Sobering thoughts on New Year's Day. #FT #Economy
Sobering thoughts on New Year's Day. #FT #Economy
You can't really summarise in a few paragraphs the state of our economy & the reasons why we are collectively less wealthy now than several years ago, but this is a pretty good attempt.
Read the whole article (it's not long, debate/informed criticism welcomed ) but here's a good quote:
"The crash of the mortgage racket occurred not just because of swindling and fraud among bankers; in fact, that was only a nasty symptom of something larger: peak oil. I know that many people have come to disbelieve in the idea of peak oil, but that is only another mode of playing pretend. Peak oil, which essentially arrived in 2006, undermined the basic conditions of credit creation in an advanced techno-industrial society dependent on increasing supplies of fossil fuels. Most people, including practically all credentialed economists, fail to understand this. There is a fundamental relationship between ever-increasing energy supplies > economic growth > and credit-based money (or “money,” if you will). When the energy inputs flatten out or decrease, growth stops, wealth is no longer generated, old loans can’t be repaid, and new loans can’t be generated honestly, i.e. with the expectation of repayment. That has been our predicament since 2008 and nothing has changed. We are pretending to compensate by issuing new unpayable debt to pay the interest on our old accumulated debt. This pretense can only go on so long before our economic relations reflect the basic dishonesty of it. Reality is a harsh mistress."
http://kunstler.com/clusterfuck-nation/the-end-of-pretend/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+clusterfucknation+(Clusterfuck+Nation)&utm_content=Google+Feedfetcher
You can't really summarise in a few paragraphs the state of our economy & the reasons why we are collectively less wealthy now than several years ago, but this is a pretty good attempt.
Read the whole article (it's not long, debate/informed criticism welcomed ) but here's a good quote:
"The crash of the mortgage racket occurred not just because of swindling and fraud among bankers; in fact, that was only a nasty symptom of something larger: peak oil. I know that many people have come to disbelieve in the idea of peak oil, but that is only another mode of playing pretend. Peak oil, which essentially arrived in 2006, undermined the basic conditions of credit creation in an advanced techno-industrial society dependent on increasing supplies of fossil fuels. Most people, including practically all credentialed economists, fail to understand this. There is a fundamental relationship between ever-increasing energy supplies > economic growth > and credit-based money (or “money,” if you will). When the energy inputs flatten out or decrease, growth stops, wealth is no longer generated, old loans can’t be repaid, and new loans can’t be generated honestly, i.e. with the expectation of repayment. That has been our predicament since 2008 and nothing has changed. We are pretending to compensate by issuing new unpayable debt to pay the interest on our old accumulated debt. This pretense can only go on so long before our economic relations reflect the basic dishonesty of it. Reality is a harsh mistress."
http://kunstler.com/clusterfuck-nation/the-end-of-pretend/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+clusterfucknation+(Clusterfuck+Nation)&utm_content=Google+Feedfetcher
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