Posts by fadedwolf20

Jerry Williams41 said:Essentially, Maria Thomas48 is onto something, though they seem to struggle with putting it into words, and they've managed to get themselves tangled up in the whole concept of credit-based money creation, which they view as inherently flawed. While the idea of money appearing out of thin air is certainly a point of contention, that’s just how the system operates. If we were distributing soap and nothing else instead of debt, we’d probably be facing an even more absurd crisis.

By the way, Maria Thomas48, what’s your take on how The Dutchman managed to secure independence from the superpower that was Spain back then? My guess is they simply had much more sophisticated banking institutions at their disposal.

The current situation is just a total mess, honestly, but I don't get why we don't just tie currency to gold and call it a day. Why does money have to be all virtual anyway? As long as it's just digital numbers and its value is dictated by market whims rather than something you can actually hold in your hand, things are gonna go sideways. We'll see hyperinflation because someone like Suker decides to hit the money printer button every time they need a quick fix, or it'll be because of the big banks... personally, I think both ways suck.

Then again, it might make more sense to shift that power from the banks over to the government—since at least the people pick the leaders, whereas banks aren't answerable to anyone... But given the American mentality—and let's be real, the way American politicians act too—I wouldn't bet a dime that wouldn't end in a complete fiasco... So yeah, Gold Standard. That's the move. Redeemable in Gold or silver.

Andrew Booth29 said:If you look back at almost any major crisis in history—from the fall of the Roman Empire right up to our modern era—you’ll notice a pattern: they are almost always preceded by massive monetary expansion. Without stable monetary aggregates, you simply don't get sustainable growth. In a functional system, money is earned the honest way—through hard work, actual sweat, and a constant drive to improve production. That is how a system should reward the productive members of society. These endless printing tactics? They have always, without fail, led the world straight into a crisis.

My question wasn't even rhetorical! Look, I'm totally a layman when it comes to economics, but I'm just trying to wrap my head around how and why everything works the way it does. Wouldn't deflation actually reward people for saving money instead of just rewarding investors? Because if we're talking deflation, you could basically just sit on your cash like a hen on an egg and wait... But today, it's the exact opposite—inflation eats away at your value, and hyperinflation just devours your savings whole.

placidranger said:It’s basic division of labor and increasing specialization. You can prove it with math—if everyone just goes solo, they end up with much less than if they specialize, handle one specific task, and then trade. Of course, you have machinery involved too—oil, gas, solar power, computers, smartphones, medical breakthroughs... anything that boosts productivity makes goods cheaper relative to the cost of work.

The reality is that productivity was climbing long before we tapped into oil, and it'll keep climbing after peak oil, just like it did back then. People are innovators.
But anyway, that’s a whole different conversation.

The actual massive question is how we transition our society from what we have now—where we're burning through insane amounts of energy—to a future where we won't have that kind of access anymore... You know? Like, if we want to maintain this current energy standard, the US would need something like ~50GWe, which is basically 50 of those top-tier modern nuclear reactors (especially if you're planning on electrifying every single vehicle on the road). Right now, there are only about four of those reactors being built, and all four are over in China, and they take nearly a decade to finish. If we face an oil drop of 4-8% every year, dragging down GDP, employment, and sending inflation through the roof, who on earth is going to foot the bill for those nuclear plants?

Honestly, the way we're wasting energy right now isn't even sustainable in the short term, yet the economy just keeps spinning in circles, trying to find someone to blame internally instead of just pointing at the actual problem.

Andrew Booth29 said:Increasing savings is essentially the same thing as boosting investment—they’re two sides of the same coin. You can't argue that ramping up savings somehow stifles investment; if anything, it’s the exact opposite. When people save more, there’s more capital available to fuel investment. Furthermore, in a deflationary environment, nominal interest rates tend to drop, and you see companies moving away from heavy debt—instead, they lean much more heavily on retained earnings to fund their growth (especially since falling prices naturally drag down operating costs as well).

So, what I'm hearing is... you think something like the gold standard is the magic fix?

Maria Thomas48 said:I didn't need to look at Sweden or Denmark to realize one inescapable thing: we spend every single day working and building things, and yet the result is just an ever-growing mountain of debt.

The whole thing is intentional, not some accident. And the people who created this mess aren't going to be the ones to fix it. We’re the only ones who can. A recent CNN poll really shows how uninformed most people actually are. It was about supporting the new administration's austerity measures: http://edition.cnn.com/politics/us-economy-news...example. All those folks cheering for budget cuts and giving up their own rights under this new government wouldn't feel that way if they understood that austerity isn't the answer. It just shows how much brainwashing has happened. You see the same pattern in other countries where the situation is even worse. There's even an article by Nobel laureate Paul Krugman arguing that austerity is a mistake: http://nytimes.com/opinion/paul-krugman-crisis-austerity

It’s obvious the government needs to spend money rationally—getting the most bang for their buck—but the issue isn't about saving money. It's about how that money is being spent. If you just keep spending more to create even more debt, then obviously, that debt is just going to pile up.

I totally see where you're coming from there! But honestly, I don't think your fix is much better, either. If you hand over total control of primary currency issuance to the states, you're basically begging for hyperinflation to kick in...

Regarding the gold standard—I was reading through this thread earlier and it seems like that would basically force everyone into "saver mode" because the value of the dollar would just climb, which pretty much kills any incentive for people to actually invest. So, we really need to find some kind of middle ground here. What if we let credit expansion happen for a bit, and then once the debt gets too crazy, we pivot back to a gold standard to steady the economy? Then maybe switch back again once things settle down? Just a constant loop to keep us balanced!

placidranger said:

fadedwolf20 I didn't say that.
What is the point of economics, anyway? Deciding how to divvy up limited resources—it’s always a mess. Whether it’s corporate budget cuts or government spending, you’re essentially playing a zero-sum game where someone always loses. It’s less about "fairness" and more about who has the most leverage at the table. Land, housing, homes, labor, and everything people actually produce—that’s what matters. Yet, the economy has built this massive empire that exists solely to serve itself. Interest rates, inflation, deflation, derivatives, futures, credit, stocks, exchanges—it’s a mountain of jargon designed to make things look complicated. But when you strip away the noise, the reality is incredibly simple:

Economics isn't some tool designed for the redistribution of resources. It doesn't "serve" anything—and it certainly isn't some engine used to "build empires."
Resources might be finite, but they’re getting cheaper relative to labor costs—meaning our time is actually becoming more valuable. An hour of work today buys you way more food, better connectivity, and more travel than an hour did a century ago. It’s a simple shift in leverage.
Take copper, for example. Even though we supposedly blew past "peak copper" ages ago—much like that whole "peak oil" hysteria—the price hasn't exactly gone vertical. It’s a simple reality: price isn't just about supply; it's driven by demand. In the past, copper was the go-to, but now we're seeing materials being swapped out for alternatives. So, even as supply tightens, demand is simultaneously cratering. We’ll likely see the same pattern with oil—once supply eventually drops, demand will follow suit—but that's a conversation for another day.

That growth isn't going anywhere if we stick to the same principles that landed us in this mess—if you can even call them principles. It’s debatable which ones exactly, but we’re definitely repeating ourselves.

The entire economic engine of Western civilization is built on one shaky assumption: constant growth. Growth, growth, and more growth. But we’re living on a finite planet with finite resources—it’s basic math. That kind of perpetual expansion isn't sustainable, and frankly, it can't be. If you ask me, the 2008 crash wasn't just some random glitch; it was the inevitable result of hitting the actual physical limits of our environment. The whole global economy is essentially a massive Ponzi scheme that requires a continuous upward trajectory of goods, services, and even population numbers just to stay afloat. We hit peak oil around 2005, which sent prices skyrocketing to $147 a barrel by 2008. That spike triggered the domino effect—that absolute mess we’ve been struggling to wade through ever since.

The 2008 crash wasn't some unique anomaly—it was just the latest chapter in a long history of financial collapses. It had nothing to do with resource scarcity. If you want to actually understand what's happening—and more importantly, how to predict the next hit—the best theory currently available is... ABCT.

So, why does everything get cheaper compared to the cost of labor? Think about it—a person can produce the same amount of basic work in one hour today as they could 2,000 years ago. But because of that work, they get way more finished products because our society, thanks to fossil fuels, generates massively more stuff than we ever could without them. Human labor is such a tiny slice of the total work society pulls off now, and the smaller that slice gets, the richer the society becomes because machines (powered by energy, obviously) are doing the heavy lifting.

It's pretty obvious you aren't quite grasping the global energy situation here. Seriously, to get the same amount of energy we pull from oil in just one day, you'd need something like 66,000 nuclear reactors running 24/7 all over the world! Demand for oil climbs about 1.5-2% every single year, even though pulling it out of the ground is basically stalling out. The reason is simple: oil is the backbone of the modern economy, so nobody wants to let go, and everyone is willing to pay whatever it takes.

If we’re talking economic terms—say an hour of manual labor costs $10—how high could the price of a barrel of oil go before oil stops being more efficient than human labor? We're talking up to $250,000! Because that one barrel holds so much energy that a person would have to work 25,000 hours just to generate it manually... okay, you gotta factor in the efficiency of an internal combustion engine, so maybe it drops to something like 15,000 hours of effective work, but you get the point. It's all about the scale of magnitude. See why an hour of human labor "worth" more than it used to? It's because oil provides that massive surplus.

Nathan Kelly5 said:The "PIGS" nations—Portugal, Ireland, Greece, and Spain—along with us, represent the group hit hardest by the crisis and crushed by debt. They tend to share that Mediterranean, laid-back, high-spending mindset. If it were purely about the population's attitude, why wouldn't we see countries like Sweden, Denmark, or Finland on this list?

Hold up! Even Sweden, Denmark, and Finland are swimming in debt... honestly, every single country is deep in the red. Like, seriously?! Who are they even borrowing from? Are they sending checks to Martians or something? 😕

Jerry Williams41 said:You’ve got it wrong. Every single morning, six billion people wake up and head out to get things done. And every day, those six billion people produce more than they did just twenty-four hours prior. If you look at the laws of thermodynamics, resources remain constant; we're really just seeing a continuous evolution in how we apply technology to utilize them.

Look, the law of conservation of energy has absolutely nothing to do with raw resources. If you’ve got one liter of diesel and you burn it to move an air-conditioned car with four people inside 9.3 miles, that’s the law of conservation of energy right there. The chemical energy stored in the hydrocarbons within that fuel gets released through combustion—oxidation, if we're being fancy—and turns into engine work and waste heat. Once it's burned, it's gone. That liter simply doesn't exist anymore.

Even if sixty billion people woke up tomorrow, they couldn't get as much work done as what 88 million barrels of oil accomplish for us in a single day.

When this massive, super-rich energy source starts shrinking, it's a straight shot down the drain—economic activity drops, GDP tanks, jobs disappear, and eventually, society is forced back into farming. It's inevitable. Because once the tractors stop running, and once a single farmer with his machine can't feed 1,000 people anymore, then 999 of them are going to have to head back to the countryside and grow everything themselves just to survive.

Just for the sake of argument, let's pretend those 1,000 people without tractors could actually produce the same amount of food that one poor guy behind the wheel used to make. But what happens to all the goods and services those other 999 people were providing before? 😕 They vanish—gone with the wind! 👍

That’s basically a simplified look at what's happening to the world today, and it really kicked off back in 2005 when oil fields in terminal decline started hitting in Mexico, the UK, and Norway. But hey, maybe we should move this over to the energy subforum so we don't wreck this thread.

What really trips me up about this whole thing is this "zero-sum game" concept... If we're stuck on a planet where we can't just export our goods and services to Mars, and every single country on Earth is drowning in debt... even the heavy hitters like Japan, France, and Germany... I gotta wonder, who are they actually owing? I mean, shouldn't everyone's debt just cancel each other out? It would make sense if Greece was the debtor and Germany was the creditor, but why is it that literally everybody is in the red?

Jerry Williams41 said:Maria Thomas48, it seems like you’re still struggling to wrap your head around the whole concept of newly created value, despite what was being attempted to be explained via the strawberry analogy just a few pages back.
If we look at the mechanics of debt—say you borrow 100 bucks and have to pay back 110—you can't just run that cycle indefinitely without some actual value being generated along the way. It simply doesn't work unless there is new value being produced to cover the gap, and that is exactly what happens over time; for instance, a century ago, jumbo jets didn't exist, but now they do.

So, what's the point of economics anyway? It's basically just setting the rules for how we divvy up LIMITED resources. Land, apartments, houses, labor, stuff people make... you name it. But honestly? Economics has built this massive empire that mostly just serves itself. Interest rates, inflation, deflation, derivatives, futures, loans, stocks, the big exchanges—it's all such a headache of terms, but the core concept is actually super simple:

The entire engine of Western civilization is fueled by constant growth. Growth, growth, and more freaking growth! But here's the kicker—we live on one finite planet with limited resources, so obviously, this endless expansion can't, and won't, last forever. I'd argue the 2008 crash happened because we finally slammed right into the physical limits of our environment. This whole economic setup is basically a giant Ponzi scheme that expects goods, services, and even the human population to keep climbing forever just to stay afloat. Then, back in 2005, we hit peak-oil, which sent oil prices skyrocketing to $147 a barrel by 2008, triggering this massive avalanche of crap that we're still drowning in today.

To me, it makes perfect sense—the root cause is that money is issued through credit along with interest, and to pay off that interest, you *have* to create new value. But right now, the whole system is shaking because we can't create that new value anymore—we've hit an energy ceiling and we're teetering on the edge of an energy abyss. Naturally, that means the credits and the interest can't be paid back... It's all over, folks.

The saddest part? People aren't even reading the market signals. Since oil is the literal FOUNDATION of our modern world, when oil gets expensive, everything else goes up too—so most people miss the real culprit behind the price hikes. They're all talking about some subprime mortgage crisis in the US and how the bankers decided to 🙏play too hard. But honestly? They've been playing this game since the end of WWII; the only difference is that back then, they actually had the resources to back up their moves, and now they don't...

Man, we had it way too good, which is why we ended up in this Idiocracy situation. We didn't invest enough in R&D and we were just too lazy, even though these problems were predicted decades ago by guys like Dr. Hubbert.