Hubbard – a symptom, not a cause.

He may be a nice guy, and a gent. Ultimately, he’s just as guilty as every one else – including me.

Here’s what I sent to Morning Report:

The problems besetting Hubbard, and financial institutions from SCF to HBOS, were entirely predictable and predicted. While the system of lending continued to require repayment of the interest it charged, it had to continue growing exponentially.

Quite clearly, that growth was based on the extraction and/or use of finite resources – like minerals, land and fossil fuels. Equally clearly, such a system had to fail beyond the point at which we reached the maximum rate of extraction, and/or of usage.

That point has been heralded for 40 years now, the prediction having been rubbished but not refuted. On the basis that ignorance is no excuse, those who continued relying on the up-and-up bandwagon have no defence from here on.

To tout economic growth – which is the only thing underpinning financial operations like the ones in question, is to tout the biggest ponzi of them all, and from now on, we can only see this scenario more often.

From where I sit, the question is: at what point is the continued refusal of politicians, the media and the ‘finance industry’, to acknowledge the end of an era, just plain socially criminal?

Hubbards problems are a symptom, not a cause. Get used to it.

And what I commented at Interest.co.nz:

Step back, folks, and this is a ponzi – but it’s not alone. And given that ignorance is no excuse, there are a lot of guilty ponzi-touts out there. Pollies, economists, business news reporters, financial hawkers, banks….

If capitalism in it’s present form needs to advance ‘money’ and charge ‘interest’ for the advance, then it is locked into needing to grow, or die.

Clearly, that growth needed to be underwritten by physical activity, carried out on/in/with physical resources. Equally clearly, that construct was temporary, on a finite planet with finite supplies of everything from fossil fuels to farm fodder.

At and beyond that point – and the Club of Rome projections, updated every ten years,have never varied – the fiscal system was in trouble. As it is, (and it was entirely predictable) we overshot the underwritable point, thanks to accelerating debt-issuance. Folk like me think that debt is not underwritable now.

I couldn’t have told you which financial institutions, but I could have told you when they would be generically in trouble. And if I could pick it to the decade from 1975, and to the year from 2001/2, why didn’t the ‘experts’?

I can’t really make it plainer. Morning report found a retired Prof as an ‘expert’ to interview. To cover butt/justify? Hard to tell.

The ignorance continues…..

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