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It's no secret that the economies of the Western World are in decline, it's the outlook we argue on. The Western World has lost it productivity and compensated that by credit and now credit has reached it limits economic decline is evident. The Western World has an older population and the population is getting older each year (in the world only Japan has more worse demographics), the Emerging World has a young population. The Western World is spooled by less production and much credit, the Emerging Nations produce for the world. The Western World has debts, the Emerging World has deposits/surpluses. Now the credit bubble has burst and can't supply purchase power any more and the purchase power of the Emerging World increases in rapid speed. The Western World needs to reposition themselves, both for world market supply position (production prices) as for the world market demand (resources payment power) position. This repositioning of the Western World is delayed by neo-colonial heritage of the the Western World: the people with an other coloured skin 'are not intelligent' and just 'must produce'. But the reality is that the only thing the East and South misses right now is good 'italian' like design, 'japanse' organizational structures and 'american' marketing, but in all other facets they beat the West. Even in Ph.Ds. In China parents works very hard to give their kid an education. In the West the kids gets a scooter bought on credit from their parents. Technology is for sale and the have the money. Confucius his spirit is less present in the East. Competition by smart people was bounded by this. Innovation was bound/limited by Confucius. This delayed invoice for the West on its cultural and economic colonial heritage has a severe price. The world is changing and the West (due its neo-colonial misplaced superiority ideas) is losing both production and their purchase power while asleep in consumption on credit. The West is also facing huge problems by their already high prosperity levels (decline is more evident than growth). Economic growth is nice. Economic decline delivers economic and social stress. So the West has had it place in the global economic sun and now a) is too expensive for the world market, b) is burdened in debt, c) is losing its UPSs in rapid speed, d) has old non productive demographics, e) has huge loads of inactive people, f) is spooled by wealth on credit, g) lose the benefits of being having a global reserve currency, h) has created stress in its relations with several world regions, i) are rather narcissistic (G7/G20 etc) and this is no longer appreciated ion the world, j) faces severe economic/social stress due to decline (which will paralyse them in many other things) and h) have governmental budget funding problems, etc. Add to this long list of head wind facets the rising prices for energy and resources and you know the West is in serious trouble. The former and current status of the West can be best illustrated by a picture parable. Take as easy example an actress (like we we were Cybill 30 years ago and we're Cybill today. The phone is not ringing so often any more. The party is over. Time for some restructioning and recovery. But we don't understand it. We're just blind. We're just trust the old car to become as good as it was earlier, even when we have flattened the tires and forgot to control the oil levels and the gasmeter is broke (but we 'think' the tank will be full, as it always was). We're wannebees, not realists. We don't understand to our financial system is based on growth: the money for the payments of the interest of loans is only created by growth (as in: by no growth defaulting is mathematically evident). We don't understand that our efficiency improvements (that brought our wealth) are eaten by higher energy/resources prices. We don't understand too much what's happening, we just take everything of the past for granted. The future equals the past, only better. We don't get it at all. This whole misconception or the situation is based on four seven mistakes: 1) we have chosen in the past for growth by credit (and credit is stretched to its max), 2) we have forgotten that growth is based on actual production, 3) we thought that we were superior, 4) we thought 'they' were 'just stupid, just inferior' (but they are even smart and try/want harder). 5) we thought 'they' would never get prosperous, 6) we just forgot that finite resources are not a very good wealth foundation (certainly if 'they' suddenly 'the nerve' also to get prosperous and become also competitors on the energy/resources buying markets and 7) we forgot that mankind first explores the easy to explore/transport/refine resources and that the second half of the energy and resources reserves maybe are too expensive to explore at all. If we keep our current energy system, it will drain out our wealth even further by fossil energy imports. We're asleep till we awake. July 2008 was our wakeup call. Energy than got to expensive and starts to slow down every economic movement. The main cause of the Credit Crisis/Crunch is not subprime, but over-crediting in general. Over crediting based on cheap energy and hard working and not much consuming people in the East. As soon they also start to develop the cheap energy/resources flow was ended. Add to this the increasing costs of exploration, transport and refining due the fact that we took the easiest to explore/transport/refine and best quality grades first, you know we're in energy trouble. Energy confronts us. With our own limitations, with other people's possibilities, with the finiteness of resources. The West has to learn that prosperity is about production not about consumption, about assets instead of debts, about surpluses instead of deficits. Energy is Decline is for the former richest nations a very valid statement.

Author: Gijs Graafland

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