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« What is Really Behind the Refugee Crisis in Europe? | Main | From the CANUSSEE-15 Biophysical and Ecological Economics Conference »

September 23, 2015


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Philip Steiner

Hi George,

Longtime reader, first time poster. I feel that globally we are worse off than 2011 - the current refugee crisis in Europe is just the leading edge of a migration tidal wave that may swamp Europe's humanitarian capacity. Look at the walls already going up!

The Fed is afraid to sneeze never mind inch its rate up 25 basis points for fear of triggering another global economic meltdown.

Here in Canada we face a federal election where the 3 major parties are so interchangeable and self-serving that I doubt the outcome would be significantly different if voters just tossed a dart blindfolded at their ballot to make their mark.

Equally ominous events in the environment- warmest year every recorded, ice-free summer Arctic by next year, giant methane-spewing sink holes in Siberia - point to the effects of human activity on the planet.

I firmly believe we've reached the maximum carrying capacity of the globe for its human infestation, ecologically it's just a matter of time until the die-off begins in earnest.

When I try engaging otherwise intelligent and informed people about this topic, I get anything from blank stares to outright hostility. - what do I mean, the economy can't grow forever, or of course we'll find more oil, or they'll think of something...and so it goes.

What do I do in the mean time? Carry on as usual, because there's little effect I can have on the outcome of 7 billion people just doing what they do. I do what I can to educate myself, take care of my family and communities, and gently try to discuss the larger picture when I find a friendly ear.


George, thanks for checking in for us regular readers and lurkers. Happy Equinox to you and to all.

Real US final sales per capita is no higher than in 2007-08 and decelerating on a cyclical basis to "stall speed".

The world economy is likely contracting, including trade.

Health care spending at ~19% of GDP has never been higher, and the differential rate of change of health care spending to GDP is at the same rate as the onset of recessions in 2001 and 2008.

Credit spreads are widening for critical metrics at the same level as 2001 and 2008 (prior to 9/11 and the Lehman take down). Going back to 1970, the Fed has NEVER raised rates under these conditions.

Auto sales are strong but are being driven at the margin by subprime auto loans and 2- and 3-year no-down leases, which is a similar situation as subprime mortgage and home-equity loans in 2004-07.

Real new and existing median house prices to real wages and salaries per capita are at the same bubbly levels as in 2004-07, i.e. it IS another bubble. House prices are overvalued by this metric by 20-25% and 35-40% in the bubbliest areas of the US that have recovered as a result of QEternity, banks withholding foreclosed properties from the market, and private equity and hedge funds borrowing hundreds of billions of dollars to bid for properties to securitize and rent, a scheme that appears to have run its course now at bubbly prices.

Payroll receipts versus reported wages and salaires imply that BLS US employment data are overstated by ~1%.

Margin debt and offshore shadow banking equity index futures leverage is at higher levels than before the collapse of Bear Stearns and Lehman, i.e., 50-80:1 versus 25-30:1. As much as a 10% decline for the US equity indices that persists for a few months will be sufficient to blow up the MASSIVE derivatives carry trade. The implosion of junk and emerging market debt could be the initial precipitant to a global derivatives implosion larger than 2008-09.

US and Japanese foreign direct investment (FDI) peaked in 2011-13 and has turned negative since 2014, with firms and expats leaving en masse and US firms repatriating US$'s from non-convertible Yuan, which is the primary reason for the press reports of "China dumping US Treasuries."

As a result, China's production and exports are contracting, which implies that China is in the process of a hard landing with real potential GDP per capita at the same rate as the US, EZ, and Japan since 2007, i.e., ~0%. The rest of Asia, including the Asian city-states, will be dragged down by the US and Japan pulling FDI and the resulting decline in intra-Asian "trade", investment, etc.

US oil production per capita is at the level of the late 1940s and down 45% since 1970. At the ongoing rate of deceleration, oil production per capita will fall 50% by no later than the early 2020s, and sooner were a recession to occur and the shale sector go bust, which appears rather likely at this point.

World oil production per capita is no higher than in 2004-05, and crude plus condensate (C+C) is not much higher than in 2001. World oil production per capita is at the same level versus peak as the US in the late 1970s, i.e., the onset of deindustrialization and financialization of the economy. Peak Oil is history, i.e., Peak Oil per capita is ten years behind us in the rear view mirror.

The oil price cycle is turning negative as in the early 1960s and 1986, implying the prospect for oil in the $20s-$30s and US production falling 3-4Mbd and consumption falling 2-3Mbd in the years ahead.

The growth of US wind and solar energy production and as a share of total energy production has peaked and is on track to contract in the years ahead with the price of oil and falling demand per capita.

US labor share of GDP is at a record low going back to the Great Depression.

Total net flows to the US financial sector now equals total annual GDP output, implying that the US economy cannot grow in real terms per capita after net flows to the financial sector and its top 0.001-1% principal owners.

Canada and Oz are experiencing MASSIVE credit and real estate bubbles that are set to burst and the economies are now following Russia and Brazil into recession.

Thirteen separate stock market indicators are occurring as only twice previously in US stock market history going back to the early 20th century: 1929 and 2007. Excepting non-financial corporate debt and margin debt to GDP, similar coincident indicators occurred in 2000, 1987, and 1937. Several critical technical and momentum indicators for the S&P 500 and NYSE suggest that a bear market has begun and confirmed as of May and July.

In addition to the aforementioned mass population migration, the foregoing is a short list of the evidence for the likelihood of another global deflationary recession and bear market, as well as "Limits to Growth", Peak Oil, overshoot, and the end of growth (EOG).

See the report at the link above for someone who "gets it"; it's a keeper.

The Fed will/cannot raise rates under the foregoing circumstances or risk blowing out the term structure for the MASSIVE levered derivatives positions. The Fed is much more likely to resume QEternity to fund increasing deficits/GDP than to raise rates hereafter.

Therefore, in case it's not obvious, I weigh in on the side that we are NOT better off and are at risk of being MUCH WORSE off in the years ahead.


Disclosure: I have a past affiliation with TPG, and I contributed in part to the report above, although I am not directly affiliated at present.


2011 seems a long time ago George. It’s difficult to give a concise summary of the situation without lapsing into rants or writing a 4 page essay.
I believe we have all underestimated the resilience and the cunning of the elites in keeping the extend and pretend ZIRP plate spinning going for so long. The cult of neoliberalism shows no sign of fatigue or extinction. The crash of 2008 should (in any sane world) have been the final nail in the coffin but the plutocracy simply rode out the storm and patched up the ship. The difference in the last 5 years is that even the elites no longer believe their own fairy stories of endless growth and jobs; technical fixes to impossible resource depletion.
What we observe at the microscale of our workplace is happening out there on a macroscale; we are all going through the motions but no-one believes in the system anymore…no-one believes in the future. The masses are hypnotised and bewitched by social media, assaulted by the relentless MSM propaganda machine where any alternative redistributive political system-however mild, is seen not simply as unworkable but insane.
I reckon things have got to get a lot worse before the populations are shocked out of their collective stupor. This has happened in Europe with the rise of anti-austerity movements such as Syriza and Podemos in Spain and recently Corbyn in the UK- although he is less of a radical and more of an old fashioned social democrat. The fate of Syriza and Tipras’s capitulation in the face of ruthless EU technocratic oppression shows the delusion of democratic ‘change’ and how paranoid the elites have become at any sign of popular resistance or uprisings.

As you may have gathered I believe the situation since 2011 has worsened but a more descriptive analysis has succumbed to fatigue.
Fatigue- a common symptom of middle-aged radicals the world over…we are burnt out with unrealised expectations and wishful predictions come to nothing. We are wiser and more cautious now. We don’t put timescales on any future events because the only thing we can be certain of is that we will be wrong.
Charles Eisenstein and David Graeber are our heros because they articulate the crisis far better than we ever could.


My current thinking is that things will keep on keeping on until global population peaks. The crash that doomers anticipate will happen in conjunction with events associated with the global population peaking or declining (nuclear war, an epidemic, or whatever), or things will unravel considerably later simply because too much of the current economic system is a ponzi scheme dependent on population growth. Also, people just start behaving strangely when they've lost the drive to reproduce.

When the peak happens is anyone's guess.


Ed I agree that the best chance for a mass awakening lies not in any social movement or revolution but the self-Cannibalisation of the global financial sector initiating Crash 2 (or crash 1b)
Bring it on.....

George Mobus


My friends the time for analysis is rapidly coming to an end. The time for action is at hand. And that action is not convincing the world of the eminent danger. It is preparing ourselves for the future.

I am enjoying the seasons and the small joys I get from interacting with the world I have known. But that world is changing so much faster than I would have ever thought.

If you are young enough to consider reproduction then you must find a place where you and a group of like-minded people can carve out a life, ready to adapt to the rapidly approaching future.

I am old and in the twilight of my time. I can continue to publish and proselytize about the future. But I cannot, in good conscience, advise those much younger to do likewise. Forget the others, the ignorant, the willfully stupid. They are not sapient and do not deserve to contribute to the future of the genus. If you understand what I am saying then you are the future. Grasp it. Make it happen.

I will continue to post missives on my perspectives of reality in hopes that those who make the future will have some ideas about how to proceed.


Matt Holbert

I agree about the action part. While my wife and I have practiced voluntary simplicity in our own lives, I would like to be a part of a community that is dynamic. This from my online journal (go to the website at or or press my name and click "Strategic Integral" at the top of my home page.):

Deep Green Company and Deep Green Club

Focus: Creating learning and leisure environments that are as self-sufficient as possible

Infrastructure: Car-free campus with residential living quarters, gardens, micro-breweries, boutique wineries, gourmet kitchens

Operating Structure: Private club with membership deposits and dues; a college with a flat organizational structure; essentially there will be a guest/leisure/club component and a student/learning/college component; guests will be able to participate in the learning component as much or as little as they desire

Locations: The first campus will likely be here in the Pacific Northwest. Please contact me if you know of a campus -- office or school -- that is for sale. Orchard properties are also a possibility. 25 acres or larger. Select urban properties may be considered as gateways.

Timing: Just as soon as a suitable property is found and fund raising is well under way. The college component can be started at any time.

Does anything like this currently exist? Esalen is probably the best example. The Duany Plater-Zyberk plan for Tsawwassen, British Columbia bears a certain resemblance to what I have in mind as far as structure is concerned. One other example is the programs at Schumacher College.

For those who have an interest in a snippet of background material, see this post from 2008. It should be noted that all of the material on this journal points to an institution/infrastructure similar to that which is briefly outlined above.



I would not advise people to try any form of agrarian self sufficiency.

Many people have tried that route, only to end up failing.

When famines hit, the people who are hurt the most are the very poor and the very rich - those whose assets are tied to the land. The middle class skilled workers have a much easier time migrating to more favorable locations.

It seems to me that learning foreign languages would be a more useful survival strategy.


Sari, doesn't self sufficiency boil down to hunter/gatherer or agrarian? Other forms of existence depend on primarily agrarian surplus to survive. We can't all be labourers for hire. We can't all be pirates or highwaymen. Doesn't that way of thinking end up with Wolfesque Masters of the Universe with $900,000 annual bonuses for swapping paper derivative "investments"?



You've written extensively on what a lifeboat community might look like and how it might organise. Dmitry Orlov has also done this with his Communities that Abide blog series. But for those people already trapped in the ratrace of debt, work, dependant children, what options are there? To answer your question of whether we are better or worse of than we were in 2011, I would say we are caught in this suspended animation of adding more debt to prop up business as usual, and that many of us who have issued warnings to family and friends in the past have been made to look like crazy false prophets of doom by all this extra debt. We know it can't continue forever, and that the longer it goes on the worse the collapse will be, but how can we move on in our personal living arrangements when arable land is held by absentee landlords and priced above our reach?

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