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The Forum > Article Comments > Economic growth to end soon - forever > Comments

Economic growth to end soon - forever : Comments

By Michael Lardelli, published 3/5/2007

With energy still cheap, we should seize the opportunity to prepare for an eventful ride down the slippery slope of energy decline.

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The comment that money supply in the last year has been 14%. The growth has been netween 12% and 15% for about ten years so is it any wonder that asset inflation is virtually out of control and young people are being priced out of the housing market. The Basle Agreement which seeks to regulate money supply by using capital adequacy ratios is a recipe for high bank charges. All excess profit over and above that necessary for a reasonable dividend flows directly to the capiatal base and results in the creation of money in inverse ratio to the capital adequacy ratio. At a 10% CAR for a billion dollars of excess profit $10billion of extra money is created.
Posted by Foyle, Thursday, 3 May 2007 6:07:10 PM
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Feedle dee, I admit I have been a consummate, if ignorant, overuser of energy.

However, I disagree with your idea that no one is in charge. Someone is trying very hard to take charge, and we will never be liberated until we rid ourselves of their influence.

The stealing of the 2000 US Presidential election, 9-11, and the plunder of Middle Eastern oil are three dots that don't need to be joined, because they already fit where they touch.

None of these things "emerged" by chance. They happened because of the logical onset of fossil energy depletion, and the goons who dreamed it up are not finished with us yet.

So before you get to feeling tooo liberated, hop in the 'wayback machine with me:

http://www.onlineopinion.com.au/view.asp?article=3837
Posted by Chris Shaw, Carisbrook 3464, Thursday, 3 May 2007 11:54:36 PM
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Peter,

I am interested to hear your opinion as to whether a post Peak-Oil period would be Inflationary or Deflationary as there appears to be quite a bit of debate on the subject. There was a recent article on the Oil Drum that asked this question.

Intuitively you would think that it would be inflationary -higher oil=higher energy=higher just about everything.

On the other hand we would be faced with a global economy that was essentially shrinking. Also governements would probably want low interest rates to stimulate demand (as happened to Japan in the 90s and after 2001 in the US).

So which one is it?

(I am considering locking in my mortgage at 5.5% for 15 years because personally I think it will be inflationary but I would feel a fool if we get rates at 2% in 10 years...!)

Nick.
Posted by NickO, Friday, 4 May 2007 3:46:28 AM
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“For many years now I have been astonished about our series of federal treasurers’ focus on growth.”

Me too healthwatcher. Man, do I hate Costello, for his narrow-minded focus on this issue, when it is way past the time that someone in his position should be advocating an end to the expansion of our economic activity, and concentrating on the technological development and improved efficiency side of growth. He is as irresponsible as Keating was, or even moreso, as the urgency for stabilisation is that much greater than it was a decade or so ago.

The trouble is, we are not seeing any significant change in the Rudd camp.
Posted by Ludwig, Friday, 4 May 2007 8:30:22 AM
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“I'm in two minds about the threats of PO”

Yes PeterJH, I don’t think it is necessarily disastrous. If it comes on reasonably slowly in a series of price rises, that force us to adapt without causing social upheaval, then it could be just what we need to get the idea of sustainability into the headspace of the populace and dumb politicians.

“The final unknown is when oil will peak.”

I don’t think the actual peak matters at all. Price rises are what matters, and they can be triggered by all sorts of things, with the changing oil supply / demand ratio as a background factor. We’ve already seen a couple of significant prices hike events and then plateaus or partial reversals. The escalation of this pattern will be vastly more significant than the actual peak in supply or availability of oil.

“The flow-on will be more expensive fuel, manufactured goods and foods.”

Absolutely. As oil prices rise, our personal economics will radically change as just about everything else becomes more expensive and less readily available.

.
Climate change has become the number one environmental / future security issue in Australia. Well, that is most unfortunate. It is effectively acting as a distraction to what really matters – the short-term adaptation to a society with much more expensive oil and the imperative to quickly learn to live sustainably.

I just hope that our new-found widespread concern about climate change, including big business and the old stodge political growth brigade, will quickly evolve into the necessary concern about peak oil and genuine sustainability.
Posted by Ludwig, Friday, 4 May 2007 8:33:27 AM
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I sometimes envy you guys who can 'rassle with the tealeaves of interest rates. I confess that I struggle to cope with household economics. I never had to think much beyond the system that I was born into.

This system has provided me with such a feeling of stability and security, that I find it difficult to empathise with folks around the world who do not enjoy such feelings. Nevertheless, I must make the effort and question everything about my "normal" existence.

Question: Why is usury and interest such a necessary part of our economy? Surely taxes are the thing that provides the common-wealth for health services, police, education, the judiciary and the whole social construct.

Why do we take monetary interest so for granted? Isn't it the wellspring of all that is wrong? Why is it considered "natural", since nature and her immutable rules have no equivalent laws. Why is it so revolutionary to talk of a world without usury? Politicians just don't go there. Why? Would they be strung up?

If money is not a token for effort, then it is surely nothing but paper.

So we borrow from the pot of effort past and present, with a promise to repay with a greater effort in the future - exponential growth personified. And why do we gift such a mountain of effort to those who do nothing of a utilitarian nature to earn it? Why are they so very, very worshipful?

Does anyone here know any of these deities personally?

Human desire is exponential, but our everyday thought is linear. Maybe this is our downfall - our big blind spot. Maybe this is the thing we need to tackle if we are to behave more like a harmonious species and less like a cancer.

Before you accuse me of being Marxist - no, I never read any of his books. I am simply trying to logically understand what seems like a no-brainer to my bog-simple thought processes.

Please explain - anyone?
Posted by Chris Shaw, Carisbrook 3464, Friday, 4 May 2007 11:25:15 AM
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