future to the point that we make terrible long term decisions. If true, what does it say about the project of your blog (or any other project out there with the aim of educating)? Knowledge is necessary, but not necessarily sufficient. Will enough people act in their own long term interest even with all the information they need academically?
Seems like an important question because your idea of voluntary poverty now to beat the rush (and preserve some cushion for learning pains) is incompatible with the human tendency to maximize relative advantage today.
12/17/14, 6:54 PM
magicalthyme said...
Mary
Mary
12/17/14, 6:58 PM
Nathan Donaldson said...
In colonial Williamsburg I was at the shoemaker's shop & he said the town usually had at least a dozen places to buy shoes. That seemed like a lot to me so I asked him just how often a typical person would buy a pair back then. He said four, in order to keep up with fashion. It was important not to look out of date and poor when trying to get a loan for tobacco seeds or land.
And I thought: dear Lord, fake it until you make it has been with us from the very beginning.
Also, after seeing the western frack boom first hand it's obvious that some commercial real estate loans are going to take a hit. The workers do not live in real houses or towns, but instead crash in motel rooms for long stretches and then commute home hundreds of miles away for a few days. Theses places are among the most deplorable I've seen across a country full of deplorable places.
12/17/14, 7:01 PM
John Michael Greer said...
Tom, I've been sufficiently disconnected from media for long enough that I had to go look up the tune...
Doctor W., well, yes -- I knew while I was writing this that regular readers of this blog would say, "Oh, okay, so it's finally here."
Merle, given that Alberta tar sand extractives are about the only form of crude oil in the planet that's more expensive to extract than American fracked oil, yes, I'd be concerned, too.
Geographist, an insane housing bubble on top of an insane oil bubble -- yeah, not a pretty sight. Too bad you missed out on the TV show idea -- you might try one in a few years called "Riches to Rags," where you interview former Alberta oil barons who are living in tarpaper shacks...
Kathleen, good for you! Making sure your kids have a trade -- that is to say, an actual, marketable skill that enables them to be something other than disposable office fauna -- is a very sound idea, and one for which they'll be grateful in the years to come. I heard about New York's ban -- I noticed also that Cuomo waited until the bottom dropped out of the fracking bubble to proclaim it, which was clever. At this point the fracking industry will be too busy filing bankruptcy papers to have the spare time to hassle the state government about the ban.
12/17/14, 7:09 PM
John Michael Greer said...
Matt, it's fashionable these days to insist that the idiotic habits common in America these days are somehow hardwired into human nature, but that won't stand up to examination -- many cultures all over the world have had far more prudent behavior patterns. It's simply that just now, in certain corners of the industrial world, a certain number of people (most of them privileged) have convinced themselves that nothing bad can actually happen to them, and are behaving in ways that are guaranteed to land them in misery in the not too distant future. Blaming human nature for that choice -- and of course it is a choice -- may be comforting but it's not helpful.
Magicalthyme, yes, and I was just talking about the senility of the elites, wasn't I?
Nathan, there'll be plenty of pain to go around, no question. As for fake it 'til you make it, well, yes -- the colonies, and later the US, was where Europe dumped all its ne'er-do-wells and low-budget con artists, you know.
12/17/14, 7:19 PM
Cherokee Organics said...
Yes: "you can observe a lot by watching" (Yogi Berra). Smart guy.
Mourning in America... I can’t have been the only person to think of that?
I have had a strong suspicion that the Saudi's are turning up the volume of flows from their wells because it is an expedient method of reducing funding and reach for the Islamic State insurgency whom are reliant on oil revenues.
At the same time, lower prices for oil brings the chooks home to roost in the fracking game. If it is only sustainable at high oil prices, the companies themselves are funded by debt and lease commitments - both of which have to be serviced regardless - then clearly lower oil prices are not good for them or the US economy.
But there is the bind; both situations are contrary to US interests. Perhaps there is no easy road to take as all choices have costs.
There is a lack of flexibility in debt arrangements, I’ve noticed here that up north in the drought affected areas there has been much talk of farm repossessions by the banks and government loans to farmers. What is meant by the term poisoned chalice? Still, banks can’t run farms.
I sort of reckon that given the natural systems on this planet use the suns energy and manage to convert about 2% (someone please correct me if I'm wrong on that figure) of that energy into other forms after a few hundred million years of evolution, then that really is about the best we can ever achieve on a long term basis (2% of the available sunlight as energy, not a 2% return).
To achieve anything more represents us eating our infrastructure whether it is natural or manmade. And once that infrastructure is gone, it isn’t easily replaced.
Sun Tzu warned about destroying a countries infrastructure and rather promoted the idea of taking it “whole”. Who would have thought that some dude 3,000 years gone has some fascinating insights into our current woes?
Sun Tzu the master wrote all those years ago: "For, while quick accomplishment has been known to give victory to the unskilful, the skilful general has never gained advantage from lengthy operations. In fact, there has never been a country which has benefited from a prolonged war."
Sound familiar to anyone? It should as our entanglement in the web that is the Middle East is a disaster. I would have to guess that he might say that it saps both our treasuries and our spirits.
Another ripper quote: "he who is ignorant of the enemy, and fixes his eyes only on his own side, conquers, and the next time is defeated; he who is ignorant of the enemy, but also of his own resources, is invariably defeated."
Wise words. I noted he appreciated disenssus in his strategies: "If a victory be gained by a certain stratagem, do not repeat it. Vary the stratagem according to circumstances."
But what I found chilling was the quote: "If the enemy be at rest in comfortable quarters, harass him; if he be living in plenty, cut off his supplies; if sitting composedly awaiting attack, cause him to move".
Sun Tzu, that guy knows people's hearts and motivations.
Cheers
Chris
12/17/14, 7:23 PM
Dujinthehiker said...
I would add two elements to your thesis, which will only magnify its import. First, we cannot forget the power of fear in these things. I remember well the oil embargo of 1973, gas station lines, people being shot, and in the context of such fear all sorts of predatory and evil creatures emerge to feast. Compared to the 70s the current period is like the 70s fears on steroids - NSA, Russia, Warming, Terrorism, Ebola, Police....the list is long. When a people is terrified their logic deserts them.
I would add as well that the high prices that brought us fracking also brought us highly costly arctic and deep water projects and these too will be set aside for a period of time. Jobs will end. Equipment will decay and rust so when it is eventually used terrible accidents will occur.
And I have recently had this thought that wonders how many of the Fed's $ 4 trillion of QE have gone straight to this fracking bubble, the student loan bubble, the auto loan bubble. In other words, has the Fed in its effort to keep the system running only made much larger and more terrible the bubbles we now know will burst?
I expect you will get to it but at some point your excellent analysis needs to move toward solutions, as in, what can we do? I know the list is long. I suggest you look at a story in the blog real economics concerning spending $ 100 trillion worldwide to move us to a sustainable mostly non fossil fuel power system in the coming two or three decades. In addition to helping with global warming, such a solution makes sense in and of itself as a way to put us all back to work, to get us off a militarized empire struggle, and perhaps find a way to print and use money that goes into the hands of the working man and woman and not the financial handlers....it's exactly the kind of big simple idea that entirely avoids pro and anti warming arguments, left and right arguments. It is an idea that is doable and limited only by those many who will always remain in the "no department" and argue against any solution. A one hundred trillion future - sustainable, endurable, real work for real people, not about killing and armies, or terror, but about life, and survival, and a future. Kind of like Kennedy's call to place someone on the moon 55 years ago (nearly) except now a tad bit bigger....
12/17/14, 7:33 PM
Pinku-Sensei said...
As for the financial panic spreading, it took two years for the popping of the housing bubble in 2005 and 2006 to turn into a recession in 2008, and that was accompanied by both a 50+% increase in the price of oil as well as the U.S. spending more than 4% of its GDP on oil. Of course, the price of oil had been rising throughout much of the housing bubble, and I strongly suspect the rising cost of commuting and heating helped prick the bubble in 2005 and 2006. As Barry Commoner pointed out, everything is connected to everything else.
12/17/14, 8:02 PM
Villager said...
And too, North Sea oil production peaked in the mid 1980s.
I think the current price crash is a different animal altogether. Saudi Arabia is determined to destroy the wildcat financing that has allowed shale oil to be produced in such quantities as to crash the market. When the smoke clears it will be a lot harder to finance shale production and the price of oil will go right back up to $100+ a barrel once that extra 2,000,000 barrels a day has decayed to 500,000.
I agree with you that there is liable to be a lot pain but I'm also quite confident that our beloved .gov is hard at work figuring out how to make the taxpayers pay the tab. I haven't followed it closely but apparently Cromnibus has riders that allow the banks to push some of their derivative losses into banks that will get bailed out with FDIC money.
And the Fed will gladly open the credit spigots again. They may even pay people to borrow the money!
What comes to mind is that history repeats itself, "the first time as tragedy, then as farce"
My gut tells me this is a tempest in a teadome.
12/17/14, 8:23 PM
Svencow said...
In regards to the higher education bubble, I wonder if us debt-serfs will decide to finally throw our weight around via a coordinated boycott of student loan payments to force concessions from the Education-Government-Industrial complex. According to the figures Matt Taibbi mentions in Rolling Stone, student loan profits for the government are supposed to be about 180 billion over the next 10 years, not sure if that's enough to get their attention. As many have stated, I think we're headed for a big increase in defaults eventually anyway, it would be nice to see some conscious thought go into the way its managed.
12/17/14, 8:27 PM
zach bender said...
re statutes of limitation, which are typically ten years on a written contract, chances are good they have occasionally invited you to acknowledge the existence of the debt, which starts the clock over at zero.
12/17/14, 8:29 PM
GHung said...
The US announced major tariffs on Chinese solar panels this week; American PV installers ain't happy at all. I've been urging my contacts who have solar in their planning to secure their panels now; a little energy independence can go a long way as a hedge against future volatility (been there, done that). Seems the energy sector is in for a wild ride with much of the economy in tow.
Renewable prices are down if one knows where to look.
12/17/14, 8:34 PM
Indrajala said...
In N.America admins started selling campus-wide drink monopolies to Pepsi or Coke. This was followed by "university rankings" in magazines where in order to be competitive you had to sell yourself to the corporate media. Even in Canada provincial universities fell into this and thus the top brass constantly insist on being "top ranked", though this requires spending more money and increasing tuition fees, even though the academic standards have arguably deteriorated. Professors have to cater to paying customers (students) rather than maintaining standards in a lot of places.
Incidentally, it isn't just America where universities make a lot of their money through investments. In Japan my university lost a huge sum of money following the 2008 crash, which was even reported in the Tokyo newspapers.
12/17/14, 8:49 PM
Repent said...
I can't help but think, what if we actually had a thinking rational society? Resources would have lasted longer, public truthfulness about our predicament would allow people to be prepared rather than disillusioned by propaganda.
The vast amounts of waste in society is staggering. I've heard of the uber wealthy taking their private jets to fly in burger joints to get out with the family on a night out. About the vast empty cities built in Dubai, Spain & China that were entirely based on real estate speculation.
If we could only think rationally, tell each other the truth, plan with realistic expectations. I think this would have cushioned the hard realities of the finite limits of the ecology and bought us a long buffer zone with which to adapt. Sadly this won't happen with the choices we have made.
Where did we go wrong? At what point did our society become unsustainable, where fictions are upheld in higher esteem than truth?
12/17/14, 8:50 PM
Brad K. said...
I think the medical industry -- especially the health insurance part -- is at least as vulnerable as the academic sector. Big hospitals, too.
ObamaCare imposes a $5-6k deductable now, a redefinition of health insurance imposed on all Americans below "stinking rich" income levels. That combined with a shrinking credit market will accumulate bad debts from patients unable to pay. A lack of investment income for insurance companies will likely threaten insurers. A very large portion of the health care sector might be at great risk.
12/17/14, 8:51 PM
Ventriloquist said...
He pulled off his gloves
and splashed his face with
water from the bucket.
"The still is fixed, and
We'll finally have a new pot
of alcohol by tomorrow morning."
She massaged the knots in
his shoulders with
strong hands.
"Remember
the old stories . . .
... buying fuel
at places
that just pumped
it out of
large tanks
in the ground?"
"Yeah," he shook his head,
"they sucked the glop
out of the earth,
which used lot of fuel,
and used more to
ship it across the globe,
and more to boil it down,
and more to transport it
to each little town,
and then just
burned it all
moving
even more people
and things
from one place to the next.
How crazy those old stories are."
12/17/14, 9:40 PM
Ed-M said...
Timely, well-thought out and most relevant post we have here! Living in New Orleans, I noticed that President Obama approved, and oil companies began carrying out, fracking operations offshore in the Gulf of Mexico. Fracking. Off Shore. In the Gulf. Previous oil extractions tell me that once you start drilling off shore, you've basically run out of places to drill on dry land.
In related news, the fracking operation near Dallas is shutting down due to the decrease in liquid fossil fuel prices. Something tells me fracking won't resume there any time soon, because even at petroleum oil prices at and above $100 US a barrel, that play in Texas will still be unprofitable.
And about your remarks that Oklahoma and the rest of the petrol belt suffering a hard, savage recession when oil prices collapsed like this the last time, New Orleans entered a long depression that didn't end until after Katrina when US rebuild money and vast amounts of it changed the equation. Looks like our housing bubble in N. O. is about to pop!
Other sectors that will be hard hit will be the Engineering and Heavy Construction. Well right now my mum just passed away :'^( and I'll be getting a small trust fund to restart my old civil engineering career... BUT I'll be going into headwinds every step of the way.
12/17/14, 9:43 PM
Cathy McGuire said...
I've been reading the discussions on peak oil blogs for a while, and they've been sounding the warning on the true nature of fracking leases for a while. Luckily, I've pulled my small retirement fund out of Wall Street, so the recent rapid descent from "record highs" didn't faze me.
This recent ND article on their oil outlook gives a good flavor of the current fear:
http://www.startribune.com/business/285687401.html
and I feel most sorry for all those workers who were lured to the fields with rosy promises and will be the ones to really suffer when the boom goes bust.
On one of the perennial topics here, I read an article about trying to preserve information over many centuries, using Egypt as a bad example:
http://aeon.co/magazine/culture/can-egyptology-teach-us-to-future-proof-our-culture/
but I have to say that some of their ideas on how to "preserve culture" are still really caught in high tech and seem almost delusional...
Thanks for another great post!
12/17/14, 9:47 PM
Mark said...
https://www.youtube.com/watch?feature=player_detailpage&v=BDUdNEkxofI
When the ship comes in
12/17/14, 10:05 PM
Junto Felicidad said...
12/17/14, 10:08 PM
Toro Loki said...
Might need some for my chainsaw to cut firewood.
On another note... I've been thinking about your recent comments about what it is like to be an Allosaur.
Reminds me of that old paper by Thomas Bagel "What is it like to be a bat?".
I read that a long time ago in a psych class...wrote a really critical report about it...but maybe we can discuss this more later. Either here or at The Well of Galabes.
Thanks for another interesting Archdruid Report.
12/17/14, 10:34 PM
Matt Savinar said...
nice post.
don't know what to make of this and I may be too conspiratorial but the WSJ sent out a reporter to interview me the other day, was very interested in me being an astrologer and fracking.
seemed very strange since my PO site (LATOC) has been defunct for four years now
Matt
12/17/14, 10:51 PM
LewisLucanBooks said...
I wonder who, or what the Main Stream Media (MSM) will scapegoat when the rubble stops bouncing from the collapse of the fracking bubble? Saudi Arabia? Russia? The evil consumers who don't burn up enough oil? Spotted Owls?
"...take that possibility seriously and act accordingly." Anything other than what's outlined in your book "Green Wizardry?" Which I keep handy and refer to and implement, often.
12/17/14, 10:58 PM
John Michael Greer said...
Dujin, hmm. I gather you haven't been reading this blog very long. I've discussed at quite some length why we're way past the point at which it's possible to prevent the decline and fall of industrial civilization, and no, this notion of flinging $100 trillion we don't have, in an attempt to build technologies that aren't economically viable and require resources that are already gone, doesn't offer a way out of that. Sure, you can dismiss that by insisting that I'm just being negative; so? The logic of the cargo cult is always popular in times like these, but it's not especially useful.
Pinku-sensei, well, we'll see. In 1998 the US economy wasn't anything like so much of a house of cards as it's subsequently become.
Villager, as I noted in my post, the Saudis don't control the price of coal, iron ore, or any of the other commodities that are cratering, or such other measures of economic activity as shipping indices, which are also down hard. This isn't just a matter of market manipulation -- the wheels are coming off the global economy. That's my read, at least.
Svencow, good question. My guess is that debt relief for people crushed by predatory student loans will be a massive political issue in a few years, but we'll see.
GHung, my guess is that it'll be possible, for the next few years, to get renewable energy systems very cheap -- and I'd encourage any of my readers who have the funds to do so. Over and above the personal benefits, when the price of energy soars again -- and it will -- if there are enough people around who know how to live with the sharply limited energy supply that can be gotten from homescale renewables, and can teach others, much might be salvaged.
Indrajala, I didn't know the Japanese university system was into the same mistakes. That's unfortunate, though not surprising.
Repent, human beings are social primates with a bad case of grandiosity. It would be nice if we were capable of living according to reason, but -- well, let's just say that it's been tried, repeatedly, and the results haven't lived up to the billing.
Brad, I've been wondering for years now whether the academic industry or the medical-pharmaceutical industry would be the first to implode. My guess is that the academic industry is ahead by a length or so, but no question, it's going to be a tight race all the way to the finish line.
Ed-M, sorry to hear about your mother. I wonder whether you can retool your civil engineering skills so that you provide some kind of service that individuals need and can barter for.
Cathy, glad to hear you've been proactive. Thanks for both of the links; the North Dakota piece is in its own way bitterly funny -- I like the way that the state official insists that the current downturn is just a blip -- and the Aeon piece is, as you've noted, partly thoughtful and partly idiotic. I notice that as usual, the only two futures they're willing to consider for humanity are endless progress and extinction...
12/17/14, 11:13 PM
Toro Loki said...
12/17/14, 11:17 PM
Unknown said...
12/17/14, 11:23 PM
John Michael Greer said...
Junto, I expect to see a fair number of colleges and universities go out of existence, a much larger number shed programs and departments, and many of the ones that survive jacking their tuition rates to unaffordable levels. Thus college students who are still in the system as things seize up are going to be in a world of hurt, with programs shutting down or pricing themselves out of reach. It won't be pretty.
Toro Loki, by all means. As for bats and allosaurs, that's mostly relevant to the other blog, where we can certainly discuss the issues involved!
Matt, it's been a while! It wouldn't surprise me at all if the WSJ was trying to make hay out of current prejudices concerning astrology. I haven't been contacted by them yet -- for all I know, the word "archdruid" isn't in their spellcheck dictionaries -- but if they do give me a call, it'll be an entertaining conversation.
Lewis, it depends very much on the personal equation; some people are more dependent on the economic sectors I cited than others. Generally, though, I'd encourage my readers to make sure they have full pantries, minimize their expenditures, maximize their ability to meet their own economic needs outside of the money economy, and do all the other things our great-grandparents did when getting ready for hard times.
12/17/14, 11:25 PM
Toro Loki said...
Hope you get back into peak oil. You used to have a very cool website.
12/17/14, 11:31 PM
jean-vivien said...
12/18/14, 12:05 AM
ed boyle said...
in wall street terms maybe this is a type of 'long cycle' for energy and the economy, which is natural as the 4 seasons. Price low point 1970, 1999, general sustained rise to mid point, collapse, slide down slope 15 years.
still I would bet on a price recovery in a year or two when this shakes out fracking, deep sea, tar sands, so next cycle may not rhyme so good. I would however not expect frackers to dive back in the waters, too dangerous so maybe PO in volume terms is now and depletion will do the rest plus demand destruction, due to unpayable debt squeezing out jobs. By 2020 should be clearer what is happening with debt, depletion, etc. and who if anyone holds better hand of cards. Then I will be back to astrology andpredicting some turmoil to clear the decks, like in WWII. Nukes make war impossible however in conventional sense so that current constellation of power nato vs. Russia/china culd be frozen in time till soviet style collapse of one or all of participants.
Great story. Thanks.
12/18/14, 12:22 AM
Cherokee Organics said...
Exactly, the more things change, the more they stay the same. I wonder what the, "but it's different this time mob will think about that concept?"
There's been a bushfire to the north of here in the past few days. At least the wind is blowing it in the other direction, but oh my, it's an early season to be sure.
Cheers
Chris
PS: I forgot to post a link to the latest blog with wombat stuff, shed stuff, some cool spiders and all the usual crazy stuff going on here: The eleventh hour
12/18/14, 12:34 AM
Jason Heppenstall said...
Of course, such short-sightedness won't come as a surprise to the readers of your blog. I'm more interested in the collateral damage that the price dip will cause.
Still, it gives us an insight into one of the driving narratives of our time - that the industrial economy is a benevolent god who dishes out goodies to His minions (consumers). If we've been good He'll give us a lower oil price, record 'holiday season' sales and a thinner iPad. Bad behaviour is rewarded with inflation, expensive petroleum and clunky electronic gizmos.
I wonder what Jesus would have thought.
In any case I've asked Santa this year to bring down the fracking industry before it spreads around the globe and poisons us all. I'll even put out an extra mince pie for him.
12/18/14, 1:24 AM
thecrowandsheep said...
12/18/14, 2:33 AM
Thomas Mazanec said...
12/18/14, 3:34 AM
Rashakor said...
But very relevant to the blog (maybe better suited the Well of Galabes).
http://www.npr.org/blogs/thetwo-way/2014/12/17/371503835/satanist-and-christian-holiday-displays-to-go-up-at-michigan-capitol?sc=ipad&f=1001
The real satanist giving a hard time to the closeted-ones.
We are really living in interesting times
12/18/14, 4:12 AM
zentao said...
A very interesting post. The following caught my attention and I think demands much more discussion, particularly since I think you have been politely sending this message out for a while.
“Still, it looks as though we may be in the opening stages of a really ugly fiscal crisis, and I’d encourage my readers to take that possibility seriously and act accordingly.”
I was forwarded some information on a new Netflix show, in the theme of Marco Polo, which is focused on Hypatia – funny coincidence given your last posting. Filtering out all the gratuitous nudity and sex their basic storyline is interesting…
Hypatia, as part of the Greek intellectual elite, had managed to draw the threads together that Alexandria was in serious decline. Ever since the tsunami the city infrastructure was not being repaired properly and she had certainly heard rumours that unrest was growing among the culturally and religiously divided citizens. Based on her discussions with colleagues, who had studied the decline and fall of previous great civilizations and cities, she had come to agreement with them that Alexandria, and the entire Greek elite civilization, was on the path to collapse. Certainly, they agreed, this would take at least one or two centuries but certainly there must be something that could be done to preserve things for the future. They couldn’t lose all their knowledge!
Hypatia had decided that she wanted to ensure the most important mathematics tomes that had been collected in the library would be passed on to future generations. She had been “borrowing” the best examples and quietly taking them home in her chariot. She would have a great library in 20 years that, surely, would be immensely useful to future generations.
Colleagues had warned her about driving her chariot alone through the streets. But how else to smuggle the books out? Besides, collapse was not going to happen in her lifetime…Unfortunately her books were found by some scavenging street folk and burnt to roast a goat in an alleyway – they never were read again.
And there we have it…
I think, John Michael, you are often too polite. For sure, as we sit enjoying some fine home-brewed beer no one wants to get into the dirty discussion of the short-term contingency plans. It is far more stimulating to debate what philosophy or tech might be most useful to someone in 100 years. That is, while it is certainly a great task to do things such as develop a quality library that will be useful in 50 to 100 years, one should definitely also be ready in case of more immediate needs to act.
I have a friend who has been greatly concerned about decline. This person is also vegan. I asked about what his plans were for when some items that are imported from the Far East no longer are transported here. “I’m not worried, it won’t happen in my lifetime.”
I’m not so sure and I certainly in having plan a, b, c and even d for some priorities. Who else is of the same mind?
John Michael, to add more to your comments above, I can recommend some other folks who also agree that we could have some bumpy drops fast approaching. Several have modeled oil going even lower towards $40:
http://euanmearns.com/oil-price-scenarios-for-2015-and-2016/
Others have been warning about the many issues in both global economy and the USA over the next 2-3 years. I think Martin Armstrong’s cyclical analysis is quite interesting. Perhaps others could post their favourites?
http://armstrongeconomics.com/2014/12/07/big-bang-2015-75/
https://www.youtube.com/watch?v=wcBBiy3DybI
I think it would be great if people discussed some plans and actions for 1-2 years, 5 years, 10 years and 20-30 years. Help in balancing these might greatly assist some folks.
12/18/14, 5:55 AM
donalfagan said...
But I also suspect that the price drop will weaken the petrodollar in favor of other currencies. China, Russia, Iran, Venezuela and others already trade oil in renminbi/yuan (RMB), and RMB is expanding geographically. The IMF has RMB on the threshold of reserve currency status. Look out for the petroyuan.
12/18/14, 6:01 AM
Bill Pulliam said...
As for how badly exposed the financial sector is to the oil glut, all you have to do is look at the stock market. It is tracking the price of crude. On paper, lower energy prices should be good for most other real economic activities, from agriculture to transportation to manufacturing to tourism to cheap-imported-crap-based-big-box-retail. The only sector it should hurt is energy. But, the whole market is behaving as though every one of the companies in it is an energy company. Investors are scared that low oil prices will trigger exactly the sort of financial collapse you mention.
12/18/14, 6:04 AM
zaphod42 said...
Craig
12/18/14, 6:09 AM
Jerry Silberman said...
12/18/14, 6:12 AM
Phil Harris said...
Tight oil and tight natural gas both come as admixtures of one another, but nevertheless are two different sources of energy with different outlets and uses. NG needs pipelines and a retail pipe network; oil can make do with trucks and rail and relatively few trunk pipelines. The highly developed legacy infrastructure of USA makes increases in production of these marginal energy supplies just about useful when they are competing with high price imports of oil & NG
Although USA for a long time has been a massive producer of NG, US nevertheless has needed to import a relatively small amount of NG at the margin, and rather surprisingly perhaps, still does.
USA remains of course a very large net importer of crude oil (It looks that JP, SK, & Germany are ahead per capita). As Number One crude oil importer, USA has narrowed the gap somewhat since 2012, but is still in front I think.
Oil Imports 2012, '000 barrels per day (EIA): United States 7,372; China 5,608; Japan 4,559; India 2,460; Korea, South 2,261; Germany 2,225
One of the big questions you have posed in the past is whether the US can maintain its position as the largest net ‘sink’ for world resources, extracted and supplied at whatever rate sufficient to keep up with its own legacy requirements and their maintenance. Thus ‘Diminishing Returns’ could easily mean that US, along with Japan and perhaps Germany have ‘topped out’ in the use they can make of the resources they can import, even if for a few months/years the price is again low.
As you rightly raise the matter, it appears USA will not be able to grow substitute economies (e.g. ‘electrical economies’ such as nuclear or renewable) that evade this gradual (?) loss of ‘return’ from the resources and their associated investment in extraction etc.
This idea takes some getting used to because ‘we’ (including Europe) until very recently demonstrated the enormous ‘growth potential’ (‘economic utility’) of petroleum and other carbon fuel, while China in the last 15 years has given us another stellar example following the same ‘model’ of industrial expansion.
We seem, perhaps, to have arrived at the cusp. Ugo Bardi did a nice historical comparison of demand / supply curves for a 19th C ‘world fuel’. http://cassandralegacy.blogspot.co.uk/2014/12/the-collapse-of-oil-prices-lessons-from.html In that case there were resources waiting in the wings to make not only substitutions but provide sufficient new fuels for enormous growth. However, during the tricky transition period, the price of this particular old fuel suffered rapid and dramatic fluctuation, even while the diminishing returns on investment in extraction went inexorably south.
In ‘our’ case, rapidity, (months or perhaps several years), of the average period of price oscillation will make all the difference at both a personal and geopolitical level, and even rapid rearrangement of legacy structure (including academe and illness industries) will not stabilise outcomes. Indeed, future arranging of substitutes for this ‘fragile’ kind of infrastructure is no small matter in a ‘no-growth’ economy, let alone one where profitability flickers across key sectors.
As you say, we will see.
Thanks
Phil H
12/18/14, 6:32 AM
Strovenovus said...
Prices of other commodities have not dropped anywhere near oil, as you would expect in a recession. The price of copper is actually up over the past year.
Something else seems to be going on with oil. I'll be the first to admit that I don't know what, but I'm skeptical about your demand destruction theory.
The zig-zag of events has a funny way of frustrating rational expectations, at least in the short-term. Given time, I am confident your theory of catabolic collapse will be vindicated, but probably not just yet.
12/18/14, 6:42 AM
Strovenovus said...
My larger point stands: oil's drop appears to be driven by something other than simply demand destruction.
12/18/14, 7:22 AM
Paulo said...
I plan to send this to my son, my brother, and two friends. However, I have mostly given up on talking about any possibility of change to BAU with others. Mostly, I am tired of being thought of as a bit of a crackpot doomer. Instead, my wife and I continue to build our modern homesteading way of life with a years supply of food in the form of home grown chickens, wild salmon, garden veggies, operating greenhouses, and an elk. We share our bounty with others. We have 5 years of firewood in sheds and bake bread on rainy/stormy days. My old work/town buddies think we have gone nuts and that has been a little hurtful. On the bright side our new and developing friends enjoy potlucks and share a like-minded lifestyle.
The biggest benefit of changing our lifestyle (paradigm) has been the internal growth we have experienced over the last 8 years. My wife and I share our plans and thoughts and do many worthwhile things together. Each day seems more and more special. Our routines have purpose beyond entertainment and gratification.
Best of luck to all readers.
regards....Paulo
12/18/14, 7:44 AM
Dennis said...
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=a103600001&f=m
I'm no economist, but I could only interpret the as showing that the economy must be weaker than anyone wants to believe. Those that have jobs drive only as much as they have to, and those that don't have jobs, don't drive anywhere.
These are just 'interesting'
Since 2007, imports have trended down
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTIMUS2&f=W
Exports have risen sharply
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTEXUS2&f=W
12/18/14, 8:08 AM
Carl said...
In a stunning analysis this week, Goldman Sachs found almost $1 trillion in investments in future oil projects at risk. They looked at 400 of the world's largest new oil and gas fields -- excluding U.S. shale -- and found projects representing $930 billion of future investment that are no longer profitable with Brent crude at $70. In the U.S., the shale-oil party isn't over yet, but zombies are beginning to crash it.
In a stunning analysis this week, Goldman Sachs found almost $1 trillion in investments in future oil projects at risk. They looked at 400 of the world's largest new oil and gas fields -- excluding U.S. shale -- and found projects representing $930 billion of future investment that are no longer profitable with Brent crude at $70. In the U.S., the shale-oil party isn't over yet, but zombies are beginning to crash it.
One trillion sounds serious.
Carl
12/18/14, 8:14 AM
Patricia Mathews said...
12/18/14, 8:20 AM
Mike said...
12/18/14, 8:34 AM
Andrew said...
12/18/14, 8:36 AM
Friction Shift said...
I'm in my fifties and I reckon mine is the last American generation to be able to obtain a decent public university education, with only modest support from parents and part-time jobs, and graduate debt-free. My wife, ten years younger than I, was not so lucky, and was able to discharge her student loan debt only after an inheritance. Otherwise, she would still be paying it. We have friends in their thirties and forties with engineering, law and medical degrees who are struggling with six-figure student loan burdens even though their incomes are much higher than ours. They will remain debt slaves for many years.
Coming as we do from academic backgrounds, it has long been dogma for my wife and I to counsel young people to get a university education. She teaches high school to a largely working and under class population, and sees daily the waste of talent as bright but economically distressed students graduate with few prospects beyond the military, becoming lifelong student debt slaves, or working minimum wage jobs and living with their parents. Her school district long ago cut its trade programs like woodworking, machine shop, auto mechanics, home economics -- too, expensive, you see -- that might offer students a path to some level of self-sufficiency.
My local four-year state institution about fifteen years ago "rebranded" itself from a college to a "university," in order to attract more students, which its marketing department unabashedly considers "customers." The school's six-figure-salaried administrators seem to be much more concerned about selling the "college experience" to more and more "customers" than they do an actual education in the traditional sense. Thus in the last decade there have been significant capital expenditures on new buildings, cafeterias (which serve discounted meals to the general public in competition with local restaurants -- more customers!), dormitories, etc. Meanwhile, this "university" has laid waste to entire departments in an effort to save money. Physics is gone, as are geology and geography. Can mathematics be far behind? After all, gosh, math is really, really hard and may not attract enough "customers." The only foreign language left standing is Spanish. In time, this institution may devolve into a business school with a football team.
I think that the coming bursting of the student loan bubble, will pick off the little public schools like my local unversity a lot sooner than the big schools that have deep connections in state legislatures. But small private universities that are more dependent on their endowments may be even more vulnerable. And so the academic racket will unfold.
It hasn't been brought up on this board yet, but under US law student loan debt cannot be discharged through traditional bankruptcy. Default is the only option. And I have heard more than one story of the collectors going after a student's parents after a default.
All of which is to say that my wife and I no longer automatically recommend a university education. What would I say now to a bright young student? Be disciplined enough to use the resources out there to give yourself the best classical education you can, but stay the hell out of debt. And learn to weld.
12/18/14, 8:48 AM
TJ said...
I'm new to your site (and I have one of your books reserved at the library). I'm in total agreement on your theories so far, including this article's prediction of another economic crises - maybe even "the big one."
I'm retired, but have a long time to live (I hope!). My wife and I are looking at land to buy debt free, and starting a small permaculture farm. My question is: I still have a lot of money invested in income generating assets (dividend stocks, real estate, etc) that pays my monthly bills. Given your outlook, where would you put your money?
I'm not looking for formal investment advice, I'm just wondering where you think the safest investments are, if there are any. Or will money even matter as we know it once this comes?
12/18/14, 8:58 AM
Moshe Braner said...
But let's look at a prediction which was a big topic here a couple of months ago: that there would be a million ebola cases by the end of the year. Here we are past mid-December and the official total cases is less than 20,000, and the official total deaths less than 7,000. Which is plenty of bad news, and the real numbers are probably considerably higher, and the epidemic is far from over, but this is far, far short of the predictions.
Why did it turn out this way? Because, again like JMG often says, negative feedbacks exist, and governments will do whatever it takes to restore order. In this case governments in, e.g., Liberia, have closed all schools for many months now, imposed curfews and quarantines, and focused their small but non-zero resources into case-tracing and education of the public on how to avoid the disease.
Similarly it is hard to predict the details of the future of the industrial economies, other than the long-term decline. One trend that stands out to me is a global fracturing. Countries literally split apart into more than one country, and groups of countries split partially off the supposedly global economy. E.g., since Russia is being actively pushed away by the Western industrial countries, it is apparently rebuilding its economy as less globalized, and in bilateral partnership with some other countries, China in particular. Such fracturing may eventually put a big dent into the dreams of the global banksters. Alas it also may be an early stage of the build-up to WW3.
12/18/14, 9:16 AM
Seaweed Shark said...
https://www.youtube.com/watch?v=AuM-yatN0pI
"The big jet rumbles over runway miles
that scar the patchwork green
where slick tycoons and rich buffoons
have opened up the seam
of golden nights and champagne flights
ad-man overkill
and in the haze, consumer crazed
we take the sugar pill.
Jagged fires mark the picket lines
the politicians weep
and mealy-mouthed, through corridors
of power on tip-toe creep.
Come and see bureaucracy
make its final heave
and let the new disorder through
while senses take their leave."
12/18/14, 9:24 AM
redoak said...
I’ve been back stage in higher education for about 15 years, including a few years doing stats in “enrollment management.” As far as I can tell the mill is running full bore and blowing oil past all the gaskets. Academic standards? Fiscal responsibility with tuition dollars? Good faith delivery of a useful education? Nope, instead we have academic lip service, Marketing, and the “golden walk” (that’s what they call the admissions tour past all the fancy new dorm$, gym$, and dining hall$). BTW, we’ve been losing colleges here in NH for the last 10 years probably at the rate of 1 per year or so.
Speaking of the decline of modern higher education, I’m recommending John Barth’s Giles Goat Boy as an excellent winter romp!
12/18/14, 9:27 AM
Steve from Lakewood said...
It isn't just energy. I was something of a futurist until I read Scarcity, by Christopher O. Clugston. I used to think it might be possible to come up with cheap fusion, or more efficient alternative energy sources, or some other technological miracle--possible, but not certain. This book shows, using official US government figures, that within 40 years 68 of the 92 materials identified as essential to our current economy will be in declining production, with a few uneconomically rare. Hubbert's Peak for oil has analogues in virtually all the essential ingredients of our tech society today. There is enough sand to make all the silicon you could ever want, and there is probably enough mineral to make concrete at our current consumption levels for centuries at least. But, imagine that in 50 years you cannot make high speed tool steel to make bits for your automated lathe or milling machine! Or high tech steel for the bearings in the axle of a car. Basically, we will have to revert to 1920's technology levels, and fall back to things like carbon tool steels assuming you have a way of making steel at all. Technology cannot solve "it doesn't exist anymore." The next half century will see changes in technology that are unpleasant to imagine for most of us.
12/18/14, 9:50 AM
Leo Knight said...
12/18/14, 10:05 AM
NosVemos said...
As always, a wonderful addition to your ongoing series. There is erudite, and then there is Erudite. And I think you deserve the capital E.
One contributing factor that hasn't reached the decibel level it warrants is the precarious state of Chinese manufacturing, finance, etc.
If China isn't sufficiently juiced by the falling energy prices, then whatever minor economic rumspringa the US/West was expecting as a silver lining might never arrive.
And should all of this occur at a moment when credit dries up, when safe bets become illiquid, when bears sulk freely through Wall Street and the City, then we are in for quite a wild ride in the very short term...
12/18/14, 10:13 AM
James Eberle said...
12/18/14, 10:19 AM
Ellen He said...
I'm currently in high school and thinking about college. How can I get a fulfilling education and yet at the same time land myself in debt ?
Also, an interesting ecotechnic civilization model would be Mark Rosenfelder's Incatena in which the Third World, after our collapse, developed ecotechnic civilization, gradually made our renewable energy technology more efficient, and evolved into a loose interstellar confederation.
12/18/14, 10:29 AM
Justin Fischer said...
(How does one address the head of a religion? "John" seems too familiar, "Mr. Greer" too formal, "JMG" too hipster, and "Your Druidness" seems... wrong.)
Regarding the impending burst of the academic bubble: it was going to happen anyway. The large Millennial generation, children of the large Boomer generation, are largely done with college and the yet-to-be-named generation (Gen Z, perhaps?) that follows lacks the numbers to match the present demand for academic credentials.
What's more, Millennials were the last group to come to college truly believing that a four year degree is the best investment they could ever make. Now that the majority of them are either still sending out resumes by the ream or working the same jobs they had in high school, they have kind of figured out they had been lied to. The general advice they are giving their juniors is, "Dude, it's not worth it."
So not only will demand drop in coming years due to simple demographics, but fewer young people believe in the product they are being sold. Combine that with the point you made in your essay about endowments being crushed in the coming years, and I think academia will be in more serious trouble than most academics can project on a spreadsheet.
12/18/14, 10:34 AM
Unknown said...
"Bankers See $1 Trillion of Zombie Investments Stranded in the Oil Fields"
http://www.bloomberg.com/news/2014-12-18/bankers-see-1-trillion-of-investments-stranded-in-the-oil-fields.html
12/18/14, 11:02 AM
Eric S. said...
12/18/14, 11:07 AM
Unknown said...
"Energy Crunch Will Morph Into a Replay of the Housing Crash"
http://davidstockmanscontracorner.com/category/stockmans-corner/
12/18/14, 11:12 AM
Clay Dennis said...
12/18/14, 11:18 AM
Marinhomelander said...
Here's an item from our local paper:
http://www.marinij.com/novato/ci_27158465/smart-needs-another-225-million-get-train-pedestrian
"For years, talk of a North Bay rail line was slammed as a "train to nowhere" because initial plans had it ending in San Rafael, without connecting to a ferry terminal or large transit center to take people into San Francisco."
"When voters in Sonoma and Marin counties approved a quarter-cent sales tax in 2008 to fund SMART, the project was for train service from Cloverdale to Larkspur, along with a path for walkers and bicyclists."
"But the downturn in the economy left the plan without full funding and the ability to borrow the needed money to complete all the work as promised. Now the project is being phased."
"Finding money for the path and the rest of the rail line is an ongoing pursuit, said Farhad Mansourian, SMART's general manager."
""We're actively trying to find the money," he said of the path. "It is a priority, as is completing Larkspur to Cloverdale.""
Huge amounts of money have been spent so far with patchwork results that satisfy no one. Now, it's time to come hat in hand to the taxpayers to ask them to pay for more, to maybe, kind of, possibly, finish the system.
Notice the word "borrow" and "tax". Interesting combination eh? To it you might add "fraud".
Make sure to read the comments at the end of the story. Some pretty mad local people who are most articulate and are not fooled.
This is why I like Marin. Besides the beauty of the environment, the local agriculture and progressive economics, you have dedicated activists that are fighting the control fraud in our local economy.
12/18/14, 12:23 PM
Cathy McGuire said...
The Green Wizards forum (www.greenwizards.org) is a great place to discuss it. If you haven't signed up, send me or David an email (addy on the site) and we'll get you in. Lots of folks already discussing there - check it out.
@Cherokee: Stay safe! I'll hope for the wind to keep blowing the other direction!
@Paulo: The biggest benefit of changing our lifestyle (paradigm) has been the internal growth we have experienced over the last 8 years. My wife and I share our plans and thoughts and do many worthwhile things together. Each day seems more and more special. Our routines have purpose beyond entertainment and gratification.
Very well said! I'm also finding that facing this decline has helped me to be more empathetic toward those who are being hid harder by it, and causing me to feel more gratitude for the good times and the beauty of nature, while it lasts.
12/18/14, 12:58 PM
Marinhomelander said...
Regarding small scale energy conservation and DIY solar, I would like to reiterate this site:
http://www.builditsolar.com/index.htm
12/18/14, 1:18 PM
Larz said...
Hi JMG,
This is my first post. I have conscientiously read each week's post along with people's comments for about a year. I took time to read all of 2012 and 2013, and a good number before that. I have let your writings seep into my heart and soul. I have a lot to say in this one note, relevant to this and past weeks' posts. In the future, rather than saving up stuff like I have been, I hope to post smaller comments often. I'm new at this, so please forgive this relatively long post.
Another of my regular reads is John Hogue's prophecy website.
Great post this week. I remember the 1973 OPEC oil crisis, the early 1980's slump, the pumped-up late 1980s, the flush 1990s, the 2006 real estate crash, the slow recovery since, and wondered what the heck happened each time. Between your writings and commenters, things are beginning to make sense.
My husband and I don't drive much so don't need to get gasoline much, and when I do, I people-watch. We got gasoline on Monday, three days ago, at Costco, midday, when there should have been no one there. It was packed. Ten lines of at least five cars long. Over the last week, I have seen evidence that people are out spending like crazy. Here, people have money and are spending it — for Christmas. Christmas is the yearly fix where they imagine that everything is okay if only a person can spend enough.
We live in a relatively mild climate but where, for a couple months in summer, temperatures are 85º F. and above. We are stuck in a hot town, and have to make the best of it. We bought a new house in the late 1990s but, after several years (do-dos as we are), we realized that the builder had not insulated the attic correctly, plus (which we knew) had only put in average (meaning cr-p) efficiency heating and cooling. Even if the central air conditioning had been perfect, the trapped heat from the attic came down into the second floor living space — half the day was a living hell. Over years, we got credit card debt to zero, saved money and last spring paid cash to get the attic properly insulated, and had new high-efficiency furnace and air conditioning installed. This summer was the first summer in eight years where we were comfortable enough to do work in our offices at any hour. Since World War II, population growth has forced more and more people to live in inhospitable climates, and individually modify living space as they can manage, over time.
A new housing development is going up near us. The sales office had been open several months. I stopped in to get the low-down. I asked "Do you get many people asking about how fuel-efficient the heating and cooling systems are that the builder is putting into these houses?" The lady said that she knew nothing about the heating and cooling — she had to research the answer — she came back saying that the builder was putting in "average" (meaning cr-p) heating and cooling — and that I was the FIRST person to inquire about heating and cooling. I thought "Oh God, people are not the least bit interested in fuel-efficiency of furnaces and air conditioning systems of new homes. They care more about the color of their washer and dryer than about their proposed monthly utility bill." Collectively, in buying a new home, buyers could demand better from the builder, but aren't, so if their monthly utility bills are sky-high long-term, they are partly to blame. THEY did it.
12/18/14, 1:24 PM
Larz said...
We get a lot of sunlight here. We have contemplated paying for (not renting) solar power for our house, but we'd have to fork over tens-of-thousands of dollars (reducing cash needed for emergencies), and may not make that money back in 15 years (the life of the system), so what is in it for us? Prices of buying solar systems are dropping but it seems the later we put in a solar system, the better — or maybe never put in a solar system at all.
As for renting a solar system, that is a racket if ever I saw one: the installer, like Walmart's SolarCity, gets the vast majority of the proceeds, not the homeowner. Renting is horrible.
A technology that I find helpful is iPhone/iPad's ability to read aloud what is on a page. On my iPhone, I listened to your last post with eyes closed listening. Wow. Even my Macintosh can't read aloud what is on a page.
In my 60-odd years, even with a Bachelor degree, I never learned how to write essays. I aim to correct that. I did a survey on how to accomplish how to learn to write essays. I learned how much traditional college costs (mega-bucks, whether in-person or online). I learned that colleges are not organized so that anyone, at whatever age, at whatever time of day or year, can learn what they need to learn affordably much, but there are companies/schools that are making inroads. I learned that most colleges are still pushing the old way of doing things (degree programs; have to be there in real life). I learned what online writing courses are out there for people to take, one course at a time, as needed, without having to apply to a formal college degree program. I learned that teaching people how to write is not high on the list of things available to learn or teach, even though it is a fundamental skill. It is my educated guess that I will be able to cobble together, between paper books, online paid courses, and online free courses, my own independent study program where, cheaply, in a year, I will have learned how to write better. I have already started, and am learning tons. What I am trying to say is that it looks like I won't have to spend mega-bucks and be forced to become an English major at some real-life college. I will let you know how it is going.
Another conclusion I came to is that organizations (old schools, new schools) that offer in the direction of straighterline.com will flourish. I looked at what I need. I need specific courses, one at a time. I do not need, nor will I consider, to commit myself to any sort of degree program. Straighterline.com is not perfect, but it is going in the right direction. I was surprised to see that khanacademy.org has no reading or writing courses.
The demand for education, I believe, will always be high. It is the suppliers of education that are having problems. Once I saw that there are a few companies on the cutting edge of education, I saw that I could cobble together the courses I need affordably — for example, it matters not whether a person is 17-years old or 60-years old to learn to write better; it doesn't matter where a person is located, as long as they have access to a Macintosh, Windows-machine, iPhone 6 Plus, iPad, or other tablet, and courses are offered online. Third-world students in India and Indonesia are getting higher educations on their iPhones — why not Americans? As another example, I feel disappointed because there is a writing program but because I am not in high school, I am not eligible. I am too old. Traditional location-based, age-based, non-online courses are so out. I am looking for courses I can start immediately where I don't have to wait until Septembers or Januarys to start. There are several types of online courses, which I won't go into here.
One should not discount community colleges. California's community colleges still offer trade courses, to their credit. It would be good for Californian's to take advantage of these programs.
Please forgive the mish-mash. I am not very good at writing essays.
Larz
12/18/14, 1:24 PM
SLClaire said...
I have been musing recently about the fact that my five closest college friends and I are, collectively, worse off than our parents were at our ages (late 50s). Not that any of us are in really bad straits (so far), but both physical reality and attitude have taken a hit. I don't think any of them expect their children to do as well as they have.
Thanks for your continuing to take notice of the larger trends. It was one of the factors that pushed me to learn to scythe and for me and my husband to have a wood stove installed this year. Both projects had been planned for several years but based on your words and my own sense of trends, I made sure they happened and now feel a bit more prepared for the aspects of decline that they address. There is always more to do, and I'll be considering projects for the coming year with your suggestions in mind.
12/18/14, 1:42 PM
Nastarana said...
12/18/14, 2:00 PM
Nastarana said...
I planted two elderberry bushes last summer and am planning on adding at least two more. I overheard the health food store manager saying she couldn't get more dried elderberries. The market for medicinals, both licit and not so much, can only grow larger, I think.
Time was, in colonial and early nation days, when everyone who had land was required to grow hemp for the navy; the time may come when every Dixie landowner might be required to maintain a family rubber tree, and pay taxes in tree latex.
12/18/14, 2:18 PM
Shawn Aune said...
12/18/14, 2:32 PM
donalfagan said...
12/18/14, 3:27 PM
John Michael Greer said...
Jean-Vivien, better still, offer up a futures contract on the ox as the sacrifice, and keep the ox. I doubt anyone on this side of the pond would notice the difference.
Ed, I'd be surprised if the price goes back up that fast. I don't think this is just a speculative bust -- there are massive economic downdrafts also in play, and those may take quite a while to get worked out.
Cherokee, they'll keep on yelling that until the water rises over their heads. Stay safe!
Jason, don't forget to leave something out for Krampus while you're at it. He might just haul the entire fracking industry away in his basket this year.
Sheep, yes, but the thought of a beefy Oklahoma oilman wearing a castoff party frock is, well, less than appealing!
Thomas, good question. I'd encourage you to do the research! (BTW, I don't reply to comments on old posts, in case you were wondering.)
Rashakor, the Satanists have really been going for publicity of late, no question. I wonder when the Ayn Rand fans in the GOP will 'fess up to their devil-worshipping ways.
Zentao, there are plenty of other forums where people talk about short-term contingencies. It's the bigger picture that tends to get neglected these days, and that's what this blog is about.
Donalfagan, no question, one possible outcome of the economic crisis that seems to be on our doorstep is a cascading series of dollar crises that eventually lead to dollar hyperinflation.
Bill, yes, I've been watching that dynamic play out in the stock market. I'm pretty sure that profits from the various financial games being played around fracking have been boosting stock prices generally, and the end of that hidden subsidy may lead to a prolonged bear market. But we'll see.
Zaphod, JK Galbraith pointed out that bitter memories of the last economic disaster are one of the few things that can stave off the next economic disaster. I'd encourage you to revisit your own memories, and talk about them to others -- it might prevent some bad decisions as we proceed.
12/18/14, 3:31 PM
John Michael Greer said...
Phil, granted -- it's impossible to know just how violent the oscillations of price and production will be, and that makes a lot of difference.
Strovenovus, obviously I disagree. There are pervasive signs of economic contraction globally and in the US, among them significant continuing declines in the consumption of important commodities and energy resources. That suggests demand destruction to me. Still, we'll see.
Paulo, you're welcome and thank you! No question, making the shift -- "collapsing now and avoiding the rush" -- is a wrench, but it does have its consolations.
Dennis, thanks for the graphs! Your read is the same as mine. As I see it, there was never actually a recovery from the real estate crash, and the attempts to paper over the resulting Great Recession are losing their effectiveness.
Carl, $1 trillion is serious. It'll probably end up being more than that.
Patricia, I've talked to a lot of very old men in the Masons and other lodges, and learned from the experience!
Andrew, fascinating. It's rare to see a government bureaucracy being quite so blatant about their role as cheerleaders for big corporations...
Friction Shift, I've heard the same thing from people all over the country, in and out of the academic industry. A very large number of US colleges and universities are making the same choices, and yes, a vast number of them are likely to crash and burn in the years ahead. In the not too distant future, I plan on doing a series of posts on adult education, and will be talking about this at quite some length.
TJ, I haven't the least idea. I don't have any investment money -- I'm unusually successful as a writer, but all that means is that I don't quite live from paycheck to paycheck -- and so haven't researched the subject.
Moshe, no argument at all. I expect that once a downturn gets well under way, we'll hear yet again from the folks who insist that the global economy is going to freeze up in a matter of weeks, leaving everyone to freeze and starve in the dark. Negative feedback is why that won't happen -- which won't prevent trillions of dollars, euros, etc. from being lost, millions of people from ending up out of work, etc.
Shark, that'll definitely work!
12/18/14, 3:49 PM
John Michael Greer said...
Steve, thank you! Tou get today's gold star for this comment: "Technology cannot solve 'it doesn't exist anymore.'" Now can we get that put on the business end of a branding iron and apply it to the backsides of those cornucopian true believers who think that yelling "technology!" is a meaningful answer to the hard limits of a finite planet?
Leo, your attitudes toward debt are the wave of the future. Take heart!
NosVemos, thank you! Yes, China's a wild card -- though there are a lot of other wild cards just now. I think the deck is full of them.
James, glad to be of help. If you can find a copy of the book I cited in the post, Belly Up, by all means read it -- it's an entertaining story, and should help put your experiences in context.
Ellen, you lost me at the interstellar bit. We don't have the energy or the resources to do more than a little interplanetary exploration, and won't have that once the fossil fuels run out; the stars? Not a chance.
Justin, nah, I'm not the head of a religion, just the executive officer in charge of one midsized religious organization on one end of a relatively small and eccentric faith. Most people online call me JMG, which is fine -- hipsterish or not! As for the academic bust, exactly -- these are all factors setting the higher-ed industry up for a world-class collapse.
Unknown, thanks for the links!
Eric, it's really easy to look like a prophet when an economic bubble gets going; predict that it'll eventually crash, and you're guaranteed to be right. That said, I was a little startled to watch things unfold as precisely as they have! It'll be interesting, in the sense of the apocryphal curse, to see how it unfolds from here, because you're quite right: those who could have done something to prevent a debacle have one and all done exactly the opposite.
Clay Dennis, no, I haven't encountered Ludlum's work yet; the "triangle of doom" sounds entertaining, if nothing else. Can you recommend a good introduction?
Marin, I suspect they'll have much more to worry about in the not too distant future. Thanks for the link to the solar site, though -- very useful stuff.
Larz, welcome to the list! I'm far from sure online courses are a good solution for everyone -- a growing number of poor people have limited or no access to the internet at this point, and that's only going to become more common as we proceed. Still, all this will be fodder for the future series of posts here on adult education, because you're certainly right that that's a critical piece of the puzzle.
12/18/14, 4:08 PM
John Michael Greer said...
Nastarana, backyard medicinals and useful resources certainly deserve a place in a green wizard's toolkit. Have you discussed this over on the Green Wizards forum?
Shawn, enjoy the waters! ;-)
12/18/14, 4:12 PM
jonathan said...
the entire junk bond sector, not just those based on oil, is showing the strain. the spread between junk and investment grade bonds has greatly increased in the last few weeks. booming new car sales are supported by zero down loans to anyone with a driver's license and a pulse. trash loans for the purpose of buying furniture, appliances etc are similarly failing (internet search for "Conn's"). emerging market sovereign debt denominated in dollars is being hammered by the inexorable rise in the the dollar's foreign exchange rate.
even g20 debt is at risk as the ruble collapses and japan's debt seems poised to reach 250%of gdp in a declining economy.
all these debts are enmeshed in various clever financial devices such as cdo's and clo's that will do serious harm to the counterparties that have insured them against default.
it looks like a true sh*tstorm is on the way.
12/18/14, 4:18 PM
Moshe Braner said...
http://www.eia.gov/tools/faqs/faq.cfm?id=23&t=10
Back to the bigger question of whether the current drop in oil price is an overall decline in global economic activity. It seems to me that signals from China and other countries is of a slowdown in growth, while in some other countries such as in Europe there is an actual slight contraction. This can explain a few percent drop in the price of copper. It by no means explains a 50% drop in the price of oil. But oil demand is famously inelastic in the short term, and thus a slight "glut", say 1% more supply than demand, can easily fill the commercial storage space and drop the price.
Plus, a lot of it is psychology. The endless hyping of the "shale miracle" has not only duped investors, it also facilitated the myth of a "glut". Psychology can change quickly, and indeed it often does when bubbles pop, resulting in the suddenness of the pop.
It may be that oil prices will rebound as fast as they did in 2009, i.e. over less than a year. Especially if and when reports of canceled drilling, and drying up of existing wells, start circulating, along with ongoing "unrest" in Libya, Iraq, Iran, Venezuela, and who knows what other oil-producing countries as they fail to find the monies to keep things quiet.
12/18/14, 4:57 PM
Bill Pulliam said...
Big 10-4 there! I don't remember anyone predicting that the fracking bubble would be popped because of overproduction, glut, and price collapse! Of course it has not actually popped yet, and it might be rescued -- the housing bubble was kept inflated many years longer that I ever imagined it could. Still it's a great example that, even when you can foresee the broad outline of the future, you are certainly going to be taken by surprise by many of the events that happem within this broad outline. And, since in the long run we're all dead, these short-term surprises are very important, indeed!
Larz, donalfagan, etc, about solar: I retrofitted our victorian with an active solar system -- a portion of the existing attic painted black, equipped with with polycarbonate roofing, and hot air from this solar furnace moved to the rest of the house with flexible duct and inline fans. I even use outside air instead of closed inside cold air return, and I still get plenty of almost free heat on sunny days. It provides much more heat to the interior of the house than any retrofitted passive solar system ever could, and it has very little impact on the house's historic character.
12/18/14, 4:59 PM
Violet Cabra said...
My mom told me that for her birthday she's getting chickens. I lent her John Jeavons How to Grow More Vegetables... and plan on helping with their garden in early spring.
I was born in Massachusetts and, after travelling for years have settled here. As the academic sector continues to implode my home-state is going to find itself in worse and worse straights. Education is one of the major revenue streams here, both directly and indirectly. There are the enormous amounts of money raked in by students and then also much research, invention, development etc that acts as satellites to the universities. I would guess that about half of the people who are on the cutting edge of research are from other countries. If the universities can no longer afford to support these highly skilled workers I foresee a reverse "brain drain" out of the Northeast, presumably into the countries that are practising scarcity industrialism the most adroitly.
I also imagine that many of the most highly skilled engineers born in the united states will take their skills to more prosperous nations.
I wonder, with some anxiety, how dramatic the endgame of the fracking bubble will be, and how long it will take to develop. Seems too early in the game to discern, but not early to make some popcorn!
12/18/14, 5:17 PM
Travis said...
12/18/14, 5:32 PM
Toomas (Tom) Karmo said...
If (this is a big "if") you really do find yourself seeking resources on writing, I guess you could try my essay "Logic Blueprints Take the Stress out of Writing Nonfiction". It can be found by Googling on the phrase
logic blueprints writing
Alternatively, you can reach it by pointing your browser directly to
http://www.metascientia.com/PNNN____lit/PNNN____logic_blueprints.html.
Hastily,
thinking that this MIGHT possibly
be of some use
(you are the second person I have
directed to the essay in the last
four weeks;
and this kind of thing DOES, I guess,
have some relevance to
the rather exciting
world of non-university education),
Tom
www dot metascientia dot com
Toomas dot Karmo at gmail dot com
12/18/14, 6:22 PM
Ed-M said...
As far as my civil engineering skill set is concerned, retooling them will be... difficult, since I'm in my 50s and my education consisted of a tsunami of rote work, and my work history has mainly been in public works (highways, street railways, public utilities, etc).
Hi, Mike,
What I said to JMG also applies to your comment. Living in a Gulf Coast state where the land is flat, and people want to keep water out, not dam it up, doesn't help. Would the Alleghenies and New England be a better place?
Hi Bill,
Yeah, well, the reason why Wall Street is panicking across the board is because the banking gnomes are up to their eyeballs in bad paper from the fracking fiasco about to unfold and the possibility exists that they may start calling in business loans. This would be especially true had the Cromnibus bill didn't include the planned transfer of the paper to FDIC insured banks and whatnot.
12/18/14, 6:26 PM
Ed-M said...
Yes, growing all that in the SE and SW United States sounds like a good idea, so long as we don't get more severe winters like the one we had last year. Four hard freezes with the average minimum extreme temperature normal to New Orleans and the Gulf Coast (20 to 25 degrees F) is not very friendly to tropicals that need minima of 30 F or warmer. But eventually those brutal winters will end.
12/18/14, 6:32 PM
Doctor Westchester said...
I believe that Steve Ludlum has posted here as Steve of Virginia. His site is http://www.economic-undertow.com/.
I admit to be dubious about charting in general, but it looks like his Triangle of Doom has made a solid hit here in terms of timing. As you have pointed out, most predictions in the Peak Oil world have a history of falling flat - year after year.
12/18/14, 7:31 PM
revert2mean said...
12/18/14, 7:36 PM
Kutamun said...
Gday mate ; yes , interesting paradox / double bind the system is presenting you, perhaps the solution is as suggested elsewhere is " get a library card and dont enter the double bind " . Spend money instead on building up your own library ..
As far as the "loose interstellar confederation of third world countries " , it is an interesting metaphor i agree ..
True enough , the third world doesnt have as far to fall as us , and their institutions may well weather the storm better than ours , rooted as they are already in the emergencies and exigencies of daily self sufficiency . When i visited India a couple of years ago i was struck by tye dignity and air of philosophical acceptance and quiet determination to press on that permeated the villages . I though to myself " if Aussies were plunged into this situation they would turn on each other like snarling dogs ", as they have been known to do in recent times during natural disasters . I think our recent homegrown film " these final hours " is a chilling metaphorical demonstration of this , as well as the power of love ....The Indians have their temple and daily prayer at the centre of their existence , you see
Cheerio
12/18/14, 7:48 PM
Val said...
I want to acknowledge an intellectual debt to yourself and especially to Violet Cabra, who posted a few weeks back on the way in which extended reading of anthropological materials substantially altered her view of human nature, and, by extension, of human polities. In brief, she expressed the idea that humans are essentially social primates, a fact which determines whether assorted sets of political arrangements do or don't work as advertised. This clicked with my recollections of a long-ago college anthropology course, specific details of which are highly confirmatory of that view. Consequently I now subscribe to the hypothesis that we're neither angels nor devils, nor are we fallen quintessences of corruptibility, nor are we really perfectible; we're just monkeys with overdeveloped brains. And experience and Jane Goodall have demonstrated that if you concentrate waaay too many bananas in the hands of a few dominant chimps, they're bound to behave badly. That, I fancy, is the basis of corruption in our socioeconomic & political systems and of the tendency of some individuals to game them.
I've always found anarchy the most attractive of doctrines, and still think it provides a fine critique of many a status quo, but like you I've observed too much of baboon politics to believe in its practicability on anything like a large scale or an extended basis. (I've even tried reading Roberts Rules of Order, but I'm afraid I found even the briefest passages excruciatingly boring.)
I think we can finally chalk up a sound prediction of deflation to Nicole Foss, at least if Chris Martenson's Peak Prosperity site is to be believed; one of the latest articles there is "Deflation Is Winning," by Brian Pretti. And indeed, checking there for the exact title of that article, I see that Nicole's smiling visage is prominently displayed above the latest item.
Let's hear it for lemonade oceans & Passional Attraction!
12/18/14, 8:22 PM
Mark said...
http://www.aljazeera.com/news/americas/2014/12/five-killed-gunman-us-20141215155439130660.html
Mark
12/18/14, 8:35 PM
John Michael Greer said...
Bill, of course! The one thing you can be sure of with a bubble is that it's going to pop; how, when, and why are always uncertain.
Violet, it'll be interesting to see whether there are jobs available for US skilled labor overseas. Depending on the severity of the global downturn, there may be very few options -- and depending on the behavior of the US over the next few years, Americans may not be welcome in a lot of other countries.
Travis, thank you, and a happy Solstice to you and yours!
Ed-M, if I knew how soon there'll be a push to reopen canals for shipping, I'd be able to advise you whether or not to look into that -- but it's anyone's guess whether that will become an option in time to matter. More on this in an upcoming post.
Doctor W, that does look like a fairly solid hit. I've bookmarked his site and will read the archives as time permits. Many thanks!
Revert, my "echo chamber" gets upwards of 300,000 page views a month, which is considerably better than most podcasts. I do appear on podcasts fairly often, by the way.
Val, the Baltic Dry Index is the usual surrogate for shipping activity -- no, it's not perfect, but it's the best source I know of. As for lemonade oceans and passional attraction, if only...
12/18/14, 9:46 PM
Øyvind Holmstad said...
JMG, you must know that many enter your site without downloading any pages, as one can read your whole posts just scrolling down. Those people will not be registered.
If you change to dynamic page views every article just has a small introduction, and you have to click it reading the whole text.
I'm sure you at least could triple your page views changing to dynamic page views, regularly getting more than one million page views a month.
12/18/14, 10:09 PM
Art Myatt said...
Guys. Oil just dropped below 59. My company shut down in November, but I have a new job elsewhere. Are you taking my advice?
1. Get rid of debt. Sell that pickup if it's financed.
2. Keep $1000 in the bank.
3. Check to make sure your company is paying your taxes and unemployment. Mine was not
4. Don't eye that 401k. If you cash out, the tax penalty will deatroy you. You do not need IRS trouble.
5. Be prepared to show up for work tomorrow and be laid off! That how it happened to me twice.
6. Do not believe your companies. They will say they have a 20 year commitment, or they have a contract, or they have work for 5 years. They are lying to most of you. 2009 I was laid off 3 fm days after my company signed a three year contract. 100% layoffs.
7. If you are on hitch, and drive home, fill the tank on your vehicle now. If you fly, be prepared to make your own way home. They may leave you stranded in ND. Personal experience.
8. If you have a company credit card, make copies of it, front and back. They may take your cards and leave you stuck with the bill. Without a copy of the cards, you won't be able to sue the company in small claims court.....agains personal experience.
9. If you keep working for a while, save 20%. Consider buying gold or silver.
10. Never, ever believe what your company tells you. I like to think they are honest, but my personal experience tells me different.
Good luck!
[end copied advice]
At least some of the people working in the oil fields have a clear idea of what's going on.
12/18/14, 10:18 PM
John Michael Greer said...
Art, oh, granted, the guys who are actually out there drilling holes in the ground know perfectly well what's going down -- most of them have been through booms and busts already. The flacks in the offices pushing papers have much less of a clue, and the poor fools who buy paper from them are completely detached from what's happening. That's always the way of it!
12/18/14, 10:34 PM
Larz said...
12/19/14, 12:19 AM
Gloucon X said...
Exactly right, and this is exactly why nothing could be more foolish than to expect a capitalist economic system such as ours to be stable and exist without boom-bust /bubbles (or to not strive for endless growth). This is what struck me when I reread The Limits to Growth. Writing back in 1972, those fools actually thought we could achieve what they called equilibrium (today, we use the term sustainability). It was a complete misreading of human nature. Terms like stability, steady-state, sustainability, equilibrium are delusional when applied to humans, and certainly when applied to mass societies of humans run by capitalists.
12/19/14, 1:30 AM
Kathleen Quinn said...
Yes, JMG--Governor Cuomo is no hero, and he is not known for political risk-taking (understatement of the year?). I love Grist's headline the following day: "Cuomo bans fracking in NY and questions climate science all in one day".
12/19/14, 4:25 AM
Ed-M said...
Speaking of shipping channels, the authorities recently closed and plugged one called "Mr. Go" because nobody used it, and because it routinely brought hurricane storm surge right up to the city -- and into it WRT Betsy, Katrina and Rita. Gustav was a very close call. Had one concrete flood wall fallen down....
12/19/14, 5:32 AM
Chris G said...
12/19/14, 5:52 AM
Chris G said...
across tje board by a factor of 6. You then designate funds for sustainable projects but you are assuming that the industrial infrastructure can even accomplish it. Probably the prices of components of solar or PV such as cadmium or copper or manganese or whatever would skyrocket. Any other designated "sustainable industry" (oxymoron) the prices for its goods or services would
skyrocket.
I think what might work better is to substantially raise taxes on the financial sector much like tje eisenhower era and redirect those funds as well as most of the entitlements to pay for the transition back to farm labor- In other words to pay people for actually working the land organically. But even this has insurmountable barriers such as housing transportation population overburden... collapse is pretty well baked in to the cake nlw
12/19/14, 6:16 AM
Chris G said...
12/19/14, 6:33 AM
william fairchild said...
I lived for many years in Casper, WY. One day I saw a bumper sticker on a pickup that said it all. "Dear Lord, give me just one more oil boom and I promise I won't piss it away." Looks like "we" pissed it away. McMansions, pickups priced competitively with double-wide trailers, the iPhone 6, etc.
A side note: The wind always blows in WY. It is very common to see mobile homes with a double row of used tires running down the roof in order to weigh it down. Otherwise the roof buckles and pops in the wind. It's like living in a tin can that someone keeps crackling and crimping. Very annoying.
12/19/14, 7:56 AM
Raymond Duckling said...
I'm not JMG, but having a 12 year old means I have been thinking about this for some time and will be having this conversation soon, so please let me chime in.
The first thing to know is that the college years is a unique opportunity to have lots of unstructured time of learning and growth. Like most unstructured (aka. unconstrained) things, most people blow it. Just don't!!! The 4 year wild party will give you a 40 year hang over.
If you do decide that indeed you have to study, you should make goals and stick to them. You must take and oath to devote yourself to a very scholastic/spartan lifestyle. First you schedule 3 hours of independent reading/studying (because coursework will take you only so far), then you schedule whatever activities you must to in order to survive, then you can attend coursework in your spare time. If there's no spare time, you cannot have a meaningful education in this environment anyways, so do not waste your time/money.
About surviving activities. You must hold a part time job. It must pay enough to cover your expenses and it must have a fixed and sensible schedule so that it will not interfere with your school activities. Therefore, all the typical low status jigs that most students take are probably not worth it. This means it is a good idea to take a few years off to learn a trade. Then you can come back to school from a strength position, instead of putting a lease on your future.
Finally, there is the financing question. All options seem to be pretty bad, at least in the US, but do yourself a favor and shop around. For what I heard, most people take on debt to go to college, but some get grants/scholarships that come with no further strings than doing what every student should be doing anyways (aka. devote at least as much time and effort to their educations as a full time job requires). Also, there are Universities that offer fee wavers to employees, so you may consider that as well. And if you know any languages besides English, there are countries that offer much better deals to foreigners than US offers its own population, so there is that.
Finally, I know the social expectations are very different in the US... but if at all possible consider not moving out of your parents' place. If the relationship is good, have a candid talk with them. This is the wave of the future. In my home country, the expectation is that people will move out when they get married... perhaps... to live with the in-laws (or have their sweetheart move in). Then the young couple will actually move out whenever they can afford it... or when the 2nd rugrat is on the way.
12/19/14, 8:04 AM
Dennis said...
I did find supplier graphs that are in line with the 368 million number you state.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=C100000001&f=M
I must admit I could not find anything that would explain the graph better I posted better, and what the title actually means. Even the 'definitions' link is no help to explain why one would be an order of magnitude different than the other. Not much can be drawn from it, I guess. My apologies.
12/19/14, 9:01 AM
Clay Dennis said...
12/19/14, 9:26 AM
John Roth said...
There are several things driving the drop in gasoline sales. The top layer has two items: a slowly improving miles-per-gallon ratio in the mix of vehicles on the road, and the actual miles driven have essentially flatlined over the last five or six years. Here’s the official chart: http://research.stlouisfed.org/fred2/series/M12MTVUSM227NFWA . Here’s an earlier version with an analysis of what’s going on.
Why have miles driven flatlined? One answer is demographics: older people don’t drive as much, especially since they don’t commute back and forth to work. Second, the Millenials simply are not driving as much either, and the ones that do aren’t looking at their cars as something to tinker with the way young people did a generation ago.
There’s also demand destruction, but that’s only part of the equation. You could call the Millenials not driving as much demand destruction as well, and I won’t argue all that much, although I think there’s a lot more going on there.
@Val
Here’s a chart for US container traffic, inbound and outbound from LA and Long Beach. I’m not sure of his data source. http://www.calculatedriskblog.com/2014/12/la-area-port-traffic-in-november.html
12/19/14, 9:53 AM
Chris G said...
Thus, I see the problem as one of finance at present - this is a temporary dip and there will be a return to fracking in the future. Might be five or ten years, depends on contingencies. But for now all the pieces of the debt puzzle are juggling around. Naturally they will congeal again and another effort will be made. It may come after production from the big easy fields in the middle east start to drop.
In general, the comment regarding the $100 trillion has got me thinking about approaching the subject with the uninitiated. For one, it's a big step to even search out and find this blog or your books, for instance. People don't go there. What they pay attention to in the mainstream is climate change, which is connected.
Well, so, low gas prices make life easier for roughly 75% of Americans; but it makes climate change harder - for the ones who both bother to think about it, and agree with science - which is not a high percentage, maybe 30% of people.
Prices down, but demand's still not there. I'm sure the powers that be can find a way to remedy that - it's the one thing the financial sector seems to get right, since the money keeps flowing into their hands by its perverse love of rubbing against itself.
So this downward flow of prices makes other energy-consuming businesses more affordable, if they have enough time to gear up and get running before prices go up again. Actually, it would be an ideal time to build up solar stock, ready to sell the next time oil crosses $80 or so.
Solar, just like fracking, is going to start and stop - as much as it can within its infrastructure needs - and probably beyond the point of being economical, just for nostalgia's sake.
You might think climate change would jump in to the conversation at some point and say, "enough already, what's the point? you're just making it worse - it's going to run out anyway..."
The heartfelt but nonsensical reply is, "not in my lifetime...but anyway, we're limitless."
Oh how convenient... Humans should be viewed not as rational at all, but rather very selfish- absent certain fundamental habits being instilled.
12/19/14, 10:04 AM
Chris G said...
It's not an idle comparison because a key component of people's belief systems is that God would never punish good people, thus delaying a reckoning of the matter that is less allegorical and closer to scientific facts.
But there is also a smarter, more daemonic form of the cargo cult that sees an underlying scientific principle surrounding exponential growth. coal was developed once growth reached a certain level. At the higher complexity, oil was developed. Nuclear was a step higher in complexity, and thus of a higher level of danger. Or, we might make discoveries at the higher levels of complexity that we can keep at lower levels. somewhat like radio. But maybe it would be nano-integrated organically grown circuitry that runs on photosynthesis and interfaces with animals, like humans. Some kind of organic computer system. Who knows? The only way to know is to run the machine as far and as fast as it will go. It's far beyond what a person can discover individually. But there may be some secret around the corner. Gotta travel to find out.
As one example, the science of ecology was not fully developed until the nuclear age, and many of the insights in ecology were close to some insights in chemistry and physics that also led to the nuclear age. Perhaps we would discover something as truly elegant as ecology. We might find it alongside truly dangerous material sciences, such as whatever incredible energy source lurks behind the Higgs boson, supposedly.
12/19/14, 10:23 AM
Chris G said...
http://thearchdruidreport.blogspot.com/?m=1
this is the page configured for a mobile phone.
One noteworthy feature is the ability to reply right on to another commenter's comment.
12/19/14, 10:32 AM
Chris G said...
Repent, I agree with you, but I can see how the following rationale for bad planning and failure to conserve could have made a lot of sense to people: we want to end slavery, serfdom. We have a huge cache of energies underground that can be taken just about as quickly as we want. With those we can free people from toil and labor and give them the same leisure opportunities as royals of old had.
Keeping in mind the coincidence in time of scientific, industrial, as well as French and American and later the Communist revolutions - all of them relied on these energies to fulfill new political constitutions.
Ecology was a later scientific development, many years after those political processes were underway. It only made sense in hindsight. Note the synchronous timing of Darwin's origin of species, the Civil War to free the slaves, and first forays into using petroleum as a fuel.
12/19/14, 10:44 AM
Alphonse Houner said...
As the economic party aged and troubles developed King Air aircraft would circle rural towns with a troubled bank like vultures only to land and disgorge their cargo of shark skin suited investors with pockets full of cash to buy the troubled banks in an attempt to further fund their financial circus; the Bush family – of dubious presidential fame – was among this scum covered crew. It was glorious and the aftermath was gory with millions of dollars of equity lost, many small towns destroyed and the livelihood of thousands wiped-out.
I was in the clean-up crew after the Penn Square debacle attempting, and rarely succeeding, in an attempt to salvage troubled community banks. For all their care in staying local in lending even they were impacted because their entire community had become dependent on the excesses in the oil patch and profits based on loan participations with fast dealing correspondent banks. The economic damage spread from New York west to the pacific and north to the Canadian border; such is the power of oil in our economy – but those events are all a distant memory now.
We keep on repeating this from tech to real estate and now back to commodities – oil among them – with the same result. It is on longer learning from the mistakes that opportunity has been lost, It is now about how we survive at a community, family and individual level and that is a daily exercise in adaption.
Excellent post and it brought back a lot of memories – thanks.
12/19/14, 10:59 AM
nuku said...
12/19/14, 12:29 PM
Rashakor said...
We are witnessing at ground level even that appear as boom and burst economic, ecological, etc...
Now let's imagine those events from the point of view of an alien 100000ft up with a 10000 years perspective.
All those boom and burst, ecological collapse, civilization upheavals, looks like noise in grander steady state cycles... This is what JMG referred many post ago.
What if in the cycle of humanity's lifetime, capitalism with all its boom, busts and collapse is just part of a dynamic equilibrium...
Personally I have difficulties imagining a system that is at perfect equilibrium (in fact in ecological terms that would be a dead system of infinite enthropy). All equilibriums (equilibria?) are dynamics and when looked under the microscope look like constant upheaval.
It is by morphological inference that we can imagine that even steady state and sustainable economies, ecosystems, etc... are made of constant cycles of growth and crash.
just food thoughs. I look forward for y'alls feedback
12/19/14, 2:44 PM
latheChuck said...
So, like, there's nothing to worry about, eh?
(Just Google "student loan forgiveness" for a flood of links, including one from US Dept of Ed. I'm not saying that I trust any of them, including the one from the US Dept of Ed.)
12/19/14, 3:15 PM
Varun Bhaskar said...
This is about what I expected. Can you perhaps estimate what will happen to the transportation system? I have my guesses but I would like a second opinion.
Anyway, I am about to start five days of fasting and meditation. So I will catch up on comments and what not next week.
Regards,
Varun
12/19/14, 5:27 PM
latheChuck said...
I'll let you know when I get authorization from the local utility to THROW THE SWITCH!
Apparently, the utility is vastly unprepared and under-staffed to issue the authorizations, even after they've installed the "smart" electric meter which can run backwards on sunny days.
I suspect that it might be a computer billing problem, maybe that they just want to let my meter run forward long enough that I won't roll it back below zero. But who knows? They respond to no one.
We've made the investment, but can't start to pay it off until they say "go".
(Other "investments" have been in insulation, tools, books, ham radio equipment, a fine made-in-USA kitchen knife (Lamson), a fine pair of made-in-USA leather boots (RedWing), and a fine warm (USA) winter coat (Carhart). Tools and books can be had at yard and estate sales for dimes on the dollar.)
12/19/14, 7:15 PM
latheChuck said...
12/19/14, 7:19 PM
Moshe Braner said...
I often use the "mobile" version of various web pages even though I'm on a desktop PC. It generally removes the fluff (ads and eye candy), loads faster (although this blog loads fast even in the full version), allows me to use the whole width of the window for the main text and to choose the font, etc. And it feels deliciously subversive, taking charge of the web page, bypassing all those ads... Sort of like a low tech version of high tech. Or vice versa. It's one component of getting ready for a leaner future. If and when bandwidth becomes recognized for its value and costs, when they start charging for internet connections by the byte rather than the month, I'll be ready.
12/19/14, 7:46 PM
Compound F said...
Please indicate your most spiritual favorite of your books. I have a gift to give, soon, in two days. Your plethora of writing is a bit much to manage. Plus, she doesn't give a rip about economical musings. She wants to know where you are coming from. That's the book I want.
Thank you,
CF
12/19/14, 9:03 PM
streamfortyseven said...
Abramowitz and Stegun: http://people.math.sfu.ca/~cbm/aands/dl/abramowitz_and_stegun-1.03.tar.gz Includes .tex file for PDF
LatheChuck: As for promises of “student loan forgiveness”, get it on paper from the lender, along with a promise to not sell the loan or use it for collateral or otherwise transfer possession and rights to payments of principal or interest. If you can, because chances are nearing 99.9999% that you can’t. These vague promises are unenforceable, and they’re probably outright lies from someone who might stand to profit from student loans - and once your kid signs on the bottom line, they’ve got him. The people in that business are without scruples or morals, they will tell whatever lies they can to get your kid to sign. College is risky enough as an investment when usibg your own money, but borrowing should be out of the question.
12/19/14, 9:04 PM
Unknown said...
@latheChuck-- two part reply. First part on student loans. Second part, advice from someone from the grandparent generation about how to do college today.
Some student loans are forgivable with strings attached. There are programs that forgive medical school loans if the doctor practices for a number of years in a rural area that has a hard time attracting doctors. That was the premise of a TV sitcom called Northern Exposure quite a few years ago. Some federal government loans can be forgiven in full if the debtor works full time at a nonprofit for ten years.
A couple of years ago, there was talk of enacting a law to cap the monthly payment on student loan debt at a certain percentage of income, and to partially forgive loans to graduates who never succeed in getting a good paying job. I don't think any of those laws were enacted, but I'm sure Senator Elizabeth Warren will get to work on it.
Obviously the time to find out under what conditions a loan can be forgiven, or the terms renegotiated, would be before taking out the loan. Certainly do not rely on hope or general promises.
The University of California claims that the majority of its students do not pay its ever-rising full tuition, but I don't know whether it is counting loans as well as scholarships.
12/19/14, 10:45 PM
Unknown said...
@latheChuck--my advice to the would-be college student of today:
Back when prosperity was more widely spread, I had the benefit of four years of decent, not great, undergraduate education paid for by my parents and the taxpayers. I got an economically worthless Bachelor of Arts degree without any work experience or useful connections, waited on tables for a year or two, then went to what was called junior college and picked up a trade practically for free. Those were the days. Nowadays, a university education paid for by someone else is probably as hard to come by as it was in the 1920s.
For most students today, I think the best way of getting the bachelor's degree without a ball and chain of debt is as follows:
1. While in high school, take as many advance placement academic courses as you can in order to get breadth requirements out of the way and rack up some college credits for free. Of course, advance placement courses are plentiful and easy to come by in elite high schools and unavailable in the public schools of the poor.
However, the parent/guardian/enterprising high school student should take the initiative to find out what advanced placement courses are offered anywhere in the school district. I'm fairly sure that if such courses are available at all, a student with the requisite qualifications is entitled to take the courses even if they aren't offered at his or her school. It probably will take both research and pushiness to exercise this right, if one is of the wrong ethnicity or class. Local community and four year colleges may also offer advance placement courses for gifted or worthy high school students, and if you do well in those, you might be on track to get admitted with a scholarship.
2. Save money by living at home and getting the rest of the freshman and sophomore class credits at community college--much cheaper, and your chances of having an instructor who is a PhD instead of a graduate student is higher than at most universities, where the PhDs' careers are based on research, not teaching undergraduates.
Think about where you might like to transfer for your junior and senior years. Check the course catalogs and graduation requirements of your aspirational four year colleges. Try to find out through unofficial channels which of the required courses for graduation and for your possible major (if you have any idea what that would be; don't stress if you don't) are hard to get into because the school doesn't offer them often enough to accommodate all the students who want to take them. This is unfortunately a common situation that turns what should be four undergraduate years (already one year too many) into five, just to get those last few required courses finished. If at all possible, avoid this extra tuition trap by getting those requirements out of the way at community college.
3. Apart from that, courses should be selected to do one of the following: a) be a fully transferable credit which satisfies a requirement for the bachelor's degree at the place you hope to transfer to and/or at the cheapest state college you think you can get into or b) fulfill a requirement toward a vocational certificate from the CC which will immediately lead to a paying job or c) be something you are truly interested in and would like to explore even if it has no obvious practical application. If you don't sign up for anything in the third category, you are wasting your youth.
4. Take as long as you have to to earn the AA degree and/or a vocational certificate, but don't go into debt. Then, take a gap year or two and get a grown up job, or travel, or raise some hell, or some children, and figure out what kind of life you want as an adult.
5. After that, you will have a much better idea of what additional education or training you want, and how to get it.
My elders did not give me any advice like this, but if they had, I wouldn't have listened. Good luck to you young'uns.
12/19/14, 11:31 PM
Chris G said...
12/19/14, 11:35 PM
Bike Trog said...
12/20/14, 12:06 AM
KL Cooke said...
I've heard them referred to as "homelanders," having been born post 911 in the era of "homeland security."
12/20/14, 12:15 AM
KL Cooke said...
Re: Writing
Suggestion (if you don't already have this)--
http://faculty.washington.edu/heagerty/Courses/b572/public/StrunkWhite.pdf
12/20/14, 12:31 AM
Vilko said...
"Shale gas is the dotcom bubble of our times. Output from shale wells declines so quickly that they will never be profitable – when investors realise this, the industry will collapse."
The article was written on the 4th of August 2014, before prices began to collapse. If Tim Morgan is right, we can expect the shale gas industry to collapse pretty soon.
12/20/14, 2:22 AM
Cherokee Organics said...
Fortunately, the fire is now reported as being under control. It took out 2,250ac (900ha). Many thanks for your well wishes.
Hi Nastarana,
Elderberries are a great plant to propagate. Really easy. Just cut a chunk off and bang it in the ground in autumn and hey presto, there's another plant.
Plus elderberry cordial is really nice stuff.
Hi Chris,
Many thanks for the data.
Cheers
Chris
12/20/14, 2:27 AM
Cherokee Organics said...
Welcome to the commentariat!
What is in it for us? You ask.
Well, the Archdruid mentioned several months ago that solar PV can actually be viewed as an offering to the ecology and the future.
It was an interesting perspective and certainly struck a chord with me. Off grid solar electricity is certainly not an economic proposition. When I mention that it costs around AU$0.80/kWh here people recoil in horror. But that is what it costs.
I generally don't consider it to be an economic decision. Perhaps that may or may not persuade your thinking?
Cheers
Chris
12/20/14, 2:34 AM
dltrammel said...
How Non Profit Hospitals Are Seizing Patients Wages
If you read that story it came across to me that the hospitals actually target people in that gap between very poor and wealthy enough to have insurance and then hit them with extremely large bills, max charges and then fees and such, in order to drive the amount high enough to garnish the max allowed, not caring what it does to the person's finances.
That I am in one of the states that allows the max, 25% of your wages, to be garnished sends a red flag up for me. Luckily I don't owe any debt and have excellent insurance, unlike many my age (in my late 50s).
I expect in the next spasm of collapse that institutions and corporations will get even more aggressive trying to collect from people who owe them money.
One more reason to get some of your income from out of the moneyed economy like JMG suggested. Its hard to garnish a meal made from your home grown garden, unless its with herbs you've grown yourself.
12/20/14, 2:52 AM
Cherokee Organics said...
Your quote: "I though to myself " if Aussies were plunged into this situation they would turn on each other like snarling dogs ", as they have been known to do in recent times during natural disasters"
Where have you been hanging out? All I've seen is the exact opposite of your description. People come together after natural disasters to assist each other.
Cheers
Chris
12/20/14, 3:58 AM
Cherokee Organics said...
Some may say that my next comment is mean spirited but it seems obvious to me and yet no one seems to question it: If a person has to borrow money to undertake a college or university education then perhaps it is an ambition that is beyond their station in life?
Dunno, but when I went to University and achieved an under graduate degree, I had to work full time whilst studying part time at night. Having a fear of debt meant that I paid for my education as I went out of my current earnings. I had to repeat the experience for a post graduate degree too.
From a person who lives outside the US and is unfamiliar with your education system except with how it is presented in the popular media, I'd have to say that living on campus appears - from my perspective - to be a good social outcome, but possibly a poor educational outcome. I would have to suggest that such social activities are not worth getting into debt for.
Just sayin...
There are certainly other alternatives, it is just that they turn up at your door looking very unappealingly like very hard work.
Part time study is a real sacrifice and not for the faint of heart, but I consider taking on huge quantities of debt to be an even greater sacrifice.
As an interesting side note, I also consider that industries that rely exclusively on their customers entering into debt arrangements in order to purchase the goods and/or services on offer - are probably well into unsustainable territory and perhaps on a finite lifeline.
There has been a notable investment scheme failure in the papers here recently which involved investors (!) purchasing investment products based on agricultural activities through loan arrangements provided by big banks. It was worthwhile noting that after the investment crashed and burned, the debts remained and the liquidators are pursuing the investors (!).
Just sayin, but the similarities are striking.
Also talk of debt forgiveness with the student loans smells to me of gaming the system. Not that there is anything wrong with that, but it should be acknowledged as such.
Cheers
Chris
12/20/14, 4:47 AM
Dan the Farmer said...
12/20/14, 4:48 AM
gjemd said...
US acts like they didn't see it coming.
What they did not see coming was Isis plans to sell oil over the Turkish border for $25/barrel.
Traders must maintain market dicipline to make money. This caused the intital sell off in oil.
What has happened since is reaction. Saudis decided this was their oportunity to take down shale. Many reports of US air strikes taking out oil assets in Mosul while leaving Isis tanks and artillery untouched. They need the Isis boogy man but not selling oil at $25 /barrel
12/20/14, 8:14 AM
Mark said...
I had to go back and read your paragraph on renewable energy again because I run a renewable energy company. Naturally it caught my attention. You noted the cultural influences of the early 80s. There’s a couple of big changes on that front.
I remember Carter telling us to conserve, wear a cardigan, turn down the heat. (I went back and watched his 1977 speech on energy as a refresher).
Reagan, on the other hand, came in and told everyone that, in effect, Carter was wrong, you can have your cake and eat it too. (While he did not literally say this, it’s the impression I’m left with after all these years)
Unlike then, I can't see the next president coming to office and pulling a “Regan.” (Telling everyone what the want to hear instead of what they should hear).
The other cultural influence that is new and different is climate change. That influence did not exist in the late 70s and early 80s. As an influence now, it will continue to make additional fossil fuel generation harder to build and should provide some check on renewable defection.
Despite all that, your point still stands. RE will take a hit because lower traditional energy prices make it harder to sell alternative energy.
(As an aside Reagan had the solar hot water panels removed from the White House and he eliminated the tax subsidies for solar – the subsidies were too generous, but losing them devastated the solar thermal industry).
12/20/14, 11:06 AM
Roger said...
Words to live by. Honesty is a quality much to be admired but never practiced in a business environment.
Did you ever ask a boss about rumors of lay-offs? Did you ever get a direct, truthful answer? No? I thought not. I'll bet what you got were dire warnings to not spread panic. And, incidentally, no, the company is NOT for sale, it will NOT be sold, so keep your head down, keep working and, most of all, keep quiet. Or else...Because news like this has a tendency to sneak out and get employees worried. You know, concerns about nickel and dime little people stuff. Like, for example, mortgages. Stuff like that.
I wish I had a buck for every time someone (typically someone from human resources) said "but we can't say that" such as in reference to upcoming corporate disembowelments, ones that typically come with big bonuses for the c-suite but massive loss of employment and income for everyone else.
You've seen it, parsimonious with facts, tricky with half-truths, every utterance carefully lawyered, bobbing, dodging, weaving in response to questions, slippery as Hillary on a Sunday morning news show.
And, if you're nimble enough to corner a boss and have the cojones to ask a direct question, they'll look you straight in the eye and lie like hell. They'll say no, contrary to rumors, yadda, yadda. Or emit meaningless word-fogs. I guess this is much more fun than telling it straight.
But most of all (and worst of all) the bosses deceive themselves. Not just small deceptions but great big ones. If you wonder why the business world and the economy are such a mess, if you wonder why the list of failed companies and failed economic policies goes to the moon and back, THAT'S why. That's the main cause. Co-incidentally, that's why the USSR and all its eastern bloc allies went down the drain, it was the unwillingness to tell the truth, especially the honchos to themselves, and to face it. The truth is painful. But avoiding it is ruinous.
And I think it was Dilbert that said the HR Director is a black winged demon. He was right.
Watch and listen when the corporate flacks speak. The amount of truth is inverse to the forthrightness apparent in the pronouncement. You learn this over time.
And, if you're thinking, this is no way to live, well, you are absolutely right. This is no way to live. It is corrosive and, in the end, advances nobody's cause.
12/20/14, 11:11 AM
Anselmo said...
One of the readers of the translation into Spanish of this post, asks whether the collapse of oil prices will be detrimental for the expansion of organic agriculture.
12/20/14, 12:47 PM
Unknown said...
@Cherokee Organics--Many students took out loans at high rates of interest; unlike mortgages, there is no provision to allow them to refinance at a lower rate. Those loans are very profitable for the banks, and I'm sure some of the debtors are looking for ways of getting out from under.
However, the more common situation is that the borrower took out the loan in expectation of earning a degree that would lead to a better paying job, and it didn't. Either he washed out of school before completing the degree requirements (which is a deliberate business practice at for profit vocational schools), or the job wasn't there when he graduated and the degree wasn't useful for getting some other good job. Another thing that can happen is that the person acquires a health problem or a family obligation that prevents them from putting enough time in to advance their chosen career.
I know a number of people from working class and middle class background who have had something like this happen to them. They wind up working part time without benefits, or in low wage jobs that they could have gotten without the degree, or going back to school for training in an entirely different field, instead of landing the steady well paying jobs that were supposed to provide income to pay off the loans.
Unless they have a spouse to support them, they are living hand to mouth despite having passed the bar or holding a doctoral degree or a nursing credential and are likely to be debt slaves for the rest of their lives.
12/20/14, 1:05 PM
peakfuture said...
http://vermontsailfreightproject.com/
Luckily, the canals (Eric and Champlain) are still operational and being maintained, for pleasure boating.
As far as higher education goes, one of the only tuition free schools (Cooper Union) started charging tuition this fall. Part of that was due to classic mismanagement, betting on the stock market, rising costs, building a starchitect building... a microcosm of the US. Sad to see.
I am curious how big schools and tech heavy schools (and their surrounding neighborhoods) will fare (the Ivies, Cal Tech, MIT, Stanford, etc.) They seem bulletproof, but if high tech stalls, they might stall as well. Looking forward to JMG's comment on this topic.
12/20/14, 1:12 PM
Tat Loo said...
across tje board by a factor of 6. ...Probably the prices of components of solar or PV such as cadmium or copper or manganese or whatever would skyrocket."
The US, and the world, has a lot of spare unused labour and industrial capacity at the moment. You can see this in how low shipping volume and purchase management indices are.
So even a relatively large influx of dollars over time would not boost real inflation by that kind of number, especially if capital investment was made into bulking up and overcoming constraints in productive capacity (a concern that you rightly alluded to).
Another step would be to move beyond a free market model for sourcing some key components and materials e.g. nationalise certain specific and narrow industries.
12/20/14, 2:06 PM
Tat Loo said...
The bankers and corporates also get to hold the next generation in thrall in debt peonage.
I would suggest that an older more established generation blaming the younger and disempowered in this society i.e. the kids from poorer and also declining middle class families, ones who have to go into debt to get an education which can never actually deliver the brighter futures promised in the glossy course brochures, is not the best way ahead.
12/20/14, 2:17 PM
rapier said...
It's fiscal crisis amounting temper tantrums by the usual suspects who are happy to spend a trillion on being in position to kill anybody but not to pay a teacher.
12/20/14, 3:20 PM
artinnature said...
Cheers from Cascadia
12/20/14, 3:50 PM
Nastarana said...
About investment, when I have money I buy good tools.
12/20/14, 4:23 PM
Paulo said...
When my daughter went to university I preached over and over, "never borrow money". She did, and one winter took her boyfriend (now husband) to Mexico. When she ran out of money that winter I co-signed a Credit Union loan and made her pay it back $200/month. It took about two years. I made her sign a formal contract with me. It was a hard lesson for her.
By the way, our formula for her schooling was Dad pay 1/3, she had to work for at least 1/3, and if she ran short could use a student loan knowing it was up to her to pay it back. Obviously, Dad helped out as needed. It was very costly at times.
Despite working all through university she graduated owing approx. $16,000. She now has a pretty good job and is paying off her loan as I write this. The bank of Dad has been closed for awhile.
My son, on the other hand, actually listened to Dad. He attended the local college just 3 blocks from home. He did a pre-app electrician course for one year. I paid the very modest tuition, for the course books, and he also worked nights and weekends for extras as needed. He drove a mustang which he paid for himself. He then obtained a red seal and worked for almost 10 years in the Oil Sands as an industrial electrician. From age 20 he has never made less than $120,000/yr and has a river front home about 300 metres from me. He is now 30 and works as a contractor doing drywall and electrical. In the Oil Sands he would work 2 and 2, sometimes 2 and 1, (weeks on and off), and as a contractor 7 days/week as required. On time off he would fly home to Vancouver Island.
I always...always tell young people to get a trade first, and then if desired attend university with a solid work background. I ask, "do you want to work summers at minimum wage, or on the tools at $30/hr? Think about it".
For God's sake, don't attend school to 'find yourself', or figure out what you want to do.
One year I held down 3 jobs. I taught high school full time, flew DHC-2 (Beavers) into logging camps after school and on weekends, and did renovations over the summer. I hired my son to help me when he was 13. It was a blast.
My formula worked as I retired 2 years ago at 57.
Don't borrow money, ever, unless it is for something big like an affordable mortgage. Never buy anything unless you already have the money in the bank. That is the advice I give young people thinking about going to school.
regards...Paulo
12/20/14, 6:49 PM
Kutamun said...
Gday there , referring to the brisbane floods a couple of years back where there were violent scenes in the suburban supermarkets as supplies rapidly ran out . A mate of mine told me the storekeeper refused to accept anything but cash as all the internet / banking systems went down , and he rapidly inflated the price of generators and other items ...profiteering
During the black safurday bushfires there were queues of people lining up for donated tools and other goods who were not affected by the fire . Closer to home i have seen people fleeing with fire bearing down then making demands over google groups that someone go check their properties while they wait in safety , and a general lack of interest / concern for checking on or assisting neighbours and others in any way shape form . Looting is quite common in Australia in disaster afgected areas , and generally we have every two bit polly in the land attempting to insert themselves into the news cycle and profit from the event . Generally these reports are fleeting and quickly suppressed , replaced with the standard evening news propaganda of heroism and hiw everyone pulled together , waltzing matulda , gid save the queen and arent aussies so caring and stoic ! But i am not fooled by this , the dark side is very much an active part of the largely spoilt first world consumer brats that comprise Auatralian society ,; having said that there is no denying that there are plenty of good people here who would do anything to help .
I tend to view apocalyptic films such as " these final hours " , in terms of metaphors that if you slow them down , show reactions to oncoming sets of conditions , depicted as apocalyptic events , and it is in this regard i find them valuable . So you are talking about reaction to natural disasters and i am talking about oncoming sets of conditions . I think if you look closely you will see that the powerful in this country are snarling very much at the ordinary people , and i have witnessed the retirees and other middle class people with hoarded assets to protect very much turning on the younger generation , devouring them amd their future if you will . I am under no illusions that this is a country of generous laid back people and koala bears , the ring of gulags that surround it does not support this , and if the elected officials and their policies are a reflection of the popular psyche , then we are a dark land indeed.
But i think you are ok mate
Enjoy the summer solstice , by Belenos !
12/20/14, 9:56 PM
Cherokee Organics said...
Many thanks for the reply.
Of course life is difficult and full of complications and unexpected turn of events. I don't dispute your point of view as it is certainly valid. Risk is inherent in just living.
What perhaps I didn't make very clear in my earlier comment about higher education was that if the system is working against your best interests then perhaps a person should seriously consider whether they join that system in the first place.
Your reply focused primarily on fall out from joining in the system, whereas I'm going back one step from your position and questioning whether it is a wise decision to join in with the higher education system in the first place.
The problem with my line of questioning is that it challenges the wants, desires and aspirations of average people.
People may want their children or themselves to get a University (or college) education, but if the outcomes are so poor the question has to be considered as to why they have that ambition. It is worth contemplating because there may not be an answer – they may be on auto-pilot.
It is uncomfortable, but in an era of decline hard choices have to be made and I am genuinely sorry for people who are in over their heads, but they made the choice to join in with that system for whatever reason.
My gut feel is that people enjoy the status they get from themselves or their children completing higher education.
Hi Tat Loo,
Exactly!
The previous generation here enjoyed free University education, but when the cost of that became too much for them to bear, they simply brought back fees - which I paid.
Cheers
Chris
12/20/14, 10:24 PM
Frank in Reno said...
12/21/14, 1:04 AM
Ozymandius said...
12/21/14, 2:06 AM
DaShui said...
12/21/14, 6:50 AM
Cathy McGuire said...
And buoyed by that energy, I've decided to share my post-decline novel in progress, JMG-style, one chapter a week, on my blog,starting today:
http://cathymcguire.blogspot.com/
Helpful feedback and critique welcome. I'm on Chapter 17 so I'm hoping to keep ahead of readers and that this will push me to find the ending!
12/21/14, 7:54 AM
hapibeli said...
12/21/14, 7:56 AM
Rebecca Brown said...
My childhood left a deep mark on me, and some of the scars I still carry very close to the surface. Food insecurity, for example, is a big deal for me; I have to have a certain amount of food in the house (measured at least in weeks) or I get worried and panicky.
12/21/14, 8:47 AM
gjemd said...
The current trend in " STEM" at the university is telling. I have witness two communites with Medical teaching Hospitals
absorb the local 4 year liberal arts university. The liberal arts departments are reduced to exapnd for biomedical largesse. Given the sandy soil the Enlightment was founded on, slavery and bourgeoise sentiment, maybe no harm. I was shocked that the most recent DSM manual of Mental Health removed Narcissim from the list of personality disorders. I suppose the Spectical of "SELF" is now offical.
12/21/14, 9:58 AM
LewisLucanBooks said...
I was a substitute clerical for a big regional library system. Floating from branch to branch, as needed. Since I was unencumbered and willing, I managed to cobble together full time work.
There had been rumblings, and I ran across the Deputy Director and asked him point blank if the substitute positions were in danger. Looking me straight in the eye, he said there would always be substitutes. 6 months later, we were gone.
Human Resources was another whole ball of wax. I managed to work enough to get into the retirement program. I heard from friends that human resources had asked building heads not to use Lew so much as I was getting "too many hours." "But he's the only one willing to come on short notice. He's easy to get ahold of."
Well, I did manage to get out with a small retirement. Very small. But since I live frugally, it makes a great difference. I'll probably have it for a good long time, unless the State of Washington goes broke. Which will probably happen about the time Social Security goes down. And when that happens, I'll muddle through.
There are plenty of other stories of my interactions with human resources, but it's pointless to rehash all that. I've moved on. I hope I still give them a sleepless night or two over "the one that got away." Probably not, but nice to think about.
Happy Solstice to all! And I agree with Cathy. It's so nice that the days will be getting longer. Lew
12/21/14, 11:31 AM
Chris G said...
12/21/14, 11:41 AM
Renaissance Man said...
So it makes sense that the neocons leaned hard on the Saudis to settle the price and to push hard for anything that could pick up the slack domestically. Hence Alaska, but I didn't actually know about the pretend oil & gas boom in Oklahoma.
Now I understand the basis for the subsequent savings and loan scandal that broke right after the oil bust. Since most of the whole delusionally overpriced subdivisions built in the middle of nowhere were mostly across the southwest. Obviously if money was rolling in, then real-estate speculation cannot be far behind.
But I think the echo of that boom went further: first what we got was Reagan taking credit for 'rescuing' the U.S. from Carter and all that negative conservation stuff. ("Morning in America" was the 1984 slogan). But I note that the fallout from Regan's "success" was, unfortunately, the re-election and increased support for pseudo-conservatives around the western world. Britain retained Thatcher; Canada got one of the most corrupt governments in Canadian history, led by Brian Mulroney. The the echo from that particular bust went rather far, I think.
12/21/14, 4:28 PM
latheChuck said...
The quote is from memory, not exact.
"Our university students and faculty have negotiated a non-aggression pact. The students promise not to interfere with the professors research (by actually making them teach), and the faculty promise not to interfere with their students' extra-curricular activities (by holding them accountable for learning)."
So, apparently, all that's necessary to obtain a college degree is payment of tuition. If it turns out that one runs into a situation where knowledge might apply, well, that's why we have Google on mobile devices. "I can search it" has replaced "I know it".
Did I mention that I'm stockpiling non-fiction (math, chemistry, surveying, nutrition, optics, engineering...) There may come a day when The Google no longer answers our questions.
12/21/14, 6:19 PM
Redneck Girl said...
Wadulisi
12/21/14, 7:32 PM
KL Cooke said...
Somewhat similar to the Department of Justice removing bank fraud from the list of crimes.
12/21/14, 11:35 PM
Mean Mr Mustard said...
I looked up the UK equivalent of that chart - here, road fuel sales have only dropped by 10% over the past five years. Some is demand destruction, but the reduction could also be attributed to more efficient engines replacing older in the vehicle fleet - now 50% diesel, typically 65mpg. And we have shorter distances to drive, which is all just as well - with forecourt prices still at $8.00 down from $9.00 a gallon...
cheers
Mustard
12/22/14, 3:54 AM
donalfagan said...
I found the first chapter very readable. Not sure why but I felt the protagonist was female until it became clear he had to be a man. As for the e-bike, mine has a range of only 45 miles, so I was wondering where to get one of theirs.
12/22/14, 4:03 AM
Cathy McGuire said...
@KL Cooke - Narcissistic Personality Disorder was retained in DSM V though they had talked about removing it... the whole process apparently had been very political, so I'm not surprised it was mentioned; glad they decided not, though.
@ ChrisG & Donalfagan - thanks for your comments. I really don't want to get off-topic here on JMG's blog, so can you (and others) post comments on mine? Unless something is wrong with Google Blogger? That way we're not hijacking this really wonderful discussion group.. I was blown away to find 66 visits to my page just yesterday - yes, JMG is getting a decent following these days!! :-)
12/22/14, 7:46 AM
Cathy McGuire said...
12/22/14, 8:32 AM
Cherokee Organics said...
Well, you are in good company because my lady read JMG's essay and my comment last night - which you politely responded to.
Anyway, after a bit of a discussion that involved strong words directed at me such as: "elitist", "self-righteous" and even "pratt" - I can admit that perhaps my intention was not clearly displayed in the original comment and could well be misinterpreted.
University / college education is a worthwhile goal. However, we live in an era of declining resources and I believe that as such it may soon - if it hasn't already - become an unobtainable goal. If that goal - which is a worthy goal - is unobtainable, then perhaps people need to consider what else they can do with their time as I would have to suggest that education is not only to be found at University / college.
That is all I was really trying to say. Apologies if I came across like a "pratt"!
Unfortunately, I tend to think that the sort of fall out that you described has become a barrier to entry for the institutions. I doubt those institutions have the wherewithal to amend their ways.
Cheers
Chris
PS: There is a new blog entry up showing: Christmas Down Under style. There is lots of quirky Christmas stuff from Down Under where the iconography is seriously confused but adapting. Shed stuff. Correcting stuff ups with electric doors. Stumpy the wallaby and more.
12/22/14, 2:23 PM
Elizabeth Kennett said...
Thank you again for another dose of sanity.
I've notice a number of fellow readers are concerned about the price of an education. I suggest going to the library and checking out "Debt-free U : how I paid for an outstanding college education without loans, scholarships, or mooching off my parents" by Zac Bissonnette. There are also numerous websites (at least for now) with instructions on whatever field of interest your heart might desire, YouTube being only one of the better known; numerous live people with all kinds of skills, most of whom respond quite generously to a sincere interest; the rest of the library, of course; and the original diving in and finding out for yourself. You may or may not have a paper/sheepskin credential afterward, but you *will* be better educated. The only thing needed is your own will.
@Justin Fischer
Any American gentleman may properly be addressed as "Mister", and in his handling of his blog and the commentary, our Mr. Greer has certainly demonstrated himself to be a gentleman.
Take care.
Elizabeth Ann Kennett, autodidact
12/22/14, 3:39 PM
Unknown said...
Hi, Chris.
You are a clear writer as well as a well mannered one and perhaps a brave one to voice the sort of thought that I usually keep to myself. [Examples of such thoughts deleted to avoid derailing this discussion.]
I'm in no position to criticize people who go into debt for an education because I got mine pretty much as a birthright. My father passed a competitive exam to get into a military academy, and served as an officer during wartime. My mother started college but had to drop out because of the Great Depression. They were the first in their families to go to college. They tried to make it easier for me, probably to the detriment of my character.
As you observed, I only addressed one aspect of your original post, the charge that people who take out school loans and then try to get out of repaying them are dishonest. I wasn't really taking on the question of whether they should have borrowed money in the first place.
Opportunity for upward mobility is a big part of American culture. Early on one might rise in class by some combination of hard work and enterprise, stealing from the Indians, and slave labor. After the US got well into the industrial revolution, we had a century in which white men and some others had multiple paths to better themselves economically.
In my lifetime many of these opportunities have disappeared. Farming takes too much capital, lone inventors can't do much, there are few apprenticeships because skilled trades have been outsourced, small businesses are squeezed out by oligopolies and regulation, wages are kept down by a volume of immigration not seen since the 1890s, etc.
Apart from organized crime and professional sports, not much is left for working class and lower middle class youth who wish to get ahead. Social mobility here is below that of other advanced industrial countries. Elites have been over promoting higher education as the panacea for class struggle and the word has not yet gotten around that this is a false hope for most.
12/23/14, 1:34 AM
LewisLucanBooks said...
12/23/14, 10:12 AM
frozenthunderbolt said...
12/23/14, 10:58 AM
Moshe Braner said...
The woman on the line said "we are in the oil and gas exploration business" and wanted to ask me "just 3 questions, and we are not selling anything". The first question was "do you still live in Vermont". The second was something along the lines of "do you have over a million dollars invested outside of your house, or an income over $200,000". (I wish!) At that point I asked who ARE they, and got the same vague blurb. Then I hung up. I wonder what the third question was going to be?
Phishing for "greater fools"? No idea why they picked my number - perhaps because my name appears in various "oil" (i.e., "peak oil") related web sites? Curiously, according to Caller ID, the call came from a nearby Excavating business. But there is no fracking in Vermont nor any neighboring state!
12/23/14, 12:25 PM
Islander800 said...
All one can do is shake your head at this blind insanity. The Peace River Valley that will be flooded is prime valley-bottom farm land that is valuable for food production now and will be even more so in the coming decades with Global Warming. The huge investment in a hydro-electric dam, one that will be used for nothing more than compressing natural gas, is blinkered political thinking from the 20th century. And these politicians are in complete denial about the true expected lifetime of fracking wells, let alone the enormous well-head methane emissions and polluted groundwaters. Clean indeed.
So we, in B.C. we will: 1) be stuck with a huge bill for a dam whose intended usefulness will be history, maybe even before the damn thing is fully built; 2) have sacrificed prime agricultural land in a future when its geographic location will make it even more productive in coming warming decades; and 3) not have an equivalent investment in clean energy for the future (image how many solar panels $9 billion would buy, in a jurisdiction with less than 5 million people).
Rest assured that blind, ill-informed, counterproductive special-interest-bought political decisions are not restricted to America.
12/23/14, 4:29 PM
Shane Wilson said...
12/24/14, 4:01 AM
Shane Wilson said...
12/24/14, 4:07 AM
latheChuck said...
There's something special about "going solar" so close to the Solstice.
12/24/14, 1:15 PM
August Johnson said...
Everything Is Awesome!
12/24/14, 4:21 PM
Unknown said...
https://itunes.apple.com/us/podcast/after-words-jake-halpern/id76464369?i=320252484&mt=2
12/24/14, 11:15 PM