Interview by Lars Schall, posted May 23rd, 2009
http://lifeaftertheoilcrash.net/Archives2009/RuppertInterview.html
Lars Schall: Mr. Ruppert, you’re about to publish a new book. What is the title of this book and what is it all about?
Michael C. Ruppert: A Presidential Energy Policy: Twenty-Five Points Addressing the Siamese Twins of Energy and Money is a book addressing what an American President should be doing and saying about energy issues free from ideological, political, or other mental restraints. It is a simple and stark analysis of the world’s current energy picture written for those with only a High School education that quickly and clearly cuts through the nonsense we have been sold about energy, money and growth. It also has wide appeal for planners and leaders (especially local) in all countries. Energy behaves the same way everywhere. German foresight on energy issues — in particular its aggressive implementation of Feed-in-Tariffs — has offered some very positive innovations that I have recommended be adopted by President Obama here in the U.S.
QUESTION: When and through what did you begin to take interest in Peak Oil? Had there been all at once a nightmarish vision like “the Road to the Olduvai Gorge” in front of your eyes?
Michael C. Ruppert: I was first exposed to the concept of Peak Oil by geologist Dale Allen Pfeiffer shortly after 9-11. I was struck by how simple and clear the actual science was; how easy the issue was to both comprehend and validate using nothing more than basic math and simple logic. It was absolutely a nightmarish vision then (and still is) but it explained so much about geopolitics, macro economics, war and the markets that I jumped into it right away. — We are still on the Road to the Olduvai Gorge and that is precisely what my book seeks to prevent.
Years have gone by since then. Even though major newspapers like the New York Times admit these days that the end of cheap oil is near, they rather avoid to discuss the underlying consequences of Peak Oil. How would you explain those consequences? Isn’t Peak Oil somehow the end of globalization?
Peak Oil is not just the end of globalization. I was saying clearly that globalization was dead five years ago. It was obvious. But Peak Oil is potentially the end of the human race and that outcome is perhaps just a few years away unless the human race essentially throws every ideological sacred cow out the window and starts with a fresh piece of paper. There are around five billion people alive today that were not sustainable before oil came along. There is no combination of alternative energies (nor will there ever be) that can possibly sustain the edifice built by oil. In the industrialized world there are ten calories of hydrocarbon energy involved in the production of every calorie of food. Our soils have been little more than infertile sponges onto which we throw massive amounts of chemicals derived from oil and natural gas.
The most dire consequences may lie in food production, anyway. Agriculture depends a huge deal on oil. At From the Wilderness (FTW) you had the thesis that we are “eating fossil fuels“. Can you explain those relations a bit?
In our world a farmer drives an oil-powered machine to plow fields. He or she then drives another oil-powered machine to plant seeds. Water for irrigation is — in most cases — pumped by electricity generated by coal, natural gas, and oil. Germany has made great strides in electrical generation through Feed-in-Tariffs which have exploded solar and wind generation but they do not resolve the whole equation. After seeds are planted and irrigated the crops are then sprayed with pesticides (derived from oil) and fertilizers (produced from natural gas). To harvest the crops the farmer then drives another oil-powered machine. Then oil is used to transport the food to processing plants and for subsequent distribution. Food is often wrapped in plastic (also oil) and frequently treated with chemical additives also derived from oil and gas.
Globalization has only compounded the issue by shipping food all over the world (wasting oil) for the sake of profit rather than sustainability. I live in California and can go to a market and find strawberries from Chile while Southern California grows great strawberries. This pattern is the same for most food consumed in industrialized countries. This only happened because cheap labour costs and less-stringent regulation became more important than common sense. Money overcomes logic every time. But just watching globalization end will not solve the problem. As I have said for years, globalization dies with cheap energy. There’s little point in fighting it anymore unless the struggle is in pursuit of a unified energy vision.
The financial mess we’re in: Has it something to do with Peak Oil, too? Is there this systemic crisis because we are heading towards the end of the Age of Oil – and no one is telling the public so?
The current economic collapse is a combination of two things. First, the current global economic paradigm — governed by fractional reserve banking, fiat currency, and compound interest (debt based growth) — is inherently and by definition a pyramid scheme. Money is useless without energy. One cannot eat a dollar bill or crumble it up and throw it in his gas tank. Each of the trillions of dollars created out of thin air since the fall of 2008 is a commitment to expend energy that cannot and will not ever be there. The Laws of Thermodynamics prevent this. I applaud the decision of Chancellor Merkel to resist the temptation to achieve a temporary solution by printing money endlessly. I am German by ancestry. My great grandfather migrated to the U.S. from a small town in Essen called Ruppertsburg at the turn of the last century. German pragmatism and realism on energy has been apparent to me since my first visit to Germany in 2003. It is not perfect and must be improved, but I have seen more clear thinking on the subject in Germany than in any of the 13 countries I have visited. That is actually not as good a thing as it might sound. There can be no “recovery”, no return to growth (which is what the economic paradigm demands), without energy.
Why is this not discussed openly: The dinosaurs of the old paradigm — who are about to pass into extinction — cannot admit this because it would have an immediate effect on the financial markets which are already dying. People would stop buying stock if they understood that a return to growth is impossible. I think, however, that on a more fundamental level the dinosaurs just cannot see their own impending extinction. They are incapable of mental and spiritual evolution which all of our survival depends upon. They cannot adapt. As the global environment changes forever, from the related issues of climate change, energy shortages, and economic collapse all dinosaurs can do is die. That’s what Darwin so clearly proved with regard to all life on this planet. Those species which cannot adapt must go extinct. We see billionaires and dinosaurs disappearing or losing money everywhere. Even Warren Buffet and George Soros are losing money because they cannot grasp that infinite growth is not possible. The term “sustainable growth” is perhaps the greatest oxymoron ever coined and an instant indicator of imminent Darwinian deselection for anyone who uses it. I keep a safe distance from such people.
Mainstream media all over the world is corporate-owned; a dinosaur by definition. In America CNN is owned by Time-Warner; CBS is owned by Viacom; NBC is owned by General Electric, ABC by Disney; the Wall Street Journal is owned by Rupert Murdoch and Newscorp, ad infinitum. All large press outlets sell stock and — far worse — are tied into a global derivatives bubble now estimated at $700 trillion in notional value that not only is collapsing: The Mother of All Bubbles.[4] Telling the truth to the people means that people will stop buying GE, Time Warner, Viacom and Newscorp stock so that is the last thing mainstream media can acknowledge.
Those who produce, edit and report the “news” are corporate citizens rather than human beings. They have chosen to murder their own children to protect their current jobs (the food they receive from an abusive parent). Being of German ancestry I am sensitive to issues about being willfully ignorant (cowardly) in the face of great evil. I am also aware of and grateful for the White Rose and von Stauffenberg and his heroic colleagues. I have felt like these great Germans must have felt for many years now. I still owe a great debt of gratitude to my old friend Andreas von Bülow from Köln[5] who graciously exposed me to authentic German culture. I have lost contact with Andreas and his wife Anne and I pray they are well. Now we find that this blindness is an inherent part of humans in all countries and the one thing that must and will go extinct with the Old Paradigm. [Source]
But the dinosaurs are losing their grip. Since the start of the collapse of industrial civilization, corporate-owned media has become something of a joke. “Check the tire pressure on your resume” is about the best advice they can offer. Then they say, “We think we have hit the bottom, so buy stock and don’t pull your retirement out of the markets” while at the same time issuing reports that show that we are nowhere near a bottom and that everything is getting worse. Who can trust such nonsense. There must be a great German word that means idiotic, contradictory and bullshit at the same time. [Kokolores]
The money that is spend in billions and trillions these days will be needed in the struggle with the consequences of Peak Oil – and will be gone. Forever. Doesn’t make that a collapse of industrial society inevitable?
The collapse of industrial civilization within the next five to ten years (perhaps sooner) is inevitable. It is the degree of collapse, what is destroyed in the collapse, how many people will have to die in the collapse, and what will survive the collapse that I and many others are fighting for now. That is what every human being should be concerned about and nothing less. Pursuing options while not rapidly disengaging from the current economic paradigm of infinite growth is the only real issue confronting the entire species. To not do that will be literally to consign unborn generations and those under 40 to death or a living hell.
QUESTION: Mr. Ruppert, if we know something for sure about 9/11 it is the fact that the world public was rather misled. Information on TV and in the newspapers was very one-sided and incomplete. What does this tell us about the handling of the situation we are facing now in 2009? And hasn’t 9/11 itself become a major distraction from the collapse of industrial civilization?
Few have done more detailed investigation of the 9-11 attacks than I have. Even though Rubicon is in the Harvard Business Library and has sold around 100,000 copies in two countries, it has never even been acknowledged by my government. 9-11 was a predictable event and it was motivated precisely and solely by Peak Oil and nothing else. I believe I proved that conclusively in Rubicon which has never been challenged; only ignored. It is absolutely too late to go back and seek justice for the crimes of Richard Cheney and George W. Bush. I believe they were counting on that. It would be literally a waste of energy. Oil and natural gas can only be burned or consumed once. The present crisis is so severe that we cannot waste oil, natural gas and the limited energies of human consciousness to go back there.
QUESTION: At the end of Crossing the Rubicon you stated this scenario:
We have to pay for $100-(or higher) a-barrel oil somehow. Why don’t
we just print the money? Anyone who has heard of the damage done
by inflation and hyperinflation to those least able to cope with it
should think back to Germany’s Weimar Republic in the 1920s.
There is no need for you to rewrite this passage insofar it seems like this recession wants to prove you’re right, don’t you think?
Weimar-style inflation is inevitable in the United States, especially as major economies start to disengage from the dollar. I predicted this at least six years ago. It is only a matter of time. Here is the basic sequence of events I see coming: FDIC insolvency, Treasury default on T-bills and all Treasury notes, the end of the dollar as the global reserve currency, hyperinflation, insolvency and bankruptcy of the Federal Reserve which is a privately-owned bank. That will be followed by the eventual collapse of the United States government. All of these things are inevitable in my opinion and could happen in full in as little as three years. The dinosaurs refuse to accept this because they won’t question a monetary ecosystem which they created and which has allowed them to thrive from the Garden of Eden until now. Those who wish to survive and understand the issue will do whatever they can to disengage from a Titanic that is clearly sinking by building local lifeboats, tailored to their local needs.
Fortunately, there are many things that can be done, independent of government action, and that’s why A Presidential Energy Policy was written.
QUESTION: In February of this year, the International Energy Agency (IEA) in Paris put out a forecast in which they are predicting an even bigger economic crisis in years to come. According to the IEA, the reason for this is the cancelling of new investments into new drilling projects by the major oil companies. In the case of rising demand in 2010, the oil price could explode, inflation could rise and the result could be that world economic growth would likely come to an end. Let us talk about the infrastructure problem first: Why do you think big oil doesn’t invest anymore in new projects?
All of those projects, whether for deep sea oil or in pursuit of alternative energies were only profitable when oil was at or near $100. All over the world, energy infrastructure is crumbling as a result of collapsed oil prices making it unprofitable to invest in infrastructure or alternatives. A few years ago Robert Hirsch of SAIC wrote a study for the U.S. government warning of the crisis which stated clearly that the time to have started preparing for this was 30 years ago.[8] He examined scenarios in which preparations were begun twenty, ten and zero years before Peak. All scenarios were catastrophic. His observations were only confirmations of warnings issued by Vice Chancellor David Goodstein of Cal Tech which said clearly in his book that it takes thirty years and a lot of money to change an energy infrastructure. Mankind has waited until the last minute and there is no money left. It’s that simple. People have been warning about precisely this moment since 1949 when the great M. King Hubbert laid this landscape out for all to see. There is little or no money left for essential infrastructure investment and the infrastructure cannot be rebuilt under the current economic paradigm. As Dutch economist Martin van Mourek said in 2003, “It may not be profitable to slow decline.” He was absolutely correct and I knew it the instant I heard him say it in Paris. [Source]
And now let us talk about the oil price spike. In 2006, you and Michael Kane wrote an article for FTW called “The Markets React to Peak Oil. Industrial Society Rides an Unsustainable Plateau before the Cliff”, in which you were writing about the Bumpy Plateau. You’ve explained it like this:
Recent price swings – both up and down – have been predicted as a
part of the Peak Oil scenario for years. I saw the first hard predictions
of the bumpy plateau in 2002, and they made good sense.
WHAT IS THE “BUMPY PLATEAU”?
Here’s how Colin Campbell described it when FTW contacted him for
this special report:
1. Price shock (as the capacity limit is breached)
2. Economic recession cutting demand
3. Price collapse (the market overreacts to small imbalances between
surplus and shortage)
4. Economic recovery (followed by increased demand)
5. Price shock (as the falling capacity limits are again breached)
Simply put, everything is triggered by the inability of the planet to
increase supply beyond a certain point, regardless of demand. That is
the definition of peak. Peak is still peak whether it leads to sharp and
immediate fall off or to the bumpy plateau we are now seeing. Source
Is this model still the procedure after which “everything is triggered”? Is it the Bumpy Plateau that the IEA is talking about for 2010? And was it the Bumpy Plateau we have witnessed already in 2008?
We are on the bumpy plateau right now. The description and predictions offered by Campbell and many others were very good but only two-dimensional in that they addressed price and demand only. I think my greatest contribution on top of their pioneering work has been to thoroughly explore and illuminate the corruption of the economic paradigm, the significance of derivatives [Example] and to introduce that as a third factor. This has allowed me to make astonishingly accurate predictions for a decade now. The implosion of the derivatives bubble which has only just begun may prevent any real or even temporary “recovery” from ever taking place. All the energy spent on a “recovery” in the infinite growth paradigm will have been wasted. One thing I am also certain of is that there won’t be many bumps in the bumpy plateau. As soon as any kind of recovery begins, it will collide instantly against the brick wall of diminishing energy. We have passed Peak I am certain. The IEA has virtually admitted all this. After the last bump it is straight down the cliff back to the Stone Age unless people take action immediately.
QUESTION: In 2001, when the Bush Administration came to power, the broader public did know nothing about Peak Oil. The Bush Administration did. In your book “Crossing the Rubicon” you point to a speech by Dick Cheney that he delivered in London at the Petroleum Institute in 1999. [Source] Mr Cheney was the CEO of Halliburton back then. He was in the loop, right?
Cheney was the loop. There is an abundant record that the most powerful policy-making institutions have known about Peak Oil since at least the 1970s. That includes our CIA, [Source] leadership in Russia, Britain, China and Japan. My studies suggest that Germany understood it best and has done the most to address it implications over the years.
QUESTION: An important topic of your research with regard to 9/11 are the unknown records of the “Energy Task Force” run by Dick Cheney, the National Energy Policy Development Group. In Crossing the Rubicon you wrote:
. . . the deepest, darkest secrets of September 11th lie buried in the
records of the US National Policy Development Group (NEPDG) which
began its work almost the same day the Bush administration took
office and produced its final report in May of 2001, just four short
months before the World Trade Center ceased to exist.
Can you explain this in more detail for those who have never heard about this before?
It’s explained in detail both in A Presidential Energy Policy and in Crossing the Rubicon. Essentially the NEPDG appears to have been set up, almost from the first day of the Bush administration, to find out how much oil was left, who had it, and how it could be obtained (bought or stolen) to support U.S. hegemony, U.S. consumption, and the monetary paradigm. Those things are all dinosaurs anyway and they are dying in the New Paradigm as they must. The fact that the NEPDG records have been kept secret from the American people who paid for it is one of the greatest crimes of all time. Seeing those records now would save a lot of duplicated effort in trying to inventory how much oil there is left.
The figures on oil reserves quoted by producing nations and companies are as fraudulent and cooked as the books on mortgages, banking, and even Bernie Madoff. The Saudis cannot hide the fact that they have passed Peak anymore. I prove that in my new book. The world’s largest energy investment banker Matthew Simmons proved it before I did in his book Twilight in the Desert. I have proved the same thing a different way. If Saudi Arabia has passed Peak then the whole world has passed Peak. It was Peak Oil that was driving Dick Cheney’s Task Force and nothing else.
QUESTION: Is there a chance that we will ever know about the real content of the NEPDG files?
I hope so. That’s what I have called for in A Presidential Energy Policy.
QUESTION: You are known for using this quote by Benito Mussolini:
Fascism ought more properly be called corporatism because it is the
perfect merger of power between the corporation and the state.
Isn’t Dick Cheney a perfect example for this? He did made a whole lot of money as a main-shareholder of Halliburton through the foreign policy of the Bush Administration, didn’t he?
He shouldn’t be singled out. The Bush-Cheney administration had its “base”. Some of that base is shared with the Obama administration. The Bush-Cheney administration, knowing that collapse was coming, looted the U.S. economy on behalf of its base. It was perhaps the largest wealth transfer (theft) in history. I predicted and warned about each step in precise detail for eight years. [Source]
I was dead-on accurate and there’s a clear record to prove that. And I suffered for it. I was harassed, sabotaged, my offices were burglarized and my computers smashed in 2006 prompting me to flee the U.S. for four months. What did we Americans do as Bush and Cheney rode out of town with all that wealth? We gave them a parade and called it inauguration day.
Beyond Peak Oil as a motive for the Bush Administration to “arrange” the thing that we know as “9/11″, you wrote extensively about the importance of Afghani drug traffic. Since the military engagement of NATO forces in Afghanistan, the profits from heroin trade are at an all time high, aren’t they?
The global drug trade is evolving. I won’t go back now and explain what happened between 2001 and today. The global drug trade was estimated by me to be generating around $600 billion a year in total revenues in 2004. That was fine as long as the infinite growth bubble appeared to be functioning. Drug cash was chased by banks and major corporations like General Electric, AIG, Philip Morris, Citigroup, etc. back then. Europe was no exception. But now the collapse of a $700 trillion derivatives bubble has changed everything. What was a lubricant to allow further expansion of the bubble in 2001 is today less than the minimum monthly payment on a credit card.
The reason why the U.S. is having all this drug violence now is, I am certain, because U.S. banks are crying for all the illegal cash they can launder to service the “minimum monthly payments” on their derivative exposure. The drug violence is here because all over Mexico the word is out on the streets, “Get a kilo of grass across the border and you get $500.” It’s a stampede because Mexicans are starving. That is because their largest oil field Cantarell is collapsing and oil revenues have plummeted. It always comes back to energy and money.
Who knows how many drugs are being consumed now? Personally, I don’t think it is significantly higher than it was five years ago or twenty-five. I have written extensively — citing scientific studies — that only about 10% to 12% of any given population is susceptible to addiction. The rest of the people may use drugs but will never get addicted because they realize it’s not beneficial. They don’t like it. One does not create addicts by pumping more drugs into a society. One only feeds that fixed percentage who are susceptible to addiction. That is what is called a captive market under the current monetary regime.
QUESSTION: Let’s take a look at this news article from Reuters, please:
Reuters: UN crime chief says drug money flowed into banks
The United Nations’ crime and drug watchdog has indications that
money made in illicit drug trade has been used to keep banks afloat in
the global financial crisis, its head was quoted as saying on Sunday.
Vienna-based UNODC Executive Director Antonio Maria Costa said in
an interview released by Austrian weekly Profil that drug money often
became the only available capital when the crisis spiralled out of
control last year . . . Source
Can you comment on this?
As Claude Rains said in Casablanca, “I’m shocked! There’s gambling going on in this establishment.”
QUESTION: Mr. Ruppert, we are talking here about Organized Crime at the top ranks in finance, economics and government. One might think: “Well, has it ever been different before?” In my opinion the main difference is that Organized Crime is nowadays almost officially part of the game – it isn’t really hidden anymore. One example for this is the manipulation of the stock market by the infamous Plunge Protection Team (PPT). Can you explain how the PPT works, who is involved and why its existence isn’t just a “conspiracy theory”?
The PPT is overwhelmed now. This collapse has been a tsunami that has rendered the PPT largely ineffective. It had the ability to intervene artificially to prevent market collapses when it was only billions of dollars involved.
Now that we’re dealing with trillions the PPT is of little interest. Broadly speaking, the U.S. Treasury (almost a proprietary of Goldman Sachs) has become in itself a PPT with increasing ineffectiveness. The U.S. is currently having the biggest “Sucker Rally” there will ever be.
QUESTION: I would also like to talk a little bit with you about gold under the circumstances of Peak Oil. I remember you have written a while ago that the “new” wealth is gold – which is the ‘old’ wealth. What do you mean by that precisely?
Look, the fact is that when the FDIC and the Federal Reserve go insolvent, gold will be the only place left to turn. Proposed new currencies cannot solve the problem. They will only destroy evidence and people by chasing the mirage deeper into the hole. New currencies will only recreate the same problem in a different and more vicious form. For seven thousand years the human race has chosen only one option as a universal store of value in hard times — gold. To protect against inflation — gold. I have seen many reports saying that there is five times more paper gold than there is physical gold out of the ground. Gold is finite. It cannot be printed. It has a connection to the earth. I strongly advise all my readers to buy and hold physical gold and have done so for years. The human race does not have to stay with gold forever. But it will help those with it to survive and function economically as collapse unfolds.
QUESTION: Another question, straight and dry: Is the gold market manipulated, and if so, how?
Absolutely gold prices have been manipulated. For the best discussion of that I recommend the Gold Anti-Trust Action Committee (GATA) and Le Metropole Cafe
QUESTION: You have said over and over again during the last years: “As long as you don’t change the way money works, you change nothing.’ For example you wrote recently in an open letter to President Obama: ‘All you are doing is buying time to prevent the collapse of a totally dysfunctional marriage where the mother (the government) kills the children (us) to save her relationship with the father (the way money works).’ Two simple questions: How does money work, and: How should it work in future?
These are addressed clearly and succinctly in my book.
QUESTION: In order to sum our interview up so far: What we need is a paradigm shift. How should it look like, besides a change of the way money works?
The way the paradigm shift should occur and what it should look like is a discussion for the entire human race. I choose not even try to answer that. I do offer some ideas on how to start the dialogue in the book.
QUESTION: Let us take at the end of this interview a look into the future. Ten years from now: Give us your best case scenario, please.
There is a mass awakening of human consciousness; the equivalent of mankind taking the red pill from the movie The Matrix. We stop chasing an impossible notion of infinite growth and begin to change our minds about life and what it means right now. We accurately, clearly and fearlessly accept and embrace the crisis and begin implementing available solutions today. We stop feeding the economic beast which has no option but to kill us in order to save itself. Maybe instead of four or five billion people starving and or dying in resource wars, or in nuclear exchanges over resources, we can reduce that number to two or three billion and also identify, redefine and preserve the best parts of human civilization for the generations that follow. We find a way to live in balance and true sustainability with the planet that gives us life and all the life that we share it with.
QUESTION: And now give us your worst case scenario, please.
Human extinction and the possible extinction of all life on the planet, either as a result of climate collapse or a global nuclear exchange over energy.
The coming situation of Peak Oil will be a turbulent event. When I got you right, you argue in “Crossing the Rubicon” that the Patriot Act and the cut-back of the Posse Comitatus Act were implemented by the American government to prepare itself against civil unrest during the ‘hard times’ of Peak Oil. Is your country heading into a future where freedom is again a privilege, not a given right? And why should people in Europe and around the world be very interested in the freedom of the citizens in the United States?
I disagree with the Russian analyst who predicted a civil war here. [Source] Civil wars are defined by geographic boundaries. I do however think it inevitable that the United Sates will dis-integrate and there are clear signs of that beginning right now. But what’s going to happen here is no different than what will happen all over the world. As human industrial civilization collapses everything will be governed by a force as powerful and unyielding as gravity. That is geography. Things do not break up. They break down. They get smaller. Problems in Essen or the Rhineland will be different from problems in East Prussia or Bavaria. There will be massive social unrest here but I do not believe it can be accurately predicted how that will play out. There can be only one end result.
Everything will revolve around what is within 50 or 100 kilometers of where one lives. The reason why the United States is so important is because my country still exerts so much political, social, economic and cultural influence around the world. In writing “A Presidential Energy Policy” I not only recognized the difficulties we face here but the fact that if the United States can change, if it can drop the suicidal notion of infinite growth and its defense of a corrupt and murderous economic paradigm, then the whole world will be that much more empowered to save itself . . . country by country, region by region, and neighborhood by neighborhood
