California Dreamin’

And the song went on to say something about: ‘Dedicated to the one(s) I love. Too true. It was always going to show up as unrepayable debt -why do the vast majority not see it?  Natural Capital – real stuff – is the underwriter of all wealth. Nothing else. The idiot economists think that energy is 20% (or whatever) ot the total ‘economy’, therefore the other 80% can get by?  Sorry folks. Does a ‘plane get by without an engine? A body without a heart? A car go far without a fuel tank?

When the small part is an essential part, you don’t go on without it.

So, we come to the little thermodynamic problem, that work requires energy. An immutable, that. Look’ee here:

oil graph june 09

When we hit the peak of oil supply, we hit the peak of work done. Simple as that. Meaning, as I explained to ODT ‘Business’ writer Dene McKenzie, the end of global average (I was careful to put it that way, some may gain at the expense of others under the sinking lid)  growth.

Yes, you can get more efficient. But that is a law of diminishing returns. Your problem is that you cannot grow under that, you have to find energy at roughly the rate you want ‘grow’. The reason you want to ‘grow’, is to cover the profit written in to everything sold ‘now’, so that it can be repaid. That needs to be bigger next time, or the system fails. Nobody lends in a scenario where the only guarantee is a diminished return. We overshot on paper – largely through inflating the ‘values’ of existing homes, and through the sheer impetus of exponential expansion. By the time it became obvious, we were past the point of repayment. Forever.

The one to call in the recievers will  be The Lorax – on behalf of Mother Nature. The impact on her is the extraction, alteration, degradation and pollution, and Arnie’s IOU’s are the – sad – representation. There’s going to be a lot of disillusioned punters out there. Don’t put your money into the Rugby World Cup, that’s for sure. I’d not hold it in a bank or in cash, either. Collect something that will be REALLY in demand, long term. Ug trade two rocks for mammoth testicle. Move over Milton, you had it all up the shute!

The tragi-comedy, will be watching the ‘leaders’, and the likes of Roger Kerr, when they see their whole dogma crumble in their faces. I suspect that, on average, those types are actually less able to adapt and deal with something like that, than the rest of us.

When?  Has to be within five years, now, on that graph, but it may fall over now, as in: California precipitates the slide, all the fiscal shots have been fired, and the whole thing implodes. I don’t know – nobody has really been this way, except in historic microcosm as in the Greenland Norse, but at the point of collapse, there is always so much social angst around, they get a bit sloppy with the recording bit. Maybe the rune-tapper walked off the job because he got an IOU? Go Arnie – into the valley of death rode the …..hey, that’s not far from where he is…..

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