Planck Foundation




GLOBAL FUTURE ANALYSIS


HEADWINDS | TRADE DEFICITS


As we forgot to produce (we had in our perception 'lower' nations to do this for us: the neo-colonial root/cause of our economic decline) and we get obsessed by consumption and valuated production less and less our trade deficits has grown and grown to never seen levels. Own sustainable energy production was not something we not achieved as foreign energy was very cheap and the future wasn't now and we were too busy with consuming. Recycling of materials and water was also something that was considered non economic. Then energy, water, food and resources prices gets elevated to never seen levels. The small gap in our economic ship widens with a speed that takes our breath away. Foreign nations tax (yes, you can call it safe a voluntary paid tax!) our economies will a huge success due our oil addiction. Caused by our short sighted stupidity and our energy/carbon addiction the biggest transfer or wealth ever is happening in just one or two dacades. We still believe in the 'knowledge based economies' bogus our imperialistic and colonial genes feed us and we're really think we're superior, smarter than any one with a colour. Meanwhile the odds are against us. Don't changing is paying. Not a little, just much. T. Boone Pickens is the US the major voice concerning this development. Every dollar earned in the USA is taxed by the Middle East now 10%, but soon 20% or even 40% (and as economies shrinks by energy payment drains, this even could come in higher numbers). There are not enough weapon demand in the world to compensate this, the weapon sales already weren't able to fill this gap, otherwise we would not have the current gap. High energy based economies turn their selves over into economic slavery of the energy surplus nations. So much for the American Dream (who already by the Credit Crisis has turned into an American Nightmare -of course same sized as the dream, but now opposite-). High energy economies get drowned till their departial. The only economic concept that is sustainable in times of expensive energy is a low energy design of the economy. Cutting physical movements of products and people as much as possible, leaving maximum purchase power (mixed with price level = wealth) for other things (= wealth). Enhanced local economies are the only economies that survive an era of high energy prices. Concerning the impact of the Energy Crisis there a lot of 'wishful thinking', the Trade Deficit brings us all back to reality. It's amazing that only 0.01% of the people with brains and education has thought about the impact of rising energy costs on our economies. Our whole system is based on cheap energy and we just say: 'yes, the main column can defaulted, the roof will stand'. Having brains seems only have the effect to make up make-believes. Just plain ordinary wisdom can tell everyone that if that what you use for everything gets more expensive, everything gets more expensive and the economic growth can catch up with this and economic decline will finds it way, with economies that bleeding jobs and international purchase power. The only good thing on high energy prices is that it brings the production jobs back home: Production in China will become too expensive by the energy costs of sea transport of it and due the fact that not energy replaces labour as main cost facet. India with it's non physical based export of ICT and callcenter activities will not be effected by this (as their products are digital and has no direct increasing energy cost price facet). Russia, Brazil and India will be the winners of the 21st century. The rest of the nations will just pay them and gets the crumps/surplus of their new realized wealth/energy/food/meat/commodities. The lack of reality sense of economists and politicians is touching, not even childish, just stupid. Even a child understands 1) when sugar gets much more expensive, candy will become more expensive and 2) the fact that a dollar only can be spend once, so if candy gets more expensive there is less candy to buy for one dollar. So simple is it. Replace sugar for energy and the rest is the same. The economic candy becomes in very high speed prohibitive and after the lost of economic candy purchase power, we will loss debt payment power (sorry, we lost that before we stopped to buy candy) and even food purchase power. The old system based on cheap energy doesn't perform well in times of expensive energy. How hard is can be to get this? Still the common believe is that energy prices rises and nothing will happen. This says enough over the quality of our economic education. The show go on even after the power is switched off. Or are we just blinded by consumption addiction that narrowed our feeling for changing realities? We're even chicken in reality observation, the trade deficit number will not wake us, but the effects of the trade deficit number will cruelly awake us. Less to spend and even shortages will bring us back in touch with reality.


Author: Gijs Graafland


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