The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Monday, January 9, 2017

Get Smart: Creative is to Destruction what Control is to Caos.

"What's that, Mr Shoempeter?"

The newly-released report from the EIA has some interesting charts and data in it for those who care to heed them:

Liquid fuels demand and economic growth indicators: The outlook for global liquid fuels demand in the December STEO (that's for Short-Term Energy Outlook, they've given up trying to predict long-term, having gotten it so hopelessly wrong in the past) has been revised upward from the November STEO, with global oil demand now expected to grow by 1.4 and 1.6 million b/d in 2016 and 2017, respectively. The projection for real oil-weighted world GDP growth increases slightly from 2.2% in 2016 to 2.7% in 2017. 

That inextricable ink between economic growth and growth in oil combustion is simply ignored, because, growth, despite the ever-more-glaring fact that its benefits accrue to a smaller and smaller percentage (but a larger brute number, such that, because the population is growing so fast, a rate that China's recently abandoned one-child policy will only accelerate (because the Chinese population flooding into every country in the Western hemisphere that'll let them in simply isn't enough) because, if you add a million people a year, let's say, to the population, the 1% has just increased by 10,000) must be fostered, bellowed, manipulated via government intervention, in what is nevertheless still referred to as the free market.

This is how the Capitalist engine chugs and chugs, stoked by governments whose growth and whose promises are all based on the dynamics of growth-induced profitability that, because it no longer can pay its promised benefits to either stockholders, pensioners, or workers, leaving only those who can write their own paychecks, the Suits and Government employees, such as Paul Ryan, with the cash to further their lavish lifestyles. 

Trumplestiltskin knows this, as does Hillary Clinton and Bernie Sanders. And what it's resulted in is the cognitive dissonance which we all have to live with today. Think of it this way, if a bank will extend a 7-year car loan to someone who is already paying more for their domicile than they can afford, to buy an asset that depreciates to half its value before it's even parked in their driveway, how long a term do you think a loan they extend to a major oil company such as Exxon, or even a minor one, such as Frontier, would be for? 10? 20? In any case, far enough into the future such that, even with vigorous mitigation efforts, which are, in any case, not being made, it paints the vivid picture that we will continue to use fossil fuel reserves until they are exhausted. What this means is that even should the US cut its emissions by 80% by the year 2050, it would only be because they have either already burned up all their reserves, or have, as is made evident in the above report, EXported them to countries that will, countries that don't have the luxury of intentionally destroying their own economies.

Now, if we were replacing fossil fuels with renewable fuels (not the same thing as renewable energy, which is a misnomer; if there were actually any such thing as renewable energy, we wouldn't need renewable fuel supplies), that could be good for the economy, but the data doesn't support this. What's occurring in the US is that these extra energy inputs are slowing down the growth in US combustion of fossil fuel (not its use, its growth, there's a world of difference, because what that means is that, as environmentalists and investors in alternate fuels point at the remarkable growth in alt-fuels' use, they never acknowledge that, as fast as these fuels are added to the mix, the growth in overall energy usage is growing even faster, such that the total combustion of fossil fuels grows apace):

Inline image

In this chart, you can see the direct correlation between energy consumption and the economy. In 2007, as the US economy continued sinking into a depression, the combustion of oil stumbled, something many people at the time were blaming on its skyrocketing price. But that skyrocketing price was actuated by insider traders who knew full well what the declining economic numbers meant for mortgage-backed securities and CDO's, and were merely reshuffling their funds out of the rigged housing market into the oil-rigged futures market, allocating their assets to make their next killing, while their friend at the Fed kept re-assuring the soon-to-be-raked-over-the-coals public that all was well.

As they then went global with their rich get richer "plays", as they like to call them, you can see the proof of what I disparaged Krugman for in a post of 2010, where he scolded McCain for "not taking enough action on climate change legislation" while he (The Krug) simultaneously called for a huge deficit-spending bill, pretending, like the rest of his "profession", that there is no connection between stimulating the economy and stimulating the combustion of fossil fuel reserves. But, as you can see from the above chart, what the stimulus of China's ginormous stimulus program translated into, (as did all those dollars flooding Emerging Market economies), was a grand ramp up in oil combustion. A ramp up that now Venezuela, Brazil, Mexico, where there were gas riots this week, are all paying the price for as they invested all those borrowed funds in a future that is anything but sanguine (ie, it won't be able to generate the profits necessary to repay those loans).

Inline image

And lest you have any doubts as to where the oil glut came from the above chart should help you cast them aside. As Trump rails against China for unfair trade practices, of which they are guilty of many, the mirror must be awfully cloudy for him not to see that printing of dollars by the Fed to pour into the fracking industry, and then dumping this enormous bonanza of extra fuel onto the world market is manipulation of the worst sort, all while, (unlike China which acknowledges itself to be a Communist country), pretending to be the bastion of Free Market economics. China was a communistic country when we started trading with it, we knew it, they knew it, so to whine about it now is simply two-faced political posturing. But the US of A is supposedly a mere slave to the free market, so when it pulls this and then whines about China dumping a few textiles, it's just plain hypocrisy. No big crime, I know, but jeeez, cut the temper tantrum short, couldja?, it's freakin' embarrassing.

Inline image

So now, this last chart to show what is so worrisome to me about the tremendous gain in solar and wind-generated energy in the last decade, and the last years of a climate-change admitting president. 

See the irony? And therefore what we're more than likely heading into with another climate-change-denying President? If you glance at the first chart you can see that the climate-change denier left the world and his country with its combustion of fossil fuel in unprecedented decline, whereas we see that the president most committed to passing climate-change legislation is set to leave office with, despite an entire tenure characterized by anemic economic growth and robust usage of renewables growth, the world is burning up 10 million barrels of oil (and that's just oil, natural gas is off the charts and coal has only recently begun to plummet) a day more than when it took office, starting at 85 million bpd, and firing it up to the current 95 million bpd.   

But not so the US. The US percentage of the total, its usage having until only recently been fairly static, has declined, so although its usage is beginning to rise again, the world's consumption has risen even faster, so even as the consequences of such a conflagration begin to take a greater and greater toll on Americans' lives,  the reduction in their own footprint is neither acknowledged nor understood. How could it be?

And the population that bears the brunt of this change is that segment that the Hillary referred to as "deplorables". But instead of rioting, as the Mexicans, whose Democracy is shall we say, somewhat nascent, the deplorables tried to address their issues via the political process and hence there arose a Tea Party. A pseudo party whose issues, some of which were indeed ridiculous, were either ignored or ridiculed, so that the current president-elect had a population that, like the untouchables in India, no longer had a voice, and therefore, no longer cared who was in power. What did it matter to them? As Naipul describes the Untouchables in much the same way in one of his novels: Persian rulers, English invaders, what did they care? They didn't even know about, never mind care about, such changes, as they didn't alter their living conditions one whit.

That is what we are creating in the West now, a political stratum whose political aims are not radical, but reactionary, allowing our soon-to-be President to threaten to persecute a religious minority, stoking political violence and treatment that is essentially pathological, its motivations either trivial or capricious. Political activity now more like a strange kind of haunting, on the edge of insanity. So ingrained and all-encompassing that his erstwhile rival can aver that the US is "energy independent", and neither Trump nor any of the moderators during the Presidential debate in which she made this ludicrous statement, had neither the temerity nor the knowledge to challenge.

And thus we come to the cusp of Trump's reign, with a President that exuded bonhomie even as he sent drones off to assassinate his chosen targets inside the boundaries of sovereign states, an iron will in a fur-lined velvet glove, soon to be replaced by a Bush successor. But instead of using a commodity that the whole world needs, as the Bush family did, by manipulating via War and investment in fracking, to run the country for his own aggrandizement on the sly, this President comes to office with the electorate's full knowledge, and acceptance by half of them, that it is now to be run solely for HIS aggrandizement, making the term "Family Values", show its true face in a way that would make King Henry or Louis XIV proud. while ensconcing his family so deeply into the deep state that the Trumplestiltskins will, with the help of the DHS (Deportment of Homely Servility) to run the next election for him, enshrine themselves in. 

With the meteoric rise in the stock market, recently, ewe can be sure (albeit sheepishly) of one thing, its subsequent fall. The fact that it's risen so completely out of touch with reality ensures what I have feared all along from a Thump Presidency, not the Wall, or the Muslim registry, or deportations, all of which I believe to be media manipulations that worked so well, he couldn't really step back from them too much (Remember, "Lock 'er Up!"? ... and the crowd went wild ... but seriously, folks), which doesn't mean I'm not wrong, just that I don't really take them seriously. I don't believe he is an evil man. What I DO take seriously is his penchant for, and ability to foment, Chaos. Although I don't really make specific predictions, it seems highly likely that, like the Republican administration of GW, The Donald's biggest contribution to the world will more than likely be to plunge it into chaos. Such chaos that the Bush double disasters creating an Arc of INstability across the middle east and then a plunge into the abyss for the world economy, will look like dress rehearsals, reversing Marx's prediction: First as farce, then as tragedy. The Tea Party's revenge.

Post a Comment