[Simon_R]

Just want to mention that, currently globalisation brings shed loads of money to previously 3rd world countries, so if we basically stop trade with them, who will explain to the people in these countries why their aspirations are being crushed.

This coming from someone, who is being replaced by a horde of Indians, in the next 4 months

[SteveO]

You have all brought up interesting points about cost of shipping, labor to manufacture and oil consumption, but I think the thing that we need to consider is global finance and debt.

What happens to globalization when the dollar collapses? Will the trade mechanisms in place survive to recover while a new currency is arising to take over, assuming the resulting chaos allows such a currency to evolve? The existing system is robust to point, but when we passed that point will it ever come back to current levels of trade?

[dolanbaker]

It doesn’t matter what is written on the paper that's used to trade with as long as traders are willing to use it as exchange for goods, likewise barter is also equally acceptable.

For example food can and is traded for finished goods or fuel, trade is not dependent on a fiat currency.

[Pops]

Right, currency and credit are two different things.

But first, the US dollar isn't about to collapse and likewise it won't be replaced for a while yet either for the simple reason there is nothing with which to replace it. Nothing big enough numerically or strange as it seems, nothing with more confidence than the greenback.

Credit on the other hand is about trading partners trusting each other. Considering that every big player is hedged 6 ways from Sunday (essentially betting the other direction than whatever risk they may be exposed to) it only takes one domino to fall for the whole casino to close the windows.

[Loki]

We can see what the Great Recession did to globalization. Big drop in merchandise trade, but it rebounded fairly quickly, though the growth curve plateaued. Less of a drop in trade in services, but no rebound at all, plateau at a lower level. Combination of demand destruction and credit crisis.





http://data.worldbank.org/indicator/TG. ... play=graph

My guess is we've seen peak globalization, or will soon. If the next financial crisis happens in the next couple years, it could be the one-two punch that puts globalization on the floor.

[ralfy]

$this->bbcode_second_pass_quote('Simon_R', 'J')ust want to mention that, currently globalisation brings shed loads of money to previously 3rd world countries, so if we basically stop trade with them, who will explain to the people in these countries why their aspirations are being crushed.

This coming from someone, who is being replaced by a horde of Indians, in the next 4 months

[Loki]

$this->bbcode_second_pass_quote('ralfy', 'T')he ones who are investing money in other countries are powerful financiers and institutions, and the last thing they want is less trade.

[Loki]

$this->bbcode_second_pass_quote('Pops', 'S')o how will we transition to a localized economy?

[Shaved Monkey]

$this->bbcode_second_pass_quote('Simon_R', 'J')ust want to mention that, currently globalisation brings shed loads of money to previously 3rd world countries, so if we basically stop trade with them, who will explain to the people in these countries why their aspirations are being crushed.

This coming from someone, who is being replaced by a horde of Indians, in the next 4 months

[dolanbaker]

$this->bbcode_second_pass_quote('Loki', '
')This story suggests that even if the global shipping industry is able to adapt to rising oil prices/scarcity, demand destruction could very well undermine their efforts. Can't fully load your new monster ship, heavily financed with payments that you can't keep up with? Uh oh.

[ralfy]

$this->bbcode_second_pass_quote('Loki', '
')What finance wants and what reality can provide are not necessarily the same thing.

One example: The world's largest container ship recently launched. Far more efficient fuel-wise, as long as it's fully loaded. If it isn't, it's a white elephant. Big gamble. And we've seen in recent years how big gambles can go terribly wrong.

$this->bbcode_second_pass_quote('', 'I')t was in 2010 — during the global recession — that Maersk Lines made the decision to create this new class of megaship. Michael Heimann, senior portfolio manager at Maersk Line, was part of the development team. He says the challenge was coming up with a design that was at least 30 percent more efficient than other big container ships....

"Obviously, the more containers that we can put on, the more containers that have to split the cost of the fuel on," he says.

Richard Meade with Lloyds List, a shipping industry news provider, says that's a great argument, but only if the ship is fully loaded.

"A ship like the Maersk McKinney Moller is a fantastic advance for the industry, as long as it is full. If it is half-empty, it is probably one of the most inefficient ships ever built," Meade says. "That is the great gamble."

It's a gamble Maersk is willing to make, based on the belief that global trade will bounce back from the recession.

http://www.npr.org/blogs/parallels/2014 ... cargo-ship

[Loki]

$this->bbcode_second_pass_quote('dolanbaker', '')$this->bbcode_second_pass_quote('Loki', '
')This story suggests that even if the global shipping industry is able to adapt to rising oil prices/scarcity, demand destruction could very well undermine their efforts. Can't fully load your new monster ship, heavily financed with payments that you can't keep up with? Uh oh.

[rollin]

Homogeneity of collapse and the rate are the two big controlling factors in how we de-globalize.

If the rate is slow, then a number of important and needed products will be made locally instead of shipped in. Many unneeded products will disappear and some new local products will appear.
If the rate is high, there will be no time to transistion products as global trade collapses quickly. Local startups will be less in number and production.

Since countries and regions will differentially collapse, the effect could be partial for longer periods of time, in some countries/regions. That could mean devastation in one area while another merely experiences a slow collapse for a while. Global trade would be lessened and restricted but not end all at once.

Of course there is always the sailing ship and other wind powered ships. Trade would be slower and less convenient but it could still occur.

[ralfy]

Re-posted:

"Peak Oil Demand is Already a Huge Problem"

http://ourfiniteworld.com/2013/04/11/pe ... e-problem/

The first chart shows that oil consumption has been dropping for EU, US, and Japan due to economic crises, but it is rising for the rest of the world. The reason for this is increasing population for the rest of the world plus rising oil consumption per capita. In addition, non-oil energy consumption for the U.S., EU, and Japan is increasing but soaring for the rest of the world. (See other charts in the article.)

The reason for increasing oil and energy consumption for the rest of the world might be the presence of a growing global middle class:

"The rise of the global middle class"

http://www.bbc.com/news/business-22956470

which includes the desire to meet various basic needs. From what I know, most people worldwide lack one or more basic needs, and these needs are generally sustained using oil and other resources.

We can see these phenomena in ecological footprint or general use of various resources. A middle class lifestyle requires an ecological footprint of around 3 or more global hectares per capita. The ave. global footprint per capita is, at 2.7, approaching that:

https://en.wikipedia.org/wiki/List_of_c ... _footprint

Unfortunately, biocapacity given previous global population is much lower (1.85), and will only allow an ave. footprint per capita equivalent to that of Cuba.

To make matters worse, that biocapacity per capita will drop given increasing global population and environmental damage.