I think he may be making a slight mistake though in thinking that the US collapse is going to look like the USSR collapse, which is what he wrote about mainly, the countries are very different in terms of the cultures, politics, social systems.

But what is not different is the fundamental requirement of our system for raw materials and resources, and the serious lunacy of believing in debt fueled and funded ‘growth’, which was supposed to replace growth based on resource exploitation, ie, manufacturing . Sadly trying to restore debt fueled growth is the method Obama is trying to keep floating, like the Bush group before him (oh, if the banks would just lend again everything would be ok…).

When growth stops in a system based on Capital and debt, ie, a system requiring growth to survive, that system will not have a neat elegant wind-down, that much you can be absolutely certain about. But I think one major difference is found in the respective histories of the US and Russia.

Russia has always been fond of oligarchs, with basically unlimited power, whether czars, Putin, Stalin, or Lenin.

The US has at least some checks and balances, and people have a certain expectation that they won’t get totally screwed by the system. Not to idealize our political process in any way, but we do have a system that, although damaged severely by corporatism, can be altered, and we have political documents, which if we follow them, are actually all the tools we need. But the people need to be really pissed off before this happens, and ready to support a party that is willing to cut off corporatism and its perks.

Lots of points here I’d guess most rabid denialists simply have never thought about, like bringing jobs back home, and so on.

Now all news, interviews, commentaries from outside sources, will go in the category Currents of the Peak.

All items that are general commentaries will go into A View from the Peak. This will be the main focus of the blog from now on, in other words, if it’s a story about a specific news item, it will go in Currents, if it’s a general commentary, it will go in A View…

Reviews and Moving Past the Peak: Tips and Tricks will remain unchanged.

Since we’re now entering into the decline phase of global peak oil (and many other raw materials) production, there’s no real point in pretending that an economic grind down event is separate from oil price spikes and other raw material instabilities.

Also, I’ll probably start to add more background commentary, and less posting of news items, interviews, etc, which you can find great sources for on sites like www.theoildrum.com and www.energbulletin.net which both have good news overviews in general, drumbeat is especially useful.

And of course, see the right-hand column for more useful, and specialized links.

But from now on, it’s just going to be one long downhill roller coaster ride, with occasional severe dips and bumps, so there’s no particular point in presenting overly granular breakdowns of individual news events.

I will try to present more overviews, and will try to tie things together a bit for readers who might find their way here.

Best of luck to you in the future, but don’t expect the present or past to reproduce, it’s just not in the cards, this is a new event, and the models that can help us are models of smaller scale collapses. Stay out of debt, that’s the best advice at this point, live within your means, whatever you may feel you are entitled to have, what you can afford is what you actually should have today.

• Key oil figures were distorted by US pressure, says whistleblower
• Comments on Guardian article: “Key oil figures were distorted by US pressure, says whistleblower”

Among some of the more choice quotes:

“The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.

“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was “imperative not to anger the Americans” but the fact was that there was not as much oil in the world as had been admitted. “We have [already] entered the ‘peak oil’ zone. I think that the situation is really bad,” he added.

And there you have it.

And unless you believe the denials, Kjell Aleklett from ASPO actually talked to at least one person in the IEA who told him the same thing, in 2007

At that opportunity, in November 2007, I had a number of private conversations with officers of the IEA. The revelations now reported in the Guardian were revealed to me then under the promise that I not name the source. I had earlier heard the same thing from another officer from Norway who, at the time he spoke of the pressure being applied by the USA, was working for the IEA.

Of course they’ll keep denying it as long as they can, blaming all the problems around us on something else, since to blame the actual, unfixable, cause, is not good politics, and might begin to make China question just how much longer it wants to keep the USA’s credit bubble inflated.

Things are getting closer.

The 4 Key Reasons an Economic Collapse is Likely Imminent

1. The U.S. has unprecedented, massive amounts of current and coming debt.
2. Foreign countries have experienced their own crises, and they cannot offer added levels of debt funding for the U.S. Even if they could, they are unlikely to do so.
3. Productivity is declining, and everything the government is doing is further hurting productivity.
4. The U.S. is printing unprecedented, massive amounts of money and no longer has an ability to control inflation and deflation.

The US treasury department list of Treasury Security holders is updated I assume every month, last stats from April. Note that almost every major holder has less US government debt in April than in May, despite the US government selling record amounts of debt to fund it’s bailouts of the cancerous financial leeches which abuse the term ‘industry’ beyond belief (‘industries’ produce things, and debt is not a thing).

So who is buying the rest? I assume we, the US tax payers are. And please don’t spout any of that Fox news generated nonsense about ‘tax and spend liberals’, this is about gross economic collapse fueled by 20 years of removing financial regulations, coupled with humanity reaching a peak in per capita natural resource consumption, then a physical peak in gross natural resource production, especially in oil, which is the primary resource that drives our modern non-sustainable ‘economy’.

Watch that chart to see what happens. Since the US needs to sell some 1.5 trillion more debt this year if I get the numbers right to keep afloat, and since increasing amounts of the debt held now by China and other major debt holders is short term, the real stat to track is who is buying the long term debt.

I suspect that the Chinese and others are now in the process of moving their longer term debt, as it comes due, to shorter term positions, which avoids creating the appearance of dropping long term investments in US bonds while actually creating the situation where they can exit slowly by translating dollar holdings into real things, like oil companies, natural resource contracts, and so on.

This is a big game, and the USA is losing.

More than any other species, human beings are gifted with the power to manipulate our environment, and the ability to accumulate and transmit knowledge across generations. The first of these gifts we call technology; the other we call culture. They are central to our humanity.

Accumulating over thousands of years, culture and technology have brought us into a separate human realm. We live, more than any animal, surrounded by our own artifacts. Among these are works of surpassing beauty, complexity, and power, human creations that could not have existed—could not even have been conceived—in the times of our forebears. Seldom do we pause to appreciate the audacity of our achievements: objects as mundane as a compact disc, a video cellphone, an airplane would have seemed fantastical only a few centuries ago. We have created a realm of magic and miracles.

At the same time, it is quite easy to see technology and culture not as gifts but as a curse. After millennia of development, the power to manipulate the environment has become the power to destroy it, while the ability to transmit knowledge transmits as well a legacy of hatred, injustice, and violence. Today, as both the destruction and the violence reach a feverish crescendo, few can deny that the world is in a state of crisis. Opinions vary as to its exact nature: some people say it is primarily ecological; others say it is a moral crisis, a social, economic, or political crisis, a health crisis, even a spiritual crisis. There is, however, little disagreement that the crisis is of human origin. Hence, despair: is the present ruination of the world built in to our humanity?

Is genocide and ecocide the inevitable price of civilization’s magnificence? Need the most sublime achievements of art, music, literature, science, and technology be built upon the wreckage of the natural world and the misery of its inhabitants? Can the microchip come without the oil slick, the strip mine, the toxic waste dump? Under the shadow of every Chartres Cathedral, must there be women burning at the stake? In other words, can the gift of technology and culture somehow be separated from the curse?

Table of Contents (under fold)

Introduction
Chapter I: The Triumph of Technology
Gee Whiz—The Future!
Utopia Postponed
The Addiction to Control
From Separation to Boredom
From Affluence to Anxiety
Chapter II: The Origins of Separation
The Biological Origins of Self
Fire and Stone
Labeling the World
Mathematics and Measure
Keeping Time Images of Images
The Marvelous Piraha Cultivation and Culture
The Machine Religion and Ritual
The Playful Universe
Chapter III: The Way of the World
The Scientific Method
My Personal Age of Reason
Masters of the Universe
The Quest for Certainty
Reducing Reality
The Ghost in the Machine
The Origin of Life
Alone in the Universe
Chapter IV: Money and Property
The Realm of Me and Mine
Alone in a Crowd
The Anonymous Power
Social Capital
Cultural Capital
Natural Capital
Spiritual Capital
Time, Money, and The Good
The Economics of Other Interest and Self-Interest
The Crisis of Capital
Chapter V: The World under Control
The Total Depravity of Man
The Winners and the Losers Life and Death
Yes and No
The Pressure to Break Free
Molding Minds
The Great Indoors
Life under Contract
The War on Germs
The War on Suffering
Life in a Playpen
Chapter VI: The Crumbling of Certainty
The End of Objectivity
Truth without Certainty
Order without Design
The Nature of Purpose
The Purpose of Nature
Life without a Replicator
The Community of Life
The Genetic Plenum
Chapter VII: The Age of Reunion
The Convergence of Crises
The Currency of Cooperation
The Restorative Economy
The Age of Water
Technologies of Reunion
Work and Art
United Back to Play
The Medicine of Interbeingness
The Spirit of the Gift
Storyteller Consciousness
In Love with the World
Chapter VIII: Self and Cosmos
Human Nature Restored
The Fall
The Perinatal Matrix
The Gaian Birthing
Eulogy and Redemption
At Play Beside The Tower

It’s pretty long, worth watching. But I have to say, the people who called in to that c-span show, both left and right, don’t give me much room for optimism. The right continues to ignore every single actual foundational component of our current issues, the Libertarians continue to blindly regurgitate their absurd anti government, pro free market foolishness long after the current financial collapse has once again proven, as if this even needed proving, that free markets don’t exist, they are fictions designed to disguise the blatant grab of power and wealth by those who espouse them. Not to say actual free markets don’t exist, but they aren’t run by oligarchs and cartels, they are individual, non corporate, and, most important, local and community based.

No hope in this administration I’m sad to say, find a copy of the July Harper’s magazine and find out why, or watch the video, it covers most of the key points.

Remember: without single payer health care, dismantling of the current financial oligarchs, and a serious redoing of the corporate lobbying industry (like banning it completely) we will not be able to move on to the next phase of our existence.

Turning off and throwing out your television is a good place to start if you’re looking for something to do right away, then you can start learning to think again.

But as Baker notes, in all likelihood, it will take a furthering of the collapse, the increased loss of the middle classes, before populist sentiment starts to rise for real. But also remember, in the Great Depression, people weren’t undergoing self-induced brain washings nightly in front of their televisions, and their lives didn’t depend nearly as much on corporate interests as they do now, and there was actual free press, not corporate controlled press.

So how this is going to play out is going to be very interesting to watch, at least in the USA. Some countries, like Germany, are at least trying to be rational, but there’s very little sign of anything like that here yet.

So it strikes me, what is the first thing to go when this system starts to crack due to rising resource costs and peaked production levels of key resources, like oil? Airlines, of course. So it’s not surprising to see, after a disastrous last year, that World’s airlines in fight for survival (with 9 billion US dollars in losses this past year).

Faced with their biggest crisis in history, airlines from throughout the world gathered in Kuala Lumpur to take stock and swap survival strategies.

“Numbers can tell powerful stories,” International Air Transport Association director-general Giovanni Bisignani told his audience of 500 airline representatives at their annual summit.

Airlines are expected to collectively lose US$9 billion (NZ$14b) this year as falling demand, lower yields, broken consumer confidence and the swine flu pandemic threaten to wipe out US$80b in revenue.

Those losses will come on top of last year’s US$10.4b deficit thanks to the double hit from record high fuel prices and the collapse of the world economy.

“The ground shifted and our industry was shaken,” Mr Bisignani says.

Airlines are in survival mode and in desperate need of help to see them through the crisis and allow them to emerge with a business model that delivers a financially sustainable future.

Yep. Can you say: (re)nationalized airlines? In fact, can you say: the only countries that will have any chance of controlling the bumpy downhill slide are going to be the ones where the state controls resource allocation and pricing? Watch the ‘free market’, one of the greatest pieces of nonsense ever generated as a concept in human history, start to show more and more how pathetically unable it is to actually do anything other than serve as an excuse to funnel more money to the hands of those who control it.

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about “green shoots” and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from “later this year” to “sometime next year.” None of them dares to say that global economic growth might be finished for good, or that it will be over in “the not-too-distant future” — a vague term they seem to like a whole lot.

There does seem to be a consensus forming that last year’s financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it’s game over. François Cellier has recently published an analysis in which he shows that at roughly $600/bbl the entire world’s GDP would be required to pay for oil, leaving no money for putting it to any sort of interesting use. At that price level, we can’t even afford to take delivery of it. In fact, at that price level, we can’t even afford to pump it out of the ground, because the tool pushers, roughnecks and roustabouts that make oil rigs work don’t drink the oil, and there would no longer be room in the budget for beer.

And so, the actual limiting price, beyond which no economic activity is possible, is certainly a lot lower, and last summer we seem to have experimentally established that to be around $150/bbl. which is something like 25% of global GDP. We may never run out of oil, but we have already run out of money with which to buy it, at least once, and will most likely do so again and again, until we learn the lesson. We will run out of money to pump it out of the ground as well. There might still be a few gushers left in the world, and so there will be a little bit of oil left over for us to fashion into exotic plastic jewelry for rich people. But it won’t be enough to sustain an industrial base, and so the industrial age will effectively be over, except for some residual solar panels and wind generators and hydroelectric installations.

I think that the lesson from all this is that we have to prepare for a non-industrial future while we still have some resources with which to do it. If we marshal the resources, stockpile the materials that will be of most use, and harness the heirloom technologies that can be sustained without an industrial base, then we can stretch out the transition far into the future, giving us time to adapt.

Contemplate the amount we will spend on oil as percentage of GDP. The cost of oil does NOT produce more GDP, unless you are an oil producing nation. Now, obviously, if we had any sense at all, we’d immediately nationalize our oil companies and fields, and start taking control over our own resource destinies, as much as possible, but since we’re fast proving we are totally lacking in sense, forget that plan for now. Maybe later though, we’ll see how things unwind.

My favorite quote, though, was this:

Another great marketing opportunity for our time is in survival goods. There are some web sites that push all sorts of supplies to put in your private bunker. It’s a clever bit of manipulation, actually. Users log in, see that the stock market is down, oil is up, shotgun shells are on sale, so are hunting knives, and if you add a paperback on “surviving financial armageddon” to your shopping cart you qualify for free shipping. Oh and don’t forget to add a large tin of dehydrated beans. Fear is a great motivator, and getting people to buy survival goods is almost a matter of operant conditioning: a marketer’s dream.

Also give the latest by Sharon Astyk, Whither America without China? and by John Michael Greer, Survival isn’t cost-effective. Both are trying to figure this stuff out, while being slightly realistic in the process. Not always perfect, but not bad in general.

These are pretty decent writers, maybe not the very best, but they do what they can, which is better than many do.

And this is against a slightly improved background where corporations are not using the government to directly dictate climate policy. Here’s the US government’s Global Change Research Program. Government scientists must be at least slightly relieved that they can start telling the truth again after the ridiculous Bush propaganda machine was voted out of office. Small win, not enough though, but at least one thing is not being lied about as much now.

1: USA Fire Sale, 2nd Meeting, June 2009: Political capital call – Eric Janszen. A somewhat satirical view of what a meeting between China and Geitner might look like today. This is part 2, here is Part 1. This post is worth reading because it’s basically true, and even if China isn’t going to say these very words to the US, they should. Now. Before the US is allowed to further destroy their future in a vain attempt to prop up a corrupt and rotten financial ‘industry’ (though the use of the term ‘industry’ requires quotes, since it produces nothing of value, and simply filters money towards its primary benefactors).

The result, probably? The American Empire Is Bankrupt. Covered further in De-Dollarization: Dismantling America’s Financial-Military Empire: The Yekaterinburg Turning Point.

“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.”

2. The Message of Overconsumption. If you’re fond of your denialism about the status quo (ie, economy, environment, resources), these graphs are nice reminders that in fact, you cannot enter into exponential growth and expect to have long term success. For those of you who don’t follow such things, exponential growth is the essence of our modern ‘capital’ based economies (see Hubbert’s discussion of the ‘culture of money’ as well, which is a critical point to understand). More on this topic at hubbertpeak.com.

Capital as found in our interest based systems is a method of finance that lends money, debt, which then requires growth to pay it back. Failure to generate this growth means the system fails. I know, of course, that denialists are all sheep who don’t use actual facts or data to come to their conclusions, so no amount of real data will ever change their minds, but for the rest of us, there might be some hope. And the sheep will just follow along eventually anyway, once you explain to them what the new reality and truth is…

Stop buying from corporations, start localizing, there is nothing they can do about this if more and more people refuse to gut their local communities, and start buying local, that money stays local, in your community. It’s a simple idea. Manufactored needs are not real needs, step out of the con-game.