Where Are We Going? And Why Are We In A Handbasket?
Over the years I've written numerous articles about the IMF, austerity policies and the systematic national rapes they have engaged in.
And I wrote how the USA looked ripe for the picking.
I had hoped that I was wrong. The trolls and optimists on CFN assured me that the USA was too big to fail.
No one had been able to demonstrate to my satisfaction how we would be immune to this sort of banker takeover.
I admit that I was conflicted in my views on when this would occur and didn't see the mortgage crisis as the set up for this takeover.
But I had pointed out that other nations got raped right after their oil production peaked. For the USA, this appears to be occurring right after world liquids has peaked.
By the historical standards of the IMF austerity measures, things aren't bad at all right now.
But looking at the history of the IMF Austerity measures, we are a nation doomed to do poorly. The two nations that beat the IMF are Venezuela and Russia. they both did so by using their oil revenue and legislation to beat back the IMF debt and retake control over their economies.
The USA has no resource base left by which to wage such a fight.
Now in the case of the USA, the IMF is not the front man for the banks. The banks that have been the power behind the IMF in the past are taking the direct route. They are raping us in person, rather than by proxy.
The USA is now entering it's Greatest Depression. There will be no real recovery as world oil production is in a permanent decline. The USA has nothing to export that can't be gotten other places. The USA will be allowed to fail, and what resources it has, will be sold later on the world market at prices decided on by the banks, in order to pay off our debt to them.
What debt you ask? After we borrow trillions to give away to the banks, we'll start borrowing from them for our survival. The banks then will give us introductory interest rates and then jack them up later.
The banks will own the USA when this is over.
No nation has turned this process around once begun. I see no sign that the USA will do so.
I'm listening to the bailout hearings right now. Everything I've heard has been outright lies, or prognostications and strategies designed to drive further growth. Some of the people speaking in my view, have their hearts in the right place.
But they lack an education necessary to understand the world as it truly works. In that I mean the physical world, based on energy and matter, and limited by the well recognized and accepted, Laws of Thermodynamics. With more than a century of fast track energy growth behind us, our view of the world has come to assume that this growth is part of the natural order of things.
It is not. It is a short term spike. And during this spike, we've come to teach that money drives economics and industry. That printing money and throwing it at a problem, will increase industry.
The world has never actually worked that way. It's a correlation, not a causation that leads to this illusion. The way things actually work is that energy drives industry. Then industry drives the economy. Money is simply a symbolic representation of energy.
As I've written before.
V = E / M
V = Value of Money
E = Quantity of Usable Energy
M = Quantity of Money
As we are in a permanent energy downturn, all efforts to drive growth through increases in the money supply will cause sever economic distortions.
The macro effects are as follows...
1. The institutions that get the new money will be able to spend it at face value.
2. The institutions that get it later, will spend it at a diluted value.
This has side effects that lead to very scary conclusions.
As the banking industry gets the money first, they get the real bang for the buck. If they use that money to create fiat dollars, then the subsequent 12 to 1 loans, means that industry gets dollars that are devalued and watered down in value.
With energy supplies in decline, industry faces steadily rising prices and shortages of feedstocks, and other goods and services. Projects will incur cost overruns. Businesses will be plagued by rising costs and diminishing profits. Loans will remain difficult to repay. Bankruptcies will rise.
In light of this, banks will continue look at real world industries and see that they aren't worth loaning money to. They will continue to invest the money in recursive financial vehicles instead. Isn't this where the smart money goes?
And of course, this is how we got where we are. And so long as we continue to fight for growth in a world of declining resources, we will continue to decline in a stair step fashion, of mini-booms and big busts.
And why won't we continue to chase after growth? So many people don't understand energy as well as 19th century scientists did. So many people believe that we'll invent a new source of energy to replace oil. So many people have no idea that energy can be measured and compared, and that oil provides such a huge quantity of energy, that nothing we know how to capture, can match it. Forget about surpassing it for the sake of growth.
I'm often accused of being a pessimist. Maybe I am. But I feel like all of my pessimism is well founded and mathematically demonstrable. My most outspoken critics that understand the math, tell me that it doesn't matter in this case. Those that can't understand basic High School math, tell me that their feelings assure them that I must be wrong.
We live in a world where feelings are more important in making decisions about how to manage our economies and industries, than rational thought. So when I demonstrate that exponential growth kills, or that exponentially growing consumption is impossible to maintain, I'm told that my emotional thinking is fueling my pessimism.
I'm assured that Science will perform miracles and that I must have faith in Science. Science Saves. When I point out the scientific principles that show our limits, the off the cuff response is that my critic doesn't understand science, so I must be wrong, because he or she has a feeling that I am. After all, I'm not as smart as the 'They', the high priests of science that perform miracles, ala, Scotty and Lieutenant La Forge. They point to the 'Miracles' of science that gave us so much so far. I point out that these 'Miracles' are forms of technology that consume energy, not create it, and once again, my 'Feelings' are put in question.
This clash of optimism and emotion versus reason, is one of the reasons that I am quite honestly, 'pessimistic'. And the Cornucopians are understandably bothered by my lack of solutions to promote. After all, we must do something right? If I argue, that do nothing, is doing something, I'm dismissed as a nutcase. If we just stopped trying to grow and stopped creating policies aimed at growth we would in my view, do less harm.
If you're still following this diatribe... I have a strange mental image sometimes that we're in a lifeboat. The cornucopians are eating all of the food as quickly as possible. I ask them to stop, and they tell me they will, if I can come up with alternatives. They laugh as me and tell me there is no such thing as Peak Food. Next they decide that need to start having babies. I argue that this isn't the best time for that, and once again that challenge me to come up with better alternatives, and point out that I have no right to tell them how many babies they can have.
And so we are in a global life boat. And too few believe in Peak Anything.
So we will pretend that infinite growth is possible. We will chase after it with every fiber of our being. Until we can't.
World Energy is in decline.
This is as good as it gets.
It's going to get much worse.
I may be a pessimist, but I don't believe that it matters.