Egypt's Warning: Are You Listening?
February 10, 2011 05:00 PM
One day, a fruit and vegetable seller was arrested in Tunisia, sparking social unrest, and a few weeks later the government of Egypt was set to topple.
Such is the nature of complex, chaotic, and unpredictable systems. The stresses build for years and years, and nothing really seems to be happening, but then everything suddenly changes. Egypt is therefore emblematic of what we might expect in any complex system in which pressures are building, such as the US Treasury market.
Can events in complex systems ever be predicted? No, and yes. No, because the precise timing and details can never be predicted. Yes, because we can be certain that anything that is unsustainable will someday cease to continue and things that are horribly imbalanced will someday topple. We can also be certain that the change, when it comes, will be rather sudden and abrupt, rather than gentle and linear.
That is, we can easily predict that a complex system will shift, and that it will probably do so rapidly, but not exactly when or by how much.
How unbalanced was Egypt? Very.
Here are a few quite relevant statistics about Egypt:
The relentless math:
Population 1960: 27.8 million
Population 2008: 81.7 million
Current population growth rate: 2% per annum (a 35-year doubling rate)
Population in 2046 after another doubling: 164 million
Rainfall average over whole country: ~ 2 inches per year
Highest rainfall region: Alexandria, 7.9 inches per year
Arable land (almost entirely in the Nile Valley): 3%
Arable land per capita: 0.04 Ha (400 m2)
Arable land per capita in 2043: 0.02 Ha
Food imports: 40% of requirements
Grain imports: 60% of requirements
Net oil exports: Began falling in 1997, went negative in 2007
Oil production peaked in 1996
Cost of oil rising steeply
Cost of oil and food tightly linked
The future of Egypt will be shaped by these few biophysical facts -- a relentless form of math that is hardly unique to Egypt, by the way -- and it matters very little who is in power. Given the choice, I would not want to live there, nor in any other country that has fostered or permitted such reckless population growth beyond what the country itself can sustain.
The interesting part is that these facts have been in plain view for decades, building into economic and social pressures that were suddenly unleashed in a wave of social and political unrest. How was it that such obvious things escaped notice for so long before they suddenly reared up into plain view? Instead of being a surprising exception to the rule, we should instead brace ourselves against the idea that this is just the way things tend to work.
Back to the main story. Without persistent (and rising) food imports, Egypt cannot feed itself. It has managed to cover up the shortfall by having enough oil to export, but, like every country, their oil reserves are finite and eventually they'll face a day of reckoning.
[..] Of course, there are two things that typically chew on a nation's oil exports: falling production and rising internal consumption. With both of these dynamics in play, Egypt's exports have been getting mauled, not by one, but by two exponential functions:
The green circle marks the date when Egypt hit its peak of petroleum production in 1996, and the blue circle and arrow marks when exports had fallen by 50%, just six years after peak production.
The gap between those two events, six years, is a very short amount of time to adjust to the new reality -- too short, as it turns out. Such is the nature of a double exponential working against you.
[..] Egypt simply reminds us that anything that is unsustainable will someday change. It is an emblem for the world.
» » » » [Excerpts: Huffington Post]
[CNN: How a fruit seller caused revolution in Tunisia]
The [Politically Incorrect] Story of the Egyptian Revolution
PeakOil.com & American Thinker
February 4, 2011
Argentina's Economic Collapse [01/12]
A friend of mine in academia forwarded this e-mail to me from an Egyptian student whose good sense he vouches for. The student tells a story very different from what most of you are seeing on television or reading in your papers.
The Story of the Egyptian Revolution
One week ago, Egypt was a stable authoritarian regime, prospects of change were minimal and every expert in Washington would have betted on the endurance of its regime. Today, Egypt is in a state of chaos. The regime, even after using its mightiest sword is not able to control the country and the streets of Egypt are in a state of utter lawlessness. As the world stands in awe, confusion, and worry at the unfolding events, perhaps it is important to write the evolving story that is happening in Egypt before any reflections can be made on them.
Contrary to pundits, it turns out that the Egyptian regime was neither stable nor secure.....
[..] What was not calculated however is the fact that suddenly a vacuum was created. The security forces were withdrawn and the army was not deployed yet. In this gap an opportunity presented itself for everyone. The scenes were unbelievable. First there was massive anger vented at symbols of state oppression such as the ruling party’s headquarters. More drastically, in what can only be described as systematic targeting, police stations everywhere were attacked. Every police station in Cairo was looted, the weapons in them stolen and then burned. At the same time, massive looting was taking place. Even the Egyptian Museum, which hosts some of the world’s greatest heritage, was not spared.
Saturday was indescribable. Nothing that I write can describe the utter state of lawlessness that prevailed. Every Egyptian prison was attacked by organized groups trying to free the prisoners inside. In the case of the prisons holding regular criminals this was done by their families and friends. In the case of the prisons with the political prisoners this was done by the Islamists. Bulldozers were used in those attacks and the weapons available from the looting of police stations were available. Nearly all the prisons fell. The prison forces simply could not deal with such an onslaught and no reinforcements were available. Nearly every terrorist held in the Egyptian prisons from those that bombed the Alexandria Church less than a month ago to the Murderer of Anwar El Sadat was freed, the later reportedly being arrested again tonight.
On the streets of Cairo it was the scene of a jungle. With no law enforcement in town and the army at a loss at how to deal with it, it was the golden opportunity for everyone. In a city that is surrounded with slums, thousands of thieves fell on their neighboring richer districts. People were robbed in broad daylight, houses were invaded, and stores looted and burned. Egypt had suddenly fallen back to the State of Nature. Panicking, people started grabbing whatever weapon they could find and forming groups to protect their houses. As the day progressed the street defense committees became more organized. Every building had its men standing in front of it with everything they could find from personal guns, knives to sticks. Women started preparing Molotov bombs using alcohol bottles. Street committees started coordinating themselves. Every major crossroad had now groups of citizens stopping all passing cars checking their ID cards and searching the cars for weapons. Machine guns were in high demand and were sold in the streets.
I do not aim to turn this into a personal story, but those people are my friends and family. It is a personal story to me. My neighbors were all stationed in my father-in-law’s house with men on the roof to lookout for possible attackers. A friend of mine was shot at by a gang of thieves and another actually killed one of them to defend his house and wife. Another friend’s brother arrested 37 thieves that day. The army’s only role in all of this was to pass by each area to pick up the arrested thieves. Army officers informed the street committees that anyone with an illegal weapon should not worry and should use it. Any death of one of the thieves would not be punished.
[..] Today the Egyptians are scared. They have been given a glimpse of hell and they don’t like what they see. Contrary to Al Jazeera’s propaganda, the Egyptian masses are not demonstrating anymore. They are protecting their homes and families. The demonstration last night had 5,000 political activists participating and not 150,000 as Al Jazeera insists. At this moment, no one outside of those political activists cares less now if the President will resign or not. They have more important concerns now; security and food.
[..] On the long run the Egyptian question remains the same. Nothing has changed in that regard. It is quite remarkable for people to be talking about the prospect for a democratic transition at this moment. A population that was convinced just two months ago that sharks in the Red Sea were implanted by the Israeli Intelligence Services is hardly at a stage of creating a liberal democracy in Egypt. But the status quo cannot be maintained. A lack of any meaningful political discourse in the country has to be addressed. Until someone actually starts addressing the real issues and stop the chatterbox of clichés on democracy, things will not get better at all. It will only get worse.
» » » » [Excerpts: Peak Oil]
White Is The New Black
James Howard Kunstler, Clusterfuck Nation
on February 21, 2011 8:55 AM
Jared Taylor: White Man's Disease [01/01]
The clinical psychologists often speak of boundary problems - the inability to recognize where your stuff leaves off and the other person's stuff begins - but what we're seeing now in the American thought-sphere is explicitly geographic (and ethnographic) confusion. We don't understand that we are not them, and they are not us.
Likewise, the infantile idea that these nations in the throes of revolt will slide from disorder into natural democracy like falafels into a pita pocket. What you generally get in political upheavals throughout history are protracted periods of confusion, factional fighting, and violence. More often than not, they resolve in the rise of a new tyrant, some figure who seems to know what he is doing when everybody else around him does not - which is the essence of human charisma, being a declension of the following:
- People who know what they are doing.
- People who seem to know what they are doing.
- People who pretend to know what they re doing.
- And people who don't know what they are doing.
Most of the human race is composed of the fourth category, which is why the figures in the categories above them claim their attention and allegience. Sometimes, the results are very unfortunate.
The world is now blowing up politically at the same time that it is blowing up financially, and there should be little doubt about the relation of these two conditions. At a time of rising resource scarcity (oil, metals, fertilizers), and capital scarcity (unpaid loans vanishing in the black hole of default), and raucous weather in places where grain crops usually grow (Russia, Australia, Argentina), you can be sure that things will get weird.
They are finally getting weird in the streets of the USA now, too. Wisconsin is surely just the first of many hashes that cry to be settled - and that state is not nearly as broke as broke as Illinois, New Jersey, and California. A lot of stuff is shaking loose out there. Our charismatic leaders, alas, have been drawn mostly from category 3, and out of all their pretending comes a banking system that is flying apart like Chrysler Slant Six engine that somebody poured Karo syrup into, thinking it might work as an "alternative fuel." The reverberations will be felt in every household, business, and office in the land.
[..] Americans lost in the Techno-rapture and the inane transports of Fashion Week have no idea how fragile our vital supply chain system is. If the lands around the Persian Gulf and the Red Sea continue to fall apart politically, you can be sure that something required by the oil markets will get broken over there - whether it is an oil terminal, or a shipping channel, or a royal skull - and before you can say Mike Huckabee the shipments of food to America's supermarkets will be interrupted, with predictable results.
This could be a helluva week. We've flattered ourselves for years about how wonderful it is that everything is connected in this world - the Tom Friedman fantasy about the eternal sunshine of the global economy. Now, we're more likely to see the dark side of connectedness, as the planet's goodie-bag deflates and folks in colorful costumes start fighting over what's left.
» » » » [Excerpts: Cluster Fuck Nation]
» » [Alternet: Are We Headed For Massive Oil Price Spikes? Leaked Cables Claim Saudi Oil Reserves Grossly Overstated]
WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices
US diplomat convinced by Saudi expert that reserves of world's biggest oil exporter have been overstated by nearly 40%
John Vidal, guardian.co.uk
Tuesday 8 February 2011 22.00 GMT
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.
The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.
The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.
[..] According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".
Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.
[..] The US consul then told Washington: "While al-Husseini fundamentally contradicts the Aramco company line, he is no doomsday theorist. His pedigree, experience and outlook demand that his predictions be thoughtfully considered."
Seven months later, the US embassy in Riyadh went further in two more cables. "Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period."
A fourth cable, in October 2009, claimed that escalating electricity demand by Saudi Arabia may further constrain Saudi oil exports. "Demand [for electricity] is expected to grow 10% a year over the next decade as a result of population and economic growth. As a result it will need to double its generation capacity to 68,000MW in 2018," it said.
It also reported major project delays and accidents as "evidence that the Saudi Aramco is having to run harder to stay in place – to replace the decline in existing production." While fears of premature "peak oil" and Saudi production problems had been expressed before, no US official has come close to saying this in public.
» » » » [Excerpts: The Guardian.UK]
Beyond the False Dawn: Global Crisis 2020-2022
18 Feb 2011
Charles Hugh Smith
Of Two Minds
Jared Diamond: Why & How Societies Choose to Fail; or Succeed [01/01]
[..] There is nothing magical about 2020 or about each crisis.
The book The Fourth Turning describes the 4-generation. 80-year cycle of political and social crisis in the U.S., and it makes sense even if you don't believe in cycles: after 80 years have passed, few humans are left who can recall the previous crisis. That loss of experiential capital, if you will, sets up the next crisis, which isn't a repeat performance of the last one but a variation on the general theme that unfolds in a unique historical setting.
That historical setting is defined by massive ecological overshoot as laid out in Overshoot: The Ecological Basis of Revolutionary Change.
This overshoot--humanity as a species expanding to fill every ecological niche when food and energy supplies are rising--leads to roughly 100-year cycles of rising prices for what I call the FEW essentials (food, energy, water) and resulting political instability--not to mention plagues, war, etc. as the over-abundant humans scramble to secure what's left of dwindling resources. This is ably described in The Great Wave: Price Revolutions and the Rhythm of History.
The credit/debt/speculative bubble that is slowly reaching its endgame has been addressed by The (Mis)behavior of Markets and Financial Armageddon: Protecting Your Future from Four Impending Catastrophes.
The end of cheap, abundant oil is covered in The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century, Beyond Oil: The View from Hubbert's Peak and The Long Descent: A User's Guide to the End of the Industrial Age, to name but three of many books on the subject.
[..] Here is an excellent summary of energy realities: A physicist models the city:West illustrates the problem by translating human life into watts. “A human being at rest runs on 90 watts,” he says. “That’s how much power you need just to lie down. And if you’re a hunter-gatherer and you live in the Amazon, you’ll need about 250 watts. That’s how much energy it takes to run about and find food. So how much energy does our lifestyle [in America] require? Well, when you add up all our calories and then you add up the energy needed to run the computer and the air-conditioner, you get an incredibly large number, somewhere around 11,000 watts. Now you can ask yourself: What kind of animal requires 11,000 watts to live? And what you find is that we have created a lifestyle where we need more watts than a blue whale. We require more energy than the biggest animal that has ever existed. That is why our lifestyle is unsustainable. We can’t have seven billion blue whales on this planet. It’s not even clear that we can afford to have 300 million blue whales.”
» » » » [Excerpts: Of Two Minds]