La fine della strada

Ugo Bardi reports a summary of a September press release from the Italian “Unione Petrolifera” in “Italy implodes” on his Cassandra’s Legacy blog

Automotive fuels have shown the following trends: gasoline has seen a reduction of 18.2% in consumption while diesel fuel has seen a 15.6% reduction, both compared with September 2011. Summed together, the consumption of the two fuels was 16.3% lower than in Sept 2011. In this month, the sales of new cars have shown a contraction of 25.5% compared with Sept 2011. The first nine months of 2012 have seen a contraction of 20.4% in the sales of new cars.

Those falls in the space of a year are breathtaking. Fuel and auto sales are falling in the UK too, but nowhere near so far or so fast.

The difference is due more to Quantitative Easing than to fundamental economic differences. Outside the euro, and with some of its own oil remaining  the UK can delay the day of reckoning but it cannot avoid its appointment with destiny (in the form of declining ERoEI) for ever.

Italy is the UK writ larger and sooner, and Spain and France are not far behind. Three of Europe’s ‘big five’ auto economies are undergoing unprecedented contraction.

This collapse will expose how deeply the ‘real’ (i.e manufacturing and trading) economies of these countries, as well as the UK and Germany, rely on auto making, trading and servicing.

Some of the commenters on Bardi’s blog entry view what’s happening as simply a cyclical economic downturn. One even speculates that the ‘savings’ Italians are making from eschewing cars and gasoline will flow into other domestically-made goods and services.

Energy slaves

Savings? There are no meaningful savings when the average European person requires the daily services of 200 ‘energy slaves’ – 95% of which come from fossil fuels.

What’s happening in Italy (and Spain and France) is deadly serious. It is the weakening and incipient collapse of a main pillar of the real economy.

Moreover, it is a positive feed back loop. If the economy does not burn oil, it doesn’t generate the real purchasing power to buy and drive autos. Without auto activity, the country burns less oil.

The simple answer would be to pump cheaper oil into Italy and Europe’s other struggling economies. But the end of ‘easy’ oil and declining net exports have blocked that escape route.

For once, Senna the Soothsayer from the old BBC sitcom Up Pompeii would be on the money with her catchphrase “Woe, woe and thrice woe.”

All the same, I’ll give the last word to a 21st century Cassandra. No, not Bardi but Massimo de Carlo of the “Mondo Elettrico” blog:

I have no words. An abyss, an abyss, an abyss. No movement because there is no work. No consumption because there is no money. Oil is not used because it is not there. Stop.


Circuses without the bread

THE ALWAYS DEPENDABLE Tory DailyGuff effortlessly demonstrates its neo-Orwellian (or should that be Nero-Orwellian) pedigree on today’s front page.

It goes for the Freestyle Ludicrous Headline gold medal with: “Keep calm and carry on – we are only one medal short of what we should have at this stage.”

Beneath the 72pt banner, a crack squad of highly-trained DT eyewash-peddlers hit the page running with:

The British public was yesterday urged not to panic over the country’s gold medal drought as officials insisted that Team GB was still on target for a bumper Olympic haul.

And there was I, running up and down our road dressed only in a pyjama top, gibbering at the sheer unrelieved tension of it all. Silly me.

Now, someone could write a whole thesis on that intro alone: for example the insinuation that all good citizens ought, by now, to have raised their level of patriotic fervour to hysteria pitch. Or the shadowy ‘officials’, whose iron grip on the Olympic Plan will surely deliver those longed-for gongs bang on cue.

Juvenal would have recognised all this at once: Duas tantum res anxius optat, panem et Circenses. (Approximately): “Two things only do the people earnestly desire, bread and the Games.”

Or just ‘the Games’ these days, since history is repeating itself 19 centuries on. If one peeks behind the wall-to-wall flag-waving by the media (at page 26 of today’s cellulose edition of the DailyGuff to be precise), problems with the bread side of the equation are popping up like the ugly heads of synchronised swimmers at a goblin gala.

Household incomes hit seven-year low” is the headline over an article that points out that families can now only afford to pay 2005 prices for burgers and chips, let alone the astronomic amounts demanded by monopoly sponsors in the hermetically-sealed east London rallying arena.

Above that article is one headlined: “Euro failure would trigger UK bank nationalisations.” It would trigger a hell of a lot more than that for the vulgaris. But it always helps to be reminded about whose priorities matter most.

I did like the suggestion that “to prevent the pound strengthening in a euro crisis” (are they saying there isn’t a euro crisis now?) the Bank of England “would have to launch a £1 trillion round of quantitative easing.”

That would definitely count as a heroic, gold medal-worthy effort for a country whose entire GDP was barely £1.5 trillion before it started shrinking.

Hmm. Let’s see now, what should we spend all that money on when it’s been printed? Bread, d’you think? Or circuses?