Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (20 page)

From the time the “Freon phase out” began, virtually hundreds of millions of refrigeration systems worldwide had to be replaced. This included automobiles, homes, businesses, and food and medical refrigerators. The systems still functioned, but they could not be economically recharged with CFCs (does this sound familiar?). This enormous cost continues to be silently passed on to consumers. It is important to recognize that the alternatives to CFCs are many orders of magnitude more expensive than CFCs themselves. This is roughly analogous to comparing the cost per kWh of electricity produced by coal versus solar or wind.
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The asthma inhalers incorporating new, proprietary propellants were not only up to 10 times more expensive than the old ones using CFCs; they were also less effective. A number of asthmatics died as a result when they failed to reach emergency rooms after using ineffective new inhalers. In my view, this is the moral equivalent of murder over a concocted hysteria about holes in the Antarctic ozone layer.

For reasons that could be debated for ages, people who were crucial gatekeepers in public discourse seem to have lost their bearings. They were only too willing to be scammed by preposterous hysteria over chlorine in CFCs, which are four-times heavier than air, somehow finding their way from the bottom of the atmosphere in the Northern Hemisphere where most of them were used, into the upper atmosphere over Antarctica.

No one ever proposed any physical mechanism by which that could occur, nor for that matter, did anyone produce even a shred of empirical evidence that CFCs harmed the atmosphere. No one could explain how the free chlorine ions from the annual use of 7,500 tons of CFCs could be crucial to damaging the ozone when the oceans of the earth emit 600,000,000 tons of chlorine annually.

Even more amazing, it was never even established that the seasonal ozone holes near Antarctica were anything out of the ordinary. When skeptical scientists attempted to publish evidence that Antarctic ozone holes predated the introduction of CFC, they were muzzled. It was not even established that chlorine ions, of any origin, were implicated in ozone depletion, as compared to cosmic rays or astrophysical phenomena.

The global credit collapse of 2008 served notice that the world's pockets are not as deep as previously supposed. With Obama apparently ruthless in his determination to press ahead with additional spending initiatives, the passage of cap and trade, could prove to be the “straw that broke the camel's back.” As Joseph Tainter argued, “a complex society that is investing heavily in many cumulative organizational features, with low marginal return, may have little or no reserve for containing stress surges.”
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This would certainly seem to describe the United States. Equally Tainter says, “once a complex society enters the stage of declining marginal returns, collapse becomes a mathematical likelihood, requiring little more than sufficient passage of time to make probable an insurmountable calamity.”
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As argued, the evidence points to actual climate change as dictated mainly by cyclical fluctuations in solar output and other astrophysical phenomena. The expectation that the sun's output should be stable is incredible in a dynamic universe. It is also belied by evidence from studies of paleoclimate, archeology, solar physics, history, and geology.

Reality is more complicated than the idea of a steady sun that radiates exactly the same amount of energy day in and day out for billions of years.

In fact, there are innumerable sources of fluctuation. Among the simpler of them is the fact that the earth does not really revolve around the sun. It orbits around the center of mass of the solar system. This is almost, but not quite the same as revolving around the sun, as the solar system's center of mass is offset by the mass of the large planets, particularly Jupiter (318 × the mass of the earth). The Jovian year, consisting of 11.86 earth years, coincides with one of the cycles of solar output, the Schwab or sunspot cycle of 11 years (also represented as 22 years). Put simply, when Jupiter is closest to the sun, its output of radiant energy tends to fall.

Just as there are short- and long-term economic cycles, so there are short- and longer-term cycles of solar activity (in combination with other astronomical variables). There is a Suess Cycle of 210 years, also known as the DeVries Cycle. There is a Halstatt Cycle of 2,300 years. A still longer cycle of solar radiation has been identified at 6,000 years.

The main driver of climate is variation in the sun's radiant energy, as it always has been. When other astrophysical factors come into play, like the transit of the solar system through the spiral arms of the galaxy, they tend to have catastrophic consequences. At those times, when the sun's output is too weak to shield the earth from intensified bombardment by cosmic rays, the world tends to go into long-lasting Ice Ages.

While the earth is spinning around the solar system, it is also trailing the sun through the Milky Way at a speed of 250 kilometers per second. Israeli astrophysicist Nir J. Shaviv has shown that the earth's trajectory through the galaxy is probably responsible for cycling in and out of the deepest and longest Ice Ages.
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Whenever the sun traverses the dense spiral arms of the galaxy, the earth is bombarded by cosmic rays and stardust, including such exotic materials as helium 3 (He
3
) that can only form in outer space. This increases cloud cover and reflects solar radiation back into space sending the earth into a deep freeze.

By comparison, a Little Ice Age like that endured in the seventeenth century and thereafter is a blessing. Indeed, the last Little Ice Age during the Maunder Minimum was a blessing in more ways than one. While weather turned decisively colder it remained much warmer than in a full-fledged Ice Age when glaciers spread over much of the Northern Hemisphere. It is estimated that the ice cover in the area where Detroit is now located was as much as a mile thick during the deepest freeze of the last Ice Age. (And you thought that the plunge in the median price of homes in Detroit to $6,000 was drastic.)

It may seem an exaggeration to say that cold weather makes people crazy. But every climate upheaval in recorded history has come as a disorienting shock to the people who experienced it. Without exception, leaders have tended to do the wrong thing, wasting precious resources. (You might well include the Bernanke/Obama policy of consciously creating inflation at a time when the weather seems destined to curtail food supplies as one of those wrong things that leaders do in climate upheavals.) Mostly, they have wanted to make offerings to whatever false gods they were worshipping at the time, or undertake bloody campaigns to purge society of evildoers imagined to have provoked the wrath of those gods. The Mayans routinely practiced human sacrifice to appease the gods of climate. Europeans were somewhat less barbaric, but only marginally.

Peter Christie recounts the story of Barbara Gobel, who woke up to a hard frost one seventeenth century morning in late May in Wurzburg, Germany. Miss Gobel was a teenager, listed in the executioner's logbook as “the fairest maid in Wurzburg.” When the late spring freezes killed the wheat crop and destroyed all the wine grapes around Wurzburg, Barbara Gobel, like many others, fell afoul of her cruel, superstitious neighbors. She and 900 other residents of Wurzburg were rounded up and put to death as “witches.” Christie reports, “About one million people are believed to have been burned, hanged, strangled, drowned or beheaded for witchcraft.”
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Whatever the precise number of victims of violent hysteria surrounding extraordinarily cold weather, their fate should be cautionary. Some of those who helped to kill the prettiest girl in Wurzburg and 900 others for imaginary crimes were probably not so much deluded that their victims caused the cold through witchcraft as just ruthless. They probably sought to keep for themselves a larger ration from meager, local food supplies that were suddenly inadequate for all the hungry mouths.

At that time, Germany's population was 95 percent smaller than it is now. Nine hundred persons would have comprised about 10 percent of the local population. Disposing of them not only helped to placate the superstitious, it left more food for the survivors.

Remember, in the seventeenth century, almost all food was consumed in the vicinity where it was produced. There were no railroads or 18-wheel trucks to haul grain or meat from one locale to another. Since the areas adjacent to Wurzburg had all suffered from the same savagely colder climate, there were few handy reserves upon which to draw when the grain crop failed, year-after-year.

If anything like the last Little Ice Age recurs today, you can expect bloody insanity in the world. Those with power will use it, arbitrarily, no doubt unjustly, to secure as much as possible of a diminished supply of food and other vital resources for themselves. When that moment comes, you do not want to be dependent on Food Stamps to survive.

Given the current fixation on imaginary global warming, you can expect the authorities to respond to the turn toward colder weather ineptly by further curtailing access to hydrocarbons, thus making it more difficult and costly to grow food and heat homes and other structures. But the bare chemical trace of manmade carbon dioxide (0.117 percent) in the atmosphere will be reduced by a bare chemical trace.

By the end of the seventeenth century, during the deepest cold of the Maunder Minimum, the winter of 1693–1694, the cold had catastrophic impact on local populations. In France, wine froze on Sun King's table at Versailles, and 1/10th of the population of France “perished from famine and attendant epidemics.”
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Louis XIV was lucky to keep his throne. The French people were too enervated to revolt successfully when savage cold led to famine. The Chongzhen emperor in China did not fare so well. In fact, he lost his throne early in the Little Ice Age. When crop failures led to famine, peasants revolted under the leadership of Li Zicheng. Li mobilized avid support in mountainous Shanxi Province, where higher altitudes amplified the adverse impact of colder weather on crop yields. Famine-stricken peasants rallied behind Li's slogan of “dividing land equally and abolishing the grain taxes payment system.”

After many adventures and some improbable good luck, Li's rag-tag forces defeated the home guard of the Ming army, and then sacked the capital Beijing, leading the last Ming emperor to commit suicide. Li moved to fill the power void, declaring himself emperor of the short-lived Shun Dynasty.

The story of how Li Zicheng mobilized famine-stricken peasants to overthrow the long-established Ming Dynasty during the last Little Ice Age in 1644 is a footnote to most investors. Ask your neighbors or your colleagues at work. I can assure you they know nothing about it. But I am equally confident that it is well known among the current hierarchy of China. You can count on them to act in whatever way they perceive will limit the risk that their dynasty will be turfed out by the modern equivalent of famine-stricken peasants.

As you know, the Chinese control trillions in foreign exchange reserves. Their economy is now the second-largest on the globe, and only marginally smaller than the U.S. economy on a purchasing power parity (PPP) basis.
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This is an astonishing change, considering that as recently as 20 years ago, China's economy amounted to just 5 percent of the U.S. economy. The building spree associated with the greatest surge of economic growth the world has ever known puts the Chinese in the driver's seat as the leading customers for many of the world's raw materials.

Depending upon how seriously China's ruling engineers view peak oil as a barrier to their internal growth and the degree of their concern about the threat to dynastic stability posed by rising food prices, they will move sooner, rather than later, to pull the plug on the U.S. economy. Deflating U.S. demand will reduce their sales, but also reduce their costs and enable them to reset oil and other commodity prices at lower levels.

If the Chinese do pull the plug on the U.S. economy, it will be because they recall the circumstances to which the Reverend Thomas Malthus alluded in lamenting the “but too frequent” bouts of bad weather that afflicted China where “millions of people” perished of hunger in “times of famine.” There does appear to be an acute risk of unrest in China. That is what the Chinese government must think, as officials there maintained tight censorship on news of the Egyptian street protests against high food prices. When Mubarak's ouster was finally reported, it was disingenuously attributed to a military coup. As reported by the
Economist
, searches for the word “Egypt” in Sina Weibo, one of China's leading Twitter-like services, produces a warning that, “according to the relevant laws, regulations and policies, the search results have not been displayed.” On Baidu, a big news portal, a prominent list of “‘hot search terms' includes ‘the return of compatriots stranded in Egypt,' but nothing else.”
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The Chinese authorities are predictably reticent about highlighting news of food riots gaining traction abroad when China has perhaps the highest food inflation rate in the world. The National Bureau of Statistics of China indicates that the average price of food in 50 Chinese cities in the January 21 to 31, 2011, period increased by 4.6 percent compared to the prior 10-day period (416 percent annualized).
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This rampant food inflation in the economy of the leading creditor of the United States, where per capita income is on par with Tunisia's, poses serious risks to the global recovery and to the United States in particular.

Officially, China's urban unemployment rate is 4.1 percent. But the Chinese are more adept at confusing their unemployment picture with statistical smoke than even the U.S. Bureau of Labor Statistics. The 4.1 percent rate they report is the Urban Registered Unemployment Rate. It is an artifact of Maoist era internal controls on migration within the country and does not count the millions (no, hundreds of millions) of internal migrants from the countryside who are not officially urban residents. When these “discouraged workers” are considered, China's actual unemployment rate is a staggering 22 percent. Given China's size, that means that about 200 million Chinese lack work.