Ready Or Not… The Unsustainable Status Quo Is Ending

I have to confess, it’s getting more and more difficult to find ways of writing about everything going on in the world.

Not because there’s a shortage of things to write about — wars, propaganda, fraud, Ebola — but because most of the negative news and major world events we see around us are symptoms of the disease, not the disease itself.

There are only so many times you can describe the disease, before it all becomes repetitive for both the writer and the reader. It’s far more interesting to get to the root cause, because then real solutions offering real progress can be explored.

Equally troubling, in a world where the central banks have distorted, if not utterly flattened, the all important relationship between prices, risk, and reality, what good does it do to seek some sort of meaning in the new temporary arrangement of things?

When the price of money itself is distorted, then all prices are merely derivative works of that primary distortion. Some prices will be too high, some far too low, but none accurately determined by the intersection of true demand and supply.

If risk has been taken from where it belongs and instead shuffled onto central bank balance sheets, or allowed to be hidden by new and accommodating accounting tricks, has it really disappeared? In my world, risk is like energy: it can neither be created nor destroyed, only transformed or transferred.

If reality no longer has a place at the table — such as when policy makers act as if the all-too-temporary shale oil bonanza is now a new permanent constant — then the discussions happening around that table are only accidentally useful, if ever, and always delusional.

Through all of this, the big picture as described in the Crash Course grows ever more obviously clear: we are on an unsustainable course; economically, ecologically, and — most immediately worryingly  — in our use of energy.

So let’s start there, with a simple grounding in the facts.

By The Numbers

Humans now number 7.1 billion on the planet and that number is on track to rise to 8 or 9 billion by 2050. Already ‘energy per capita’ is stagnant across the world and has been for a few decades. If the human population indeed grows by 15-25% over the next three and a half decades, then net energy production will have to grow by the same amount simply to remain constant on a per capita basis.

But can it? Specifically, can the net energy we derive from oil grow by another 15% to 25% from here?

Consider that, according to the EIA, the US shale oil miracle will be thirty years in the rear-view mirror by 2050 (currently projected to peak in 2020). And beyond just shale, all of the currently-operating conventional oil reservoirs will be far past peak and well into their decline. That means that the energy-rich oil from the giant fields of yesteryear will have to be replaced by an even larger volume of new oil from the energetically weaker unconventional plays just to hold things steady.

To advance oil net energy on a per capita basis between now and 2050, we’ll have to fight all of the forces of depletion with one hand, and somehow generate even more energy output from energetically parsimonious unconventional sources such as shale and tar sands with the other hand.

These new finds…they just aren’t the same as the old ones. They are deeper, require more effort per well to get oil out, and return far less per well than those of yesteryear. Those are just the facts as we now know them to be.

In 2013, total worldwide oil discoveries were just 20 billion barrels. That’s against a backdrop of 32 billion barrels of oil production and consumption. Since 1984, consuming more oil than we’re discovering has been a yearly ritual. To use an analogy: it’s as if we’re spending from a trust fund at a faster rate than the interest and dividends are accruing. Eventually, you eat through the principal balance and then it’s game over.

Meanwhile, even as the total net energy we receive from oil slips and our consumption wildly surpasses discoveries, the collective debt of the developed economies has surpassed the $100 trillion mark — which is a colossal bet that the future economy will not only be larger than it is currently, but exponentially larger.

These debts are showing no signs of slowing down. Indeed, the world’s central banks are doing everything in their considerable monetary power to goose them higher, even if this means printing money out of thin air and buying the debt themselves.

Along with this, the demographics of most developed economies will be drawing upon badly-underfunded pension and entitlement accounts — most of which are literally nothing more substantial than empty political promises made many years ago.

These trends in oil, debt and demographics are stark facts all on their own. But when we tie these to the obvious ecological strains of meeting the needs of just the world’s current 7.1 billion, any adherence to the status quo seems worse than merely delusional.

Here’s just one example from the ecological sphere. All over the globe we see regions in which ancient groundwater, in the form of underground aquifers, is being tapped to meet the local demand.

Many of these reservoirs have natural recharge rates that are measured in thousands, or even tens of thousands, of years.

Virtually all of them are being over-pumped. The ground water is being removed at a far faster rate than it naturally replenishes.

This math is simple. Each time an aquifer is over-pumped, the length of time left for that aquifer to serve human needs diminishes. Easy, simple math. Very direct.

And yet, we see cultures all over the globe continuing to build populations and living centers – very expensive investments, both economically and energetically – that are dependent for their food and water on these same over-pumped aquifers.

In most cases, you can calculate with excellent precision when those aquifers will be entirely gone and how many millions of people will be drastically impacted.

And yet, in virtually every case, the local ‘plan’ (if that’s the correct word to use here) is to use the underground water to foster additional economic/population growth today without any clear idea of what to do later on.

The ‘plan’ such as it is, seems to be to let the people of the future deal with the consequences of today’s decisions.

So if human organizations all over the globe seem unable to grasp the urgent significance of drawing down their water supplies to the point that they someday run out, what are the odds we’ll successfully address the more complex and less direct impacts like slowly falling net energy from oil, or steadily rising levels of debt? Pretty low, in my estimation.

Conclusion

Look, it’s really this simple: Anything that can’t go on forever, won’t.  We know, financially speaking, that a great number of nations are utterly insolvent no matter how much the accounting is distorted. Said another way: there’s really no point in worrying about the combined $100 trillion shortfall in Social Security and Medicare, because it simply won’t be paid.

Why? It can’t, so it won’t. The promised entitlements dwarf our ability to fund them many times over. There’s really not much more to say there.

But the biggest predicament we face is that steadily-eroding net energy from oil, which will someday be married to steadily-falling output as well, can’t support billions more people and our steadily growing pile of debt.

Just as there’s no plan at all for what to do when the groundwater runs out besides ‘Let the folks in the future figure that one out,’ there’s no plan at all for reconciling the forced continuation of borrowing at a faster rate than the economy can (or likely will be able to) grow.

The phrase that comes to mind is ‘winging it.’

The wonder of it all is that people still turn to the same trusted sources for guidance and as a place to put their trust. For myself, I have absolutely no faith that the mix of DC career politicians and academic wonks in the Fed have any clue at all about such things as energy or ecological realities.  Their lens only concerns itself with money, and the only tradeoff concessions they make are between various forms of economic vs. political power.

If the captains supposed to be guiding this ship are using charts that ignore what lies beneath the waterline, then you can be sure that sooner or later the ship is going to strike something hard and founder.

I’m pretty sure the Fed’s (and ECB’s and BoJ’s and BoE’s) charts resemble those of medieval times, with “Here be dragons” scrawled in the margins next to a series of charts of falling stock prices and unwinding consumer debt.

So there we are. The globe is heading from 7.1 billion to 8 or 9 billion souls, during a period of time when literally every known oil find will be well past its peak. Perhaps additional shale finds will come along on other continents to smooth things out for a bit (which is not looking likely), but it’s well past time to square up to the notion that cheap oil is gone. And with it, our prospects for the robust and widespread prosperity of times past.

Because all of this inevitably leads to some sort of time of reckoning, natural questions emerge: What might happen and when? What would that feel like?  How would I know it’s started? Given the knowns and unknowns, are there any dominant strategies for mitigating the risks that I should undertake?  What are the challenges and what are the opportunities?

In Part 2: The 3 Likeliest Ways Things Will Play Out From Here we’re going to explore three scenarios as a means of teasing out what’s most likely to happen over the coming years as the above forces increasingly impact our way of living. Simple math tells us the status quo is unsustainable and therefore will change. What will those changes be? And what can you do today to mitigate their impact on your life and well-being?

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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  • This is the FRUIT of BAD GOVERNMENT by

    1) predatory,

    2) conscience free (‘liberated’ from guilt feelings by the almighty Freud in order to avoid ‘neurosis’),

    3) social Darwinist,

    4) game theory (cooperation is a guise to fool and destroy the competition) fucked up world view,

    5) situational ethics (an oxymoron!),

    6) if it feels good-DO IT

    corporate consent manufacturing propagandists in the service of SHIT CANNED ETHICS for SHORT TERM PROFITS!

    The SOLUTION lies in GOOD GOVERNMENT; the PROBLEM is that CORPORATIONS ARE the present BAD GOVERNMENT! They support imprisoning people that speak truth to power and giving the people the mushroom treatment for the same reason they ignore global warming and pollution: SHIT CANNED ETHICS FOR SHORT TERM PROFITS!

    As part of being responsible, caring human beings, we have to pressure our government to take major action to stop the degradation of the biosphere from climate change. This is causing death and disease to both domestic animals and wildlife, all of which have done nothing to deserve such a horrible fate at our hands. It’s time to eliminate the excuse our fossil fuel loving oligarchy uses for “resources” wars for oil that bring nothing but misery to us and profits for them.

    I started a petition on Care2: Demand Liberty From Fossil Fuels Through 100% Renewable Energy WWII Style Effort. I’m hoping that if enough people sign my petition, we can make a difference. I have 339 signatures. Will you help me collect more by adding your name?

    Here’s a link to the petition: http://www.thepetitionsite.com/420/529/456/demand-liberty-from-fossil-fuels-through-100-renewable-energy-wwii-style-effort/

    Thank you and please pass it on. The biosphere you save may be your own. http://www.pic4ever.com/images/earthhug.gif http://www.pic4ever.com/images/icare.gif

  • Euro-BRICS
  • allisnotasitseems

    Mr. Martenson – We have all been enamored with yelling from the rooftops about all the problems in the world. This addiction to fear porn always must come to an end also. Our endlessly droning on about all the woes seemingly everywhere, the desperation, the violence, and desperately wanting to find someone that will listen must come to an end. Our need to have yet more that will now “be informed” by our “courageous” efforts, and need to have even more be shocked and awed with the information and our outrage and intellectual prowess about all the problems must come to an end. All habitual ways of being must come to an end if we want anything different than the status quo. and yes, they will end whether we like it or not.

    Most are so deeply in fear that they forget they just woke up to certain realities a year ago. Memory fades not realizing at 45 years old they are just now catching on to a couple of things. What does
    that say about our first 44 years? Intelligence, education, awareness? Yikes! Capacity to manage stress, how much else about life have we sleep walked through?

    Not much is as it seems we are finding out.

    Question is then, what about these “realities” we drone on about? E.g. these population numbers everyone touts with no real context or depth of understanding. UN numbers who most de-populationist elites tout are not anything like they claim. Anyone bothering to read the actual scientists documents used to promote overpopulation narratives say quite clearly the population will start to decline after about 2048 even under the most optimistic growth trajectories – no war, no catastrophes, no anything really. Yes, we may reach about 8.5B with no major wars, etc., but there is so much infertility that even
    the most outrageous growth trajectories wont sustain the populace and we will start to decline. Many countries are already starting to promote more population as actual underpopulation is becoming an
    issue. Putting things in a different perspective – if one gave everyone on the planet a ¼ acre we wouldn’t even come close to filling up Australia. Isnt that fascinating, yet another erroneous “truth” firmly entrenched in the world’s psyche by those that desire to control it. Overpopulation and the scarcity game have been used since there has been mankind. And all it took was someone to say this nonsense enough times from a place of “authority” and the world runs around saying the sky is falling and starts planning to kill off a certain amount of the herd?

    And yes, energy needs….even simple old technology like solar with its latest efficiency improvements is quite cheaper to employ in much of the world. these stupid grids are antiquated, beyond their capacity rating and massively lossy. Battery technology is many fold better than even 3 years ago and way grander versions just havent made it into the marketplace yet but are already created. This makes wind and solar way cheaper and better, simplistic alternatives way cheaper than polluting fossil fuels, than numerous trillions of dollars wasted in wars for oil, in fictions for the naïve called wars on terrorism. There is much, much grander technology available as well that would make energy issues and pollution and control a non-issue. It also does with these dumb transmission grids that do not make any sense in 2014 or beyond and havent for decades for those paying attention.

    As far as financial “realities”, what is reality here? We all need to put up with completely fixed, fraudulent markets and currency fictions for control of resources by the usual suspects? I think you and I both know there are grander conversations to be had. Why would a society pay for manufactured, fraudulent debt? Its over as soon as the 7 billion willing victims including WB want it to be over. Why doesn’t WB talk about solutions, rather than just burning up energy on regurgitating oligarch talking points about insurmountable, inevitable problems and their collapse?

    Fear is the first order of business when controlling a mind. That is our issue. The collective mind is so gripped in fear it cannot do anything except think of the latest threat to its survival, the latest sabre tooth tiger scenario, i.e. he is completely and utterly controlled by his masters.

    Most just dont catch on that this game is millennia old. Its nothing new, its just remarketed every few years. The only questions are what side each of our “alternative” media is playing on and how much longer the herd puts up with folks like WB and the rest of the lot and simply just moves on? What side is WB playing on, perpetuating a fool’s mind control game, knowingly, or unknowingly??

    Why would people think they can solve problems by continuing to fixate on the problem and all its shapes and colors. This, again, only serves to occupy the little mental power one has left beyond the sabre tooth tiger survival issue. How many great minds and spirits, much grander than mine, have shown one cannot change anything by fixating on the problem and perpetually forecasting our demise. And what do we do? We enlist numerous others to fixate and obsess on the same problem, i.e. by numerous persons fixating on what they dont want, we flame out in a fireball of fear, anger, and doom…cowering in a corner til the end of days. Physics proves this issue rather nicely with regard to energy and particle flow. Some might prefer terminology around consciousness and spirituality that describe the exact same things. Some just realize simply by common sense born from their life experience – what we think about we bring about.

    Things change when people’s thinking focuses on what they actually want, rather than what they don’t want. Wars on poverty, terrorism, hunger, saving the whales, saving the children, saving the this and that never work – they simply put everyone’s mental powers upon the problem, thus manifesting more of said problem.

    If we want a better world, then we must think, write, act, and most importantly feel our way to one. We must spend our energy on empowerment, staying out of fear, staying in creativity. Creativity is the first fatality of a fear based mind obsessing on problems. This is a literal, physics proven fact. How much
    longer are we going to fight the laws of physics and expect to “win”? The problem with the alternative media and the main stream presstitute corps is one has to find courage to do something other than follow the herd over the cliff. The alternative media may be even more detrimental in some cases than the MSM as they ratchet up the fear many fold and are supposedly allies of the people. They are already factored into the control equation. They are counted on to propagate the fear just like the MSM, particularly unknowingly makes it way more compelling.

    Look around – sex sells? No, what really sells is fear, anger, violence, scarcity, i.e. the status quo. Hypnotic rhythm is what we have. That is, the mind works overtime, 24/7 even, seeking information that supports its existing world views. It works so hard in fact it disregards all evidence to the contrary. It takes a trained mind to look at things and see beyond its own conditioned beliefs.

    If one doesn’t realize he is brainwashed, then he is at best a menace to himself and others, others he actually thinks he cares about, but yet is unwilling to even examine closely his own failed ways to help support. Facing this hypnosis is courage. We have to admit we are neurotic.

    Continuing to do the same thing over and over with the same result is what exactly?

  • thulsa doom

    Your conclusion is we should get rid of money.