You would think that we have more than sufficient troubles caused by global warming, pollution, resource depletion, biodiversity loss, ecosystem disruption and a few more. But there is a problem that’s not directly related to the natural world, but by a purely human construction: the financial market. Here is a discussion by Ian Schindler — maître de conference émérite (emeritus professor of mathematics) at the University of Toulouse 1, France, who proposes that we are close to a financial collapse.
I suspect certain well-placed people already know that our monetary system is about to blow up, and know the societal disruption will be epic. That would explain a few things.
People start to behave differently when they sense a pending "extinction" event on the horizon. They become more frenzied, lay aside the normal considerations they would have for the long term and throw caution to the winds, and have a greater tendency to behave more immorally. More and more these days, business and finance has come to resemble looting. People who already own more than they can ever possibly spend seem anxious to create opportunities to get their turn at the feeding trough one more time for a big score. (If we drew a behavior curve with morality on the Y-axis, I guess we'd see another Seneca Effect as doomsday approaches.)
A blockchain currency like Bitcoin, with a public ledger might have possibilities. But the official discussion is centered around Central Bank Digital Currencies (CBDCs), another thing entirely. The model being pushed is one where the currency is programmable, controllable by central authority, and perhaps even carrying an expiration date. If this is allowed to replace physical currency, it will no longer be money, but a mere ration coupon whose distribution and terms of use will be controlled by someone other than the "owner".
I’m glad that Ian starts with farming, the traded kind of food that must feed the cities. I am thinking of primary production of calories and the basis of the protein food chain, and something which is more than a sideline, the 'commodity' crops, fiber, energy etc. 'Feeding' the non-farming original agrarian craft economies required credit / debt / trading in goods and 'money'. There were serious problems for these systems, see references below. I note that vastly increased urbanisation (a ratio) is concomitant with industrialisation and with the expansion of modern energy-based economies, which greatly adds to the complexity.
I think JPBill's comment on this thread is correct. Somewhen around the last 'western' financial crash I obtained a curious tome which traced the history and theories of 'money', (Zarlenga 2002). I could not judge how well it was done. But I read later an IMF paper, (Benes & Kumhof, 'The Chicago Plan, 2012) which extensively cited and quoted Zarlenga and his sources. I understand Kumhof was later recruited to the Bank of England who had already issued a paper on the essentially private / not-public creation of credit/money.
FWIW a quote from Benes & Kumhof introductory history prefacing their discussion of 'The Chicago Plan'
"It was the English Free Coinage Act of 1666, which placed control of the money supply into private hands, and the founding of the privately controlled Bank of England in 1694, that first saw a major sovereign relinquishing monetary control, not only to the central bank but also to the private banking interests behind it."
PS I listened yesterday to Nate Hagens latest 'Frankly' (25 min). Some credit systems might evade the denouement better than others, but the financialised 'western' economies especially seem to face an urgent problem keeping the loot coming.
The description is quite interesting if we look at oil market and investments related, seems that AMARCO too is not too busy to expand production (fewer investments reported by Italian SAIPEM)!
The push on "markets" by the USA and other is more interesting if we understand that PENSION FOUNDS are some of the biggest players there, a sharp drop in market value can trigger a big correction in actual retirement benefits for a huge portion of population..... retired Americans are a big vote pool are not viable for the job market! Something similar happened to the Republic of Venice (Serenissima) when they tried to correct the "debit" (1600 AC), a lot of their social security was based on charitable institution supported by the "market" of state sponsored commercial expeditions, the effect was an almost complete collapse of living standards and a weakness that prepared the fall.
Today, oil is not a real asset because EROEI and the skilled labor needed by the industry to keep it positive, we must look the big picture for full understand the meaning: extraction EROEI is still quite good also for shale oil and the number of skilled professional needed to drill a well is usually limited, but after you extract it must be transported (ship, pipeline, etc), processed (refining, reforming, etch) and shipped to users (again ship, pipeline, etc) and here you need a lot of energy that lower the EROEI and a lot more of skilled labor!
Coal is a premium for underdeveloped countries because can go almost from the mine to the boiler, it's easy to handle (a solid, almost inert collection of lumps) and can be burned without working it, technology and skill may be concentrated only at the power plant. Coal is a commodity, but is a difficult one because have a huge pollution footprint, excluding the CO2 problem that is a non issue for underdeveloped countries coal is really DIRTY cheep only when "dirty" so the flue is charged with a lot of contaminants (sulfur, silica particulate, metals and a lot of other funny things) that explain the photos of developing capitals suffocated by yellowish smog.
The next big commodity will probably be SKILL, we are going to enter a demographic winter and are looking at a constant decline of average intelligence that begun almost half a century ago, so it is quite clear that if you want to amass positive interest rate commodities you'll go for skill..... and you can mass produce it too, AI!
Energy is still a problem, but we are growing fast in renewable, and probably we'll see a lot more of nuclear but it's an ad interim issue because the main push is on fusion energy now and with enough ingenuity is probably a matter that can be addressed in half a century. When we'll have fusion energy, we'll still have the skill shortage so long term investment will be skill, a more equal and meritocratic economy based on a different assumption of money will emerge: today amassing money bring more money and the "riches" doesn't need more intelligence or skill to keep and expand their revenue, a "skill market" is probably more similar to the ones that drove the Middle Age's cities that had a lot of almost independent "skill providers" (artisans) coordinated by a mix of economic interaction and mutual obligations (guilds) supported by a communal framework offered by the govern.
I suspect certain well-placed people already know that our monetary system is about to blow up, and know the societal disruption will be epic. That would explain a few things.
People start to behave differently when they sense a pending "extinction" event on the horizon. They become more frenzied, lay aside the normal considerations they would have for the long term and throw caution to the winds, and have a greater tendency to behave more immorally. More and more these days, business and finance has come to resemble looting. People who already own more than they can ever possibly spend seem anxious to create opportunities to get their turn at the feeding trough one more time for a big score. (If we drew a behavior curve with morality on the Y-axis, I guess we'd see another Seneca Effect as doomsday approaches.)
A blockchain currency like Bitcoin, with a public ledger might have possibilities. But the official discussion is centered around Central Bank Digital Currencies (CBDCs), another thing entirely. The model being pushed is one where the currency is programmable, controllable by central authority, and perhaps even carrying an expiration date. If this is allowed to replace physical currency, it will no longer be money, but a mere ration coupon whose distribution and terms of use will be controlled by someone other than the "owner".
Thanks Ian & Ugo.
I’m glad that Ian starts with farming, the traded kind of food that must feed the cities. I am thinking of primary production of calories and the basis of the protein food chain, and something which is more than a sideline, the 'commodity' crops, fiber, energy etc. 'Feeding' the non-farming original agrarian craft economies required credit / debt / trading in goods and 'money'. There were serious problems for these systems, see references below. I note that vastly increased urbanisation (a ratio) is concomitant with industrialisation and with the expansion of modern energy-based economies, which greatly adds to the complexity.
I think JPBill's comment on this thread is correct. Somewhen around the last 'western' financial crash I obtained a curious tome which traced the history and theories of 'money', (Zarlenga 2002). I could not judge how well it was done. But I read later an IMF paper, (Benes & Kumhof, 'The Chicago Plan, 2012) which extensively cited and quoted Zarlenga and his sources. I understand Kumhof was later recruited to the Bank of England who had already issued a paper on the essentially private / not-public creation of credit/money.
FWIW a quote from Benes & Kumhof introductory history prefacing their discussion of 'The Chicago Plan'
"It was the English Free Coinage Act of 1666, which placed control of the money supply into private hands, and the founding of the privately controlled Bank of England in 1694, that first saw a major sovereign relinquishing monetary control, not only to the central bank but also to the private banking interests behind it."
PS I listened yesterday to Nate Hagens latest 'Frankly' (25 min). Some credit systems might evade the denouement better than others, but the financialised 'western' economies especially seem to face an urgent problem keeping the loot coming.
The description is quite interesting if we look at oil market and investments related, seems that AMARCO too is not too busy to expand production (fewer investments reported by Italian SAIPEM)!
The push on "markets" by the USA and other is more interesting if we understand that PENSION FOUNDS are some of the biggest players there, a sharp drop in market value can trigger a big correction in actual retirement benefits for a huge portion of population..... retired Americans are a big vote pool are not viable for the job market! Something similar happened to the Republic of Venice (Serenissima) when they tried to correct the "debit" (1600 AC), a lot of their social security was based on charitable institution supported by the "market" of state sponsored commercial expeditions, the effect was an almost complete collapse of living standards and a weakness that prepared the fall.
Today, oil is not a real asset because EROEI and the skilled labor needed by the industry to keep it positive, we must look the big picture for full understand the meaning: extraction EROEI is still quite good also for shale oil and the number of skilled professional needed to drill a well is usually limited, but after you extract it must be transported (ship, pipeline, etc), processed (refining, reforming, etch) and shipped to users (again ship, pipeline, etc) and here you need a lot of energy that lower the EROEI and a lot more of skilled labor!
Coal is a premium for underdeveloped countries because can go almost from the mine to the boiler, it's easy to handle (a solid, almost inert collection of lumps) and can be burned without working it, technology and skill may be concentrated only at the power plant. Coal is a commodity, but is a difficult one because have a huge pollution footprint, excluding the CO2 problem that is a non issue for underdeveloped countries coal is really DIRTY cheep only when "dirty" so the flue is charged with a lot of contaminants (sulfur, silica particulate, metals and a lot of other funny things) that explain the photos of developing capitals suffocated by yellowish smog.
The next big commodity will probably be SKILL, we are going to enter a demographic winter and are looking at a constant decline of average intelligence that begun almost half a century ago, so it is quite clear that if you want to amass positive interest rate commodities you'll go for skill..... and you can mass produce it too, AI!
Energy is still a problem, but we are growing fast in renewable, and probably we'll see a lot more of nuclear but it's an ad interim issue because the main push is on fusion energy now and with enough ingenuity is probably a matter that can be addressed in half a century. When we'll have fusion energy, we'll still have the skill shortage so long term investment will be skill, a more equal and meritocratic economy based on a different assumption of money will emerge: today amassing money bring more money and the "riches" doesn't need more intelligence or skill to keep and expand their revenue, a "skill market" is probably more similar to the ones that drove the Middle Age's cities that had a lot of almost independent "skill providers" (artisans) coordinated by a mix of economic interaction and mutual obligations (guilds) supported by a communal framework offered by the govern.
when will peak all global fossil fuels like natural gas crude oil and coal occur ?