With apologies, I must head off the mainland tomorrow to see an ailing friend. Kali is going to be very kind and cover for me with a Climate thread on Friday and an Economic thread on Monday. I’ll be back at my station for Tuesday’s Climate thread.
Huge thanks to August’s sponsor, Mick, who wishes recommend the book “Wild Free and Happy” by Richard Adrian Reese, which can be downloaded for free here. You can also find it in the PDF resource section at the excellent Post-Doom website.
“Investors have warned that big economies are entering a new period of “fiscal dominance”, in which central banks are under growing pressure to keep interest rates artificially low to offset the cost of record government borrowing…
“Ray Dalio has warned of a “debt death spiral” in an extreme scenario where governments are forced to borrow more to service surging interest costs. “If bond yields “get too high, central banks will need to step in again, print money and buy [bonds] to try to hold rates down, which will reduce the value of money”, he said in an interview.”
https://www.ft.com/content/8478aaac-0d16-4c52-8d8c-caad02785d20
“Scott Bessent bets on stablecoins to bolster demand for Treasuries.
“Treasury secretary Scott Bessent is betting the crypto industry will become a crucial buyer of Treasuries in coming years as Washington seeks to shore up demand for a deluge of new US government debt.”
https://www.ft.com/content/1914c189-b4ed-46dd-adde-106b08a68183
“Trump’s tariffs replace diplomacy as other US tools of statecraft are discarded…
“On the campaign trail, Donald Trump pledged to use tariffs to revitalise American industry, bringing jobs home and helping to make America great again. But more than six months into his administration, experts say the president’s trade war is increasingly being wielded as a political cudgel, in lieu of more traditional forms of diplomacy.”
“One in three businesses says they plan to raise prices as Trump’s tariffs begin and inflation grows.
“Almost a third of U.S. businesses have said in a survey that they’re likely to raise prices by the end of 2025 as they adjust to increasing costs and inflation, according to a new report.”
“Housing shrinkflation is here to stay. New homes are 11% smaller but 74% more expensive than a decade ago [US]…
” A new LendingTree study found new single-family homes have shrunk 11% in the past decade, while their price per square foot has jumped 74%. Driven by surging land, labor, and material costs (compounded by tariffs and worker shortages), builders are trimming square footage and eliminating wasted space like hallways.”
“Reeves considering new property tax on houses worth more than £500,000 [UK]…
“If adopted, the new levy would be paid by owner-occupiers when they sell a home worth more than £500,000. The amount would be based on the property’s value, with the rate set centrally and collected by HM Revenue and Customs (HMRC).”
https://www.independent.co.uk/news/uk/home-news/reeves-property-tax-stamp-duty-b2809910.html
“Reeves’s headroom wiped out by surge in borrowing costs.
“Economists warned that the Chancellor would have to raise taxes by “at least” £20bn in the autumn Budget against a backdrop of weak growth and interest rates that are likely to stay higher for longer. Borrowing costs on UK government debt have climbed sharply since the Spring Statement in March…”
https://www.telegraph.co.uk/business/2025/08/19/rachel-reeves-headroom-by-surge-in-borrowing-costs/
“Eurozone Long-Term Yields Under Pressure as Debt Supply Builds.
“Eurozone government bond yield curves are steepening, with the 30-year maturity particularly vulnerable. Yields on German 30-year Bunds touched 3.34% on Friday, their highest level since 2011, highlighting the fragility of ultra-long bonds.”
“Serbia protesters accuse police of abuse and warn of ‘spiral of violence’.
“Belgrade (AFP) – Serbian anti-government protesters accused police Tuesday of beating and threatening detained activists, fuelling fears of a spiralling crackdown after a week of violent clashes.”
“‘It would be a terrible loss’: Ukrainian frontline troops sceptical of ceding land…
““The loss of Donetsk region, the area that is heavily fortified against Russia, will just open up new directions for further advances – Kharkiv, Dnipropetrovsk, Zaporizhzhia, which are not well fortified. It would be a huge and terrible loss of positions,” the commander warns.”
https://www.theguardian.com/world/2025/aug/20/ukraine-frontline-troops-drones-dobropillia
“Kremlin plays down Zelensky talks as Trump warns Putin may not want to make deal.
“The Kremlin has played down talk of an imminent summit between Russian President Vladimir Putin and Ukraine’s Volodymyr Zelensky, as Donald Trump renewed his call for the two leaders to meet to discuss ending the war in Ukraine.”
https://www.bbc.co.uk/news/articles/cn92e52rpjxo
“Kim Jong-un: US military drills show ‘willingness to ignite war’.
“Kim Jong-un has inspected a new naval destroyer and called for a “rapid expansion” of nuclear capability in response to joint military drills by South Korea and the United States… South Korea and the US began the drills, codenamed Ulchi Freedom Shield, on Monday.”
https://www.thetimes.com/world/asia/article/kim-jong-un-nuclear-north-korea-sztwlrxdr
“China to unveil advanced weapons at huge military parade to mark WWII end…
“China will stage a massive military parade next month in the heart of Beijing to commemorate 80 years since the end of World War II, and to showcase new Chinese weaponry that will be “displayed to the outside world for the first time”, state media report.”
“Australia, Philippines stage largest-ever drills: ‘denial of China’s aggression’…
“Exercise Alon, launched on Friday, is taking place less than 300 nautical miles (555km) from the Philippine-held Thitu Island in the Spratly archipelago – an area at the heart of escalating territorial disputes in the South China Sea.”
“Following conflict with Thailand, 35,000 displaced Cambodians remain in sanctuaries.
“The NCDM stressed that Prime Minister Hun Manet, who serves as NCDM chairman, continues to pay close attention to the welfare of all displaced citizens. The government has prepared sufficient food supplies, coordinated through local administrations, with the NCDM secretariat and command structures in charge.”
“Pakistan Army Chief General Asim Munir Warns India Not To Build Dams On Indus River: ‘We Are A Nuclear Nation – If We Are Going To Go Down, We Will Take Half The World Down With Us’…
“”Pakistan will never allow India to choke the Indus River and will defend its water rights at all costs even if the forces will have to destroy any controversial dam that India sought to build on it.””
“‘Economic suicide’: Afghan expulsions spark labor crisis in Iran…
“Iran’s economy is reeling from an acute labor shortage following the mass deportation of undocumented Afghan migrants, with key industries such as construction and agriculture struggling to function. For decades, Afghans have formed the backbone of Iran’s low-wage workforce…”
https://www.iranintl.com/en/202508172861
“At least 71 die in bus crash involving Afghans deported from Iran.
“At least 71 people, including 17 children, have been killed in western Afghanistan after a passenger bus carrying refugees, recently deported from neighbouring Iran, caught fire after colliding with a truck and motorcycle…”
“Inside Syria’s battle to dismantle Assad’s narco-state.
“…while Ahmed still pops the occasional [captagon] pill in Damascus nightclubs, Syria has since that December day seen a startling reversal: a sweeping war on drugs as new President Ahmed al-Sharaa seeks to dismantle the empire Assad left behind.”
https://www.ft.com/content/d81e3c6c-c157-4281-92ec-135d70b497cb
“Missiles running low: US struggles to replenish interceptors depleted in aid to Israel.
“Pentagon is seeking $3.5 billion in emergency funds to replace missile interceptors depleted during June’s Israel-Iran war, raising concerns over America’s ability to sustain supplies while maintaining its own military readiness.”
https://www.ynetnews.com/article/bjnl7afteg
“Trump calls Israel’s Netanyahu a ‘war hero’ and says ‘I guess I am too’…
“Despite the Israeli prime minister’s detractors wanting him jailed as a war criminal following a November 2024 arrest warrant for alleged war crimes in the Gaza conflict issued by the International Criminal Court, Trump insisted: “He’s a war hero.””
“‘We’ve given up on Israel’: Disillusioned with Netanyahu and the war in Gaza, Israelis are fleeing.
“Israel has seen emigration double since the attacks of October 7, 2023, and the subsequent war in Gaza. While some are choosing to leave for security reasons, among those choosing exile are activists weary of war and feeling increasingly isolated amid their country’s illiberal drift.”
“‘People are dying of hunger’: Darfur resident explains what life is like for besieged civilians.
“An estimated 500,000 civilians are trapped in El-Fasher, the capital of Sudan’s North Darfur state, which has been under siege for more than a year by the Rapid Support Forces paramilitary group. Our team spoke to one resident who told us about his daily fight for survival.”
https://www.france24.com/en/africa/20250818-north-darfur-el-fasher-hunger-besieged-civilians
“Cameroon’s conflict is part of a bigger trend: negotiations are losing ground to military solutions.,,
“Cameroon’s case reveals a broader trend. Across Africa and beyond, the post-cold war norm of resolving political conflicts through negotiation is losing ground. In its place, a militarised approach is becoming increasingly common.”
“Maduro mobilises rebel groups against U.S. military build-up along Venezuelan coast.
“Venezuelan President Nicolas Maduro has mobilised 4.5 million civilian fighters in response to a major U.S. military deployment near Latin America and the Caribbean. Speaking to local officials from his ruling coalition, Maduro described the move as a strategy to safeguard national sovereignty against what he labelled as “U.S. threats of war”.”
“US strikes deportation deals with Honduras and Uganda…
“Both deals are part of the Trump administration’s broader push for deportation arrangements with countries on several continents – including those with controversial human rights records. So far, at least a dozen nations have agreed to accept deported migrants from other countries.”
https://www.bbc.co.uk/news/articles/cn02eezlykdo
“US Tech Stocks Weaken Amid Worries About AI Boom’s Future.
“Warnings have emerged suggesting that the excitement surrounding artificial intelligence may be exaggerated… These concerns are affecting investor sentiment and market performance.”
https://intellectia.ai/news/stock/us-tech-stocks-hit-by-concerns-over-future-of-ai-boom
“What is ‘AI psychosis’ and how can ChatGPT affect your mental health?
“…Keith Sakata, a psychiatrist at the University of California at San Francisco, said he has admitted a dozen people to the hospital for psychosis following excessive time spent chatting with AI so far this year.”
https://www.washingtonpost.com/health/2025/08/19/ai-psychosis-chatgpt-explained-mental-health/
“Meta’s AI rules have let bots hold ‘sensual’ chats with kids, offer false medical info.
“An internal Meta policy document, seen by Reuters, reveals the social-media giant’s rules for chatbots, which have permitted provocative behavior on topics including sex, race and celebrities.”
https://www.reuters.com/investigates/special-report/meta-ai-chatbot-guidelines/
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You can read the previous “Economic” thread here. I’ll be back on Tuesday with a “Climate” thread.
The recent Rystad report had a very low level of oil discoveries of 1.8 billion barrels for 2024 (so low I may have misunderstood). For this year, to the end of June, a recent Westwood report showed nigh impact wells (targeting greater than 100 million) have discovered about 1.5 billion of oil at 27% success rate. The discovery rates are falling and on trend it looks like offshore exploration will pretty much stop around 2030, with remaining added reserves around 20 billion barrels rather than the 313 Rystad showed. Maybe on shore discoveries could fill the gap but I think they’d have to be new non-conventional types, which I don’t think are what Rystad have in mind
The Echo Effect of Oil Discoveries
Few things in the world have been “discovered” as many times as oil. Take Guyana: since 2015 the press has reported almost every year that ExxonMobil has made another “major discovery” there. For investors and politicians it creates a reassuring rhythm, a humming mantra: there is always more oil on the way. But in reality, it is the same field being delineated again and again. A discovery happens only once. Everything afterwards is development, not a new find.
The same goes for Suriname. In the narrative, the country is constantly presented as “the new Guyana,” as if it were an endless source of surprises. But here too, the few billion barrels that lie underground can only be added once to the world’s reserves. After that, the only questions are: can it be produced, at what cost, and how fast?
This echoing of discoveries creates an illusion of continuity, as if there were always another field on the horizon. But the numbers are unforgiving: the world consumes about 30 billion barrels of oil each year and finds at most 5 to 6 billion to replace them. In 2024, according to Rystad, it was only 1.8 billion. The deficit cannot be solved by endlessly repeating the same press release, no matter how often the echo reverberates.
The echo effect is therefore a psychological buffer. It masks the structural decline in discoveries with recycled headlines, as though we should be surprised each time. But anyone who does the math can see that the margin has long since vanished.
Guyana and Suriname are not annual gifts. They are one-time discoveries. After that, the echoing should stop — and the counting should begin.
As far as I can see we are no longer finding 5 to 6 billion, but at best 3 to 4 and falling. Even the headline making discoveries are being described as only “potentially commercial”.
Zip,
You are wrong about the Guyana discoveries. Each new discovery is indeed a new prospect being drilled, not a field extension.
It is not one huge field, but rather, a bunch of smaller, structurally separated accumulations. Each separate structure has to be drilled to see if oil is there,,, and if there is enough oil there to justify development.
And it’s the same with Suriname, because the geology is very similar.
I see your point, and you’re correct to push back here. The Guyana offshore play (Exxon’s Stabroek Block in particular) isn’t one giant “superfield” like Ghawar; it’s a cluster of dozens of discrete reservoirs/accumulations spread across structural and stratigraphic traps. Each new discovery well—Liza, Payara, Snoek, Turbot, Yellowtail, Fangtooth, etc.—proved up separate prospects, not just extensions of the same pool.
That’s why Exxon and partners keep announcing “another discovery”: geologically, they are distinct closures, even if they sit in the same petroleum system. Collectively, they add up to >11 billion boe recoverable (latest estimates), but technically you have to treat them as separate developments, even if FPSOs can tie in several nearby finds.
Suriname looks similar because it’s essentially the mirror image of Guyana’s margin, with the same Late Cretaceous deepwater turbidite fairways, high-quality reservoirs, and similar structural segmentation. The play concept is regional, but each trap is discrete: meaning you need to prove hydrocarbons and volume for every prospect.
The mistake that often gets made in the press (and by some analysts) is to talk about “a giant field” in Guyana. That framing works for headlines, but as you note, it’s misleading geologically. What’s there is a play province with multiple accumulations—not a single, continuous oil-bearing structure.
Do you want me to lay out a side-by-side of Guyana vs. Suriname: discoveries so far, estimated reserves, development timelines, and what’s realistic in terms of production profiles? That could help clarify how much of the “spreadsheet optimism” actually translates into barrels over time.
Zip, thanks but not necessary.
I’ve just finished reading this book, and thought I would share.
An interesting & somewhat *different* analysis on the global financial system. I’m not convinced about it being a game-changer, or harbinger of the loss of Dollar Hegemony etc, but it has intriguing possibilities on cushioning or slowing catastrophic financial collapse .. allowing degrowth and economic contraction to be gradual and keep financial economy more closely linked to the ‘real’ economy.
Multi currency Mercantilism
https://www.goodreads.com/book/show/200827451-multicurrency-mercantilism
Thank you all very much for your thoughts. Although I have no deep expertise in the area, learning about oil limits was my first introduction to our burgeoning polycrisis, so I always enjoy geeking out on this sort of back and forth.
Bob, I don’t think you’ve commented before, so welcome to the site.
Would you happen to know what the melting arctic and antarctic have to offer as far as keeping the FF global growth party going? I know there is lots of explorational snooping going on there, but am not clear on exactly what is known and confirmed as far as quantities.
Would you happen to know what the melting arctic and antarctic have to offer as far as keeping the FF global growth party going? I know there is lots of explorational snooping going on there, but am not clear on exactly what is known and confirmed as far as quantities.
Here we go again…why not? Do we really have a choice?
Mexico Bets on Two Major Shale Plays to Break Free from Debt Spiral
By Tsvetana Paraskova – Aug 19, 2025, 4:00 PM CDT
Petroleos Mexicanos, or Pemex, the world’s most indebted energy firm, has seen declines in its output in recent years as old shallow-water conventional fields mature.
Earlier this month, Mexico and Pemex unveiled a 10-year plan to reverse a years-long decline in oil and gas production by tapping more unconventional resources through hydraulic fracturing.
Two unconventional formations could launch a true shale revolution in Mexico.
“Now Sheinbaum has agreed to give the green light to increased fracking despite a campaign pledge last year that she would not allow it.
Mexico has an estimated 545 Tcf of technically recoverable shale gas resources, the sixth largest in the world, per U.S. government data.
…Our analysis suggests that to optimize production, most of these projects must either initiate production or launch secondary recovery programs without delay,” said Sergio de la Cruz, Research Associate at Wood Mackenzie.
However, unconventional production is still in its initial pilot phase. Reaching commercial viability will take years to develop the required specialized supply networks and recruit experienced unconventional operators,” WoodMac noted.”
“….Pemex carried out shale exploration activities in the past, with only partial success, said Marcos Bernabe, Research Associate at Wood Mackenzie.
“Collaboration with international operators can significantly enhance horizontal drilling, multi-stage fracturing, field development optimization and environmental management,” Bernabe added.
International operators are likely to wait and see what the so-called Investment Fund for Pemex will look like.
What mine is mine, and what yours is negotiable…works every time.
Yes Sir, let’s extend the fossil fuel age a few more years..regardless of the consequences
Pan, hope your visit goes well and a thank you to Kali.
Pemex: Theft, Depletion, and the Excel Dream
Mexico’s shale dream must also be seen against the backdrop of Pemex’s internal erosion. The state oil company is not only struggling with declining giants such as Cantarell and Ku-Maloob-Zaap, but also with widespread oil theft. The huachicoleros – organized groups tapping pipelines – cost Pemex billions of dollars each year and further undermine the credibility of the entire system.
At the same time, Pemex carries a debt load of more than $100 billion, the heaviest burden in the global oil sector. With production falling year after year, new discoveries and shale promises are used mainly as a rhetorical tool: a story to reassure investors, politicians, and the public.
The contrast is stark. On one side: the daily reality of corruption, theft, and depleted reservoirs. On the other: an Excel sheet with 545 Tcf of “technically recoverable reserves,” meant to serve as a counterweight. But without infrastructure, investors, and stability, that number remains a mirage.
Mexico’s shale dream thus becomes little more than a paper shield. Not to solve an energy crisis, but to buy time in a country where the oil industry is sinking under theft and depletion.
Thanks Zip for the follow up and a clearer view of the situation. You are indeed correct on the corruption. I did a search and it is rather extensive and rampant.
Financial Times
Jun 10, 2025 — Pemex had around 17,000 barrels stolen per day last year, according to the company’s annual report, generating 20.5bn pesos ($1.1bn) in losses.
People also ask
And even their top executives have a hand in it
Former Head Of Mexican State Oil Company Extradited On Bribery Charges
Emilio Lozoya was the chief executive of Mexico’s state-run oil company and a close adviser to former President Enrique Peña Nieto.
https://www.youtube.com/watch?v=_J8Ni1RAtSk
Apparently, many have their hands in the cookie jar, so to speak.
Also, a shout out to George Kaplan for his analysis too.
Meanwhile, Argentina’s shale dream is apparently taking off:
“In a shock development, crisis-prone Argentina, South America’s second-largest economy, recently emerged as the continent’s third-largest oil producer. The surge in unconventional hydrocarbon output from Vaca Muerta, one of the world’s top five shale formations, is driving significant growth in oil and natural gas production.”
https://oilprice.com/Energy/Energy-General/Who-Will-Benefit-the-Most-From-Argentinas-Shale-Oil-Boom.html
Everything is relative…
Oilprice loves to keep the fossil myth alive, throwing around words like “gamechanger” and “spectacular find.” That’s what they are paid to do.
The news that Argentina has become South America’s third-largest oil producer sounds impressive. The growth of Vaca Muerta – one of the world’s largest shale plays – is internationally presented as a breakthrough. But behind the headlines lies a more sobering reality. Argentina now produces around 700–750,000 barrels per day, barely above its own domestic consumption of 650–700,000 barrels.
The result: a trickle of exports, but the bulk of output disappears into local refineries, transport, and agriculture. For the global market, it is almost irrelevant. The contrast with small states like Guyana or Suriname is clear: there, every new discovery translates directly into export. In Argentina, with 46 million people and an energy-intensive economy, domestic demand swallows almost everything.
At the same time, the country has one of the highest deforestation rates in South America, and about 60 percent of agricultural land is degraded to some degree. Soil erosion, monocultures, and overgrazing are eating away at its productive base.
The contrast is painful. While the oil industry briefly puts Argentina in the spotlight, the real export engine – agriculture – is being structurally undermined. An energy system built on shale with steep decline rates, combined with a farm system losing its soil, is not a recipe for sustainable prosperity, but for deferred collapse.
What’s all the red mean? 😉
https://usdebtclock.org/world-debt-clock.html
Pick your favorite loser.
I’m gonna get my kicks before the whole shithouse goes up in flames.” – Jim Morrison member of “The Doors”…
Relax people, does it really matter how accurate our forecast really is..
“No one gets outta here alive”.
One night in the studio, Jim had John play a primitive 4/4 beat which created a tribal rock sound. Then, Jim chanted, “Five to one, baby, one in five—no one here gets out alive.” When John asked Jim what it meant, he replied, “John, that’s for me to know… and for you to find out.”
Jim was correct but he left a little too early. I’m sure Rock & Roll Heaven has one hell of a band. I really miss Duane Allman, Stevie Ray Vaughn, Ray Charles, Tina Turner & too many others to list. I’m really pissed off that I don’t have musical skills but I’ve got a strong back & weak mind. The weak mind I share with many. 😉
I miss George Carlin the most.