Greetings Doomfans, and welcome to the Special New Year's Edition of the Frostbite Falls Daily Rant for the end of 2015, and heading into more Doom in 2016.
It's been a Banner Year for Doomers, 2015 has seen a marked increase in just about all areas of Doom, from the Economy to Geopolitics & escalating Warfare to the ever deteriorating Climate Problems. In fact, there are so many fucking Doom Stories from 2015 that I doubt I can cover them all here, no matter how long I run on this rant. However, I will endeavor to run very long and you can listen while you recover from your Hangover on New Year's Day-Morning. LOL.
2015 Doom began with a BANG, with the crash in Oil Prices starting around November-December of 2014, just as my good friend Steve from Virginia of Economic Undertow predicted with the Triangle of Doom. However, that early crash was nothing compared to what has taken place through the rest of 2015, we are now down to a $34 Handle and our good friends at the Squid are predicting $20 handles too! "Lower for Longer" is the Battle Cry in the Energy industry these days, and the big question is who can withstand the low prices the longest here before they finally go BK, unable to access more credit to roll over the mountain of debt already accumulated here?
Rumour is of course that it's all the fault of the Saudis, they are going to keep pumping no matter how low the demand in order to drive everyone else in the Oil extraction biz...OUTTA BIZ! If that was the goal, they have already been quite successful with it, as the Frackers over here shut down one drilling rig after another and Venezuela itself has basically shut down.
Of course the whole explanation the "the Saudis did it" is a crock of shit, the Saudis want high prices just as much as any OPEC country. They run huge subsidies on food & energy for the local population, and they have a huge Goobermint payroll and they run a huge military as well. Cutting their food subsidies means instant food riots with Saudi Prince heads rolling like bowling balls. So as the price dropped, the Saudis had no choice but to keep pumping and keep as much income rolling in as possible. They are just hoping their credit card line holds out long enough for the price to come back up as hopefully all the other producers go outta biz first. The problem is of course the price won't come back up anytime too soon, because end consumers of the product don't have the credit to burn it. Demand for energy is crumbling everywhere, the price of coal and NG as well as Chinese factories go outta biz one after the other.
All the energy extraction companies are leveraged to beat the band, and the only reason they stay operational is by rolling over their debt, for so long as they are deemed TBTF by the also TBTF banks that hold their debt, and the derivatives based on that debt. At some point however, the whole Ponzi will come apart, and then down comes the House of Cards. Will that occur in 2016? WTF knows, but it won't last forever that's for sure. As of right now, basically all land storage for Oil and Distillates is full up, and you have full tankers turning around in the middle of the Atlantic Ocean and steaming back for the GoM, where I suppose they hope to offload at a somewhat better price than the Europeans will pay here in the FSoA. Unclear here though is whether we need any more diesel either, since with less freight coming in at the Port of Long Beach from China, that means less trucks moving around the eisenhower interstate also.
Of course the low, low price everyday for Energy & Raw Commodities is having huge blowback in the financial markets and on a Geopolitical level also. First the markets.
All the investment banks speculate on Energy & commodity prices just like they speculate on Stock & Bond prices. So as the commodities market tanks, they try and sell out and go to some other investment class perceived as a "safe haven", like USTs, or they gamble still more on the stock market inflating up Apple I-shit and Netfucks stock to the stratosphere. This of course accelerates the downward spin of the commodities, nobody wants to buy them and lose money the minute the contract is signed. Then all the notional money gets loaded up into stocks, which when thet try to unload there start losing money. It all becomes very illiquid and you get wild swings in valuations on any given day as the HFT algos go wild trying to squeeze out a profit somewhere. If you do sell your stock at some price, what do you then buy with it?
It's not just the commodities that are in the toilet here, the sovereign bond market is also going south, as the realization dawns that none of these goobermints that owe Billions or Trillions are never going to be able to pay them off and rolling over old debt with new debt is just throwing worse money after bad money, because there was never any good money in here to begin with.
This leaves pretty much just a few places considered "safe", like USTs and Kraut Bunds, but the demand for them as a safe haven is so great that they are moving into negative interest rate territory. This means it costs you money to hold the debt! However, a slow bleed is preferable to hemmorhaging, so this debt continues to be purchased, if not by the TBTF banks, then by the Central Banks themselves, in the ultimate circle jerk of money creation. This then plays havoc with the currency markets, and the peripheral nations that can't sell their debt see their currencies get hammered. Mercantilist countries that manufacture toys to sell abroad actually like this, because it makes their products cheaper to consumers in other countries and theoretically more competitive, the problem of course being that all of their currencies are getting hammered which keeps making the products cheaper and cheaper until there is no more profit in the trade. Besides that, for their local population their local currency buys less and less every day, and inflation rates in these countries go into the double and even triple digits, until the currency ceases to have any value at all and the economy "dollarizes", as the locals try to get hold of dollars at any price they can. Of course, not a whole lot of these FRNs are really floating around out there as paper money, most of it is all notional digibits so local trade begins to grind to a halt as well, and in places like Venezuela they can't even get toilet paper without waiting on day long lines for a roll of Charmin.
All of these financial problems come packaged with a whole slew of geopolitical problems as well, because as each country slides off the economic cliff they begin to experience internal dissent and their Goobermints become unstable because they simply cannot deliver what their populations want without money to do so. Popular Parties promising the MOON crop up, get elected into power and then promptly fail to be able to deliver on said promises. You get a right wing goobermint followed by a left wing goobermint followed by a more extreme right wing followed by a more extreme left wing gobermint, rinse and repeat until the country is completely ungovernable and you have a failed state. The problem here isn't lack of democracy, it's lack of MONEY! It takes money to run a Goobermint. If you can't get credit from the International Banking Cartel, you are SOL no matter what your policies are.
Just as the internal politics of individual countries start breaking down, so do the relationships between countries. The big players of China, Russia, Germany and the FSoA are all jockeying for position either on the monetary end or the resource control end. As more of the peripheral countries surrounding them descend into chaos, they incur more costs in terms of trying to find military solutions to control that chaos and keep it from migrating inside their own borders, which is mostly an exercise in futility. Each of these countries has their own Home Grown terrorists coming from their own underclasses and ethnic minorities. The Ruskies have the Chechnyans, the Chinks have the Ughyurs, the Krauts have the Muslims and the FSoA has the Black & Latino underclass.
Add to the disaffected and disenfranchised folks inside your own borders the tsunami of refugees swarming all over the globe like Africanized Bees, porous borders everywhere and the conflict between "humanitarian aid" and being able to provide for your own current citizens, and it sets the stage immediately for conflict between groups all struggling to get a piece of the shrinking resource pie.
In Sweden for instance, you have native swedes disgruntled by the fact their pensions & services are being cut while at the same time brand new migrants are going on the dole, because of course there is no work for them. Particularly if a few hundred are dropped in a small town in northern Sweden which doesn't have a sewage system to handle all their shit, or enough housing for them either! Given most of them are young men and likely bored out of their minds, even if they have enough food to eat they are bound to make trouble just to relieve the boredom!
So the once Politically Correct Swedes ready to take in the masses of poor and hungry are rapidly becoming just as xenophobic or displasophobic or whatever you want to label it as the Hungarians Croatians and Krauts too now. Frau Merkel's open door policy isn't sitting well with the Kraut Hans 6 Packs either.
So now you have the Supra National Elite Clowns & Jokers in Brussels unilaterally declaring that THEY will seal the borders, by forking over more Funny Money to a "Rapid Deployment" team of Frontex guards, who presumably will hop from Hot Spot to Hot Spot to keep a few MILLION refugees from crossing the borders into Greece, Italy, Austria etc, with maybe a few thousand troops and helicopters? Are you fucking kidding me? There are thousands of miles of coastline along the Mediterranean sea to begin with, and exactly how or where they expect to detain them for 2 years or more while their refugee status is determined and then keep these refugee camps under control is a completely unanswered question. They already have an Epic Fail with Turkey, pitching €3B at Erdocrook to keep the refugees from Syria happily penned up in Turkey. Even if it was enough moolah which it is not, all Erdocrook will do with this money is stash 90% of it in his Swiss Bank account and do some window dressing on Refugee Camps for the TV Cameras with some of the chump change.
A few thousand mercenaries jumping around the coastline is NOT going to stop the flow of migration, because the places the migrants are trying to GTFO of Dodge from have become UNLIVABLE, not just because of the lack of money and non-stop war going on in their old home towns, but more crucially because those towns no longer Exist as a result of Cimate Change. Drought in Syria has been ongoing so long now that towns inhabited since Biblical times have been completely abandoned. Migrating to the cities still semi-functional like Damascus, there's no work for these folks, and they aren't particularly welcome by the long time residents of Damascus either. So they keep moving, with the Pot at the End of the Rainbow goal being making it alive to Sweden or Germany.
If it was JUST the Syrians, maybe you could contain this, but the same bizness is occuring all across Africa, India & Pakistan and SE Asia also! These are all the most highly populated places on Earth besides China, India by itself has over 1B people! You have Pakistanis finding passage from some Human Trafficker to get them to South America, where they then walk on foot and pay another bunch of traffickers to make it across borders and swamps and rainforest between them and the Holy Grail land of Good & Plenty here in the FSoA. Down in Oz, you have a perpetual flow of Boat People island hopping their way down from Myanmar to the Queensland coast, with the Crocodile Dundee's trying to stop that flow too. The Aussies of course have their own economic and climate problems as well, the Chinese aren't buying their coal or iron ore and the Baby Lambs are dieing of thirst. If they don't have coal, iron, wool or lab chops to sell, exactly what will they sell? Digeridoos?
Which of course brings up that next major collapse topic of 2015, the explosion of interest in Climate at long last, which should have taken off around the time Rachel Carson wrote Silent Spring back in the 60's, but has been on the literal back burner ever since with the entire energy industry lying through their teeth and lobbying against any effective changes while things kept getting gradually worse, up until 2015 when it stopped being so gradual and got IN YOUR FACE, just about everywhere. Droughts in California and meg-cities like Sao Paolo and Johannesburg, Super Typhoons with non-stop flooding rolling over the Phillipines on a weekly basis, the entire world oceans practically coming to a boil, if not with water vapor then with methane bubbles popping off at the surface like Fizzies or Alka-Seltzer tablets as clathrates beneath the sea bed melt off, which I maintain is a result of getectonic forces but it really doesn't matter what is causing it, because it's clearly wreaking havoc with the comfortable climate we've been used to since the dawn of agriculture.
Just about everybody is jumping on the climate bandwagon nowadays, from the Vicar of Christ on Earth Pope Frank to the Prince of Wales and Roseanne Barr. You had your big COP21 Climate Conference in Paris coming in right on the heels of the big Terror Job there and the various pols all agreeing that they should voluntarily do something pretty soon, although how any of the lofty goals of keeping average global temps below 1.5C above the recent historical average will actually be accomplished is an open question. Lots of talk about Renewables, but no solutions to intermitency problems or the economic problems that are already accruing here even before any voluntary restricitions on burning fossil fuels are dropped in place.
The reality is here that we will stop burning copious quantities of FFs, but not because of any voluntary actions by Nation States or voluntary actions by the population at large either. We'll stop burning them because they can't be extracted at a cheap enough price for the population to afford to buy them and burn them in the quantities we have for the last century. Will that stoppage occur fast enough to prevent AGT from warming up 2C or 4C or 8C? Probably not, so what we really need to be thinking about and planning for is how to stay alive on a planet that will be significantly warmer than it is today. Over the course of the next 50 years, we're likely to lose many of the largest coastal cities on the planet, most of them are just above sea level right now. So encouraging a migration out of those cities now rather than doing it at the last minute would seem like a wise idea. Not that I believe this is likely of course, based at least on the nonsense in CA and in Sao Paolo. In large part this is because even if they do realize the place they live isn't survivable long term, it's where their job is if they still have one. Even if you're just a Paolista janitor in Sao Paolo, it's better than packing up and heading for Rio to join the legions of unemployed Cariocas there living in the favelas, which 50 years after I was there not only are no longer there, they are bigger and better than ever.
To tie it up for the New Year's Rant, all these problems in theory are going to be solved by Democracy, since here in the FSoA we are moving into the stretch run of the POTUS campaign, and the Hated Obama-sama who replaced the Hated Dubya will at last be gone from the Center Stage of the Marionette show, to be replaced by one of the Most Excellent choices we have instead, from the likes of Shillary Clinton, Ted Bruise and of course The Donald. You can be sure with any of these choices, even Bernie Sandbox, that none of them will be able to solve problems that have their underpinning in resource depletion and population overshoot. The illusion of the Matrix will be maintained until it cannot be maintained anymore, and finally the collapse that is well underway all around us makes it inward to the Heart of Darkness. Will it make it to your neighborhood in 2016? That I do not know, and perhaps it already has anyhow. If you already are unemployed, if your McMansion was already foreclosed on, if the town or city you live in has already gone BK, then Collapse has arrived for you already. It's a Recession when your neighbor loses his job, it's a Depression when you lose yours.
Anyhow, there should be plenty to write and rant on in the world of collapse in 2016, and the Diner will be here to report on it all until the Internet Goes Dark.
And that's all the Doom, this year until next year, here on the Doomstead Diner. See ya after the Bombs...er I mean Ball...drops Diners.