The System is Dying

by John Little | October 27, 2017

The System Is Dying I – Oil

Our current, high tech civilization started dying a little over ten years ago. A system that began in the 1800s, races towards an inglorious end and the death of billions of people. And, you know nothing about this, because our dear leaders are not serious people.

In fact, these same ‘dear leaders’ undoubtedly tell themselves that our fantastic empire will continue, that nothing can shake this great ship as it travels into the night. But, not all is as it seems, and that jolt you felt in 2008 was the same kind of iceberg that sank the unsinkable Titanic.

As our system dies, will you be ready for this?

---

When I stumbled back to the US, eleven years ago, I had no idea that I would be doing what I am doing, that I would be sitting where I am sitting or that I would be married to whom I am married. In my mind, I ‘knew’ that I would be back in Jerusalem double-quick, picking up, where I left off. So in 2006, as i landed in Indianapolis, my mind was filled with all things Middle East as I struggled to piece together the tattered remains of my life.

Some of you know what I’m talking about, since you’ve been through it. As for the rest of you… your time will come. But, suffice it for now to say that the shock of returning to my birthplace, was overwhelming.

So much had changed, and most of it, for the worse. Horribly, horrifyingly worse. And, as I struggled through the process of putting myself back together, I did not recognize what I see now:

The death of empire, and the civilization that it spawned.

The Death Of Empire

I never thought of America as an empire until just about four years ago, and even then it took a while for the thought to solidify in my mind. America is as imperial as her progenitor, 2000 years ago.

Just as Rome, America channels support to ‘resistance movements’ and overthrows countries from within. Those ‘color revolutions’ that swept Eastern Europe and the Caucasus Mountains, had the taint of the Roman strategy of ‘Divide et Impira‘. The breakup of the Soviet Union and the ending of the Cold War were unmistakeably good, and an application of that ancient strategy.

What Rome called the Praetorian Guard, we now call bureaucracy. And, what the Praetorian Guard wants, the Praetorian Guard gets. The emperor might have stood upon the dais, but the Praetorian Guard were the true power behind the throne. But, Rome’s bureaucracy could not keep the mines from running out of gold and silver.

The Roman Mines of Iberia

That is always what happens when an empire is based on one thing:

It always runs out of that one thing.

When the mines of Iberia – aka, Spain – started to produce less and less gold and silver, the Roman Empire did not collapse immediately. It still carried on, but it was forced to do so by debasing its currency and then using threats of force to get what it wanted.

The following provides an infographic on the decline of the Roman Empire, based on the decline of its currency:

http://www.businessinsider.com/how-currency-debasement-contributed-to-fall-of-rome-2016-2

What it does not show, is the collapse of the mines that destroyed the empire. It could still carry on, but it could only do so… badly.

The American Version

America sits in the same position as Rome, but instead of silver and gold mines, the empire has oil. This will undoubtedly surprise you, but it is still the truth.

If you want to see – and hear – how oil created the American Empire, go here:

Episode 310 – How Big Oil Conquered The World
https://www.corbettreport.com/episode-310-rise-of-the-oiligarchs/

Do NOT underestimate how important this was. Without oil, America would not have become the empire that it is today. It was American oil that fueled the Allied forces that defeated Germany. It was American oil that fueled the innovation that made American technology the best on the planet. But, when it began to run out – when it peaked – a clever man was running American foreign policy.

His name was Henry Kissinger, and he convinced the Arabs to huddle under the wings of the American military. They needed someone strong to protect them, and the US had the military to do it. So, the Arabs joined the empire, as did anyone who was selling oil on the international market.

How?

By selling oil only in US dollars, and then keeping excess dollars in US government bonds.

With the petrodollar system in place, the American Empire continued to prosper. But, you can cheat the laws of physics for only so long, before reality comes crashing in.

And Then I Got Dragged Back

Just like the gold and silver mines of Iberia, the oil wells, pumping oil for American dollars, reached their peak – right about the time that I was dragged back to Indianapolis from Jerusalem.

No, there’s no direct connection there. I was on a new direction, one that would lead me to northern Taipei, writing about Geopolitics and disaster – while teaching English. But, I remember a moment, when I was filling my car in 2007 in Indiana, that the economy could not continue with the price of gasoline so high.

And, sure enough, in 2008… it didn’t.

And, whenever the price of crude oil – and gasoline – shoots high enough, the economy will come crashing down again. And, with each rise, and then crash, the economy will be weaker and weaker and weaker.

The Ghost Town

Have you heard of American ‘ghost towns’?

Do you know why they are there?

Obviously, the first reason that comes to mind is that no one wants to live there. “Well, duh,” is all that I have to say about that. We’re looking for a deeper reason. But, let me back up a bit.

For those of you who don’t know what a ‘ghost town’ is, let me share a definition with you:

A ghost town is an abandoned village, town, or city, usually one that contains substantial visible remains. A town often becomes a ghost town because the economic activity that supported it has failed, or due to natural or human-caused disasters such as floods, government actions, uncontrolled lawlessness, war, or nuclear disasters. The term can sometimes refer to cities, towns, and neighborhoods that are still populated, but significantly less so than in years past; for example those affected by high levels of unemployment and dereliction.

Some ghost towns, especially those that preserve period-specific architecture, have become tourist attractions. Some examples are Bannack; Calico; Centralia; Oatman; and South Pass City in the United States, Barkerville in Canada, Craco in Italy, Elizabeth Bay and Kolmanskop in Namibia, Pripyat in Ukraine, and Danushkodi in India. Visiting, writing about, and photographing ghost towns is a minor industry.

 – Wikipedia

In the ‘wild west’ of the United States, towns would spring up because prospectors found gold. Some of you might even know that sentence, “Thar’s gold in them thar hills!” And no, I don’t know where I heard that, but you can bet that it was one of those ‘Westerns’ that were on TV, when I was growing up in the ’70s.

But, what happened when the gold ran out?

Everyone moved away. And, THAT is how you have so many ghost towns littering western America. All the gold that was easy to mine, stopped being easy to mine.

And oil?

Believe it or not, but we are seeing modern ‘ghost towns’ rise as oil rich areas become less rich in oil. Those towns that had a reason to exist before oil, will still exist, but those that sprung up around the oil wells… well …just look at Azerbaijan and the ghost towns that remain. When the oil ran out, the people went away.

Is there still oil left in Azerbaijan?

Of course, but remember when I said that you can only cheat physics for so long. After a while, reality arrives. And, the oil that is left in Azerbaijan is hard to suck out of the ground. And yes, the operative word is ‘suck’.

When Wells Run Dry

Remember that an oil well is just a straw with a pump attached to it. And, there’s a limit – described by physics – to how far down that straw can go and still suck out oil. Once you reach the limit, there’s nothing that you can do, but stop pumping oil.

The world is littered with oil wells that had to stop pumping – just as Spain is littered with gold and silver mines that stopped producing gold and silver. Remember that the US used to be the Saudi Arabia of oil. Now, it isn’t.

Unfortunately, Saudi Arabia has hit its own limit in her ability to produce oil. It’s downhill from here on out. And, there are more and more people who want their share of the oil.

What will people do, when they don’t get the share of oil that they feel that they deserve?

Unfortunately, history shows us the answer:

The death of the system in a holocaust of death and destruction.

 

The System is Dying II – When Growth Stops

In both the natural and geopolitical world, there seems to be one law that that is universal – at least on this planet. And that law is:

Systems grow until they die.

Look at ANY biological system at the macro level. That system grows and grows and grows, until it runs out of food, and then rapidly dies – to be replaced by a different biological system that does the same thing. And, scientists have wondered at this seemingly mindless, unchanging rule of nature.

---

I spent my formative years, expecting to earn my Ph.D. in a field of science. And, my initial exposure to Physics captured my attention pretty quickly. The design and construction of the universe was magnificent, and I was completely fascinated by how incredible it was.

What a marvelous creation.

Unfortunately, something went wrong as I was laying the mathematical foundation that I needed to succeed in Physics, so I crashed and burned on the shoals of Advanced Calculus. Calculus isn’t difficult. It’s not even hard. But, when faced with differential equations, my mind rebelled.

Then, I found myself studying geopolitics, with a concentration on the Middle East, and a different kind of fascination gripped me. What an absolutely incredible mess. But, the sense of order that I learned in my pursuit of Physics, encouraged me to look for the reasons why the Middle East was such a violent and dangerous place. And, the Middle East isn’t the only ‘violent and dangerous’ place.

In fact, the whole world is violent and dangerous, and it is that way because of this one rule that never seems to change:

Systems grow until they die.

Scientists like to talk about ‘equilibrium’, and it’s that condition where two opposing forces are equal and cancel each other out. But, that rarely seems to happen, except on a small scale for a short period of time.

The Natural World

Look at any biological system.

Do any of them stay static?

Of course not. Every single living creature exists as a part of a larger biological system and is, itself, a biological system. And, every biological system grows until it dies. The only time when it does not do this, is when it is balanced out by an opposing biological system.

Deer are adorable. Everyone knows about Bambi, and everyone loves Bambi. But, given half a chance, deer will breed and breed and breed and consume and consume and consume until there’s nothing left to eat and too many deer. Just ask any farmer or hunter.

If you loved deer, you need to shoot some of them, every year, or they will die of starvation. I know that this will be shocking to some of you, but this is absolutely the case. And, that’s why wolves were designed to keep the deer population in check. Hence, that interesting word, ‘equilibrium’.

The Nature Of Humanity

Why am I talking about this in a newsletter dedicated to geopolitics?

Well, political systems act in much the same way, except… in this case …humanity is the wolf. And, the only thing that keeps the wolves in check, are other wolves.

What do these two-legged wolves feed on?

Stuff.

We love that ‘catchall’ word. Stuff. You stick it in there because it represents too many different things to talk about in a paragraph or sentence. Stuff.

What stuff are we talking about?

Well, as humanity spread out into the world, they learned to farm and raise cattle. And, since they were fruitful and multiplied, they quickly ran out of room to do farming and cattle raising. And, the result was always war.

Sometimes, one group of humans found themselves with such incredible farmland and awesome weather, that they grew quickly. And, growing quickly always means that you have lots of sons. The firstborn always inherited the family farm, and the other sons…

…well, they had to either find other farmland, or… well …um… do, err… something else.

Usually, that ‘something else’ was join the local king’s army and take someone else’s farmland – killing the original occupants of that farmland. Of course, there are other reasons why some of that farmland might not have owners, like disease or drought that might have killed off the original owners. But generally, the biggest threat to a farmer was another farmer.

Why do you think that, until the late 1800s, world population hovered around one billion people?

Up to that point, any and all ‘progress’ by mankind was marginal. There weren’t very many scientists. There weren’t very many teachers or professors. There was barely enough extra food to feed the population and allow a few rich people to play at doing ‘research’.

Coal And Oil

What changed?

Coal and then oil.

Take a look at this rather interesting graph that I discovered almost four years ago:

Please understand that there isn’t a single geophysicist, oil expert or petroleum company that doesn’t predict that Peak Oil is coming. In fact, if you dig around and look hard enough, you will find their predictions on when Peak Oil will arrive. And, you need to understand that.

Peak Oil

To put it another way:

Among experts, there is no debate over the existence of Peak Oil.

There is only debate over WHEN it occurs.

Do you understand the difference?

You need to understand that difference because a lack of understanding will cause you to ignore the need to prepare for the inevitable. You also need to understand the fact that you are not being told the truth. And, there’s a principle that points to the reason why you are not being told the truth:

Anyone whose existence is based upon the need to believe that a certain thing is true, will always believe that this certain thing is true.

So, when I say that you are not being told the truth, part of the reason is that those who should be telling you the truth are telling THEMSELVES lies. That’s right. Self-deception is rife in the oil industry. In any industry. But, the ‘self-deception’ is only a part of the deception.

Stock Price And Lying Liars

If the financial markets found out that the oil industry had a limited life-span, their stock price would collapse. And, stock price often has a lot to do with the Price-to-Earnings Ratio. As an ex-finance guy, I can tell you what the price-to-earnings ratio (P/E) actually means:

It’s the number of years that you need to hold a single share, to ‘break even’ on your investment.

Most finance people would object to me simplifying the P/E ratio like that. But, it’s still the truth. And, you need to remember that finance people lie to themselves, just like oil people do.

What is the P/E ratio for the oil company, Exxon Mobile?

18.84

This means, that if you buy a share of stock in Exxon, you either expect to get your money back in less than 19 years, or you expect Exxon profits to rise more quickly than most people think – which would mean that you ‘break even’ sooner. Yes, I know that I’m glossing over a bunch of other issues. But, that’s essentially it.

What would the P/E ratio be, if everyone knew that Exxon had only five years of life left?

Well, it would be a fraction of it’s current P/E – certainly less than five. And, that would mean a GIGANTIC collapse in the price of Exxon. And, the management of Exxon is paid based on their share price.

Do you get it now?

The oil companies are never EVER going to admit Peak Oil to you, until after it has happened.

Well, I’m here to tell you that it has already happened. As proof, look at this oil production graph:

( Oil Production Outside The US )

Why is it important to look at non-US oil production?

Because the US has been fueling the fracking boom with lots and lots of debt. It’s artificial, which is why you don’t see the problem. Everything seems fine. But, you’ll notice something very interesting in that chart.

Oil production goes flat, when you hit 2005.

Remember my point about growing until you die?

That’s right. Oil production has stopped growing. And, the one thing that keeps the world economy going is cheap transportation. Without it, the global economy dies. Then the financial system dies. After that, people die.

How Many Will Die

I don’t care who you are, but if you understand the world… you know that there’s a limit to everything. If you are smart, you can push that limit higher. But, there’s still a limit.

Is humanity smart?

Look around you.

Do you see smart people in charge?

Right. So, the ‘limit’ won’t be pushed as high as it can go, which leaves us with this question:

How many people can survive on Earth, when morons are in control, and the oil is gone?

Well, there was a billion before oil. The advent of oil allowed us to learn a lot of cool stuff – most of which requires oil to be cool. But, our planet is being run by morons.

Yes, I believe that we can sustain our current population of 7.6 billion people, without oil or coal, if everyone works together and is smart. But, history shows us that people don’t work together, and smart people are never allowed to be in charge.

So, how many people can survive on a planet without oil or coal, and with morons in charge?

My most optimistic guess is about half of what we have right now.

Can you imagine what the world would be like, when we kill each other, to the point where half of the world’s population is dead?

And, before you tell me that this is years away, let me remind you that the killing starts when one nation with weapons starts running out of what it considers to be its right. America has already run out of most of its oil, and is subsisting on imports and useless fracking. America has the best weapons on the planet. It is already the source of 90% of the worlds pornography and heroin.

What do you think America will do, when lack of oil becomes a problem?

What will other countries with weapons do?

 

The System is Dying III – Fall of the Republic

Take the time to analyze history, and you will find remarkable similarities to our current age. So many countries have followed the same path and suffered the same, painful conclusions.

Unfortunately, this means that freedom, democracy and the rule of law will disappear and be replaced by slavery, dictatorship and injustice. Every country in the world has experienced this, and now it’s time for the United States of America.

I hate the thought of this, but history shows us that there are few options when corruption reaches a certain level. Just look at Rome, if you think otherwise.

---

Very few Americans understand that before Rome was an empire, it was a republic. Even fewer Americans realize that the United States was directly modeled after the Roman Republic. The language of America was English, but it might as well have been Latin. And, when you look closely at the Roman Republic, you see remarkable similarities.

I don’t want to get into all of those similarities, since my purpose isn’t to focus on the past. The past is an interesting place, full of interesting events, but a dark and dreadful future awaits. So, let’s try to predict the future by looking at the past.

All Systems Die

As I said last week, “Systems grow until they die.” I should have added, “If left unchecked,” but that’s okay. We were focusing on ‘human systems’, and there isn’t much that can ‘check’ a human system, except God.

Last week was about the fundamental resources that a political system is built upon. With Rome, it was gold and silver. When the gold and silver ran out… the empire began to falter.

The Fall Of The Roman Republic

But, what about the Roman Republic that gave birth to the empire?

What caused it to falter?

In a word, corruption.

If the rich had not been so greedy, there would have been no uprisings. If the Senate had not been so corrupt and power-hungry, they would not have forced Gaius Julius Caesar to rebel against the government and take power. And Caesar (pronounced ‘kae sar’) would not have succeeded if the average Roman did not welcome his response to corruption. And, it was Julius Caesar that marked the beginning of the end of the Roman Republic.

I bring this up, because I see America running down the same path as the Roman Republic. Just as the Roman Senate was obscenely corrupt, so is the House of Representatives and the Senate. As with Rome then, the rich in America are using their wealth and influence to gather even more wealth and influence. And, Roman farmers dispossessed from their farms in the countryside, flooded into the city, where they were handed promise after promise, just as politicians are doing, right now – everywhere.

But, there’s always a limit to corruption, and the Roman Republic reached theirs in January of 49 BC.

The Roman Senate had demanded that Caesar disband his army and return to Rome. Caesar knew that obeying this demand would have been a death sentence. Yet, staying in Gaul in open rebellion to the Senate, would have also led to his death. His only option, in his mind, was to overthrow the government, which is why he marched his 13th Legion across the Rubicon.

This ‘Crossing The Rubicon’ caused the Roman Republic to be replaced with a military dictatorship. The corruption of the government was cleaned out, and new rulers were put in their place. And, I believe that we are working towards the same thing happening in the US.

The Fall Of The American Republic

Over the past week, we have seen revelation upon revelation of some of the most insane corruption imaginable. The evidence of outright treason is almost too much to watch. And, I am betting that the majority of Americans feel the same way. If they don’t, they will – soon.

When will the average American reach their breaking point?

When the corruption seems to impact their bank account. I’ve been talking about an economic/financial collapse for a while. And, it should have happened, but the central banks stepped in and pumped up the system and kept institutions alive, that should have died. As a result, the next collapse will be far worse. And, the American public will be looking for someone to blame.

Who do you think that the average American will point their finger at?

They certainly won’t blame themselves, so they’ll be looking for those that they CAN blame. Right now, Congress has an approval rating of just 13% (according to Gallup). And, that’s incredibly low, even though consumer confidence seems so high. Normally, good economic conditions lead to strongly favorable views about Congress.

So with a strong economy, why isn’t Congress more popular?

In a word, Corruption. And, when the economy tanks and the financial system crashes, the American people will blame Congress and ask someone to do something about the incurable evils of the US government in Washington DC. And, there will be pressure on the military to do something.

Just as with the fall of the Roman Republic, the evil in Washington is so deep, so large, so huge… that there will seem to be no other entity big enough and organized enough to handle the job – assuming that the military would want to. And, throughout history, the military has always been called in, when corruption reaches levels like this.

A Military Takeover

Oh, and what is the approval rating, among Americans, for the US military?

About 80% (according to Pew Research)

When you think about that figure, then you KNOW what is going to happen. Unless something comes along to tarnish the image of the US military, there will eventually be a military takeover of the US. And, the average American will demand that it happens.

Oh, and who has Donald Trump surrounded himself with?

Right.

Generals.

Of course, North Korea could ‘rescue’ us from this question by launching an EMP attack upon North America. That would also put the military in control of the US, but for entirely different reasons, and under cataclysmic conditions.

I just don’t know how much more corruption America can take. Since I am neither the average American, or God, I can only wonder at when we hit the limit that results in disaster.

We are hitting Peak Corruption, and that’s NEVER a good thing.

 

---

Copyright © 2017 John Little. All Rights Reserved.