The Global Financial Crisis (GFC) of 2008/2009 truly broke the US (and global) financial system and ever since then the US government (and other Western governments) has practised a mix of extremely lax banking oversight, massive amounts of monetary stimulus, the socialization of private debts, and government deficit spending to keep the financial system afloat. The counting, especially in the US, of financial extractive rents as economic value creation instead of economic costs (together with some misrepresentation of the inflation rate) has obscured the reality of slow, or no, economic growth ever since. At the same time, the corporate leaders of the financial system have been continuously protected from the consequences of their actions; something that started with the sovereign debt crisis of the early 1980s. The decades of “getting away with it” have bred a culture of extreme risk taking in the financial sector that has leaked heavily into the corporate sector.
The financiers and their political enablers have behaved like termites and have eaten away at the support structures of their civilization, which is only still standing because there is a small level of resilience left. However no efforts are being made to repair the damage already inflicted so the coming collapse seems inevitable. In addition to this, the delusion of our political leadership is such that they will not recognise the collapse even when angry citizens are roaming the streets baying for blood, which is already happening with the European farmers.
I didn't think that Western civilisation would last for ever but I never imagined that it implode so fast. It is quite frightening as the implosion seems to be accelerating rather than slowing.
From your essay... "With US$1.5 trillion of CRE debt coming due in the next 18 months, there will be a forced market clearing which will most probably drive CRE prices lower and force banks to take extremely large credit write offs."
Would seem we could expect some financial crisis next year?
Thanks for the drum roll rendition of reality as it is. Love the truth . Best summary I have read. Feasting upon democracy as its bones were picked clean .
"As is the inability of Western industries to compete in the clean energy industries such as solar, wind, batteries and electric vehicles which form the basis of so much future growth and economic strength."
Unfortunately biophysical reality dictates we can only build and maintain solar energy harvesting infrastructure - that has a 20-30 year life span - with fossil fuels, which are rapidly depleting.
We simply can NOT build wind mills nor solar farms nor hydroelectric dams nor mass electricity storage nor distribution networks with electricity.
This means at best a "just and sustainable future" and "the energy transition" is NOT "well within our reach" at best it is only possible for far fewer than ~8 billion humans - and even if humans dis magically spend every last effort on building "the energy transition" with the least pain and suffering, it would only last for a few decades - because fossil fuels are rapidly depleting.
Fossil fuel depletion is measured by the 'Energy Returned on Energy Invested' (EROI) of fossil fuels, which is decreasing. The EROI for the production of oil and gas globally by publicly traded companies has declined from 30:1 in 1995 to about 18:1 in 2006 (Gagnon et al., 2009). The EROI for discovering oil and gas in the US has decreased from more than 1000:1 in 1919 to 5:1 in the 2010s, and for production from about 25:1 in the 1970s to approximately 10:1 in 2007 (Guilford et al., 2011). Alternatives to traditional fossil fuels such as tar sands and oil shale (Lambert et al., 2012) deliver a lower EROI, having a mean EROI of 4:1 (n of 4 from 4 publications) and 7:1 (n of 15 from 15 publication). In 2013 world oil and gas had a mean EROI of about 20:1
We can't mine minerals needed for "the energy transition" without diesel due to its ~40 times higher energy density than batteries, which are close their maximum density the laws of physics dictates.
Clearly Russia and Kazakhstan and others have greater reserves than 'Western' Big Oil but the trajectory is the same just delayed a hand full of decades or so.
Geo Political analysis without this back drop of biophysical reality is misleading. Please read these very insightful researchers / authors.
Thanks Roger.
The financiers and their political enablers have behaved like termites and have eaten away at the support structures of their civilization, which is only still standing because there is a small level of resilience left. However no efforts are being made to repair the damage already inflicted so the coming collapse seems inevitable. In addition to this, the delusion of our political leadership is such that they will not recognise the collapse even when angry citizens are roaming the streets baying for blood, which is already happening with the European farmers.
I didn't think that Western civilisation would last for ever but I never imagined that it implode so fast. It is quite frightening as the implosion seems to be accelerating rather than slowing.
FYI... Prof. Richard Werner brilliantly explains how the banking system and financial sector really work.
https://www.youtube.com/watch?v=EC0G7pY4wRE
My head is bursting!
Thank you Roger!
From your essay... "With US$1.5 trillion of CRE debt coming due in the next 18 months, there will be a forced market clearing which will most probably drive CRE prices lower and force banks to take extremely large credit write offs."
Would seem we could expect some financial crisis next year?
INDY
roger - an article you might find interesting -
https://www.thebureau.news/p/fake-chinese-income-mortgages-fuel?utm_campaign=post
Thanks for the drum roll rendition of reality as it is. Love the truth . Best summary I have read. Feasting upon democracy as its bones were picked clean .
"As is the inability of Western industries to compete in the clean energy industries such as solar, wind, batteries and electric vehicles which form the basis of so much future growth and economic strength."
Unfortunately biophysical reality dictates we can only build and maintain solar energy harvesting infrastructure - that has a 20-30 year life span - with fossil fuels, which are rapidly depleting.
We simply can NOT build wind mills nor solar farms nor hydroelectric dams nor mass electricity storage nor distribution networks with electricity.
This means at best a "just and sustainable future" and "the energy transition" is NOT "well within our reach" at best it is only possible for far fewer than ~8 billion humans - and even if humans dis magically spend every last effort on building "the energy transition" with the least pain and suffering, it would only last for a few decades - because fossil fuels are rapidly depleting.
Fossil fuel depletion is measured by the 'Energy Returned on Energy Invested' (EROI) of fossil fuels, which is decreasing. The EROI for the production of oil and gas globally by publicly traded companies has declined from 30:1 in 1995 to about 18:1 in 2006 (Gagnon et al., 2009). The EROI for discovering oil and gas in the US has decreased from more than 1000:1 in 1919 to 5:1 in the 2010s, and for production from about 25:1 in the 1970s to approximately 10:1 in 2007 (Guilford et al., 2011). Alternatives to traditional fossil fuels such as tar sands and oil shale (Lambert et al., 2012) deliver a lower EROI, having a mean EROI of 4:1 (n of 4 from 4 publications) and 7:1 (n of 15 from 15 publication). In 2013 world oil and gas had a mean EROI of about 20:1
https://www.sciencedirect.com/science/article/pii/S0301421513003856#s0020
We can't mine minerals needed for "the energy transition" without diesel due to its ~40 times higher energy density than batteries, which are close their maximum density the laws of physics dictates.
Clearly Russia and Kazakhstan and others have greater reserves than 'Western' Big Oil but the trajectory is the same just delayed a hand full of decades or so.
Geo Political analysis without this back drop of biophysical reality is misleading. Please read these very insightful researchers / authors.
https://surplusenergyeconomics.wordpress.com/2023/11/10/265-explore-and-explain/
https://dothemath.ucsd.edu/2023/09/can-modernity-last/