Friday, January 3, 2014

Pigs on the Wing

Will the FTSE reach new heights in 2014?
Another year dawns and it’s with some wry amusement that I note almost everyone in the peak energy/collapse blogosphere has been throwing out predictions as to what the coming year has in store for us. It seems to me a bit of a fool’s errand to try and predict what will happen over the coming twelve months because, as the Danish physicist Niels Bohr noted, it’s hard to make predictions, especially when they are in the future. But then Mr Bohr was pretty bad at making predictions himself, failing to foresee that inventing the atomic bomb might lead to a few problems in the future.

Mind you, if one considers oneself as having something even vaguely worthwhile to say about the future of our energy supplies and thereby our industrial civilisation it’s perhaps not too hard to see why people might expect some kind of periodic prediction with a timeframe attached to it. I mean, is it too much to ask? So here’s my prediction about what will happen in the year to come:

I don’t know.

There it is - you have it. I have no clue about gold or silver prices, and still fail to understand why these should be considered important to so many people in this corner of the internet. Neither do I have a clue about the price of oil, subject as it is to a baker’s dozen vagaries ranging from supply and demand, to geopolitics and corruption. I do know that the supply of oil is slowly but steadily dwindling, especially so when you take into account the quality of said oil, but what turn that will take in 2014 is anyone’s guess. Those who have spent far more time analysing these factors seem to be saying that it could be as low as $20 a barrel, or perhaps as high as $200 - or somewhere in the middle, and bouncing around quite a bit. Let’s face it: nobody knows. What we do know is that high prices and volatility cause economic damage, and that low prices mean it isn't profitable to produce it in the first place. These are both good and bad depending on your perspective.

Speaking of geopolitics, what is to happen on the international stage? Will China and Japan have a war? Will Saudi Arabia have an Arab Spring? Will the European Union bust apart at the seams with Greeks fighting Germans? Will Syria’s bloody conflict spread beyond its borders and engulf surrounding lands?

In each case I could say ‘possibly’, but I’d also have to admit that anything else could happen, and probably will. Going from past experience it’s equally as likely that some new previously overlooked regional flashpoint escalates in a way nobody expected it to. China might attack its own Uighurs. North Korea might throw a fit. Israel or Russia might have a nuclear 'whoops' moment. Anything could happen.

Here at home, what is to happen in ‘Great’ Britain? Scotland might or might not decide to turn its back on Sassenach rule. The best of luck to them but either way it won’t make much difference to the fortunes of these increasingly damp and dispirited isles. Will we be invaded by legions of Romanians and Bulgarians - all of whom are thieving, benefit cheating, swarthy ‘others’ as the press keeps telling us? Again, I don’t know, but I doubt it (Romania’s economy is doing better than the British one). If they do arrive en masse, perhaps they could teach us a few of the skills we have so willingly forgotten.

Will Fukushima kill us all? Will the US government launch a war against its own people? Will the world economy crash and we will all have to revert to making transaction with pigs’ teeth? I don’t know, I don’t know, I don’t know.

I’m not much use am I?

Well, okay, if we have to play this game then I’ll make a few predictions that are close enough to home that I feel confident enough to call. Here they are, in no particular order of importance:

  • The government and press will continue to confuse asset price inflation with economic recovery. The fact that the FTSE has inflated like a giant floating pig at a Pink Floyd gig will continue to be heralded as proof that an economic recovery is underway. If further proof were needed, house price rises will continue to such an extent that home ownership will slip even further from the outstretched grasp of Mr and Mrs Average, while multi million pound mansions in London will continue to be snatched up like hotcakes by Chinese, Russian and Arab buyers.
  • At the same time, the number of families who rely on food banks will continue to climb. As will the number of children turning up hungry to school and unable to afford school uniforms. Austerity will continue to bite deeper and harder and more people will end up living on the streets. More families will break down and the number of people with a decent job that allows them a good standard of living and a chance to put some aside for the future will continue to fall.
  • The public will become increasingly fed up. British people don’t get angry, they just get miffed. There will be more peeved letters written to The Times, and mostly they will be about the price of petrol and food, and the fact that energy bills and train fares are going up almost as fast as savings rates and pensions are going down. 
  • There will be a growing realisation among people that the retirement age is accelerating away from them as they age, like a mechanical rabbit at a greyhound track. 
  • The government will continue to enact policies that may have made sense ten or twenty years ago before energy supplies had plateaued but which now make no sense whatsoever unless interpreted through the lens of cargo cult behaviour. They will promise more housing development on protected land, more nuclear power stations, more ‘golden age of energy’ fracking, more high speed train lines that nobody needs or can afford, more airports and more road building to promote GROWTH!
  • More people will see through this increasingly desperate tissue of lies and start wondering why they hadn’t seen through it all a few years earlier when they had more cash. They will start reading books on peak oil and searching the internet for somewhere ‘safe’ to go and live. Their friends will think they are weird and have ‘lost the plot’.
  • Usury will continue to be the most profitable business in the country. More and more people will consider it to be normal behaviour to turn to companies like Wonga.com that feature cute animated 'normal people' characters on prime time adverts and take out loans at 5,853% interest.
  • The weather will be awful, again. Floods, torrential rain and storms will continue to turn this once green and pleasant isle into something from a dystopian sci-fi B movie where it never stops raining. As a result, more homes built on flood plains, beside rivers or a bit too close to the sea, will become uninsurable. And when it does occasionally stop raining it will turn into a scorching drought that gives old people heat stroke and dries up all the rivers.
  • More and more councils and local authorities will slip into the red and have to cut the services they offer. At the same time, the ongoing wholesale privatisation of council services will massively drive up costs as inefficient and bloated corporate behemoths stuffed with thousands of salaried middle managers attempt to make money out of vital public services - and succeed - at the expense of the public. 
  • Ditto with public health services.
  • More public assets will be sold off at fire sale prices to overseas ‘investors’ and this will be spun as a ‘good thing’ and positive for the economy.
  • The number of road miles driven will continue to fall (it has already fallen by 18% since its peak in 2008) and this will again be put down to increased haulier efficiency and better SatNavs.
  • The number of street lights switched off will continue to climb and safety campaigners will continue to insist that we we are going ‘back to the dark ages’.
  • I will finish writing my book entitled “When the Lights Go Out: A Survival Guide for Energy Descent” and a handful of people will place orders for it through this blog.

These are the things we can look forward to in 2014. There are a whole load of other predictions that one could wager upon in the realm of economics, but I’m not going to make any because for the time being at least that realm is controlled by fantasists and mental herds.

One thing that I have observed that should worry anyone with the sense to be worried by it is that the abstract notion of the ‘economy’ as we know it is showing alarming signs of becoming something similar to the state-controlled Soviet communism of yore. It’s ironic, to put it mildly, that as China becomes ever more capitalist in nature (and increasingly hardline attempts to control its shadow banking system are something to look out for this year) the West becomes increasingly monolithic. Because that’s what quantitative easing seems to be all about, namely taking wealth from the population and delivering it to a tiny elite who increasingly control the means of production and are able to successfully lobby governments and enact regulatory capture. But all this is more or less hidden from view, or at least rarely mentioned, and won’t really come apparent until we are looking in the rear view mirror and asking what went wrong.

And I’m not even going to mention the so-called taper.

Or the US fracking bubble.

So there it is. A bunch of predictions and non-predictions. The only one I feel I can make with cast iron certainty is that our over-loaded techno-economic-infrastructure will continue to be worn thinner by the physical constraints that underpin it and that a great many people will proclaim that this isn’t so while simultaneously becoming poorer in any metric that you care to measure except, perhaps, the availability of credit.

And then maybe credit will die too. But maybe that’ll be next year. Or the year after. 

28 comments:

  1. And Good Mother Earth will continue to rotate gently on her axis giving us all that we needed (in moderation) - and we all will continue to ignore the stark fact that this nest is the ONLY one available in which to live and that we've totally shitted it up.

    Happy and Prosperous (in the old sense) New Year anyway....

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  2. Thanks for that realistic approach to predictions. I like to think total miles driven have declined from their 2008 peak because I jacked in work at the end of that year following Dimitri Orlov's advice.

    My own prediction for 2014 is that a lot of people will die and even more will be born.

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    1. I think you might just be right there, Phil. Saying that, I wonder which year 'peak people' will arrive.

      My 'commute' to work involves walking from the bedroom to the upstairs study. It's a bit longer if I'm working at the woodland, but am hoping to make more use of my bike (it's not the done thing to bring a chainsaw on a public bus).

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  3. Thanks for the list of likely prospects for the year ahead in the UK. I had contemplated something like this myself, but you've nailed it.

    Good luck with the book, I'll be very interested in getting a copy myself. I've something similar to finish this year too, currently titled, The Future is Pagan: Collapse and the New Indigeneity, but it will be a challenge to get it completed.

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  4. Thanks for the last years work and best wishes for 2014. I also made the move back to these dismal wet islands just before Christmas. After nearly six years being away I'm swinging between shocked and amused at the state of the place and people. Looking forward to the book when it arrives.

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    1. The thing that struck me most about moving back here is that society seems to have undergone infantilisation. Adults enjoy entertainment (originally) aimed at children, adverts speak on the level of a kindergarten teacher and the whole celebrity 'culture' thing has got completely out of hand.

      Still, I'm happy to see that there are still a lot of wise and intelligent people living between the cracks, and that gives me hope.

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    2. It was already in progress when I left start of 2008. There was an increasing expectation of more and better at least partly fuelled by debt and drawing equity from the previous housing bubble. Maybe I was too optimistic but I thought the change in the economy would reverse the direction but it doesn't seem that way. People demonstrate a frighting ability to think it should be different for them, maybe we caught a dose of that American exceptionalism. It makes the tactic of the current government of divide and conquer frighteningly effective. I find people are very resistant to considering the bigger picture either looking at the wider state or the world or back into history to put our current situation in context.

      You are right though, it is good to be home, the political situation is dire but not quite at the same point as Hungary was.

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  5. Dmitri Orlov's predictions here:

    http://cluborlov.blogspot.com/2013/12/predictions-for-2014.html

    One thing about predictions is that predictors underestimate the ability of things to just keep on keeping on. When I look back on the last twenty years, what strikes me is just how stagnant society has been.

    Its not that the bottom doesn't fall out, but you can never get the time right. Something like the Great War happeing wasn't a suprise, governments had been spending huge amounts of money and conscripting large armies for decades preparing to fight it. That it came about during the 1914 Balkan crisis, after there had been Balkan crisises almost annually several years, was a surprise and it wasn't until the last week of July did people realize that it was actually finally happening.

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    1. This comment has been removed by the author.

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    2. Yes, it's almost like the boy who cried wolf - over and over. The interminable debt problems of, say, Europe continue unabated, but people have got bored of it and decided to focus on something else. At this stage in the game it's all about perception management. Capital has nowhere to go - everywhere looks scary - and so governments, such as the UK's, use every trick in the book to talk up the economy to attract hot money so that the free lunch can be extended a bit longer.

      I've no doubt anymore that many in the financial classes realise exactly what is going on and are protecting their positions at the expense of the weaker. Of course, they've always done that, but with peak oil that just means that the intended victims are now you and I.

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  6. my prediction is that 2014 is going to suck just a bit more than 2013 if we look at the mean prosperity for the first world masses. Then 2015 is going to suck a bit more than 2014, and so on...all the way down the Long Descent of the next 100 or 200 years.

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    1. Lots of sucking noises punctuated by occasional gulps, and eventually a loud burp as industrial civilisation digests slowly in the gastric juices of Gaia's stomach.

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  7. Here's a comment from David Trethewey - anyone else having problems?
    ***


    I tried to post this using bother Firefox and Chromium on your blog directly but it didn't work - there's probably something in the browser settings etc. causing the problem:

    Here in Cornwall those in charge (who may not be the elected councillors) have their heads in the sand.

    The planned waste incinerator at St. Dennis - a continuation of the 20th century mentality of "bury it and forget about it" to "burn it and forget about it". The industry puts a lot of effort into greenwashing waste incineration but not enough into actually solving the polution problems with them.

    General transport policy with roundabouts altered in an attempt to give more capacity for cars by increasing lanes of approach rather than thinking about accessibility for all road users. See Trafalgar roundabout in Truro, Chiverton roundabout, A30 dualling east of Bodmin.

    Build houses and supermarkets anywhere someone thinks they can make money out of it. I've heard it said that by the end of the next century Cornwall will be entirely built over if we continue at the current rate, based on a doubling of the built up area since 1961.

    'Sustainable' is just one of those buzzwords.

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    1. The councillors in Cornwall seem pretty clueless. It all seems to be geared to attracting more wealthy holidaymakers from the rest of the country and sticking giant supermarkets all over the place (Sainsbury's has just opened here in Penzance and they are building an Asda in Hayle.

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  8. This comment has been removed by a blog administrator.

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  9. I think this is about 3rd party cookies, when I allow 3rd party cookies to be set, commenting works again. Jason - feel free to delete these two comments.

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  10. Interesting that you mentioned Bohr. Our world might in fact be quite different if he hadn't given his tacit support to the Manhattan Project. From what I understand, he wasn't too worried, because he thought building a bomb was impossible (in 1939). A lot of our problems started right there. ---- Eddie

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    1. I read that he dropped out of the project when the implications hit him. Still, by then it was too late.

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  11. Well, if you wanted some assessment of your questionable predictions, here it is...

    China and Japan won't go to war. China needs Japan, Japan needs China as they're both parts of the same manufacturing consortium, the engineers stuck in Japan, the production overpolluting China. Overall, don't expect any serious conflicts or anything that's not showoff *until* resource wars. Which is why the Asian countries have been arming themselves, curiously...

    Saudi Arabia, being pretty much a US protectorate, won't have any "spring" or other insurgency, these curiously tend to happen in countries where the US and EU have some resource-extraction interests (such as sweet light oil in Libya, say). Egypt might not be what it seems either.

    The EU won't fall apart, on the contrary, it will become ever more like the USSR - a collection of rich and poor republics "bound in one chain" as a (Russian) poet once wrote in the 1980s. Despair pulls people together, debt and expectations of credit or well-being, too. The Greeks will still be militant and generally sensitive at home though. Rightfully so, there might be some fancy surprises there.

    Syria's civil war will likely remain contained. In the Middle East, national conflicts are usually kept national even with help/interference from surrounding countries (just remember Lebanon and HAMAS).

    North Korea will keep doing what it used to, that is, lying to its own citizens, being a commie police state and maybe blackmailing other countries with its military threats. No chance of much happening there, Koreans aren't the kind of people who start revolutions - they're pretty much collectivist, and in a sense communism fits in that they won't ever go individual-freedom at any point and will behave like a pack instead.

    Not much chance of a "whoopsie" happening with anything nuclear at either Israel or Russia. The ironic bit of truth is, nuclear weapons have to be *maintained* in a state which allows activation. They're fairly complex chemical/physical systems, requiring a lot of care and monitoring. Even then, nuclear weapons are not activated by a mere impact, say (there're tales of base personnel dropping nuclear warheads and even mines or bombs - nothing happens until the controlling electronics are activated). There're all sorts of permissive control chains built into device activation too, suffice to say it's usually not as simple as dropping a bomb out of a plane or firing a mine, upper command has to establish data links first.

    Fukushima is not going to kill much, it's a lot less of a disaster than Chernobyl was, and there's wild life living and breeding happily in Pripyat' and surroundings nowadays. If anything, radioactive contamination has allowed animals to live freely without humans.

    The US government has been fighting its own people, directly or indirectly, for years now. If anything it'll get ever more (obviously or not) totalitarian and ever more like the USSR too.

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    1. You'll notice that those were not 'predictions' of mine - they were said in a tongue-in-cheek way in response to what others are saying on other blogs. Like I said though, any one of them is a possibility, even if it is an outside chance.

      Saying that, I disagree with you on Fukushima. Time will tell whether it is a 'less of a disaster than Chernobyl'. My suspicion is that it isn't.

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    2. Yes, well, the reply isn't that serious either, it's more of a comment...

      Jason, here's an important question for you... Which doctor in the UK did you go to for your parasite treatment and diagnosing? There's a friend who's been withering year after year, he's convinced he either has some sort of tropical parasites which nobody in the US has been able to diagnose, or it's an unusual illness of some kind. It's affected him badly, and he suspects he got the illness from foreign workers in his previous company's cafeteria. So the contacts of your physician would be very appreciated, it might be a matter of life and death.

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    3. Hello - well, I can't actually remember the name of the doctor but it was at the London Hospital for Tropical Diseases. I just looked online at the consultant staff members and none of them rang a bell. I don't know where you or your friend are situated, but for me it was obvious to go there as local GPs have very little clue when it comes to the more exotic tropical parasites and diseases. Saying that, it sounds highly unlikely that your friend would contract something from people sitting in the same cafeteria.

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    4. Working in the cafeteria. He thinks it was the new immigrant workers there who transmitted some sort of a parasite or disease.

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  12. And here's one more accurate prediction for 2014: transportation cost hikes. Particularly public transportation. It's already happened here a month before 2014.

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I'll try to reply to comments as time permits.