Gail Tverberg: Something Has Got To Break
Submitted by Adam Taggart via PeakProsperity.com,
Actuary Gail Tverberg explains the tight correlation between the rates of GDP growth and growth in energy supply. For decades, energy has been becoming more costly to obtain, and instead of accepting lower GDP growth, we have been using debt to fund further energy exploration and extraction.
That strategy has diminishing returns, Tverberg warns. And we are close to the moment of reckoning:
The more we look at it the more we see that the rate of growth and energy supply is very closely correlated with the rate of GDP growth. And I know on some of my recent posts I’ve included a chart that goes back to 1820 that shows the same correlation. You have to have an increasing supply of energy in order to get GDP growth. The GDP growth tends to be a little higher than the energy growth. That’s especially the same when we made the change in the mid 70’s, when we had the big first oil crisis and we realized that Japan had already started making small cars, and so we could make smaller cars, too, and save quite a bit of oil very quickly. And we realized then that we didn’t have to burn oil to create electricity; there were a lot of other alternative approaches, including nuclear. So we pulled those off line, and where home heating had been done by oil it was easy to transfer that to other types of energy. So we had a number of different things we could do very quickly back then -- and I think people got the idea that because we could pick the low-hanging fruit, then somehow or other we could do the same thing again. But we’re not getting that same kind of effect any more.
I think the thing that people don’t realize is how closely the growth in debt is tied to the growth in the economy. Even back many years ago we needed to add more debt as the economy attempted to grow, and what you would see very often back then was some country would add debt to fund a war. And if they were successful, maybe they would get some increment into the economy so that the debt made sense. And if they lost the war then somebody got their bonds written off. But what’s happened is that, as the cost of energy has gone up, especially since about the mid 70’s, the amount of debt required to find GDP growth has gone way, way up. And I think this is because it takes a given quantity of energy in terms of BTU’s or in terms of how far it can make a truck go -- if it now costs a whole lot more to do that, we’re going to have to borrow a whole lot more money in order to make the whole system operate. We have a seen a spiraling of debt since the mid 70’s, and I think that’s very much related to the higher cost of energy since then.
That only works for a while. You can dial up your debt growth for a while but then you discover that debt growth has a lot of adverse effects. And one of the big ones is that it tends to funnel money to the wealthier class and take money away from the poor members of society.
I’m afraid what it means is that at some point there’s got to be a discontinuity. Something has got to break.
Click the play button below to listen to Chris' interview with Gail Tverberg (61m:03s):
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Been waiting for 7+ years..... Is it this year? Who knows? Just please keep that Silver and Gold price down so I can keep filling the lake.
Isn't this lady a true believer in globull warming? That is an automatic disqualifier. Only shills for deep state or idiots purport belief.
Takeaction2
Consider value-dense platinum as well. Pt is way down in price, it now sells at an unusually low ratio to gold (some 20% discount). Pt has many industrial uses (catalysts) as well as being precious.
I was noticing that..... It is WAY down....$889 an oz. A great addition to the lake. Thanks
"energy supply is very closely correlated with the rate of GDP growth"
YIKES Shaggy! Were in trouble! Thanks Gails for letting us know.
More Gail, we love Gail!
Scooby Doo!
I think the old rule of economy driven by energy is long gone. Now it's more like the economy is driven by drugs or gigabytes.
the rate of growth and energy supply is very closely correlated with the rate of GDP growth.
Well, duh -- Gail has always been a moron who has no understanding of commone sense economics. Naturally energy suppliers match their supply with demand. Otherwise severe gluts or shortages would quickly be resolved by price spikes.
According to Gail peak oil happened in 2005... oops, production is way above that now.
And Gail was absolutely right. CONVENTIONAL OIL peaked in 2005/2006.
Anyway, here is a better way to look at it: The Middle East Rig Count has gone from 140 to over 400 in 15 years. About half of this increase has come from Saudi Arabia. 2000 versus 2015 rig production decline is over 50%.
Recent data on Saudi Arabia is rather hard to come by but in 2010 they had about 3,270 wells, counting half those in the neutral zone, and they produced about 9.5 million barrels of oil per day. That puts Saudi average production at somewhere between 2,800 and 3,000 barrels per day per well.
At about the same period of time, 2010, the US had about 510,000 wells producing an average on 10.5 barrels per day per well. Today about 400,000 of those wells are stripper wells producing an average of 1.8 barrels per day.
http://peakoilbarrel.com/rig-count-drilling-less-oil/
Ron does some fine work!!
I would normally be with you on that but this old bird really knows her stuff. She's also not a global warming asshole like Gore et al; she seems to have a simple concern for the way overconsumption of fossil fuels and other pollution harms the environment. While we may not agree, this belief is no reason not to give her a careful hearing.
Here is the deal: I know with absolute certainty as a scientist that globull warming is a hoax. So there are two alternatives
-1- she does not know it is a hoax. Well then she has missed what is patently obvious. Globull warming is a scam, a power grab a huge excuse to tax anything and everything. She has missed the COMPLETE OBVIOUS.
-2- she knows it is a hoax and is lying.
Either way I have a huge hard time taking her seriously. Fossil fuel is not really over consumed. The real problem is it is the in the ruling class oligarchy control triad of petrodollar / banking / intelligence apparatus. I would respect her more if she just spoke the truth rather than using the easy polically correct way out.
About 40% of US scientists claim to believe in god.
So, because these are scientists, does it mean god is real?
Then, if so, where’s the proof?
I'm not interested in god. I'm interested in science. I knew "god" was impossible when 4 years of age because of the "Santa Claus" problem to wit: how does he do it without the help of FedEx. So to the question of glo-bull warming: only fools and deep state beneficiaries believe in it.
I assume you are the former.
Assume what you want, fuck tard. The mexican has a good point.
Science means believing things based on PROVABLE FACTS. Religion means accepting things based on faith, facts be damned. The 2 are not compatible.
That means a scientist who believes in god IS NOT really a scientist. He or she is a fraud. Everything nowadays is corrupted by politics, including science.
You're not to sharp are you mkkby?: Iscrava Isaura is a BRAZILLIAN character.
https://en.wikipedia.org/wiki/Escrava_Isaura_(1976_telenovela)
Not mexican. I'm sure I know quite a bit more about science than either one of you so you should probably just stop talking. You did get it right about science being corrupted by politics. Politics is where globull warming came from. Not science. I truly laugh and at the same time feel sorry for you slow types liberals that come on ZH trying to troll the crowd because they really rip you borderline retards to shreds.
What's wrong with you? People are not rational. One can be a real scientist and behave rationally when solving equations and the next moment invest into a Ponzi on the moments decision. It doesn't mean that this scientist can't prove a new theorem in his area of expertise.
DownWithYogaPants: I know with absolute certainty as a scientist
Personally, I think you are an empty sack.
http://ossfoundation.us/projects/environment/global-warming/myths/31000-scientists-say-no-convincing-evidence
I've seen your comments before Escrava. You're a moron.
4 years of age? FedEx? You must have good memory because I don’t know anyone that can remember that far back.
Second, you are the one that wrote: I know with absolute certainty as a scientist. Well, 97% of WORKING CLIMATE SCIENTISTS disagree with you.
You see the problem you got yourself into?
"Well, 97% of WORKING CLIMATE SCIENTISTS disagree with you."
Maybe that is becauset they are afraid to bite the government hand that feeds them.
The 97% figure proves that globull warming is a hoax and a scam. When you can' t get 100% of cherry picked scientists to agree with you the 3% that does not agree with you has it right.
The methodology used to select the "scientists" polled in the famous 97% is easily googlable. But yet again Iscrava can't be bothered with that!
I'm not surprised you don't know anyone that can remember when they were 4 years old. Stupid people like you Escrava generally hang out with other stupid people. In fact I have clear memories of age 1. With an IQ of 160 I clock in as gifted. So I generally see people like you as borderline retarded and quite laughable.
Because scientists get punished very quickly by unreliable research. And because scientist avoid embarrassments. Can’t say the same of propagandists calling themselves scientist.
You know nothing Escrava. It's easy to see you're bit simple minded. Perhaps you should just go back to making burgers and get my order ready. I'll have fries with that.
I've been in science and engineering my entire career. You? I am sure your career tends towards liberals arts or worse yet womenz studies.
Scientist or not. Get curious about your attitude. About your vocabulary. Then, you might start sounding like a scientist/engineer.
And I rarely eat meat. And definitely not burger. But I do open an exception for Steak Tartare from great Chefs.
yoga pants is a fat slob living in his moms trailer. The bigger they huff the more full of shit they are......... besides you are both morons....... this a non issue that retards like you can argue over some unproven hypothesis on either side, while the theif seals the earth...... PLEASE KILL YOURSELF !
I was hopeing to increase my morgan and peace dollar collection with these low prices. Sadly... they still cost to much for any good quality ones...
No. Nothing has to break.
Jimmy Kunstler is the John the Baptist of the Latter-day Doomers, of which I am a member in good standing.
Dmitry Orlov is our Paul, fleshing out his vision of collapse, giving it shape.
Gail Tverberg is the Den Mother of Doom.
She is a member of the Church of Glo-bull warming so you have to have doubts about anything else she says when she gets something so obvious wrong. Globull warming as a hoax leaps off the computer screen and slaps you in the face like a 14 inch dong. It's hard to miss. You have to try to miss to not see it.
Is that you Robo trader??? Got bored so you changed your trolling style?
And you are clearly a misdirection troll, since Gail doesn't talk about global warming.
You are confusing global warming with peak oil. Two completely different concepts. Quit barking up the wrong tree.
You need to understand that money is just another form of energy. It is energy in disguise, easily circulated small bits that represent energy. As the energy supply flowing through our economic ecosystem bulged from the bonanza of a 100 year supply of highly concentrated energy in the form of oil, societal complexity, population, and technology all proliferated in response, like a tree leafing out suddenly as spring hits. And along with it, the money supply bulged.
But now winter is coming. And the crackpot monetarists think that they have found the economic throttle with the money supply, but increasing that supply only causes real growth if it is piggybacked on top of a real increase in energy, which is what really makes the system run. And as we ran though the easily accessible oil energy and had to start going after the much less rewarding stuff, society would have experienced a contraction, except that we managed to prolong the party a little more through the ruse of debt. But debt means consumption now in exchange for austerity later -- that's the only way that debt actually works. So now, as we reach debt saturation, we will start to see the true nature, the true state of things. The supply of energy and the societal perception of the supply of energy are yoked together, but with bungee cords. Imagine trying to tow a car with bungee cords -- there will be a lot of stops and starts, sudden rushes from the towed car while the other car seems to be sitting still, and that's a good analogy for the relationship between the money supply, societal complexity, and commodities.
Absent some ground breaking energy supply discovery, global societal complexity will slowly diminish from here on out, become a lot flatter and more efficient. It doesn't have any other choice. That's what the second law of thermodynamcs says, in essence. And no amount of printed pieces of paper can make that go away.
Pleased to meet you sir ;
...sad there ain't enough of us though...
Always good to see something from Gail …… something tells me we’ll be hearing more from her in the future. Sure do miss The Oil Drum
'How Big Oil Conquered the World' https://www.youtube.com/watch?v=ySnk-f2ThpE&feature=youtu.be&t=0
Beating a dead horse: https://twotehtarik.files.wordpress.com/2008/10/flogging-dead-horse.jpg
Was interesting documentary: Did you notice the part at the end where they factored in the glo-bull warming scam and how it fit into the Oiligarchs plans for world control?
I've known since day 1 that glo-bull warming was a hoax and that documentary put that aspect in very clear focus. It is mentioned very near the end.
This has nothing to do with going off a pseudo-gold standard on August 15, 1971.
Sheer coincidence!
Sheer coincidence!
Sheer coincidence!
Sheer coincidence!
Pal, we went off the gold standard March 9, 1933. Despite Article 1 Sec. 10.
Chicken and the egg.... which comes first?
So, if you put the kabosh on fossil fuels, you put the kabosh on economic growth (barring introducing a viable alternative)?? Maybe she should have a discussion with our friend BO.
Debt became vogue the moment the gold standard was abandoned. It had nothing to do with an objective of growth. It was, and still is, all about funnelling cash to the few at the inflationary hands of the many. Oil, gas, whatever - a coincidental yet convenient distraction that occurred as a result of the same few agreeing to having all commodities measured and traded in $USD. Gail is looking for a logical explanation - something that you might find in a text book when instead, she should be simply be going back to 1913.
We can pile debt higher than you can believe. Just look at Japan, it is our model. They are still piling it on 26 years after their market crash. We have a lot more printing, promising, and borrowing to go yet. Let the good times roll!!!
It's not a real economy.. its a fantasy land.. why does it have to break if its not based upon reality to begin with? add more unicorns and fairy dust and it will be fixed. I'm getting sick of reading these articles now and listening to everyone talk about "the collapse" that's always 3 months away.. if you say the world is going to end in 3 months and you're wrong then you should STFU, it's getting ridiculous
Because of central bank manipulation there are now two different realities, the world of money creation and the world of main street. The first world has seemingly unlimited funds. The second world does not. The collapse will not begin in the first but in the second world. ZIRP causes a depletion of capital in the second world and the signs are already everywhere. The first world can do nothing about it unless it wants to accept hyperinflation. Capital destruction will trickle down from the second into the first world. That can be masked for quite a while by distorting accounting rules. But the fact remains unchanged. We live in an era of wealth illusion not in an era of wealth.
They used up all the fairy dust and unicorns...........
Does Growth - debt = real growth?
Both Gail and Chris are dedicated believers in Hanlon's Razor presumptions, which deliberately underestimate the degree to which the world is covertly controlled by criminal conspiracies, whose successfulness has captured control over governments.
While I listen to their recordings, and read their articles, they are typical (at least as republished on Zero Hedge) regarding the degree to which their analyses are superficially correct. Since those analyses ARE superficially correct, those are worthwhile considering. HOWEVER, there is NOT actually any "discontinuity" when the underlying facts that money is measurement backed by murder becomes more blatantly obvious.
At about the 48 minute mark, Chris points out that the word "discontinuity" is a euphemism, (and thanks Gail for providing that euphemism!) Neither Gail nor Chris like to admit and address the way that the debt controls were backed by the death controls, and therefore debt insanities will provoke death insanities. Indeed, the overall nature of the dilemmas facing civilization are that any particular EXPONENTIAL GROWTH CAN NOT GO ON FOREVER!
Rather, by definition, what stops exponential growth are some death control systems, and indeed, it was ALWAYS the case that the debt controls were backed by the death controls. Since Gail and Chris tend to resort to Hanlon's Razon presumptions regarding how those developed, they tend to avoid any deeper analyses of how and why the money systems became fundamentally fraudulent financial accounting systems, which, OF COURSE, first and foremost applied to the ways that "money" made out of nothing as debts was used to "pay" for strip-mining the planet's natural resources, which more than anything else explains burning through the petroleum resources as fast as possible.
At the end of that audio recording, there is some focus upon the overall systems, BUT, without appropriate emphasis upon the history of the death control systems, which were always central to everything else! Personally, I always find it somewhat "ironic" how some of the best, publicly available, analyses of the overall problems that civilization faces STILL manage to avoid admitting and addressing the most essential issues, which are the history of the human murder systems.
In general, I never have too much of a problem with how the various mainstream morons and reactionary revolutionaries engage in their kinds of superficial analyses, which are nevertheless still correct and worthwhile to consider upon the level at which those are presented. But nevertheless, I continue to find that those who presume upon Hanlon's Razor are being willfully blind. Although I can somewhat sympathize with that, unfortunately that kind of superficial analysis can never admit and address the actual situations that are developing, at what is STILL (but now, barely) an exponentially accelerating rate, and will do so until the euphemistic "discontinuities" (which are actually NOT discontinuities) become more painfully obvious.
In general, from the vainglorious, sublimely intellectual point of view, superficially correct analyses are worthwhile considering. However, if one is willing and able to engage in deeper analysis, then one must address the ways that MONEY IS MEASUREMENT BACKED BY MURDER, and use that insight to consider how and why petroleum resources were actually "developed" in ways which have become runaway criminal insanities! Those, like Gail and Chris, who tend to use Hanlon's Razor, are enabled to thereby ignore those kinds of deeper analyses.
However, all political economy existed INSIDE human ecology. Therefore, understanding the problems regarding the debt insanities are NOT enough to better understand the death insanities that those could provoke. It is mistaken to presume that:
The death control systems, which were ALWAYS necessarily there, but which those relying upon Hanlon's Razor kinds of presumptions deliberately discounted and disregarded, do NOT actually become any " discontinuity," but rather, only from the point of view of those kinds of superficial analyses does it appear that "something has got to break." ACTUALLY, the death control systems (which were ALWAYS there, and were ALWAYS central to everything else), merely become too blatantly obvious for those who liked to rely upon Hanlon's Razor to continue to be able to so easily deliberately ignore.
Hence, nothing "breaks." Rather, from the point of view of deeper analyses, the same processes which ALWAYS existed continue through as the death insanities, which are provoked by the debt insanities, when the fundamentally fraudulent financial accounting systems are being called upon to show their hands, which were ALWAYS there, despite having been previously concealed, while those who relied upon Hanlon's Razor presumptions were tacitly agreeing to not think about that those hands had already, ALWAYS been dealt ...
P.S.
The same points made by Gail, along with charts, were posted here:
Gail Tverberg: Something Has Got To BreakYou may have a point here. Consider that Ms. Tverberg is a glorified accountant. Call them an accountant on steroids. If one understands most accountants, they are not very keen on the Big Picture. The generally don't care about it. Most have no concept of it. Why they make terrible CEOs.
For the same, they are not very sharp at macroeconomics. They may be very good at specifically intelligence analysis. Not too good at intelligence gathering. They really don't know what to look for, in the field situation. In behind-the-lines ops, there is little or no communication with HQ. You are on your own, and for the most part, given some guidelines, have to wing it. In analysis, they need to be directed what to look for as well. Analysis is the same as gathering.
To that, I seriously doubt Tverberg and most actuaries are all that familiar with black swans and white hats ..
http://eagleonetowanta.com/
And, forgive me, but listening to Ms. Tverberg I cannot not be reminded of Mrs. T.G. Culpepper ..
Those who trained as financial accountants were generally NOT educated to think about human beings and civilization as entropic pumps of environmental energy flows, in ways which could be reconciled with the mathematical accounting done through measuring energy flows, since the human energy flows actually operate through fundamentally fraudulent financial accounting systems.
Both Gail and Chris have broadened their outlook considerably, but have not yet, in my view, dug deeper into the ways that the murder systems made and maintained the monetary systems, and therefore, no better environmental ecology approach to understanding human beings is possible that does not focus first and foremost upon the human murder systems, as the most extreme form of the human death control systems in general.
I like the phrase "agenda analyst," rather than "conspiracy theorist," due to how effective the CIA's several decade long propaganda campaign has been at giving the phrase "conspiracy theory" a bad reputation, which it does not deserve.
While there appear to be plenty of creative alternatives, especially considering the technological progress with respect to solar energy collection, and storage batteries, the central core to everything else was always the human murder systems, with the most significant leverage from those being the assassination of politicians who could otherwise not be bribed or intimidated.
From the individual's point of view, "something DOES break" when they die, and similarly so for other larger organizational entities. However, my theoretical point is that "energy" itself never breaks, and so, energy systems only relatively "break."
At the present time, the main effect of petroleum and other natural resources having been high-graded to hell, with the previous abilities to engage in exponential growth of strip-mining the planet's natural resources beginning to run into diminishing returns, which look like those are going to get worse, faster, the crazy competition for what remains will probably get way more intense ...
Eventually, human beings shall have to develop different political economy and human ecology, in order to cope with the fresh planet full of abundant resources having been already mostly consumed, as that was turned into more people and pollution, WHICH WAS ABLE TO DONE, AND DID HAPPEN, AS BOTH PREVIOUSLY GREW AT AN EXPONENTIAL RATE FOR MANY GENERATIONS, demonstrating that there were not previously the kinds of real limits that are manifesting more and more now, as various diminishing returns from efforts to continue to GROW.
While different political economy and human ecology to cope with those real limits are theoretically possible, BY DEFINITION, those MUST mean different death control systems. Since people will continue to vehemently disagree upon those, and indeed, are practically guaranteed to be as deceitful as possible regarding those, the emergence of new death control systems will surely become quite hyper-complicated!
You know what's going to break, RM?
The news that the planet will be out of crude oil in a couple of decades.
Better news for Putin than for the Negro.
Small correction - the world will never be 'out of crude oil' - it will only run out of 'cheap crude oil', which of course will be its last 'discontinuity' - energy will no longer be affordable.