#257: Of theory and practice
IN SEARCH OF EXPLANATIONS Even with the best intent, it can be hard for anyone to pause and take an objective look at his own work. For this reason, I’m very grateful to blogger The Naked Emperor (NE) for an article, entitled The Everything Bubble, The End Of Growth & Managing Expectations – A theory…
#256: A path of logic
IN SEARCH OF THE REAL ECONOMY As outlined in the previous article, we’re starting to see the emergence of a modified consensus about the outlook for the global economy. In place of a previous, near-universal assumption that economic output could expand indefinitely at a continuing trend annual rate of about 3.5%, the World Bank has…
#255: The emerging ‘modified consensus’
INCHING TOWARDS ACCEPTANCE? As you may know, the interpretation long set out here is that the underlying ‘real’ or physical economy of products and services has deteriorated, via stagnation, into contraction. Partly because of a mistaken belief that monetary gimmickry can promote material expansion, a huge gulf now yawns between the ‘real economy’ and its…
#254: A tale of two economies
GROWING, GROWING, GONE After more than two centuries of expansion, the global economy has inflected into contraction, meaning that prior growth in material prosperity has gone into reverse. By 2040, aggregate prosperity is projected to be 13% lower than it was in 2019, implying that the prosperity of the world’s average person will have fallen…
#253: How has it come to this?
ECONOMIC REALITY, UP-CLOSE AND NASTY It’s no exaggeration at all to say that the IMF is increasingly worried about the global economy and the financial system. In its latest World Economic Outlook, the IMF warns about instability in the financial sector, a problem which extends beyond banks into pension funds and insurers. Central banks’ efforts…
#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…
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#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…
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#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…
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Surplus Energy Economics 