On  the 6th of October, the self-organized European Citizens' Initiative against TTIP (Transatlantic trade and investement partnership) and CETA managed to pass the goal of getting more than 3 million people to sign the citizen petition against the secretly negotiated and highly controversial trade deals between Europe, the US and Canada.

With reference to major risks of the ISDS clause (corporations suing states), lowering environmental standards and worker rights, deregulation of public institutions and infringement on internet freedom, the initiative wants the negotiations to be stopped.

Yesterday, citizens all over Europe went out to demonstrate the undemocratic so called trade deals, attracting hundreds of thousands of people in Berlin. The biggest protest in Germany for many years. Demonstrations also took place in eight Swedish cities.

One of the most common arguments for TTIP is that "there will be more growth and jobs" through, for example, removing safety procedures (crash testing) in the automobile industry which according to a recent study could lead to a drastic increase in traffic-related deaths in Europe (since a European car is 33% more safe than the American counterpart). In other words,  it would generate more financial capital for the big multinationals at the expense of ordinary Europeans' health and safety.

According to a leaked document, published on Corporate Europe Observatory (20th of April, 2015), murky negotiations of "regulatory exchange" that would force laws drafted in any of the 78 states to go through a screening processes by a technocratic elite has taken place without public knowledge. This screening process would be done by a bunch of lawyers and lobbyists, in form of a permanent, undemocratic, and unaccountable group of technocrats. Most people think this type of group only will serve to uphold the interests of multinational corporations. 

According to attorney David Azoulay, at the Centre for International Environmental Laz, "Not only will it extend an outrageously burdensome process on future legislation, but any current legislation in the public interest that doesn't sit well with trade interests on either side of the Atlantic could be subjected to the same process to make it conform to corporate interests"

In summary, this is the response of a predatory Empire, and it's elite, to a world without growth. It starts cannabilizing on the very foundation that underpins it, ordinary people and nature. Now is the time to change the entire system, or crumble under it.

I was listening to the latest Radio Ecoshock show, featuring Stanford biologist Paul Ehrlich, when I realized that I haven’t really mentioned the population problem as much as I should in this blog. Indeed, the topic is problematic because people don’t like to talk about it and most environmental scientists have even given up speaking about it since most feel that “there is nothing we can do about it”. To some extent that’s correct, we cannot force people to have fewer kids (or we don't want to do that).

However, by voluntarily lowering energy use per capita it could lead to fewer kids, and it's better to plan for such a future than to be forced into lowering ones energy usage by “other means” (poverty, famine, war etc.). Throughout history, the expansion of the human population resulted from a steadily growing energy supply. But this increase came from finite fossil energy, that have (2006) or is about to peak, globally (2015-2020). My contention is that an average human living a western lifestyle, of massive over consumption, could lower his/her energy use and still have a perfectly okay life.

In 8,000 B.C., when there were an estimated 8 million people who made some use of animal power, wind, and river currents each human was on average equivalent to a somewhat larger Atlantic Humpbacked Dolphin.

Credit: Chris_huh (CC-BY-SA 3.0)

By 1500 A.D. there were 350 million humans, each the average energy equivalent to the still larger Risso’s Dolphin.

In 1800 A.D., as the Industrial Revolution was just beginning to exploit fossil energy there were almost 1 billion humans, each on average now the energy-converting equivalent to a Beluga Whale.

Credit: Chris_huh (CC-BY-SA 3.0)

From this point on many of the world’s people, especially the rich, would as fossil fuel users become “colossal” in terms of energy use. By 2000 A.D. the human population reached 6 billion with an average per capita energy use of more than a dozen times that of our old ancestors. By this time, an average American were using as much energy as a full grown Sperm Whale. Only there were 300 million of them.

And finally, by 2009 A.D, Catton estimated that an average American used as much energy as a 41 ton heavy dinosaur. Turiasauris is among the largest dinosaurs known at 36-39 m in length and with a weight of 40-48 tonnes.

"You cannot permanently pit an absurd human convention, such as the spontaneous increment of debt [compound interest], against the natural law of the spontaneous decrement of wealth [entropy]" - F. Soddy (Cartesian Economics, p. 30).

The Swedish Central bank (Riksbank) have cut the repo rate to -0.35% and bought another 30 billion SEK in government bonds in the belief that this will stave off deflation (i.e. import inflation). Which it won’t, since the global economy has taken a downturn and it looks like most economies now are facing recession or depression due to the deflationary collapse of commodities, capital spending and global trade. Most intelligent people know that GDP growth is over, since we live on a finite planet, and the reason for this latest bubble had to do with private sector borrowing to inflate consumption rather than productivity increases in the real economy. What professor Didier Sornette at ETH Zurich calls “The illusion of the Perpetual Money Machine” (2012).

The Riksbanks policy will not win over deflation (there are no winners in a global currency war), however, it will fuel the already overheated housing market in Sweden, with a risk of popping this bubble. The ultra-loose monetary policy will encourage Swedish households to take on more debt, despite them being overburdened by debt already. Household debt to disposable income is currently at 172% (see diagram). One can compare this to the famously over leveraged American households before 2008 which topped out at 130% of disposable income.

There should be plenty of people around today that actually remember the devastating property crash of the early 1990s, but it seems like most people have a short memory. In the early 90s the government had to step in and nationalise the banks while increasing public spending to keep the economy alive in the midst of soaring unemployment. It took at least a decade for the economy to recover and the state to restock its finances after that.

Property price index in Sweden (1986-2014) adjusted for inflation. Country average (grey), Stockholm (black), Göteborg (red), Malmö (blue). Credit: Rika Tilsammans

Sweden’s present housing boom started right (2000) after the recovery from the crisis in the 1990s. The boom was set off by low interest rates and a massive expansion of the financial sector with increasingly lower standards for issuing credit/loans. This have driven up prices to extreme levels, mainly in Stockholm, Göteborg, and Malmö, effectively forcing more people to borrow to afford housing in the inner cities. Property prices have been rising 8-9% per year on average for almost 20 years. During the last 12 months, prices have risen by 12% (average price per m2 SEK 32,692).

Even after 28 years of queueing it is impossible to get a rental flat in Stockholm. So plenty of people, or rather their parents, take on loans of SEK 1-3 million to buy a flat as small as 20-40 m2. Of course not everyone can afford to do that, so it's mostly the rich kids that stay in the city centre, in Södermalm, where all the other hipsters are. No integration there! Most of these youngster don’t have any savings. The only thing they have is their flat, speculating that asset prices will rise, seeing it as an “investment”. But of course it’s not real wealth, it doesn’t contribute to the real economy in any way, all it does is inflate property prices further.

Now, finally, mainstream media and Swedish authorities have started issue warnings about the housing bubble and a potential crash. Of course it’s too late to avoid it now. I guess everyone just love rising housing prices, no wonder since it's private and household debt that has driven GDP growth over the last decade in Sweden. So much for Anders Borgs famous “Swedish growth miracle”! Borrowing consumer demand from the future through credit creation is not equal to creating real wealth, it just implies we will be poorer (can consume less resources) in the future. After all, we live on a finite planet.

In 2013 the Swedish Institute of Agricultural and Environmental Engineering (JTI) released a report about potential impacts on the country’s food supply from sudden oil import shocks. JTI looked at three different scenarios, where oil imports would be redistricted (-25%, -50%, -75%) for a period of 3-5 years. Not enough time to make a transition to some other fuel. 

In the worst case scenario, where 75% of oil imports disappear, the authors stated that the diesel price could increase to some SEK 160/litre, and we would likely experience widespread starvation! Food supplies, in stores and warehouses, would only last for 10-12 days. Swedes don’t even know that the government has said that it’s up to the citizens themself to provide for their own food needs in a crisis situation. Most people seem to believe we still live in the 1970s when Sweden was a socialist country, not any more, not since the neoliberals came into office and started dismantling healthcare, defence, education etc. There is no emergency preparedness!

Without fossil fuels (oil and gas) we wouldn't be able to produce enough food in Sweden. This is partly due to our high food imports (50%)​, large-scale mechanisation of farms, loss of small-scale farmers and high costs (taxes) on farming. Most farm machinery runs on diesel while oil is used for heating and transportation. Areas like Stockholm and parts of Norrland are especially dependent on food imports. For example, the Stockholm region only produces some 5% of the milk consumed and less than 10% of the meat.

Today there are no food or fuel reserves, instead the entire country is totally dependent on “just-in-time” supplies. Again, in the worst case scenario, there will be no cooking oil, 75% less fruits and berries, 67-70% less grains, 40% less milk, and 64% less pigs, chickens and eggs. The only thing increasing is sheep and cow meat since a lot of land only will be used for grazing.

Swedes can be kept over the starvation line if only 25% of oil imports disappear, but we will experience food shortages and risk of starvation if a larger oil shock occurs (50-75%). Looking at the export-import data some commentators have estimated that 90% of all oil imports will be gone by 2030. And this is probably a conservative estimate since it doesn’t account for sudden shocks due to an economic crisis, conflict, and so on. 

In a recent opinion poll (2013) two out of every three (63%) Swedes stated that they wouldn't be able to handle a shorter crisis. People in Gotland, Öland (islands) and Småland were most worried about a future crisis (49% think they will experience a crisis). Most people (58%) can only manage for about one week but it's likely that the respondents underestimate how much resources are actually required for everyday life. For example, water (3 litres/day) and heating during the winter.

Sweden's food supply is in any case extremely vulnerable to a shortage in oil imports, and Swedes are not prepared despite a lacking government. Our dear politicians have absolutely no plan on changing this, instead they claim “we need to stay competitive” totally missing the point that growth is over! (0.3% per capita GDP growth the last decade). The situation is not made better by half of all our oil imports now coming from Russia that we are engaging in trade wars with (sanctions etc). 

People in Europe are getting fed up with the elite. Rising resource costs, austerity, bank bail-outs, tax rate hikes and massive corruption of governments has led to a shattering European Union. Of course there are many different reasons for the increasing decentralisation trend in Europe, but my perspective is that the low ranked members of society has started coalitions to demand that the high ranked members of society share a larger part of their natural resources with the rest. As we all know, economic inequality is at an all time high with half of the worlds total capital in the hands of the top 1%, according to Oxfam. 

As we can see in the map above there are several so called "separatist" movements popping up all over Europe. As the global resource pie starts to shrink there will be winners and losers, the weakest suffering first. And this is what we see with the PIIGS (Portugal, Ireland, Italy, Greece, and Spain) countries suffering, all time high youth unemployment, increasing refugee flows and homelessness. The trend towards decentralisation is the same as a break up of nations, or collapse of society, controlled by centralised corrupt or ineffective governments. Politicians have not understood or accepted that the Earth is finite and that debts have only postponed the harsh reality of resource depletion and economic down turn. Instead they have promoted perpetually borrowing year-after-year (for the last 30 years) despite that science tells us that we can never pay those loans back.

Now when the global economy is turning down, governments are going to attack ordinary people much more aggressively (increasing taxes, cutting benefits, slashing jobs, negative interest rates etc). Unfortunately most governments will think that if they can only increase taxes they will survive another election cycle. They do not understand that massive deflation, and rapidly rising unemployment, is what kills nations. Some politicians will think about starting international war to shift blame, create a diversion for their own population and to steal resources. Just think about what is happening in Syria right now, its a total mess.

So really it is no wonder that people are getting fed up with the political elite, in Europe and elsewhere, and are trying to return to smaller more local types of decision-making and trading of essential resources (food, water, housing etc). It is what one would expect realising that natural resources are scarce, expensive, and becoming more so. Only a steadily increasing supply of energy can maintain a complex society with a wealthy elite, but when the supply of energy starts falling and the elite gets richer on the backs of ordinary people we can expect social unrest and break up into smaller, simpler groups. I think this is whats happening right now.

Oil is like a two edged sword. Considering climate change and ecological degradation we should stop using it tomorrow. Greenhouse gas emissions is only one of the reasons. Another is our usage of oil to make plastic products that now fill the oceans and kills marine life. On the other hand, we have made our civilisation totally dependent upon oil for transportation, food production, medicines and keeping the economy going. Economic growth is basically a function of energy (oil) per capita consumption. Also, in Sweden we import a staggering 50% of all the food we consume, while farmers go into debt or have to close down their farms (which is totally outrageous). If there is a serious oil shock we might not be able to feed our population and people would starve! One report said that we perhaps could eat more horse meat since we currently have 360 000 horses only for recreational use. That is a bizarre proposal for solution. 

I wonder what will happen when credit run dry due to an economic slow down, can we still import the oil we need? Looking at the current situation of falling commodity prices one might think that this would be a good thing. But I'm afraid it could be just the opposite. First of, it is lack of demand that has caused the current falling prices, people are broke and debt saturated, not some myth about "Saudi-America". Second, falling prices means that many commodity companies will face bankruptcy which eventually would mean falling supply. And once supply falls I'm not sure it will be able to come back online again as no one will fund these expensive and risky operations in a economic downturn. So either if there is a shock or we simply cannot afford it, we are very vulnerable to a loss of oil imports.

Ordinary people are not aware of how precarious our situation really is since government officials have started changing their statistics. Since 2010 they have chosen to exclude GDP per capita measures adjusted for inflation, something that almost no journalist seems to have questioned. What has been seen as a "Swedish miracle" of strong GDP growth compared to rest of Europe, since 2008, has been total fiction that mainstream media fell for without critical analysis. Looking at the numbers, GDP per capita adjusted for inflation, we can see that Sweden actually only grew by 0.3% per year between 2006-2014 (see diagram). Compared to other "developed" nations Sweden places somewhere in the middle, with Poland having strong growth (3,5%/year) while the Greeks have suffered de-growth (-3,1%/year). What also becomes evident is that most of these countries have actually been stagnant or suffered de-growth. Something that is no surprise for those who are aware of the limits to growth, the fact that we live on a finite planet with a limited amount of natural resources and dwindling energy.  

As with most things these days our politicians don't really have a plan for any of the above situations. It seems to be a rule these days that the more serious the situation gets the more they fight about inconsequential things. This becomes evident in the latest budget discussions. The conservatives don't want to raise taxes while the social democrats want to tighten finance but at the same time makes the debt problem even worse!

The central bank has adopted negative real interest rates and supported buying of securities in a desperate attempt to stimulate the economy while the government has presented a budget that is supposed to be financed by raising taxes and lowering government spending. This sends the signal of a totally incompetent government that has no clue of what its doing. These policies will only benefit the people who have financial assets, speculating on houses and stocks, while savers are being punished. Thus, making the debt crisis worse. The private sector has an enormous amount of debt (252% of GDP), way above the stagnant GDP per capita income, which according to one study makes Sweden the number one country with the largest private sector debt in the world.

It is no wonder that the Swedish people are growing impatient with the political elite, especially when they present a story that does not fit with reality. The self serving myth of the "Swedish miracle" only help worsen the debt crisis at the same time as politicians escape responsibility. Swedish household debt has sky rocketed and now widely exceeds disposable income. The housing bubble reaches new highs for every month. But this is not real wealth, only fictive wealth, no products or services have been created. As most people probably understand, even if they repress it, there cannot be large deviations from the real economy without an eventual correction. It is not hard to figure out how it will end, rapidly growing asset prices in a country where income is stagnant is not sustainable. The hard part is telling when the bubble will pop. So when Swedes say "the Greeks have themselves to blame" then this will surely have to apply to the Swedes also when the crisis hits. All our debt is in the private sector, which is what kills economies, while the Greek debt is in terms of government debt.

Signs of deflation are now everywhere. Back in 2008 the central banks of the developed world and China decided to double down on failed policies that had promoted massive debts to accumulate in the private sector, that eventually led to a near implosion of the banking sector. Now here we are 8 years later and with $60 trillion in new debt that has not led to any significant recovery of the real economy, only asset inflation. But there is a limit to how much debt people can and are willing to take on. 

Now we see global currency markets in disarray, for example the Swedish krona lost 2.0%. The global debt bubble could be bursting leading to tightening financial conditions and a flight to safety into the US dollar. Emerging markets are struggling due to falling commodity prices. China has stumbled and is doing all it can to prevent a stock market collapse. Manufacturing and shipping is way down. And the list goes on, something is definitely happening. 

Since interests rates are at zero, or negative, central banks have lost this weapon in their toolkit. All the stimulus that piled up even more debt has not led to any substantial recovery in the real economy. No monetary policy in the world can change the fact that we have reached limits. But desperate times have led to even more desperate measures. All G20 nations have put in force so called "bail-ins" which means that the big banks can take depositors savings next time there is a crisis. This is what happened in Cyprus. The EU is pushing Sweden to do the same and most likely we will go along with it, according to some sources it could come into effect by 2016. In other words, no one is safe when the next crisis hits. And all the suffering to come will be due to humanity's inability to understand that infinite growth on a finite planet is impossible and doomed to fail miserably.