The Scenarios of the Collapse

SUBHEAD: It would be wise to start making contingency plans. Something ‘biblical’ is approaching.

By Tuomas Malinen on 11 January 2019 for GNS Economics  -
(https://gnseconomics.com/en_US/2019/01/11/the-scenarios-of-the-collapse/)


Image above: Painting of  "Noah's Ark" (1846) by American painter Edward Hicks. From (https://en.wikipedia.org/wiki/Noah%27s_Ark).

2019 has started more calmly after a very volatile year-end in the markets. Focus has been on the trade deal between China and the US and the words of the central bankers, most notably those of Jay Powell. However, this is all just a distraction, a side-show.

The market volatility was only the first sign of an approaching global economic crisis, as we warned in December 2017.

As the recent PMI figures across the globe show, a global downturn has started and the world is utterly unprepared for it. The global imbalances that have been growing for years cannot lead to anything else than a global crisis . However, there are different paths the crisis could take.

Here, we present three scenarios that the global economy is likely to follow, when the global downturn morphs into something much more sinister. We’ll start with the most likely scenario: Global Depression.

Scenario I: Global Depression

In a depression, everything that has been driven the economic expansion goes into reverse. Asset markets experience severe contraction (in excess of 50 percent), credit becomes restricted, corporations and households de-lever fiercely, and global trade flows stall (for more details see Q-review 2/2018). Gross Domestic Production (GDP) falls dramatically, between 10 to 25 percent.

Unemployment skyrockets. The standard means of stimulus by central banks (CBs) and governments are exhausted without any notable improvement in the economic environment.

The implosion of the current asset bubble will start a relentless unwinding of leverage and risk in the global financial system. Because major CBs are still “all-in” with rates pinned at or near historic lows, and balance sheets bloated to extreme levels, their ability to respond will be highly restricted.

Governments are also highly-indebted, and when interest rates rise, some sovereigns are likely to default, aggravating the global banking crisis, which will probably be in motion already. Combined with the zombified global business sector and a hard landing in China, these factors will lead the world economy into a depression.

However, a possibility of something even more ominous is lurking in the background.

Scenario II: Systemic Meltdown

Systemic crisis would mean that the global financial melts down due to an existential deficit of trust between counterparties within the system. Before 2008, a systemic meltdown was mostly a theoretical construct.

However, in mid-October in 2008, global leaders were faced with the possibility that banks would not open on Monday. The inter-bank markets had frozen, because no one knew the amount of the losses banks carried on their books.

The global financial system was grinding to a halt. Politicians and central bankers saved the day by guaranteeing bank deposits and by providing capital and extraordinary guarantees to keep the important financial institutions standing and credit flowing.

Now the problem is that many of these measures are already in play and when the next crisis hits, the solvency of governments and CBs will also be in question.

This creates a perilous situation because, for example, the shares of the Global Systemically Important Banks have been falling since the beginning of last year, which was also the time when the balance sheet normalization (QT) program of the Fed kicked into full gear.

This is no coincidence and it implies that troubles are, once again, brewing in the banking sector.

Because a crash in the asset values would affect the collateral of banks and because global depression would lead to a massive increase in loan losses, the already-impaired banking sector could, again, face collapse.

However, this time around, there is very little authorities can do to stem the panic. These factors make the systemic meltdown an ominously-likely scenario.

Systemic meltdown would mean that all banking actions, distribution of money, loans, swaps, banking services, etc., through the banking sector would stop. Credit cards would cease to function, ATMs would not give out money and loans could not be originated or rolled-over.

Following the likely collapse of global trade, the world economy would also collapse. This would imply that the global GDP would experience a harrowing fall of 20 to 40 percent. Modern societies would cease to exist in their current form.

Scenario III: The Fairy Tale

Could this all be averted somehow? We’ve been pondering this for two years now, and our resounding answer is no. The leverage in the system usually results in a crash at some point, and asset bubbles very rarely deflate in a controlled manner.

However, CBs can probably still postpone the inevitable, if they could re-start Quantitative Easing (QE) programs or find some other way to push artificial central bank liquidity into the financial markets.

To soften the eventual blow, and as an extremely desperate measure, central banks could, at least in theory, engage in a “QE-squared”. In it, major central banks would buy a hefty chunk of global risk assets, estimated to total $400 trillion.

This would mean that the balance sheet of major Central Banks would need to expand at least five-fold from the current level of approximately $20 trillion.

To cover the crippling losses to their collective balance sheets that these purchases would be likely to inflict, they would need to use their money-printing ability to paper them over.

CBs earn seigniorage-revenue from all the money they create. This is the difference between the nominal value and the production costs of the money.

Because production costs of digital entries are very close to zero, the seigniorage revenue CBs receive from each entry is close to 1-to-1. Still, this would mean that they would need to create new money in the range of tens of trillions of US dollars.

By comparison, in 2017, the global nominal GDP of the world was approximately $75 trillion.

To distribute such incomprehensible sums of new money, CBs would need to give it directly to consumers and governments.

Even in normal circumstances, the production side of the economy would be unlikely to be able to respond to such a massive increase in (artificially created) demand, and this time there would have been wide-spread corporate bankruptcies driven by global depression.

A hyper-inflation would be likely to follow.

There’s also the alternative that CBs would make a complete U-turn and continue to backstop market losses.

This would be the “way of Japan”, where the BoJ already owns over 40% of the sovereign bond universe. It would eventually mean the effective nationalization of capital markets which would continue to function in name only.

We have no historical experience with what the expropriation of modern capital markets would cause.

However, it would be unlikely to be anything good as capital markets have been around for several centuries, and they are extremely important in allocating financial capital efficiently. If CBs take a permanent active role in the capital markets, it would lead to financial market socialism.

 It would be likely to bring similar horrors as regular socialism in the form of lost incentives (breaking down of the risk-reward relationship) and inflated asset values.

It is unlikely that global central bankers would be willing, or that they would be allowed, to do so.

The Endgame Nears


The global balance sheet of CBs turned in August 2018. This marks the start of global QT and thus the end of the most reckless monetary policy experiment in history.

When this is combined with the slow-down in China, the engine of the world economy since 2008,  we have finally entered the endgame of at the current business cycle.

The desperate measures of central bankers and China enacted after the financial crisis have pushed the global debt and financial alchemy to never-seen heights.

The global financial system has become rigged with leverage, moral hazard and regulatory failures to a point where a “purge” has become all-but-impossible to avoid. This is the end.

Still, every company, household and government should start to make contingency plans. Something ‘biblical’ is approaching.

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Farewell to Bargain Shopping

SUBHEAD: Perhaps Generations X, Y & Z will recognize an opportunity to go into business.

By James Kunstler on 7 January 2019 for Kunstler.com -
(http://kunstler.com/clusterfuck-nation/a-farewell-to-bargain-shopping/)


Image above: Photo image of K-Mart closing announcement by James Kunstler from original article.

[IB Publisher's note. Mr. Kunstler nailed it today! His humor is that of the grave, but it still amuses as it stings. Our little island of Kauai The Macy's is barely hanging on at the Kukui Grove Mall but our only mall has lost its Sears and K-Mart as well as Border's Books, Sports Authority, and a host of other national chains.The Walmart has hung on in Lihue but is quickly morphing intoi a competitor to Costco with an ever larger percentage of grocery floor space - Besides economy of size Costco seems to be aiming for the connoisseurs, restaurateurs and foodies - while Walmart is trolling for everyone else, including elderly, handicapped, and bottom feeders.We do much of our shopping through Azazon and are just waiting for CEO Jeff Bezos to buy the US Postal Service to stay in business.  Fortunately we still have a Home Depot to keep our homes intact, but that will likely disappear when new home building grinds to a halt. All those stores are a 30 minute (if your lucky) drive from here in Hanapepe. Thank god we still hava a Napa Auto Supply and Ace Hardware with walking distance. Hunker down folks. We have visited Jim Kunster's town outside of Albany, NY. and found it much like our former home in Panama, NY where you coulkd noit buy a can of soup or quart of milk without half an hour in a car.]

France has its Yellow Vests. Here in USA, we have a few poor shlubs hoisting the “Going Out of Business” signs on the highway in front of the K-Mart.

The store in my little flyover town in upstate New York announced that it would shutter in March, and the sign-hoisting shlubs appeared out on Route 29 the first Saturday in January, an apt kick-off to a nervous new year.

K-Mart’s parent company, Sears, is moving into liquidation, meaning anything that’s not nailed down must be converted into cash to pay off its creditors.

The store’s closing is viewed as both an injury and an insult to the town.

There just isn’t anywhere else to buy a long list of ordinary goods, from dish-towels to tennis balls without a 17-mile journey west, which means an hour behind the wheel coming-and-going, plus whatever time you spend picking stuff up inside.

And, of course, many people in town feel that this is just another way of Wall Street saying “…you deplorable, pathetic, tapped-out, drug-addled, tattoo-bedizened yokels are not worthy of a K-Mart….”

The K-Mart occupied the better part of a small strip mall at the edge of town, which also boasts a Dollar Store, which appears to sell stuff that fell off a truck.

There’s another, newer strip mall beyond it with a supermarket, a drug store, and a Tractor Supply outlet that probably stole a lot of K-Mart’s business after opening a few years ago.

There’s much speculation about what’ll go into Kmart’s soon-to-be vacant space, about 80,000 square feet of crappy tilt-up construction not far from the end of its design life, with a flat roof that has groaned under heavy snow loads for four decades. Nobody I talked to has a clue.

Probably not Neiman Marcus, for starters. I’m thinking: maybe an evangelical roller rink. It’s too big for a wig shop, or a motorcycle thug-wear boutique, the usual bottom-feeders in the declension of commercial collapse.

More likely, nothing will replace it. The national chain retail model has fallen apart, along with new car sales. Something is up in this foundering land, despite all the heraldic trumpet blasts on cable news about the “booming economy.”

What’s up is the international implosion of the bad debt, and the fading illusion that it doesn’t matter. It has any number of ways to express itself, from store closings, to dissolving pensions, to stock market instability, to divorce, homelessness, and war.

It’s what you get from a hyper-financialized economy that doesn’t really produce wealth but only steals it from somewhere else. It’s not the fault of “capitalism,” which, in theory just stands for the management of a society’s savings. America doesn’t save, it borrows.

Zero interest rates made savings a mug’s game, and zero interest rates were necessary to extend the borrowing far beyond the credible boundaries of repayment. Debt isn’t capital, it just pretends to be for a period of time. Wall Street made its trillions off the time-value of that pretense and now time is up.

Even in the hardship economy we’re sailing into, people will need to buy and sell things and it is very hard to see how that fundamental process of exchange might be reorganized going forward.

Back in the 1990s I attended many a town meeting (in many towns) where chain stores applied for permits to set-up operations. It was often contentious. There was always a contingent of locals — organized by the chains themselves — waving placards that said “We Want Bargain Shopping.”

And there were the short-sighted town officials drooling over the real estate tax “ratables” that chain stores represented. Their adversaries feared that their locally-owned Main Street businesses would be killed, and that was exactly what happened, in very short order.

You could see it coming from a thousand miles away. Now the Big Boxes are going down. Boo Hoo….

What will emerge out of the current disorder? Perhaps Generations X-Y-and-Z will recognize an opportunity to go into business — as an alternative to purchasing a degree in gender studies for $200,000 (at 6 percent interest).

There will be lots of opportunities, even in a world with generally less shopping.

 But it may require a deeper collapse to sweep away the impediments, both practical and mental, before that awareness turns to action.


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Destruction of our postal service

SUBHEAD: The Trump Administration, Republicans and corporations are already taking it apart.

By Jim Hightower on 2 January 2019 for nTruthDig  -
(https://www.truthdig.com/articles/the-wholesale-destruction-of-our-postal-service-is-already-underway/)


Image above: USPS mail truck on delivery. From original article.



Last spring, President Trump created an inter-agency federal task force to propose structural reforms in the U.S. Postal Service.

In only two months, the task force (comprised entirely of top Trump officials) zapped out a down-and-dirty report with this key recommendation: 
“Prepare [USPS] for future conversion from a government agency into a privately-held corporation.”
Privatization! Are they not aware that our public postal agency is enormously popular and important to… well, to the public?

A February Pew Research poll finds that an astonishing 88 percent of Americans give the Postal Service a thumbs up.
Even the president’s executive order setting up the task force conceded that the post office “is regularly cited as the Federal agency with the highest public approval rating.”

The 640,000 middle-class postal workers and letter carriers merit such kudos because they literally deliver for us.
Working from 31,585 local offices, they trundle 150 billion pieces of mail a year, 4 million miles a day, to 157 million addresses across the land — from inner-city neighborhoods to back roads — delivering all with remarkable speed.

USPS does this without taking a dime in taxpayer funds, financing its operations entirely from its sales and services to customers. This is a genuine public good linking all of America’s people together.

For decades, though, anti-government propagandists have pushed the narrative that government is inherently incompetent, wasteful, and a social evil that must to be eliminated.
But the problem for these ideologues is that USPS is not only a government agency that works, but millions of folks see it working for them daily.

Therefore, to maintain the negative political narrative about public entities, the far-right corporatists are desperate to kill our public post offices.

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Predictions for 2019

SUBHEAD: "Ding Ding! - Margin Call USA". Reality is about to bite us in the ass.

By James Kunstler on 31 December 2018 for Kunstler.com -
(http://kunstler.com/clusterfuck-nation/forecast-2019-ding-ding-margin-call-usa/)


Image above: The Greenleaf subdivision near Dawsonville Georgia was abandoned several years ago after it was found to be at the center of a mortgage fraud scheme. The developers knew the project was doomed from the start, as there were no public sewer lines anywhere in the area they could hook up to, and the lots were too small for septic tanks.From (https://imgur.com/gallery/G6SIf).

[IB Publisher's note: Two books published in 2005 transformed my understanding of the real world. The books were Jared Diamond's "Collapse" and James Kunstler's "The Long Emergency".Both identified the mortality and suicidal tendencies of human civilization. Together they provoked a reevaluation of my understanding of how the world works and our future in it. I am indebted to their clear thinking. Over time I came to personally know Kunstler. My wife Linda and I visited him twice in upstate New York. I even worked briefly with his agent on a movie proposal for his novel "World Made By Hand" (2008) that describes the unwinding and aftermath of a collapse of America as we know it. Over subsequent years we have kept in touch. I realized our thinking was wandering apart over our differences of opinion about the TV series "Treme" that premiered in 2010. "Treme" follows the lives of people in the Ninth Ward of New Orleans in the aftermath of hurricane Katrina. Many of the primary characters were black and/or female. Kunstler could not "get" the show at all. He could not getr through half the premier episode because it seemed to him incoherent and foreign - a zombie apocalypse. Since then I have come to realize Kunstler holds a resentment that many white male Baby-Boomers about increasing emergence of women and black people into positions of American privileges. Did they earn it? Did George Bush? Anyway, with that caution in mind I continue to read Kunstler with a bit of caution. I think he is still spot-on in his understanding of money and energy - the grease on the gears of Western Civilization. This post is an excerpt from his predictions for 2019, hopefully less the white male screed. Happy New Year!]   

Markets and Money
The jig is really up. The big bad bear market is already underway, even if it rallies in January. The debt bubble engineered by the Federal Reserve is blowing up and thundering through the system.

The epic market instability of December 2018 on the heels of persistent Fed rate hikes points to major credit problems and especially an inability to roll over old debt into new loans at higher interest rates — in particular loans to zombie enterprises that need to borrow to keep paying interest on previous loans (a lot of that among the shale oil companies).

The US government can’t take higher interest rates either. It’s already paying about as much in annual interest on US debt as we pay for our war machine. There are only two ways out, both of them nasty.

Either suck up debt defaults, which will induce an impoverishing disappearance of money; or provoke high inflation, by injecting more Central Bank QE “money” into the system, which can destroy the value of money.

Inflation is typically the choice of governments because it reduces the face value of debts while it allows government to pretend that it is taking action.

In the end, you may have plenty of worthless money, which is no different from having not enough money that retains value. The latter was the main feature of the Great Depression.

So, inflation is the usual choice, but it also typically leads to incendiary resentment among the citizenry when they realize they’ve been played and it takes a wheelbarrow full of cash to buy a loaf of bread and a jar of peanut butter.

I suppose that Fed chief Jerome Powell knows all too well he’s popped the Mother-of-All-Bubbles. He can blame it on Mr. Trump. Everybody else will, of course.

Sometime in the second quarter of 2019, the Fed will resume the money-for-nothing gambit of “quantitative easing” in the hope of arresting the damage, but this time the dollar will lose value uncontrollably and catastrophically. Many people will be ruined, especially retirees at the mercy of insolvent pension funds.

Before 2019 is out, the US could find itself in a situation worse than the Great Depression. Supply lines are much longer now than they were then.

If suppliers can’t get paid because trust has collapsed in the short-term corporate paper system, they won’t deliver supplies, which means you may not eat, or fill your gas tank, or heat your house, or get whatever else you need.

Also, the USA in 1931 had not yet transformed itself into the fiasco-waiting-to-happen called suburban sprawl. How is Dallas going to work for people who spend a substantial chunk of their income on mandatory motoring (if there’s little or no income)?

Stock market activity may appear to stabilize in January, but it will go south again later on in the first quarter and the Bear will growl louder for the rest of the year.

Civil Disorder
Be prepared for it in 2019. There are going to be a lot of pissed-off people around the country. They are liable to attack Federal property and their fellow citizens (and their property).

The hungrier they are, the worse it will be. They will not understand the forces that are destroying the money system.

There are a gazillion small arms out there and the government will not be able to control them or confiscate them. Any attempt to do that will only inflame the situation.

A major principle of The Long Emergency is that government becomes increasingly impotent and ineffectual as it rolls out. We’re already seeing that in Washington, and it is not at all just because Mr. Trump has inspired such an impasse between the branches. The states, too, will be hard-pressed to do anything useful.

Many of them, like Illinois, New Jersey, Connecticut, and California, are already technically insolvent. The federal government may have to pretend to rescue them financially, which will only make the national predicament worse.

Oil
The shale oil “miracle” was an impressive stunt. For a while, it goosed US production way above the former all-time production peak of 1970, and it achieved that with astounding speed — about a decade. But this is oil that is very expensive and complex to produce. It was made possible by massive borrowing at artificial low interest rates, which are now rising.

Something like three-quarters of the shale operators never made a red cent in net profit, and many of these companies will find it hard or impossible to roll over their existing debt, especially with oil under $50-a-barrel.

But the price is a deceptive metric. If it zoomed up to $100-a-barrel tomorrow, the effect would only be to crush economic activity, because industry requires cheaper oil to pencil out its operations and citizens can barely afford to drive when gasoline hits $4-a-gallon at the pump.

At the lower $45-a-barrel, the price crushes the oil producers. Take your pick. There’s no “Goldilocks” price.

The other problems with shale oil have to do with the nature of the shale plays. The Permian Basin in Texas is very large, but the best plays are developed in the so-called “sweet spots” and there’s a limited amount of them.

They are the places that the producers developed first, and when they are played out, the next round of plays will be in spots not-so-sweet (or productive) — possibly not worth drilling. The character of the shale oil wells is also way different from the old conventional classic oil wells. The old wells cost about $400,000 (in current dollars). It involved just sinking a pipe into the permeable source rock.

The oil came out under its own pressure at the rate of thousands of barrels a day.  Eventually, you put a simple pump-jack on the well (the “nodding donkey”) and it produced for decades, like running a cash register. Shale oil wells cost between $6- 12 million.

They require technically demanding horizontal drilling and fracking, with additional costs in highly technical labor, water for fracking, sand to hold open the fracks, chemicals to aid the process, and a gazillion truck trips to deliver all the water and sand (and take the oil away).

Shale wells produce maybe a few hundred barrels a day for one year, after which they typically deplete by over 60 percent.

After four years, they’re done. The oil is also different. Shale oil is typically ultra-light. It contains little-to-none of the heavier diesel, kerosene, jet fuel, and heating oil distillates, making it less valuable.

Trouble in the credit markets could shut down shale production for a period of time and create dire problems for the American economy. That could happen in 2019 as poorer-performing companies fail to get new financing.

As mighty as it seems to be, the industry is fraught with fragility.

Meanwhile, discovery of new, producible oil has fallen to the lowest level since the 1940s, after three recent previous record low years. Current low oil prices at around $45-a-barrel may give Americans a false sense of security.

Low prices are mostly indicative of the collapse of the demand for oil at the global margins and among the large US demographic that cannot afford it anymore — that is, the impoverished former middle class.

As the damage becomes more obvious, we could hear calls to nationalize the oil industry. The attempt to do that would collide with the aforementioned trend for government to become more strapped  for revenue, more impotent, and more incompetent.

Geopolitical
The Golden Golem has gone an extra mile to antagonize Russia the past two years. Is it to demonstrate how not Putin’s puppet he is? If so, it’s pathetic.

For instance, heaping ever more sanctions on Russia, tossing Russian diplomatic staff out of the country because of the laughable Novichok poisoning of the Skripal father-and-daughter in Britain. Nobody believed that set up — who recovers from the world’s supposedly most potent, high-tech military toxin?

The larger Russia hysteria, ginned up by the US “Intel Community” to cover the embarrassment of Hillary Clinton’s election loss, has destroyed the brains of thousands of Washington insiders and infected whole sectors of the educated coastal elites who really ought to know better.

Meddling in elections? Is that something the US has never entertained?

Recall that 1996 Time Magazine cover with the headline that bragged, “Yanks to the Rescue: the Secret Story of How American Advisors Helped Yeltsin Win.”

And now we’re wetting our pants over a baker’s dozen Russian Internet trolls on Facebook?

Yes, this is what the brightest people in the room have been doing for two years. The net result is a new cold war, pushing Russia into the arms of China, giving both of those countries an incentive to construct a new framework for global relations that excludes the toxic US as much as possible.

That new framework, by the way, will not be the same as the late, unwinding Globalism Release 2.0 (Release 1.0 was 1870 – 1914) that allowed America to exchange IOUs for flatscreen TVs lo these many years. Let’s call that Tom Friedman Globalism, after the pundit who said it would last forever.

The world will become a wider place again as the Great Powers are increasingly bound to their own regions for trade relations in a world growing short of energy and capital resources. The exception to that is in weaponry, now that Russia has demonstrated its ability to launch hypersonic rockets that can reach the US in little more than a few Noo Yawk minutes.

Do we have anything like that?

I suppose we wish we did. The media is not even talking about it, the implications are so dreadful.

Has Mr. Trump actually accomplished anything with his deal-seeking in China while beating it on the snout with his tariff stick?

Well, he got a lot of US companies loading up on inventory of goods they feared will carry costly duties a year hence, so they’re all stocked up just in time for a vicious bear market and the recession / depression that it entails. A lot of that stuff may end up being distributed by the bankruptcy judges.

How does our antagonism against China work with the campaign to “normalize” the behavior of North Korea. I doubt it helps. In 2019, North Korea will be the whoopie cushion that China places under America’s seat at the negotiating table.

Mr. Trump defied the conventional State Department wisdom by meeting face-to-face with Kim. It got the two Koreas actually speaking with each other for the first time in 60 years, with some concrete steps toward ending the de facto state-of-war.

Will Li’l Kim play the role China assigns to him? I think so. They can squash him like bug. And, of course, everything that the US congress and Mr. Mueller do to injure and weaken Mr. Trump will make further progress in Korea unlikely.

How about the second greatest economy in the world? That would be the European Union.

The EU’s financial system is way more dysfunctional than even ours, with no mechanism or provision for regulating each country’s spending vis-à-vis the debt generation of the Union as a whole.

There’s no way it can continue and no prospect for debugging the set-up. What’s more, decades-long shenanigans of the European Central Bank have created imbalances that will never be corrected.

Even the attempt to normalize operations — as the ECB ceases its debt monetization routines starting in the first quarter of 2019 — is guaranteed to crack up the EU economy, which is a horror show of zombie companies and zombie banks. They will suffer particularly in the recession / depression to come.

The next domino to fall, theoretically Italy, will take the EU down, whatever happens with the dithering over Brexit. Without the ECB vacuuming up unwanted EU paper, nothing really pencils out over there. In 2019, expect a substantial fall in the value of the Euro, and possibly its demise as a currency.

In fact, expect wholesale disintegration of many structural arrangements all over Europe beginning in 2019, along with more political violence that exceeds the simple street actions of the Yellow Vests in France.

NATO has been staging war games on Russia’s border for two years, apparently with no awareness that the NATO members are deeply dependent on Russian oil and natural gas to remain advanced nations with comforts and conveniences, like heating their homes. Perhaps that recognition will hit in 2019. But there will be plenty of noise for that signal to cut through.

Climate Change
Something’s going on ‘out there’ though the picture is deeply non-linear and is being confused for the moment by an extraordinary low level of cyclical sunspot activity. Not being a scientist, I have only two salient points worth considering about the issue:

The first is, we’re not going to do anything about it — because nothing can be done about it. Whatever’s happening, we’re going to have to roll with it. I’m also not persuaded that many of the proposed mitigations — carbon taxes, seeding the upper atmosphere with reflective particles — will accomplish anything.

The second thought is this: the civilized world has experienced many many instances of climate change over the past several thousand years. Civilizations rise and fall with these changes, but the human project as a more general matter continues, with periods of history that appear to be restful time-outs.

The Roman Optimum (warming period) segued into the Dark Age Cooling, and then the Medieval Warming (viniculture in England!), and eventually the Little Ice Age comes along with Isaac Newton and skaters on the Dutch canals.

 The difference this time is that our civilization is so deeply complex that successful adaptation to new conditions is a low percentage outcome, at least in the form of salvaging many of our current arrangements.

In other climate disruptions, people adapted, sometimes with very severe changes in customs, practices, political arrangements, and life-styles.

It will be especially stark this time, and the broad pop culture of Collapse suggests that we intuit this — everything from Game of Thrones to The Road, to my own World Made By Hand novels.

It begins with the wobbling of the most abstract and fragile of our systemic arrangements, finance, which is mostly based on ephemeral trust (that the other fellow will pay you).

From there, the trouble proceeds to politics and culture.

[IB Publisher's postscript: And that is the most optimistic view possible. I personally think we are closer to extinction than that. As a reminder see this 2011 "Scientific American" article One Time Through the Bottleneck - "Almost 200,000 years ago humans faced extinction. Only a few hundred were saved along the coast of Cape Horn"].  Happy New Year!


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Energy collapse is upon us

SUBHEAD: This is your chance to engage with and become an agent of a new paradigm for humanity.

By Nafeez Ahmed on 28 December 2018 for Medium
(https://medium.com/insurge-intelligence/brexit-stage-one-in-europes-slow-burn-energy-collapse-1f520d7e2d89)


Image above: Van on fire in Paris after violent Yellow Vest protests. From original article.

Everyone’s talking about Brexit. Some about the French riots. But no one’s talking about why they are happening, and what they really mean. They might think they are, but they are usually missing the point.

On 6th May 2010, the Conservative Party took the reins of power for the first time since 1992, propped up with some help from the Liberal Democrats.

Hours before the election result, I warned in a blog post that whichever government was elected, it would be the first step in a dramatic shift toward the far-right that would likely sweep across the Western world within 10 years.

I wrote, describing the failure of all three political parties to understand why the heyday of economic growth was unlikely to return.
“The new government, beholden to conventional wisdom, will be unable or unwilling to get to grips with the root structural causes of the current convergence of crises facing this country, and the world...” 
“This suggests that in 5–10 years, the entire mainstream party-political system in this country, and many Western countries, will be completely discredited as crises continue to escalate while mainstream policy solutions serve largely to contribute to them, not ameliorate them.  
The collapse of the mainstream party-political system across the liberal democratic heartlands could pave the way for the increasing legitimization of far-right politics by the end of this decade…”
My prediction was astonishingly prescient. The global shift to the far-right began within exactly five years of my forecast, and has continued to accelerate before the decade is even out.

In 2014, far-right parties won 172 seats in the European Union elections — just under a quarter of all seats in the European Parliament.

In 2015, David Cameron was re-elected as Prime Minister with a parliamentary majority, a victory attributed in part to his promise to hold a referendum on Britain’s membership of the European Union.

Unbeknownst to many, the Tories had quietly established wide-ranging links with many of the same far-right parties that were now capturing seats in the EU.

The following year in June, the ‘Brexit’ referendum shocked the world with its result: a majority vote to leave the EU.

Six months later, billionaire real estate guru Donald Trump shocked the world again when he became president of the world’s most powerful country. Like the Conservatives in the UK, the Republicans too had forged trans-Atlantic connections with European parties and movements of the extreme-right.

Since then, far-right parties have made continued electoral gains across Europe in Italy, Sweden, Germany, France, Poland and Hungary.

We are on the cusp of a tidal wave, that looks poised to accelerate into a tsunami. Exactly as I had anticipated, far-right politics is no longer the province of the fringe, but is becoming increasingly normalised.

This not an accident. It is the result of a system that is failing — and the efforts of a network of far-right groups to exploit the fractures emerging from this system-failure to tear everything down, and erect a new order of their own fashioning.

My prediction of the resurgence of the far-right was based on analysing the probable consequences of a long-term ‘system-failure’ in which we are unable to return to the levels of economic growth we had become accustomed to in the heyday of the 1980s and 90s.

That system-failure, I explained, is rooted in the economics of the energy production that enables economic growth:
“…. a full and lasting recovery… is likely to be impossible in the constraints of the current system, because we’re running short on the physical basis of the last few decades of exponential (and fluctuating) ‘growth’ — and that is cheap, easily available hydrocarbon energies, primarily oil, gas and coal.

The turning point has arrived, and without that global cheap energy source in abundant supply, we cannot continue growing, no matter what we do. Something has to give. Our economies need to be fundamentally, structurally, transformed. 


We need to transition to a new, clean, renewable energy system on which to base our economies. 

We need to transform the way money is created, so that it’s not linked to the systematic generation of debt. We need to transform our banking system on the same grounds. 

Whitehall, and the three political parties, recognize only facets of the picture, but they don’t see it as a whole.”

Turning Point

The energy turning point is unequivocal. In the years preceding the historic Brexit referendum, and the marked resurgence of nationalist, populist and far-right movements across Europe, the entire continent has faced a quietly brewing energy crisis.

Europe is now a ‘post-peak oil’ continent. Currently, every single major oil producer in Western Europe is in decline. According to data from BP’s 2018 Statistical Review of Energy, Western European oil production peaked between 1996 and 2002. Since then, production had declined while net imports have gradually increased.

In a two-part study published in 2016 and 2017 in the Springer journal, BioPhysical Economics and Resource Quality, Michael Dittmar, Senior Scientist at the ETH Zurich Institute for Particle Physics and CERN, developed a new empirical model of oil production and consumption.

The study provides perhaps one of the most empirically-robust models of oil production and consumption to date, but its forecast was sobering.

Noting that oil exports from Russia and former Soviet Union countries are set to decline, Dittmar found that Western Europe will find it difficult to replace these lost exports. As a result,
“total consumption in Western Europe is predicted to be about 20 percent lower in 2020 than it was in 2015.”
The only region of the world where production will be stable for the next 15 to 20 years is the OPEC Middle East.

Everywhere else, concludes Dittmar, production will decline by around 3 to 5 percent a year after 2020. And in some regions, this decline has already started.

Not everyone agrees that a steep decline in Russia’s oil production is imminent. Last year, the Oxford Institute for Energy Studies argued that Russian production could probably continue to grow out to at least 2020. How long it would last thereafter was unclear.

On the other hand, the Russian government’s own energy experts are worried. In September 2018, Russia’s energy minister Alexander Novak warned that Russia’s oil production might peak within three years due to mounting production costs and taxes.

In the ensuing two decades, Russia could lose almost half its current capacity. This sobering assessment is still broadly consistent with the Oxford study.

The following month, Dr Kent Moor of the Energy Capital Research Group, who has advised 27 governments around the world including the US and Russia, argued that Russia is scraping the bottom of the barrel in its prize Western Siberia basin.

Moor cited internal Russian Ministry of Energy reports from 2016 warning of a “Western Siberia rapid decline curve amounting to a loss of some 8.5 percent in volume by 2022. Some of this is already underway.”

Although Russia is actively pursuing alternative strategies, wrote Moor, these are all “inordinately expensive”, and might produce only temporary results.

It’s not that the oil is running out. The oil is there in abundance — more than enough to fry the planet several times over.

The challenge is that we are relying less on cheap crude oil and more on expensive, dirtier and unconventional fossil fuels. Energetically, this stuff is more challenging to get out and less potent after extraction than crude.

The bottom line is that as Europe’s domestic oil supplies slowly dwindle, there is no meaningful strategy to wean ourselves off abject dependence on Russia; the post-carbon transition is consistently too little, too late; and the impact on Europe’s economies — if business-as-usual continues — will continue to unravel the politics of the union.

While very few are talking about Europe’s slow-burn energy crisis, the reality is that as Europe’s own fossil fuel resources are inexorably declining, and as producers continue to face oil price volatility amidst persistently higher costs of production, Europe’s economy will suffer.

In September, I reported exclusively on the findings of an expert report commissioned by the scientific group working on the forthcoming UN’s Sustainability Report.

The report underscored that cheap energy flows are the lifeblood of economic growth: and that as we shift into an era of declining resource quality, we are likely to continue seeing slow, weak if not declining economic growth.

This is happening at a global scale. EROI is already beginning to approach levels seen in the nineteenth century — demonstrating how constrained global economic growth might be due to declining net energy returns to society.

End of energy growth

Britain, which is due to leave the European Union on 29th March 2019, is a poster boy for this brewing energy-economic crisis.

In January 2017, the Centre for Climate Change Economics and Policy run by the University of Leeds and London School of Economics, produced a startling analysis of Britain’s declining net energy problem.

The study attempted to develop a methodology to examine national-level figures for Energy Return on Investment (EROI) — the amount of energy one uses to extract a particular quantity of energy.

The goal of the study was to pinpoint the EROI value as much as possible using Britain as a prime case-study. The concept of EROI fleshes out the recognition that a significant surplus of energy is required to fuel economic activity, separate to energy that is consumed precisely to extract energy in the first place.

The less energy we use to get new energy out, the more energy we have left to invest in the wider goods and services of economic activity. But if we keep using more energy just to get energy out, the amount of net energy we have left to fuel our economies decreases.

According to the study authors, Lina Brand-Correa, Paul Brockway, Claire Carter, Tim Foxon, Anne Owen and Peter Taylor:
“The higher the EROI of an energy supply technology, the more ‘valuable’ it is in terms of producing (economically) useful energy output. In other words, a higher EROI allows for more net energy to be available to the economy, which is valuable in the sense that all economic activity relies on energy use to a greater or lesser extent.”
The verdict on the UK predicament is stark. They find that “the UK as a whole has had a declining EROI in the first decade of the 21st century, going from 9.6 in 2000 to 6.2 in 2012.

These initial results show that more and more energy is having to be used in the extraction of energy itself rather than by the UK’s economy or society.”

Citing the work of French economists Florian Fizaine and Vincent Court, which estimates a minimal societal EROI of 11 for continuous economic growth, the paper concludes:
“… the UK is below that benchmark.”

In other words, early last year, a major scientific study found that for the last two decades and beyond, Britain’s economic growth is fundamentally constrained by domestic net energy decline. But this groundbreaking news did not make the ‘news’.

Break-up

At the close of 2010, in my book A User’s Guide to the Crisis of Civilization, I predicted that large trans-national state structures like the European Union are likely to face challenges to their territorial integrity as a side-effect of these processes.

The failure to address the systemic causes behind the 2008 financial crash, the incapacity to recognise it as a symptom of a system in decline, would lead to an increasingly authoritarian politics.

The integrity of large trans-national structures depends on the abundance of cheap energy flows to sustain them. If those flows come at greater cost and lower quality, then those structures will become increasingly strained and potentially even begin to break down.

Costs to keep the system going increase while returns are squeezed, meaning that the surplus to invest in core social goods to maintain such structures declines.

That is why despite the so-called ‘recovery’ — tepid as it is and based on accelerating debt levels (in biophysical terms borrowing from the Earth today with promise of paying it back tomorrow with what has already been over consumed today) — in real terms, peoples’ purchasing power continues to decline.

The failure to understand and engage with the root, systemic causes of the crisis also means that policymakers put themselves in a position where they can only address surface-symptoms.

All too often, that means short-term, reactionary responses.

And so in France, instead of addressing the question of how to galvanise a third industrial revolution to speed a post-carbon transition and infrastructure revival, Macron’s response to the climate crisis was to protect fossil fuel and nuclear producers while hiking up fuel taxes.

He didn’t want to tackle the horrendous supply chains of big French corporations. He didn’t want to penalise the powerful oil, gas and nuclear lobbies that he hopes might help him get re-elected, and did next to nothing to speed a viable post-carbon transition that might transform economic prosperity on more sustainable foundations.

And so by placing the burden almost exclusively on French workers and consumers, Macron triggered the spiral of rage and riots.

Protestors have set fire to banks, smashed and looted shops, and even targeted the Arc de Triomphe. They demand an end to corporate freeloading, along with nationalist demands such as ‘Frexit’ - France’s departure from the EU, and preventing migration.

It is telling that while some demands are compelling, there is no semblance of understanding the real planetary crisis beyond banal tropes about Big Banks. The French state has responded with its own violence, firing water cannons and tear gas on protestors, arresting over a thousand people, and threatening to bring in the French Army.

This is a microcosm of what can happen when states and peoples both fail to understand the deeper dynamics of a failing system: everyone responds to what is in front of them. Protestors blame Macron. The French state cracks down on violence. Politics becomes militarised, while scepticism of the liberal incumbency across the political spectrum finds vindication.

France’s riots therefore did not come out of the blue. They are part and parcel of a wider process of slow-burn EROI decline in which the returns to society from economic activity are being increasingly constrained by the higher energetic costs of that activity and productivity declines of the ageing centralised industrial-era infrastructure and technology.

It was only a matter of time before the average person began to feel the impact of that squeeze in their day to day lives. Macron’s tax hikes were not the cause, but the trigger. They lit the match, but the tinder box was already fuming.

Brexit

But we’ve been here before, in Syria and beyond.

Brexit was triggered in the context of global system dynamics which remain poorly understood. Over the decade preceding the 2008 financial crisis, Britain’s economic growth was being undermined not merely by a debt-bubble in the housing markets, but by an ailing fossil fuel dependent energy system.

That ailing system was indelibly linked to the European migrant crisis, which saw over a million refugees from the Middle East and North Africa seeking sanctuary across Europe, including the UK and France, that fuelled the surge in nationalist populism sweeping across the continent.

The migrant crisis, too, did not come out of the blue, but followed hot on the heels of the turbulence of the Arab Spring. The destabilisation of Syria, Egypt, Yemen and beyond was a long time coming — but it was triggered by a perfect storm of crises.

Domestic oil production declines which pulled the rug out from beneath oil-export dependent state revenues conspired with global oil price spikes thanks to the plateauing in world production of cheap conventional oil. A string of climate crises across the world’s major food basket regions led to crop failures and droughts which boosted food price spikes.

Global systemic crisis interacted with the breakdown in local national systems. As I’d reported in 2013, a natural drought cycle in Syria was massively worsened due to climate change, devastating agriculture and driving hundreds of thousands of Sunni farmers into Alawite-dominated coastal cities.

As Syrian oil revenues plummeted, its domestic conventional oil production having peaked in the mid-1990s, the government’s slashing of critical fuel and food subsidies just as prices were spiking globally was the last straw. People could not even afford bread, so they hit the streets.

Bashar al-Assad responded with escalating brutality, including shooting civilians in the streets. When protestors picked up arms in response, the cycle of violence kicked in.

Outside powers intervened to coopt their favoured sides, Russia and Iran backing Assad, the West backing various rebel groups — neither particularly interested in supporting Syrian civil society. The conflict escalated, devastating the country, and fuelling an unprecedented refugee crisis.

When NATO intervened in Libya, when the US and UK backed Saudi Arabia’s indiscriminate aerial bombardment of Yemen, it only destabilised the region further. The arc of collapse across the Middle East and North Africa resulted from a fatal combination: an earth system crisis, compounded by short-sighted and self-serving responses from human systems.

When families and children began turning up in their droves on European shores, the earth system crisis ‘out there’ came home.

The West could not shield itself from the long-range consequences of the unsustainability of the very postwar system it had nurtured since the Second World War: structural dependence on fossil fuels, a patchwork of alliances with regional despotic regimes, laying the groundwork for converging climate change, crude oil depletion and the resulting domino effect of food and economic crises.

The earth system crisis that erupted in Syria triggered a wave of human system destabilisation of which Brexit was merely the first eruption.

And so the Syria crisis is indeed a taste of things to come. Europe is already a post-peak oil continent, whose domestic fossil resources are in decline.

Most credible studies of Europe’s shale gas potential show that it is extremely weak and not similar to the American situation. If we are hell-bent on maintaining dependence on fossil fuels, we will be forced to import.

But as I showed in my scientific monograph for Springer Energy Briefs, Failing States, Collapsing Systems: BioPhysical Triggers of Political Violence (2017), if demand growth increases at current rates, it is unlikely that Central Asian and Russian suppliers will be capable of meeting that demand at costs we can cope with in coming decades.

Meanwhile, certain climate impacts are already locked in. Between 2030 and 2045, large parts of the Middle East and North Africa (MENA) are likely to become increasingly uninhabitable due to climate change. This is the same period in which oil production across the MENA region has been forecast to begin plateauing and declining.

As the energy costs of fossil fuel production and imports increases, and as the EU is likely hit again by the challenge of large-scale migration from the Middle East due to climate devastation, the challenges to the EU’s territorial integrity will not go away.

Brexit is merely a ripple on the surface of deeper currents. It is a symptom of the great civilisational phase-shift to life after fossil fuels.

In this sense, the Brexit fiasco is an example of how distant we are as a species from the conversations we need to be having.

Talking about being in or out of Europe and in what way is not unimportant, but it’s also a massive distraction from the deeper systemic crisis that is unfolding beneath the very issues driving our immediate concerns about Brexit.

Earth system disruption does not inevitably result in destabilisation of human systems. But if human systems refuse to engage and adapt to those disruptions, then they will be destabilised.

As long as Britain, Europe and their citizens continue to obsess myopically on the symptoms rather than the causes, we will be incapable of responding meaningfully to those causes.

Instead, we will fight with each other manically about the symptoms, while the ground beneath our feet continues to unravel.

The crisis of Brexit and the eruption of the riots in France are symptoms of a great unfolding civilizational transition, in which an old reductionist paradigm of materialist self-maximation is dying.

Citizens and policymakers, activists and business leaders, need to wake up to what is actually happening to have the conversations that can kick-start meaningful approaches to systemic transformation.

This is not a far-flung crisis that is going to happen years in the future. This is now. This is happening and it is affecting you, your children, and those you love the most. And it will affect their children, and their children.

This is your legacy. This is your choice. This is your chance to engage with and become an agent of a new paradigm, one that speaks for all humans, all species, and the Earth itself.

Maybe we don’t know exactly what the emerging paradigms will look like. But we know that it’s time to ask ourselves:Where do we stand? With the old, or with the new?

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A Very 1960's Christmas

SUBHEAD: Fifty years ago, Christmas in New York came with dead bodies, fringes, patchouli and Jimi Hendrix.

By Staff on 25 December 2018 for Alternet.org -
(https://www.alternet.org/2018/12/very-1960s-christmas/)


Image above: Jimi Hendrix living in the Drake Hotyel in NYC in 1968.  From (https://www.thatericalper.com/jimi-hendrix-at-the-drake-hotel-in-new-york-city-1968/).

Christmas in 1968 was the first I would spend apart from my family. I was a cadet at West Point, and my parents and sisters lived in Hawaii, and I couldn’t afford to fly there for the holidays, so I called a woman I had been seeing in the city and asked if I could stay with her. To my great relief, she said yes.

She was a nurse who worked nights and lived on a bombed-out block of East 2nd Street, between Avenues A and B, as I recall. I took the bus to Port Authority, grabbed the shuttle to Grand Central and took the Lex to Bleecker Street and walked east. It was around freezing, and a stiff wind was blowing.

The further east I walked, the more deserted the streets were. Her block faced husks of deserted buildings and empty lots with Houston Street just beyond. It felt like a landscape out of some kind of post-apocalypse movie — boarded-up doors and blown-out windows, a few cars up on cinder blocks with missing wheels and tires, empty lots piled with derelict mattresses and broken furniture and plain old garbage.

Even in the bitter cold, the street stank.

But not as much as the entryway of her building. I smelled it the minute I pushed open the door: that sickly, sweet, somehow thick odor of death. It mixed with the smells of frying grease and garlic and peppers and onions and got stronger as I went up the stairs.

I turned onto the third floor and knew there was a body behind one of the doors. Her place was on the fourth floor, and when she opened the door, I asked her, don’t you smell that? I know, she said. The Puerto Ricans are always cooking stuff in this building.

I threw open a window to flush the smell out of the apartment and looked up the number for the Fifth Precinct and called them. A couple of beat cops showed up an hour or so later, and after them came a truck from the morgue. They hauled out the body of an old man who had died alone in his apartment a few days previously.

After they left, I went downstairs and propped open the front doors, and over the next day or so, the smell of death was gradually overtaken by the odors of fried food and cheap wine that had been spilled by winos trying to escape the cold. It was four days until Christmas.

She was a few years older than me, and we didn’t have a relationship as much as an arrangement. In the afternoons, we would lie around on her narrow bed in the front room watching a black and white TV until she had to put on her uniform for work, then we would venture out into the cold and dark New York winter and meet up again when she came back sometime after midnight.

I’d usually pick up something from one of the bodegas on First or Second Avenue, and we’d eat a late dinner in her kitchen and drink some wine and go back to bed.

The temperature dropped into the 20s on the day before Christmas, and with the wind blowing through the cracks around the old tenement windows, the radiators in her place struggled to keep up. We huddled under a pile of blankets and quilts until she had to go to work.

She had a later shift that night, so it was 9:00 by the time we bundled up and hit the street. I walked her over to the bus she took up First Avenue to Bellevue Hospital. I had read in the Voice that there would be a Christmas eve poetry reading at St. Marks in the Bowery, so I headed up Second Avenue.

Inside the church, it was a real old-fashioned beatnik scene. The place was crowded with long-haired East Village characters wearing long woolen overcoats and their old ladies in raccoon coats they’d picked up in the second hand shops on St. Marks Place. Someone was passing out cups of red wine at the door, and everyone was in a festive mood.

Up on the altar at the front of the room were several real beatniks: Hubert Huncke, known as “Huncke the junkie,” who was famous for his ability to scrounge up the scratch to feed his habit while staying out of jail; Gregory Corso, a diminutive pinch-faced guy with a cloud of curly hair and a mischievous smile; Ed Sanders, famous as an “investigative poet” and one of the Fugs, who ran the Peace Eye Bookstore, where he published “Fuck You: A Magazine of the Arts.”

I took a seat on one of the pews several rows back from the front. They began playing a tape Allen Ginsberg had sent from somewhere upstate for the occasion, reading his poetry in his distinctive cadences, cheerful no matter the subject matter. Ginsberg’s chant was filling the church when I smelled a woosh of patchouli oil to my right.

I turned just as Jimi Hendrix slid in and sat down next to me. He was wearing a black hat with a wide brim and a fancy hat-band and a furry fringed vest and feather boas and a big silver belt that rode low on the hips of his bellbottoms. With him was an entourage of gorgeous young women chattering excitedly. Jimi sshhhed them.

We sat there for the next hour listening as East Village poets cried out in political protest and in celebration of sex and pot and Buddhism and the vegetarian lifestyle. Gregory Corso read a poem that managed to be angry and funny at once, and Ron Padgett read, and from Warhol’s factory Gerard Malanga read, and then there was an intermission.

Hendrix and his crew stood up and left, and I thought they were gone for good, but they came back and sat where they had been before, and Jimi shhhhed his entourage again when Ed Sanders took the mic and read a bawdy poem about a motel room.

Then Ed read a poem he had published in the Voice earlier that year when one of the Voice’s best writers, Don McNeill, had died unexpectedly. It was a sad, beautiful poem that captured something about that year, 1968, in its celebration of the death of a man who had covered the descent of hippiedom from pot and rock and roll and be ins into speed and smack and murders on Avenue B.


Image above: IslandBreath publisher Juan Wilson lived in a 4th floor walk-up apartment at 620 East Sixth Street between Avenue B and C in NYC in 1968 while attending the Cooper Union School of Architecture. 

Ed finished reading, and everyone sat silently for a moment, and then it was over. Hendrix stood, and in a rush of boas and fringe and patchouli, he was gone. He had sat there listening to poetry for at least two hours, and he never said a word.

After that night, I never listened to his music the same way again because I heard in his lyrics the rhythms of that night, his beat allusions to “happiness staggering down the street footprints dressed in red,” while “the wind whispers Mary.” I mean, how could you not hear his debt to the Beats amongst his brilliant guitar licks?

Hendrix was a poet who went out on a frigid New York Christmas eve to listen to poetry. He would be dead in London a year and a half later, but on that night in 1968, at the end of a year of protests and turmoil and war and assassinations, he was happy.
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The Darkest Hour

SUBHEAD: We're now into Winter, but at least we're heading into increasing light as we enter the New Year.

By Juan Wilson on 24 December 2018 for Island Breath -
(https://islandbreath.blogspot.com/2018/12/the-darkest-hour.html)


Image above: Image of light through the trees in winter.  From (https://www.mnn.com/earth-matters/climate-weather/stories/8-things-know-about-winter-solstice).

Linda and I have been off the KIUC grid for over five years now. The first few winters (beginning about this time of year) we were so low on stored battery energy from our solar panels  that we were reduced to playing chess at night by candlelight once the sun went down.

Over the least several years we've added panels, new batteries and what ever else was necessary to get through the winter. We now can do it.

But that means careful shepherding of the use of power through the day and evening so that there is still some juice left after finishing dinner and watching some news and some online entertainment to get through the dark nights of winter.

To me, from my experience sailing in the Great South Bay and Long Island Sound,  living with solar energy is like sailing a boat. You have to be on watch 24/7. With a boat it's about the wind -  as it relates to strength and direction.

With solar panels it relates to the charge and depth the batteries. We are finally at the point where we can sail through the night.

As we turn from the darkest hour and into the light, heading towards Spring, Linda and I wish you all a Merry Christmas, Happy Solstice, a Blessed New Year, or whatever it is you do in these pivotal days away from the dark.

Hunker down and enjoy the ones you love!

See also:
Ea O Ka Aina: Get Off the Grid Now! 8//19/18
Ea O Ka Aina: Christmas Story 12/25/17
Ea O Ka Aina: Mistakes to avoid going off-grid 1/9/16
Ea O Ka Aina: Failing to live Off-Grid 1/3/16
Ea O Ka Aina: Living off-grid becoming illegal 11/7/15
Ea O Ka Aina: Off Grid living is illegal 1/26/15
Ea O Ka Aina: Kicking the KIUC habit 5/1/14
Ea O Ka Aina: Hawaii utilities fighting customers 1/6/14
Ea O Ka Aina: Off-grid handcrafted life 12/5/13
Ea O Ka Aina: KIUC afraid of residential PV 10/8/13
Ea O Ka Aina: Fracking Hawaii 1/31/13
Ea O Ka Aina: And to All a Good Night
12/22/10
Ea O Ka Aina: Island Breath is off the Grid 7/6/12
Ea O Ka Aina: A Christmas Carol 2011 12/26/11
Ea O Ka Aina: Stop War for Christmas 12/24/11
Ea O Ka Aina: All I Want for Xmas Is the Truth 12/23/10
Ea O Ka Aina: A Doomer's Christmas Carol
12/24/09
Ea O Ka Aina: Merry Christmas 2009 12/24/09

Ea O Ka Aina: Blue Christmas
12/21/09
Ea O Ka Aina: A Christmas Wish 12/16/09
Ea O Ka Aina: Poor Rich People at Xmas 12/24/09
Ea O Ka Aina: Off-Grid Night Lighting 8/14/09
Ea O Ka Aina: Rural, not Suburban, Kauai 4/2/09
Island Breath: Solar Energy - A case study 5/12/04
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The Big Picture

SUBHEAD: Each day of relative normalcy that remains is an occasion for opportunity and action.

By Richard Heinberg on 17 December 2018 for Resilience -
(https://www.resilience.org/stories/2018-12-17/the-big-picture/)


Image above: This Hubble Space Telescope image by NASA of the cluster Westerlund 2 and its surroundingswas been released in 2015 to celebrate Hubble's 25th year in orbit. From (http://time.com/3833015/hubble-telescope-photo/).

Humanity has a lot of problems these days. Climate change, increasing economic inequality, crashing biodiversity, political polarization, and a global debt bubble are just a few of our worries.

None of these trends can continue indefinitely without leading to a serious failure of our civilization’s ability to maintain itself. Taken together, these metastasizing problems suggest we are headed toward some kind of historic discontinuity.

Serious discontinuities tend to disrupt the timelines of all complex societies (another name for civilizations—that is, societies with cities, writing, money, and full-time division of labor).

The ancient Roman, Egyptian, and Mayan civilizations all collapsed. Archaeologists, historians, and systems thinkers have spent decades seeking an explanation for this pattern of failure—a general unified theory of civilizational collapse, if you will.

One of the most promising concepts that could serve as the basis for such a theory comes from resilience science, a branch of ecology (the study of the relationship between organisms and their environments).

Why Civilizations Collapse: The Adaptive Cycle
Ecosystems have been observed almost universally to repeatedly pass through four phases of the adaptive cycle: exploitation, conservation, release, and reorganization. Imagine, for example, a Ponderosa pine forest.

Following a disturbance such as a fire (in which stored carbon is released into the environment), hardy and adaptable “pioneer” species of plants and small animals fill in open niches and reproduce rapidly.

This reorganization phase of the cycle soon transitions to an exploitation phase, in which those species that can take advantage of relationships with other species start to dominate. These relationships make the system more stable, but at the expense of diversity.

During the conservation phase, resources like nutrients, water, and sunlight are so taken up by the dominant species that the system as a whole eventually loses its flexibility to deal with changing conditions.

These trends lead to a point where the system is susceptible to a crash—a release phase. Many trees die, dispersing their nutrients, opening the forest canopy to let more light in, and providing habitat for shrubs and small animals. The cycle starts over.

Civilizations do roughly the same thing. In their early days, complex societies are populated with generalist pioneers (people who do lots of things reasonably well) living in an environment with abundant resources ready to be exploited. These people develop tools to enable them to exploit their resources more effectively.

Division of labor and trade with increasingly distant regions also aids in more thorough resource exploitation. Trading and administrative centers, i.e., cities, appear and grow. Money is increasingly used to facilitate trade, while debt enables a transfer of consumption from the future to the present. Specialists in violence, armed with improved weaponry, conquer surrounding peoples.

Complexity (more kinds of tools, more social classes, more specialization) solves problems and enables accumulation of wealth, leading to a conservation phase during which an empire is built and great achievements are made in the arts and sciences.

However, as time goes on, the costs of complexity accumulate and the resilience of the society declines. Tax burdens become unbearable, natural resources become depleted, environments become polluted, and conquered peoples become restless.

At its height, each civilization appears stable and invincible. Yet it is just at this moment of triumph that it is vulnerable to external enemies and internal discord. Debt can no longer be repaid. Conquered peoples revolt. A natural disaster breaks open the façade of stability and control.
Collapse often comes swiftly, leaving ruin in its wake.

But at least some of the components that made the civilization great (including tools and elements of practical knowledge) persist, and the natural environment has opportunity to regenerate and recover, eventually enabling reorganization and a new exploitation phase—that is, the rise of yet another civilization.

Energy Is Everything
Global industrial civilization shows significant signs of being in its conservation phase. Our accomplishments are mind-boggling, but our systems are overstretched, and problems (including climate change, inequality, and political dysfunction) are accumulating and worsening.

However, our civilization is different from any of its predecessors. Unlike the ancient Romans, Greeks, Egyptians, Shang Dynasty Chinese, Incas, Aztecs, and Mayans, we have built a civilization that is global in scope.

We have invented modes of transportation and communication previously unimaginable. Thanks to advances in public health and agriculture, the total human population has grown to many times its size when Roman armies marched across North Africa, Europe, and Britain. Have we perhaps outgrown the adaptive cycle and escaped natural checks to perpetual expansion?

In order to answer the question, we must first inquire why modern civilization has been so successful. The rise of technology, including advances in metallurgy and engineering, certainly played a part. These provided better ways of obtaining and harnessing energy.

But it’s the rapid shift in qualities and quantities of energy available to us that really made the difference.

Previously, people derived their energy from annual plant growth (food and firewood), and manipulated their environment using human and animal muscle power. These energy sources were inherently limited. But, starting in the 19th century, new technologies enabled us to access and harness the energy of fossil fuels. And fossil fuels—coal, oil, and natural gas—were able to provide energy in amounts far surpassing previous energy sources.

Energy is everything. All terrestrial ecosystems and all human societies are essentially machines for using (and dissipating) solar energy that has been collected and concentrated through photosynthesis. We like to think that money makes the world go ’round, but it is actually energy that enables us to do anything at all—from merely getting up in the morning to launching a space station. And having lots of energy available cheaply can enable us to do a great deal.

Fossil fuels represent tens of millions of years’ worth of stored ancient sunlight. They are energy-dense, portable, and storable sources of power. Accessing them changed nearly everything about human existence.

They were uniquely transformative in that they enabled higher rates of harvesting and using all other resources—via tractors, bulldozers, powered mining equipment, chainsaws, motorized fishing trawlers, and more.

Take just one example. In all previous agrarian civilizations, roughly three-quarters of the population had to farm in order to supply a food surplus to support the other 25 percent—who lived as aristocrats, traders, soldiers, artisans, and so on. Fossil fuels enabled the industrialization and automation of agriculture, as well as longer-distance distribution chains.
 Today only one or two percent of the U.S. population need to farm full-time in order to supply everyone else with food. The industrialization of food systems has freed up nearly all of the former peasant class to move to cities and take up jobs in manufacturing, marketing, finance, advertising, management, sales, and so on.

Thus urbanization and the dramatic expansion of the middle class during the 20th century were almost entirely attributable to fossil fuels.

But fossil fuels have been a bargain with the devil: these are depleting, non-renewable resources, and burning them produces carbon dioxide and other greenhouse gases, changing the climate and the chemistry of the world’s oceans.

These are not small problems. Climate change by itself is far and away the most serious pollution dilemma any human society has ever faced, and could lead to crashing ecosystems, failing food systems, and widespread forced human migration.human needs and desires can be satisfied by self-reproducing machines.

Denial comes in shades, some of them quite benign. Many thoughtful and informed people acknowledge the threats of climate change, species extinctions, soil depletion, and so on, and insist that we can overcome these threats if we just try harder. They are often on the right track when they propose changes.

Elect different, more responsible politicians. Donate to environmental nonprofit organizations. Drive an electric car.

Put solar panels on our roofs. Start solar co-ops or regional non-profit utility companies that aim to source all electricity from renewable sources. Eat organic food. Shop at local farmers markets.

These are all actions that move society in the right direction (that is, away from the brink of failure)—but in small increments. Perhaps people can be motivated to undertake such efforts through the belief that a smooth transition and a happy future are possible, and that renewable energy will create plentiful jobs and lead to a perpetually growing green economy.

There is no point in discouraging such beliefs and their related actions; quite the contrary: they should, if anything, be encouraged. Such practical efforts, however motivated or rationalized, could help moderate collapse, even if they can’t prevent it (a point we’ll return to below). But an element of denial persists nonetheless—denial, that is, of the reality that the overall trajectory of modern industrial society is beyond our control, and that it leads inexorably toward overshoot and collapse.

What to Do?
All of the above may help us better understand why the world seems to be running off the rails. But the implications are horrific. If all this is true, then we now face more-or-less inevitable economic, social, political, and ecological calamity. And since industrial civilization is now global, and human population levels are multiples higher than in any previous century, this calamity could occur on a scale never seen before.

Although no one can possibly predict at this point just how complete and awful collapse might actually be, even human extinction is conceivable (though no one can say with any confidence that it is likely, much less inevitable).

This is more than a fragile human psyche can bear. One’s own mortality is hard enough to contemplate. A school of psychology (“terror management theory”) proposes that many of our cultural institutions and practices (religion, values of national identity) exist at least in part to help us deal with the intolerable knowledge of our inevitable personal demise.

How much harder must it be to acknowledge signs of the imminent passing of one’s entire way of life, and the extreme disruption of familiar ecosystems? It is therefore no wonder that so many of us opt for denial and distraction.

There’s no question that collapse is a scary word.

When we hear it, we tend to think immediately of images from movies like Mad Max and The Road. We assume collapse means a sudden and complete dissolution of everything meaningful. Our reasoning shuts down. But this is just when we need it most.

In reality, there are degrees of collapse, and history shows that the process has usually taken decades and sometimes centuries to unfold, often in stair-steps punctuated by periods of partial recovery. Further, it may be possible to intervene in collapse to improve outcomes—for ourselves, our communities, our species, and thousands of other species.

After the collapse of the Roman Empire, medieval Irish monks may have “saved civilization” by memorizing and transcribing ancient texts. Could we, with planning and motivation, do as much and more?

Many of the things we could do toward this end are already being done in order to avert climate change and other converging crises.

Again, people who voluntarily reduce energy usage, eat locally grown organic food, make the effort to get to know their neighbors, get off the consumer treadmill, reduce their debt, help protect local biodiversity by planting species that feed or shelter native pollinators, use biochar in their gardens, support political candidates who prioritize addressing the sustainability crisis, and contribute to environmental, population, and human rights organizations are all helping moderate the impending collapse and ensure that there will be more survivors. We could do more.

Acting together, we could start to re-green the planet; begin to incorporate captured carbon not only in soils, but in nearly everything we make, including concrete, paper, and plastics; and design a new economic system based on mutual aid rather than competition, debt, and perpetual growth. All of these efforts make sense with or without the knowledge that civilization is nearing its sell-by date.

How we describe the goals of these efforts—whether as ways of improving people’s lives, as ways to save the planet, as fulfilling the evolutionary potential of our species, as contributing to a general spiritual awakening, or as ways of moderating an inevitable civilizational crash—is relatively unimportant.

However, the Big Picture (an understanding of the adaptive cycle, the role of energy, and our overshoot predicament) adds both a sense of urgency, and also a new set of priorities that are currently being neglected.

For example, when civilizations collapse, culturally significant knowledge is typically lost. It’s probably inevitable that we will lose a great deal of our shared knowledge during the coming centuries. Much of this information is trivial anyway (will our distant descendants really suffer from not having the ability to watch archived episodes of Let’s Make a Deal or Storage Wars?).

Yet people across the globe now use fragile storage media—computer and server hard drives—to store everything from music to books to instruction manuals. In the event that the world’s electricity grids could no longer be maintained, we would miss more than comfort and convenience; we could lose science, higher mathematics, and history.

It’s not only the dominant industrial culture that is vulnerable to information loss. Indigenous cultures that have survived for millennia are being rapidly eroded by the forces of globalization, resulting in the extinction of region-specific knowledge that could help future humans live sustainably.
Upon whom does the responsibility fall to curate, safeguard, and reproduce all this knowledge, if not those who understand its peril?

Act Where You Are: Community Resilience
We at Post Carbon Institute (PCI) have been aware of the Big Picture since the founding of the organization 15 years ago. We’ve been privileged to meet, and draw upon the insights of, some of the pioneering ecologists of the 1960s, ’70s, and ’80s who laid the basis of our current understanding of resilience science, systems thinking, climate change, resource depletion, and much more. And we’ve strived to convey that understanding to a younger generation of thinkers and activists.

Throughout this time, we have continually grappled with the question, “What plan for action makes the most sense in the context of the Big Picture, given our meager organizational resources?”
After protracted discussion, we’ve hit upon a four-fold strategy.
Encourage resilience building at the community level

Resilience is the capacity of a system to encounter disruption and still maintain its basic structure and functions. When it is in its conservation phase, a system’s resilience is typically at its lowest level throughout the entire adaptive cycle. If it is possible at this point to build resilience into the human social system, and ecological systems, then the approaching release phase of the cycle may be more moderate and less intense.

Why undertake resilience building in communities, rather than attempting to do so at the national or international level? It’s because the community is the most available and effective level of scale at which to intervene in human systems.

National action is difficult these days, and not only in the United States: discussions about nearly everything quickly become politicized, polarized, and contested. It’s at the community level where we most directly interact with the people and institutions that make up our society. It’s where we’re most affected by the decisions society makes: what jobs are available to us, what infrastructure is available for our use, and what policies exist that limit or empower us.

And critically, it’s where the majority of us who do not wield major political or economic power can most directly affect society, as voters, neighbors, entrepreneurs, volunteers, shoppers, activists, and elected officials.

PCI has supported Transition Initiatives since its inception as one useful, locally replicable, and adaptable model for community resilience building.

Leave good ideas lying around.
Naomi Klein, in her book The Shock Doctrine, quotes economist Milton Friedman, who wrote:
“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Friedman and other neoliberal economists have used this “shock doctrine” for decades to undermine regional economies, national governments, and indigenous cultures in order to further the project of corporate-led economic globalization. Klein’s point is that the key to taking advantage of crises is having effective system-changing plans waiting in the wings for the ripe moment.

And that’s a strategy that makes sense as society as a whole teeters on the brink of an immensely disruptive shift.
What ideas and skills need to be lying around as industrial civilization crumbles?

One collection of ideas and skills that’s already handily packaged and awaiting adoption is permaculture—a set of design tools for living created by ecologists back in the 1970s who understood that industrial civilization would eventually reach its limits. Another set consists of consensus group decision-making skills. The list could go on at some length.

Target innovators and early adopters.
Back in the 1960s, Everett Rogers, a professor of communications, contributed the theory of the Diffusion of Innovations, which describes how, why, and at what rate new ideas, social innovations, and technology spread throughout culture.

The key to the theory is his identification of different types of individuals in the population, in terms of how they relate to the development and adoption of something new: innovators, early adopters, early majority, late majority, and laggards.

Innovators are important, but the success of their efforts depends on diffusion of the innovation among early adopters, who tend to be few in number but exceptionally influential in the general population.

At PCI, we have decided to focus our communications on early adopters.

Help people grasp the Big Picture.
Discussions about the vulnerability of civilization to collapse are not for everyone. Some of us are too psychologically fragile. All of us need a break occasionally, and time to feel and process the emotions that contemplating the Big Picture inevitably evokes.

But for those able to take in the information and still function, the Big Picture offers helpful perspective. It confirms what many of us already intuitively know. And it provides a context for strategic action.

Pro-Social, Nonpartisan
I’m frequently asked if I have hope for the future. My usual reply is along these lines: hope is not just an expectation of better times ahead; it is an active attitude, a determination to achieve the best possible outcome regardless of the challenges one is facing. PCI Fellow David Orr summed this up best when he wrote, “Hope is a verb with its sleeves rolled up.”

However, if that’s as far as the discussion goes, merely redefining “hope” may seem facile and unsatisfying. The questioner wants and needs reasonable grounds for believing that an outcome is possible that is something other than horrific. There is indeed evidence along these lines, and it should not be ignored.

Steven Pinker, in his book The Better Angels of Our Nature, argues that we humans are becoming more peaceful and cooperative. Now, it could be argued that any decline in violence during the past few decades can be seen as yet another indication that civilization is in a conservation phase of the adaptive cycle: we have attained a balance of power, facilitated by the wealth flowing ultimately from fossil fuels; perhaps violence is simply being held in abeyance until the dam breaks and we head into the release phase of the cycle. Nevertheless, evolution is real, and for humans it occurs more rapidly via culture than through genes. It is entirely possible, therefore, that we humans are rapidly evolving to live more peacefully in larger groups.

Earlier I explained how the findings of neuroscience help us understand why so many of us turn to denial and distraction in the face of terrible threats to civilization’s survival. Neuroscience also offers good news: it teaches us that cooperative impulses are rooted deep in our evolutionary past, just like competitive ones.

Self-restraint and empathy for others are partly learned behaviors, acquired and developed in the same way as our capacity for language. We inherit both selfishness and the capacity for altruism, but culture generally nudges us more in the direction of the latter, as parents are traditionally encouraged to teach their children to share and not to be wasteful or arrogant.

Disaster research informs us that, in the early phases of crisis, people typically respond with extraordinary degrees of cooperation and self-sacrifice (I witnessed this in the immediate aftermath of wildfires in my community of Santa Rosa, California). But if privation persists, they may turn toward blame and competition for scarce resources.

All of this suggests that the one thing that is most likely to influence how our communities get through the coming meta-crisis is the quality of relationships among members. A great deal depends on whether we exhibit pro-social attitudes and responses, while discouraging blame and panic. Those of us working to build community resilience need to avoid partisan frames and loaded words, and appeal to shared values. Everyone must understand that we’re all in this together.

The Big Picture can help here, if it aids people in grasping that the collapse of civilization is not any one group’s fault. It is only by pulling together that we can hope to salvage and protect what is most intrinsically valuable about our world, and perhaps even improve lives over the long term.

Hard times are in store. But that doesn’t mean there’s nothing we can do. Each day of relative normalcy that remains is an occasion for thankfulness and an opportunity for action.

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