What is truth?

Posts tagged ‘Christopher M. Quigley’

The Unfolding Economic Crisis in Europe

By: Christopher M. Quigley

B.Sc. (Maj. Accounting), M.I.I. (Grad.), M.A. www.wealthbuilder.ie

Since October 24th, the German newspaper Der Spiegel has been running a fascinating series of essays on the unfolding economic crisis in Europe.

The scope and detail of the series has caused a bit of an online stir since this bastion of German mainstream journalism painted a very negative view of the future; accordingly, many are wondering whether the German elite are finally beginning to question the sustainability of the current monetary paradigm.

The main issues addressed in the articles were the lack of economic inclusion, the instability of contemporary European economic policy and the increasing wealth disparity among European social groups. One example with regards to the latter outlined how, in the Swiss Canton of Zürich, the 10 richest residents own as much as the poorest 500,000.

Surprisingly, Der Spiegel was very critical of the European Central Bank. The paper went to pains to point out that despite years of easy monetary policy the Euro was still very much a vulnerable project and highlighted the fact that while many problems still remained there was “no more ammunition” left in the ECB’s arsenal of “weapons”.

[Read: ECB Policy Misstep Poses Biggest Risk to Markets]

This “conclusion” perturbed a number of Irish politicians because vary rarely has such a negative German spin been placed on European monetary policy. Upon reading the four articles, one is left with the distinct impression that Euroland is a failing entity exhausted from years of fighting ongoing crises ready to finally roll over and die when the next recession hits.

Thus, despite the glam and glitter surrounding the memorial celebrations for the fall of the Berlin wall, things are not so rosy in the European garden. Next year the British go to the polls to pick a new parliament. The English Prime Minister David Cameron has publically stated that if he wins he will hold a referendum to take Britain out of the European Union. Many believe that such an event might just be the catalyst to push the EU over the edge. 2015 could prove to be a momentous year for Europe and it is my view that Der Spiegel is beginning to see the writing on the wall.

European Deflation Raises Its Ugly Head

Apart from the issue of economic, social and political exclusion, Europe’s other major problem is that of deflation.

To combat a serious collapse in the circulation of money the ECB has embarked on the drastic policy of negative interest rates. Here is what Simon Black of Sovereign Man had say on this matter:

It Begins: German Bank ‘Charging’ Negative Interest To Its Retail Customers

Central bankers today have a delusional view of the world. Just three months ago, Mario Draghi (President of the European Central Bank) embarked on his own folly by taking certain interest rates into NEGATIVE territory. Draghi convinced himself that he was saving Europe from disaster. And like Don Quixote of Spanish lore, everyone else has had to pay the price for his delusions.

On November 1st, the first European bank has passed along these negative interest rates to its retail customers. So if you maintain a balance of more than 500,000 euros at Deutsche Skatbank of Germany, you now have the privilege of paying 0.25% per year… to the bank.

We’ve already seen this at the institutional level: commercial banks in Europe are paying the ECB negative interest on certain balances. And large investors are paying European governments’ negative interest on certain bonds. Now we’re seeing this effect bleed over into retail banking. It almost seems like an episode from the Twilight Zone… or some bizarre parallel universe. That’s the investment environment we’re in now.

In my opinion the main reason why this deflationary banking policy is spreading throughout Europe is the fact that stratospheric structural unemployment rates exist among European youth in Cyprus, Greece, Portugal, Spain and Italy. Seven years and no strategic initiative has emerged from Brussels to tackle this serious human catastrophe. How long it can continue without social breakdown is anyone’s guess but it is this factor which is behind regions such as Catalonia and Scotland seeking to “go it alone”.

Many believe that the only long-term solution to Europe’s economic malaise is reversion back to a union of sovereign states within an economic union rather than a political and monetary one. Such a move would allow the inefficient southern European states devalue their currencies and thus achieve economic competitiveness. However, it would appear the powers that be will not countenance such a move. Sometimes it requires fate to take a hand. I am sure in 1989 the politburo of the Soviet Union did not wish to see their hegemony diminish but their Empire collapsed, not due to desire but due to the sovereign power of economic truth.

Is the Market Preparing to Go Hyperbolic?

Despite the recent run up in the markets since the 17th of October, when you look at the S&P 500, the Dow Industrials, and the NASDAQ, there is no evidence to be seen of real momentum breakdown.

Yes the market advance has lost some power over the last week but this looks to me like the market is merely catching its breath in preparation for a strong rally into the New Year.

Such price action allows the main indices to wear down their overbought positions through time rather than through price retraction.

Thus while, ideally, I would like a nice pullback to give some technical support to new long positions entered into I do not think it is going to happen. Thus, any major moves up should be taken advantage of as I believe the market has a higher probability of going hyperbolic in early 2015 than contracting.

Chart: S&P 500: Daily
sp500 nov 13

Chart: Dow Industrials: Daily
dj30 13 nov

Chart: QQQ ETF: Daily
qqq 13 nov

Charts Courtesy Of Worden Bros.

Sources: Der Spiegel “The Zombie System”, Michael Sauga, October 24th 2014.

Sovereign Man blog, Simon Black, 4th. November 2014.

© Christopher M. Quigley 14th. November 2014

Stock Market Choppy Earnings Season but the Bull Remains Firmly Intact

By Christopher M. Quigley

It was a choppy earnings season but despite its volatility the bull trend remains very much intact.

The Dow Transports and Dow Industrials both are trending upward with higher highs and higher lows and both indices are in congruence. (Though it must be noted that the Transports Index is significantly stronger than the Industrials). In addition The VIX remains at historically low levels and the Advance/Decline line shows no sign of any technical stress what-so-ever.

Despite this strength there are some specific areas of weakness.

One sector experiencing difficulty is technology. It would appear the gloss has definitely come off silicon valley. Review the charts below of Facebook and Twitter. This weakness is asking questions of this industry going forward. If a solid recovery is safely in place these media poster-boys should be “booming”. The chart evidence presented proves they are not. I think the issue here is overvaluation and the inability of future income streams to validate exorbitant P/E ratios.

This technological weakness is not company specific. The  NASDAQ is indicating real technical weakness. The chart below of the QQQ’s shows that the index is hovering about its 100 daily moving average. If the price action breaks below this important average  and then fails to consolidate around the 200 daily moving average (which is only 5% lower), it will be very worrying for the sustainability of this bull market, long term.

Another area of weakness is bio-tech which has technically entered a bear trend. While there has been a 15% retrenchment from previous highs in the bio-tech ETF: IBB, I still anticipate further correction.

As suggested in last month’s brief the consumer staples sector (ETF: XLP) has had a positive season. This I believe is due to rotation by astute money managers into markets offering earnings consistency. The consumer staples bear trend, which began last autumn, is definitely over.

In the general “blogosphere” for the past 2-3 months there has been numerous stories heralding the “collapse” of the American real estate market. While these articles make for interesting reading they are somewhat sensational. The market confidence in this sector remains strong as can be observed by reviewing the Dow Jones Real Estate Index Fund ETF: IYR below. This year this ETF is up 11% and technically the trend is powerful. I think this is one of the reasons the FED is continuing with the QE tapering policy. I think Janet Yellen and her team are genuinely confident the recovery has legs. Of course should this strength become too robust it will call into question the continued low interest rate environment.

Of course when that mantra begins to be played out in the media all bets concerning future market trend will be off ,from my point of view. But that is a discussion for another day.

Dow Jones Transport Index: Daily………………………………..

full article at source: http://www.marketoracle.co.uk/Article45466.html

Wealthbuilder Market Brief 6th. March 2014

The Stock Market’s New Normal: A Wall of Worry.

While I realize that fundamentals are important to investment success I also appreciate the relevance of technical analysis in gauging investor sentiment and in timing entry and exit points.

From the technical point of view the market is in a strong bull trend and would appear to be poised to reach new highs. However, when I research into the fundamental reason behind this strength I find little to support it other than the actions of the FED. To explain what I mean I attach 5 charts from two different sources. They outline real underlying weakness. Thus while I am fully invested in equities at the moment I have hard sell stops in place and I am prepared to quickly and solidly go short should my key technical positions break-down on high volume.

full report in PDF form Here: Wealthbuilder Market Brief 6th. March 2014



The “REVOLUTION” of the Antichrist at work in the world

By Christopher M. Quigley


“Father Seraphim Rose (Eugene Rose):

His Life and Works.”

(By Hieromonk Damascene)

Despite the intellectual elitism of his youth, Eugene was the first to admit that everything he had ever learned with his mind meant nothing beside true wisdom. What he called the “vision of the nature of things.” “The nature of things is non-intellectible in essence, can never be known by the intellect ,” he said, “it was Rene Gueron who taught me to seek and love the Truth above all else, and to be unsatisfied with anything else.”


Gueron believed that intellectual elite was needed to restore meta-physical knowledge to the West. In his writings Eugene found things he had always felt without being able to understand, having never had a clear perspective on them. He had always felt that there was something wrong with the modern world; but since that was the only world he had known, he had had nothing by which to judge the matter; and had thus been inclined to think that there was something wrong with himself. Gueron taught him that it was in fact not him, but the modern world that was abnormal……. In essence, Gueron convinced him that the upholding of ancient tradition was valid, and not just a sign of becoming unenlightened, as the modernists would claim. Whereas the modern mentality viewed all things in terms of historical progress, Gueron viewed them in terms of historical disintegration……. Without a traditional worldview to bring all into a coherent whole, modern life becomes fragmented, disordered,

confused, and accordingly the modern world heads towards a catastrophe.


In his book “The Reign of Quantity and the Signs of the Times,” Gueron explained how the elimination of traditional spiritual principles had led to a drastic degeneration of humanity. He showed how modern science, with its tendency to reduce everything to an exclusively quantitative level, has corrupted man’s conception of true knowledge and confined his vision to what is temporal and material. In his journal Eugene wrote: “our age has been taught to believe in nothing higher than the human mind, and in the ideas of the mind; that is why the conflicts of our day are “ideological” and why TRUTH is not in them for truth is only in living communion with Christ; apart from him there is no life, no TRUTH.”


In his writing, Eugene wanted to do more than confirm his new-found faith. His conversion (to Orthodoxy) was not only a finding of the truth, but also an emerging out of untruth. He came from a society built upon apostasy, the historical “stepping away” from the revelation of Christ the God-man. As a result of this apostasy, he saw everywhere signs of the deterioration of culture; of humanity reverting to a kind of “sub-humanity,” of noble values being replaced by crude materialistic ones….


Eugene, then. did not deny the truth contained in non-Christian religions; he only indicated its incompleteness. He took a similar approach when comparing Orthodoxy to Roman Catholicism: “the Catholic Church, however much it has capitulated – and continues to capitulate – to the modernist mentality, has remained in contact with the Truth…. But what has been transmitted with imperfect understanding in the Catholic Church has been transmitted in full by the Orthodox East, which has even to the present day preserved intact that whole truth from the fullness of which the Catholic West departed in schism nearly a millennium ago….. Orthodoxy has preserved the authentic mystical Christian tradition…. Modernism, indeed, was no sudden arbitrary movement, but had roots that reach far into the character of Western European man. It is in the Orthodox Christian East alone then, that it is to be found the whole standard wherewith to measure the denial of Christian truth that is modernism.” ….


In the political sphere one wonders whether the collapse of the iron curtain and communist power in Russia and Eastern Europe correspond s to the “withering away of the nihilistic State” described by Eugene, after which there is to be a “world-order” unique in human history.  Communism has done its job: it has effectively destroyed the OLD ORDER. Now there can be an “opening up” to make way for the next stage of the nihilistic program, directed by the international forces. As Eugene wrote. “the final epoch will not, after all, be characterized by national disputes and the communist stifling of man’s spiritual needs, but by a superficial unity and a fulfilling of these needs by means of clever (untrue) substitutes.”……


Precisely three decades before the collapse of the Soviet Union, Eugene wrote the following words, sobering in their prophetic import: “violence and negation are, to be sure, a preliminary work; but their operation is only part of a much larger plan whose end promises to be not something better, but something incomparably worse than the age of nihilism. If in our own times there are signs that the era of violence and negation is passing, this is by no means because nihilism is being “overcome” or “outgrown,” but because its work is all but completed and its usefulness is at an end. The REVOLUTION, perhaps, begins to move out of its more violent phase and into a more “benevolent” one. Not because it has changed its will or direction, but rather because it is nearing the attainment of its ultimate goal which it has never ceased to pursue. ; fat with its success it can prepare to relax in the enjoyment of its goal.” …..


In 1989, during the era of glasnost and perestroika, immediately preceding the fall of the Soviet Union, General Secretary of the communist party Mikhail Gorbachev mad a revelatory statement that chillingly echoed Eugene’s predictions from the early 1960’s: “having embarked upon the road of radical reform,” Gorbachev said. “the Socialist countries are crossing the line beyond which there is no return to the past. Nevertheless, it is wrong to insist, as many in the West do, that this is the collapse of Socialism. On the contrary, it means that the Socialist process in the world will pursue its further development in a

multiplicity of forms.” (CMQ Note: Be it the European Union, The United Nations, The World Court, The General Agreement on Tariffs and Trade, The European Central Bank, The World Bank, The Federal Reserve and NATO).

(C) 28th. August 2012 Christopher M. Quigley. All rights reserved.







Paddy Honohan, the Irish Central Bank and Justice for the Irish People


Christopher M. Quigley B.Sc., M.M.II., M.A.

Paddy Honohan, Governor of the Irish Central Bank, shamed himself when he
gave testimony to the Oireachtas Finance committee today.
When asked about debt forgiveness for struggling Irish citizens he retorted that it was the job of the Irish
banks to get back as much capital as possible and not “grant any gifts”. How dare he say such a thing.This is the very same person who had no problem with the following:

35 Billion in capital being GIFTED to NAMA developers on the 3rd of August 2011.30 Billion being GIFTED to Anglo Irish Bondholders through a 10 year promissory note.

17 Billion being GIFTED to the Irish Banking fraternity  to create a so called “core pillar banking system”.

All the above GIFTS are being bankrolled on the good faith and credit of the hapless Irish citizens.Irish consumers were motivated over ten years to enter into a lending boom overseen by an incompetent regulatory framework  under the command of the very self same Irish Central Bank which Paddy Honohan proudly and arrogantly currently presides over.When will the Irish people get JUSTICE from this heartless self serving mandarin?Paddy Honohan destroyed the negotiating position of Brian Lenihan and the Irish State with his mis-timed statements during the course of IMF/EU bailout crisis. For this he should have been made resign. Now he is exercising the same kind of treason on the average Irish debt consumer. Under his watch he wants blood extracted from Irish homes instead of compassion being granted.The Irish people deserve better, they need a break. They need fairness. What is good for the developer goose is good for the hard working gander.Irish citizen’s taxes will be used to bail out the banking mess for decades to come. Many of these citizens are in financial hell. Under the leadership of Enda Kenny and Eamon Gilmore the very least the new Irish government should do is to stand down this Central Banking Governor and insist that debt leniency be granted to families struggling to maintain homes and hearths. Justice and fairness are not a GIFT they are a right.



Robots Dont Buy Cars

Christopher M. Quigley

B.Sc., M.M.I.I., M.A.






Ourworld lurches from financial crisis to financial crisis yet very few academics,reporters or commentators point out the fatal flaw in current orthodox economic theory which is the central force behind these crises. The flaw relates to the general lack of purchasing power in contemporary society. This weakness in classical economic theory is not new and many scholars have explained the problem however, increasingly, the issue is being conditioned out of people’sconsciousness. The collapse of the international banking system, as a result of the Sub-Prime; “Originate to Distribute” catastrophe, has brought the Achilles heel of Keynesian economics into sharp focus. The elite thus fear that the prospect of a “greater depression” will force change that will eliminate theirposition of control and privilege. Hence the current “spin” emanating from controlled media outlets. The growth of the “tea party movement” is a case in point. Should this political revolution gain in power the possibility of real change in US economic policy will become increasingly probable thus the perceived need to crush it or at the very least gain ownership and control over it. The end objective of this grass root movement is the dismantling of FED interest bearing credit policy in favour of treasury cash, the abolition of the “open door” Chinese trade policy  and the redistribution of true purchasing power to the average American citizen. Fairly remunerated citizens need to replace foreign robots. Robots do not buy cars, raise families, and care for the well being of elderly parents. Americans must stop looking on their nation simply as a mechanical economy and start to see it as a human society.

 Why is purchasing power so important? It is fundamental because without money no exchange can take place. In order to understand what I am talking about let us look at the historical example set by Henry Ford. He completely redefined “classical” economics through the policies undertaken by the Ford Motor Company in the 1920’s. Under “normal” theory it was assumed that a corporation could only maximise profits by increasing price and limiting supply. Ford did the exact opposite because he had a more holistic view of the role of the corporation in society.He doubled the wages of his workers, decreased the price of the Model T and in the process remade the Ford Motor Corporation. (This policy was not inflationary because he knew he could at least double supply through increased efficiencies). The company boomed. How did this happen. It was axiomatic for he understood the importance of money and purchasing power in communities. With Ford’s workers able to make a good living, their financial anxiety ceased and staff turnover dropped by a multiple of five in one year. This dramatically decreased management expense and increased productivity. Workers finally had peace of mind. With the increased disposable income in the Detroit area the general economy boomed. All classes of economic sectors expanded. As a result
more workers, new business owners, company managers, insurance brokers, real estate brokers, bankers, salesmen, craftsmen, delivery men, builders, farmers and retailers could afford Ford cars. Demand for the model T doubled through the increased buying power WHICH HE HAD CREATED. Accordingly profits at the Ford Motor Company dramatically improved as a result of his innovative policy.

 Ford understood economics and he understood the issue of PURCHASING POWER. FOR HIM PURCHASING POWER WAS NOT CREDIT BUT
REDISTRIBUTED DIVIDENDS FROM THE OWNERS TO THE WORKERS. THIS BRILLIANT INSIGHT MADE THE FUTURE FOR THE COMPANY. It built up the economy of Detroit and it helped define America as a country where a factory worker was respected and well paid, not exploited, as had been the case throughout the English industrial revolution. The American dream was Ford’s vision made manifest. It was a dream brought to fruition not through political fantasy but through the laws of accounting, finance, production and marketing.


 “Power and machinery, money and goods, are useful only as they set us free
to live. They are but means to an end. For instance, I do not
the machines which bear my name simply as machines. If that was
there was to it I would do something else. I take them as concrete
of the working out of a theory of business, which I hope is
more than a theory of business—a theory that looks toward
this world a better place in which to live. The fact that the
success of the Ford Motor Company has been most unusual is
important only because it serves to demonstrate, in a way which no one can
fail to understand, that the theory to date is right.

Considered solely in this light I can criticize the prevailing system of industry and the organization of money and society from the standpoint of one who has not been beaten by them. As things are now organized, I could, were I thinking only selfishly, ask for no change. If I merely want money the present system is all right; it gives money in plenty to me. But I am thinking
of service. The present system does not permit of the best
because it encourages every kind of waste—it keeps many men
getting the full return from service. And it is going nowhere. It
is all a matter of better planning and adjustment.”

 Henry Ford My Life and Work

Compare for one moment the circumstances in Detroit in the 1920’s and mainstream America today. The exact opposite is occurring. Meaningful wage levels are being destroyed and thus the required buying power is contracting in a structured and planned manner. This system cannot hold. Society is being hollowed out from the inside. Folks do not understand what is happening due to “dumbed down” educational policies. To replace falling money (wage) levels between goods available for purchase and actual purchase capability the banking elites are “managing” the availability of credit. This credit substitute for real wages is an unstable arrangement because the debt is very expensive and is non-liquidating other than through bankruptcy or lotto wins or death. This is no way to run nations.
It creates constant anxiety and eventual depression among citizens. It is
inherently unstable particularly now that most banks are actually insolvent and
are no longer in the position to provide credit in the form of business loans,
credit card facilities, car loans, overdrafts or home equity draw-downs.

 Thus in essence the “solution” to “the problem” in America and for that matter in Europe, is enlightened redistribution of purchasing power other than through non existent credit. Currently too much power over such redistribution is controlled by banks and associate entities.
This money centralization is stagnating the system and the fact that this
arrangement failed to regulate itself, and caused a credit collapse, has accentuated the speed of failure by multiples. It is time to change. Society must move on. The intellectual framework to effect this change, as demonstrated by Ford, has been known for over 80 years. Its successful implementation today would bring a renaissance to world commerce and societal development. There is no more important function for Academia today other than to dissemination this vital economic truth.

 Armed with this knowledge for how long do we allow the folly of present economic “orthodoxy” to continue? To me this situation is akin to an adult perceiving the behaviour of a wild and immature teenager, wondering when the “penny will drop” and wisdom will prevail. To the elites, who must know the truth, this monopoly credit based boom-bust phenomenon is obviously allowed to continue because they have control. Their ownership motivates them to disregard consequences provided they are protected
through privilege.
However, I believe that the truth is too
obvious to ignore anymore.  The end result of the current repression is the on-going development of the new modality which I call: “Techno-Feudalism”. This “Techno-Feudalism” will bring with it vast disparities in wealth, ownership and opportunity. It will lead to an eventual obliteration of the middle classes in developed nations. It will engineer the slow Fabian demise of effective democratic institutions in the West. Untamed it will break traditional social cohesion and lead to mass unrest,criminality and despair. But the future does not have to be so bleak. The money solution is so obvious it is “madness” not to sort it out. The truth must beallowed to break free.


“The organism has a right in natural law to draw sustenance from its environment. We cannot with impunity abstract humanity from the natural world. ….Unfortunately, the present financial system creates an ever greater deficiency of effective and unattached purchasing power giving the illusion, through a distorted financial lens, of actual or physical scarcity in the midst of actual and potential abundance…..

 We are trying to pass from one type of civilization into another in which the possibilities are such that we cannot begin to imagine. That transition, I believe, will best be facilitated in an environment which provides maximum freedom (immanent sovereignty) for the individual in the context of absolute economic security.”

Wallace Klinck


In the 1930’s the engineer and self-taught economist Major Clifford Douglas claimed that society was intellectually hypnotized and that only a drastic de-hypnotization and re-education could save it. Douglas believed in people. He felt that individuals had far more goodness and potential than society was allowing them for. He reckoned that if common folk were given enough freedom and leadership they could move society and civilization into a new golden age. An age of extended liberty, discovery, art and culture.  The alternative he felt would be booms, busts, over-consumption, under-consumption, excesses,depressions and wars. Eighty years later this is exactly what the world has experienced and is continuing to experience. However, the period between each stage is narrowing and the level of debt, instability and inequality are exploding beyond comprehension. To followers of Douglas this situation is not happening by accident; it is happening inevitably because of conceptual flaws in financial and fiscal policy.

 The monetary and economic policies of such people as Henry Ford, Clifford Douglas, E.C. Riegel and E. F. Schumpeter et al are heartfelt attempts to bring about “steady state” change to historical economic orthodoxy. It is incumbent on all interested parties who desire to solve this problem of problems to become educated and aware of the available solutions and to actively participate. Not to do so will allow the current “greater depression” to expand and gain a greater grip on economic activity. History shows that such a development will eventually lead to war as sure as night follows day. Thus the choice is clear;do we want war or peace? If you opt for peace, as I do, we must strive to free contemporary economic policy from its death waltz with outmoded Keynesianism.Economic theory must move on, sanity demands it.


“Flight from Inflation”


The Heather Foundation,

Los Angeles.

 “My Life and Work”

Henry Ford

In Collaboration with

Samuel Crowther

 “Small Is Beautiful”

E. F. Schumacher

 “Social Credit”

Major Clifford Hugh Douglas

Mondo Politico.Com


by Christopher M. Quigley, B.Sc., M.M.I.I., M.A.
June 12, 2007
Integrity, intellectual honesty, courage, focus, foresight, leadership, belief in the goodness of the American people. These are descriptions that spring to mind when thinking of M. King Hubbert. He was a visionary who believed in the power of ideas and the need to use intellectual rigour to analyse and manage change. As a research geophysicist he understood the problems posed by the reality of peak oil and the cultural catastrophe that lay before humanity unless it realised the non-recurring historical nature of the growth phenomenon.

In his presentation to the House of Representatives National Energy Conservation Policy Act Hearings in 1974, he acknowledged the problems of inflation, growth and monetization, but he understood their causes like no other. The fact that these same problems still exist today, to a greater degree 34 years later, shows the lack of effectiveness and understanding in World organizations. These general problems are too important to be left to institutions alone. Everybody counts. To solve current financial crises we must have a fundamental understanding of their makeup.

I think Mr. Hubbert provided posterity a great service in spelling out some of the core problems clearly and perhaps they can help us form the framework for a debate, creating a new paradigm of human comprehension, based on intellectual integrity and excellence rather than fraud and exploitation.

All the words that follow are a synthesis of direct quotes by Mr. Hubbert:

“Without further elaboration, it is demonstrable that the exponential phase of the industrial growth which has dominated human activity during the last couple of centuries is drawing to a close. It is physically and biologically impossible for any material and energy component to follow exponential growth for more than a few tens of doublings, and most of those possible doublings have already occurred….It is inevitable that with the slowing down in the rates of physical growth cultural adjustment must be made….

It appears that the stage is now set for a critical examination of this problem, and that out of such enquiries, if a catastrophic solution can be avoided, there can hardly fail to emerge what the historian of science, Thomas S. Kuhn, called a major scientific and intellectual revolution….

A non-catastrophic solution is impossible unless society is made stable.”

M. King Hubbert. 1981
“Two Intellectual Systems: Matter-energy and the Monetary Culture“:

“The World’s present industrial civilization is handicapped by the co-existence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin.

The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance. The second (monetary culture), an inheritance from the pre-scientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is super-imposed.

Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely exponential growth, which has made a reasonable stable co-existence possible. But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is almost now over. The monetary system has no such constraints, and, according to one of its fundamental rules, it must continue to grow by compound interest. This disparity between a monetary system which continues to grow exponentially and a physical system which is unable to do so leads to an increase, with time, in the ratio of money to the out-put of the physical system. THIS MANIFESTS ITSELF AS PRICE INFLATION. It appears that the stage is now set for a critical examination of this problem, and that out of such enquiries, if a catastrophic solution can be avoided, there can hardly fail to emerge what the historian of science, Thomas S. Kuhn, has called a major scientific and intellectual revolution.

I was in New York in the 30’s. I had a box seat at the depression. I can assure you it was a very educational experience. We shut down the country because of monetary reasons. We had manpower and abundant raw materials. Yet we shut the country down. We are doing the same kind of thing now but with a different material outlook. We are not in the position we were in 1929-30 with regard to the future. Then the physical system was ready to roll. This time it is not. We are in a crisis in the evolution of human society. It’s unique to both human and geological history. It has never happened before and it can’t possibly happen again. You can only use oil once. You can only use metals once. Soon all the oil is going to be burned and all the metals mined and scattered. That is obviously a scenario of catastrophe but we have the technology. All we have to do is completely overhaul our culture and find an alternative to money. We are not starting from zero. We have an enormous amount of existing technical knowledge. It’s just a matter of putting it all together. We still have great flexibility but our maneuverability will diminish with time. A NON-CATASTROPHIC SOLUTION IS IMPOSSIBLE UNLESS SOCIETY IS MADE STABLE. This means abandoning two axioms of our own culture the (current) work ethic and the idea that growth is the normal state of life. Our window of opportunity is slowly closing, at the same time, it probably requires a spiral of adversity. In other words things have to get a lot worse before they can get better. The most important thing is to get a clear picture of the situation we’re in and the outlook for the future.”

M. King Hubbert, 1974
“On The Nature Of Growth”

Submission to the House of Representatives
National Energy Conservation Policy Act Hearings

“Two terms applicable to an evolving system are of fundamental importance. These are steady state and transient state.

A system is said to be in a steady state when its various components either do not change with time, or else vary cyclically with the repetitive cycles not changing with time (i.e. the seasons). A system in a transient state is one whose various components are undergoing non-cyclical changes in magnitude, either increase or decrease.

Transition From Steady State To Transient State Due To Fossil Fuels:

By about 2 million years ago biological evolution had advanced to where the ancestors of the present human species had begun to walk upright and to use crude stone tools. At that stage this species must have existed as a member of an ecological complex and competed with other members of the complex for a share of the local solar energy essential for its existence. The energy utilizable was almost exclusively the food supply derived by the biological system from solar energy by the mechanism of photosynthesis. During the subsequent million or more years the human species progressively devised means of capturing an ever-larger supply of the available energy. In view of the slowness with which these developments must have occurred, the whole ecological system of which the human species was a member can only be regarded as comprising a slowly changing ecological steady state.

Although the pace quickened about 8,000 to 10,000 years ago, with the domestication of plants and animals, a rapidly changing transient state of evolution was not possible until the large supplies of energy stored in fossil fuels began to be utilized-when the mining of coal as a continuous enterprise was begun near Newcastle in Northeast England about 9 centuries ago. This was followed as recently as 1857 in Romania and in 1859 in the United States by the exploitation of the second major source of fossil-fuel energy, petroleum.

What is most particular about the history of coal production is the large contrast between the magnitudes of the rate of coal production following the year 1800 and that, which must have prevailed during the preceding 7 centuries. From earlier statistics it can be estimated that the cumulative coal production during the eight hundred years before 1860 amounted altogether to only about 7 billion metric tons, whereas 133 billion metric tons, or 19 times as much coal, was mined during the 110-year period from 1860 to 1970.

Constraints On Growth:

In addition to supplies of energy, other constraints operate to modify growth. These constraints may be broadly classified as being ecological in nature. For more than a century it has been known in biology that if any biological species from microbes to elephants is given a favourable environment, its population will begin to increase at an exponential rate. However, it was also soon established that such a growth rate cannot long continue before retarding influences set in. In our earlier review of the rates of production of the fossil fuels it was observed that for close to a century in each case the production increased exponentially with doubling periods within the range of 8 to 16 years.

The present world population (1974) is about 4 billion, which is increasing at a rate of about 2 per cent per year, with a doubling period of about 35 years. What could have been the minimum average doubling period during the last million years? This minimum would occur if we make a wholly un-realistic assumption, namely that the population a million years ago was the biological minimum of 2. How many doublings of this original couple would be required to reach the World’s present 4 billion? Slightly less than 31. Hence, the maximum number of times the population could have doubled during the last million years would have been 31 with the average period of doubling being 32,000 years. Consequently when we compute a maximum average growth rate between the finite levels of population at a time interval of a million years, we arrive at the same conclusion, NAMELY THAT THE NORMAL STATE, THE STATE THAT PERSISTS MOST OF THE TIME, IS ONE OF AN APPROXIMATE STEADY STATE. The abnormal state of an ecological system is a rapidly changing transient or disturbed state.

To obtain an idea of how long a disturbed or transient state can persist a fundamental question that may be asked is: about how many doublings of any biological or industrial component can the earth itself tolerate? A clue to this may be obtained if we consider the problem of the grains of wheat and the chessboard. According to an ancient story from India, a king wished to reward one of his subjects for some meritorious deed. The man replied that his needs were few and he would be satisfied to receive a bit of corn. If one grain were placed on the first square of a chess board, two on the second, four on the third, and the number of grains were doubled for each successive square, he would be content to receive that amount of grain. The king ordered the board to be brought in and the grain counted out. To his consternation he found that there was not enough wheat in the kingdom. i.e. 2 to the power of 64, this amount of wheat, it turned out would be 2000 times the World’s present annual wheat crop. This may appear to be a trivial problem; its implications are actually profound. The Earth itself cannot tolerate the doubling of one grain of wheat 64 times. The same principles and the same kind of constraints apply when we are dealing with successive doublings of any other biological or industrial component. Even if there are no shortages of energy or of materials the Earth will not tolerate more than a few tens of doublings

Cultural Aspects Of The Growth Problem:

WITHOUT FURTHER ELABORATION, IT IS DEMONSTRABLE THAT THE EXPONENTIAL PHASE OF THE INDUSTRIAL GROWTH WHICH HAS DOMINATED HUMAN ACTIVITY DURING THE LAST COUPLE OF CENTURIES IS DRAWING TO A CLOSE. It is physically and biologically impossible for any material and energy component to follow exponential growth for more than a few tens of doublings, and most of those possible doublings have already occurred. Yet, during the last two centuries of unbroken industrial growth we have evolved WHAT AMOUNTS TO AN EXPONENTIAL GROWTH CULTURE. Our institutions, our legal system, our financial system, and our most cherished folkways and beliefs are all based upon the premise of continuous growth. Since physical and biological constraints make it impossible to continue such rates of growth indefinitely, it is inevitable that with the slowing down in the rates of physical growth CULTURAL ADJUSTMENTS MUST BE MADE.”

Two Intellectual Systems: Matter-energy and the Monetary Culture. M. King Hubbert 1988
On The Nature of Growth: Hearing on the National Energy Conservation Policy Act. M. King Hubbert 1974



 2007 Christopher M. Quigley




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