[Bas]

...will pose a major problem. We're all stuck in countries that are making debts with the notion that while their economies grow, it will be easy to pay those debts of in the future. However, soon we will have to get used to slowly declining economies and while the market will impose this on us, institutions outside of the direct influence of the market will need time to get used and adjust to this new situation.

please elaborate.

[JPL]

$this->bbcode_second_pass_quote('Bas', '.')..will pose a major problem. We're all stuck in countries that are making debts with the notion that while their economies grow, it will be easy to pay those debts of in the future. However, soon we will have to get used to slowly declining economies and while the market will impose this on us, institutions outside of the direct influence of the market will need time to get used and adjust to this new situation.

please elaborate.

[Grifter]

Blimey JPL. Took me a while to get that analogy but I see what you mean now.

I started (and have now completed) paying off my debts when I first learned of Peak Oil. I may be forever miffed that quite possibly everyone elses debts could be wiped out in the impending crisis.

As I had the ability to pay off those debts though, it wasn't a gamble I was willing to take. I am looking at Peak Oil with the same mental paradigm that brought us to where we are.

However, I think the most likely outcome is that those without debt will be the last to be enslaved and maybe never will. Sure, I may have to look a former sociatal high flyer in the face as he toils as I trade (to some extent). But yeah, I really don't know how things will pan out.

$this->bbcode_second_pass_quote('', 'i')nstitutions outside of the direct influence of the market will need time to get used and adjust to this new situation.

[Bas]

well Grifter, I'm talking about governmental institutions and their expansive policies mainly, besides that unions, and quite important; the central banks.

[Grifter]

Oh well, I think unions are going to stamp their feet a lot but as always they'll be painted as irrational and old fashioned. I don't know how unions are viewed in the rest of europe though but here they'll be largely ignored.

I think the central banks will try to control matters but you and others here know far more about this than me.

Nature will be dictating matters though, I'm sure of that.

[Bas]

$this->bbcode_second_pass_quote('Grifter', 'O')h well, I think unions are going to stamp their feet a lot but as always they'll be painted as irrational and old fashioned. I don't know how unions are viewed in the rest of europe though but here they'll be largely ignored.

I think the central banks will try to control matters but you and others here know far more about this than me.

Nature will be dictating matters though, I'm sure of that.

[vision-master]

$this->bbcode_second_pass_quote('', '.')..will pose a major problem. We're all stuck in countries that are making debts with the notion that while their economies grow, it will be easy to pay those debts of in the future. However, soon we will have to get used to slowly declining economies and while the market will impose this on us, institutions outside of the direct influence of the market will need time to get used and adjust to this new situation.

[Bas]

I don't see why people should or will stop using credit cards after PO.

Anyway, back to the topic which I gave some more thought; I think that the institutional rigidness will cause the labor unions not to accept paycuts for the members which will be needed in order to preserve jobs. They will only come around when the unemployment will have reached relatively high levels but by then alot of damage will have been done.

The case with the central banks will be similar; when confronted with inflation their auto-response will be to raise rates steeply while that same inflation is needed to lower the real wages and keep unemployment down. The most important thing however, is that high interestest rates will push alot of companies and individuals that are already deeply indebted, into bankruptcy.

Governments probably face the most complicated problems; they will be faced with rising deficits to begin with and America, with it's already huge deficit and national debt will be financially crippled and be forced to cut back on everything in a time in which leadership from the state will be needed and expected by many; the price of running an expansive economic policy in "the golden years"

In short, the same institutions that have proven valuable in a growing economy will worsen problems considerably especially considering they are going into this totally unprepared. They will have to adapt policies more sharply than ever, with an ever declining economy in mind and it will take years before these are fine tuned, after which they might become beneficial again to society as a whole.

please elaborate/give feedback

[highlander]

$this->bbcode_second_pass_quote('Bas', 'G')overnments probably face the most complicated problems; they will be faced with rising deficits to begin with and America, with it's already huge deficit and national debt will be financially crippled and be forced to cut back on everything in a time in which leadership from the state will be needed and expected by many; the price of running an expansive economic policy in "the golden years"

In short, the same institutions that have proven valuable in a growing economy will worsen problems considerably especially considering they are going into this totally unprepared. They will have to adapt policies more sharply than ever, with an ever declining economy in mind and it will take years before these are fine tuned, after which they might become beneficial again to society as a whole.

please elaborate/give feedback

[Bas]

$this->bbcode_second_pass_quote('highlander', 'T')he gov'ts will fall back on the tried and true measures
taxes will increase
regulation on the individual will increase
corporate regulation will decrease

bureaucracies are unable to contract.

[Bas]

$this->bbcode_second_pass_quote('JPL', '
')
Hi Bas

There was a documentary in The UK a few years ago about new research from Stonehenge. Basically under & around the current stones is a much older (& larger site) which was designed to keep track of the phases of the moon rather than the solar year (which the later, big monument, is mainly designed to do).

They postulated that the old site may have originally been set-up by hunter-gatherers at the end of the last ice age - who mainly hunted at night - and for whoom the moon (bright or dark on a particular night) was more important than anything else.

When the ice melted and agriculture began to practiced ( - based on solar seasons) the priests/social leaders tried to adapt the ancient site and make a new 'solar' calander.

Except the trouble was, no-one actually needs a 200 giga-lith calculator to work out the phases of the solar year (grin).

So the religion collapsed, the site fell into dis-use, and the whole thing has been a mystery ever since.


JPL

[MrBill]

Bas wrote:
$this->bbcode_second_pass_quote('', 'n')aturally, goverments that only run a small deficit/have a small debt are best positioned to deal with the outfall, they can afford to run bigger deficits for at least some time. In those countries that have a big deficit taxes will have to be increased, sometimes considerably which will only contribute to the economic turmoil.

[Bas]

I disagree to some extend; deficit spending has worked in a lot of countries helping them out of a recession as long as the economy had long term growth (and increased taxflows to look forward to).

The big difference now will be that the economy will contract over the long term in which situation, running deficits will be much less sustainable; the debt of past deficits will start to hurt much more too, except if there's a lot of inflation. And economies will quickly run a big deficit when the PO crisis hits, even (or maybe esspecially) if they don't change a thing from the policies they have now.

MrBill, wouldn'd you agree that the tried and tested policies of the governments and central banks will not work this time around and that it will take time for them to recognize that; the problem of institutional rigidness.

[MrBill]

$this->bbcode_second_pass_quote('Bas', 'I') disagree to some extend; deficit spending has worked in a lot of countries helping them out of a recession as long as the economy had long term growth (and increased taxflows to look forward to).

The big difference now will be that the economy will contract over the long term in which situation, running deficits will be much less sustainable; the debt of past deficits will start to hurt much more too, except if there's a lot of inflation. And economies will quickly run a big deficit when the PO crisis hits, even (or maybe esspecially) if they don't change a thing from the policies they have now.

MrBill, wouldn'd you agree that the tried and tested policies of the governments and central banks will not work this time around and that it will take time for them to recognize that; the problem of institutional rigidness.

[Bas]

$this->bbcode_second_pass_quote('MrBill', 'I')n that respect I can agree that current government policies, even amoung some of the most enlightened fiscal conservatives, nevermind the rest, are poorly-equipped to deal with falling growth and a protracted contraction in the real economy. And I am sure they will make EVERY mistake while adjusting to the new reality!

[MrBill]

Bas wrote:
$this->bbcode_second_pass_quote('', 'P')S didn't the Bush tax cuts help to kick-start the American economy a couple of years ago? or do you distinguish between deficit by taxcuts vs deficit by spending?

[Bas]

$this->bbcode_second_pass_quote('', 't')he longer you let unpaid balances accumulate the larger the interest bill, and therefore the lower your future spending will be. issuing new debt to pay interest is not a free ride either. it is all cumulative.

[MrBill]

$this->bbcode_second_pass_quote('Bas', '')$this->bbcode_second_pass_quote('', 't')he longer you let unpaid balances accumulate the larger the interest bill, and therefore the lower your future spending will be. issuing new debt to pay interest is not a free ride either. it is all cumulative.

[Bas]

$this->bbcode_second_pass_quote('', 'B')ut here is a quiz. Whether -3% in the eurozone or -6% for the USA have they sustained growth levels higher or lower than Asian economies with high levels of personal savings that have been growing faster than the 4-5% global average?

[MrBill]

$this->bbcode_second_pass_quote('Bas', '')$this->bbcode_second_pass_quote('', 'B')ut here is a quiz. Whether -3% in the eurozone or -6% for the USA have they sustained growth levels higher or lower than Asian economies with high levels of personal savings that have been growing faster than the 4-5% global average?