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Image | 2013 Year in Review
2013 Year in Review
by David Collum

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.

2013 Year in Review
 by David Collum

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full.

Image | Gail Tverberg: The Shale Oil Boom is More “Mirage” than “Miracle”
Gail Tverberg: The Shale Oil Boom is More “Mirage” than “Miracle”
by Adam Taggart

In this week's podcast, Chris asks Gail Tverberg to assess the merits of the shale oil "revolution". Does it usher in a new Golden Age of American oil independence?

With her actuarial eyeshade firmly in place, Gail quickly begins discounting the underlying economics behind the shale model:
Gail Tverberg: The Shale Oil Boom is More “Mirage” than “Miracle”
 by Adam Taggart

In this week's podcast, Chris asks Gail Tverberg to assess the merits of the shale oil "revolution". Does it usher in a new Golden Age of American oil independence?

With her actuarial eyeshade firmly in place, Gail quickly begins discounting the underlying economics behind the shale model:
Image | There Is Too Little Gold in the West
There Is Too Little Gold in the West
by Alasdair Macleod

Western central banks have tried to shake off the constraints of gold for a long time, which has created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand. It is important to understand how little there is and the dangers this poses for financial stability.
There Is Too Little Gold in the West
 by Alasdair Macleod

Western central banks have tried to shake off the constraints of gold for a long time, which has created enormous difficulties for them. They have generally succeeded in managing opinion in the developed nations but been demonstrably unsuccessful in the lesser-developed world, particularly in Asia. It is the growing wealth earned by these nations that has fuelled demand for gold since the late 1960s. There is precious little bullion left in the West today to supply rapidly increasing Asian demand. It is important to understand how little there is and the dangers this poses for financial stability.
Image | What Happened to the Future?
What Happened to the Future?
by Gregor Macdonald

Improbably, the global economy has returned to growth over the past four years despite the ravages of a deflationary debt collapse, a punishing oil shock, ongoing constraint from debt and deleveraging, and stagnant global wages. The proof of this growth comes from the best indicator of all: the growth of global energy consumption.

What Happened to the Future?
 by Gregor Macdonald

Improbably, the global economy has returned to growth over the past four years despite the ravages of a deflationary debt collapse, a punishing oil shock, ongoing constraint from debt and deleveraging, and stagnant global wages. The proof of this growth comes from the best indicator of all: the growth of global energy consumption.

Image | Why Social & Environmental Imbalances Are Becoming the Biggest Risks
Why Social & Environmental Imbalances Are Becoming the Biggest Risks
 PREVIEW
by Gregor Macdonald

Executive Summary

  • The growing risk of disinflation
  • Why instability in the U.S. is accelerating
  • The danger of social rifts emerging in the near future between economic classes
  • Why environmental constraints and social instability may trump energy issues going forward

If you have not yet read What Happened to the Future?, available free to all readers, please click here to read it first.

If this is the case, it echoes the realization now dawning on economists in the U.S. that an acceleration in the economy, which many expected, is simply not going to arrive. As was discussed in previous essays, OECD GDP growth appears to be converging once again at a level below 2.00%. The U.S. is on track to achieve only 1.6% GDP growth this year. This is a primary reason why inflation, again – outside of natural resources – has still not broken out, or even appeared. Moreover, the U.S. and the OECD could once again be on the verge of disinflation.

One notable and important piece of the disinflation puzzle is the continued growth in inequality. As income growth narrows to a tiny vanishing point among workers, it’s become increasingly difficult to mount economic growth across many industries. Demand for goods from the 1% is robust. Demand from the rest of the populace continues to dwindle. It may be hard to believe, but policy makers, politicians, and – gasp! – even economists and financiers used to be deeply concerned about wealth inequality. Today, it’s as if enough time has passed for an entire generation to forget the destructive structural damage that long-term inequality can wreak on an economy.

For those of you who remember, one of the more severe cases of wealth inequality for many decades was the country of Brazil. Tellingly, it was not until Brazil elected a reformer, Lula, that the country left behind its days of boom-and-bust, debt crises, inflation, and general instability and embarked on its current path as a more balanced, sustainable economy. Coincidence? Not likely.

But what’s really scary is…

Why Social & Environmental Imbalances Are Becoming the Biggest Risks
 PREVIEW by Gregor Macdonald

Executive Summary

  • The growing risk of disinflation
  • Why instability in the U.S. is accelerating
  • The danger of social rifts emerging in the near future between economic classes
  • Why environmental constraints and social instability may trump energy issues going forward

If you have not yet read What Happened to the Future?, available free to all readers, please click here to read it first.

If this is the case, it echoes the realization now dawning on economists in the U.S. that an acceleration in the economy, which many expected, is simply not going to arrive. As was discussed in previous essays, OECD GDP growth appears to be converging once again at a level below 2.00%. The U.S. is on track to achieve only 1.6% GDP growth this year. This is a primary reason why inflation, again – outside of natural resources – has still not broken out, or even appeared. Moreover, the U.S. and the OECD could once again be on the verge of disinflation.

One notable and important piece of the disinflation puzzle is the continued growth in inequality. As income growth narrows to a tiny vanishing point among workers, it’s become increasingly difficult to mount economic growth across many industries. Demand for goods from the 1% is robust. Demand from the rest of the populace continues to dwindle. It may be hard to believe, but policy makers, politicians, and – gasp! – even economists and financiers used to be deeply concerned about wealth inequality. Today, it’s as if enough time has passed for an entire generation to forget the destructive structural damage that long-term inequality can wreak on an economy.

For those of you who remember, one of the more severe cases of wealth inequality for many decades was the country of Brazil. Tellingly, it was not until Brazil elected a reformer, Lula, that the country left behind its days of boom-and-bust, debt crises, inflation, and general instability and embarked on its current path as a more balanced, sustainable economy. Coincidence? Not likely.

But what’s really scary is…

Image | Our Era’s Definitive Dynamic: Diminishing Returns
Our Era’s Definitive Dynamic: Diminishing Returns
by charleshughsmith

We all intuitively grasp the meaning of diminishing returns: Either it takes more effort to maintain a project’s payoff, or the payoff declines even though the effort invested remains constant.

This dynamic leads to the final phase of doing more of what has failed spectacularly.
Our Era’s Definitive Dynamic: Diminishing Returns
 by charleshughsmith

We all intuitively grasp the meaning of diminishing returns: Either it takes more effort to maintain a project’s payoff, or the payoff declines even though the effort invested remains constant.

This dynamic leads to the final phase of doing more of what has failed spectacularly.
Image | Growth is Obsolete
Growth is Obsolete
by JHK

Despite the wishful thinking and happy-talk propaganda lighting up the media-space, we have arrived at the problematic point of the story: the end of cheap oil. The sad, stark fact is that oil is now too expensive to permit further expansion of economies and populations. 
Growth is Obsolete
 by JHK

Despite the wishful thinking and happy-talk propaganda lighting up the media-space, we have arrived at the problematic point of the story: the end of cheap oil. The sad, stark fact is that oil is now too expensive to permit further expansion of economies and populations. 
Image | Getting to a Future That Has a Future
Getting to a Future That Has a Future
 PREVIEW
by JHK

Executive Summary

  • The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
  • How food production will need to evolve if we are to continue to feed ourselves in the future
  • How pursuing "growth" is wasting us precious time and energy
  • Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..

If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.

The problem of growth in its current context is first a problem of language, but  do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.

Three Fundamental Activities

I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:

  1. re-localizing
  2. downscaling, and
  3. de-complexifying.

The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.

I will describe the particulars in a moment, but first the point must be made that…

Getting to a Future That Has a Future
 PREVIEW by JHK

Executive Summary

  • The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
  • How food production will need to evolve if we are to continue to feed ourselves in the future
  • How pursuing "growth" is wasting us precious time and energy
  • Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..

If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.

The problem of growth in its current context is first a problem of language, but  do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.

Three Fundamental Activities

I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:

  1. re-localizing
  2. downscaling, and
  3. de-complexifying.

The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.

I will describe the particulars in a moment, but first the point must be made that…

Image | Lester Brown: The Sobering Facts on Global Resource Scarcity
Lester Brown: The Sobering Facts on Global Resource Scarcity
by Adam Taggart

Environmental analyst Lester Brown has made a lifetime career of tracking declining supplies of global resources. He is the founder of the Earth Policy Institute and author of the book Plan B 4.0 Mobilizing to Save Civilization, both of which provide massive data sets on the precipitous drop in key natural resources as well as urgent policy recommendations for addressing them.

In today's podcast, Chris and Lester discuss the global depletion themes that concern Lester most greatly, including population growth, water usage, limits to food production, and climate changes. In many of these areas, the picture painted by the data is alarming.  Our future choices are quickly being limited to when these constraints will limit our way of life, not if.

Lester Brown: The Sobering Facts on Global Resource Scarcity
 by Adam Taggart

Environmental analyst Lester Brown has made a lifetime career of tracking declining supplies of global resources. He is the founder of the Earth Policy Institute and author of the book Plan B 4.0 Mobilizing to Save Civilization, both of which provide massive data sets on the precipitous drop in key natural resources as well as urgent policy recommendations for addressing them.

In today's podcast, Chris and Lester discuss the global depletion themes that concern Lester most greatly, including population growth, water usage, limits to food production, and climate changes. In many of these areas, the picture painted by the data is alarming.  Our future choices are quickly being limited to when these constraints will limit our way of life, not if.

Image | Surviving the Colorado Floods
Surviving the Colorado Floods
by Latersbrau

For the past year, I’ve lived in a valley at 6,500 feet, in a small community of homes tucked in the mountains of northern Colorado, surrounded by national forest. It’s just a fifteen-minute drive down the mountain to Lyons, a surprisingly vibrant town of twenty-five hundred or so that’s now drowning in water and sewage and pieces of people’s homes, and has been since the early hours of Friday, September 13.

I was with some friends at the Distillery in Lyons the night of the floods, but made it back up the mountain before the water tore through town in the middle of the night. It’s now several days later and entire neighborhoods are gone, the water is contaminated with E. coli, the infrastructure is destroyed, the St. Vrain river is now somehow a few hundred yards south of where it was, and most everybody in town is displaced for several months, or permanently.
Surviving the Colorado Floods
 by Latersbrau

For the past year, I’ve lived in a valley at 6,500 feet, in a small community of homes tucked in the mountains of northern Colorado, surrounded by national forest. It’s just a fifteen-minute drive down the mountain to Lyons, a surprisingly vibrant town of twenty-five hundred or so that’s now drowning in water and sewage and pieces of people’s homes, and has been since the early hours of Friday, September 13.

I was with some friends at the Distillery in Lyons the night of the floods, but made it back up the mountain before the water tore through town in the middle of the night. It’s now several days later and entire neighborhoods are gone, the water is contaminated with E. coli, the infrastructure is destroyed, the St. Vrain river is now somehow a few hundred yards south of where it was, and most everybody in town is displaced for several months, or permanently.
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