by Daniel_Plainview » Mon 02 Jan 2012, 00:17:13
$this->bbcode_second_pass_quote('Cog', '')$this->bbcode_second_pass_quote('Heineken', 'C')og, how do you define collapse? For me true collapse must be accompanied by at least partial population die-off. No die-off is taking place. Large parts of the world---Asia, South America---ARE booming. What we have right now is a pretty big case of indigestion. Not collapse. Maybe a PRELUDE to collapse, at most.
I do not define collapse in the same way others do evidently. I'm more of a slow crasher. When I observe the Fed and Treasury pull out every tool in their arsenal, lowering interest rates to near zero, quantative easing, near one trillion in direct bailouts to the banks, massive stimulus to the states, and after all of this manage to achieve very low "growth", it makes me think that growth, as we know it is impossible.
The underlying assumption behind pensions, 401k's, social security, medicare, ability to pay interest on debt, etc is all predicated in growth of GDP. When real growth becomes impossible, the whole system fall apart. That is what I believe is occuring right now. For those still working, we don't see it yet. For the millions of middle class people who have lost their jobs, their houses, and have joined the poverty class, its all too real. They have experienced a fast crash. No, they haven't died yet since we can still play financial games for a while to feed and house them using even more borrowed money. Eventually those games will not be able to be played and death will follow.
Now I do not blame peak oil/expensive oil for causing the slow collapse we are undergoing. I do blame cheap oil for permitting us to construct a system which at its core is a Ponzi scheme. What peak oil does now, is to insure that we can't inflate any more bubbles, grow GDP without massive borrowing, or continue our empire. We will collapse slowly at first and then all at once as things continue to unravel on the Ponzi assumptions we have made to this point.
China and India will continue to grow for a while. The USA and to a large extent Europe has outsourced its production to these countries. Competition for the remaining oil can not help but raise the price of oil. It may be a slow rise, $10/year for a while, but at some point, our economic/infrastructure system as constructed, will simply not be able to function. The middle class squeeze as it were.
We don't have two decades. We don't even have one decade. I give us five years before the crisis is truly on us. In between then and now, we will lurch from crisis to crisis with expensive oil behind every bit of it.
Excellent post.
$this->bbcode_second_pass_quote('', 'N')ow I do not blame peak oil/expensive oil for causing the slow collapse we are undergoing. I do blame cheap oil for permitting us to construct a system which at its core is a Ponzi scheme. What peak oil does now, is to insure that we can't inflate any more bubbles, grow GDP without massive borrowing, or continue our empire. We will collapse slowly at first and then all at once as things continue to unravel on the Ponzi assumptions we have made to this point.