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The Peak Oil Crisis: A Winter Update

The Peak Oil Crisis: A Winter Update.

Posted Feb 20, 2014 by Tom Whipple

As the years go by, those studying peak oil are beginning to develop a better understanding of what has been happening since the concept of limits to oil production came to widespread attention. First of all, it is important to understand that in one sense, production of what had been thought of as “conventional oil” really did peak back in 2005. While there has been growth in certain sectors of the “oil” industry in the last nine years it has come in what are known as “unconventional liquids”; and, as we shall see, the maintenance of existing conventional oil production has come at a very high price.

The recent growth in the “oil” production has been nowhere near what had been normal prior to the “Great Recession,” so that if anyone should wonder why our economy has been stagnant in recent years, one can take the price and availability of oil as a good starting point. US consumption has been falling at 1.5 percent a year since 2005 as opposed to a normal growth rate of 1.8 percent in prior years.
In the last decade global oil production grew by only 7.5 percent and not the 23 percent that would have been needed to support the growth in the world’s GDP at a rate we would have liked to have seen. Since 2005, total “oil” production has grown by 5.8 million b/d, of which 1.7 million consists of natural gas liquids (NGL). While NGL’s are valuable and a useful form of what we now call “oil” they do not contain the same energy as crude and have a more limited range of uses, thereby contributing less to economic growth.
US unconventional liquids (shale oil and NGL’s) are up by 5.1 million b/d since 2005. Along with an additional million b/d from the Canadian tar sands, North American non-conventional liquids constitute nearly all the growth in the world’s oil supply in recent years. Production of conventional crude has remained essentially flat during the period. Moreover, OPEC production has dropped by nearly two million b/d in the last three years largely due to wars, insurgencies, and embargoes, and another 1.7 million b/d of its “oil” production has been NGL’s and not crude.
The world’s existing fields are depleting at rate of circa 4 million b/d each year, so without constant drilling of new wells in new fields global production will quickly wither and prices will climb still more. A good estimate is that the oil which now costs about $110 a barrel will be at $140 or above by the end of the decade unless some major geopolitical upheaval sends it still higher.
To keep the oil flowing, the world’s oil companies have invested some $4 trillion in the last nine years to drill for oil. About $2.5 trillion of this was spent on simply replacing production from existing oil fields. Even this gigantic expenditure was not enough since conventional oil production fell by 1 million b/d during the period.
About $350 billion went to drill shale oil and gas wells in the US, and increase Canadian oil sands production. This was clearly a bargain as compared to maintaining conventional oil production which is now focused on ultra-expensive deep water wells.
Recent announcements by the major oil companies indicate that they have reached their limit. Profits and production are falling. Expenditures for finding and developing oil fields have tripled in the last decade and the return from these expenditures has not been enough to justify the costs. Nearly all of the major oil companies have announced major reductions in their exploration and drilling programs and several are selling off assets as they are caught in a trap between steady oil prices and rapidly rising operating costs.
Note that the major oil companies do not constitute the whole oil industry as most of the world’s oil production is now in the hands of state-owned companies and small independent producers. These firms are obviously facing the same problems as the large publicly traded companies, without as much publicity.
What is going to happen in the next few years? First, investments in future production are going down, meaning that in a few years depletion likely will overwhelm new production and output of conventional oil will drop.
Then we have the Middle East which, to put it mildly, is coming unglued. Oil exports from several countries have nearly disappeared and the spreading sectarian violence is likely to reduce exports from other countries before the decade is out.
Venezuela, from which the US still imports some 800,000 barrels of crude a day, is not transitioning to the post-Chavez era gracefully. The current student riots could easily morph into reduced oil exports.
With much of the growth in global oil production coming from US shale producers, a fair question is just how long fracked shale oil production will continue to grow. Opinions vary. Some foresee the possibility that growth will slow considerably this year, while others think there are two or three years of large production increases ahead. The three months of extremely cold and snowy weather we have had this winter is already hurting production, but most believe production will rebound in the spring.
Even though production of conventional oil peaked nine years ago, massive investment and a five-fold increase in oil prices has allowed the economical production of shale and deepwater oil at a profit since 2005. Further growth in shale oil production, however, clearly has a half-life, be it one, three or five years.
Recent news concerning deepwater oil production is not encouraging. Brazil’s deepwater oil fields which are thought to contain many billions of barrels of oil are not looking too good at the minute due to the very high costs and risks of production. All in all, the recent news from the oil industry tends to be one of growing pessimism.
Originally published at Falls Church News-Press
Barnett peak image via Post Carbon Institute

Ponzi World (Over 3 Billion NOT Served): The Corporatized Matrix Liquidated the Real Economy

Ponzi World (Over 3 Billion NOT Served): The Corporatized Matrix Liquidated the Real Economy.

We are the human batteries powering the Corporatized Matrix – born into indentured servitude. The Corporate endless growth paradigm cannibalized the real economy, leaving a hollow illusion populated by denatured human drones…

Denatured from Birth
Every aspect of our lives has been denatured and controlled by one soulless corporation or another.
From the Frankenfood-like substance at the grocery store of unknown Monsanto origin, to the Newspeak-like information that we are fed via the corporate media. They control the media, they control the message.
The machine doesn’t like people to ask too many questions, so the human batteries have been steadily dumbed down one episode of South Park/American Idolatry at a time.
When the internet became commercialized in 1995 a la the “World Wide Web”, it was immediately flooded and overwhelmed by mangled, obfuscated, contorted disinformation. A toxic waste sewer of for-profit-only garbage. Hyperlinked bullshit sent attention deficit disorder through the roof where it has grown acute amid texting and mobile handset addiction.
The Sociopathic Corporation (aka. Agency Theory)
As I’ve explained before, agency management assures that corporations remain fixated on their goal of mindless growth at all costs. Any given shareholder may be environmentally conscious or worker friendly, but via the corporate model, the incentives of the agency management are to maximize share price at all costs. Some companies say they support this “good cause” or that one as part of their overall Marketing slogan, but as soon as they miss Wall Street expectations, that other non-profit-related  bullshit goes straight out the window. As I also explained, obscene profits are not adequate, corporations must continue to grow profits at all times or the stock market will vote their shares down in real time, and as the stock price plummets those management options will be rendered worthless. The growth-at-all-costs model does not go in reverse.
Sociopathic Buffoons Running Amok
These country club CEOs and their management lackeys are hardcore sociopaths. They’ve impoverished millions without even the slightest twinge of guilt. They turned the economy into a zero sum game to their own overwhelming personal benefit and in the process turned their companies into call options. Most of them were hatched in Ivy League schools which generated the text book alchemy that gives the all-important specious stamp of approval to this entire fucking fiasco. Harvard et. al. must never be questioned, no matter how self-destructive are their ideas.

Front-Running Democracy
Like HFTs in the stock market, the corporate special interests front-run the public at the polling booth by buying both/all parties ahead of time. The game show hosts in politics with % approval ratings hovering near single digits, bear the brunt of the public frustration while the puppet masters remain out of view. The Lost Boys of the Idiocracy and various other complicit stooges rail away at “evil government” in faux outrage, while the special interest groups who direct all government actions remain fully intact and unquestioned.

Feasting on the Carcass of the Real Economy
In the context of the Fed’s generated Potemkin Village, the real economy no longer matters. The Fed expands the money supply as a proxy for real economic growth and the stock market is now programmed to only go up when the real economy goes down. So the corporate incentive to create organic growth, in aggregate is now negative. Investment in real plant and equipment has been supplanted by speculation in secondary market paper assets. A zero sum game. The one time industrial arbitrage between East and West cannibalized demand while massively inflating supply. The output gap going into this next downturn will be unprecedented in scale.
Those of us corporatized slaves, accept the Fed’s debased dollars without any form of rebellion, because as a society we’ve been bred for docility. The corporate hierarchy is the ultimate passive aggressive breeding ground. Still, some of us know that the special interest groups closest to the printing press benefit at our expense. And those who understand deflation know that this is all just a smoke screen to cover up the ongoing collapse of the real economy. Once that smoke screen lifts, the fully hollowed out devastation will be revealed for all to see.
Dopamine Addicted Zombies
The worst part about this entire fiasco is that we are surrounded by human zombies who have been denatured to the point where they can no longer be happy outside of this corporatized Disneyland. They seek comfort in the illusion being projected onto the paper walls of the Fed’s Potemkin Village. They don’t question it in the slightest.
Granted, they can’t really help it. The human batteries have been turned into dopamine addicts by the Corporatized Matrix. They can’t envision life without McMansions, SUVs, Black Thursday shopping sprees, supercarriers and other trinkets. They are bought in and sold out to the status quo no matter how fake or unsustainable it may be. Therefore, like any other type of junky they will have a hard time surviving when taken off of their consumption-oriented stimulants.
So when it all implodes spectacularly and reality is revealed in all of its natural glory, then it’s highly likely that these zombies will behave in desperate ways that are highly “unpredictable”.
You’ve been warned.

How To Identify Economic Zombies – Monty Pelerin’s World

How To Identify Economic Zombies – Monty Pelerin’s World.

 February 25, 2014

apocalypsezombie-apocalypse

Economics is not a difficult subject, unless you try to learn it from an economist. As described by John Kenneth Galbraith, who posed as an economist but was far better as a critic:

Economics is a subject profoundly conducive to cliche, resonant with boredom. On few topics is an American audience so practiced in turning off its ears and minds. And none can say that the response is ill advised.

Common sense is all that is required to be a good economist. Unfortunately, in order to get your union card, you must pretend to have none. Belief in fairy tales like more spending and “free lunches” is also necessary.

But that is of little import in regard to the title – How to identify economic zombies.  

What Is A Zombie?

Webster defines zombie as

… a will-less and speechless human in the West Indies capable only of automatic movement who is held to have died and been supernaturally reanimated

An economic zombie can speak and is not dead in any physical sense. His defining feature is a focus almost solely on the present. He assumes tomorrow will be just like today. If his current behavior has not created trouble or hardship thus far, then it won’t tomorrow or on into the future. Linearity describes his thinking and world. The future will be just like today.

A Simple Test For Economic Zombie Determination

The test to determine whether you or your friends are zombies is simple. Answer the following question: How would you live if debt/credit were outlawed? The economic zombie has difficulty comprehending the question, no less answering it. If you or your friends do, then you are well on your way toward full zombie-hood, if in fact you are not already there.

The question is relevant because it identifies those too ignorant to comprehend the fact that you cannot consume more than your income will support, at least not forever.

Income for a period determines the amount you can spend that period, or it would in the absence of debt or savings. Borrowing this period enables spending to exceed income this period. But borrowing is nothing but advancing consumption that otherwise would occur in a later period. Whatever is borrowed raises consumption this period but reduces it next period when some of the income earned then cannot be spent because it must be used to service the prior debt. Total consumption for both periods is lower than it would have been without the borrowing. That is due to the paying the carrying cost of debt, interest.

If you cannot understand this concept or you believe that you can nullify it by borrowing again next period, you qualify as an economic zombie. If you answered that you could not live if debt/credit were outlawed, you are an economic zombie, and perhaps also an economic idiot. Osavi Osar-Emokpae colorfully described debt:

And don’t tell me debt is not a big deal. Debt will cut off your legs and laugh at you as you grovel in the dirt begging for mercy. If you don’t need it, don’t get it. If you can’t afford it, don’t get it. If you’re already in debt, get out quickly. If you think you’ll never get out, you’re right, you won’t.

If you are using your credit cards as loans (i.e., you are not paying in full the balance each month) then you are zombie-qualified.

Economic zombies are not born. They are made. They choose their lifestyle. Behind every economic zombie is someone who believes he should live better than his abilities allow. That may work for a time. Then the Osar-Emokpae quote takes over.

The reality is that negative borrowing, saving, should be occurring every year. Man has a finite lifespan and a finite earning career. The latter is shorter than the former. Part of life is to be responsible enough to prepare for the future when income stops. Borrowing is a sign of immaturity and ignorance. Occasionally borrowing is necessary to meet an unforeseen emergency. If it is routine, then you are an economic zombie!

Water Rationing Begins Outside Malaysia Capital Amid Drought – Bloomberg

Water Rationing Begins Outside Malaysia Capital Amid Drought – Bloomberg.

By Chong Pooi Koon and Ranjeetha Pakiam  Feb 25, 2014 1:10 AM ET

Water rationing began in areas surrounding Malaysia’s capital after a prolonged drought, as Selangor state officials sought to wrap up talks to nationalize the local industry.

“The supply of raw water in Selangor state is in a critical condition,” Khalid Ibrahim, the state’s chief minister, said in a faxed statement late yesterday. “The water levels at a few dams have been shrinking to reach an alarming stage.”

Rationing may also start in parts of Negeri Sembilan, south of Kuala Lumpur, if there is no rain in coming days, the New Straits Times reported today, citing the state’s Chief Minister Mohamad Hasan. Several other states have also reported shortages amid rising concerns over the potential impact on Malaysian palm oil crops if the drought continues. Prime Minister Najib Razak is due to discuss the situation in cabinet tomorrow, including the possibility of cloud-seeding, the official Bernama news service said.

Opposition-controlled Selangor, which surrounds Kuala Lumpur, has been trying to nationalize water-treatment assets in its jurisdiction for years to restructure the industry and tackle periodic shortages. Malaysia’s local and national governments want to announce a final resolution to the buyout within two weeks, the state’s chief minister said Feb. 18.

Photographer: Mohd Rasfan/AFP/Getty Images

Residents collect water from a tank truck in Balakong, outside Kuala Lumpur on Feb. 20, 2014.

Commodities Impact

The regional government offered companies including Gamuda Bhd. (GAM) a combined 9.7 billion ringgit ($3 billion) for their assets in December, Sharizan Rosely, an analyst at CIMB Group Holdings Bhd., wrote in a Jan. 10 report. Kumpulan Perangsang Selangor Bhd. (KUPS) and Puncak Niaga Holdings Bhd. (PNH) are also being asked to sell.

Malaysia’s palm oil, cocoa and rubber-tapping industries are dependent on regular rainfall. An El Nino weather pattern, which can parch Australia and parts of Asia while bringing rains toSouth America, may occur in the coming months, Australia’s Bureau of Meteorology said today.

“It needs a very prolonged drought to have a severe effect” on palm oil production, Ling Ah Hong, director of Malaysian research and consulting company Ganling Sdn., said by phone. “This current drought is only about three to four weeks.”

A prolonged drought might have a lagged effect on next year’s production, mainly through floral abortion when cells die before they can mature, said Ling.

Palm Prices

Crude palm oil prices have climbed 7.6 pecent this month and rose 0.4 percent to 2,753 ringgit per metric ton as of the 12:30 p.m. trading break in Kuala Lumpur, according to data compiled by Bloomberg.

The positive price uptrend for crude palm oil is expected to be sustained as the current hot and dry weather affects parts of Malaysia and IndonesiaIOI Corp. (IOI), Malaysia’s second-largest palm oil producer by market value, said in a stock exchange filing today.

The dry weather began in early February and may last until mid to end of March, the Malaysian Meteorological Department says in e-mailed statement to Bloomberg News today. El Nino weather conditions may develop after May or June, it said.

For optimal yield per hectare, palm oil requires rainfall of 1,500-2,000 millimeters or more distributed evenly through the year without a drought of more than three months, the department said.

Production Impact

“The severity of the decline in production will depend on how long the dry season lasts,” Alan Lim Seong Chun, an analyst at Kenanga Investment Bank Bhd., said by phone in Kuala Lumpur. “In the worst-case scenario, it can drop to 30 percent below normal.”

Residents in parts of Selangor will get water on alternate days and rationing will continue until the end of March if hot weather continues, the chief minister said. The government will evaluate the situation before deciding on whether to declare an emergency, Bernama reported on Feb. 21, citing Najib.

“If the drought continues past March, then we might have to deal with more severe rationing that could possibly have an impact on our GDP,” Yeah Kim Leng, chief economist at RAM Holdings Bhd., said in a phone interview from Kuala Lumpur. “It’s likely to be short-lived.”

Neighboring Singapore had a record 27 consecutive days of dry weather from Jan. 13, the country’s National Environment Agency said. The rain shortage may extend into the first half of March, it said in a statement.

To contact the reporters on this story: Chong Pooi Koon in Kuala Lumpur atpchong17@bloomberg.net; Ranjeetha Pakiam in Kuala Lumpur at rpakiam@bloomberg.net

To contact the editor responsible for this story: Barry Porter at bporter10@bloomberg.net

Cassandra’s legacy: Gold and the beast: a brief history the Roman conquest of Dacia

Cassandra’s legacy: Gold and the beast: a brief history the Roman conquest of Dacia.

 

Roman soldiers bringing civilization to Dacia (from the Trajan column in Rome). The Roman empire invaded Dacia at the beginning of the 2nd century AD seeking the control of the Carpatian gold mines. 

The ascent of the Roman Empire is best understood if we think of it as a beast of prey. It grew on conquest, by gobbling its neighbors, one by one, and enlisting them as allies for more conquest. By the first century AD, the Roman Empire had conquered everything that could be conquered around the Mediterranean sea; that for good reasons the Romans called “Mare Nostrum”, “Our Sea.” But the beast was still hungry for prey.

And what a beast that was! Never before, the world had seen such a force as the Roman legions. Well organized, trained, disciplined, and equipped, they were the wonder weapon of their times. The great innovation that made the legions so powerful was not a special weapon or a special strategy. It had to do, rather, with a concept dear to the military: command and control. In the Roman system, command and control was based on gold (and silver). The Roman had not invented coinage, but they used systematically gold and silver coins to pay their soldiers. So, the size of the Roman army was not limited by the Roman population: almost anyone could enlist either as a legionnaire or as an auxiliary fighter; his reward was simply money. Gold was, in a sense, the secret weapon of the Roman Empire; it was the the blood, the lymph, and the nerves of the beast of prey.

Because of its command and control system, the Roman army could grow in size by means of a self-reinforcing mechanism. The more gold the Romans had, the larger their army could be. The larger their army, the more gold they could raid from their neighbors. Also, the more gold the Romans had, the more they could invest in extracting more gold from their Spanish gold mines. The beast kept growing bigger and, the more it grew, the more food it needed.

But even the mighty Roman legions had their limits. With the 1st century AD, the Spanish mines started showing signs of depletion. At the same time, the Empire had reached practical limits to its size and, with that, to the amount of gold it could loot from its neighbors. Already in 44 BC, the legions had been stopped at Carrhae in their attempt to expand in the rich East at the expense of the rival Parthian Empire. And in Teutoburg in 9 AD, a coalition of German tribes had inflicted a crushing defeat on the legions, stopping forever the attempt of the Romans to control Eastern Europe. There were no other places where the empire could expand: in the West, it faced the ocean; in the South, the dry Sahara desert. Confined in a closed space, the beast risked to starve.

Not only the Roman Empire couldn’t get any more gold; it couldn’t even keep the gold it had. The Roman economy was geared for war and it couldn’t produce much more than grain and legions, neither of which could be exported at long distances. At the same time, the Romans had a taste for expensive goods that they could not produce: silk from China, pearls from the Persian gulf, perfumes from India, ivory from Africa, and much more. The Roman gold was used for pay for all of that and, slowly, it made its way to the East through the winding silk road in central Asia and from Africa to India by sea. It was a wound that was slowly bleeding the beast to death.

With less and less gold available, the legions’ power could only decline. That the Empire was in deep trouble could be seen when, in 66 AD, the Jews of Palestine – then a Roman province – took arms against their masters. Rome reacted and crushed the rebellion in a campaign that ended in 70 AD with the conquest of Jerusalem and the burning of the Jewish Temple. It was a victory, but the campaign had been exceptionally harsh and the Empire had nearly gone to pieces in the effort. Nevertheless, the empire had managed to bring home a considerable amount of desperately needed gold and silver. The beast was eating itself but, for a while, it was satiated.

With the gold plundered in Palestine, the Roman Empire could gain some time, but the problem   remained: where to find more gold? It was at this point that the Romans turned their sight to a region just outside their borders: Dacia, an area at the North-East of the Empire that included Transylvania and the Carpatian mountains. The beast was smelling food.

We don’t know much about Dacia before the Roman conquest. We know that it was a thriving society that was expanding and that, probably, had ambitions of conquest of its own; so much that the Roman empire had agreed to pay to the Dacian kings a tribute. We know that the Carpatian region had been producing gold already in very ancient times and there is evidence (Bogden et al.) that, at the time of the Roman conquest, the Dacians were mining gold veins in the mountains. It may well be that they had learned new mining techniques from the Romans themselves. So, Dacia was probably experiencing a gold mining boom. It was a prey in the making.

The Dacians may have had plenty of gold at that time, but they were still building up their economy and their technology. The only gold coins that can be said to have a certain Dacian origin are a curious mix of Roman iconography and Greek characters spelling the term “Koson“, whose meaning is uncertain. We don’t know if these coins were actually minted in Dacia, although they were surely used there. It is possible that the Dacians had sent some of their  gold to Rome, to have it transformed into coins and brought back in Dacia – not unlike what oil producers are doing today when they send their oil to the United States to be transformed into dollar bills. The Romans were surely happy to work the Dacian gold, but they must have noticed that the Dacian mines were producing it. So, it was clear that a military conquest of Dacia could pay for itself. The beast had sighted its prey.

In the year 101 AD, a young and aggressive Roman Emperor, Trajan, invaded Dacia. It was a bold attempt, given the difficult terrain and the strong resistance of the Dacians. Surely, the nightmare of the Teutoburg disaster of nearly a century before must have haunted the Romans but, this time, the legions overcame all obstacles. After two campaigns and five years of war, the gamble paid off and Dacia was transformed into a Roman province. The beast had made another kill.

We have no reliable data on how much gold and silver the Romans looted in Dacia, although it had to be a considerable booty. We also know that the Romans invested in the Dacian mines, probably bringing in their expert miners from Spain. However, the overall effect of this inflow of gold seems to have been small on the Roman economy. If we look at the data for the silver content of Roman coins (data from Joseph Tainter) there is no evident effect of the Dacian conquest. We see an increase in silver content at about 90 AD, but that’s a decade before the Dacian campaign and we may attribute it, rather, to the inflow of precious metals deriving from the conquest of Palestine. The Dacian mines, apparently, couldn’t match the wealth that the Spanish mines had been produced in their heydays. The beast had become too huge to be fed just with crumbles.

But the content of silver in coins doesn’t depend only on the looting of foreign countries. It depends also on the policies of the government. So, if we look at the graph above, we see that both the Palestinian and the Dacian campaigns correspond to drops in the silver content of coins. That makes sense: of course the Roman government would see the advantage of debasing a little their currency when it was question of having to pay large numbers of troops. Trajan, indeed, didn’t stand still after the conquest of Dacia and, in 113 AD, he attempted another bold project: that of expanding in the East, attacking once more the Parthian Empire after the failed attempt at Carrhae, in 44 BC. But the task was too much even for an expert commander as Trajan. After some initial successes, the Romans simply had to stop; possibly they understood that the campaign had become too expensive. Asia was just too big for them to conquer. The beast had found a prey too big to swallow.

With the death of Trajan in 117 AD, the new emperor, Hadrian, took the decision of stopping all attempts of the Empire to conquer new territories, a policy that was basically kept by all his successors. In a sense, it was a wise decision because it prevented the Empire from collapsing. But the final result was unavoidable as gold continued to bleed away from the Roman territory and could not be replaced. The Western Empire, which included the city of Rome, disappeared forever after a few centuries as an impoverished shade of its former self. The beast was to die of starvation, slowly.

And Dacia? Over nearly two centuries of Roman rule, it was “romanized”, in the sense that it adopted Roman customs and the Latin language – at least in the cities. However, it was also one of the first Roman provinces to lose contact with the central government when, around 275 AD, the legions abandoned it (for comparison, Britannia was not abandoned before 383 AD). We have no data on gold production in Dacia during this period but the simple fact that the Romans decided to abandon the province means that the Dacian mines had been thoroughly depleted, just like the Spanish ones. There was no food left for the beast.

From then on, we have scant data. For sure, Dacia was exposed to all the invasions that were to sweep through Europe in the period we call “The Great Migrations”. Apparently, however, the region maintained its Roman roots better than Britannia. However, we have no records of a Dacian King who bravely fought the invaders, as King Arthur did in Britannia, and we don’t have to think that Dacia always remained a Roman fortress. Indeed, the earliest records we have of the Romanian language go back only to the 16th century and we have no clear evidence that its origin went back all the way to the times of the Roman colonization. However, it is a fact that, still today, the region we call “Romania” – the land of the Romans – is a Latinized island in a Slavic sea. Were the gold mines still producing some gold during this period? We cannot say but, if they did, it may be possible that the wealth they generated, even though modest, helped to maintain the cultural and social unity of Dacia.

This brief survey tells us a lot of how important is gold in human history. For the region that we call Romania today, the gold mines located in Roșia Montană, in the Carpatian Mountains, have been a fundamental element. Exploited from remote times, these mines have periodically experienced new waves of exploitation as technological improvements made it possible to recover lower and lower grade gold ores. And with these cycles of boom and bust, there went invasions, migrations, kingdoms, and empires. The cycle is continuing today with a project to restart exploiting these ancient mines using the last technological wonder in gold mining: the cyanide leaching process. But getting more gold from the exhausted Carpatian mines is costly and the damage it could do to the land is tremendous. The drop in gold prices of the past few years may soon make these new gold mines too expensive even to be dreamed of. Even existing gold mines may have to be closed.

So, it looks like the beast of prey that, today, we call “Globalization” is facing the same problem that the old Roman Empire was facing in its times: the disappearance of the vital minerals it is preying upon (and gold is just one of them). Since today there are no perspectives of conquering unexploited lands, it is an unsolvable problem. The globalized beast will have to die of starvation, or it will survive only if it will accept to change its diet.

Millennium Ark: Hot News| How to avoid the coming food shortages…

Millennium Ark: Hot News.

50% of America’s fruits and veggies are grown in California and the Feds
are destroying their crops. What this means for you.

 

PREFACE: Only a small space is required to grow most fruits and veggies for a family. So Stan and I will scamper over to our local garden center this week and for additional organic compost to augment our Super Soil and get those growies growing! By the end of Summer our own compost piles should be ready to sustain the gardens hereafter. It just takes a little while to get there.Sunday, we planned out this year’s garden – including more than usual. Definitely making time for canning this year. Had the equipment, not the time. Since warmth – and dry (drat!) – are coming early this year to the West, Southwest and Southeast, it’s important to get our garden ready in February and seedlings sprouted and sunk in the ground by late March instead of late April – a full month ahead of normal. The most time-consuming aspect will getting the Super Soil pre-warmed as described in Garden Gold, which will only require a couple hours, so plants get a head start and beat this Summer’s killing heat.

These NOAA maps show the probability of temperatures exceeding the norm, so roughly 1/3 of the Country can get their veggies and fruits in early. Unfortunately, as 2014 progresses, a bunch of us will be sweating bullets living in tank tops and shorts.

Click on the different NOAA 3-month outlooks (under More POE Outlooks) on the left to see how temps are revving up hotter and earlier this year. It’s weird that after this blisteringly bitter cold winter, we have to think in terms of excessive heat, but that’s what extreme climate change is about and something Stan and I have warned would descend since 1995. Now that it’s here, everyone must act with fore-thought and planning. With what’s coming, every day counts. —Holly




February 24, 2014
Holly Deyo

TAN DROUGHT KILLING THE GOLDEN STATE

Government has lost its mind. It is no more evident than their decision last week to cut off water to America’s food basket. Squeezed by the worst-ever drought in the state’s history, California is dying of thirst. Crushing news was delivered to farmer’s that no water would be coming from the Federal government. This dreaded decision was compounded by the Sierra Mountains getting just 25% of normal snowpack. There is no water to replenish already dangerously low reservoirs, so no water for farmers.

Photo: Government shut off water in 2009 to California farms in a controversial effort to help threatened species. (NOAA) Now they shut off water to farmers because of low snowpack and rainfall. They can’t win.

Despite recent storms, it’s done nothing to alleviate the staggering dryness. California needs snow. Desperately. Down bursts can’t soak into parched, concrete-like soil so it rolls off, unused, into sewers and drainage ditches. Snowpack melts slowly and is easily funneled into reservoirs and sinks into land and eventually groundwater basins.

Gov. Jerry Brown declared a drought emergency 5 weeks ago and conditions have worsened since.

Farmers who thought this might be coming delayed planting crops. Some have given up altogether. Even late harvests, where possible, would be better than wasting the cost of fuel to run equipment, paying farm workers to work dying fields, paying for seeds that likely won’t survive summer – and have it all come to nothing. Over half a million acres won’t even be planted.

Not that anyone wants a business penalized, but golf courses will be allowed to waste water in the most extravagant method possible. What would you rather have: food on the table or 225,000 acres of lush golf links? The amount of water required to keep them verdant is staggering. Residential customers are already being warned to conserve and some cities have passed mandatory water restrictions. The San Francisco Chronicle reports that 17 communities are at risk of running dry.

Image: It’s clear from the image below that regions of California worst hit and in danger of running out of water are the prime food growing areas.
DROUGHT = SLOW DEATH

We saw this same scenario play out in Beulah, Colorado in 2002 – the year after Stan warned the Pine Drive Water District they needed vastly more water storage. They didn’t listen. The very next year when residents turned on their faucets, literally not a drop dripped. So dire was the situation, it made national news. It was a shock to have literally no water available.

Huge white plastic water storage tanks were hastily set up in front yards and water was trucked in weekly from Pueblo. Wells went completely dry and livestock were reluctantly sold off. It was either that or watch them die.

The next Spring when Stan and I drove around Beulah, the wildlife took your breath. Most telling were larger animals. Baby deer that survived were unbelievably scrawny. Their mothers’ ribs stuck out of their backs and sides from patchy coats like awkward jagged tree branches. Their faces were unhealthily gaunt, lit by haunted eyes. It was heartbreaking.

That was one small mountain community. Now we’re talking about an entire state facing extreme conditions. Heaven help them in the 2014 fire season, which for Californians, began January.
PROMISES, PROMISES

Last week Pres. Obama promised $100 million in livestock-disaster aid, but that doesn’t make water fall from the sky. This is less than a pittance when livestock and poultry alone gross nearly $10 billion in California.1 Instead farmers, like Beulah residents, will be forced to sell their animals. This is a calamity. We’re not talking about a few hundred head. On average, when drought conditions hammer down, like those in Texas a couple years ago, it takes at least 3 years to rebuild herds. This means further rising beef prices that we Americans are already experiencing. Just wait, it will get worse. I warned in 2010 what the Texas drought would do to beef prices in the next few coming years, and this story bears it out: Ground Beef Prices Have Skyrocketed, Here’s Why. The article warns to expect steak to double.

Three weeks ago news agencies reported that beef herds are the smallest since 1951 – and this didn’t factor in what will surely be a massive cattle sell-off in the Golden State.

Other crops feel it too. “Retail prices for tomatoes rose 10% in the 12 months through Jan. 31, and U.S. retail prices for beef, bacon, lettuce and broccoli have also risen at least 10% last year.”2 This hike came before farmers found out they won’t be getting water for crops and 8 million California farmland acres depend on federal and state irrigation.

MEGA-DROUGHT, MEGA-DISASTER

In a stunning report from Time Magazine, Bryan Walsh writes that scientists fear California’s dryness “could get much, much worse” bringing back the horrible era of mega-droughts. “These mega-droughts aren’t predictions. They’re history, albeit from a time well before California was the land of Hollywood and Silicon Valley. And the thought that California and the rest of the modern West might have developed during what could turn out to be an unusually wet period is sobering. In 1930, a year before construction began on the Hoover Dam, just 5.6 million people lived in California. Today more than 38.2 million live in the largest state in the U.S., all of whom need water. California’s 80,500 farms and ranches produced crops and livestock worth $44.7 billion in 2012, but dry farming districts like the Central and Imperial Valleys would wither without irrigation.”3

Image: According to the Drought Monitor, 91% of California is in Severe to Exceptional Drought. For comparison, the rest of CONUS looks much better except Nevada and they don’t grow much of anything.

SQUEEZE PLAY

As one Millennium-Ark reader pointed out in an email last week, after the jump in beef prices, people will look to chicken, pork, fish and turkey. Chicken is already up though not as much as beef.  This will, in turn, drive up their costs and affect availability of these other meats. Keep in mind that California also produces all of these proteins plus lamb. Then consider this: Ag Specialists Warn of Higher Wheat Prices Due to Drought. It’s not just beef, weather is clobbering food from all angles. Rising Threat to Crops from Climate underscores it.

Not to be totally depressing, but remember to factor in possible health issues from the Corexit ridden fish and seafood in the Gulf courtesy of BP’s Deepwater Horizon debacle. Then there’s Fukushima Daiichi’s radiation affecting fish all up and down the West Coast.

Food production is not a national only issue. We export food around the world. In the grain arena, so does Argentina, Australia, Canada, the EU with India, Pakistan, Thailand, the U.S. and Viet Nam contributing to world rice production. Every – single – country is being hit with flood, heatwaves or drought.

Friends, serious climate issues are clobbering beef, grain, fruit and veggies – nearly all food – with unpleasant trickle-down repercussions coming. At this point, it doesn’t matter if it’s caused by geo-engineering, climate change (aka global warming), natural cycles or Sun-driven events. We must deal with the fallout and it’s coming fast.

If you think the beef and grain scenario is bad, check what’s happening in the fruit and veggie department.
CALIFORNIA’S GOLDEN BREAD BASKET

California grows half, HALF of America’s produce. Another 13% is exported4 around the world. California’s yearly produce is valued at more than $45 billion5. In the list below, out of some 400 different foods it grows for our Nation, California leads production for 79 of them. Out of these 79, California grows ALL of 14 crops (in bold). Keep in mind, this list is only 79 out of some 400 foods including sugar beets, mushrooms, oats, potatoes, cucumbers and many more.

Now scroll down to one very important item in the 4th column – Greenhouse Vegetables. These are the nicely potted vegetable, fruit and herb seedlings people purchase every year at building materials centers and nurseries around the Country. These are now at risk.

 

Crop and Livestock Commodities in Which California Leads the Nation6
Almonds
Apricots
Artichokes
Asparagus
Avocados
Beans, Dry Lima
Beans, Fresh Market Snap
Bedding/Garden Plants
Broccoli
Brussels Sprouts
Cabbage, Chinese
Cabbage, Fresh Market
Carrots
Cauliflower
Celery
Chicory
Cotton, American Pima
Daikon
Dates
Eggplant
Escarole/Endive
Figs
Flowers, Bulbs
Flowers, Cut
Flowers, Potted Plants
Garlic
Grapes, Raisins
Grapes, Table
Grapes, Wine
Greens, Mustard
Hay, Alfalfa
Herbs
Kale
Kiwifruit
Kumquats
Lemons
Lettuce, Head
Lettuce, Leaf
Lettuce, Romaine
Limes
Mandarins & Mandarin Hybrids
Melons, Cantaloupe
Melons, Honeydew
Milk
Milk Goats
Nectarines
Nursery, Bedding Plants
Nursery Crops
Olives
Onions, Dry
Onions, Green
Parsley
Peaches, Clingstone
Peaches, Freestone
Pears, Bartlett
Peppers, Chile
Peppers, Bell
Persimmons
Pigeons and Squabs
Pistachios
Plums
Plums, Dried
Pluots
Pomegranates
Raspberries
Rice, Sweet
Safflower
Seed, Alfalfa
Seed, Bermuda Grass
Seed, Ladino Clover
Seed, Vegetable and Flower
Spinach
Strawberries
Tomatoes, Fresh Market
Tomatoes, Processing
Vegetables, Greenhouse **
Vegetables, Oriental
Walnuts
Wild Rice
California is the sole producer (99% or more) of foods and commodities in bold

 

LADIES AND GENTLEMEN, START YOUR SEEDS!

People who have never grown their garden plants from seed think it’s hard and jet down to retailers to buy what they want to grow. There’s nothing wrong with this; we’ve done it too. However, it is so much more economical – and fun – and easy – to start your own plants from seed.

For those who are interested in starting their seedlings this year, here are some practical reasons.

1) Most retailers don’t offer non-hybrid, non-GMO, open-pollinated and heirloom plants.

2) It saves a bunch of money in the long run.

3) Allows a head start on the growing season. Retailers normally have their veggies and fruits for sale on a predictable timetable not taking into account yearly climatic differences. It’s possible to lose weeks in the growing season.

4) Get what you want. Last spring, some plants we wanted, like romaine, NuMex chilies and red lettuce, sold out early. Due to the economy, some veggies were completely unavailable as they only stocked the most popular. Additionally, we noticed that Lowe’s and Home Depot didn’t carry as extensive a variety as they normally do.

5) Avoid greenhouse-borne diseases.

6) This is a fun project for kids and grandkids – a good educational tool so they see how plants make food from seed to table.


Assuming you see the need to get busy, this is the set-up we use.

Photo: From top left, clockwise: seed tray bottom, lights set into the plastic dome cover, seed tray, heating mat.

Seeds don’t need sunlight to sprout, but do need warmth around the clock. We set the Seedling Heat Mat on a 1″ piece of styrofoam. The foam both protects the tabletop and keeps the warmth from escaping out the bottom. The heat mat keeps the soil temperature consistent and 10-20 degrees warmer over room temperature air. They’re relatively inexpensive and really improve germination and seedling growth.

The bottom tray goes on top of the mat with the little seedling plastic pots set inside. Depending on how many seedlings are needed, it’s more economical to do these plastic pots in a sheet than peat pots. It’s cleanable and reusable. If you’re only going to start 20 or so plants, then peat pots save washing it out.

The Seedling Heat Mat  (9” x 19-1/2”) and lights are extra. Mats are about $20 and grow lights are about $21 each, but vary widely in price depending on retailer.

Then the clear plastic greenhouse dome cover sits on top with its edges resting on the sides of the bottom tray. Stan puts aluminum foil between the dome and the metal so it doesn’t turn the plastic an ugly yellow-brown. The yellowing problem we found out the hard way and ruined one dome. No place mentions this tip – and others – except in Garden Gold.

It’s important to get a greenhouse that has a high enough dome cover. Some kits’ covers are only about 2″ or 3″ tall. We use the Mondi 7″ dome (7-1/2” H x 11” W x 21-1/4” L) that sells for $4.60 and fits the 1020 tray. As the seedlings grow, if the lights become too close, they can burn tender leaves and suck the life out of tiny plants. Stan has even put in a set of 2″ or 3″ risers at each end between the dome and the bottom tray if the seedlings grew too tall. Risers can be made out of anything that’s not too heavy, just strong enough to support the dome and not break the bottom tray’s lip. The 1020 Tray runs $1.40 and the 72-cell propagation tray that fits perfectly inside is $9 for 10.

Photo: This is how it looks assembled – all ready for 72 seedlings waiting fill your food needs!

Some seed starter kits come without the plastic tops, but you need the dome to both hold the lights and keep moisture in. On top are two circles for moisture control. They can be opened or closed as needed.

Simply setting planted seeds in a window won’t provide enough light once the seedlings sprout. Plus, windows can get transmit cold, which can either delay or stop germination altogether and defeats the purpose of the heat mat.

Stan cut holes in the ends toward the top of the greenhouse dome and inserted 4 grow lights that are 2 feet long. We use Sun Blaster F24T5 24W HO lights. If you’re looking on-line for the best price, they are normally listed as “Sun Blaster T5 HO”. Gave a cursory look and the best price so far was at GroswersHouse.com:growershouse.com/sun-blaster-t5-ho-fluorescent-strip-light-2.

GETTING SEEDY

NOW is the time to purchase open pollinated, organic, non-genetically engineered seeds. When we ordered onion sets last week, I noticed there were already a few products on Seeds of Change that had sold out or were temporarily sold out. People are getting on the stick early this year!

You’ll get further savings from companies that offer seed in bulk. This is a smart purchase for the foods you love. We did this several years ago and now have our own seed bank.

Here are 4 great resources – ones we use – for open pollinated, heirloom seeds:


If they don’t have what you want, Garden Gold lists over 350 suppliers with their contact information and websites. You’ll spend less time hunting for open-pollinated seeds and supplies, which leaves you more time to get your plants going.

NO COLORADO DOPE, JUST THE STRAIGHT SKINNY

I’m no mystic, but do see what’s coming down. It will be hurtful – possibly signaling prophetic bells to remind of us of Revelation’s 3rd Seal. ALL of our food is being squeezed one way or another. Just after I placed that short note Sunday on our website about getting the garden going, within 15 minutes a dozen people wrote saying they feel that same pressing urgency.

For many fruits and veggies, you can greatly lessen the pain at the grocery store simply by starting (or continuing) your home gardens. While community gardens and farmer’s markets are preferable to depending on the grocery stores and getting ‘robbed’ at check out, it’s best to have fruits and veggies right in your own yard. As they say with precious metals, if it’s not in your hand you don’t own it. You can harvest so much in such little space by using the ancient Chinese technique of bio-intensive growing described in Garden Gold. You will have produce running out your ears. There will be enough to can or sell depending on your family size. Whatever method of gardening you choose, get your beds ready soon.

Now for the beef and other proteins dilemma, if you have a spare freezer, it would behoove you to stock up now before prices shoot up further. You would easily be money ahead to purchase a freezer and stock that baby till it’s ready to burst. Alternately, look at some freeze-dried meats. The last time we checked, the food price bump had not yet hit this industry. Why? Because they literally buy tons of meats at a time and process same until they nearly run out. Then they take the hit on food prices and pass it onto customers. However, we the grocery store consumer, feel every bump and tickle along the way. There is a window of opportunity here…

We caution you to buy from only reputable, long-established retailers. It’s questionable for some smaller outfits where they got their foods, especially if they are a new name. One company is selling food that was around at least since 1998 and has been repackaged to look new. This is a smaller, lesser-known company so stay with the power names for best freshness: Mountain House, Alpine Aire, Thrive (Shelf Reliance). Read What They Don’t Tell You About Storable Foods for more insight. Also check these reviews: Mountain HouseProvident Pantry / Emergency EssentialsShelf Reliance / ThriveWiseEFoods Direct.

Don’t miss my next article coming shortly: How to Start Your Own Seed Bank.

 


ABOUT THE AUTHOR: Holly Drennan Deyo is the author of three books: bestseller Dare To Prepare (4th ed.)Prudent Places USA (3rd ed.) and Garden Gold (2nd ed.) Please visit she and her husband’s website: standeyo.com and their FREE Preparedness site: DareToPrepare.com.

 


Sources:
1 A Look at California Agriculture, November 2012, agclassroom.org/kids/stats/california.pdf
California Farm Drought Crisis Deepens, By Andria Cheng, MarketWatch, Feb. 22, 2014; marketwatch.com/story/california-farm-drought-crisis-deepens-2014-02-22-16103424
3 California Drought: Water Supply Could Tighten in Mega Droughts, By Bryan Walsh, Time Magazine, Jan. 23, 2014; http://science.time.com/2014/01/23/hundred-years-of-dry-how-californias-drought-could-get-much-much-worse/
California Agricultural Exports, University of California Agricultural Issues Center, cdfa.ca.gov/statistics/PDFs/2013/Export.pdf
5 California Agricultural Statistics, http://www.cdfa.ca.gov/statistics/
6 California Agricultural Statistics 2012 Crop Year, USDA, pg. 1, nass.usda.gov/Statistics_by_State/California/Publications/California_Ag_Statistics/Reports/2012cas-all.pdf

http://standeyo.com/NEWS/14_Food_Water/140223.CA.drought-food.impact.html

Activist Post: 5 New Solutions For Growing Healthy Produce Indoors

Activist Post: 5 New Solutions For Growing Healthy Produce Indoors.

Jeffrey Green
Activist Post 

An increasing number of people are moving into urban environments and away from traditional agriculture. As a consequence, those who have a mind for self-sufficiency can find themselves falling short. Storable foods are of course an important part of every emergency prepper’s pantry, but storable foods are not a sound long-term solution that contain optimal nutrition.

Even produce from farmers markets and store-bought organic food will lose peak freshness faster than one might imagine. Alanna Ketler from Collective-Evolution explains:

Most people do not realize that vegetables will lose about half of their nutrients within the first week of being picked. The food that you are getting from the supermarket will not be as nutritionally rich as the food you are growing yourself and consuming immediately after harvesting. Imagine how much more fresh and alive this food tastes. If you have or have ever had a garden I’m sure you have certainly noticed a difference. (Source)

Nothing can beat growing your own fresh fruits, vegetables, herbs, and flowers. But it is quite a challenge for those with limited space; not everyone can afford acres of land to become a full-fledged farmer. Then, of course, are the climate considerations that inhibit year-round growing in most places across the planet.

However, several high-tech solutions are becoming available for city dwellers, or those who have a less-than-green thumb. As food prices surge due to climatological and economic factors, there never has been a better time to find ways of becoming self-sufficient at a low cost. It’s a movement toward becoming the ultimate locavore.

The following inventions offer an exciting way to have fresh produce year-round … right in your own kitchen, while also presenting a potential reduction in overall cost.

1. Urban Cultivator – This is a hydroponic system that is currently in use both professionally and in personal homes. One model, as seen in the short promo below, is roughly the same size as a dishwasher and is set up in a similar manner, according to the site’s design specs. By setting the perfect level of humidity and temperature, it’s as simple as adding a 100% organic food solution to be able to grow a wide range of pesticide and chemical free produce in your indoor garden.

Visit the site here.

For restaurateurs, here is what the commercial model looks like:

2. GrowCubes – Using aeroponics, GrowCubes offer efficient indoor growing for a wide variety of fruits and vegetables, using 95 percent less water, with an added built-in resistance to diseases and pests. A software program underpins the system, offering a detailed Internet-connected analysis and customization platform to obtain and fulfill the optimal level of nutrients and maintenance. A coming Kickstarter program will focus on bringing this system to market later in the year.

3. Click and Grow Smart Farm – This is a another concept that is heavily invested in the ideas surrounding the Internet of Farming. The Click and Grow system is actually an expandable series of “smart pots” that can grow produce, as well as flowers. It begins by providing soil that remains in proper nutrient and pH balance throughout the growth of the plant. As they point out, the constant watering in traditional potted plants actually leaches away nutrients, so the addition of proper water management increases efficiency and production. This demo shows the process.

4. Kitchen Nano Garden – This is a concept being developed by Hyundai. It is roughly the size of a refrigerator and employs a similar method of hydroponic growing as seen in the Urban Cultivator. It controls the amount of light, nutrient supply and water to create the optimal efficiency for growing. The prototype won the 2010 Fast Company Idea Award and also doubles as a natural air purifier. While still only a concept, it is exciting to see a company with the resources of Hyundai working on this technology.

5. UrbGarden – While the 4 items above appeal to modern sensibilities, some of us still would like to retain a bit of the natural even if we can’t get our hands dirty on a traditional farm. TheUrbGarden is designed to be a vertical herb garden with an integrated worm farm for easy composting. The system produces a natural fertilizer which is then fed back through a drip system. Its open-window design offers an element of harvesting, as the grow trays are removed and re-potted as needed.

It is worth mentioning that in a grid-down situation, the four “high-tech solutions” offered here will become virtually useless as they rely on a power source. And none of these systems should be seen as direct replacements for developing a solid relationship with your local farmer, farmers market, or development of community gardens. However, these solutions do enable people to get away from commercial food and the toxic packaging that its often wrapped in, while making the act of farming as easy and hassle free for as many people as possible.

One thing is for certain: there is a movement to regain the self-sufficiency that has been lost within our modern world. If we are going high-tech, then we at least need to employ it the healthiest and most economical ways possible.

Note: Activist Post does not receive compensation from any of the products mentioned in this article. 

Recently from Jeffrey Green:

New Internet law in Turkey sparks outrage – Features – Al Jazeera English

New Internet law in Turkey sparks outrage – Features – Al Jazeera English.

Controversial web controls implemented after phone-recording leaks raise questions and stoke public anger.

 Last updated: 25 Feb 2014 13:10

Street protests and anti-censorship campaigns have been launched to oppose Turkey’s internet law [AFP]
Turkey’s new law tightening the state’s grip on the Internet has gone into force after President Abdullah Gul approved the controversial legislation pushed by the ruling Justice and Development Party (AKP) government.The legislation changes Turkey’s original 2007 Internet law, and has sparked street protests and various public campaigns against the new online controls.

The conservative government has rejected claims that the law will lead to censorship, arguing instead that it aims at protecting individual rights and privacy. “There is no censorship on the Internet. Freedoms are not restricted. We are only taking precautions against blackmail and immorality,” Turkish Prime Minister Recep Tayyip Erdogan recently said.

“If the Internet and computers are not used in a proper way under certain monitoring and order, they do not constitute beneficial or educational tools anymore. Instead, they turn into dangers with bitter results.”

Last year’s Gezi Park protests against the Turkish government were largely organised through social media, which Erdogan at the time called “the worst menace to society“.

#UnFollowAbdullahGul

A Twitter campaign – #UnFollowAbdullahGul – was launched after Turkey’s tech-savvy president approved the proposed Internet bill, despite his expressed concerns. His follower count dropped by more than 100,000 in two days last week.

In another campaign named #4Saat (“four hours” in Turkish), liberal newspaper Radikal started self-censoring various news stories on its website every four hours – the time needed to block a URL under the new administrative process – to protest against the legislation.

Critics of the new law organised several protests

Eyup Can, the editor-in-chief of Radikal, told Al Jazeera the digital campaign aims at providing the Turkish public with a better understanding of the new law.

“As the legislation is highly technical both in terms of law and technology, sometimes it is not easy for the public to understand. We wanted to display the practical future outcomes of the law and make the Turkish public grasp what changes it would make in our lives,” he said.

The Republican People’s Party (CHP), the main opposition party, has repeatedly declared it would take the legislation to the Constitutional Court.

“The AKP government, striving to restrict freedom in every domain, is stepping up its pressure on the Internet, which is becoming increasingly important in our daily lives,” CHP said in a statement.

Turkey is an Internet-savvy country with 21.9 million broadband Internet subscriptions as of last September, according to a report by Turkey’s Information and Communication Technologies Authority. There are 68.4 million mobile-phone subscriptions and 47.5 million 3G subscriptions in a country with 75 million people.

The European Union, the Council of Europe and the United Nations have expressed concern over the legislation, along with rights groups such as Human Rights Watch and Amnesty International.

A similar bill proposed by the government in 2011 was shelved following mass street protests. This time, however, the government decided to go forward despite a similar reaction.

What is new?

The legislation allows Turkey’s telecommunications authority (TIB) to block websites without first obtaining a court order. With a complaint filed for breach of “privacy of persons”, TIB has the power to order the blocking of a URL, which will be carried out by Internet service providers within four hours.

A court order must then be sought by the telecommunications authority within 24 hours. However, the web page remains offline until the court makes a decision.

The president of the TIB can also block URLs without complaints having been filed, if prospective plaintiffs are not capable of applying, or if a delay could cause “irreversible consequences”.

Gokhan Ahi, a lawyer and lecturer specialising in Internet law, told Al Jazeera the TIB could use its newly given authority anyway it sees fit. “Will it monitor delays of complaints [over breaches of privacy] for every citizen, or only for the government? By law, this institution works under the jurisdiction of the government, and it would carry out any written order from it to block a web page when it has such a power,” Ahi said.

Blocking web pages immediately after complaints are lodged creates a legal basis to sweep news reports and other online information under the carpet, Ahi said, pointing out that the ensuing court process ensures the URLs stay blocked for some time.

The rush of phone recordings to the Internet is so disgusting that, I believe, accelerating the legal decision-making mechanism [for blocking URLs] is in line with the principle of right to privacy.- Hilal Kaplan, columnist

Data will be stored

The law also requires Internet service providers to collect all data on web users’ activities for up to two years, and to provide authorities with the data in question on demand.

Users’ information on Internet traffic will be collected based on IP and subscriber numbers, instead of URLs, which was criticised as being more intrusive. The collected data will only be accessible by court order.

The law allows single URLs to be blocked, as opposed to entire websites, as directed by the old legislation. The blocking of YouTube from 2007 until 2010 for videos insulting Mustafa Kemal Ataturk, the founder of modern Turkey, was a significant example of that.

It also removes prison sentences for content and access providers who violate the law, which was a big obstacle for foreign investors in the sector. However, prison sentences can still be handed down if violators do not pay fines they incur under the law.

According to Can of Radikal, there is nothing wrong with regulating the Internet as long as it doesn’t restrict freedom of information.

“Through this law, the job [to block web pages] has been left to the initiative of a public employee heading a state institution, and this creates an arbitrary situation,” Can said.

Leaked recordings

The swift adoption of the new Internet law comes after the online leak of phone recordings that allegedly document corruption in state tenders and bribery involving businessmen and the Turkish government.

The latest recording, which was leaked on Monday, purports to be a conversation between Erdogan and his son Bilal, in which the prime minister asked him to move money from his and his relatives’ homes. Bilal supposedly said in the recording that some 30m euros ($41m) still remain to be disposed of. The prime minister has said the recording is fake.

Other recordings have revealed Erdogan’s direct intervention in mainstream media coverage. He confirmed one of these conversations at a recent press conference.

Some of these recordings were released through court orders and publicised by the CHP, the main opposition party. Others were leaked anonymously on social media and video-sharing websites, and their authenticity has not been challenged by the government.

Listening Post: Turkey’s media pressure points

In mid-December, the government was hit by unexpected and comprehensive corruption probes, mainly targeting the sons of ministers, bureaucrats and prominent businesspeople.

The government alleged the investigations were organised by a “parallel state”, an apparent reference to Gulen, a religious group formerly allied with the AKP whose followers are widely believed to wield significant influence over Turkey’s police and judiciary.

Erdogan linked the phone leaks several times to the Gulen Movement.

The government’s reaction to the corruption investigations was to initiate a country-wide comprehensive reshuffling in the Turkish Police Forces, which, according to media reports, halted a planned second and third wave of detentions. Prosecutors who launched the investigations were removed, and the AKP-dominated parliament recently adopted a new law increasing its influence over the judiciary.

Hilal Kaplan, a pro-government columnist for the Yeni Safak daily, linked the revamped Internet law to the recent phone leaks. “The rush of phone recordings to the Internet is so disgusting that, I believe, accelerating the legal decision-making mechanism [for blocking URLs] is in line with the principle of right to privacy protected by Article 20 of the constitution,” she recently wrote.

The government has rejected any link between the phone leaks and the new legislation, saying it had worked on the text of the law for the past two years.

Radikal’s editor Can disagreed, however, saying the leaked recordings had spurred the government to push through the new Internet controls before local elections scheduled for March 30.

“The government would not bring the bill to the parliament this fast if it was not for the recent developments. It is an issue that should have been widely discussed in the country, as there are no certain global norms about the use of the Internet,” he said.

Follow Umut Uras on Twitter: @Thriceee

oftwominds-Charles Hugh Smith: Eating Our Seed Corn: How Much of our “Growth” Is From One-Time Cashouts?

oftwominds-Charles Hugh Smith: Eating Our Seed Corn: How Much of our “Growth” Is From One-Time Cashouts?.

We as a nation are consuming our seed corn in great gulps, and there will be precious little left in a decade to pass down to the next generation.

Anecdotally, it seems a significant percentage of our recent economic “growth” is being funded by one-time cashouts of IRAs, 401Ks, sales of parents’ homes, etc. This is the equivalent of eating our seed corn. Once these pools of savings/equity/capital are gone, they aren’t coming back.

I personally know a number of people who have cashed out their retirement account 401Ks (and paid the taxes) to pay for their kids’ college expenses–in effect, cashing out their retirement to lower but not eliminate the debt burden of their offspring who bought the “going away to college” experience.

The cashed-out 401K delighted the government, which reaped huge penalties and income taxes, as the cashout pushed the annual income of the recipient into a high tax bracket. (“Hardship” withdrawals for medical care and education waive the penalties, but the income tax takes a big chunk of the withdrawal.)

The middle-aged person who cashed out their retirement will not work long enough to save an equivalent nestegg. Not only is time against such an accumulation of retirement savings, so is the stagnant economy: companies are slashing 401K contributions to offset rising healthcare (a.k.a. sickcare) expenses, and many workers young and old alike are finding jobs that pay them as self-employed contractors or part-time jobs with no benefits.

Another set of middle-aged people are withdrawing from IRAs (and paying the penalties) just to fill the gap between expenses and income. For a variety of reasons, many people are loathe to cut expenses or are unable to do so without drastic changes in their lifestyle. So they withdraw from the IRA (individual retirement account) to cover expenses that are left after income has been spent.
This “solution” is appealing to those whose incomes have declined in what they perceive as “temporary” hard times.

Another pool of equity that is being drained is the home equity in aging parents’ homes. The government will only pay for one set of medical expenses (long-term care, for example) if the elderly person has assets of less than $2,000 (as I recall). Given this cap, it makes sense for elderly homeowners to transfer ownership of their home to their offspring well before they need long-term care (which can cost $12,000 to $15,000 a month).

A variety of other medical expenses can arise that cause the home to be sold to raise cash–either expenses for the elderly parents or for their late-middle-age offspring who develop costly health issues. Family disagreements over sharing the equity can arise, leading to the sale of the house and the division of the equity among the offspring.

This cash is immediately hit with a variety of demands: a grandkid needs a car, somebody needs money to go back to graduate school (pursuing the fantasy that another degree will provide financial security), and so on–not to mention “we deserve a nice vacation, a new car, etc.”, the temptations in a consumerist culture that we all “deserve.”

Once the family home is sold, the furnishings and other valuables are also sold off to raise cash. In many cases, the expense of transporting the items across the country to relatives exceeds the value of the furnishings.

One common thread in all these demands for liquidation of equity is the short-term need is pressing. A consumerist culture offers few incentives for long-term savings other than life insurance, IRAs and 401Ks, and all of these can be tapped once a pressing need arises.

Though people may want to hang on to their nestegg, they are faced with short-term needs: how else can I pay tuition, or this medical bill?

As incomes have stagnated and costs for big-ticket expenses such as college and healthcare have soared, the gap between income and expenditures has widened every year for the bottom 90%.

Even those in the top 10% are not protected from draw-downs in retirement funds and family equity in homes and other assets.

Retirement funds, home equity, family assets–these are the financial equivalent of seed corn. Once they’re cashed out and spent, they cannot be replaced.

In more prudent and prosperous times, these nesteggs of capital were conserved to be passed on to the next generation not for consumption but as a nestegg to be conserved for the following generation. That chain of capital preservation and inheritance is being broken by the ravenous need for cash to spend, not later but right now.

So how much of the recent “growth” in GDP results from our consumption of seed corn? It is difficult to find any data on this, something which is unsurprising as the data would reveal the entire “recovery” story as a grandiose illusion: we as a nation are consuming our seed corn in great gulps, and there will be precious little left in a decade to pass down to the next generation.

We face not just an impoverishment in consumption but in expectations and generational assets.

China’s Corporate Debt Hits Record $12 Trillion | Zero Hedge

China’s Corporate Debt Hits Record $12 Trillion | Zero Hedge.

Remember these two charts?

From November 2012, The Chinese Credit Bubble – Full Frontal:

 

 

And from November 2013, “How China’s Stunning $15 Trillion In New Liquidity Blew Bernanke’s QE Out Of The Water

 

 

It seems people are starting to listen, and not a moment too soon: as of December 31, China’s corporate debt just hit a record $12 trillionFrom Reuters:

China’s corporate debt has hit record levels and is likely to accelerate a wave of domestic restructuring and trigger more defaults, as credit repayment problems rise.

 

Chinese non-financial companies held total outstanding bank borrowing and bond debt of about $12 trillion at the end of last year – equal to over 120 percent of GDP – according to Standard & Poor’s estimates.

 

Growth in Chinese company debt has been unprecedented. A Thomson Reuters analysis of 945 listed medium and large non-financial firms showed total debt soared by more than 260 percent, from 1.82 trillion yuan ($298.4 billion) to 4.74 trillion yuan ($777.3 billion), between December 2008 and September 2013.

 

While a credit crisis isn’t expected anytime soon, analysts say companies in China’s most leveraged sectors, such as machinery, shipping, construction and steel, are selling assets and undertaking mergers to avoid defaulting on their borrowings.

 

More defaults are expected, said Christopher Lee, managing director for Greater China corporates at Standard and Poor’s Rating Services in Hong Kong. “Borrowing costs already are going up due to tightened liquidity,” he said. “There will be a greater differentiation and discrimination of risk and lending going forward.”

And then there was the worst capital misallocation in history:

Exacerbating China’s corporate troubles has been the questionable use of 4 trillion yuan in stimulus that Beijing pumped into the economy following the onset of the global financial crisis in 2008, explained Lee of Standard & Poor’s.

 

“Many companies invested heavily into competitive and low-return projects because funding was readily available,” he said. “These investments aren’t doing well and are making little contribution to profitability.”

Of course, there is also this:

And this:

What happens next as the Chinese perfect debt storm is finally unleashed? Read this for the upcoming next steps: ‘”The Pig In The Python Is About To Be Expelled”: A Walk Thru Of China’s Hard Landing, And The Upcoming Global Harder Reset 

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