The Race To Collapse

As readers of this blog know, I have long regarded the return of economic crisis as an inevitability (because the core energy and no-growth predicament facing the Western world wasn’t solved in 2008-9 but merely kicked further down the road by increasing debt and printing money). It looks like 2012 will be the crunch year, as a series of inter-related crises are rapidly converging: (1) The European sovereign debt crisis; (2) The continuation of the chronic US inability to balance its books, and of instability in the Middle East; (3) The probable onset of serious declines in global oil production, as new oil megaprojects are no longer able to compensate for accelerating decline from existing fields; (4) heightened risks of a war with Iran, as the narrow window opens between the start of US delivery of the next-generation bunker buster MOP (from November 2011) and the culmination of the Iranian nuclear weapons program and its hardening against air strikes (next year or two).

The European debt crisis dominates headlines, with the Anglo-Saxon media crowing about the lazy, shiftless Meds (as opposed to the diligent and careful Germans) and blaming socialism for their problems. This of course has a number of flaws within it. Greeks work the most hours in the EU – 2000 per year, relative to 1300 in Germany. And the only major EU nations without huge debt and fiscal problems are the Scandinavians, who are about as “socialist” as one gets nowadays.

But this is all sidestepping the fact that debt and fiscal crisis afflict the entire Western world, and it is just that – due to the special political weaknesses of the Eurozone – have manifested first and foremost in Greece, Italy, and Spain. However, a look at the actual statistics reveals that even the “serious” countries are in a great deal of trouble. For instance, in 2010 both the US and Britain had bigger primary deficits (cyclically adjusted) than “basketcase” Greece, whereas Italy’s was actually positive! The Meds’ total net government debt is larger, but on the other hand, if even France is beginning to experience perturbations – a country whose fiscal balances are better in every way than Britain’s or America’s – then it surely cannot be long before the crows come home to roost in the Anglo-Saxon world.

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References: Peak Oil And Resource Depletion (up to 2010)

Although I have several articles on the threats posed to industrial civilization by runaway global warming and ecological degradation on Sublime Oblivion (see 1, 2, 3, 4, 5), I have yet to cover the Charybdis of resource depletion in as much detail (1, 2, 3, 4). As such, I have assembled many links to relevant articles on blogs such as the Oil Drum and Energy Watch Group to provide a foundation for the layman interested in exploring these very important concepts. With time I will write short descriptions next to some of the more important links summarizing what they are about.

EDIT Dec 2010: The Best of 2005-2010 is ultra-recommended.

Basic Summaries

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Book Review: James Kunstler – World Made by Hand

kunstler-world-made-by-hand“World Made by Hand” by James Howard Kunstler, published in 2008. Rating: 3/5.

World Made by Hand is a speculative fiction book about how a sociopolitical collapse may be experienced by small-town Americans. It is of a reasonable length, engaging and generally well-written, although far from a literary masterpiece – not that that is necessarily a minus, since it serves a polemic rather than a purely artistic purpose, and it is from the latter angle that we shall approach it.

Kunstler depicts a collapsed world where by the 2020’s the engines of commerce have grounded to a shuddering halt, the arm of the state has withered into oblivion, and the electric lights (‘juice’) of modern civilization petered out, ushering in a new Dark Age, both literally and metaphorically. The largely listless and apathetic population is wracked by super-high mortality rates as that Malthusian trinity, famine, disease and war, stalks the land and reaps down the weak and stupid. Although life is dirtier and more violent, at least for some, like Robert Earle, the narrator and hero of the story, it is also more wholesome and fulfilling. With ‘machine noise’ silenced and its noxious, hallucinogenic fumes and toxins curtailed, man is free to rediscover nature, revealing a world much realer and richer than the rows of bland metallic boxes and suffocating serpents of asphalt that symbolize our consumer society.

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Oily Origins of the Economic Crisis

In an article some months ago I suggested that “perhaps this crisis is simply an unconscious recognition of this inconvenient truth?” – namely, the peaking of oil extraction and all that it implies for the continued survival of a financial system built on assumptions of continuous economic growth. In other words, the fashionable approach of focusing on exotic financial instruments, regulatory failures, etc, if a case of mistaking the forest for the trees.

The Oil Drum had a nice graphical summary. According to the author, Gail the Actuary, the chain of causation runs thus: rising oil prices -> inflated asset values -> booming phantom wealth -> high energy costs undermine real economy -> more and more bubbles pricked -> banking crisis -> credit crisis -> cascaded economic failure -> oil demand destruction -> oil prices plummet -> so do ever costlier long-term investments in oil extraction -> economic recovery at lower level -> rising oil prices. Cycle repeats itself to oblivion.

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Mailbag: Back from a Russian Century?

Four days and 50 reader views into our baby blog’s existence, we have been priveleged to receive a number of letters to our darussophileATyandexDOTru address. All of them deal with our Towards a New Russian Century? core article (which is, in addition, the most popular item on this blog by far – possibly because colleen was kind enough to link his winthrop88 blog to it).

The biggest critique of it, voiced by colleen and the letter writer DP, was my neglect of the topic of peak oil in my analysis of geopolitics in the next 20-30 years.

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