Hope Part V: Global Depression: A necessary Evil?
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Read the following articles about US economy "bubbles".
Is a USA Economic Collapse Due in 2005
The summarize, the article essentially stated that the US economy (hence world's economy) is facing a depression soon due to high debt, low interest and unemployment.
This should not come as a surprise to students of world's economy. Our economy is built upon debt and projected growth due to the "sustainable growth" nature of our economy. Let me explain.
When a person do a credit card purchase, that person is actually incurring a debt. However, since the merchandise is officially sold to a consumer, to the company, it counts towards revenue, with cash in debt liable to that consumer. Theoratically this is fine since the consumer will one day pay up the debt. However, this create the phenomenon of virtual growth. What that means is that the company actually claim growth based on revenue sold to consumer's debt. When taken into the grand picture of global economy, it creates a vicious cycle: The consumers need to be paid so that they can slowly pay off the debt, company needs to claim growth so that they can pay their employees (aka consumers), which leads to a need to lower interest rate to encourage credit purchase, which deepens the debt. In a very simplistic way, this was what happened to Enron.
In a sense, we are buying the debt of our own future.
On the other hand, the premature economy collapse might be a good thing to human society from a holistic view. Maybe that's the "market correction" so many people believed in to save our asses.
What do I mean by that?
When Peak Oil is fully in effect, there will still be a global depression. The only difference between then and now is human's ability to recover from the depression. If our economy collapse from within itself before the need to exhaust our planet, there is a hope that human will realize certain mistakes of our way, and when global population is sufficiently reduced, the survivors will be able to learn from the mistakes and utilize the resources wisely in the future. Otherwise, if we learn the lesson too late, there won't be any resource left for us human to climb back up again.
In other words, the longer we delay the economy depression, the closer we are to extinction.
Of course, that's a objective conclusion. Personally, I hope they (whoever those nebulous "they" are) can delay the Peak Oil and economy problem for another 100 years so I can enjoy my entire life and live happily into an old-age retirement.
Not that it's likely.
Well, can't fault me for hoping.
Read the following articles about US economy "bubbles".
Is a USA Economic Collapse Due in 2005
The summarize, the article essentially stated that the US economy (hence world's economy) is facing a depression soon due to high debt, low interest and unemployment.
This should not come as a surprise to students of world's economy. Our economy is built upon debt and projected growth due to the "sustainable growth" nature of our economy. Let me explain.
When a person do a credit card purchase, that person is actually incurring a debt. However, since the merchandise is officially sold to a consumer, to the company, it counts towards revenue, with cash in debt liable to that consumer. Theoratically this is fine since the consumer will one day pay up the debt. However, this create the phenomenon of virtual growth. What that means is that the company actually claim growth based on revenue sold to consumer's debt. When taken into the grand picture of global economy, it creates a vicious cycle: The consumers need to be paid so that they can slowly pay off the debt, company needs to claim growth so that they can pay their employees (aka consumers), which leads to a need to lower interest rate to encourage credit purchase, which deepens the debt. In a very simplistic way, this was what happened to Enron.
In a sense, we are buying the debt of our own future.
On the other hand, the premature economy collapse might be a good thing to human society from a holistic view. Maybe that's the "market correction" so many people believed in to save our asses.
What do I mean by that?
When Peak Oil is fully in effect, there will still be a global depression. The only difference between then and now is human's ability to recover from the depression. If our economy collapse from within itself before the need to exhaust our planet, there is a hope that human will realize certain mistakes of our way, and when global population is sufficiently reduced, the survivors will be able to learn from the mistakes and utilize the resources wisely in the future. Otherwise, if we learn the lesson too late, there won't be any resource left for us human to climb back up again.
In other words, the longer we delay the economy depression, the closer we are to extinction.
Of course, that's a objective conclusion. Personally, I hope they (whoever those nebulous "they" are) can delay the Peak Oil and economy problem for another 100 years so I can enjoy my entire life and live happily into an old-age retirement.
Not that it's likely.
Well, can't fault me for hoping.
posted by Zuraffo at 12:06 PM
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