The worst of the upcoming financial crisis?

[sen-no-sen]

Except that in Janco's model it was not supposed to happen so quickly!

Yes, and that's the scariest thing!
Because Janco talks about physical crises: oil, mining and ecological.
Currently we are going through a structural crisis linked to very abusive banking practices, so we are not yet in the thick of it!
When this is the case, expect the worst: war.
As a reminder, the euro crisis is only a continuation of the crisis of "subprime" made in the USA, should not be forgotten ...

[Christophe]

Yes, it is indeed a banking and financial crisis today and not a resource crisis ...

Now, as wealth creation decreases, resources, even at fixed prices, become more expensive ... It's mathematical ...

Otherwise yes it may be worse in 50, 100 or 1000 years about resources ...

[sen-no-sen]

Yes, it is indeed a banking and financial crisis today and not a resource crisis ...

Whatever we say, the "subprime" crisis was triggered by peak oil, even if it was not the latter that was the bulk of the problem, because the bubble was to burst in some way. of another.

We will soon find ourselves on a wavy plateau acting in a retroactive loop = less oil = less growth, therefore less growth = less oil consumption, then slight return to growth (for China, India etc.) .), so more oil consumption and therefore less growth ...

Otherwise yes it may be worse in 50, 100 or 1000 years about resources ...

Many indicators are already in the red, especially with regard to fish stocks.

[Ahmed]

Christophe, you write:

Now, as wealth creation decreases, resources, even at fixed prices, become more expensive ... It's mathematical ...

It is too simple a reasoning, one could easily support the opposite from the same starting point: as the creation of wealth decreases, the wage bill decreases, from where a stability or a fall in prices (in absolute value) of resources ... It's mathematical ... but also inaccurate!

[Remundo]

The current economic collapse is not linked to the strain on physical resources.

We are at maximum hydrocarbon extraction capacity, and we don't lack any ore [that doesn't mean that it's sustainable, structural decrease of around 3% / year over the next 30 years]

We are in a rather simple situation and artificial, in 5 steps ...

1) Crisis of the Subprimes: The financial system made a huge error because of the non-respect of the elementary rules governing the loans (reasonable solvency of the borrower, absence of speculation of the bank on its borrower and the good bought)

2) The financial system "securitizes" to hide the dust under the carpet: 2nd huge mistake because the bubble increases as much as rotten debts plague all the global economic players

3) The bubble bursts, the States provide their "guarantee" to support the banks, without which companies no longer have access to credit.

4) This forces States to (over) go into debt with central banks which are eager to create thousands of billions ex nihilo.

5) The huge interest payable automatically leads to austerity and we are in the vicious circle of economic collapse, [because austerity reduces tax revenues, which leads to over-taxing, therefore increasing austerity ...]

We are currently in step 5.

To stop this massacre, it would be necessary to make a monetary "clean slate", to freeze the debts, even to cancel them, to clean up the functioning of the banking system and to reorient massively the world industry on renewable energies.

Pious wishes.

@+

[sen-no-sen]

You summarized the situation very well Remundo.

More deeply, the major problem of the current system is that of debt money / exponential growth.
1) States go into debt to make growth.
2) Once the states are in debt, they must grow to repay their debts.
Its last being astronomical, the states find no other solution than to perpetuate their research of growth in an unlimited way.
This retroactive loop accelerating the perverse effects at each phase: structural crisis, social conflicts, wars, environmental destruction.

The priority is therefore to put an end to this hellish spiral.

[Ahmed]

You have both summed up the current phenomena well: Remundo appropriately order the most immediate logical loops and you, Sen-no-sen, the underlying cause.
What is "stuck" is the impossibility of satisfying this conditionality of growth, the cornerstone of our economic system. only uncontrolled artifices and with devastating consequences can still (for how long?) create an illusion and "the reorganization of the functioning of the banking system" would not change anything * (no more than a "reorientation on renewable energies" ).
For a few decades after the Second World War, external extraction (raw materials and work) allowed, temporarily, to relax the noose of internal extraction **; today, the noose tightens again and the economy turns against those who naively believed that it was at their service ...

* On the contrary, it would remove the perfusion which keeps the patient (the economy) alive as best they can.
** To which was added the productivity boom.

[phil53]

I don't even understand that men supposed to be talking about growth again!
It went on the head.
We can access almost all basic needs, at least in wealthy countries.
If we cut out all the useless, unproductive, counterproductive jobs in addition to polluting less, we could devote more time to others.
For example, looking for a job, I go to dozens of job interviews, I am registered in I do not know how many temping agencies. Not to mention the tests that the job center gives me, fashion being the recruitment in situation. All this occupies people but is completely unproductive.
Utopia, I know it!

[Ahmed]

Phil53, you write:

It's stepping on your head (than worshiping growth).

Economy is a religion, it contains its end (in both directions!) And does not care about us (or at least very indirectly), as for our primary needs or not, it determines them according to its advantage!

Many of the primitive religions, I think of all those corresponding to an animist vision, aimed at the survival of the group by its harmonious integration in a natural environment; it was also a mode of transmission of knowledge recognizing everything as an eminent and respectable place on this earth: the establishment of taboos guaranteed respect for nature *.
The passage to more restrictive polytheisms, then to monotheisms making man equal to God ("God made man in his image") definitively rejected all other creatures in a subordinate and negligible role: henceforth free from all restrained, humanity could shamelessly attack its destructive work.

"Humanization of the world is its de-naturation."

Economism is the latest avatar of these latter religions, the most accomplished form of their potential drifts; freed from their ethics, it revives pagan cults of sacrifice and restores new ones Moloch devouring his daily ration of victims ...

* Well, I'm not saying it was always perfect!

[Remundo]

Thank you Ahmed and Phil

Regarding "growth", it is quite clear that this is not an end in itself. It would still have to be defined ...

If it is GDP growth through exacerbated and polluting extractivism, it is effectively a dead end.

A first lever for "quantitative growth" is to reorient the energy system on renewables, precisely because they are inexhaustible on the scale of a few billion human beings. (it is the overhaul of the energy mix)

A second lever of "qualitative growth" is to have the same use with less energy (this is technical progress)

A third lever, which is no longer growth, is to banish the superfluous, and roughly stop deifying the consumer society and redirecting towards a society of useful and reasoned purchases.

If we do not do 1) and 2), we will have a forced march on 3) without any mattress to absorb the shock.

"cleaning up the functioning of the banking system" would not change anything *

Oh yes. The loan system HISTORY is a collection of individual savings used for useful investment projects of varying size, but lacking the equity to start the work.

Obviously, to interest lenders, you have to give them interest and guarantees on the project. Otherwise, their money does not flow and does not stimulate the economy.

The banking system is completely out of its loyal and useful missions for the community which are the collection of savings and the granting of reasonable loans. In this system, lenders and borrowers find their advantage for the benefit of the community. The bank is not intended to get rich, but just to pay its current expenses and its employees.

The famous "investment banks", who don't give a damn about the 3 pillars of banking (lender, borrower, community): they are only at the service of themselves and become de facto perfectly useless, and even harmful for the "everyday" economy because their nonsense ends up destabilizing the "deposit" banks.