STOCK MARKET WATCH -- Tuesday, 18 June 2013

[bread_and_roses]

18. "Why America & China's Future Plans Are Totally Nuts"

http://www.alternet.org/economy/america-and-chinas-terrible-plans-future

Societies periodically go insane. Fallacious memes sweep through a frightened and confused populace and bad things happen, bad choices get made. Two bad ideas in particular infect the American thought-o-sphere these days: 1) that non-cheap oil can keep all the rackets of consumerism going; 2) that we can offset all the quandaries of non-cheap oil with accounting fraud and debt creation.

... None of these accredited morons seems to get the basic equation between available cheap energy — e.g. oil with a high energy-return-on-investment — and capital formation — the accumulation of wealth that can be deployed to produce more wealth-producing activity. That was only possible on the way up Hubbert’s curve. On the way down, alas, the relationship enters a Ponzi unwind of too many claims on excessive promises to pay. The net result is a society with a lower standard of living. Personally, I think it will go way lower, and way sooner than later.

... China is doing exactly the opposite of what the future requires — namely, destroying the basis for small-scale local food production. But, not to put too fine a point on it, China is fucked. They are simply in the hopeless zone of population overshoot and resource scarcity.

... the Princeton-bred American economists think that we can all migrate onto the Web and live a virtual existence on virtual wealth with virtual energy.

(emphasis added)

I really love that last sentence - it's the main reason I posted this.