Tuesday, October 04, 2022

We Blew It: Malinvestment and the Plundering of Productive Assets

Plunder is fun until everything has been plundered. Nothing is infinite except greed and credulity. Unfortunately, neither greed nor credulity can build a sustainable, productive economy.

We blew it: rather than investing in a sustainable mix of energy and in increasing the productivity of labor and industrial processes, we squandered irreplaceable oceans of capital and credit in oh-so profitable skims and scams such as $10 trillion in stock buybacks and completely unproductive speculative absurdities.

All the capital that was malinvested in shifting production overseas, financial scheming and speculation cannot be replaced. All the credit that was squandered on skims and scams (borrow billions to fund stock buybacks, borrow trillions to reward cronies and buy the complicity of the masses) is now an unstable toxic dump that threatens a financial system that is now the crumbling keystone of the entire global economy.

We didn't have to be this foolish, but the incentives made it all rational to squander trillions of irreplaceable capital and decades of irreplaceable time. The incentives reward maximizing short-term profits by any means available, which include bribery, buying political favors, balance sheet fraud, loading companies with debt then taking them public, etc.-- none of which increase productivity, innovation or sustainability.

These incentives follow a power-law distribution: the greater the leverage, debt, monopoly and financial trickery, the greater the gains.

None of these extremely profitable financial strategies boosted productivity, jobs or efficiencies. All they accomplished was enriching the already rich. Call this incentive structure whatever you like: late-stage capitalism, crony capitalism, etc., the bottom line is this global system doesn't reward investing in productivity or long-term sustainability because those investments are risky.

Why invest in something risky when you can generate billions in pure profits via exploitation, fraud and financial games that were once illegal? Exploitation: arbitrage low wages and minimal environmental standards by shipping production overseas; should costs rise slightly as residents object to their nation becoming a toxic waste dump and their workers being ripped off, production is moved to a more exploitable locale.

Fraud: off-balance sheet, buying a company with debt, selling off its assets, hiding expenses and debt in off-balance sheet footnotes and then selling the indebted shell to unwary investors.

Financial games: load the company with debt to buy back shares, reducing the float and boosting per share earnings without increasing sales, productivity or profits.

Stock buybacks were illegal not that long ago because they are blatant means of self-enrichment. So were pharmaceutical ads aimed at consumers.

This is not the warm and fuzzy version of capitalism found in textbooks. In the PR textbook version, entrepreneurs "create wealth" via innovation that creates new products and services and boosts productivity by increasing the skills of the workforce and the efficiencies of industrial production.

Those paid to glorify this facade can cherry-pick examples, but the real money isn't made in innovation, it's made by ring-fencing monopolies and plundering productive assets. Rather than foster innovation, monopolies choke off disruptive innovations and competition as threats to their steady flow of profits.

Rather than invest in increasing productivity--the only real source of wealth creation--profits have been maximized by plundering productive assets: the workforce, resources and once-productive sectors.

All this profiteering took cheap energy and resources and limitless credit for granted. As long as somebody somewhere was doing the dirty work of extracting and processing all the energy and resources needed to keep the system running, then the financiers were free to "create wealth" for themselves via fraud, exploitation and games.

Now that the low-hanging fruit has all been plucked, it's taking a lot more capital and expertise to extract harder-to-get resources.

Credit seemed infinite when rates were near-zero, and everyone said that was The New Normal. But alas, capital still responds to risk by demanding a return, and the happy days of infinite credit and zero rates is over, regardless of whatever hopeful predictions are issued by those wistful for bottomless credit lines.

Rather than incentivize investing in our workforce and productivity, the system incentivizes plundering the workforce and productive assets, commoditizing everything into chunks that can be tossed into the plunder-meat-grinder to maximize the short-term gains of those who own the financial assets and the political power.

Now that we need to boost productivity and efficiency to build a sustainable economy, the capital, credit and skills needed to do so have been squandered to benefit the few at the expense of the many.

Time is running out to change the incentive structure and the system to reward investment in productivity rather than plunder. Look at the charts below of global energy and population. Hundreds of billions of dollars, yen, yuan and euros have been invested in alternative energy sources, but their share of global energy is still so thin a slice that you have to squint to see it.

It will take tens of trillions of dollars to make a dent in energy and industrial-transport-building efficiency. Many people are proponents of nuclear energy, but few look at the scale or cost. The U.S. has built a grand total of two nuclear plants in the past 25 years. Yes, a small modular design recently received approval, and the first prototype may be ready for testing in 2030.

(According to the U.S. Energy Information Administration, "As of May 25, 2022, there were 54 commercially operating nuclear power plants with 92 nuclear power reactors in 28 U.S. states. The newest nuclear reactor to enter service, Watts Bar Unit 2 with 1,122 MW net summer electricity generating capacity, began commercial operation in 2016. Two new nuclear reactors are actively under construction: Vogtle Units 3 and 4 in Georgia.")

To make a real difference, hundreds of such nuclear energy modules will have to be manufactured, and not next century, but starting now. Where are the resources, fuel, capital and expertise to do so? Oops, all the capital went into skims and scams rather than into the workforce and real-world productivity.

Investing in our workforce has morphed into an especially cruel form of financial plunder, self-exploitation: the workforce is expected to borrow tens of thousands of dollars to fund their own education, with little guidance from a rapacious banking-higher-education system other than "the more diplomas you get, the richer you'll become."

While this self-serving advice enriches the banking-higher-education cartels, it isn't generating systemic productivity gains. If it did, we'd be seeing huge leaps in productivity rather than declines.

Gordon Long and I discuss these macro-trends in our new program, The Plundering Of Productive Assets (34:52 minutes, 50 charts).

Plunder is fun until everything has been plundered. Nothing is infinite except greed and credulity. Unfortunately, neither greed nor credulity can build a sustainable, productive economy.









My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters


My recent books:

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

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Sunday, October 02, 2022

Devil's Advocates are Investors' Best Friends

If those on the opposite side of the trade are viewed as threats rather than friends, it's time to revise the analysis.

Of the many self-generated dangers investors face, few are more dangerous than confirmation bias, the comfort we experience seeking out views that confirm our own positions and our resistance to studying opposing views.

Confirmation bias is both self-evident and complex. We all understand the psychologically soothing feeling when others heartily agree with us, and the frustration, anxiety and sense of being threatened we experience when our core positions are challenged.

But there's more to it than just that. Taking a position with conviction empowers us, for by publicly espousing a forecast, prediction or position, we're implicitly saying, "When events show I'm right, that will show I'm smarter than the average bear."

If we push our position and conviction to an extreme and shout it out loudly enough, we'll attract those seeking to confirm their own biases. Confirmation bias thus generates a self-reinforcing feedback loop, as those shouting the loudest attract those who agree with them, rewarding their conviction with "likes."

We all know the danger of marrying your position, that is, taking not just a financial stake but also an emotional stake that eventually becomes entwined with our identity. What may have started out as a calculated risk morphs into an all-or-nothing reflection of our identity. Any challenge becomes a threat to our selfhood.

Conviction is good, but a hedge and a Plan B are even better. Hedges and Plan Bs arise from a simple question: what if I'm wrong?

If we want to avoid the dangers of confirmation bias and marrying our positions, Devil's Advocates become our best friends. Devil's Advocates delight in probing the consensus or popular view for weaknesses, and exploring how and why the consensus or popular view might be riskier than advertised, or even completely, catastrophically wrong.

The grizzled investor who's ridden conviction trades all the way to zero suppresses the desire to confirm biases in favor of seeking out informed Devil's Advocates, skeptics and proponents of the opposite side of the trade.

This is especially important in unstable, volatile eras like the present. Since every forecast and prediction (and thus every investment position) is based on previous analogs playing out, what happens when none of those analogs map to the present? Very simply, nobody knows what's going to happen, and the appropriate level of confidence in any prediction or forecast is near-zero.

If we cannot justify a conviction trade, then it becomes appropriate to pair every position with a hedge (to protect the position if we're wrong) or a Plan B (escape with most of our capital intact, limit our risk in any one position or sector, stay in cash until the weather clears, etc.).

If we listen with some detachment to informed Devil's Advocates, we might even change our minds (gasp). No crystal ball is unclouded, but being flexible enough to change our minds when presented with evidence is a positive trait.

In other words, the most fervent Bulls would be well-served by seeking out the most fervent Bears--and vice versa. There's a spectrum of Devil's Advocates, of course; some delight in puncturing everyone's balloons, others are probing their own conviction trade for potentially fatal weaknesses, and so on.

If those on the opposite side of the trade are viewed as threats rather than friends, it's time to revise the analysis. It's never comfortable to be told "you're wrong," but the possibility of being wrong should be uppermost in every investor's mind, as that possibility informs calculated risk: yes, we understand this position is risky, but we're taking it anyway because we judge the potential upside to be worth the risk.

Anyone who helps me re-think a position and hedge risk is a friend, not a threat.

What are some current Devil's Advocates' provocations? Here are a few guaranteed to make blood boil in many veins: (Remember, the key question is: what if I'm wrong?)

1. The US dollar will only continue strengthening, crushing the euro to .80, the yen to 250, the yuan to the depths of Heck, etc. It will not crash or die, not now and not in five years or ten years.

2. The 10-year yield is heading toward 5% and TLT toward 85. Rates are not going back to zero.

3. Not all fiat currencies will die.

4. Not all markets will crash.

5. Liquidity isn't all that matters.

6. Burning all the deadwood (non-performing debt, phantom wealth, etc.) is necessary to re-seed the forest.

7. Every prediction and forecast will be wrong because the past doesn't map the present. Correct forecasts will be so rare that they will be statistically insignificant.

8. Take control of your life, take ownership of everything you generate. Everything else--opinions, forecasts, predictions-- is signal noise.



My new book is now available at a 10% discount ($8.95 ebook, $18 print): Self-Reliance in the 21st Century.

Read the first chapter for free (PDF)

Read excerpts of all three chapters


My recent books:

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Melissa B. ($50), for your marvelously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Jeff W. ($5/month), for your superbly generous pledge to this site -- I am greatly honored by your support and readership.

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Tuesday, September 27, 2022

Chart a Course To Self-Reliance

Self-reliance in the 21st century is uniquely challenging because we've become overly dependent on globalization abd financialization.

As things unravel, the one surefire strategy is to chart a course for greater self-reliance. Improving self-reliance has no downside, only upside, and everyone can increase their self-reliance incrementally in small ways.

Self-reliance isn't the same as self-sufficiency. Even Thoreau on Walden Pond used manufactured tools and supplies sourced from afar. The basic idea of self-reliance is to reduce our dependency on long, fragile supply chains and the hamster-wheel landfill Economy of planned obsolescence and waste is growth consumption, and increase what we can do for ourselves and those we care about.

Self-reliance isn't going it alone, it's assembling trusted personal networks as a producer as well as a consumer, as a means of reducing the number of links in your personal supply chain and increasing local sources of life's essentials.

Self-reliance increases as we acquire skills and capital in all its forms. Self-reliance isn't the same as money; what's truly valuable can't be bought: trust, reciprocity, integrity. Those are the foundations of self-reliance.

Self-reliance in the 21st century is uniquely challenging because we've become overly dependent on globalization and financialization--not just on traditional supply chains and finance, but a near-total dependence on hyper-globalized supply chains and hyper-financialized credit-asset bubbles that are inherently unstable and unsustainable.

There's no downside to becoming more self-reliant and enormous upside. If the Landfill Economy continues chewing through the planet's dwindling resources, it doesn't diminish the value of being able to do more for ourselves and those we care about.

But if long, fragile supply chains break and hyper-financialization blows a gasket and sinks, the self-reliant will have a much easier time than those with minimal self-reliance. We're only powerless if we cede all power over our lives to others. Self-reliance is all about taking control of our own lives rather than relying on unsustainable global supply chains and centralized authorities to provide us with essentials.

I address all this in my new book Self-Reliance in the 21st Century (96 pages). I'm offering it to my readers at a 20% discount for the Kindle edition ($7.95) and 15% discount for the print edition ($17).

You can read the first chapter for free (PDF). In later chapters, I cover the mindset of self-reliance and the nuts and bolts of self-reliance.

I wrote this book not as someone on the peak looking down but as someone on the trail looking up. Self-reliance is a work in progress, not a destination. I'm constantly improving my self-reliance, too, and have a long way to go. I wrote this book to offer a few pointers on charting your own course to greater self-reliance.





My new book is now available at a 20% discount ($7.95 ebook) 15% discount ($17 print) this week: Self-Reliance in the 21st Century.


My recent books:

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Melissa B. ($50), for your marvelously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Jeff W. ($5/month), for your superbly generous pledge to this site -- I am greatly honored by your support and readership.

Read more...

Monday, September 26, 2022

Loonshots and Collapse

The momentum of franchise success and centralization of power are fatal.

Loonshots are like moonshots, only crazier and trickier to commercialize. Author Safi Bahcall titled his book on how to nurture change-the-world innovations Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries.

But as Bahcall persuasively argues, loonshot innovations aren't enough. You also need to nurture franchises that commercialize the innovations into products and services that pay the bills and fund the search for loonshot.

Bahcall identifies two kinds of loonshots: product and system. One of his examples: the 747 Jumbojet was a product innovation, the SABRE airline reservation software was a system innovation. Both are essential.

The book has much to say about structuring organizations--corporations and agencies--to encourage the fragile emergence of loonshots and commercialize them into change-the-world products and services. Organizations that excel at fostering innovations often fail to capitalize on their discoveries, and Bahcall identifies two sources of this failure: the supreme leader who leads the organization astray with hubristic self-confidence, and the organization lacking managers with the means to push the innovation into production / adoption.

Near the end of the book, Bahcall explores a topic that has engaged historians for decades: why didn't China capitalize on its vast trove of change-the-world innovations? Why didn't China leverage its monumental technological advantages from 1500 to 1800 to dominate the world?

This has long been of interest to me, and I found the book The Man Who Loved China: The Fantastic Story of the Eccentric Scientist Who Unlocked the Mysteries of the Middle Kingdom helpful in providing context. It's the story of Joseph Needham and Lu Gwei-djen's assembly of the multi-volume Science and Civilisation in China.

Setting aside the many specifics of China's culture and history, we can identify general principles for this systemic failure to capitalize on innovation within organizations. These principles are scale-invariant, meaning they operate at the level of small enterprises, corporations and nations.

When the organization's franchises are successful, there's little selective pressure to gamble on innovations. Scaling innovations up (i.e. commercializing to ubiquity) is tricky and failures are the norm. Taking chances on new ideas and products is risky. As the Loonshots book explains, there are false start failures where the initial product is tossed aside as a failure but the problems were fixable.

When the franchise of an empire or movie studio is running smoothly, the risks of investing in loonshots are daunting. The inevitable failures will not only hurt the bottom line, sucking up capital, they are risky for managers promoting the innovations.

Even worse, the innovation might morph into a threat to the core franchise and thus the organization's dominance and leaders. Some folks in the lab invent digital cameras while the franchise's dominance and revenues are based on selling film--hmm, what to do? How about burying the innovation as needlessly risky?

The greater the centralization, the stronger the risk aversion and the greater the odds of the supreme leader making a catastrophic error of judgement. As the supreme leader moves from success to success, critics are dismissed as naysayers and the inner circle fears being cashiered / sent to Siberia, so over time the supreme leader is surrounded by sycophants and toadies who serve their own ambitions by praising the supreme leader's every move and elevated self-glorification.

In this self-reinforcing feedback loop, the decay of the core franchise is rationalized, ignored or discounted. Bad news is unwelcome, and anyone who gives voice to the news risks elimination from the leadership pool. All the system incentives favor downplaying the decay of the franchise or cloaking it with massaged statistics.

In this sealed echo-chamber, the supreme leader coasts along, confident everything is peachy while the empire, army, trade and the currency all slide toward collapse. The worse it gets, the greater the danger for those who dare to reveal the true measure of the decline.

Better to game the numbers and announce you met your quota / sales number.

In other words, the momentum of franchise success and centralization of power are fatal. When you're making steady profits from selling typewriters, why invest in some crazy homebrew computer thingy that might sink the company if it fails and kill typewriter sales if it takes off? Since our division lives and dies on typewriter sales, who is dumb enough to support some innovation that has the potential to destroy everything we've built and everything that enables our success?

And what organizations dominate the planet? Hyper-centralized franchises, states and corporations alike. The selective pressure favors protecting the franchise from innovation, because innovation could upset the entire apple cart. So centralized organizations only support innovations that increase the power of centralized authority.

But that's not how innovation works. As the franchise decays and the supreme leaders start believing their own PR and making catastrophically misguided decisions in an echo-chamber of cheering toadies, the whole system slips into a non-linear dynamic that ends in a dramatic phase change, the collapse of the franchise and all those who clung to it as no-risk and permanent.

Stifle decentralization and dissent and you stifle innovation. With potentially threatening loonshots safely buried, the system has only one pathway: decay and collapse.





My new book is now available at a 20% discount ($7.95 ebook) 15% discount ($17 print) this week: Self-Reliance in the 21st Century.


My recent books:

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Rick A. ($108), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Elon G. ($54), for your superbly generous contribution to this site -- I am greatly honored by your support and readership.

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Friday, September 23, 2022

2022-2030: Transformation or Stagnation?

Some decades are easy and expansive, others are painful but necessary to lay the foundations for future progress.

Many people reject the idea of historical cycles due to their imprecision. I understand the appeal of this objection, but it is nonetheless striking that transformative decades tend to manifest in cycles rather than evenly over time.

Compare the decades of the past 70 years: 1952 to the present. How different was the culture and economy of the U.S. between 1952 and 1959?

While there was progress in civil rights and prosperity, the zeitgeist (the look, feel, values, expectations, beliefs, outlook, mood, etc.) of 1959 was not much different from that of 1952: clothing, films, the Cold War, segregation, etc. were identifiably in the same era.

Elvis, Chuck Berry, et al. enlivened popular music, but the overall impact of rock/R&B was limited to entertainment and youth culture.

Now compare the zeitgeist of 1962 and that of 1969. The zeitgeist of 1969 was nothing like the zeitgeist of 1962. It wasn't just clothing and music that changed; the values, expectations, beliefs, outlook, mood, and the political, social and economic structures had been transformed in ways that reverberated for decades to come.

The 1960s were not just tumultuous; the decade was transformative. The civil rights, feminist and environmental movements changed laws, values, culture, politics, society and the economy. Economically, the stagflation of the 1970s was a consequence of changes that occurred in the 1960s, much of it beneath the surface.

In 1969, the popular music from fifty years before (1919) might as well have been the music of a previous century. Yet here in 2022 the music of the late 1960s and early 1970s is still listened to, purchased and influential today, 50+ years later.

Cycles are often the result of the interconnecting forces of wars, economic turmoil, energy/food scarcities and large-scale economic and social forces: the transition from wood to coal, for example, or the mass immigration generated by crop failures and poverty.

The 1920s is another example of a decade of rapid transformation that laid the groundwork for the Great Depression of the 1930s. New freedoms of personal expression made the 1920s different in look and feel from the immediate post-World War I era of 1919-1920.

The 1870s was another decade that transformed economies and societies globally. The investment boom in railroads following the end of the American Civil War, the reparations imposed on France after the Franco-Prussian War of 1870, the end of silver coinage in the U.S., a speculative stock market boom in Europe that crashed in the Panic of 1873--all these dynamics reinforced each other, leading to a global depression that by some accounts lasted into the 1890s.

Yet despite the failure of railroads and banks and widespread unemployment and suffering, the Second Industrial Revolution continued transforming economies as coal, iron, steel, manufacturing, transport and urbanization all changed the underpinnings of global economies.

The western powers' industrial expansion drove colonization and reactions to colonization such as the Meiji Restoration of 1868 transformed Japan.

We can of course detect change in every decade of human history, but Lenin's famous exaggeration ("There are decades where nothing happens; and there are weeks where decades happen") speaks to the way various dynamics build up beneath the surface, interact with other forces and then burst forth.

Could the world of 2030 look and feel completely different from the world of 2022, which is still coasting on the excesses of the waste is growth Landfill Economy of extreme financialization and globalization?

My guess is yes. Previous cycles emerged from financial excesses of either expansion or contraction, the aftermaths of wars, deep economic changes as energy sources expand (shifts from wood to coal and then to oil) or contract (forests depleted) and climate change (the "years without summer" in the 1630s, etc.).

Though many believe the next energy expansion is starting (fusion or other nuclear power, solar/wind), the practicalities of physics, resource depletion and cost provide little support for these projections.

For example, the U.S. would need to build hundreds of nuclear reactors in the next 20 years to make a dent in hydrocarbon consumption, yet only two reactors have been built in the past 25 years.

There is no evidence that the resources, material and financial, and the political will required to build 500 reactors in the next 20 years are available.

If a massive quantity of wind and solar power is installed over the next 20 years, all the systems that are 20 years old will need to be replaced because they're worn out. These aren't renewable, they're replaceable.

Thus we face an energy contraction at the same time as the extremes of financialization and globalization that have driven expansion unravel.

This unraveling won't be linear, i.e. gradual and predictable. It will be non-linear and unpredictable, with apparently modest changes collapsing supply chains and speculative excesses.

Extremes of inequality and repression act as pendulums. Once they reach the maximum endpoint of momentum, they reverse and trace a line to the opposite extreme, minus a bit of friction.

Many of these dynamics are already visible. What's not yet visible is the rapid acceleration and mutual reinforcement of these dynamics.

Eras of expansion may be liberating and fun, but there is no guarantee that the liberation and fun will be evenly distributed.

Eras of contraction are rarely fun, and the misery is widely distributed. Whether we like it or not, the era of the waste is growth Landfill Economy is ending in what promises to be a non-linear process.

But that doesn't mean the eventual result won't be positive. Tumultuous transformations can set the stage for more widely distributed prosperity and liberation. Some decades are easy and expansive, others are painful but necessary to lay the foundations for future progress. Which will 2022-2030 be? Stay tuned.

The music of the late 1960s was remarkably different from the music of 1962--not to mention 1952 or the popular music of fifty years earlier in 1919.









An essay on this topic was first published as a weekly Musings Report sent exclusively to subscribers and patrons at the $5/month ($54/year) and higher level. Thank you, patrons and subscribers, for supporting my work and free website.


Recent podcasts/videos:

Roundtable Insight: Charles Hugh Smith on the Insanity of Central Banks in Addressing Inflation (38 min.)


My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal.

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.



My recent books:

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 Kindle, $8.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $1/month patron of my work via patreon.com.




NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Sum Dood ($5/month), for your splendidly generous pledge to this site -- I am greatly honored by your support and readership.

 

Thank you, Frank W. ($10.80), for your much-appreciated generous contribution to this site -- I am greatly honored by your support and readership.

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All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act


This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Do Not Sell My Personal Information


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

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