Global financial system implosion begins
- Thread starter Falcon
- Start date
Osborne launches raid on QE surplus
Financial Times. November 9, 2012
Britain's richest 5% gained most from quantitative easing – Bank of England
guardian.co.uk, Thursday 23 August 2012
Financial Times. November 9, 2012
£35 billion surplus? "Smoke and mirrors"? They're going to write off the quantitative easing money aren't they?
Britain's richest 5% gained most from quantitative easing – Bank of England
guardian.co.uk, Thursday 23 August 2012
Lest we forget.
It was created out of nothing in the first place, so it is just going back whence it came.
As has been noted elsewhere:
ferrelhadley
There is no love between us anymore.
How many people believe if were were to spend loads of debt on stimulus we would get to a situation of sustainable growth in a couple of years?
ymu
Niall Ferguson's deep-cover sock-puppet
Doesn't that depend entirely on how the stimulus is applied?
WWII provided the stimulus that got us out of trouble last time. This time, if we have any sense at all, it will be climate change, requiring massive investment in infrastructure, technology and the education and training needed to develop that techology.
Not quite. I can't claim to fully understand this, but:
WWII didn't provide the stimulus. One trillion barrels of free energy (the quantity of now exhausted conventional hydrocarbon that then lay ahead of us in the period following the war) provided the stimulus.
"Sustainable growth" was an oxymoron, even when the matter/energy system was expanding. Our matter/energy system is now irreversibly contracting. The question of how we can sustain growth now is not even wrong.
ymu
Niall Ferguson's deep-cover sock-puppet
WWII provided the political imperative for stimulus that otherwise would not have happened on a sufficient scale to make much difference. There's no reason I can see that climate change can't play that role this time around. 'Free energy' in the form of oil didn't exist until we discovered it and worked out how to use it.
We already have the sustainable battery technology we need to make irregular sources of energy such as solar and wind viable: pumped hydro-electric. Current solar technology may not be sustainable for low-efficiency uses but even in its current state it can be used to desalinate sea water for irrigation to grow water-intensive crops in the desert - killing three birds with one stone. Wind power is providing orders of magnitude more energy today than was predicted a decade ago.
As for infinitely sustainable growth, of course it isn't possible. That does not mean that growth cannot be part of any kind of plan for the immediate future. Dense urban populations are much more sustainable than scattered rural ones, which means a move away from subsistence farming in less developed parts of the world. To be sustainable, the benefits of this have to accrue to local populations rather than foreign investors. The best way to limit birth rates is to increase incomes, which means more evenly distributed global wealth. We could achieve a lot just through equalising incomes, but growth (on a global level) is an inevitable part of achieving that.
It is not, of course, a strategy that the current global elite have any interest in pursuing, but that means only that it is politically impossible at the moment.
Come on now Falcon ! Yeh, Ok, the long post WWII economic boom was indeed partly based on abundant cheap oil.. but equally on the ever increasing efficiency of production methodologies and technologies of the postwar period, and the freeing of world markets from the straightjacket of the old colonial "imperial preference" trade system. However , as ymu quite correctly says, without WWII rearmament forcing every country to competitively abandon the ever deepening negative economic recessionery spiral of the 30's Great Depression,( and the profitable production opportunities presented by post war reconstruction), the world would never have even experienced the extraordinary period of generalised economic growth and prosperity of the post WWII period. Even WITH those billions of barrels of cheap oil potentially available the capitalist straightjacket on economic activity in the 1930's slump would have meant , without rearmament , war, and the reorganisation of world markets, that the world would have been trapped , at best, in a permanent underproductionist Slump. Those oil barrels would have largely remained in the ground.. millions more would have starved compared to the actual post WWII reality. I'm not for a moment suggesting WWII with its millions of dead was in any way a "good thing" of course. It's just a fact that rearmament and war spending and reconstruction "shocked" capitalism out of the otherwise endless 1930's Slump. And of course plenty starved anyway in the post WWII reality... but that was because of the inequalities inherent in capitalism... the everpresent phenomenum of "starvation for many whilst others feast", that has always personified capitalism.. regardless of the overall level of productivity.
The key "problem" facing the world today simply isn't the running out of oil supplies, but the squandering of the world's resources, finite and otherwise, by a tiny capitalist elite in particular, and wasteful "first world" consumerism in general. Even diminishing oil supplies could be "managed" with a more equitable sharing of world resources linked to better energy usage and ever greater development and exploitation of alternative energy sources. Politics, and political action.. that's the element you never take account of with your never ending neo Malthusian pessimism, Falcon.
free spirit
more tea vicar?
I'm confused. Did those hydrocarbons not also lie ahead of them in 1933, 1934, 1935, 1936 etc? Why were they not providing the economic stimulus at that point if that's all it was about?
Barking_Mad
Non sibi sed omnibus
and 
ska invita
back on the other side
means nothing to me, but makes more sense than BMs jazz vid 
http://www.zerohedge.com/news/2012-12-12/baltic-dry-plunges-over-8-overnight-most-2008
Baltic Dry Plunges By Over 8% Overnight, Most Since 2008
http://www.zerohedge.com/news/2012-12-12/baltic-dry-plunges-over-8-overnight-most-2008Baltic Dry Plunges By Over 8% Overnight, Most Since 2008
ferrelhadley
There is no love between us anymore.
Baltic dry is a measure of the cost of hiring a ship. It is sometimes a good indicator of trade volumes as when ships are in demand it goes up and when their is no cargo it goes down. Over the past couple of years lots of new shipping has been hitting the waters, inertia from the precrash rise in demand. So they index has lost some of its worth as there is an excess of shipping due to demand not increasing as fast as expected rather than the demand simply not being there.means nothing to me, but makes more sense than BMs jazz vid
Baltic Dry Plunges By Over 8% Overnight, Most Since 2008
From that chart it had risen over a couple of days and merely fell back to slightly lower than it had been. More likely some speculation did not pay off than a big slump in sentiment.
Fed links rates to US unemployment
FT December 12, 2012
From $40 billion a month to now $85 billion a month. Open ended.
"A bit" lol.
The problem is, of course, what happens when the 'more equitable sharing of world resources linked to better energy usage and ever greater development and exploitation of alternative energy sources' as ever fails to materialise.
free spirit
more tea vicar?
does the answer involve the words string and lampposts and em up from?
So she went to the Bank of England and basically told them that they didn't give enough power away when the FSA it was set up and took responsibilites off the Bank of England
junglevip
Marijuana leads to heron
Paul Mason on Spanish economic collapse http://www.bbc.co.uk/iplayer/episode/b01pgqpn/This_World_The_Great_Spanish_Crash/
Your fail to distinguish between "stimulus" and "means to satisfy stimulus".
A clear blue sky offers the stimulus to me to flap my arms and fly like a bird. I lack the means to satisfy such a stimulus.
1 trillion barrels of high density, high net energy, highly fungible, highly transportable, highly stable fuel afforded the means to satisfy the stimulus presented by the post war reconstruction effort and synthesised growth demand created by neoliberal market economics.
Energy neutral science projects that are themselves the products of (but inadequate powerers of) the hydrocarbon powered global industrial manufacturing system cannot provide the means to satisfy anything, post hydrocarbon.
Just because we *need* to address climate change doesn't mean we *can* address climate change. It's a lesson, in other spheres, we learn around the age of 10.
Nope. That's one of the many unexamined assumptions infesting the mythology of transcendence-over-physical-reality-through-technology which, on examination, turn out to be unfounded.
The production methodologies and technologies of the post war period only appeared to exhibit increasing efficiency if you happened to partition the global system in two parts (roughly, the "developed" and "developing" countries), measured the energy intensity of one of them (the "developed" bit) and ignored all the energy consumption exported to the other.
When we stopped making shit and started to sell photocopy insurance to each other - apparently, increasing efficiency of production - where do you think all the millions of tonnes of concrete and steel embodied in the cars we continued to drive and buildings we continued to construct came from? And guess what - we didn't count it in our economic estimates.
Those increasing efficiencies are a hallucination.
Nope. Pre 1900/oil era, the population of the planet, sustained by the real time conversion of incidental solar energy into food, was about 2 billion.
We invented a system (a.k.a "the industrial agriculture manufacturing system") for converting stored, fossilised sunlight into protein and carbohydrate, taking the food system temporarily out of real time. We quadrupled food yields per acre and tripled the population.
Then we sterilised the soil, dropped the water tables, exterminated the pollinators, and altered the climate, reducing the unstimulated food yield capacity to below its pre-1900 capacity.
Then the energy source necessary to sustain the industrial agricultural system's energy requirements depleted, bringing us back into real time food production rates.
If it sustained less than a third of current population before we turbocharged it with hydrocarbon and wrecked the ecosystem what - exactly - is the basis for your assertion that it can sustain three times that amount after we remove the turbocharger and wreck the foundational ecosystem? Politics?
There is no amount of political action alters that basic physical reality, and no amount of ideologically motivated "neo Malthusian" misdirection claims that can compensate for the failure of your argument to address physical reality.
Energy and the Wealth of Nations gives an excellent explanation of this.
They were providing the means to fulfil economic stimulus. They were not of themselves a stimulus.
The Chicago School of Economics (the ideological economic core of contemporary neoliberal capitalism) began to assert its peculiar notions of perpetual physical growth underpinned by its equally peculiar notions of resource scarcity transcendence from the late 1940's onwards.
free spirit
more tea vicar?
so when you said this you actually meant something different then?
so in actual fact you're now accepting that the oil didn't provide the economic stimulus at all, as is obvious due to the fact that the oil was there all the way through the preceding depression, it took other factors to provide the economic stimulus just as it took other factors to create the depression in the first place.
This in a nutshell is the problem with your entire line of argument over the last few years on this, you've assigned primary importance to oil, and virtually no importance to all the other myriad of factors that influence the global economic situation.
Oil is but one of many factors, and is certainly not the primary factor in it. Even in energy terms oil only accounts for something like 30% of global energy provision, and there is no current shortage of the other 70% (though we need to drastically reduce our consumption of other fossil fuels for climate change reasons), but it's complete bollocks to assign primary importance to oil for our current economic malaise - this is caused almost entirely by other economic and political factors, and even the oil price spike's part in this was around 90% caused by speculation and 10% by actual normal supply and demand issues.
Put simply, we're in this mess because of the inevitable failure of neoliberal economics as a system, and the fact that our political classes have largely abandoned keynsian economics in favor of the economic ideologies espoused by Hayek, which they've run riot with and have now set us on a course that can only ever lead to crippling impacts on the economies of Western Europe as their austerity policies kill the economy and tax receipts faster than they can reduce government spending. This is a vicious downward economic spiral with no end other than economic obliteration - until the policies are reversed, and people like you who continually attempt to assign the blame for this to Peak Oil are providing them with a get out clause, of something else other than their policies that could be to blame for this mess.
The sole reason we're now in the mess we're in in this country instead of being 3 years into an economic recovery is because the coalition government cancelled the vast majority of the keynsian style government stimulus packages that the previous government had put in place - cancelling school building, road building, energy saving, renewable energy support etc etc. all of which they're now trying to put back in place to provide that stimulus again, but are finding that it actually takes years to get those projects back to the point where they can actually start providing jobs and the economic stimulus that's needed. This is economic mismanagement of epic proportions.... the one thing I will say in favour of your position on this is that in the 80's Thatcher did a similar thing, but the economy then was propped up by North Sea oil and gas so she got away with it to a greater extent, whereas now the reverse is true, and the true idiocy of these policies is now being seen.
Please have a think about your position on this and stop providing cover for the disastrous economic policies we're enduring - I too was a bit guilty in the past of assigning more blame for the economic crash than was due to the oil price spike in 2007/8, but once I investigated the situation a bit more it was obvious that the facts didn't fit that hypothesis. The oil price spike obviously didn't help matters, but firstly it was mainly a result of speculation in the markets to an extent that was banned until the late 90s, so was also a direct result of neoliberal economic policies, and secondly most of the problems that caused the crash were unrelated to, and largely preceded this oil price spike.
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