The Tide Goes Out…

Off the keyboard of RE

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on the Doomstead Diner on November 30, 2014

Discuss this article at the Economics Table inside the Diner

There are numerous morons out in the MSM rejoicing at the falling price of gas at the pump, comparing it to a “stimulus” package which will free up gobs of money for consumers to spend on other stuff.  Still more imbeciles claim this is a Price War gimmick by the House of Saud to put frackers in the FSoA outta biz and spank Vlad the Impaler for being a bad guy.

None of this of course is true, as I covered in yesterday’s Rant, Oil Price Crash!!!  The folks who write this stuff are either complete imbeciles (true in many cases) or they are paid to spin the newz the way the oligarchs who own the media want it spun (true in all cases).  There also is the problem of completely FALSE and wrong headed economic theories that Ph.D. Economistas pitch out, themselves also pawns of the oligarchy in charge. have two sides to this part of the action battling it out daily on the pages of Blogs like Zero Hedge, the ever reviled there, “Keynesians” who favor blowing money out of Bazookas and “Austrians” who favor stacking Gold Bars in the basement safe.  Neither side has a clue here, because money isn’t the problem, resource depletion is the problem. their constructs, “Capital” is Money.  So if you need more Capital far as the Keynesians are concerned, you just issue more Money, which turns up as Debt on somebody’s balance sheet, generally you the Taxpayer.  Far as the Austrians are concerned, if you just back all your money with Gold, it will provide all the Capital you need to have a smooth running economy.

Neither of these viewpoints is correct, because Money of ANY sort is not Capital, resources and most specifically Energy resource in our energy intensive society is the Capital here.  The money just serves as a proxy for this, a numerical accounting system through which people buy and sell things and distribute out the surplus of your society.  When your society runs out of surplus, the money starts losing its value.  Even Gold loses its value, as evidenced by the also now dropping like a stone price of Gold.

Which brings us to the fairly hilarious Repatriation schemes for Gold various countries are undertaking here, notably the Swiss who are holding a referendum this week, but numerous other countries are also trying to stack Gold Bars in the basement safe of their respective Central Banks.

In the case of the Swiss, they want to make it a law that the bank can’t sell the gold, which of course makes it meaningless as an asset.  A corollary to this would be nobody could redeem the money the bank issues for any of the Gold, because if they did that everyone would want to trade their notes for the Gold and then there would be no Gold left in the safe to back the currency with!

 photo robber_barons_500.jpg

The underlying problem here is that all the money that has been issued out since the beginning of the Age of Oil is debt notes on Oil.  No coincidence here that the same folks like the Rockefellers and Rothschilds run the banking system AND own all the energy and mineral resources on earth.  They are just a very big Company Store, they issue out the Scrip with which you can then buy the Oil.  They don’t give it away of course, they Loan it to somebody, Oligarchs in some cases, directly to your Goobermint in others but it still is a loan, and the way you get access to that money is by getting a job of some type working for the Oligarchy or working for Da Goobermint.  Numerous self-employed people also glom onto this economy of course, your Dentist gets hold of the money by drilling your teeth, you got hold of the money from your job as a Teacher or working as an IT designer, but originally the money was borrowed into existence either by Da Goobermint or an Oligarch.

Anyhow you now have all this money in existence supposedly representing assets, but the assets aren’t assets anymore or in the case of Oil simply is not there to extract up at a price most folks can afford to buy.  So little by little at first the economy starts collapsing, and for a while it stays disguised and most of the problems occur in the peripheral nations to the credit system, so as an Amerikan or Brit you might not notice it, unless of course your job has already gone south too.

At a certain point however, all the accumulating problems add up, and finally something breaks, and what broke was the price of Oil.  Much like the Tsunami at the top of the page here, the receding price of Oil is like the receeding Tide before the Tsunami rolls in.  The Tsunami here will be a wave of Defaults and Bankruptcies that eventually will engulf even the largest Nation-States like Russia, but will of course start smaller than that with Independent Drillers heavily leveraged who will face margin calls.

cover_Drilling-Deeper_300w (2)How much further the price will drop before we start to see major shutins remains to be seen, however this is now not in the “Most Likely Case” that David Hughes projected in his report “Drilling Deeper“, but rather a WORST CASE scenario.  Tomorrow here on the Diner we will have an Interview with David we did back a few weeks ago when Oil was at $80, down then from $90.  Now down to around $69/barrel and looking like it will drop into the $50s.

Now, these folks can continue issuing out Credit theoretically in perpetuity, but they can’t make that credit redeemable in anything they still have left, namely enough Oil to power an industrial civilization with 7B people wandering around it.  They also don’t recognize that most all of the Assets that the loans were made on themselves are going worthless.  The Gold Mine that Rio Tinto (a Rothschild owned company) owns is not an asset when it costs more in energy to extract the Gold than anyone will pay for the Gold.  The Car Factory is not an Asset when people can’t afford to buy the carz that come off the production line of that factory.  Securitized bundles of McMansion Mortgages are not an asset when people can’t afford to buy carz to zip back and forth from them every day.  And so on here.

No monetary games, no change of money over to gold changes the already done deal fact of life that the investments made through the Age of Oil are all MALINVESTMENTS which cannot be sustained without gobs of cheap energy flowing out of the ground every day, and those days are gone FOREVER.

What takes time is the recognition of the losses, along with the Geopolitical and Economic shifting around of the pain, generally shifting the worst problems onto the weakest nations first here.  However, it is not as many pundits believe a question of who will come out of this as a “Winner”, with China and Russia Bulls rejoicing at the end of Anglo-Amerikan Empire and forseeeing a new Ascendancy in the East, but rather just a question of who will be the LAST LOSER in the game and circle down the toilet the last.

In a few decades at the most, the last planes will have stopped flying and the last cars will have stopped driving, and Industrial living will begin to fade out of the memories of whoever is left walking the earth at that time.  For now though, we can only sit and wonder at the foolishness of it all and wait for the Tsunami to roll in.

3 Responses to The Tide Goes Out…

Knarf plays the Doomer Blues

Support the Diner
Search the Diner
Surveys & Podcasts


Renewable Energy


" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch


Inside the Diner

The Chevy's at The Levee and The Levee is DryFebruary made me shiver. Bad news on my doorstep and I couldn't take one more step. With no where to go, no way could I know which way to go. I was out of luck but not alone. Music died an...

The Horse has left the Barn and the Cat is out of the Bag.  A lawsuit does no good now.  RE[embed=1111,666]

Atlanta Mayor Keisha Lance Bottoms, shown here in 2019, says one of her children has also tested p...

Quote from: K-Dog on Today at 10:08:10 AMpotentially violates Trump’s own ethics policy ROLF"Trump" and "Ethics" in the same sentence is an oxymoron.RE

Quote from: Surly1 on Today at 10:02:31 AMQuote from: RE on Today at 08:56:26 AMQuote from: Eddie on Today at 07:14:41 AMShe will die before she names na...

Recent Facebook Posts

No recent Facebook posts to show

Diner Twitter feed

Knarf’s Knewz
Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

One of the continuing frustrations of online life [...]

The Pandemic Is the World’s Long Overdue Reality C [...]

Doomstead Diner Daily July 7The Diner Daily is ava [...]

Quote from: Eddie on July 06, 2020, 05:43:50 AMQuo [...]

Quote from: UnhingedBecauseLucid on March 18, 2019 [...]

CleanTechnicaSupport CleanTechnica’s work via dona [...]

QuoteThe FACT that the current incredibly STUPID e [...]

Quote from: K-Dog on February 24, 2020, 06:23:52 P [...]

I wonder how much these coins have been debased? [...]

Precious tip of the day.....Buy silver NOW  She [...]

Scientists have unlocked the power of gold atoms b [...]

Quote from: azozeo on August 14, 2019, 10:41:33 AM [...]

I am OUT of Jury Service!  I got summoned to be a [...]

Quote from: Eddie on May 16, 2020, 10:30:30 AMQuot [...]

Quote from: RE on May 16, 2020, 08:20:06 AMQuote f [...]

Quote from: RE on May 16, 2020, 08:20:06 AMQuote f [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

The Flim-Flam Men by Cognitive Dissonance   I suspect if average Joe or Jane were asked to identify [...]

The Coming War With China Re-posted from   (Have you noticed that (suddenly) Ch [...]

Papers Please! By Cognitive Dissonance     For those who may not know, Mrs. Cog and I live in the mo [...]

Lies, Damn Lies and Coronavirus Statistics By Cognitive Dissonance     “Never believe anything in po [...]

The Decline and Fall of Civil Society Chapter One By Cognitive Dissonance     From my perspective at [...]

Event Update For 2020-07-05 [...]

Event Update For 2020-07-04 [...]

Event Update For 2020-07-03 [...]

Event Update For 2020-07-02 [...]

Event Update For 2020-07-01 [...]

However don't expect strikes and yellow vests to fix underlying problems [...]

So how many more times are we going to hear that this is our last chance to take action in order to [...]

This is definitely not a bona fide post [...]

Daily Doom Photo


  • Peak Surfer
  • SUN
  • Transition Voice

The Great Pause Week 16: Cash Bounties for Scalps"The word “redskin” has been coined to refer to these trophies."Paris, June 15, 1756. Anti [...]

The Great Pause Week 15: Pirata"The white gull can bank steeply, climb, dive, and even invert, but it lacks by a large margin [...]

"The blow felt by a globalized, just-in-time, cheap-energy driven, modern consumer economy will [...]

"There are ten million times more viruses on Earth than there are stars in our universe."H [...]

The Great Pause Week 11: Son of a Lab Rat"Humans, by and large, seem unshakable in their beliefs that skin color, religious affiliation, [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

What extinction crisis? Believe it or not, there are still climate science deniers out there. And th [...]

My new book, Abolish Oil Now, will talk about why the climate movement has failed and what we can do [...]

A new climate protest movement out of the UK has taken Europe by storm and made governments sit down [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

In reply to Tim Groves. I take your points Tom I agree that they have wrecked their own country and [...]

In reply to JMS. >> It’s not easy to see what the world will look like in say July 2021. I thi [...]

In reply to Harry McGibbs. " still retains its glitter and was still lingering at near a [...]

In reply to Minority Of One. The first part of the video talks about the floods and other natural di [...]

In reply to May Hem. Better education, with Victorian ideas of discipline, is likely to generate mor [...]

I don't get it. For years this blogger and others like Martenson have been on about the fragili [...]

In reply to steve from virginia. This Brookings webinar goes over some of the ground discussed here [...]

In reply to Ken Barrows. Everything is bullish! [...]

Also, it's very possible we could send the virus packing if everybody would just wear a face-ma [...]

The crux of the problem is that what Chris Martenson has christened the "Honey Badger Virus [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...


Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

Globally, subtropical circulation in the lower troposphere is characterized by anticyclones over the [...]

Numerical models are being used for the simulation of recent climate conditions as well as future pr [...]

This study aims to provide improved knowledge and evidence on current (1986–2015) climate vari [...]

In many countries, urban heat island (UHI) effects come along with urbanization in metropolitan area [...]

Follow on our