Timothy Wilken, MD writes: Imagine you own a comfortable 3000 square foot home with four bedrooms, three bathrooms, a big  family room, and a three car garage located on over an acre of land. Your home provides very comfortable shelter for you, your spouse and your three kids.

Then your spouse’s brother loses his job. Soon he and his wife can’t make their mortgage payments, and so they move in with their two kids. Now your home is less comfortable with nine people living there, but with some creative scheduling, it is livable.

But the economy continues to worsen, more family members lose their jobs, and suddenly you have twenty people living in the house. With this four-fold increase in population, living conditions in your home have changed from being livable to being nearly intolerable.

You are reaching the limits of your home’s ability to shelter you. After all the home is finite — it is limited to 3000 square feet.

Now humanity’s home is the Earth. While the Earth is quite large, it is still finite.  As in the example above, living on Earth was comfortable when the number in the human family was under one billion. Our species, Homo Sapiens, has existed for over 200,000  years on the planet. For 199,790 of those years, our population remained under one billion.

We reached 1 billion humans in 1800. By 1900, the world population was 1.5 billion. At that time, my grandfather was a young man raising his family that would eventual include 8 children. I was born in 1945, and would be one of three children. When I was a freshman in high school in 1960, the world’s population had doubled to 3 billion. Today, as I write this essay the World census is estimated to be 6.8 billion.

Humanity’s home, the Earth, is getting full. Our human population has increased over four-fold since 1900. We are reaching the limits of the planet. This is what really lies at the heart of our current world economic crisis. We are encountering Peak Oil, Peak Water, Peak Soil and Peak Food as a result of overpopulation, and the political-economic policy of over-consumption in order to maximize corporate profits.

Modern humans are no longer called people, they are consumers. Remember, when George W. Bush called on the American people to: “Go out and buy something.” Peak does not mean we are out of oil, water, soil or food. It means we are reaching the Peak of possible production for these necessities of life on a global basis.

Our current system of Market Capitalism, which is based on the premise of unlimited growth, has collided with the reality of a finite planet.

Things must change. We can expect no help from Big Government, the long term for Government is the length of time before the next election, and all political decisions are based on one dollar = one vote. We can expect no help from Big Business, they are only interested in the bottom line of their Profit and Loss Balance Sheets, and they clearly own our government directing it to base every political decision on what will increase the bottom line. Remember, “What is good for business is good for the nation.”

It will be up to us ordinary humans to solve our own problems by ourselves, and despite the actions of our government and corporations.

So, what can we do?

Imagine, if every human limited themselves to having only one child, the total population could be reduced dramatically within a few generations. This is something we can do voluntarily, if we choose to. Human reproduction remains in the control of ordinary humans.

In the meantime, there are lots of very practical things that can also be done. Today’s author shares two proposals that you can begin implementing tomorrow.

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Don’t Just Stand There, Grow Something!

Andrew MacDonald

Be a food grower in some small or large way! You’ll connect to nature, our “daily bread”, and some fundamental political realities. You’ll educate yourself and redefine your relationship to fundamentals – and I didn’t even mention “cheap” yet!

I use the word “growing” in preference to gardening because gardening sounds like a hobby.

The good news about gardening can’t stay underground forever – it’s going to grow! Growing food – and eating local and simple food  – is at the heart of relocalization.

Growing has a way of plugging you into that beating heart. It’s a simple and deceptively multi-layered activity that you can find a way to be part of, whatever your background. Growers get that they’re connected to a deep natural process, as of course they are, and that connection is close to the heart of relocalization.

My partner Lynn’s and my growing efforts are new and so far we’ve been on the receiving end of local food abundance as neighbors and community members have shared with us. We hope to pay’em back over time.

The two interconnected ways to start are 1) to grow something right now, and 2) to learn to enjoy eating simply and low in the food chain.

1)  Grow something, whether it’s sprouting, growing a few pots of tomatoes, putting in a garden, joining a CSA (Community Supported Agriculture) group, or connecting to a local gardening group or food initiative.

Lynn and I have set ourselves the goal of  growing all our vegetables and some of the beans. We’ll have to buy others – we love lentils which don’t grow so well here (in southern Canada). Some of our grains come from local farmers but we buy our rice from away and we’ve harvested some “wild rice” (not really a true rice) too though we’ve not learned to thresh it.

2) The other part is to eat in a way that respects natural realities and limits – not just because it’s “a good thing,” though it is, but because eating a low-impact, mostly local diet will be the future in a world defined by peak oil, shifting climate, and high population and unrest from all of these. It’ll be your future and certainly your kids future. Eating simple is simply getting with the program, which in turn helps others do the same.

We’ve been eating a simple, tasty, nutritious and inexpensive diet for a while now. My partner Lynn has been experimenting and refining how to do this for years and I recommend what she’s developed as something to explore and adapt. It’s a total system that makes it easy to cook healthy food conveniently while keeping your grocery bill under $150 a month per person. That’s from the get-go, before you grow your own. It’s a way to fast track to a simpler, more local and more peaceful life. It’s totally possible to really enjoy food while eating more like the majority of people in the world. It’s a vegetarian diet, but you can add meat where you will. No shame but stopping eating meat is one of the simplest ways you can make a real difference in what you personally are putting into the atmosphere. Full disclosure, we do eat meat if we’re at someone’s home and it’s offered and we eat game when it’s given to us.

There are political-economic  ramifications to food and soil too . . . .think “peak soil” to go along with peak oil. As Wendell Berry says, “If we continue to be economically dependent on destroying parts of the earth, then eventually we will destroy it all.”

Visit the author’s website: Radical Relocalization

Read Poster artist, Judy Wilken’s StarChild Science Healthy Living Initiative

Canada, called the world’s most resource-rich country, is now being subjected to austerity measures like those imposed on third world countries in earlier decades.  It is all done in the name of reducing a federal debt that got out of control in the 1970s, when Canada quit borrowing from its own central bank.

Is Austerity the Best Choice for Canada?

Last week in Ottawa, the Canadian House of Commons passed the federal government’s latest round of budget cuts and austerity measures.  Highlights included chopping 19,200 public sector jobs, cutting federal programs by $5.2 billion per year, and raising the retirement age for millions of Canadians from 65 to 67.  The justification for the cuts was a massive federal debt that is now over C$ 581 billion, or 84% of GDP.   

An online budget game furnished by the local newspaper the Globe and Mail gave readers a chance to try to balance the budget themselves.  Possibilities included slashing transfer payments for elderly benefits, retirement programs, health benefits, and education; cutting funding for transportation, national defense, economic development and foreign aid; and raising taxes.  An article on the same page said, “The government, in reality, doesn’t have that many tools at its disposal to close a large budgetary deficit. It can either raise taxes or cut departmental program spending.”

It seems that no gamer, lawmaker or otherwise, was offered the opportunity to toy with the number one line item in the budget: interest to creditors.  A chart on the website of the Department of Finance Canada titled “Where Your Tax Dollar Goes” shows interest payments to be 15% of the budget—more than health care, social security, and other transfer payments combined.  The page was dated 2006 and was last updated in 2008, but the percentages are presumably little different today.

Penny wise, pound foolish

Among other cuts in the 2012 budget, the government announced that it would be discontinuing the minting of Canadian pennies, which now cost more than a penny to make.  The government is focusing on the pennies and ignoring the pounds—the massive share of the debt that might be saved by borrowing from the government’s own Bank of Canada.

Between 1939 and 1974, the government actually did borrow from its own central bank.  That made its debt effectively interest-free, since the government owned the bank and got the benefit of the interest.  According to figures supplied by Jack Biddell, a former government accountant, the federal debt remained very low, relatively flat, and quite sustainable during those years.  (See chart below.)  The government successfully funded major public projects simply on the credit of the nation, including the production of aircraft during and after World War II, education benefits for returning soldiers, family allowances, old age pensions, the Trans-Canada Highway, the St. Lawrence Seaway project, and universal health care for all Canadians.

The debt shot up only after 1974.  That was when the Basel Committee was established by the central-bank Governors of the Group of Ten countries of the Bank for International Settlements (BIS), which included Canada.   A key objective of the Committee was and is to maintain “monetary and financial stability.”  To achieve that goal, the Committee discouraged borrowing from a nation’s own central bank interest-free and encouraged borrowing instead from private creditors, all in the name of “maintaining the stability of the currency.”

The presumption was that borrowing from a central bank with the power to create money on its books would inflate the money supply and prices.  Borrowing from private creditors, on the other hand, was considered not to be inflationary, since it involved the recycling of pre-existing money.  What the bankers did not reveal, although they had long known it themselves, was that private banks create the money they lend just as public banks do.  The difference is simply that a publicly-owned bank returns the interest to the government and the community, while a privately-owned bank siphons the interest into its capital account, to be re-invested at further interest, progressively drawing money out of the productive economy.

The debt curve that began its exponential rise in 1974 tilted toward the vertical in 1981, when interest rates were raised by the U.S. Federal Reserve to 20%.  At 20% compounded annually, debt doubles in under four years.  Canadian rates went as high as 22% during that period.  Canada has now paid over a trillion Canadian dollars in interest on its federal debt—nearly twice the debt itself.  If it had been borrowing from its own bank all along, it could be not only debt-free but sporting a hefty budget surplus today.  And that is true for other countries as well.

Another way

Why are governments paying private financiers to generate credit they could be issuing themselves interest-free?   According to Professor Carroll Quigley, Bill Clinton’s mentor at Georgetown University, it was all part of a concerted plan by a clique of international financiers.  He wrote in Tragedy and Hope in 1964:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Each central bank . . . sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.

In December 2011, this charge was echoed in a lawsuit filed in Canadian federal court by two Canadians and a Canadian economic think tank.  Constitutional lawyer Rocco Galati filed an action on behalf of William Krehm, Ann Emmett, and COMER (the Committee for Monetary and Economic Reform) to restore the use of the Bank of Canada to its original purpose, including making interest free loans to municipal, provincial and federal governments for “human capital” expenditures (education, health, and other social services) and for infrastructure.  The plaintiffs state that since 1974, the Bank of Canada and Canada’s monetary and financial policy have been dictated by private foreign banks and financial interests led by the BIS, the Financial Stability Forum (FSF) and the International Monetary Fund (IMF), bypassing the sovereign rule of Canada through its Parliament.

Today this silent usurpation has been so well obscured that governments and voters alike are convinced that the only alternatives for addressing the debt crisis are to raise taxes, slash services, or sell off public assets.  We have forgotten that there is another option: cut the debt through the use of  publicly-owned banks that return the interest to public coffers.  Cutting out interest has been shown to reduce the average cost of public projects by about 40%.

Game over: we win.

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles.

First the bad news: over the next twenty years, the United States must cut 20 quadrillion BTUs from its annual consumption of fossil fuels, more than 25 percent of the energy currently being used. This is a matter of both economic and environmental necessity. The good news is that we have the technology to pull it off. But where should we start? What exactly needs to be done? How much will it cost? And won’t such a drastic reduction in energy use destroy the American way of life?

In Before the Lights Go Out, science blogger and journalist Maggie Koerth-Baker presents a comprehensive analysis of the ways in which America produces, distributes, and consumes energy. She explains how our current systems developed, points out their strengths and weaknesses, and offers candid assessments of the time, the difficulty, and the expense involved in making radical changes to the energy systems that have shaped our lives for a hundred years. And the new world that results will be neither business-as-usual nor a hippie utopia.

Drawing on more than two years of research and interviews with experts on everything from our electrical grid and electric cars to fracking and passive buildings, Koerth-Baker explains what we can do, what we can’t do, and why “the solution” is really a lot of solutions working together.

This isn’t about planting a tree, buying a Prius, and proving that you’re a good person. Economic and social incentives got us a country full of gas-guzzling cars, long commutes, inefficient houses, and coal-fired power plants in the middle of nowhere, and economics and incentives will build our new world. Ultimately, change is inevitable. If we don’t control it, it will control us.

Koerth-Baker argues that we’re not going to solve the energy problem by convincing everyone to live like it’s 1900—nobody wants to do that. Rather than reverting to the past, we will be building a future where we get energy from new places and use it in new ways and do more with less. But for all the new technology, we’ll still need coal-fired, nuclear, and natural gas–burning power plants—and we’ll still be pumping gasoline into our (far more fuel-efficient) cars for many decades to come.

She also looks at new battery technology, smart grids, decentralized generation, clean coal, and carbon sequestration—buzzwords now, but they’ll be a part of our everyday life soon.

Yes, solving the energy problem is more urgent than ever before. Yes, we have the technology to do that—and the results may surprise you. Before the Lights Go Out reveals what that will look like.

The following excerpt is re-posted from the Scientific American.

Before the Lights Go Out:
Conquering the Energy Crisis Before It Conquers Us

Maggie Koerth-Baker

Most people reading this would probably find Merriam, Kansas, very familiar. Not because they’ve been there, but because it’s a lot like home.

Merriam is usually described as a suburb of Kansas City, Kans.—a small town that grew into a residential center for people who worked in the much larger city nearby. Yet the mental images that go with the word suburb don’t really fit Merriam all that well. When I think suburb, I imagine something like Levittown, treeless insta-villages where rows of identical houses dot gleaming new cul-de-sacs recently carved out of some farmer’s field. The greater Kansas City area certainly has its share of developments that would fit that description, but Merriam isn’t one of them.

In fact, when I was a kid, I didn’t even know Merriam existed at all. I thought it was Kansas City. Specifically, I thought it was where Kansas City began, the distinct point where you exit the Interstate and find yourself in the big city. This particular misconception has more to do with my family’s regular travel plans than anything else—Merriam’s main drag happens to be the same road that leads to the art museum my dad and I went to a lot and to the Christmas light displays I visited every winter with my mom. It also speaks volumes about what Merriam actually looks like, though, and it’s tied to some important trends in the way most Americans live today.

Merriam isn’t a small town. There’s nothing really recognizable as a small town central business district. Instead, Merriam’s stores and offices are mostly concentrated along two major thoroughfares—Shawnee Mission Parkway and Johnson Drive. These wide, multilane roads are dotted with clusters of shopping centers and big box stores, like necklaces strung with fat pearls. The municipal building and the police station are a couple of nondescript offices that sit off the frontage of Shawnee Mission Parkway, on a ridge overlooking the Interstate. Nothing about that says, “Classic Americana.”

Yet Merriam isn’t a suburb, either—or an urban city. It’s too dense to be the first and not dense enough to be the latter. Merriam has a mixture of house styles. Drive down one street, and you’ll see a 1930s bungalow standing shoulder to shoulder with a spare little 1950s Cape Cod. Next to that, there’s a 1980s split-level with windows on the front and the back but none on the sides. More than three generations of the American Dream are living here.

Each house sits on its own little lot, generous by the standards of city dwellers, but those lots would seem cramped to anyone who grew up on an expansive, truly suburban range of lawn. Some neighborhoods have sidewalks; others don’t. All in all, Merriam doesn’t quite fit in with any of the paradigms we use to describe “place” in the United States, and that sense of befuddlement extends all the way to the edge of town—if you can find it. The truth is that Merriam’s borders are hazy, known only to people whose jobs require them to be aware of that sort of thing. To most people, Merriam bleeds into Mission, into Shawnee, and into Overland Park. Those towns, in turn, nuzzle up against others just like themselves. You could almost call them neighborhoods, except that they have their own separate governments.

It’s ironic that Merriam doesn’t really fit any of the classic American paradigms, because, quite frankly, most of us have already left those paradigms behind. We talk about this country as if it’s full of neatly defined small towns, big cities, and tidy suburbs. In reality, the places where we live are lot mushier than that. Merriam isn’t the exception. Merriam is the rule.

The Brookings Institution calls places such as Merriam metropolitan areas. Each named community is just one part of a larger symbiotic organism. “Being in a metro means being tied to someplace else,” wrote Jennifer Bradley and Bruce Katz, of the Brookings Institution’s Metropolitan Policy Program, in 2008. The collection of cities in a metro work together, economically and socially, and by the Brookings Institution’s tally, this is how most Americans live—as much as 84 percent of the population.

That definition of “metro” is wide-reaching, encompassing places that might think of themselves as cities, small towns, and suburbs. That’s certainly true of Tonganoxie, where my paternal grandparents lived. Thirty miles from Kansas City, it was a far-flung Hicksville when my dad was a teenager. Today, Tonganoxie is part of the metro—not really just a suburb, but not truly its own entity, either. The Brookings definition also includes such places as where I live now—a 1920s streetcar suburb that’s been absorbed as a neighborhood of Minneapolis. We aren’t urban, as visiting friends from New York City often remind us, but we’re not suburban, either.

You can see that the Brookings definition is kind of broad, possibly overly broad. Residents of the places it describes might disagree with it, even vehemently. Yet if you’re trying to figure out an objective way to group places by shared economic and social characteristics, it makes sense. This is better than a survey, which would tell you more about perceptions than about what places are actually like. It also makes an important point: Independent, small-town life isn’t archetypal America anymore. The interconnected metro is.

Kansas is full of places that aren’t like Merriam. There are also tiny towns such as Quinter—a Western Kansas community with a population of fewer than a thousand—and mid-size cities such as Salina, which is home to more than forty-five thousand people. If you want to know what’s at risk in the future of energy, however, Merriam is the place to focus. It’s the place that can teach the majority of us something important about the places where we live and about the risks we’re taking when it comes to energy.

There are lots of reasons to care about energy, and lots of reasons to want to change the way we make and use energy in this country. For me, though, it boils down to a concern about climate change and about energy diversity. Those are the big reasons I think we need to seriously alter the way we make and use energy. Why do I think that? In a nutshell: that’s what the majority of scientific studies tell me. When many different, unconnected scientists come to the same conclusions, after decades’ worth of research, I listen. You should, too.

It all boils down to a preponderance of evidence—evidence collected by many different people, in many different ways, during the course of more than three decades. That’s what “scientific consensus” really means. It’s not only something a bunch of scientists choose to believe in. It’s something they’ve seen. It’s what the bulk of the evidence is telling them.

In Kansas, researchers have collected more than a hundred years’ worth of data about temperatures, rainfall, and weather patterns. From the perspective of a single year or even a decade or two, you might not notice much of a difference. There are seasons. Winters are still colder than summers. Kansas is one of those states with a reputation for fickle weather, anyway. Don’t like this cold winter day? Just you wait a week; you’ll be wearing shorts. Yet if you zoom out and look at the century, patterns emerge. The average winter temperatures have gone up by 2 degrees Fahrenheit. Summer has been more stable, with an increase of only .6 degrees. In general, during the last century, Kansas has had fewer relatively cold days, while the number of relatively warm days has increased. When those increases happen also matters. During both winter and summer, average nighttime temperatures have increased more than average daytime temperatures have.

That doesn’t sound like much, but it makes a difference in practical ways. In Merriam, Kansas, there are plants thriving today that probably couldn’t have survived thirty years ago. When I was born, home gardeners in Merriam chose the seeds they’d plant outdoors by finding species that were rated to USDA Hardiness Zone 5—meaning that those plants could survive winter temperatures as lowa’s –20 degrees. By the time I graduated from high school in 1999, the Kansas City metro, along with most of Kansas, had been upgraded to Hardiness Zone 6. Winter was no longer likely to be so frigid. If a plant could survive a few days of zero-degree temperatures, it could probably live in Merriam just fine.

That opens up more possibilities for creative green thumbs. There aren’t a lot of buildings in Kansas that are covered with the trailing green fingers of English ivy, but today, if you wanted a little ivy-covered cottage on the prairie—or an ivy-covered fence surrounding your metro backyard—you could grow it, without much worry of winter killing the plants. If English ivy doesn’t sound like a particularly horrible fate, that’s because climate change isn’t inherently good or bad, in and of itself. It’s all about how those changes affect people. We might like some of the results—English ivy can thrive, and even Kansas’s many food crops are likely to grow better, at least in the short term—but we won’t like everything that happens.

For instance, the same warmer temperatures that favor English ivy are also quite favorable to ivy of another sort. Research shows that rising temperatures—even the small increases seen in Kansas—and rising CO2 levels in the atmosphere are combining to expand the range of poison ivy, allowing it to be active for a longer part of the year and making it more poisonous.  A walk through local parks or state lands near Merriam is now more likely to involve a brush with the less-than-friendly side of nature.

The warmer climate works in tandem with a wetter one. Merriam and much of the northern and eastern parts of Kansas have become a lot wetter, especially in the winter. The Midwest is experiencing heavier storms more often than it did in the past. Those storms can cause serious damage and cost communities some serious money. That’s not all, though. Higher temperatures and more frequent downpours affect metro areas and their residents in a number of ways.

When you combine warm water and flash flooding, you get a risk of water-borne disease. That’s because many harmful microorganisms favor higher temperatures. If floods overwhelm water-treatment facilities, those organisms can find their way into the pipes, out of the tap, and into your glass. This isn’t something that happens only in underdeveloped countries or other places we can write off as “not like home.” The sanitation infrastructure of American metro areas is impressive, but it’s not infallible. Many parts of the Midwest have experienced increased precipitation from more numerous large storms. This isn’t only a Kansas problem. In 1993, Milwaukee, Wisconsin, suffered an outbreak of gastrointestinal disease caused by the bacteria Cryptosporidium. This bacteria doesn’t merely give you a tummy ache. Instead, it leads to a week or more of diarrhea, cramps, vomiting, and fever. Fifty-four people died. Just before the illness struck, the region had received its heaviest rainfall in fifty years.

Since 1993, researchers have found that heavy rainfalls are associated with higher levels of potentially dangerous bacteria. This has been measured in drinking water and in recreational waters. It’s also turned up in floodwater. In 2008, when major flooding inundated Iowa City and Cedar Rapids, Iowa, raw sewage came right out of the Cedar Rapids water-treatment plant and into the flood. Those contaminated waters sloshed into people’s houses, and when the water finally receded, it left behind buildings full of muck and mold. The people tasked with cleanup duties suffered from what they called “flood crud,” weeks of fatigue, cough, and other respiratory symptoms.

Speaking of breathing problems, warmer springs that bloom earlier in the year have also led to longer allergy seasons, and scientists say that the higher CO2 concentrations found in traffic-heavy cities and metros are causing plants to have higher pollen counts. This means that people who weren’t affected by allergies thirty or forty years ago might be sniffling and stuffy today, and Merriam residents who have always had allergies now have to deal with them for longer periods of the year.

Air pollution is another big problem. In the heat of a hot and sunny day, tailpipe emissions from cars turn into lung-damaging, heart-straining smog. In any metro area, including Merriam, the more relatively hot days you have, the greater the risks of smog-associated asthma and heart attacks. Kansas City, Kansas, and Overland Park—two cities near Merriam—spent more than $13 million on asthma treatment in 2001. The more risk there is of smog-related lung damage, the higher those costs will rise.

During the next thirty years or so, a warmer, wetter Merriam might be, in some ways, a more comfortable place to live—the last few decades have brought longer growing seasons for plants and winter temperatures that are more reliably pleasant. Yet Merriam is also becoming a more expensive place to live and a place where the individual risk of illness and property damage is going up—and up and up. The more greenhouse gases are added to the atmosphere, the higher the global average temperature will eventually climb. As that happens, Merriam and places like it all around the United States will be exposed to risks that are greater and more numerous.

Some people talk about thresholds for climate change—how many years we have left to act, how much CO2 we can afford to release, how high of a global average temperature we can accept before all hell breaks loose. I’m not sure that’s really a great way to think about it, though. Our climate is already changing. The risks are already being realized, and every emissions reduction goalpost ever set is somewhat arbitrary. There’s not a magic number that can save us. Instead, we should really just be trying to limit the continuation of climate change as much and as fast as possible.

If that isn’t enough to worry about, metros such as Merriam are also likely to be hard hit when oil production peaks and higher gasoline prices follow.

There’s an increasingly large collection of research telling us it probably isn’t a good idea to rely solely on fossil fuels. Why? Because those fuels are finite. There’s only so much of them to go around—although it is still open to debate exactly how finite the supplies of oil, coal, and natural gas are.

All three fossil fuels come from the same place—ancient plants and animals that died and were buried beneath layers of earth and rock, often millions of years before dinosaurs roamed this planet. Changed by heat, pressure, and the process of decomposition, these dead remains became the substances that make our modern lives possible. The coal that we burn to make electricity was once forests and swamps full of plants. The oil in your gas tank and the natural gas that heats your house are the remains of tiny sea creatures. Turning those plants and animals into fuel takes millions of years, and it can happen only under certain circumstances. Once we burn through these fuels—or, more important, once we burn through the ones that are relatively cheap to collect—there won’t be any more. Not on any time scale that would be useful to you or to me.

That’s worrisome. All of the conveniences, comforts, and wealth we’ve accumulated since the late 1800s have been largely based on the availability of relatively inexpensive fossil fuels. Those fuels pack a lot of energy into a compact space. Other fuels, such as cut wood, can’t compete with that kind of energy density—a fact that becomes especially important when you need to travel somewhere and must carry fuel along with you. The weight and the volume of fuel definitely matter. More than a hundred years ago, oil, refined into gasoline, solved the transportation-fuel problem, but what happens if oil becomes too expensive for most Americans? What happens, eventually, when it finally runs out?

To answer these questions, we first have to know “when.” If we have a hundred years before oil production peaks, then we’ll be in a very different position compared to that peak happening next year—or last year. The timing of this peak isn’t easy to figure out. The world’s supply of oil is harder to measure than carbon dioxide concentrations in the atmosphere, for the simple reasons that nobody owns the atmosphere, and the atmosphere is well-mixed. Oil, on the other hand, is a business. It comes with trade secrets. It also comes without an industry-wide standard for calculating untapped oil reserves. If one company tells you how much oil it has left, you can’t directly add that to another company’s number and get a reliable total, because both calculations were figured in very different ways. Unlike the atmosphere, you can’t just take a sample from anywhere on the planet and expect it to tell you something about conditions everywhere.

Finally, there’s no equivalent of the Intergovernmental Panel on Climate Change (IPCC) for peak oil. This matters. Part of what makes the IPCC so important is that it does the job of consolidating many little theories into one big Theory. The IPCC reviews all of the scientific papers published on climate science and the impact of climate change. It looks at methodology and figures out which papers are more trustworthy than others, and it compiles all of that information into realistic estimates of what might happen and when.

If there are two competing little theories that should be given equal attention—because nobody knows yet which is correct—the IPCC tells you that.

In contrast, peak oil research is a confusing jumble of individual, often contradictory, papers. To a layperson, it’s not easy to tell which little theories on this subject deserve more respect, and it’s hard to get a sense of what the overarching scientific consensus is, if one exists at all. That means you have nothing to draw on when it comes time to judge the statements about peak oil that are made outside the scientific community. When you read an op-ed that claims oil production has already peaked and that our entire way of life is imminently going to collapse, do you know how much evidence supports that and how much doesn’t? When another source tells you that peak oil isn’t something to worry about at all, is there a reason to believe this statement? Without an IPCC-like entity, answering those questions requires a lot of time and a not-insignificant amount of scientific expertise.

There’s been some progress made in solving this problem. In 2009, British researchers put together a sort of micro-mini IPCC aimed at answering the question “What evidence is there to support the proposition that the global supply of ‘conventional oil’ will be constrained by physical depletion before 2030?” In other words, is peak oil a short-term problem or a long-term problem?

The researchers’ report doesn’t cover all of the questions surrounding the idea of peak oil. For instance, they specifically avoid predicting what economic, political, or social side effects peak oil could produce, and their research covered only supplies of “conventional oil”—no tar sands or fuels made from coal or natural gas. This group was also much smaller than the one that evaluates the evidence for climate change—only eight experts, drawn from the United Kingdom and the United States. Yet the project is an important first for peak oil: a group with no obvious bias had collected all of the available research, evaluated it in a transparent way, and summarized the whole body of evidence for non-experts.

Here’s what they found. First, peak oil is a real occurrence. We know enough about how oil fields work and what happens during the life of a given oil deposit to say that production of oil will peak, and then it will decline.

Second, figuring out when that decline will happen isn’t easy, for reasons I’ve already mentioned and more. Yet although the data on oil supplies are flawed and patchy and the methods used to forecast future supplies have some serious limitations, the researchers agree that there’s still enough information available that we can start to form a clear picture of global oil supplies and make some adequate estimates about how long conventional oil will last. These estimates won’t be perfect, but they’re necessary, and they’ll be accurate enough to help us plan for the future, at least until better data come along.

Finally, even if you factor in a wide range of reasonable estimates about the quantity of oil supplies, you’re still left with a relatively narrow window of time during which oil production is likely to peak.

The peak is probably going to happen by 2030. To claim a later date, the researchers wrote, you have to start getting optimistic in your estimations of global oil supply. When we hit peak oil, it won’t mean that gasoline will vanish overnight, or even in a few years. But it would most likely mean the end of cheap gasoline. You may not feel that gas is cheap when you’re paying for a full tank. It’s never cheap right then. Even when I first started driving, in the late 1990s, and paid less than a dollar per gallon, I still drove away from the pump feeling disgruntled. Today, in early 2011, I pay closer to $4 a gallon, but that gas is cheap, too.

Gas has always been cheap in the United States, both compared to other developed countries and compared to the finite supply and the amount of work and convenience we get out of burning it. Gasoline is so cheap here that we built our entire lives around the expectation of being able to burn it whenever we want, no matter the reason. Gas is so cheap, I don’t even think twice about driving alone in my car less than a mile to the grocery store, just because I want an errand done faster. Gas is so cheap, my father-in-law can use a snow plow in the winter, instead of a shovel. Gas is so cheap, my mother can go for a ride through the woods on a four-wheeler, just for fun.

Peak oil means all of that will likely change. We’ll have to start considering whether we can afford certain aspects of our lifestyles that we currently take for granted.

For instance, right now, living in Merriam means owning a car. The whole town is designed around the idea that cheap gasoline will always be available. The main shopping center is a strip mall off the Interstate. Sidewalks—and easily walkable grid street plans—come and go throughout the neighborhoods, following the whims of past developers. Merriam has two bike routes, but one is mostly aimed at recreation. It doesn’t follow any path that people travel daily for business, school, or shopping. The other bike route begins and ends suddenly, covering only a small portion of busy Shawnee Mission Parkway. There are bus lines that pass through town, but the service isn’t particularly robust. Most of the buses are strictly for commuters, offering a handful of morning trips to downtown Kansas City and evening trips back. The system isn’t really meant for general mobility. A trip from Merriam’s main shopping center to my favorite Chinese restaurant in nearby Overland Park is a nine-minute drive. By bus, it’s forty-four minutes, and you can’t go for lunch or a late dinner. The buses don’t run between nine a.m. and four p.m., and they shut down for the night after six p.m. You see the problem here.

As the price of gas climbs, and middle-class Americans have to start seriously thinking about whether they can afford a given trip, the residents of Merriam will find themselves without an easy, all-weather way to navigate the crazy quilt of metro towns that surrounds them. For those who work outside Merriam, it’ll be harder to get to work. Inside Merriam, businesses will suffer the loss of the heavy traffic that now passes by twice a day.

Metro towns aren’t self-reliant. Their fates have been tied to the fates of the towns they touch for decades. That interconnection works now because gasoline is cheap. What happens to a metro town when travel from one part to another is no longer easy and frequent, no longer something that can happen daily or hourly? What happens when the parts of a metro can no longer rely on the direct support of all of the others but are still on the hook for funding shared systems? What happens to the city at the metro’s heart when it can no longer count on the social support, the financial investments, and the intellectual capital of people who actually live elsewhere?

Maybe the parts of a metro can break down into tighter-knit blocks. In a world of high fuel prices, Merriam could theoretically band together with the cities of Shawnee, Mission, and Overland Park to make a smaller, more walkable version of the metro experience. Yet it likely wouldn’t be as well-off as those places are today, when they can easily trade throughout the larger metro area and far beyond, when a local job doesn’t have to be closely tied to local demand, when the cost of food and goods isn’t also being driven up by the high cost of the fuel needed to make and transport them.

If you think about all of the parts of our lives that rely on cheap oil, it’s easy to see how authors such as James Howard Kunstler can believe that peak oil will lead, unstoppably, to the collapse of modern, industrial civilization—where metros will descend into poverty and anarchy, and only independent small towns will be able to survive in a future that shares a lot of similarities with the nineteenth century. You don’t even have to go that far, however, to be concerned about the impact of peak oil.

In a 2005 report (pdf) written for the Department of Energy, researcher Robert Hirsch wrote that total economic meltdown wasn’t an inevitable consequence of peak oil. Yet he also pointed out that most economic recessions in the United States after 1969 were preceded by a spike in oil prices, and that every jump in oil prices was followed by a recession. There’s a key quotation from the paper that really drives home the kind of risks we’re talking about: “Economically, the decade following peaking may resemble the 1970s, only worse, with dramatic increases in inflation, long-term recession, high unemployment, and declining living standards.” The 1970s, only worse. That’s the pleasant outlook. Even that won’t be possible, Hirsch says, if we don’t start changing the way we make and use energy now.

Remember, oil is most likely to peak sometime before 2030. We don’t know exactly when. It could be tomorrow, could be 2029. Yet if we want to really mitigate the impact of peak oil and keep the economy as stable as possible, Hirsch thinks we need at least twenty years of dedicated effort to sufficiently reduce oil consumption and create alternative fuels. As the prep time shortens, the consequences get larger. With only a decade of preparation before peak oil, we’re likely to be stuck with ten years of chronic fuel shortage. If we don’t start trying to mitigate the effects of peak oil until it actually happens, Hirsch thinks we’ll be looking at more than twenty years of hardship.

We have two problems: our metro lifestyles require energy, but we also want to avoid the negative impacts climate change and peak oil will have on metro communities. The timeline for action: the sooner, the better. So, the question becomes “Now what do we do?”

Go to Amazon to buy the book: Before the Lights Go Out: Conquering the Energy Crisis Before It Conquers Us © 2012 by Maggie Koerth-Baker.

Once the black sheep of high finance, government owned banks can reassure depositors about the safety of their savings and can help maintain a focus on productive investment in a world in which effective financial regulation remains more of an aspiration than a reality.

—Centre for Economic Policy Research, VoxEU.org (January 2010)

Public-Sector Banks:
From Black Sheep to Global Leaders

Ellen Brown

Public-sector banking is a concept that is relatively unknown in the United States. Only one state—North Dakota—owns its own bank. North Dakota is also the only state to escape the credit crisis of 2008, and has sported a budget surplus every year since, but skeptics write this off to coincidence or other factors. The common perception is that government bureaucrats are bad businesspeople. To determine whether government-owned banks are assets or liabilities, then, we need to look farther afield.

When we remove our myopic US blinders, it turns out that, globally, not only are publicly owned banks quite common, but countries with strong public banking sectors generally have strong, stable economies. According to an Inter-American Development Bank paper presented in 2005, the percentage of state ownership in the banking industry globally by the mid-nineties was over 40 percent. The BRIC countries—Brazil, Russia, India and China—contain nearly 3 billion of the world’s 7 billion people, or 40 percent of the global population. The BRICs all make heavy use of public-sector banks, which compose about 75 percent of the banks in India, 69 percent or more in China, 45 percent in Brazil and 60 percent in Russia.

The BRICs have been the main locus of world economic growth in the last decade.  China Daily reports, “Between 2000 and 2010, BRIC’s GDP grew by an incredible 92.7 percent, compared to a global GDP growth of just 32 percent, with industrialized economies having a very modest 15.5 percent.”

All the leading banks in the BRIC half of the globe are state-owned. In fact, the largest banks globally are state-owned, including:

—The two largest banks by market capitalization (Industrial & Commercial Bank of China [ICBC] and China Construction Bank)
—The largest bank by deposits (Japan Post Bank)
—The largest bank by assets (Royal Bank of Scotland, now nationalized)
—The world’s largest development bank (Brazilian Development Bank [BNDES by its Portuguese acronym] in Brazil).

A May 2010 article in The Economist noted that the strong and stable publicly owned banks of India, China and Brazil helped those countries weather the banking crisis afflicting most of the rest of the world in the last few years. According to Professor Kurt von Mettenheim of the Sao Paulo Business School of Brazil:

Government banks provided counter cyclical credit and policy options to counter the effects of the recent financial crisis, while realizing competitive advantage over private and foreign banks. Greater client confidence and official deposits reinforced liability base and lending capacity. The credit policies of BRIC government banks help explain why these countries experienced shorter and milder economic downturns during 2007-2008.

Surprising Findings

In a 2010 research paper summarized on VoxEU.org, economist Svetlana Andrianova and her colleagues wrote that the post-2008 nationalization of a number of very large banks, including The Royal Bank of Scotland, “offers an opportune moment to reduce the political power of bankers and to carry out much needed financial reforms.” But, wrote Andrianova, “there are concerns that governments may be unable to run nationalised banks efficiently.”

Not to worry, say the authors:

Follow-on research we have carried out (Andrianova et al, 2009) … shows that government ownership of banks has, if anything, been robustly associated with higher long run growth rates.

Using data from a large number of countries for 1995-2007, we find that, other things equal, countries with high degrees of government ownership of banking have grown faster than countries with little government ownership of banks. We show that this finding is robust to a battery of econometric tests.

Expanding on this theme in their research paper, the authors write:

While many countries in continental Europe, including Germany and France, have had a fair amount of experience with government-owned banks, the UK and the USA have found themselves in unfamiliar territory. It is therefore perhaps not surprising that there is deeply ingrained hostility in these countries towards the notion that governments can run banks effectively…. Hostility towards government-owned banks reflects the hypothesis … that these banks are established by politicians who use them to shore up their power by instructing them to lend to political supporters and government-owned enterprises. In return, politicians receive votes and other favours. This hypothesis also postulates that politically motivated banks make bad lending decisions, resulting in non-performing loans, financial fragility and slower growth.

But that is not what the data of these researchers showed:

[W]e have found that … countries with government-owned banks have, on average, grown faster than countries with no or little government ownership of banks…. This is, of course, a surprising result, especially in light of the widespread belief—typically supported by anecdotal evidence—that ” … bureaucrats are generally bad bankers.”

What accounts for their surprising findings? The authors provide a novel explanation:

We suggest that politicians may actually prefer banks not to be in the public sector…. Conditions of weak corporate governance in banks provide fertile ground for quick enrichment for both bankers and politicians—at the expense ultimately of the taxpayer. In such circumstances politicians can offer bankers a system of weak regulation in exchange for party political contributions, positions on the boards of banks or lucrative consultancies.  Activities that are more likely to provide both sides with quick returns are the more speculative ones, especially if they are sufficiently opaque as not to be well understood by the shareholders such as complex derivatives trading.

Government owned banks, on the other hand, have less freedom to engage in speculative strategies that result in quick enrichment for bank insiders and politicians. Moreover, politicians tend to be held accountable for wrongdoings or bad management in the public sector but are typically only indirectly blamed, if at all, for the misdemeanours of private banks. It is the shareholders who are expected to prevent these but lack of transparency and weak governance stops them from doing so in practice. On the other hand, when it comes to banks that are in the public sector, democratic accountability of politicians is more likely to discourage them from engaging in speculation. In such banks, top managers are more likely to be compelled to focus on the more mundane job of financing real businesses and economic growth.

The BRICs as a Global Power

Focusing on the financing of real businesses and economic growth seems to be the secret of the BRICs, which are leading the world in economic development today.  But the BRIC phenomenon is more than just a growth trend identified by an economist. It is now an international organization, an alliance of countries representing the common interests and goals of its members. The first BRIC meeting, held in 2008, was called a triumph for then-Russian President Vladimir Putin’s policy of promoting multilateral arrangements that would challenge the United States’ concept of a unipolar world.

The BRIC countries had their first official summit and became a formal organization in Yekaterinburg, Russia, in 2009. They met in Brazil in 2010 and in China in 2011, and they will meet in India in 2012. In 2010, at China’s invitation, South Africa joined the group, making it “BRICS” and adding a strategic presence on the African continent.

The BRICS seek more voice in the International Monetary Fund (IMF), the World Bank and the United Nations. They are even discussing their own multicultural bank to fund projects within their own nations, in direct competition with the IMF.  They oppose the dollar as global reserve currency. After the Yekaterinburg summit, they called for a new global reserve currency, one that was diversified, stable and predictable—and they have the clout to get it. According to Liam Halligan, writing in The UK Telegraph: “The BRICs account for … around three-quarters of total currency reserves. They have few serious fiscal issues and all are net external creditors.”

Western financial interests have long fought to maintain the dollar as global reserve currency, but they are losing that battle despite economic and military coercion. Russia, China and India are now nuclear powers. The BRICS will have to be negotiated with, and the first step to forming a working relationship is to understand how their economies work. We need to lift the curtain on how the other half of the world does it. Rather than declaring war on their more successful practices, we may decide to assimilate some of them into our own.

As Gandhi said, “First they ignore you, then they laugh at you, then they fight you, then you win.”

Written for the Public Banking in America Conference to be held April 27-28 in Philadelphia.

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back.  Her websites are http://WebofDebt.com  and http://EllenBrown.com.

After a decade of warning signs, it seems fairly obvious that we are now in the active process of devaluing a hyperinflated, mostly virtual, global economy. The necessary collapse is so large that managing a soft landing is almost impossible.

It’s so complicated that the unravelling will come by way of many slips and falls, few of which are predictable. It also seems the trick of the super-rich is to extract whatever financial benefits they can along the way.

What bothers me most is that entire countries are now held hostage to this collapse.  The banks own the government debt.

Even in “doing it easy” Australia we are told that interest rates must remain high because the “cost of money” for the banks is so high.  Money costs money (costs money, costs money….).  Duh!  Apparently these days around a half of the cost of everything and anything – from electrical appliances to water to education – is debt; debt carried by the businesses that produce the resources, the consumer that buys them and every step along the value chain and within the social matrix that supports it.

I’m looking forward to a time when money more closely represents real value.  Then, for example, we might treasure the planet and its wondrous species.

Here is this morning’s take on things as re-posted from: Global Research.

How Greece Could Take Down Wall Street

“A lie told often enough becomes the truth.”
– Vladimir Lenin, adopted and reused by Joseph Goebbels

Why America’s Housing Crisis can only get Worse!

Michael Olenick

Every doctor knows the fastest way to stabilize a patient is to kill them, because there is nothing more stable than death. While that solution may be fast and inexpensive it’s also sub-optimal. Yet pundits repeatedly posit the fastest way to end the housing crisis is through mass foreclosures. In a strict sense they’re right, that will achieve stability, though so will other policies calibrated to cause less micro and macroeconomic damage .. and a lot less human suffering.

Honest economists explain their reasoning, which is that there is a need to find a market bottom. They argue that in a healthy market sellers should not compete with REO properties and buyers need not worry an oncoming glut of foreclosures will drive down the value of their house. These economists, who remain in the minority, usually preface this is a lousy solution albeit the only one they can think of.

More common are bankers and economists who paint a rosy picture at the notion of throwing millions of families to the street, and millions of homes to the market.

“Once distressed inventory comes down and all of a sudden there’s not enough homes, you’re going to have a real bounce,” said JP Morgan Chase CEO Jamie Dimon in a recent interview.

Dimon surely knows the 2010 Census reports 131.8 million residential housing units for 312.9 million people, including about 17 million empties, so I’m not sure where his housing shortage comes from.

Dimon’s bank is sitting on a powder-keg of $87.6 billion of mostly worthless second mortgages at the end of Q3, 2011, according to the FDIC, so I can see why he’s playing cheerleader for a housing renaissance. But treating people like chumps, by encouraging them to buy in this broken market, crosses the line from puerile to patronizing.

If Dimon’s bank is genuinely bullish on housing then let them show it by dramatically ratcheting up their non-GSE lending. It will be interesting to see how JPM investors react to what I’m sure will be Dimon’s forthcoming announcement that JP Morgan Chase plans to lower credit-standards, increase private mortgage lending, and retain the loans on their own balance sheet.

Every argument housing cheerleaders advance is easily debunked.

Dimon argues household formation is increasing. I argue that’s irrelevant because the new couples do not qualify for home loans. Bloomberg reports that student-loan debt is approaching a crippling $1 trillion, preventing young people from qualifying for mortgages.

Bloomberg’s story focuses on a pharmacist with $110,000 in student-loan debt and a steady job that pays $125,000 a year, but who doesn’t qualify for a mortgage. It isn’t only employed professionals: the Bloomberg article goes on to note the Federal Reserve reports the number of 29-34 year old’s who qualified for a first mortgage declined from 17 percent ten years ago to 9 percent in 2009-2010. That is, young people are forming rented households.

This meme, that it’s a great time to buy a house, is relentless.

In a Bloomberg story along the same lines, Potomac Gap Shows Court Foreclosures Delay Housing Recovery, former Fannie Mae chief economist Thomas Lawler compares Maryland and Virginia house prices to argue expedited foreclosures increase home prices.

Asking Fannie’s former chief economist his thoughts on housing is akin to asking Francesco Schettino, Captain of the domed Italian cruise ship, his thoughts on maritime safety. Let’s ignore that though and focus on Lawler’s conclusion, which the data doesn’t support.

Lawler argues that Virginia and Maryland have virtually identical characteristics, yet that house prices in VA rose .8 percent last year while MD prices fell 3.6 percent. Lawler attributes this to the fact that MD is a judicial foreclosure state — where foreclosures require court approval that move through the system slower — whereas VA is a non-judicial state, where banks can simply auction a house after a default.

I have a simpler answer: house prices in MD ran up considerably higher than those in VA during the bubble so prices in both states are now adjusting towards the mean.

Specifically, according to the FHFA’s Housing Price Index (HPI) data Maryland house prices rose 17.7% higher from Q1, 2000 to Q3, 2007, when prices in both state’s peaked. Prices in MD are still 10.8% higher than those in VA, even though, by Lawler’s reasoning, they should be the same.

If anything, the data suggests judicial foreclosure is dampening home price declines in MD, by slowing foreclosures and the drag they place on home prices.

Less foreclosure inventory in judicial foreclosure states, thanks to slower foreclosure processing, reduces supply and stabilized home prices is a simpler explanation, though it’s seldom explored. I’ll refer to it as the Linda Green House Price Stabilization theory.

Obviously, people cannot continue to live in houses they are not paying for forever. But crafting public policy to figure out how to work with these people, which has the least impact on both the economy and the families involved, requires an honest and forthright dialog that just isn’t happening.

My own home state of FL is an economic disaster zone thanks largely to foreclosures and other housing related dysfunction. I often find myself spending the evening discussing housing finance.

It is not uncommon for those current, or with paid-off houses, to launch into a harangue about their irresponsible neighbors and demand that they’re thrown to the street immediately. But when I ask these people to quantify how much they’re willing to pay to punish their neighbor the answer is always zero.

I explain there are two options. One option involves modifying their neighbors mortgage, arguably giving their neighbor a windfall but limiting their own home price decline to no more than 10-percent. The other option involves throwing their neighbor to the street, decreasing the person’s home value by more than 10-percent. Nobody has ever opted to throw their neighbor out if it will personally cost them anything.

Dimon argues “indiscriminate blame of both (economic) classes denigrates our society, destroys confidence .. and damages us.” I agree, though argue the relentless “break the borrowers bones,” theme, combined with less than honest discourse about economic reality, is more destructive than frustration-fueled barbs launched towards those like him who pocketed a $21 million paycheck last year while relying heavily on corporate welfare.

Depending on one’s understanding the 50-state Attorney General settlement is worth somewhere between about $5 and $40 billion. Let’s use the higher number: we still have about a half trillion gap to put a long-term floor on the housing market. It’s time for an honest, open, fact-based national dialog about how to make that happen.

1910 Ford Model R

Anonymous

It was manufactured one hundred and two years ago. What a difference a century makes! Here are some statistics for the Year 1910:

********************************************************************

The average life expectancy for men in the US was 47 years.

Fuel for this car was sold in drug stores only.

Only 14 percent of the homes had a bathtub.

Only 8 percent of the homes had a telephone.

There were only 8,000 cars and only 144 miles of paved roads.

The maximum speed limit in most cities was 10 mph.

The tallest structure in the world was the Eiffel Tower !

The average US wage in 1910 was 22 cents per hour.

The average US worker made between $200 and $400 per year.

A competent accountant could expect to earn $2000 per year, A dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year, and a mechanical engineer about $5,000 per year.

More than 95 percent of all births took place at HOME.

Ninety percent of all Doctors had NO COLLEGE EDUCATION! Instead, they attended so-called medical schools, many of which were condemned in the press AND the government as ‘substandard.’

Sugar cost four cents a pound. Eggs were fourteen cents a dozen. Coffee was fifteen cents a pound.

Most women only washed their hair once a month, and used Borax or egg yolks for shampoo.

Canada passed a law that prohibited poor people from entering into their country for any reason.

The Five leading causes of death were:

There were only 45 US states, and the American flag had 45 stars.

The population of Las Vegas , Nevada , was only 30!

Crossword puzzles, canned drinks, and iced tea hadn’t been invented yet.

There was no Mother’s Day or Father’s Day.

Two out of every 10 adults couldn’t read or write and only 6 percent of all Americans had graduated from high school.

Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores. Back then pharmacists said, ‘Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health.’

Eighteen percent of households had at least one full-time servant or domestic help.

There were 230 murders reported in the entire United States for the year.

*************************************************************

I am now going to forward this to someone else without typing it myself. From there, it will be sent to others all over the WORLD — all in a matter of seconds!

Try to imagine what it may be like in another 100 years. GOD BLESS

Reader Dexter Graphic writes:

I received the same email last November but it claimed to be for a different year, the numbers were exactly the same however.

When I looked up the official mortality statistics here I found somewhat different numbers than what the email claims.

Homicides 3,190 (not 230)

Suicides 8,590

Pneumonia 54,187

Influenza 7,774

Tuberculosis 86,309

Diarrhea (under 2 years old) 54,266

Diarrhea (2 years and over) 8,914

Heart disease 85,489

Stroke 39,701

Cancer 41,039

Accidents 45,416

Kidney disease 54,720

(These last three were not even mentioned in the email, and the high number of deaths from diarrhea really only applies to very young children.)

I found it interesting to read what people actually died of 100 years ago. You might want to look at the Mortality table yourself, it starts on page 106 of this pdf file.

Also, for someone born in 1910, the average life expectancy was 54 years. For those who survived their first two years, life expectancy was 60 years. (From US Government life tables published in 1912). There’s an informative essay on interpreting life expectancy statistics here: Life Expectancy – Beyond the Statistics. (It’s not really as bad as the numbers make it appear.)

]]> http://solutions.synearth.net/2012/02/3475/feed/ 0 http://solutions.synearth.net/2012/01/working-together-1124/ http://solutions.synearth.net/2012/01/working-together-1124/#comments Tue, 31 Jan 2012 23:11:35 +0000 admin http://solutions.synearth.net/?p=3467 Reposted from TomDispatch.com.

Closure of the Strait of Hormuz?

Michael T. Klare

Ever since December 27th, war clouds have been gathering over the Strait of Hormuz, the narrow body of water connecting the Persian Gulf with the Indian Ocean and the seas beyond.  On that day, Iranian Vice President Mohammad Reza Rahimi warned that Tehran would block the strait and create havoc in international oil markets if the West placed new economic sanctions on his country.

“If they impose sanctions on Iran’s oil exports,” Rahimi declared, “then even one drop of oil cannot flow from the Strait of Hormuz.”  Claiming that such a move would constitute an assault on America’s vital interests, President Obama reportedly informed Iran’s supreme leader Ayatollah Ali Khamenei that Washington would use force to keep the strait open.  To back up their threats, both sides have been bolstering their forces in the area and each has conducted a series of provocative military exercises.

All of a sudden, the Strait of Hormuz has become the most combustible spot on the planet, the most likely place to witness a major conflict between well-armed adversaries.  Why, of all locales, has it become so explosive?

Oil, of course, is a major part of the answer, but — and this may surprise you — only a part.

Petroleum remains the world’s most crucial source of energy, and about one-fifth of the planet’s oil supply travels by tanker through the strait.  “Hormuz is the world’s most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011,” the U.S. Department of Energy noted as last year ended.  Because no other area is capable of replacing these 17 million barrels, any extended closure would produce a global shortage of oil, a price spike, and undoubtedly attendant economic panic and disorder.

No one knows just how high oil prices would go under such circumstances, but many energy analysts believe that the price of a barrel might immediately leap by $50 or more.  “You would get an international reaction that would not only be high, but irrationally high,” says Lawrence J. Goldstein, a director of the Energy Policy Research Foundation.  Even though military experts assume the U.S. will use its overwhelming might to clear the strait of Iranian mines and obstructions in a few days or weeks, the chaos to follow in the region might not end quickly, keeping oil prices elevated for a long time.  Indeed, some analysts fear that oil prices, already hovering around $100 per barrel, would quickly double to more than $200, erasing any prospect of economic recovery in the United States and Western Europe, and possibly plunging the planet into a renewed Great Recession.

The Iranians are well aware of all this, and it is with such a nightmare scenario that they seek to deter Western leaders from further economic sanctions and other more covert acts when they threaten to close the strait.  To calm such fears, U.S. officials have been equally adamant in stressing their determination to keep the strait open.  In such circumstances of heightened tension, one misstep by either side might prove calamitous and turn mutual rhetorical belligerence into actual conflict.

Military Overlord of the Persian Gulf

In other words, oil, which makes the global economy hum, is the most obvious factor in the eruption of war talk, if not war.  Of at least equal significance are allied political factors, which may have their roots in the geopolitics of oil but have acquired a life of their own.

Because so much of the world’s most accessible oil is concentrated in the Persian Gulf region, and because a steady stream of oil is absolutely essential to the well-being of the U.S. and the global economy, it has long been American policy to prevent potentially hostile powers from acquiring the capacity to dominate the Gulf or block the Strait of Hormuz.  President Jimmy Carter first articulated this position in January 1980, following the Islamic Revolution in Iran and the Soviet invasion of Afghanistan.  “Any attempt by an outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America,” he told a joint session of Congress, “and such an assault will be repelled by any means necessary, including military force.”

In accordance with this precept, Washington designated itself the military overlord of the Persian Gulf, equipped with the military might to overpower any potential challenger.  At the time, however, the U.S. military was not well organized to implement the president’s initiative, known ever since as the Carter Doctrine.  In response, the Pentagon created a new organization, the U.S. Central Command (CENTCOM), and quickly endowed it with the wherewithal to crush any rival power or powers in the region and keep the sea lanes under American control.

CENTCOM first went into action in 1987-1988, when Iranian forces attacked Kuwaiti and Saudi oil tankers during the Iran-Iraq War, threatening the flow of oil supplies through the strait.  To protect the tankers, President Reagan ordered that they be “reflagged” as American vessels and escorted by U.S. warships, putting the Navy into potential conflict with the Iranians for the first time.  Out of this action came the disaster of Iran Air Flight 655, a civilian airliner carrying 290 passengers and crew members, all of whom died when the plane was hit by a missile from the USS Vincennes, which mistook it for a hostile fighter plane — a tragedy long forgotten in the United States, but still deeply resented in Iran.

Iraq was America’s de facto ally in the Iran-Iraq war, but when Saddam Hussein invaded Kuwait in 1990 — posing a direct threat to Washington’s dominance of the Gulf — the first President Bush ordered CENTCOM to protect Saudi Arabia and drive Iraqi forces out of Kuwait.  And when Saddam rebuilt his forces, and his very existence again came to pose a latent threat to America’s dominance in the region, the second President Bush ordered CENTCOM to invade Iraq and eliminate his regime altogether (which, as no one is likely to forget, resulted in a string of disasters).

If oil lay at the root of Washington’s domineering role in the Gulf, over time that role evolved into something else: a powerful expression of America’s status as a global superpower.  By becoming the military overlord of the Gulf and the self-appointed guardian of oil traffic through the Strait of Hormuz, Washington said to the world: “We, and we alone, are the ones who can ensure the safety of your daily oil supply and thereby prevent global economic collapse.”  Indeed, when the Cold War ended — and with it an American sense of pride and identity as a bulwark against Soviet expansionism in Europe and Asia — protection of the flow of Persian Gulf oil became America’s greatest claim to superpowerdom, and it remains so today.

Every Option on Every Table

With the ouster of Saddam Hussein in 2003, the one potential threat to U.S. domination of the Persian Gulf was, of course, Iran.  Even under the U.S.-backed Shah, long Washington’s man in the Gulf, the Iranians had sought to be the paramount power in the region.  Now, under a militant Shiite Islamic regime, they have proven no less determined and — call it irony — thanks to Saddam’s overthrow and the rise of a Shiite-dominated government in Baghdad, they have managed to extend their political reach in the region.  With Saddam’s fate in mind, they have also built up their defensive military capabilities and — in the view of many Western analysts — embarked on a uranium-enrichment program with the potential to supply fissile material for a nuclear weapon, should the Iranian leadership choose someday to take such a fateful step.

Iran thus poses a double challenge to Washington’s professed status in the Gulf.  It is not only a reasonably well-armed country with significant influence in Iraq and elsewhere, but by promoting its nuclear program, it threatens to vastly complicate America’s future capacity to pull off punishing attacks like those launched against Iraqi forces in 1991 and 2003.

While Iran’s military budget is modest-sized at best and its conventional military capabilities will never come close to matching CENTCOM’s superior forces in a direct confrontation, its potential pursuit of nuclear-arms capabilities greatly complicates the strategic calculus in the region.  Even without taking the final steps of manufacturing actual bomb components — and no evidence has yet surfaced that the Iranians have proceeded to this critical stage — the Iranian nuclear effort has greatly alarmed other countries in the Middle East and called into question the continued robustness of America’s regional dominance.  From Washington’s perspective, an Iranian bomb — whether real or not — poses an existential threat to America’s continued superpower status.

How to prevent Iran not just from going nuclear but from maintaining the threat to go nuclear has, in recent years, become an obsessional focus of American foreign and military policy.  Over and over again, U.S. leaders have considered plans for using military force to cripple the Iranian program though air and missile strikes on known and suspected nuclear facilities.  Presidents Bush and Obama have both refused to take such action “off the table,” as Obama made clear most recently in his State of the Union address.  (The Israelis have also repeatedly indicated their desire to take such action, possibly as a prod to Washington to get the job done.)

Most serious analysts have concluded that military action would prove extremely risky, probably causing numerous civilian casualties and inviting fierce Iranian retaliation.  It might not even achieve the intended goal of halting the Iranian nuclear program, much of which is now being conducted deep underground.  Hence, the consensus view among American and European leaders has been that economic sanctions should instead be employed to force the Iranians to the negotiating table, where they could be induced to abandon their nuclear ambitions in return for various economic benefits.  But those escalating sanctions, which appear to be causing increasing economic pain for ordinary Iranians, have been described by that country’s leaders as an “act of war,” justifying their threats to block the Strait of Hormuz.

To add to tensions, the leaders of both countries are under extreme pressure to vigorously counter the threats of the opposing side.  President Obama, up for re-election, has come under fierce, even hair-raising, attack from the contending Republican presidential candidates (except, of course, Ron Paul) for failing to halt the Iranian nuclear program, though none of them have a credible plan to do so.  He, in turn, has been taking an ever-harsher stance on the issue.  Iranian leaders, for their part, appear increasingly concerned over the deteriorating economic conditions in their country and, no doubt fearing an Arab Spring-like popular upheaval, are becoming more bellicose in their rhetoric.

So oil, the prestige of global dominance, Iran’s urge to be a regional power, and domestic political factors are all converging in a combustible mix to make the Strait of Hormuz the most dangerous place on the planet. For both Tehran and Washington, events seem to be moving inexorably toward a situation in which mistakes and miscalculations could become inevitable.  Neither side can appear to give ground without losing prestige and possibly even their jobs.  In other words, an existential test of wills is now under way over geopolitical dominance in a critical part of the globe, and on both sides there seem to be ever fewer doors marked “EXIT.”

As a result, the Strait of Hormuz will undoubtedly remain the ground zero of potential global conflict in the months ahead.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. His newest book, The Race for What’s Left: The Global Scramble for the World’s Last Resources (Metropolitan Books), will be published in March. 

Copyright 2012 Michael T. Klare

2012 Forecast: Bang and Whimper

There’s a lot to be nervous about, even if you don’t subscribe to the undercooked Mayan apocalypse lore moving through the gut of the Internet like a Staphylococcus-infected tamale. The casual observer might say that nothing seemed to give on the world scene in 2011 despite the Fukushima meltdown, the Arab Spring uproars, the train wreck of European finance, the disappearing act at MF Global, and the assorted injuries done to the Kardashian brand by the giant walking dildo Kris Humphries.

I demur. On close examination, the industrial world underwent complete zombification in 2011. Its member states and their institutions are now lurching across the stage of history like so many walking dead. Whole European nations are dead, their citizens squirming around the ruined bones of failed speculative condo projects, housing estates, and luxury hotels like botfly larvae. The USA lies in complete moral ruin despite the exertions of ten thousand evangelical preachers in dusty back-road tilt-up chapels from Texas to Carolina, several new museums of Creation Science, and the shining example of former Senator Rick Santorum. Just look at how we behave, from the cloakrooms of Congress to the piercing parlors of West Hollywood to the 7-Elevens of suburban Maryland: a nation of thieves, racketeers, reality TV sluts, wannabe road warriors, light-fingered gangsta-boyz, and crybabies living in an anomie-drenched decrepitating demolition derby landscape of failure. When everybody is a zombie, whose brains are left to eat? Echo answers…. On to the predictions for 2012 then.

The biggest political shock awaiting us is the massive disruption of the major party nominating conventions next summer, when thousands of angry citizens descend on Tampa and Charlotte demanding a reality test. The parties will attempt to go about their ritual business, ignoring the mischief outside the convention centers, and both parties will make the mistake of siccing the cops on the protestors. The result will be a much bigger mess than the one I personally witnessed on the streets of Chicago, 1968, when the party hacks anointed the grinning sell-out Hubert Humphrey to run against Ole Debbil Nixie. Just before getting tear-gassed on Michigan Avenue that night, I saw some kid hoisting a sign that depicted the nominee with a Hitler mustache over the epithet: Mein Humph! It made my night, despite the subsequent retching in the gutter.

The two major parties are completely bankrupt zombie organizations and this election may be their last stand – if they even survive the conventions. Neither of them can come to grips with the reality-based issues of the day: epochal financial and economic contraction, peak energy (and many other resources), climate change, the absence of the rule of law in banking, and generational grievance – or, perhaps more to the point, the manifestations of these giant trends as presented in unemployment, debt slavery, foreclosure, bankruptcy, homelessness, hunger, and X-million family tragedies. Both parties can only promise the return to a bygone status quo that is largely mythical.

President Obama, the putative “progressive” – spokesman of the Ivy League, Silicon Valley, Lower Manhattan, and all the other precincts where “folks” imagine themselves to be advanced thinkers – can’t even wrap his mind around the simple fact that we will never be “energy independent” if we think that means running 260 million cars and trucks, no matter how many algae farms we pretend to invest in. Here is man who ought to know better and either doesn’t, or is lying about it. He has other failures to answer for, too. Why, following the Citizens United decision in the Supreme Court, did Mr. Obama not prompt his party to sponsor federal legislation (or a constitutional amendment) that would redefine a corporation as not identical in “personhood” to a human being? Why does he still employ an Attorney General who has not started one prosecution for financial misconduct amid a panorama of arrant swindling and fraud? (Ditto: heads of the SEC, CFTC, etc.) And why did he not object loudly to the provision in the latest defense appropriations bill that allows for the capricious arrests and indefinite detention of anyone in the USA on suspicion of “terrorism?” Does this graduate of Harvard Law remember what habeas corpusmeans?

A lot of voters projected on Mr. Obama some notion of supernatural brilliance – our Hollywood fantasies are rife with wishes to be saved, and therefore redeemed, by our former victims – but he turned out to have a pedestrian mind. Could he possibly believe we have “a hundred years of natural gas” in the ground? Or that we’re in a position to ramp up another cycle of industrial economic “growth?” Or that we can continue the web of cruel rackets that passes for medical care in this country? When the Democratic Party re-nominates Obama, it will be sealing its death warrant, and it will be on its way to the same cosmic vacuum where the memory of the Whigs lingers on.

Meanwhile, the Republicans labor to convert themselves into the party of corn-pone Nazism with all their unconcealed lust to push everybody around under the plastic eagle rubrics of “Freedom” and “Liberty.” Look at the dismal lineup of morons, hypocrites, and religious fanatics arrayed for the Iowa caucus: a doctor who is also a creationist!? A leveraged buyout artist! A grifter fresh from K Street! A lady Christian theocrat wholly owned by the “dominionist” New Apostolic Reformation cult! A George W. Bush imitator showing symptoms of early onset senility! The whole posse is preoccupied with things supernatural. And being so dedicated to things unreal, they’re the prime representatives of the suburban clusterfuck, who will do anything to keep that obsolete machine running, even if it means national suicide, because they lack the brains to understand where history is taking us and what the mandates of reality are shouting at us about the urgent need to reorganize American life. They are also the vassals of corporate despotism – where the Democrats are mere footservants. They masquerade as “job creators,” but they promote the off-shoring of every activity that corporate America can shed in its quest for ever-greater executive compensation. The lip-service they pay to “freedom” is belied by their intent to control everybody’s personal life, commoditize the public interest, and sell out their grandchildren’s future for a few extra rounds of golf.

I think this gang, too, will be sent packing by the mobs of 2012. I have a nagging intimation that some third party candidate will emerge. The two personalities I keep seeing in that role are Howard Dean and Michael Bloomberg. Both of them are imperfect, but both of them are clear-headed and action-oriented, and I have a feeling that both of them are stewing in the background over the spectacle of idiocy, inertia, and dithering they see at every political compass point. Maybe somebody else will crawl out of the woodwork. I’ve said before in the weekly blog that conditions could deteriorate so badly that a Pentagon general might have to step into national leadership just to keep the grocery stores supplied with basic rations – but that is an outcome in my personal asteroid belt of  probabilities.

Whatever party ends up running things, and whomever fronts it, is going to be in for a helluva wild ride. The USA is diving into an economic depression that will make the 1930s look like a Busby Berkeley production number. Compressive contraction will have its way with us, whatever Ben Bernanke thinks. There will simply be less activity of the kinds we’re used to – Big Box shopping sprees, hamburger sales, theme park visits, house closings, you name it – than our hypertrophic system requires to keep its own destructive momentum going. Instead, the whole thing will just topple over, inert, like a 99-cent gyroscope giving into the forces of entropy. There will be a lot of bewildered, angry, dispossessed people from sea to shining sea. Not a few of them will “act out,” that is, start breaking things, stealing things, targeting easy prey, hurting bystanders, and even tangling with police. Personally, I don’t believe in the internment camp meme so popular among the doomer paranoiacs, but surely a lot of people will be cooling their heels in some slammer – while many other miscreants will just get away with crimes against persons and property.

The global banking system was on death-watch all through 2011. Somehow the various doctors in the central banks and finance ministries were able to muster enough accounting legerdemain to give the appearance of a system still showing a pulse. But in a compressive debt deflation, there are only so many accounting tricks you can pull off as money (and wealth) literally disappears down a cosmic worm-hole. In Europe, the process has moved from the margins toward the center. The people of Greece, Portugal, Ireland, Spain, Italy, Belgium will have less income, fewer government services, lost wages and pensions, less comfort than they have had for a couple of generations. Meanwhile, France is drowning in bad paper and the German banks are choking on it. There is really only one plausible outcome and that is default. The reckoning of the bondholders is at hand. Everybody will get poorer simultaneously – and if not, there will be not just regime change but civil war and revolution. The fantasy of a fiscal union in Europe is impossible because it means two things: that Germany will have to issue orders to everybody else; and that Germany would have to pick up the tab for everybody else while telling them what to do. Both are intolerable and implausible. Let’s just think of the Euro experiment as an interesting side effect of the peak energy era… now drawing to a close.

These professional economists with their jabber about QEs and “financial repression” and bond-term “twists” and debt-to-GDP ratios are missing the point. The advanced industrial nations will not be re-jiggered onto any “growth” runway. Rather, we’re entering the rutted wagon-road of de-industrializing and un-advancing. What awaits us in a “time-out” from hyperbolic technological progress. Forget about Ray Kurzweil’s nanobot nirvana. That is not in the cards. Instead, wrap your mind around life in an economy organized around farming, with a much sparser distribution of big urban centers, and far fewer people overall. Don’t imagine for a moment that your grandchildren will be zinging across the landscape in electric cars sampling one theme park after another while “networking” with “friends” on cyborg social networks implanted in their brain jellies. Think of them grooming their mules in the summer twilight. Anyway, you get the picture: everything that the finance ministries and treasuries and central banks are affecting to do is mere shadow theater performed in support of wishful thinking.

The question, then, is what kind of hardship and disorder will attend our journey out of the industrial era into post-technological age we are entering. Will we just turn the world into a Michael Bay movie and blow everything up? Or will we make some graceful descent and retain what is really best about the human spirit?

2012 will be the year of internal strife in these “advanced” nations, of people fighting over the table scraps of modernity among their own, in their own backyards, a desperate sorting out of the remnants. I don’t think we’ll see fighting between the European nations until the internal conflicts are resolved and that will take a few years.

The hot-spots for 2012 are very likely to be in the Middle East. You already know that. What could be more obvious than the tinderbox character of that region? Islamic extremism is poised to take over governments (and armies) in Egypt, Syria, Libya, possibly Algeria, and probably Pakistan.  Iran lost its mind decades ago and seems determined to dominate the region by means of a strategy that can only get it into trouble (and perhaps the whole world if it goes really badly). Saber-rattling is one thing; making an actual move something else. Block the Straits of Hormuz? Not if you don’t want Teheran to turn into an ashtray. That may happen anyway if Iran rattles a nuclear saber. Germany, France, Britain, and Italy, all struggling with terrible problems at home, would breathe a sigh of relief if the mullahs were chastened. The chatter around the Web about an Israeli preemptive attack never ceases.

But it is a possibility.

Oh, and don’t forget Turkey. Formerly the “sick man” of Europe, Turkey has become strangely resurgent, prompting some recollections that the Ottoman Empire actually administered over much of the Middle East until 1914, and not with complete incompetence, either. They just sort of imploded from empire fatigue, which is not the worst way to go down, if history is taking you there anyway. But empires come back, too, and what passes for Turkey today is a polity that in one incarnation or another has been around since the ancient Greek days, and was, for quite a long while, Rome Release 2.0.

Don’t be surprised if some hostilities break out between Turkey and Iran, since a battleground named Iraq lies between them. Iraq is a basket-case despite an immense reserve of oil under its sands, and having had the US military babysit it for eight years. The last American combat units left Iraq this fall, but there are still plenty of US soldiers there, maintaining our garrisons and keeping an eye on things. The question is: can they control what the Kurds do in the north, and whatever meddling Iran engages in around the Basra oil region in the South? These American support troops remaining in Iraq could find themselves looking like a ham-and-cheese sandwich between a lot of crusty mischief north-and-south. The Turks have already had a dustup or two with Syria lately – Syria occupies a big wedge between Turkey, Iraq and the Mediterranean Sea – and Turkey will take a dim view of that nation falling into the hands of Islamic extremists if Assad gets booted.

All bets are off in Egypt. Anything can happen there.

The dangerous position of Israel vis-à-vis all these quarreling players is probably as bad as it has been in two generations. An attack by a neighbor or getting caught in a crossfire between neighbors would stimulate a lusty response, and perhaps World War Three. As if the world needed this added aggravation. It makes my kishkas ache just to think about it. Sometimes I wonder why the whole Israeli nation doesn’t just pack up and move to Nebraska.

2012 is the year that China proves to be a mortal nation and rolls over with a very bad case of the vapors. Their banking system is a sham. Their property bubble is a fiasco. Their government has no formal legitimacy and will install a new leadership group this year, while exports crash and mass factory layoffs happen. There will be a lot of pissed off people in China, and they may express themselves politically in ways that have seemed unthinkable for decades. The aura of social control looms large in China, but an aura is a light garment not recommended for stormy political weather. 2012 could be the year that China begins its journey into a “Balkanized” collection of smaller autonomous parts, which is the big fat trendline for all the nations of the world, including the USA.

It is hard to think about the bizarre case of India, a nation with one foot in the modern age and the other in a colorful hallucinatory dreamtime. Their climate-change related problems are doing heavy damage to the food supply. Their groundwater is almost gone. The troubles of the wobbling global economy will take a lot pep out of their burgeoning tech and manufacturing sectors. It wouldn’t be surprising if these travails prompted distracting hostilities with its failed-state neighbor, Pakistan. Pakistan, with its inexhaustible supply of Islamic maniacs could easily start a rumble with some crazy caper like the Mumbai hotel assault of two years ago, but this time India would answer with a heavy cudgel, perhaps even a nuclear sortie designed to neutralize Pakistan’s dangerous toys at a stroke. And that would be that. Like cleaning out an annoying neighborhood crack house. It’s not a very appetizing scenario, but what else can you do about failed states with nuclear bombs?

Turning to Japan….That sore beset kingdom is suffering all the blowback of modern times at once: the Godzilla syndrome up in Fukushima; a demographic collapse; an imminent bond crisis; the collapse of export market partners; and a long, agonizing death spiral of its banks. I stick by a prediction I tendered back in March, after the deadly tsunami: Japan will decisively opt for a return to pre-industrial civilization. Why not? The rest of the world will be dragged kicking and screaming to the same place. Let Japan get there first and enjoy the advantage of the early adapter – back to an economy of local, hand-made stuff, rigid social hierarchy, folkloric hijinks in whispering bamboo groves, silk robes, and frequent time outs for the tea ceremony.

Russia? The big bear might have just sat out another decade and enjoyed its remaining fossil fuel supply, but the temptation to project power is a demanding habit, so they make all sorts of noises about watching Iran’s back – though mutual hatred abounds – and generally rushing into the power vacuum occupied by a US with dwindling mojo. There were stirrings of political discontent just  few weeks ago, after the rigged early rounds of national elections, and who knows where that will lead. Vlad Putin has held things together there impressively after the meltdown of the 1990s, but apparently the tranquil veneer is thin. Except for two big cities, the sprawling nation is broke and decrepitating, with little to offer the world but oil and gas – not an inconsiderable offering, but one with certain limits especially as they drain their oil fields for export cash. The rule of law is also pretty sketchy there. The government, as ever, is a kind of gangster affair, only this time one that allows some people to get really rich, not just connected. Their 70-year experiment with Marxian dogma has probably put them off ideology for a few centuries to come, which means less money spent on prisons for people with independent thoughts and more for call girls and home furnishings. I imagine that Putin will maintain his grip through the year. The Russians will appreciate relative order more when they see a few other countries devolve into internal conflict.

I don’t see much action around South America this year. Some Americans are already fleeing to Argentina. Perhaps they’ll enjoy it, but there is always the menace of property confiscation, and worse. Brazil will continue to appear vibrant while it grows more population, shoving it toward eventual ruin. They will see setbacks in the development of their deep-sea oil due to an international shortage of investment capital.

Mexico’s fortunes depend on its oil industry, Pemex, which faces remorseless depletion. Revenue from oil production and (dwindling) exports can’t hope to keep up with continuing population growth (and ever more poverty). These trends suggest a continued loss of control for the central government and more territorial fighting among the drug gangs and other criminal mafias. As long as all those loose heads roll on the south side of the Rio Grande the US will just tut-tut off to the side. But if the gangs get bold and start venturing cross border to make mischief we will make like Woodrow Wilson did and send the regular army down to spank them. It would be a satisfying diversion for that portion of the US demographic that enjoys Ultimate Fighting on TV, though it won’t get them their job back at the Pontiac plant.

The global oil picture is not so reassuring. The fragility of our supply is simply unnoticed by commuters enjoying Lady Gaga on their iPods. Meanwhile, our politicians retail fantasies of endless domestic reserves, which is total horse shit. Global exports are in remorseless decline, apart from geopolitical fissures and strains that could just paralyze allocation cold. If a hot war breaks out in the Middle East, you’ll see the American supermarket shelves empty in three days. Won’t that be fun. Note, too: the manias over shale oil and shale gas will reveal themselves as just more bubbles in a long cavalcade of bubbles, and both will begin to founder on a shortage of investment capital. The shale plays will prove to have been a national self-esteem-building program, not any part of an energy policy.

The abiding question as we turn the corner into the New Year is: how come Jon Corzine is still at large? (Not to mention Angelo Mozilo, plus the entire executive floor of Goldman Sachs, and about 5000 other assorted Wall Street grifters still on the loose.) There is plenty of dire talk that the collapse of MF Global, and the shenanigans around its demise involving the evaporation of segregated accounts, has gravely and permanently damaged the entire investment industry, but especially the commodities funds, who can no longer depend on the Chicago Mercantile Exchange to honestly clear trades and regulate behavior. The whole affair, and the thundering silence from the oval office, makes Barack Obama seem not just inept but somehow complicit in the looting of America. As if he needs another mark of discredit in his record of consistent fumbling. There are signs that a lot of people who still have something resembling money invested in various funds will go to cash in the weeks ahead, including under-the-mattress style. The distrust and paranoia is palpable now, with the frenzies of Yuletide bygone for another year. After all, why trust banks, especially the TBTF monsters. Such a mass move could take the starch even out of highly manipulated equity markets.

Nemesis may have her day, though. Jamie Dimon might have just gone a swindle too far for the fates to ignore him another year. JP Morgan looks to be in a peck of trouble for its role in the confiscation of MF Global accounts, not to mention its hijinks in the precious metals markets. The impudence of these rascals! In a nation when all sorts of people are murdered every day for little more reason than being in the wrong place at the wrong time, is it not a wonder that some poor swindled Grampa with nothing left to live for has not tossed a Molotov cocktail through the window of a Wall Street watering hole known to be frequented by banking poobahs? Perhaps this sort of action awaits us in 2012.

Longtime readers of this blog know how much I love predicting the Dow Jones Industrial Average to crash down to 4000 every year. I never disappoint – though I am often disappointed. In 2011, the SP index managed the delightful trick of finishing a fraction below its previous January kickoff. The stock markets have churned in range-bound purgatory for a decade while the price of a jar of pickles has multiplied four-fold. Applying the calculus, and given the pickle-DOW differential, I’d say my call was actually pretty good. In any case, this year I change the tune slightly: I predict the DJIA will go to 4000, with the catch that the number is only a way-station to 1000, which it will hit in 2014. We may be short of snow here in the Northeastern US – thanks to La Nina – yet not short of confidence that the mills of the Gods grind slowly, but grind exceedingly fine.

Finally, look for the publication of my next book round July 2012, a non-fiction work titled Too Much Magic: Wishful Thinking, Technology and the Fate of the Nation… from The Atlantic Monthly Press. In a week, I begin work on World Made By Hand3.

Good luck to you in 2012, and report any suspicious characters adorned with ear-plugs, quetzel feathers, and carrying obsidian knives to your nearest office of Homeland Security.

Why We Must Make Peace

Timothy Wilken, MD

Capitalism and the Great Market are features of Neutrality. Neutrality requires unlimited resources. Humanity has had unlimited resources in our endless supply of fossil fuels.

Our present economic crash, which is now being compared to the Great Depression, is the result of approaching end of fossil fuels. As of August 2001, 23 out of 44 nations [representing 99% of world oil production in 2000] have passed their production peaks.

Most of humanity is unaware of this approaching crisis, but the governments of the world are aware and are now acting to control the last of the fossil fuel on the planet. This of course is the real purpose of America’s coming war with Iraq. Our leaders are trying to secure control of the Iraqi oil.

Saddam Hussein has threatened to set the Iraqi oil fields on fire if pressed too hard in the coming war. During the Persian Gulf War from the fall of late 1990 to early 1991, Iraq embarked on a systematic destruction of Kuwait’s oil industry, and Iraqi forces set fire to 789 individual Kuwaiti oil wells. It took Red Adair, hundreds of millions of dollars, and over 11 months to put out the fires. How many million barrels of oil were burned is unknown. The attendant results of the fires were catastrophic both from an economic and ecological standpoint.

Recently the workers of Venezuelan oil industry have gone on strike. Prior to the strike Venezuela was exporting 3 million barrels of oil a day to the United States. Now they are exporting none. They have even started to import gasoline because the autos and trucks of their nation are running dry.

This past friday oil closed at $32.72 a barrel. If things don’t go well in the new Gulf war, and Hussein does successfully torch the oil fields, the price of oil could triple.

This would mean gasoline at the pump could rise to over $5 a gallon and the cost of energy four powering our homes and businesses could triple.What would the effect of such a tripling have on the economy and our personal lives?

As I said at the top of this essay. Neutrality is obsolete. We humans need to move on the next stage of our evolution. We need to reorganize synergically.  We all need air, water, food, shelter, security, love and meaning. We humans are all the same. We are the same species.

We need to make peace. If we humans won’t work together to solve our mutual problems, then we will perish separately fighting like animals.