massornament

I really need to start posting more uplifting items… but, as usual, I spent my lunch hour reading some of the news and financial sites I frequent and finally had confirmed what I have been suspecting for some time: that the modern economy is nothing more than a giant ponzi scheme.  Of course, I am not the first one to come to this realization but even today I am really surprised at the level of negativity by those who would appear to know what is what when it comes to fianances and economics (and, of course, who are willing to discuss it).

It might be that modern economies are nothing more than the creation of a financial elite or cartel (and the politicians who empower them) which would include the U.S. Federal Reserve but it goes well beyond the U.S. and the 20th Century.  I suspect that the true underlying cause was petro-wealth (cheap, petroleum-based energy) which was plentiful for  most of the 20th Century.  The bounty allowed developed nations like the U.S., Japan, Britain, Canada… to build a modern, growth-based economy where much of what was promised to citizens would actually be realized in the future.  Promises and expectations blossomed.

Today, we are entering an era that will be characterized by expensive, hard-to-access and hard-to-refine energy.  However, the promises and expectations are absolutely dependent upon vast quantities of cheap (20th Century) energy.  And so, quite simply, something has to give.  Unfortunately, it will most likely be our modern, consumption-based, cheap-energy-dependent, and put-off-until-the future economies.

And what will this mean?  In some ways, I am sure it will affect your average citizen and his or her current lifestyle.  But here is where I am less doom-and-gloom.  While it will no doubt affect you and me (assuming you and I are both ‘average’ citizens of a developed country), I am sure it is going to affect the elites much more than anyone else.  It will also affect governments (who are or who represent the elites) who tax away wealth and squander it (think of all the wars fought over the course of the 20th Century) or hand it over to those same elites (think of all the financial bubbles, printing of money, and corporate welfare/bailouts).  For them, the Ponzi Scheme will no doubt end soon… and let’s hope it is a rather gradual and peaceful transition.

At any rate, these are some of the lunch-hour (or so) readings that influenced this post:

What Does Japan’s Implosion Mean For the Rest of Us? by John Rubino on January 26, 2010

Bernanke’s Doom Loop by Gary North

Banking on the State, Piergiorgio Alessandri & Andrew G Haldane, Bank of England, November 2009

On the end of the era of cheap energy, see:

Aleklett, Kjell, Mikael Hook, Kristofer Jakobsson, Michael Lardelli, Simon Snowdon, Bengt Soderbergh.  “The Peak of the Oil Age: Analyzing the World Oil Production Reference Scenario in World Energy Outlook 2008.” Energy Policy, vol. 38, no. 3 (March, 2010): 1398-1414.  http://www.tsl.uu.se/uhdsg/Publications/PeakOilAge.pdf

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