Thread regarding Wells Fargo & Co. layoffs

The Financial System is Untethered to Reality

The reason the banking system is showing signs of distress is because global claims on resources are way out of line with our underlying physical realities. Money and debt are not intrinsically valuable, they are just symbolic claims on physical resources. These symbolic claims on physical resources have grown exponentially over the last several decades (see charts for global debt). However, the underlying physical reality has not changed (and in some cases, has decreased -- i.e. fossil fuels being consumed).

As humans, we've come up with very creative ways to kick the can down the road; QE, low interest rates, shale drilling, etc. However, at a certain point, we will have to contend with the fact that infinite economic growth is unsustainable on a finite planet. We may not face this reality until massive debt defaults occur, or governments print huge quantities of cash to prevent this from happening (and hyperinflation ensues).

The modern economy is built off of fossil fuels. As fossil fuels grow increasingly scarce, it will become more expensive to produce and transport all of the physical products that people demand. This results in supply-side inflation, which partially explains some of the inflation we see today (the other side of inflation has been demand generated from central bank policies/government printing). At a certain point, fossil fuels will grow too difficult to extract and this will result in either: 1) debt defaults, economic depression, and oil/gas prices falling too low to justify extraction, or 2) massive currency printing by government resulting in hyperinflation.

We are simply a clever species that figured out how to temporarily blow past the environment's carrying capacity using stored solar energy. However, we ignored the fact that it was finite. We treated the resource as a flow instead of a stock, and that is why we are in for a rude awakening.

by
| 1042 views | | 7 replies (last March 23, 2023) | Reply
Post ID: @OP+1lMio9aY

7 replies (most recent on top)

EV drivers don't care about the environment, they are virtue signaling. Much like people who drive Mercedes’ and BMWs and think that makes them look better than others when anyone can buy them now, lol

by
| | Reply
Post ID: @qim+1lMio9aY

A nice perspective that fosters a healthy debate. Everything is relative and sometimes when things are reduced too far it can sound as if we have no future. There is a future, it will be vastly different and it will be difficult to comprehend in today's terms. We don't have all the answers but we know for a fact our life spans will continue to increase, science will continue to solve humanity's big problems.

The Information Age will be wrapped up soon as classical computing gets reduced to more analog work. A new Age will begin w/ real advances and applications for artificial intelligence and quantum computing. Cannot underestimate how significant that will be. And yes, there are enough resources (money, fuels, food, etc) for quite some time to realize these things.

It all really hurts today and feels dystopian because money and control has been concentrated to the few. A lack of trust in banking and gov't by the masses speaks loudly. But the concentrated few (scientists, industry leaders, etc) will end up figuring a way out of all this. Most of us simply don't have control or a seat at the table to be a part of this effort and voting is not enough of a freedom to facilitate changes we want quick enough.

We all see the problems and now the hardest work begins.

by
| | Reply
Post ID: @hqh+1lMio9aY

We will know if this post is real if the OP mentions how nuclear and or fusion power will fit in.

by
| | Reply
Post ID: @inv+1lMio9aY

This all only applies so long as we are unable to shift to renewable energy. Sure that relies on an assumption that the tech will advance beyond current capabilities, but your POV relies just as much on the assumption that it will not. Many people will undoubtedly feel squeezed throughout the inevitable transition, but that’s always happened whenever there has been a major realignment in the structure of the global economy. The world goes on.

Im much more worried about the long-term impact of the fossil fuels we’ve already burned (and those we inevitably will continue to burn in the short term) than the hypothetical impact of an eventual lack of fossil fuels to burn.

by
| | Reply
Post ID: @azn+1lMio9aY

Another gold bug.

by
| | Reply
Post ID: @zac+1lMio9aY

Not disagreeing with the entire post, but plenty of non-physical things have value.

by
| | Reply
Post ID: @tvk+1lMio9aY

Peak Oil?

by
| | Reply
Post ID: @krd+1lMio9aY

Post a reply

: