Enormous thanks to my anonymous donor for the remainder of April and May, who wishes to call attention to Rob Mielcarski’s thought-provoking un-denial site, also featured in my blogroll, which looks at overshoot and related issues.
“Another crisis, another IMF summit: but unlike 2008, the delegates are disunited…
“It remains to be seen whether any of the global policymakers assembling in Washington are willing to set out an alternative vision to Trump’s – but even if they don’t, the clash between the US and the rest of the world will be on clear display; and, as in 2008, the omens for the global economy look bleak.”
“IMF’s tariff warnings may be too little, too late.
“The IMF is delivering stark warnings about the damaging impact of tariffs and other US actions on the global economy and financial markets. But it may be too little too late to avoid a financial meltdown and global recession.”
“How much ‘weaponization’ can the global economy take?
“…In such a fractured strategic environment, each economic node — be it a shipping corridor, a payments system or a data platform — becomes a new potential front line. Over time, weaponized interdependencies will splinter global trade into rival blocs…”
https://www.japantimes.co.jp/commentary/2025/04/21/world/weaponization-can-the-global-economy/
“First Shockwaves of Trump’s Tariffs Are About to Hit the World Economy…
“Meanwhile, Trump is again raising questions about whether he will seek to limit the Fed’s independence, as new tensions flare in his contentious relationship with the central bank.”
“Central Banks Stare Into Trade-War Abyss With Rate Cuts Primed…
“The case to tread cautiously with easing is the need to guard against inflation pressures, either lingering from the previous consumer-price surge, or looming from the current crisis. The Federal Reserve faces the greater challenge there.”
“Global confidence slumps as trade turmoil looms…
“The confidence numbers for the US are particularly stark, showing the lowest confidence levels since the index began, alongside a sharp deterioration in financial market conditions. Confidence levels in China and Germany also hovered at depressed levels.”
https://www.ft.com/content/22f3ac70-0191-4436-8f5d-73c4f3b7e4f5
“Gold soars to record high on trade war concerns, weaker dollar…
“”Fundamentally, markets are pricing in heightened geopolitical risks, driven by U.S. tariff tensions and stagflation concerns, while resilient central bank demand offers an added tailwind for prices as well,” said IG market strategist Yeap Jun Rong.”
“China’s Cosco Says US Levies Risk Destabilizing Global Shipping.
“China’s largest shipping line said on Monday that the Trump administration’s plan to impose levies on Chinese vessels docking at US ports would erode stability in global trade and supply chains.”
“Beijing threatens countermeasures against countries that ‘appease’ Washington in trade war.
“China has warned it will take “resolute and reciprocal” countermeasures against other countries negotiating with the US if they make a deal at China’s expense during the trade war.”
“China’s rare earths controls prompt fears of auto shortages and shutdowns.
“China’s latest export controls on rare earth minerals could cause shutdowns in automotive production, with stockpiles of essential magnets set to run out within months if Beijing fully chokes off exports.”
https://www.ft.com/content/b8269eff-b60a-435f-8e85-43f9fa36f9c2
“China warned against US bond sell-off in response to tariffs…
“Analysts warn that any mass dumping would artificially raise the value of the yuan at a time when China’s export competitiveness is under threat from tariffs and a US bond panic would also dramatically reduce the value of China’s money manager holdings, which amount to $3 trillion in dollar assets.”
“Is the US dollar at risk of a ‘confidence crisis’?
“For close to a century, the US has been the world’s investment “safe haven”. Dozens of countries still maintain a peg to the greenback, meaning their currency prices are correlated. But investors are now starting to worry about the long-term safety of the dollar, and the consequences could be dramatic.”
https://www.aljazeera.com/news/2025/4/19/is-the-us-dollar-at-risk-of-a-confidence-crisis
“South Korea risks fourth straight quarter of near-zero growth.
“South Korea is on track to post economic growth of 0.1% or less for a fourth consecutive quarter, an unprecedented stretch of stagnation even during past financial crises, fueling calls for aggressive stimulus and policy action.”
https://www.chosun.com/english/market-money-en/2025/04/21/JF34DT7C6VEKHPFHCB6KBMBZ3M/
“UK bonds signal danger: Why I’m watching this alarming 50% growth forecast cut.
“Britain’s bond market is flashing warning signals as economic growth forecasts take a dramatic downturn. Investors who traditionally view UK government bonds as safe havens are now reassessing their positions…
“UK set to ramp up weapons production to reduce reliance on US and French imports…
“First reported by The Times, BAE Systems, the UK defence company, has been developing new methods to make sufficient explosives and propellants in the UK to meet the Ministry of Defence and export requirements.”
“Germans have ‘erotic relationship’ with weapons, says defence minister…
““I don’t know where this erotic relationship with weapons comes from,” Mr Pistorius said this week, as Friedrich Merz, Germany’s next chancellor, tried to convince the Social Democratic Party, his coalition partners, to agree to sending the [Taurus missiles to Ukraine].”
“Sweden Has the Tanks. Finland Has the Troops. Welcome to the Pan-Nordic Army…
“…combined, the Nordics have an economy about the size of Mexico’s, and nearly the same size as Russia’s. Following Sweden and Finland’s accession to the North Atlantic Treaty Organization, they have pooled some of their forces.”
https://www.wsj.com/world/europe/europe-nordic-military-defense-a5d5da5b
“Ukraine and Russia have accused each other of breaching a 30-hour “Easter truce” announced by Russian President Vladimir Putin on Saturday, which has now expired.
“Ukrainian President Volodymyr Zelensky said Russian troops had violated the ceasefire nearly 3,000 times since the start of Sunday.”
https://www.bbc.co.uk/news/articles/czd3ge7j92zo
“Ethnic Karen people flee Myanmar for Thailand amid bombing, unrest.
“Fighting has been raging in Myanmar’s Kayin state on the Thai border… Four years of conflict across Myanmar have spurred mass displacement, driving tens of thousands across the border into neighbouring Thailand.”
“Jailed for fishing: India-Pakistan tensions trap families in debt, poverty…
“Though India and Pakistan share a heavily militarised land border, their International Maritime Boundary Line in the Arabian Sea is also largely disputed, especially in a zone called Sir Creek, a 96km (60-mile) tidal estuary…”
“Lebanese president says disarming Hezbollah ‘delicate’ as Israel kills two…
“The Trump administration has been applying sustained pressure on Beirut to push for the disarming of Hezbollah, leading to Aoun announcing last week that he hopes to complete the process by the end of 2025…”
“Gazans resort to turtle meat amid famine, humanitarian crisis: UN.
“…some desperate families have turned to eating sea turtles as a rare source of protein. Once the shell has been removed, the meat is cut up, boiled and cooked in a mix of onion, pepper, tomato and spices.”
“Egypt and Israel near point of open hostility but not outright conflict…
“Egypt’s relations with former foe Israel are nearing the point of open enmity, with distrust between the pair fuelled by proposals to resettle Palestinians in Egypt’s Sinai Peninsula and claims that Cairo may be boosting its forces near Israel’s border in preparation for war.”
“‘They were chanting as they killed people in their homes’: survivors describe attack on Sudan’s Zamzam camp…
“An estimated 700,000 people had sought refuge in Zamzam, Sudan’s largest displacement camp, but last weekend they were forced to seek cover and plot the best escape route.”
“Trump to gut US diplomacy in Africa, cut global soft power, according to draft order…
““All non-essential embassies and consulates in sub-Saharan Africa shall be closed,” the draft order says, with all remaining missions consolidated under a special envoy “using targeted, mission-driven deployments”.”
“Outside forces are fuelling the civil war raging in the Congo…
“Erik Prince, who has sought mining concessions there for the past decade, has been accused by the UN of planning to deploy Latin American mercenaries to protect mines and repel rebels; the record of Blackwater, the private military contractor he founded, accused of a massacre in Baghdad in 2007, does not suggest a helpful involvement.“
https://www.thetimes.com/comment/the-times-view/article/outside-forces-civil-war-congo-0qbrzzhpp
“With African mining interests at stake, China wades into DR Congo-Rwanda conflict…
“China also voted in favour of a UN Security Council resolution that unanimously condemned Rwanda’s role in the conflict. This is a departure from the norm: China mostly abstains in resolutions that involve conflicts between its key allies.”
“How China is filling a weapons supply gap in Africa’s Sahel left by France and Russia…
“Beijing [has] expanded its military footprint in the region, with China’s largest weapons manufacturer, China North Industries Group Corporation, or Norinco, growing its presence in West Africa through sales offices in Nigeria and Senegal.”
“Nigerian authorities have seized 3.76 metric tons of pangolin scales and arrested five people in Lagos, in a follow-up to the recent arrest of a Chinese national…
“The seizure, made in April, is estimated to have come from at least 1,900 dead pangolins… used in traditional East Asian medicine.”
“‘I love my country but nobody is safe’: the plight of Cameroon’s exiles, trapped in Nigeria…
“”…when I see pictures of people that have been killed, I just burst out into tears because I really love my country,” she said. “But nobody is safe. If you run to the army, the Amba Boys will pursue you. If you run to the Amba Boys, the army will pursue you.””
https://www.theguardian.com/world/2025/apr/19/cameroon-exiles-nigeria-trapped-refugees
“Algeria begins mass deportation of Sub-Saharan migrants to Niger.
“The operation began over the weekend with the arrival of a convoy of 60 buses in Assamaka, a remote desert town in northern Niger… Nigerien officials in Assamaka confirmed the arrivals, describing the operation as one of the largest migrant returns seen in recent years.”
“How Trump Could Actually ‘Get’ Greenland…
“The power of eminent domain allows governments to take private property for public purposes, so long as “just compensation” is paid. This is the power that governments use to take property — including houses — that stand in the way of roads and other public goods.”
“The weakening Arctic consensus is worrying…
“Trump’s taboo-breaking musings about Greenland cast doubt on the inviolability of international law in the region. Russia (and the USSR before it) has consistently issued bad-faith challenges of Norway’s compliance with the Svalbard Treaty.”
https://www.ft.com/content/20b4c69f-06d5-4c60-82b5-c0cf52b98f3d
I rely on donations and tips from my readers to to keep the site running. Every little bit helps. Can you chip in even a dollar? Buy me a coffee or become a Patreon supporter. A huge thank you to those who do subscribe or donate.
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
I have been thinking about the implications of EROI. In very round numbers our civilisation was built on 50 to 1 energy. Assuming energy use is approximately evenly distributed that would mean 2% of the population working to provide the energy, or about 4% of working age people and say 5% of those available to work (i.e. not taking care of children, long term sick disabled etc.).
For renewables alone, i.e. assuming batteries, hydrogen etc. could provide necessary storage, then the EROI would be at best around 5 to 1. This would mean 50% of available workers providing the energy for everyone. With high tech. renewables these would all need to be fairly well educated, not shelf stackers or hotel cleaners, so they would be taken from those who might otherwise be hospital staff, policemen, plumbers, solicitors, accountants, shop managers etc. There would not be enough left for any kind FIRE industry or advertising industry, or chain restaurants, extensive tourism etc. and with much reduced medical care, tertiary education, public services etc.
Note I don’t think we will get to a society like this, we have neither the technology nor resources, we will collapse first and biodiversity loss or climate change will wipe out most of us irrespective of the EROI, but I think a lot of the stories we see on the “economics” days make more sense when seen in relation to a falling EROI.
Also here is the latest from Prof. Rees (not much new though).
https://www.youtube.com/watch?v=wjrrww5aIz4
Here is Primal Scream saying something that may or may not be relevant:
https://www.youtube.com/watch?v=-3KZ5N6Ayoc
George, falling EROI + resource-depletion is certainly the primary prism through which I try to make sense of current affairs. South Korea and the UK stand out to me in today’s thread as post-growth, major economies that can no longer even paper over that reality with financial sleight of hand. I’d add Germany but removing the “debt break” might conceivably offer them a reprieve.
Tim Morgan sums it up in his most recent post:
“The inevitability of a financial crash far exceeding anything experienced in 2008-09 is being compounded by the process of global economic inflexion from growth into contraction.
“Though much remains to be discovered, evaluated and located within chains of cause and effect, we can be in little real doubt that relentless rises in the Energy Costs of Energy have been combining with deterioration in non-energy natural resources to put prior growth in the material economy into reverse.”
https://surplusenergyeconomics.wordpress.com/2025/03/30/301-how-bad-could-this-get/
A lyric from your gritty Primal Scream track: “It’s the new dark ages, every man for himself.”
Prof. Rees is good – seems a very reasonable “discourse” to me
When faced with ideas/objects that does not agree with what we “know” we just do not see it (sometimes we do not see it very aggressively)
Reminds me of the story (?) of a ship going to an island – the islanders saw the boats from the ship but did not see the ship.
But we do have some strange oral memories with some indigenous people
Electrifying the Titanic whilst ignoring the icebergs Hahahaha
A well planned, orderly and co-operative desent towatds sustainability – yes please
I suppose, as this makes sense to me, being brought up, loved and being quite fond of the species of humans does help me argue that the Heritage Foundation lot are totally batty and avoiding the obvious “truth”
Or Heritage are right?
Reduce human population massively (preferably to white people) – stop messing about with “green” policies, create areas of (forgotten what they are putting in the areas) where a CEO will be in charge – he will buy shares in that area and the globe will be run by businesses – “The Heritage Foundation advocates for policies that foster economic growth through free markets and entrepreneurship” Nope – they want growth, again – mind you, after a cruel upbringing by Nazi nanny and frequent beating with belt and branches – I do expect them to be suicidal.
How about the technofeudal lot?
Technofeudalists emphasize growth through technological advancement while sustainability is often critiqued for being secondary to profit motives; ethnicity issues arise as marginalized groups may face increased inequalities within this framework.
Not them then – well that lot are the powerful ones so it’s the usual strap up and suck it up for the rest of us – thanks for the video
Thank you for your thoughts, Mad Hatter.
“A well planned, orderly and co-operative descent towards sustainability – yes please.”
Wouldn’t it be nice, as the dear old Beach Boys once sang.
It’s interesting that the oil price has been on a rising trend as risk of recession seems to be growing, though maybe reality is reimposing itself today. Some of the change has been from the fall in US dollar value and maybe a pre-holiday feel good factor, but there might be a suggestion that buyers are expecting some kind of supply side impact, maybe a near term significant drop in light tight oil production. Baker Hughes rig numbers will be informative in the coming weeks. The full effects of the tariff announcements probably won’t start feeding through for another two weeks as it takes a bit of time to complete active drilling campaigns and change contracts. The US ports are supposed to stop working on May 1st so a lot of new wells will depend on what tubulars the E&Ps have on hand, given the just-in-time nature for almost all supply strategies nowadays I’d have thought this would be measured in days only. However there is an inventory of two or three months of drilled wells awaiting fracking and completion and I don’t know how much the fracking materials and topsides equipment rely on imports (for the well head valving I think probably quite a lot).
Also Saudi and UAE, the only OPEC members with any kind of spare capacity, must be reconsidering whether they want to add production into the current market and with so much economic and geopolitical volatility around. Having said that I am absolutely the last person to rely on for futures markets’ predictions.
Thank you, George, for the overview.
I see oil prices are down to today on progress in the Iran/US nuclear talks. Hopefully, they won’t be needing those B-2 Stealth bombers stationed at Diego Garcia after all. 🤞
I found this piece on OFW Gail’s comment .
This comment starts out:
If you look at the interest rate swaps spreads. They have never been this negative. Every time something happens bad within the monetary system the interest rate swaps show it.
2008 is obvious. But smaller hiccups register too. Like. The mini bank blowup we had a year or so ago and when the UK’s bond market had its melt down.
Anyway everyone can clearly see all the selling in the treasury market. Yes some of that is the hedge funds so called basis trade blowing up. But some of it is most definitely foreign selling to acquire dollars.
So you have two things conflicting here. Swap spreads are clearly signaling a deflationary outcome is coming. That interest rates are not only going lower. Much lower, but also that they will be staying much lower.
It ends:
Gold and bitcoin are both just assets. If you want to use gold or bitcoin to pay debts you have to sell them first to get dollars. . . Both gold and bitcoin are purchased through currency creation or debt. As the dollar supply shrinks so will the price gold and bitcoin. Which will decrease their purchasing power.
HHH
“When these banks become risk averse. And decide not to lend. Well there just isn’t enough dollars to go around.
Then sh&t really really starts breaking. And the dollar spikes.”?
https://peakoilbarrel.com/open-thread-non-petroleum-april-10-2025/#comment-787794
Seems everything is interrelated…stack up on Tuna Cans with gold tops and silver bottoms and lead sides…just kidding really
As George and others point out, climate disruption will probably be what brings us to our knees…..
Thank you, Vince. The subsequent comments are worth a read, too.
EndGame Macro on X made this comment about the gold rally (gold picture featured in today’s thread is from “The Goonies”, just in case anyone is burning with curiosity 😆):
“What the Largest Gold Inflow in History Really Means:
“Yes, the inflows are massive. But let’s cross-correlate: global sovereign bonds are collapsing, FX volatility is erupting (yen, euro, yuan divergences), and U.S. long-duration Treasuries are getting dumped even as equities slide. This gold rush isn’t about inflation or speculation it’s about liquidity insurance, reserve integrity, and monetary regime distrust. The biggest buyers likely aren’t Western retail, but institutions, sovereign wealth funds, and shadow CB flows preparing for a potential monetary fracture.
“Where this logic could break: if the Fed intervenes quickly, restabilizing long-end rates and FX. But if the divergence between yields and the dollar persists, gold inflows could go parabolic signalling a silent, global vote of no confidence.”
https://x.com/onechancefreedm/status/1914308345298551110
For some reason there was more to Gail’s comment…
Better make sure you have an expanding energy supply that will allow your commercial banks to continue making loans or else you’re screwed. No amount of gold or bitcoin will save you.
I would add that the expanding energy supply is what allows a growing supply of goods and services to be made. Without these, debt cannot be repaid with interest.
Well, we can see that’s not going to happen good day everyone
Anyone hear any talk about the banks might be getting another bailout if things continue to get worse, memories of ’08/09. If one can’t take care of business they don’t need to be in business.
I understand why the masses of poor let BS like this happen, they are stupid. It will never happen under the right wing that hates socialism?
From “The Dirty Fucking Hippies Were Right” – Socialism is for the rich, Capitalism is for the rest of us.
How stupid are 77 million that elect officials that surrender the power of tariffs to one individual who destroys the lives of his voters.
“Stupid is, as stupid does.”, & it’s been busy. 😉
“American taxpayers will no longer be forced to serve as collateral for irresponsible student loan policies,”- Education Secretary Linda McMahon said. Applies to banks, farmers & ranchers also?
MAGA!