Bakken

The Glad News Bears

Off the Keyboard of Thomas Lewis
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The Glad News Bears are cute and entertaining, but should not be mistaken for financial advisers or life coaches. (Frederick Stuart Church)

The Glad News Bears are cute and entertaining, but should not be mistaken for financial advisers or life coaches. (Frederick Stuart Church)

First published at The Daily Impact March 20, 2015

This week, the U.S. Energy Information Agency forecast that oil production in the country’s two largest fracking patches — Bakken in North Dakota and Eagle Ford in Texas — will actually decline this month. To those who have been watching the agony of the oil patch with clear eyes, this had all the shock value of a soaked weather forecaster, standing in a downpour, predicting rain. But it had no effect at all on the Glad News Bears, the relentless chanters of “Don’t Worry, Be Happy,” and “Ain’t Gonna Rain No More, No More.”

By Glad News Bears I mean the people who have been successfully spun by the propaganda juggernaut run by the Masters of the Fracking Universe and their financial-engineer accomplices. It is they who invented and sold the idea of a renaissance of the American oil bidness that would lead to energy independence and total world domination (cue the insane laughter). They sold it to the riverboat gamblers who comprise the financial industry these days, who for five years have lavished other peoples’ money in unlimited quantities on anyone who could even pronounce “hydraulic fracturing;” they sold it to the corporate news industry, which as usual demonstrated all the reserve, dignity and critical faculties of a drunken football cheerleader; and, it goes without saying, they sold it to a gullible public, who seems to want nothing more than to watch Dancing With the Stars, undisturbed.

Grace under pressure is one thing, but this is something else. As the conflagration consumes the fracking industry, and spreads to the high-yield bond markets and the subprime lenders, and threatens the entire banking industry and the stock market, the Glad News Bears warble on. For example:

Everything will be fine when the prices go back up. It’s just another temporary bust in a boom-and-bust industry, we’ve seen it all before. The producers will just hunker down, wait until prices come back up, and everything goes back to normal. This ignores the fact that every player in the fracking patch – every single one — is up to its eyeballs in debt. It is now mathematically impossible for most of them to ever repay what they owe, but to keep going they to have to pay the interest, and roll the old debt over into new when it comes due. Wait until prices come back up? If you find that your mortgage payment exceeds your income, you can’t just put everything on hold for a few years until things get better.

Low gas prices are good for the economy because people will have more money to spend. Not only is there no evidence for this, it is an illogical proposition. People have exactly the same amount of money to spend when gas is at $4 as when it is at $2. That they get to spend it on food, or cigarettes or lottery tickets instead of gas may mean a marginal improvement in the urgency of their choices, but it does not mean that their income increases or that the economy as a whole improves. It means mainly that they drive more miles and get bigger cars.

So what if the frackers go out of business? It’s a nasty, polluting industry that we won’t miss, it’s only a tiny fraction of the U.S. economy.Similarly, Glad News Bears wondered back in 2008 who was going to miss the hedge funds and the subprime mortgage hucksters (turns out we never got much of a chance to miss them, they were back in business about a week after the Crash of ‘09). When they flamed out, we didn’t miss them, we missed the pension funds and 401(k)s and portfolios and homes and lives they took down with them. The money at risk right now in the oil patch is estimated to be twice the amount that was at risk in ‘09. It’s not just their end of the boat that’s sinking.

We can handle it. The stock market’s up, job creation is up, unemployment is down, consumer confidence is high. The glass is half full.That glass doesn’t have any water in it at all. Price/earning ratios on publicly traded stock have swelled, balloon-like, to twice what is normal and prudent (almost always happens just before a crash). Along with extreme volatility, today’s unnaturally high valuations are signs of sickness, not health. While we are creating about 250,000 jobs a month (most of them food service), last month 375,000 people left the work force. They gave up. They’re still out there, jobless, but they are no longer part of the statistic. The unemployment rate cooked up by the government has been branded by no less than the Gallup organization as a sham. Consumer confidence is what the television tells it to be.

Like the orchestra playing on the submerging deck of the Titanic, the Glad News Bears singing while the economy goes up in flames might sound nice, but it sure doesn’t make much sense.


Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

 

 

Oil Patch Ebola

Off the keyboard of Michael Snyder

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Published on The Economic Collapse on January 20, 2015

http://theeconomiccollapseblog.com/wp-content/uploads/2015/01/Oil-Rig-Texas-Public-Domain.jpg

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12 Signs That The Economy Is Really Starting To Bleed Oil Patch Jobs

The gravy train is over for oil workers.  All over North America, people that felt very secure about their jobs just a few weeks ago are now getting pink slips.  There are even some people that I know personally that this has happened to.  The economy is really starting to bleed oil patch jobs, and as long as the price of oil stays down at this level the job losses are going to continue.  But this is what happens when a “boom” turns into a “bust”.  Since 2003, drilling and extraction jobs in the United States have doubled.  And these jobs typically pay very well.  It is not uncommon for oil patch workers to make well over $100,000 a year, and these are precisely the types of jobs that we cannot afford to be losing.  The middle class is struggling mightily as it is.  And just like we witnessed in 2008, oil industry layoffs usually come before a downturn in employment for the overall economy.  So if you think that it is tough to find a good job in America right now, you definitely will not like what comes next.

At one time, I encouraged those that were desperate for employment to check out states like North Dakota and Texas that were experiencing an oil boom.  Unfortunately, the tremendous expansion that we witnessed is now reversing

In states like North Dakota, Oklahoma and Texas, which have reaped the benefits of a domestic oil boom, the retrenchment is beginning.

“Drilling budgets are being slashed across the board,” said Ron Ness, president of the North Dakota Petroleum Council, which represents more than 500 companies working in the state’s Bakken oil patch.

Smaller budgets and less extraction activity means less jobs.

Often, the loss of a job in this industry can come without any warning whatsoever.  Just check out the following example from a recent Bloomberg article

The first thing oilfield geophysicist Emmanuel Osakwe noticed when he arrived back at work before 8 a.m. last month after a short vacation was all the darkened offices.

By that time of morning, the West Houston building of his oilfield services company was usually bustling with workers. A couple hours later, after a surprise call from Human Resources, Osakwe was adding to the emptiness: one of thousands of energy industry workers getting their pink slips as crude prices have plunged to less than $50 a barrel.

These jobs are not easy to replace.  If oil industry veterans go down to the local Wal-Mart to get jobs, they will end up making only a very small fraction of what they once did.  Every one of these jobs that gets lost is really going to hurt.

And at this point, the job losses in the oil industry are threatening to become an avalanche.  The following are 12 signs that the economy is really starting to bleed oil patch jobs…

#1 It is being projected that the U.S. oil rig count will decline by 15 percent in the first quarter of 2015 alone.  And when there are less rigs operating, less workers are needed so people get fired.

#2 Last week, 55 more oil rigs shut down.  That was the largest single week decline in the United States in 24 years.

#3 Oilfield services provider Baker Hughes has announced that it plans to lay off 7,000 workers.

#4 Schlumberger, a big player in the energy industry, has announced plans to get rid of 9,000 workers.

#5 Suncor Energy is eliminating 1,000 workers from their oil projects up in Canada.

#6 Halliburton’s energy industry operations have slowed down dramatically, so they gave pink slips to 1,000 workers last month.

#7 Diamondback Energy just slashed their capital expenditure budget 40 percent to just $450 million.

#8 Elevation Resources plans to cut their capital expenditure budget from $227 million to $100 million.

#9 Concho Resources says that it plans to reduce the number of rigs that it is operating from 35 to 25.

#10 Tullow Oil has reduced their exploration budget from approximately a billion dollars to about 200 million dollars.

#11 Henry Resources President Danny Campbell has announced that his company is reducing activity “by up to 40 percent“.

#12 The Federal Reserve Bank of Dallas is projecting that 140,000 jobs related to the energy industry will be lost in the state of Texas alone during 2015.

And of course it isn’t just workers that are going to suffer.

Some states are extremely dependent on oil revenues.  Just take the state of Alaska for instance.  According to one recent news report, 90 percent of the budget of Alaska comes from oil revenue…

But oil is also a revenue source in more than two dozen states, especially for about a third of them. In Alaska, where up to 90 percent of the budget is funded by oil, new Gov. Bill Walker has ordered agency heads to start identifying spending cuts.

Sadly, it looks like oil is not going to rebound any time soon.

China, the biggest user of oil in the world, just reported that economic growth expanded at the slowest pace in 24 years.  And concerns about oversupply drove the price of U.S. crude down another couple of dollars on Monday

Oil declined about 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.

U.S. crude, also known as West Texas Intermediate or WTI, settled 4.7 percent lower at $46.39 a barrel, near its intraday bottom of $46.23.

There is only one other time in history when we have seen an oil price crash of this magnitude.

That was in 2008, just before the greatest financial crisis since the Great Depression.

Many believe that we are now on the verge of the next great financial crisis.

I hope that you are getting ready.

Attention in the Crowded Theater: Fire!

From the keyboard of Thomas Lewis
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Firefighters try to snuff an oil well fire in Iraq in 2003. What is happening to the oil business today, especially in the United States, is akin to a thousand such fires.

Firefighters try to snuff an oil well fire in Iraq in 2003. What is happening to the oil business today, especially in the United States, is akin to a thousand such fires.

First published at The Daily Impact  January 7, 2015

The flames of the next financial crash are leaping up everywhere you look (if you look without wearing the rose-colored glasses): in the Bakken fracking fields of North Dakota, the Eagle Ford in Texas, the tar sands of Alberta, the deep waters of the Gulf of Mexico. They are lighting up the night sky in all directions, and in the daytime the smoke is sickening the light and smelling up the air in the skyscraper offices of the Masters of the Universe where they shuffle decks of junk bonds, subprime loans and derivatives. Along with the smoke, you can smell the fear. This is going to be bad.

Serious testimony in a minute, but first an odd moment of clarity that I caught by accident yesterday on CNBC during its “Closing Bell” program. One of the female anchors was interviewing an analyst sent over from Central Casting to opine on oil prices. How low could they go, she asked him, somebody was predicting $20 a barrel? “Well,” oozed the analyst, “the models don’t support $20 a barrel.” Which is when the anchor person lost it (I was caught off guard, and am reconstructing this from memory, so consider it a paraphrase).

“You know what?” She said. “This conversation is driving me crazy. What do you mean the models don’t support $20? The models didn’t see any of this coming. None of them predicted any of this. Nobody saw any of it coming. Doesn’t anybody have any idea what is going on?”  

I wonder if we will see her face again, now that she has committed the worst sin a journalist can commit on air — blurting out the truth.

With respect to the narrow question of why oil prices collapsed in June, no one has a clue. One of the analysts on that very CNBC panel said as much, averring that the fundamentals of supply and demand do not explain the price movement. The best estimate of the current world surplus of crude oil over demand is two per cent. Two. On what planet does an oversupply of two percent for a machine burning 90 million barrels a day lead to a 50% drop in prices?

As to the larger question of what is happening to the oil industry and everything related to it — and everything is related to it — lots of people know what is going on but they can’t go on television with their hair on fire. It’s not considered audience-friendly. But let’s review what they know:

  • The number of US oil rigs actively looking for or extracting oil is dropping fast. A report out Monday from oil field services company Baker Hughes showed the number of rigs operating in the United States declined for the fourth consecutive week — by 29 in the latest count, to 1,811. That, combined with last week’s decline of 35, marked the largest two-week drop in the U.S. rig count since 2009. (Ahem: you remember what else was going on in 2009?)
  • Layoffs are rising of stunned workers who thought they were in a bonanza that would last for years. For weeks now, many players in the fracking patch have been announcing that nothing is wrong but that as precautions they are laying down rigs and reducing exploration budgets and cutting production forecasts. So far just one company, American Eagle Energy, has suspended drilling entirelyuntil oil prices rebound. There will be more, directly.
  • Collateral damage is spreading to oil-patch service providers: Civeo, a Houston-based company that builds lodging for oil workers,announced on December 29 that it would cut its workforce by 45 percent because of lower demand for “man camp” trailers. U.S. Steel has just announced the shuttering of two plants in Texas and Ohio that make oil drilling equipment and that employ 750 people. In Williston, North Dakota “The Bakken Club,” which offered exclusive services to oil-patch players including fine dining, airport shuttling, and corporate events, has been closed because it can’t pay its rent.The Federal Reserve Bank of Dallas, estimates that 250,000 jobs could be lost in 2015 if oil prices don’t rise.

 The “Don’t Worry Be Happy” chorale  has a new verse, about how it takes a year for plans to reduce output to show up as reduced output, so maybe prices will recover first and hesto presto, no pain! That was true when the average productive life of an oil well was on the order of 20 years, but the productive life of a fracking well is about three years. This, as they say, changes things.  Wells playing out in the Bakken in November, for example, subtracted 60,000 barrels per day from the field’s production. In November, that was more than made up for by new wells coming on line. In January, after God-knows-how-many more rigs have been idled, 77,000 barrels per day will be lost. Get the picture?

Not yet? Then look at this picture. Geological consultant and shale-oil expert Arthur Berman explained to Oilprice.com that the chorale’s other verse, about frackers breaking even at the new low price, because of their new technologies, makes no sense:

“Continental Resources is the biggest player in the Bakken. Their free cash flow—cash from operating activities minus capital expenditures—was -$1.1 billion in the third- quarter of 2014. That means that they spent more than $1 billion more than they made. Their debt was 120% of equity. That means that if they sold everything they own, they couldn’t pay off all their debt. That was at $93 oil prices. And they say that they will be fine at $60 oil prices? Are you kidding?”

But wait, there’s more. If you call right now, we’ll give you the latest increases in junk bond and leveraged-loan rates, which are driving up driller’s expenses as fast as their revenues are shrinking. And the latest quotes for the tanking share prices of just about any company having anything to do with oil. Oh, and the even-worse-case scenario in the Canadian tar sands.

You might have to let the phone ring for a while. I’ll be in the bunker, putting out my hair.

***

Thomas Lewis is a nationally recognized and reviewed author of six books, a broadcaster, public speaker and advocate of sustainable living. He also is Editor of The Daily Impact website, and former artist-in-residence at Frostburg State University. He has written several books about collapse issues, including Brace for Impact and Tribulation. Learn more about them here.

 

 

Oil Price Crash!!! Part 2

logopodcastOff the microphone of RE

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Aired on the Doomstead Diner on December 16, 2014

http://evsroll.com/images/Historic-Oil-Price-Graph.gif

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Before going into the Rant, I thought it would be a good idea to review the price charts and profitability aspects as the price continues to crater here, with the Saudis now Jawboning a possible $40 Handle.  Below some charts for where we are right now as background for the Rant.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_EOD17.jpg

Here we see how vast the decoupling of Stocks and Credit is from the cratering price of Oil.  In all likelihood, both will catch up (or rather DOWN) here in short order.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/12/fig%20133.jpg

On the international level, this chart gives you a good idea of how much Red Ink various OPEC countries are bleeding at the current price. It gets bigger obviously as the price goes further south.  The Saudis are sitting on a pile of money to try to weather the storm, but Venezuela is already broke.  The Ruskies are seeing a Run on the Ruble as well as dealing with sanctions.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_CL3.jpg

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/11/20141107_shale.jpg

At a price in the $50 Handle range, most of the Fracking Plays are money losers.  They’ll probably pump dry what is already drilled as the costs are sunk in the ground already, but new drilling and new CapEx will not occur until prices come back up, if they ever do.  Market Cap of Energy Companies is getting hammered and many will go into Chapter 11.  Halliburton has lost half its Market Cap since July, EOG Resources about a third of theirs.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_EOD3.jpg

Bond Yields for the Energy Sector are skyrocketing, which means the Bond Prices are collapsing since Price moves inversely to Yield.  Rolling over old debt and financing money losing operations is going to become increasingly more difficult.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/12/Barrons%20top%20tick.png

Stocks are trailing Oil in the Crash, but are likely to get a lesson in Gravity soon.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/12/20141212_rig.jpg

Rig Counts are already declining, a pattern likely to accelerate after January 1st.  Large Layoffs and Unemployment in the sector is likely soon.

Now, LET’S RANT!!!!


Snippet:

liquidation…The latest Jawboning from the Saudis is they are prepared to let it fall to the $40 range, but it is unclear that even a $40/bbl price will get demand to rebound here in countries now sporting 50% youth unemployment. If they start giving it away FREE, that might get it to rebound, which brings us right back to how this whole system got rolling.

In the beginning, when Oil came Spurting up out of the Ground on Jed Clampett’s farm, it cost close to nothing to extract it. John D. Rockefeller and Standard Oil provided cheap oil to leverage up all the industries that depend on consuming it, the automotive and airline industries primarily. For around 100 years from 1875 to 1975, Oil price was FLATLINED at below $1/bb, and then the first of the Oil Shocks hit with the Embargo from OPEC, and then around 2000 the price went parabolic and shot up to over $100, precipitating the crash of 2008.

The price dropped into the $30 range, and then Da Fed began its EZ money policies, providing a stream of ZIRP money for Wall Street to gamble with, which they did in spades, funding the Shale Revolution with a ton of junk bonds, now all set to go worthless. What they forgot to do here was fund the consumption end of the equation, and as a result demand has been dropping steadily, to the point now where there is a glut of oil on the market and the producers have to do a Liquidation Sale at whatever they can get for it, EVERYTHING MUST GO!

For the rest, LISTEN TO THE RANT!!!

In case you missed it, here is Oil Crash!!! Part 1

Note: For non-native speakers of English and people who prefer to read rather than listen, you can find the Full Transcript HERE on Thursday

The Dimming Bulb

Off the keyboard of RE

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Published on the Doomstead Diner on December 7, 2014

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dim-light-bulb

While all eyes are focused right now on the Oil Price Collapse, with it’s numerous implications as far as the Energy Industry, Bankstering and Transportation Industries are concerned, in the background and not well reported on or chronicled statistically is the ever widening problem of Electrical Grid Blackouts & Brownouts.

Even more than liquid fuels for transportation, Electricity DEFINES the Modern Industrial Culture, and is considered an “Essential Service“.

Living without electricity in today’s technological world may be difficult to imagine. Yet the reality of living without computers, mobile phones and entertainment systems, and managing a transport system thrown into chaos by an absence of traffic lights, trains and subways, may become increasingly common, according to an academic study published today.

New research by Hugh Byrd, Professor of Architecture at the University of Lincoln, UK, and Steve Matthewman, Associate Professor of Sociology at the University of Auckland, New Zealand, reveals that today’s occasional blackouts are dress rehearsals for the future, when they will occur with greater frequency and increased severity.

According to the study, power cuts will become more regular around the globe as electrical supply becomes increasingly vulnerable and demand for technology continues to grow at an unprecedented rate.

Professor Byrd said: “Electricity fuels our existence. It powers water purification, waste, food, transportation and communication systems. Modern social life is impossible to imagine without it, and whereas cities of the past relied on man-power, today we are almost completely reliant on a series of interlocking technical systems. Our research therefore explores what happens when the power goes off, and explains why the security of fuel supply is such a pressing social problem.”

Electrical power has been defined as a ‘critical infrastructure’ by the International Risk Governance Council, in that it is a ‘large-scale human-built system that supplies continual services central to society’s functioning’. However, electricity supply is less robust than commonly supposed.

You simply cannot run any modern city without copious amounts of Electricity, most often provided by Coal Plants around the world, but with dependence also on all the forms of Fossil Fuel and Nuclear, as well as Hydro and Wind Power in selected locations.Every one of these forms of Power generations faces issues now, and the grid which distributes the power also is deteriorating and keeping it repaired and functional after every weather related problem from Tornadoes to Ice Storms and just plain old T-Storms costs every community more money they just do not have every day.

Going back to 1989 in Mr. Peabody’s WAYBAC Machine, Richard Duncan developed a metric of PER CAPITA Energy, which is much more important than precisely how much Oil is coming out of the ground at any given point in time, although despite the Hype on Fracking, Oil Production globally has been FLATLINED for near a decade now, and the Fracked stuff just keeps us treading water, at an enormous price.

http://crudeoilpeak.info/wp-content/uploads/2014/08/World_without_US_shale_oil_Jan2001_Mar2014.jpg

In the intervening time between January of 2005 and January of 2014 though, the Total Global Population of Homo Sapiens has increased by roughly 1 Billion People with a current total population somewhat in excess of 7 Billion, for a roughly 15% Population increase over the time period:

http://3.bp.blogspot.com/-yS_YzuA20gw/UxfS-fxFD-I/AAAAAAAANPA/t5Zx1VgBlSI/s1600/6.jpg

So, just to stay EVEN in Per Capita Energy Consumption, over this time period Energy Extraction would have needed to increase also by 15%, but obviously it has not.  The amount of AVAILABLE per capita energy has been decreasing for quite some time, due mainly to Population Increase while the extraction rate for energy has remained more or less Flatlined for around a decade now.

At this point however, as credit becomes constricted to access energy in most places of the world (Ugo Bardi for instance noted that Italy has seen a 35% drop in Oil Consumption over the last decade), it’s not just Per Capita energy consumption that is on the downslide, but GROSS TOTAL CONSUMPTION as well.

You can see this in this chart from Doug Short, which shows a 10% drop in Gasoline consumption here in the FSoA over the last 6 years since the end of the Consumption Peak in 2008

Screen Shot 2014-10-27 at 11.57.00 AM

So, the Demand Destruction and decreasing consumption of Energy is pretty apparent by the numbers in the Liquid Fuels area, but what about in the even more critical area of Electricity, powering the Lights, the Sewage Treatment Plants, the Elevators and the Subway systems of the major cities that have exploded in population since the Age of Oil began?

Fortunately for us observers of Energy Resource Depletion & Dissipation, we have available the Suomi NPP Visible Infrared Radiometer Suite, which has made some marvelous images of the night time Earth, including the Black Marble Image.

http://eoimages.gsfc.nasa.gov/images/imagerecords/79000/79803/earth_night_rotate_lrg.jpg

Here’s the Flat Map of the Whole Globe, revealing clearly where industrialization has infected over the years:

Night Lights 2012 - Flat map

Remarkable how small a portion of the world really got Wired Up here before burning through the legacy of a few million years of fossil fuel collection

After doing a bit of Googling, I found these two images of North America, one from 2012, the other from 1995.

1995-2012-lights

Now, these two images were captured with different equipment, but you can see unmistakeably how much the Great Plains area has diminished in overall lighting, with one notable exception, that VERY large and bright spot I circled in Yellow.  What do you suppose that is?

That folks is the Bakken Oil Fields around Williston, ND.  It’s partially increased electric lighting, but mostly NG Flaring.  Here’s a Closeup View:

http://www.aei.org/wp-content/uploads/2012/12/bakken1.jpg

http://www.catastrophemap.org/oilmap/bakken-flaring-2014.gif

You can see the opposite effect if you look in the Southeast, increasing brightness down there where a lot of development took place through the period.

With the Suomi Instrument now up, detailed analysis of changing amounts of “light pollution” have been undertaken, most notably around Europe in this report published in January of 2014 in the Journal Nature:

Contrasting trends in light pollution across Europe based on satellite observed night time lights

The analysis is very thorough, and generates some very interesting data

We assessed changes in artificial lighting in terms of the extent of the areas decreasing and increasing in brightness over the region. The method was validated by the successful attribution of regions of both increasing and decreasing intensity in a calibration area in South-West England to urban and industrial developments, confirming that the observed direction and timing of change is consistent with known changes in nighttime light intensity on the ground. We then extended the approach to map areas of increasing and decreasing brightness across Europe. While the brightness of nighttime light pollution across Europe is increasing overall, clear regional differences exist, with considerable regions experiencing apparent net dimming over the period.

Here is the area around Southwest England used for calibration purposes.  Blue areas are decreasing light intensity, Red areas increasing:

15-year changes in nighttime brightness in South-West England.

Highlighted regions: (a) Annual trend in brightness for areas associated with the china-clay (kaolin) industry, (blue line); total china clay production (black line). (b) Annual trend in brightness for the urban region of Torbay (blue); total power load on municipal street lighting in Torbay (black). (c) Annual trend in brightness for Wytch Farm onshore oil field (blue); total oil production from the field (black). Map generated using ESRI ArcMap 9.2.

For Europe as a whole, here’s the maps and analysis:

(a) Intercalibrated mean brightness for Europe 2005–2010. (b) 10-year change in brightness, calculated as the difference in mean values for the periods 2005–2010 and 1995–2000. Grey areas are saturated throughout the time period, so trends cannot be detected. (c) Proportions of the total land surface area for which artificial light was detected to increase (orange) and decrease (blue) by more than 3 DN units in constituent countries of Europe. *Data south of 65 degrees latitude only. Map generated using ESRI ArcMap 9.2.

Changes in European light pollution

In common with recent studies in Asia13, 16, 24, Europe has experienced a marked net increase in nighttime light pollution since satellite images first became available (Figure 2). Inferences about heavily urbanised areas must be treated with caution as the DMSP/OLS sensors saturate at high light levels; however, marked regional differences within the unsaturated rural and suburban areas exist. It has been previously noted that large areas of some countries of the former Soviet Union, such as Moldova and Ukraine, experienced a contraction in lighting following independence22; the effects of this change are still evident in this study over a more extended time period. Widespread decreases in brightness also occur in Hungary and Slovakia. Moreover, we find that several economically developed countries, including Sweden, Finland, Denmark, Norway, the United Kingdom, Belgium and Northern Germany also show areas apparently experiencing detectable localised declines in brightness.

The changes here aren’t uniform, and while some are predictable based on the current economic situation, some others are counter-intuitive.  Here’s a Geographical breakdown of a few selected locations:

Selected areas of maps shown in Figure 2, showing contrasts in trends in detected nighttime light between different countries.

(a) Belgium shows decreases in nighttime brightness along the motorway network, while neighbouring regions of France have increased substantially in brightness. (b) Slovakia shows marked decreases in brightness, with the exception of Bratslava and towns in the west of the country. In contrast, neighbouring regions of Poland have become substantially brighter. Map generated using ESRI ArcMap 9.2.

As you might have expected if you follow collapse dynamics, countries formerly in the orbit of the Former Soviet Union (FSU), which did not glom onto the Western economy after the fall like Slovakia see a marked Dimming of the Bulbs, whereas countries like Poland got Brighter Bulbs in the aftermath of that collapse.  Southern European Nations which saw a lot of investment over the time period got brighter, whereas aging industrial countries like Belgium and the Netherlands have grown dimmer.

Moving around the globe to the East, you can see the close relationship between power consumption and GDP by looking at the graph of Power Output versus GDP for the period from 1998 through 2012:

http://av.r.ftdata.co.uk/files/2012/05/china_power_GDP.png

What can we expect moving forward here into the future?

Well, far as China is concerned, those numbers are going to continue to slide, and in all probability you are going to see the Bulbs go Dimmer in China over the next couple of years.  Even more than China, India is likely to see total lumens decreasing rapidly as time passes.

Unlike the numbers dished out by the Chinese Politburo or Da Fed and the BLS here which can be easily massaged to make it appear as though there is “Growth” where there is no real growth, the image data generated from the Suomi Satellite is harder to disguise, though of course not impossible either since both NASA and NOAA are Goobermint agencies.  At the moment however, there are probably too many scientists with access to the real time data streams to falsify the imagery, and too few people who recognize what is going on for it to matter on a political level if the Globe clearly shows a progressive and increasing Dimming effect.

If you are aware of these things though, this provides one of the BEST METRICS around to observe the collapse of Industrial Civilization.  At the moment I am unable to locate a way to access regular updated satellite imagery on this for the typical web surfer, however I am hopeful that my good friend Ugo Bardi, Professor of Physical Chemistry at the University of Firenza may have better luck through the university system.

 photo city_black_out_500.jpgBesides watching and cateloging as cities like Detroit and Hoboken grow dimmer, another fascinating Bright Spot to watch over the next year is that Bonfire going on in the Bakken right now, which one of my friends in the industry who flies in there regularly says is simply amazing to see from the air.  With an already 40% decrease in Drilling permits being applied for as the price of Oil drops here, it seems likely that this particular Bright Light will be a lot Dimmer next year, and dimmer still the year after that.

How LONG will it take for the Planet to go COMPLETELY Dark at night?  Probably a relatively long time, but at the same time there will probably be occassions where large regions go dark simultaneously and other occassions where the overall lumens decrease rapidly in a given location as many of the lights are extinguished.  A simple example would be a struggling municipality cutting off half its Streetlights in order to save on the Electric Bill.  Or a Suburb with a lot of foreclosures having a greater number of Dark McMansions.

1995-2012-lightsThe Comparison Photo I put up of North America 1998 vs 2012 probably gives the best indication of how the loss of electric power will go, first disappearing from Low Population Zones and gradually spreading toward the densely populated areas.  It looks as though California is getting close to being Sunffed Out going West from Bakken, and moving Eastward the Mississipi River Population Zone will see more Dimming.  This correlates well with the ongoing Geopolitical problems in places like Ferguson, a suburb of St. Louis, and of course rust belt cities like Detroit and Gary, Indiana.

In the Final Countdown, probably only a few Major Metros of First World cities like NY Shity, London, Berlin etc will still have so many lights on they resemble Diodes on a circuit board.  How LONG will this process take though?  Absolute Light Intensity Dimming  in North America over the last 15 years is discernable, but it hasn’t totally stopped BAU in the FSoA.  If the regression is a linear function, in another 15 years things would be worse, but not altogether different.

Thing is, this is probably not a linear function, as suggested by Ugo Bardi’s Seneca Cliff.

http://4.bp.blogspot.com/-0DnON_XkgQc/Ts_9icXLfOI/AAAAAAAADuY/SPSgxOXs4W0/s1600/SenecaCliff.jpg

Once the dropoff begins, it tends to accelerate with many positive feedback loops involved.  So in all likelihood we will see acceleration of this phenomenon around the globe over the next 15 years, and a significant portion of the currently Lit Up portions of the Black Marble will have gone dark by then.

Here in the FSoA, probably the most significant one to watch over the next couple of years is the Hoover Dam.  As of Novemeber 2014, the water level is at 1083 feet.  Here’s the last few years of records for Lake Mead:

2007  1129.55  1129.35  1125.79  1120.69  1115.89  1113.50  1111.58  1111.84  1111.06  1110.95  1111.22  1114.81
2008  1116.46  1116.93  1115.65  1110.61  1107.05  1104.98  1104.42  1105.13  1105.76  1107.94  1107.33  1110.97
2009  1111.78  1111.43  1107.40  1101.26  1096.92  1095.26  1094.20  1093.73  1093.68  1093.26  1093.52  1096.30
2010  1100.02  1103.21  1100.66  1098.00  1094.30  1089.30  1086.97  1086.91  1083.81  1082.36  1081.94  1086.30
2011  1091.73  1095.78  1096.39  1095.76  1097.90  1102.38  1107.07  1113.45  1116.04  1121.00  1125.82  1132.83
2012  1134.18  1133.06  1129.41  1123.93  1119.38  1115.84  1115.92  1116.56  1115.16  1116.50  1117.24  1120.36
2013  1122.32  1122.14  1118.59  1112.91  1108.36  1105.98  1105.92  1106.13  1106.92  1104.04  1106.36  1106.73
2014  1108.75  1107.94  1101.71  1094.55  1087.46  1082.66  1080.60  1081.55  1081.33  1082.79  1083.57

Hoover reaches the “Dead Pool” level at 950 feet, still 130 feet away, but relief from the drought affecting the Colorado River watershed is nowhere in sight at the moment.

“The level of Lake Mead is supposed to drop to an elevation of 1081.75 over the next few days, which is the lowest elevation it’s ever been since the lake was filled when Hoover Dam was built,” said Rose Davis, Bureau of Reclamation.

Lake Mead is not only the primary water source for Las Vegas, but it’s also how Hoover Dam produces power. Simply put, the lower the lake, the less electricity.

“Our concern is the ability to generate power. We’ve seen a 23 percent reduction in our capacity to generate power since the lake continues to drop,” Davis said.

The hydroelectric facility is taking steps so its current capacity of 1592 megawatts won’t go down anymore.

“We’ve been proactive over the last five years in putting in new equipment that operates more efficiently at low lake levels,” Davis said.

Three wide head turbines have been installed, and two more are on the way in the next couple years. It’s hoped they will arrive before Lake Mead gets to catastrophic levels that could bring the dam to screeching halt.

“What we call the dead pool, which is the elevation of Lake Mead where Hoover Dam cannot generate any power is about 950 feet,” Davis said.

Even without complete shutdown at Hoover, a 23% Reduction in power output is already hugely significant.  Referencing back to the close connection between GDP and Electric Power however, such a large reduction in Power Output means a similarly large reduction in GDP for the neighborhoods served by Hoover, which are vast going from Vegas to Phoenix to Los Angeles.  To replace that power they have to BUY fossil fuel power off the grid, every Kilowatt Hour Hoover does not produce is more money out of the ever more insolvent coffers of everyone living in this neighborhood.

However, until Hoover shuts down completely, these issues mostly are not recognized, neither by the typical J6P nor the MSM reporting on it and not even by most Economistas.  They don’t tie the ever decreasing Standard of Living to the Falling Water Level in Lake Mead.  These are disparate phenomena to them.  In fact your Standard of Living is ALL about how much Power you consume, and the higher the power consumption, the higher your ‘Standard of Living”, at least by the common metrics of the Industrial Era such as GDP.  The less access you have to energy, either Electricity or Gasoline to power your car, the lower your Standard of Living will be, eventually achieving 3rd World levels where the vast majority of the population has access to neither one.

How fast this will actually spin down still remains an open question, but now we do have Metrics by which to observe it, and to document that in fact there IS a Collapse in Progress, which most of the population remains in Denial about.  The end result is quite clear, it is the End of Industrial Civilization, and this is the FINAL COUNTDOWN.

Prior Collapse Cafes of Interest

Dense Fog Turns into Toxic Smog

Off the keyboard of Jim Quinn

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Published on The Burning Platform on December 31, 2013

Discuss this article at the Kitchen Sink inside the Diner

 

In mid-January of this year I wrote my annual prediction article for 2013 – Apparitions in the Fog. It is again time to assess my inability to predict the future any better than a dart throwing monkey. As usual, sticking to facts was a mistake in a world fueled by misinformation, propaganda, delusion and wishful thinking. I was far too pessimistic about the near term implications of debt, civic decay and global disorder. Those in power have successfully held off the unavoidable collapse which will be brought about by their ravenous unbridled greed, and blatant disregard for the rule of law, the U.S. Constitution and rights and liberties of the American people. The day to day minutia, pointless drivel of our techno-narcissistic selfie showbiz society, and artificially created issues (gay marriage, Zimmerman-Martin, Baby North West, Duck Dynasty) designed to distract the public from thinking, are worthless trivialities in the broad landscape of human history.

The course of human history is determined by recurring cyclical themes based upon human frailties that have been perpetual through centuries of antiquity. The immense day to day noise of an inter-connected techno-world awash in inconsequentialities and manipulated by men of evil intent is designed to divert the attention of the masses from the criminal activities of those in power. It has always been so. There have always been arrogant, ambitious, greedy, power hungry, deceitful men, willing to take advantage of a fearful, lazy, ignorant, selfish, easily manipulated populace. The rhythms of history are unaffected by predictions of “experts” who are paid to spin yarns in order to sustain the status quo. There is no avoiding the consequences of actions taken and not taken over the last eighty years. We are in the midst of a twenty year period of Crisis that was launched in September 2008 with the worldwide financial collapse, created by the Federal Reserve, their Wall Street owners, their bought off Washington politicians, and their media and academic propaganda machines.

I still stand by the final paragraph of my 2013 missive, and despite the fact the establishment has been able to fend off the final collapse of their man made credit boom for longer than I anticipated, they have only insured a far worse outcome when the bubble bursts:

“So now I’m on the record for 2013 and I can be scorned and ridiculed for being such a pessimist when December rolls around and our Ponzi scheme economy hasn’t collapsed. There is no disputing the facts. The economic situation is deteriorating for the average American, the mood of the country is darkening, and the world is awash in debt and turmoil. Every country is attempting to print their way to renewed prosperity. No one wins a race to the bottom. The oligarchs have chosen a path of currency debasement, propping up insolvent banks, propaganda and impoverishing the masses as their preferred course. They attempt to keep the masses distracted with political theater, gun control vitriol, reality TV and iGadgets. What can be said about a society where 10% of the population follows Justin Bieber and Lady Gaga on Twitter and where 50% think the National Debt is a monument in Washington D.C. The country is controlled by evil sycophants, intellectually dishonest toadies and blood sucking leeches. Their lies and deception have held sway for the last four years, but they have only delayed the final collapse of a boom brought about by credit expansion. They will not reverse course and believe their intellectual superiority will allow them to retain their control after the collapse.”

The core elements of this Crisis have been visible since Strauss & Howe wrote The Fourth Turning in 1997. All the major events that transpire during this Crisis will be driven by one or more of these core elements – Debt, Civic Decay, and Global Disorder.

“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe

My 2013 predictions were framed by these core elements. After re-reading my article for the first time in eleven months I’ve concluded it is lucky I don’t charge for investment predictions. Many of my prognostications were in the ballpark, but I have continually underestimated the ability of central bankers and their Wall Street co-conspirators to use the $2.8 billion per day of QE to artificially elevate the stock market to bubble level proportions once again. If I wasn’t such a trusting soul, I might conclude the .1% financial elite, who run this country, created QEternity to benefit themselves, their .1% corporate CEO accomplices and the corrupt government apparatchiks who shield their flagrant criminality from the righteous hand of justice.

Even a highly educated Ivy League economist might grasp the fact that Ben Bernanke’s QEternity and ZIRP, sold to the unsuspecting masses as desperate measures during a crisis that could have brought the system down, have been kept in place for five years as a means to drive stock prices and home prices higher. The emergency was over by 2010, according to government reported data. The current monetary policy of the Federal Reserve would have been viewed as outrageous, reckless, and incomprehensible in 2007. It is truly a credit to the ruling elite and their media propaganda arm that they have been able to convince a majority of Americans their brazen felonious disregard for the wellbeing of the 99% is necessary to sustain the .1% way of life. Those palaces in the Hamptons aren’t going to pay for themselves without those $100 billion of annual bonuses.

Do you think the 170% increase in the S&P 500 has been accidently correlated with the quadrupling of the Federal Reserve balance sheet or has Bernanke just done the bidding of his puppet masters? Considering the .1% billionaire clique owns the vast majority of stock in this corporate fascist paradise, is it really a surprise the trickle down canard would be the solution of choice from these sociopathic scoundrels? Of course QE and ZIRP have impacted the 80% who own virtually no stocks in a slightly different manner. Do you think the 100% increase in gasoline prices since 2009 was caused by Bernanke’s QEternity?

Do you think the 8% decline in real median household income since 2008 was caused by Bernanke’s QE and ZIRP policies?

Click to View

Do you think the $10.8 trillion stolen from grandmothers and risk adverse savers was caused by Bernanke’s ZIRP?

Was the $860 billion increase in real GDP (5.8% over five years) worth the $8 trillion increase in the National Debt and $3 trillion increase in the Federal Reserve balance sheet? Was it moral, courageous and honorable of the Wall Street plantation owners to syphon the remaining wealth of the dying middle class peasants and leaving the millennial generation and future generations bound in chains of unfunded debt to the tune of $200 trillion?

My assessment regarding unpredictable events lurking in the fog was borne out by what happened that NO ONE predicted, including: the first resignation of a pope in six hundred years, the military coup of a democratically elected president of Egypt – supported by the democratically elected U.S. president, the rise of an alternative currency – bitcoin, the bankruptcy of one of the largest cities in the U.S. – Detroit, a minor terrorist attack in Boston that freaked out the entire country and revealed the Nazi-like un-Constitutional tactics that will be used by the police state as this Crisis deepens, and revelations by a brilliant young patriot named Edward Snowden proving that the U.S. has been turned into an Orwellian surveillance state as every electronic communication of every American is being monitored and recorded. The Democrats and Republicans played their parts in this theater of the absurd. They proved to be two faces of the same Party as neither faction questions the droning of innocent people around the globe, mass spying on citizens, Wall Street criminality, trillion dollar deficits, a rogue Federal Reserve, or out of control unsustainable government spending.

My predictions for 2013 were divided into the three categories driving this Fourth Turning CrisisDebt, Civic Decay, and Global Disorder. Let’s assess my inaccuracy.

Debt

  • The debt ceiling will be raised as the toothless Republican Party vows to cut spending next time. The political hacks will create a 3,000 page document of triggers and create a committee to study the issue, with actual measures that slow the growth of annual spending by .000005% starting in 2017.

The government shutdown reality TV show proved to be the usual Washington D.C. kabuki theater. They gave a shutdown and no one noticed. It had zero impact on the economy. More people came to the realization that government does nothing except spend our money and push us around. The debt ceiling was raised, the sequester faux “cuts” were reversed and $20 billion of spending will be cut sometime in the distant future. Washington snakes are entirely predictable. I nailed this prediction.

  • The National Debt will increase by $1.25 trillion and debt to GDP will reach 106% by the end of the fiscal year.

The National Debt increased by ONLY $964 billion in the last fiscal year, even though the government stopped counting in May. The temporary sequester cuts, the expiration of the 2% payroll tax cut, the fake Fannie & Freddie paybacks to the U.S. Treasury based upon mark to fantasy accounting, and the automatic expiration of stimulus spending combined to keep the real deficit from reaching $1 trillion for the fifth straight year. Debt to GDP was 104%, before our beloved government drones decided to “adjust” GDP upwards by $500 billion based upon a new and improved formula, like Tide detergent. I missed this prediction by a smidgeon.

  • The Federal Reserve balance sheet will reach $4 trillion by the end of the year.

The Federal Reserve balance sheet stands at $4.075 trillion today. Ben is very predictable, and of course “transparent”. This was an easy one.

  • Consumer debt will reach $2.9 trillion as the Feds accelerate student loans and Ally Financial, along with the other Too Big To Control Wall Street banks, keep pumping out subprime auto loans. By mid-year reported losses on student loans will soar and auto loan delinquencies will show an upturn. This will force a slowdown in consumer debt issuance, exacerbating the recession that started in 2012.

Consumer debt outstanding currently stands at $3.076 trillion despite the fact that credit card debt has been virtually flat. The Federal government has continued to dole out billions in loans to University of Phoenix wannabes and to the subprime urban entitlement armies who deserve to drive an Escalade despite having no job, no assets and a sub 650 credit score, through government owned Ally Financial. It helps drive business when you don’t care about being repaid. Student loan delinquency rates are at an all-time high, as there are no jobs for graduates with tens of thousands in debt. Auto loan delinquencies have begun to rise despite the fact we are supposedly in a strongly recovering economy. The slowdown in debt issuance has not happened, as the Federal government is in complete control of the non-revolving loan segment. My prediction has proven to be accurate.

  • The Bakken oil miracle will prove to be nothing more than Wall Street shysters selling a storyline. Daily output will stall at 750,000 barrels per day and the dreams of imminent energy independence will be annihilated by reality, again. The price of oil will average $105 per barrel, as global tensions restrict supply.

Bakken production has reached 867,000 barrels per day as more and more wells have been drilled to offset the steep depletion rates of the existing wells. The average price per barrel has been $104, despite the frantic propaganda campaign about imminent American energy independence. Tell that to the average Joe filling their tank and paying the highest December gas price in history. My prediction was too pessimistic, but the Bakken miracle will be revealed as an over-hyped Wall Street scam in 2014.

  • The home price increases generated through inventory manipulation in 2012 will peter out as 2013 progresses. The market has been flooded by investors. There is very little real demand for new homes. Young households with heavy student loan debt and low paying jobs will continue to rent, since the oligarchs refused to let prices fall to a level that would spur real demand. Mortgage delinquencies will rise as job growth remains stagnant, leading to an increase in foreclosures. Rent prices will flatten as apartment construction and investors flood the market with supply.

Existing home sales peaked in the middle of 2013 and have been in decline as mortgage rates have jumped from 3.25% to 4.5% since February. New home sales remain stagnant, near record low levels. The median sales price for existing home sales peaked at $214,000 in June and has fallen for five consecutive months by a total of 8%. First time home buyers account for a record low of 28% of purchases, while investors account for a record high level of purchasers. Mortgage delinquencies fell for most of the year, but the chickens are beginning to come home to roost as delinquent mortgage loans rose from 6.28% in October to 6.45% in November. Rent increases slowed to below 3% as Blackrock and the other Wall Street shysters flood the market with their foreclosure rental properties. My housing prediction was accurate.

 

  • The disconnect between the stock market and the housing and employment markets will be rectified when the MSM can no longer deny the recession that began in 2012 and will deepen in the first part of 2013. While housing prices languish 30% below their peak levels of 2006, the stock market has prematurely ejaculated back to pre-crisis levels. Declining corporate profits, stagnant consumer spending, and increasing debt defaults will finally result in a 20% decline in the stock market, with a chance for losses greater than 30% if Japan or the EU begin to crumble.

And now we get to the prediction that makes me happy I don’t charge people for investment advice. Facts don’t matter in world of QE for the psychopathic titans of Wall Street and misery for the indebted peasants of Main Street. The government data drones, Ivy League educated Wall Street economists, and the obedient corporate media propaganda apparatus declare that GDP has grown by 2% over the last four quarters and we are not in a recession. If you believe their bogus inflation calculation then just ignore the collapsing retail sales, stagnant real wages, and rising gap between the uber-rich and the rest of us. Using a true measure of inflation reveals an economy in recession since 2004. Whose version matches the reality on the ground?

 

Corporate profits have leveled off at record highs as mark to fantasy accounting fraud, condoned and encouraged by the Federal Reserve, along with loan loss reserve depletion and $5 billion of risk free profits from parking deposits at the Fed have created a one-time peak. The record level of negative earnings warnings is the proverbial bell ringing at the top.

negative earnings

I only missed my stock market prediction by 50%, as the 30% rise was somewhat better than my 20% decline prediction. Bernanke’s QEternity, Wall Street’s high frequency trading supercomputers, record levels of margin debt, a dash of delusion, and a helping of clueless dupes have taken the stock market to another bubble high. My prediction makes me look like an idiot today. I’m OK with that, since I know facts and reality always prevail in the long-run. As John Hussman sagely points out, today’s idiot will be tomorrow’s beacon of truth:

“The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak. There’s no calling the top, and most of the signals that have been most historically useful for that purpose have been blazing red since late-2011. My impression remains that the downside risks for the market have been deferred, not eliminated, and that they will be worse for the wait.”

  • Japan is still a bug in search of a windshield. With a debt to GDP ratio of 230%, a population dying off, energy dependence escalating, trade surplus decreasing, an already failed Prime Minister vowing to increase inflation, and rising tensions with China, Japan is a primary candidate to be the first domino to fall in the game of debt chicken. A 2% increase in interest rates would destroy the Japanese economic system.

Abenomics has done nothing for the average Japanese citizen, but it has done wonders for the ruling class who own all the stocks. Abe has implemented monetary policies that make Bernanke get a hard on. Japanese economic growth remains mired at 1.1%, wages remain stagnant, and their debt to GDP ratio remains above 230%, but at least he has driven their currency down 20% versus the USD and crushed the common person with 9% energy inflation. None of this matters, because the .1% have benefitted from a 56% increase in the Japanese stock market. My prediction was wrong. The windshield is further down the road, but it is approaching at 100 mph.

  • The EU has temporarily delayed the endgame for their failed experiment. Economic conditions in Greece, Spain and Italy worsen by the day with unemployment reaching dangerous revolutionary levels. Pretending countries will pay each other with newly created debt will not solve a debt crisis. They don’t have a liquidity problem. They have a solvency problem. The only people who have been saved by the actions taken so far are bankers and politicians. I believe the crisis will reignite, with interest rates spiking in Spain, Italy and France. The Germans will get fed up with the rest of Europe and the EU will begin to disintegrate.

This was another complete miss on my part. Economic conditions have not improved in Europe. Unemployment remains at record levels. EU GDP is barely above 0%. Debt levels continue to rise. Central bank bond buying has propped up this teetering edifice of ineptitude and interest rates in Spain, Italy and France have fallen to ridiculously low levels of 4%, considering they are completely insolvent with no possibility for escape. The disintegration of the EU will have to wait for another day.

Civic Decay

  • Progressive’s attempt to distract the masses from our worsening economic situation with their assault on the 2nd Amendment will fail. Congress will pass no new restrictions on gun ownership and 2013 will see the highest level of gun sales in history.

Obama and his gun grabbing sycophants attempted to use the Newtown massacre as the lever to overturn the 2nd Amendment. The liberal media went into full shriek mode, but the citizens again prevailed and no Federal legislation restricting the 2nd Amendment passed. Gun sales in 2013 will set an all-time record. With the Orwellian surveillance state growing by the day, arming yourself is the rational thing to do. I nailed this prediction.

  • The deepening recession, higher taxes on small businesses and middle class, along with Obamacare mandates will lead to rising unemployment and rising anger with the failed economic policies of the last four years. Protests and rallies will begin to burgeon.

The little people are experiencing a recession. The little people bore the brunt of the 2% payroll tax increase. The little people are bearing the burden of the Obamacare insurance premium increases. The number of employed Americans has increased by 1 million in the last year, a whole .4% of the working age population. The number of Americans who have willingly left the labor force in the last year because their lives are so fulfilled totaled 2.5 million, leaving the labor participation rate at a 35 year low. The anger among the former middle class is simmering below the surface, as Bernanke’s policies further impoverish the multitudes. Mass protests have not materialized but the Washington Navy yard shooting, dental hygenist murdered by DC police for ramming a White House barrier, and self- immolation of veteran John Constantino on the National Mall were all individual acts of desperation against the establishment.

  • The number of people on food stamps will reach 50 million and the number of people on SSDI will reach 11 million. Jamie Dimon, Lloyd Blankfein, and Jeff Immelt will compensate themselves to the tune of $100 million. CNBC will proclaim an economic recovery based on these facts.

The number of people on food stamps appears to have peaked just below 48 million, as the expiration of stimulus spending will probably keep the program from reaching 50 million. As of November there were 10.98 million people in the SSDI program. The top eight Wall Street banks have set aside a modest $91 billion for 2013 bonuses. The cost of providing food stamps for 48 million Americans totaled $76 billion. CNBC is thrilled with the record level of bonuses for the noble Wall Street capitalists, while scorning the lazy laid-off middle class workers whose jobs were shipped to China by the corporations whose profits are at all-time highs and stock price soars. Isn’t crony capitalism grand?

  • The drought will continue in 2013 resulting in higher food prices, ethanol prices, and shipping costs, as transporting goods on the Mississippi River will become further restricted. The misery index for the average American family will reach new highs.

The drought conditions in the U.S. Midwest have been relieved. Ethanol prices have been flat. Beef prices have risen by 10% since May due to the drought impact from 2012, but overall food price increases have been moderate. The misery index (unemployment rate + inflation rate) has supposedly fallen, based on government manipulated data. I whiffed on this prediction.

  • There will be assassination attempts on political and business leaders as retribution for their actions during and after the financial crisis.

There have been no assassination attempts on those responsible for our downward financial spiral. The anger has been turned inward as suicides have increased by 30% due to the unbearable economic circumstances brought on by the illegal financial machinations of the Wall Street criminal banks. Obama and Dick Cheney must be thrilled that more military personnel died by suicide in 2013 than on the battlefield. Mission Accomplished. The retribution dealt to bankers and politicians will come after the next collapse. For now, my prediction was premature.

  • The revelation of more fraud in the financial sector will result in an outcry from the public for justice. Prosecutions will be pursued by State’s attorney generals, as Holder has been captured by Wall Street.

Holder and the U.S. government remain fully captured by Wall Street. The states have proven to be toothless in their efforts to enforce the law against Wall Street. The continuing revelations of Wall Street fraud and billions in fines paid by JP Morgan and the other Too Big To Trust banks have been glossed over by the captured mainstream media. As long as EBT cards, Visas and Mastercards continue to function, there will be no outrage from the techno-narcissistic, debt addicted, math challenged, wilfully ignorant masses. Another wishful thinking wrong prediction on my part.

  • The deepening pension crisis in the states will lead to more state worker layoffs and more confrontation between governors attempting to balance budgets and government worker unions. There will be more municipal bankruptcies.

Using a still optimistic discount rate of 5%, the unfunded pension liability of states and municipalities totals $3 trillion. The taxpayers don’t have enough cheese left for the government rats to steal. The crisis deepens by the second. State and municipal budgets require larger pension payments every year. The tax base is stagnant or declining. States must balance their budgets. They will continue to cut existing workers to pay the legacy costs until they all experience their Detroit moment. With the Detroit bankruptcy, I’ll take credit for getting this prediction right.

  • The gun issue will further enflame talk of state secession. The red state/blue state divide will grow ever wider. The MSM will aggravate the divisions with vitriolic propaganda.

With the revelations of Federal government spying, military training exercises in cities across the country, the blatant disregard for the 4th Amendment during the shutdown of Boston, and un-Constitutional mandates of Obamacare, there has been a tremendous increase in chatter about secession. A google search gets over 200,000 hits in the last year. The divide between red states and blue states has never been wider.

  • The government will accelerate their surveillance efforts and renew their attempt to monitor, control, and censor the internet. This will result in increased cyber-attacks on government and corporate computer networks in retaliation.

If anything I dramatically underestimated the lengths to which the United States government would go in their illegal surveillance of the American people and foreign leaders. Edward Snowden exposed the grandest government criminal conspiracy in history as the world found out the NSA, with the full knowledge of the president and Congress, has been conspiring with major communications and internet companies to monitor and record every electronic communication on earth, in clear violation of the 4th Amendment. Government apparatchiks like James Clapper have blatantly lied to Congress about their spying activities. The lawlessness with which the government is now operating has led to anarchist computer hackers conducting cyber-attacks on government and corporate networks. The recent hacking of the Target credit card system will have devastating implications to their already waning business. I’ll take credit for an accurate prediction on this one.

Global Disorder 

  • With new leadership in Japan and China, neither will want to lose face, so early in their new terms. Neither side will back down in their ongoing conflict over islands in the East China Sea. China will shoot down a Japanese aircraft and trade between the countries will halt, leading to further downturns in both of their economies.

The Japanese/Chinese dispute over the Diaoyu/Senkaku islands has blown hot and cold throughout the year. In the past month the vitriol has grown intense. China has scrambled fighter jets over the disputed islands. The recent visit of Abe to a World War II shrine honoring war criminals has enraged the Chinese. Trade between the countries has declined. An aircraft has not been shot down, but an American warship almost collided with a Chinese warship near the islands, since our empire must stick their nose into every worldwide dispute. We are one miscalculation away from a shooting war. It hasn’t happened yet, so my prediction was wrong.

  • Worker protests over slave labor conditions in Chinese factories will increase as food price increases hit home on peasants that spend 70% of their pay for food. The new regime will crackdown with brutal measures, but the protests will grow increasingly violent. The economic data showing growth will be discredited by what is happening on the ground. China will come in for a real hard landing. Maybe they can hide the billions of bad debt in some of their vacant cities.

The number of worker protests over low pay and working conditions in China doubled over the previous year, but censorship of reporting has kept these facts under wraps. In a dictatorship, the crackdown on these protests goes unreported. The fraudulent economic data issued by the government has been proven false by independent analysts. The Chinese stock market has fallen 14%, reflecting the true economic situation. The Chinese property bubble is in the process of popping. China will never officially report a hard landing. China is the most corrupt nation on earth and is rotting from the inside, like their vacant malls and cities. China’s economy is like an Asiana Airlines Boeing 777 coming in for a landing at SF International.

  • Violence and turmoil in Greece will spread to Spain during the early part of the year, with protests and anger spreading to Italy and France later in the year. The EU public relations campaign, built on sandcastles of debt in the sky and false promises of corrupt politicians, will falter by mid-year. Interest rates will begin to spike and the endgame will commence. Greece will depart the EU, with Spain not far behind. The unraveling of debt will plunge all of Europe into depression.

Violent protests flared in Greece and Spain throughout the year. They did not spread to Italy and France. The central bankers and the puppet politicians have been able to contain the EU’s debt insolvency through the issuance of more debt. What a great plan. The grand finale has been delayed into 2014. Greece remains on life support and still in the EU. The EU remains in recession, but the depression has been postponed for the time being. This prediction was a dud.

  • Iran will grow increasingly desperate as hyperinflation caused by U.S. economic sanctions provokes the leadership to lash out at its neighbors and unleash cyber-attacks on Saudi Arabian oil facilities and U.S. corporations. Israel will use the rising tensions as the impetus to finally attack Iranian nuclear facilities. The U.S. will support the attack and Iran will launch missiles at Saudi Arabia and Israel in retaliation. The price of oil will spike above $125 per barrel, further deepening the worldwide recession.

Iran was experiencing hyperinflationary conditions early in the year, but since the election of the new president the economy has stabilized. Iran has conducted cyber-attacks against Saudi Arabian gas companies and the U.S. Navy during 2013. Israel and Saudi Arabia have failed in their efforts to lure Iran into a shooting war. Obama has opened dialogue with the new president to the chagrin of Israel. War has been put off and the negative economic impacts of surging oil prices have been forestalled. I missed on this prediction.

  • Syrian President Assad will be ousted and executed by rebels. Syria will fall under the control of Islamic rebels, who will not be friendly to the United States or Israel. Russia will stir up discontent in retaliation for the ouster of their ally.

Assad has proven to be much tougher than anyone expected. The trumped up charges of gassing rebel forces, created by the Saudis who want a gas pipeline through Syria, was not enough to convince the American people to allow our president to invade another sovereign country. Putin and Russia won this battle. America’s stature in the eyes of the world was reduced further. America continues to support Al Qaeda rebels in Syria, while fighting them in Afghanistan. The hypocrisy is palpable. Another miss.

  • Egypt and Libya will increasingly become Islamic states and will further descend into civil war.

The first democratically elected president of Egypt, Mohammed Morsi, was overthrown in a military coup as the country has descended into a civil war between the military forces and Islamic forces. It should be noted that the U.S. supported the overthrow of a democratically elected leader. Libya is a failed state with Islamic factions vying for power and on the verge of a 2nd civil war. Oil production has collapsed. I’ll take credit for an accurate prediction on this one.

  • The further depletion of the Cantarell oil field will destroy the Mexican economy as it becomes a net energy importer. The drug violence will increase and more illegal immigrants will pour into the U.S. The U.S. will station military troops along the border.

Mexican oil production fell for the ninth consecutive year in 2013. It has fallen 25% since 2004 to the lowest level since 1995. Energy exports still slightly outweigh imports, but the trend is irreversible. Mexico is under siege by the drug cartels. The violence increases by the day. After declining from 2007 through 2009, illegal immigration from Mexico has been on the rise. Troops have not been stationed on the border as Obama and his liberal army encourages illegal immigration in their desire for an increase in Democratic voters. This prediction was mostly correct.

  • Cyber-attacks by China and Iran on government and corporate computer networks will grow increasingly frequent. One or more of these attacks will threaten nuclear power plants, our electrical grid, or the Pentagon.

China and Iran have been utilizing cyber-attacks on the U.S. military and government agencies as a response to NSA spying and U.S. sabotaging of Iranian nuclear facilities. Experts are issuing warnings regarding the susceptibility of U.S. nuclear facilities to cyber-attack. If a serious breach has occurred, the U.S. government wouldn’t be publicizing it. Again, this prediction was accurate.

I achieved about a 50% accuracy rate on my 2013 predictions. These minor distractions are meaningless in the broad spectrum of history and the inevitability of the current Fourth Turning sweeping away the existing social order in a whirlwind of chaos, violence, financial collapse and ultimately a decisive war. The exact timing and exact events which will precipitate the demise of the establishment are unknowable with any precision, but there is no escape from the inexorable march of history. While most people get lost in the minutia of day to day existence and supposed Ivy League thought leaders are consumed with their own reputations and wealth, apparent stability will morph into terrifying volatility in an instant. The normalcy bias being practiced by an entire country will be shattered in a reality storm of consequences. The Crisis will continue to be driven by the ever growing debt levels, civic decay caused by government overreach, and global disorder driven by resource shortages and religious zealotry. The ultimate outcome is unpredictable, but the choices we make will matter. History is about to fling us towards a vast chaos.

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

Podcast: Gail Tverberg- Credit & Energy

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Aired on the Doomstead Diner on June 25, 2013

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Discuss this at the Podcasts Table inside the Diner


A 2 Part Podcast on Credit and Energy with Gail Tverberg of Our Finite World.

RE

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