PowerSwitch

For those of you who have read my posts here for the previous few years, you will know that I have followed the Limits to Growth projections for the future closely. Without repeating myself too much, at some point this decade, global per capita will start a terrifying and relentless drop as the global economy starts to face ever growing problems, culminating in a economic collapse in 2030 (less than 15 years away).

http://www.theguardian.com/commentisfre ... g-collapse



With economic tensions, plus worsening resource tensions both within and between nations around the world, geopolitics and intra-societal tensions will worsen every year.

2016 is starting to feel like a game-changing year for the world - when the business as usual, return to growth illusions start to strip away and the a frightened world starts to turn to alternatives.

Look at the headlines... climate change worsening at a frightening rate (hottest ever month in decades)...

Right-wing populist forces rising fast in Germany, Europe's economic and political great power...

Massive waves of Muslim migrants trying to get into Europe, with more entering Greece in the last 2 months than the first 6 months of 2015!...

Donald Trump leading the Republican race on a nationalistic, populist and isolationist programme, and who knows, maybe all the way to the White House...

Middle East in a slow burn, with terrorist attacks, sectarian bloodshed and a growing wave of failed states across the MENA region...

Far-right National Front close to power and within a shot of winning next years presidency...

ECB pumping ever more 'funny money' into the money markets and the banks, with no real sign of a proper economic recovery, 7 years after the economic crash...

I could go on. My gut instinct says that this is the year that the culminating forces which are sending our Industrial Civilization into a new mode of scarcity (as Greer has predicted) is finally upon us. Don't get me wrong, it isn't the end of the world, but I do wonder what changes that shift from abundance to scarcity will lead.

Look around you, you are already seeing it.[/url]

I predict the next big economic crash will occur this year. The derivative nightmare is going to start its unwind. I think all fiat currencies will suffer badly and the stock market will drop dramatically.
I hope I am wrong.

If all fiat currencies fare badly who will notice the difference? Or will all major currencies inflate or all currencies deflate?

All the major national banks coordinate their money supply to avoid individual currencies getting too far out of line.

If derivatives seriously risk stability, the rules will be ebnt to prevent their invocation, That happened in 2008. Finanacial accountability is for the little people.

PS_RalphW wrote:If all fiat currencies fare badly who will notice the difference? Or will all major currencies inflate or all currencies deflate?

All the major national banks coordinate their money supply to avoid individual currencies getting too far out of line.

If derivatives seriously risk stability, the rules will be bent to prevent their invocation, That happened in 2008. Finanacial accountability is for the little people.

If all fiat currencies fall in value, then that will be of little consequence if trading one currency against another.
It would however be off considerable importance if one was paid in the fiat money, or had some saved for future use, and it devalued quickly before you could spend it on real goods.
What seems a useful amount of paper money at present might in future purchase a very disappointing supply of food , fuel, or other essentials.

Whilst times are still more or less normal, it is in my view sensible to keep a MODEST reserve of fiat currency for any unexpected financial emergency.
The exact amount would depend upon ones age, income, and other circumstances. A minimum of a months income, and a maximum of 6 months income might be prudent. Some in actual banknotes and some in a bank.
Any more substantial reserves might be better spent on useful physical goods, or other useful preps for an uncertain future.

PS_RalphW wrote:If all fiat currencies fare badly who will notice the difference? Or will all major currencies inflate or all currencies deflate?

I believe loss of confidence in fiat money will occur, leading to Hyperinflation. We will all notice it!

PS_RalphW wrote:All the major national banks coordinate their money supply to avoid individual currencies getting too far out of line.

This will be ineffective and irrelevant.

PS_RalphW wrote:If derivatives seriously risk stability, the rules will be ebnt to prevent their invocation, That happened in 2008. Finanacial accountability is for the little people.

Really? I don't think so, but I hope you are right - fingers crossed.

The cauldron's been bubbling some time (essentially since the Reagan/Thatcher and then Clinton deregulation years), with frequent boilings-over in the financial world scalding the poor.

I too get that gut feeling that this is going to be a far worse century than the last: resource depletion, expanding inequality/plutocratic fascism, climate chaos.

The oil price - oil having a central part in all this - can only now go upwards. To what? What's the trajectory? And will people rise to protect their privileges?

adam2 wrote:

PS_RalphW wrote:If all fiat currencies fare badly who will notice the difference? Or will all major currencies inflate or all currencies deflate?

All the major national banks coordinate their money supply to avoid individual currencies getting too far out of line.

If derivatives seriously risk stability, the rules will be bent to prevent their invocation, That happened in 2008. Finanacial accountability is for the little people.

If all fiat currencies fall in value, then that will be of little consequence if trading one currency against another.
It would however be off considerable importance if one was paid in the fiat money, or had some saved for future use, and it devalued quickly before you could spend it on real goods.
What seems a useful amount of paper money at present might in future purchase a very disappointing supply of food , fuel, or other essentials.

Whilst times are still more or less normal, it is in my view sensible to keep a MODEST reserve of fiat currency for any unexpected financial emergency.
The exact amount would depend upon ones age, income, and other circumstances. A minimum of a months income, and a maximum of 6 months income might be prudent. Some in actual banknotes and some in a bank.
Any more substantial reserves might be better spent on useful physical goods, or other useful preps for an uncertain future.

Good advice, and pretty much what I've done.

I still think that this year will be more or less normal (if you call the current state 'normal'), but things might begin to deteriorate from next year.

At present deflation seems more of a problem than hyperinflation. Bad debts lead to a decrease in the nominal money supply, and fear of bad debts is preventing banks from making new loans, or corporations spending their excessive profits. The velocity of money is slowing, hence ZIRP and and QE. As soon as the banks end QE the markets dive and the central banks have to start printing again. The problem is that consumers are too deep in debt to keep spending on all the new consumer tat - this cuts demand and that leads to falling prices.

Oil supply will decrease in the coming years, but there is no guarantee it will trigger very high prices. It may be that demand keeps falling ahead of supply as the global economy stagnates.

When all the demand for tat is finally stripped out of the economy, that will be the point at which prices can do no other than rise. You can't destroy demand for food, water shelter etc. But, obviously we are some way off from that point yet.

So what do people think the likely events/trajectory going forward will be, assuming the business as usual model works out, in line with Limits to Growth model.

Lord Beria3 wrote:So what do people think the likely events/trajectory going forward will be, assuming the business as usual model works out, in line with Limits to Growth model.

Extremely hard to predict.

One thing I think is clear is that interest rates cannot rise. And I wonder how long the powers that be can go on saying that ZIRP is temporary as it becomes increasingly clear that it is in fact permanent. But what are the consequences of TPTB admitting it is permanent, or a widespread understanding by the public and/or financial markets that it is permanent? I don't know.

My gut feeling is that we are in a temporary period between two prongs of the same financial crisis. In other words "the next financial crisis" will really just be a continuation of the last one, which has been kept in a state of suspended animation by ZIRP and QE that were billed as a temporary stabilising mechanism until "the recovery" starts, but turned out to be like a drug which extends the life of a patient suffering from a terminal illness, but which eventually kill the patient by some other mechanism.

The question is what "the next financial crisis" will look like. And my guess is that it will involve more financial institutions going bust, but this time it will be politically mega-toxic to bail them out with public money. It may happen anyway, which will lead to a major political crisis. And it may not, which will lead to economic and financial chaos, and ultimately monetary chaos.

I think the whole thing ends with a monumentl struggle between powerful forces whose wealth and power is tied up in the existing fiat monetary system, and the forces of the real world with which that system is ultimately incompatible. How that ends I don't know, but I doubt it will be pretty.

http://www.dailymail.co.uk/news/article ... sable.html.

Great article by Max Hastings. Like his strategist friend i predict a collapse of the ME leading to huge waves of migration into Europe. At some point, a European civil war with inter state violence is possible and certainly the far right will get to power across Europe.

Regarding food I would watch a few countries as bellweathers for food supply. Egypt is a big grain importer and Philippines imports a lot of rice. If the prices of these two go up then watch for trouble there. When staying Singapore a taxi driver told me he bought containers full of rice, in Thailand I think, and held the rice in storage until the price went up. Egypt's democratically President got overthrown because America stopped giving them grain essentially for free and they had to pay for it.
These countries are relatively weak in the big scheme of things but if China or even India run out of food they may use nuclear blackmail to get their food.

I think the UK will be one of the last to collapse, but still in front of Australia I hope, but you will probably get the Muslim hordes before we do.

Quite a lot of elements are very rare. I read that a smartphone contains about 60 of the 92 naturally occurring elements these days. That's quite a lot. Now while iron and aluminium are relatively abundant there are a few such as indium (used to make LCD displays apparently) has only about 10 years left. China caused a stir with the restriction of rare earths (apparently neodymium is used in some wind turbine generators). While there are a lot of things that can be substituted one that cannot is phosphorus and there are about 60 years of that one left.

Moving to finance one interest rates go to zero there governments seem to be out of ideas. In Australia abnormally low interest rates have caused a property boom and excluded any capital to be available for real investment such as solar or wind farms.

I don't think pollution will be a biggie except for China with the one exception of CO2 pollution of course.

I don't see population declining too much. People can put up with extreme privations and if the UK lifestyle went down to Indian or Bangladesh standards it could probably support the current population.

Yes we are seeing it in Australia as well, just a bit later than Europe.

Right now Pitcairn Island is very appealing. Apparently they are opening their borders for immigration.

Yes, good points.

Australia should do ok, you are rich enough to adapt to climate change. You just need to avoid being dragged into a war with China by the USA.

http://www.dailymail.co.uk/sciencetech/ ... ought.html

Most scientists agree that sea levels will rise, but some say it won't happen for centuries.

Now, a new study suggests sea levels will increase several feet over the next 50 years.

It claims the world's coastal cities, including New York and London, could be underwater by the end of the century.

One wonders how feasible will it be for future governments to effectively stop the flooding of our great cities as the cost would be enormous.