A Certain Sense of Déjà Vu

[ecosophia]

A little less than forty-nine years ago, war broke out between Israel and a coalition of Arab nations. The United States didn't get directly involved, but supported Israel with more than $2 billion of emergency military aid. In response, Saudi Arabia and several other Arab oil-producing countries responded by slapping an oil embargo on the US and other nations allied with Israel.  The US in those days was still one of the world's largest oil producers, but it used far more oil each year than it pumped from its own wells, and the peaking of US conventional oil production in 1970 meant that domestic production couldn'rt increase to cover the difference. The result was chaos -- steep increases in the price of oil and everything made with it, rolling shortages affecting the whole economy, and an era of troubles that lasted for a decade. On the bright side, the energy crisis sparked a wave of interest in conservation and low-energy lifestyles. 

Now war has broken out between Ukraine and Russia, and the United States has again refused to get directly involved but is sending emergency military aid to Ukraine and slapping sanctions on Russia -- which is, ahem, one of the world's largest oil producers, and the source of a great deal of the oil that powers Western Europe and the United States. One way the Russian government could respond is to slap an embargo on oil exports to the United States and its allies. With more than US$600 billion in foreign currencies and gold in its central bank, Russia can afford such a step. As for the US, we still use vastly more oil than we produce, we imported 232 million barrels of oil from Russia last year, and with oil prices soaring above US$90 a barrel even before the Ukraine crisis, it's far from obvious where we could get the replacement oil. Meanwhile Europe, which has negligible oil reserves, is even more dependent on Russian oil, coal, and natural gas. 

Whether anything of the kind will happen is still up in the air, but I'd encourage my readers to be aware of the possibility, and consider what you will do if the price of gasoline and heating fuels doubles or triples in the year ahead, as happened in 1973-1974. For example, if you can insulate and weatherize your home, and haven't done this yet, you might consider getting that done in a hurry. More generally -- well, let's just remember for a moment that fifty years ago next month, The LImits to Growth first saw print. It predicted that if nothing was done, sometime in the early to middle years of the 21st century, unchecked growth on a finite planet would slam into planetary limits, resulting in a cascading crisis that would continue for a century or more.  Nothing was done -- and here we are. 

Comments

[(Anonymous)]

There's another crucial difference which promises to make the current crisis all the more dramatic: in 1973, the austerity of the War Years was still living memory for much of the country: the end of World War II wasn't even 30 years old in those days. A good portion of the country could remember the Great Depression, and many could even remember life back before the radical upheavals of the years from 1914 on.

Today? It's been a good 40+ years since the last serious disruption to the flow of oil, and close to 80 since we've faced any kind of national austerity. So I expect this shock to be a lot worse than the last one...

[ecosophia]

If in fact we get an oil shock, no question, the panic and flailing will be for the record books.

[(Anonymous)]

Well, I've had a very troubling thought of late as well: it could cripple Europe easily enough by banning all exports to them, but the US wouldn't be crippled right away. But if you lost Russian oil, and Canadian oil, at the same time, that would plunge the US into utter chaos.

Given the discontent here in Canada, it seems likely to me that it would be trivial to launch a revolt which would actually succeed in destabilizing the country, especially after the government wasted so much political capital on the Emergencies Act debacle. In fact, the shut the protests down, leave the city, and allow chaos to unfold in parliament as everyone demands to know why there's still an emergency seems like it could be a brilliant strategic move, because when there's another, nastier round of protests, it'll be a lot harder for the government to justify taking decisive actions....

[(Anonymous)]

Most of the people I work with are intelligent but not university educated. Over the last five years, they’ve gone from being politically uninterested sports fans to students of political science. Once I found out how complicated NASCAR rules (among others) are, the ability to jump from sports to politics became unsurprising. But… The fact that this group made the jump from disaffected to fully invested still puzzles. Perhaps there is some counterbalance effect to the mass formation psychosis of the American left?
Surprisingly… or really not, quotes from Green Wizardry and The Wealth of Nature are getting warm responses instead of the “maybe someday” dismissal people with trade or engineering experience used to give.
Wait a minute… Many of my coworkers were introduced to ecology and civics through the hunter safety education courses required for the purchase of a hunting license. Given the roots of outdoor education in Latitudinarianism, I wonder if Druidry and working-class politics have converged enough that a synergistic effect is possible. Could the Green Wizards Benevolent and Protective Association move from being a meet-up with a sense of humor?
Have you or the commentariat had any similar experiences or observations?
Rhydlyd

[hearthspirit]

This is great news. I wish I was seeing it.

In my region it is a local election year, and in a lot of municipalities I've been starting to worry there were going to be vacant seats and constant by-elections. Few of the competent people who've been in politics before wanted to run again because they either had a demanding full time job (municipal politics is part-time at best) or they were retiring after many terms, or they were sick of the death threats and email explaining to them that they didn't know how to do their jobs and just wanted to be able to tend their chickens in peace.

No one else that I spoke to who was interested in political topics wanted to do the job because they were afraid of being yelled at, afraid they'd yell back, and/or didn't want to have to read all the reports required to do the job competently.

This group seems like they a)give a crap b)already do the homework and c)wouldn't have trouble standing up to the heat.

Interesting times

[ecosophian]

We live in interesting times. Perhaps, as a religious leader you can find some words of encouragement, JMG? Especially for your younger readers who haven't been around in the 1970s.

Re: Interesting times

[ecosophia]

I'll reflect on that and see what comes to mind.

What, me worry?

[(Anonymous)]

Thank you JMG for the reminder.

I feel much better prepared than I was for the 2008 crisis.
I am not talking only about material preparations - I also feel in a better place mentally. Life is an adventure so why stress out every time something changes?

That being said, I had no success in warning people most at risk. My family in Eastern Europe won't even store a couple of bags of rice or flour in the house. They suffered a couple of days without heat because they did not have a replacement for a battery that died during a snowstorm.

Human mind is a weird thing. I grew up in a relatively happy family in a peaceful time but I am willing to accept that things can change fast and I can lose everything.
Older people I know lived through WWII, the famine that followed, the communist revolutions (both in and out), and strict rationing that included no meat at all in the stores. And yet they refuse to believe that anything bad might happen even though I warned them about the Ukraine war for a couple of years - it was quite obvious that US like every bully will push until Russia has to fight back.

Re: What, me worry?

[vitranc]

Cheers to you! Feel the same way.

[(Anonymous)]

In Australia there is already talk on the news that the war is one reason why petrol is now 1.70-1.80 Australian dollars a litre. There was even mention that a few people worry Brent crude could reach $150.

[(Anonymous)]

Now past $2 a litre. I love/hate that the war is blamed for this even though we had been heading to this point for years!

[sinners4diseasecontrol]

JMG, you have done more than anybody else I know, including our dear late Michael C. Ruppert, to prepare folks for this very sort of thing. I also have praise for David Trammel for what he has done with the Green Wizards project.
For people here undergoing anxiety attacks, especially at night when your brain processes all this new information and gives you warnings, I want to assure you that with time this settles down if you go about making whatever adjustments and preparations you can. For me a spiritual life is essential, but others may differ. In either case, when you feel such anxiety arising, give your brain praise for doing its work.
Regarding getting an idea of what is going on in the fog of war--and the psy-ops currently dwarf what we have been dealing with regarding the foxes and thankfully distract from that--I have found The Saker to be reasonable, clearly biased on the side of Russia, but a good source on that perspective, as a careful military analyst not prone to making snap judgements, but calling for quality information and assessing that over the course of a few days. If his site is taken out, he recommends moonoralabama.org

[(Anonymous)]

Did you mean www.moonofalabama.org?

[(Anonymous)]

Higher oil prices is a given at this stage, but I suspect embargos would hurt Russia much more than the US. 232 million barrels of oil a year represents only 10 days supply for the US, and IMO is imported as a feedstock, not energy per se. US plants can be retuned for natural gas / heavier oils if it is a long term embargo. Furthermore, if Russia does embargo, then there is less downside for the US and Europe to impose sanctions on everything, and those large reserves Russia has are not so useful if they can no longer play in the world markets. Russian reserves are declining at $30billion/month, so even in a BAU scenario Russia may face significant currency issues in the next 12-18 months. According to analysts like Peter Zeihan, Russia is hurtling over a demographic cliff, and cannot supply the treasure or manpower to do any more invasions of this scale after Ukraine.

Europe has *much* more of a problem, and would face a cold winter if Russian energy is cut off. Maybe that is worth it in the long run for Europe to figure out a long term plan, or at least how to live with less energy since alternative at thin on the ground for them.

IMO, relatively speaking, the US won't be feeling much from this. I suspect the burden will be falling on Europe (for energy) and 3rd world countries (higher wheat prices).

[(Anonymous)]

Years of sanctions have only made Russia more self-reliant and better prepared to thrive without western inputs. They are a net food exporter, and they are not without customers for their energy and technical expertise. A number of SWIFT alternatives are fairly well-developed.

It seems to me that the SWIFT lockout may unintentionally boomerang and hurt the USA painfully. If Russia responds by refusing to accept dollars for its gas and oil, (demanding renmimbi or, God forbid, gold, instead) that would send shudders through the global petrodollar system and perhaps even bring about its collapse.

Swift

[(Anonymous)]

Morning John
With the west blocking Russias access to the swift bank payment system I’m not clear how the west can pay for Russian oil and gas which brings the possibility of cutting supplies on the grounds of lack of payment. If that happens things could get messy. Germany is particularly dependent on Russian gas. Mmmmmmmm
Regards
Averagejoe

Re: Swift

[(Anonymous)]

I'd be a bit weary of believing everything they yell so loudly: here is Borrel from the EU effectively saying they can't touch a big chunk of Russias reserves (headlines a few hours ago where that russia is completely blocked from their central bank reserves) https://t.me/QVINTAAETAS/3166

[1wanderer]

I lived through that period.
The real issue was the tripling or quadrupling of oil prices and the economic effects that followed. At one level inflation, as the price of everything dependent on oil went up. Inflation had not been a problem for twenty-five years and nobody knew how to deal with it. It produced speculation, poverty for the old and pensioners, and demands for wage increases to keep up. But the major effect was actually deflationary: massive amounts of purchasing power were taken out of the economy, and recycled to OPEC. What you spend on petrol, you can't spend on other things. So demand crashed, factories closed, and unemployment (previously a word in a dictionary for my generation) came roaring back. House prices spiralled out of control as people desperately bought anything as a hedge against inflation.

There was a Conservative government in power at the time, but they lost the elections in 1974, and it was a Labour government that was left with the mess, of what was called "stagflation" (inflation together with economic stagnation) as well as industrial militancy and political chaos. A particularly harsh winter, industrial action and a botched election timetable handed a narrow victory to Thatcher's Tories in 1979. Attempts to bring down inflation with interest rates of 17% and a massively overvalued pound killed off most of what industry remained, and began the process of transferring the heart of the economy to the City of London. Deregulation of raw material prices stopped economic growth dead in developing countries and produced political instability and wars. Floating exchange rates caused regular currency crises and national bankruptcies.

So in many ways, the Oil Crisis of 1973-4 was the ultimate cause of the globalised, marketized world that we have today, with all the political consequences that have followed, including the present war. Of course history does not repeat itself absolutely (as somebody said) but it often rhymes. I would expect a whole series of political consequences and disasters to follow, most of them unforeseeable at this stage. As regards energy, the massive return of nuclear power is now inevitable. In France, 70% of our power comes from nuclear already, and more will now be built. The really interesting case is Germany, where the Greens have managed to kill off nuclear energy, but also want to close down traditional coal and gas fired stations. They propose to generate electricity, I think, by standing around in circles holding hands and chanting Om. (They need electricity for their electric bicycles and Twitter fights).

[(Anonymous)]

Howdy 1wanderer,

You write:

"They propose to generate electricity, I think, by standing around in circles holding hands and chanting Om. (They need electricity for their electric bicycles and Twitter fights)."

Alas, this is so true. And most people seem to me to be just as happy-go-lucky in their assumptions about energy as they are in their assumption that the emergency authorized experimental mRNA gene therapy injections are one and the same as those good-old-everybody-except-nutters-takes-them vaccines.

Miss P

[(Anonymous)]

I'm sorry for not being able to provide you a reference to what I'm going to write, so take this with a grain of salt. Perhaps you know the reference.

You seem to favor the original version of the BAU model in The Limits to Growth. I think I read one of the updates to the model was a steeper decline in population after it peaks; the explanation provided was including to the model aspects not present on the original one.

Now what worries me is a possible adverse reaction to the mass vaccination program to fight COVID-19. If people start dying in significant numbers because of the vaccines, The Limits to Growth might just become the next hot thing, as a justification that hides the truth. It perhaps would be impossible to tell the difference anyway. The upside might be seeing some of its recommendations being implemented; better that than nothing.

I was considering posting this on the open post at the main blog, but since this is tangentially related to the theme of this post I hope you excuse me for posting it here, where it will be considerably more hidden.

Hang on tight

[cs2]

Thanks JMG! We're lucky to live in an insulated apartment in a walk-able city, with any travels done by train. We live below our means and don't own a car. We experimented this winter with setting the thermostat even lower than we usually do, and using smaller implements (like a heating pad or hot water bottle) to keep warm. Still, if things skyrocketed at the grocery store, that could become a very real problem. We'll keep an eye out and best wishes to everyone from where I am in Central Europe.

Re: Hang on tight

[ecosophia]

Curiously enough, I also live in an insulated apartment in a walkable city, travel (when I have to) by train, live below my means, and don't own a car! I'ts a very pleasant way to live, isn't it?

Thanks JMG

[(Anonymous)]

...For your clever, dispassionate and smart comment on the current international situation. In this times of propaganda (pro-western and pro-russian), I wellcome serious and impartial analysis like yours.

-A Spaniard.

Extended oil (and food?) crisis on deck

[drhooves]

The skirmish in Eastern Europe won't help the oil supply lines, that's for sure. Couple that with lack of investment in new exploration, and the fact that new oil field discoveries have been low the last 7 or 8 years, and it's looking a bit grim.

In the U.S. we can probably scale back some more travel, and free shipping from Amazon is a luxury we don't need. But I think the oil supply and ammonium nitrate supply lines from Russia could have the biggest squeeze when it comes to fertilizer. IIRC the Soviets had some lean years with the wheat crops in the 1970s, and now the shoe could very quickly be on the other foot...

[(Anonymous)]

JMG,

I'm old enough to remembe those days. I was a child so it just seemed like "this is the way it is." But I remember the fear and concern of my parents. They were a pretty smart pair and I remember them calculating the rate of inflation vs. their income. It was in that time period that my family went from a one income family (my dad as a teacher) to two income. My mom had to join the workforce for the family to survive. She began working at a daycare and then began teaching at the local community college.

Of course, the problem is that most families only have two adults to work and both of them are already working. Either we are going to see an influx of teenagers working to help support their families, grandparents returning to the workforce, or maybe this will be the opportunity for the polyamorus movement to get a toe hold in the culture.

AV

[(Anonymous)]

At one point in New Zealand mortgage interest rates got up around 25%. Hard to believe in retrospect, but that's what inflation can do.

[(Anonymous)]

It does make one wonder why the Ruskies didn't just throttle Europe and cut Murica off, instead of doing military things.

In any case, I do agree the 70s was probably the prelude of today, it does seem that many of the themes are being re-discovered and re-explored, whether or not people want them to be.

[(Anonymous)]

Because they don’t want people to freeze to death. Applying the western zero sum realpolitik to Russia may not be the best way to analyse their decisions. They probably possess a different ethic.

US Pluto return

[(Anonymous)]

I know your argument about Pluto's declining influence - but it strikes me that this will be a good case study. The Ukraine invasion happened on the day that the US Pluto return went exact. It's in the 2nd house in the Sibley chart and there are two major economic issues that I can see that could play out in a destructive way for the US. One is the oil matter you've sketched out here, the other is the removal of Russia from SWIFT and the activation of the Russia/China alternative. So the US could be hit with oil embargoes at the same time a large portion of the world realizes how little they need the US dollar system.

I think the scale of the results should give us a snapshot of Pluto's present influence. It could be anything from a manageable blip to an economic catastrophe.

Breanna

Re: US Pluto return

[1wanderer]

For you and anyone else who may be interested, I've been sent a link to a discussion between astrologers about the war on Wednesday next. It's organised by the French astrology association, but one of the speakers is a well known astrologer from England, Lynn Bell. It's free and by Zoom. https://federation-astrologues.com

From a long ago

[degringolade]

https://youtu.be/vZNnDiDSUiI

Prices Hit the sideshow bell

[(Anonymous)]

Last night I dreamed the gas prices had hit the bell, the way a strong man game at a sideshow has a weight that someone hits with a hammer, and when hard enough, rings the bell. In other words I think I was getting a preview that prices are about to get slammed to the top.

JPM

european gas

[(Anonymous)]

One of my main worries regarding side-effects of the Ukraine war is european gas. Given some Russian banks are now cut off from SWIFT, what's going to happen to the eastern european countries who depended on it for, in some cases, 90-100% of their gas. Or Germany, with 50%? We all know how bad the european gas situation is right now. At least it is nearly march. Imagine if this was the beginning of January.

The UK is in a different situation - I understand none of their gas is from Russia. It's north sea and LNG from the world market. But there's still going to be knock-on price impacts I bet, and on a personal level, I have a lot of relatives over there.

[(Anonymous)]

As bad as this level of economic disarray would be, I’ll be relieved if that’s the worst consequence of the current troubles. The rhetoric and actions between the two sides have heated up far too quickly, it seems, over the past two days. As I consider the nuclear arsenals in the balance, I’m hoping most of it this is bluster.

-balowulf

[(Anonymous)]

The U. N. has called an emergency security council meeting. That could be good, since Russia’s a member, but I’m still praying.

—Princess Cutekitten

[(Anonymous)]

I remember the 70s well; and they weren’t pretty. I also remember the economists had no clue about how stagflation was even possible; as far as their models went it wasn’t possible. I doubt their understanding has improved.

I have to say President Carter is looking wiser and more foresighted by the day.

I agree with the other comments; I really hope cool heads prevail on the war. I hope the Western leaders keep in mind the economic sanctions probably won’t do what that want, and have some idea of what they will do then. If the war keeps escalating; things could be beyond bad!

Cugel (the Clever, but worried)

[(Anonymous)]

With apologies to Dickens, I've fairly often cited a snarky quote about the seventies:

"It was the worst of times, it was the worst of times."

Can't recall where I first saw that. But it captures the decade pretty succinctly.

[boccaderlupo]

I have seen quotes circulating on the Web that raise the question of whether OPEC is still in the driver's seat on this shambling thing. And if not, then what does that portend for the fossil fuel future?

Axé,
Fra' Lupo

[kimberlysteele]

My Ogham just made a prediction that Russia will soon eat the Ukraine, for what it's worth.

I'm glad I decided to collapse my music studio when I did. Now I understand the horary astrology reading that fellow Ecosophian Andrew Skeen did for me: he saw hanging on to my beloved Studio as impossible, not because of anything I did but because of more "unfortunate events". In happier news, I'm hanging in there. My husband built a beautiful recording space in our living room that I believe will be a tremendous draw to new vocal students. I recorded some beautiful vocals in the new vocal booth for my latest Orphic hymn arrangement, Hestia. You can download it for free at http://queeniemusic.bandcamp.com/

I also made a new business website after switching web hosts to GreenGeeks this week at http://kimberlysteelemusic.net.

[hippieviking]

Hi Kim,

I'm glad to hear you could figure something out for your studio. I posted a comment to your ogham page and then realized you'd said it was closed for the week! Disregard and apologies for trying to post after it was closed (forgive me I'm new over there!).

HV

[(Anonymous)]

One thing that nobody mentioned yet is the obvious fact that this will be the replacement for the scamdemic.

Please, let's try to remember that we knew this was one possibility.
The "leaders" tried different propaganda campaigns (remember the UFOs?) but in the end they went back to the tried and true - after the "plague" the "invasion".

I think they might be scared of actually taking this too far. That's why we see all the waffling - first threatening Russia with nukes then saying no US troops in Ukraine, then back to sending weapons and maybe troops.
Same for the "sanctions". Big talk about kicking Russia out of SWIFT then a clarification that no, they could still accept worthless dollars for gas.

I see the exact same waffling from Russia, which is surprising. After years of trying to negotiate (despite publicly stating that US is not "negotiation-worthy"), Russia finally took decisive action only to stop and ask for negotiation again?

I have no idea what's going on but could this be one situation where the enemies end up having the same goals? Ugo had a post about the UK and Germany collaborating at the end of WWII to kill German civilians. Yes the Nazi govt provided suicide pills to its citizens.

If my hypothesis is correct, expect this crisis to last at least a couple of years.

So don't burn out all your mental energy on panicking now.

[(Anonymous)]

"I have no idea what's going on but could this be one situation where the enemies end up having the same goals? Ugo had a post about the UK and Germany collaborating at the end of WWII to kill German civilians. Yes the Nazi govt provided suicide pills to its citizens."

Hitler also gave multiple orders to destroy the whole infrastructure in Germany, which would have resulted in the death of a lot of civilians. After the Germans failed his aspirations, he didn´t seem them worth to live on. Funnily, he somehow succeded with this task, as the Germans seem to long for their own disapperance due to their collective guilt.

Kind regards
Secretface