That was certainly true for the Russian Federation, but as noted down the thread it also resulted in a huge drop in production, contributing to a large drop in net oil exports.

I just wish the fools try to maintain "status-quo" until they realize they don't have enough oil for wars. I wish, things unfold like its mentioned in the Long Emergency. But I'm scared to think of what the various nations will do given their latent nuclear weapons. They don't need (much) oil for firing these, anyway.

A self-destructing pakistan is good enough to start WWIII.

The HL method gives us a plausible estimate of the area under a production rate versus time curve, i.e., URR for a region. As such, it is far more accurate at predicting cumulative production than at predicting the production rate at a specific point in time.

In the comments section on my original post on the top net oil exporters, in January, 2006, after some discussion with Khebab based on HL modeling, I concluded that Russia would probably resume its production decline within one to two years. My premise was the ongoing rebound in Russian production was largely just making up for what was not produced immediately after the fall of the Soviet Union. I outlined the theory in this article:

http://graphoilogy.blogspot.com/2007/06/in-defense-of-hubbert-linearizat...
In Defense of the Hubbert Linearization Method (June, 2007)

I should add that all of this was based on using Russian production data through about 1984 to predict future cumulative production.

I have read articles suggesting that the decline in production (due to failure to adopt new technology) may have also been a cause in the failure. I haven't really looked at the situation in the Soviet Union, but all one needs is a flattening in oil available for domestic use, or a small dip, to start cause widespread debt defaults, and to begin a downward cascade.

A key to understanding what happened to the USSR and their oil production is that oil prices crashed in the mid 1980's from the high levels of the 1970's and USSR lost its main source of external income. With low oil prices there was no incentive to invest in or even maintain their oil industry, nor was there money to pay for imports or their military, police, etc.

No doubt some of this is taking place today, not just with oil but also with mining and manufacturing.

I used to think that an economic collapse leading to social disintegration was something that was unlikely to happen, at least in my lifetime; however, when I read accounts of USSR and Argentina I see that it clearly is possibe.

We are living in dangerous times.

The most troubling feature of the FSU collapse was the lack of law and order that Dmitri Orlov told of in "Reinventing Collapse".

I remember in 1996 being on a business trip to Norway, just across the border from St. Petersburg. When I told my hosts that I wanted to go to St. Petersburg they where emphatic that I not do so and that I would most certainly be mugged and possibly killed, as several people they knew had.

Hello Greyzone,

I would also imagine the nuke targets would include the P & K mines and processing facilities, the H-B natgas into ammonia & urea factories, plus the huge sulfur stockpiles. In short, ICBM-targeting existing I-NPKS infrastructure would guarantee full-on O-NPK recycling for any survivors!

Here's are a couple of articles expanding on my view, which is essentially that credit bubbles have their own internal dynamics that are far older than the fossil fuel era. They are thoroughly grounded in human nature. I would argue that energy subsidy has driven this one to unprecedented heights, and a lack of energy will be a very significant factor in the severity of its aftermath, but I do not believe that lack of energy is a proximate cause of the great deleveraging.

On the nature of credit bubbles: From the Top of the Great Pyramid

Everyone has heard of pyramid, or Ponzi, schemes. In their simplest form they are short-lived deliberate frauds where a small number of existing members are paid from the buy-in of a larger number of newer members until the supply of newer members is exhausted, whereupon they collapse. Typically, the founders, and perhaps a few others who got in early and out before it was too late, end up making a lot of money at the expense of later entrants, who end up holding the empty bag. There are always many more losers than winners. What most do not realize, however, is that Ponzi dynamics are far more pervasive than people think. There are many human systems that ultimately rest on the buy-in of new entrants, and every one of them will ultimately meet the same fate, although it can take far longer for complex constructions than for simple pyramid frauds.

On the fate of credit bubbles: Inflation Deflated

Attempts by governments and central bankers to reinflate the money supply are doomed to fail as debt monetization cannot keep pace with credit destruction, and liquidity injected into the system is being hoarded by nervous banks rather than being used to initiate new lending, as was the stated intent of the various bailout schemes. Bailouts only ever benefit a few insiders. Available credit is already being squeezed across the board, although we are still far closer to the beginning of the contraction than the end of it. Further attempts at reinflation may eventually cause a crisis of confidence among international lenders, which could lead to a serious dislocation in the treasury bond market at some point. If a debt-junkie economy can no longer easily raise funds, then interest rates would rise substantially and spending at home would be drastically cut. This would be the financial equivalent of hitting the 'emergency stop' button on the economy, as it would cause a far larger rash of defaults than anything we have seen so far.

On the genesis of this particular credit bubble: The Resurgence of Risk - A Primer on the Developing Credit Crunch (August 2007)

We have been living in inflationary times, for as long as most of us can remember. The money supply keeps expanding and prices increase over time as a result. Central bankers have many tools at their disposal which they can use to tweak the economy-–they can raise or lower interest rates, can control reserve requirements for fractional reserve banking and can inject liquidity into the banking system, among other things – and we have become used to thinking that they can prevent the kind of 'economic accidents' that previous episodes of excess have led to in the past. Especially in recent years-–since the apparently successful containment of the dot com aftermath--we have acted as if risk were a thing of the past. Sliced, diced and spread around Wall Street and the rest of the global financial system, risk has seemed tamed, contained and controlled, until last week that is.

Hyperinflation? Not any time soon.

I don't think it's necessary to figure out how exactly Americans are going to go broke. Most will get there the old- fashioned way, they'll lose their jobs. No jobs, no money. No money, no borrowing. No borrowing, no spending. No spending and the businesses that depend on spending fail. The circle is closed when these businesses fire their workers.

Any debt held by any of the above is more or less uncollectible. Bankruptcy clears the accounts.

Here are foreclosures:

Here are personal bankruptcies:

Unemployment:

If anyone thinks demand is going to pick up anytime soon, they are totally insane. Few are creditworthy and those that are treat credit like it is a contageous disease.

Inflation takes place/causes and is caused by credit expansion. A 'virtuous' cycle causes GDP to expand. This is what the government and the Fed are trying to revive.

Hyperinflation takes place when money velocity increases and GDP declines. It might happen yet, but money velocity is in the toilet:

You can get the sense that available cash to fuel demand is falling faster than the depletion rates for just about everything else. No 'Mon' no 'Fun'.