Huge thanks to August’s sponsor, Mick, who wishes to 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.
“Higher-order headaches lurking in the financial system…
“…it’s been known for a while that banks and shadow banks can be brought down by “indirect” exposures… [but] What if you have no exposure to a counterparty and no portfolio overlaps, but that counterparty is in a separate crowded trade, with somebody else that you do have exposure to?
“Your own capital could be at risk from what happens to someone that you don’t even know you’re exposed to. This sort of thing is called a “higher order exposure”.”
https://www.ft.com/content/748a7552-f76a-4696-a3a9-19239b74d1b2
“For bruised bond markets, turbulence persists as debt sales ramp up again…
“Signals from the world’s biggest bond markets point to more volatility as Germany, Japan and the U.S. prepare to sell long-dated bonds in early September – adding pressure to an already bruising year.”
“The financial sector and global dollar system.
“The second Trump administration’s approach to financial markets and institutions mixes familiar deregulatory policies with a range of other policies (financial and non-financial) that are largely without precedent… They may undermine financial stability by loosening prudential standards, especially with respect to limits on leverage.”
https://cepr.org/voxeu/columns/financial-sector-and-global-dollar-system
“For first time in nearly 30 years, foreign central banks hold more Gold than U.S. treasuries…
“As of the end of last year, dollars made up 57.8 percent of global reserves. That is the lowest level since 1994, representing a 7.3 percent decline over the last decade. In 2002, dollars accounted for about 72 percent of total reserves.”
“Trump’s attack on the Fed threatens US credibility…
“History offers a blunt lesson: chaos follows when leaders capture their central banks and force them to buy government debt or cut interest rates to hold down debt service expense. Germany in the 1920s, Hungary after the second world war. Likewise, Argentina and Turkey quite recently — the names change, but the story is the same.”
https://www.ft.com/content/d2eab80f-1314-41f1-8c1e-5fc3bbfb1e43
“Less than 1 percent of Democrats say they are satisfied with the direction of the country, according to a new Gallup poll…
“While 76 percent of Republicans say they are satisfied with the direction of the country, just 0.4 percent of Democrats said the same. The 76-point gap is the highest Gallup has ever recorded on the measure.”
https://www.newsweek.com/0-democrats-happy-state-us-gallup-2120091
“Chinese banks face profit squeeze as loan growth falters.
“Top Chinese banks’ first-half results on Friday will underline the impact of slowing loan growth in a deflationary economy, a piling up of bad loans as defaults by small businesses and consumers rise, and narrowing margins due to lower rates.”
“British farmers brace for a second year of poor harvests…
“Farmers in England have warned in recent weeks that intense drought is severely hampering their ability to produce food, just a year after record rainfall led to the second-worst harvest since modern records began.”
https://www.ft.com/content/73763ff0-641b-48db-9c26-ff7196e1e8b2
“Sky-high electricity costs hinder Britain’s net zero mission…
“According to the International Energy Agency, large energy intensive companies in Britain paid about four times more for electricity last year than U.S. businesses, and more than double competitors in France and Germany.”
“Who will be most vulnerable as Europe’s energy crunch deepens?
“Early lights out at the Eiffel Tower. Lowered thermostats. Cold showers. Europe is bracing for a tough winter as it tries to scale back energy consumption to counter cuts in Russian gas flow and surging fuel prices.”
“Macron’s stunned troops see no good way out of France’s impasse. New prime minister? New elections? Neither would seem to defuse France’s ticking debt bomb.
“President Emmanuel Macron’s allies don’t seem to have any good answers as to what happens after the almost certain fall of the government of Prime Minister François Bayrou in the Sept. 8 parliamentary vote of confidence.”
“The time is ripe for another widespread protest in France…
“A movement calling itself Bloquons tout (Let’s block everything) has threatened action to bring France to a standstill from September 10… Bloquons tout, if it has the committed support of a substantial far-left movement that Mr Mélenchon promises, could be far more disruptive than the gilets jaunes.”
“Migrant riots have come to Switzerland.
“For decades, Switzerland seemed immune to the turmoil engulfing its neighbours. It has no colonial past, traditionally prided itself on tight immigration control, and stands outside the European Union. Yet the scenes in Lausanne tell a different story…”
https://www.spectator.co.uk/article/migrant-riots-have-come-to-switzerland/
“Wary of Russia, Germany tiptoes toward compulsory military service…
“Germany took a major step Wednesday toward a controversial return to compulsory military service, as Berlin confronts the inadequacy of its armed forces to stand up to Russia and the prospect that European nations will be tasked with providing security guarantees for Ukraine.”
https://www.washingtonpost.com/world/2025/08/27/germany-compulsory-military-service-russia/
“‘Turning point’: German weapons firm opens Europe’s largest munitions plant.
“German arms maker Rheinmetall opened Europe’s largest munitions plant in northern Germany on Wednesday, a move NATO chief Mark Rutte hailed as key to bolstering Western defenses. The facility, spanning 30,000 square metres, aims to produce 350,000 artillery shells annually by 2027.”
https://www.france24.com/en/europe/20250827-defence-giant-rheinmetall-europe
“European leaders outraged after Russian strikes kill 23 and damage EU’s HQ.
“The head of the European Union’s executive Commission, Ursula von der Leyen, has spoken of her outrage at Russia’s deadliest onslaught on Kyiv since July – which also damaged the EU’s delegation office in the Ukrainian capital.”
https://www.bbc.co.uk/news/articles/cvg3y7m2gz0o
“Frustrated Russians grapple with fuel crisis as Ukraine attacks oil refineries…
“Wholesale prices for A-95 – Russia’s most widely used petrol – hit record highs last week, climbing to about 82,300 roubles (£760) a tonne, almost 54% higher than in January… Output only just covers domestic demand, leaving the system highly vulnerable to disruption.”
“Mining company Mechel reported worsening losses on Thursday and said it had suspended output at one of its mines, a sign of a deep crisis affecting Russia’s coal industry.
“The sector is struggling with a host of problems including low coal prices, international sanctions and the strength of the rouble, which makes its exports less competitive.”
“Japan has lodged a protest accusing China of carrying out the “unilateral development” of gas fields in disputed waters in the East China Sea.
“In a statement late on Monday, Japan’s Ministry of Foreign Affairs said it had detected the construction of “a new structure” in waters west of the median line between the countries.”
“Australia, Canada, Philippine ships hold drills in tense South China Sea…
“The Philippine military said on Thursday that the joint naval drills east of the Scarborough Shoal – a flashpoint for confrontations with Chinese vessels – focused on simulations to counter aerial threats “through coordinated defensive measures”.”
“Indonesia: Protests escalate after death of demonstrator.
“Mass protests in Indonesia reignited on Friday following the death of a 21-year-old motorcycle taxi driver who was run over and killed by an armored police vehicle as security authorities tried to contain student protests… The incident sparked nationwide outrage.”
https://www.dw.com/en/indonesia-protests-escalate-after-death-of-demonstrator/a-73805617
“‘In a nightmare’: India braces for big layoffs as Trump’s tariffs bite…
“Five rounds of talks have failed to yield a trade deal between Washington and New Delhi, and Gupta said exporters now fear their customers might give up on India altogether.”
“India-Pakistan missile race heats up, but China in crosshairs, too…
“The Agni’s range puts most of Asia, including China’s northern regions, and parts of Europe within reach. This was the missile’s 10th test since 2012 and its first since March last year, but its timing, say analysts, was significant. It came just ahead of Indian Prime Minister Narendra Modi’s trip to China…”
“Iran plunged into new crisis as currency drops to near-record low of 0.000001% on Dollar.
“Iran’s rial currency plummeted to near-record lows Thursday amid mounting concerns in Tehran that European nations may initiate a process to reinstate UN sanctions on the Islamic Republic over its nuclear program, further pressuring the country’s struggling economy.”
“Turkey warns of potential crisis with Greece over ‘cheap politics’,
“Turkey’s foreign minister warned on Thursday that tensions with Greece could escalate into a crisis with “geostrategic costs” for Athens if Greek politicians continue what he described as “cheap politics” targeting Ankara.”
“Israeli forces raid former air defence base near Syrian capital.
“Israeli forces raided a former air defence base in southern Syria on Wednesday during a series of airstrikes in the area – their farthermost such operation inside Syria since Bashar al-Assad was ousted last December.”
“Israel’s military said on Wednesday that the evacuation of Gaza City is “inevitable” ahead of a planned military offensive as aid groups sound the alarm over expanded operations in the Strip.
“”The evacuation of Gaza City is inevitable,” the IDF’s Arabic-language spokesperson Avichay Adraee wrote on X, as he advised residents of the city to prepare to leave.”
https://www.euronews.com/2025/08/27/israeli-military-calls-gaza-city-evacuation-inevitable
“Israel ‘targets Houthi leaders’ in Yemen air strikes.
“Israeli intelligence learned at around 1 pm that 10 Houthi ministers, including the minister of defense, and senior officials had gathered outside Sanaa to hear a speech by the group’s leader, Abdul Malik al-Houthi… The IDF then launched a strike targeting the meeting.”
https://www.telegraph.co.uk/world-news/2025/08/28/israel-air-strikes-yemen-houthis/
“Somalia, UAE hold talks as tensions simmer over Puntland, Somaliland.
“Somalia and the United Arab Emirates held high-level talks on Wednesday in Mogadishu in a bid to strengthen relations strained by Abu Dhabi’s dealings with Somalia’s breakaway regions and its growing role in the Horn of Africa.”
“Sudan: A staggering 30 million are in need, as war grinds on.
“The senior OCHA official recalled that Sudan was once the “breadbasket” of the Horn of Africa, but last year famine conditions were reported in the Zamzam camp in North Darfur. The current lean season finds some 680,000 people nationwide in a state of catastrophic food insecurity.”
https://news.un.org/en/story/2025/08/1165739
“US naval group begins arriving in southern Caribbean amid Venezuela tensions.
“A US naval group consisting of seven warships and a fast-attack submarine has begun to arrive in the southern Caribbean, a source familiar with the matter confirmed to Anadolu Thursday amid heightened US-Venezuela tensions.”
“United Nations says children make up 50 percent of gang members in Haiti.
““Children are being forced into combat roles, directly participating in armed confrontations. Others are being used as couriers, lookouts, porters to carry weapons or are exploited for domestic labour.””
“Climate banking group pauses activities amid rising political pressure…
“The American president has previously labelled climate change as a “hoax”. The industry club has struggled to reconcile accusations in the US of wokeness or anti-competitive behaviour with its ambition to help members cut the carbon footprint of their loan and deal books.”
https://www.ft.com/content/5bba361e-aae4-4d1e-b077-eebb340ede81
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You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
Fascinating view of collapse, somewhat different to the Mad Max scenario..
https://youtu.be/mMbtY4ljEMQ?si=HW11G0LlEnl1NHPj
Surplus and Slavery
Every society ultimately turns on a single question: how much energy is left over after daily survival? That surplus determines whether there can be cities, armies, and elites. And whoever controls the surplus immediately builds a system to keep it flowing in their direction.
In antiquity, surplus grain meant pyramids, temples, and armies — and millions of slaves to produce it. After the fall of Rome, Europe seemed briefly freer, but as soon as agriculture yielded enough again, a feudal order emerged with serfdom and bondage. The Industrial Revolution, powered by coal and later oil, created an unprecedented surplus and instantly produced a new wave of factory labor, Sowjet terror ,colonial extraction, and inequality.
That’s why it is naïve to think that the collapse of the fossil era will automatically bring liberation. There may be a brief pause, but as soon as a new energy source is harnessed — hydropower, biomass, whatever it may be — a hierarchy will form to monopolize that surplus. And where hierarchy arises, coercion follows: whether you call it slavery, serfdom, or wage labor.
Surplus does not create freedom; it creates new chains. That is the hard law that repeats itself throughout history. The only things that change are the names and the technologies.
Zip, thank you for your thoughts.
The end of the fossil fuel era will be so catastrophically destabilising that any new hierarchies emerging are going to be tiny, localised and organised around very meagre energy surpluses from subsistence farming, wood-fires and the like. It could even wipe us out entirely.
Rain, thank you for that. For those short of time, here is an article article summarising Kemp’s book:
https://www.theguardian.com/environment/2025/aug/02/self-termination-history-and-future-of-societal-collapse
I would argue that modern industrial civilisation is inherently self-terminating rather than just potentially so. The sort of societal transformation he talks about is not possible because what we have is fundamentally a physics problem that cannot be solved on the social or political level.
Just another bullshit hopium windup from “freelance environmental consultant” Kemp.
He’s “optimistic” about people, which allows him to get paid despite being a collapsologist, and tell other people to somehow find a job in the gig economy that doesn’t violate their conscience. Oh, that and the Hallmark advice not to be a “dick.” Brilliant.
A “fundamental transformation” of human society is required. Coming right up, squire. Annnnny minute now, it’s gonna happen!
Just can’t read this shit anymore.
Martin, good to see you are on your usual acerbic form. 😂
Thinking about it, Luke Kemp’s outlook is like a disorientating mix of David Korowicz and Jason Hickel.
Another great synopsis from Zip and perfect bottom line from Martin:
“Just another bullshit hopium windup”
🎯
Head spinning post today
That minefield graphic is the millenials life since we graduated HS.
Doom Wizard, as I’ve said before, I feel terrible for my kids and the younger generations coming of age amidst ebbing prosperity and worsening eco/climate instability.
Life is tougher, more fraught with risks, less full of possibilities and flat out less fun that it was for people of my generation (I am 70’s vintage).
“I had more fun being 20 in the 70s than being 70 in the 20s.” – Joe Walsh
I think that what we have done to the environment with our unregulated free market capitalism might be more fun than the 70s. Never thought I could enjoy misery so much.
For me, I realize that age has clarified my critical thinking ability or is that dementia, senility & Alzheimers 😉