[AgentR11]

I don't get this obsession with New England. I make fun of them and lightly mock their dependence upon heating in order to not die; but past that I really don't pay much attention to them or think they are symbolic of anything else.

Most of the world is more like urban Krung Thep or Mexico City. Dependent upon extremely cheap food for survival. When food is no longer cheap, millions will starve and die. On TV. For everyone to see. And NO ONE will be able to do a thing about it.

$this->bbcode_second_pass_quote('', 'T')hat's because a global capitalist economy requires increasing production and consumption of goods for more profits

[dsula]

$this->bbcode_second_pass_quote('AgentR11', '
')By contracting the economy, increasing the money supply, then locking inflation reported below inflation experienced by the lower & middle class; the whole game works all the way down to the end of the line when food calories fail to meet required consumption and people start dieing.

[AgentR11]

If they all went away in a year for most, I'd agree. I don't think they will. Of course, each individual experiences it as a discontinuity, but smoothed over the population, I think we have a good couple decades of this sort of suffering ahead of us.

I do try to be ready for that outlier possibility of mass discontinuity though.

[SeaGypsy]

I think the US is too important to overall agriculture to be in serious calorie shortage. The US has a comparitively rosie potential for a combination of movement of people 'back to the land' and mass ag for export. (If it can get over the shocks coming at the death of the oil age).
The next bump of global social significance is about now and can be seen in the snippets coming out of NE Africa. Where productive regions are unwilling or unable to supply enough to those with nothing to pay and no economic potential. Such regions are going to be allowed to fall off a cliff/ Mad Max/ Somalia Style (Note the UN Has been having fun blowing pirates to hell on their seafront). Lawless/ failed states will proliferate over the next decades, these are where the inevitable population bottlenecking will become evident first.

[ralfy]

$this->bbcode_second_pass_quote('AgentR11', 'I') don't get this obsession with New England. I make fun of them and lightly mock their dependence upon heating in order to not die; but past that I really don't pay much attention to them or think they are symbolic of anything else.

[Corella]

$this->bbcode_second_pass_quote('ralfy', '')$this->bbcode_second_pass_quote('Corella', '.')..the effect of such is decreasing population...! -> @ralfy: http://en.wikipedia.org/wiki/Demographic_transition

[Corella]

@Agent & Ralfy, my 2 cents: you are arguing matters not possible to quantify: not to mention to balance against each other. Whether any single opinion becomes a real scenario will be a matter of organization, especially on an international level. Therein lie both: fears and hope!

[radon]

$this->bbcode_second_pass_quote('ralfy', '
')No. A global capitalist economy requires increasing REAL production and consumption of goods due to competition. That's why oil demand has been rising for decades and continues to do so.

[Corella]

It is the theories of Schumpeter, describing an economy where no company can ever rest if it wants to survive. Processes aim at increasing consumption but more effectivity as well. The way it balances is a matter of regulation!

[evilgenius]

It seems to me that there are a lot of supply side arguments in this thread. I'm much more of a demand side thinker when it comes to what the limiting factors are. Take right now, for instance, a shrinking ability of people to spend is what the problem is, not a lack of investment funds, except where those funds are not making it at low rates to small business at the street level. Those who make the decisions generally are not in favor of measures that put money into the hands of the middle class during times like these because they figure that your average person will exhibit too high a tendency to save rather than consume. Isn't it interesting that because of such biased thinking against the middle class the operations of the government were oriented towards the banks, who proceeded to do exactly what they feared from the middle class, but at a much more perilous level within the framework of the economy.

Anyway, focusing more on the limiting factor discussion, it has mostly to do with consumption by the middle class. You could say that it pertains to Marx's argument of worker surplus, but that would miss how modern economies have managed to grow to the place they have. Worker surplus economies under Marx could only have gotten here via some huge capitalist pillage that would have left no room for what we understand the middle class to be. I think this points out the role of debt in a developing and a thriving middle class. Debt can either be employed to create more wealth or it can be employed to luxuriate or it can be employed falsely. In the housing crash it was employed falsely. The veneer over the last few decades is that it was employed luxuriously. Judging by how much money retirees have to spend, and are projected to have to spend going forward, a lot of it was employed to create more wealth.

More and more in the US what is emerging is a huge gulf between those who managed their financial paths throughout their lives, staying clear of poor investment of their money and labor, and those who didn't. The US doesn't have a dole. As a consequence there are people lining every freeway offramp and large intersection holding cardboard signs. They are the kind of people who don't stop to ask themselves whether getting caught up in sign holding as a means to cope is a viable strategy for getting out of the mess they are in. Mostly they are in too deep. They are going whole hog with the strategy that even though their own selfishness was the cause of their predicament appealing to the masses is the answer. Hmmm, isn't that what they were also doing when they were misplacing their chips in their actions which led up to this mess? Isn't it also what the successful do as well? Whether investing or developing skills or starting a business or simply participating in society the successful also appeal to the masses, to a sense of common identity. Their efforts are not generally directed outside of their society, except where those efforts can bring back wealth into their lives and thus back into their society.

This, of course, sets up a criticism of the role of fraudulent tax haven offshore banking, sucking society's wealth into other systems. It also lays bare the poverty of cowtowing to such offshoring within the political system because it allows all sorts of money laundering schemes such as the drug business to take advantage of the same system and expropriate wealth as well. The very mindset inebriates officers of large corporations to selfishly see their own roles as more important than they really are and remunerate themselves lavishly, to the detriment of investor returns. They get away with this because investor have drunk the coolaid of growth over dividends to such an extent that they are willing to see growth where it doesn't exist. When a society turns away from the fruitful grindstone and toward the flowers which lay along the path it is never long before trouble follows. It's too darn bad that the right things are not sexy enough, are never sexy enough.

[AgentR11]

$this->bbcode_second_pass_quote('ralfy', 'I')n short, you're comparing the global situation to New England, where "there aren't hundreds of thousands freezing to death" or are not "short on calories."

[ralfy]

$this->bbcode_second_pass_quote('AgentR11', '
')
No. I'm not. New England is pretty much unique. It is however a "check-off" box on my "we're doomed" list. A canary in the mine, if you like.

[AgentR11]

$this->bbcode_second_pass_quote('ralfy', '')$this->bbcode_second_pass_quote('', 'n')o no no. I am VERY opposed to a gold standard in currency, it'd wreck the economy so fast, the ink wouldn't even have had time to dry on the legislation's presidential signature. We trade much to fast now for there to be an exchange-ability at anywhere near market price for a commodity like gold or even silver. No, currencies must stay fiat.

[SeaGypsy]

One thing a peaker travelling notices very clearly is the global link between the local cost of fuel and the cost of energy intensive products. The saying 'Oil in another form' is apt. First worlders have been living atop the reward (oil) for effort (value extraction) positive feedback loop. At peak, we have reached a stage where just about all our resources are mapped, where exploitation is dependent on the cost of (oil) extraction just as development depends on affordable inputs (extracted primary value) and labor (second cycle) and on and on..

Having lived in the 3rd world recently, I can assure you agent, food is not cheap. Being embodied oil, food is similarly priced globally, especially primary commodities like rice. However the whole of life is so differently viewed. If you have 10 people in a house and 5 of them work and bring home $5 a day, that $25 a day pooled is enough to have a reasonable standard of living for the household. Enough to even have a status symbol or 2 on credit parked in front or used as a taxi whilst everyone works their 6/12 week. New England is the ideal 'canary' because it is the classic secondary economy, with very high personal consumption and little of importance to offer outside of consumption.

(I can buy most food cheaper (in cross currency) in Melbourne, than I can in Manila. Fuel is about the same, but cooking gas is 3 times cheaper because Melbourne is on mains.)

[radon]

Enforcement was slow in old times, you'd have to send a regiment of soldiers to sort out irregularities in case someone decided to play odd with the money. Hence coins had to carry intrinsic value with them in order to ensure validity of the money/goods exchange instantaneously.

Nowadays the enforcement is instantaneous, money/goods exchange can be traced/enforced with a mouse click at a speed of light. Therefore no intrinsic value is required to enforce the legal consequences of the contract designated by a money bill.

When and if the modern society crumbles, golden money may gain allure again, for the same reasons.

[Pops]

$this->bbcode_second_pass_quote('radon', 'N')owadays the enforcement is instantaneous, money/goods exchange can be traced/enforced with a mouse click at a speed of light. Therefore no intrinsic value is required to enforce the legal consequences of the contract designated by a money bill.

[AgentR11]

Ok... if yall won't accept the phrase "food is cheap"; let me offer something different.

Food will become vastly more expensive in the years ahead.

[ralfy]

$this->bbcode_second_pass_quote('AgentR11', '
')
No, it doesn't contradict it. For analysis purposes, any random commodity can be used as the denominator on a set in order to remove some of the price manipulation that is the result of fiat currency policies. That doesn't imply that I think a gold (or any other commodity) standard would be in any way beneficial(or even possible) to the economy. Its also a good way to compare costs across currency discontinuities (such as the dropping of the gold standard, introduction of a new currency, or the creation of a federal reserve system aka lender of last resort).

[AgentR11]

That makes about as much sense as saying paper is an inappropriate medium for drawing graphs of oil well productivity since pumps are not made of paper.

currency, trading commodities, orbs of magic light... whatever, its just a yardstick used to measure relative and over-time changes in cost.

[ralfy]

$this->bbcode_second_pass_quote('AgentR11', 'T')hat makes about as much sense as saying paper is an inappropriate medium for drawing graphs of oil well productivity since pumps are not made of paper.