Tag Archives: crisis

The coming chaos

(Survival Manual/2. Social issues/The coming chaos)

THE COMING CHAOS: PART I

Planning and puzzle solving
Trends, expectations, and the  daily events of life can be thought of like scattered colored pieces of a jigsaw puzzle. From your experience and the short historical perspective of your life, you form an idea of the current and probable security provided by your environment. You look at the assembled parts of the picture and develop a general idea of the completed future image and your place in it.

 In good times, there are fewer puzzle pieces and each seems big, so putting a few parts together allows you to easily imagine the larger-view of the future.
In harder times, when nations and huge international (food, banking, energy) industries have financial, political and military reasons for hiding their ‘game hand’, the important pieces of information become numerous and small.
As global and national economic times deteriorate and you continue about your daily life, you have an ever decreasing  intuitive  understanding of conditions and less accurate view of the big picture, resulting in a diminished capacity to carry about your long term life business effectively.  The ebb and flow of your stored money, your potential energy is generally: Where to store these hard-earned savings? How much to save over any given period of time?  What is the best long-term manner in which to spend or store large blocks of value when a given need is seen  arising?

During increasingly difficult economic times, you still put those pieces of the puzzle together in your mind, the same as you always have, but the scale and quality of the information you receive, has changed.
Think of this as somewhat related to inflation. When inflations first begins, no one sees it for what it is, but as prices creep up, inflation slowly becomes visible and irritating to everyone, only then do people individually begin to change their behavior in self-interest.
Meanwhile, the entities causing the inflation want to cover their tracks, so information given to the public is doctored, altered and diminished, official news bites are false, designed to keep the populace calm, to keep them from acting in their own best interest.

Because the normal indicators are not functioning in the accustomed way, you have to rely on other lagging indicators to replace the ones previously used. This requires work, so most people, being busy, go with the flow and in doing so no longer have that ‘more accurate’ larger-view of the future which they once held.

It’s all about money, and if not money, power. What can you lose by not adjusting your view of the future to fit the current cycle of economic reality? You can lose: the value of your 401K, value in your Treasury notes and bonds, long-term stock valuations, your home equity, interest from saving in bank instruments, while paying higher local-state-Federal tax rates, food, energy, maybe even a Value Added Tax.

In todays context, if you knew how these broad investments were falling out of favor, you’d have begun putting your savings into other assets, ie., certain foreign currencies, gold, silver, precious metals stocks, energy production and infrastructure, a little more food in the back of your cupboard before prices rose, maybe cash in the cookie jar.
Believing there would always be plentiful oil and gasoline, maybe you bought a large auto– without  the  knowledge that within a few years gasoline would be  much more expensive in real terms and there might even be rationing. By then, with the economy, still in a recession, with everyone seeing higher gas prices and few having cash to spend, you would have to take a major loss on trading in the ‘gas hog’ vehicle for a smaller more gas efficient model.
Perhaps, with  better information you might have bought a townhouse close to your local shopping district, instead of a stand alone house in the suburbs, ‘gas-miles’ from the shopping district.
Rather than buying a recreational vehicle, you might have bought a small parcel of rural property for camping or a cabin, and used a car top carrier or utility trailer to carry gear to your private bit of nature. The rural property could also be used if for a while, things grew unsafe in the city.

Money is also supposed to be a store of wealth and accountability.
It’s not that ‘prices are going up, the value of your money is going down.
Note: 50 years ago, in 1961, the price of one gallon of regular gasoline cost 31¢, that would be a quarter, a nickel and a penny, 31¢ . The quarter you would have paid for the gas with, was what we now call a ‘silver quarter’ containing 0.18084 ounces of silver. Real money-silver coinage was discontinued by 1965, where upon, nearly valueless copper clan coins were issued and which we still use today.
The current value of that common old 25¢ coin is now $7.05 (silver spot price= $39.01). Today, 10 August 2011, a gallon of local regular gasoline costs $3.59, so that silver quarter would buy practically 2 gallons of gas,  2 gallons x $3.59/gallon=$7.18, while the value of the silver quarter is $7.05.
And this is why during the last 70 years we’ve gone from a condition where one worker could support his family, to a time when it took both Mom and Dad to support the family, and now takes Mom and Dad, credit cards, and  maybe a 2nd home mortgage to provide the same.

At some levels of societal organization, it’s all about money or power; on lower levels it’s about not being robbed and left to face the economic winter (depression, unemployment or old age) with out the safety net provided by your savings–the product of your labor.
In the deep past, when men depended directly on the land for their livelihood, when a robber Prince took part of that property the peasant family had less resilience to survive. Today we don’t have ‘land’, per sae, we have money and investments, when the modern version of the robber Prince takes your property, they take your money or your future claim to the things money can buy, leaving you less resilient to survive.

If you prepare for a man-made crisis, you will be on the same path as some one preparing for natural disasters: hurricanes, power outages, etc. Man-made vs. Natural disasters differ mostly by scale and duration. [Mr Larry]

The Coming Chaos, will turn over a few pieces of the puzzle, ones that you may not have seen, ones that give you a somewhat larger view.  Be aware, that sometimes its better not seeing to your life’s horizon.

The world is in a state of constant flux and continuous change and there is nothing so certain in life as uncertainty. None of us know what the coming years will bring. One must be wary both of the innocent and rose-tinted view that the US and hence the global economy are just fine and the good times are about to roll again and of fear mongers and prognosticators of doom whose only message seems to be ‘resistance is futile’.
Meanwhile, with the evolution of electronics into computer, satellite, Internet, and digital information technologies, the recent decades have created a web of global interdependence, of ‘just-in-time’ supply, transportation, international banking, a layering of complex financial interactions and the immediate spread of information. Globally, human society has accumulated such complex interdependencies that it has affectively become like a spider’s web – where a disturbance of one strand shakes the entire web. Further, this intertwined body of global humanity has reached critical points in its equilibrium. It is at a point of dynamic, critical vulnerability; and at such moments the slightest of impacts in one sphere of global concern can set into motion an unpredictable chain of events across the interconnections.
It is only common sense, with the fragility of our system, to prepare for any disturbance with supplies. How long could you survive with what is on hand? Think about storing extra food, water, fuel, and whatever you think you need to get through. If one very large, or several moderate to large (Volcanic Explosivity Index) volcanoes go off, we may experience very muted daylight for several seasons to a year and unable to grow enough food for even the prosperous nations. Are you even prepared for the possibility that your communities electric power could go out for a week or more, during the summer, during the winter?

Why We Need Insurance
Many of us have never had to make a claim on our insurance. Therefore when we continue to write an insurance payment check month after month, we feel as if we are pouring money down the drain. Even though you’ve never had to make a claim on your insurance, there is a good reason that it’s there. Naturally, insurance is there to protect your you, your family and your investments, but let’s face it; many of us wouldn’t bother with insurance if it wasn’t required by law, or the bank.

How we buy insurance
First, we decide which threats to protect ourselves from, then we find a way of doing so at the lowest possible cost.
Survivalism is basically the same. I’ve created a list of survival threats at the side of the page. Some events are so destructive that they are not worth worrying about and have not been included, i.e., multiple impacts from a fragmented comet, or a ‘nearby’ star emitting a planetary sterilizing gamma ray burst.. There is no way of protecting yourself against Hollywood style events so there is no point in spending money on them. The best value for your money is to identify threats that you think are moderately likely and that may be dealt with easily. Most threats require the same core defensive measures with varying specifics.
Everyone should take some simple steps to protect themselves and their families from potential real risks that are on the horizon, but don’t take my word for it. Answer the following questions:
1. Is your job & income 100% secure?
2. Would you be able to have the basic necessities (shelter, food, water) if you lost your income for a prolonged period of time?
3. Would you be ok if your local grocery stores didn’t have an inventory resupply for a few weeks?
4. How would your finances hold up in a currency crisis where the dollar rapidly lost much of its value?
5. Would you be able to protect your family in the event of increased crime and decreased police presence?

Ready America
From the FEMA ‘Ready America’ website:
“…Each person’s needs and abilities are unique, but every individual can take important steps to prepare for all kinds of emergencies and put plans in place. By evaluating your own personal needs and making an emergency plan, you can be better prepared for any situation. A commitment to planning today will help you prepare for any emergency situation. Preparing makes sense. Get ready now.
• Consider how a disaster might affect your individual needs.
• Plan to make it on your own, at least for a period of time. It’s possible that you will not have access to a medical facility or even a drugstore.
• Have a week or longer supply of medications and medical supplies
• Identify what kind of resources you use on a daily basis and what you might do if they are limited or not available.
• Buy or make an emergency supply kit.
• Have copies of emergency documents
• Create a support network…”

Headline: “15 Million Americans Infected with Xyz- Flu”
“You just heard it on the evening news. It’s now a reality. Your city has been locked down. There are roadblocks on all arteries in and out of the city. No one can come in or go out of the area.
The grocery stores, the gas stations, and all other public facilities are closed. Everyone has been told to stay in their homes.
Your family has five days of food left. Seven days, if you and your wife eat much less, and give it to the kids. Water is only sporadically available when you turn on the faucet.
You realize you should have thought about the news, what it might mean, but you remained a spectator of the events unfolding around yourself and in the world. You wonder how you missed the signs. You feel guilty and powerless because you don’t know how you will feed your family.”

Things you should know
• Don’t rely on the government to help you. As big as they are, when disaster hits they’re both: 1) too big a bureaucracy, 2) with too few people on the ground, to help a large number of people in a reasonable amount of time.
• Don’t rely on utility companies to help you. They will have priorities and will be working almost around the clock, to get things restored, but, a) it won’t be fast enough no matter who you are, and b) you’re probably not a priority. Don’t complain about it – be prepared for it.
• Don’t rely on your Insurance company for anything more than a check. Insurance is about money, it’s not their job to repair your home or put your life back in order. While some might refer you to local contractors, many do not, and in times of overwhelming need, both adjusters and contractors are going to be hard to come by.
• Know what your area is at risk for (i.e. Seattle has a major earthquakes every 100 years or so, and moderately damaging windstorms every 10 years) and be prepared to take care of yourself for awhile.
• The government’s, ‘Three Days of Self Sufficiency’ campaign, is woefully inadequate.
• Mankind endures ‘an episode of great wealth destruction’ at least once every century. People should prepare to ride out a disaster, be it a tsunami, a market meltdown, an EMP grid down scenario, volcanic winter, deadly pandemic or Islamic terrorists with a dirty (radioactive materials) bomb.
• The rich (all of us in the Western world) get complacent, assuming we’ll have time “to extricate ourselves and our wealth” when trouble comes. The rich are mistaken, as ‘the Holocaust’ proved.
• People generally do not feel the unthinkable will happen to them. However, many times there are situations out of our control that affect us in a big way. Major events that affect the food supply are especially troubling.
• Events move much faster than anyone expects’ and the barbarians are on top of you before you can escape.

The times that we endure today will be the history that others will read tomorrow. History has shown us events that have destroyed some societies and created new ones to take their place. Those who rise to power often decide the fate of millions. And there have been times when a people rise up as a nation, united to achieve mutual goals of prosperity and hope for a better future.
Today as a nation, Americans must uphold their moral convictions and beliefs that a nation of people who stand united will not perish. There are events occurring in this country that could change the very existence of our nation as we know it. And no one person or political party can decide the best course of action to ensure our prosperity and hopes will not be taken away from us. The answer to our problems is right in front of us, and we must cling to it as if it is our only hope, because it is the only thing ‘We The People’ have left: The Constitution of the United States of America .

Our policy makers are in a Catch 22. It’s checkmate, and the only thing that we can do is delay… to a point.
We need austerity measures, much more severe than those of France, Greece and the rest of Europe, but mass cuts in entitlement programs that tens of millions of Americans have come to depend on will lead to serious problems, not just for our economy, but on a social level as well. What happens if 40 million people were to lose their food stamps, or 20 million people lose their unemployment benefits? Many are already at the breaking point, if the government were to stop the gravy train, as Chapman puts it, the system would get very chaotic, very quickly. Thus, we just don’t see something like that happening anytime soon. But make no mistake, the current entitlement system, driven mainly by US government borrowing, is unsustainable. So, whether we like it or not, the cut to entitlement programs is coming one way or the other.
Politicians are just not going to do it. For many, it would be political suicide.
The end result we foresee is, as Chapman points out, ‘a high inflationary environment that will make it impossible for the average food stamp, unemployment or welfare recipient to purchase essential goods like food, energy and shelter’.
We’re seeing it in Social Security already, albeit in limited form. The government has not re-adjusted social security payments higher because the CPI inflation index has not shown an increase over the last couple years. However, the CPI does not include calculations for food and energy because our government says those are highly volatile and should not be counted. Thus, Social Security recipients are now paying more for food than they were two years ago, but there has been no adjustment made in their benefits. They’ve essentially taken a mandated pay cut as the US dollar has lost value.
This is exactly what we will see in other entitlement programs. Now imagine for a minute what it will look like if/when inflation is running rampant at 10% – 15% per year, and entitlement adjustments only account for 1% to 3% increases.
A lot of people will go broke a whole lot faster.
We’re not talking about people not being able to buy iPads, new home decor, or Christmas presents for the kids. No, we’re talking about being able to put food on the table, paying the rent for shelter and putting gas in the car.
This can get very ugly. As Peter Schiff previously pointed out, ‘a great number of Americans will be impoverished’ and, according to Gerald Celente, ‘many may take to the streets in riots and protests circa 2011 and beyond’.

 40 ways to lose your future
June 2009, TheAutomaticEarth.com
People have been asking how we see the future unfold. Here is a brief summary (in no particular order and not meant to be exhaustive) of the ground we have consistently covered here at TAE over the last year and a half, and before that elsewhere.
1.  Deflation is inevitable due to US financial Ponzi dynamics
2.  The collapse of credit will crash the money supply as credit is the vast majority of the effective money supply
3.  Cash will be king for a long time
4.  Printing one’s way out of deflation is impossible as printing cannot keep pace with credit destruction (the net effect is contraction)
5.  Debt will become a millstone around people’s necks and bankruptcy will no longer be possible at some point
6.  In the future the consequences of unpayable debt could include indentured servitude, debtor’s prison or being drummed into the military
7.  Early withdrawals from pension plans will be prevented and almost all pension plans will eventually default
8.  We will see a systemic banking crisis that will result in bank runs and the loss of savings
9.  Prices will fall across the board as purchasing power collapses
10.  Real estate prices are likely to fall by at least 90% on average (with local variation)
11.  The essentials will see relative price support as a much larger percentage of a much smaller money supply chases them
12.  We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits
13.  Real interest rates will be even higher (the nominal rate minus negative inflation)
14.  This will cause a tsunami of debt default which is highly deflationary
15.  Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure
16.  Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)
17.  Centralized services (water, electricity, gas, education, garbage pick-up, snow-removal etc) will become unreliable and of much lower quality, or may be eliminated entirely
18.  Suburbia is a trap due to its dependence on these services and cheap energy for transport
19.  People with essentially no purchasing power will be living in a pay-as-you-go world
20.  Modern healthcare will be largely unavailable and informal care will generally be very basic
21.  Universities will go out of business as no one will be able to afford to attend
22.  Cash hoarding will continue to reduce the velocity of money, amplifying the effect of deflation
23.  The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates
24.  Eventually the dollar will collapse, but that time is not now (and a falling dollar does not mean an expanding money supply, i.e. inflation)
25.  Deflation and depression are mutually reinforcing in a positive feedback spiral, so both are likely to be protracted
26.  There should be no lasting market bottom until at least the middle of the next decade, and even then the depression won’t be over
27.  Much capital will be revealed as having been converted to waste during the cheap energy/cheap credit years
28.  Export markets will collapse with global trade and exporting countries will be hit very hard
29.  Herding behavior is the foundation of markets
30.  The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists
31.  A sense of common humanity will be lost as foreigners and those who are different are demonized
32.  There will be war in the labor markets as unemployment skyrockets and wages and benefits are slashed
33.  We are headed for resource wars, which will result in much resource and infrastructure destruction
34.  Energy prices are first affected by demand collapse, then supply collapse, so that prices first fall and then rise enormously
35.  Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years
36.  Hard limits to capital and energy will greatly reduce socioeconomic complexity (see Tainter)
37.  Political structures exist to concentrate wealth at the centre at the expense of the periphery, and this happens at all scales simultaneously
38.  Taxation will rise substantially as the domestic population is squeezed in order for the elite to partially make up for the loss of the ability to pick the pockets of the whole world through globalization
39.  Depressive political structures will arise, with much greater use of police state methods and a drastic reduction of freedom
40. The rule of law will replaced by the politics of the personal and an economy of favors (i.e., endemic corruption)

We Have Some Hard Decisions Ahead
The economy has taken a dramatic turn for the worse for many Americans. While many individuals and households have had the financial resources and good fortune which will allow them to weather economic uncertainty, many will simply not be able to maintain their standard of living. Many two income households are now one income households and that income may have decreased due to companies cutting back on work hours. This situation has been occurring for many Americans for many, many months, forcing people to assess what is important and downgrade their lifestyle. The time to make hard decisions has arrived, and will dramatically alter the lives of many for years.
People who relied on spouses to pay the bills are now paying the bills. Those who have relied on savings and unemployment benefits to maintain their standard of living are now faced with the reality that those resources are exhausted. Bills are not being paid. Healthcare premiums are not being paid. Automobile and household maintenance is being neglected, which will create costlier repairs down the road. Simply put:
•  You might have to stop making your car payment and save those payments up to buy a used car. The car you currently have financed will be repossessed.
•  You might have to stop paying your mortgage and save those payments up to move into an apartment.
•  You might have to give up your healthcare, your magazine subscription, your club membership, your vacation plans, your charitable donations, your cell phone, your internet access or home phone service, your lawn care service, your financial support that you provide to friends and family who are having financial problems themselves, and many more expenditures not listed here.
•  You might have to contact an attorney to discuss bankruptcy.
•  You might have to sell off your possessions and assets.
•  You might have to move in with other families, friends, relatives, or shelters provided by the government or charitable organizations.
•  You may come to realize that what you thought was valuable and important to you has no value or significance at all.

Basic human needs will become the biggest priority in your life after you shed (lose the use of) the things that have merely brought comfort and convenience to you. You may be forced to downscale your lifestyle so dramatically that it will cause you to question your own intelligence and hindsight for not planning for such a life changing event.
The things that you have always taken for granted could become difficult to obtain now that there is no longer enough money to buy those things. Basic needs become vital issues that need to be addressed:
•  Food and ‘non-electric’–with the means both to prepare it and store it.
•  Portable water filtering devices and containers to store water for drinking, cooking, and bathing.
•  Over the counter medicines, vitamins, supplements, first aid supplies, and some basic health and first aid literature in book form. Individuals using prescription medications, or require medical attention, will need to determine their best course of action during a period of financial distress.
•  The need for shelter may require the purchase of a tent, camper trailer, and other camping equipment if you can no longer provide an actual roof over your head and have no one to turn to.
•  The need for personal protection will become more obvious as desperate people begin to take desperate actions to provide basic needs for themselves and their families. The level of security you choose will be determined by your location, your finances, and your personal views and beliefs. If chaotic conditions occur, lawless activity will surely follow. Past incidents of disaster and mayhem give much testimony to this.

A look at the civil unrest that can arise when a government just ‘proposes’ austerity measures
“French gov’t undercuts Senate on retirement bill
Oct 21, 11:40 AM (ET), By ANGELA CHARLTON
PARIS (AP) – The French government is short-circuiting a protracted debate in the Senate on a bill raising the retirement age to 62, brushing aside some 250 amendments.
Faced with widespread protests against the bill, the government is ordering Senators to vote on a package of its own design, using Article 44-3 of the Constitution that allows it to step into the parliamentary debate.
PARIS (AP) – Protesters blockaded Marseille’s airport, Lady Gaga canceled concerts in Paris and rioting youths attacked police in Lyon on Thursday ahead of a tense Senate vote on raising the retirement age to 62.
A quarter of the nation’s gas stations were out of fuel, despite President Nicolas Sarkozy’s orders to force open depots barricaded by striking workers. Gasoline shortages and violence on the margins of student protests have heightened the standoff between the government and labor unions that see retirement at 60 as a hard-earned right.
Shopping streets stood nearly empty Thursday in central Lyon. The Bistrot de Lyon didn’t put tables outside as usual out of fear of clashes. “We’ve seen a reduction of 30-35 percent of business overall, for the last few days with the rioting in town. Lunchtime, nothing is going on, we’ve no one. It’s more than calm,” said restaurant manager Philippe Husser.
In Nanterre, the scene of running street battles between masked and hooded youth and riot police in recent days, the scene Thursday morning was calm, said Mehdi Najar, one of a few dozen red-jacketed mediators organized by the city hall to try to keep the peace.
In Marseille, hundreds of workers blocked all access to the main airport for about three hours early Thursday. Passengers tugged suitcases along blocked roads as they hiked to the terminal, before police came in and the protesters dispersed.
Wildcat protests blocked train lines around Paris on Thursday. Protesters in cars and trucks blocked several highways around the country, from near Calais in the north to the Pyrenees in the south, according to the national road traffic center.”

Coming Chaos: No Banks, No Public Facilities, No Food and Rampaging Gangs of Desperate People
Bob Chapman, of The International Forecaster, says it’s time to prepare for the worst, comparing our impending economic crisis to that which was experienced at the onset of 1348 and the following century and a half.

Flashback to 1348:
The Black Death is estimated to have killed 30% to 60% of Europe’s population, reducing the world’s population from an estimated 450 million to between 350 and 375 million in 1400. This has been seen as creating a series of religious, social and economic upheavals which had profound effects on the course of European history. It took 150 years for Europe’s population to recover. The plague returned at various times, resulting in a larger number of deaths, until it left Europe in the 19th century.
While Chapman does not suggest we will experience our own black plague pandemic, he predicts that the consequences of our economic collapse may lead to total destabilization and wars, much like post-plague Europe.
As you are now well aware Fannie and Freddie are going to punish people who have stopped paying their mortgages, who can pay them, and who are paying other bills instead. This leaves lenders with foreclosures and much more inventory than they ever imagined. This additional problem will bring on the double dip that Wall Street and Washington so fear.
As a result of this and other failures we are about to experience the worst economic collapse since 1348. The stock market is topping out readying itself for its most disastrous fall in history. The fall will be followed by years of depression, all of which has been deliberately created to bring the world economically and financially to its knees in an attempt to bring about world government by Illuminists.
Some market analysts understand where the market is headed, but most who do understand, write and talk about the mundane observable trappings and not what the situation is really all about. We have several analysts talking about a market collapse. They do not talk about the real forces behind our misfortune.
There are always these lone voices in the wilderness, which at best – some 15% of the populace – listens too. You had better listen this time because it could well cost you not only your assets, but your life, especially when another war is being prepared for you to engage in. Nothing is really as it seems to be and there are no coincidences. You are about to enter a world of chaos from which few will survive unscathed. A world of no banks, no public facilities, no food and rampaging gangs of desperate people. Unemployment of 50% and little law and order. Violence will be rife. This is not a pretty picture, but we have spared you the details. The world had better wake up fast so they’ll be prepared to deal with what is to come. If you were not aware of it the dark side really exists.
We are now entering the next to last phase of our journey. The wanton creation of wealth, inflation and perhaps hyperinflation, which will rob you of your assets. A stealth attack on what you have left by the people who control your government. Such monetary creation is the only way these people can keep the game going. They know it won’t last, but they proceed anyway. For awhile they’ll keep the multitudes at bay with extended unemployment and food stamps, but that will fade in time for lack of financial control, as the system begins to break down.
You already see all fiat currencies under fire, as is sovereign debt. Can it get any worse? Of course it can, and it will. Implosion is the word everyone is going to discover and understand.
The picture Bob Chapman paints is one that may lead to an initial reaction of, “What? No way that can happen.” Perhaps it can’t happen. Perhaps, it really is different this time and our benevolent leaders and the powers that be are capable of managing this crisis. Perhaps they will restore jobs to pre-crash levels. Perhaps home prices will go back up to record 2006 levels because tens of thousands of buyers will appear in the market. Perhaps the Federal reserve will be able to sell of their toxic assets, not have to print more money to bail anyone out, and the world will demand that the dollar remain the reserve currency of choice. Perhaps all of these people in delinquency on their mortgages will be able to catch up on those late payments. Perhaps governments will stop spending more than they take in and all of their debts will be paid off. Perhaps the globe’s top financiers will figure out a way to deleverage the trillions of bad debt currently working its way through the system.

Or, perhaps they will not be able to reverse course. Let’s assume that they can’t reverse course. How bad can it really get? This is something that our elected officials and those at the Fed, Treasury and large institutions will not overtly discuss. But clues have been dropped throughout the last several years. And, you need to look no further than those very same officials.

President Obama, during the green shoots recovery of 2009 and 2010, told the American people
that a depression was avoided. Thus, we can assume that a depression is a strong possibility if we are in fact about to see another economic collapse. In 2008 and 2009, former Secretary of Treasury Henry Paulson said that we were “on the brink,” in fact, after he left his position with Treasury, he wrote a book with this very title. The brink, from what we can surmise, meant a complete collapse of our financial, economic and political systems. The result would have been martial law. Hard to believe? Yes. Impossible? No:

THE COMING CHAOS: PART II

Are some popular movie and television images from the end of the first decade of the 21st century, a harbinger of less severe, but rhyming themes to come? Movie entertainment themes are a fulfillment of consumer curiosity and expression of the sediment of the times.

Movie image, I Am Legend (left). Disease has almost eradicated mankind, only a few random survivors exits in decaying cities.
Movie, 2012. Earth crustal shifts with continents sinking into the ocean. Several thousand people escape drowning aboard huge ships.
Movie, The Road. A catastrophe has almost wiped out mankind. Survival is harsh in a barren land of armed scavengers.
Movie, The Book of Eli.  Most of Man destroyed by calamity, there are few survivors, much chaotic lawlessness is pervasive.
TV series, The Walking Dead. Brain disease reduces most of mankind to zombies, a few healthy survivors gather and try to eke out an existence without becoming infected.
TV series, Falling Skies. Aliens attack Earth; humans are slaughtered and small remnants driven from cities. Survivalist lifestyles develop as ragged groups try to feed themselves and resist the aliens.
Movie, Contagion. Earth population depleted by fast acting virulent disease. Chaotic conditions develop.

Real life images
Garbage lined streets (right) : During the (2011) snowstorms that hit the NYC, the Sanitation Department suspended garbage collection for days at a time in order to use trucks for snow removal, which meant about 11,000 tons of trash per day didn’t get collected. Granted, the mess has been caused by more than just missed collections. People have been tossing loose trash onto the bags, and it’s winding up on the sidewalks and streets. Plastic McDonald’s cups. Broken bottles of Budweiser and empty cans of Four Loko, cigarette butts, smashed umbrellas, sheet music, soggy gloves, old newspapers, and damp, dirty sofas — all left out in the open, as if they, too, will just melt away. And thanks to pet owners, who got a little lazy in the bad weather, many city streets are now shellacked with dog feces.  Crumbling Detroit, 2010.
In the late nineteenth century Detroit (left)emerged as a major transportation hub along the Great Lakes.  Gilded Age mansions and other grand buildings spawned the city’s nickname “Paris of the West.” The gasoline crises of the 1970s impacted heavily on the car industry, while racial tensions and increasing drug-fuelled crime spurred the beginning of the end for Detroit’s industrial supremacy.  As the city descended into high unemployment, many of its finest buildings, including theatres, hotels, offices and apartments, fell into ruin.

Our Jig Saw Puzzle:
The parts that go bump in the night, the parts that can trigger the coming chaos, are:

1.  Peak Oil
(Think broadly: ANY energy crisis.)
The world is rapidly approaching Peak Oil production and will be at an inflection point soon, if not already, after which, real prices will (or already have) begin a long rise. Price inflection is possible before the next economic recovery, but will certainly come with a recovery, which will then be short-lived, because rising energy prices will channel money away from other discretionary expenditures.
During the years, 2009-2010, the USA and Europe were in recession with lower oil requirements, which have skewered the associated 2007 chart by extending the plateau top and pushing the ‘decline in production slope’ (with subsequent increase in prices) into the future another couple of years past the original 2007 projection. Whether we are out of the recession or not by 2015, production declines and the resultant rise in petroleum prices will probably have become an unpleasant factor in our national and personal, financial lives.

Official Peak Oil reports
Saturday, 4 Sep 2010, FinancialSense.com weekly, ‘News Hour’ podcast, gave leads to the Peak Oil reports listed below. These articles (only the lead paragraphs have been re printed here) seem to be telling a story, a story which has not yet been shared to any degree with the American people by either the Government or the news media. Furthermore, there is not just one news item, but increasingly frequent, almost monthly reports issued by responsible, main stream institutions in Europe, the USA and the Middle East.
Europe is currently advancing on a continent wide program toward fossil fuel independence; its estimated that in 10 years, by 2020, 20% all of Europe’s energy, not just its electricity, will be derived from renewables. What is happening in the United States? Nothing that I’ve heard of or seen. Maybe the government is waiting for a ‘Peak Oil-Pearl Harbor’ type crisis to create a popular mandate for action—as opposed to making plans and choosing an intelligent path while there is more time and opportunity to implement and mass test renewable systems.
The energy transition from one type energy to an alternative, historically, only happens about once per century and does so with momentous consequences.  We will begin to move away from fossil fuels quite rapidly from here on forward. Business, families and individuals who can adapt to the charge and manage risk will gain an advantage with the shrinking energy pie. (See also ‘Survival Manual/1. Disasters/Peak oil and energy crisis’)

The reports:
a)  London, 10 February 2010: UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) study on peak oil was released: “Business calls for urgent action on ‘oil crunch’ threat to UK economy”. A group of leading business people today call for urgent action to prepare the UK for Peak Oil. The second report of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilize economic, political and social activity potentially by 2015.
b)  March 2010: Telegraph.Co.UK, “Oil reserves ‘exaggerated by one third’. The world’s oil reserves have been exaggerated by up to a third, according to Sir David King, the Government’s former chief scientist, who has warned of shortages and price spikes within years. Published: 9:51PM GMT 22 Mar 2010, by Rowena Mason, City Reporter (Energy)
c) March 2010:  heatingoil.com, Kuwait University and Kuwait Oil Company’ Peak Oil report: “Kuwaiti Researchers Predict Peak Oil Production in 2014, Posted by Josh Garrett on March 10, 2010
d)  “A new study published in the Journal Energy & Fuels predicts that world conventional oil production will hit its peak in the year 2014.
e) April 2010: guardian.co.uk, “US military warns oil output may dip causing massive shortages by 2015” by Terry Macalister. The Shortfall could reach 10 million barrels a day, report says, while the cost of crude oil is predicted to top $100 a barrel.
“The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact. The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.
f) June 2010: Guardian.co.uk, news article posted 11 July 2010, “Lloyd’s adds its voice to dire ‘peak oil’ warnings”, by Terry Macalister. “Business underestimating catastrophic consequences of declining oil, says Lloyd’s of London/Chatham House report. One of the City’s most respected institutions has warned of “catastrophic consequences” for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy. The Lloyd’s insurance market and the highly regarded Royal Institute of International Affairs, known as Chatham House, says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming. “Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences,” says the Lloyd’s and Chatham House report “Sustainable energy security: strategic risks and opportunities for business”.
g) August 2010: Spiegal Online International, posted 4 September 2010, “German Military Study Warns of a Potentially Drastic Oil Crisis“, by Stefan Schultz “A study by a German military think tank has analyzed how “peak oil” might change the global economy. The internal draft document — leaked on the Internet — shows for the first time how carefully the German government has considered a potential energy crisis.
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

The news report from Spiegal Online was specific about their study’s socio-economic findings, pointing out that:
•  “Shortages in the supply of vital goods could arise as a result, for example in food supplies.
•  Oil is used directly or indirectly in the production of 95 percent of all industrial goods.
•  Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain.
•  In the medium term the global economic system and every market-oriented national economy would collapse.…
•  (Relapse into planned economy) Since virtually all economic sectors rely heavily on oil, peak oil could lead to a partial or complete failure of markets. A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis….
•  (Global chain reaction)  A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil. It is likely that a large number of states will not be in a position to make the necessary investments in time, or with sufficient magnitude.
•  If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it’s so tightly integrated into the global economy….”
•  The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government….”

2.  Real Food Price Increases
Another sign of the times and portent for the near future burden of costs falling on household budgets is shown in the New York Times news article dated, 5 August 2010:
•  “MOSCOW — Prime Minister Vladimir V. Putin on Thursday banned all exports of grain after millions of acres of Russian wheat withered in a severe drought, driving up prices around the world and pushing them to their highest level in two years in the United States…Russia is suffering from the worst heat wave since record-keeping began here more than 130 years ago…Wheat prices have soared by about 90 percent since June because of the drought in Russia and parts of the European Union, as well as floods in Canada, and the ban pushed prices even higher. Exports from Ukraine, another major exporter, are down sharply this year…Before this year’s drought, yields had risen steadily, and Russian grain exports totaled 21.4 million metric tons last year, about 17 percent of the global grain trade.
But on Thursday, rail cars heaped with fresh grain came to a halt around Russia, stopped in mid-journey from the country’s fields to the main exporting ports on the Black Sea. The order covered a variety of grains, including barley and corn, but will have its greatest impact on wheat exports…”
Global food supplies will be tighter and more costly in the last half of 2010 and into 2011. Beyond fall 2011 prices may not return to lower levels, because energy input costs from gasoline, petroleum, fertilizer costs, harvest, packaging and shipping will be tightening with the approach of peak oil.
See at right, the 2007 U.S.A. ‘Grain Stock to Use Ratios’ chart, projected to 2016. Note, that during the decades when the country was at its wealthiest, we had twice the ‘Stock to Use Ratio’ as when the current recession began. Rather than build and maintain reserves during good times, we have depleted reserves.
•  Globally, 2008 saw record lows in global grain stocks. When commodity prices reached their peak, average global grain stocks reached 18.7% of annual global utilization, equivalent to 68 days worth of supply, well below the long-term average.

Where are food prices going?
When combining: 1) globally reduced food stock supply plus, 2) increasing demand from a growing world population; 3) increasingly demand from affluent Asian markets wanting higher quality foods; 4) higher priced agricultural fuel & fertilizer, 5) higher priced packaging, and 6) more expensive transportation costs,m 7) devaluation of the US dollar, it points toward an escalating Real Cost of food across the coming years.

3.  National energy grid at threat from EMP disruption
“Civilization is like a great web upon which all things are connected. Bop one strand of the web and the whole thing jiggles. Perhaps no other country on earth is more enslaved to conventional, fuel burning transportation than the United States. Transportation is the lifeblood of the economy, which would quickly collapse if the means for transporting needed supplies were disrupted in any way. With our just-in-time inventory management system, grocery stores commonly carry only a three-day supply of food. This statistical three-day supply would disappear within a few hours during an emergency situation; a panicked populace would make sure of that.”

EMPact America, Inc. Conference, 8-10 September 2009, Niagara, NY, conference speakers pointed out:
•  “An electromagnetic pulse, or EMP, is a super energetic radio wave that’s immediately harmless to people, but it’ll burn out all the critical electronic systems that sustain human economic activity and human life across vast areas, including the entire continental United States.” Dr. Peter Vincent Pry, President, EMPact America
•  “It’s not a secret. You can’t do anything about something that’s this broad in impact and still keep it a secret. So in order to get anything done you actually have to acknowledge we have a weakness. And, we worried about the fact that if we acknowledged that we had a weakness, how damaging will that be since we will inform our adversaries. We came to the conclusion that our adversaries are really quite well-informed already.”-Robert Hermann, Commissioner, Congressional EMP Commission
•  “I have believed for a long time that EMP or electromagnetic pulse may be the greatest strategic threat we face, because without adequate preparation its impact would be so horrifying that we would, in fact, basically lose our civilization in a matter of seconds.”-Newt Gingrich, Former Speaker of the US House of Representatives

A)  Solar Flare produced EMP
The magnetic pulses from solar flares can fry microchips and disrupt any electronic devices. A solar flare disrupted primitive electronics such as telegraphs in 1859 and another one occurred in 1989 as well. One of the most serious solar flares took place in 1921 and disrupted communications in the U.S. An EMP from the sun in the 21st century could be devastating and wipe out any system using electricity or microchips.”
In 2008, the National Academy of Sciences produced a report for NASA that confirmed the EMP Commission’s warning that a “great” geomagnetic storm could have catastrophic consequences for modern civilization.  According to the NAS report, if the 1859 Carrington event happened today, it could destroy nationwide the electric grid, collapse the critical infrastructures and take 4-10 years to recover – if recovery is possible at all. In June 2010, the Department of Energy and North American Electric Reliability Corporation released a joint report that, again, confirmed the EMP Commission’s warning about the catastrophic threat from a “great” geomagnetic storm.
So it is incomprehensible why the Senate Energy and Natural Resources Committee on Aug. 5 – just days after NOAA warned about the possibility of a severe geomagnetic storm actually striking our planet – would gut H.R. 5026, The Grid Reliability and Infrastructure Defense Act, that is designed to protect the United States from the effects of a geomagnetic storm.  H.R. 5026 would protect the national electric grid from “all hazards” – including EMP from geomagnetic storms, nuclear EMP from terrorists or rogue states, cyber threats, sabotage and natural disasters.  H.R. 5026 embodied the recommendations of the EMP Commission, the National Academy of Sciences and the Department of Energy.
The revised H.R. 5026 does nothing to protect the United States from EMP from geomagnetic storms, or nuclear EMP from rogue states and terrorists, from sabotage or from natural disasters.  The Senate gutted H.R. 5026 despite the EMP Commission’s recommendation that protecting the grid against “all hazards” is technologically the best and most cost-effective strategy.  For example, an “all hazards” strategy could mitigate the worst threats to the grid from natural and nuclear EMP and cyber threats for $100 million – and possibly save the lives of millions of Americans.
But the Senate Energy and Natural Resources Committee chose to ignore the EMP Commission, the National Academy of Sciences and the Department of Energy.  Every member of the Senate Energy and Natural Resources Committee received a personal appeal from the EMP Commission and other prominent experts to pass H.R. 5026 with its provisions for protecting against EMP and “all hazards” intact – but those appeals were ignored.
Fortunately, Earth dodged the bullet from the August 6, 2010 solar flare.  Fortunately, NOAA’s estimated 10 percent chance of a severe geomagnetic storm did not materialize – this time.  We may not be so lucky next time.

B)  Nuclear EMP attack against the US electrical grid
“Wednesday, 18 August 2010, TVC Special Report: Electromagnetic Pulse (EMP) weapons pose a serious and growing threat to our national security. Rogue nations and terrorists are working to develop EMP devices to attack the United States and other developed nations. These include North Korea, Iran and China. Once North Korea and Iran have missiles capable of reaching the U.S., they can use an EMP burst over our nation to destroy us.
1) A high altitude nuclear blast above middle America
A nuclear blast 200 miles above the U.S. could wipe out every electric grid in the country, plunging our nation into darkness. It would literally send our nation back to the 18th century. (A powerful X15+ class solar flare would have the same impact.) An EMP blast from a nuclear bomb would shut down devices, and our vehicles using microchips. Planes would stop flying; banks and hospitals would cease operation; trains would stop running; tractors, trucks and cars would cease working. Elevators would malfunction; subways would stop. All commerce would cease. A blast like this could not only wipe out the electric grid in the U.S., but in Canada and Mexico. The more technologically advanced a nation is, the more vulnerable it is to an EMP attack.
2)  What Can Be Done?
The United States must take seriously the threat posed by EMP attacks. The military has already taken measures to shield its systems from EMP attacks, but little has been done yet to shield our electric grid system from such an attack. This includes banks, water treatment plants, planes, hospitals, schools and any other facility that relies on computers. All of these must be shielded from the potential of an EMP attack or a solar flare.”
3)  If the power ever goes off for an extended period
• 
50% of the people will just sit down and wait for someone to come and help them, and if no one does, they’ll just die. 10% of the people know what to do and do what is needed in a logical way. 5% of the people become extremely dangerous almost immediately.  About 33% of the people  feel that they’re entitled to electric power and when they don’t get it they go nuts and will bring down the social system.
•   James Rawles interview by The Watchmen Radio Station, 3 Sep 2010:
“…If we were to have the onset of an EMP collapse in summertime we’d see a public health crisis very quickly. If it were to happen mid-winter we’d actually see more people dying of exposure, dying of the cold, than we would of dying of disease, especially in the Eastern United States and the North East. It doesn’t take too long a period before blankets are insufficient – people don’t have any alternate source of heat they’ll be freezing to death in large numbers. In a ‘grid down collapse’ that goes on for more than a year, we literally could see a 90% population loss in the big cities, and a 50% population loss in the suburbs and as much as a 40% loss in non-viable rural areas – I’m talking desert regions or other areas where there’s not a lot of agriculture that goes on.”

4.   US Debt:
As of this morning, ~ 4:05AM, Thursday, 9 September 2010, the Outstanding US National Debt is $14,278,946,101,012 dollars—that’s $14.2 trillion dollars and constitutes 93% of the national Gross Domestic Product. With the current US population of 310,383,941 the National Debt comes to $46,004 per person.
The Outstanding US National Debt is the sum of all outstanding debt owed by the Federal Government and includes: Social Security and Federal retirement programs, other trust funds, US Treasury Securities, and Savings Bonds.
Organizations loaning money to the US Government through US Treasuries include: state and local governments; individual investors, including brokers, public and private; pension funds; mutual funds; holders of US savings bonds; insurance companies; banks and credit unions; and foreign investors.

Add the GSE (Freddie/Fannie) debt to that and we are over 18 trillion.
Pile on the unfunded liabilities hidden on the government’s ‘off balance sheet ledgers’ and you will find these figures:  Social Security (14.6 trillion), Prescription Drugs (19.2 trillion), Medicare (76 trillion). You owe, your kids owe, all of us owe about $400,000 each.
Considering the median home price on the east-coast is $205,000.00, you now owe for two homes, in addition to anything that you may owe on your existing home, and it’s at a variable rate loan. In fact, principle and interest are subject to change. This debt is just like some toxic negative amortization pay-what-you-can-add-more-to-principle mortgage.”
http://www.financialsense.com/contributors/d-sherman-okst/mutant-rat-epidemic-spreading-economic-black-plague

Considering our economy (and the World’s too)
The annual US Budget Deficit is about $1.4 trillion. The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. In order to get an idea how much $1 trillion is, if you counted one dollar every second, you’d need to count for 31,000 years to go through the $1 trillion pile of dollars. About 31,000 years ago the Neanderthal died off across Europe. Our stone age ancestors were just beginning to make engravings on cave walls.
“The downside to increasing deficits and a rising national debt is that public sector spending “crowds out” more and more private sector investment spending. If you like the idea of Congress and the president playing a growing role in the nation’s allocation of resources, then I suppose that should be of little concern. On the other hand, if you think government leaders are far more likely to make bad investment decisions than are private decision-makers, then crowding out is of considerable concern.
The fallout will not be in the form of an unfair tax increase on our grandchildren when the associated debt is paid off because, it will never be paid off. The fallout will come in an increased drift toward an economy increasingly controlled by the federal government.”
“The debt merry-go-round cannot go on forever. When the average consumer runs out of credit, when the US Treasury itself is no longer considered creditworthy, and when the US dollar is recognized for what it really is, then things will get ugly. If you stop making payments on your car, the banks send a repo man to tow your car away. And when entire nations go in to default, it usually signals cataclysmic events. Be prepared.” James Wesley Rawles in How To Survive the End of the World As We Know It

China Syndrome
Today the United States has become so reliant on the largesse of foreigners that its needs are now larger than all the savings in the Western world. Someday soon, those foreigners will grow cautious about lending to a country with no self-discipline and demand instead higher interest rates to protect them from a depreciating dollar. Or they could, as hinted recently, insist on lending in Euros or Renminbi, currencies that the American government cannot print.
The unprecedented expansion of central bank liabilities, has made China nervous about holding more dollars and China has begun to dump dollars, driving up prices of dollar based hard assets. China is so concerned about America’s dollar inflation that it has reduced its treasury holdings to $776 billion from $801 billion in May. China has also bought more gold as a hedge against the debasement of the dollar.

5.  Then comes hyperinflation – spend it now!
“Hyperinflation is not just an increase in the money supply, after all the central bank increases the money supply all the time, a phenomenon we know as simple inflation and which we come to expect as a constant. Hyperinflation, however, happens when uncertainty in the future worth of the currency causes people to start trading it for things of actual utility and more reliable stores of value as soon as they can, as soon as they’re paid. The velocity of paper money moving through the system increases as people seek to get rid of it.
So hyperinflation isn’t just the expansion of the monetary base, though the expansion is at the root. The expansion is fuel, but the conflagration doesn’t start till the herd panics.
Hyperinflation takes off when the entire population gets wise. The money supply might have been growing in fits and spurts for decades, but the hyperinflationary storm happens when that money really starts to move around as people try to get rid of it. The prices of useful goods get bid up to mind boggling levels. The process accelerates when governments try to stabilize markets…often by adding more paper…because honestly, what else can a government do? Mismanagement and fraud are the only things governments really get right consistently. So, for the government, a problem that’s caused by the theft of inflation can only be solved by…more mismanagement and fraud. The entire process is self-reinforcing and results in the hyperinflationary death spiral to which all currency is heir.

Common threads during a Hyperinflation:
•   Early on, leaders see their popularity wilt when public anger over spending increased.
•   The banking system soon becomes an instrument of the government.
•   The printing of money becomes a priority, the hyperinflation may come in two waves   separated by a short, slower inflationary period.
•    The government may increase minimum wages by 75 percent.
•   Up to 80 percent of the population may become unemployed.
•   Living standards may fall 35-40 percent.
•   Some stores may sell goods in a reputable foreign currency.

When it’s all said and done, realize this:
Industrial society is built on, 1) a foundation of an organized social structure with feedback loops, 2) an  interdependent infrastructure of transportation, homes and utilities,  3) and a massive, energy driven commodity flow that processes materials from the mine, timber and field to operate; diminish any link and the size of the system must shrink, break any link and the system collapses.


Things to keep in mind:
•   Where ever you live– the greater the population density of your community and surrounding communities, the greater the resource requirements are, and the faster the breakdown will occur when the supply infrastructure (money, food, water, electricity, auto gas, etc.) is stopped.
•   Once the Welfare and Medicare checks stop ‘the poor will take care of their own family’ by taking from the people with an apparent wealth of material goods, people who are perceived to be their oppressors anyway.
•   Once you lose that sense of community, it’s basically every man for himself.

Comments Off on The coming chaos

Filed under __2. Social Issues

Financial collapse

(Survival Manual/1. Disaster/Financial Collapse)

The great play

‘The Coming Liquidity Tsunami Into Something Real’
14 May 2011, Gold Eagle editorial, by Mark J Lundeen
<http://www.gold-eagle.com/editorials_08/lundeen051411.html> and <Mlundeen2@Comcast.net>
“I was once told, by someone who’s name I’ve long since forgotten, that the ancient Greeks once pondered death from a scientific perspective: One day Pericles was manning the walls of Athens against the Spartans. The next day a plague came and Pericles was gone, though his now room-temperature body was still in Athens.

Question: what changed?

Maybe warming his now cold body would cause Pericles to return; and then again, maybe not! But who can say until we try?

If I were to write a script for a play, using the Peloponnesian War as a motif of the current financial situation, the US financial system would certainly be Pericles: glorious and powerful one day, and somewhat else the next.

If asked, I’m sure the academics from our Ivy-League schools of social sciences would demand to play the part of the old Greek philosophers. But I see them more as the vectors of “policy” that has pulled our poor hero down to his lamentable state. That leaves us with what to do with the politicians?

Well no one would ever mistake these corrupt, baby-kissing sycophants for Greek philosophers! So, I guess the politicians will have to play the part of the vectors of “policy” and I’ll let Doctor Bernanke dress up like Socrates.

In the opening scene, Pericles lays still on a marble slab, at room temperature, when Doctor Bernanke orders members of the AMA (Athenian Medical Association) to warm poor Pericles’ human remains to that of the living. He steps back into the gloom of the Parthenon, as a Greek choir (played by the financial media) then lets loose a mournful chant, 3 times:
“Woe unto Athens! Though the philosophers have warmed worthy Pericles until his toes smoke, still neither does he move nor speak!”

A brilliant spot light cuts through the gloom of the scene, highlighting the noble presence of Socrates (played by Doctor Bernanke) as he brings the Greek Choir to silence with a sweep of his arm, and proclaims to the audience (played by everyone who still believes their pension fund and social security will be worth something ten years from now):
“Pericles needs not move nor speak to serve Athens well. A pulse he needs not. As long as the wise men of “policy” can maintain his body temperature above that of the marble slab on which he rests, all will be well!”
The spot light fades to black, the curtain closes, and all educated and respectable people are happy with the performance, and will continue to be until dear Pericles begins to reek more than “policy” predicted. This is as good a way of understanding the current state of the debt markets as any you’ll  see on TV or in the papers. Think of structured finance, using derivatives in the hundreds-of-trillions, as “policy’s” method of giving trillions of dollars in dead assets the appearance of being alive, though a closer inspection shows they are merely warm and motionless.

The secondary market in American mortgages stopped trading several years ago, so for what purpose are these dubious derivatives still serving? I suspect someday we will discover that this is the “policy makers” chosen method to enable trillions of dollars of worthless mortgage assets held by large banks, to continue generating income for the financial system.
[Image above right: Pericles,  495-429BC]

The show goes on
Derivatives are simply another form of margin, the nemesis which caused the last great market crash. This time though it’s “different enough from the last time so no one realizes what is happening.” Use this analogy: “…it is like the floor show in a seedy nightclub. A sequence of girls trots on the scene, first a collection of Apaches, then some ballerinas, then cowgirls and so forth. Only after a while does the bemused spectator realize that, in all cases, they were the same girls in slightly different costumes.” In other words, “the so-called hedge fund actually is an excuse for a margin account.”
Pasted from <http://www.usagold.com/derivativeschapman.html>
.

Act 1:  We go broke

 It Is Now Mathematically Impossible To Pay Off The U.S. National Debt
4  Feb 2010, The Economic Collapse
<http://theeconomiccollapseblog.com/archives/it-is-now-mathematically-impossible-to-pay-off-the-u-s-national-debt>
A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are demanding a solution. What they don’t realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt. So why doesn’t the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?  Well, for one very simple reason. That is not the way our system works.
You see, for more dollars to enter the system, the U.S. government has to go into more debt.
The U.S. government does not issue U.S. currency – the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers. If you will pull a dollar bill out and take a look at it, you will notice that it says “Federal Reserve Note” at the top. It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system. Instead, it must get it from the Federal Reserve. So, when the U.S. government needs to  borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds  for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called “U.S. dollars” to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on. Every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.
Are you starting to get the picture?

[Image at left: $1 trillion in $1 bills would fill the interior of the Empire State building.
The current $14.3 trillion debt (May 2011) would fill a 3/4 mile high block, 50% higher than the green block shown in  the picture at left.
Consider this: One hundred dollars in one dollar bills, pressed down, measures about ½ of an inch. One million, 100 dollar bills, measures four feet in height. One billion 100 dollar bills is 4,000 feet high, almost three Sears Tower buildings tall.
$1 trillion $100 dollar bills measures 789 miles, or one hundred and forty four Mt. Everests stacked on top of each other. Our national debt is more than 14 times THAT… ]

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure. So how much money actually exists in the United States today? Well, there are several ways to measure this.

The “M0” money supply is the total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks. As of mid-2009, the Federal Reserve said that this amount was about 908 billion dollars.

The “M1” money supply includes all of the currency in the “M0” money supply, along with all of the money held in checking accounts and other checkable accounts at banks, as well as all money contained in travelers’ checks. According to the Federal Reserve, this totaled approximately 1.7 trillion dollars in December 2009, but not all of this money actually “exists” as we will see in a moment.

The “M2” money supply includes everything in the “M1” money supply plus most other savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000). According to the Federal Reserve, this totaled approximately 8.5 trillion dollars in December 2009, but once again, not all of this money actually “exists” as we will see in a moment.

The “M3” money supply includes everything in the “M2” money supply plus all other CDs (large time deposits and institutional money market mutual fund balances), deposits of Eurodollars and repurchase agreements. The Federal Reserve does not keep track of M3 anymore, but according to ShadowStats.com it is currently somewhere in the neighborhood of 14 trillion dollars. But again, not all of this “money” actually “exists” either.
So why doesn’t it exist?
It is because our financial system is based on something called fractional reserve banking.

When you go over to your local bank and deposit $100, they do not keep your $100 in the bank.
Instead, they keep only a small fraction of your money there at the bank and they lend out the rest to someone else. Then, if that person deposits the money that was just borrowed at the same bank, that bank can loan out most of that money once again. In this way, the amount of “money” quickly gets multiplied. But in reality, only $100 actually exists. The system works because we do not all run down to the bank and demand all of our money at the same time. [All going at the same time  is what a ‘bank run’ is]

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way….”If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”
So much of the “money” out there today is basically made up out of thin air.
In fact, most banks have no reserve requirements at all on savings deposits, CDsand certain kinds of money market accounts. Primarily, reserve requirements apply only to “transactions deposits” – essentially checking accounts.

The truth is that banks are freer today to dramatically “multiply” the amounts deposited with them than ever before. But all of this “multiplied” money is only on paper – it doesn’t actually exist.
The point is that the broadest measures of the money supply (M2 and M3) vastly overstate how much “real money” actually exists in the system.

So if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this….
1)  If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.
2)  The only way to create more money is to go into even more debt which makes the problem even worse.
You see, this is what the whole Federal Reserve System was designed to do. It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win. As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.
If you owe more money than ever was created you can never pay it back. hat means perpetual debt for as long as the system exists.
It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.
We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for). But the politicians in Washington D.C. are not about to do that. So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.
.

Act 2:  They go broke

What happens when Greece defaults?
25 May 2011, The Telegraph, By Andrew Lilico
http://blogs.telegraph.co.uk/finance/andrewlilico/100010332/what-happens-when-greece-defaults/
It is when, not if. Financial markets merely aren’t sure whether it’ll be tomorrow, a month’s time, a year’s time, or two years’ time (it won’t be longer than that). Given that the ECB has played the “final card” it employed to force a bailout upon the Irish – threatening to bankrupt the country’s banking sector – presumably we will now see either another Greek bailout or default within days.

What happens when Greece defaults. Here are a few things:
•  Every bank in Greece will instantly go insolvent.
•  The Greek government will nationalize every bank in Greece.
•  The Greek government will forbid withdrawals from Greek banks.
•  the Greek government will declare a curfew, perhaps even general martial law.
•  Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)
•  The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting on 50 per cent or more of all Greek euro-denominated debts.
•  The Irish will, within a few days, walk away from the debts of its banking system.
•  The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.
•  A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.
•  The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.
•  The French and German governments will meet to decide whether (a) to recapitalize the ECB, or (b) to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)
•  They will recapitalize, and recapitalize their own banks, but declare an end to all bailouts.
•  There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.
•  This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalizing a number of banks via debt-equity swaps.
•  Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.
•  Attention will turn to the British banks.

Then we shall see…

Ilargi:
What I think is important is to connect the dots here. Greece is but a two-bit player relatively speaking, but the effects of a default in Athens, and the haircuts it would force upon financial institutions (and dare we even consider pensions funds?!), would -make that will- be felt across the world. For one thing, it would substantially weaken banks and economies pretty much around the globe. Just Greece alone.

It all comes back all the time to the dreaded mark-to-market theme. The last thing anyone wants is to let anyone else know what the paper they’re holding is truly worth. But it will be done.
.

Act 3: All go broke

Derivatives: The Quadrillion Dollar Financial Casino Completely Dominated By The Big International Banks
<http://theeconomiccollapseblog.com/archives/derivatives-the-quadrillion-dollar-financial-casino-completely-dominated-by-the-big-international-banks>

“If you took an opinion poll and asked Americans what they considered the biggest threat to the world economy to be, how many of them do you think would give “derivatives” as an answer? But the truth is that derivatives were at the heart of the financial crisis of 2007 and 2008, and whenever the next
financial crisis happens derivatives will undoubtedly play a huge role once again. So exactly what are “derivatives”?
Well, derivatives are basically financial instruments whose value depends upon or is derived from the price of something else. A derivative has no underlying value of its own. It is essentially a side bet.
Today, the world financial system has been turned into a giant casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from it. The system is largely unregulated (the new “Wall Street reform” law will only change this slightly) and it is totally dominated by the big international banks.

Nobody knows for certain how large the worldwide derivatives market is, but most estimates usually put the notional value of the worldwide derivatives market somewhere over a quadrillion dollars.
If that is accurate, that means that the worldwide derivatives market is 20 times larger than the GDP of the entire world. It is hard to even conceive of 1,000,000,000,000,000 dollars.
Counting at one dollar per second, it would take you 32 million years to count to one quadrillion.

So who controls this unbelievably gigantic financial casino? Would it surprise you to learn that it is the big international banks that control it? The New York Times has just published an article entitled A Secretive Banking Elite Rules Trading in Derivatives. Shockingly, the most important newspaper in the United States has exposed the steel-fisted control that the big Wall Street banks exert over the trading of derivatives. Just consider the following excerpt from the article….

“On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan. The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.”

Does that sound shady or what?
In fact, it wouldn’t be stretching things to say that these meetings sound very much like a “conspiracy”. The New York Times even named several of the Wall Street banks involved: JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup. Why does it seem like all financial roads eventually lead back to these monolithic financial institutions?

The highly touted “Wall Street reform” law that was recently passed will implement some very small changes in how derivatives are traded, but these giant Wall Street banks are pushing back hard against even those very small changes as the article in The New York Times noted….

“The revenue these dealers make on derivatives is very large and so the incentive they have to protect those revenues is extremely large,” said Darrell Duffie, a professor at the Graduate School of Business at Stanford University, who studied the derivatives market earlier this year with Federal Reserve researchers. “It will be hard for the dealers to keep their market share if everybody who can prove their creditworthiness is allowed into the clearinghouses. So they are making arguments that others shouldn’t be allowed in.”

So why should we be so concerned about all of this?
Well, because the truth is that derivatives could end up crashing the entire global financial system.

In fact, the danger that we face from derivatives is so great that Warren Buffet once referred to them as “financial weapons of mass destruction”.

In a previous article, I described how derivatives played a central role in almost collapsing insurance giant AIG during the recent financial crisis….

Most Americans don’t realize it, but derivatives played a major role in the financial crisis of 2007 and 2008. Do you remember how AIG was constantly in the news for a while there? Well, they weren’t in financial trouble because they had written a bunch of bad insurance policies. What had happened is that a subsidiary of AIG had lost more than $18 billion on Credit Default Swaps (derivatives) it had written, and additional losses from derivatives were on the way which could have caused the complete collapse of the insurance giant. So the U.S. government stepped in and bailed them out – all at U.S. taxpayer expense of course.

As the recent debate over Wall Street reform demonstrated, the sad reality is that the U.S. Congress is never going to step in and seriously regulate derivatives. That means that a quadrillion dollar derivatives bubble is going to perpetually hang over the U.S. economy until the day that it inevitably bursts. Once it does, there will not be enough money in the entire world to fix it.

Meanwhile, the big international banks will continue to run the largest casino that the world has ever seen. Trillions of dollars will continue to spin around at an increasingly dizzying pace until the day when a disruption to the global economy comes along that is serious enough to crash the entire thing.

The worldwide derivatives market is based primarily on credit and it is approximately ten times larger than it was back in the late 90s. There has never been anything quite like it in the history of the world.

So what in the world is going to happen when this thing implodes? Are U.S. taxpayers going to be expected to pick up the pieces once again? Is the Federal Reserve just going to zap tens of trillions or hundreds of trillions of dollars into existence to bail everyone out?

If you want one sign to watch for that will indicate when an economic collapse is really starting to happen, then watch the derivatives market. When derivatives implode it will be time to duck and cover. A really bad derivatives crash would essentially be similar to dropping a nuke on the entire global financial system. Let us hope that it does not happen any time soon, but let us also be ready for when it does.”
.

Act 4:  The citizens speak


The Depression Of 2011?: 23 Economic Warning Signs From Financial Authorities All Over The Globe
28 May 2010, Daily Markets.com, by Michael Snyder
<http://www.dailymarkets.com/economy/2010/05/28/depression-in-2011-23-economic-warning-signs-from-financial-authorities-all-over-the-world/&gt;

“Could the world economy be headed for a depression in 2011? As inconceivable as that may seem to a lot of people, the truth is that top economists and governmental authorities all over the globe say that the economic warning signs are there and that we need to start paying attention to them. The two primary ingredients for a depression are debt and fear, and the reality is that we have both of them in abundance in the financial world today. In response to the global financial meltdown of 2007 and 2008, governments around the world spent unprecedented amounts of money and got into a ton of debt. All of that spending did help bail out the global banking system, but now that an increasing number of governments around the world are in need of bailouts themselves, what is going to happen? We have already seen the fear that is generated when one small little nation like Greece even hints at defaulting. When it becomes apparent that quite a few governments around the globe cannot handle their debt burdens, what kind of shockwave is that going to send through financial markets?

The truth is that we are facing the greatest sovereign debt crisis in modern history. There is no way out of this financial mess that does not include a significant amount of economic pain.

When you add mountains of debt to paralyzing fear to strict austerity measures, what do you get?
What you get is deflationary pressure and financial markets that seize up.

Some of the top financial authorities in the world are warning us that unless something substantial is done, that is exactly what we are going to be seeing as 2010 turns into 2011.

Of course some governments around the world could try to put these economic problems off for a while by printing and borrowing even more money, but we all know by now that only makes the long-term problems even worse.

For now, however, it seems as though most governments are opting for the austerity measures that the IMF seems determined to cram down the throats of everyone. So what will austerity measures mean for the global economy? Think “stimulus” in reverse.
Yes, things are going to get messy. It looks like there is going to be a great deal of economic fear and a great deal of economic pain in 2011 and the years beyond that.

So are we headed for “the depression of 2011”?
Well, let’s hear what some of the top financial experts in the world have to say….
1)  Economist Nouriel Roubini:
“We are still in the middle of this crisis and there is more trouble ahead of us, even if there is a recovery. During the great depression the economy contracted between 1929 and 1933, there was the beginning of a recovery, but then a second recession from 1937 to 1939. If you don’t address the issues, you risk having a double-dip recession and one which is at least as severe as the first
one.”
2)  Bank of England Governor Mervyn King:
“Dealing with a banking crisis was difficult enough, but at least there were public-sector balance sheets on to which the problems could be moved. Once you move into sovereign debt, there is no answer; there’s no backstop.”
3)  German Chancellor Angela Merkel:
“The current crisis facing the euro is the biggest test Europe has faced for decades, even since the Treaty of Rome was signed in 1957.”
4)  Paul Donovan, the Senior Economist at UBS:
“Now people are questioning if the euro will even exist in three years.”
5)  Michael Pento, Chief Economist at Delta Global Advisors:
“The crisis in Greece is going to spread to Spain and it’s going to be very difficult to deal with. They are bailing out debt with more debt and it isn’t sustainable. It’s a wonderful scenario for gold.”
6)  LEAP/E2020:
“LEAP/E2020 believes that the global systemic crisis will experience a new tipping point from Spring 2010. Indeed, at that time, the public finances of the major Western countries are going to become unmanageable, as it will simultaneously become clear that new support measures for the economy are needed because of the failure of the various stimuli in 2009, and that the size of budget deficits preclude any significant new expenditures.”
7)  Telegraph Columnist Edmund Conway:
“Whatever yardstick you care to choose – share-price moves, the rates at which banks lend to each other, measures of volatility – we are now in a similar position to 2008.”
8)  Peter Morici, an Economics Professor at the University of Maryland:
“The next financial tsunami is emerging and will ripple to America.”
9)  Bob Chapman of the International Forecaster:
“The green shoots of recovery have now turned into poison ivy. The abyss has again been filled with more debt and more fiat currency. In the process the Fed and now the ECB have lost all credibility.”
10)  Telegraph Columnist Ambrose Evans-Pritchard:
“The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.”
11) Professor Tim Congdon from International Monetary Research: “The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly.”
12)  Reuters Columnist  Iliana Jonas:
“The default rate for commercial mortgages held by banks in the first quarter hit its highest level since at least 1992 and is expected to surpass that by year-end and peak in 2011, according to a study by Real Capital Analytics.”
13)  Paul Krugman, a Nobel Prize-winning Economist:
“It’s not hard to see Japan-style deflation emerging if the economy stays weak.”
14)  Stan Humphries, Chief Economist for Zillow.com:
“Anyone expecting a robust rebound in the housing market … will be sorely disappointed.”
15)  Fox News:
“As the national debt clock ticked past the ignominious $13 trillion mark overnight, Congress
pressed to pass a host of supplemental spending bills.”
16)  Bloomberg:
“The U.S. government’s Aaa bond rating will come under pressure in the future unless additional measures are taken to reduce projected record budget deficits, according to Moody’s Investors Service Inc.”
17)  Peter Schiff:
“When creditors ultimately decide to curtail loans to America, U.S. interest rates will finally  spike, and we will be confronted with even more difficult choices than those now facing Greece. Given the short maturity of our national debt, a jump in short-term rates would either result in default or massive austerity. If we choose neither, and opt to print money instead, the run-a-way inflation that will ensue will produce an even greater austerity than the one our leaders lacked the courage to impose. Those who believe rates will never rise as long as the Fed remains accommodative, or that inflation will not flare up as long as unemployment remains high, are just as foolish as those who assured us that the mortgage market was sound because national real estate prices could never
fall.”
18)   The National League of Cities
“City budget shortfalls will become more severe over the next two years as tax collections catch up with economic conditions. These will inevitably result in new rounds of layoffs, service cuts, and canceled projects and contracts.”
19)  Dan Domenech, Executive Director of the American Association of School Administrators:
“Faced with continued budgetary constraints, school leaders across the nation are forced to
consider an unprecedented level of layoffs that would negatively impact economic recovery and deal a devastating blow to public education.”
20)  Mike Whitney:
“Without another boost of stimulus, the economy will lapse back into recession sometime by the end of 2010.”
21) Kevin Giddis, Managing Director of Fixed Income at Morgan Keegan:
“There is big money making big bets that at a minimum we we’ll have a recession if not a depression that could last for years.”
22)  John P. Hussman, Ph.D.:
“In my estimation, there is still close to an 80% probability (Bayes’ Rule) that a second market plunge and economic downturn will unfold during the coming year. This is not certainty, but the evidence that we’ve observed in the equity market, labor market, and credit markets to-date is simply much more consistent with the recent advance being a component of a more drawn-out and painful deleveraging cycle.”
23)    Richard Russell, the Famous Author of the Dow Theory Letters:
Do your friends a favor. Tell them to “batten down the hatches” because there’s a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don’t need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won’t recognize the country. They’ll retort, “How the dickens does Russell know — who told him?” Tell them the
stock market told him.”

Other words of wisdom and woe…
1)  Jean-Claude Juncker,  Chairman of the Eurozone finance ministers and the currency union’s key spokesmen, 7 May 2011: “When it becomes serious, you have to lie”.
2)  George Orwell: “During times of universal deceit, telling the truth becomes a revolutionary act”
3)  Mark Twain: “There are three types of lies: Lies, Damned Lies, and Statistics.”

≈ Intermission ≈ 

 

Why The U.S. Economy Is Not Recovering
21 May 2011, Economic Crisis Writings, by Dick Kazan
http://economiccrisiswritings.blogspot.com/2011/05/why-us-economy-is-not-recovering.html
“20 million people unemployed, underemployed or no longer counted because they have been unemployed too long.
Falling home prices with no bottom in sight and foreclosures and notices of default mounting, as half of all home sales are now foreclosures or short sales in which owners lose their equity and lenders forgive some of the mortgage amount.

This is today’s American economy. Add to that young people also having trouble finding jobs including recent college graduates. And many people are defaulting on their credit cards, student loans and other financing. This is not what economists and pundits predicted. Why is this happening? What’s gone wrong? The answer is simple: 

1)  We are now a military industrial economy.
Coast to coast we produce weapons of mass destruction and delivery systems, including jet fighters, and for the 1st time in our history, we are now fighting perpetual wars. Before World War II, we had about 14 military bases and today we have well over a thousand all over the world. We spend as much on our military as the rest of the planet combined spends on theirs, and all of what we spend is at tax payers expense. It is draining the life out of our economy.
2)  Including its military expenses, and its refusal to tax the people to pay for it, the U.S. brings in only 59 cents for every dollar it spends. This in itself is a formula for financial disaster.
3)  Our finances are so dire, we are willing to slash our Medicare, Medicaid, Educational System (our children’s future) and Social Security (whose funds are now mostly a government IOU) and police and
fire protection in order to support our military industrial complex. Why?
Because they are a massive source of jobs. “Defense” is the one part of our economy that is booming [which includes Homeland Security].
4)  Wall Street and the stock markets are doing well because giant companies have shipped much of their manufacturing overseas and their profits are up. And stocks trade on profits, not on American jobs.
5)  Speaking of being up, gas prices are up as are food prices, clothing prices, doctor and hospital prices, college tuition and the cost of most everything else, as inflation is beginning to take hold. This
is a result of the Fed’s stimulus plans in which they print and circulate large sums of money in the vain hope we can spend our way out of this mess.

No my friend, we cannot solve a debt crisis by spending our way out of it. We will have to confront our problems and solve them, starting with ending our three wars. Then we must slash our military spending, which will bring hardship but hardship is coming anyway as we are going broke. Clearly the two political party monopoly under the control of lobbyists is failing us and it is long past time we
Americans raised our voices and got involved. This was a great nation and it can be great again. We must restore it for ourselves, for our children and for the world.

≈ The show resumes ≈

Act 5:  Consulting the Oracle

Predicting date of economic collapse (TSHTF)
2 Feb 2010, Gold Eagle editorial,  by Ray Elliott
<http://www.gold-eagle.com/editorials_08/elliott020210.html>
“The event that many would like advance warning on is economic collapse. It is an event that most informed economists say is inevitable due to U.S. deficits that are too large to be paid back. Yet, those of us that must work and pay our bills cannot stop what we are doing and dig a hole to hide in every time a new event happens that appears to be the beginning of the Economic Collapse.

We must first make assumptions on what Economic Collapse is. History tells us. All paper money falls into one of two categories, those that have failed and those that are going to fail. They failed in the past (including United States currency) in a spiral of constantly losing value. The federal government continually increases the obligations that it must pay for.
Buyers of federal debt slowly back away from buying long term debt and later will not purchase even short term debt. The government begins buying its own debt by issuing new paper money. As more paper money is issued it loses more and more of its value. When the public becomes aware that the issuance of paper money is out of control, and that holding it weeks or days will result in a loss of
value, they attempt to convert the paper money that they have into assets that retains some value. To do this, they have to remove any cash they have from banks and other institutions and convert it to something else. What ensues is a run on the banks.

When will this happen? We have some clues because of the process that will take place prior to
the event.

The Main Stream Media (MSM) generally is in favor of big government spending and supports the
socialistic policies of the Obama administration. The problem with socialism is that eventually you run out of other people’s money.  At the point that MSM begins to see the hazards of the uncontrolled printing of money, the beginning of the end is near. Then the Main Stream Media will begin to report the REAL MONEY CRISIS. For those that ask, “When will the SHTF?” That is when.

The events that follow this are events that you will not want to be a part of.
•  Long lines will appear at banks for those trying to get their money out while it still has some value.
•  Paper money will be issued in greater and greater denominations.
•  Food and other necessities of life will skyrocket in price.
•  Soon a bank holiday will be declared while the government attempts to control the panic.
•  Rules will be enforced that restrict how much money may be withdrawn at a time.
•  Attempts will be made to “freeze” food prices.
•  Payment for all goods and services will be turned upside down.
•  Everything will rapidly increase in price. Soon, the paper money you have will not buy the things that you need. At some point, $1,000 will not buy a pair of shoes.

The events that follow this are also predictable because they have happened before.
•  Gold and silver become extremely valuable. Pre 1965 silver coins (they still have some silver in them) will become a known standard of value that is accepted by those that still have something to sell.
•  The barter system for goods and services will return.
•  People that want to eat will grow gardens.
•  Most people who have had life savings in 401Ks will be poor again.
•  The winners are the ones that have planned in advance and the ones that still have outstanding loans or mortgages. The mortgages will no longer have any value. Homeowners will be able to send a million dollar note to a mortgage holder and tell them to keep the change. The change will not buy a loaf of bread.
•  Large cities will become dangerous places to be.
•  Those that plan ahead can avoid the most severe aspects of this scenario. It is up to each individual to plan ahead early enough to survive. A following article will outline some suggested courses of actions that any individual can implement.

.

Act 6:  The Public makes sacrifice

Personal Actions You Should Take Before the TSHTF!
Ray Elliott
<http://www.silverbearcafe.com/private/03.11/actions.html>
“In a previous article I discussed when the financial collapse will occur. This report will review some steps each individual should take in advance of the difficult days that are coming. Before going into the details, it is important for you to judge the necessity of following these steps. If you follow them and no collapse occurs, you have lost very little. If you follow them and the collapse occurs, these steps may save your life. If this discussion seems unreal, think about how unreal the world will be when the U.S. cannot pay its bills. Treasury Notes are no longer being purchased by China or Japan. Both are now selling (just like PIMCO). The Fed’s printing press is becoming the sole buyer.

Think about what your days are going to be like when paper money has no value. People that depend on government jobs, Social Security, food stamps, welfare, retirement checks or unemployment checks will no longer receive them. As the system winds down, some checks may be mailed, however; they will have little or no purchasing power. A new method of exchange will begin taking place.

Money in 401K’s will be gone. Money in banks will be worthless. Some people will benefit from the
collapse. Some that have mortgages will find that they now own the property, but no longer have a burdensome loan payment. Larger and larger denomination currency bills will drive out smaller denominations. You will be able to wipe out your mortgage by simply sending your mortgage company a million dollar bill and tell them to keep the change. The change will not buy a loaf of bread. The
banks know this and are making very few loans while foreclosing on others before TSHTF.

Silver coins (pre 1965 have silver in them) will be valuable for purchasing necessities. Gold coins will have great value, but will not be useful for small purchases. One or two ounces of gold may purchase a
home. Other basic necessities will be used for bartering to acquire goods that you need. In Russia, after 1989 or in Argentina, in the late 90’s, liquor was used as money to acquire goods. Producing alcohol requires having a small, home still (for distilling alcohol). Food items that you have stored or produce from your garden, sometimes gets too old for consumption (such as potatoes) and can be converted into alcohol with a still. Alcohol can be used for trading, for powering your generator or even fueling your vehicle. In post World War II Germany (during the German Occupation), poverty was widespread. A pack of cigarettes would purchase several hours of labor. Five gallons of gasoline was
worth a week’s supply of food. These days, medicines will be in demand (even outdated ones). Storing a quantity of aspirin will be useful for trading. Salt will also be used for money (as it was thousands of years ago).

Many have reviewed the need for storing sufficient food supplies. The amount depends on you and how many you need to sustain. Canned goods can be kept for two or more years. Rice and pasta in large bags can be kept in plastic storage boxes in a cool location. A water source and a method of sterilizing water are essential. Water disinfectants cost about one half cent per quart of water. Having a small garden will help feed your family. Storing good quality seeds is essential.

Finding a safe place for your family is more difficult to solve. Large population centers will not be safe. Those that have not prepared will begin taking from those that have prepared. Law and order will be sporadic because few in law enforcement will be paid. You should keep your survival supplies in or near the vehicle you plan on using when you leave. Getting out of town before TSHTF will be much easier than trying to leave later. Quickly relocating to a small town in a farming community will be much safer than remaining in a suburban home near a large city. Visit a small community near you now and set up a safe haven. See if you can arrange a garden and/or camping site. Small rural towns have lots for sale that can be acquired for very little. A small deposit can secure an option to purchase a lot in a small town that will give you a place to park your vehicle (a small motor home would be ideal) and a place for a garden. One quarter acre is more than you will need. Be careful about locating in a more remote location because it can be dangerous. In Argentina, roving bands of thieves routinely raided remote ranches and homes, inflicting both financial and physical harm. A small community is safer and may have an organized defense.

Last, but certainly not least is personal defense. Weapons are required. They can be used for both hunting and defense. Using the same caliber for both hand guns and long guns will save on the types
of ammunition needed to be stored. Nine millimeter is a good choice. A shotgun is both a good hunting weapon and a defense weapon. A 22 rifle is a good weapon to harvest small game for your family. A compound bow also serves both purposes. Having a plan of action when strangers appear is a necessity. In the meantime, you may ask yourself, can you defend your current home? Do you have a safe room? Do you have a guard dog? Do you have a warning system? Do you have friends nearby that would help you? How do you contact them?

As I stated in the beginning, you may never need to use any of these tactics. I pray that you do not. However; if and when TSHTF, you and your family will have a far better chance to survive than those that do not prepare.”

.

Act 7:  and with the Ides of March, the winds blew cold…

The Coming U.S. Depression of 2011/2012: Full of  homelessness, hunger, street  and the emergence of a 3rd party
7 Feb 2011, PBT Consulting
<http://tommytoy.typepad.com/tommy-toy-pbt-consultin/2011/02/the-coming-us-depression-of-20112012-full-of-homelessness-hunger-street-violence-and-the-emergence-o.html&gt;

“The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting a revolution in America, food riots and tax rebellions – all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012.

Gerald Celente, the CEO of Trends Research Institute, is publisher of the Trends Journal which forecasts and analyzes business, socioeconomic, political, and other trends, and is renowned for his accuracy in predicting future world and economic events which can send a chill down your spine.

Celente says that by 2012 America will become an underdeveloped nation, that there will be a revolution marked by food riots, squatter rebellions, tax revolts and job marches, and that holidays will be more about obtaining food, not gifts.

“We’re going to see the end of the retail Christmas… we’re going to see a fundamental shift take place… putting food on the table is going to be more important than putting gifts under the Christmas tree,” said Celente, adding that the situation would be “worse than the great depression.”

“America’s going to go through a transition the likes of which no one is prepared for,”said Celente, noting that people’s refusal to acknowledge that America was even in a recession highlights how big a problem denial is in being ready for the true scale of the crisis.

Celente, who successfully predicted the 1997 Asian Currency Crisis, the sub-prime mortgage collapse and the massive devaluation of the U.S. dollar, told UPI in November last year that the following year would be known as “The Panic of 2008,” adding that “giants (would) tumble to their deaths,” which is exactly what we have witnessed with the collapse of Lehman Brothers, Bear Stearns and others.

He also said that the dollar would eventually be devalued by as much as 90 per cent. The consequence of  what we have seen unfold this year would lead to a lowering in living standards, Celente predicted a year ago, which is also being borne out by plummeting retail sales figures.

[Movie image above: Bartertown where futureworld power structures fought over ‘pig shit- methane energy’; a time and condition which brought about roving, mobile gangs that killed and plundered their way across  the land.   This is the view of ‘collapse’ at the grass roots, an image from the movies.]

The prospect of revolution was a concept echoed by a British Ministry of Defense report last year, which predicted that within 30 years, the growing gap between the super-rich and the middle class, along with an urban underclass threatening social order would mean, “The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest,” and that, “The middle classes could become a revolutionary class.”

In a separate recent interview, Celente went further on the subject of revolution in America.There will be a revolution in this country,” he said. “It’s not going to come yet, but it’s going to come down the line and we ‘re going to see a third party and this was the catalyst for it: the takeover of Washington, D.C., in broad daylight by Wall Street in this bloodless coup. And it will happen as conditions continue to worsen.”
Internet image: This is how marginal people are affected – before the ‘main event’ unfolds; its what we see at the grass roots, this is reality.]

“The first thing to do is organize with tax revolts. That’s going to be the big one because people can’t afford to pay more school tax, property tax, any kind of tax. You’re going to start seeing those kinds of protests start to develop.”
“It’s going to be very bleak. Very sad. And there is going to be a lot of homeless, the likes of which we have never seen before. Tent cities are already sprouting up around the country and we’re going to see many more.”
“We’re going to start seeing huge areas of vacant real estate and squatters living in them as well. It’s going to be a picture the likes of which Americans are not going to be used to.
It’s going to come as a shock and with it, there’s going to be a lot of crime. And the crime is going to be a lot worse than it was before because in the last 1929 Depression, people’s minds weren’t wrecked on all these modern drugs, over-the-counter drugs, or crystal meth or whatever it might be..

So, you have a huge underclass of very desperate people with their minds chemically blown beyond anybody’s comprehension.
Above left, territorial boss ‘Humongous’ from movies. Right: territorial bosses- the Council on Foreign Relations.
Below left, citizen Mad Max, just struggling to stay alive from the movies. Below right, a suburban family with short term survival supplies. Reality.

The George Washington blog has compiled a list of quotes attesting to Celente’s accuracy as a trend
forecaster.
•  “When CNN wants to know about the Top Trends, we ask Gerald Celente.” – CNN Headline News
•  “Gerald Celente has a knack for getting the zeitgeist right.” – USA Today
•  “There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.” – CNBC
•  “Those who take their predictions seriously …consider. Gerald Celente and the Trends Research Institute.” – The Wall Street Journal
•  “Gerald Celente is always ahead of the curve on trends and uncannily on the mark … he’s one of the most accurate forecasters around.” – The Atlanta Journal-Constitution
•  “Mr. Celente tracks the world’s social, economic and business trends for corporate clients.” – The New York Times
•  “Mr. Celente is a very intelligent guy. We are able to learn about trends from an authority.” – 48 Hours, CBS News
•  “Gerald Celente has a solid track record. He has predicted everything from the 1987 stock market crash and the demise of the Soviet Union to green marketing and corporate downsizing.” – The Detroit New
•  “Gerald Celente forecast the 1987 stock market crash, ‘green marketing,’ and the boom in gourmet coffees.” – Chicago Tribune
•  “The Trends Research Institute is the Standard and Poor’s of Popular Culture.” – The Los Angeles Times
•  “If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.” – New York Post
So there you have it – hardly a nut job conspiracy theorist blowhard now is he? The price of not heeding his warnings will be far greater than the cost of preparing for the future now. Storable food and
gold are two good places to make a start.”

≈≈≈  ≈  ≈≈≈
While the future seldom unfolds the way we imagine, it may come in a  flavor that is not surprising. We may not know the exact height a tide may rise to on the beach, but we can certainly tell the direction the water is flowing; similarly, without seeing the wind, we can feel its pressure and see its effects. Even within a decade, the U.S.A may not experience literal secession as predicted by the Russian professor, but several regions may suffer patchy, severe economic depression, areas within other regions  may become wracked by moderate scale social/racial upheaval requiring federal military support…
.

“Dark clouds gather on the global horizon, the wind direction is changin’.
 Flashing light in the darkening sky, promise storms gale soon rising ”.
5-29-2011 Mr. Larry]

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Venezuela: Shortages and hyper inflation… How it looks on Main Street

news-desk[1]A. Venezuela Enforces Fingerprint Registry to Buy Groceries: What to Do Before Rationing Starts in America 2 April 2014, SHTFplan.com, by Daisy Luther, The Organic Prepper, http://www.theorganicprepper.ca/venezuela-enforces-fingerprint-registry-to-buy-groceries-what-to-do-before-rationing-starts-in-america-04022014

Pasted from: http://www.shtfplan.com/headline-news/venezuela-enforces-fingerprint-registry-to-buy-groceries-what-to-do-before-rationing-starts-in-america_04022014

Editor’s Note: In recent weeks the country of Venezuela has implemented everything from price controls to rationing in an effort to control the hyperinflation that has gripped the nation. All attempts at controlling demand and ‘hoarding’ have thus far failed, prompting government officials to issue directives requiring biometric verification for the purchase of foodstuffs. What’s happening in Venezuela is a clear example of how government first causes the problem, often leading to panic, and then points the blame at everyone but themselves. Officials claim that unscrupulous merchants (who have been forced to sell goods at prices lower than they have acquired them) and the hoarding of food by individuals is to blame for the shortages.

The solution, of course, is more government, and in this case that means registration of fingerprints and other personal data in exchange for permission to purchase food. Be assured that the same plans are in place right here in the USA. In fact, we already have an electronic mechanism of exchange in the form of Electronic Benefit Transfer (EBT) cards. Should the worst happen and the US dollar crashes at some point in the future, those who failed to prepare (or, hoard as the government would suggest) are destined to forced registrations at their local post office or other government entity. Daisy Luther of The Organic Prepper explains what’s happening right now in Venezuela, how a similar situation could unfold in the USA, and what you can do to prepare in advance.

For those looking to implement a frugal and highly effective strategy in advance of food shortages or currency crisis we suggest taking a look at Daisy’s book The Pantry Primer: How to Build a One Year Food Supply in Three Months.

Venesuela1(Pictured: Amateur photo: Venezuelans line up for miles in an effort to acquire food during hyperinflationary food shortages – March 2014)

.Venezuela Enforces Fingerprint Registry to Buy Groceries: What to Do Before Rationing Starts in America
By Daisy Luther

What if you were forced to “register” in order to buy groceries?  And what if, through that registration, the food you bought could be tracked and quantities could be limited?

That’s exactly the plan in Venezuela right now.  The AP reports that in an effort to crack down on “hoarding” that ID cards will be issued to families.  These will have to be presented before foodstuffs can be purchased.

President Nicolas Maduro’s administration says the cards to track families’ purchases will foil people who stock up on groceries at subsidized prices and then illegally resell them for several times the amount…

Registration began Tuesday at more than 100 government-run supermarkets across the country. Working-class shoppers who sometimes endure hours-long lines at government-run stores to buy groceries at steeply reduced prices are welcoming the plan.

“The rich people have things all hoarded away, and they pull the strings,” said Juan Rodriguez, who waited two hours to enter the government-run Abastos Bicentenario supermarket near downtown Caracas on Monday, and then waited another three hours to check out.

Checkout workers at Abastos Bicentenario were taking down customers’ cellphone numbers Monday, to ensure they couldn’t return for eight days. Shoppers said employees also banned purchases by minors, to stop parents from using their children to engage in hoarding, which the government calls “nervous buying.”

Rodriguez supports both measures.

“People who go shopping every day hurt us all,” he said, drawing approving nods from the friends he made over the course of his afternoon slowly snaking through the aisles with his oversized cart.

Reflecting Maduro’s increasingly militarized discourse against opponents he accuses of waging “economic war,” the government is calling the new program the “system of secure supply.”

Patrons will register with their fingerprints, and the new ID card will be linked to a computer system that monitors purchases. On Tuesday, Food Minister Felix Osorio said the process was off to a smooth start. He says the system will sound an alarm when it detects suspicious purchasing patterns, barring people from buying the same goods every day. But he also says the cards will be voluntary, with incentives like discounts and entry into raffles for homes and cars.

Expressionless men with rifles patrolled the warehouse-size supermarket Monday as shoppers hurried by, focusing on grabbing meat and pantry items before they were gone.

Last year in Venezuela, it became a crime to “hoard” food, and the country’s Attorney General called upon prosecutors to crack down on “hoarders” by imprisoning them for the “crime”.

Some people may read this and think to themselves, “Why on earth do I care about what happens in Venezuela?” You’d better care, because this is our future.

Already the Obama administration has moved the pieces into place on the board to be able to appropriate supplies from anyone, at any time.  Mac Slavo of SHTFplan warns: It should be clear from the laws that are already in effect that the government has given itself a legal pretext for confiscating anything they so choose in the midst of an emergency.

Should an emergency befall the United States, the military, national guard, and local police operating under orders from the Department of Homeland Security will have carte blanche to do as they please.

In a widespread emergency where supply lines have been threatened and millions of Americans are without essential resources because they failed to prepare, the government will swoop in an attempt to take complete control.

They will enter our homes and search them without a warrant. They will confiscate contraband. And they will take any ‘excessive resources’ that you may have accumulated. This includes food, toiletries, precious metals and anything else emergency planners and officials deem to be a scarce material.

Just think how much easier it would be to do so if every purchase you make is tracked and documented for future reference.

How Much of a Footprint Are You Leaving?
Now, think about those “loyalty cards” that every grocery store in North America promotes when you go through the checkout. Have you noticed how much more those are being pushed lately? Could there be a nefarious purpose to that?  I doubt the person at the cash register thinks twice about it – if these actually are data collection tools, it is something put in place by people far higher up the food chain (pun intended) than the staff of your local supermarket.

I strongly recommend you think twice about collecting “points” – the discounts may not be worth it if it means that your stock-up purchases are in some database, easily accessible to the NSA.  If you feel it is imperative to have one of those cards, consider using a pseudonym and false address.  You really don’t want to provide an inventory of your stockpile to the government. Some cards, like the one from Target, for example, even take it a step further and link to your credit card or debit account.  I can’t even wrap my brain around giving out that type of information to the person who rings up my paper towels and garbage bags.

To take this even further, if you haven’t been convinced yet that you need to begin producing your own food by gardening and raising micro-livestock, this should solidify the importance of not being totally dependent on “the system” for what you eat. Looking at the drought conditions across America’s farmland, is it a stretch of the imagination to think we could soon be facing rationing like that which is currently happening in Venezuela?  As the middle class gasps its last breath here in America, we may soon be faced with a situation where only the wealthy can afford to avoid rationing.  By becoming independent from the purveyors of food, you can assure that your family will not go hungry at the whims of a government who really doesn’t care.

Plan of Action
Here are a few things that you can do to pre-empt feeling the effects of a system like the one in Venezuela before such a change occurs on our own soil. Start now to leave less of a footprint for the government to follow.

  1. Plant a garden.
  2. Grow food indoors in sunny windows.
  3. Consider an aquaponics set-up in a spare room.
  4. Raise chickens and meat rabbits.
  5. Stock up NOW on long-term staples like grains and beans, before limits are instituted.
  6. Buy heirloom seeds – lots and lots of seeds.
  7. Practice careful OPSEC (OPerational SECurity) when making large purchases.
  8. Store long term food supplies in more than one location. That way if you lose some of your supplies to thugs (government or other varieties), you still have supplies to fall back on.
  9. Learn to preserve food.
  10. Stock up of preservation supplies like lids, jars, etc.
  11. Do NOT use so-called “loyalty cards” or memberships to make large purchases.
  12. When ordering large quantities of supplies, consider having them mailed to some place other than your home.
  13. Use cash or prepaid VISA cards purchased with cash to make large purchases.
  14. Don’t tell others about your supplies and purchases.
  15. Teach your children not to discuss things like food pantries and preparedness.
  16. Don’t store your supplies out in the open for anyone who comes into your home to see. Stash your 5 gallon pails away in closets, under beds, or in the basement.
  17. Disengage from the system by purchasing from small local farmers.
  18. Use the barter system whenever possible.  When money was tight and I lived in a place where I couldn’t grow much food, I worked on a farm harvesting vegetables in exchange for produce that I could preserve for my family.
  19. Change the way you eat – go with a local, in-season menu that is far more difficult to track than grocery-store purchased items.
  20. Learn to forage. Even in the city, you might be surprised at how many things can be found growing in your own back yard or falling off of the trees in a local park.  My children and I picked up one small bag of walnuts a day at a little park down the street one year, resulting in almost 15 pounds of shelled nuts by the time we were through.

Whatever your plan, don’t delay. We need only to read the many articles predicting a food shortage this year due to poor weather conditions to see the writing on the wall. You must become responsible for your family’s sustenance if you don’t want to suffer at the hands of those in power. I have no intention of standing in line for hours with my “ID card”, only to be allowed to purchase a small amount of highly inflated food.

[Please feel free to share any information from this article in part or in full, giving credit to the author and including a link to The Organic Prepper and the following bio.

Daisy Luther is the author of The Pantry Primer: How to Build a One Year Food Supply in Three Months.  Her website, The Organic Prepper, offers information on healthy prepping, including premium nutritional choices, general wellness and non-tech solutions. You can follow Daisy on Facebook and Twitter, and you can email her at daisy@theorganicprepper.ca

  .

B. Price controls and scarcity force Venezuelans to turn to the black market for milk and toilet paper
16 Apr 2015, by Girish Gupta in Caracas
Pasted from: http://www.theguardian.com/global-development-professionals-network/2015/apr/16/venezuela-economy-black-market-milk-and-toilet-paper

From those struggling to meet inflated prices for everyday goods, to lawyers turned pasta smugglers, the street economy flourishes under President Maduro

Venesuela vendorWith supermarket shelves empty, buhoneros (street peddlers) hustling everything from coffee to
shampoo are an increasingly common sight across Venezuela’s slums.  Photograph: Girish Gupta

In Petare, a giant slum overlooking Caracas from the east, hustlers known as buhoneros sell their goods at a busy intersection. “I’ve got milk, toilet paper, coffee, soap…” said 30-year-old Carmen Rodríguez, pointing to her wares by the side of a road busy with honking motorbikes, cars and buses. “Of course they cost more than the government say they should. We have to queue up to get them or buy them from someone who has done. We’re helping people get the basics.”

Yet, many of the poor simply can’t afford Rodríguez’s basics. In a raw and arguably necessary display of capitalism, she sells them for far more than the government’s legally required “fair prices”. It is ironically because of those government-imposed fair prices that the goods often aren’t available at supermarkets at fair prices as it’s simply not profitable to import them. This is thanks to economic policies dating back more than a decade.

Rodríguez sells each of her products for around 100 bolívares. At the black market currency exchange rate, that’s just 30 pence or so. But at that same exchange rate, the minimum wage in Venezuela is around £15 a month.

Venesuela2 queueA queue for a supermarket in Caracas. Photograph: Girish Gupta

“I can’t live like this, earning the minimum wage. It’s not enough at all,” said Araceli Belaez, 40, lining up for groceries at a supermarket in the Caracas slum of Catia.

Johan Elizandre is a fruit-seller in 23 de enero, a slum on the other side of Caracas. It overlooks the presidential palace and its walls are adorned with murals of leftist heroes such as Che Guevara, Karl Marx and former Venezuelan president Hugo Chávez. “A kilo of meat costs me 600 bolívares” said Elizandre, who earns 7,000 bolívares a month, around £20 when measured at the black market exchange rate – far more than the minimum wage. “I have sons, aged five and seven. I’d rather give them the food and not eat so much myself.”

Of course my goods cost more than the government say they should. We’re helping people get the basics

The scenes at Petare’s intersection, 23 de enero’s streets and Catia’s supermarkets are manifestations of an economy in tatters: one in which people buy milk, toilet paper and shampoo at inflated prices because supermarkets, with long queues outside, are near empty; in which engineers and lawyers smuggle pasta and petrol across borders to earn many times more than they would carrying out their profession; and in which surgeons complain that people are dying on the operating table because they cannot import medicines and equipment.

Venesuela3 queueThere will not be much left in the supermarket for people at the back of this queue Photograph: Girish Gupta

President Nicolás Maduro’s approval ratings are currently in the mid-20s. Annual inflation is at nearly 70% – which doesn’t include goods prices with the hefty premiums charged by the buhoneros like Rodríguez. The currency has fallen some 30% against the US dollar this year on the black market. And the murder rate is one of the world’s worst.

In 2003, Maduro’s predecessor Chávez enacted strict currency controls, pegging the bolívar to the US dollar. The aim was to reduce inflation and curb capital flight though neither has been achieved. Price controls, currency controls and the lack of dollars the government provides mean that importers no longer have the incentive to bring in goods. A thousand bolívares would have bought £30 on the black market when Maduro was elected to power in March 2013; it now buys less than £3. In the meantime, prices have risen rapidly while wages have not kept up.

On the country’s border with Colombia at San Antonio, engineer Jesús Arias, 33, has given up on his profession and smuggles petrol across the border. One of the country’s most costly price controls means that filling an entire tank costs just a couple of cents, converted at black market rates. Over the border, petrol sells for hundreds of times more. “Here petrol is practically a free gift,” Arias said. “A litre of mineral water costs more than a litre of gas.”

Children walk across the bridge to Colombia with Coca-Cola bottles filled with petrolThe subsidy costs the government around $12bn (£8bn) a year and Maduro is very clear that it needs to end – though that would be politically disastrous. Arias fills his 50-litre tank for just a few pence; a few hundred metres across the bridge in Cúcuta, Colombia, he can sell that for around £15. “Doctors, lawyers, architects, engineers we’re all doing it,” he said. “Here on the border, I can earn in three or four days what I earn as a professional in a month.” Children walk across the bridge with Coca-Cola bottles filled with petrol.

Maduro blames the problems on an “economic war” being waged against his government, with help from Washington. He blames smugglers, hoarders and street vendors for causing the problems rather than being a consequence of them.

Venesuela cash- barterPeople are leaving their jobs as they can make more as a black-market vendor. Photograph: Girish Gupta

Last year, the government tried to ban websites which publish the black market exchange rate, leading one blogger to liken the manoeuvre to banning the sale of thermometers to crack down on cold weather.

Yet, the black market, while imperfect, is offering an escape valve for the economy, a means for the poor by whatever means to obtain goods they would otherwise have to do without. “Repressing the black market rate, smuggling or trading is going to deteriorate the economic picture even further,” said Alberto Ramos, a senior analyst at Goldman Sachs in New York. “It will lead to even high inflation and higher levels of goods’ scarcity. The unofficial foreign exchange market and smuggling are to a large extent economic escape valves.”

(News & Editorial/ Venezuela: shortages and hyper inflation. How it looks on Main Street)

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An approaching learning curve for non preppers

A. “I’ll Come To Your Place When SHTF” – No You Won’t
23 Oct 2014, SHTFplan.com,  by Mac Slavo
Pasted from: http://www.thedailysheeple.com/ill-come-to-your-place-when-shtf-no-you-wont_102014

Editor’s Note: This article has been generously contributed by Glen Tate of 299Days.com. Glen is the author of the 10-part series 299 Days, which is inspired by his own life and personal journey. It begins with 299 Days: The Preparation and introduces us to a husband who awakens to the fragility of modern society and embarks on a personal journey that introduces him to a world of self-reliance and liberation. 

non prep1In the following article Glen covers an issue that is very dear to most preppers – what to do when neighbors, friends and family come knocking. With limited resources available we’re all going to have to make tough decisions. Like many of us, Glen plans on helping those truly in need. But what about those who refused to see the warning signs and stuck their head in the sand, perhaps even lambasted you for your extreme ideas and theories? Instead of being frugal and preparing, they focused their efforts on entertainment and good times.

But when the good times end, they will come to you for help. What will you do when they show up at your front door?

 

“I’ll Come To Your Place When SHTF” – No You Won’t By Glen Tate Author of  299 Days
(This post is something you can send to your friends or print out and hand to them when SHTF.)

Dear Friend: I love my friends, but I will shoot you if I have to.  I’m serious.  Here’s why.

I tried to persuade you to prepare for what’s coming and, in the process, revealed that to you that I’m preparing.  You realized that I have food, guns, etc., and ended up saying, half kidding but half serious, “I’ll come to your place when SHTF.”

No you won’t.  I will shoot you.  If you threaten me and my family, I will use force to defend against any threat.  And showing up at my place hungry and unprepared is a threat to me.  You will eat my food and use up my medical supplies, generator, firewood, etc.  That’s less of these life-saving things for me and my family.  That’s a threat.

Is this greed on my part?  No.  I will take care of the truly needy – those who cannot take care of themselves.  But you are different.  Very different.  You had plenty of chances to prepare for yourself.

But what did you do?  You spent the weekends watching football, went on expensive vacations, and never made your spouse mad at you with your “crazy” ideas that something bad was happening.  You didn’t do shit because… you would just come to my place.  Problem solved, right?  You didn’t need to spend time, money, and create domestic strife because I did that all for you.

Not.  Why should I spend my time, money, and stress just so you can waltz into my place and live happily ever after?  I’m a nice guy, but – really? – I’m going to spend my (very limited) free time, disposable income, and domestic tranquility just so you can have a leisurely life and more material comforts pre-Collapse while I don’t?

Why do you think I will sacrifice enormous amounts of my time and money so you can enjoy yourself while I’m slaving away?  Would you assume you could come over and leave your broken car at my house?  That I would just spend thousands of dollars on parts and several weekends fixing it and then hand it over to you with a smile – just because I’m a “good guy”?  Would anyone expect that?

You do, apparently.  You actually expect to waltz over to my cabin and receive – with a smile – thousands of dollars of food and other supplies that took me all my weekends to acquire and store.

So, my grasshopper friend (as in the story of the grasshopper and the ant), here is your official warning: if your “plan” for you and your family’s safety is to come to my place, you’re wrong.  When you show up, I’ll ask you to leave.  When you don’t, I’ll point a gun in your face.  If you refuse to leave, I will shoot you.  You are a threat to me.

You had years of time and very clear warnings to get ready.  But you didn’t.  Hey, I love football but haven’t been able to watch a game in a few years; I’ve been fixing up the cabin, buying supplies, and training with the Team.  I spent a lot of money doing all these things so I haven’t gone on a long vacation in… forever.  I have had several difficult times with my wife because of all the prepping I’m doing; I could have easily done what you did, which is just say “Yes, dear” and not prepare because she didn’t want you to. I hope this message jolted you.  There’s still some time.  Go prep.

.

B. When Real Disaster Strikes: These Are The People Who Will Loot, Pillage and Kill You For Your Food
27 Jan 2015, SHTFplan.com, by Mac Slavo
Pasted from: http://www.shtfplan.com/headline-news/when-real-disaster-strikes-these-are-the-people-who-will-loot-pillage-and-kill-you-for-your-food_01272015

Time and again we are reminded why it is prudent to have a backup plan just in case things go wrong. You’ve already got car insurance, house insurance, medical insurance and life insurance. But what about disaster insurance? And no, we’re not talking about a piece of paper guarantee issued by some behemoth corporation who you’re supposed to call when things go wrong.

Real disaster insurance in this context refers to your own personal and familial emergency reserve supplies and strategies, to be consumed and implemented when all hell breaks loose.

non prep hopeful shoppers(Panic In Northeast: Tens of thousands raid grocery stores in search of food and supplies)

What’s happening in the North Eastern part of the United States right now – “Snowpacolypse” – should convince anyone who hasn’t done so yet to prepare themselves for short- and long-term calamities. They happen quite regularly all over the world. We’ve seen them hit time and again in both, first and third world nations in the form of storms, natural disasters and even economic meltdowns. Yet, despite the repeated media broadcasts of suffering and complete destitution often wrought by these events, millions of people still laugh at the notion that, as even the government recommends, you should have a two week emergency supply of food, water and other disaster gear.

It is these very people – the ones who call preppers crazy and snicker at their idea of prudent preparedness and self sustainability – who will be out in force to loot, pillage and kill for these critical lifesaving supplies when a widespread disaster or emergency strikes their area. And no, we’re not talking about a 3-day scenario like a snow storm, which is limited in scope and comes with warnings ahead of time, with supply lines being restocked soon after the storm passes.

non prep shop lineRather, we’re talking about any number of events that are capable of crippling our entire nation in one fell swoop for an extended period of time lasting two weeks or more. These may include national-scale disasters such as a cyber-attack on our utility infrastructure, a super electro-magnetic pulse weapon that takes down our power grid, or a massive financial collapse that locks credit markets and makes resupply of essentials like food, medicine and gas impossible.

All of these events and numerous others like them, though unlikely, remain a plausible and serious threat to our way of life because they are capable of literally sending us back into the middle ages overnight. Should such a scenario ever become reality, then guess who’ll be coming over looking to take your supplies? Here’s a hint. They’ve been lining up in droves at local super markets and clearing shelves all over the North East as a massive snowstorm approaches.

Store shelves are cleared within hours of people realizing that a disaster is in progress.

We know what you’re thinking, “it’s just a snow storm.” And you’re right. These short-term events are nothing to really worry about. Even if you got to a grocery store late and couldn’t get food or fresh water you can still go over to a friend’s house or perhaps knock on your neighbor’s door for some food to get you by. But should the disaster facing the population be something more severe, when people have realized that no re-supply is coming because our just-in-time transportation system has shut down, then you can fully expect that frantic knocks on peoples’ doors will be ignored. Then what?

The answer is simple. As The Prepper’s Blueprint author Tess Pennington notes in Anatomy of a Breakdown, you can expect widespread societal breakdown within 72 hours:

Have you ever heard the saying, “We’re three days away from anarchy?” 

In the wake of a disaster, that’s all you have is three days to turn the crazy train around before crime, looting and chaos ensue.

Multiple factors contribute to societal breakdowns including failure of adequate government response, population density, citizens taking advantage of the grid being down and overwhelmed emergency response teams.

non prep empy shelvesFor whatever reason, 3-5 days following a disaster is the bewitching hour. During this short amount of time, the population slowly becomes a powder keg full of angry, desperate citizens. A good example is the chaos that ensued in New Orleans following the absence of action from the local government or a timely effective federal response in the aftermath of Hurricane Katrina. In such troubled times, people were forced to fend for themselves and their families, by any means necessary. This timeline of Hurricane Katrina effectively illustrates “the breakdown,” and within three days, the citizens of New Orleans descended into anarchy, looting and murder

The majority of the looting, and certainly the despair, can easily be prevented with basic preparedness strategies that include managing your own food supply and stockpiling key supplies. In her free 52 Weeks to Preparedness web series Pennington outlines scores of essentials that you won’t really know you need until you need them, including food supply lists, medical items, toiletries, alternative power sources, and home defense tools.

At the very least, every American should have a stockpile, even if just a couple of boxes that fit in your closet, containing the following:

  • Meals Ready To Eat – These are full course meals that pack a caloric wallop and will suffice just fine for a period of two weeks or more. They are compact and easy to store, and given their relative low cost, are an excellent investment not just for emergencies in your home, but something to take hiking, camping or leave in your car in case you find yourself broken down in the middle of nowhere. High density emergency food bars are another option to diversify your reserves.
  • Water Reserves – Expect water utility companies to be out of operation as employees stay home to care for their families. This happens in almost every major disaster, meaning that you either better have effective water filtration and treatment supplies, or have reserve water packets.
  • Medicine – Basic first aid kits are an absolute must. A small cut can do serious damage over a two-week period when there is no doctor.
  • Toiletries – You’ll want some reserve toilet paper, for obvious reasons. But also consider sanitation as a key preparedness strategy, because if your toilet doesn’t flush then things will get ugly very quickly.
  • For an extensive list of preparedness considerations, supplies and strategies check out the free 52 Weeks To Preparedness web series.

At last count some 1% of Americans, roughly three million out of our nation’s 300-plus million people, have taken any steps to prepare. It’s a sobering statistic to be sure, especially considering that the Department of Homeland Security has warned people to stockpile at least a two week supply of food and water rations just in case.

Most Americans, it seems, still think the government will be there to provide assistance when the worst happens. The problem, of course, is that despite the millions of meals-ready-to-eat they have stockpiled, they will not have the resources to deal with 300 million desperate people.

The following statement from one San Francisco resident hit by last year’s West Coast storm pretty much sums it all up:

“I couldn’t get my car out of the garage, I have no food, I have no cash, so I’m trying to forage for something.”

After the 72-hour mark this individual and others like him will have no choice but to go out “foraging” for food. They’ll likely be armed, operating in groups and they’ll be going door-to-door.

non prep - watch

Be Prepared

(Survival Manual/Prepper Articles/ An approaching learning curve for non preppers

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The Tragedy of the Commons

(News & Editorial/The Tragedy of the Commons)

What & who we are
(Excerpted from http://en.wikipedia.org/wiki/Homo_sapiens)
“Humans are bipedal primates belonging to the species Homo sapiens (Latin: “wise man” or “knowing man”) in Hominidae, the great ape family. They are the only surviving members of the genus Homo. Humans have a highly developed brain, capable of abstract reasoning, language, introspection, and problem solving. This mental capability, combined with an erect body carriage that frees the arms for manipulating objects, has allowed humans to make far greater use of tools than any other species.

Like most higher primates, humans are social by nature. However, humans are uniquely adept at utilizing systems of communication for self-expression, the exchange of ideas, and organization.

Humans create complex social structures composed of many cooperating and competing groups, from families to nations.

Social interactions between humans have established an extremely wide variety of values, social norms, and rituals, which together form the basis of human society.
Humans have a marked appreciation for beauty and aesthetics which, combined with the human desire for self-expression, has led to cultural innovations such as art, literature and music.

Humans are noted for their desire to understand and influence their environment, seeking to explain and manipulate natural phenomena through science, philosophy, mythology and religion. This natural curiosity has led to the development of advanced tools and skills, which are passed down culturally; humans are the only species known to build fires, cook their food, clothe themselves, and use numerous other technologies…”

“In humans, behavioral innovations are usually passed down culturally from one generation to the next through social learning. For many, the existence of culture in humans is the key adaptation that sets us apart from animals.” However,

Humanity’s Archille’s Heel:
“The greatest shortcoming of the human race is our inability to understand the exponential function.” – Dr. Albert Bartlett, physicist.
All species expand as much as resources allow and predators, parasites, and physical conditions permit. When a species is introduced into a new habitat with abundant resources that accumulated before its arrival, the population expands rapidly until all the resources are used up.”  – David Price, Energy and Human Evolution 

.The tragedy of the commons
Pasted from http://en.wikipedia.org/wiki/Tragedy_of_the_commons
The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone’s long-term interest for this to happen. This dilemma was first described, in modern times, in an influential article titled “The Tragedy of the Commons,” written by ecologist Garrett Hardin and first published in the journal Science in 1968.

Central to Hardin’s article is an example (See a similar cartoon below in this post. Mr Larry] of a hypothetical and simplified situation based on medieval land tenure in Europe, of herders sharing a common parcel of land, on which they are each entitled to let their cows graze. In Hardin’s example, it is in each herder’s interest to put the next (and succeeding) cows he acquires onto the land, even if the quality of the common is damaged for all as a result, through overgrazing. The herder receives all of the benefits from an additional cow, while the damage to the common is shared by the entire group. If all herders make this individually rational economic decision, the common will be depleted or even destroyed, to the detriment of all.

[The behavior of ‘Self interest vs. The Commons’ is a  common flaw in Man’s mental abilities and has been with us for thousands of years, if not since our dawn. You can see it today during the recent financial crisis where banks, whom during good times privatized their profits and in bad times spread their losses to the public.]

Thucydides (ca. 460 BC-ca. 395 BC) stated: “They devote a very small fraction of time to the consideration of any public object, most of it to the prosecution of their own objects. Meanwhile each fancies that no harm will come to his neglect, that it is the business of somebody else to look after this or that for him; and so, by the same notion being entertained by all separately, the common cause imperceptibly decays.”

Aristotle (384-322 BC) similarly argued against common goods of the polis (city-state)  of Athens: “That all persons call the same thing mine in the sense in which each does so may be a fine thing, but it is impracticable; or if the words are taken in the other sense, such a unity in no way conduces to harmony. And there is another objection to the proposal. For that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few.”

Psychologist Dennis Fox used a number, what is now termed “Dunbar’s number”, to take a new look at the tragedy of the commons. In a 1985 paper titled “Psychology, Ideology, Utopia, & the Commons”, he stated “Edney also argued that long-term solutions will require, among a number of other approaches, breaking down commons into smaller segments. He reviewed experimental data showing that cooperative behavior is indeed more common in smaller groups. After estimating that “the upper limit for a simple, self-contained, sustaining, well-functioning commons  may be as low as 150 people”.
[If Fox is right and Dunbar’s number for cooperative behavior in a Commons is around 150, then our global political subdivisions of nation, state and county, municipality, are wholly wrong for long term human sustainability. When was the last time you found any personal democratic power in a group of about 150, or of any larger size. Casting our votes on election day really has little to do, ever, about The Commons which we all inhabit. Mr. Larry]

Cartoon illustrating The Tragedy of the Commons
From http://www.garretthardinsociety.org/info/cartoon_commons1.html

.


The Tragedy of the Commons, becomes a problem of Exponential Growth
<http://www.webpotential.com/ambiente/exponential_growth.htm&gt;

In America, growth is seen as American as the flag and apple pie. But there is trouble in paradise. The flag that flies for growth is a noose and the apple pie of expansion is laced with cyanide. But it’s not just America that has this unhealthy relationship with growth it’s the majority of the world and its economies. As our populations, economies, and resource use grow exponentially, so do our environmental problems and the potential for collapse of the earth’s ability to sustain human life. Growth as we know it cannot continue.

As the primary proponent of growth worldwide, business must adjust to the reality of the problems created by growth. Because our current systems of business rely upon continuous growth and development they can not survive in their current form. As Paul Hawken writes in, The Ecology of Commerce, “Just as internal contradictions brought down the Marxist and socialist economies, so do a different set of social and biological forces signal our own possible demise. Those forces can no longer be ignored or put aside”. The internal contradictions that Hawken is speaking of are creation of waste, unsustainable uses of resources, environmental degradation, a disparity of wealth, and a plethora of other unsustainable business practices.

The most important foundation of all of these problems is exponential growth in human population and resource use. Hawken states, “The problems to be faced are vast and complex, but come down to this: 5.5 billion people are breeding exponentially [the population is 7 billion now, the article pasted here was written a few years ago. Mr. Larry]. The process of fulfilling their wants and needs is stripping the earth of its biotic capacity to produce life; a climactic bust of consumption by a single species is overwhelming the skies, earth, waters, and fauna”. Hawken relates this to business practices by showing that business relies on and creates unsustainable growth. Hawken seeks to answer, as did the United Steelworkers of America (USWA) Task Force on Environment, “What kind of jobs will be possible in a world of depleted resources, poisoned water and foul air, a world where ozone depletion and greenhouse warming make it difficult even to survive.”.

What exactly is exponential growth, and is exponential growth in population and resource use really unsustainable? Much of the public and by many of our policy makers do not understand exponential growth. Unfortunately, this lack of understanding has not keep exponential population growth and resource use from becoming a problem.
.
The possible origin of chess shows a striking example of exponential growth.
Legend has it that chess was invented by a mathematician who asked a king for what seemed to the king like a small price for the game. He asked that the king pay him in wheat. He asked the king to place 1 piece of wheat on the first square of the board, two on the second and that he continue to double the grains of wheat for all the squares on the board. The king agreed to pay the price, but it’s quite impossible that he held up his end of the bargain.
The amount of wheat needed is enormous. With 64 squares on a chessboard, the king needed 263 grains of wheat to pay the mathematician. This is roughly 400 times the 1990 worldwide harvest of wheat, and could be more wheat than has been harvested in the history of humanity! This is exponential growth. The king was probably thinking of linear growth, where the number of grains would grow by one for each square, when he made the deal. Linear growth would give 2048 grains of wheat in total. Enough grain for a few meals perhaps, but nothing compared to the amount of wheat harvested in human history.

Many things other than that cunning mathematician’s grains of wheat grow exponentially. Human population, resource use, and the waste that accompany them are growing exponentially. While many types of resource use are growing at over 5% per year, the human population is growing at about 1.6%. 1.6% does not seem too like an unacceptable rate of growth to many. In economic terms 1.6% growth is downright horrendous. The Japanese declare their economy is in recession if it grows less than 3% per year.
Although 1.6% does not seem like much to some of the kings and economists of the world, applied to human population it can yield huge numbers. While it took 2 million years for us to reach a population of 1 billion, we will add another billion to the earth’s population in just the next 11 years. If we calculate 1.6% growth out another 600 years, we find that there would be one person for each square yard of the dry land surface of earth, and in 1800 years the mass of humans would exceed the mass of the earth. Clearly human population growth will stop. But it’s not just our population that is growing, it’s also our use of natural resources.

Most types of resource use are growing faster than population. Although many associate growth in resource use with population growth, growth in resource use can also be independent of population growth. Resource use can grow even without population growth, although the reverse is hard to imagine. An example of what exponential growth means in resources can be seen with US coal reserves.
.
Coal is the US’s most abundant fossil fuel.
In 1991 the US Department of Energy reported that at current rate of use US coal reserves could last almost 500 years. But the caveat here is current rate of use. Between 1971 and 1991 the use of coal grew 2.86%. With this rate of growth US coal could last about 94 years if we could use it all, but more likely 72 years of coal would be.
[That means we could be out of coal by 2063 (1971+72 years), just 30 years after the decline from current Peak Oil has greatly reduced gasoline consuming private automobiles. Mr. Larry. See also the 4dtraveler Post: (News& Editorial/ Exponential Growth)

The lack of understanding of how long coal could last, comes from people’s lack of knowledge of exponential growth. In 1978, Time Magazine reported that there is “enough coal to meet the country’s energy needs for centuries, no matter how much energy consumption may grow. This is clearly untrue. If we look just at the amount of electrical energy the country uses and its historical growth over the last 40 years, we see that coal could meet that need for just 36 years. Remember, coal is our most abundant fossil fuel. This utter lack of understanding of the results of exponential growth isn’t limited to Time — it’s pervasive in our government, media, and general public.

Coal is just one example of the larger issues surrounding resource use. No one knows if we’ll be able to discover enough resources to maintain our level of growth, or if the social, human, and environmental costs of using these resources will be too high to use them if they are found. If one understands the way exponential growth works it becomes clear, as it is to most that study the issue, that population and resource use growth cannot continue. The manner in which these will stop is unknown. We seem to have two basic choices: we can decide how to stop the growth of population and resources use, or we can let nature do it for us.

Petroleum is another example of the larger issues…
http://nymoral.blogspot.com/2009/12/greatest-shortcoming-of-human-race.html
In 1974, Dr Hubbert predicted that the peak of world oil would occur around 1995, so let’s see what’s happened. We have to go to the geology literature and ask the literature,
“What do you think is the total amount of oil we will ever find on this earth?”
The consensus figure in the literature is 2000 billion barrels. Now, that’s quite uncertain, plus or minus maybe 40 or 50%.
That would mean the peak is this year (2004). If I assume there is 50% more than the consensus figure, the peak moves back to 2019. If I assume there’s twice as much as the consensus figure, the peak moves back to 2030.

So no matter how you cut it, in your life expectancy, you are going to see the peak of world oil production. And you’ve got to ask yourself, what is life going to be like when we have a declining world production of petroleum, and we have a growing world population, and we have a growing world per capita demand for oil. Think about it.

[The problem of Mankind dealing with exponential growth leads back to the Tragedy of the Commons. In order to satisfy the needs and appetites of an exponentially growing population, exponential consumption is required, unless we each incrementally accept less and less.
We seek to satisfy our needs, and appetites individually, and on a family scale, meanwhile, considering any resultant problems as being the responsibility of The Commons.
Human beings will not search for, much less reach a consensus on how to equally share the responsibility of The Commons, in a multi-national environment; it’s our Human Nature to continue with new civilizations, with booms and busts.
Unfortunately, the petroleum, coal and commodity fed boom of the 20th Century will lead to a quite stellar bust in the 21st Century. Mr. Larry]

A few words of wisdom
•  “The greatest shortcoming of the human race is our inability to understand the exponential function.” – Dr. Albert Bartlett, physicist.
•  Can you think of any problem in any area of human endeavor, on any scale, from microscopic to global, whose long-term solution is in any demonstrable way aided, assisted, or advanced by further increases in population, locally, nationally, or globally?” – Dr. Albert Bartlett, physicist.
•  Bartlett’s law will result in the exhaustion of petrochemical resources due to the exponential growth of the world population in line with the Malthusian Growth Model. – Dr. Albert Bartlett, physicist.
•  “The extinction of the human race will come from its inability to emotionally comprehend the exponential function.”- Edward Teller, American nuclear physicist, known as “the father of the hydrogen bomb.”
•  “Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” – Kenneth Boulding, economist, system scientist, educator, author, poet.
•  Thomas Jefferson, in a 1787 letter to Peter Carr, made a profound observation about human nature that only now is being verified by neuroscience and behavioral genetics studies. “Man is”, Jefferson wrote, “a social animal and is endowed with a sense of right and wrong. If one would State a moral case to a ploughman and a professor … the former would decide it well, and often better than the latter, because he has not been led astray by artificial rules.”

Haiti and the Dominican Republic – comparing potential futures

[Photograph below: The border between Haiti (left) and the Dominican Republic (right) on the Caribbean island, Hispaniola. Policies that  led to deforestation practices in Haiti vs. the Dominican Republic, show that decision making, can and does make a difference in the condition of The Commons.

Centuries of man-made deforestation have reduced forest cover to about 2%  in Haiti, and 21% in the Dominican Republic.
The Dominican Republic constructed, dams to generate hydroelectric power. They launched a crash program to spare forest from being  use for fuel, by instead importing propane and liquefied natural gas. Haiti’s poverty forced its people to remain dependent on forest-derived charcoal from fuel, thereby accelerating the destruction of its last remaining forests.
Dominicans like the Haitians, have experienced a great deal of corruption and instability, but since 1970 the country has maintained the transition of power through peaceful elections. The continuity of the Dominican government made possible a set of economic reforms in 1990 that led to a decade of steady growth.
In the Dominican Republic, average life expectancy is nearly 74 years, in Haiti, it’s 61 years. [Photograph at right, farm community in the Dominican Republic.]

Haiti provides a dim image of an overpopulated, degraded world, where material things are scarce, where The Commons were ignored until it was too late.

What has come to Haiti in the 200 years, since her colonial days, pre 1804?
The Haitian environment has become a severely degraded ecosystem; her wildlife habitats have been destroyed or seriously damaged, with 25 to 30 watersheds largely degraded or altered. Because most of the trees have being cut, there is increased soil erosion and flood damage from storms, crop losses are greater.

 The countryside is already barely able to provide minimal living standards for the people. Those who lose their entire crop often end up living in a shanty in Port-au-Prince.
About three in four Haitians (73%) say there have been times in the past year when they or their families have gone hungry. Globally, only Africans in Chad (76%), Malawi (76%), and Niger (74%) are as likely to say they experienced food deprivation.
A majority of Haitians (57%) say there have been times in the past year when they did not have enough money to provide adequate shelter for themselves.
In Haiti, chronic political instability and corruption have combined with poverty, illiteracy, and racial discrimination to pose insurmountable barriers to modernization.
Meanwhile, Haitians are far more likely than Dominicans to say they’ve been assaulted in the past year. A full 30% of Haitians say they have been assaulted or mugged in the past 12 months, nearly three times the percentage of Dominicans who say the same (11%). In fact, among residents of more than 100 countries surveyed worldwide, only Burundians in central Africa (33%) are more likely than Haitians to say they’ve been attacked in the past year. [Photograph at right, farming community in Haiti.]

 Much of the rest on the planet could experience conditions somewhat similar to Haiti – 100 years from 2012. Considering that  petroleum and coal resources will  have been fully exploited and reduced to exhaustion within about 50 years (but 50 before that hypothetical 100 years has passed). Considering that other easily mined natural resources that we use in our civilization, will have  similarly been mostly extracted, it simply defies explanation where the energy will come from. If we do manage to overcome the energy challenge with a technological tour de force, starting immediately, where will the mines and minerals,  revitalized carbon depleted farm soil, restocked global fisheries, below ground  recharged water aquifers, and new surface fresh water resources come from?

All these problems are of course ‘in the future’ meaning… it’s going to ultimately be someone else’s responsibility…  [smile to yourself and think,  The Commons]. From your family’s view, the reality of peak oil is arriving now, along with increasing costs from food, medical care, college expenses… add your observations to the list. However, as a society, we’re seeing a decay in public infrastructure; diminishing economic returns; a long term continuing increase in social subsidies, income disparity, sub inflationary wage increases; no interest gained from our savings; political unrest is spreading at home and abroad.
.
This then, is the coming of the Tragedy of the Commons.

Mr. Larry

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After peak oil

(Survival manual/2. Social issues/After peak oil)

Topics:
1.  Peak Oil facts
2. When the lights go out
3. Depletion of key resources
4. Peak oil info and strategies
5. Urban vs. Rural Sustainability
6. Cities, Peak Oil and Sustainability
7. Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression

Prologue
Oil is the fuel that enabled the growth of modern civilization, and all industrialized countries now rely on it to an extraordinary extent.
Oil provides 40 percent of all primary energy, and 90 percent of our transportation energy.
It is furthermore critical to industrial agriculture, the chemical and pharmaceutical industries, much of the clothing industry, and a vast array of others.
The physical and chemical versatility of oil, combined with its high energy density, are such that no other known energy source can serve as a full or even adequate substitute. In short, oil is the lifeblood of the industrial world.

Once peak oil hits, economic growth will  be gone. Our financial system needs growth to sustain it, so that loans can be paid back with interest. What has been economic growth may be replaced with economic  decline.

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1.  Peak Oil Facts & What They Mean to You


Pasted from <http://www.energytrove.com/peak-oil-facts.html>
The peak oil facts are undisputed despite the raging debate over when it will actually occur. This page summarizes peak oil theory, facts and what it all means to you…
•  Undisputed facts about peak oil
•  Peak oil: taking the facts one step further
•  Projections about peak oil’s timing
•  Boiling it all down & next steps

Undisputed Peak Oil Facts
There are widely opposing viewpoints about peak oil. When will it happen? How much oil is left? How will renewable energy reduce its demand? What will be the impact to the national and global economy?

Before you can consider these questions, their implications and what they mean to you, you must first establish a foundation of the undisputed peak oil facts accepted by all viewpoints…

Fact #1 of 11 Peak Oil Facts:
Oil is a nonrenewable resource, which means that it can’t be reproduced for use by humans (it is made over millions of years). In other words, once it’s gone, it’s gone.

Fact #2: Peak oil occurs and can be confirmed when the rate at which oil is taken from the ground worldwide hits its high point and starts to decline.

Fact #3: There are a finite number of oil reserves on the planet. Regardless of technological advancements that allow us to find and extract what’s there, eventually existing reserves will be depleted and there will be no more oil to find.

Fact  #4: All individual oil fields (and therefore all nations’ and the planet’s oil production) inevitably peak, decline and are depleted. For example, the United States reached peak oil production in the 1970’s which has been in decline ever since.

Fact #5: One or both of two things must occur after peak oil is reached and the decline in oil production continues:
•  The price of oil will go up
•  The demand for oil will go down

__Peak Oil Facts In Context: Canadian Tar Sands
Canada has about 178 billion barrels of proven oil reserves (2nd only to Saudi Arabia), over 95% of which are in the form of oil sand deposits. If it could be easily extracted, it would still only add about another 5- 1/2 years to the world’s oil supply at the current rate of consumption. However…
The amount of oil able to be extracted per day from tar sands: About 3.5 million barrels or roughly 4% of the world’s daily consumption

__Environmental impact of tar sand oil extraction:
•  By 2012, the Canadian tar sands operations are expected to  use as much gas as is needed to heat all of the homes in Canada.
•  Extracting oil from tar sands causes as much as 3 times the greenhouse gas pollution as a regular barrel of oil.
•  Canadian tar sands production methods do not comply with many U.S. environmental laws.
In either  case, all but the wealthiest individuals must reduce their dependence on oil as the price increases.

Fact  #6: Our current prevailing culture is utterly dependent on oil.Oil makes the modern world tick… not only does it fuel our cars, trucks, trains, boats and planes but it is used to produce the materials they are made up of.

It’s also extensively used during every step of the food process up to the point that the food enters your mouth… oil’s products are used to plant seeds, fertilize crops, kill bugs and weeds, harvest crops (which are also fed to the animals we eat) and to preserve, package, ship and refrigerate our food. Fully one-fifth of the United States’ oil consumption is used to produce and transport our food.

Oil is also used directly or indirectly to create the utensils, plates, pots, pans, counters, stoves, dinner tables and chairs that we use when cooking and eating…not to mention part of the electricity used to cook our food and to keep the lights on while we eat.
Rather use candles? Most are made of paraffin wax which is made from refined oil.
Countless oil-derived products are used in our everyday lives. See some common examples in the table above:

Fact  #7: Demand for oil is overtaking the speed at which we can produce it, regardless of peak oil’s timing, which will ultimately prevent oil prices from falling.
If demand continues on the same long-term trajectory — which appears to be the case outside of intermittent fluctuations caused by economic factors — there is no end in sight to rising oil prices.
The 2008 “Great Recession” caused a reduction in the demand of oil which caused its price to drop, but oil’s price must resume its increases for two main reasons:
1)  As illustrated in Fact #6 above and Fact #8 below, oil is used in too many aspects of our lives for us to reduce our consumption past a certain point and there is not enough energy available from alternative sources to make up for a significant shortfall.
2)  If oil’s demand drops for a long enough period of time, either production will slow down and bring prices back in line or production will continue at its current pace thus getting us closer to depleting the world’s oil (and therefore reducing oil’s supply which will eventually bringing its price back up). At best, reduction in the demand of oil would only serve to push back the timing of peak oil.
For a case in point about our world’s unquenchable and growing thirst for oil, consider that the United States and its 311 million citizens currently consume about 25% of the world’s oil and increase their demand every year.

__Chinese Oil Flow
China, the most populous country in the world with 1.3 billion citizens, currently consumes 9% of the world’s oil. It is increasing its oil consumption at a rate of 7.5% per year, 7 times faster than the U.S.
According to the International Energy Agency, by 2030 world energy demand will be 40% higher than it was in 2007: “Price volatility will continue, but the days of cheap energy are over.”

The United States Joint Forces Command concludes, “Assuming the most optimistic scenario for improved petroleum production through enhanced recovery means, the development of non-conventional oils (such as oil shales or tar sands) and new discoveries, petroleum production will be hard pressed to meet the expected future demand of 118 million barrels per day.”

__Peak Oil Facts In Context: New Oil Discoveries
The 10 largest oil discoveries from 2000 – 2010 combined (including Brazil’s 2010 discoveries) amount to about 48 billion barrels.
•  The world’s 2010 oil consumption per day was 87.4 million barrels
•  Number of days these combined discoveries will last at current rate of consumption: 549 (about 1.5 years)
In a typical economic scenario, when a  price point gets too high consumers simply shift their buying over to another good or service. But what happens when our infrastructure, products and services
don’t have a viable replacement?

Fact  #8: On the global scale, renewable energy sources and non-conventional oil will come nowhere close to offsetting our dependence on oil through 2030 and beyond.
According to United States Joint Forces Command, even taking into account all other available energy sources, oil will still need to satisfy the majority of our energy needs through 2030.
ExxonMobil, the largest oil company in the world, agrees: “80% of global energy needs through 2030 will continue to be met by oil, natural gas and coal.”

Fact #9: Everyone will eventually be forced to reduce their consumption of oil and its byproducts. Whether oil price increases make it unaffordable or government policy requires less consumption, as oil production continues to decline every single person will be affected at some point.

__Energy Per Barrel: Pros & Cons
One barrel of oil is equivalent to about 25,000 hours of human labor. Assuming weekends off, no vacation time and a 40 hour work week, that’s equivalent to over 12 years of work from one person.
That much work packed into one barrel of oil has enabled humans to accomplish amazing feats, ultimately allowing us to grow our global population 575% since 1857 when the first large oil refinery was built. That’s a growth of 5.8 billion people over the last 150 years compared to 1.2 billion over the previous 2,000. What happens as that amazing energy source starts to go away?

Fact  #10: Those people that have permanently adopted the use of less oil-dependent products, services, forms of energy and lifestyles will be less affected as the availability of oil declines and its price increases.

Fact  #11:  On the individual level, reducing dependence on oil is affordable and requires only minor changes to lifestyle. There are hundreds of ways to reduce your dependence on oil and the other finitely-available fossil fuels, many of which are either completely free or very affordable.
For example, replacing just one incandescent light bulb with an energy-efficient compact fluorescent bulb and always turning it off when it’s not in use can save up to $75 or more per year (this is after taking the higher cost of the fluorescent bulb into account). And that’s just the very tip of the energy-saving, oil-dependence-reducing iceberg.

More on what can be done on the individual level in a moment. First, let’s discuss how these peak oil facts will affect the oil-dependent…

Taking the Peak Oil Facts One Step Further & What it Means to You
As  illustrated above, oil is intimately connected to almost every aspect our culture. So what happens when the price of oil increases? History has shown the following three effects:

1)  Inflation goes up proportionately. According to the U.S. Department of Energy (DoE), “inflation, measured by the rate of change in the consumer price index (CPI), tracks movements in the world oil price.”
What this means to you: A little inflation is a good thing. By encouraging people to outpace it, low inflation (as opposed to 0% inflation or deflation) leads to additional investing and borrowing thereby creating jobs, additional spending and an improved economy.
But rising inflation is bad for several reasons. In general, it means that the money you earn today (or saved in the past) will not buy you as much tomorrow… especially if your employer’s pay raises don’t keep up. For example, a 5% pay raise alongside 2% inflation means that you’ll be able to buy 3% more stuff with your money than you could previously. But that same 5% pay raise alongside 10% inflation has the opposite effect: a reduced standard of living.
It’s also bad news for retirement accounts since higher inflation makes it more difficult for your investments to outpace it, ultimately leaving you with a difficult decision: make riskier investments in an attempt to outpace higher inflation or remain in safer investments and watch your money lose value.
Higher inflation also leads to higher interest rates which makes borrowing money more expensive.

2)  The price of oil-dependent goods and services increases. Not surprisingly, when the cost of a good or service’s underlying expenses go up, the price of those goods and services must go up as well.
What this means to you: Every oil-dependent product or service that you currently use will go up in price. In general, the more oil that a product or service uses, the more dramatic its price increase will be.
For example, the price of corn keeps pace with the price of oil since so much oil is used in its production and because ethanol, an alternative energy source, is made from corn. Organic crops, on the other hand, use much less oil and are therefore less affected.

3)  Recession occurs. The DoE also points out that since the 1970s there have been “dramatic changes in GDP growth as the world oil price has undergone dramatic change.”11 More explicitly, as the price of oil and inflation (CPI’s rate of increase) go up, the economy goes down.
What this means to you: Recessions cause obvious hardships… unemployment rises, employer pay falls or remains stagnant, housing prices fall and inflation becomes more painful.

To recap what we’ve established so far…

1)  Oil will eventually run out. As it does, the price will continue to go up.
2) If demand outpaces supply before oil runs out, the price will go up in a similar fashion since oil is unique in its energy-producing capacity and because…
3) On a global scale, oil will be still be required to provide as much as 80% of our energy needs by 2030; there will not be enough power available from alternative sources to reduce our projected dependence on oil much below this.
4) On an individual scale, reducing oil dependence is relatively easy and affordable.
Before getting into ways to reduce our individual oil dependence, the next question should be obvious: when will peak oil – or the time when demand outstrips supply – occur? In other words, how much time do we have?

Boiling down the Peak Oil Facts & Next Steps
Oil is going away eventually for all of us – either because we’ll use it all up or because it will become too expensive as its demand outstrips its supply.

Rising oil prices will cause a severe and compounding downward spiral in a world that is dramatically underprepared with alternative energy sources; The inevitable oil-induced inflation increases, the higher cost of oil-dependent goods and services and an ongoing recession that is in lock-step with rising oil prices will eat away at more and more of our paychecks and savings.

When evaluating predictions from the US and international governments to the largest oil companies to organizations specifically focused on analyzing the data, it appears that if the scales have not tipped already, at the latest they will have by the time our babies are out of college.

This all may come as a shock. (Why hasn’t the media at-large assembled and communicated the research and opinions? Why isn’t the government acting more aggressively on the opinions of the organizations that they themselves have charged with compiling the research?)

Regardless of who’s right about the timing or how quickly the data will make its way into the minds of the masses, the peak oil facts should leave you asking three important questions first over all others:
1) When (not if) oil peaks or its demand outstrips its supply, how will the rising cost of oil affect you and your family?
2) What is the worst thing that can happen by beginning a transition to a less oil- and fossil-fuel-dependent lifestyle? (Here’s part of the answer: it will permanently reduce your expenses, freeing your money up for use elsewhere)
c) What can you do now to begin the transition?
Fortunately, the transition –- and where it leads — is neither all that bad nor expensive.
Pasted from <http://www.energytrove.com/peak-oil-facts.html>

First, about 2008-2010, global oil use per capita (purple bell curve on bottom) is seen just beginning to decline from its peak plateau. It’s use per capita declines at a rate of about 20% per decade so that in 50-60 years there is very little being used

Coal quickly peaks after oil and by 2025, it too is in decline.

The Human population has exploded as a result of the energy bonanza provided by petroleum and coal and their generation of electricity, resource extraction and transportation. The population numbers steeply declines when the free lunch diminishes.
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2.  When the Lights Go Out

When the Lights Go Out
10 January 2010, by Peter Goodchild
<http://www.culturechange.org/cms/index.php?option=com_content&task=view&id=590&Itemid=1>

When fossil fuels begin to vanish, the first sign of the times will not be made of cardboard and propped up in front of an empty gas pump. The sign will be the flickering bulb in the ceiling, because electricity is always the weakest link in the synergistic triad that includes fossil fuels and metals.

When the lights go out, so does everything else. The house or apartment will be largely non-functioning. Not only will there be darkness throughout the dwelling between sunset and sunrise, but all the sockets in the wall will be useless. The “four major appliances,” stove, refrigerator, washer, and drier, will be nothing more than large white objects taking up space, so there will be no means of cooking food or preserving it, and no means of doing laundry. There will be no heating or air-conditioning, because these are either controlled by electricity or entirely powered by it. For the same reason, there will be no plumbing, so clean water will not be coming into the house, and waste water will not be leaving it.

And that is only one’s own habitation. The entire country will be affected, the whole world will be affected. Computers will cease to operate, and computers have insinuated themselves into almost every device we use. There will be no long-distance communication: no telephones, no Internet, no transmission of data from anywhere to anywhere.

Money will largely cease to exist, because there will be no electronic means of sending or receiving it, and no way of balancing accounts. In fact money nowadays is not reckoned as coins or bills, but as data on a screen, and the data will no longer be there. All bank accounts will cease to exist.

Modern medicine will vanish. Doctors will have almost no means of taking care of their patients. Hospitals will be burdened with the sick and dying, and there will be no means of taking care of them. There will not even be a means of removing and burying the dead.

The police will be immobilized, because they will have no means of sending or receiving information. Since police forces anywhere have only enough personnel to deal with normal crises, it will not take long for officers to realize that they are powerless to do anything, but stay home and protect their own families.

For anyone, it will be impossible to jump into a car and get help, because cars require gasoline, and the gas pumps are run by electricity. In any case, the oil wells and the refineries will have ceased operation. The biggest “vicious circle” will have taken place: no electricity means no fossil fuels, and no fossil fuels means no electricity.

For a while, people will try to get by with emergency devices and equipment. Backup generators can save lives for a while, but those generators are not meant to be running for more than a few weeks, because they themselves require fuel. On a more primitive level there will be battery-powered devices, and even simple oil lamps and candles, but these will not last very long.

“When the lights go out” is mainly a synecdoche, of course, because the incandescent or fluorescent light bulbs in a house will not be the major concern: in the daylight hours, one does not need light bulbs. But the flickering of bulbs will nevertheless act as an early-warning system, the canary in the coal mine. During a severe storm, it is the flickering of light bulbs that indicates that it is time to get to whatever emergency supplies have been put aside: bottled water, canned food, and in winter warm clothing. The unsolved problem, however, may be that the concept of “emergency” is usually regarded in terms of a short period of time. There is always the spoken or silent refrain of “until the authorities arrive.” But those authorities will be waiting for other authorities to arrive, and so on ad absurdum.

On a more optimistic note, nevertheless, it must be said that there is a great deal that can be done. Of all the resources one can accumulate, the most important are those that are stored inside one’s own head: knowledge, skills, wisdom. “Knowledge” is perhaps not the right word, though, because to have read or heard a particular fact does not automatically grant the ability to deal with particular issues.

Even more important than mere “knowledge” is practice. For example, I used to read a great many books on vegetable gardening, but when I owned and ran a market garden for several years I was constantly mumbling, “Why isn’t this information in the books?” And there were several answers to that question. In the first place, the books were badly written. Secondly, it is not the overall principles that count, but the minutiae. Thirdly, those particulars often cannot be put into writing or even into speech: “I can’t explain it, I can only show you” is an expression I often heard. A good gardener knows a thousand tiny tricks that lead to success, and it is those particulars that matter, not the general statement that one does not sprinkle seed in a snowstorm.

The skills needed for country living are rarely the same as those needed in the city, although anyone who has built up experience in what the books call “home repair and improvement” will be ahead of those whose knowledge consists of more ethereal matters. Hunting and fishing are not taught in academia.

When I say, “When the lights go out, so does everything else,” I mean “everything in the city.” What matters is not to be in the wrong place at the wrong time. Living in the city will certainly be a case of the wrong place at the wrong time. There will be no food and no water, and no mans of dealing with the victims of famine and disease. When there is an inkling that the light bulbs everywhere are about to fail, the answer is to be well outside the city limits. One should either be living in the country or at least have some property in the country and a well-tested means of getting there.

Even a plan of that sort, however, involves a few caveats. “Property” in the modern world is nothing more than a convenient legal fiction. If a gang of outlaws moves in next door, or even if there is a single oppressive neighbor to be dealt with, then the whole concept of “property” can vanish into thin air. I have known several cases in which people gave up house and land because they could not deal with troublemakers. What will it be like when the troublemakers are doing something more unpleasant than a little trespassing? So it is good to own property, but it is better to realize that ownership, in the modern sense of the word, might be nothing more than a scrap of paper.

Getting out of the city means knowing the roads ― not the main highways, but the back roads. In an emergency of any duration, the main roads become jammed, partly because of the volume of traffic but also because of accidents. In more severe situations, vehicles will even be abandoned, either because they are out of gas or because the passengers have discovered that it is quicker to walk. Knowing the back roads, and even knowing alternative routes among those back roads, means freedom of choice in one’s movements.

The last matter is that of community. As mentioned above, the concept of property can be illusive, but there is more to consider in the question of who lives in the general area. Neighbors who take pleasure in noisy dogs, loud radios, or heavy drinking can make proximity unpleasant nowadays, but such people may not prevail in the kind of “natural selection” that will take place, where common decency will be everyone’s concern. In any case, the greatest blessing of the post-petroleum age will be the demise of all-terrain vehicles, electronic amplifiers, and the other technological marvels with which people now ruin one another’s enjoyment of “cottage country.”

Even then, the trouble of having a neighbor may be less than the trouble of not having one. It has often been said, correctly, that in reality the loner will not survive. If such a person is the hero of a Hollywood movie, it is only for the sake of a story, for the vicarious excitement of defying the odds. No one can stay awake for a month, cradled in a corner with a gun. Without a family, a band, a tribe, there will be no means of distributing the tasks to be done.

It is not reasonable to expect a perfect neighborhood. Within the happiest band of jungle-dwellers there is gossip, discontent, jealousy, manipulation. Troubles and troublemakers can be dealt with in such a way that the community itself does not fall apart. In a primitive community, ostracism, for example, can be an effective means of resolving a problem. A community leader who lacks what we now call “managerial skills” can be replaced by one who does a better job. It is largely a myth to say that country people are nicer than city people; in any setting, neighbors are merely human, with common desires and antipathies and fears. What is important is not to wish for angelic neighbors but to have enough daily contact with them to anticipate how they will respond in a difficult situation.

When the lights go out, so does everything else, but that is not entirely true for those who are far from the city. Living out in the country when the lights go out means getting a better look at the stars.
<http://www.culturechange.org/cms/index.php?option=com_content&task=view&id=590&Itemid=1>
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3.  Depletion of Key Resources
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Depletion of Key Resources: Facts at Your Fingertips
27 January 2010, by Peter Goodchild
<http://www.culturechange.org/cms/index.php?option=com_content&task=view&id=597&Itemid=1&gt;

The author presents a definitive essay. Learn why,
•  “Those who expect to get by with ‘victory gardens’ are unaware of the arithmetic involved.”
•  “There are already too many people to be supported by non-mechanized agriculture.”
•  “To meet the world’s present energy needs by using solar power, then, we would need… a machine the size of France. The production and maintenance of this array would require vast quantities of hydrocarbons, metals, and other materials — a self-defeating process. Solar power will therefore do little to solve the world’s energy problems.”
•  “In a milieu of social chaos, what are the chances that the oil industry will be using extremely advanced technology to extract the last drops of oil? “

 Modern industrial society is based on a triad of hydrocarbons, metals, and electricity.
The three are intricately connected; each is accessible only if the other two are present. Electricity, for example, can be generated on a global scale only with hydrocarbons. The same dependence on hydrocarbons is true of metals; in fact the better types of ore are now becoming depleted, while those that remain can be processed only with modern machinery and require more hydrocarbons for smelting. In turn, without metals and electricity there would be no means of extracting and processing hydrocarbons. Of the three members of the triad, electricity is the most fragile, and its failure serves as an early warning of trouble with the other two.

Often the interactions of this triad are hiding in plain sight. Global production of steel, for example, requires 420 million tons of coke (from coal) annually, as well as other hydrocarbons adding up to an equivalent of another 100 million tons. To maintain industrial society, the production of steel cannot be curtailed: there are no “green” materials for the construction of skyscrapers, large bridges, automobiles, machinery, or tools. But the interconnections among fossil fuels, metals, and electricity are innumerable.

As each of the three members of the triad threatens to break down, we are looking at a society that is far more primitive than the one to which we have been accustomed.

The ascent and descent of oil production are those of the famous promontory known as Hubbert’s curve. The back side of the mountain probably does not greatly resemble the front. It is likely that the descent will be rather steep, again because of synergistic factors. As oil declines, more energy and money must be devoted to getting the less-accessible and lower-quality oil out of the ground. In turn, as more energy and money are devoted to oil production, the production of metals and electricity becomes more difficult. One problem feeds on another. The issue can also be described in terms of sheer money: when oil production costs about 4.5 percent of the economy, the latter begins a downward spiral.

There is a final piece of ill luck that occurs after the peak. When individual countries such as the USA begin to run out of domestic oil, depletion can be mitigated by the importation of oil from other countries, so the descent is not as troublesome as it might have been. When the entire planet begins to run out of oil, however, there will be nowhere to turn in order to make up the difference. We cannot get oil from outer space.

Global Energy per Capita
Global consumption of energy for the year 2005 was about 500 exajoules (EJ), most of which was supplied by fossil fuels. This annual consumption of energy can also be expressed in terms of billion barrels of oil equivalent. What is more important in terms of the effects on daily human life, though, is not consumption in an absolute sense, but consumption per capita, which reached what Richard C. Duncan calls a “rough plateau” in 1979.

Use of electricity worldwide rose by 70 percent from 1990 to 2008 [1]. This means an increase per capita of 41 percent. Since global energy per capita is not increasing significantly, there may come a point at which there is insufficient energy to prevent widespread brownouts and rolling blackouts [6, 7].

Fossil Fuels
The entire world’s economy is based on oil and other fossil fuels. These provide fuel, lubricants, asphalt, paint, plastics, fertilizer, and many other products. In 1850, before commercial production began, there were about 2 trillion barrels of oil in the ground. By about the year 2010, half of that oil had been
consumed, so about 1 trillion barrels remain. At the moment about 30 billion barrels of oil are consumed annually, and that is probably close to the maximum that will ever be possible. By the year 2030, some analysts say, oil production will be down to about half of that amount. [Editor’s note: we must consider the factor of oil-industry inflexibility to contract and to maintain extraction if collapse has already hit the economy.]

A vast amount of debate has gone on about “peak oil,” the date at which the world’s annual oil production will reach (or did reach) its maximum and will begin (or did begin) to decline. The exact numbers are unobtainable, mainly because oil-producing countries give rather inexact figures on their remaining supplies. The situation can perhaps be summarized by saying that many studies have been done, and that the consensus is that the peak is somewhere between the years 2000 and 2020. Within that period, a middle date seems rather more likely. Among the many who have contributed to that debate are Kenneth S. Deffeyes, Colin J. Campbell, Jean Laherrère, Dale Allen Pfeiffer, and Matthew R. Simmons, and the Association for the Study of Peak Oil has done its own appraisals.

The quest for the date of peak oil is somewhat of a red herring. In terms of daily life, what is more important is not peak oil in the absolute sense, but peak oil per capita. The date of the latter was 1979, when there were 5.5 barrels of oil per person annually, as opposed to 4.5 in 2007. This per-capita date of 1979 for oil consumption is the same as that noted above for per-capita consumption of energy in general.

Coal and natural gas are also disappearing. Coal will be available for a while after oil is gone, although previous reports of its abundance in the US were highly exaggerated. Coal is highly polluting and cannot be used as a fuel for most forms of transportation. Natural gas is not easily transported, and it is not suitable for most equipment.

Solar Power
The world’s deserts have an area of 36 million km2, and the solar energy they receive annually is 300,000 EJ, which at a typical 11-percent electrical-conversion rate would result in 33,000 EJ.

(EJ=exajoule;  1 EJ = 1018 joules.
Electrically, one joule is the work required to produce one watt of electric power for one second. Mechanically , one joule is the energy expended in applying a force of one newton through a distance of one meter.  [The United  States uses  roughly 94 exojoules per year, so 1 exojoule is about 1% of the US energy needs.]

As noted above, annual global energy consumption in 2005 was approximately 500 EJ. To meet the world’s present energy needs by using solar power, then, we would need  an array (or an equivalent number of smaller ones) with a size of 500/33,000 x 36 million km2, which is about 550,000 km2 — a machine the size of France. The production and maintenance of this array would require vast quantities of hydrocarbons, metals, and other materials — a self-defeating process. Solar power will therefore do little to solve the world’s energy problems.

Minerals Other than Petroleum
Depletion of other minerals on a global scale is somewhat difficult to determine, partly because recycling complicates the issues, partly because trade goes on in all directions, and partly because one material can sometimes be replaced by another. Figures from the US Geological Survey indicate that within the US most types of minerals and other nonrenewable resources are well past their peak dates of production. Besides oil, these include bauxite (peaking in 1943), copper (1998), iron ore (1951),
magnesium (1966), phosphate rock (1980), potash (1967), rare earth metals (1984), tin (1945), titanium (1964), and zinc (1969). The depletion of these resources continues swiftly in spite of recycling.

In the past it was iron ores such as natural hematite (Fe2O3) that were being mined. For thousands of years, also, tools were produced by melting down bog iron, mainly goethite, FeO(OH), in clay cylinders only a meter or so in height. Modern mining must rely more heavily on taconite, a flint-like ore containing less than 30 percent magnetite and hematite.

Iron ore of the sort that can be processed with primitive equipment is becoming scarce, in other words, and only the less-tractable forms such as taconite will be available when the oil-powered machinery has disappeared — a chicken-and-egg problem. To put it more bluntly: with the types of iron ore used in the past, a fair proportion of the human race would have been able to survive; in the post-industrial world, with only taconite, it will not.

Grain
Annual world production of grain per capita peaked in 1984 at 342 kg. For years production has not met demand, so carryover stocks must fill the gap, now leaving less than 2 months’ supply as a buffer.
Rising temperatures and falling water tables are causing havoc in grain harvests everywhere, but the biggest dent is caused by the bio-fuel industry, which is growing at over 20 percent per year. In 2007, 88 million tons of US corn, a quarter of the entire US harvest, was turned into automotive fuel.

Water
The production rate of fresh water is declining everywhere. According to the UN’s Global Environment Outlook 4, “by 2025, about 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world population could be under conditions of water stress ― the threshold for meeting the water requirements for agriculture, industry, domestic purposes, energy and the environment. . . .”

Arable Land
[While reading this section, remember that 1 acre is about the area as a football field and that 2.5 acres is the area of 1 hectare]
With “low technology,” i.e. technology that does not use fossil fuels, crop yields diminish considerably. The production of so-called field or grain corn (maize) without irrigation or mechanized agriculture is only about 2,000 kilograms per hectare (10,000 m2), about a third of the yield that a farmer would get with modern machinery and chemical fertilizer.

Yields for corn provide a handy baseline for other studies of population and food supply. More specifically, corn is one of the most useful grains for supporting human life; the native people of the Americas lived on it for thousands of years. Corn is high-yielding and needs little in the way of equipment, and the more ancient varieties are largely trouble-free in terms of diseases, pests, and soil depletion.

[A hard-working (i.e. farming) adult burns about 2 million kilocalories (“calories”) per year. The food energy from a2.5 acres of corn is about 7 million kilocalories. Under primitive conditions, then, 2.5 acres of corn would support only 3 or 4 people. [2.5 acre or about an area about 208 ft x 520 ft – lfp]

Even those figures are rather idealistic. We are assuming that people will follow a largely vegetarian diet; if not, they will need even more land. We also need to allow for fallow land, cover crops, and green manure, for inevitable inequities in distribution, and for other uses of the land. On a global scale a far more realistic ratio would be 2 people to each 2.5 acres of arable land. [Or about 1 person/1.25 acre just for food]

The average American house lot is about 900 square yards, i.e. less than a tenth of a hectare, including the land the house is sitting on. Those who expect to get by with “victory gardens” are unaware of the arithmetic involved.

In the entire world there are 15,749,300 square yards of arable land. This is 11 percent of the world’s total land area. The present world population is about 6,900,000,000. Dividing the figure for population by that for arable land, we see that there are 438 people per km2 of arable land. On a smaller scale that means about 4 people per hectare. Less than a third of the world’s 200-odd countries are actually within that ratio.
In other words, there are already too many people to be supported by non-mechanized agriculture. [Currently, with fossil fuels, fertilizer and mechanized farming, there are globally, 4 people receiving food from each hectare arable land. Without fossil fuel inputs, ie no gas/oil, no fertilizer, and without modern farm mechanization, global arable land will only support 2 people/hectare – lfp]

The UK, for example, has a population-to-arable ratio of slightly more than 10 people per hectare (2.5 acres or 2.5 football fields]. What exactly is going to happen to the 8 people who will not fit onto the hectare? But many countries have far worse ratios.

Population
The world’s population grew from about 1.6 billion in 1900, to about 2.5 in 1950, to about 6.1 billion in 2000 and in  Nov 2011 has become 7 billion. It has often been said that without fossil fuels the population must drop to about 2 or 3 billion. The above figures on arable land indicate that in terms of agriculture alone we would be able to accommodate only about half the present number of people.

Another calculation about future population can be made by looking more closely at Hubbert’s curve. The rapid increase in population over the last hundred years is not merely coincident with the rapid increase in oil production. It is the latter that has actually allowed the former: that is to say, oil has been the main source of energy within industrial society. It is only with abundant oil that a large population is possible. It was industrialization, improved agriculture, improved medicine, the expansion of humanity into the Americas, and so on, that first created the modern rise in population, but it was oil in particular that made it possible for human population to grow as fast as it has been doing. It is not only fossil fuels that form a bell curve: there is also a bell curve for human population.

Of course, this calculation of population on the basis of oil is largely the converse of the calculation on the basis of arable land, since in industrial society the amount of farm production is mainly a reflection of the amount of available oil.

If we look further into the future, we see an even smaller number for human population, still using previous ratios of oil to population as the basis for our figures. But the world a hundred years from now might not be a mirror image of the world of a hundred years in the past. The general depletion of resources could cause such damage to the structure of society that government, education, and intricate division of labor no longer exist. In a milieu of social chaos, what are the chances that the oil industry will be using extremely advanced technology to extract the last drops of oil? Even then we have not factored in war, epidemics, and other aspects of social breakdown. The figure of 1 to 3 billion may be wildly optimistic.

Looking Forward
A great deal of silliness goes on in the name of preparing for the future. Global collapse should not been seen in terms of middle-class country elegance. At present there are no “transition towns” that acquire food, clothing, or shelter without large quantities of fossil fuels somewhere in the background. The post-oil world will be much grimmer than most people imagine, and that is partly because they are not looking at the big picture. Hydrocarbons are the entire substructure of modern society. The usual concept of “transition towns” evades the sheer enormity of the problems.

Whatever a “transition” polity might be, it most certainly will not be a city or town. Those who are living at the end of all the bell curves will prosper only if they are far from anything resembling an urban or suburban area. It has always been possible for small rural communities to live close to the land, somewhat avoiding the use of fossil fuels, metals, and electricity, but modern large centers of population are founded on the premise of an abundance of all three. Urban areas, in fact, will be experiencing the worst of each form of depletion described above.

In view of the general unpopularity of family-planning policies, it can only be said euphemistically that nature will decide the outcome. Even if his words owe as much to observation of the stages of collapse as to divine inspiration, it is St. John’s ‘Four Horsemen’ of war, famine, plague, and death who will characterize the future of the industrial world. Nor can we expect people to be overly concerned about good manners: although there are too many variables for civil strife to be entirely predictable, if we look at accounts of large-scale disasters of the past, ranging from the financial to the meteorological, we can see that there is a point at which the looting and lynching begin. The survivors of industrial society will have to distance themselves from the carnage.

The need for a successful community to be far removed from urban areas is also a matter of access to the natural resources that will remain. With primitive technology, it takes a great deal of land to support human life. What may look like a long stretch of empty wilderness is certainly not empty to the people who are out there picking blueberries or catching fish. That emptiness is not a prerogative or luxury of the summer vacationer. It is an essential ratio of the human world to the non-human.
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4.  Peak Oil Info and Strategies
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Peak Oil Info and Strategies
<http://www.oildecline.com/page2.htm
The world is not running out of oil itself, but rather its ability to produce high-quality cheap and economically extractable oil on demand. After more than fifty years of research and analysis on the subject by the most widely respected & rational scientists, it is now clear that the rate at which world oil producers can extract oil is reaching the maximum level possible. This is what is meant by Peak Oil. With great effort and expenditure, the current level of oil production can possibly be maintained for a few more years, but beyond that oil production must begin a permanent & irreversible decline. The Stone Age did not end because of the lack of stones, and the Oil Age won’t end because of lack of oil. The issue is lack of further growth, followed by gradual, then steep decline. Dr King Hubbert correctly predicted peaking of USA oil production in the 1970’s on this basis.

We have taken our lifestyles and the cheap & abundant supply of oil all for granted. We expect the pumps will run to supply us with fuel to drive our SUV’s to run around town, work and school and we cannot accept an alternate future. But when oil becomes more scarce, it is very likely that these pumps will be the first to run dry, because they are at the end of the supply chain. But implications will be much worse than that.

It is not a question if but when the world economy will be confronted with a major shock that will stunt economic growth, increase inflation, and potentially destabilize the Middle East. It will make the Great Second Depression look like a dress rehearsal and may change the world as we know it today.

It is a coming crisis that few understand, but with far reaching implications. Nations will fight over the remaining oil. Without hydrocarbons, this planet can only produce enough food to sustain a population of 2.5 billion. The current world population is in excess of 7 billion and growing (UN projection: 7.3 billion by 2050). In the US, without industrial agriculture, it is estimated that only 2/3’s of the current population can be fed (D. Preiffer). Fossil fuels effectively temporarily raised the carrying capacity of the earth.
__A.  Peak Oil Imminent
While there is no agreement yet on the exact date that world oil production will peak, the degree of consensus among them is quite remarkable. Out of 21 studies, the statistical mean date is 2013 (excluding some of the biased oil company estimates), suggesting that the world may be facing shortfalls much sooner than expected.
Recently, CNN and Britain’s Independent also point out the reality of Peak Oil, acknowledging that world oil and gas reserves are as much as 80% less than predicted.

__B. The fallacy of Alternatives
The public, business leaders and politicians are all under the false assumption that oil depletion is a straightforward engineering problem of exactly the kind that technology and human ingenuity have so successfully solved before. Technology itself has become a kind of supernatural force, although in reality it is just the hardware and programming for running that fuel, and governed by the basic laws of physics and thermodynamics. Much of our existing technology simply won’t work without an abundant underlying fossil fuel base. In addition, physicist Jonathan Huebner has concluded in The History of Science and Technology that the rate of innovation in the US peaked in 1873, and the current rate of innovation is about the same as it was in 1600.
According to Huebner, by 2024 it will have slumped to the same level as it was in the Dark Ages. Hence, without sufficient innovation and a comfortable surplus of fossil fuels, we may simply lack the tools to move forward.

With this energy base dwindling, there is simply not enough time to replace a fluid so cheap, abundant and versatile. It is rich in energy, easy to use, store, and transport. Nothing has the bang for the buck of oil, and nothing can replace it in time – either separately or in combination. Wind, waves and other renewables are all pretty marginal and also take a lot of energy to construct and require a petroleum platform to work off.
•  Natural gas is a diminishing resource as well and cannot satisfy the growing demand for energy. US Gas supplies were so low in 2003 after a harsh winter that to preserve life and property supplies were close to being cut off to manufacturers, electric plants and lastly homes.
•  Ethanol has a net energy value of zero (not accounting for soil and water damage and other costs due to unsustainable agricultural practices) – it is subsidized as a boon to agribusiness and would have a negligible effect (Prindle, ACEEE).
•  Solar energy produces marginal net energy, but are still decades away at best from being a viable substitute given the recent rate of progress in efficiency and costs (averaging about five percent a year) and is nowhere ready to meet the world’s energy needs. More importantly, solar photovoltaic cells (PVC) are built from hydrocarbon feed stocks and therefore require excess resources. It is estimated that a global solar energy system would take a century to build and would consume a major portion of world iron production (Foreign Affairs, Rhodes).
•  The widespread belief that hydrogen is going to save the day is a good example of how delusional people have become. Hydrogen fuel cells are not an energy source at all, but are more properly termed a form of energy storage. Free hydrogen does not exist on this planet. It requires more energy to break a hydrogen bond than will ever be garnered from that free hydrogen. The current source of hydrogen is natural gas – that is, a hydrocarbon. In the envisioned system of solar PVC & hydrogen fuel cells, every major component of the system, from the PVC to the fuel cells themselves will require hydrocarbon energy and feedstocks. The oil age will never be replaced by a hydrogen fuel-cell economy.
•  Coal is abundant, but its net energy profile is poor compared to oil and its conversion process to synthetic fuels is very inefficient. Coal would have to be mined at much higher rates to replace declining oil field. In addition, coal production is extremely harmful to the environment. One large coal burning electric plant releases enough radioactive material in a year to build two atomic bombs, apart from emitting more greenhouse gases than any other fuels.  Coal is implicated in mercury pollution that causes 60.000 cases of brain damage in newborn children every year in the USA. Resorting to coal would be a very big step backwards and what we may face then may be more like the Dim Ages. More importantly,  coal is distributed very unevenly with the top three countries (China, USA, USSR) possessing almost 70% of total. Much of the current oil and gas supply is in low-population countries, such as Saudi Arabia, that cannot possibly use all of the production for themselves. They are hence quite willing, indeed eager, to sell it to other countries. When oil and gas are gone, and only coal remains, and the few (large-population) countries that possess it need all of it for their own populations, it will be
interesting to see how much is offered for sale to other countries.
•  Obtaining usable oil from tar sands requires huge amounts of energy, as it has to be mined and washed with super hot water. From an energy balance, it takes the equivalence of two barrels of oil to produce three, which is still positive but poor in terms of energy economics. In the early days of conventional oil, this ratio used to be one to thirty.
•  Nuclear power plants are simply too expensive and take ten years to build, relying on a fossil fuel platform for all stages of construction, maintenance, and extracting & processing nuclear fuels. Additionally, uranium is also a rare and finite source with its own production peak. Since 2006, the uranium price has already more than doubled.
•  Nuclear fusion is the kind of energy that the world needs. However, mastering it has been 25 years away for the past 50 years, and still is…

Fossil fuels allowed us to operate highly complex systems at gigantic scales. Renewables are simply incompatible in this context and the new fuels and technologies required would simply take a lot more time to develop than available and require access to abundant supplies of cheap fossil fuels, putting the industrial adventure out of business.

In a recent interview with The Times, Shell CEO Jeroen van der Veer calls for a “reality check” and warns that the world’s energy crisis cannot be solved by renewables. “Contrary to public perceptions, renewable energy is not the silver bullet that will soon solve all our problems. Just when energy demand is surging, many of the world’s conventional oilfields are going into decline. The world is blinding itself to the reality of its energy problems, ignoring the scale of growth in demand from developing countries and
placing too much faith in renewable sources of power”, according to van der Veer.

Nobody knows exactly what will happen. We have never seen a situation like this where the excesses have been so extreme. It is difficult to see how it will resolve itself. What is terrifying is that when you get excesses this bad you get results you can’t expect.

Highlights of what to expect:
<http://www.oildecline.com/page3.htm>
•  Oil extraction from wells will be physically unable to meet global demand
•  Alternative energy sources will fall far short of compensating for expected shortages of oil. There is simply not enough time to convert over to them and all require an underlying fossil fuel platform.
•  Disruptions to transportation and the economy are expected as the global decline of petroleum begins.
•  Gradual, permanent cut-off of fuel for transport and for industrial machinery. Global trade will greatly
decline.
•  Food shortages; agrobusinesses would not be able to operate without the supporting fossil fuels
•  Resource scarcity; most products depend on fossil fuels
•  Reduction of virtually all business and government activity and very serious unemployment
•  Social unrest
•  Resource wars

Dr. Smalley, in the February 2005 issue of Discover magazine gave the following prognosis as a result of the energy shortage brought on by peak oil and the fact that the world cannot produce oil as fast as the world’s growing economies demand it: “There will be inflation as billions of people compete for insufficient resources. There will be famine. There will be terrorism and war.”

__C.  Rising Oil Prices
The inexorable tightening of supply is destabilizing oil markets, which now exhibit extreme price responses to the smallest of disturbances. Higher oil prices are hurting economies by increasing the cost of consumer goods while simultaneously reducing disposable income. Sharply rising oil prices have always preceded economic recession and plummeting stocks.

Analysts predict that market-based panic will drive prices skyward. And as supplies can no longer slack daily world demand, the market will become paralyzed at prices too high for the wheels of economy and even daily living in ‘advanced’ societies”. No region in the world would be able to rely on distant energy supplies and they would have to fall back on their own resources.

One economic aspect of oil is that its demand is very price inelastic in the short term, meaning that it would require a large price increase to cause a significant reduction in demand. Prices at the pumps in the USA have almost doubled in recent times, yet gas-guzzling Hummers and other SUV’s are still purchased like there is no tomorrow. Industry experts say massive effects on behavior will only happen if supplies are disrupted or prices hit $5-a-gallon.

Another complication is that in the more developed countries the services industry has replaced much of their traditional oil dependent industries. This is why I don’t believe that the oil prices will stop at $100 a barrel, like some financial experts predict. In the short term, they would probably have to increase in excess of 300% or so to have the desired effect. This uptrend would then eventually be (temporarily) interrupted by slowing economic growth and from efforts of conservation.

Inflation
Rising energy prices would spur overall price increases, causing inflation. Energy costs will then become an increasingly bigger part of the economy, and the same % increase in oil prices that once had a negligible economic effect will suddenly be significant. At the same time, higher prices will cause a fall in demand and a stagnating economy. This is called ‘stagflation’ and is exactly what happened during the 1973 oil crisis.

Debt in many countries like the USA and the United Kingdom are at record levels, and strong economic growth then becomes essential. Falling home prices would threaten the foundations of those economies. Therefore, efforts to curb inflation by raising interest rates would hit house prices, which in a leveraged economy would cause a devastating downward spiral, pulling down businesses, consumers and banks. Policymakers will therefore be powerless to fight inflation that will then soon become widespread. Prices of food and manufactured goods will shoot up.

Depression
The world will first enter a recession followed by a very deep Depression that may well be greater than the 1930’s Great Depression. Stock markets may plunge, businesses will go bankrupt and huge job losses will follow. Eventually, economic growth will cease or continue only in a few places at the expense of other places. The economic stress among almost all nations, advanced and developing, rich and poor will be considerable and is certain to lead to increasingly desperate competition for diminishing supplies of oil. The world will become a larger place again with less and less globalism.

Resource Wars
Many countries have become heavily reliant on Middle Eastern oil, and the geopolitical stakes of conflicts in this region have risen to all-time highs.

Indeed, the worst case scenarios are terrifying: genocide on a scale never before seen, as control of the remaining oil divides along racial, ethnic and national boundaries. Even the best-case scenarios, all of which require unprecedented levels of international cooperation, political courage and public participation, offer grim life-and-death choices. (Richard Heinberg)

So far, only the United States have ventured into the Middle East. But what is to stop China from continuing into Iran, Iraq and even Saudi Arabia as China will be energy starved in the foreseeable future. A military contest over oil could eventually spread war from the Middle East to Southeast Asia, and it could leave the oil production infrastructure of many countries severely damaged in the process. Such a conflict may be the Third World War.

Some Latin American countries may find themselves combatants in their own oil wars. Australia and New Zealand may fall victim to desperate Chinese adventuring or to anarchy emanating from Southeast Asia.

Social Chaos & Dark Ages
The European fuel protests of 2000 were an excellent example of what will happen when we are deprived of our the fuel powering our artificial lives. The implications of just this minor shortage
caused by blockades of fuel depots was tremendous. Naturally, there were huge lines at petrol stations to refuel, but there was also panic buying at the shops. Some ran out of bread and milk. Postal collections were suspended on Sundays to conserve fuel. Farm animals were threatened with starvation because
the feed was unable to be delivered. Schools closed down and hospitals cancelled all but emergency operations. And all this from two and a half weeks. Similar events happened in the USA during the 1973 Oil Embargo.

The impending fuel crisis will be permanent though and the trucks will no longer pull into the Wal-Marts or supermarkets. The freighters bringing cheap and disposable household products from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence, and chaos. For only a short time will the police and military be able to maintain order, if at all.”

When worldwide oil production starts to decline considerably, countries will be competing aggressively for fossil fuels as  difficulties will start with even keeping electricity plants running.

The blackouts that hit the eastern USA and Canada in August 2003, and the lesser failure that hit London’s Underground system shortly afterwards shows the how totally dependent we are on electricity power and the dramatic effects that its absence causes.

Reduced food supplies will also comprise immune systems and set up refugee camps will lead to diseases. New strains of the age-old human enemies such as tuberculosis, malaria, cholera and others will be on hand while vaccines will be ineffective and out of reach.

Food
It may come as a surprise to many that the world’s industrial food supply system is one of the biggest consumers of fossil fuels. Vast amounts of oil and gas are used as raw materials and energy in the manufacture of fertilizers, herbicides and pesticides and as cheap and readily available energy at all stages of food production. Fossil fuels are also essential in the construction and the repair of equipment and infrastructure needed to facilitate this industry, including farm machinery, processing facilities, storage, ships, trucks and roads. Just consider that currently agriculture accounts for 17% of the US annual energy budget.

Industrial, ‘green revolution’-style agriculture is particularly energy intensive. Every calorie of food produced today requires between 10-16 calories of hydrocarbon energy (from planting, irrigation, feeding and harvesting, through to processing, distribution and packaging). This style of agriculture increased world grain production by 250%, and was almost entirely attributable to fossil fuel input.

Food  production will become a problem of extreme urgency
Modern agriculture is merely a way of converting petroleum into food. Without energy, food supplies decrease and the current world population of 7 billion has no hope whatsoever of sustaining itself at current levels.

It has been estimated that, without hydrocarbons to provide energy, fertilizers and pesticides, agriculture could not support a population greater than two billion. This reduction would take us back to pre-20th century levels but the disruption to society and its infrastructure would probably mean a reversion to pre-industrial revolution.

The example of North Korea shows us what happens to agriculture when oil products are removed. After the Korean war, it had developed a modern farming system depending on machinery and oil-based fertilizers. After the Soviet Union fell, Communist aid to the country stopped and they were unable to purchase oil and supplies. Without oil, farm machinery was sitting idle and large proportions of the people had to return to the agriculture. Unfortunately the soil had been drained of nutrients over the
years and, without fertilizers, it was unable to produce the same output as before. Crop yields fell by 60% over the period 1989-1998. US congressmen and others who have visited North Korea tell stories of people eating grass and bark. Other reports talk of soldiers who are nothing more than skin and bones.
Throughout the country, there is starvation to rival the worst found in Africa.
 Chronic malnutrition has reached the point where many of the effects are irreversible. Unless it can get access to oil and fertilizers again, the population will decline until it reaches a sustainable level and civilization will be faced with the delicate task of determining who survives. The history of North-Korea (DPRK) demonstrates how an energy crisis in an industrialized nation can lead to complete systemic breakdown.

Mitigation Strategies?
Peak Oil represents a unique challenge and unlike 1973, peaking won’t be brief but permanent. The inescapable conclusion is that the scale and complexity of the problems that must be resolved to avert a permanent crisis are enormous and almost inconceivable. More than a decade will be required, under the most favorable circumstances, for the collective contributions of substitutes to produce meaningful results. Understanding Net Energy is crucial. Optimists may argue that technology, the market, brilliant scientists, and comprehensive government programs are going to hold things together. However, with an acute lack of awareness, time, knowledge, capital, energy, political will, and international collaboration, it is difficult to see how business can continue as usual. This is a startling conclusion, but it would be the most logical and likely outcome of a process that has been building for decades. Addictions are hard to shake…
You cannot solve this world’s problems with the same thinking that created them,” Albert Einstein

Preparations
“You must not only be able to survive the crash, but continue afterward”
“… it’s easier to put off dealing with problems that seem just too complicated and unpleasant to fix now (because of human nature).”

September 27, 2010, Fortune.., by Becky Quick
The experts and politicians have no plan B to fall back on. On a global scale Peak Oil is a problem without a solution. No amount of savings will help us if there is no more oil to purchase. We need to
start planning for alternative sources of energy now. If we wait until we are given no other option, it could be chaos.

It is extremely difficult to gather and process the enormous amount of information available and figure out what to do about it. Is it not a problem with an immediate solution or as some say, a condition without a remedy. You must not only be able to survive the crash, but continue afterward.

We must shortly choose a new path, or one will be forced upon us.

In the short time available, attempts to make collective changes are most likely to fail. Energy expert Simmons says that once energy peaks, the shock will be greater than anyone could imagine, while there is no solution to the problem other than to pray.

However, on the level of the individual/family there is much that can be done at relatively low cost to not only prepare for an economic crash, but to leapfrog past it to a post oil paradigm. While the present infrastructure continues to function you still have vast resources disposable that are only a click away.  Once a crisis begins, it may be too late.

There is probably no cluster of solutions which do not involve some major changes in lifestyles, especially for the global affluent. Peak Oil presents the potential for quite catastrophic upheavals, but also some more hopeful possibilities, a chance to address many underlying societal problems, and the opportunity return to simpler, healthier and more community oriented lifestyles.

Hope for the best, Prepare for the worst, and Accept whatever comes.
• 
The majority of the preparation (perhaps as much as 2/3) is mental  preparation. Acceptance of a new future is crucial and knowledge about Peak Oil will give you a new perspective on life and the future and will serve as an excellent guidance when making important decisions in areas such as careers, real estate and retirement, even absent a well defined ‘plan B’.
•  Protection of your wealth is a crucial step, and having many of your assets hedged against inflation, in my opinion, is never going to hurt you, even if a peak oil crisis fails to materialize in the short or medium term future. Purchasing power will most likely have a positive impact on survival chances during a crisis.
•  If you think the crisis is going to be severe, if you can afford it, it would be a good idea to plan some sort of safe haven, at least 200 miles or so from any major city / metropolitan area.

I am fairly pessimistic about the feasibility (especially long-term) of isolated retreats. It is going to involved extensive, informed planning tailored to the precise needs of the people who will use it. The problems that you must resolve in making such an arrangement viable are enormous and most likely unachievable. Land ownership laws may become meaningless in a post-oil world.
•  It is useless to be well prepared if you are in the wrong place to start with. Some countries around the globe will without doubt suffer much more than others as a result of a Peak Oil crisis. The odds of eventually being discovered are not negligible and will go up as a function of general population density. And then, once you have been discovered, the chances of you becoming a target of jealous & needy thieves, mobs or organized gangs much depend on how relatively well-off a country is as a whole during a global crisis. As an example there is the story about a village in India during a famine. After a while, the starving villagers noticed that some villagers did not seem to be as starving as the rest of them. The end result was that the well off who had stored food were killed and the food stolen. [Killed by the ‘Zombies’- Mr Larry] You may be better off ill-prepared, but in the right place than vice-versa. There are going to be some countries that may remain relatively immune, based on their geographic position and potential degree of self-sufficiency, where ambient chances of survival are relatively higher. This is why the focus of my research & planning is on individual countries.
•  When considering strategic relocation and you want to also take into account climate change, an excellent and very recent source of information on average predicted temperature changes is the BBC site that ran an experiment involving millions of computers from around the world. In its conclusions, countries like New Zealand will be relatively unaffected, while other areas like Asia and Central America will be greatly affected.
•  You can never be sure what will happen, and it is extremely difficult to cross that mental barrier to jump into action. Any life impacting decision you make, you must be able to live with until the crisis unfolds, even if this is still a decade away.

__D.  History As A Guide To Survival….
<http://www.oildecline.com/steps.htm
For a year, five experts ditched theory for practice, running a Welsh farm using 17th Century methods. What lessons for modern living did they learn? The BBC series Tales from the Green Valley follows historians and archaeologists as they recreate farm life from the age of the Stuarts. They wear the clothes, eat the food and use the tools, skills and technology of the 1620s.

It was a time when daily life was a hard grind, intimately connected with the physical environment where routines were dictated by the weather and the seasons. A far cry from today’s experience of the countryside, which for many involves a bracing walk ahead of a pub lunch.

While few would choose to live a 17th Century lifestyle, the participants found they picked up some valuable tips for modern life.
•  Know thy neighbor’s. Today it’s possible to live alone, without knowing anyone within a 20-mile radius (the same goes for townies). That was simply not possible in the past – not only did the neighbors provide social contact, people shared labor, specialist skills and produce. “And women were judged on good neighborliness,” says historian Ruth Goodman. “If you were willing to help others – particularly during and after childbirth – then others would be more prepared to help you in times of need.”
•  Share the load. It was nigh on impossible to run a 1620s farm single-handedly, and the family – either blood relatives, or a farmer, his wife and hired help – had to be multi-skilled. Labor, too, was
often divided along gender lines, but at busy periods, such as harvest time, it was all hands on deck.
•  Fewer creature comforts have some benefits. No electricity meant once daylight faded, work stopped in favor of conversation, music-making and knitting. And no carpets meant fewer dust mites,
which are linked to asthma and allergies. “They scattered herbs on the floor which released scent when trodden on – this drove out flies and other insects,” says Ms Goodman.
•  Eat seasonally. Today it’s because of “food miles” and the inferior quality of forced products. In the 1620s, it was because foods were only available at certain times of year – and not just fruit and veg. Mutton, for instance, was in abundance in spring, soon after shearing time. This was because a sheep’s wool quality plunges after eight years – thus animals of that age were killed after their final fleece was
removed.
•  Tasty food comes in small batches. Today farmers’ markets are a tourist attraction and many delight in regional specialties. For these producers play to the strengths of their ingredients, unlike, for instance, the makers of mass-produced cheese. This has to taste the same year-round, despite seasonal variations in milk quality. “So high-quality milk in the spring is downgraded so the finished product is consistent throughout the year,” says Ms Goodman.
•  Reuse and recycle. Today we throw away vast mountains of packaging, food, garden waste and other materials. In 1620s, there was a use for everything, with tattered bed linens made into fire-lighters and animal fat into soap. Even human waste had uses. Faeces was a fertiliser, and urine was stored to make ammonia to remove laundry stains.
•  Dress for practicalities. Today fashion and social convention dictate our wardrobes. While polar fleeces and high-performance tramping boots may be all the rage when going rural, the wardrobe of 400 years ago proved more comfortable. “While the crew shivered in their modern garb, we never felt the cold in just two layers – a linen shirt and woolen doublet,” says archaeologist Alex Langlands.
Breeches meant no wet and muddy trouser legs, and staying covered up – rather than stripping off in the heat – prevented bites, stings, sunburn and scratches.
•  Corsets, not bras. “By that I don’t mean Victorian corseting,” says Ms Goodman. “Corsets support your back as well as your chest, and don’t leave red welts on your skin like bra elastic does. They made it hard to breath walking up hills, but I get short of breath doing that anyway. And most people feel sexy in a corset.”
•  Biodiversity protects against unforeseen calamity. While the developed world no longer counts the cost of crop failure in starvation and mass migration – the result of Ireland’s Great Potato Famine in 1845 – the 2001 foot-and-mouth crisis decimated farms up and down the country as animals, the farmers’ livelihoods, were put to death. The 1620s farm had grains, fruit and vegetables, and a range of animals – if one failed, alternatives were available.
•  Reliance on any one thing leaves you vulnerable. Hence the country ground to a halt during the petrol blockades of 2000, and a shortage of coal during 1978-9’s Winter of Discontent caused electricity shortages. On the 1620s farm, when oxen used to plough fields fell ill, the implements were reshaped and horses did the job instead.
•  No pesticides means a richer variety of birds, butterflies and other insects, many of which feast on pests – a result as desirable for the gardener as the farmer. And the hedgerow and fields of wild flowers of the past are today making a comeback, as these provide habitats for these creatures and allow edible plants to flourish.

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5.  Urban vs. Rural Sustainability
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Urban vs. Rural Sustainability
Published Dec 25 2004 by Permaculture  Activist
by Toby Hemenway
http://www.energybulletin.net/node/3757
“Over ten years ago my wife and I moved to the country. One of our many reasons for leaving the city was to finally pursue the dream of self-reliance: to create a permaculture homestead that would trim our resource use and let us tap in more fully to nature’s abundance. And in the back of my mind was the quietly nibbling worry that someday the overconsumption party would end—the oil would run out, and things might get ugly. I wanted to be settled where we could be less dependent on the fossil fuel umbilicus when the cord finally snapped.

We went a good way toward making that dream come true. The red clay of our former clearcut turned, in places, to chocolate loam, though I noticed that even as our trees matured I still seemed to be needing more wood chips from the electric company or manure from a stable two miles away. From the garden flowed a steady procession of fruit and vegetables, but I confess I tried to ignore how much well-water we were pumping once our rain catchment ran dry partway through Southern Oregon’s four-month dry season.

We became involved in the local community: Master Gardeners, an environmental group, town meetings. Although we were busy in regional life in the beginning, eventually I found I preferred to drive the hour to see friends in progressive-minded Eugene than fight the pro-logging consciousness that permeated our county. Over the years my few local friends fell away as I became more drawn to the mind-set of those in Eugene, and as the local economics made it necessary for me to be away for weeks to teach and do design work. We were on good speaking terms with all our neighbors, but never found much common ground with them. Local parties began with watery beer and often ended in drunken fights, and neither was to our taste.

Slowly a mild paranoia set in. I started to wonder whether, if the Big Crash came, I was really in the right place. We had the best garden for miles around, and everyone knew it. If law broke down, wasn’t there more than a chance that my next door neighbor, a gun-selling meth dealer and felon, might just shoot me for all that food? How about the right-wing fundamentalists past him, who shot Stellar’s jays for fun and clear cut their land when they suspected spotted owls lived there? Or the two feuding families beyond them—one had fired a pistol during an argument, and neither would give way when their cars met on the road. I began to sense the outlines of a pattern that replicated one in society at large. We have the technical means to feed, clothe, and house all humanity. But legions starve because we have not learned to tolerate and support one another. People’s real problems are not technical, they are social and political. Down in Douglas County, I’d solved most of the technical problems for our own personal survival, but the social hurdles to true security were staring me in the face.

Our isolation also meant we were burning a lot of gas. A simple drive for groceries was a 40-minute round trip. Fortunately we both worked at home and had no children, so we could go for days without using the car. But the odometer was whirling to higher numbers than it ever had in the city. A couple of families had moved off our hill because they were exhausted by two to four round trips each day down our steep, potholed gravel road to work, school, soccer practice, music lessons, and shopping.

We cherished our decade-plus in the country, but eventually the realities began to pile up. There wasn’t a local market for the work we did. Community events left us saddened by the gulf between our way of life and theirs. And we were still tethered to the fossil-fuel beast, just by a much longer lifeline of wire, pipe, and pavement. That the beast looked smaller by being farther away no longer fooled us.

There was a positive side, too. We had achieved what we’d set out to do: to make sense of our lives, find the work we loved, and grow into ourselves. The portents now spoke clearly. It was time to return to where the people were, and to be in the thick of things once more.

So we have moved to Portland, and into the heart of town. We love it. The first of many good omens was the bio-diesel Mercedes across the street sporting a Kucinich sticker. And it’s a pleasure to be within walking distance of a bookstore, good coffee, and Ben and Jerry’s.

During the first few days in the city I would stand on the back porch, eyeing our yard with permaculture dreams in my head. The sole tree is a sprawling European prune plum. Other than that, the yard is a blank slate, dominated by a brick patio, a lawn, and an old dog run. And it’s small. I wondered how I would I fit all my favorite fruit trees in that tiny space.

The answer soon came. The plum tree straddles the fence we share with our neighbor Johnny, who has lived next door for 55 years. One day, on opposite sides of the fence, Johnny and I were gathering a small fraction of the branch-bending loads of plums when he called out, “Do you like figs?” I said I did, and soon a tub of black mission figs wobbled over the fence toward me.

We kept returning the basin to Johnny, but it found its way back almost immediately, full of figs. “You weren’t here in time for the apricots I’ve got,” Johnny told us, “But next year you’ll get your fill of them.”

As the buckets of plums began to fill up the yard, I tried to unload some on Theressa across the street. “Oh, no,” she said, “I’ve got my own tree. But when the Granny Smith’s come on, you’d better help me with them. And next year’s peaches will knock you out.”

When I met our neighbor Will, he begged me to take some of the pears that were plopping onto his yard. The American chestnuts up the street are bearing heavily, although the Asian community is all over them each morning before I wake up. I’ve cracked a few of the local walnuts, and they’re pretty good. And yesterday I discovered a nearby strawberry tree dotted with creamy mild fruit.

This informal assessment of local resources has revised my mental landscape design. I don’t need to grow all my favorite trees, only the ones that my neighbors lack (I’m thinking Asian pears, persimmons, and some early and storage apples). My neighbor’s yards are my Zones Two and Three. [Ed’s note: a common feature of permaculture design is the zoning of a property up into areas, numbered one through to five or so, relating to proximity to the house and levels of required maintainence. -AF ] Plus, Stacey and Troy on the next block have persuaded the owner of a vacant lot to let eight families create a community garden on the site. A local tree service will soon be dumping chips there for sheet mulch, and next year we’ll be awash in food.

The Big Rural Footprint
I had always assumed that cities would be the worst place to be in bad times. I’m revising my opinion. Granted, Portland is an exceptional city. (Shhhh! Don’t tell anyone!) But I can’t help comparing this neighborhood to our old one. There, we were twelve families on two miles of road, driveways hundreds of feet long, all served by long runs of phone and electric wire, individual septic systems and wells, each commuting long distances. And with political and social views so divergent that feuds, gossip, and awkward conversations about safe topics were the norm.

In the city, an equal group of twelve families use 10% of the road, wire, and pipe needed in my old neighborhood. Many neighbors bus or bike to work, or at worst, drive single-digit mileages. And our social and political views are close enough that I am fairly confident we can work in mutual support if times get tough.

This is not the place to go deeply into the question of whether cities are more sustainable than contemporary American country life, but at each point where I delve into the issues, I find suggestions that urbanites have a smaller ecological footprint per capita.

Over the last two decades, millions of people have moved out of cities. Many of them are people of modest means, driven out by the high costs of urban life. Unfortunately, they have brought their city ways with them. Our neighbors in the country all clear cut their land and planted acres of grass. Many built enormous houses, since low interest rates made more square footage affordable. Some put up
glaring streetlights in their front yards. They bought boats, ATVs, RVs, and other gas-guzzling toys. Unlike earlier self-reliant country folk, these are simply city people with really big yards. And there are millions of them.

Sociologists Jane Jacobs and Lewis Mumford have each noted that during the Depression and other hard times, urban residents have generally fared better than ruralites. The causes mainly boil down to market forces and simple physics. Since most of the population lives in or near cities, when goods are scarce the greater demand, density, and economic power in the cities directs resources to them. Shipping hubs are mostly in cities, so trucks are emptied before they get out of town.

In the Depression, farmers initially had the advantage of being able to feed themselves. But they soon ran out of other supplies: coal to run forges to fix machinery, fertilizer, medicine, clothing, and almost every other non-food item. Without those, they couldn’t grow food. Farmers who could still do business with cities survived. Those too remote or obstinate blew away with the Kansas dust.

Survival Skills
Today the situation for farmers has worsened. Few farmers grow their own food. Agribusiness has made them utterly dependent on chemicals and other shipped-in products. The main lack of cities compared to farms is food-growing, but farms lack nearly everything else—and most of that comes from cities. Setting aside for the moment the all-important issue of social and political cohesion, for cities to survive a peak-oil crash, the critical necessity is for them to learn to grow food. For country people to survive, inhabitants will need to provide nearly every single other essential good for themselves. And since many country people are simply transplanted urbanites lacking gardening or other land skills, but having the isolation that makes social cohesion unnecessary to learn (for now), their survival is even more doubtful. If catastrophe comes, the cities may be unpleasant, but I fear the countryside may be far worse off.

One important tenet of permaculture is to design for disaster. While giving a talk on the wildfire that destroyed his cabin at the Lama Foundation, Santa Fe designer Ben Haggard was asked what his biggest lesson was. “Plan for disaster,” he said. “Whatever is the likely catastrophe at your site, count on
it happening. Because sooner or later, it will.”

A technique displayed in good design that also happens to be a way to deter disaster is to meet destructive forces with mechanisms or attitudes that transform them into productive, or at worst, harmless energies. When this machinery of transformation is missing, even seemingly mild events wreak havoc. A gentle rain falling on bare ground will quickly sluice away topsoil and wash downhill in gullies. If instead plants carpet that same patch of earth, the rain becomes not an erosive force, but life-giving moisture whose energy is damped and welcomed by the vegetation. Instead of gullying, the water is held by the plants, stored over a longer time for them and for the animals that feed on or live among the vegetation. This is one of nature’s secrets: knowing how to create structures and systems that convert gales to refreshing breezes, change baking sun into sugars and living tissue.

What nature doesn’t do, and humans attempt so often, is to treat large forces as enemies to be vanquished and destroyed. This summer, as hurricanes repeatedly battered the Caribbean, ridiculous proposals appeared in letters-to-the-editor columns: Let’s build giant fans on the Florida coast
to blow away the storms. Pour oil over the Atlantic to smooth out the waves. And (inevitably), why can’t we toss a few nukes into those pesky hurricanes? (Whether it’s replacing the Panama canal or toppling Saddam, someone always seems to propose atomic bombs.)

Sector Acceptance
The conceptual tool offered by permaculture in these cases is to view large forces as sector energies: influences from off the site that are beyond the control of the designer. We deal with sector energies by designing systems or placing elements to deflect, absorb, or harvest these forces, or allow them to pass unhindered. This is nature’s way as well, and how she does it offers, as usual, some profound lessons.

As ecosystems mature, biomass and complexity increase. Ecologist Ramon Margalef, in his landmark 1963 paper, “On Certain Unifying Principles in Ecology” (American Naturalist 97:357-374), suggests we think of biomass as “a keeper of organization, something that is proportional to the influence that an   actual ecosystem can exert on future events.” In other words, we can think of biomass, complexity, and the other indicators of maturity as measures not only of the resilience of a system, but as a form of wisdom. That’s because as ecosystems mature, the aftermath of environmental tumult such as storm or
drought depends more on the richness of the ecosystem than on the nature of the disturbance. A drought that withers a weed lot doesn’t faze an old-growth forest—the forest has learned what to do with drought. It has grown structures, cycles, and patterns that convert nearly any outside influence into more  forest, and that protect key cycles during bad times. It has become wise.

Nature uses two principal tools to achieve this  protection from catastrophe.

1)  The first is diversity in space—in size, shape, physical pattern, and composition. If all the pieces of a system are at the same physical scale—all the same size, or the same genetic makeup, for example—a disturbance occurring at that scale will wipe out the whole system. Diversity in scale brings protection. When a hurricane hits a trailer park, the trailers blow away, but the bacteria, mice, and other elements of very different size escape damage. A plague of cats, on the other hand, strikes at the scale of the mice, leaving the trailers and bacteria unscathed. Mature ecosystems have enough diversity in space that any catastrophe may knock out the pieces living at that particular scale but will almost never destroy the whole landscape.

2)  The second protective tool of mature ecosystems is diversity in time—in rate, frequency, and schedule. Understory shrubs often leaf out earlier in spring than canopy trees, which lets the shrubs grab enough light to build plenty of leaves. Then when the trees grow leaves, the shrubs have the photosynthetic area to gather ample light in the dappled shade. Another classic example of diversity in time is the hatching cycle of locusts. Timed to emerge at intervals of years having prime numbers such as 13 and 17, they frustrate the predators whose more regular breeding period requires their food to arrive  more predictably.

Permaculture designers use similar approaches to design for disaster. Instead of using concrete embankments and other brute-force tactics to resist flood, we place fences that can lie down, reed-like as rushing waters advance and then can be easily set up afterward. Rather than gouging enormous barren firebreaks into their hillside, Lama Foundation stacks roads, swales, and plantings together in
a multiply functioning firebreak. When monsoon downpours arrive in Tucson, instead of standing by as flooding street runoff pours down sewers, Brad Lancaster harvests the water with cleverly placed curb cuts that lead to mulched food-tree basins. All these examples are detailed in Permaculture Activist #54 (November, 2004).

By observing nature’s wisdom, permaculturists follow nature’s lead and use patterning, succession, edge, and cyclic opportunities to convert large pulses of energy into smooth generators of structure, harvest, and nutrient flow. Permaculture design inquires into the nature of some of these “large pulses” and shows how they can teach us to use their energy, aikido-like, to benefit ourselves and the larger ecosystem.”
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6.   Cities, peak oil, and sustainability
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Cities, peak oil, and sustainability
Energy Bulletin, Published Dec 25 2004, by Permaculture Activist by Toby Hemenway
http://www.energybulletin.net/node/51386
In  mid-August I drove to a party in the country outside of Portland, Oregon. Twenty miles of freeway took me to a two-lane road that wound ten miles up steep forested hills and down through remote valleys. As the roads grew narrower and less traveled, I began to wonder how, if gas hits $5 or $10 a
gallon, people and supplies will reach these isolated spots. What kind of post-oil vehicle will climb this hilly, winding road that quite literally goes nowhere—a converted truck run on home-made biodigested methane? Then, after I arrived at the secluded acreage, I questioned whether my hosts could really supply most of their own needs, just the two of them and their kids.

I think these isolated places will disappear the way that Roman outposts in Britain and Gaul did during the empire’s decline.

In a recent issue of this magazine (Permaculture Activist 54 p. 2, “Designing Beyond Disaster”) I wrote that when I moved to the country 11 years ago, I assumed that rural people use fewer resources than urbanites, but now that I’m back in the city I can see that isn’t true. That article [“Urban vs. Rural Sustainability.”-immediately above this article-lfp] has generated more response than any other I’ve written, and has been reprinted around the Web many times, often with some furious comments. Obviously, a lot of people are thinking about the same topics. I’d like to re-visit the subject, respond to some of the commentary, elaborate on my reasoning, and describe some new thoughts on the subject.

First, a clarification on word usage. When I speak of rural, I generally mean places where people live on acreage outside of towns, with most services too far to walk to. Small towns decreasingly can be called rural, as their takeover by chain stores, engulfment by sprawl, and reliance on non-local goods renders many indistinguishable from suburbs.

•  I’m not a believer in the Peak Oil “end of the world” scenario, where decreasing oil production somehow mutates into the sudden, permanent shutoff of urban water supplies, and contented suburbanites are transformed overnight into looting gangs. Yes, fossil fuels surely will become much more expensive in the next decades, and scarce soon after. I don’t doubt that several tipping points will be broached along the way, with rapid and unexpected changes cascading through society. But civilization won’t end. People have repeatedly predicted the apocalypse: in millennial 1000, again in 1666 (the number of the beast), and many times between and since. Is our memory so short that we have forgotten the foolishness around Y2k? Or are we so wedded to the delicious notion of our annihilation that we grasp at any possibility? Why do we hunger so for our own extinction?

•  Neither the mega-cities nor the survivalist’s bunker will be viable in a post-oil future. The places with the best chance of surviving an oil peak will be cities of less than a million people, ranging down to well-placed smaller cities and towns. Cities of a million or so existed before fossil fuels—ancient Rome proper held roughly a million people—thus they are clearly possible in a limited-oil era.

Scale works to the advantage of sensibly sized cities. For example, Portland’s 500,000 people are served by two sewage treatment plants that use about 2000 miles of pipe to reach every home. Building this cost in the low hundreds of millions of dollars (exact figures don’t exist). Compare this to the sewage system for 500,000 rural people. That’s roughly 125,000 septic tanks, each with 300 or more feet of drain-field pipe, plus trenching and drain rock for all. A septic system costs about $10,000 to build, so the cost of 125,000 of them is $1.25 billion, several times that of the urban system, and the ruralites need 7000 miles of pipe compared to Portland’s 2000 miles. Of course, composting toilets and graywater systems would obviate the need for both of those unsustainable, resource-intensive methods of waste treatment, but I’m talking about what exists right now. Virtually any service system—electricity, fuel, food—follows the same brutal mathematics of scale. A dispersed population requires more resources to serve it—and to connect it together—than a concentrated one. That fact cannot be gotten around.

•  One of the most common responses to the Peak Oil panic is, “We’re planning on moving to the country with our friends and producing everything we need.” Let me burst that bubble: Back-to-the-landers have been pursuing this dream for 40 years now, and I don’t know of a single homesteader or community that has achieved it. Even the Amish shop in town. When I moved to the country, I became rapidly disabused of the idea of growing even half my own food. I like doing one or two other things during my day. During my life…” [Having ‘been there and done that’ myself, with 27 years experience on 29 acres of rural MN acreage, I agree. Mr. Larry]
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7.  Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression.
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Surviving Peak Oil, The Economic Meltdown and A Possible New Great Depression: Hypothetical Scenarios and Crazy Ideas For a Crazy New World.
http://www.peakoilstories.com/survival_strategies_for_the_comi.htm
The following survival strategies are for the possibility a post peak oil  world that is truly in chaos. No one knows if we will see such a scenario come to pass and I hope that they won’t.  As a self described “survivalist” and a Red Cross Volunteer who has spent time at the epicenter of category 5 hurricanes,  I have firsthand knowledge of what you need to stay alive. You need: 1) clean water, 2) food, 3) shelter, 4) medicines and 5) communications, basically in that order and last but not least, 6) a good plan.

If you are one of the lucky ones and can afford to keep your home during the current financial crisis or an even worse one that could happen, what kind of neighborhood will your home be located in? Already, in the early stages of the mortgage meltdown some of our suburbs are turning into suburban slums as the homeless and criminals occupy foreclosed homes and mosquitoes breed in abandoned swimming pools. There are nearly 12 million U.S. homeowners who owe more on their homes than those homes are worth and many people are walking away, bad credit be damned because they can now rent for a fraction of what they were paying the bank.  For those who choose to hang on to their homes it will be a challenge to keep that home safe as the crime rate increases.

 Strategy # 1: Standing Your Ground In The City
If you are able to hold onto your home and can find work in the area where you live then your home will become your fortress against the increasingly dangerous urban world around you. Residents of “bad neighborhoods” such as parts of East Los Angeles already have experience in protecting their castles against invaders. But for those of us accustomed to living in “nice” neighborhoods the learning curve will be steep.

a) You can start by spending some of the money you might have left on security bars for your windows, shotgun, and a fence for your yard. By this time property associations will be bankrupt and won’t be able to enforce rules so make your fence as high as possible. You’ll be building the fence to keep thieves out and a dog in. Dog food is an added expense but a good watchdog can be worth their weight in gold.
b) See the book, The Secure Home for more ideas on how to protect your property.
c) You’ll need a backup source of power since the power grid will become increasingly unreliable  and power may only be available for certain hours of the day. A tri fuel generator that runs on natural gas, propane and gasoline is a good choice. So is a diesel generator since you can store barrels of diesel more safely than gasoline. Ideally a large propane tank, in an area away from thieves, is the best way to go. You can run a tri-fuel generator several days straight on a 150 gallon propane tank. You will need at least 5000 watts of power to run your appliances.
d) A more lasting solution is to invest in a solar power system of at least 500 watts for battery charging and to power an inverter to run small appliances. If you can afford a larger backup solar power system of at least 3KW, with multiple deep cycle batteries now is the time to buy one before prices skyrocket. An Air Marine wind generator can provide additional power when the sun is not shining.
e) A wood stove can burn waste wood and lumber  to keep your home warm in winter. Choose one that has a cooking surface. You will need  a flue cleaning kit to clean your smokestack regularly when burning anything other than clean firewood.
f) For water you can divert your gutters into a 1000 gallon or larger fiberglass tank and use a solar panel and RV type demand pump to pressure up your plumbing if city water is interrupted. Broken water mains will be a frequent problem as cities go bankrupt and can’t afford to pay for repair crews.
g) If your yard is big enough you will want to replace much of your existing lawn with food producing
plants including fruit trees.
There are many varieties  of greens such as mustard, collard and kale that grow in marginal soil and shade. You can plant pinto beans, straight from the pantry to produce green beans in spring and summer. Choose hardy varieties of plants such as hybrid tomatoes that are resistant to blight and fungus.  Plant the eyes of russet potatoes in deep flower beds or stacked up tires filled with soil. You can kill pests with diluted dishwashing soap and by picking them off by hand. It is unlikely that you will be able to produce enough food on your own city lot to feed your family but your garden will fill in when other sources are scarce. You can also trade for different varieties of vegetables with your neighbors.
h) Since food supplies will be disrupted having a good supply of food on hand is a must. Buy canned
staples such as corned beef, evaporated milk, brown rice and beans and keep them in airtight containers such as Rubbermaid trash cans. Rust is the enemy of canned food so add dehydration packets which are available at boating supply stores. Keep a stock of dehydrated and freeze dried food for more long term storage. One good tasting brand is made by a company called Mountain House. Also keep a good supply of multivitamins to supply the nutrients you may be missing. Body-builder’s protein powder made from soy or whey also keeps well.
i) Skills like sewing will be needed again to mend items. Get a good quality sewing machine, a supply of thread and spare parts for it.
j) You’ll need a source of news and  it is unlikely you will be able to afford or even get cable at this point.  A simple solar powered radio may become your entertainment center. A small portable TV that operates on 12 volts can be operated from your solar battery bank.
k) You may not be able to afford medical care. Keep a good supply of  broad spectrum antibiotics such
 as Cipro and pain killers. You may want to consider stocking up on essential prescription medicines that you need but do so with caution and always store medicines in a cool dry place sealed in airtight containers.

Communications Gear For Survival
It is unlikely that you will be able to afford cell phone service in a severe depression if it is even available. Instead you can utilize long range handheld radios to keep in touch with  family around your neighborhood. There is a new type, that blows away the previous GRMS/FRS radios and gives about the same range. It is called  a 900MHz FHSS 2-Way Radio and it uses a new type of frequency hopping to provide up to a billion privacy codes so your transmissions are just between you and the other party.

High power SSB CB and ham radios can reach out for thirty miles under the right conditions and using “skip” or bouncing the signal off the atmosphere can talk around the world. Unlike some peak oil “doomers” I don’t see high tech going away in the near term.
There are enough garage inventors out there to scavenge and come up with all kinds of technology to fill in the gaps when the grid goes down as we have seen in third world countries.

In Thailand  entrepreneurs pedal around neighborhoods with solar powered Wi-Fi.  As in India, neighbors may also agree to set up and share a single secure wireless connection across several  city blocks with long range wi-fi antennas. Internet telephony services like Skype may replace traditional phones as land based networks become increasingly unreliable. There are now handheld phones that allow you to talk on the Skype network for free with any open WiFi connection in the world. Read more about how to set up a free internet connection with super long range WiFi antennas and boosters:

Someday you may have to decide to either hit the road or stand your ground.

Should you start buying guns? Should you start a neighborhood watch organization or patrol? Should you put in a garden for extra food or buy emergency rations? What about the infrastructure? Will power keep flowing down the lines with no money to fix our upgrade our electrical grid? Should you put in an auxiliary power supply such as solar panels or a generator? Maybe you should just pack up and hit the road.

Strategy #2: Going Mobile, Mad Max Style
For each of us our personal survival strategy may be different. For some it may mean leaving the home behind and taking to the road to find a less violent place to take shelter or an area where work can still be found. An RV, travel trailer or even a large tent  might become your new residence as they have become for so many evicted homeowners recently. For those who choose the mobile path traveling smart and light are essential.

You’ll want a good supply of freeze dried food or MRE’s, tools, a  multi – fuel generator for power and some communications gear such as a ham radio or CB in your vehicle for emergencies. You’ll also want a number of water storage containers and a pump system for filling from streams. You will need a good water purifier to deal with contaminated sources.   You will need a means of buying food so you will want a hiding place in your vehicle or RV for cash and small denominations of silver and gold coins in case the dollar becomes worthless.  A versatile gun that can also be used for hunting, such as a shotgun is a must . You’ll want a good supply of ammunition. Just remember to keep that gun in a safe place, both from thieves and your kids.

“Here’s your burger sir, that’ll be two twelve gauge shells and five 22 calibers please”. It is very possible that ammunition will become a currency itself so carry a large supply of the most commonly used sizes including 12 gauge shotgun shells and 22 caliber bullets.  The barter system may replace currency for most transactions. Items such as disposable razors, cigarettes and hand tools will be good for trading for gas and food. Sticking with a group of like minded people will be good insurance against trouble. This means finding safe RV parks and campgrounds where law and order still prevails. You’ll need good neighbors to watch your things while you leave to find work, if there is any.

For those without a car you’ll need a good frame backpack and everything you need to survive in miniature. Weight is your enemy so choose lightweight tents, sleeping bags, water purifiers and take along freeze dried food and MRE’s to live on. Carry your cash, silver and gold in a money belt or shoe hiding place. You’ll want to avoid crime ridden cities and find shelter and camping in safe campgrounds or on farms where you can find work. Setting up camp near a body of water has advantages for bathing and catching fish.  Since you may be crossing many jurisdictions carrying a pistol may not be wise. Consider large pepper spray – dye spray containers instead. You’ll need a lightweight crank or solar powered radio for news and if traveling with family a couple of GMRS radios to keep in touch with each other plus a solar battery charger. Consider a high power SSB CB radio for long range communication.

There are other options. A small sailboat is one of them. A self contained sailboat can provide shelter and mobility without the use of fuel. It can allow for movement to areas where there is work and safety along the vast Intercoastal Highway and navigable rivers as well as a way to leave the U.S. if necessary. There are many books that have been written about self-sufficient living aboard sailboats. In a post peak oil world sailboats may be one of the only affordable means of covering long distances. A fuel efficient motorcycle is another. The same packing strategy for backpacking applies to traveling by bike. Carry spare motorcycle parts, tire tubes, a good toolkit and extra gas.

Strategy #3: Rural Survival
If you are lucky enough to own your own farm you will be in the best position of all for survival in a post peak or post economic meltdown world. You will be able to produce not only enough food to supply yourself but also for trade. Since the supply chain will be disrupted and parts hard to find you will want to have spares of everything and the means to can and store your own food. Farmers will undoubtedly form closer alliances with other nearby farmers and cooperative groups  for tasks like  firefighting and crop harvesting. Home canning and self sufficiency skills as described in the aforementioned books apply both to urban dwellers and rural residents.   It will be essential for small farmers to re-learn the  ways and the wisdom of the old timers  before they pass on, such as growing crops without expensive chemical fertilizers.

Take The Middle Path, Be Prepared In The Early Stages Of The Crisis
I have met quite a few other individuals who call themselves “survivalists” in the hurricane ravaged areas where I have volunteered with the American Red Cross.  Although it is never a good idea to try to ride out a hurricane, the ones that made it had electricity, water, food and medicine plus communication gear such as CB or Ham Radio. Unlike the common image of survivalists as gun toting hoarders, these individuals often became excellent volunteers, helping their less prepared neighbors and beginning the rebuilding of their community.

A total economic meltdown caused either by peak oil or something else will bring out both the best and the worse in people. I’d like to think that most will choose to work to keep their community intact but those who are inclined to take advantage by looting and stealing instead of cooperating will do so.  I believe, cynically perhaps, that many of our citizens would react differently than they did in the Great Depression of the 1930’s because now many of us see having certain possessions and lifestyles as a right and therefore any means of getting them is justified.

I think that we would seem like a spoiled nation to those people of the 1930’s if they could have looked into the future and seen us now and the excessive energy wasting lifestyle that we take for granted. Once this is ripped away from us how will Americans react and who will they blame? Surely not ourselves. When the full blown crash comes there will be calls for more government bailouts or even wars to punish whoever caused us such hardship. Few will realize that it was living beyond our means and failing to have a plan of energy self sufficiency behind it all.

The current economic situation could go either way. There are many signs that point to it getting worse and all it will take is some type of unpredicted event to send the economy spiraling downward toward total collapse. The best thing to do right now is to prepare for the worst case scenario that could happen. Tailor your personal survival plan to either one of staying put or going mobile, based on your home ownership situation. You may want to prepare on both fronts, by having a ready pack of supplies in case you are forced to leave and at the same time preparing your home for a long term crisis.

Start by preparing your home to be a safe place when outside support systems fail. If you can afford to add things like solar backup power and rainwater collection now is the time to do it, not when it is too late. Invest in things that make your home more energy efficient and vehicles that use less fuel.  Stock up on freeze dried food and MRE’s now before they become unavailable or extremely expensive and have things like home medical kits and supplies already in place. In case paper money becomes worthless you should keep a savings of small denomination gold and silver coins in a good hiding place to buy food with.

Whether our nation turns a corner and is able to establish a renewable energy future and avoid a severe peak oil crash remains to be seen. Yet investing in home energy efficiency and more efficient vehicles is a win-win way of preparing. Having a stockpile of food and supplies is a cheap peace of mind insurance policy, regardless of how things turn out.
Ultimately it all comes down to preparedness and keeping one step ahead of the tide. Those who make fun of your survivalist ways will be the ones coming to you for help when the poop hits the fan.

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Hubbert’s Peak Oil and the Hirsch Report

(Survival Manual/1. Disaster/ Hubbert’s Peak Oil and The Hirsch report)

(The Hubbert peak theory posits that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve. It is one of the primary theories on peak oil.)

I.  BACK IN THE 1950s
they saw it coming, we knew what it meant, it was ignored.

A.   M. King Hubbert – the first to predict an oil peak
In the 1950s the well known U.S. geologist M. King Hubbert was working for Shell Oil. He noted that oil discoveries, graphed over time, tended to follow a bell shape curve. He supposed that the rate of oil production would follow a similar curve, now known as the Hubbert Curve. In 1956 Hubbert predicted that production from the US lower 48 states would peak between 1965 and 1970.
Despite efforts from his employer to pressure him into not making his projections public, the notoriously stubborn Hubbert did so anyway. In any case, most people inside and outside the industry quickly dismissed the predictions. As it happens, the US lower 48 oil production did peak in 1970/1.
In that year, by definition, US oil producers had never produced as much oil, and Hubbert’s predictions were a fading memory. The peak was only acknowledged with the benefit of several years of hindsight.
No oil producing region fits the bell shaped curve exactly because production is dependent on various geological, economic and political factors, but the Hubbert Curve remains a powerful predictive tool.

In retrospect, the U.S. oil peak might be seen as the most significant geopolitical event of the mid to late 20th Century, creating the conditions for the energy crises of the 1970s, leading to far greater U.S. strategic emphasis on controlling foreign sources of oil, and spelling the beginning of the end of the status of the U.S. as the world’s major creditor nation. The U.S. of course, was able to import oil from elsewhere. Mounting debt has allowed life to continue in the U.S. with only minimal interruption so far. When global oil production peaks, the implications will be felt far more widely, and with much more force.

What does peak oil mean for our societies?
Our industrial societies and our financial systems were built on the assumption of continual growth growth based on ever more readily available cheap fossil fuels. Oil in particular is the most convenient and multi-purposed of these fossil fuels. Oil currently accounts for about 41% of the world’s total fossil fuel consumption, 33% of all global fuel consumption, and 95% of global energy used for transportation.
Oil and gas are feed stocks for plastics, paints, pharmaceuticals, fertilizers, electronic components, tires and much more.
Oil is so important that the peak will have vast implications across the realms of war and geopolitics, medicine, culture, transport and trade, economic stability and food production. Significantly, for every one joule of food consumed in the United States, around 10 joules of fossil fuel energy have been used to produce it.

B.  The ‘Hirsch Report’
A U.S. Dept. of Energy commissioned study “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” [PDF] was released in early 2005. Prepared by Science Applications International Corporation (SAIC), it is known commonly as the Hirsch Report after its primary author Robert L. Hirsch. For many months the report, although available on the website of a Californian High School, remained unacknowledged by the DOE.
The executive summary of the report warns that: as peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.
A later paper by Hirsch recommends the world urgently begin spending $1 trillion per year in crash programs for at least a decade, preferably two, before peaking. Obviously, nothing like the kind of efforts envisaged have yet begun. Hirsch was not asked to speculate on when the peak was likely to occur.
[In retrospect, the peak ocurred between 2000-2005; by 2011 we have quietly entered the decline phase. Although the West is in a double dip recession, gas prices have only slightly declined. Asian markets are absorbing production. Western commercial petroleum bulk storage is the lowest in years, while production cannot rebuild stocks to capacity. Its slow, its quiet. Who’s upset, yet? -Mr Larry]

C.  The Olduvai Theory
The theory is a proposed way of measuring industrial civilization by a single ratio – world annual energy use to population. The important idea is that, unlike previous civilizations which have risen and fallen to be replaced by others, industrial civilization would be the last because we would have used up all the easily obtainable resources (oil, coal, minerals) which are necessary for a civilization to form.
The theory is defined by the ratio of world energy production (use) and world population. The details are worked out. The theory is easy. It states that the life expectancy of Industrial Civilization is less than or equal to 100 years: 1930–2030.
World energy production per capita from 1945 to 1973 grew at a breakneck speed of 3.45%/year. Next from 1973 to the all-time peak in 1979, it slowed to a sluggish 0.64%/year. Then suddenly – and for the first time in history – energy production per capita took a long-term decline of 0.33%/year from 1979 to 1999. The Olduvai theory explains the 1979 peak and the subsequent decline. More to the point, it says that energy production per capita will fall to its 1930 value by 2030, thus giving Industrial Civilization a lifetime of less than or equal to 100 years.

The chart above is a graphic showing energy usage/population as a curve with various key points defined. These are:
Note 1: (1930) the beginning of Industrial Civilization
Note 2: (1979) all time peak of world energy production per capita
Note 3: (1999) the end of cheap oil
Note 4: (2000) eruption of violence in the Middle East
Note 5: (2006) all-time peak in world oil production
Note 6: (2008) OPEC crossover when more than 50% of oil comes from the OPEC nations
Note 7: (2012) permanent blackouts spread worldwide
Note 8: (2030) world energy production falls to 1930 level
The future dates may vary but it is easy to see how, with the knowledge we have of peak oil, the world could slip into a Medieval or even Stone Age scenario. Even a Dark Ages world would be difficult to sustain with no coal and little wood to burn. We are so dependent on energy that, unless we find some alternatives to hydrocarbon energy generation pretty quickly, we will find ourselves without the time or energy to switch.
.

II.  Predictions

Four Stages of Oil Depletion Through 2020
http://peakoilquestionoftheday.blogspot.com/p/life-after-crash.html
A.  World Oil and Natural Gas Liquids Production & Changes in each stage
Stage 1 (Now to end of 2011): World conventional crude oil and NGL production (CO&NGL) which is currently at 82 mbpd will remain stable with slight decline to 81 mbpd.
Continued economic stagnation with possible weak recovery, continued high unemployment will put little pressure on oil prices; gas prices will be generally stable. Non-OPEC production will begin to all off. Oil at $75 to $90 bbl; Gas at the pump in Dobbs Ferry $2.90 to $3.20.
Stage 2 (2012): Decline will accelerate in 2012 to 80 mbpd. Prices rises will become more pronounced, but still not seen as an emergency.
Global production fall off by end of year gets attention, markets respond with higher prices. Oil at $100 to $120 bbl; Gas at the pump in Dobbs Ferry $3.30 to $3.70. Economy continues to bump along in recession mode.
Stage 3 (2013 to 2015): Decline will be rapid in 2013 – 2015 with world production at 75 mbpd for CO&NGL by end of 2015.
Increasing fall off in production gets serious, news reports start talking about various causes — bad government policy, global conspiracy, return of “Drill, Baby, Drill”. Airlines cut back drastically as air travel becomes expensive. Demand for fuel-efficient cars soars. Government establishes crash programs to conserve, develop alternatives. Economy in terrible shape. By 2015 oil at $150 bbl; Gas at the pump at $6.00 to $10.00.
Stage 4 (2016 to 2020): by 2020 production will be 62 mbpd. Impossible to really estimate what prices will be. Life as we know it will be a memory.
Economy in shambles, oil prices continue higher.
By 2020 oil at $250+ bbl; Gas at the pump, when available, $15+.

B.  What will life be like once oil goes into decline. Here are a few things to expect.
1. Near Term Impact
__a) Continued economic decline with high unemployment. Without oil to fuel manufacturing, transportation, and food production, the only possible result is economic decline. Unemployment will continue to be high until people realize that they have no choice but to work for far less than they ever expected. Many of the unemployed will find work in agriculture as reliance on oil fueled machinery declines.
__b) Stagnant or declining stock market. Economic decline will inevitably impact the stock market and, as a result, the retirement savings of millions of Americans.
__c) Population move to urban areas/decline of suburbs. Who will want to (or be able to) live in a 4,000 square foot home 40 miles or more from work? The value of suburban housing (especially big houses) will decline as people try to get closer to urban centers and mass transit. Expect housing abandonment of the type already seen in California.
__d) Decline in construction, more people living together. As real income declines and construction costs increase, people will not be able to afford the square footage of living space they have become accustomed to. The migration from suburb to urban area, without additional construction, will mean more roommates, boarders, and houses cut up for rental.
__e) Air travel only for the rich. This is a no brainer. The airline industry is already in contraction. It won’t take much higher oil prices to push it over the edge.
__f) International trade declines.
__g) Deterioration of infrastructure as government revenues dry up.
__h) Increases in all prices — especially food and fuel.
__i) International conflict over remaining oil resources.
__j) Attempts by government to retain current lifestyle will fail and cause huge deficits, decline of currency.
__k) Solid waste disposal
2. Longer Term Impact
__a) more long distance transportation.
__b) Life becomes entirely local.
__c) Government breakdown.
__d) Social unrest.
__e) Population decline.
__f) Land becomes the main source of wealth.


 III. 
Preparing for Life in a Peak Oil World

23 January 2011, Oil Price.com, by Gail Tverberg
http://oilprice.com/Energy/Crude-Oil/Preparing-for-Life-in-a-Peak-Oil-World.html
“We know that peak oil will be here soon, and we feel like we should be doing something. But what? It is frustrating to know where to start. In this chapter, we will discuss a few ideas about what we as individuals can do.
1.  What will the first few years after peak oil be like? It is hard to know for certain, but a reasonable guess is that the impact will be like a major recession or depression. Many people will be laid off from work.
•  Gasoline is likely to be very expensive ($10 a gallon or more) and may not be available, except in limited quantities after waiting in line for a long time. Fewer goods of all types will be available in stores. Imports from third-world countries are likely to be especially unavailable, because of the impact of the oil shortage on their economies.
[Internet image right: Sanyo Enloop AA rechargeable batteries]
•  Gasoline prices may not rise as high as $10 gallon; the problem may be that at lower prices than $10 gallon, oil prices send the economy into recession. There may actually be a glut of oil supply because of recession or depression, because many cannot afford the high priced oil. For example, state highway departments cannot afford high priced asphalt. This is related to low “energy return on energy invested”. If the goods and services made with oil aren’t great enough to justify its high price, high oil price can be expected to send the economy into recession. Countries that use a lot of oil for purposes other than creating new goods and services are likely to be especially vulnerable to recession.
•  Money may not have the same value as previously–opinion is divided as to whether deflation or rampant inflation will be a problem. Investments, even those previously considered safe, are likely to lose value. Things we take for granted–like bottled water, fast food restaurants, and dry cleaners–may disappear fairly quickly. Electricity may become less reliable, with more frequent outages. Airplane tickets are likely to be extremely expensive, or only available with a special permit based on need.

2.  If a scenario like this is coming, what can a person do now? Here are a few ideas:
• Visit family and friends now, especially those at a distance. This may be more difficult to do in the future.
•  Learn to know your neighbors. It is likely that you will need each other’s help more in the future.
•  If you live by yourself, consider moving in with friends or relatives. In tough times, it is better to have others to rely on. It is also likely to be a lot cheaper.
•  Buy a bicycle that you can use as alternate transportation, if the need arises.
•  Start walking or jogging for exercise. Get yourself in good enough physical condition that you could walk a few miles if you needed to.
•  Take care of your physical health. If you need dental work or new glasses, get them. Don’t put off immunizations and other preventive medicine. These may be more difficult to get, or more expensive, later.
•  Move to a walkable neighborhood. If it seems likely that you will be able to keep your job, move closer to your job.
•  Trade in your car for one with better mileage. If you have a SUV, you can probably sell it at a better price now than in the future. [Internet image right: Mitsubishi or another make of small electric car.]
•  If you have two cars powered by gasoline, consider trading one for a diesel-powered vehicle. That way, if gasoline (or diesel) is not available, you will still have one car you can drive.
•  Make sure that you have at least a two-week supply of food and water, if there is some sort of supply disruption. It is always good to have some extra for an emergency–the likelihood of one arising is greater now.
•  Keep reasonable supplies of things you may need in an emergency–good walking shoes, boots, coats, rain wear, blankets, flashlights and batteries (or wind-up flashlights).
•  Take up hobbies that you will be able to continue in a low energy world, such as gardening, knitting, playing a musical instrument, bird watching, or playing cards with neighbors.
•  Join a local sustainability group or “permaculture” group and start learning about sustainable gardening methods.

3.  Do I need to do more than these things? It really depends on how much worse things get, and how quickly. If major services like electricity and water remain in place for many years, and if gasoline and diesel remain reasonably available, then relatively simple steps will go a long way.
Some steps that might be helpful to add once the crunch comes include:
•  Join a carpool for work, or make arrangements to work at home. If public transportation is available, use it.
•  Cut out unnecessary trips. Eat meals at home. Take your lunch to work. Walk or jog in your neighborhood rather than driving to the gym. Order from the internet or buy from stores you can walk to, rather than driving alone to stores.
•  If you live a distance from shopping, consider forming a neighborhood carpool for grocery and other shopping. Do this for other trips as well, such as attending church. If closer alternatives are available, consider them instead.
•  Plant a garden in your yard. Put in fruit or nut trees. Make a compost pile, and use it in your garden. Put to use what you learned in sustainability or permaculture groups.
•  Meat, particularly beef, is likely to be very expensive. Learn to prepare meals using less meat. Make casseroles like your grandmother’s, making a small amount of meat go a long way. Or make soup using a little meat plus vegetables or beans.
•  Use hand-me-down clothing for younger children. Or have a neighborhood garage sale, and trade clothing with others near you.

4.  Should families continue to have two, three, or four children, as they often do today? With the uncertainties ahead, it would be much better if families were very small–one child, or none at all. The world’s population has grown rapidly in the last 100 years. Part of the reason for growth is the fact that with oil and natural gas, it was possible to grow much more food than in the past. As we lose the use of these fossil fuels, it is likely that we will not be able to produce as much food as in the past, because of reduced ability to irrigate crops, and reduced availability of fertilizers, insecticides, and herbicides. In addition, manufactured goods of all types, including clothing and toys, are likely to be less available, with declining fossil fuel supply. Having smaller families will help fit the population to the available resources.
If couples have completed their families, it would probably be worthwhile for them to consider a permanent method of contraception, since birth control may be less available or more expensive.

5.  Are there any reasons why steps such as those outlined in Question 3 might be too little to handle the problem? Besides the decline in oil production, there are a number of other areas of concern. Hopefully, most of these will never happen, or if they do happen, will not occur for several years. If they do happen, greater measures than those outlined in Question 3 are likely to be needed.
•  Collapse of the financial system. Our financial system needs growth to sustain it, so that loans can be paid back with interest. Once peak oil hits, growth will be gone. Economic growth may even be replaced with economic decline. It is not clear our financial system can handle this.
•  Collapse of foreign trade. Many factors may come into play: The cost of transportation will be higher. Airline transport may not be available at all. Fewer goods are likely to be produced by the poorer countries of the world, because of power outages related to high oil prices. Rapid inflation/deflation may make monetary transactions more difficult.
•  Rapid climate change. Recently, scientists have discovered that climate change can take place over a very short period of time–as little as a decade or two. Temperature and precipitation changes may cause crop failures, and may make some areas no longer arable. Sea levels may also rise.
[Image right: Hot water and photovoltiac collectors on the roof of a private residence.]
•  Failure of the electrical grid. The grid tends to be vulnerable to many kinds of problems–including deterioration due to poor maintenance, damage during storms, and attacks in times of civil unrest. Maintenance is currently very poor (grade of D) according to the “Report Card on America’s Infrastructure” by the American Society of Civil Engineers. If we cannot maintain the grid, and upgrade it for the new wind and solar capacity being added, we will all be in the dark.
•  Water shortages. There are several issues–We are drawing down some aquifers at unsustainable rates, and these may be depleted. Climate change may reduce the amount of water available, by melting ice caps and changing storm patterns. City water and sewer systems require considerable energy inputs to continue functioning. If these are not provided, the systems will stop. Finally, systems must also be adequately maintained–something that is neglected currently.
•  Road deterioration. If we don’t have roads, it doesn’t matter whether we have cars. In the future, asphalt (a petroleum product) is expected to become more and more expensive and less available. It is not clear whether recycling asphalt from lesser-used roads will overcome this difficulty.
•  Decline in North American natural gas production. Natural gas is especially used for home heating, making plastics and making fertilizer. It is also used in electrical generation, particularly for extra load capacity when demand is high. Conventional natural gas is declining, and it is not clear that supply from other sources can make up the gap.
We now have shale gas and other unconventional making up the gap, but there are uncertainties how long it will stay with us.
•  Inadequate mineral supplies. A number of minerals are becoming less available, including copper (used in electric wiring), platinum (used in catalytic converters), phosphorous (used in fertilizer).
•  Fighting over available supplies. This could happen at any level. Individuals with inadequate food or gasoline may begin using violence. Or there may be fighting among groups within a nation, or between nations.

6. Are there any reasons for optimism? Yes. We know that people throughout the ages have gotten along successfully with far fewer resources than we have now, and with much less foreign trade. Financial systems have gotten into trouble in the past, and eventually new systems have replaced them. If nothing else, barter works.
We know that among the countries of the world, the United States, Canada, and Russia have reasonably good resource endowments in relation to their populations. They have fairly large amounts of land for crops, moderate rainfall, reasonable amounts of fossil fuels remaining, and populations that are not excessively large.
We also know that Cuba successfully made a transition from high oil usage to much lower oil usage, through the development of local gardens, increased public transit, and bicycles. A movie has been made about the Cuban experience.

7. What should we do, if we want to do more than described in Question 3? Some web sites (such as Life After the Oil Crash and wtdwtshtf.com) advocate moving to a farming area, buying land and hand tools, and learning to farm without fossil fuels. Typically, an individual purchases an existing farmhouse and adds solar panels or a windmill. The web sites generally recommend storing up large supplies of food, clothing, medicine, tools, guns, and ammunition, and learning a wide range of skills. These sites also suggest storing some things (liquor, razor blades, aspirin, etc.) for purposes of barter.
This approach may work for a few people, but it has its drawbacks. Making such a big move is likely to be expensive, and will most likely involve leaving one’s job. The individual will be alone, so security may be a problem. The individual may be dependent on his or her own resources for most things, especially if the farm is in a remote location. If the weather is bad, crops may fail. Living on the edge of a small town may prevent some problems, but such a move would still be a major undertaking.

8. How about Ecovillages? What are they? These are communities dedicated to the idea of sustainable living. These communities were set up in response to many issues facing the world, including global warming, resource depletion, and lifestyles that are not fulfilling. They were generally not formed with peak oil in mind.
Each ecovillage is different. Organizers often buy a large plot of land and lay out a plan for it. Individuals buy into the organization. Homes may be made from sustainable materials, such as bales of straw. Gardening is generally done using “permaculture”- a sustainable organic approach. Individuals may have assigned roles in the community.
The few ecovillages I investigated did not seem to truly be sustainable–they bought much of their food and clothing from outside, and made money by selling tours of their facilities. The ecovilliage approach could theoretically be expanded to provide self-sustaining post-peak oil communities, but would require some work. Some adventuresome readers may want to try this approach.

9. Is there a middle ground? What should people be doing now, if they want to do more than outlined in Questions 2 and 3, but aren’t ready to immerse themselves in a new lifestyle?
As a middle ground, people need to start thinking seriously about how to maintain their own food and water security, and start taking steps in that direction.

a) Food security. We certainly hope our current system of agriculture will continue without interruption, but there is no guarantee of this. Our current method is very productive, but uses huge amounts of energy. If we can keep our current system going, its productivity would likely be higher than that of a large number of individual gardens. The concern is that eventually the current system may break down due to reduced oil supply and need to be supplemented. Vulnerabilities include:
•  Making hybrid seed, and transporting it to farmers
•  Getting diesel fuel to the farmers who need it
•  Transporting food to processing centers by truck
•  Creating processed food in energy-intensive factories
•  Making boxes and other containers for food
•  Transporting processed food to market
[Internet image: Example of a way to grocery shop: Topeak trolley tote folding basket with groceries…also indicating that your home is located nearby a shopping district.]

If diesel fuel is allocated by high price alone, farmers may not be able to afford fuel, and may drop out. Or truck drivers may not be able to get what they need.
It is in our best interest to have a back-up plan. The one most often suggested is growing gardens in our yards–even front yards. Another choice is encouraging local farms, so that transportation is less of an issue. It takes several years to get everything working well (new skills learned, fruit trees to reach maturity), so we need to start early.
One type of crop that is particularly important is grain, since grain provides a lot of calories and stores well. In some parts of the country, potatoes might be a good substitute. It would be good if people started planting grain in gardens in their yards. There is a lot to learn in order to do this, including learning which grains grow well, how much moisture and nutrients the grains need, and how to process them. If the grain that grows well is unfamiliar, like amaranth, there is also a need to learn how to use it in cooking.
Individuals (or local farms) should also begin growing other foods that grow well in their areas, including fruits and nuts, greens of various types, and other more traditional garden crops, including beans. For all types of gardening, non-hybrids seeds (sometimes called heirloom seeds) are probably best for several reasons:
•  It makes storing seeds after harvest possible, and reduces dependence on hybrid seeds.
•  There is less uniformity, so the harvest is spread over a longer period.
•  The reduced uniformity also helps prevent crop failure in years with drought or excessive rain. Some seeds will not grow, but others will. (Hybrids are all or nothing.)
Imported foods are likely to shrink in supply more quickly than other foods. If you live in a country that is dependent on imported foods, you may want to consider moving elsewhere. [Farmers Market sales as seen in the picture above will not feed a community much less a city. Such sales seems to provide some sort of fuzzy safety net. The veggies look  so clean and healthy, but they are not an arithmatic solution (in lbs/person/year), but things could change, as they did in Cuba and North Korea, when the people got hungry. The problem is, following a crisis you have to ‘make do’ throught the next planting season to it harvest before the hopeful crop increase is realized.]

b) Water Security. Here, the largest issue is whether there is likely to be sufficient supply in your area. Another issue is whether there will be sufficient water for your garden, at appropriate times. A third issue is whether there will be disruptions in general, because of poor maintenance or because the process of treating fresh water (and sewage) is energy-intensive.
With respect to sufficient water in your area, if it looks like there is a problem (desert Southwest, for example), relocating now rather than later is probably a good idea. Transporting water is energy intensive, and new efforts at developing energy (like shale oil or more ethanol) are likely to make the water supply situation even worse.
With respect to water for gardening, consider a rainwater catchment system for your roof. Runoff water is saved in barrels, and can be used for irrigation in dry periods.
General disruptions of water supply are more difficult. Keep some bottled water on hand. You may also want to consider a tank for greater storage supply. Rainwater catchment can be used for drinking water, with the correct type of roofing (not asphalt shingles!) and proper treatment, but this is not generally legal in the United States.

10. What kind of investments should I be making? A person’s first priority should be buying at least a little protection for a rainy day – some extra food and water, comfortable clothing, blankets and flashlights. I suggested two weeks’ worth in Question 2. If you have money and space, you may want to buy more.
Paying down debt is probably a good idea, if only for the peace of mind it brings. There are some possible scenarios where debt is not a problem (hyper-inflation but you keep your existing job and get a raise). In many other scenarios (deflation; job lay-offs; rising food and energy prices) debt is likely to be even harder to pay off than it is now.
Land for a garden is probably a good investment, as well as garden tools. You will want to invest in gardening equipment, some books on permaculture, and perhaps some heirloom seeds. You may also want to consider a rainwater catchment system, to collect water from your roof.
You may also want to invest in solar panels for your home. If you want round-the-clock solar energy, you will also need back-up batteries. Buying these is questionable–they tend to be very expensive, require lots of maintenance, and need to be replaced often.
There is a possibility that the financial system will run into difficulty in the not-too-distant future. Some ideas for investments that may protect against this are
• Treasury Inflation-Protected Securities (TIPS). [At 69 years of age I recieve Social Security, its suppose to ‘inflation protected’. With the price of every thng going up at the store, doctor’s office and gas station, we haven’t received a COLA raise in two years. I’m afraid TIPS investors will  conveniently
encounter the same non inflationary ‘protection.-Mr. Larry]
• Bank accounts protected by the FDIC  [Where FDIC means– some of the same folks that brought us here today.]
Gold coins
• Silver coins

If you want to invest in the stock market, we know that there will be more and more drilling done for oil and gas done in the next few years, so companies making drilling equipment are likely to do well. Small independent oil and gas companies may also do well, doing “work-over” business. We know that there are likely to be shortages in some metals in the years ahead (copper, platinum, uranium), so shares in companies mining these types of metals may do well.
Investments in biofuels should be considered with caution. Most ethanol from corn appears to be heavily dependent on subsidies. If it should ever have to compete with other fuels on a level playing ground, it is likely to do poorly.
I would be cautious about buying insurance policies, except for short-term needs such as automobile coverage, homeowners coverage, and term life insurance. If we encounter a period of significant deflation, insurance companies are likely to fail, because bondholders cannot pay their debt. If we run into a period of rapid inflation, the life insurance or long term care coverage you buy may have very little real value when you come to use it.

11.  Should I move to a different location? There are many reasons you might want to consider moving to a different location:
• To find something less expensive. If times are going to be difficult, you do not want to be paying most of your income on a mortgage or rent.
• To be closer to friends or family, in the difficult times ahead.
• To share a house or apartment with friends or family.
• To be closer to work or public transportation.
• To be closer to a type of employment that you believe will have a better chance of continuing in the future.
• To have better fresh water supplies.
• To join a community with similar interests in sustainability.
• To leave a community that you feel may be prone to violence, in time of shortage.

There are disadvantages as well as advantages to moving to a new location. If many others are trying to move at the same time, you may not be welcome in the new community. You will likely not have friends and the support group you would have had in your prior location. Because of these issues, it is probably better to move sooner, rather than later, if you are going to move. If you balance the pluses and the minuses, it may be better to stay where you are.

12.  We hear a lot about various things we can do to be “green”, like buying fluorescent light bulbs. Do these save oil? Most of the “green” ideas you read about save energy of some kind, but not necessarily oil. Even so, they are still a good idea. If there is a shortage of one type of energy, it tends to affect other types of energy as well. Doing “green” things is also helpful from a global warming perspective. Here are some green ideas besides using fluorescent light bulbs:
•  Move to a smaller house or apartment.
•  Insulate your house, and have it professionally sealed to keep out drafts.
•  If any rooms are unused, do not heat and cool them.
•  Keep your house warmer in summer, and cooler in winter.
•  If you no longer need a big refrigerator, buy a smaller one. Be sure it is an “Energy Star” refrigerator.
•  If you have more than one refrigerator, get rid of the extra(s). Refrigerators are a big source of energy use. For parties, use ice in a tub.
•  Separate freezers are also big energy users. Consider doing without.
•  Eat less meat. Also avoid highly processed foods and bottled water. All of these require large amounts of energy for production.
•  Get power strips and turn off appliances that drain energy when not in use.
•  Turn off lights that are not needed.
•  Rewire lights into smaller “banks”, so you do not need to light up the whole basement when all you want is light in a small corner.
•  Get a clothes line, so you do not need to use your clothes dryer.
•  When cooking, use the microwave whenever possible.
•  Reduce air travel to a minimum. Air travel results in a huge number of miles of travel with corresponding fuel use.
•  Recycle whenever you can.
•  Eliminate disposables as much as possible (coffee cups, napkins, plastic bags, etc.)

13. Should we be talking to our local government officials about these problems? Yes! At the local level, there are many changes that would be helpful:
•  Laws permitting people to put up clothes lines in their yards.
•  Laws encouraging gardens to be grown, even in the front yards of homes.
•  Laws permitting multiple occupancy of houses by unrelated individuals.
•  New local public transportation plans, particularly ones that do not require large outlay of funds. For example, a plan that is more like a glorified car pool might work.
•  Allocation of funds to study the best crops to be grown in the area, and the best cultivation methods, if energy supplies are much lower in the future.
•  It would also be helpful to make changes at higher levels of government, but these are beyond the scope of the discussion in this chapter.”
“The phrase, ‘consent of the governed’ has been turned into a cruel joke. There is no way to vote against the interests of Goldman Sachs. Civil disobedience is the only tool we have left.” —Chris Hedges
.

IV. Where we’ve been, where we are

Peak Oil
The world is rapidly approaching Peak Oil production and will be at an inflection point soon, if not already, after which, real prices will begin a long rise. Price inflection is possible before the next economic recovery, but will certainly come with a recovery, which will then be short lived, because rising energy prices will channel money away from other discretionary expenditures. For the last two years (2009-2010), the USA and Europe have been in recession with lower oil requirements, which have skewered the following 2007 chart by extending the plateau top and pushing the ‘decline in production slope’ (with subsequent increase in prices) into the future another couple years past the original 2007 projection.
Whether we are out of the recession or not by 2015 (within 4 years from now), production declines and the resultant rise in petroleum prices will probably have become an unpleasant factor in our national and personal, financial lives. On Saturday, 4 Sep 2010, FinancialSense.com weekly, ‘News Hour’ podcast, gave leads to the Peak Oil reports listed below. These articles seem to be telling a story, a story which has not yet been shared to any degree with the American people by either the US Government or the news media. Furthermore, there are almost monthly reports being issued by responsible, main stream institutions in Europe, the USA and the Middle East.
As I write, northern Europe is advancing on a program to greatly reduce their fossil fuel dependence; its estimated that in 10 years, by 2020, 20% of Europe’s energy, not just its electricity, will be derived from renewables.
What is happening in the United States? Nothing significant that I’ve heard, seen or read about. Maybe the government is waiting for a Peak Oil–Pearl Harbor type crisis to create a popular mandate for action, as opposed to making plans and choosing an intelligent path while there is time and opportunity to implement and mass test renewable systems.
The energy transition from one type energy to an alternative, historically, only happens about once per century and does so with momentous consequences. We will begin to move away from fossil fuels quite rapidly from here on forward. Business, families and individuals who can adapt to the charge and manage risk will gain an advantage with the shrinking energy pie. [Mr. Larry]

1)  February 2010: UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) study on peak oil was released: “Business calls for urgent action on ‘oil crunch’ threat to UK economy
London, 10 February, 2010: A group of leading business people today call for urgent action to prepare the UK for Peak Oil. The second report of the UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) finds that oil shortages, insecurity of supply and price volatility will destabilize economic, political and social activity, potentially by 2015. This means an end to the era of cheap oil.
•  Taskforce warns Britain is unprepared for significant risk to companies and consumers
•  Poorest to be hit hardest by price rises for travel, food, heating and consumer goods
•  New policies must be priority for whoever wins the General Election
•  Recommended packages include legislation, new technologies and behavior-change incentives
•  Fundamental change in demand patterns triggered by emerging economy countries

2)  March 2010: Telegraph.Co.UK, “Oil reserves ‘exaggerated by one third’
<http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7500669/Oil-reserves-exaggerated-by-one-third.html>
The world’s oil reserves have been exaggerated by up to a third, according to Sir David King, the Government’s former chief scientist, who has warned of shortages and price spikes within years.
Published: 9:51PM GMT 22 Mar 2010, by Rowena Mason, City Reporter (Energy)
“The scientists and researchers from Oxford University argue that official figures are inflated because member countries of the oil cartel, OPEC, over-reported reserves in the 1980s when competing for global market share.
Their new research argues that estimates of conventional reserves should be downgraded from 1,150bn to 1,350bn barrels to between 850bn and 900bn barrels and claims that demand may outstrip supply as early as 2014. The researchers claim it is an open secret that OPEC is likely to have inflated its reserves, but that the International Energy Agency (IEA), BP, the Energy Information Administration and World Oil do not take this into account in their statistics.
It’s critically important that reserves have been overstated, and if you take this into account, we’re talking supply not meeting demand in 2014-2015.”
Dr Oliver Inderwildi, who co-wrote the paper with Sir David and Nick Owen for Oxford University’s Smith School, believes radical measures such as switching freight transport to airships could become common in future.
“The belief that alternative fuels such as biofuels could mitigate oil supply shortages and eventually replace fossil fuels is a pie in the sky. Instead of relying on those silver bullet solutions, we have to make better use of the remaining resources by improving efficiency.”

3)  March 2010: A heatingoil.com, Kuwait University and Kuwait Oil Company– Peak Oil report
Kuwaiti Researchers Predict Peak Oil Production in 2014
March 10, 2010,  by Josh Garrett
<http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7500669/Oil-reserves-exaggerated-by-one-third.html>
“A new study published in the journal, Energy & Fuels, predicts that world conventional oil production will hit its peak in the year 2014. The study, undertaken by researchers at Kuwait University and Kuwait Oil Company (their chart shown above), looked at oil production in the top 47 oil-producing nations and found that humanity has extracted about 54 percent of total world oil reserves and that conventional oil production will reach its peak of 79 million stock tank barrels per day (an industry term, abbreviated as STB, that refers to the number of barrels of crude oil successfully extracted and “treated”) in about four years.
The study began with the Hubbert forecast model, named for peak oil pioneer M. King Hubbert, who successfully predicted that crude oil production in the US would peak in 1970. Though proven to be a useful tool in predicting peak oil, the Hubbert model has limitations when applied to more complex and diverse oil production methods and measures of the 21st century. The Kuwaiti researchers accounted for those limitations in the study, and also allowed for updates of their findings as new oil production data becomes available.
It should be noted that the study, no matter how sound its methods, reports exclusively on conventional oil (liquid crude that can be extracted from the ground relatively cheaply), and in doing so paints an incomplete picture of world oil supplies and the expected arrival of peak oil production.
(Note: If the study were to include data on unconventional sources such as Canada’s tar sands and oil shale deposits of the American West, the supply figures would grow substantially and the date of peak production would likely be pushed forward by at least a decade or two. However, because the technology and costs associated with extraction of unconventional oil vary widely and face an extremely uncertain future, it is logical that the study excludes unconventional oil figures.)
The more prepared governments and citizens are for any supply declines that could lead to rapid price increases in consumer fuels like heating oil, diesel, and gasoline, the less disruptive those increases will be to our daily lives.”
“Very few metro regions, cities or businesses are prepared for the impact of the global peak oil issue on their economies, or finances, operating budgets and mobility.
Cities, households and the economy will be impacted, as will industries. Some industries will be hurt (agriculture, retail, petrochemicals) and some sectors could be positively impacted (smart growth planners, alternative transportation providers, “smart city” technology providers, alternative fuel producers, mixed-use and infill developers)
Whether it’s bonafide peaking of global oil supplies, or a short- to medium-term “oil crunch,” the initial result will be the same. Rapidly rising gas prices and price instability should become evident by 2013, or even earlier if there are any supply shocks because of natural disasters (hurricanes in Gulf), political events, war and terrorists acts.
The most obvious area of impact of rising oil prices is transportation and mobility. During the gas price rises of 2006-2008, U.S. citizens turned to public transportation in record numbers. Light rail ridership was the biggest winner, as was an old and reliable form of gas-free transportation, the bicycle.
The biggest losers: SUVs (RIP Hummer) and personal automotive use. Across the nation, people substantially reduced their driving for the first time in decades, particularly in metro areas that had other mobility options.”

4)  April 2010: guardian.co.uk, “US military warns oil output may dip causing massive shortages by 2015” by Terry Macalister
<http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply>
“The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.
The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander, General James N. Mattis. It adds: “While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India.”
•  Shortfall could reach 10 million barrels a day, report says
•  Cost of crude oil is predicted to top $100 a barrel

The US military says ‘its views cannot be taken as US government policy’, but admits they are meant to provide the Joint Forces with “an intellectual foundation upon which we will construct the concept to guide out future force developments.”
The warning is the latest in a series from around the world that has turned peak oil – the moment when demand exceeds supply – from a distant threat to a more immediate risk.

Future fuel supplies are of acute importance to the US Army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.
But there are signs that the US Department of Energy might also be changing its stance on peak oil. In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the Obama administration, admitted that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

“It’s surprising to see that the US Army, unlike the US Department of Energy, publicly warns of major oil shortages in the near-term. “The Energy Information Administration (of the Department Of Energy) has been saying for years that Peak Oil was “decades away”. In light of the report from the US Joint Forces Command, is the EIA still confident of its previous highly optimistic conclusions?”
The Joint Operating Environment report paints a bleak picture of what can happen on occasions when there is serious economic upheaval. “One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest,” it points out. From

5)  June 2010: Guardian.co.uk, news article posted 11 July 2010, “Lloyd’s adds its voice to dire ‘peak oil’ warnings”, by Terry Macalister
<http://www.guardian.co.uk/business/2010/jul/11/peak-oil-energy-disruption>
“Business underestimating catastrophic consequences of declining oil, says Lloyd’s of London/Chatham House report. One of the City’s most respected institutions has warned of “catastrophic consequences” for businesses that fail to prepare for a world of increasing oil scarcity and a lower carbon economy.
The Lloyd’s insurance market and the highly regarded Royal Institute of International Affairs, known as Chatham House, says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming.
“Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences,” says the Lloyd’s and Chatham House report “Sustainable energy security: strategic risks and opportunities for business”.
The insurance market has a major interest in preparedness to counter climate change because of the fear of rising insurance claims related to property damage and business disruption. The review is groundbreaking because it comes from the heart of the City and contains the kind of dire warnings that are more associated with environmental groups or others accused by critics of resorting to hype. It takes a pot shot at the International Energy Agency which has been under fire for apparently under-estimating the threats, noting: “IEA expectations [on crude output] over the last decade have generally gone unmet.”
The report the world is heading for a global oil supply crunch and high prices owing to insufficient investment in oil production plus a rebound in global demand following recession. It repeats warning from Professor Paul Stevens, a former economist from Dundee University, at an earlier Chatham House conference that lack of oil by 2013 could force the price of crude above $200 (£130) a barrel.
It also quotes from a US department of energy report highlighting the economic chaos that would result from declining oil production as global demand continued to rise, recommending a crash programme to overhaul the transport system. “Even before we reach peak oil,” says the Lloyd’s report, “we could witness an oil supply crunch because of increased Asian demand. Major new investment in energy takes 10-15 years from the initial investment to first production, and to date we have not seen the amount of new projects that would supply the projected increase in demand.”
And while the world is gradually moving to new kinds of clean energy technologies the insurance market warns that there could be shortages of earth metals and other raw materials needed to help them thrive. From

6)  August 2010: Spiegal Online International, posted 4 September 2010, “German Military Study Warns of a Potentially Drastic Oil Crisis“, by Stefan Schultz
“A study by a German military think tank has analyzed how “peak oil” might change the global economy. The internal draft document — leaked on the Internet — shows for the first time how carefully the German government has considered a potential energy crisis.
The study is a product of the Future Analysis department of the Bundeswehr Transformation Center, a think tank tasked with fixing a direction for the German military. The team of authors, led by Lieutenant Colonel Thomas Will, uses sometimes-dramatic language to depict the consequences of an irreversible depletion of raw materials. It warns of shifts in the global balance of power, of the formation of new relationships based on interdependency, of a decline in importance of the western industrial nations, of the “total collapse of the markets” and of serious political and economic crises.

The news report from Spiegal Online was specific about their study’s socio-economic findings, pointing out that:
1.  “Shortages in the supply of vital goods could arise as a result, for example in food supplies.
2.  Oil is used directly or indirectly in the production of 95% of all industrial goods.
3.  Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain.
4.  In the medium term the global economic system and every market-oriented national economy would collapse.…
5.  (Relapse into planned economy) Since virtually all economic sectors rely heavily on oil, peak oil could lead to a partial or complete failure of markets. A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis….
6.  (Global chain reaction) A restructuring of oil supplies will not be equally possible in all regions before the onset of peak oil. It is likely that a large number of states will not be in a position to make the necessary investments in time, or with sufficient magnitude.
7.  If there were economic crashes in some regions of the world, Germany could be affected. Germany would not escape the crises of other countries, because it’s so tightly integrated into the global economy….”
8.  The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil “as a general systemic crisis.” This would create “room for ideological and extremist alternatives to existing forms of government….”
.

V.   The economy of extracting the last half of the oil

6th June 2010, MI2G, “Beyond Oil: Beginning of A New Era?”, London, UK
As the marginal cost of extracting oil has risen ever higher, it has been a red rag to the investment bulls seeking a return. Given that the risk profile of extracting that extra barrel of oil has now grown exponentially, this is likely to act as a new deterrent. The risks are rising much faster than previously anticipated as we approach peak oil.
The inertia which has set in amongst governments, businesses and the investment community in regard to preserving the status quo is going to be knocked sideways by the Gulf oil spill and as the costs of the cleanup mount, it will become imperative to invest in cleaner and safer forms of energy. The change in direction will ultimately be driven by a forced change in our collective value system. The end of oil-dependency is likely to mark the end of an era for the globalised western civilization’s model of oil-centric capitalism. If we survive, the age of oil will be followed by an age of recovery, restoration and a return to local generation of power through alternative means. What does the future look like without oil-dependency? Cleaner forms of energy are likely to proliferate. The possibility of a world in balance with natural resources, clean air, clean water, and with the natural environment, is like a shining light at the end of a dark tunnel.
If the problems were only the current recession, we’d muddle through and eventually it would end; if it were a matter of too much personal and national debt, we’d still muddle through, after increasing taxes and fees on everything and decade or so of unusually high inflation; if the problem were only Peak Oil, we’d muddle through, but with a sense of nervous urgency. However, combining, the recession, massive multi levels of debt and Peak oil is going to be taxing (pun intended), economically and socially exhausting.
It appears that global socio-economic systems are working their way deeper into a period of increasing stress. If there were no other major exogenous events to hit humanity over the next 5-10 years, we could probably pull off a global Manhattan type project of converting to renewable resources. An expansion of the ‘renewable energy’ paradigm would fuel manufacturing employment and consumer spending, banks would loan money, and for a short while there would be an economic boom, until the fallout from Peak Oil caught up. Our conversion from Oil to ‘renewables’ will not be fast enough to make up for the coming price hike in petroleum products. Look for the race from oil to renewables to be a ‘diminishing returns’ scenario, the more renewables we adopt, the higher energy prices go. Why? Because the problem is time related, we are starting too late to mitigate the coming Peak Oil price hikes.
So, even with the recession, massive debt and a late start at converting to renewable, we could with higher taxes and prices, come through with the current system intact, but jarred. Under these conditions the global economic system will be tight, there is little if any economic slack as we move forward through the recession toward Peak Oil. If an unexpected calamity arises, that could very well be the straw that breaks the camel’s back, resulting in serious, wide ranging population ‘hardships’.
[The term ‘hardships’ can cover a lot of unpleasant ground! Think about it. Name 10 inconveniences that could arise in your life from a national calamity, then throw in 10 unknowns you didn’t expect. Mr. Larry]
 .

VI. Energy: Shell’s future scenarios – Staring into energy’s black hole

6 Jul 2008, Author: Tobias Webb
http://www.climatechangecorp.com/content.asp?ContentID=5937
Shell’s “energy scenarios” see fossil fuels remaining a huge part of the energy mix to 2050. And if Shell is right, what does it mean for the planet’s future?

1.   Scramble scenerio
Under the Scramble scenario, the current and future “flight to coal” as a relatively cheap energy source cannot last forever. According to Bentham, in this scenario, around the mid part of the decade (ca 2014-2016) comes “a triple squeeze” in energy. This is made up of the logistical difficulties of having to move growing volumes of coal around the world. At the same time, conventional oil and gas supplies are likely to plateau because of a lack of investment and for “political issues” (shorthand for oil nationalism or a lack of big oil company interests in major projects).
These two factors could lead to the “demand levers being pulled rapidly”, Bentham said, and knee-jerk reactions by governments, such as reducing car speed limits to save on fuel use, decommissioning inefficient power plants quickly, and changing building regulations. All this, needless to say, is set to make the world a volatile place.
In Shell’s Scramble scenario, second generation (non-food sourced) biofuels will grow rapidly from 2020 onwards. Meanwhile, renewable energy sources, such as wind and solar, will see local growth but will not yet be able to compete with conventional energy in size and scale. The economic conditions of the 2020s will encourage further renewables growth, Shell says, and renewable energy will “rebound” by the end of that decade. The flip side will be that only by then will serious action be likely on global carbon prices as climate change related weather events begin to be blamed on a lack of action during the world’s previous dash to coal sources for energy. This rather paints a bleak picture for the future for environmentalists and, indeed, anyone else.

2.  Blueprints scenerio
Shell believes that its Blueprints scenario presents a much more positive picture. While the company does not believe that achieving a global balance of 450ppm of CO2 by 2050 or earlier is remotely feasible, Shell says that global energy demand can be met by less-polluting sources than fossil fuels, and can be reduced significantly by technology, driven by both regulation and collaboration between governments.
Bentham spoke of the “political reality” of climate change as a key driver for this scenario of collaboration on energy use. He cited two key examples: the law passed in California in 2006 which mandated a cap-and-trade carbon emissions trading system by 2012; and the recent attempts by politicians in Australia to distance themselves from their nation’s past recalcitrant attitude to the Kyoto Protocol and carbon dioxide emissions regulation.
The Californian approach has influenced other US states, Bentham said, noting that in the US, climate change is now “a Federal issue”, with both US presidential candidates saying that they take the threat seriously. Bentham said that the C40 group of cities around the world, which is sharing best practices on transport management and infrastructure development across borders, in both developed and developing economies, is another example of an emerging consensus around the need for collaboration to tackle energy and climate concerns.
Developing countries such as China, and their citizens, are also increasingly concerned about environmental issues and this may drive change towards cleaner economies much faster than in the past, Bentham claimed. China has far more UN-approved clean development mechanism greenhouse gas reduction projects than any other nation.

By 2012 to 2015, under the Blueprints scenario, Bentham thinks that we might see “a critical mass of carbon pricing being applied to a critical mass of sectors in a critical mass of countries”. While this rollout is not global, it begins to influence the choices that people are making in investments. This encourages technological progress such as carbon capture and storage by 2020, and vehicle electrification – by 2050 around 40 per cent of all ‘vehicle miles’ are electric under this scenario. National approaches begin to be harmonized, such as around carbon pricing. This encourages energy efficiency and wind power, while helping electric vehicles come to mass market in the 2020s.
CO2 emissions rise, plateau and then fall by around 2050, under Blueprints. Shell believes that there is no one solution to the global energy and climate conundrum, and that, according to Bentham: “Any technology that is going to be deployed at global scale in the next 50 years is already out of the laboratory.” It’s all about policy and incentive choices, he concluded, “the next five years are crucial”.

3. A third scenario: no fossil fuels
So what do others make of Shell’s predictions and dire warnings about the future of climate change and energy? Opinions are mixed.
“Shell is living in la la land,” says Mark Lynas, author of climate disaster bestseller Six Degrees: Our Future on a Hotter Planet. “They are constructing scenarios where they continue to be relevant as a fossil fuel company.” Lynas points out that the climate crisis is so serious that what he calls the “real world” will not tolerate such a high carbon vision of energy for 2050. “The whole scenario process should be about figuring out realistic outcomes and planning for them, whereas what Shell seems to be doing is deciding what they would most like to happen, and writing it down,” he says, calling Shell’s scenarios a “political exercise”.
Shell’s view that stabilizing global carbon emissions at 450 ppm is unrealistic is “totally irresponsible”, says Lynas. “If we don’t stabilize at way below 450 ppm we’ll see irreversible climate change with several tipping points being crossed as a result,” he argues. “They are obviously saying that the world can go fry and that their profits must come first.” Lynas believes that despite oil company claims that they can innovate around the frameworks set by politicians and prosper in a low-carbon world, the current large energy majors will eventually die off, as newer, hungrier firms replace them with what he calls “disruptive” energy technology.
David Strahan, author of The Last Oil Shock, says Shell’s best case analysis – Blueprints – is a “fairly disastrous scenario, because (by their estimation) coal is getting bigger as we go up to 2050”. Strahan notes that NASA’s Jim Hanson believes that if the planet managed to eliminate the emissions from coal-fired power stations by either closing them or capturing all the carbon, then “we squeak in at around 440 parts per million” of CO2. “What’s interesting about [what] Shell [is] saying [is] that it’s the end of the planet” if they are right, Strahan claims.

The carbon capture dream
Carbon capture and storage (CCS) is still largely wishful thinking, Lynas agrees. Right now only a tiny number of pilot projects exist around the world, with none being commercially viable. He is in favor of an upstream cap-and-trade system for carbon, which he says is “much easier to manage than regulating emissions” and should be discussed further. Under upstream trading systems, carbon is measured before consumers can become responsible for emitting it and effectively taxed heavily, creating energy efficiency and renewable energy investment incentives across the board.
While Lynas believes there is sufficient technology to decarbonizes power generation by 2050, he thinks it will have to come from renewable sources, with even nuclear a possibility, rather than from fossil fuels. He estimates that future scenarios should factor in a carbon price of €200-€300 a ton to make renewable energy power generation and transportation a reality by 2050. “We need to eliminate coal from the energy mix,” he says, noting that “nuclear may be a good option for China and India”.
“I think the scenarios are a good way of focusing policy makers’ attention on the progress we need to make,” says King. But she notes soberly that even with the considerable co-operation and technology implementation envisaged in Shell’s more positive Blueprints scenario: “We would not deliver the reductions that the climate science indicates we need. It is a useful reminder of the size of the challenge and the urgency.”

Scary future
A bleak message in many ways, but one that Shell appears increasingly comfortable offering – both as a wake-up call to others and to reassure shareholders of the company’s place in the future, after the firm was rocked in 2004 by a massive reserves accounting scandal and struggles to replace oil reserves.
Perhaps the most alarming two facts to emerge from Shell’s scenario planning are the uncertainty around predictions of future energy supply and the potential, or lack of it, of carbon capture and storage technology. No-one knows exactly when “peak oil” – the moment when more of the planet’s oil is out of the ground than left in it – will be reached and what the ramifications for global economics, unrest and politics will be.
Secondly, while many banks and energy firms say 2020 is the earliest when carbon capture and storage will be rolled out, the technology is still at its earliest stages. Unless massive investment in renewable energy is made over the next five to ten years, and if CCS is unable to decarbonize power generation from fossil fuels relatively quickly and on a commercially viable basis, the world will be short of low-carbon power options.
The fight between industry, with their hopeful ideas of carbon capture and storage technology, and those that want to see the whole planet shifting to renewable energy in the next two decades shows no signs of abating.

The peak oil problem
Shell predicts that global oil production will peak around 2020. But the company neatly side-steps the debate in its scenarios by predicting in both the Scramble and Blueprints scenarios that the decline rate of global production will be virtually negligible up to 2040.
David Strahan is surprised that Shell’s oil peak estimation is now 2020. “I haven’t heard them say that before,” he says. The world has already reached the beginnings of a global oil peak, he argues. “The facts are stark. The amount discovered has been falling for 40 years. For every barrel we find each year, we now guzzle three. Output is already falling in more than 60 of the world’s 98 oil-producing countries. And global oil production has been essentially flat, at just less than 86 million barrels per day, since early 2005. Serious analysts now forecast $200 per barrel.”

Blueprints or Scramble
Strahan believes peak oil is coming even earlier than Shell believes and will have a much faster decline rate in production than the company predicts. “Peak oil is this side of 2020”, he says. “Even if you take the most optimistic future discovery numbers that have any credibility and apply a little bit of common-sense you get a peak in 2017”. His fear is that global production will quickly descend to a 4 per cent annual decline rate sometime after that date. “That is the average decline rate of existing oil production capacity.
All major oil companies are struggling to replace their reserves and increase production, Strahan observes. Many are giving more money back to shareholders than they are spending on exploration and production combined, he claims. “They are basically liquidating themselves. Although the high oil price is giving them high profits for the time being, they are in trouble.”

[Did you understand that last statement (bold, brown text above)? After peak oil production, the rate of decline in oil coming to the market will quickly reach the standard average oil production DECLINE  rate of 4% a year. Every year there will be 4% less available oil in the market to sell, and for you, 4% less to buy.
Question: How can there be “growth” if every year there is 4% less work being done? How can we feed 2% more children born into the world with declining food production, when we already have a great deal of dislocation, warfare and starvation on the African continuent?
Since it takes 10 calories of energy input to produce and place 1 calorie of food on your table, if the energy input is declining so are the numbers of available food calories.
Of course there will be a couple years of belt tightening, which will briefly mitigate the food shortage in richer countries, but then with the energy continually declining 4% a year, the deficiencies add up fast: -4%, -8%, -12%, -16%, -20%….in less than 5 years we’ll be unable to hold back to flood tide of misery sweeping across the world, the country, into our homes. In 10 years there would be 40% less petroleum, in 25 years…..in less than 25 years, its all changed. Before 2034.
However, for now, (sadly said) if we can remain in a global recession for the next couple years that will push forward the ‘peak production’ inflection point a few months, while lower recessionary demand may or may not curtail price increases.
Your vote at the polls will not change this. Writing to elected officials or demonstrating on the street will not change this. The global population has voted, they are becoming increasingly concerned and now that they are becoming poorer, they are arming; some are hungry and many are angry, more are in the streets, but none will change the outcome. We are faced with classic ‘overshoot and collapse’.

In closing, a look back at a chart from the book, The Limits to Growth, © 1972, by the Club of Rome. The ‘limits to growth model’ data run is seen below, where there is a  cascading effect from the decline in (resources) oil production that spreads like falling dominos  across the variables, except death rate. The ‘establishment’ -governement, industry and finance, have found it economically convenient to ignore the concepts discussed by the Club of Rome, they did not heed the warning in Hubbert’s Peak oil or the Hirsch report; time passed and these ‘limiting factors’ have  quietly approached. Today, the leadership are ignoring the ‘peak oil’ reports made by various military, business and academic institutions…. Wake up, Neo!
Mr Larry]


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