Over 1.5 MILLION International Followers and Readers have engaged our various periodic blogs plus the regular curated digest of research, commentary and ideas from top global investors, economists, scientists, experts and media; focusing on Humanity's "BIG 7 Es" as they pertain to economics, investing and wealth concepts..In the Know ,Ahead of Markets ,Deciding Wisely
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TOP International LEADERS Calling Market Crashes Years Ahead
Second to None, Anywhere...
'Warned 2000 tech slide; predicted 2008 meltdown in 2007. Forecasted 2020 global economic collapse in 2011, AND NOW- BY 2050 - THE MOTHER OF ALL CRASHES"
Utter trash, which demonstrates how out of touch - those who research and study economics, create new social/economic and political theories - are with the realities of this planet. They premise their thinking on the idea that we need and can grow economically forever but fail to appreciate that we live under the governing physical and mathematical constraints of a finite planet that is now also diseased by many ecological, resource and climate maladies that are together leading us to civilised and economic collapse by 2040 as calculated by competent, unbiased MIT researchers - among others- in the best selling book - The Limits to Growth, in 1972.
The end result - if an Arctic BOE (Blue Ocean Event)or another massive event does not get us first - then the extinction of the species and most other forms of life on the planet is reasonably probable in the near term.
Given the current global economic situations, we are well on target to meet this 2040 date as hyperinflation, pandemics, resource exhaustion, global warming, food/energy shortages, nuclear threats, national collapses, social unrest, currency/ stock panics, anarchy and more problems are evidenced everywhere - just as predicted by MIT researchers and other competent, professional scholars and mathematicians since the early 70s. , To sum up, the author likely wrote this fairytale while visiting Disney Land and was perhaps also under the influence of some unknown externalities - for there is nothing in this propaganda that can help to reverse the path we are on - save an adverse worldwide event that substantially reduces the human population in a decade or so that would then rebalance the number of our species back to what remains of our various key resource quantities. That event is nearly impossible to effect without wiping out the habitat.
Why do so-called economists attempt such pitiful undertakings when the hard facts and honest numbers indicate there are only enough non-renewable resources (oil, natural gas, copper, etc.) and arable lands to last humanity 20- 50 years? Who do they think they are kidding? The Invisible Hand? Are they insane?
Anyway if you want to entertain yourself with the musings of a bankrupt and disillusioned profession that still operates with and under the historic archaic theories of Adam Smith, Karl Marx, Paul Samuelson, et al - this may be just the childrens' storybook you have been looking for - a real stinker!
Too bad so much time and resources have been wasted here -as ironically it could have been applied more diligently, wisely and creatively - considering the real numeric constraints and short timelines we have before us.
To be brief, in this post we daringly bring together the critical observations and salient conclusions of three of the planet's top researchers and thinkers. To a large degree, they follow the path created, in 1972, by the researchers from MIT who wrote and published the book 'Limits To Growth.' Over 30 million copies were sold internationally - but its thesis, models, and outcomes were sadly not accepted nor embraced by leaders in economics, business, religions, academics, and politics - who all generally wanted to maintain a business as usual approach and pursue infinite growth on a finite planet without regard for the dire consequences. Was it just their self-interest and greed?
The consequences and various symptoms of unbridled growth in a finite context are now abundantly clear and self-evident in terms of overpopulation, complete resource depletion, climate change, ecocide, with the related sixth species extinction, and ultimately economic and civilization collapse. We were warned; but failed to take arms against these crafty, clever, invisible demons of physics, mathematics, and nature. Nor did we pay any concern to their exponential powers and outcomes; which no doubt, as the late Dr. Albert A Bartlett points out, is one of the greatest shortcomings of humanity.
As mentioned, this post incorporates the work and research of three leading contemporary thinkers who follow the reasoning of growth limits and the consequential physical shortages to be created - that are sure to lead to hyperinflation causing the collapse of economies and civilizations. There are many nations that are already experiencing these terrible circumstances. Gail Tverberg, Chris Clugston, and Paul Cheferka are the leading forward progressive thinkers whose works we will briefly summarize here.
Along with climate change, ecocide and massive non-vertebrate species extinction Gail points out that we are also on course to run out of critical fossil fuel energy sources in less than 50 years (2070) and that it remains highly unlikely we can transition to Green Energy renewable sources due to limitations and constraints imposed by storage and intermittency - making them impractical and unreliable. Moreover, a quantity of fossil fuels will still be needed to operationalize these energy sources.
Chris Clugston puts another bullet in the 'Green Energy Fairy Tale, by crunching the numbers and concluding that we will run out of the critical NNRs needed to sustain our 300-year-old experiment with the industrial, consumer, military, congressional complex, in 2050. In other words, there will be no materials available to build solar panels, wind turbines, hydro plants, and fission or fusion nuclear plants. Without fossil or non-fossil energy sources, we cannot sustain economic industrial activity in any form - the writing is hence on the proverbial wall.
So in face of all the logic, facts, science, and exponential mathematics why did we continue to grow our populations and economies? Was it simple self-interest, power, and greed? Paul Chefurka takes us into much deeper reasoning that asserts that despite our cognitive abilities and talents we are governed by the same laws of the universe as all other species. We are no different than bacteria in a Petri bowl or yeast - in that the only choice they/we have is to continue to grow, survive, and procreate until our habitat that allows this growth environment is gone. Entropy is a cruel mistress.
To summarize, we are on a population and economic growth path governed and driven by Entropic laws - de-growthing to a lower state of growth is practically, politically, and economically impossible as asset valuations depend upon going-concern assumptions. Without them asset values will dramatically collapse and so will the fractional-reserve global banking system, and thus all forms of sovereign and cryptocurrencies will become worthlesswithout the energy and materials sources required to keep our global economies running.
So what do we do? In this regard, Paul provides us with his analytical wisdom acknowledging that we are dealing with a multi-variable complexity that can produce combinations and permutations of untold outcomes.
We are in the hands of destiny.
We are in the hands of finite energy and materials.
Figure 1. Wind, solar and hydro as a share of total energy consumption for selected parts of the world, based on BP’s 2021 Statistical Review of World Energy data. Russia+ is Russia and its affiliates in the Commonwealth of Independent States (CIS).
We have been told that intermittent electricity from wind and solar, perhaps along with hydroelectric generation (hydro), can be the basis of a green economy. Things are increasingly not working out as planned, however. Natural gas or coal used for balancing the intermittent output of renewables is increasingly high-priced or not available. It is becoming clear that modelers who encouraged the view that a smooth transition to wind, solar, and hydro is possible have missed some important points.
Let’s look at some of the issues: (Provided are the key areas of concern. For the detailed facts and discourse please read Gail's attached report)
[1] It is becoming clear that intermittent wind and solar cannot be counted on to provide adequate electricity supply when the electrical distribution system needs them.
[2] Adequate storage for electricity is not feasible in any reasonable timeframe. This means that if cold countries are not to “freeze in the dark” during winter, fossil fuel backup is likely to be needed for many years in the future.
[3] After many years of subsidies and mandates, today’s green electricity is only a tiny fraction of what is needed to keep our current economy operating.
[4] Even as a percentage of electricity, rather than total energy, renewables still comprised a relatively small share in 2020.
Figure 2. Wind, solar and hydro as a share of total electricity supply for selected parts of the world, based on BP’s 2021 Statistical Review of World Energy data.
[5] Most modelers have not understood that reserve to production ratios greatly overstate the amount of fossil fuels and other minerals that the economy will be able to extract.
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Figure 3. Reserve to production ratios for several minerals, based on data from BP’s 2021 Statistical Review of World Energy.
[6] The world economy seems already to be reaching limits on the extraction of coal and natural gas to be used for balancing electricity provided by intermittent renewables.
To add to the concern and support with facts that the global economy is reaching its limits - the trends in US inflation demonstrate a breakout that is heading towards an even higher rate as the shortage and balance between supplies of key energy, agricultural, minerals, and metals (NNRs) and demand is forever widening. In fact, most NNRs are expected to be fully depleted by 2050 according to the research book - Blip - written and researched by Chris Clugston.
Meaning logically that sustainable renewable green resources are an utter myth because they are reliant upon NNRs to exist and physically create such resources. Putting 2 and 2 together, we can strongly and rightly conclude that by 2050 we will have very limited sources of energy to sustain human economies and conditions given the almost complete depletion of key resources.
Blip: Humanity's 300 year self-terminating experiment
[7] Conclusion. Modelers and leaders everywhere have had a basic misunderstanding of how the economy operates and what limits we are up against. This misunderstanding has allowed scientists to put together models that are far from the situation we are actually facing.
So where are we heading? What drives us to grow? Why can we not degrowth? What does all this mean?
Here is Paul Chefurka's summation from his prophetic Paradise Lost (2013) post which gives us practical guidance and insights with something profound to ponder.
Excerpted Paradise Lost
I have given up speculating on possible outcomes, because they are so inherently unpredictable, at least in detail. But what I’m discovering about the way life works at a deep level makes me continually less optimistic. I now think near-term human extinction (say within the next hundred years) has a significantly non-zero probability.
Our cybernetic civilization is approaching a "Kardashev Type 0/1 boundary" and I don’t think it's possible for us to make the jump to Type 1. Like most other people, Kardashev misunderstood the underlying drivers of human behavior, assuming them to be a combination of ingenuity and free will. We indeed have ingenuity, but only in the direction of growth (and damn the entropic consequences). We can’t manage preemptive de-growth or even the application of the Precautionary Principle, because as a collective organism humanity doesn't actually have free will (despite what it feels like to us individual humans). Instead, we exhibit an emergent behavior that is entirely oriented towards growth.
I see no purpose in wasting further physical, financial or emotional energy on trying to avoid the inevitable. Given our situation and what I think is its root cause, I generally tell people who see the unfolding crisis and want to make changes in their lives simply to follow their hearts and their personal values.
I'm not exactly advising them to “Eat, drink and be merry”, though. You might think of it more as, “Eat, drink and be mindful.”
The world economy has been largely driven by a pandemic cycle since early 2020. In spring 2020, there were major concerns about the near and medium-term prospects for the world economy due to the severe economic dislocations caused by the spread of the virus and the societal and public health responses to it. In this initial phase, there was a large decline in global economic activity and many investment and production plans for 2021 and beyond were downgraded or cancelled. The significant recovery in the third quarter of 2020 and, most importantly, the rollout of vaccine programmes since late 2020 has led to a faster-than-anticipated recovery, while the success of fiscal policies in protecting the incomes of households and firms has further reinforced global demand conditions.[2]
At the same time, the recovery has necessarily been quite asymmetric. Social distancing has continued to constrain demand and activity levels in high-contact services sectors and the relative expenditure switch towards the consumption of goods has constituted a substantial sectoral shock. In addition, manufacturing production has continued to be disrupted by the shocks to labour supply and temporary factory shutdowns that have been generated, among other factors, by infection clusters and virus containment measures around the world.[3]
The combination of all these factors has resulted in many types of supply-demand mismatches. These have been compounded by the nature of global supply chains, with a disruption in one part of the chain cascading both upstream and downstream. An additional amplification mechanism has been the bullwhip effect by which ordering strategies along the value chain adjust in a nonlinear manner to demand shocks from customers and supply shocks from input providers.
In the specific context outlined above, I will use the term bottleneck to refer generically to a supply-demand mismatch. Under typical circumstances, an unexpected increase in demand or an unexpected loss of supply capacity will quickly invite the creation of new supply capacity and the entry of new suppliers and, through relative price adjustment, the rotation of demand towards substitute categories. However, the common and global nature of the pandemic has meant that, in any given industry, potential alternative suppliers have all faced similar constraints. Moreover, the option to switch demand away from goods and towards services has been severely limited by the impact of the pandemic on both the desire to consume and the ability to supply contact-intensive services. Under the atypical circumstances of the pandemic, large and sudden surges in sectoral demand or declines in sectoral supply are difficult to resolve in a speedy, smooth or gradual manner. This gives rise to delays in production and sales processes throughout the supply chain and jumps in relative prices.
It is important to recognise that the patterns of supply/demand mismatches seen during the pandemic have been extremely rare in history. While the combination of a sudden demand shortfall and an overhang of excess supply has been generated by financial crisis episodes, the reverse is rarely seen. Prior case studies that may be seen as relevant for understanding what is going on today are the post-war reopening episodes, when demand decompressed and firms had to retool and switch from production of military equipment back to consumer goods.
CLEARLY, IT IS NOT ALL IS GOOD WHEN IT COMES TO GLOBALIZATION. WE LOSE JOBS AND BRING MORE DISEASES, IMMIGRANTS, DRUGS, OUTBREAKS OF VIOLENCE, AND CRIMINAL ACTIVITY TO OUR HOMELANDS.
FOR WHAT? SO THE WEALTHY GET RICHER AND THE POOR BECOME POORER???. THERE ARE NO REAL LONG-TERM BENEFITS AND THE NEXT IMPORTED PANDEMIC MAY WIPE US ALL OUT.
Ponder what a clawback of the $50 trillion might entail, and the immense benefits of returning to producing quality goods and services by completely unwinding financialization and globalization.
The happy story that's been ceaselessly promoted for 45 years is that financialization and globalization have been wunnerful for all of us, boosting wealth and saving a small fortune as the cost of products fell.
This is a remarkable distortion of reality. The fact is your household lost $500,000 in earnings and gained essentially nothing in supposed "cost savings." The facts are presented in a study by the RAND Corporation: Trends in Income From 1975 to 2018$50 trillion in earnings has been transferred to the Financial Aristocracy from the bottom 90% of American households over the past 45 years..
B-b-but wait, didn't we all save a fortune on cheap jeans and TVs? No, you lost on that, too, as every product was crapified by globalization. I discussed the uncounted losses of the U.S. economy being crapified in my post The "Crapification" of the U.S. Economy Is Now Complete.
Let's start by defining financialization and globalization.Financialization is the reaping of profits not by creating value by producing goods and services but by exploiting credit and leverage to reap unearned profits.
Here are two examples. Borrow $1 billion and then use this to do a leveraged buyout (LBO) of a $10 billion company. Break the company's divisions into separate companies and sell them off or take them public via an IPO (initial public offering). Make $10 billion in pure profit from breaking up a company and selling its pieces, all from $1 billion in borrowed money. Note that this LBO didn't generate any gains in productivity or any new goods and services, nor did it create any new jobs. All it did was greatly enrich a few financiers and Wall Street banks.
Oil Rises to 7 Year High Approaching Levels of 2008 Meltdown
Editor's Comments
Many leading experts and oil executives now expect oil prices to climb well over $100 a barrel this year and that would be disastrous for the economy just as it was in 2008.
We know that we are on the downward supply slope that anticipates exhaustion by 2050. The pressure and trend are towards higher and higher prices. Like it or not - oil is the lifeblood of energy and thereby the economy.
Huge increases in prices could have massive inflationary effects combined with asset deflation that could collapse the banking sector as collateral values decline beyond lending obligations and fresh lending shrinks dramatically under large interest rate increases.
To sum up, the global economy faces a tough road ahead as we cannot defeat the mathematics of hard physical constraints with finite resources.
T A McNeil
Founder CEO
First Financial Insights
A picture says it all...
Oil rocketed to a fresh seven-year high above $92 a barrel, and almost every indicator is pointing to the rally extending. The market’s structure is trading at its strongest level in years, indicating scarce supply. Diesel — the fuel that helps power the global economy — is also surging as a cold snap hits the U.S. and demand soars.
Inventories at key storage hubs are waning, and vital price gauges indicate an expectation the tightness will persist. Traders increasingly suspect demand is being underestimated as economies emerge from Covid-19. Saudi Arabia’s state oil company said late last month that consumption will soon return to pre-pandemic levels, though International Energy
Agency data show it about 1 million barrels a day lower in the first quarter than during the same period in 2019. The outlook for a tight oil market is being reflected in high prices at the pump.
The question is why do we overpopulate? Because it is evidenced to be innate in biological entities to comply with the universal laws of entropy and consume more energy to survive and procreate for another day. It is an endless battle - as chaos drives the pursuit to grow, acquire, and use more energy to return the systems to a temporary equilibrium. Only to start the cycle once again.
We observe this phenomenon in the smallest of cell constructs to the largest of vertebrate creatures (remember the mice utopia experiment) - ultimately they outgrow their respective habitats and go extinct. I have seen no evidence anywhere in the universe that any biological construct has dispensation from the laws and cycle of entropy and thus its consequential guaranteed final outcome - EXTINCTION
In the end, all biological constructs are imprisoned in a Devil's Bargain that cannot be breached or voided to avoid its slings and arrows of outrageous misfortune.
T A McNeil
CEO Founder
First Financial Insights Inc
There Are Exponential Limits to Growth We Cannot Defeat.
