The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Oceania Saker.
Dmitry Orlov has an amazing knack of processing information and then presenting to you, in his usual humorous fashion, the nuggets of truth.
Here Dmitry gives us another 30,000 foot view of what is happening to us and our planet.
This blog is dedicated to the idea of presenting the big picture—the biggest possible—of what is going on in the world. The abiding areas of interest that make up the big picture have included the following:
1. The terminal decay and eventual collapse of industrial civilization as the fossil fuels that power it become more and more expensive to produce in the needed quantities, of lower and lower resource quality and net energy and, eventually, in ever-shorter supply.
The first guess by Hubbert that the all-time peak of oil production in the US would be back in the 1970s was accurate, but later prediction of a global peak, followed by a swift collapse, around the year 2000 was rather off, because here we are 15 years later and global oil production has never been higher. Oil prices, which were high for a time, have temporarily moderated. However, zooming in on the oil picture just a little bit, we see that conventional oil production peaked in 2005—just 5 years late—and has been declining ever since, and the shortfall has been made up by oil that is difficult and expensive to get at (deep offshore, fracking) and by things that aren’t exactly oil (tar sands).
The current low prices are not high enough to sustain this new, expensive production for much longer, and the current glut is starting to look like a feast to be followed by famine. The direct cause of this famine will not be energy but debt, but it can still be traced back to energy: a successful, growing industrial economy requires cheapenergy; expensive energy causes it to stop growing and to become mired in debt that can never be repaid. Once the debt bubble pops, there isn’t enough capital to invest in another round of expensive energy production, and terminal decay sets in.
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Source: Club Orlov
Over the course of 2014 the prices the world pays for crude oil have tumbled from over $125 per barrel to around $45 per barrel now, and could easily drop further before heading much higher before collapsing again before spiking again. You get the idea. In the end, the wild whipsawing of the oil market, and the even wilder whipsawing of financial markets, currencies and the rolling bankruptcies of energy companies, then the entities that financed them, then national defaults of the countries that backed these entities, will in due course cause industrial economies to collapse. And without a functioning industrial economy crude oil would be reclassified as toxic waste. But that is still two or three decades off in the future.
In the meantime, the much lower prices of oil have priced most of the producers of unconventional oil out of the market. Recall that conventional oil (the cheap-to-produce kind that comes gushing out of vertical wells drilled not too deep down into dry ground) peaked in 2005 and has been declining ever since. The production of unconventional oil, including offshore drilling, tar sands, hydrofracturing to produce shale oil and other expensive techniques, was lavishly financed in order to make up for the shortfall. But at the moment most unconventional oil costs more to produce than it can be sold for. This means that entire countries, including Venezuela’s heavy oil (which requires upgrading before it will flow), offshore production in the Gulf of Mexico (Mexico and US), Norway and Nigeria, Canadian tar sands and, of course, shale oil in the US. All of these producers are now burning money as well as much of the oil they produce, and if the low oil prices persist, will be forced to shut down.
[Please click below to continue reading] Continue reading Whiplash!, by Dmitry Orlov
Source: Club Orlov
Ancient Slavic god Zimnik: a squat old man, long hair the color of snow, wears a white coat, always barefoot. Carries an iron staff, one swing with which instantly freezes everything solid. Can summon snowstorms, ice storms and blizzards. Goes around taking whatever he likes, especially children who misbehave.
Recent events, such as the overthrow of the government in Ukraine, the secession of Crimea and its decision to join the Russian Federation, the subsequent military campaign against civilians in Eastern Ukraine, western sanctions against Russia, and, most recently, the attack on the ruble, have caused a certain phase transition to occur within Russian society, which, I believe, is very poorly, if at all, understood in the west. This lack of understanding puts Europe at a significant disadvantage in being able to negotiate an end to this crisis.
Whereas prior to these events the Russians were rather content to consider themselves “just another European country,” they have now remembered that they are a distinct civilization, with different civilizational roots (Byzantium rather than Rome)—one that has been subject to concerted western efforts to destroy it once or twice a century, be it by Sweden, Poland, France, Germany, or some combination of the above. This has conditioned the Russian character in a specific set of ways which, if not adequately understood, is likely to lead to disaster for Europe and the world.
Lest you think that Byzantium is some minor cultural influence on Russia, it is, in fact, rather key. Byzantine cultural influences, which came along with Orthodox Christianity, first through Crimea (the birthplace of Christianity in Russia), then through the Russian capital Kiev (the same Kiev that is now the capital of Ukraine), allowed Russia to leapfrog across a millennium or so of cultural development. Such influences include the opaque and ponderously bureaucratic nature of Russian governance, which the westerners, who love transparency (if only in others) find so unnerving, along with many other things. Russians sometimes like to call Moscow the Third Rome—third after Rome itself and Constantinople—and this is not an entirely empty claim. But this is not to say that Russian civilization is derivative; yes, it has managed to absorb the entire classical heritage, viewed through a distinctly eastern lens, but its vast northern environment has transformed that heritage into something radically different.
Since this subject is of overwhelming complexity, I will focus on just four factors, which I find essential for understanding the transformation we are currently witnessing.
1. Taking offense
Western nations have emerged in an environment of limited resources and relentless population pressure, and this has to a large degree determined the way in which they respond when they are offended. For quite a long time, while centralized authority was weak, conflicts were settled through bloody conflict, and even a minor affront could cause former friends to become instant adversaries and draw their swords. This is because it was an environment in which standing your ground was key to survival.
[Please click below to continue reading] Continue reading Peculiarities of Russian National Character, by Dmitry Orlov
On the wall of George Orwell’s Ministry of Truth from his novel 1984 there were three slogans:
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH
It occurred to me that these apply just a little bit too well to the way the Washington, DC establishment operates.
War certainly is peace: just look at how peaceful Iraq, Afghanistan, Yemen, Libya, Syria and the Ukraine have become thanks to their peacemaking efforts. The only departures from absolute peacefulness which might be taking place there have to do with the fact that there are some people still alive there. This should resolve itself on its own, especially in the Ukraine, where the people now face the prospect of surviving a cold winter without heat or electricity.
Freedom is indeed slavery: to enjoy their “freedom,” Americans spend most of their lives working off debt, be it a mortgage, medical debt incurred due to an illness, or student loans. Alternatively, they can also enjoy it by rotting in jail. They also work longer hours with less time off and worse benefits than in any other developed country, and their wages haven’t increased in two generations.
And what keeps it all happening is the fact that ignorance is indeed strength; if it wasn’t for the Americans’ overwhelming, willful ignorance of both their own affairs and the world at large, they would have rebelled by now, and the whole house of cards would have come tumbling down.
But there is a fourth slogan they need to add to the wall of Washington’s Ministry of Truth. It is this:
DEFEAT IS VICTORY
The preposterous nature of the first three slogans can be finessed away in various ways. It’s awkward to claim that American involvements in Iraq, Afghanistan, Yemen, Libya, Syria or the Ukraine have produced “peace,” exactly, but various lying officials and assorted national teletubbies still find it possible to claim that they somehow averted worse (totally made-up) dangers like Iraqi/Syrian “weapons of mass destruction.” What they have produced is endless war financed by runaway debt which is leading to economic ruin. But ignorance helps a lot here.
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Continue reading Defeat is Victory, Dmitry Orlov
I seem to be doing a lot of hyperproductive things lately: explaining to people how to kill the foul beast of Empire, revolutionizing the way English literacy is taught to both native English speakers and the rest… Somebody just emailed me to tell me that I have become “one of those significant commentators.” Yikes! If I keep going this way, then I will run the risk of making a Significant Contribution to Society (SCS). And that would be a mistake; not just for me, but for anyone.
Plus I’d be spending most of my time deleting blog comments from imbeciles. It’s the blogging equivalent of scraping bugs off your windshield. (It’s about 1% thoughtful comments from actual readers, and 99% senseless blather from idiotic trolls. I am serious. Very sad. But I liked the one I got the other day from a Ukrainian who said that his people will drown all the Russians in their (Ukrainians’) own blood. That was cute, but I deleted it anyway because it’s hate speech.
But allow me to explain about SCS and what the title of this blog post means.
As Venkatesh Rao explains so well over at his Ribbonfarm, a person faces two opposing risks in grappling with the vicissitudes of earthly existence: the risk of achieving nothing, and the risk of achieving something that’s not on strategy. Let me summarize his argument.
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The question of when the US Empire will collapse is on everyone’s mind, it is repeatedly asked. Here, Dmitry Orlov, very accurately gives a reasonable analysis and timeline. This is by far the best we have read on the subject so far.
The recent Birth of the Eurasian Century as Pepe Escobar has coined it, the growth of sovereignty in Latin America with recent wins in Bolivia and Brazil and even the UK government decision to issue renminbi (RMB) Bonds,are all signs of what Dmitry calls “positive feedback”. Positive Feedback that could influence the timeline proposed below.
We highly recommend that you take out time and read this.
Based on the lessons of history, all empires collapse eventually; thus, the probability that the US empire will collapse can be set at 100% with a great deal of confidence. The question is, When? (Everyone keeps asking that annoying question.)
Of course, all you have to do is leave the US, go some place that isn’t plugged into the US economy in non-optional ways, and you won’t have to worry about this question too much. Some people have made guesses but, as far as I can tell, no one has come up with viable methodology for calculating the date. In order to provide a remedy for this serious shortcoming in collapse theory, I once tried to outline a method for figuring it out in an article titled “Peak Empire,” which was based on Joseph Tainter’s theory of diminishing returns on complexity—or diminishing returns on empire. It’s a perfect problem for differential calculus, and all those microeconomics students who are busy calculating marginal cost vs. marginal revenue, so that they can look for work in the soon-to-be-defunct shale gas industry, might take it up, to put their math talents to better use. In the meantime, here is an update, and a revised estimate.
Just to review, as the brilliant analyst Chalmers Johnson explained, the US is an “empire of bases,” not an empire of colonies. It is not considered politically correct to annex other countries anymore. Witness the reaction to Russia taking back Crimea, even though its population has a right to self-determination, and voted 98% in favor of the idea. But, had things turned out differently, putting a NATO base in Crimea would have been just fine. Still, there are quite a few US “territories” (read “colonies”) listed in the Pentagon Base Structure report, including American Samoa, Guam, Johnston Atoll, Marshall Islands, Northern Mariana Islands, Puerto Rico, US Virgin Islands and Wake Islands. We should probably include Hawaii, since in 1993 the US Congress “apologized” to Hawaii for kidnapping the Queen and illegally annexing the territory. They are not giving it back, mind you, but they don’t mind saying we’re sorry, because they stole it fair and square. The same could be said for Texas, California—the whole bloody continent for that matter. But they don’t do that sort of thing any more—not too much. Sure, the US stole Kosovo from Serbia just to set up a huge NATO base there, but in general there has been a shift to controlling other countries through economic institutions—like the IMF, the WTO, and the World Bank. There has also been plenty of political subterfuge, assassinations and coups d’états, as explained by John Perkins in Confessions of an Economics Hit Man, or in Michael Hudson’s work. William Blum writes: “Since the end of the Second World War, the United States of America has…
1. Attempted to overthrow more than 50 governments, most of which were democratically elected.
2. Attempted to suppress a populist or nationalist movement in 20 countries.
3. Grossly interfered in democratic elections in at least 30 countries.
4. Dropped bombs on the people of more than 30 countries.
5. Attempted to assassinate more than 50 foreign leaders.”
Only a few of these actions—such as Iran in 1953, Guatemala in 1954, Nicaragua in the 1980’s, Ukraine 2014, etc.—are well known in the US. Now here is the key point: all of this “democracy-building” requires the US to have plenty of foreign military bases. Much of the military is outsourced, so there is no need for consent of the governed any more—just their tax money. Marching in the streets in protest is a complete waste of time. Millions of people marched against the Iraq War in 2003. Did it make any difference? Secretary of State Alexander Haig remarked during a peace march in the 1980’s: “Let them protest all they want as long as they pay their taxes”; Kissinger explained that “Soldiers are dumb, stupid animals for the conduct of foreign policy”; and CIA director William Casey made sure the US public remains completely in the dark with his famous dictum, “We’ll know our disinformation program is complete when everything the American public believes is false.” (This is from his first staff meeting in 1981; it’s not a secret.) The US is completely open about its desire to subjugate the entire world—if this weren’t already obvious from its behavior.
[Please click below to continue reading] Continue reading Peak Empire, by Dmitry Orlov