#CENTRAL #BANKS CANNOT FIX REAL PHYSICAL #ECONOMY - NATURE BATS LAST

EDITOR'S NOTE:

What is perfectly clear from this analysis is that none of the  Central Banks can fix the real economy with currencies or economic policies because the planet is now overwhelmed by too many people and rapidly exhausting resources - meaning applying their final tool kit of  financial  shenanigans is going to be completely fruitless. 

When that happens then the global economy will collapse; just as it is currently doing in specific developing and developed countries, it will no longer be possible to operate our complex global society. 

DYNAMICS OF TRAGIC FAILURE

Block Chain, FinTech, EVs, nor AI hold any promise to solve our real physical  predicament outside of providing conceptual absurdities by either Hollywood or Commercial lunacy to sell.

Projections  therefore about what happens next should only be viewed as pure speculation or utter poppycock because there are both infinite permutations and outcomes possible.  Nonetheless, it is highly likely that society is approaching the end of days similar to historical complex civilizations mentioned in the above linked video presentation by Joseph Tainter .

Let's face it, you cannot eat any form of physical (gold) or abstract currency (bitcoin, dollars etc.) - for as science has long professed

 NATURE BATS LAST...

T A McNeil

OUR FINITE WORLD

 The major issue is that money, by itself, cannot operate the economy, because we cannot eat money. Any model of the economy must include energy and other resources. In a finite world, these resources tend to deplete. Also, human population tends to grow. At some point, not enough goods and services are produced for the growing population.

Why financial approaches won’t fix the world’s economic problems this time

Posted on October 18, 2022 by Gail Tverberg

Time and time again, financial approaches have worked to fix economic problems. Raising interest rates has acted to slow the economy and lowering them has acted to speed up the economy. Governments overspending their incomes also acts to push the economy ahead; doing the reverse seems to slow economies down.

What could possibly go wrong? The issue is a physics problem. The economy doesn’t run simply on money and debt. It operates on resources of many kinds, including energy-related resources. As the population grows, the need for energy-related resources grows. The bottleneck that occurs is something that is hard to see in advance; it is an affordability bottleneck.

For a very long time, financial manipulations have been able to adjust affordability in a way that is optimal for most players. At some point, resources, especially energy resources, get stretched too thin, relative to the rising population and all the commitments that have been made, such as pension commitments. As a result, there is no way for the quantity of goods and services produced to grow sufficiently to match the promises that the financial system has made. This is the real bottleneck that the world economy reaches.

CENTRAL BANKS ARE CLEARLY ON VERGE OF COLLAPSE

I believe that we are closely approaching this bottleneck today. I recently gave a talk to a group of European officials at the 2nd Luxembourg Strategy Conference, discussing the issue from the European point of view. Europeans seem to be especially vulnerable because Europe, with its early entry into the Industrial Revolution, substantially depleted its fossil fuel resources many years ago. The topic I was asked to discuss was, “Energy: The interconnection of energy limits and the economy and what this means for the future.”

In this post, I write about this presentation.

Slide 3

TOO MANY PEOPLE, TOO LITTLE FOOD

NOT GOOD

The major issue is that money, by itself, cannot operate the economy, because we cannot eat money. Any model of the economy must include energy and other resources. In a finite world, these resources tend to deplete. Also, human population tends to grow. At some point, not enough goods and services are produced for the growing population.

EUROPE & OTHERS IN ECONOMIC HELL 

WE'RE NEXT

I believe that the major reason we have not been told about how the economy really works is because it would simply be too disturbing to understand the real situation. If today’s economy is dependent on finite fossil fuel supplies, it becomes clear that, at some point, these will run short. Then the world economy is likely to face a very difficult time.

A secondary reason for the confusion about how the economy operates is too much specialization by researchers studying the issue. Physicists (who are concerned about energy) don’t study economics; politicians and economists don’t study physics. As a result, neither group has a very broad understanding of the situation.

I am an actuary. I come from a different perspective: Will physical resources be adequate to meet financial promises being made? I have had the privilege of learning a little from both economic and physics sides of the discussion. I have also learned about the issue from a historical perspective.

WHY DID WE IGNORE LIMITS TO GROWTH?

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