Global financial system implosion begins
- Thread starter Falcon
- Start date
littlebabyjesus
one of Maxwell's demons
That is faulty logic. There is no 'therefore' from your first statement to your conclusion. You've already been shown on another thread how the subprime fiasco and the subsequent credit crunch had nothing to do with anything other than the crazy logic of money in the capitalist system.
What does have limited explanatory power is to look at any one part of the system in isolation when looking for future trends. That resources are scarce has always been the case, that there are resource problems approaching is nothing new - there have been pressures on various resources, particularly land, for a long time now. That does not in itself tell you anything about how societies will react to that resource scarcity. To do that requires a political analysis, and most certainly requires consideration of the mechanisms we have in place to distribute scarce resources, in particular money.
I have? I recall a statement being made that an irregularity originating in the US housing sector accounts for a 5 year global recession better than a systemic oil price increase, despite empirical evidence that systemic oil price increases accounted for 11 of the last 12 recessions. I recall academic, peer reviewed analysis refuting that statement being met with baffled silence. I don't recognise anything that explained that statement, which seems extraordinary.
Indeed. We are both agreeing that emu's speculation about the properties of the financial system are meaningless without recognition of the energy system in which it is embedded and is an emergent property of.
On the contrary. We have dozens of examples of how complex societies have responded to resource scarcity, and those examples are exhaustively examined. In 100% of the samples, they fail. How's that for empirical evidence?
Conversely, we are the only complex society that faces a future in which no higher density fuel source is available. Your position is about as far from empirical as can be conceived.
Whether that is true or not, it has no relevance to emu's speculations about what inflation and its absence tells us about the merit of economic models devised under different paradigm assumptions. This is a non-argument.
littlebabyjesus
one of Maxwell's demons
Threads do not belong to the thread-starters, particularly long and long-standing ones.
Crispy
The following psytrance is baṉned: All
If I thought this, I would say it straight.
elbows
Well-Known Member
Im suggesting that you are shooting yourself in the foot.
I dont suffer from optimism bias, and perhaps I should be grateful to you and other doom-rampers for making me look slightly less doomy by comparison
littlebabyjesus
one of Maxwell's demons
No it's not. An example of how it is not is Japan. Here is a country that suffered a series of financial crises and experienced tough economic times right through the 'cheap-oil' 1990s. Without political analysis and also analyses that look at the workings of the financial system, you have no hope of understanding such a phenomenon.
The Great Depression, similarly, was fundamentally caused by the financial system itself. No doubt there were 'this is the end of times' people in their sandwichboards back then too.
Extrapolation of the properties of a malfunctioning subsection of a functioning whole reveals nothing about the properties of the malfunctioning whole.
Are you honestly suggesting that I can start a thread with the intention of discussing a particular subject, then become constrained in what I can say in it because other people decide they want to use it to discuss another subject, when the facility exists to start new threads?
Crispy
The following psytrance is baṉned: All
Yes.
Hilarious. Care to explain why? If I come and have a party in your living room, are you hijacking your living room when you return home?
ymu
Niall Ferguson's deep-cover sock-puppet
And, their current economy cannot be explained by the austerity hawks either. The highest national debt, and the lowest interest rates on that debt. Wut?
The austerity hawks couldn't explain why US bond yields went down after they got downgraded either. Nor why the UK has the lowest interest rates in history. Nor why countries like Ireland and Spain which were running surpluses before the crisis are in as much trouble as Italy and Greece.
They can't explain this shit because their model cannot account for it. Because their models are based on ideologically-driven fantasy and have no empirical basis.
Actually, I'm sorry - don't. Some of the conversation is dire enough. Meta conversation is the worst experience.
ymu
Niall Ferguson's deep-cover sock-puppet
I often agree with you, and I often have no idea what you are trying to say. I don't know why you insist on taking every conversation down the same blind alley. There's no point discussing what should or could be done about the crisis with someone who seems to be arguing that it is pointless doing anything because we're doomed regardless.
Krugman's model can explain, and did predict, (some of) this stuff. Which is why I think he's worth listening to, BTW.
We're being fucked over by some very powerful forces. I don't know if you think any kind of sustainable future is possible at all. I do, but not if we let these fuckers carry on the way they are. Rightly or wrongly, I think your obsession with resources serves to obscure what is important about the economic debate in the here and now and promotes confusion and defeatism.
In my view, this conversation matters as much as any other conversation going on around the world, because the only way things can change for the better is ordinary people understanding enough about what is going on to oppose it effectively. Which is why I don't want you to hijack your own, fantastic, thread.
OK. For what it's worth, the reason I think a consideration of resources is important is because it fundamentally determines what range of policy responses are possible and likely to be effective. I don't believe the fundamental relationship between the financial and energy systems are sufficiently well recognised (let alone understood) and, given the crisis which is demonstrably unfolding in the energy system, it is hard to avoid mentioning it.
But to the extent that we agree that we were being fucked over by some powerful forces, and should not let them carry on the way the are, we can find alignment. Meanwhile thank you for your energy and enthusiasm, which I know is sincere
.
ymu
Niall Ferguson's deep-cover sock-puppet
I don't disagree with your fundamental point about resources. I just think that a very big part of the solution to the economic crisis has to be using the massive spare capacity available, due to recession, to invest in sustainable technology for the future. Investment in education and infrastructure and the technology we will need for an oil-free world is the best use of the Keynesian stimulus that is so obviously needed (ie much more efficient than war, or letting the banks spend it as they see fit).
I think your problem is potentially soluble (and if it isn't, we still have to try), and that we can kill two birds with one stone, if we can get the neoliberal parasites out of the way.
It is the substance of this "massive spare capacity" upon which the argument turns. If (as I believe) any spare capacity we might have must necessarily be a function of surplus energy, and we are in energy deficit, then there is none. In which case, any solutions which presume such capacity is either available now, or will continue to be available for the duration it would take to replace what we have with what we need, are shaky to say the least.
My own response to that possibility is complex. I take the same view they promote on aircraft in the safety briefings - put your own mask on first, then help others. Selfish? Well, not if you avoid (a) being a problem for someone else and/or (b) can then help someone else. I can't avoid the conclusion that if I have to choose between making my own arrangements for self sufficiency, and hoping that a corrupt and dysfunctional neoliberal capitalist system will spontaneously reverse a century of vested interest and do it for me at precisely the moment when such vested interest will intensify, pragmatic self interest suggests I ought to choose the former. It gets mistaken for defeatism but is, in my view, about the most effective response we can make.
I absolutely agree with you that we need to invest in education, in order to sensitise people to the hazard they face and create the demand for change. On the bright side, unlike investment in infrastructure and technology, that task requires almost no material or energy resource, and is feasible under even the darkest scenario.
Crispy
The following psytrance is baṉned: All
Threads do not belong to their starter. They are in the shared ownership of everybody who posts on them. It was never "your" living room in the first place.
ymu
Niall Ferguson's deep-cover sock-puppet
The spare capacity primarily consists of under-employed people and under-utilised brains. Universities don't take up much in the way of tangible resources, but they sure as hell generate a lot of tangible output. The kind of output we need if we are going to reinvent technology to fit an oil-free world. New ways to use the energy we have available to us, new means of generating energy, new means of reducing waste, and better ways of distributing scarce resources.
It means dense urban populations supplied by efficient production and transport systems. It doesn't mean hippies and survivalists bunkering down on their acre of land. It's ridiculously resource-intensive to live like that, and there is no way forward but primitivism once you have constructed a world that can support so few people. Technology doesn't magic itself out of nowhere, it comes from lots and lots of people trying to solve a problem, rather than just making do with what they can lay their hands on.
It means dense urban populations supplied by efficient production and transport systems. It doesn't mean hippies and survivalists bunkering down on their acre of land. It's ridiculously resource-intensive to live like that, and there is no way forward but primitivism once you have constructed a world that can support so few people. Technology doesn't magic itself out of nowhere, it comes from lots and lots of people trying to solve a problem, rather than just making do with what they can lay their hands on.
We are kind of over that, Crispy.
Crispy
The following psytrance is baṉned: All
Didn't see this. My apologies.
ymu
Niall Ferguson's deep-cover sock-puppet
This story fits in well here, I think.
What we're being told by the parasites has fuck all to do with how things work, and it is becoming ever more painfully obvious. Inflation doesn't materialise in a liquidity trap (well, duh!), austerity turns out not to be expansionary (well, duh!), countries which are spending more are growing more (well, duh!).
(I am being cooperative here, and simply enquiring how you account for certain observations about the current context)
We have a population of 7 billion heading to 9 billion sustained by a hydrocarbon powered industrial agriculture system, on a planet which can apparently only support about 2 billion with an undegraded solar agriculture system.
We have an atmosphere which can apparently only tolerate us burning 20% of the remaining known hydrocarbon resource currently constituting 80% of current primary energy needs and powering our agriculture and global industrial manufacturing systems.
We have technologies which are the *product of* surplus energies, but no technologies yet capable of *yielding* surplus energy after accounting for the hydrocarbon powered global industrial manufacturing system all contemporary technologies are dependent on.
We have a financial system based on debt predicated on all of that expanding into the future at the rate it has expanded over the last century.
Q: Are we *constructing* a world that can support so few people, or are we *in* a world that can support so few people? I realise this puts me perennially at risk of being branded a Malthusian Nazi Genocidalist, but I've yet to see a superficially convincing explanation that doesn't degrade to some variation of this:
We have a population of 7 billion heading to 9 billion sustained by a hydrocarbon powered industrial agriculture system, on a planet which can apparently only support about 2 billion with an undegraded solar agriculture system.
We have an atmosphere which can apparently only tolerate us burning 20% of the remaining known hydrocarbon resource currently constituting 80% of current primary energy needs and powering our agriculture and global industrial manufacturing systems.
We have technologies which are the *product of* surplus energies, but no technologies yet capable of *yielding* surplus energy after accounting for the hydrocarbon powered global industrial manufacturing system all contemporary technologies are dependent on.
We have a financial system based on debt predicated on all of that expanding into the future at the rate it has expanded over the last century.
Q: Are we *constructing* a world that can support so few people, or are we *in* a world that can support so few people? I realise this puts me perennially at risk of being branded a Malthusian Nazi Genocidalist, but I've yet to see a superficially convincing explanation that doesn't degrade to some variation of this:
A Dashing Blade
Takes horses to water but can't make donkeys drink
I would imagine they would answer
1) wrt US debt, the "buy on rumour, sell on fact" effect together with an element of "flight to liquidity weighted quality"
2) wrt UK gits, that would be a move to longer dated bonds + desire to be underweight Euro denominated assets.
3) wrt Ireland . . . iirc because the then Govt guaranteed all of their banking industry's debt without doing the maths
SpineyNorman
Inappropriate content removed
Got to be honest - I'm keeping an open mind with regards to peak oil and its effects on the economy until I understand the physical science/resource/climate side of it well enough to make a judgement. But I really cannot get my head around what that graph is supposed to represent, despite reading the explanations a couple of times. Crispy is right on this one.
(Also, believing that peak oil could restrict the number of people the earth can feed does not necessarily make one a misanthrope. Some of the people who put forward these arguments completely ignore class and regional inequalities, and without realising it are really saying "I can't maintain my unjust privilege under resource depletion without a mass die-off", but I really don't think Falcon is one of those people. If things really are as bad as he's saying we need to acknowledge it, not bury our heads in the sand - if he's right acknowledging it and trying to do something about it is the only way we can stand any chance of avoiding die off and the kinds of political, economic and social barbarism he warns of).
Green U is how much beer was poured in the glass. Red H is the rate you'll drink the beer, given the rate you could drink it before, noting your straw is getting progressively blocked. Red N is the rate you'll drink the beer if you get a stroke and you lose the power of sucking altogether (that doesn't work as an analogy. It's the amount you get if you stop investing). Red D is the rate you would have to drink beer if you wanted the world tomorrow to look like the world yesterday.
D-H is the amount of beer that is missing, relative to the assumptions of everyone in the pub about how long the party will last.
I suspect that doesn't help either. This is petroleum engineering, and there is a limit to how far fairly complex abstract mechanisms can be simplified and translated into concrete terms. I'm not patronising.
ymu
Niall Ferguson's deep-cover sock-puppet
My problem is not with his pointing out the resource problem, my problem is that he offers only a survivalist/Mad Max vision of the future, regardless of what we do now. He's given up and is hoarding supplies for when it all goes tits up.
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