Saturday, December 10, 2011

Money IS NOT wealth!

Greetings good citizen,

Occupy Boston was folded up ‘peacefully’ last night. I can’t help but wonder if the ‘kid gloves’ weren’t partly due to history. The ‘shot heard ‘round the world’ was fired not too far from Dewey Square…

And I suspect, more than a little, that there is a very deep fear of ‘repeating’ that historic event.

But that’s not the topic of today’s offering…

No, today’s offering is intended to disabuse you of the notion that when The End comes, it will drop like a bag of hammers.

When, as I have been, er, ‘warning’ (actually for years now) that it will ‘creep up on us’…gradually.

Still, at this point the same lack of bankable projects has come home to roost. A series of lavish Fed money printing operations (the euphemism du jour is "qualitative easing") flooded the banking system in the United States with immense amounts of cheap cash, in an attempt to make up for the equally immense losses the banking system suffered in the aftermath of the 2005-2008 real estate bubble. Pundits insisted, at least at first, that the result would be a flood of new loans to buoy the economy out of its doldrums, but nothing of the kind happened. There are plenty of reasons why it didn’t happen, but a core reason was simply that there aren’t that many business propositions in the industrial world just now that are in a position to earn enough money to pay back loans.

Among the few businesses that do promise a decent return on investment are the ones involved in fossil fuel extraction, and so companies drilling for oil and natural gas in shale deposits—the latest fad in the fossil fuel field—have more capital than they know what to do with. The oil boomtowns in North Dakota and the fracking projects stirring up controversy in various corners of the Northeast are among the results. Elsewhere in the American economy, however, good investments are increasingly scarce. For decades now, profits from the financial industry and speculation have eclipsed profits from the manufacture of goods—before the 2008 crash, it bears remembering, General Motors made far more profit from its financing arm than it did from building cars—and that reshaping of the economy seems to be approaching its logical endpoint, the point at which it’s no longer profitable for the industrial economy to manufacture anything at all.

I have begun to suspect that this will turn out to be one of the most crucial downsides of the arrival of peak oil. If the industrial economy, as I’ve suggested, was basically an arbitrage scheme profiting off the difference in cost between energy from fossil fuels and energy from human laborers, the rising cost of fossil fuels and other inputs needed to run an industrial economy will sooner or later collide with the declining cost of labor in an impoverished and overcrowded society. As we get closer to that point, it seems to me that we may begin to see the entire industrial project unravel, as the profits needed to make industrialism make sense dry up. If that’s the unspoken subtext behind the widening spiral of economic dysfunction that seems to be gripping so much of the industrial world today, then what we’ve seen so far of what peak oil looks like may be a prologue to a series of wrenching economic transformations that will leave few lives untouched.

What is described in the last paragraph is ‘clearly visible’ to any capitalist today. We are rapidly (and I cannot stress that point enough, think ‘the ground is rushing up to meet us’, ‘rapidly’.)

With all of the, er, ‘overhead’ associated with the financial sector (which is to point out, once again that ‘money’ IS NOT ‘wealth’) the ‘capacity’ to produce wealth diminishes as the ability to ‘pay’ for it shrinks.

One can easily see this is a ‘management problem’ BUT the, er, ‘demands’ of capital have outstripped the ability of wealth creation to produce sufficient ‘profit’.

No irony should be lost on the fact that efforts to ‘offset’ this ‘imbalance’ has come from the ‘employee/customer’ (higher prices/lower pay.)

This is akin to starving a beast of burden while working it twice as hard…

And somehow the idiots are outraged when the obvious outcome is realized!

Seriously good citizen, this is INSANITY!

We have certifiably whacko people in charge of our economy!

Which leaves us with our ‘original problem’…

What the hell can we ‘do’ about it?

Due to the extremely ‘poor planning’ on our founder’s part, these, er, ‘morons’ are, in fact, ‘The Law’ and we have no (legal) way to, er, ‘remove’ them before they drive our civilization off a cliff!

But, as I pointed out in ‘Fear Factor’ it is futile to point out that we’ve been here (many times) before.

Although, this time I would definitely say it IS ‘different’…but not in a good way.

As I have undoubtedly annoyed many of you every time I repeated it, the destruction of our civilization proceeds apace (and unhindered, despite OWS best efforts.)

While some would opine that ‘A’ doesn’t happen if ‘B’ isn’t present, the difficulty of having to adopt a new commerce system coupled with the realities of ‘energy scarcity’ (that will render large swaths of this planet ‘unlivable’ for considerable periods each year) present a considerable ’challenge’.

Worse, the current ‘foot dragging’ regarding ‘alternative energy’ will result in needless bloodshed. Billions will suffer so ‘a few’ can be rich…

But as I have emphasized repeatedly, money IS NOT ’wealth’.

This is a reality that will dawn upon the clueless all too soon.

Then the current regime’s ‘mismanagement’ will be writ large for all to see…and to weep over!

Thanks for letting me inside your head,


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