Kim Hill Saturday. RNZ. My letter to….

she read it out…… wonder how many ‘pollies were listening. Wonder if Bollard was?

To: saturday@radionz.co.nz
That was simply one of the most revealing, timely and thought-provoking interviews I’ve ever heard.

It begs the following question, though:  If energy underwrites global economic activity, and energy is “on the way down”, then what will the impacts be?

Society took a century to incrementally build itself a structure entirely dependent on oil. Now it has to morph that infrastructure, to some as-yet-to-be-determined form, even as the tank empties. In a very short time, in other words. On top of that, the fiscal structure we have constructed, was evolved in the energy-growth phase. Unsurprisingly, that fiscal system is based on that growth, to the extent that it assumes to continually borrow from the future, at exponentially-increasing rates.

Clearly, if energy underwriting diminishes, so too does the ability to borrow from the future, or at least, for the future to underwrite. Furthermore, we’re in overshoot already, due to currently held debt.

I suggest it is no coincidence that Peak Oil coincided with a fiscal crash, and no coincidence that interest rates – which represent the ability of the future to repay – are trending to zero, as with the Fed. Presumably, on the downslope, they would have to trend negative, but one suspects there would be a lack of eagerness on the part of investors in that paradigm

In a nutshell, peak energy represents the time at which we have to change our fiscal system, and our expectations. Growth will have to be seen as an irrelevant goal, and I suggest the replacement should be something along the lines of:  “Will or children thank us for this action?”

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