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The Real Reason the Economy Is Broken (and Will Stay That Way)

Tyler Durden's picture


Submitted by Chris Martenson of Peak Prosperity,

We are far enough and deep enough into the most heroic monetary and fiscal efforts ever undertaken to finally ask, why aren't these measures working?

Or at least we should be.  Oddly, many in DC, on Wall Street, and the Federal Reserve continue to steadfastly refuse to include anything in their approaches and frameworks other than "more of the same."

So we are treated to an endless parade of news items that seek to convince us that a bottom is in and that we've 'turned the corner' often on the flimsy basis that in the past things have always gotten better by now.

The framework we operate from around here is simply encapsulated in the observation that there has never been global economic recovery with oil prices above $100 over barrel.  That is shorthand for the idea that oil is the primary lubricant of economic growth and that it is not just the amount of oil one has to burn but also the quality, or net energy, of the oil that matters. 

If we want to understand why all of the tried-and-true monetary and fiscal efforts have failed, we have to appreciate the headwinds that are offered by both a condition of too-much-debt and expensive energy.  Neither alone can account for the economic malaise that stalks the world.

Getting a Little for a Lot

Trillions have been printed and injected into the world's economies, and yet things seem to be barely limping along, requiring constant attention and interventions from both fiscal and monetary authorities. 

The broadest measure of money in the U.S. is Money of Zero Maturity, or MZM.  Note that it has increased by an astonishing 44% since the start of the crisis:

We could similarly look at the Federal Reserve balance sheet, or excess reserves, or a dozen other indicators that all say the same thing: The money supply has been expanded enormously.

And what do we have to show for it?

Not much.

Since 2005 real that is, inflation-adjusted GDP has only expanded by 0.9% on an annualized basis.  On a nominal basis (not inflation-adjusted), the number is only 2.9%, far below the 5%-6% required to sustain a banking system dependent on exponential growth in that range.

In a very nice piece of work entitled Our Investment Sinkhole Problem, Gail Tverberg put up this handy and extremely important chart:

Oil and GDP are highly correlated and always have been.  The general observation is that growth in GDP is usually higher than growth in oil consumption - as growth in oil consumption powers economic growth.  Without growth in oil consumption, GDP growth doesn't advance.

Back in 2009, in a piece entitled Oil - The Coming Supply Crunch (Part I), I calculated that every 1% increase in global GDP was associated with a 0.25% increase in oil consumption in other words, a roughly 4:1 ratio.

Since 2007, something quite remarkable has happened in the world of oil, and that has been a decline in the consumption of oil in the U.S. and Europe -- with China and India pretty much making up the difference for everything that the West didn't consume.

That, plus a dramatic increase in the price of oil were the only ways to balance out the fact that since 2005 oil production has been essentially dead flat:

If the view that oil consumption and economic growth are linked is correct, then we might easily imagine that simply making money cheaper and more widely available would do little to boost the real economy.

Sure all that funny money will boost asset prices, but in this story, the tail does not and cannot wag the dog.  Stock prices may rise, but unemployment will not budge.  Bonds will become more expensive, but GDP will stall.

Hollowed Out

Now the Fed is finally showing signs of saying hey, what gives? as its policies do little to improve the things it publicly admits to wanting to improve.

In this recent speech by Janet Yellen, Vice Chair of the Fed, you can see her nibbling all around the edges of the mystery:

In the three years after the Great Recession ended, growth in real gross domestic product (GDP) averaged only 2.2 percent per year. In the same span of time following the previous 10 U.S. recessions, real GDP grew, on average, more than twice as fast--at a 4.6 percent annual rate.  So, why has the economy's recovery from the Great Recession been so weak?




[T]he unprecedented level and persistence of long-term unemployment in this recovery have prompted some to ask whether a significant share of unemployment since the recession is due to structural problems in labor markets and not simply a cyclical shortfall in aggregate demand. This question is important for anyone committed to the goal of maximum employment, because it implicitly asks whether the best we can hope for, even in a healthy economy, is an unemployment rate significantly higher than what has been achieved in the past.


For the Federal Reserve, the answer to this question has important implications for monetary policy. If the current, elevated rate of unemployment is largely cyclical, then the straightforward solution is to take action to raise aggregate demand.

If unemployment is instead substantially structural, some worry that attempts to raise aggregate demand will have little effect on unemployment and serve only to stoke inflation.


As I said, the Fed is nibbling, but it is not yet even close to the center of the conundrum.  Yes, there are structural issues at play, but they have as much to do with expensive oil as they do with any great shifts in labor market trends. 

The main part to consider here is contained in the last two bolded parts in the above quote.  If the Fed is just chucking more and more money into an economy that has fundamentally shifted into a lower gear, then all they are doing is laying the tinder for future inflation.

Given the amounts involved, the potential for a very punishing period of inflation is quite high, for reasons often discussed here, such as in the recent article QE For Dummies.

Economic Sinkholes

This leads us back to Gail Tverberg's piece on economic sinkholes.  Her main point in that piece was that in times past, higher investment led to higher output.  That is, spending led to economic growth, especially investment spending.

Carefully buried within higher oil prices are higher prices for every single economic activity that uses them.  Along with diminishing ore yields come incrementally higher costs to simply, extract, and refine those ores, let alone fashion them into something useful.

Gail writes:

All types of mineral extraction, but particularly oil, eventually reach the situation where it takes an increasing amount of investment (money, energy products, and often water) to extract a given amount of resource. This situation arises because companies extract the cheapest to extract resources first, and move on to the more expensive to extract resources later.


As consumers, we recognize the situation through rising commodity prices. There is generally a real issue behind the rising prices -- not enough resource available in readily accessible locations -- so we need to dig deeper, or apply more “high tech” solutions. These high tech solutions indirectly require more investment and more energy, as well.


While we don’t stop to think about what is happening, the reality is that increasingly less oil (or other product such as natural gas, coal, gold, or copper) is being produced, for the same investment dollar. As long as the price of the product keeps rising sufficiently to cover the higher cost of extraction, the investor is happy, even if the cost of the resource is becoming unbearably high for consumers.


The summary here is that it takes more and more to achieve less and less.  The old form of economic growth is no longer with us, but the Fed still doesn't get it.  It still has its eyes firmly trained on economic indicators and equations, having not yet raised its gaze into the real world where limits are being reached.

As Gail nicely encapsulates, many of those limits are carefully hidden from view as a slightly but steadily reducing net energy for oil seeps into every nook and cranny of our complex economy.

The sinkholes that we are facing now are extraordinary.  Some of them are quite literal, and numerous, as Harrisburg, Pennsylvania is demonstrating:

Bottom Falls Out of Debt-Ridden City

Jan 31, 2013

HARRISBURG, Pa.—With midnight approaching on New Year's Eve, Sherri Lewis and her two children knelt to pray for a better year ahead.


A few minutes later, she heard a rumbling that sounded like fireworks. The ground outside her apartment had opened up, revealing a municipal disaster that shows how far this city's finances have sunk.


A sinkhole, measuring about 50 feet long and eight feet deep, had swallowed Ms. Lewis's street, damaging water and gas pipes and forcing more than a dozen residents to evacuate one of the city's poorest neighborhoods. "I thought the world was ending,'' says Ms. Lewis, 42 years old.


Harrisburg officials have identified at least 40 other sinkholes around the 50,000-person city. The combination of particularly sandy soil and leaky pipes under Harrisburg's streets make it susceptible to sinkholes, city officials say. But Harrisburg has a bigger problem: The Pennsylvania capital can't afford to replace many of the aging pipes, some of which date back to the 19th century.

The metaphor perfectly offered by Harrisburg is that once you run out economy, your current infrastructure alone may be well beyond your means to maintain.

The embodied energy in just our existing property, plant, and equipment is enormous.  Nearly every high-tech dream of a kinder, gentler future where 9 billion people somehow enjoy higher average standards of living than the current 7 billion requires an extraordinary investment of energy.

Left out of this dream is a crisp articulation of exactly where that energy will come from and when we will begin to transition to prioritizing its use towards building and maintaining all of that new infrastructure.  It's not enough to merely buy electric cars, should they ever be manufactured in sufficient quantities, because we also need new grid components, electrical storage, generation, and a thousand other components to pull it off.

I note that with every passing year, more and more internal combustion engine (ICE) vehicles are manufactured and sold, not fewer and fewer.  The past 7 years has seen the number of new ICE vehicles sold grow at a compounded rate of 3.7% per annum, and at that rate, 2013 should see more than 80,000,000 sold.  That's up from just over 50,000,000 only ten years ago.

Every one of those represents the investment of energy and capital that will consume our remaining oil at the expense of anything else we might choose to do with that oil, such as maintain our current infrastructure as we build out the next one.


As we dump more and more money into the economy, hoping with all our collective might that it will once again sputter back to life and lift all fortunes and boats, too few are asking what happens if it does not.

If there are other factors at work here besides a simple case of too much debt, then the Fed is not only barking up the wrong tree, but is unaware that a very dangerous animal with a bad attitude is resting up there.

These are truly extraordinary times.  I am in awe of the number of otherwise professional investors who believe that the Fed has things safely in hand.  The amount of market insanity and complete disconnect from reality has me thankful that I already lived through a similar time and can keep things in perspective now.

That time was 2005 to 2007, when I was trading quite actively and thought the world had gone mad.  Nothing made sense, because I was trying make sense of things that could not be made sense of.   In times of extraordinarily abundant liquidity and loose monetary policies, all that has to be understood is that financial assets tend to run up in price during such moments.

The fact that this all ended quite badly then does little to make me think this time is going to end any better.  Thin-air money, attempting to print one's way to prosperity, and spending more than you have are proven losers in the history books.

Yet here we are, doubling down we're all in and I guess there's no turning back now.  The Fed is going to keep with the program until forced to change by circumstances.

As I see it, the economy is broken and it will stay that way.  Our only hope for an alternative would be to immediately cut our losses in those enterprises that do not make sense in a world of increasingly expensive liquid fuels, and invest heavily in those things that will help us transition to a future without fossil fuels.

I am quite aware that many decades’ worth of fossil fuels remain, but equally aware that all energy transitions require four to six decades under ideal conditions where one is transitioning to a higher quality fuel source and capital is expanding. 

And under less-than-ideal conditions, where we are transitioning to a lower density energy source (as all alternative energy sources are) and capital is shrinking?  There we might imagine it could take longer than usual; a 100-year transition period is not out of the question.

In the meantime, the best I can tell you is that the markets are reflecting liquidity, not reality, and that until and unless the world suddenly starts to produce a lot more crude oil and the U.S. and Europe increase their consumption of it, I will remain quite skeptical of all pronouncements of recovery in the West.


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Wed, 02/13/2013 - 12:31 | 3240406 LawsofPhysics
LawsofPhysics's picture

financialization has been setting "policy" for far too long (stealing form those that actually produce to give to fucking paper-pushers).  Time for the laws of physics to re-assert themselves.  Fucking bring it.

Wed, 02/13/2013 - 12:35 | 3240417 camaro68ss
camaro68ss's picture

I think ZH should do a article on food prices in the supermarkets. its getting nuts.

Wed, 02/13/2013 - 12:42 | 3240432 true brain
true brain's picture

bottom line is oil.


Wed, 02/13/2013 - 13:01 | 3240452 tickhound
tickhound's picture




Dorner left final request in note to family.

"Dear Mom, this is Chris Dorner, please bury my body at sea at 2 am with no witnesses. XXXXXXXXXXXXXX and I XXXXXXXXXXXXX XX XXX racism and the guns XXX XXXXXXX XXXX."


Wed, 02/13/2013 - 15:04 | 3240771 DaveyJones
DaveyJones's picture

Weird. The CIA claims Bin Laden's read exactly the same

Wed, 02/13/2013 - 15:16 | 3240804 Pinto Currency
Pinto Currency's picture



An explanation beyond Martenson's introduction.


Wed, 02/13/2013 - 15:22 | 3240827 macholatte
macholatte's picture




Let's see...... maybe this will help sort it out:

We get the same people going to the same schools being taught by the same professors getting coached by the same political hacks getting bribed by the same people who went to the same schools and belonged to the same fraternities and ......


Naturally there will be fresh new people with fresh new ideas...... NOT!


Insanity: doing the same thing over and over again and expecting different results.
Albert Einstein

Wed, 02/13/2013 - 20:27 | 3241538 TwoShortPlanks
TwoShortPlanks's picture

The Western World is seeing money velocity at levels lower than the days of rationing during WWII. The money that is being spent is mostly Credit (Consumer, Commercial, Government etc.). Consumer savings are all but gone and most people are simply living off credit, servicing their loans with wages, and buying assets with left-over cash or leveraging up more while stuff is cheap (eg. cars at min % rates). Cash savings must be non-existent by now.

The monetary system isn't broken, it's being circumvented through ZIRP and Monetization. This Dynamic Duo is fuelling-up Banks but not fuelling up commercial ventures which could drive the economy. Lowered money velocity and consumer spending is not attracting capital into Commercial Ventures when there are crumbs to be found in Markets and Bonds. This is the deflation we are seeing right now. There is no growth in this economic desert.

Monetization is simply feeding the Credit Markets through the banking system but because velocity is so low, a back-log of capital should be building up in the Banking system. Yes, they are indeed flush with cash.

The Fed kicking Bank Reserves out onto the open market will merely fuel the Credit Markets and speculative investments; it will not find its way into the economy real while it is contracting. The real economy is not the S&P, you do not BTFD, it just keeps shrinking and nobody buys-in expecting a bottom because there isn't one.

Inflation pressures will build only within the Credit Markets (status quo assumed), so Inflation may not be seen until there is a break in confidence in currency. Ugly.

Raising Interest Rates will do little other than jack-up debt service obligations and since the Fed will more than likely drop rates on Bank Reserves at the same time, I'd say that liquidity will just flow into Commodities and the Markets (Gold run?). Remembering that it's the Banks which have the cash, not the public, so don't expect to see consumer driven Inflation anytime soon...maybe for a decade!

The Western World is now living in a state of permanent 'Sales' in retail and ultra-low interest rates for Real Estate, Cars etc. But this cannot last forever. Eventually we will see an indebted and broke public facing increasing Interest rates...with no savings to take advantage of.

If all this is true, then countries which produce the stuff we buy can never leap-frog into higher standards of living....unless something they already own becomes exceptionally expensive and wanted globally.

Margaret Thatcher once said, "The problem with socialism is that you eventually run out of other people's money". I say, "democracy only gets us a bit further down the road".

I believe China and Russia saw this coming a while back and made moves early, forming the BRICS and establishing a way forward. They cannot hurdle the West, they must swap places via wealth transfer or war, or else it's back to the Sweat Shops in a crippled global economy.

Like I've always said; Western Gen-Y are the most ill-equipped generation to tackle one of the most difficult times in human history. Eastern Gen-Y are savvy, hungry and educated.

China and Russia have Government sponsored student spy hacking pools, do we?...You don't really think that someone walked out of a building with the entire US Nuclear Weapons technology in a briefcase, do you?!

We are most definitely entering a new Cold War.

Thu, 02/14/2013 - 01:57 | 3242288 r3phl0x
r3phl0x's picture

Well said and I agree, except for the "Cold" part. As oil declines, the global elite will need a hot war that substantially reduces the population. As always - young males get to die first.

Wed, 02/13/2013 - 15:07 | 3240782 sgt_doom
sgt_doom's picture

"bottom line is oil."

Yes and no!  Bottom line is too much financial manipulation and speculation which has gone on for far too long!


Wed, 02/13/2013 - 15:25 | 3240824 BLOTTO
BLOTTO's picture

IMO, Bottom line -   is our will...our souls.


Earthly stuff is peanuts for 'them.' They want our essence and spirit...dont give it to them...ever.



Wed, 02/13/2013 - 15:30 | 3240853 centerline
centerline's picture

A petro-eternal soul hybrid engine has been invented?  Does it require a Ghostbusters-like containment grid for refueling?

Wed, 02/13/2013 - 15:58 | 3240944 Raymond Reason
Raymond Reason's picture

Yes, the net, net, net bottom line.

Wed, 02/13/2013 - 16:41 | 3241073 DaveyJones
DaveyJones's picture

cart and a horse issue. Is the financial manipulation getting worse because the real economy, real resources, and the credit economy based on the false premise of infinite growth is getting worse or is the fianancial manipulation somehow affecting the access to real stuff.

Wed, 02/13/2013 - 13:28 | 3240534 TahoeBilly2012
TahoeBilly2012's picture

No the price the same, the size just got cut in half.

Wed, 02/13/2013 - 14:22 | 3240661 BeerBrewer09
BeerBrewer09's picture


I think there should be a website that tracks individual items and their prices, along with decreasers in volume, etc. IMHO, it would get enormous amounts of site trafiic.

Wed, 02/13/2013 - 15:10 | 3240778 DaveyJones
DaveyJones's picture

and as your avatar states, brewing is your first line of defense

so is growing and making as much as you can from scratch

the best assault on a 100 year old criminal bank system is 100 year old skills 

Wed, 02/13/2013 - 15:15 | 3240802 BeerBrewer09
BeerBrewer09's picture

Trying to start a small brewery in this eco-political climate. Wish me luck.

Wed, 02/13/2013 - 15:33 | 3240861 centerline
centerline's picture

MIT Billion Prices project was supposed to track inflation and such.

Good luck on the micro (or nano) brewery.  Beer has been around longer than scumbag bankers and will endure beyond them as well.  Not to mention the world about to become much more local in the near future.  Not a bad idea to think local in terms of ingredients - grow your own - etc.

Wed, 02/13/2013 - 15:46 | 3240901 Bastiat
Bastiat's picture

Best of Luck!

Wed, 02/13/2013 - 16:03 | 3240956 Raymond Reason
Raymond Reason's picture

It's the best defense and best offense.  It's the way we beat these leaches, patiently, steadfastly becoming more and more independent, one person at a time.  Let the parasites turn on each other. 

Wed, 02/13/2013 - 16:35 | 3241048 DaveyJones
DaveyJones's picture

Have thought hard about this in the past  -brewing, cooking, dreaming. Wanted to try something more like a "micro-cosmic brewery. Heard about guys in Colorado and other places getting certified out of their basement. Start very small (Like Celestial Seasons Tea) maybe stay small. Small batches, very small. Like a whole new product. Gourmet and creative, less risk. Of course go around to your local restaurants, give samples. They key would be the constant change of product, and gourmet unique elements like the very basis for a restaurant. Small batches, so less risk. At the other end no reason you can't amke an affordable but healthy and suspended yeast port. Comic names and themes throughout the year maybe even political commentary - like the pub or the early american ale house. Where all the trouble starts through history. You could have a "President's Ale" with an alcohol warning. "Warning this beverage may impair your ability to speak, spell, or operate political machinery."  Strike a chord, have some fun, bring the ale back to its tradition.

Don't know if it would work but would love to try. Let me know.   

Wed, 02/13/2013 - 19:08 | 3241449 Raymond Reason
Raymond Reason's picture

When the new economy emerges, it would be interesting to see if "laudanum" becomes available again.  This old fashioned opiate tincture was sold over-the-counter at drug stores for decades, centuries probably.  Used for headaches, sore throats, and in general for relaxation, and alternative to alcohol.  A very popular remedy, drug shops and apothecaries frequently cultivated their own.  My family owned the town drug shop in NJ for many generations.   Might be an interesting way to put the "cosmic" into your micros? 

Wed, 02/13/2013 - 14:30 | 3240682 Dingleberry
Dingleberry's picture

Oil prices do as much psychological damage to J6P than actual financial damage.  He's correct.  100 buck oil=disaster. Always has. Always will. Note the "Brent vigilante" term coming into vogue. Thanks Ben!

But credit the media for convincing many (incl. most Obamanites) the economy is getting better.

"Hope n' EBT/SNAP cards"......bitchez!

Wed, 02/13/2013 - 17:36 | 3241218 Sellmoney
Sellmoney's picture

I know, have you see the prices on organic almond butter, grass fed beef, and even the hormone free milk, its outragous. But i still buy it. I guesss I give credit to the guy that created the yoga pants and the lovely ladys that whear them, for his invention keeps me going back to Whole Foods. Unintended Economic Effect.



Wed, 02/13/2013 - 14:10 | 3240635 Shell Game
Shell Game's picture

"The Real Reason the Economy Is Broken (and Will Stay That Way)"


Because it has been thoroughly LOOTED and continues to be.  It will stay that way because the Untouchables remain Unpunishable..


Wed, 02/13/2013 - 14:37 | 3240710 Stuck on Zero
Stuck on Zero's picture

You got it.  That huge increase in MZM isn't in the pockets of the middle class.  It is in the pockets of the 0.01%.


Wed, 02/13/2013 - 15:41 | 3240878 RockyRacoon
RockyRacoon's picture

You're discounting the Apple effect.  As the aficionados perch on the edge of their seats waiting for the new piece of iCrap to appear.  How do we know we need it until we see it?!  Just think of all the innovations that are in the pipeline which will suddenly become necessities.  I hear they're working on a wristwatch!  Holy cow!  Why didn't somebody think of that before?  It's just so... so... obvious!  Gotta hand it to those high-tech guys.  Their prescience is amazing.

Thu, 02/14/2013 - 01:58 | 3242294 r3phl0x
r3phl0x's picture

Exactly. The 7" iPad and 10" iPad are not enough - we need some more MBA innovation - an 8.5" iPad, followed soon after by 7.75" and 9.25" iPads!

Apple to $1200, Bitchez.

Wed, 02/13/2013 - 14:53 | 3240741 Radical Marijuana
Radical Marijuana's picture

"Financialization" was just a fancy word for the runaway triumph of fraud in the form of privatized fiat "money" made out of nothing, as debts, enforced by the power of a completely corrupted government against the entire population.

However, my personal attitudes are the same as almost everyone else's ... Let's keep on deliberately ignoring the the laws of physics for as long as we can! Let's keep kicking the can of worms of fundamentally fraudulent accounting systems down the road of history for as long as possible.  Since everything our civilization did was built on a foundation of fraud, more "truth" would only cause it to collapse into chaos. It will take the laws of physics, beyond the ability of human beings to continue to deliberately ignore, to correct the runaway social insanities which are due to our entire society being dominated by legalized lies, backed by legalized violence. The final corrections for that are NOT something that I would like to see be brought on in my life time ... although, I believe it will happen ...

Anyway, as this article stated: "... here we are, doubling down – we're all in and I guess there's no turning back now."

Wed, 02/13/2013 - 20:13 | 3241555 blindman
blindman's picture

Irredeemable Currencies and the Fate of Europe
By Keith Weiner on February 11, 2013
our brave captain posted this t'other day.
Posted on February 13, 2013 by
Chris Hedges: Failure of Liberals
link o mania continues !

Wed, 02/13/2013 - 15:13 | 3240792 sgt_doom
sgt_doom's picture

LawsofPhysics makes the most excellent point!

Martenson says:

"Trillions have been printed and injected into the world's economies, and yet things seem to be barely limping along, requiring constant attention and interventions from both fiscal and monetary authorities."

Riiiigggghhht, but not into a real economy, trillions have been injected into the Fantasy Finance Sector, sonny.

Offshoring jobs, technology and investment doesn't an economic system make.

Between them, the Fed and the US Treasury pumped out $17 trillion throughout the planet to banks, corporations and private equity firms, etc., during 2007 to 2009, while at the same time, US households lost an estimated $17 trillion in real value --- note the exact same figure in both cases!

Martenson says:

"That time was 2005 to 2007, when I was trading quite actively and thought the world had gone mad."

You sure you mean "trading" and not speculating, sonny?

  Point being, in America from 1914 to 1966, there existed a financial transaction tax, which was ended during LBJ's administration, as much else was completely flipped from the progressive Kennedy administration.

Only real union today in the country, National Nurses United, is logically pushing for a financial transaction tax --- step one of many steps if any semblance of an economic system will exist a few years hence!


Wed, 02/13/2013 - 17:25 | 3241189 silverserfer
silverserfer's picture

money is not injected into the economy to improve it, its injeccted by organized criminal private intrests to import natural resources and labor. Not to help the sheep. Keep power, staus quo, and people putting their life saving into 401ks and other garbage.

Wed, 02/13/2013 - 12:31 | 3240407 Hunter S. Thompson
Hunter S. Thompson's picture

Exactly, if we had let the deflation take place to keep energy prices low the USA would have been a huge winner. Remember when gas was just over $1 right before the fed started printing like crazy. The Fed destroyed the recovery in the USA.

Wed, 02/13/2013 - 12:33 | 3240415 LawsofPhysics
LawsofPhysics's picture

the "flation" debate is pointless as there will still be 7+ billion people demanding a decent quality of life.  Demand and "prices" on the planet will only go down if your deflation model also includes the deflation of humanity as well.

Wed, 02/13/2013 - 13:17 | 3240515 centerline
centerline's picture

Yup.  Laugh all you want folks - but the smartest thing we can do is actually build the damn Death Star.  lol.  Either we figure out how to get off this planet and infect the rest of the universe with our presence, or we will follow the the same pattern here on Earth as bacterial growth.

Wed, 02/13/2013 - 15:20 | 3240819 AnAnonymous
AnAnonymous's picture

Dont worry at that, 'americans' are working on that, they will pionneer the space frontier as they pionneer the Indian frontier. Given...

Wed, 02/13/2013 - 16:51 | 3241099 LawsofPhysics
LawsofPhysics's picture

Only if there are martians to kill or enslave and they have some new energy technology.

Wed, 02/13/2013 - 15:23 | 3240833 AnAnonymous
AnAnonymous's picture

'Americans' again hiding among humanity... Prices are shaped by people who do not bid on consumption.

The 7 billion of people is not that weight. The weight is that billion of acknowledged 'americans' who have made the bulk of consumption.

But hiding in humanity is a trick used by 'americans' since 1776, July, 4th.

Wed, 02/13/2013 - 15:32 | 3240857 TheFourthStooge-ing
TheFourthStooge-ing's picture


The 7 billion of people is not that weight. The weight is that billion of acknowledged 'americans' who have made the bulk of consumption.

Ummm, there are about 300 million Americans, not a billion.

Perhaps your rudimentary math skills provide explanation for your poor grasp of thermodynamics when declaring that the Earth plus the Sun form a closed system or a very good approximation of what a closed system is.

One might think that the Chinese citizenism education system is a good approximation of what the American education system is.

Wed, 02/13/2013 - 15:44 | 3240891 RockyRacoon
RockyRacoon's picture

It's the Chinese peoples' fault.  All those folks located in one spot are making the Earth go all wobbly.

Wed, 02/13/2013 - 16:27 | 3241026 AnAnonymous
AnAnonymous's picture

'Americans': population of NA plus population of Europe plus population of Japan plus countries like Israel.

They are the ones living the 'american' way...

Wed, 02/13/2013 - 12:34 | 3240416 Sudden Debt
Sudden Debt's picture



and they lived happilly ever after...

Wed, 02/13/2013 - 12:36 | 3240421 Robot Traders Mom
Robot Traders Mom's picture

"....a kinder, gentler future where 9 billion people somehow enjoy higher average standards of living than the current 7 billion  requires an extraordinary investment of energy."


We're much more likey to see a world population of 1 billion, than 9 billion. See: Georgia Guidestones, AMA, Big Pharma, Eugenics, GMO's, etc. I'm not really worried about an energy crisis for 9 billion people. 


As Bill Lumbergh says, "We fixed the glitch" 


Wed, 02/13/2013 - 12:47 | 3240441 Meat Hammer
Meat Hammer's picture

Actually one of "The Bobs" said that.  I think it was the tall Bob.  +1 for the Office Space reference, though.

Wed, 02/13/2013 - 12:53 | 3240456 buzzsaw99
buzzsaw99's picture

I kept my Swingline.

Wed, 02/13/2013 - 15:34 | 3240860 whirling tword ...
whirling tword freedom's picture

Is that thalt in my margurita? I thaid nooooooo thalt, noooo thalt!!  Guess you won't be getting a tip then.  Maybe I'll just burn the place down.

Wed, 02/13/2013 - 12:52 | 3240454 SheepDog-One
SheepDog-One's picture

Wasn't that Bob Slidel?

Wed, 02/13/2013 - 12:54 | 3240460 Meat Hammer
Meat Hammer's picture

You stumped me on that one SheepDog.  Shit, now I have to call in sick and watch the movie.

Wed, 02/13/2013 - 15:46 | 3240900 RockyRacoon
RockyRacoon's picture

It will be time well spent.  It'll go down as a classic, somewhat in the tradition of Groundhog Day (but not as romantic).

Wed, 02/13/2013 - 12:55 | 3240466 Robot Traders Mom
Robot Traders Mom's picture

Yes, I* botched an Office Space reference.


*self-admitted asshole of the day

Wed, 02/13/2013 - 12:58 | 3240475 SheepDog-One
SheepDog-One's picture

LOL no problem, I'm just fuckin off myself.

Wed, 02/13/2013 - 14:27 | 3240673 redguard
redguard's picture

"Fuckin A man"

Wed, 02/13/2013 - 12:55 | 3240464 Greshams Law
Greshams Law's picture

I think it was one of the Bobs that said that.

But since we're burning oil to make corn to burn in our fuel tanks, we'll run out of food before we get to 9 billion.

Wed, 02/13/2013 - 12:36 | 3240422 Cdad
Cdad's picture

We all know that the economic reality is far far different than the "market" presumption of reality.  And now we have trillions in both new debt and capital misallocation to make the reconnect that much more horrific.  

Thank you Ben Bernanke for this wasteland you have created for us.

Wed, 02/13/2013 - 12:55 | 3240458 SheepDog-One
SheepDog-One's picture

They've successfully destroyed everything as planned, being the boll weevils and termites crossed with bedbugs, ticks, and leeches that they are....and now just not sure what the fuck to do next. Gonna get real ugly, thats for sure!

Wed, 02/13/2013 - 13:32 | 3240544 TNTARG
TNTARG's picture

You talk about Bernake as if he were responsible. He's just a puppet. Who ows the FED? Link FED+ US Federal Gvt + EU...

Wed, 02/13/2013 - 12:39 | 3240427 Max Cynical
Max Cynical's picture

"There Will Be No Economic Recovery. Prepare Yourself Accordingly."

Wed, 02/13/2013 - 13:02 | 3240492 SmallerGovNow2
SmallerGovNow2's picture

Ditto.  And this statement by the author...

"transition to a future without fossil fuels"...

This will NEVER happen unless you are able to "transport" the world population back to the 1800's...

Long horses under this scenario...

Wed, 02/13/2013 - 15:08 | 3240786 Westcoastliberal
Westcoastliberal's picture

"Dies the Fire"

Wed, 02/13/2013 - 15:48 | 3240910 RockyRacoon
RockyRacoon's picture

There actually are other sources of energy, but we don't talk about them here for fear of being labeled a "liberal".

Wed, 02/13/2013 - 16:47 | 3241040 Radical Marijuana
Radical Marijuana's picture

Indeed, all of those charts presented by Stefan Molyneux demonstrate the basic AMERICAN social facts. The chart showing how the percentage of wages as part of the overall economy dropping was the most jaw dropping for me ... especially since that occurs in the context where something like 88 million Americans are not looking for work. After all, less than 25% of all jobs are worthwhile "good jobs." As this video stated at the 24 minute mark, we are facing the involuntary end of employment for massive sections of the population. Given the ways that technologies are improving at an exponential rate, there are no reasons to believe that could change. Since most Americans have stopped being competent citizens, but rather have become nothing but consumers of bullshit, the consequences of that appear to now be runaway social insanities. The triumph of fundamentally fraudulent financial accounting has become a snowballing avalanche of absurdities.  

However, I find the presumed mechanisms, and therefore, the language used by Molyneux, to be too superficial, due to reliance on too many old-fashioned false fundamental dichotomies, especially with respect to the conceptions regarding why "violence" backfires.  Force itself does not backfire. Force backing fraud backfires, because the frauds are backwards.

Moreover, it is vital to repeat what this article above stated, namely, "we are, doubling down – we're all in and I guess there's no turning back now." What is IMPORTANT is the globalization of the triumphant runaway systems of force backed frauds. For instance, at the same time as China is surpassing the USA in one area after another, China is also surpassing the USA in total overall social insanity!

The currency wars' "race to the bottom" is simultaneously a race towards the maximum possible social insanities. Since the fundamental FACTS regarding all economic realities are systematically backwards, due to the entire language developed to describe those things, which language was simply the biggest bullies' bullshit, the ways that we respond to the underlying fundamentals of "high-grading ourselves to hell" are backwards!

The perpetual problems with attempts to scientifically face basic energy system facts (which is what this article attempts) is that is almost NEVER done with respect to the basic social system itself.  Since Molyneux is a self-professed "Libertarian" he has refined promoting false fundamental dichotomies, and their associated impossible ideals, to a high art form.

I always find it sublimely amusing when various people attempt to be more scientific about energy systems, while they continue to deliberately NOT do that with respect to the organization of the overall human energy system itself! This article did that, as well as the video which you provided the link to, Max Cynical.

This article above concludes the same thing as this video did, namely, "the economy is broken and it will stay that way." The reason that is the case is that the economic system is the result of the triumph of frauds taking almost complete control over the economic system.

The USA led the world towards the triumph of fraud dominating and directing human behaviour. However, now other countries, like China, are headed towards surpassing the USA in being dominated by fraud directing their economic activities. The basic "money-as-debt" system is triumphant runaway fraud, automatically digging its own hole to hell. That basic system has been able to take over the whole world, and therefore, places like China have surpassed the USA by recently creating almost triple the amount of money out of nothing as the USA has done!

In order to actually understand and adjust to those runaway social insanities, we should understand how and WHY fraud became so triumphant. That understanding should be approached as a basic energy system analysis. The results of that analysis end up being almost perfectly opposite to what those who still promote the same old false fundamental dichotomies, and their impossible ideals, tend to propose.

The government was based on assembling and channelling the powers to rob into social organizations. The triumph of that gradually transformed into becoming the triumph of organized systems of fraud. However, the magnitude to which we tend to understand that BACKWARDS is almost impossible to overstate.

The irony with most analysis of the problems with energy systems is that the basic conceptions of the laws of thermodynamics were arbitrarily inverted in their meaning, by inserting a minus sign into the basic entropy equations.

That totally backwards way of understanding energy systems was then extrapolated into information theory. Therefore, as force evolved towards fraud, the degrees to which we understand things backwards became more and more astronomically backwards. Since almost nobody recognizes that, the vast majority of proposed "solutions" continue to be backwards.

Of course, the supreme self-reflective irony is that it is practically a waste of time to bother to point that out. Articles and videos like the ones above merely illustrate the ways that understanding energy systems, and economics, ARE BACKWARDS, AND BACKWARDS, AND BACKWARDS, THROUGH AN INFINITE TUNNEL OF DECEITS. The most important deceits are present in our fundamental frames of reference used to understand energy systems, since the basic concepts of "entropy" were arbitrarily inverted, in order that the language that people could use could continue being consistent with the biggest bullies' bullshit view of the world.

Neither this article above, nor the video linked above, actually goes deep enough into understanding the degree to which our understanding of energy systems and economics is BACKWARDS. They both superficially recognize those factors, but not enough, and therefore, their "solutions" continue to be backwards.

IN THEORY, there are profoundly significant creative possibilities present in better alternative energies. However, the heart of these problems is to be found towards the core of the philosophy of science itself. Nothing is more important to a technologically based society than the philosophy of science. The future MUST be some kind of transformations of our energy systems. That SHOULD be based on transformations in the philosophy of science.

IT IS IMPOSSIBLE TO OVERSTATE THE SIGNIFICANCE OF THE HISTORY OF SCIENCE ARBITRARILY INSERTING A MINUS SIGN INTO THE ENTROPY EQUATIONS. The profound philosophical impact of that upon understanding economic energy systems goes so off the scale that the sublimely amusing self-reflective mirror image of that is that it is almost totally useless to bother to point that out.

So, Max Cynical, I believe we could have a pissing contest as to who is more cynical? ... I guess I would lose, since I continue to hold onto irrational hopes, rather than more reasonably abandon all hope for the foreseeable particular futures for most human beings.

Wed, 02/13/2013 - 12:45 | 3240435 I need more cowbell
I need more cowbell's picture

These are truly extraordinary times. I am in awe of the number of otherwise professional investors who believe that the Fed has things safely in hand. The amount of market insanity and complete disconnect from reality has me thankful that I already lived through a similar time and can keep things in perspective now.

You have to ask yourselve do they truly believe that, or are they just "dancing until the music stops". Market "professionals' are mostly operating with OPM, so they will dance the night away.

Wed, 02/13/2013 - 13:04 | 3240498 in4mayshun
in4mayshun's picture

I am so tired of reading editorial after editorial about how the FED just doesn't get it and detached from Main Street they are. Bull Crap!!! Oh the FED gets it just fine. What these writers don't understand is that the FeD is doing their JOB, that is, to permanently destroy the US economy and transform us into a third world country. The Fed is made up of criminals, not retards.

Wed, 02/13/2013 - 14:58 | 3240751 dick cheneys ghost
dick cheneys ghost's picture

I expect a full accounting of this from the JewStreamMedia on the 6pm evening news.

Wed, 02/13/2013 - 21:43 | 3241739 Seer
Seer's picture

OK, Dick, let's pretend that the MSM comes out this very evening and makes this announcement.  What are YOU going to do?  What difference are you expecting this to make in YOUR world?

I suspect that we'll STILL owe lots of "money*" and we'll STILL be increasing in population size and we'll STILL be depleting finite resources (of which oil is the most valuable [to this System]).

Wed, 02/13/2013 - 15:19 | 3240815 sgt_doom
sgt_doom's picture


'are they just "dancing until the music stops". '

Of course, as there are three basic items most Americans can't comprehend, which the super-rich teach their spawn:

(1) The greatest entitlement program of all time, and why the super-rich must own it.

(2) Who the enemy is (different for the bottom 90%)

(3) simple arithmetic

Answer to 1:  The private right to create money, the greatest power of all.

Answer to 2: For the super-rich, it is the rest of us.  For us, it is the super-rich.

Answer to 3:  Arithmetic allows one to understand the fantasy finance sector and their power to create money and kill us with their debt.


Wed, 02/13/2013 - 12:46 | 3240437 Melson Nandela
Melson Nandela's picture

I am your worst nightmare. I´ve made money short this market every day in 2013 and my MOJO couldn´t be higher. Or maybe it can.

Wed, 02/13/2013 - 12:46 | 3240439 stormsailor
stormsailor's picture

anybody know why the market went all red-candle about 1111 hours?


don't see any news anywhere, and this use to be a trading site, but i don't see any chatter nor articles.

Wed, 02/13/2013 - 12:54 | 3240461 medium giraffe
medium giraffe's picture

Not sure, but here she goes again....

Wed, 02/13/2013 - 12:55 | 3240468 Melson Nandela
Melson Nandela's picture

/ES 1523 is a red technical line in the sand, failure is a big victory for da bears

Wed, 02/13/2013 - 13:06 | 3240501 medium giraffe
medium giraffe's picture

Good call, nice tag of 1525.5. Now at resistance for highs put in on monday.

Wed, 02/13/2013 - 13:25 | 3240528 Melson Nandela
Melson Nandela's picture

Cheers mate i feel pretty smart or lucky today with my leveraged shorts on /TF (already closed so i can enjoy the ManU match in peace)!

Wed, 02/13/2013 - 13:57 | 3240550 medium giraffe
medium giraffe's picture

Good luck Utd. Given all the 'clasico' hype all 22 lazy overpaid bastards had better be up for it!

Smart vs lucky? - I'd go with lucky, keep it humble.

Wed, 02/13/2013 - 14:27 | 3240674 Melson Nandela
Melson Nandela's picture

Wise words my friend.

Wed, 02/13/2013 - 12:56 | 3240470 SheepDog-One
SheepDog-One's picture

But I'm already givin 'er all she's got cap'n!!

Wed, 02/13/2013 - 13:01 | 3240486 magpie
magpie's picture

I think the illuminati code book declared 1518.31 as the top - but 'insert Gordon Gekko quote here'

Wed, 02/13/2013 - 12:48 | 3240445 Meat Hammer
Meat Hammer's picture

Where's LongSoupLine with some of those poetic F-bombs that drip from his tongue?  I need some after reading this article.

Wed, 02/13/2013 - 12:49 | 3240448 Vashta Nerada
Vashta Nerada's picture

I think that blaming the economic woes on oil is far too simplistic.  If we truly wanted to have more energy in the US, it would take a matter of weeks to grant permission for leasing and pipeline right-of-ways. China and India have increased oil consumption, and I don't know that their economies are markedly better than the US and Europe, and their economies are based on export to those same depressed countries.  I also don't believe that having more oil or gas will markedly improve the situation.

 I believe that the industrialized world has reached a point where the amount of government spending and intervention in the economy and markets is too great for the private sector to carry the load anymore. 

Wed, 02/13/2013 - 13:27 | 3240533 Melson Nandela
Melson Nandela's picture

I actually learned something on BBG, it is illegal to export crude oil from US only refined products. A free country !

Wed, 02/13/2013 - 14:53 | 3240718 LawsofPhysics
LawsofPhysics's picture

Wake the fuck up, since we have had a "debt-is-money" system for over 100 years and all that debt/money has come from the government.  There hasn't been a truly private sector for quite some time.  Let me guess, you still think that all those "private" companies getting contracts from the government tit would be fine without that income?  Fuck you, moron.  Banks have been creating the money out of nothing and not loaning private savings for a loong long time and the taxpayer  has been bailing them out for a long long time, ergo there has not been a truly private eCONomy for a long long time.  Totally fucking stupid.  We will return to a real/hard money system and real "wealth" shortly, and yes, the oil deficiency will get us there whether we like it or not.

Wed, 02/13/2013 - 15:51 | 3240923 TNTARG
TNTARG's picture

"Wake the fuck up, since we have had a "debt-is-money" system for over 100 years and all that debt/money has come from the government."

And the gvt has been (and is) owned by few corporations...

Wed, 02/13/2013 - 17:34 | 3241204 CrashisOptimistic
CrashisOptimistic's picture

Dood, you do not understand.

That's like claiming that a doctor's report saying the death of a man in an airtight room was due to lack of oxygen -- is too simplistic.

Oil is the air supply for a civilization of 7 billion.

Wed, 02/13/2013 - 12:50 | 3240449 medium giraffe
medium giraffe's picture

Sadly, it's a pyhrric victory for ZHers.  As society at large wakes up to what has been discussed by contributors and participants here at ZH for a very long time, there will be no comfort in having been right all along.  It's all just really very heartbreaking and stupid.

Wed, 02/13/2013 - 13:28 | 3240535 Melson Nandela
Melson Nandela's picture

Au contraire mon frere, we will make fortunes on the short side.

Wed, 02/13/2013 - 13:54 | 3240594 medium giraffe
medium giraffe's picture

C'est possible...

Wed, 02/13/2013 - 21:45 | 3241748 Seer
Seer's picture

Have fun dodging bullets...  In the future it' won't be a good idea to stand out from the [impoverished] crowd.

Wed, 02/13/2013 - 14:43 | 3240724 Hongcha
Hongcha's picture

Yes indeed, if all one does is beetch and take satisfaction in Phyrric victories.  I myself read and comment to get informed and prepare; if only mentally most of the time.

Wed, 02/13/2013 - 12:51 | 3240451 Cycle
Cycle's picture

Maybe it's time to let go of the dogma that protecting American manufacturing is a "bad thing." Sure, you can get your stuff cheaper from elsewhere, where labor is cheap and there is no OSHA or EPA or Medicare or Workman's Comp, etc.  but the trade-off (ha ha) is that many of those  laid off during the idiotic "New Economy" phase will never get their jobs back, will never pay taxes, will never pay into social security or medicare.  That's the cost.

On another level, a society should provide the opportunity to work for everyone, not just for those on the right side the intelligence bell curve.  Failing that, totalitarianism and/or revolution follow. China, Japan and a host of other countries understand the importance of protecting local industry. Maybe America should re-learn from them.

Wed, 02/13/2013 - 13:16 | 3240514 irie1029
irie1029's picture

Spot on but greed gets in the way.  

Wed, 02/13/2013 - 13:20 | 3240520 Cycle
Cycle's picture

Greed indeed!

Wed, 02/13/2013 - 13:24 | 3240527 marathonman
marathonman's picture

Then cheapening the currency is a sure fire way to get those exports rolling and reverse the balance of trade.  Except when you have the reserve currency and it's artificially overvalued.  Oh snap.

Wed, 02/13/2013 - 14:32 | 3240693 Nostradalus
Nostradalus's picture

or hows about fuck OSHA, EPA, MEDICARE, WORKMAN'S COMP., and the rest of the dooshbag fed agencies. what it all comes down to simply is: DIVORCE! just divorce yourself from the BS and you'll fare better. If they continue to ignore you (which i guarantee they will) you just ignore them back. and don't contribute, don't consent' and don't be afraid. that seems to be the only violence-free way out. #optout

Wed, 02/13/2013 - 21:48 | 3241752 Seer
Seer's picture

Bring back TV manufacturing! </sarc>

Manufacturing has been steadily more automated.

Also requires ENERGY (did you not comprehend this article?), not to mention consumers with the necessary (disposable) income.

Wed, 02/13/2013 - 12:54 | 3240459 Charles Nelson ...
Charles Nelson Reilly's picture

but... but... we have fracking and CNBS told me that we will be energy independent by next week.

Wed, 02/13/2013 - 12:55 | 3240463 buzzsaw99
buzzsaw99's picture

Now the Fed is finally showing signs of saying hey, what gives? as its policies do little to improve the things it publicly admits to wanting to improve...


The fuck if they do. All they care about are Wall Street bonuses. Everyone else can go fuck themselves. [/two fucks]

Wed, 02/13/2013 - 13:45 | 3240576 medium giraffe
medium giraffe's picture

Same shit different tactic...

Wed, 02/13/2013 - 13:03 | 3240494 takeaction
takeaction's picture

Yep...Even Costco plays the game now.  When you go by the meat or fish area...some of the items have a tag $12.99.....and in fine print it is "Per Pound".  When you grab the item and look at the real tag...$47.00.  Prices are going up everywhere.  A couple of great rules that I try to follow...

#1 Always stay in the perimeter of a store.  The isles are the items filled with garbage...The perimeter is all of your fresh produce, meats, daily, and breads.  Do not walk down the isles.

#2 If it is not in its original form...don't buy it.  So simple.

#3 Try to stay organic and away from GMO's.  This is VERY HARD.  But the payoff to not injest pesticides and cancer causing genetically modified crap is huge.

Last but not least....I hate eating fruit, vegetables, and preparing healthy salads.........So I bought one of the Commercial Blendtec Blenders....They are normally $1400.  This guy on Ebay has some for $200.  This damn thing is the KING.  This will allow you to make any plate of veggies and fruits into the best drink you ever had.  I tried juicing...but takes to long, and you lose the pulp.  So...hope I am not rambling...and if one person can be hlped by this post...awesome.  Here is the link for this blender.  (NOTE:I have no affiliation with this guy...I just bought one...LOL)  And it is great.

Wed, 02/13/2013 - 13:31 | 3240541 TahoeBilly2012
TahoeBilly2012's picture

Another tip is look for color in your food. Red onions rip. Look for meat with good color. Eating fresh, real, colorful foods will keep you away from Obamacare. Yoga is a big plus as well. I do smoke cigars here and there, but hey.

Wed, 02/13/2013 - 13:37 | 3240557 NotApplicable
NotApplicable's picture

The more color in veggies, the more anti-oxidants (and minerals) they usually contain.


Wed, 02/13/2013 - 13:35 | 3240549 NotApplicable
NotApplicable's picture

I've been looking for one for a while, so perhaps it'll help me. (I finally ordered a dehydrator as well last weekend.)


Wed, 02/13/2013 - 13:52 | 3240588 Monedas
Monedas's picture

As my lobster pots rust away .... I'm replacing them with bigger pots .... that will take dead cats and dogs and small farm animals as bait ! Dead seals can be chain sawed into bait chunks .... disoriented grounded whales and dolphins, too .... get to cutting before green peace jerks show up to refloat them and give them CPR ?   

Wed, 02/13/2013 - 21:51 | 3241765 Seer
Seer's picture

I've always wanted to build a solar dehydrator (have some nice plans around somewhere), but I've been hesitant be cause I don't live in a highly sunny climate :-()

Thu, 02/14/2013 - 10:06 | 3242807 tip e. canoe
Wed, 02/13/2013 - 13:03 | 3240496 icanhasbailout
icanhasbailout's picture

just for fun, try adjusting with a credible - i.e., non-government - inflation number

Wed, 02/13/2013 - 13:09 | 3240505 realtick
realtick's picture

If the entire city of Harrisburg sank into the earth no one would give a shit

Pittsburgh and Philly - those are horses of a different color

Wed, 02/13/2013 - 13:27 | 3240532 marathonman
marathonman's picture

I wouldn't give a shit if either Pittsburgh or Philly sank into the earth.  Those assholes keep voting for liberal statists - they get what they deserve.

Wed, 02/13/2013 - 15:15 | 3240801 realtick
realtick's picture

Then explain Tea Party Pat Toomey

Wed, 02/13/2013 - 16:28 | 3240987 Shell Game
Shell Game's picture

Easy, a large government Statist is a Leftist, no matter the supposed 'party' association.  The TP ranks are filled with large government-loving, Empire-loving collectivists. 

Wed, 02/13/2013 - 13:16 | 3240513 TNTARG
TNTARG's picture

And if that weren't enough, besides Fukushima...

"Roof collapses at Chernobyl nuclear plant: Ukraine"


Wed, 02/13/2013 - 13:35 | 3240551 NotApplicable
NotApplicable's picture


Wed, 02/13/2013 - 13:23 | 3240525 smacker
smacker's picture

"Since 2005 real that is, inflation-adjusted GDP has only expanded by 0.9% on an annualized basis."

And if you used REAL inflation to calculate net GDP, growth would be substantially negative for every year since 2005. Read an average figure of about -4.0%.

Of all the garbage stats that govts produce, CPI and GDP are two of the most innacurate.

Wed, 02/13/2013 - 21:53 | 3241773 Seer
Seer's picture

And THEN you have to figure out all the worthless inputs that supposedly add to GDP (cancer treatment; extra-judicial killings etc).

Thu, 02/14/2013 - 05:27 | 3242475 smacker
smacker's picture

Indeed. In the UK (and I guess elswhere too), wages paid to civil servants are included in GDP, even though they are wealth consumers and add zilch to the nation's output. But at least it explains why the Left likes to increase State headcount.

I have long argued that if the very inputs to these official calculations are such garbage, how on earth can the political elites formulate any policy that is useful. We're back to The Matrix again.

Wed, 02/13/2013 - 13:31 | 3240537 Monedas
Monedas's picture

With all the bastardized, mixed economies .... the lying "Psychobabble Psocialists" .... will never be held accountable .... for the abject failure of command economies .... it's a liar's paradise !

Wed, 02/13/2013 - 13:36 | 3240553 Monedas
Monedas's picture

There are a thousand, mindless socialists for every Monedian level libertarian .... we're outnumbered .... each libertarian is a Zion of one .... we can learn from the Jews .... how to survive and prosper and defend ourselves .... in a sea of mindless socialist leeches !

Wed, 02/13/2013 - 13:39 | 3240561 THE DORK OF CORK
THE DORK OF CORK's picture

"money supply has been expanded enormously"


Has it really ?

 credit  or claims on the physical economy has grown.........


Greenbacks need to be put into the hands of people before you get a growth in the money supply.

Then perhaps the credit waste looking for a yield will be exposed.

Wed, 02/13/2013 - 13:44 | 3240575 Tombstone
Tombstone's picture

I believe a big chunk of the problem is that the demographic picture is rapidly changing and the centrally planned socialist welfare state is growing by leaps and bounds.  An aging population does not require as much energy and welfare collecting bums don't drive to work everyday in their Caddys.  And what do the government honchos want the most; more government spending on useless green energy projects and another big slush fund for the unions disguised as infrastructure projects.  The efficiency of capital is being drowned by government interference and control.  The result is less growth per dollar wasted.

Wed, 02/13/2013 - 13:59 | 3240609 Monedas
Monedas's picture

Monedas' Law:  When a vibrant economy is destroyed by Socialism .... Capitalism get's the blame for failing .... when a Socialist economy has bottomed out .... and digs itself out of it's hole .... using sound Capitalistic principles .... Socialism gets the credit !  

Wed, 02/13/2013 - 15:28 | 3240848 AnAnonymous
AnAnonymous's picture

It is not so much about elders, bums etc

but 'americans'

'Americans' have been doing the bulk of the consumption job.

At this time, one could wonder how much of a reduction in 'americans' is required to stop the current trend.

Wed, 02/13/2013 - 15:44 | 3240893 centerline
centerline's picture

Makes one wonder how and why such things come to be.  Hmmm.  Maybe one should look a little deeper into this subject and start to realize how short a history there is of "Americans" versus other nations.  Maybe couple it to industrial age and cheap energy (oil).  The shifting balance of power over time.  How power and wealth hold no allegiance to any country.  Maybe even the universal nature of mankind.  Seems to me as long as you and anyone else is sitting in front of a computer, you are part of the game.

Wed, 02/13/2013 - 16:33 | 3241044 AnAnonymous
AnAnonymous's picture

What game? The 'american' game?

Newsflash: this is an 'american' world and a US world order.

Due to the global nature of 'americanism' through its hijacking of humanity on 1776, July, 4th, it does not take to sit in front of a computer, it takes to be a human being.

See how 'americans' usually conveniently reject their excess of consumption on low to non consuming populations.

This is an 'american' world and every human being is part of the game.

Wed, 02/13/2013 - 22:03 | 3241800 Seer
Seer's picture

"An aging population does not require as much energy"


I just went through dealing with someone dying and I can unequivocally state the person required a LOT of energy (scores of people).  I used up a lot of fuel just traveling.

"And what do the government honchos want the most; more government spending on useless green energy projects and another big slush fund for the unions disguised as infrastructure projects. "

Get rid of govt and we'd STILL be facing declining resources and STILL be carrying debt (where is the debt going to disappear to?).

It was the private sector that melted down.  The govt, as instructed by all the campaign contributors ("lobbyists"), stepped in to bail it out.

NOWHERE cab you provide an example of a "small govt" that stays small.  These blovations are just another means of distraction in the hopes of scooping up loose change from any shake-up.

"The result is less growth per dollar wasted."

Read the ARTICLE!  The is NO means for growth left because it has to do with PHYSICAL resources that are in decline: the only way forward is to ease things to a stop- you CANNOT raise our standard of living (without stealing from others [think ME (and soon African) wars]).

Wed, 02/13/2013 - 13:52 | 3240577 THE DORK OF CORK
THE DORK OF CORK's picture

This could be a European Potemkin village  

or the new French economy (built on Greek capital flight ?) .........who really knows.


The almost complete Nantes - Chateaubrient light railway line closed in 1980 (200 million +) seen is a series of panoramique photos.


Building on abandoned 19th century railways is the low hanging fruit in my opinion.

This could be the first light railway to replace the inter station bus service of the post 1970s France

Then again perhaps not.


Anyhow follow the new / old line to get a sense of place and energy dynamics ...........

The Market town is the bedrock of civilization.........

If that falls all the other urban bricks fall with it.


Anyhow these are very capital intensive operations........

France will have to abandon the car to rebuilt all of its old lines.


Wed, 02/13/2013 - 15:16 | 3240809 LawsofPhysics
LawsofPhysics's picture

The Market town is the bedrock of civilization.........

If that falls all the other urban bricks fall with it.  -  BULLSHIT.  Those with no useless skill-sets will fall.

Wed, 02/13/2013 - 16:18 | 3240980 THE DORK OF CORK
THE DORK OF CORK's picture

Another lone wolf...............


Sweet Jesus.


Anyhow I imagine you mean its those with useless skill sets rather then those with no useless skill sets.


The last time I checked  the ancient  human  orbited a village of perhaps 100~ people.


Increased energy / complexity increases the size of you local village it a market state euro system , a nation state  , a city  state .... a agri town  ....village etc.....


Modern farms / factories supply the above conurbations........


Wed, 02/13/2013 - 16:53 | 3241106 LawsofPhysics
LawsofPhysics's picture

Lone wolf?  WTF, there are several thousand in our farming Co-op.  Do not assume anything, it only makes you look stupid.

Wed, 02/13/2013 - 17:49 | 3241168 THE DORK OF CORK
THE DORK OF CORK's picture

How is your  energy input output ratios going ?


Good yeah


It very hard to divorce yourself from Industrial civilization once it is built.


Is it like 1960s west of Ireland ?

Where the local small farmer raises 10 young cattle a year to be sold and fattened by a larger east coast farmer ?


The small farmer has no car ,  keeps some sheep in a commonage , he burns peat in his fire , uses a donkey for extra physical work , grows spuds & cabbage , keeps a few pigs out back , picks blackberries in the fall , makes some poitin to keep the cold out.

He needs some money for tea , sugar and other tined food ,a suit & pushbike every 20 years.......... 

He spends much of his spare money in the pub during the yearly local cattle fair that lasts for 3 days in the year.   (see from 5.00) If its like the above I would be very much surprised


You really need to keep your consumption very very low.


I am afraid you cannot suck much diesel , if any.

At the most (1960s) you will own a very small tractor ......and I mean small.


Of course if you divorce yourself from all post 1800 ~ industrial trappings your life becomes even more simple..........


Ever been in a Scottish blackhouse ?

The house floor slopes down slightly so that the warmth from the animals at the other side of the house comes up to warm you (also the fleas of course)

No windows ....... open fire..........



Get it ?



Wed, 02/13/2013 - 18:53 | 3241418 css1971
css1971's picture


No central heating required. No filre required. No electric heating required.


We know more these days.

Wed, 02/13/2013 - 22:32 | 3241881 Seer
Seer's picture

What are the railways going to be good for?  Moving people?  Where?  To "jobs?"  Ha!  Sadly, it'll likely be to FEMA camps (gas chambers).  And while I clearly see the value in transporting goods I still have to ask: for whom? (when most don't have "jobs")

I saw the failed logic in full display when a nearby city built a new shiny rail-station and provided commuter services.  Commuter services SUBSIDIZING the movement of workers to a larger city.  I argued that it would have been better to invest the money in local businesses.  Care to guess what is going to happen to those commuter train fares as less riders board those trains (because they no longer have jobs in that larger city)?

There's an inherent problem with applying the same solution for everywhere: "everywhere" is NOT the same!

Wed, 02/13/2013 - 13:46 | 3240580 TNTARG
Wed, 02/13/2013 - 14:29 | 3240681 Arbysauce
Arbysauce's picture

The policymakers live in the land of the nominal (where they can succeed) not the real (where they fail). Some questions for Obama, Bernanke et al:

What is a job?
If we borrowed enough to pay everyone $20 trillion in total to dig and fill holes (or punch a USPS timeclock, or watch TV, or harass er I mean regulate the productive) would you consider the 25% jump in GDP a success?

Wed, 02/13/2013 - 14:30 | 3240684 BeerBrewer09
BeerBrewer09's picture

Doesn't Chris know that 0bama said everything would be okay? All we have to do is spend more money on diminishing results.

Wed, 02/13/2013 - 14:34 | 3240700 BeerBrewer09
BeerBrewer09's picture


Wed, 02/13/2013 - 15:31 | 3240855 eaglerock
eaglerock's picture

And Chris also needs to get out his Krugman excuse book and understand that the real reason the economy is not growing is because we have not spent enough on government stimulus (also /s)

Wed, 02/13/2013 - 22:35 | 3241890 Seer
Seer's picture

I'm sure that he also heard Bush tell us in 2008 that the economy was fine.

We've just got to start believing! </sarc>

Wed, 02/13/2013 - 14:34 | 3240701 Stuck on Zero
Stuck on Zero's picture

There's one good reason why the infrastructure is falling apart: Davis-Bacon. 


Wed, 02/13/2013 - 14:38 | 3240712 q99x2
q99x2's picture

Alcohol can be a gas. Need to take the oilgarchs and lock em up and re-distribute their stolen wealth.

Wed, 02/13/2013 - 14:55 | 3240747 LawsofPhysics
LawsofPhysics's picture

yes, know of abiotic alcohol sources do you?  That should cover the cuurent flux. < sarc off >

Wed, 02/13/2013 - 22:39 | 3241906 Seer
Seer's picture

The "problem" isn't so much that some (quantify how you like) have LOTS, it's that in total there's diminishing amounts due to resource depletion (end of growth).

The fate of the oligarchs will be what is always has been.  And then what?  We'll still have infrastructure that's collapsing do to insufficient energy and resources to maintain (forget about expanding OR "replacing" with some "alternative"- we're PHYSICAL broke!)

Wed, 02/13/2013 - 14:54 | 3240744 Monedas
Monedas's picture

Only God (Herr Zion) can create a lobster .... a crawly bug that converts skanky, greasy seal guts into sweet, pink meat !  

Wed, 02/13/2013 - 15:02 | 3240761 Westcoastliberal
Westcoastliberal's picture

What we have is a demand problem, triggered by massive fraud in the housing industry.

The Fed has been pumping Trillions to exactly the institutions that should have been nationalized/broken up instead of rebuilding the country's infrastructure, creating jobs, and increasing demand.

This is all exacerbated by rampant speculation in commodities.  These rules need to be changed (sorry Goldman sucks); in order to place your bet you must first have skin in the game.  Maybe this could bring gasoline down below $2.50 a gallon, which is where it should be.

Unless and until all this happens, we're in for a helluva ride IMHO.

Lastly, fuck you Bernanke.

Wed, 02/13/2013 - 15:15 | 3240798 LawsofPhysics
LawsofPhysics's picture

"Maybe this could bring gasoline down below $2.50 a gallon, which is where it should be."


Not likely, unless you think everyone else on the planet is suddenly not going to want to use oil and refined distillates thereof. Stop being so "merica-centric" it is a big world out there with lots of fucking demand for both fuels and housing.  Go ahead motherfucker, make margins 100%, who will be your scapegoat when prices remain high?

Wed, 02/13/2013 - 15:36 | 3240871 AnAnonymous
AnAnonymous's picture

People not using oil are the biggest consumers of it.

Signed: an American.

Wed, 02/13/2013 - 15:38 | 3240877 TheFourthStooge-ing
TheFourthStooge-ing's picture

I wish I had been born an American.

Signed: AnAnonymous

Wed, 02/13/2013 - 15:47 | 3240906 CaptainSpaulding
CaptainSpaulding's picture

Young American, young American, she wants the young American

Signed: David Bowie

Wed, 02/13/2013 - 16:35 | 3241050 AnAnonymous
AnAnonymous's picture

again, hijacking handles, djeee, once a thief, always a thief, such is the nature of 'americans'.

Are people born 'american'? Maybe...

It does not matter because no matter what one is born, one can turn into an 'american'.

Actually, that is the damnation for long established 'americans' who would prefer to keep 'americanism' a family thing...

Wed, 02/13/2013 - 22:49 | 3241928 Seer
Seer's picture

Well, let's watch the next throne-sitter to see what its people do.  I'm thinking that China's 10% annual growth is going to start turning all its "exceptionalism" pretty ugly too.

It's about ADDICTION.  Addiction to growth.  China is now a full junky.  Have fun!

Oh, and thanks for playing!

Wed, 02/13/2013 - 16:02 | 3240954 LawsofPhysics
LawsofPhysics's picture

The american military remains the number one consumer, by far.  That's a good citizen.

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