#252: Hardest months, strangest years
THE ANATOMY OF AN UNFOLDING CRISIS Try as I might, I’ve never quite understood why T.S. Eliot picked on April as “the cruellest month”. In the northern hemisphere, winter is receding into memory by the time that April arrives, whilst spring sees nature getting back into its stride, with May and June, perhaps my favourite…
#251: The Everything Crisis
THE ANATOMY OF A SUPER-BUST Introduction Even the most cursory glance at economic and financial history will reveal a litany of bubbles and booms, crashes and crises. We’ve seen numerous instances of speculative manias, real estate bubbles, market collapses and banking crises. Even the dot-com bubble of 1995-2000 wasn’t really ‘a first’, since there’s at…
#250: The Surplus Energy Economy, part 5
WHAT HAPPENS NEXT? Introduction Right from the outset, it was likely that the multi-article synopsis of The Surplus Energy Economy would extend to a fifth instalment on the subject of ‘what happens next?’ What most of us probably want to know is whether the economy is destined for gradual decline or sudden collapse. The indications…
#249: The Surplus Energy Economy, part 4
FRACTURE AND DE-FINANCIALIZATION Introduction In this fourth instalment of The Surplus Energy Economy, we turn to perhaps the most complex part of the equation, which is the financial system. The connections between energy and material prosperity, though largely disregarded and dismissed by orthodox economics, are nevertheless comparatively straightforward, at least in principle. The nearest approach…
#248: The Surplus Energy Economy, part 3
A WORLD LESS PROSPEROUS Introduction Now that we have addressed first principles, economic output and the role of energy, we can turn our attention to prosperity. The conclusions set out here are that, whilst aggregate prosperity has gone into decline, the real costs of energy-intensive necessities will continue to increase. This creates leveraged downside in…
#247: The Surplus Energy Economy, part 2
THE ENERGY DYNAMIC Introduction As we have seen in part one of this series, underlying or ‘clean’ economic output, known here as C-GDP, has correlated remarkably closely with primary energy consumption over a period of more than forty years. This means that we cannot “de-couple” the economy from energy use. This conclusion is wholly logical,…
#246: The Surplus Energy Economy, part 1
FROM FIRST PRINCIPLES Introduction We have reached a turning-point at which economics and the economy have parted company. Orthodox economics continues to promise growth in perpetuity, but the economy itself is going in the opposite direction. The explanation for this is simple. Conventional economics assumes that the economy is driven by money, which is entirely…
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#245: 2023 – Navigating the narratives
FACING FACTS, RELYING ON REASON At the start of 2023, an impartial observer could easily conclude that ‘the world has gone mad’. This is most evident in what is sometimes called ‘the public discourse’. Where our economic prospects are concerned, what we are witnessing must rank as the most extreme case of collective denial ever…
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#244. In search of illusory value
WHATEVER HAPPENED TO RETURNS ON CAPITAL? FOREWORD If you own a portfolio of stocks whose value has risen over time, or a property whose market price has increased, you are at liberty to cash in those gains by selling your investment. This, though, does not apply to investors in the aggregate because, by definition, any…
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