Italy

Limits to Growth was RIGHT

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Published on Cassandra's Legacy on February 28, 2016

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Italy's Population Starts Declining
 

 

The "base case" scenario described in the 2004 edition of "The Limits to Growth", an update of the original study sponsored by the Club of Rome and published in 1972. Note how the world's population is supposed to start declining some years after the peaking of the world's economy. We are not yet seeing this decline at the global level, but we may be seeing it in some specific regions of the world; in particular in Italy.
 

More and more data are accumulating to disprove the legend of the "mistakes" that has been accompanying the study titled "The Limits to Growth" (LTG). For instance, Graham Turner has shown how the historical data for the world's economy have been following rather closely the curves of the "base case" scenario presented in 1972. But the fact that this scenario has been working well up to the beginning of the 21st century doesn't mean it will keep working in the same way in the future. The base case scenario describes a worldwide economic collapse that should start at some moment during the first two-three decades of the century. Clearly, the world's economy has not collapsed, so far, even though it may be argued that it is giving out ominous signs that it is starting to do just that. But, we can't yet prove that the base case scenario was right.

Yet, the LTG collapse scenario is an average over the whole world and we may imagine that some sections of the world's economy should collapse earlier, and some later. And, indeed, it appears that some local economies are collapsing right now. It may be that a country like Italy is already well advanced in this process, so that we shouldn't be not just seeing the decline of its GdP, but also the start of an irreversible population decline. And some recent data indicate that this is exactly the case: the LTG base case scenario is playing out in Italy, and probably not just in Italy.

So, let's try to make a qualitative comparison of the LTG scenario and the actual data for Italy. First of all, the scenario shows how the consumption of natural resources is supposed to reach a maximum and then decline, followed by a similar trajectory for the economic output. We are already well past this point in Italy. As you can see in the figure below, from a previous post on Cassandra's legacy, Italy's consumption of hydrocarbon fuels (by far its main source of energy) peaked in 2005, followed by the peak in the GdP in 2008. Considering that the GdP is a measure of the overall economic output of a country, we can take it as proportional to the parameters that were indicated as the industrial and agricultural production in the LTG study (the data for 2015  indicate a small GdP increase for Italy, but that changes little to the overall trend).
 

So, we may say that the base case LTG scenario has been playing out in Italy in terms of the behavior of the economy of the country. But, if this is the case, at some point we should expect another curve of the scenario to peak and start declining: the population curve. And, indeed, we seem to be seeing exactly that. Here are the most recent data from the Italian statistical agency, ISTAT
 

You can see the remarkable jumping up in the mortality rate for 2015: it corresponds to 165,00 more deaths than births. Despite the influx of immigrants, Italy has lost 139,000 residents in 2015; not a large loss (0.23%) but it is significant. And it had never happened during the past few decades. Also, Italy sees for the first time in decades a reduction in the life expectancy at birth (from 80.3 years to 80.1 years for males and from 85 years to 84.7 years for females).

 

What have been the causes of this population decline? There are several, and the torrid summer of 2015 has surely played a role in killing more old people than usual, as you can see in the figure below (again from ISTAT)

 


Then, other causes have been proposed; the general aging of the population, the economic crisis, the worsening diet, pollution, the higher costs of medical care, and more. But the point, here, is not to discuss these various causes, most of which probably had a role in the decline. The model doesn't describe the details of the process, nor it is detailed to the point of considering different age cohorts. It is a quantitative description of a relatively simple phenomenon: a population under stress because of reduced resource availability and pollution will react by an increasing number of deaths in its weakest age groups: the elderly ones. And this is exactly what we are seeing in Italy: a decline in population following the decline in GdP.

Of course, we only have data for one year and we cannot say if what we are seeing is a long-term trend or just a statistical fluctuation. Yet, it is hard not to think that the degrading economic, social conditions in Italy, as well as the degradation of the ecosystem, are not taking their toll on the population. And that we are indeed seeing the LTG scenarios playing out.

 

 

 

 

 

 

 

 

Coal, Wars, and Beautiful Women

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Published on Cassandra's Legacy on February 22, 2016

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Why in Italy we speak Italian and not French

 

 

Virginia Oldoini, Countess of Castiglione, 1837-1899. Portrait by Michele Gordigiani. The following text is part of the talk that I gave in Paris on Feb 12, at the Momentum Institute (h/t Yves Cochet, Agnes Sinaï, and Mathilde Szuba)

In the study of history, it is fashionable to use quantitative data as much as possible. We speak of financial and economic factors, of the competition for natural resources, of population unbalances, of the effects of climate, and more. And, yet, sometimes history goes on according to the whim of one or another ruler making colossal mistakes; from Napoleon to Saddam Hussein. In that case, human factors become predominant and only in some cases we can have a glimpse of what may have passed in the mind of the people at the top. One such case may have been that of countess Virginia Oldoini, femme fatale of the 19th century, mistress of the French Emperor Napoleon III, and, perhaps, the origin of the Italian unification of 1860. Beautiful woman, indeed, and hard to describe using system dynamics models!

Let's go back to the early 19th century. At that time, the industrial revolution was in full swing; fueled by the coal mines of Northern Europe, mainly in England, France, and Germany. This revolution had created an economic unbalance, making the Northern countries much richer and more powerful than the Southern ones. It was not just a question of having or not having coal. It was a question of transporting it. Coal is heavy and bulky and, at that time, the only practical way to carry it over long distances was by the sea. Sailing ships could take coal everywhere in the world but, when it was a question of taking it inland, waterways were needed. No waterways, no coal. No coal, no industrial revolution. That was the reason of the unbalance: the Southern European countries, just as the North-African ones, could have no waterways because of the lack of water. Hence, they could not industrialize and they remained economically and militarily weak.

Here is the situation as it was in 1848.
 

At this date, the only Mediterranean regions that had waterways and could industrialize were France and Northern Italy, and Piedmont in particular. Of the two, France was by far the most powerful and, already in 1848, you can see how France had occupied Algeria, snatching it away from the weak Ottoman Empire. The rest of the North-African region was ripe for the taking and even the Kingdom of Naples, in Southern Italy, was militarily and industrially weak; an easy prey for any industrialized country. So, what could have stopped the French from turning the whole Mediterranean sea into a French lake? That had been, apparently, Napoleon's idea when he had invaded Egypt, in 1798. It had not worked out at that time, but it had been a good strategic intuition that later French governments could have carried out.

Now, put yourself in the shoes of the British. In the great strategic game of the 19th century, they had sighted Egypt, that they would occupy in 1882, but there was little or nothing that they could do to stop France from occupying the whole Northern African shore, all the way to Egypt and perhaps farther than that. Nothing direct, that is, but what if they could create a strategic counterweight to balance the French power? And what could that counterweight be? Italy, of course, if it could be unified and transformed into a single country, out of the plethora of statelets it was at that time.

So, in mid 19th century, the strategic pieces of the Mediterranean game were all in their places, as if on a giant chessboard. The British objective was shared by Piedmont: unify Italy as soon as possible and stop France from further expansion. On the other side of the chessboard; France's objective was also clear: avoid at all costs the unification of Italy and take as much as possible of North Africa, as soon as possible.

Clear; perfectly clear. And easy for France. They had almost nothing to do; just keep Piedmont in check; which they could do easily. It is true that Piedmont was a small industrial powerhouse for its times, but it was no match for the much larger and much more powerful neighboring France. But the French president and emperor of that time, Louis Napoleon, or "Napoleon III" did exactly the opposite, even engaging the French army in support of the expansion of Piedmont in Northern Italy in a series of bloody battles against the Austrians, in 1859. Not that France helped Piedmont for nothing, of course. In exchange, the French obtained a slice of land on the Western side of the Alps, formerly part of Piedmont. It was a territorial gain but, in strategical terms, it was nothing in comparison to what France was losing.

One year later, Piedmont, with the support of the British, sent an army led by Giuseppe Garibaldi to invade the Southern Kingdom of Naples. The Neapolitans put up a spirited resistance, but, alone, they couldn't cope and Napoleon III did nothing to help them. With the collapse of the Southern Kingdom, the complete unification of Italy became unavoidable, despite a last-ditch attempt by Napoleon III in 1867, when he sent troops to Italy to stop Garibaldi from taking Rome.

So, Italy was. And it still is. The curious thing is that it had not to be. Had Napoleon III stopped Garibaldi in 1860 in the same way as he did in 1867, probably we would still have a kingdom of Naples and the country that today we call "Italy", would be mainly a French protectorate. And, most likely, French would be the dominant language in most of the country.

Instead, France had lost a historical occasion to become the dominant Mediterranean power. Later on, the Franch still managed to carve out some more pieces of North Africa, occupying Tunisia in 1881 and Morocco in 1904, but all further advances in the Mediterranean region were stopped when, in 1911, Italy claimed what Italians saw as their rightful slice of the declining Ottoman Empire: the region that we call Libya today.

So, how was it that Napoleon III made such a colossal strategic mistake? In a way, we can say that it is rather normal: Rulers of states are often awfully incompetent at their job (just think of our George W. Bush). But, for Napoleon III, there may have been a reason that goes beyond simple incompetence.

The French have invented the phrase "Cherchez la femme" ("look for the woman") as an explanation for many otherwise inexplicable events. And, in the story of the unification of Italy, there is a woman involved: Virginia Oldoini, Countess of Castiglione. She was the cousin of Count Cavour, prime minister of Piedmont at that time, and she was sent to Paris by him, it seems, with the specific idea of influencing Napoleon III. She was a faithful Italian patriot and she understood very well what was to be her role as mistress of the French president and emperor. She was to convince him to do something that the French should never have allowed: help Piedmont to invade and conquer the rest of the Italian peninsula. According to what we can often read in history books, she fulfilled her role and, from the portraits and the photographs we have of her, maybe we can also understand how.

Of course, we can legitimately think that this story is just a legend. But could it be that Virginia Oldoini really convinced Luis Napoleon to do what he did? In this case, the Countess should be considered as one of the most influential women in modern history. But we will never be able to know: by now, she is on the other side of the mirror, perhaps watching us from there and laughing at us.

 

For a fictional tale of what could have happened had Napoleon III been smarter (or Virginia Oldoini less beautiful) see "The Tipping points of History" on the "Chimeras" blog.
 

 

 

 

 

 

 

 

 

 

 

 

Post-Peak Italian Food

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Published on the Cassandra's Legacy on January 15, 2016

 

Post-peak Italian food: a lunch with organ meats, bread, and a glass of red wine. The beauty of life is in its small pleasures. 

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If you are not a Florentine, you may be under the impression that the food of Florence is mostly a sophisticated combination of such things as "Carpaccio" and pasta with truffle. But, as it is often the case, reality is in the eye of the beholder. Depending on who you are and what you are doing in Florence, your culinary experience may considerably vary.

In particular, given the economic situations, for most local people there is no money left for fancy food. So, the past few years have seen a considerable renaissance of a traditional Florentine food: organ meats sold at roadside stalls.  You can see an example of this kind of food in the snapshot above, taken today.

This is is a kind of lunch not directed to the average tourist (who is not prevented from trying it, either!). It is popular both with blue collar workers and office workers, both categories having been badly hit by the crisis. In comparison to the classic hamburger from a fast food outlet, it is tastier and you see what you are eating. Also, I am reasonably sure that the meat doesn't come from very far away. Whether it is also a healthy lunch, it is, of course, debatable, but I can personally attest of never having suffered ill effects to my digestive system from this kind of food. But, in the end, its fundamental characteristics is of being very inexpensive: it is what makes it "post peak food."

Of course, it remains to be seen how organ meat stalls will survive such things as a possible global collapse of the kind I call "Seneca Collapse." But, for the time being, it is one of those small things in life that you can still enjoy.

Below, a picture of yours truly, Ugo Bardi, drinking his wine with his lunch, today. Sorry for looking like a jailbird or something, it was in the open and it was kind of cold. Also, behind me, you can see a glimpse of the architecture of the place; obviously nothing like the majestic Renaissance architecture of downtown!

Note 1. See also some musings of mine on ancient Florentine cuisine from the "Chimeras" blog.

Note 2: Several commenters noted the plastic containers. Yes, they are unsustainable and let me tell you more: after finishing your lunch, you are supposed to throw everything, plastics and food scraps (and glass or aluminum if you ordered a beer) into a single container. Not even a feeble attempt at separating the waste in its different components. I asked the sellers why they don't separate the waste, and they looked at me as if I were a nerd (which I am, after all) and then answered me by asking why should they bother. Which I think is significant. We'll use plastic and throw it away as long as we can have it, and then move to something else, as long as we can have it. But recycling plastics? Well, it is for nerds. 

 

 

 

The Refugee Tsunami

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Published on the Doomstead Diner on August 20, 2015

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Migrants, who were found at sea on a boat, collect water during a heavy rain at a temporary refuge camp near Kanyin Chaung jetty, Myanmar, on June 4, 2015.

The Refugee problem is one of several Collapse Topics to be covered in a Live Broadcast this Sunday at High Noon Alaska Time on the Collapse Cafe You Tube Channel

Guests to include Nicole Foss, Gail Tverberg, Ugo Bardi, Steve Ludlum, Tom Lewis and Norman Pagett

(assuming everyone's plugins work right and the bandwidth is decent)

A growing problem all across the Globe is that of Refugees.  Millions of people trying to flee from one place and seek refuge in another.  The reasons appear to vary, in some cases because of ongoing conflict and war; in others due to Drought and the inability to provide enough food for the local population; other cases due to religious and ethnic differences between classes in the local society, etc.

Of course, all of these phenomena have two things in common, which are Population Overshoot and Resource Depletion.  All the conflicts stem from that, all the rest is just distraction.  If there really was plenty for everybody, if some people weren't being exploited for the benefit of others and there was an equitable distribution of the wealth, then you would have no conflict.  Everybody would be HAPPY! 🙂

http://s3.amazonaws.com/rapgenius/desert1101_428x269_to_468x312.jpgThe great surplus of energy we enjoyed globally here for the last couple of centuries allowed populations to balloon up all over the world, many of those populations in locations which have no chance of being self-sufficient at their current population size.  Saudi Arabia a prime example of this, they traded their oil for food and used it to pump up water from deep aquifers and desalinate still more water from the ocean, and blew up from 1M people to 30M people in a century.  In reality of course, Arabia is a DESERT!  The House of Saud Princes are descendents of a bunch of Bedouin Tribesmen who wandered that desert. Then with their Oil Wealth they imported in tons of people to do the scut work of the industrial society.   No way all these folks can continue to survive in Deserts of Arabia, so they will go on the MOVE.  At least if they don"t die first anyhow.

Although we have seen this for quite some time here in Amerika down on the Border with Mejico, constant bewailing of the problemof "Illegal Aliens" (as though they come from Outer Space without papers), the current really BIG problems are occuring in Southern Europe as refugees from the War Zones and progressively more desertified areas attempt to flee across the Mediterranean Sea by any thing that sort of floats, and on foot across Turkey and into Greece, all trying to get to the closest place where they think they still might carve out a life for themselves.

Boat-RefugeesSadly of course, Ground Zero for a lot of this migration is Italy where they are only doing marginally better than the folks down in MENA are doing.  At least 1000 a day currently actually arriving alive, plus they find a few bodies washing up on the beaches  in the Tourist hangouts on a daily basis as well.

Recently Jason Heppenstall from 22 Billion Energy Slaves was vacationing down in Italy and wrote this about the situation:

"[As an aside, a friend of mine got married in Sicily a couple of months ago and the wedding reception was continually interrupted by overhead helicopters coming back from sea with migrants dangling from them. Some children asked “What is going on?” and the adults comforted them by saying it was just some swimmers who had got into difficulty. When this carried on for two full days (Sicilian weddings being long affairs) the children must have concluded that practically everyone swimming needed rescuing.]"

For those that do make the crossing alive, they aren't exactly being welcome with open arms by the Italians

Italian protesters torch beds to try block migrant arrivals

http://www.barenakedislam.com/wp-content/uploads/2013/05/zx620y348_1075644.jpgRome (AFP) – Residents in a chic Rome suburb and a northern Italian village staged angry anti-immigrant protests on Friday, with villagers setting mattresses ablaze in a bid to stop authorities from housing migrants.

Authorities in the village of Quito plan to accommodate 101 immigrants in empty apartments, but several residents broke into one of the buildings, removed camp beds, mattresses and televisions intended for the newcomers and set them on fire outside.

The protesters then put up tents, with the Corriere della Sera newspaper quoting them as saying: "We aren't going home until they leave — this is an invasion."

Italy is currently hosting more than 80,000 migrants who have crossed the Mediterranean fleeing war, persecution or poverty in the Middle East and Africa. The arrivals include many Africans, particularly Eritreans, as well as Syrians.

Not very welcoming over there, obviously. Not a lot different here though, as currently leading Repub POTUS candidate The Donald not only doesn't want to let any new refugees IN, he wants to kick the ones already here OUT.

Donald Trump says illegal immigrants 'have to go' during NBC interview

Donald Trump has fired another loud shot in the battle for the Republican presidential nomination in 2016, telling NBC News’ Meet the Press illegal immigrants to the US “have to go”.

Republican presidential candidate Donald Trump said: ‘They have to go. Chuck, we either have a country, or we don’t have a country.’ Photograph: Jim Young/Reuters

The real-estate mogul and sometime reality TV star, who leads polls of the Republican field after a series of controversies stoked by abrasive remarks, made the comment during an interview with host Chuck Todd which was conducted on his private plane as it sat on a runway in Des Moines, Iowa.

The conversation covered the candidate’s determination to rescind President Barack Obama’s executive orders on immigration which, subject to court battles, would protect up to 5 million undocumented children and family members from deportation.

Now, I cannot agree with The Donald that we even could kick all the undocumented migrants out, even if he could get such legislation passed.  It's completely impractical, how would you do such a purge?  Go on a house to house search with the Gestapo asking "Let me see your papers"?

http://northamericanimmigration.org/uploads/posts/2011-02/1298837157_statue-of-liberty.jpgHowever, the idea that in an era of steady resource depletion and population overshoot all refugees can be welcome with open arms and the Torch of the Statue of Liberty serving as a Beacon of Freedom is an equally unrealistic idea.  Both here, in Europe and in Asia as well borders are going to be shut down and migration is going to become increasingly more difficult as time goes by.  If you are figuring on trying to migrate BEFORE things get that bad in your neighborhood, now would be a good time to get moving.

As with many article on the Diner, this one was inspired by a post made by one of the KollapsniksTM on the Diner Forum.  I will close with my response to that post.

Frankly, Andre, fuck charity!  These people are voting with their feet, and they're coming to America.

I believe you were trying to embed Neil Diamond's "America", but that video version has been removed.

However, I found this one heading this article with a great Slideshow presentation, worth watching. (above heading this article)
 


Now, this gives you warm and fuzzy feelings about the History of Amerika as written in the history books,  and those images of the Statue of Liberty always bring up the Patriotic feelings and belief in the Land of Liberty.

A few things to note here though.  What do you notice about all those pictures of Immigrants?  They're all WHITE people from Europe!

Then look at those wonderful pictures of Greenery, Farms, Open Spaces etc.

Is that what CA is going to look like in 10 years?  Iowa in 20?

This is nostalgia for the PAST.  Those wide open spaces and boundless opportunity are GONE now.

Let's dissect Neil's lyrics:
 

"America"

 

 

 

 

 

Far,
We've been traveling far
Without a home
But not without a star

Free,
Only want to be free

We huddle close
Hang on to a dream

On the boats and on the planes
They're coming to America
Never looking back again,
They're coming to America

Home
Don't it seem so far away
Oh, we're traveling light today
In the eye of the storm
In the eye of the storm

Home
To a new and a shiny place
Make our bed and we'll say our grace
Freedom's light burning warm
Freedom's light burning warm

Everywhere around the world
They're coming to America
Ev'ry time that flag's unfurled
They're coming to America

Got a dream to take them there
They're coming to America
Got a dream they've come to share
They're coming to America

They're coming to America
They're coming to America
They're coming to America
They're coming to America
Today, Today,
Today, Today, Today

My country 'tis of thee (today)
Sweet land of liberty (today)
Of thee I sing (today)

Of thee I sing
Today, Today, Today
Today, today, today……

Writer(s): Neil Diamond
Copyright: Stonebridge Music


Now, how realistic is this idea of "Freedom" and Liberty in the Amerika of TODAY, not your nostalgic history lessons?  Patriot Act, NDAA, TPP, Militarized Police, spying by the NSA and data mining from Google, precisely where is the FREEDOM here?  Granted it is still probably better than wherever they are coming from, but they'll be pretty disappointed in a few years, at most.

The main issue though remains the resource problem.  Half of the land mass of the FSoA west of the Mississippi River will once again be the Great Amerikan Desert soon enough.  We will have our own internal refugee problem that cannot be solved, except by Dead People.  Taking in more now just makes the problem worse here later.

The days of escaping as a refugee to freedom in less populated lands where there was still Opportunity are OVAH.  Refugees are unlikely to be welcome anywhere pretty soon.  Certainly in Europe they are not going to constantly accept Wave After Wave of boat people coming from North Africa and walking across Syria and Turkey into Greece.

For probably 2/3rds of the Global population, there is already no hope.  They cannot escape.

In the words of Hawkeye from "Last of the Mohicans"

“they’re not strangers… and they stay as they lay…”

https://cenantua.files.wordpress.com/2011/09/mohicans1.jpg

Living La Dolce Vita

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Published on 22 Billion Energy Slaves on August 18, 2015

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"Venice, August 20th – Here as a joy-hog: a pleasant change after that pension on the Giudecca two years ago. We went to the Lido this morning, and the Doge's palace looked more beautiful from a speed-boat than it ever did from a gondola. The bathing, on a calm day, must be the worst in Europe: water like hot saliva, cigar ends floating into one's mouth, and shoals of jelly-fish."

Robert Byron, 1933, The Road to Oxiana

I first went to Italy at the age of eight and remember it vividly. It was my first trip abroad and everything seemed alien and strange to me. I went with my father, who had been prescribed ‘mountain air’ by his doctor for a catarrh condition, and so we went to stay in a village in the Alps with an industrialist friend of his named Tito. I remember there being lots of snow and a ski lift and I remember almost knocking myself out by walking into a double glazed door (double glazing having not yet taken off in England). But most of all I remember staying with Tito’s family and being given a plate of garlic-fried calf's stomach as a ‘treat’, along with a glass of sheep’s milk to wash it down. How homesick I felt at that moment.
 
Thirty-six years later and it’s me bringing my daughters to see Italy for the first time. Italy, I should point out, is their quarter-country, as my wife is half-Italian. Visiting her relatives was one of the reasons we felt it necessary to go there. To achieve this we swapped our house in Cornwall with an Italian family living just north of Milan. Gone are the days of jetting off and staying in hotels – this is simply unaffordable to anyone on even a modest income – so a house swap using sites such as homelink.org is the way to get a free holiday. The town we found ourselves temporarily living in was something of a dormitory for that powerhouse of a city, and other than a nice palace and gardens there was nothing special about it. This suited me fine because I wanted to get a good look at normal everyday life in Italy, which by many metrics (not least of which is energy consumption) is in a state of precipitous decline.

 

 

 

 

What follows is a snapshot of my impressions.

 
On our arrival, driving along the motorway corridor between Milan and Bergamo, I immediately noticed a number of abandoned factories. “Aha!” I thought “a clear sign of industrial malaise.” But I shouldn’t have been too quick to jump to conclusions because contrary to my expectations this was really the only sign of decay I saw in two weeks. Because, on the whole, the entire northern portion of Italy seems to be extraordinarily well off. The motorways were packed with shiny new cars, condominiums and office blocks were going up and record numbers of wealthy tourists and businesspeople were filling the restaurants in which tables groaned under dishes of the world’s best foods. Crisis – what crisis?
 
The first week we stayed close to home, not venturing much further than the exquisite hilltop city of Bergamo. Despite being loaned a newish Suzuki SUV we quickly learned that heading out onto the motorways was asking for trouble. This being August, about half of the population of sixty million were on their holidays, meaning traffic chaos on the roads. And then there were the tolls. You pay to drive on motorways in Italy and the toll booths, where you must stop and hand over cash, cause some truly horrendous traffic jams.
 

 

 

 

 

 
And speaking of driving in Italy … something strange was going on. I’ve been to Italy enough times to develop a certain fondness for the devil-may-care attitude of its drivers. There’s a reason the Ferrari was invented there. But now, all of a sudden, everyone seemed to be driving slowly and carefully. What was going on?
 
“Fines,” explained a man who ran a hotel. “There are cameras everywhere now and you will get a fine if you go even one kilometre per hour over the limit.” He went on to say that the average Italian now pays the equivalent of an extra 2% of his income in traffic fines every year. On one particular stretch of road, he said, the police had lowered the speed limit the camera was set at, resulting in a five million euro haul in the month of July alone. “They have no money otherwise,” he explained.
 
And perhaps that was when I came to realise that the clean face (northern) Italy was presenting might just be concealing some troubling secrets. People we spoke to generally had no illusions – which was quite refreshing to hear after being immersed in the infinite recovery rhetoric of Britain. “Everything is shit here,” said a lady who owned a café. “People have no money, they are unemployed, corruption is everywhere and it gets hotter every year,” she moaned. I looked around at her customers, all of them – like most Italians in general – were smartly-dressed healthy and wealthy looking couples and families enjoying ice cream and coffee. “Really?” I thought. The woman said she wanted to escape the ‘misery’ and dreamed of moving to Glasgow. Glasgow? “Yes,” she said, she had seen it on TV. People were not corrupt there and it was not hot.
 
She had a point about the heat. We arrived just at the tail end of the worst heat wave in recorded history. With 40C (104F) temperatures being recorded across the country roads were melting and so too it seems were some cars. If the house we had been staying in had not had air conditioning I’m not entirely sure how I would have coped. Cold beer, ice cream and swimming pools certainly helped, but the heat at night was paralysing. We could certainly see why the family we had swapped with were overjoyed to be spending their holiday beneath thick grey British clouds – they even sent us a picture of themselves ‘rain bathing’.
 
One morning, hiding with my computer in the basement office to escape the heat, I came across an article on Bloomberg Business news that speculated about Milan pulling away from Rome. Milan, it pointed out, was economically muscular, whereas Rome – despite all its wonderful architecture and the Vatican – was a den of corruption, chronic unemployment and disintegrating infrastructure. Bloomberg, of course, approved of Milan’s ‘looking north to Germany’ mentality and the booming nature of its business.
 
But I wasn’t much taken with the flat parts of Lombardy, of which Milan is the capital. Of course, I wouldn’t expect an Italian holidaymaker to be taken with the area around, say, Birmingham. But Lombardy to me seemed like one giant printed circuit board of mega-factories, motorways, power lines and housing developments. Much of it is green, but it is the green of industrially grown maize planted in neat rows. I didn’t see any forests and – apart from the churches – hardly any buildings seemed to date from before the twentieth century. There were not many wildflowers and the garden of the house we stayed in had no birds whatsoever in it. It is sad and almost spooky to be somewhere with no birds. People, I noticed, had taken to fixing small plastic and polystyrene birds to trees and fences as decoration. Some of these had real feathers glued onto them. But this is the price of Bloomberg’s definition of success.
 
Every evening we watched the national news on the family’s huge flat-screen television. I have a limited understanding of Italian (I can just about get the bits that sound like Spanish) so my wife interpreted for me. There were lots of stories about the extreme weather (baking heat followed by cataclysmic thunderstorms) but the big news was the arrival of the migrants from North Africa and the Middle East. Italy, by all accounts, is struggling to cope not just with the successful ones who have made it, but with the less successful ones who need to be rescued. Worse still, bodies were beginning to wash up on the beaches. One news segment showed a dead person lying on the shoreline surrounded by sunbathing holidaymakers who seemed unbothered by the presence of the corpse. Of course, it would be grossly unfair to pretend that everyone felt as unmoved as those people on the beach (and who knows, TV newsmakers can portray things however they want with the use of clever camera angles and timing), and most people interviewed expressed horror and despair.
 
[As an aside, a friend of mine got married in Sicily a couple of months ago and the wedding reception was continually interrupted by overhead helicopters coming back from sea with migrants dangling from them. Some children asked “What is going on?” and the adults comforted them by saying it was just some swimmers who had got into difficulty. When this carried on for two full days (Sicilian weddings being long affairs) the children must have concluded that practically everyone swimming needed rescuing.]
 
Perhaps because of this, and if one pays much attention to the writings on the walls, there was much worry about a resurgence of fascism and the security offered by a strong leader. One aspect of the area in which we were staying that I picked up on was a latent regard bordering on fondness for the legacy of Mussolini. The grand but soulless architecture in places like Brescia and Forli (my wife’s family’s home town, also the birthplace of Mussolini) is described with contempt by foreign guidebooks, but looked upon more favourably by local tour guides. It is interesting to note that the area of Lombardy was considered the hotbed of fascism, and also saw itself as the most forward-looking and industrious part of the nation.
 

 

 

 

 

 
Mussolini, of course, was eventually caught and killed trying to flee over Lake Como to Switzerland. We went to Como one day (actually we were only half an hour away) just to see what all the fuss was about. People will excitedly tell you that George Clooney lives there, but I can’t report that I saw him. There are several towns and villages clustered along the Italian side of the lake, and the hills are liberally endowed with the villas of the über wealthy. Places around the lake will be familiar to Star Wars fans as the home of Princess Amidala – and one can’t deny the starry romance of the setting. But encapsulating beauty within easy reach of a major industrial city can only mean one thing: high prices. We were just about able to afford a plate of chips and a glass of Coke before leaving. This is a place where people dressed in tennis whites drive sports cars and sit in chic cafés checking their stock portfolios on their iPhones. Many of the small beaches along the shore were the private enclaves of the grand villas but I found one that was open to the public. It was a relief here to be able to wade into the water – even if it the experience was akin to swimming in Robert Byron's hot saliva – and swim out for some distance taking care not to end up in the path of one of the many speedboats – the preferred way of getting around the lake for its monied residents.
 

 

 

 

 

 
One day we went to Venice. It was a hell of a long day (five hours of driving each way, much of it stewing in traffic jams of melting cars) but we wanted our kids to see this fabled city before it sinks beneath the waves. Of course, Venice is fabulous and there’s no way to adequately convey this short of actually going there. I had expected a horde of tourists, and I wasn’t disappointed. This year’s ‘must have’ it seems is the selfie stick. For those who don’t know what one is, it’s a retractable metal stick that you fix your smart phone onto, enabling you to make sure there isn’t a photo of a single architectural gem without your grinning face obscuring most of it. It is a sight to behold watching hundreds of people walking around and holding these things – literally filming themselves as they walked. I wondered how many drownings might have occurred as distracted selfie stick holders blunder into the canals. Future sub-aquatic archaeologists may find skeletal hands preserved in the sediment, still gripping their vanity sticks.
 
It’s hard to be in a place like Venice and not marvel at how much the business of travel has changed since Robert Byron described it in the opening quote of this post. Back then it was a pursuit of the rich or the adventurous, whereas now it just seems to be a pursuit for the ostentatiously wealthy. The alleys leading off from the square around the Piazza di San Marco are stuffed with luxury brand outlets. Most tourists seemed to hail from China or the Middle East, and were dressed to impress with Gucci and Louis Vuitton accessories. This is quite a change from the last time I was in Venice –15years ago to the day – when the archetypal loud American (Hawaiian shirt, big camera around neck, crumpled map) was the most obvious visitor – the thrifty see-the-world backpacker, sitting on church steps eating a piece of stale bread being a close second. Neither type of tourist fauna were much in evidence this time around, perhaps a reflection of how much things have changed in the world since.
 
Other long distance trips we took included Ravenna – whose beautiful Byzantine mosaic artworks and easy way of life goes some way to restoring ones faith in humanity. Driving on the outskirts of the city when we arrived we found ourselves in the middle of one of the most ferocious storms I’ve ever witnessed. Like being under a power shower, I could barely see the road ahead for more than a few yards. Lighting literally crashed around us and I was quite fearful that we’d go up in a puff of smoke (despite rationalising that a car acts as a Faraday cage). “Is this normal?” I asked my wife’s uncle. “No, not normal,” he replied.

 

 

Italy does things by extremes. It has the world's most beautiful architecture sitting right alongside the ugliest aspects of modernity. There's the extreme wealth of the north, where the gated stuccoed villas keep out the riff-raff and the motorways are stuffed with BMWs and Range Rovers, and then there's the poverty of the south where mangy dogs snuffle around giant piles of burning trash and those refugees continue to wash up on the rocky shores, day in day out. 

Now I’m back here home it’s difficult to reconcile the prosperous Italy we saw with the knowledge that, like Greece and many others, the country is facing bankruptcy. You can mask financial and economic stress for only so long before something gives. And when it does come it is hard not to conclude that it will likely be the office and factory workers of northern Italy who find themselves in more of a precarious situation than those in the non-industrial south. But Italy has a long history of trouble and strife, and an economic collapse – which in any case will be global in scale – will be simply the latest chapter. But difficult questions remain for Italy, such as from where will it get its future energy supplies, and how does it deal with the increasing numbers of refugees arriving from destabilised and war-torn areas across the Med? And with these questions in mind perhaps all that remains is to ponder how long Italy can carry on living la dolce vita.

 

Hot Holiday in Italy

Off the keyboard of Ugo Bardi

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Published on Resource Crisis on August 15, 2015

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An image of the "new normal" in Italy. In Florence, a downtown shop tries to fight the heat wave of this summer by installing an air conditioner, without worrying too much about spewing hot air right onto the hot and sweating tourists.

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Happy August 15th (and a little rant from UB)

Happy Aug 15th, everybody! Here, in Florence, the worst seems to be over and the forecasts tell of rain today and tomorrow. This July has been the hottest ever recorded in Italy, but we suffered, on the whole, only limited damage. We had more than a month of brutal heat, but also some rain that eased the problem of the forest fires. Now, we can hope to arrive to September without big troubles, at least in terms of sheer heat. 

It is sure, anyway, that this Summer we got a taste of what the "new normal" is going to be. Apart from the horrible heat, we saw a number of spectacular disasters created by bad weather. I can tell you that I had never seen the roof of a house blown away by the wind. I had seen something like that only on TV, and mainly in the US, where the wooden homes always have that look as if they were coming from the tale of the three little pigs and the big bad wolf. But seeing the roofs of concrete buildings in Florence being ripped off and deposited in the courtyards, below, well, it has been a shock.

So much the shock caused by these events, that on TV someone mentioned the term "climate change". Fortunately, they immediately found an "expert" who appeared on screen and said that everything was fine and that it had been just a normal summer thunderstorm. 

Apart from the shy, and immediately removed, intrusion of the real world on the TV screen, Italy continues to operate in conditions that I would call "political Alzheimer." That is, conditions in which the patient continues to repeat the same things over and over, without reacting to external stimuli. So, we vaguely remember that, in the past, there was a good time in which the economy was growing and there follows that there is nothing else and nothing more than pursuing growth to fix all the problems.

This catatonic form of politics is not a fault of any specific political force. The faces we see on TV are a little like what people saw in one of those old "houses of mirrors" in amusement parks. Distorted mirrors would return your image as taller or shorter, fatter or thinner, crooked or straight; but it was always the same person. So, the politicians ruling Italy today are just slightly deformed reflections of the society that has produced them. It is us: we are aggressive, disoriented, angry, and without ideas. 

On this point, there is a very interesting post by John Michael Greer (the "archdruid") titled "the war against change."  Greer maintains that the traditional distinction between "progressives" and "conservatives" has been replaced by a situation in which the progressives became conservatives in the sense they oppose any and all change, whereas the conservatives still favor changes, provided that they will worsen things considerably.

This view can be perfectly applied to the Italian situation, with the so called "left" that shows a deep hate for renewable energy and for everything sustainable, whereas the right continues to push for drilling more and drilling deeper in order to get more energy from the sea of oil on which, notoriously, Italy floats. This idea of the right is being applied with great enthusiasm by the left, presently in power.   

But I would also say that Greer is somewhat optimistic, in the sense that the ongoing mental paralysis is affecting all political forces, both on the right and on the left. And it is not just a problem of the political parties: it is the entire Italian society that can't find anything better to do than to blame the bugaboo of the moment, be it Putin's Russia, Merkel's Germany, or whatever. And a good fraction of the public seems to find refuge in the most extreme forms of conspiracy theories, those which are unseemly for the dignity of the human condition, such as chemtrails and the upcoming new ice age. 

All right, sorry for this little rant from me. But, really, it is impressive to note how nothing moves in the debate, while we are facing gigantic changes in the ecosystem and in the economy. Do we have any hope to see something moving in the future? Hard to say. Surely, 2016 will be hotter than 2015, and 2017 will be even worse. But, on TV, there will always be some "expert" telling people that everything is normal. 

_______________________________

Note: to be sure, this 2015 has seen one big change in terms of new ideas. The "Laudato Si" Papal encyclical. It is impressive how this set of  ideas comes from the Church of Rome, the bugaboo of the old and rigid "left," who once were priding themselves of the definition of "progressives." It reminds me of Tonybee, when he placed himself in the position of an ancient Roman and asked: "what good can ever come out of Bethlehem?" And yet….

Peak Tourism in Florence

Off the keyboard of Ugo Bardi

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Published on Resource Crisis on August 10, 2015

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One of the many shops in downtown Florence whose owners hastily installed an air conditioner to save themselves from the heat wave engulfing the city. Note how the exhaust blows hot air directly onto the tourists walking in the narrow street where this shop is located. Florence is clearly unprepared to the "new normal" of hot weather created by climate change. But the main problem may be the concentration of hundreds of thousands of tourists in about one square km. And the administrators of the town want more of them! (photo by the author, August 2015)

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Good tourist is one more tourist: Florence's fragile tourism industry.

 

If you have been visiting Florence during this hot and humid August, it is likely that you'll remember your experience not so much in terms of the art pieces you saw. Rather, you'll probably remember a place that looks more than all like one of Tokyo's busiest subway stations during rush hour.

I took a small trip to downtown Florence this week, and I have seen tourists marching in crowds, waiting for hours under the scorching sun to have access to the main tourist attractions, carrying bottled water with them as if they were crossing the Sahara desert in an adventure movie. Florence, as a city, is simply not prepared to the "new normal" of temperatures that climate change is creating. And one can only wonder how the situation will evolve as climate change runs its course with higher and higher temperatures.
 

 

Tourists in Florence carrying umbrellas to defend themselves from the scorching sun.  (photo by the author, Aug 2015)


Heat is only one of the problems that tourists have to face in Florence. An even worse one is overcrowding. Let me pass you some data. In 2014, we had some 13 million overnight stays of tourists in Florence or in the nearby area. To this number we have to add all those who come by bus or by car just to spend a day in Florence and then go back or move on to another destination. I think we have to add at least a couple million of them per year. So, a conservative estimate of the total would some 15 million "tourist-days". That makes an average of more than 40,000 tourists in town every day.

But that is only an average. Clearly, tourists tend to come during high season, especially in summer, and then the density is much larger than the average. So how many of them are in town every day this August? A hundred thousand? Two hundred thousand? Or more than that?

 

Tourists in Florence on their rented Segway vehicles. Given the density of people in town, it is not much more useful than trying to use it in your living room. (photo by the author, Aug 2015)
 


In principle, there is nothing wrong in cramming the city with so many tourists; at least as long as the people in the crowd don't panic and stampede, generating a large number of casualties. It is just that when the historical Florence that tourists see nowadays was built, there were perhaps 100.000 inhabitants in the town. Today so many visitors are a disaster for the structures of the city (and note that they tend to concentrate more and more in the same, restricted, areas). Some people speak of the need of "saving Florence" from this calamity. They are well intentioned, but arrive too late. Florence, intended as a "normal" town, doesn't exist any more. What exists is a huge theme park surrounded by an expanse of suburbs. And, as in any theme park in the world, the people whom you see walking in the street are not residents; they are either visitors or employees of the park.

As everything in this world, if something happens, it means it had to happen. Under many respects, it was unavoidable that Florence would be transformed into a major worldwide tourist attraction; and it was unavoidable that more and more people would want to visit the town every year. What surprises me in this story is not the transformation that Florence underwent, but how the city authorities and the representatives of the tourism industry are totally oblivious to the problems brought by this huge mass of people dumped into the city center. Not only they are blind to that, but they want more! When the data for 2014 came out, everyone was delighted, actually ravished, that the number of tourists in Florence had increased of about 3% with respect to the previous year. If there was some regret about that result, it was that it was "only" of 3%! The rule seems to be simple: good tourist is one more tourist.

Everyone is so completely convinced that more is always better that the city authorities are planning a substantial expansion of the city airport that should perhaps double the number of passengers landing in Florence. The only criticism I heard about this idea is that the new airport should be built somewhere else, not that more people are not a good thing.

But can anyone remember that in 2005, 10 years ago, the tourists arriving in Florence were less than seven million, that is about half as many than today? How long do you think you can keep doubling the number of tourists every ten years and still report it as a good thing? And how long do you think that the tourists will put up with being crowded, herded, goaded, trapped, pushed, overcharged and mistreated in various ways, before they decide that they can find a less crowded theme park – say – in Anaheim?

This great tourist boom is so fragile that it is incredible that nobody realizes it. Some 75% percent of the people visiting Florence come from abroad, and many from overseas. An economic crisis or a major geopolitical instability could easily stop the tourist flow and destroy the economy of a city that, by now, depends on the two billion dollars or so that the tourists bring in every year. If you want to have some idea of what might happen, you could do well by re-read "Babylon Revisited", by Scott Fitzgerald, that describes Paris as a ghost town after that the great crash of 1929 had sent away the American tourists.

So, does anyone in this world understand the concept of "resilience"? Apparently not, and I can't blame too much the city authorities of Florence for pushing so hard for their new toy, the airport. After all, the mining industry keeps operating on the assumption that resources are infinite and always abundant. And then, what's the difference? Humans just seem to be made to overexploit resources and, be the resources crude oil or tourists, it is about the same. So, it had to happen, and it is happening.

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I don't want you to think that I am trying to prevent you from visiting Florence. Despite the ongoing disaster, it is still worth coming here if you avoid the overcrowded areas of the center and if you take a little more time than the average tourist. If you do this, you may discover that such a thing that I would call "city spirit," survives in Florence (for now, at least)

Tragedy of the Commons: Italian Tourist Traps

Off the keybord of Ugo Bardi

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Published on July 27, 2015 on Resource Crisis

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Image by James Good

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Hardin's "tragedy of the commons" explained with a practical example: a tourist trap in Florence

Garrett Hardin's idea of "The Tragedy of the Commons" has become well known, but not always really understood. In my case, I can say that I have big troubles in having my students grasping its mechanism; that is the interplay of individual advantage versus public goods; the basic factor that leads to what we call "overexploitation."

Perhaps the problem lies in the fact that Hardin used the example of sheep and pastures to explain the reasons of the tragedy, but that's rather unfamiliar to my students (as well as to most of us). For instance, many of my students don't seem to be able to grasp the concept of "overgrazing", that is the fact that grass doesn't regrow if it is grazed too much. Besides, the pastures that Hardin was considering never experienced the "tragedy"; they were well managed and well regulated, specifically in order to avoid it.

So, let me propose a different example for the mechanism of overexploitation, based on a real event that happened to me. Maybe it can explain the concept better.

Just a few days ago I was literally kidnapped inside an underground parking in Florence because I had lost my entrance ticket, with the employees of the place insisting that they won't let me out unless I was willing to shell out 237 euros for about two hours of parking (!!).

I described the experience in detail in a post in Italian, that you may machine translate if you are really interested. The gist of the story, anyway, is that I found myself caught in a trap mainly designed to siphon out some money out of the pockets of the hapless foreign tourist passing by. In my case, I was able to negotiate my release and avoid paying the exorbitant surcharge. But, put yourself in the shoes of someone who doesn't speak the local language, doesn't know what are his/her rights, is in a hurry; then the best strategy is to pay and be over with it. Although, after such an experience, most tourists will probably swear that they won't ever again set foot in this hateful city.

Now, despite the rather nasty circumstances, what I have described is nothing more than an economic transaction. But, here, there doesn't seem to hold the conventional view that demand and offer are always the same and, at the same time, "right". What happens, instead, is the perverse mechanism of Hardin's tragedy taking hold of the situation.

Let's quantify: by forcing a tourist to pay 237 Eur, the management of the parking lot gains the difference between the normal parking rate (say, 4 euros) and the surcharge; a net gain of 233 Euros. At the same time, the fact that the tourist mugged in this way will never come back to Florence means a loss in terms of hotel rooms, meals, various purchases and more. Considering that the enraged tourist will also discourage friends and relatives from coming to Florence, the overall loss is surely of the order of several thousand euros. The transaction, therefore, turns out to be a net loss for everyone involved.

But here comes Hardin's tragedy. The loss of thousands of euros is spread over several thousands of operators in the tourism industry and for each one it is so small to be nearly invisible. Instead, the monetary gain of 233 euros is well visible for those who pocketed it. There follows that almost everyone, as an individual or a single firm, gains in overcharging tourists. That's what generates what we call a "tourist trap," a common occurrence everywhere tourists go.

It is the same mechanism of Hardin's original example, with the tourists in the role of grass and the tourism operators in the role of shepherds. In Hardin's example, overgrazing leads to the destruction of the resource (grass). In the case I was describing, tourists in Florence have not been destroyed, yet, but they are constantly overcharged, overcrowded, and overexploited in various ways. It is not so obvious that they will continue to flock to a place where they are so badly mistreated and so often.

I know what you are thinking, that Florence will always be Florence. True, but visiting Florence is, in the end, the result of the fact that it is fashionable to do it. And fashions change over time. Years ago, it was fashionable to buy overpriced and oversized cars, and manufacturers thought they could overexploit their customers at will. For a while, yes; then look at what has happened to Detroit.

The final point of this discussion is to note how difficult it is for human beings to manage well the resources they exploit. The overexploitation phenomenon lurks almost everywhere and it is extremely difficult to stop it, because it generates a cascade of economic gains that overcome the (usually feeble) attempts of the authorities to regulate the use of the resource. It is true for tourism, but also for minerals, for fish, for agriculture, whatever you have that generates an economic return sufficiently large to make it possible to reinvest a fraction of it to increase the exploitation rate. We haven't found a way to avoid the tragedy in modern times and chances are that we never will, at least as long as we reason in terms of maximizing individual profits and we keep believing that doing that optimizes the exploitation of the system. Maybe it does, but at the cost of destroying it.

Greek Debt Chicken Game

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Aired on the Doomstead Diner on February 6. 2015

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Souvlaki                  or                    Strudle

http://d.ibtimes.co.uk/en/full/1422542/greece-yanis-varoufakis-says-ecb-talks-fruitful.jpghttp://i57.tinypic.com/2z57qtl.jpg

Snippet:

…Once again, the Greeks have taken the Center Stage in the Collapse Kabuki theater, with the newly elected Syriza Goobermint under the leadership of Alex Tspiras attempting to follow through on their many promises to throw off the Debt Choke Hold held on them by the Brussel Sprouts.

The new “Rock Star” player in the game here is the new Greek FinMin, Yanis “Souvlakis” Varoufakis. Yanis is making a lot of headlines in the Econ blogosphere since Syriza took power, first with the threat to outright default and lately with some more creative phrasing of concotions like “perpetual bonds” in some kind of new game of debt musical chairs.

On the other side of this nonsense is Yanis’ Evil Twin, the Kraut FinMin Wolfgang “Strudle” Schauble. Wolfy won’t take any shit from Yanis, and has made it clear he thinks the Greeks are responsible for every penny of the debt that the ECB and by extension the Kraut population extended to the Greeks, despite of course the reality that the Krauts never had the money before the last Greek Goobermint of Bankster Sock Puppets signed for it…

For the rest, LISTEN TO THE RANT!!!

Who CHICKENS OUT first?

Rotisserie_Chicken

Prior Rants on the Greek Debt Kabuki Theater you may have missed:

Post-peak Italy: the decline continues

Off the keyboard of Ugo Bardi

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Published on Resource Crisis on October 27, 2014

Oil consumption in Italy in million tons. From “MondoElettrico

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Italy’s free fall continues. The most recent data indicate that oil consumption keeps going down. Oil and gas together have peaked around 2004 and continue the downward trend, as shown in the graph below, (From “Resource Crisis“)
Italy is in full collapse, with all economic and financial indicators in decline. Industries are closing down and restaurants are opening; the system is trying to adapt by tapping the remaining available resources in the form of foreign tourists. Outside the main touristic centers, however, the crisis is clearly detectable. Shops are closing down, traffic is slowing down, unemployed people are everywhere and you can’t miss their presence among friends and acquaintances; especially young people.
At the same time, there is a sensation of ghostliness around, as if everything we are seeing were unreal, happening somewhere else and to someone else. It is as if it were something you watch on TV, but not in real life. The debate in the press and on the web is detached from anything connected with the loss of the capability of the country to move and produce goods. When the crisis is mentioned, different culprits periodically appear in the first pages of the newspapers: the Euro, the European Union, politicians, immigrants, government employees, bureaucracy, lazy workers, terrorism, femicide, Angela Merkel, Valdimir Putin, Silvio Berlusconi, and more. It is a cycle that never stops, it keeps turning, every time pointing at something – new or old – that the government will target to solve the crisis once and for all.
And it keeps going.

CRASH2: the roadsigns become so frequent, people can’t see them for looking

Off the keyboard of John Ward

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Published on The Slog on August 29, 2014

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  THIS WAY TO THE CRASH

https://hat4uk.files.wordpress.com/2014/08/crash.pngDespite a consensus expecting US disposable income to grow by 0.2% in July, it fell by 0.1% – for the first time in six months. Having endured the jobless recovery, it looks like Americans might now be in for the cashless recovery.

In Russia, the economy is rapidly weakening: inflation is high, the ruble is weak, interest rates are climbing, and disposable incomes have dropped.

Eurozone inflation fell to its lowest level since November 2009 this August, as analysts warned that price growth in the currency bloc is “worryingly low”. “This is yet another bad indicator of the health of the eurozone economy”, said Luke Bartholomew, of Aberdeen Asset Management. Give that man a kupee doll.

Meanwhile, Italy – the country long targeted by The Slog as the real European basket case – saw its consumer prices drop by the most since records began. It’s the eurozone’s third-largest economy…and so firmly entrenched in recession, prices fell at twice the expected rate.

In the UK, retail behemoth Tesco has issued another profit warning, and its intention to slash the dividend by 75%. That’s a very big number indeed, and the company’s bland statement blaming “challenging” trading conditions cannot hide the reality: Tesco is losing out bigtime to the bottom-rung discounters, particularly Lidl. Every Lidl helps, as they say….but this sort of share loss and growth doesn’t happen during an economic recovery.

Neither does a stalled housing market. It is quickly becoming clear that, despite British Chancellor George Osborne’s Help to Buy scam, UK house prices have stagnated: more than normal numbers of sales are falling through due to nervous buyers in the residential property market. UK values edged up by just 0.1% from July to August for the second month in a row. Vendors in England and Wales got around 96% of their asking price in August – a third fall: if that level drops to 94%, sector analysts say price drops will accelerate.

Global manufacturing output continues to engage reverse gear, as a result of which mining giants are staring at a $US30bn slump in revenue during the next 12 months. The price of iron ore has collapsed some 36% during 2014.

Even those famous O’Neill Brics are somewhat out of true. The Brazilian economy was this afternoon declared officially to be in recession – something of a bummer for Dilma Rousseff’s re-election bid.

Before these latest developments, dear Reader, you heard that German gdp shrank by 0.2%, the French economy flatlined for the second quarter running, in China an spectrum of indicators suggested faltering growth, and falling energy demand was beginning to make the Russian economy look not so much sick as poorly.

And how, pray, have the markets, bourses and other misleading outcomes reacted?

The Dow Jones was flat. The FTSE was up 0.2%. The French CAC 40 edged 0.34% higher. The Australian S&P/ASX 200 index gained 0.08% to 5,629. The European Euro Stoxx 50 added 0.42%. The German DAX rose 0.22%

They’re coming to take us away haha/ They’re coming to take us away/To the funny farm/Where life is beautiful all the time

Great stuff, Ward: 6.30 pm BST on a Friday is the perfect aperture for this kind of bad news. Ed

Earlier at The Slog: All aboard for the Trojan Horse to BUPA

Hookers, Blow & Frackers

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Aired on the Doomstead Diner on May 27, 2013

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Snippet:

…In the area of you can’t make this shit up, the Italian Goobermint announced that it will now include illegal activities like Drug Trafficking and Prostitution in its GDP. What about Burglary and Bank Robbery and Forgery? Why aren’t they including that in GDP too? What about Political Graft? Shouldn’t that be included in Italian GDP? What about Protection Shakedowns by the Sicilian Mafia? Those are all HUGE portions of the Italian Economy!

On the SAME day as this nonsense, the EIA announces is is doing a downward revision on its estimates of recovereable oil from the Monterrey Formation in sunny California by…get this…96%! This is the same thing as saying on their first test, the EIA got 4% correct answers. In my day, below a 65 in school was FAILING…

For the rest, LISTEN TO THE RANT!

Don’t miss The Money Valve, first of a 4 part series  examining the Industrial Economy, now UP on the Diner Blog.

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RE

Die Off of the Top Predator

Off the keyboard of Ugo Bardi

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Published on Cassandra’s Legacy on February 13, 2014

BigFishLittleFish

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The post below, by Dmitry Orlov, is the result of an exchange of e-mails about the similarities between the collapse of the Soviet Union (30 years ago) and the ongoing collapse of several Mediterranean countries, including Italy. Read Orlov’s post to understand his interpretation of a phenomenon that I tend to see as the result of the behavior of the so called “Apex Predators” (or “Top Predators”). If you work with socioeconomic systems, you can’t miss the similarity these systems show with ecosystems. In particular, in a socioeconomic system you can identify the top predator as the government; that is, the entity that controls the police and the army and which has the power of levying taxes on citizens without any specified limit. Now, in these systems, there exists a tendency of going in “overshoot”, when a predator takes more preys than the capability of the prey population to reproduce itself, or when the preys destroy the resource on which they depend. In this case, the predator eventually destroys the prey population and, at that point, is left without resources and no other choice than disappearing in turn. Models show that, in this case, the top predator population is the last to disappear. That is, the government of a country tends to persist as long as citizens own something that can be taxed. But if the wealth of citizens depends on non renewable resources, such as fossil fuels, then in the long run most citizens are spoiled of everything they have and there remains nothing to tax for the government. At this point, we can see the government as a predator without prey: it has no other choice than to go extinct. It folds over and leaves; the state structure collapses and disappears. That could be a good interpretation of what’s happening today in many countries. (UB) 

How To Time Collapses 

by Dmitry Orlov

Douglas Smith
Zeus

Over the past half a decade I’ve made a number of detailed predictions about collapse: how it is likely to unfold, what its various manifestations are likely to be, and how it will affect various groups and categories of people. But I have remained purposefully vague about the timing of collapse and its various stages, being careful to always append “give or take half a decade” to my dire prognostications. I wasn’t withholding information or being coy; I really had no way of calculating when collapse will happen—until five days ago, when, out of the blue, I received the following email from Ugo Bardi:

Hi Dmitry,
You may be interested in this post of mine.

Starting from this post, I’m trying to draw a parallel between the collapse of the Soviet Union and the impending collapse of Italy. There are, as always, similarities and differences. In particular, the Soviet Union collapsed almost immediately after that oil production flattened out and started declining. On the contrary, the Italian government survives despite a loss of 36% in oil consumption.

My impression is that it is all related to different taxation methods. I understand that the Soviet tax system was based mainly on commodity taxes and on taxes on production. When production stalled, people had nothing to buy and the government had nothing to tax because most people owned nothing and had little or no savings in banks. So, the government had no choice but to fold over and disappear.

Instead, the Italian system is based largely on income tax and property tax. The government is losing revenues on commodity taxes (e.g. on gasoline) but it can compensate with property taxes. Italians, on the average, are “rich,” in the sense that they have savings in banks and most of them own their homes. So, the government can tax their properties and their savings. As long as Italians still have something taxable, then the government will survive. It will disappear only when it has managed to strip citizens completely of everything they have.

Do you agree with this interpretation? (BTW, Italy as a state may be even more culturally diverse than the old Soviet Union was.)

Ugo

 

I wrote back:

Hi Ugo,

Very interesting article. Yes, the entire southern tier of the EU is in some early stage of collapse, but so far it hadn’t occurred to me to draw parallels between it and USSR. Now that you mention it, the parallel is obvious: it is financial collapse triggered by something having to do with oil, but with polarities reversed, and delayed by a period of wealth destruction.

In the case of USSR, taxation wasn’t really a source of government revenue. The national economy was based on government ownership of everything, central planning and budgets, and a system of assigning ministerial contracts to enterprises owned by the ministries. The external economy was a matter of exporting hydrocarbons in exchange for foreign currency, which was used to buy grain—mostly feed grain for cattle, without which the population would become protein-deprived and malnourished. Over the so-called “stagnation” period of the 1980s the Soviet economy became hollowed out because of several trends. Too much spending on defense was one of them. Another was that investment in capital goods (machinery, plant and equipment) reached the point of diminishing returns, which is very difficult to characterize but not so difficult to observe. Lastly, Solzhenitsyn and the dissident movement had done irreparable damage to Soviet prestige, destroying morale. The coup de grace, when it came, consisted of two pieces. One was the inability to expand oil production given the state of Soviet oil extraction technology of the era. The other was the fall in oil prices, down to $10/bbl at one point, because North Sea and Alaska both went on stream, and the Saudis pumped as much oil as they could based on a tacit agreement with the US to depress oil prices and thus crush the Soviets. In this they largely succeeded. The USSR became heavily indebted to the West, and, at the very end, needed Western credit to keep the lights on in the Kremlin. One of the final scenes featured Gorbachev on the phone with [West Germany’s Chancellor] Helmut Kohl asking him to ask the Americans to release some funds.

 

 

 

 

Now, I can see parallels to this in what is happening now in the US and in the EU, but with all the polarities reversed: here oil flows in and money flows out, and the coup de grace [will be] high oil prices rather than low. Instead of failures of central planning, which failed to allocate production effectively, we have failures of the globalized market, where production is effectively globalized but consumption is ineffectively localized among the wealthy and the formerly wealthy, and has to be fueled by credit. Instead of diminishing returns from deployment of capital goods, we have diminishing returns from deployment of capital itself, where a unit of new debt now produces much less than a unit of economic growth. The damage to reputation and morale is mostly on the US side of the Atlantic, where in place of Solzhenitsyn and the dissident movement we have Abu Ghraib [scandal], [Wikileaks’ Julian] Assange and [Edward] Snowden. With the EU, most of the damage has to do with [the] experience of economic disparities between the rich core and the increasingly impoverished periphery, and the recent move in Ukraine to walk away from the EU, and the ensuing Western-financed mayhem in Kiev, show that the bloom is off the EU rose as well. The runaway military spending is likewise mostly a US issue, although epic failures in Afghanistan, Libya and Syria, in which the EU is complicit, are likely to have some effect as well.

 

 

 

Comparing USSR to Italy is difficult because of the disparity of scale: 1/5 of the planet’s dry surface versus a smallish peninsula; an economy that slowly decayed in isolation versus an integral part of the EU; a country where the choice is between burning hydrocarbons or dying of exposure versus one where the choice is between riding a scooter or taking the bus; a country with a ravaged agricultural sector unable to grow enough protein calories versus a nation of foodies where corner groceries make worthy subjects for oil paintings. But I think that when it comes to the actual collapse, when it finally comes, there will still be identifiable similarities. Financial collapse always comes first: all sorts of financial arrangements unravel as the center becomes unable to float the periphery, and in response the periphery starts to withhold economic cooperation. The result is a breakdown in supply chains, shutdown of production, and, shortly thereafter, shutdown of commerce. In the case of the USSR, this unfolded in 1989-91 as the various republics and regions refused to cooperate with Moscow. I suspect that this will also happen in the EU, at some point. But I think that you are exactly right that whereas the average Soviet citizen could not be fleeced, Italy, and much of the EU, still have plenty of fat sheep that the government can shear to keep things running. Thus we are looking at a few more years of steady decline before the lights start going out. This, then, is the key distinction: the USSR collapsed promptly because it was already skin and bones, whereas the US and the EU still have plenty of subcutaneous fat to burn through. But they are, in fact, burning through it. And so, the conclusion is, collapse will come, but here it will take a little longer.

 

 

 

-Dmitry
Ugo responded:
 

 

I agree with you, of course. It makes perfect sense to me and it is the main point I was making: the Soviet government couldn’t tax Soviet citizens too much because they owned very little.


The Italian government instead has some luck in the sense that Italians have some savings and most of them own their homes. So, the government is progressively strangling their citizens to squeeze out of them all that they have—while they still have something.

The last round of tax increases in Italy is targeting homes and it is really, really hurting, especially the poor. You can be poor here, and still own a house that you inherited from your parents. Now the government asks you to pay as if that house were revenue! That is truly evil. People who don’t have the money to pay this property tax can only indebt themselves with banks (or worse). Eventually, they’ll have to sell their homes or give them to the bank (or to the Mafia)—the result is disaster for everybody, including for the banks, and even the government. But the whole thing has a perverse logic. It has the advantage that it generates some immediate cash which is badly needed, then the hell with the future.

The [next] phase will be to target bank accounts. Then, when there will be nothing left, the government will decamp and say bye to everybody. Hell, what a planet I landed in…..

All the best,

Ugo

 

And so here is the outline of the method for calculating the timing of collapses:
1. Find out when the collapse clock starts running by looking for a significant drop in energy consumption
2. Calculate how long the clock is going to run by dividing the total wealth of the citizenry by the economic shortfall of the shrinking economy
For any industrial economy the collapse clock starts running as soon as the consumption of fossil hydrocarbons starts dropping appreciably. It is sometimes difficult to tell whether this has already happened if the country in question is still a major hydrocarbon producer. Gross production numbers can still be holding steady or even seem to go up a bit, but once you subtract all the energy that is being expended on energy production itself, and on the unprofitable mitigation of its many undesirable consequences, you might be able see a decline sooner rather than later. Notably, the net energy yield, or EROEI, is very low for all the newer unconventional sources that have been trumpeted as panaceas in recent years, such as ones that require hydrofracturing and drilling in deep water, tar sands and so on. (The so-called “renewables,” such as wind, solar and biofuels, are an even bigger joke, because all of them with the exception of hydroelectric plants have net energy that is too low to sustain an industrial economy, plus they all depend on technologies that are “nonrenewable” unless the country maintains a vast industrial base which happens to run on fossil fuels.) And so the drop in net energy consumption is clear for Italy, which produces 7% of the oil it consumes and imports the rest, whereas the picture is somewhat less clear for the US, which still manages to supply around a third of its oil.
Since all industrial economies literally run on fossil fuels, lower energy consumption immediately translates into a lower level of economic activity and a shrinking economy. The gap between the expectations of economic growth that are dialed into all of the financial arrangements, and the reality of economic decline driven by lower energy availability, has to be plugged with the population’s savings. There are a number of ways of expropriating wealth, generally proceeding from various kinds of stealth taxation measures, to more overt measures, to outright expropriation. Taking the US as the example (since I am most familiar with it) the expropriation cascade is proceeding as follows:
1. Central bank policy of zeroing out of interest rates on savings combined with massive money-printing. This forces money into speculative markets (stocks, real estate, etc.) creating huge financial bubbles; when these bubbles pop, savings are said to be destroyed, but in reality that money has already been spent by the government or used to fill the private coffers of those closely associated with the government.
2. Government policy of canceling retirements or short-changing retirees. The federal government has worked hard to make its official measure of inflation all but meaningless so that it can justify its policy of making cost of living adjustments to social security payments that are far less than the the real increases in the cost of living. Another federal expropriation scheme is via guaranteed student loans, which cannot be discharged through bankruptcy, and which have created an entire class of indentured servants. At the more local level, state and municipal governments are curtailing or canceling retirement programs by virtue of going bankrupt.
3. Ever more onerous reporting requirements for financial transactions, especially for those who try to leave the country and expatriate their savings. All foreign bank accounts must now be reported, and people who work abroad are now forced to file voluminous annual reports that cost thousands of dollars to prepare. Those who decide to repudiate their US citizenship are made to pay a hefty exit tax. Nevertheless, record numbers of US citizens have been doing just that. Just having a US passport often makes it impossible to set up accounts in foreign financial institutions, which have little desire to comply with US demands for financial disclosure.
These are the measures that are already in place. Looking at what’s been tried before, here and elsewhere, we can see what other measures are in the works. Among them:
1. So-called “bail-ins” where insolvent financial institutions are rescued by confiscating depositor funds. We can expect the script to be similar to what happened in Cyprus: politically connected depositors get word ahead of time and yank out their money forthwith; everybody else gets shorn.
2. Limits on bank withdrawals. You might still “have” money in the bank, but that’s the only place you can “have” it. The semantics of the verb “to have” can be quite tricky, you see…
3. Ever-increasing taxes on property resulting in property confiscation. It works like this: government prints money and hands it out to its friends; its friends use it to temporarily bid up property values; property taxes go up to a point where the property owners can’t pay them; owners lose their properties. A staggering 63% of real estate purchases in Florida last December were cash purchases.
4. Various kinds of sudden, new, super-complex regulations, noncompliance with which results in very large fines. In turn, nonpayment of these fines results in forfeiture of assets. The US has some very curious laws according to which inanimate objects such as cars, boats and houses can be charged with a crime, seized and auctioned off. We can expect lots more of such property grabs in the future.
5. Gold confiscation, which happened once in the US already, so there is a precedent for it. Yes, I know that this will make a number of people upset, but I am yet to hear a convincing argument for why the US government would not resort to gold confiscation when that turns out to be one of the few remaining cards it can play.
This list is by no means comprehensive. If you feel that I have missed something major, please submit a comment, and I will consider it for inclusion.
Now, it would be nice if all of these measures worked like clockwork, always producing the right amount of wealth confiscation to levitate the government, and the financial scheme on which it is based, for a little while longer. Alas, as with most things, something is bound to go wrong at some point, most likely when you least expect it. And it seems like a dead certainty that something will in fact go wrong well before every last American citizen is relieved of every bit of their accumulated wealth and is living peacefully in a roadside ditch, wearing an attractive loincloth and a stylish mudpack for a hat, quietly perfecting a nouvelle cuisine that features snails au jus and dandelion salad au chaume. Maybe you can imagine it, but I can’t. Beyond a certain point, I can only imagine reports of widespread “public disturbances” followed by “breakdown of law and order.”
Still, I hope that this framework will allow us to set an upper bound for how long collapse can be deferred for any given country. Once hydrocarbon consumption drops appreciably, the clock starts running. Then it is possible to estimate how long the clock can theoretically run by dividing the remaining net worth of the population by the size of the hole in the economy created by falling energy consumption.
But after that things get messy. Some countries will hollow themselves out quite peaceably, and go softly into the night, while others will explode and fast-forward though the financial-commercial-political collapse sequence. And so perhaps the most useful thing to know is whether the collapse clock is already running for any given country, because if it is already running, then it becomes a fool’s game to wait around for the inevitable outcome.
One reasonable approach is to get another passport and quietly relocate to another country. It is important that this country be one for which the collapse clock is not running and won’t be for a long time yet. Ideally this would be a financially secure, politically stable, energy independent, militarily invincible, underpopulated, non-extradition country which will be among the last to be severely disrupted by climate change and where you could have lunch with Edward Snowden. But this approach doesn’t appeal to everyone, and I understand that.
And so another approach is to adapt to what’s coming while remaining in the US, or in any other country for which the collapse clock is running, by making yourself, and your wealth, should you have any, illegible. Here is a very nice article by one smart cookie by the name of Venkatesh Rao on the concept of illegibility. And here is his very nice primer on being an illegible person. This kind of illegibility has nothing to do with bad handwriting; it is about hiding in plain sight. Please read these as homework, because I will have more to say on this topic in the near future. And I would love to see a list of countries for which the collapse clock is running, along with first-order estimates for how long it could possibly run for each one, based on their population’s net worth and the country’s economic shortfall. But since this post has just gone over 3000 words, I am leaving this as an exercise for the reader.

Crash 2: Draghi Implicated

Off the keyboard of John Ward

Published on The Slog on June 24, 2013

dragrakept

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CRASH 2: DRAGHI IMPLICATED AS ITALY FACES CYPRUS TEMPLATE

Snake hit by rake: Draghi rumours of malpractice in 1990s and 2012 resurface…looking more solid

A report submitted earlier this year to the Corte dei Conti, Italy’s state auditors, suggests not only that Italy faces a potentially massive derivatives hit, but also that Mario Draghi may be personally implicated in those and other frauds. In particular, several appear to have been central to Italy gaining entry to the eurozone in 1999….based on clearly falsified data.

Allegations being made against Signor Draghi insist that he ‘cooked’ Italy’s debt picture when seeming to reduce Italy’s budget deficit from 7.7 % in 1995 to 2.7% by the crucial entry-qualification year, 1998. It was, by a country kilometre, the steepest debt reduction among any of the (then) eleven eurozone applicants. Draghi went on to join Goldman Sachs in 2002, and by then accusations of book-cooking were already starting to emerge. In 2005, the Bank of Italy was forced to issue a denial, but several eminent commentators found it unconvincing. In 2006, news agency Bloomberg  applied to Draghi’s mentor Jean-Claude ‘Tricky’ Trichet for the release of further information, which Trichet refused to give…again, to the consternation of a number of mainstream financial journalists.

Author Simon Johnson, for example, not only found the answers given by Draghi “unpersuasive”, he also pointed out how unlikely it was that, as a Goldman employee, the Italian had “known nothing” about the fraudulent marketing of debt cover-up assistance to the Greek Government. Pascal Canfin, Member of the Italian Parliament and former chairman of the ECON committee, grilled Draghi on how he could have known about these transactions and allowed them to go through. He was not satisfied with the answers. The New York Times reported, after Draghi’s nomination for the ECB was approved, that Supermario had marketed similar transactions to other European governments. So it’s pretty clear there have been clouds above Il Draghi’s head for some time.

Meanwhile, the present Italian Government faces  billions of euros in derivatives contract losses that it restructured at the height of the eurozone crisis, according to the Corte dei Conti report. Those having had sight of it say the document ‘sheds more light on the financial tactics that enabled the debt-laden country to enter the euro in 1999′ (linking straight back to Draghi’s time at the Italian Bank) while in turn – according to the FT – it ‘details Italy’s debt transactions and exposure in the first half of 2012, including the restructuring of eight derivatives contracts with foreign banks with a total notional value of €31.7bn’. There was a suggestion from one US source last night that Draghi is also implicated in these.

Meanwhile, new information received at The Slog suggests the Knights Template may be at it again.

Another source emailed The Slog yesterday to point out that a US banking major (unidentified as yet) has told all its staff, on Fed Treasury orders, ‘to inform the US government about all deposits emanating from Italy, from any entity, company, individual or institution, with full and complete comprehensive details of any account opening or transfer or balance in excess of $100,000′.

There is only one reason for such an order: to trace any and all bailin escapees. Yesterday, The Slog posted in Smoke Signals that Italy’s second biggest financial institution, Mediobanca, ‘has overtly warned that the country is going to need a further rescue-cum-bailin within six months at the most. “Time is running out fast,” said Mediobanca analyst, Antonio Guglielmi, “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.”’

Last Saturday’s Slogpost  on Draghi’s financial power in the EU accused the EC the previous Thursday of ‘having handed absolute power to the unelected [Draghi]….at the expense of the citizen.’ I went on to accuse the ECB boss of being ‘completely unaccountable to any body or institution – elected or otherwise. Under the ECB’s Constitution guaranteed by the European Commission he is totally immune from prosecution. He cannot be removed from his position. He is obviously censoring any and all information that might reveal the true situation in the eurozone. He illegally subordinated an entire class of bondholders over the second Greek bailout. He managed and spearheaded an overt heist to steal the banking expertise and economic wellbeing of Cyprus, and in so doing committed an act of grand larceny against innocent depositors in the Island’s banks.

It looks suspiciously like Italy is heading for a Cyprus, and pretty soon. I can only repeat the bold type warning I gave then:

This is not a queue for the showers, European nations. It is the line heading directly to the extermination of your democratic rights, individual liberties, and personal wealth. There may be 27 of you and only one Draghi; but your divisions just make his job far easier. Step in the way of the Beasts now, or you will have a jackboot stepping on your face forever. 

Stay tuned.

Building Community Amidst Collapse

Off the keyboard of RE

Published on the Doomstead Diner on April 3, 2013

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In the most recent elections over in Italy, a bunch of Beppe Grillo MPs were elected, the ruling Party lost some seats, the coalition they had for running Italy fell apart, so for the last Month, Italy has had “No Goobermint”. Wait a minute…

Whaddya mean they don’t have a Goobermint? All those MPs elected are getting paid, right? Cops are still giving out tickets, right?

What they mean by No Goobermint is there is nobody who will sign for Italy for the next loan they need. No “Ruler” who will take responsibility for Axing Pensions and Raising Taxes. WTF in their Right Mind would take responsibility for that? You might as well paint a Bullseye on your forehead.

Italy of course is running on Inertia, and so of course also is the FSoA. CONgress hasn’t agreed on a Budget in years here now, they just keep taking Emergency Measures and raise the debt limits if not directly, then by Stealth. Since letting the FSoA Collapse means GAME OVER, the Banksters still print money to buy the worthless Bonds issued by Treasury, keeping the ball in the air another day. What happenned to all the Doomsday Sequester Scenarios? Is the Pentagon handing out Pink Slips? Not insofar as I am aware. They still got plenty-o-money to buy Jet Fuel for the Fighters & Drones patrolling MENA.

Back to the more pressing problem of Italy though, what happens when “Democratic Process” fails to come up with a Goobermint that can decide to do ANYTHING? The general approach so far has been “Caretaker” Goobermints like the one Super Mario “3-card” Monti was running for Goldman, which was so successful it was sent packing in a year. 3-card would sign whatever Goldman wanted him to sign, but sadly the Ities weren’t Cooperating with the diktats. Hard to Goober if the people you Goober don’t buy into your Leadership.

So eventually here you arrive at a point where the Democratic Process just votes into office a bunch of squabbling bureaucrats who because they don’t command control over anybody cannot make deals that stick with the Banking Oligarchy. At this point they are Set Adrift to descend into Failed State status, which then allows the Military Arm of NATO to drop in on “Peacekeeping” Missions, so that any remaining assets can be further Strip Mined.

Thing about Greece and Cyprus, really there is nothing LEFT to be strip mined, not too much left in Italy either. Nothing left but what Food can be produced and shipped off their lands, but as Transportation costs increase, even shipping around food isn’t profitable. So the populations will shrink down to just what the local land will support, which in both cases of Greece and Cyprus isn’t all that many.

The trick here of course is for EVERYONE to get off the bandwagon of Coveting the products of the Age of Oil. Why did humanity get sucked down this toilet to begin with? Because of the CARGO. Jared Diamond writes about Polynesian cultures who were essentially Self-Sufficient,but when Europeans arrived with their Amazing Toys, Metal Knives and Farming Implements, well they just HAD to have them. Only way to GET them was to become part of the Money based Banking system these Europeans used to trade about their goods.

Essentially, every community needs to be self-sufficient in local production for all basic needs, water, food, shelter, clothing. This can’t be done at current populations just about anywhere Industrialization and the Banking system has already infected with the Plague of Money, at least not in aggregate. Further, re-learning how to be self-sufficient in the basics and Reverse Engineering infrastructure to do that with will not occur overnight, which leads to the probability of an Undershoot event following the crash of the current Overshoot.

Here on the Diner, our Foxstead Group is aware of these issues, and together seeks to develop models for integrated self-sufficiency in the Post-Fossil Fuel driven era of Industrialization. The Monetary system WILL COLLAPSE, IS COLLAPSING as we speak in real and rapid time. Building resilient systems BEFORE collapse arrives in your neighborhood is the key, and it can only be done effectively with groups of people all working together to achieve these goals.

Here on the Diner, we welcome all such Kindred Souls who see the Writing on the Subway Walls, and will join with us in the effort to Build a Better Tomorrow.  Come visit with us in the Community Owned Doomstead thread and share your ideas on Community Building.

RE

Big Ideas…

Off the keyboard of Steve from Virginia

Published on Economic Undertow on March 7, 2013

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It’s hard to miss the Big Idea that the wheels are coming off the grand twentieth-century capitalist experiment; waste for its own sake, or waste for the sake of moving all-important ‘economic indicators’, waste for the purpose of enriching the even-more-important ‘entrepreneurs’ and ‘innovators’. The list of falling wheels would have to include China, Japan and Europe, but there are many more on a long list. It’s hard to think of a country in this world that doesn’t have major problems, the countries are interconnected by trade, treaty or finance so all are infected with each others’ problems in addition to their own: (Washington Post):

 

CDC says ‘nightmare bacteria’ a growing threat 

Lena H. Sun

Federal officials warned Tuesday that “nightmare bacteria” — including the deadly superbug that struck a National Institutes of Health facility two years ago — are increasingly resistant to even the strongest antibiotics, posing a growing threat to hospitals and nursing homes nationwide.

Thomas Frieden, director of the Centers for Disease Control and Prevention, said at a news conference: “It’s not often that our scientists come to me and say we have a very serious problem and we need to sound an alarm. But that’s exactly what we are doing today.”

He called on doctors, hospital leaders and health officials to work together to stop the spread of the infections. “Our strongest antibiotics don’t work, and patients are left with potentially untreatable infections,” he said.

 

Just like the finance economy, the biosphere, the political economy; there are “potentially untreatable … infections”. The treatments remaining in the pharmacy are the same treatments that spawned the problems in the first place: repeat applications of MORE, everywhere in the world. If MORE cannot be had immediately there are earnest promises of MORE to come … tomorrow!

A ‘Big Idea’ that is making the rounds has the various countries engaged in a currency war. Nations actively depreciate their own currencies so that they might gain export trade advantage at the expense of others.

Instead, the nations are engaged in a war for petroleum that is being waged with currency. As in all wars there are the winners who will gain fuel imports, the losers will have limited access to petroleum, their domestic fuel consumption will be exported to the winners.

In this war all the countries are engaged, to do otherwise would be to give up claims on petroleum in the future. To have a seat at the table or have any chance of winning, the countries must waste as much- as fast as possible, as waste is the collateral for the needed (depreciated) currency. The advantage lies with the United States, not only does it waste more than the others, but it produces as a consequence much of the world’s credit. The waste of other countries such as China is collateral for American credit, that is, collateral for even more American waste.

China Crude 030313

Figure 1: China crude oil imports vs. exports from Mazama Science (click on for big). So far, China is winning, it must waste or be left behind: China currency is tethered to the dollar, its fate is intertwined with ours. To run in place the Chinese must waste more than the Americans, adding to both countries’ prodigious waste- costs.

As in America, China’s waste is promoted to the citizens as ‘progress’. These ‘improvements’ never acknowledge China’s multi-thousand-year traditions or even meet any real human needs. Instead, grandiose follies are heaped upon monstrous excesses … the process serves to rationalize the excesses’ so-called ‘value’. As with the other developed countries, sunk capital has the country by the neck. China’s vast waste is collateral for China’s vast debts, to service the debts it must add to collateral. The country devours energy today so that it might devour even more tomorrow. It’s always tomorrow, good or ill, China must devour otherwise the hated Americans will do so in its place.

Stone Heads

The bravado of the xenophobic industrialism rings hollow, to win this war over resources is to lose: permanent smog, water pollution, desertification, land theft, an out of control loan-shark economy and high level capital flight. China growth is gained by constructing buildings rather than using them: ‘growth’ is thousands upon thousands of gigantic stone heads concrete towers.

Credit-driven speculation in apartments and office towers in China is intended to be a hedge against rising energy costs, just like recent credit-speculation in tract houses in the US and Tokyo office buildings twenty years ago. The Big Idea is that building prices will rise faster than the credit-inflated fuel prices. By this way of thinking, fuel is always affordable because what sets the price — credit — is the means to meet the price — credit driven momentum-chasing in asset markets. Fuel is simply another asset, rationed by access to credit.

These kinds of hedges arbitrage stupidity, they live in the hedgers’ minds and nowhere else. On Planet Earth fuel is either plentiful or not: what sets the price of fuel is the credit-cost to pull it from the ground plus a supply-and-demand driven scarcity premium. The real cost of fuel increases relentlessly over time because of depletion, meanwhile, the internal costs of the hedges increase as well. Even when fuel costs remain low, as they were from the mid-eighties to the end of the millennium, the hedges become unprofitable and collapse.

For hedgers to gain their fuel, the asset(s) must be sold to others more effectively greedy than the hedger. Whether they sell to actual customers or take out loans against their investment doesn’t matter. The selling reduces the number of potential customers: sooner or later they run out, even in populous China! That is the end of the hedge.

The Chinese who buy these buildings are unwitting conscripts in the great global currency war over petroleum. Millions of relatively prosperous Chinese have invested the life-savings of generations in future energy waste. In a world with diminishing energy supplies, the investments are stranded. The Chinese cannot afford to make use of all the currently empty buildings and the cities that contain them, otherwise they would be doing so! The Chinese would have been much better served to invest in conservation, instead they have invested in ‘conservation by other means’.

Another reason for the Chinese building frenzy is to literally set in concrete the claims of developers and urbanites over prior occupants of China’s countryside. This Big Idea is no different from Anglo-American claims that were perfected on native lands in the 19th century with farms and mines, railroads, towns and barbed wire cattle fences. There are certainly less costly ways that are equally effective and more equitable than the Big Stone Head approach.

Keep in mind, when the Chinese property bubble unravels like all the others, the banking system will be ruined. So too if one of the major currencies such as the euro, sterling or yen fails … that is, if China wins the currency war. China holds hundreds of billions- or trillions of these currencies as reserves, its positions are far too large to unwind. A currency failure, a run out of banks or a bond market hiccup would bankrupt China finance … which in turn would bankrupt the rest of the world’s finance.

Mercantilism is another Big Idea energy hedge. A country obtains petroleum at a price and uses some of it to make high-worth goods such as (fake) Gucci handbags or Lexuses which are sold to customers overseas. The gains from the sale pay for the country’s fuel plus profits to the manufacturers.

The mercantile country and its firms borrow against the overseas trading partners’ accounts. Exporter’s fuel consumption grows larger than what it ordinarily would be without the trade. This is the presumed intent of today’s currency combatants, for each become successful mercantilists and have ‘others’ subsidize their fuel waste.

Japan Crude 030313

Figure 2: Japan is going broke because its fuel imports are too costly to be met by export of its goods to increasingly broke customers. The reason the customers are broke is high fuel prices! They cannot find any countries to subsidize their own fuel waste.

If Japan doesn’t depreciate its currency it cannot export or win the petroleum war. At the same time, if it depreciates any gains from exports will offset by increased fuel cost. If the yen is sufficiently beaten down the world’s fuel suppliers will not accept it and demand dollars instead.

Japan has large foreign currency reserves but these are collateral for domestic debt. Like China, Japan has few options to free up its collateral: whatever collateral it can access is over-committed.

Japan is orbiting the drain, the recent trade deficit is the last straw, the country has too many obligations to meet … all of them coming due at once. The inflow of overseas funds into Japan and the carry trade have been the means by which the country has endured deflation without the associated depression. Japan now needs more waste — growth — or a return to the inflow of overseas funds.

Depreciating the yen is a symptom of Japan’s “potentially untreatable infection” — its past success is now killing the country. Japan is beyond desperate: on deck is nominal GDP (NGDP) targeting. This is the Bank of Japan making unsecured loans (because the Japanese private sector finance is not making any).

Sadly, the Japanese establishment does not understand why the private finance does not lend … they are in denial like the rest of the industrialized world. The private sector is bankrupt, it cannot borrow! So are Japan’s overseas customers, they just aren’t announcing it. Instead, they pretend and hope nobody is paying attention.

Deflation feeds on remedies designed to defeat it. All avenues here lead to entropy: if the private sector delevers, the government itself becomes insolvent. If Japan’s central bank leverages itself, it too becomes insolvent and there is no lender of last resort. The result is a run on Japanese banks and out of yen.

Around the world, various finance markets are pressurized, the Big Idea is to wring out volatility and create a Potemkin market that can pass as the real thing; ditto commodities, particularly gold, copper, foodstuffs and petroleum.

Time marches on and costs of volatility suppression are added to other ex-market costs, volatility emerges where the suppression forces are weakest. Right now, this is the currency markets. Switzerland can peg its currency to the euro at an affordable cost, just like the Chinese can peg its currency to dollars. Today’s question is where and how does Japan fit in particularly with its new trade deficit?

Japan has its own currency, unlike Europe, its treasury can issue yen to retire debt, extinguishing the self-created currency along with the debt. However, this remedy is likely too late to apply b/c the Japanese banking system is insolvent. An issue of government notes sufficient to effect Japan’s debt market would cause the banks to collapse.

Meanwhile, the Big Idea in Europe is the purposeful absence of any ideas at all! The technocrats are disappearing leaving a vacuum, to be filled by demagogues.

Europe crude 030613

Figure 3: Europe produces about twenty-percent of its own petroleum fuel from rapidly depleting native sources, the rest must be imported. The mercantile states Germany and Italy export energy waste to others to meet their expenses, however, these customers cannot use the exporters’ waste to meet theirs. Like Japan, Europe is bankrupt.

The big difference between Europe and Japan the euro non-currency. Factionalism suggests Europe is set to lose the currency war and have its petroleum consumption shifted to others such as China and the United States. In other words, Europe cannot afford the euro, any currencies it can afford are nut suitable for the petroleum import trade. Because the euro is the currency of none of Europe’s states, there is no real issuer nor any lender of last resort, only a pretender.

Europe’s approach to the euro has been typical of the humans’ approach to everything else: to grasp what is immediately wanted then ignore life-cycle consequences. Europe wanted the euro as an energy hedge: it gave smaller countries the means to import waste from both Germany and OPEC. Now, these small countries cannot pay for the imports and the currency does not allow for the transfer of these costs to ‘others’. The waste — of course — is worthless, it cannot be ‘repossessed’.

The outcome is a Europe frozen on the spot. If it tries to pay for the expensive euro the entire continent will be ruined and unable to afford petroleum. This is the ‘austerity’ dynamic in force currently. If any country abandons the euro, the entire enterprise falls apart and there is nothing left to the Europeans with which to gain fuel. It is hardly likely that any petroleum supplier will accept a national currency from a bankrupt nation if the same nation’s bankruptcy has fatally undermined the euro! Of course, if the euro fails so will China finance, which holds massive amounts of euro-denominated debt as reserves, far too many to be readily rid of … without precipitating the disaster that it so desperately seeks to avoid.

Like so many other countries, Europe has an unraveling property bubble/energy hedge that also failed.

Meanwhile, the exit of the technocrat is the last step in post-petroleum down escalator toward chaos. After the technocrat comes zero-government, factionalism or abdication of governing authority. This is not to say that political and administrative reform is not possible; without new resources or an ‘upside down’ approach that husbands capital there is no foundation for reforms. The factions all promise MORE and a return to waste: the broken government is able to export fuel consumption elsewhere more efficiently and with less cost than do the factions, technocrats or ineffective government.

Zero government = entropy.

The problem in Europe and elsewhere is at the end of the everyone’s driveway. Every single day the Europeans must import twelve million barrels of crude oil at staggering cost, they must borrow from New York and London financiers to do so, as they have for ever day since the end of World War Two. Europe’s pathetic car industries cannot pay their own way much less the wasteful continent’s gigantic fuel bill. Europe is beyond insolvent, beyond broke, by rights it should never borrow again, ever, from this point in time until the sun consumes itself and balloons to fill the solar system. Europe’s bosses believe with this bit- or that bit of beautifully embellished central bank promises it can claim a good that is vanishingly rare and valuable … so that this good might be burned up for time-wasting entertainment purposes and economists’ reputations only.

This is the real Big Idea, it has not materialized in the imagination of the modern world … yet. It emerges from a concrete Big Reality that the modern human works hard to ignore. Modernity is intrinsically dysfunctional, its products are entropy and ruin. Its managers defend their right to waste as they please at the expense of the rest, the non-managers demand the right to waste along with the managers: this is madness! That a war might be waged with competitive waste as a tactic speaks to the inherent moral and physical bankruptcy of the ‘modern’ idea: it has hollowed itself out. At the end of the day the competitors are all smashed, together. There can realistically be no other outcome.

The next Big Idea must be an economy that rewards conservation and the husbandry of capital by every and all means, that treats all of capital as precious, rather than a substitutable ‘input’. It isn’t such a hard idea to grasp, its application is becoming a desperate necessity. Stewardship is less difficult than competitive depreciation financed by increased resource waste. In a well-functioning conservation economy shepherds of capital become rich and by so doing the others would become rich along with them. There is still entropy, but not the Hammer of Thor.

Time is running out … we adapt or else.

The End of Technocracy and Zero Government

Off the keyboard of Steve from Virginia

Published on Economic Undertow on February 26, 2013

Detroit Tax Map 1

Figure 1: Detroit city tax map from WDWOT (click on for interactive big), (HT Atlantic Cities): Detroit is a good model for the rest of the United States as the country sinks into post-petroleum depression. One symptom is the inability of the city to provide basic services for its citizens because of shrinking revenue. Owners in the city are unable or unwilling to pay property taxes.

Discuss this article at the Epicurean Delights Smorgasboard inside the Diner

The map illustrates properties which are current, properties in arrears and those in states of foreclosure. Only a handful of neighborhoods within the city are home to owners current on their property taxes. You can adjust the map to determine the degree to which property in the city is impaired, for instance half the city looks to be in tax arrears and under threat of tax auction.

Here’s Atlantic Cities:

 

Detroit’s Property Tax Black Hole, in Map Form John MetcalfeTo get a handle on how bad of a tax mess Detroit is sitting in right now, look no further than (above) depressing map showing every property in the city suffering “tax distress.”What looks like a big hunk of moldy cheese is in fact the property-tax status of 384,861* properties, as logged by Wayne County’s online tax portal. The lighter yellow boxes represent more than 59,000 distressed buildings where the owners haven’t paid their taxes. Squished among them are a honeycomb of orange boxes, indicating that these properties have such a large backlog of delinquent taxes that they’re now subject to foreclosure. (Count those up and you arrive at about 74,000 doomed properties.) The plots shown in red, meanwhile, are the 18,246 properties that have already been foreclosed.

On the bright side, gray areas mean those places don’t have tax issues. Lucky!

 

The gray areas are highways and city streets, parkland, commercial structures that earn enough in rent to pay expenses and non-taxable city property.

Detroit does not currently have a purely technocratic city administration but one looms over the horizon. Perhaps the establishment in Michigan can rethink the process as technocracy is an endgame, it will fail in Detroit as it has in Greece and Italy.

What is technocracy? It’s an establishment- installed ‘non-political’ manager with powers to restructure a jurisdiction to protect big business interests regardless of social or political consequences. Jurisdictions that have lost the ability to borrow and thence roll-over debts and pay interest are candidates for the technocratic ‘fix’. Meanwhile, the same inability to borrow strands the technocrats who have no tools to work with.

Technocracy tends to be the last step before default/repudiation of non-payable debts. After technocracy comes ‘zero-government’; the capitulation of the establishment, its dissolution into factions and chaos. This is part of the transition to a post-petroleum economy and breakdown of the status quo. Arguably, Detroit has endured ineffective, paternalistic ‘pro-business’ leadership since World War Two: the non-government is a necessary precondition to technocracy which surrenders shortly afterward to zero-government.

Hat meet rabbit: an emergency managers cannot magically deliver the means to repay tax arrears or interest on loans. To do so requires the creation of thousands of new jobs which is never within managers’ scope of employment. Their duty is to cut jobs. Technocrats lack imagination, they are repo-men They provide administrative smokescreens behind which the creditor interests pick over and privatize remaining marketable assets that have previously been too costly to pillage. The problem is … when governments reach the technocratic inflection point assets aren’t worth anything.

Here is the current Emergency Manager of the Detroit Public School System:

 

Roy S. Roberts was appointed by Gov. Rick Snyder in May 2011 to serve as Detroit Public Schools Emergency Manager under the Local Government and School District Fiscal Accountability Act. Mr. Roberts, who was most recently Managing director at Reliant Equity Investors, has decades of managerial, financial and organizational experience, having served as the highest-ranking African-American executive in the U.S. automobile industry as Group Vice President for North American Vehicle Sales, Service and Marketing of General Motors Corporation from July 1999 to April 2000. Prior to that, Mr. Roberts also served as Vice President and Group Executive, North American Vehicle Sales, Service and Marketing of General Motors Corporation from October 1998 to July 1999. He was Vice President and General Manager in charge of Field Sales, Service and Parts for the Vehicle Sales, Service and Marketing Group of General Motors Corporation from August 1998 to October 1998. He served as General Manager of the Pontiac-GMC Division from February 1996 to October 1998, presiding over the merger of Pontiac-GMC …

 

Do you laugh or cry? Roberts offers management expertise to a bankrupt school system gained from within the bankrupt General Motors as a glorified car salesman! Roberts is not expected to improve learning in Detroit, but to facilitate the flow of public funds toward the private sector … this is what technocrats do.

 

3.1 Salary The Emergency Manager’s salary for services rendered under this Contract shall be $250,000.00 per year, paid by the District.

 

He is additionally compensated for personal expenses. Unsurprisingly, the citizens refuse to pay taxes. Tax evasion/declining government revenue is a characteristic of technocracies: why throw good money after bad? Here’s Mike ‘Mish’ Shedlock:

 

Half of Detroit Properties Have Not Paid Taxes; Update on Detroit Bankruptcy The hollowing out of Detroit is nearly complete. All that’s left is a bankrupt shell of a city with no services and scattered citizens that do not pay taxes.The Detroit News reports Half of Detroit Property Owners Don’t Pay Taxes.“Nearly half of the owners of Detroit’s 305,000 properties failed to pay their tax bills last year, exacerbating a punishing cycle of declining revenues and diminished services for a city in a financial crisis, according to a Detroit News analysis of government records.

The News reviewed more than 200,000 pages of tax documents and found that 47 percent of the city’s taxable parcels are delinquent on their 2011 bills. Some $246.5 million in taxes and fees went uncollected, about half of which was due Detroit and the rest to other entities, including Wayne County, Detroit Public Schools and the library.

Delinquency is so pervasive that 77 blocks had only one owner who paid taxes last year, The News found. Many of those who don’t pay question why they should in a city that struggles to light its streets or keep police on them.

“Why pay taxes?” asked Fred Phillips, who owes more than $2,600 on his home on an east-side block where five owners paid 2011 taxes. “Why should I send them taxes when they aren’t supplying services? It is sickening. … Every time I see the tax bill come, I think about the times we called and nobody came.”

 

Shedlock’s ‘solution’ is technocratic: to quash the unions and fire workers. It would be far better to fire the automobiles instead. Raising taxes in a depression is a failure, blaming the city workers is blaming the victims.

In Detroit, homeowners are broke and unable to pay, others are in dispute with the city over the amount of tax due: real estate worth has plummeted over the past 20 years and assessments are ‘uncertain’. There are questions about durable title particularly on foreclosed properties. The large banks and mortgage servicers own multiple properties they look to shift the burdens each property represents onto the taxpayers.

Many thousands of houses in Detroit are burn-outs or dilapidated and require demolition. By not paying taxes, the banks force the city to take over properties and demolish buildings at city’s- rather the banks’ expense. In Detroit, the cost of demolition is not much less than the average cost of a house.

Occasionally the government runs amok: houses in Detroit are demolished after people buy them … to save them from demolition. Why pay taxes and support ineptitude or criminals?

It is likely to be difficult for Michigan’s governor to find another car salesman willing to become Detroit’s Next Great Technocrat! Pre-failure failure in Detroit, (Huffington):

 

Asked during a short, one-on-one session with The Associated Press if any potential candidates for such a job (emergency manager) had already declined it, Snyder responded: “Oh yeah. There were quite a few people who were in that camp. Because if you think about it, and this is not to imply we’re going to do one, but it would be an extremely challenging position.” Challenging may be an understatement.Mayor Dave Bing has placed the city’s current budget deficit at about $327 million. The report given to Snyder Tuesday by the state-appointed review team said the accumulated deficit as of June 30, 2012, would have topped $900 million if Detroit leaders in recent years had not issued bonds to pay some of its bills.Long-term liabilities, including underfunded pensions, is more than $14 billion, and in recent months the city has relied on bond money from an escrow account to meet its dwindling cash flow needs and to pay city workers.

The review team also said that because of its cash deficit the city would have to either increase revenues or decrease expenditures, or both, by about $15 million per month between January and March to “remain financially viable.”

 

The ‘Blame the Victim’ Game in Detroit

 

In areas where technocracy has been installed such as Greece, both the initial conditions and the failure of the process is blamed on the inhabitants. Greeks are ‘corrupt tax-cheats and lazy’. Detroiters are ‘stupid, drug-crazed Negro savages bent on murder and destruction’, French are ‘near-communists and cowards’, Irish are ‘ugly … drunken child molesters’. The purpose of the blame game is distraction while retirement savings are stolen by the establishment. The elderly ‘deserve what they (don’t) get! The blame game hits the target by appearing to miss it.

In Detroit, the citizens didn’t chase retail stores away, they didn’t over-invest in the auto industry, they didn’t ghettoize the city with ill-conceived developments and a web of freeways, they didn’t pollute the city with lead, zinc, chromium, mercury, toxic petroleum-based chemicals, they didn’t sell the city out to billionaire developers.

The citizens didn’t pave the city over with parking lots or built thousands of monstrously ugly concrete box- buildings. Detroiters are being shot by criminals, being driven out by block busting and urban decay, losing what little property wealth they had, having already lost hundreds of thousands of jobs. Detroiters have been abandoned by their country not the other way around.

The US spends hundreds of billions of dollars in Afghanistan, why not Detroit?

Detroit’s notorious crime problem appears to be the result of lead pollution from fuel additives and manufacturing residues in the soil along with fumes from burning lead paint spewed into the air from the thousands of building fires taking place every year in the city … rather than skin color.

The black establishment in Detroit has never been able to stand up to the white establishment which owns everything important, which controls the city’s budget, which anoints various city administrations, which constantly looks for opportunities to blame blacks for everything gone wrong.

Since 1920 the auto industry has run Detroit like a coal mining ‘company town’. Most of the housing stock in Detroit was sub-standard as built: cheap frame houses thrown up as rapidly as possible on an unrelenting grid. Detroiters are learning the hard way: land use and urban design matter. The citizens did not design the buildings or lay out the streets. What charm the city once possessed has been swept away for parking lots and cheap commercial and institutional ‘facilities’. The citizens did not do this, it was business interests seeking the quick buck for themselves at the expense of everyone else.

Following the Great Wave of European master craftsmen to the city in the 19th century, most of the emigres in decades following have been unskilled, uneducated agricultural workers seeking assembly-line jobs. They added little to the community other than modest paychecks and a burning desire to relocate themselves to the suburbs as soon as possible. Even in the 1950s, when the auto workers union gained touted increases in pay and benefits, the companies they worked for were shrinking, first by way of automation then by ruinous competition and business failure.

The unraveling of the US car industry has been the decline and fall of Detroit: the population has shrunk from 1.8 million to less than 700,000. Who is to live in the abandoned houses? Even without the fires and the blight, half of the ‘original city’ would be empty. Where are the jobs?

Meanwhile, the Detroiters are on the hook for tens billions of dollars of debt taken on to run the ossified city government, pay pensions, build football and baseball stadiums … arenas, improvements for casinos and retail ‘big-box’ stores. The reason Michigan keeps Detroit at arm’s length is because the state is as bankrupt as the city. If it does nothing, the city’s finance burdens will crush the state, if it tries to ‘fix’ the city the effort will crush the state just as well.

The establishment has created this mess, not the Detroiters. Meanwhile, technocracy marches over the edge of the cliff around the world:

– Japan’s ‘democracy’ has been a facade that masks control by business cartels, in this way all recent governments in Japan are technocratic. Japanese citizens are confronted with the doubling of consumption taxes by 2014: these are taxes levied to meet the spiraling cost of servicing Japan’s monumental debt. Enter the new ‘Shinzo Abe 2.0′ government promising to borrow more, faster … presuming Japan’s total debt burden can be added to without causing a crash. Increasing numbers of Japan’s citizens are elderly, they do not consume, they are unwilling to pay more taxes. Meanwhile, Japan’s overseas customers are broke. They cannot buy Japanese products and by doing so lend to the Japanese.

The outcome is a currency market panic … that is not likely to end well.

– The Greeks are bankrupt, the European Union has bailed out (some of) Greece’s lenders while burdening Greeks with higher taxes that the Greeks refuse to pay. The technocratic government installed by the IMF, European Central Bank and the EU has collapsed, the country now has post-technocratic ‘zero government’.

– Italians have been confronted with higher technocrat-imposed taxes: they evade them or refuse to pay. Voters have just now jettisoned the current IMF-supported technocrat regime. The outcome is post-technocratic zero-government in Italy.

– The French unraveling is well underway the current government is the precursor to a technocracy. The Socialists are incoherent, they appear to have no set strategy or clear understanding of their dilemma which is the consequence of extinguished capital. When the French cannot borrow cheaply, they will be given the ‘Italian Choice’: to install a technocratic regime or be frozen out of credit markets.

– Sequester in the US is technocracy-by-the-numbers, the theft of retirements under the guise of ‘responsible government’ for the benefit of lenders. After technocracy fails comes zero-government.

Moderns look to waste resources but the outcome is to become Detroit in every sense. Japan and Greece have passed their respective points of no-return. Their ability to waste resources is collapsing because their external debt subsidies have been curtailed, they cannot borrow to repay their debts so they cannot borrow to obtain fuel. Meanwhile, working out of debt is beyond what can be done with human labor or what modest remaining capital can leverage.

The wild card in Italian politics: by John Hooper and Lizzy Davies (Guardian UK):

 

Italy on Monday night risked pitching into political turmoil as projections of the result of its general election pointed to a hung parliament and confirmed that the anti-establishment Five Star Movement (M5S), led by an ex-comedian, Beppe Grillo, had exploded onto the national stage. So far, Grillo has ruled out supporting either side in his drive to sweep away Italy’s existing political parties and the cronyistic culture they support.

 

Ambrose Evans-Pritchard (Telegraph UK):

 

In an earthquake result, the Five Star protest movement of comedian Beppe Grillo looked likely to emerge as the biggest single party in the lower house. The scourge of bankers and corrupt elites, Mr Grillo has campaigned for a return to the lira and a restructuring of Italy’s €1.9 trillion (£1.64 trillion) public debt. The conservative bloc of ex-premier Silvio Berlusconi looked poised to win the senate, coming back from the political grave with vows to rip up the EU’s austerity plans and push through tax cuts to pull Italy out of deep slump.“The majority of Italians have clearly voted against the Brussels consensus. That is a damning indictment,” said Mats Persson from Open Europe.A euphoric rally on European bond and stock markets early on Monday gave way to abrupt selling as it became clear that Italy would be left with a hung parliament and no consensus over fundamental policies, leaving the country almost ungovernable.

 

There is little chance of escape for Italy from zero-government, just like Detroit. The innovation of the Five Star Movement is that it spurns TV and the need for officials to sell themselves to business interests in order to raise advertising money. Five Star candidates offer their platforms on Facebook and Twitter. None of this addresses our evaporating capital problem. Italy and the rest need new ideas about how to wisely use what capital remains: to husband it for the future rather than burning it up faster and faster.

Our current economy uses the destruction of capital as collateral for ‘infinite’ loans. This process must be voluntarily ended or it will be ended for us with zero-government as a component of the process.

Europe and the rest of the world is being de-carred: this is because cars are unaffordable luxuries. For some reason, this is too complex and difficult a problem for economists and policy makers to grasp! What is ‘growth’? Always more and more cars. Why isn’t there any growth? Because adding more cars amplifies the car-cost problem, which is the increasingly efficient destruction of capital. The solution to our capital destruction problem isn’t baling out lenders … presumably so they might lend again … but to end cars and their monstrous claims against capital!

The world’s fuel supply is shrinking along with credit availability. Without a constant supply of new fuel there are shortfalls. Economic activity is curtailed as a result. Without that constant supply of new credit, nobody can retire old loans or service them, nobody can obtain fuel. Credit is constrained further in a vicious cycle … there is no way out.

The establishment insists that the problems in Detroit and elsewhere is the social safety net/excess savings. Lenders complain about the safety net, insisting savings impinges debt repayment. Yet gutting it represents only a temporary reprieve, the debts cannot be repaid because the collateral for the debt is waste and the instrument of waste is cars. In a way, Detroit is a victim of its own success.

The cars’ days are numbered: the car and tire manufacturers, the fuel industry, the highway construction industry, the tract house industry, the big-box retailer industry, the truck-transport industry, the gigantic 80-story concrete penis in the middle of town industry, the military industrial complexes, the finance and insurance industries … all of the automobile dependencies are bankrupt, a gigantic, worldwide dinosaur that has cut its own head cut off by way of its pointless success … too stupid to lay down and die.

Die it will and very soon, children, very soon … not before threshing everything in the world to bits, first.

Coming of Age in the Age of Oil

Off the keyboard of RE

Discuss this article at the Kitchen Sink inside the Diner

In what seems to me at times like another life entirely, I reflect back on my years growing up in the Age of Oil.  I wrote some about this in Pump Up the Volume and more about a later period in my life as an Over the Road Trucker.  Still to come at some future date the Pigman Years on Wall Street, the School Teaching Years and so forth, and I still have more Chapters to write on the Over the Road years.

For today though, I am going to review experiences I had travelling around Europe in the summer after my HS Graduation.  I graduated HS at the age of 16, On the Edge of 17.  Skipped a couple of years through the period, moving back from Brazil I was placed up a year enrolling in the NY Shity Public School system, then in Junior High I went into the 2 Year “Special Progress” program they had which allowed you to do the normal 3 Years of JHS in 2 years.

Besides being chronologically pretty young on HS graduation, I also was physiologically pretty young.  I looked probably about age 13-14 when I was travelling around Europe with a Backpack on the Interrail system.  I shaved about once a week at the time to give you a clue as to where my morphology was at the time.

Anyhow, in the 2 years prior to HS graduation I took on summer jobs to save money for my Journey and also for the Hewlett Packard HP-35 Scientific Calculator I coveted to replace my Trusty Slide Rule.  Actually ended up with an HP-45, which came out JIT for my Freshman Year of College at Columbia.  Cost about half my Summer Earnings, and really I would have done fine with just a Slide Rule, but just HAD to have that cool piece of technology.

In the Summer after my Sophomore Year I worked in a Shower Curtain Factory in the Garment District of NYC, before all this shit was moved over to China.   I was actually an Illegal Child Laborer that summer, because I was not old enough for Working Papers until the end of the summer on my Birthday.  Nice Irony that the Son of a Chase Manhattan Pigman Bankster would be a Sweatshop Worker, at least for one summer, eh?  LOL.

Anyhow, this was a Mom & Pop “Factory” which really just took up one floor of an old Warehouse, employed about 4 Hispanic and Chinese ladies Sewing the Curtains and ME putting the Grommet Holes and Grommets into the top of the Shower curtain.  I worked at an entirely mechanical station where I would depress a floor pedal with my foot to cut the holes, then put Grommets into them and use another mechanical machine to squish the grommet halves together, the final completion of the Shower Curtain before Shipment out.

Needless to say, this was EXCEEDINGLY boring work, and by the end of the second week I was about ready to blow my brains out, except at the time I did not own a Gun. LOL.  HTF anyone works these sort of Factory Assembly Line Job for a LIFETIME is beyond me.  Over in China today, Foxconn Workers commit Seppuku on a Daily Basis, and I am not surprised in  the least by that one.

Fortunately I had a friend from HS who had not been able to land a Summer Job, and I handed this job off to him and became the Shipping Clerk.  This was WAY more interesting, I got to not only Fold the Shower Curtains Neatly, but also Tape the Package Closed, Label and Address it and Stamp it with the appropriate postage for its weight.  Numerous tasks of a High Level of RESPONSIBILITY!  LOL.  Joking of course, but compared to stomping your foot over and over again making holes in the top of a Shower Curtain, this was positively INTERESTING stuff.  LOL.  Plus I was earning like $3/hr Minimum Wage and tucking it away in my savings account for my Journey and the Cool Calculator I wanted.

Despite the excruciating BOREDOM of this Summer of Work (my first experience in the “working” world), I somehow made it through without committing Seppuku and at the end had a few hundred DOLLARS in my Bank Account.  My OWN MONEY!

The next Summer, I got my first Job on Wall Street, age 15. 🙂  Courtesy of Dad the Pigman and his friend who was CEO of Merrill Lynch at the time.  I was dropped into the Accounts Receivable Department at a Desk with an Adding Machine, and each morning a Pile of Checks would be dropped on my desk, and my Job was to punch them all into the Adding Machine and run a Tape to tally them up.  You had to do this at least Twice and come up with the same result both times; if the results were different you had to go back through the tape to find the error, even if it was just 1 Penny.  Then you had to run a new tape and get it all RIGHT.  If you made a mistake on this one, Rinse and Repeat.  Before you could turn in your work you had to have 2 perfectly clean tapes with exactly the same result on them.

Well, this also is Mind-Numbingly BORING stuff, and at the time I wasn’t all that great on a 10-Key Pad.  So first off I was SLOW compared all the pro clerks whose fingers just FLEW over the 10-Key.  Second, I generally sucked at this and made mistakes, and the typical Clerk in that sea of desks (no Cubicles at that time) could run 10 Tapes in the time it took me to run 1.  However, I was put there by the CEO, so nobody complained how bad I was, and they were paying me just slightly over the minimum wage by $1.  This however was better than Shower Curtain salary, and I found it marginally COOL at this time to put on a Collar Shirt and Tie each morning for something other than Church or a Wedding.

So in two summers of real “Work”, I managed to save somewhere in the negihborhood of $1500-2000 or so, including Birthday Money and Christmas Money and so forth.  $350 1970s dollars of this went to buy my HP-45 Calculator, the rest I earmarked for my Big Trip to Europe!  A similar Calculator to that HP can now be purchased for around $50 2012 dollars at Walmart.

First deal was to get over there as CHEAP as possible, and at the time a Brit by the name of Freddie Laker started Laker Airlines, run on the same principles of Greyhound Bus Lines, no Reservations you bought your Ticket at the Door and hopped on the Plane.  The price of this ticket I recall was around $150 at the time.

Second Big Expense was the Railpass.  I could have bought a 2nd Class Eurail Pass similar to the Interrail Pass the Eurotrash had access to, but I was advised to buy the 1st Class one, because you generally got several seats empty and could stretch out to sleep lifting up the armrests.  This was a good Investment and worth the extra $200 or so I paid for a 6-week Railpass.  Total cost I recall was $350 or so.

So all in all, the travel cost to get there and the cost of the railpass knocked off about $500 from the Savings, leaving me slightly over $1000 for 8 weeks in Europe.  My Plan was to spend the First and Last Weeks in Jolly Old England around London so I didn’t need the Railpass for that.  So Weekly Budget was around $125, about $18/day.  If I spent $10 on a Hostel bed for the night, that left $8 to Eat with.  However, while the Railpass was Active, I took mainly Night Trains and slept aboard the trains, saving money on Hostels this way.  Also, when in the South of France and in Spain, I slept on the Beaches periodically with other wandering Eurotrash Teens and some Amerikan ones also.  So actual Budget was probably closer to $25/day on days I did not buy a Hostel bed.

By the standards of the Eurotrash Teens Interrailing, I was positively LOADED with money, many of them had NO MONEY with them and just played their Guitars on the Streets to get Daily Change to eat with.  Many of the girls would sleep with you just for a meal and a few bottles of beer.

The first girl I got involved with I did NOT get to sleep with, she was an “Older Woman” Brit Girl around 25.  I met her on a London Bus 2 days after I got to London and she invited me to stay at her “Flat”.  She was kind of Motherly and was surprised to see what looked to her like a 13 year old boy travelling around with a Backpack.  She heard my “Amerikan Accent” talking to the Fare Collector on the Bus and started a conversation with me.  Anyhow, she saved me several days of Hostels even though she refused my overtures for Nookie. LOL.

From there at the end of the Week I Activated my Railpass and got on a Hovercraft over to France, also covered with the First Class Eurail Pass.  It also covered Ferries to Greece and Ireland, it was an incredible Bargain.

Arriving in Paris I walked around for a while navigating with a Map I picked up at the train station and a little Book I had which listed all the Hostels, restaurants etc that Students could go to on the cheap.  However, the first two Hostels I hit were DUMPS, plus the Desk people in both places were RUDE beyond belief, and that is coming from a New York Shity boy quite used to Rude People.  LOL.  I  stayed one night in Paris and headed for the Train Station in the morning, Destination SCANDINAVIA!

Like most 16 year old boys, the Numero Uno thing on my mind was SEX!  I wasn’t travelling around Europe to absorb the Culture or eat Foreign Cuisine, I wanted to GET LAID!  LOL.  A few years before I headed to Europe the film “I am Curious, Yellow” had been released in the FSoA, it was a Swedish Produced X-Rated Film, the first such film I ever saw.  Produced in 1967, but I don’t think it made it to the FSoA until the early 70s.  At least I didn’t see it until the 70s, I am sure I was at least 13 or 14 when I saw it.  The film convinced me Swedish Girls would jump into the sack at the drop of a hat.  LOL.

Anyhow, arriving in Stockholm with a Roll of Quarters in my Pants (LOL), I was disappointed to find out that there weren’t too many Swedish girls running around Naked and besides that Stockholm was ridiculously EXPENSIVE.  Even the Hostel was expensive and the restaurants were ridiculous.  So once again I spent one night in Stockholm, then headed back to take the train to…AMSTERDAM!

Amsterdam was (and still is I think) famous for its Red Light District, where State Sanctioned Prostitution is Legal.   Also plenty of DRUGS floating around Amsterdam at that time, it was the Hashish Capital of Northern Europe I think.  There was also VERY cheap Hostelling available in Amsterdam, I stayed on a Barge in a Canal that charged $5/night.  It was so cheap and entertaining I stayed in Amsterdam a whole Week, going to Dance Clubs, Smoking Hash at night on the Barge with the Eurotrash and even wandering the Red Light District to Buy some SEX.  I never did though because first off the $50 the Pros were charging was Outta Budget, and second they just did not seem very appealing to me sitting in their Windows in Garter Belts and so forth.

I DID finally get laid in Amsterdam though, but NOT by Eurotrash, Dutch Prostitutes or Swedish Girls, but by another Amerikan!  Met her in a Club, invited her back to my dive on the Barge and did the horizontal bop after Bonging several bowls of Hash with her!  However, she ditched me after 2 days for somebody else.  She was in Europe to do the same thing I was, collect Notches on her Gunbelt, without having her “reputation” sullied at home.

I did learn in Amsterdam though that the best ACTION was down in the South in Spain, Italy and Greece and that’s where all the Hot Topless Girls were to be found  on the beaches also!  So after getting Ditched by the Yank Slut it was off for the long Train Ride down south, and I elected to go to Greece first since I was nearing Midway in the Adventure.  This was the furthest to get to and required a Ferry Ride from Brindisi in Italy over to Igoumenitsa in Greece as I recall.

Greece was really cool from the traditional Tourista viewpoint, checking out the Acropolis and Parthenon and so forth, the Food was cheap and great also but I didn’t meet any GIRLS there.  Also, apparently the best places to Vacation in Greece were on the Greek Islands, and to get to them you had to have a Yacht for the most part.  I went down to one of the Yacht Clubs to see about hooking on as Crew since I know how to Sail, and a Kraut dude with a really NICE 50′ Beneteau Yacht was agreeable to my crewing for him.  Just when he made a pass at me after a few drinks I got the picture on that one and elected not to go for that cruise.  Turned out to be a good choice since had I taken that cruise I would have missed meeting Ingrid later in Nice.

So I did not see much of Greece on this trip, it wasn’t until a cupla  years later when I leased a Yacht with some friends that I got to Cruise the Greek Islands, which really were marvelous in those days and might still even be.  The Plumbing was Crude to non-existent and many of the Tavernas cooked over open flame BBQs, but all the fish, feta cheese, olives, lamb chops and produce were Local so in theory they could still be OK.  35 years later though much has changed, so probably not.

So, it was back to the Port at Igoumenitsa to catch the Ferry back to Brindisi, where I met a Finnish couple, a Guy & Girl travelling together, quite common also of course.    I’ll change some names here to maintain Anon some, call them Jensen and Janna.  I met Jensen first, I was playing Chess against myself waiting for the Ferry and he asked me if I would like to Play some with him.  This before the days you had laptop computers or I-Pads to play against of course.  I had a little Pocket Magnetic Set  I played on with me, and it was a pretty good conversation starter on all the Plane Rides and Train Rides I took.  Almost always found a Chess Player in Europe.

Jensen was pretty good too, and he was funny in a Dour sort of way as well.  We were playing for about an hour when Janna showed up, and OMFG she was STUNNING.  I was IN LOVE with her the minute I saw her.  Jesse’s Girl though.  I was DETERMINED though I would get into Janna’s Pants, and after three days travelling with them I did.  Unfortunately by day 5 Jensen figured this out, we got in a Fistfight, Janna was crying and pleading with Jensen telling him she was SORRY and I felt like a complete ASSHOLE, which of course I WAS!  So I split off from Janna and Jensen in Italy after about 5 days of the Adventure of trying to STEAL another guy’s Girlfriend.

In Italy the first city I hit to check out after the split was Rome, and I did the Tourist thing checking out the Vatican and Michaelangelo’s artwork and so forth.  I wasn’t looking for Nookie for a couple of days there, the experience with Janna and Jensen had made me feel very GUILTY and STUPID.  But of course, being On the Edge of Seventeen and all by day 3 I was once again HUNTING for BABES!  That is how it GOES when you are a Male On the Edge of Seventeen.  Everybody Knows.

Nothing real good turned up in Rome, so it was back on the Interrail to head for Nice in the South of France this time, where I had been told the Beaches were PACKED with Topless Girls, which in fact was TRUE!  On one of those Beaches I AT LAST met my Swedish Girl, again for anonymity purposes I will change the name here to Ingrid.  I invited her to come with me to Venice, where I promised a Swell Hotel Room and she AGREED to come!  She was with her Sister Ilsa though who had promised Parents back in Sweden to watch out for her, so she hadda come also.  I was playing the part of Filthy Rich Amerikan Boy and really had done pretty well conserving my money for the first few weeks in Europe, so I felt I could AFFORD to buy a Swell Hotel Room for a few days.

On the train to Venice is where we met Torsten, the Danish Dude I spoke about in Jason Happenstall’s thread about Denmark.  I visited with Torsten a few years later on another trip and got to see the Immaculate City of Copenhagen. Torsten and Ilsa Hit it Off, so now we were nicely Coupled Up by the time we arrived in Venice.

Upon arrival in Venice, we went  a-walking around to find a Hotel Room, and came upon a Bed & Breakfast down an Alley that was pretty non-descript from the front, with an Old Italian Lady who managed it.  She gave us a big bright SMILE when we came in, and asked how long we would like to stay.  I said a Week, and her Smile got even BIGGER.  LOL.  It was $50/night, but $300 for the Week.  She took us upstairs to the second floor and showed us the room.  It was all OLD furniture, I mean REALLY OLD.  The Bed where all the Banging went on was a four poster that probably was 100 years old at least.  Lord Only Knows how many people Banged on that Bed over the Decades/Centuries.  LOL. Despite the Age,  it was all IMMACULATE.  It had one Window which was Floor to Ceiling, and openning it it was right over a Main Canal  with a FABULOUS view of this part of Venice.  Had a tiny Balcony as well, though not really big enough to do anything but stand on.

Anyhow, I sure wish I could have stayed in that Bed & Breakfast FOREVER with Ingrid, but sadly I did not have an endless Deep Pocket plus I also had to start working my way back to Jolly Old England because my Railpass only had 6 weeks on it, and I already had used up about 4-5 of them.  So sadly with tears in my eyes, I bid adieu to my Swedish Amour and began my journey back to England, with my Stash of Cash now seriously Depleted.  In fact, I had barely more than the cost of the $150 Ticket on Freddie Laker’s Air Bus necessary to make it back to the FSofA after this adventure.  I spent FREELY buying us great dinners in Venice and plenty of nice bottles of Italian Wine as well, so there was just about nothing left for me to eat on for the trip back.  Weeks of work in the Shower Curtain Factory and pounding the 10-Key at Merrill Lynch were spent in that one wonderful week.   I bought Baguettes and Cheese at Grocery Stores, slept on the trains and in the train stations for the 3-4 days it took me to get back to London.  I lived on the approximately $2/day the typical 3rd Worlder lives on now, except in 1970s Dollars which bought substantially more then.  I also had the Pre-Paid Railpass as well of course.

I had hoped to be able to crash again with the Brit Mommy type who befriended me when I arrived in London, but she apparently was not in town or busy when I got back.  I called her twice the first day and never got an answer, this in the days before Answering Machines and Voicemail.  She probably was on Vacation or just not home.

The REASON I called her was this:

All the Students and other Cheap Travellers who had come over to Eurotrashland through the Summer all converged on London at the end of the summer in the last week before the Colleges reopenned for the Fall Semester here in the FSoA.  Freddie was only running a few planes, and they could not handle so many passengers all at once.  The rest of the Airline Tickets were double or triple his price.  So THE BIG QUEUE formed along the Thames river, hundreds if not thousands of young Amerikans seeking to get BACK to the FSoA all at once on the cheap flights of Freddie Laker.  It took DAYS of waiting in this Queue, which was very informal really, Freddy did not organize it, we did.

Along the Thames River, hundreds of Shanty shacks were set up by Students with No Tents with them.  They were constructed from Plastic, Pallets, Scrap Wood, old newspapers and Boxes from Grocery stores.  The average wait was 2-3 days in the queue.  I  have Googled to find Pictures of this time, but apparently either nobody ever put them up or else Google won’t find them.  The Entrepreneurs walked the line Hawking T-shirts which read “Better Laker than Never” and “‘Sooner or Laker“.  Not a lot different than an OWS encampment, just not as nice with commercially produced Tents and Tarps.

Unlike my less well prepped neighbors, I DID have a Tent, and an Air Matress too!  This made me a VERY popular guy amongst the Ladies, even more Popular than the guys who had some Hash to smoke. 🙂  So the 3 Days I spent on the Big Queue on the Thames River were actually a lot of FUN and I would have stayed longer except I was 100% OUT OF CASH even for Food so I hadda get home.  Besides, Freshman Orientation at Columbia was starting in around 2 or 3 days.

Now, in a conversation a while back with Diner Karpatok, I mentioned that I was “Serially Monogamous” and did not Indiscriminately Bang a lot of Coeds in College.  This story of course belies that claim, but the Eurail Adventure was an anomaly and only represents 8 weeks out of my whole life.  In total during that 2 months I think I banged 5 different girls, which was more than in all my years of College.  That was what all the Teens and 20s  Interrailing were DOING!  It was the whole reason for making these Journeys.  It represented a form of Coming of Age in the Age of Oil over in Europe.

Is there anything else which makes this Article “Peak Oil” and “Collapse” related?  Not on the surface of course, it’s just more Autobio off my keyboard  so the readers get a better Picture of the guy who writes all the DOOM on the pages of the Doomstead Diner.  But in subtext there is much related to these themes.

First off, the Cheap Airfare which got me over to Europe in the first place is among the first thing that is going to dissappear here, and horny HS Graduates here who want to go traipsing around Europe looking for I Am Curious Yellow Swedish Girls will not be doing this much longer.  The Swedish Girls themselves won’t be travelling around doing this either in Spain and Greece, where they are likely to get caught up in a Riot.  Many people all travelling around willy-nilly being “Tourists” is going the way of the Dinosaur here, and will not return anytime too soon.

The next relationship is the Eurail system itself, probably the most comprehensive Inter-City Mass Transit system anywhere in the entire world.  Because of it, if any neighborhood can survive to maintain an Industrialized lifestyle for a while WITHOUT Carz, it is in Europe.  Only though for as long as they can keep those Trains running, and the Rail system in Eurotrashland has ALWAYS been Goobermint Subsidized, never paid for itself in any way.  It’s pretty hard to imagine how the Greek and Spanish Goobermints are going to be able to afford to subsidize their portions of the Network here pretty soon.  Not to mention the Tres Gran Vitesse.

Beyond the Financial problem of running that rail system is the Energy problem.  Even though they mostly do not use Oil or Gas like Carz do for their energy input, its going to become harder and harder for all these countries to get enough Coal and/or Nat Gas to provide enough Electricity to keep them running.  Its unlikely anyone will build anymore Nukes there for Electricity Generation, and you can’t push Big Trains around with Windmills.  So even though the Rail System might run a few more years than the Carz/Trucks system, its longer term sustainability likelihood is equally small.  Besides, without Touristas zipping around on these Trains to Gawk at Old Buildings, eat in 5-Star Restaurants or Bang Swedish Girls, such Inter-City transport does not have a whole lot of Utility.  The main thing the rail system might be used for as long as it can be maintained would be to move FOOD around Europe and keep the population somewhat fed..  Except probem there would be that each Country doesn’t really have much Surplus Food to ship to any other country, particularly not once the Tractors run Outta Gas.

The Europeans were the first to Industrialize with the Steam Engine used at first mainly to pump water out of Coal Mines so more Coal could be Mined to provide Energy for said Steam Engines, in a “Virtuous Economic Cycle” for so long as there was Plenty-o-Cheap Coal to mine anyhow.  In Fitting Irony here, it also appears the Europeans are going to be the First of the major Industrialized societies to fall off this Energy and Economic Cliff, and we can continue here to watch them as the Canary in the Coal Mine for what will eventually Cross the Pond and come down here as well.

How LONG will it take for this to Cross the Pond?  This remains an unanswered question, but it doesn’t seem to me like it will be all that long here.  It seems to me that this Journey, the Journey to the End of the Age of Oil is…wait for it…

…Coming Soon to a Theatre Near You.

 

RE

 

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