Tag Archives: future

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.
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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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Filed under Survival Manual, __1. Disaster

Global Cooling

A. Earth heading for ‘mini ice age’ in just 15 years, scientists say
11 July 2015, upi.com, by Doug G. Ware
Pasted from: http://www.upi.com/Top_News/World-News/2015/07/11/Earth-heading-for-mini-ice-age-in-just-15-years-scientists-say/2751436649025/

cooling iceSolar scientists predict that the Earth will enter a “mini ice age” around 2030 due to decreased activity by the sun, which will bring with it frigid cold winters. The last time the Earth experienced a similar situation occurred between 1645 and 1715. Photo: Albina Tiplyashina / Shutterstock

LLANDUDNO, Wales, July 11 (UPI) — Solar scientists, armed with the best data yet regarding the activities of the sun, say the Earth is headed for a “mini ice age” in just 15 years — something that hasn’t happened for three centuries.

Professor Valentina Zharkova, of the University of Northumbria, presented the findings at the National Astronomy Meeting in Wales this week, Britain’s Independent reported Saturday.

Researchers, saying they understand solar cycles better than ever, predict that the sun’s normal activity will decrease by 60 percent around 2030 — triggering the “mini ice age” that could last for a decade. The last time the Earth was hit by such a lull in solar activity happened 300 years ago, during the Maunder Minimum, which lasted from 1645 to 1715.

Scientists say there are magnetic waves in the sun’s interior that fluctuate between the body’s northern and southern hemispheres, resulting in various solar conditions over a period of 10 to 12 years. Based on that data, researchers say they are now better able to anticipate the sun’s activity — which has led to the Zharkova team’s prediction.

“Combining both [magnetic] waves together and comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97 percent,” Zharkova said. If the “mini ice age” does indeed arrive, scientists say it will be accompanied by bitter cold winters — frigid enough to cause rivers, like the Thames in London, to freeze over.
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  B.  Ice Core Analysis Shows Fastest Decline in Solar Activity for 10,000 Years
18 January 2014, The Daily Sheeple, by Chris Carrington
Pasted from: http://www.thedailysheeple.com/ice-core-analysis-shows-fastest-decline-in-solar-activity-for-10000-years_012014

Solar physicist Richard Harrison says he has never seen the sun this quiet in more than 30 years of studying it.
“If you want to go back to see when the Sun was this inactive… you’ve got to go back about 100 years,” he says.
At this point in the solar cycle the sun should be a hive of activity, popping off flares and dotted with sunspots.

cooling solar flareProfessor Mike Lockwood, a space environment physicist at Reading University UK has studied ice cores going back tens of thousands of years. He thinks there’s a very good chance that the Sun is heading for an extremely quiet period. Speaking to the BBC  he said that it was
“…an unusually rapid decline. It’s a very active research topic at the present time, but we do think there is a mechanism in place where we should expect more cold winters when solar activity is low.”

He went on to explain how Europe would bear the brunt of the change he believes is afoot.
“There are large meanders in the jet stream, and they’re called blocking events because they block off the normal moist, mild winds we get from the Atlantic, and instead we get cold air being dragged down from the Arctic and from Russia,” he says.

“These are what we call a cold snap… a series of three or four cold snaps in a row adds up to a cold winter. And that’s quite likely what we’ll see as solar activity declines.”

“If we take all the science that we know relating to how the Sun emits heat and light and how that heat and light powers our climate system, and we look at the climate system globally, the difference that it makes even going back into Maunder Minimum conditions is very small.
“I’ve done a number of studies that show at the very most it might buy you about five years before you reach a certain global average temperature level. But that’s not to say, on a more regional basis there aren’t changes to the patterns of our weather that we’ll have to get used to.”

The Maunder Minimum was a period of intensely cold winters during the 1600′s. If Lockwood and his colleagues are right this is yet another indicator that points towards global cooling. Although the effects of the jet stream are predominantly felt in Europe the overall temperature drops caused by a cessation of activity on the Sun will be felt across the Northern Hemisphere.
As the warnings about global cooling and it’s connection to lack of activity on the Sun continue to gather pace, we need to start thinking about a world where the summers are cooler, where growing zone boundaries are changing due to the weather.

The government, backed by their butt buddies at the IPCC are not going to warn us, they are not going to admit that global warming was flawed science at best and an out and out con at the worst.

C. The Number Of Volcanic Eruptions Is Increasing And That Could Lead To An Extremely Cold Winter
16 Sep 2014, theeconomiccollapseblog.com, by Michael Snyder
Pasted from: http://theeconomiccollapseblog.com/archives/the-number-of-volcanic-eruptions-is-increasing-and-that-could-lead-to-an-extremely-cold-winter

The number of volcanoes that are erupting continues to rise, and scientists cannot seem to explain why this is happening.  In 2013, we witnessed the most volcanic eruptions worldwide that we have ever seen in a single year, and this increased activity has carried over into 2014.  In recent months, we have seen major volcanoes roar to life in Russia, Peru, Hawaii, Reunion Island, Indonesia, and all over Alaska.  It is highly unusual for so many volcanoes to all be erupting at the same time.  According to Volcano Discovery, a whopping 34 volcanoes are erupting around the globe right now.  This is sending a massive amount of dust and ash into the upper atmosphere, and it may explain why many parts of the planet are experiencing strangely cold weather at the moment.  If this trend continues, we could potentially be facing years of crop failures and widespread famines all over the world.

And what we have witnessed already may just be the beginning.  There are several more very large volcanoes around the globe that scientists are extremely concerned about right now.

For example, just check out what is going on in the Philippines…cooling volcanic activity
Mayon Volcano in the province of Albay was placed on “Alert Level 3” on Monday evening, September 15, after showing signs of “relatively high unrest,” the Philippine Institute of Volcanology and Seismology (PHIVOLCS) said.
In a bulletin issued at 10:00 pm, PHIVOLCS observed 39 rockfall events from 5:00 am to 8:00 pm on September 15, symptoms of the build-up of magma at the summit dome. At least 32 low frequency volcanic earthquakes were also recorded, indicating magma intrusion or volcanic gas activity.
PHIVOLCS-DOST raised the alert status of Mayon Volcano from Alert Level 2 to Alert Level 3 which is equivalent to a “Critical Alert” in the agency’s 5-level alert system. This means that the volcano is exhibiting relatively high unrest, magma is at the crater, and that an eruption is possible within weeks.

But of even greater concern is Bardarbunga.  It is the largest volcano system in Iceland, and a major eruption could potentially be absolutely catastrophic…
This time the threat of an eruption – potentially even more powerful than the one in 2010 – is posed by Bardarbunga, the biggest of Iceland’s 30 or so volcanic systems. Located roughly at the country’s centre, the volcano’s 10-kilometre caldera lies several hundred metres beneath Vatnajokull, Europe’s largest glacier by volume.
Scientists are taking the latest rumblings seriously: roughly 8000 years ago, after all, the volcanic leviathan let rip with the largest eruption of the past 10,000 years.
“It is very difficult to predict exactly what will happen with an eruption,” says Monash University vulcanologist Professor Ray Cas, who is president of the International Association for Volcanology and Chemistry of the Earth.

Scientists tell us that over the last 10,000 years Bardarbunga has produced “more lava than any other volcano on the planet.”
If we witness a full scale eruption at Bardarbunga, the cancellation of a few thousand flights may be the smallest of our concerns.
The truth is that we might be looking at the coldest winter that any of us have ever seen in the northern hemisphere.

But don’t just take my word for it.  The following is from a British newspaper article entitled “Icelandic volcano could trigger Britain’s coldest winter EVER this year”…
Depending on the force of the explosion, minute particles thrust beyond the earth’s atmosphere can trigger DECADES of chaotic weather patterns. Tiny pieces of debris act as billions of shields reflecting the sun’s light away from earth meaning winter temperatures could plunge LOWER THAN EVER before while summer will be devoid of sunshine. The first effect could be a bitterly cold winter to arrive in weeks with thermometers plunging into minus figures and not rising long before next summer.

If this did happen, there is nothing that we could do to change it. We would just have to deal with it.

This is a kind of “climate change” that everyone can agree on.  It is well known that volcanic eruptions can substantially lower global temperatures.  In fact, some global warming theorists are already blaming increased volcanic activity for why temperatures have not been rising in recent years…
“In the last decade, the amount of volcanic aerosol in the stratosphere has increased, so more sunlight is being reflected back into space,” said lead author Benjamin Santer, climate scientist at Laurence Livermore National Laboratory, in a press release. “This has created a natural cooling of the planet and has partly offset the increase in surface and atmospheric temperatures due to human influence.”

But if Bardarbunga fully erupts, we could be looking at something a lot worse than a little “global cooling”. We could potentially be facing winters that never seem to end. It has happened before in recorded history many times.  The following list comes from Wikipedia…
The effects of volcanic eruptions on recent winters are modest in scale, but historically have been significant. Most recently, the 1991 explosion of Mount Pinatubo, a stratovolcano in the Philippines, cooled global temperatures for about 2–3 years.
In 1883, the explosion of
Krakatoa (Krakatau) created volcanic winter-like conditions. The four years following the explosion were unusually cold, and the winter of 1887-1888 included powerful blizzards.  Record snowfalls were recorded worldwide The 1815 eruption of Mount Tambora, a stratovolcano in Indonesia, occasioned mid-summer frosts in New York State and June snowfalls in New England and Newfoundland and Labrador in what came to be known as the “Year Without a Summer” of 1816.

A paper written by Benjamin Franklin in 1783 blamed the unusually cool summer of 1783 on volcanic dust coming from Iceland, where the eruption of Laki volcano had released enormous amounts of sulfur dioxide, resulting in the death of much of the island’s livestock and a catastrophic famine which killed a quarter of the Icelandic population. Northern hemisphere temperatures dropped by about 1 °C in the year following the Laki eruption.

In 1600, the Huaynaputina in Peru erupted. Tree ring studies show that 1601 was cold. Russia had its worst famine in 1601-1603. From 1600 to 1602, Switzerland, Latvia and Estonia had exceptionally cold winters. The wine harvest was late in 1601 in France, and in Peru and Germany, wine production collapsed. Peach trees bloomed late in China, and Lake Suwa in Japan froze early.

The possibility of volcanic eruptions substantially cooling our weather is the biggest “climate threat” that we are facing by far.
Without warm summers and plenty of sunshine, our crops will not succeed. And global food supplies are already stretched to the limit.  Just this week we learned that one out of every nine people in the world does not have enough food to eat. What would happen if global food production was cut by 10 or 20 percent for a few years?

So keep an eye on Bardarbunga and the other major volcanoes around the planet that are rumbling right now. They may just play a major role in our immediate future.

.

D.  Global Cooling: Is an Ice Age coming?
7 Jan 2014, Scottnet, from YouTube
Pasted from: http://www.sott.net/article/271736-Global-Cooling-Is-an-Ice-Age-coming

YouTubeVideo: Global Cooling: Is an Ice Age Coming?

The climate is changing, but it’s not changing the way the climate change crowd predicted it would. Nature has made a mockery of global warming, so who are the real climate deniers?

.

E.  Heaviest snow in 50 years blankets most of Iran
5 Feb 2014, Posted by EU Times
Pasted from: http://www.eutimes.net/2014/02/heaviest-snow-in-50-years-blankets-most-of-iran/

cooling Iran snowRescue operations are underway in different parts of Iran as the heaviest snowstorm in five decades has blanketed the country’s northern provinces, leaving many people without power and running water.

The Iranian Red Crescent Society says teams have rescued over 10,000 people caught in the heavy snow in 18 different provinces.
Rescue operations are also underway in the northern provinces of Gilan and Mazandaran. Thousands of people are reportedly trapped on the roads of the two provinces.

The Islamic Revolution Guards Corps (IRGC) and army troops have been sent to help people. Water and power supplies were cut off in the remote regions, but reports say electricity is mostly restored. Schools and universities have been shut down because of the heavy snow. There have been no official reports of casualties. Iranian President Hassan Rouhani has formed an emergency ministerial team to supervise relief assistance to provinces.

(News & Editorial/ Global Cooling)

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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

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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.
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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.
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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.
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This then, is the coming of the Tragedy of the Commons.

Mr. Larry

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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.
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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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Filed under Survival Manual, __1. Disaster

Modern Freedom of Choice: Death by a 1000 cuts

(Survival manual/2. Social issues/Modern freedom of choice)

Modern Freedom of Choice topics:
1. ‘The Matrix’ (as a metaphor)
2. How Industry Manipulates Public opinion
3. How Propaganda Works in the West
4. Who Really Determines What You Will Or Will Not See On TV, Or Read In The Newspaper?
.  .
1.  ‘The Matrix’
Live Real: Where Science and religion meet common sense
<http://www.livereal.com/movies/matrix_for_real.htm>

_A. “Wake up, Neo.  The Matrix has you.”
So, what is “The Matrix”?
A seriously cool action flick. Stellar visuals. Next-generation special effects. Gnarly fight scenes. Carrie Anne-Moss. Really twisted story. Leather.
But that’s just the surface, the appearance of the movie. That’s all it seems to be.
But there’s something more going on here.
After all, The Matrix movies seem to have a deeper effect on people than that of just another sci-fi flick. What is it about this movie that seems to be speaking to people on such a deeper level? Maybe there is something there to explore…like The Inner Meaning of “The Matrix”

Some quotes from the movie:
“You’re here because you know something.
What you know you can’t explain.
But you feel it.
You’ve felt it your entire life.”
“That there is something wrong with the world.
You don’t know what it is, but it’s there,
like a splinter in your mind, driving you mad.”

 What is the Matrix?
It is the world that has been pulled over your eyes to blind you from the truth.”
What truth?
That you are a slave, Neo. Like everyone else you were born into bondage. Born into a prison that you cannot smell or taste or touch. A prison for your mind. Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.”
“You’ve been living in a dream world, Neo.”

“The Matrix” – in one sense – is an entertaining adventure movie, with far-out psychological twist. Nothing more.
Keanu, the everyday guy, living the normal life as a computer software programmer, soon is faced with a harsh truth: he’s been living a double life; one by day, another by night. He’s forced to choose which one is really him.
From there, and once he makes a few more key choices, practically everything he believes about himself, his world, his place in the world, fundamental assumptions about him and his identity . . . unravel.
Pretty interesting movie, pretty interesting fantasy, but that’s all it is…or is it?

_B. Views from ‘The Real World’
Consider the following observations from some quite brilliant minds:

•  The first view is from Peter Ouspensky, the 20th-Century mathematician and author of In Search of the Miraculous, in which he quotes philosopher G. I. Gurdjieff:
 “If men could really see their true position and could understand all the horror of it, they would be unable to remain where they are even for one second. They would begin to seek a way out and they would quickly find it, because there is a way out; but men fail to see it simply because they are hypnotized.”

“You do not realize your own situation. You are in prison. All you can wish for, if you are a sensible man, is to escape. But how escape? It is necessary to tunnel under a wall. One man can do nothing. But let us suppose there are ten or twenty men – if they work in turn and if one covers another they can complete the tunnel and escape.”

“. . . Furthermore, no one can escape from prison without the help of those who have escaped before . . . if a man in prison was at any time to have a chance of escape, then he must first of all realize that he is in prison. So long as he fails to realize this, so long as he thinks he is free, he has no chance whatever. No one can help or liberate him by force, against his will, in opposition to his wishes. If liberation is possible, it is possible only as a result of great labor and great efforts, and, above all, of conscious efforts, towards a definite aim.”

      “If a man could understand all the horror of the lives of ordinary people who are turning round in a circle of insignificant interests and insignificant aims, if he could understand what they are losing, he would understand that there can be only one thing that is serious for him – to escape from the general law, to be free. What can be serious for a man in prison who is condemned to death? Only one thing: how to save himself, how to escape: nothing else is serious.”

•  Or the following from Indian spiritual teacher Sri Nisargadatta Maharaj
 “Thus is created the world in which we live, our personal world. The real world is beyond the mind’s ken; we see it through the ‘net of our desires’, divided into pleasure and pain, right and wrong, inner  and outer.
To see the universe as it is, you must step beyond the net. It is not hard to do so, for the net is full of holes. Look at the net and its many contradictions.”

  From Plato
“’And now,’ I said, ‘let me show in a figure how far our nature is enlightened or unenlightened: behold human beings living in an underground den, which has a mouth open towards the light and reaching all along the den; here they have been from their childhood, and have their legs and necks chained so that they cannot move, and can only see before them, being prevented by the chains from turning round their heads. Above and behind them a fire is blazing at a distance, and between the fire and the prisoners there is a raised way; and you will see, if you look, a low wall built along the way, like the screen which marionette players put in front of them, over which they show the puppets.’
‘I see.’
‘And do you see,’ I said, ‘men passing along the wall carrying all sorts of vessels, and statues and figures of animals made of wood and stone and various materials, which appear over the wall? Some of them are talking, others silent.’
‘You have shown me a strange thing, and they are strange prisoners.’
‘Like ourselves,’ I replied; ‘and they see only their own shadows, or the shadows of one another .

  Or the words of  philosopher J. J. van der Leeuw
“Our life is like that of the prisoners in the cave; we too see only the back of the cave, the wall of our own consciousness on which dance the shadows, the images cast there by the reality which we do not behold.

We have come to know the play of these shadows so well that we have been able to build up an entire science concerning them. This science is right in so far as the shadows have a vital relation to the reality that casts them, but it is ever doomed to find itself confronted by mysteries which in the world of shadows never be solved, unless some who have seen the real world introduce into these sciences a wider knowledge. But we are impatient and incredulous when anyone would tell us that the world upon which we gaze is not the world of the Real, but only our world-image.

Yet among us too evidence is not lacking of men, who, throughout the ages, have found freedom from their bondage, who have conquered illusion and discovered that world of Reality of which this world of ours is but a shadow or image, cast in the cave of our consciousness . . .” (quoted from The Conquest of Illusion, 1928)

  Or the following from a description of Gnosticism
(Gnosticism was a philosophy that was influential around the time of the origin of Christianity. Many argue that Jesus was a member of a Gnostic sect called The Essenes.)
“. . . gnosticism taught that we are souls trapped in a prison like material world by an evil divinity, kept unaware of our plight by its carnal seductiveness. Only those with the occult knowledge (gnosis) of the true state of affairs can transcend this prison and enter a higher reality. The good divinity dwelling above this evil realm aids the lost souls by sending a messenger of truth to reveal the deception.
Replace archons with agents and magic with machine guns, and “The Matrix” is a virtual, point-for-point retelling of an gnostic concept.”

   Or the following from two psychologists
“The average person is unaware that he or she is living out a negative destiny according to his or her past (childhood) programming, preserving his or her familiar identity…,”
– Robert W. Firestone and Joyce Catlett

   Or the thoughts from Albert Einstein
“A human being is a part of the whole called a universe, a part limited in time and space. He experiences himself, his thoughts and feelings as something separated from the rest, a kind of optical delusion of his consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty.” [Image at left is an attempt to display the meaning of Einstein’s  4-dimensional universe on a 2-dimensional surface.]

   And from Scientific American
“Our innate perception that the world is three-dimensional could be an extraordinary illusion…results suggest that our universe, which we perceive to have 3 spatial dimensions, might instead be “written” on a 2-dimensional surface, like a hologram. Our everyday perceptions of the world as 3-dimensional would then be either a profound illusion or merely one of two alternative ways of viewing reality…”
– from “Information In the Holographic Universe” by Jacob D. Bekenstein, Scientific American, August 2003 [Image right]

These descriptions are very similar to the core message in the movies: The Truman Show, Jacob’s Ladder, The Thirteenth Floor, The Wizard of  Oz and Waking Life.
“It is not until you awaken that you will realize that you have been asleep, dreaming that you are awake.”Leonard Jacobson

 And If You Want To Go Deeper… – down the rabbit-hole
   It’s pretty safe to say that the vast majority of people who see The Matrix trilogy will more or less enjoy the movies, have a fun couple of hours with each…then move on with their lives, and that’s it. Good flicks.
  Another, smaller group of people, will go see the movies, and afterwards, think about the underlying message and philosophy that pervades the movies. They’ll take it to a slightly deeper level, and get intellectual about it…In a way, they will be like dreamers in a dream who dream that someone told them they were dreaming, and they talked and thought about it in the dream.
  And yet another, much smaller group, will go even further. They will see the movies, like them, and work to understand the deeper message that pervade the movies intellectually… then they’ll get to work.

After all, if the movies strike a chord with people because there’s some truth to them. If we actually are, in some way, living in some kind of illusion, and we’re more or less ‘cut off’ from reality or “IT” or whatever you want to call it, and this is why we suffer from all kinds of deception then there’s a lot of work to do.

And if there is some truth behind the ‘machines’ that we created becoming the enemy that enslaves us, then working to free ourselves from their grip and find ‘The Truth’ is what we need to do, which means, among other things, that we should probably be studying and practicing certain exercises, like a kind of ‘mental martial-arts, and work with others to help win the battle…and then, maybe one day we can all wake up.
.

2.  How industry manipulates public opinion
http://www.healingdaily.com/beliefs.htm
Why you believe what you believe.
PR (public relations) was created to manipulate public opinion. More and more of what we hear, see and read as ‘news’ is actually PR content. On any given day much of what the media broadcasts or prints as news is provided by the PR industry.
There are two kinds of ‘experts’ we’re dealing with:
1)  the PR spin doctors behind the scenes and
2) the ‘independent’ experts paraded before the public, scientists who have been hand-picked, cultivated, and paid handsomely to promote the views of corporations which are involved in controversial actions.

“Third parties” set PR apart from advertising. Stauber and Rampton describe how the tobacco industry first hired movie stars to promote cigarettes and then spent millions of dollars to counter findings that cigarettes cause cancer, a strategy based on testimonials and the so-called third-party technique.


The book, Trust Us We’re Experts also considers the effect big money has on universities and scientific journals, describing instances in which tobacco companies paid 13 scientists $156,000 to write letters to influential medical journals.
People don’t realize how most issues of ‘conventional wisdom’ are scientifically implanted in the public consciousness by a thousand media clips a day.

If everybody believes something, it’s probably wrong. That’s what we call “Conventional Wisdom”. In the U.S., conventional wisdom which has mass acceptance is usually contrived: somebody paid for it. For example:
● “Hospitals are safe and clean”
● “The cure for cancer is just around the corner”
   Pharmaceuticals restore health”
  “America has the best health care in the world”
  “Vaccination brings immunity”
  “When a child is sick, he/she needs immediate antibiotics”
  “When a child has a fever he/she needs Tylenol”
  And many more

Public relations shaping public opinion
In “Trust Us We’re Experts“, Stauber and Rampton point to some compelling data describing the science of creating public opinion in the U.S. They trace modern public influence back to the early part of the 1900’s, highlighting the work of people like Edward L. Bernays, the “Father of Spin”.

[Image at right: Trust Us We’re Experts a book co-authored by John Stauber and Sheldon Rampton of the Center for Media and Democracy, shows how the world’s richest and most powerful corporations are involved in the shenanigans of the public relations industry, which pays, influences and even invents a surprising number of those ‘experts’.]

Edward Bernays layed the groundwork for the fledgling public relations industry in the 1920s to the power it wields over public policy today.

In his book “Propaganda”, Bernays argued that scientific manipulation of public opinion is key. “A relatively small number of persons,” he wrote, “pull the wires which control the public mind.” Bernays believed that “somebody interested in leading the crowd needs to appeal not to logic but to unconscious motivation.”

Bernays dominated the PR industry until the 1940s, and was a significant force for another 40 years following that. During that time, Bernays took on hundreds various assignments to create a public perception about some product or idea. For example, as a new member on the Committee on Public Information, one of Bernays’ first assignments was to help sell the First World War to the American public with the idea to “Make the World Safe for Democracy.”

A few years later, Bernays helped popularize the notion of women smoking cigarettes. Not being one to turn down a challenge, Bernays set up the advertising format, along with the AMA, which lasted for almost 50 years proving that cigarettes are beneficial to health. It’s interesting to look at ads in issues of “Life” or “Time” magazines from the 40s and 50s.

Bernays also popularized the idea of bacon for breakfast.

Bernay’s job was to reframe an issue, to create a certain image which would put a particular concept or product in a desirable light. Bernays described the public as a ‘herd that needed to be led.’ And this herd-like thinking makes people “susceptible to leadership.” Bernays never strayed from his fundamental axiom to “control the masses without their knowing it.” The best PR takes places when the people are unaware that they are being manipulated.

Stauber describes Bernays’ rationale like this: “the scientific manipulation of public opinion was necessary to overcome chaos and conflict in a democratic society.” (“Trust Us We’re Experts” p. 42)
Once the possibilities of applying Freudian psychology to mass media were uncovered, Bernays’s list of corporate clients grew rapidly. Global corporations were eager to court the new Image Makers. There were hundreds of goods and services and ideas to be sold to the susceptible public. Over the years, these players have had the money to make their images happen. Some of those players are:

Monsanto
Philip Morris
DuPont
Pfizer
Dow Chemical
Union Carbide
tobacco industry
General Mills
Allstate
Eli Lilly
Ciba Geigy
Goodyear
lead industry
Coors
Chlorox
Shell Oil
Standard Oil
Procter & Gamble
Boeing
General Motors

The best PR is PR that goes unnoticed.

For decades these “players” have created the opinions most of us were raised with, on virtually any issue which has the remotest commercial value, including:

pharmaceutical drugs,
vaccines,
medicine as a profession,
tobacco,
leaded gasoline,
alternative medicine,
dental amalgams,
pollution of the oceans,
forests and lumber,
images of celebrities  inc. damage control
fluoridation of city water,
aspartame,
chlorine,
household cleaning products,
dioxin,
global warming,
cancer research and treatment,
crisis and disaster management,
genetically modified foods,
food additives; processed foods

Bernays learned early on that the most effective way to create credibility for a product or idea is with “independent third-party” endorsement. For example, if General Motors were to come out and say that “global warming” is a hoax invented by some liberal tree-huggers, the public would suspect GM’s motives, since GM’s fortune is made by selling cars.

If however some independent research institute with a very credible sounding name like the Global Climate Coalition comes out with a scientific report which says that global warming is really a fiction, the public begins to get confused and to have doubts about the issue.

So that’s exactly what Bernays did. With a policy inspired by genius, he set up “more institutes and foundations than Rockefeller and Carnegie combined.” (“Trust Us We’re Experts” p 45)

Quietly financed by the industry giants whose products were being evaluated, these “independent” research agencies would churn out “scientific” studies and press releases which could create any public image their handlers wanted. Such front groups are given important-sounding names like:

Alliance for Better Foods,
Temperature Research Foundation,
Consumer Alert,Industrial Health Federation,Manhattan Institute,
The Advancement of Sound Science Coalition,
International Food Information Council
Center for Produce Quality,
Tobacco Institute Research Council,
Cato Institute,
Air Hygiene Foundation,
American Council on Science and Health,Global Climate Coalition,
International Food Information Council

As Stauber explains in “Trust Us We’re Experts“, these organizations and hundreds of others like them are front-groups whose sole mission is to advance the image of the corporations which fund them.

Public relations and the media
The news media regularly fails to investigate so-called “independent experts” associated with industry front-groups. These front-groups all have important-sounding names like “Consumer Alert” and “The Advancement of Sound Science Coalition,” but they fail to reveal their corporate funding and their propaganda agenda.

Industries’s front-groups promote their agenda in part by an endless stream of “press releases” announcing “breakthrough research” to every newspaper, radio and TV station in the country. Many of these press releases read like news, and indeed are purposely molded in the news format. This saves journalists the trouble of researching the subjects on their own, especially for topics about which they know very little. Entire sections of the press releases can be just lifted intact, without any editing, given the byline of the reporter or newspaper or TV station – and voila! Instant news. Written by corporate PR firms

Does this really happen? It happens every single day, since the 1920s when the idea of the Press Release was first invented by Ivy Lee. (“Trust Us We’re Experts”, p. 22) These types of stories are mixed right in with legitimately researched news stories. Unless you have done the research yourself, you won’t be able to tell the difference.

Words in press releases are very carefully chosen for their emotional impact. A front group called the International Food Information Council handles the public’s natural aversion to genetically modified foods. Who do you think funds the International Food Information Council? Take a wild guess. Right – Monsanto, DuPont, Frito-Lay, Coca Cola, Nutrasweet – corporations in a position to make fortunes from GM foods. (“Trust Us We’re Experts” p. 20)

Science For Hire
Stauber tells the amazing story of how leaded gas came to be. In 1922, General Motors discovered that adding lead to gasoline gave cars more horsepower.
When there was some concern about safety, GM paid the Bureau of Mines to do some fake “testing” and publish “research” that “proved” that inhalation of lead was harmless. This is where Charles Kettering comes in.

Founder of the world-famous Sloan-Kettering Memorial Institute for medical research, Charles Kettering also happened to be an executive with General Motors. By some strange coincidence, we soon have the Sloan Kettering Institute issuing scientific reports stating that lead occurs naturally in the body and that the body has a way of eliminating low-level exposure.

Through its association with PR giant Hill & Knowlton and The Industrial Hygiene Foundation, Sloane Kettering opposed all anti-lead research for years. (“Trust Us We’re Experts” p. 92). For the next 60 years more and more gasoline became leaded, until by the ’70s, 90% of our gasoline was leaded.

Finally, it became too obvious to hide that lead was a major carcinogen, and leaded gas was finally phased out in the late ’80s. But during those 60 years, it is estimated that some 30 million tons of lead were released in vapor form onto American streets and highways. 30 million tons.

I hope this page will help you to start reading newspaper and magazine articles a little differently, and perhaps start watching TV news with a slightly different attitude. Always ask yourself, what are they selling here, and who is selling it?

If the news is dealing with an issue where money is involved, objective data won’t be so easy to obtain. Remember, if everybody knows something, that image has been bought and paid for.

Real knowledge takes a little more effort, a little digging down at least one level below what “everybody knows.”

We are all “conditioned”. What we are exposed to through the media, especially television, does shape our beliefs. Britney Spears is paid millions of dollars to tell us to drink Pepsi because IT ABSOLUTELY WORKS.
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3. How Propaganda Works in the West
11 November 2008, Ed Strong blog.com
http://edstrong.blog-city.com/noam_chomsky_how_propaganda_works_in_the_west.htm
The American approach to social control  is so much more sophisticated and pervasive  that it deserves a new name  It not propaganda any more, it’s “prop-agenda”. It’s not so much the control of what we think, but the control of what we think about.
Remember, children. Propaganda works because we don’t know we’re being propagandized.
How could anyone suggest that in this beacon of ‘freedom and democracy’, the magnificent United States of Amnesia, that we are programmed to follow an ideology?

Propaganda for Dummies
In the West the calculated manipulation of public opinion to serve political and ideological interests is much more covert and therefore much more effective than a propaganda system imposed in a totalitarian regime.
Its greatest triumph is that we generally don’t notice the influence of propaganda — or laugh at the notion it even exists.
We watch the democratic process taking place – heated debates in which we feel we could have a voice – and think that, because we have “free” media, it would be hard for the Government to get away with anything very devious without someone calling them on it.
The American approach to social control is so much more sophisticated and pervasive that it really deserves a new name. It isn’t just propaganda any more, it’s “prop-agenda.” It’s not so much the control of what we think, but the control of what we think about.
When our governments want to sell us a course of action, they do it by making sure it’s the only thing on the agenda, the only thing everyone’s talking about. And they pre-load the ensuing discussion with highly selected images, devious and prejudicial language, dubious linkages, weak or false “intelligence” and selected “leaks”.

With the ground thus prepared, governments are happy if you then “use the democratic process” to agree or disagree — for, after all, their intention is to mobilize enough headlines and conversation to make the whole thing seem real and urgent.
The more emotional the debate, the better. Emotion creates reality, reality demands action.

Keeping the People Passive & Obedient
The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum – even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.

Since the voice of the people is allowed to speak out in democratic societies, those in power better control what that voice says — in other words, control what people think.

One of the ways to do this is to create political debate that appears to embrace many opinions, but actually stays within very narrow margins. You have to make sure that both sides in the debate accept certain assumptions — and that those assumptions are the basis of the propaganda system. As long as everyone accepts the propaganda system, the debate is permissible.

One reason that propaganda often works better on the educated than on the uneducated is that educated people read more, so they receive more propaganda. Another is that they have jobs in management, media, and academia and therefore work in some capacity as agents of the propaganda system — and they believe what the system expects them to believe. By and large, they’re part of the privileged elite, and share the interests and perceptions of those in power.

It is much more difficult to see a propaganda system at work where the media are private and formal censorship is absent. This is especially true where the media actively compete, periodically attack and expose corporate and government malfeasance, and aggressively portray themselves as spokesmen for free speech and the general community interest.

What is not evident (and remains undiscussed in the media) is the limited nature of such critiques, as well as the huge inequality of the command of resources, and its effect both on access to a private media system and on its behavior and performance.

Propaganda & the Ruling Ideology
When a leading journalist or TV news presenter is asked whether they are subject to pressure or censorship, they say they are completely free to express their own opinions. So how does thought control work in a democratic society? We know how it works in dictatorships.

Journalists are an integral part of the ruling ideology. They are so well ‘integrated’ that they can’t see outside the ideological box they inhabit. Their journalism is balanced, fair and tolerant of other points of view. But that is part of the ‘value system’ they are promulgating. ‘Truth’ is their version of the world.

To return to the original question. If one suggests there is censorship in the Western media, journalists immediately reply: “No one has been exerting any pressure on me. I write what I want.” And it’s true.  But if they defended positions contrary to the dominant norm, someone else would soon be writing editorials in their place.

Obviously it is not a hard-and-fast rule: the US press sometimes publishes even my work, and the US is not a totalitarian country. But anyone who fails to fulfill certain minimum requirements does not stand a chance of becoming an established commentator. It is one of the big differences between the propaganda system of a totalitarian state and the way democratic societies go about things. Exaggerating slightly, in totalitarian countries the state decides the official line and everyone must then comply.

Democratic societies operate differently. The line is never presented as such, merely implied. This involves brainwashing people who are still at liberty. Even the passionate debates in the main media stay within the bounds of commonly accepted, implicit rules, which sideline a large number of contrary views.  The system of control in democratic societies is extremely effective. We do not notice the line any more than we notice the air we breathe.

We sometimes even imagine we are seeing a lively debate. The system of control is much more powerful than in totalitarian systems. Look at Germany in the early 1930s. We tend to forget that it was the most advanced country in Europe, taking the lead in art, science, technology, literature and philosophy. Then, in no time at all, it suffered a complete reversal of fortune and became the most barbaric, murderous state in human history. All that was achieved by using fear: Fear of the Bolsheviks, the Jews, the Americans, the Gypsies – everyone who, according to the Nazis, was threatening the core values of European culture and the direct descendants of Greek civilization (as the philosopher Martin Heidegger wrote in 1935).

However, most of the German media who inundated the population with these messages were using marketing techniques developed by US advertising agents. The same method is always used to impose an ideology. Violence is not enough to dominate people: some other justification is required.

When one person wields power over another – whether they are a dictator, a colonist, a bureaucrat, a spouse or a boss – they need an ideology justifying their action. And it is always the same: their domination is exerted for the good of the underdog. Those in power always present themselves as being altruistic, disinterested and generous.

In the 1930s the rules for Nazi propaganda involved using simple words and repeating them in association with emotions and phobia. When Hitler invaded the Sudetenland in 1938 he cited the noblest, most charitable motives: the need for a humanitarian intervention to prevent the ethnic cleansing of German speakers. Henceforward everyone would be living under Germany’s protective wing, with the support of the world’s most artistically and culturally advanced country.

When it comes to propaganda (though in a sense nothing has changed since the days of Athens) there have been some minor improvements. The instruments available now are much more refined, in particular – surprising as it may seem – in the countries with the greatest civil liberties, Britain and the US.

The contemporary public relations industry was born there in the 1920s, an activity we may also refer to as opinion forming or propaganda. Both countries had made such progress in democratic rights (women’s suffrage, freedom of speech) that state violence was no longer sufficient to contain the desire for liberty. So those in power sought other ways of manufacturing consent.

The PR industry produces, in the true sense of the term, concept, acceptance and submission.

It controls people’s minds and ideas. It is a major advance on totalitarian rule, as it is much more agreeable to be subjected to advertising than to torture.

4. Who Really Determines What You Will Or Will Not See On TV Or Read In The Newspaper?
http://www.whoownsthenews.com/
In the early years of our democracy the ‘free press’ was all that stood between greedy corporate interests, government corruption and you and I. While many newspapers were controlled by wealthy individuals such as William Randolph Hearst, who influenced the content of the news in his papers, a kind of journalistic ‘Hippocratic oath’ seemed to prevail across the country as reporters and publishers at small papers usually chose to pursue the truth in reporting.

Local papers, TV stations and radio outlets were owned mostly by local individuals with an interest in their community. That began to change as a powerful institution known as the Council On Foreign Relations gained power and the trend toward total corporate media control rapidly accelerated during the Bush-era with media consolidation.

Suddenly the old rule that one corporation could not own all of the town’s news outlets was gone. Companies like Clear Channel Communications suddenly began to buy up every radio station, TV outlet and newspaper in major markets, effectively controlling everything that people read, watched and heard. The pattern of media consolidation has increased during the last eight years to the point that now only a few corporations control the news that we watch.

He who owns the media, controls the media. With such powerful platforms they are able to drown out independent media and control public opinion and government policy. There can be no freedom without freedom of the press and there can be no freedom of the press if only a few powerful corporations own it.

What Liberal or Right Wing Media? It’s Just Corporate Media.
Who really controls the media? Is the so-called ‘liberal media’ that the’ right’ complains about controlled by Hollywood and liberal special interests? Is Fox News controlled by the Republican Party? If you believe any of these generalizations you are dead wrong and the truth will shock you.

Major multinational corporations, Middle Eastern sovereign wealth funds and Saudi Princes, all hell-bent on protecting their own interests, choose what you will see on the nightly news and trick you into believing it is unbiased reporting. As we see below all the major news outlets, regardless of what they make you believe, contributed heavily to George W. Bush in both 2000 and 2004, so any argument that they are controlled by liberals evaporates. In this case they all supported the candidate that promised to allow consolidation of multiple media companies.

The very news stories that you are fed by the mainstream media are manipulated to mirror the public relations campaigns of companies that operate nuclear plants, sprawling theme parks that gobble up wetlands, defense contractors, oil companies and even Saudi Princes.
Remember the old ‘Outer Limits’ TV shows where the announcer says “We control everything you see and hear, the vertical, the horizontal,” etc? The corporate controlled news media controls all you see and hear.

Below,  are the top twenty media corporations in the U.S. according to mediaowners.com All but two, #18 and #19, are not members of the Council On Foreign Relations.

1. Time Warner Inc.
2. Walt Disney Company
3. Viacom Inc.
4. News Corporation
5. CBS Corporation
6. Cox Enterprises
7. NBC Universal
8. Gannett Company, Inc.
9. Clear Channel Communications Inc.
10. Advance Publications, Inc.

11. Tribune Company
12. McGraw-Hill Companies
13. Hearst Corporation
14. Washington Post Company
15. The New York Times Company
16. E.W. Scripps Co.
17. McClatchy Company
18. Thomson Corporation
19. Freedom Communications, Inc.
20. A&E Television Networks

Question: Who Owns The Media?
Answer:  Industry Giants, Saudi Princes and Australian Robber Barons.
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Here is a breakdown of the “Liberal” media ownership By Corporations:
..
GENERAL ELECTRIC, –Not Just Light Bulbs Anymore
General Electric – NBC (In 2000  they donated 1.1 million to George W Bush for his election campaign)

_TV Holdings:
 •    NBC: Owns outright 13 stations and many affiliates, Market penetration: 28% of US households.
 •   NBC Network News: Owns The Today Show, Nightly News with Tom Brokaw, Meet the Press, Dateline.
 •   CNBC business network, MSNBC 24-hour cable and Internet news service (co-owned by both NBC and Microsoft); Court TV (co-owned with Time Warner), Bravo (50%), A&E (25%), History Channel (25%).
The MS in MSNBC stands for Microsoft, Bill Gate’s Microsoft donated 2.4 million in 2000 to get George W Bush elected.

_Other Holdings:
 •   GE Consumer Electronics and Household Products and components used in military electronics..
 •   GE Power Systems, which makes turbines for nuclear reactors, wind turbines, “clean” coal technology.
 •   GE Plastics: produces military hardware for fighter jets, ships and nuclear power equipment.
 •   GE Transportation Systems: manufactures engines and diesel and electric locomotives.

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WESTINGHOUSE / CBS INC. –  Not Just Fridges Anymore.
Westinghouse Electric Company, part of the large Nuclear Utilities Business Group of British Nuclear Fuels.
Which is Headed By Frank Carlucci of the Carlyle Group. A group with very strong ties to the Bush Administration.

_TV Holdings:
 •   CBS: Owns outright 14 stations and over 200 affiliates in the US.
 •   CBS Network News: 60 minutes, 48 hours, CBS Evening News, CBS Morning News.
•   Country Music Television, The Nashville Network.
•   Group W Satellite Communications.
Other Holdings:
 •   Westinghouse Electric Company: provides services to the nuclear power industry including owning 4 nuclear plants, waste disposal and transport.

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 DISNEY – ABC Not just cartoon characters, ‘Worlds’ or family movies anymore.
(Donated $640,000 to George W Bush’s 2000 political campaign)

_TV Holdings:
 •   ABC: includes 10 stations outright, many affiliates, Penetration in the market: 24% of US households.
•   ABC Network News: Prime Time Live, Nightline, 20/20, Good Morning America.
•   ESPN, Lifetime Television (50%), as well as smaller holdings in A&E, History Channel and E!
•   Disney Channel/Disney Television, Touchtone Television.

_Other Major Media Holdings.
 •   Miramax, Touchtone Pictures.
•   Major Magazines: Jane, Los Angeles Magazine, Discover.
•   Three recording labels, twelve major local newspapers.
•   Hyperion books.
•   Infoseek search engine.

Major shareholders include Sid R. Bass, oil and gas baron.
Disney’s environmental and social record: Source wikipedia.org

The company has been accused of human rights violations regarding the working conditions in factories that produce their merchandise. Numerous environmental groups in Florida and California have criticized development procedures used in building theme parks including damage to wetlands.

An environmental management plan for a zone of Great Guana Cay, in the Abaco Islands, criticized Disney for poor management of a 90-acre (36.4 ha) tract of the island. Disney partially developed, but then abandoned the place, which was to have been a cruise ship resort called Treasure Island. The report, by the University of Miami and the College of the Bahamas, blames Disney for leaving hazardous materials, electrical transformers, and fuel tanks, and for introducing invasive alien plants and insects that threaten the natural flora and fauna of the island.
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TIME-WARNER TBS – AOL (In 2000 they donated 1.6 million to George Bush’s political campaign)
“Time, Not Just On The Coffee Table Anymore”.
America Online (AOL) acquired Time Warner which was the largest merger in corporate history.

_TV Holdings:
 •   CNN, HBO, Cinemax, TBS Superstation, Turner Network Television, Turner Classic Movies, Warner Brothers Television, Cartoon Network, Sega Channel, TNT, Comedy Central.
•   Largest cable system owner with an estimated 13 million households.

_Media Holdings:
 •   HBO Productions, Warner Home Video, New Line Cinema, Castle Rock, Looney Tunes, Hanna-Barbera.
•   Music: Atlantic, Elektra, Rhino, Sire, Warner Bros. Records, EMI.
 •   Thirty three major magazines including Time, Sports Illustrated, People Magazine, In Style, Fortune, The Book of the Month Club, Entertainment Weekly, Life Magazne, DC Comics, MAD Magazine.

_Other major corporation Holdings:
   Sports Teams and Wrestling: The Atlanta Braves, The Atlanta Hawks, World Championship Wrestling.
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NEWS CORPORATION LTD. / FOX NETWORKS (Rupert Murdoch, numerous donations. On Board of Directors of Phillip Morris, Phillip Morris Donated 2.9 million to Bush’s campaign.
Why did Australian Rupert Murdoch forsake his native country and become a U.S. citizen? Reportedly it was because he could save on taxes and start over in virgin territory after leaving behind so much scorched earth in the Australian economy as he laid waste to his business opponents and bought up media outlets. Or perhaps it was just so he could get around foreign media ownership laws. (Which no longer exist.)

Does a Saudi billionaire actually have the power to control the news on the Fox network, of which he is a part owner?

_Major Television Holdings:
 •    Fox Television: includes 22 major and many affiliate stations, Penetration into more than 60% of US households.
•    Fox International: extensive worldwide cable and satellite networks include British Sky Broadcasting (40%); VOX, Germany (49.9%); Canal Fox, Latin America; FOXTEL, Australia (50%); STAR TV, Asia, IskyB, India; Bahasa Programming Ltd., Indonesia (50%); and News Broadcasting, Japan (80%), major owner of DirecTV.
•   The Golf Channel (33%).

_Other Major Media Holdings:
 •   Twentieth Century Fox, Fox Searchlight.
•   132 major newspapers (113 in Australia alone) including the New York Post, the London Times and The Australian.
•   Owns 25 magazines including TV Guide and The Weekly Standard.
•   Owns Harper Collins books.
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_Other major corporation holdings around the world:
 •    Sports: LA Dodgers, LA Kings, LA Lakers, National Rugby League.
•   Ansett Australia airline, Ansett New Zealand airlines.
•    Rupert Murdoch is on the Board of Directors of Philip Morris, a major Bush donor.
It’s no surprise that corporate robber baron Rupert Murdoch is a major Bush supporter, but who else owns Fox News?
•   Prince al-Walid bin Talal owns 5.5% of Fox News.  Prince al- Walid bin Talal stated recently that he used his influence to change Fox’s headlines. During the recent riots in Muslim neighborhoods in France Fox was using the term “Muslim Riots” to describe rioting by Muslim youths and Prince bin Talal claims that called Fox News had them change the title of the story to “Youth Riots”.
Source. worldnetdaily.com [Image at left.]

 •   In another instance, where supposedly conservative Fox News should have been up in arms, was the deal by a United Arab Emirates holding company to buy U.S. ports. Suddenly Fox went from being against the deal to very supportive of a deal that would have put US container ports in foreign hands.
A U.A.E. sovereign wealth fund also owns major shares of Fox.

The “good ole boys” that hang on every word that Sean Hannity and Bill O’Reilly utters might not be so happy when they hear who is whispering in their idol’s ears.
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The Council On Foreign Relations and What It Has To Do With Corporate Control Of The News CFR Seal.
What do Dan Rather, Barbara Walters, Jim Lehrer, Rupert Murdoch, Tom Brokaw and the late William F. Buckley have in common? They are all members of the CFR, The Council On Foreign Relations. The stated goal of the CFR is to manipulate the News to bring about a new world order or corporate control of everything. This is not some weird conspiracy theory, it is stated in their original charter.
Who else belongs to the CFR, Disney’s Michael Eisner and ABC’s Thomas Murphy, Tom Johnson, CEO of CNN, Time Warner’s Gerald Levine, and many, many more media CEO’s who have merged their empires under the CFR’s guidance.

Freedom of the press is vital to our democracy. We need to prevent things like media consolidation, where one company is allowed to own all the news outlets in any given market. Speak up and stop the corporate robber barons and the CFR from taking that right away from us.

[Sorry to say, but the horse is already out of the barn, the time for prevention has passed. Modern freedom of choice really is part of the milieu we find ourselves in: a slow, social, economic, environmental and democratic death by 1000 cuts. Mr Larry]

2 Comments

Filed under Survival Manual, __2. Social Issues

Modern Competition: Part 3 of 3 (Illegal Immigration & Free Trade)

(Survival Manual/ 2. Social Issues/ Death by 1000 cuts/ Modern Competition: Part 3 of 3)

Topics:
Part I
1.  College and future income

2.  Consumer debt

Part II
3.  Wage slaves

Part III
4.  Illegal (Mexican) immigration
5.  Free trade & globalization
.

4 . Illegal (Mexican) immigration

A.     Illegal Immigration
1 Sep 2010, SHTF Plan.com
“…With a 10% unemployment rate, nationally, estimated by the government; it means there are more than 35 million Americans out of work. At more than 16% unemployed based upon Shadow Stats analysis, it means that more than 50 million Americans are out of work, while presumably, 30 million Illegal Latinos are still working. If these 30 million Illegal’s are not working in American jobs, what the hell are they doing here to survive? And if they are working in American jobs, why is this acceptable to our federal government?

Many false arguments arise with respect to the employment picture. The biggest fallacy is that these Latino foreign nationals are taking jobs Americans don’t want. Does any American citizen really believe that there are 30 million Latino “lettuce pickers” in the United States?

 

A.  “Legal vs Illegal
(–from the web: anonymous)
You have two families: “Joe Legal” and “Jose Illegal”. Both families have two parents, two children, and live in California . Joe Legal works in construction, has a Social Security Number and makes $25.00 per hour with taxes deducted. Jose Illegal also works in construction, has NO Social Security Number, and gets paid $15.00 cash “under the table”.

Ready? Now pay attention . . .

Joe Legal: $25.00 per hour x 40 hours = $1000.00 per week, or $52,000.00 per year. Now take 30% away for state and federal tax; Joe Legal now has $31,231.00.
Jose Illegal: $15.00 per hour x 40 hours = $600.00 per week, or $31,200.00 per year. Jose Illegal pays no taxes. Jose Illegal now has $31,200.00.

Joe Legal pays medical and dental insurance with limited coverage for his family at $600.00 per month, or $7,200.00 per year. Joe Legal now has $24,031.00.
Jose Illegal has full medical and dental coverage through the state and local clinics at a cost of $0.00 per year. Jose Illegal still has $31,200.00.

Joe Legal makes too much money and is not eligible for food stamps or welfare. Joe Legal pays $500.00 per month for food, or $6,000.00 per year. Joe Legal now has $18,031.00.
Jose Illegal has no documented income and is eligible for food stamps and welfare. Jose Illegal still has $31,200.00.

Joe Legal pays rent of $1,200.00 per month, or $14,400.00 per year. Joe Legal now has $9,631.00.
Jose Illegal receives a $500.00 per month federal rent subsidy. Jose Illegal pays out that $500.00 per month, or $6,000.00 per year. Jose Illegal still has $ 31,200.00.

Joe Legal pays $200.00 per month, or $2,400.00 for insurance. Joe Legal now has $7,231.0
Jose Illegal says, “We don’t need no stinkin’ insurance!” and he still has $31,200.00.

Joe Legal has to make his $7,231.00 stretch to pay utilities, gasoline, etc . . .
Jose Illegal has to make his $31,200.00 stretch to pay utilities, gasoline, and what he sends out of the country every month.

Joe Legal now works overtime on Saturdays or gets a part time job after work.
Jose Illegal has nights and weekends off to enjoy with his family.

Joe Legal’s and Jose Illegal’s children both attend the same school.
Joe Legal pays for his children’s lunches while Jose Illegal’s children get a government sponsored lunch.

Jose Illegal’s children have an after school ESL program.
Joe Legal’s children go home.

Joe Legal and Jose Illegal both enjoy the same police and fire services, but Joe paid for them and Jose did not pay.”
..

B.  Income Gap Growing in Texas, Group Says. Illegal Aliens and a Spineless Government the Cause, I Say!
Friday, May 16, 2008
<http://theunloadingzone.blogspot.com/2008/04/income-gap-growing-in-texas-group-says.html&gt;

The Dallas Morning News recently did an article on how the gap between Rich and Poor in Texas is growing. REALLY? You’re just noticing that now?
In Texas the gap between rich and poor is growing. Not only is it true, but they define “rich” as $124K per year and poor at $16K per year. Texas rich is upper middle class up north….barely. And Texas poor, well you tell me how anyone can support a family on $16K a year.

The article ends: “You can either live in Texas, where you may be poor but you have lots of job opportunities, or you can do what these people propose and turn us into Michigan or Illinois, which are hemorrhaging jobs,” he said. “There, if you’re poor, you stay poor.” .

That’s because they’re not over-run with millions of illegal aliens working below the minimum wage for cash. That’s because employers get away with hiring them every day.

It’s because Governor Perry and TxDot are turning every road and highway in what was middle class Texas into “lucrative” toll roads. And that’s their plan for the future…..toll, toll, toll. Why?
We have Fund 6 where all the gas tax money is SUPPOSED to be going, but instead is being siphoned off for other “projects”. Gas prices are 2 weeks away from $4/gallon for regular. In Collin County, STATE HIGHWAY 121 (not supposed to be a toll road), when complete, will cost the average user $1800 a year for their work commute.

The middle class is systematically being wiped out. Sales taxes are at 8.25% and, unlike most States, food and clothes are not exempt. What was the middle class has no discretionary income; no dinners out; no movies. The solution? BRING IN MORE Illegal Aliens! But at least we can brag we don’t have a State Income Tax.

It’s because Texas is re-fighting the Mexican-American War alone and losing. Texas is losing its identity, it’s heritage, it’s culture, and it’s standard of living. Crime rates are up, taxes are up paying to educate, feed, house, and provide free health care for people not legally allowed in this country in the first place.

The Feds don’t care. The Dept. of Homeland Security is such a tangled bureaucratic mess that even divisions like ICE don’t know what they’re responsible for. And the politicians: all they know is Hispanics will be the majority racial group in this country by 2060 and they want those votes at any cost.

They talk about “amnesty”. Ronald Reagan, a giant of a man, badly miscalculated when he gave a million Hispanics amnesty in 1986. I spoke to the Regional Director of ICE recently: they are STILL trying to process those illegals from 22 years ago!
How are we going to give amnesty to 12-18 million more illegals? That will take centuries!

And Texas is losing because it’s culture is passive-aggressive. With a very few exceptions, people and towns take action. Most just smile and say how wonderful diversity is in public, and then go home and rant and rave. So much for the myth of the “plain-spoken Texan”.
Meanwhile, half the jobs advertised require bi-lingual language skills, there are Spanish-Only billboards and signs popping up every day, and the people do nothing.…while the small to medium sized business community cashes in.

And now even the big box retailers are joining in. Walmart has more Spanish signage than English in many of their stores. And you can walk the entire length of the store and never hear a word spoken in English. So much for the melting pot theory.  What a Great TV Ad for Texas this article would make! I’m sure all the local Texas Chambers of Commerce loved it too.
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5.  Free Trade

A.  How “Free Trade” Ruined America
28 February 2011, The Drifting Ship: The U.S. and Global Economy
http://fsuchick86.blogspot.com/2011/02/how-free-trade-ruined-america.html

The one question that is running rampant in class is, “Where are the jobs, professor?”
How will America get jobs back in America? How do we jump start the American economy without deficit spending? It appears that all economists — at least the ones teaching — haven’t an answer. It’s all about finding the right “incentives” and “business environment” and BAM… back to the booming 1980s. But perhaps it’s due to the entire economics profession selling out to Wall Street interests or corrupted by age-old economic doctrinaires that DO NOT work in the “real world.”

I, however, offer a different take on why there are no jobs in America and it has to do with “free trade” and the practice that Wal-Mart aka “the Temple of More” is notorious for… outsourcing.

[Image above: Our exports]

Today, economists are blind to the loss of American industries and occupations because they believe these results reflect the beneficial workings of “free trade.” Whatever is being lost, they think, is being replaced by something as good or better. This thinking is rooted in the doctrine of comparative advantage put forth by David Richardio in 1817. In sum, it states that, even if a country is a high-cost producer of most things, it can still enjoy an advantage, since it will produce some goods at lower relative cost than its trading partners.

Today’s economists leading the pack and teaching in academia can’t identify what the new industries and occupations might be that will replace those that are lost (manufacturing), but they’re certain that those jobs and sectors are out there somewhere. We just have to look a little bit harder. What does not occur to them is that the same incentive that causes the loss of one tradable good or service — cheap, skilled foreign labor — applies to all tradable goods and services. But there is no reason that the “replacement” industry or job, if it exists, won’t follow its predecessor offshore.

For comparative advantage to work, a country’s labor, capital, and technology must NOT move offshore. This international immobility is necessary to prevent a business from seeking an absolute advantage by going abroad. The internal cost ratios that determine comparative advantage reflect the quantity and quality of the country’s technology and capital. If these factors move abroad to where cheap labor makes them more productive, absolute advantage takes over from comparative advantage.

This is what is wrong with today’s debate about outsourcing and offshore production. It’s not really about trade, but about labor arbitrage. Companies producing for U.S. markets are substituting cheap labor for expensive U.S. labor. The U.S. loses jobs and also the capital and technology that move offshore to employ the cheaper foreign labor. Many economists argue that this loss of capital does not result in unemployment but rather a reduction in wages. The remaining capital is spread more thinly among workers, while the foreign workers whose country gains the money become more productive and are better paid.

Economists like to call this wrenching adjustment short-run “wage adjustments.” But when the loss of jobs leaves people with less income but the same mortgages and debts, upward mobility collapses. Income distribution becomes more polarized to the upper tiers of society, the tax base is lost, and the ability to maintain infrastructure, pension funds, and public commitments is reduced. Nor is this adjustment just short-run. The huge excess supplies of labor in India and China mean that American wages will fall a lot faster than Asian wages will rise for a long time. That is economic reality.

Until recently, advanced economies retained their capital, labor, and technology. Foreign investment occurred, but it worked differently from outsourcing. Foreign investment was confined mainly to the world’s advanced economies. Its purpose was to avoid shipping costs, tariffs, and quotas, and thus sell more cheaply in the foreign market. The purpose of foreign investment was not offshore production with cheap foreign labor for the home market.

When David Ricardo developed the doctrine of comparative advantage in 1817, climate and geography were important variables in the economy. The assumption that factors of production were immobile internationally was realistic. Since there were inherent differences in climate and geography, the assumption that different countries would have different relative costs of producing tradable goods was also realistic.

Today, acquired knowledge is the basis for most tradable goods and services, making the Ricardian assumptions unrealistic. Indeed, it is not clear where there is a basis for comparative advantage when production rests on acquired knowledge. Modern production functions operate the same way regardless of their locations. There is no necessary reason for the relative costs of producing manufactured goods to vary from one country to another. Yet without different internal cost ratios, there is no basis for comparative advantage.

Outsourcing is driven by absolute advantage. Asia has an absolute advantage because of its vast excess supply of skilled and educated labor. With American capital, technology, and business know-how, this labor can be just as productive as American labor, but workers can be hired for much less money. Thus, the capitalist incentive to seek the lowest cost and most profit will seek to substitute cheap labor for expensive labor. India and China are gaining, and America is losing!
Until outsourcing is reversed one should not expect jobs to return to America any time soon. That is just something I like to call the harsh economic reality of 2011!

B.  Cost of US ‘free’ trade: collapse of two centuries of broadly shared prosperity
April 1, 2011, The Christian Science Monitor, By Ian Fletcher
http://www.csmonitor.com/Commentary/Opinion/2011/0401/Cost-of-US-free-trade-collapse-of-two-centuries-of-broadly-shared-prosperity

It’s time to face a brutal truth about the American economy: Even if rising gas and food prices don’thasten a double dip recession, our 200-year tradition of broadly shared prosperity is over. That’s because the great American job machine has been destroyed by a reckless free-trade policy.

Since the end of the cold war, and accelerating after NAFTA in 1994, Washington has pursued a globalized economy made possible by ever-expanding “free” trade agreements. This policy is a major factor in America’s increasing inequality, our rising indebtedness, community abandonment, and the weakening of the industrial sinews of our national security.
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[Photo above: Our imports]

About to crumble
The good news is that this global order of free trade is about to crumble – within the next 10 years at most. The unsustainable American trade deficit alone makes this a near-certainty.
For now, though, America’s economy continues to struggle because our trade deficit – fluctuating around $500 billion a year for a decade now – acts as a giant “reverse stimulus.” It causes a huge slice of domestic demand to flow not into domestic jobs but foreign wages.

Our trade deficit helps Guangdong, Seoul, Yokohama, even Munich – but not Gary, Indiana, Fontana, California, and the other badlands of America’s industrial decline. Washington’s response? Yet more stimulus, leading to an ever-increasing overhang of debt, both foreign and domestic, the cost of whose servicing then exerts its own drag on recovery.

Despite the 216,000 jobs added last month, the American economy has, in fact, entirely lost the ability to create jobs in tradable sectors. This cheery fact comes straight from the Commerce Department. All our net new jobs are in non-tradable services: a few heart surgeons and a legion of busboys and security guards, most of them without health insurance or retirement benefits.

These are dead-end jobs, and our economy as a whole is being similarly squeezed into dead-end industries. The green jobs of the future? Gone to places like China, where governments bid sweeter subsidies than Massachusetts can afford. Nanotechnology? Perhaps the first major technology in a century where America is not the leading innovator. Foreign subsidies are illegal under WTO rules, but no matter: Who’s going to enforce them when corporate America is happily lapping at their very trough?

Part of the problem is that today’s free-trade order is in reality a curious mixture of genuinely free trade practiced by the United States and a few others with the technocratic mercantilism of surging East Asia and Germanic-Scandinavian Europe. It wasn’t always like this.

A history of protection
From 1790 to 1945, America grew and prospered in a largely protected economic environment. Our trade then was not “free.” But after World War II, we wandered away from Alexander Hamilton’s vision of a relatively self-contained American economy in order to win the cold war. We threw our markets open to the world as a bribe not to go communist. If we fail to return to a policy of strategic, not unconditional, economic openness, we may lose the next cold war – to a Confucian authoritarianism no less opposed to the idea of a free society than Marxism, and considerably more efficient.

There is an appropriate policy response. For starters, the US should apply compensatory tariffs against imports subsidized by currency manipulation, an idea that originated with Kevin Kearns of the US Business and Industry Council and was recently passed by the House of Representatives. Also essential is a border tax to counter foreign export rebates implemented by means of foreign value-added taxes.

The fundamental reality of free trade is that it relieves corporate America from any substantial tie to the economic well-being of ordinary Americans. If corporate America can produce its products anywhere, and sell them anywhere, then it has no incentive to care about the capacity of Americans to produce or consume. Conversely, if it is tied to making a profit by selling goods made by Americans to Americans, then it has a natural incentive to care about American productivity and consumption.

Productivity and consumption are prosperity. [Think about that. The US has lost productive capacity,  there are less production jobs, unemployment has increased considerably and become a structural problem (very long term), the US dollar is declining in value–prosperity is slowly evaporating, like soil moisture before an expanding drought . Mr Larry]

C.  Globalization and American Wages: Today and Tomorrow
October 10, 2007, EPI Briefing Paper #196 Globalization and American Wages
Today and Tomorrow,  by L. Josh Bivens
<http://www.epi.org/publications/entry/bp196/&gt;

The continuing integration of the rich United States with a far poorer global economy has provoked much anxiety among American workers. Because it is well-known that basic economic theory predicts that global integration leads to gains for all nations, this anxiety is often treated as a political puzzle. A once again fashionable explanation for this puzzle is that globalization’s benefits are huge but diffuse (primarily, lower prices for imported goods), while its costs are small but concentrated (workers displaced by imports); hence, the gains are hard to see, but the losses are all too visible.1

This Briefing Paper reexamines what conventional economics actually predicts about the effects of integrating the rich United States and poor global economies. Contrary to popular rhetoric, there is no puzzle to be explained: conventional economic theory argues that American workers will indeed be harmed by this integration—and their anxiety is well-founded.

The paper also provides rough empirical estimates of integration’s effect on American wages and inequality. Lastly, it uses some prominent forecasts about the future potential reach of service-sector offshoring to make a very rough guess as to the future wage implications of these forecasts.

The key findings indicate:
•  In 2006, the impact of trade flows increased the inequality of earnings by roughly 7%, with the resulting loss to a representative household (two earners making the median wage and working the average amount of hours each year) reaching more than $2,000. This amount rivals the entire annual federal income tax bill paid by this household.
•  Over the next 10-20 years, if some prominent forecasts of the reach of service-sector offshoring hold true, and, if current patterns of trade roughly characterize this offshoring, then globalization could essentially erase all wage gains made since 1979 by workers without a four-year college degree. [A couple decades ago, wives went to work to supplement the erosion of a one income family, that 2nd income is now rapidly eroding; over the next decade or so, lower class  and less fortunate children may again need to return to work ‘to help make ends meet’. Mr Larry]

[Before 1938 (when the US Child Labor Laws were enacted), a great many American children worked to help support their families. More recently, because of the loss of substantial numbers of good paying US production jobs, increasing energy prices as we decline from Peak Oil, the US household donsumer debt structure, and erosion of income from 2 income families–we may again see pictures comparable to the one above. When Amazon and Apple market shares tank and Walmart scales back it inventory and floor space, look for a line of ‘Made in USA’, young teens ‘rough and ready work dungarees’ at your favorite clothing retailler.]

Globalization’s real costs: not just unemployment or adjustment
Some readers may think these results are obvious. Nobody, for example, denies that, say, U.S. steel workers displaced by import competition face hardship from trade. These costs, however, are often thought to be small and manageable with temporary government assistance.

This is, however, a radical understating of globalization’s costs. Note that the above example did not take into account the adjustment cost of workers’ unemployment spell between jobs. These adjustment costs are, of course, real and should be of concern to policy makers, but they are not the first-order costs of globalization to American workers.

Rather, the losses identified above are permanent wage-loss suffered by labor in this simple economy. Empirical studies in the trade and wages debate have generally used production and non-supervisory labor as a proxy for labor in the United States, and non-production and supervisory labor as a proxy for professionals. Occasionally, workers with a 4-year college degree stand in for professionals, with the rest of the workforce standing in for labor.

Production workers constitute roughly 75% of the entire U.S. workforce, and workers without a four-year college degree constitute roughly 70% of this workforce. Hence, while gross gains may exceed gross losses in the U.S. as global integration proceeds, it is not necessarily the case that winners outnumber losers. Global integration, in short, has the potential to inflict permanent harm to most American workers, and the scale of this harm is much larger than commonly realized.

[Sooner, or later, we’ll return to the time honored, ‘old fashion way’ of competing – by production, work, scrimping to save, investing wisely and personal responisbility…Mr. Larry]

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Filed under Survival Manual, __2. Social Issues

Modern Competition: Part 2 of 3 (Wage Slaves)

(Survival Manual/ 2. Social Issues/ Death by 1000 cuts/ Modern Competition: Part 2 of 3)

Topics:
Part I
1.  College and future income
2.  Consumer debt

Part II
3.  Wage slaves

Part III
4.  Illegal (Mexican/Central American) immigration
5.  Free trade & globalization
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3.  Wage Slaves

A.      What is a wage slave?
<http://www.whywork.org/about/faq/wageslave.html&gt;

So what exactly is a wage slave? It’s doubtful that you’d be exploring this web site if you didn’t have some idea at least, but for the sake of ease, we’ll clarify further.
Here are some brief and incomplete definitions from CLAWS members:
•  “Wage slavery is the state where you are unable to perceive choices and create courses of action different from the grind of the job.”
•  “Wage slave: A wage earner whose livelihood is completely dependent on the wages earned.”

The point here, of course, is that we don’t have a single agreed-upon definition of wage slavery. Many of us prefer to focus on wage slavery as a state of mind, while others prefer to focus on the external aspects of wage slavery such as the wage economy. But overall, we seem to sense something rotten at the core of what we’ve been taught about “making a living”, and that’s the place to begin our questioning.

Have you ever noticed how many of us seem to live “lives of quiet desperation”, as Henry David Thoreau puts it? We feel trapped by forces beyond our control, trapped in a mindless job, for the sake of money, status or recognition. We complain that we never seem to have the time for what’s really important to us, because our jobs take so much energy and focus that we hardly have anything left over. We plod along day to day; sometimes we even dread getting out of bed in the morning.

We see the futility of the standard, socially approved path in America. It goes something like this: Go to school, get good grades, so you can get a “good” job, make lots of money, get a mortgage and a car and a spouse, keep up with the Joneses, and be “successful”. We know it’s not the path for us; we want to define success for ourselves. But we don’t know how to forge a new path for ourselves, because, well, what would we do for money if we quit? How would we support ourselves? Sometimes there’s a glazed look in our eyes; it’s as if some part of us has died. We are just doing time, working hard and hoping for the next promotion, waiting for the day when we can throw off our shackles, quit our dull jobs, and finally live life. Everything gets put on hold until we have more time, or more money. Meanwhile, life is passing us by.

Perhaps you are one of these people. If so, CLAWS (Creating Livable Alternatives to Wage Slavery) was created for your benefit. We have news for you: You do not have to live your life that way. CLAWS is here to inspire you to greater fulfillment, and to help you figure out how to get out of the endless cycle of living paycheck to paycheck and feeling chained to a job you don’t care about.

We have other news, too: It won’t necessarily be the easiest thing you’ve ever done. You have a choice, but you may have to re-examine your way of thinking very thoroughly. The pull of the socially accepted way of doing things is amazingly strong, and trips up the best of us despite our good intentions. It takes a certain kind of independent thinker to be “job-free”. We use that term rather than “unemployed”, in an effort to convey to people that we’re proud, not ashamed, of not having regular jobs. We also make an important distinction between jobs and work. All of us do some kind of work, though not necessarily for monetary compensation.

Another thing you’ll need if you decide to rethink your beliefs about jobs and money is the willingness to challenge conventional wisdom. It will take perseverance, and a commitment to throw out the limiting beliefs you may have unwittingly adopted. This is not the path for everyone. If your priority is comfort or social approval, or if you’re the sort of person who doesn’t rock the boat, CLAWS probably won’t meet your needs.

If you embark on this path, it’s important to know what it will ask of you. It may require you to disassemble, dissect, and tear apart your old beliefs, let go of some mighty persistent and tempting illusions, and build a new foundation for your thinking, sometimes from scratch. Are you prepared to do this? If so, you’re in the right place.

Even if you have seen through the false sense of “security” a normal job offers you, and already questioned that approach to life, you may not really believe you can do it. You may still have questions about how to bridge the gap from the old way of life to a new one that you envision. That’s where we can help, dear reader. CLAWS would like to see you devote yourself to the life you’ve dreamed of, the life your heart desires. We don’t want to see you waste your precious days any longer. Life is short, and the time to pursue your dreams is NOW.

In the words of Norman Cousins:
“Death is not the greatest loss in life. The greatest loss is what dies inside us while we live.”
“The debt and work cycle is an ingenious tool of subjugation. Make people think they need all these things, then they must have a job, and they give up control of their lives. It’s as simple as that. We live in one of the most free countries in the world, but we fix it so we are not free at all

Larry Roth
“Capitalism only supports certain kinds of groups, the nuclear family for example, or ‘the people I know at my job’, because such groups are already self-alienated & hooked into the Work/Consume/Die structure.”

Hakim Bey
“Supposing we suddenly imagine a world in which nearly everybody is doing what they want. Then we don’t need to be paid in order to work and the whole issue of how money circulates, how we get things done, suddenly alters.”

Robert Theobald
When survival or mere subsistence is at stake, a society can focus only on the overwhelming needs of the moment, and questions of meaningful work and leisure are considered purely academic. But we believe that the world has enough wealth to move all of humanity above survival and subsistence.”
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B.  Modern Day Slavery, or Debt Slavery
Saturday, January 3, 2009, by Patent Attorney Robert Platt Bell
http://livingstingy.blogspot.com/2009/01/modern-day-slavery-or-debt-slavery.html

When I discuss Modern Day Slavery, or Debt Slavery, some people freak out, or even say such talk is racist, or some such nonsense. In reality, Slavery has existed for millennia. In the old days of Leviticus and such, slaves were not necessarily Black, but merely folks, who, for one reason or another, found themselves indentured. Typically, invading armies would enslave foes, usually people they deemed to be of lesser intelligence and value.

It was only until the 18th Century that Slavery became associated as a Black-only thing. But the roots remained the same – a view by the slave-masters that they were superior to the enslaved. And even then, the enslavement of Africans was a follow-on to the practice of indentured servitude, which was promulgated in the New World. Once the settlers in the New World ran out of indentured servants, taking Africans as slaves seemed like a natural next step. Debt-slavery conditioned people to accept actual slavery – which is troubling, given the conditions in the world today.

Even today, slavery exists in the world, albeit in a much smaller scale. Oppressed people are coerced into slave-like conditions. The traffic in human misery continues, as women are forced into prostitution, or the poor are kept as virtual hostages as housekeepers and servants in some countries – sometimes even in the US!

But that is not what I am talking about here. While those types of modern-day slavery exist and are deplorable, they are not as common as what might be called Debt Slavery – the defacto condition of servitude that many in this country (and others) find themselves in as the result of economic conditions and consumer debt. While Debt Slavery is certainly not on the level of the traffic in human flesh, it can be debilitating and devastating to its victims. And since it is far, far more widespread, one could argue that Debt Slavery is a greater harm overall.

The conundrum of Debt Slavery is that most victims willing fall into it, through their own actions and by yielding to easily-offered temptation. And like traditional slavery, it disproportionally affects minorities, the poor, and the less educated. However, even white, middle-class folks can end up selling their souls to “the man”.

What is Debt Slavery?
In England in the 1700’s, one could literally fall into a real form of Debt Slavery. If one failed to pay the bills and went bankrupt, not only would you lose all your worldly possessions, one could be forced into the workhouse or jail (debtor’s prison) until the debt was considered “paid” or a prison sentence served. Like in antebellum slavery, children were often separated from their parents (as in Dickens’ Oliver Twist) and literally sold.

Reforms brought about in part by stories like Dickens’ have made bankruptcy less harsh. We no longer throw debtors into prison or take them to the workhouse. However, even a lavish prison is still a prison, and many folks in modern America find themselves in perpetual debt. If real slavery were legalized tomorrow, within a few years, a staggering proportion of Americans would end up as slaves, all because of the inability to control spending. People would literally sell themselves into bondage, all for a wall-screen TeeVee.

Debt Slavery might be defined as a condition of perpetual debt, which in turn forces a person to perpetually work in order to pay off this perpetual debt. It is a condition in which a large percentage of a person’s labor (one third or more) is devoted to servicing debt – most of which is payment of interest on debt. A person in Debt Slavery never gets ahead, since as soon as one debt is paid off, another is incurred. A person in Debt Slavery never owns anything, they only owe.

And while reforms since Dickens’ time have made the poorhouse and the debtor’s prison things of the past, recent “reforms” to bankruptcy laws have made it nearly impossible to get out from some debts, particularly student loan debts. The old days, where debts were “wiped clean” are largely past. And as a result, we have created a nation of perpetual debtors, who are forever trying to “work out” their past debts, never to get ahead.

How Do People Become Debt Slaves?
One of the most puzzling thing about Debt Slavery is that most, if not all, people who fall victim to this condition willingly sign up for it. In exchange for shiny consumer goods (cars, boats, televisions, clothes, etc.) they sign their lives away, so that they can have it all “now” rather than later. Often this means paying two, three, or four times as much for an article than its actual retail price.

So, for example, a person buys a brand new car, signing up for three or four years of car payments. With interest, they easily pay 1-1/2 times the retail price of the car. Compared to the same car purchased used, they pay double the value of the car. Throw in the added cost of collision insurance over the life of the loan, and (for young people in particular) they can end up paying four or five times the value of the car.

They signed up for this to satisfy the need of the ego to have something new and shiny – and because of weakness – the inability to say “no” to a persuasive salesman. It also is a result of ignorance, or lack of experience or training. Car salesmen and dealers are not going to point out the economic folly of such a transaction. And yet the victim sees all his peers doing the same thing, so he thinks, “This must be an OK deal, right?” Wrong, of course.

Once the process starts, it worsens. Paying too much for one item, like a car, leaves the victim with less money to spend on other essentials, such as car maintenance. When the car is finally “paid for” (or even before) it is in such bad shape that the victim goes back to the dealer to “trade in” – often on onerous terms. Since the car may be worth less than the balance of the loan, sometimes the “negative equity” is folded into a new loan. As the creditworthiness of a Debt Slave is always suspect, and the balance on the loan exceeds the value of the new car, the terms of the loan (interest rate) are staggering.

But the debt slave, seeing only a monthly payment and a shiny new car, signs the papers and kids themselves they are “ahead” of their neighbor who owns and older, paid-for car.
The car scenario is only one major example, and an example of how debt can snowball out of control. Granted, most people don’t end up being scammed as badly as in my example above. But that example is based on the real-world experiences of a friend of mine, so I can say that it does happen.

How Do People Remain Debt Slaves?
Once people get into Debt Slavery, it is very, very difficult to get out. Institutions cater to the Debt Slave and continually entice them to staying in its grasp. Once a credit rating is shot, only the worst sort of financing is available to the Debt Slave – interest rates of 20-30% or more.

Catering to the “I have to have it NOW” mentality, enterprises such as Rent-To-Own furniture and appliances sell consumer goods to the Debt Slave for 2-3 times their real market value. A recent trend and extension of this concept is the Rent-To-Own Rims (car wheels) that enslave their victims in exchange for what is literally bright shiny and cheaply made trinkets. The Manhattan Indians were tricked in a similar manner, swapping the Island of Manhattan for $24 worth of beads and trinkets. In the cities today, young men do the same thing for cheap Korean-made “bling” rims.

Of course, once the process starts, the Debt Slave is short of money. Financing companies fill in the gap by providing payday loans, often at interest rates of 300% or more. Each payday loan is folded over into another loan, and never paid off. Tom Wolfe wrote about this practice back in the 1930’s in Look Homeward Angel, in which an unscrupulous local lawyer would loan $20 to the poor, having them pay it back in $1 weekly installments perpetually – to cover only the interest. Once trapped like this, the victims never paid the loan back. In over 70 years, not much has changed.

Pawn Shops, Car Title Loan shops, and other enterprises separate the Debt Slave from the meager consumer goods that they have managed to pay off. For pennies on the dollar, they sell off what little they have in exchange for getting money NOW.
Even if the Debt Slave manages to get ahead somewhat in payments, or gets a raise or promotion, they often fall back into slavery by buying yet another new car or purchase.

Credit Cards merit special mention. Credit Card companies have been very aggressive in recruiting new customers, oftentimes customers they know cannot pay off large debts. They offer large credit lines, knowing that the victims will indulge themselves with purchases of food, clothing, and other consumer items. Once they reach their limit, they will be charged over-limit fees and the like. Since the Debt Slave cannot manage their finances, they may pay a card late, which in turn jacks the interest rates to 20-30% or more, making paying off the debt nearly impossible. And the Credit Card companies have successfully lobbied to pass new laws limiting a debtor’s rights in bankruptcy. The one weapon that debtors had in the past has been severely blunted.

Why Do People Remain Debt Slaves?
Peer Pressure is one reason many people remain in Debt Slavery. By this I do not mean the type of pressure to conform faced by high school students. Rather, I mean the tendency of human beings to judge their own actions by the actions of others. If a suburbanite sees that his neighbor is in debt, but has a new car and other desirable consumer goods, then he/she thinks that such indebtedness is a “normal” part of modern life.

Unfortunately, we, as humans, tend to judge our actions this way – by what our peers are doing. And this negative tendency can explain some of the most egregious human behavior. If all your neighbors join the Nazi party, then it certainly doesn’t seem like such a bad thing. Germans were not being particularly evil, they were just being particularly human. The scary lesson here is that any behavior can be adopted on a mass-scale, once people view it as a “norm”.

Or take cigarette smoking – and the campaigns against it. When everyone smoked, the idea of lighting dozens of small, hand-held fires in an aircraft surrounded by aviation fuel seemed “normal”. Today, the “norm” is to be anti-smoking, so smokers can be ostracized. Homophobia worked the same way. Today, homosexuality is accepted as part of the “norm”, but in the not-too-distant past, it was not. What is viewed as a “norm” in society can change, and change very rapidly.

For this reason, the Debt Slavery industry does not want to change what is perceived as normative. Here in Georgia, for example, laws were passed outlawing payday loans. The payday loan industry has fought this, arguing that they are a legitimate business, and that in certain instances, people need such loans to get by – and that the government should not interfere in what is, essentially, a private transaction. Usury laws and the like were also repealed on similar grounds.

The Debt Industry advertises heavily. You probably know the catch-phrases and jingles of most major credit card companies (“What’s in YOUR wallet?”). Payday loan places, Rent-to-Own furniture stores, and the like, all heavily advertise on Radio and TeeVee. Unscrupulous home refinancing deals also advertise heavily, offering the Debt Slave a “way out” – but one paved with toxic ARMS, junk fees, and loan points.

For many people, however, the TeeVee is the source of their normative cues. Most Americans watch 6-8 hours a day, believe it or not. They wake up to the TeeVee, watch it at a restaurant during lunch, turn it on after work, and shut it off before they go to bed. The TeeVee is the ultimate propaganda machine, and if you keep watching it, you will end up brainwashed, no matter what. The best thing to do, is turn it off entirely.

So long as Debt Slavery can be viewed as a “norm,” it will continue. The best thing you can do is stop taking your normative cues from television and your dimwitted neighbors, and learn to think for yourself.

One interesting aspect of Debt Slavery is that on many blog sites and other discussion boards, you will see postings from people who actually defend bad financial decisions that lead to Debt Slavery. While some of these postings are no doubt shilling from the debt industry, others appear to be from genuine individuals who want to self justify their own bad behavior, by convincing themselves that leasing a brand new car every three years or running up debt on an ” airline miles” card really isn’t such a bad thing after all.

So Why is Debt Slavery a Bad Thing?
Some might argue that Debt Slavery affects only its victims. And by being in debt, the victims of Debt Slavery have a motivation to go to work every day, and thus it encourages productivity from the masses. Debt Slavery results in a massive transfer of wealth from the people in our society who can afford it least, to a small minority of people and institutions who need it least.

But just as secondhand smoke affects non-smokers, Debt Slavery harms society as a whole, not just its immediate victims. Debt Slavery creates a permanent underclass in our society, an underclass that feels it has been lied to and taken advantage of. The Debt Slave tends to believe, with good reason, that the system is fixed and the game is rigged – that there is no legitimate way to win.

And with ” reforms” in bankruptcy laws, the debt industry has been emboldened to lend money more and more to people they know in advance cannot pay it back. They count on “workouts” and other means of getting their money back, plus copious interest payments. By the time most Debt Slaves think about bankruptcy, they have paid for their credit card purchases at least twice over, with interest charges. Any workout money is a pure bonus for the debt industry. Compare this to the old days, when banks and credit card companies were reluctant to loan money to people they knew would default – as there was a real risk of not being paid back!

Creating a permanent disgruntled underclass degrades our entire society, not just the underclass it affects. Once a person comes to believe, either from personal experience or by watching the experiences of others, that they cannot get ahead legitimately, then criminal activity seems all the more legitimate. The next time you are robbed or your car stolen, ask yourself if the motivation of the robber or thief was pure laziness or merely a sound economic decision based on the perceived choices available to them.
The wealthy have far more to lose by creating a permanent underclass than does the underclass itself.

How do You Avoid Debt Slavery?
The key here is to redefine your normative cues. This can be difficult in a city or suburb, or even in the country (Many a farmer has gone bankrupt buying the latest and largest tractor, just because his neighbor has one). Bucking the norm will open you up to ridicule and abuse. But life at the center of the herd is never the richest. Most of the grazing grass at the center of the herd has been eaten down, trampled and pooped upon. The edge of the herd is dangerous, to be sure, but that’s where the prime grazing is.

      If you buy a second hand car and then keep it for 10 years, you can be sure that a shallow neighbor will rib you about having an “old car”. This is to be expected, particularly if the neighbor has a shiny new car and a string of car payments (or worse, lease payments). You are challenging their norm, and it scares them. They want to reassure themselves that being in debt is good, and that you are the one who is wrong.

In other cultures, it may be different cues. In Gay communities in major cities, many young men bankrupt themselves trying to appease a mythical “norm” which involves spending enormous amounts of money (all on credit) on clothes, bars, and oftentimes, drugs. Those who challenge such norms will be ridiculed for not having “stylish” clothes and $200 haircuts.

The list goes on and on. Regardless of whether you live on a 1,000 acre farm, an Army barracks, a tract home, or a school dorm, you will be pressured to get involved in many forms of self-destructive economic behavior. It takes strength and resolve to fight these trends and have your own ideas – and follow through with them. Once you have that resolve the rest is easy.

The procedural techniques of what you need to do to get out of debt and stay out of debt are well-known and obvious, and can be summed up in one simple statement: spend less than you make. That is not the hard part. Like a diet, the hard part is willpower.

It is also a good idea to understand the politics of Debt Slavery. Payday loan operators spend a lot of money supporting candidates who want preserve their line of work. Credit Card companies pay lobbyists millions of dollars to get Congressmen to pass laws in their favor. If you vote for such politicians based on their position on “social issues,” for example, but fail to recognize the real dangers to yourself and society, then it is you, not the slave-masters, who are to blame.

Debt Slavery is deadly serious, and nothing to take lightly. And anyone can fall victim to it, without thinking. If you follow the herd and take your cues from the television, chances are you are on your way to becoming a debt slave, if you are not already one.

“Money is the new form of slavery” – Leo Tolstoy 1900 AD
End of part 2 of 3.

Continued in Survival Manual/ 2. Social Issues/ Death by 1000 cuts/ Modern Competition: Part 3 of 3.

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