Planck Foundation



The driving force of the last 150 years of human economics/civilization is characterized by one facet major alone: The abundant availability of low priced energy. This energy has given us the opportunity to do/realize what we did. Therefore let's start with the Energy Crisis. The origin of both accelerating wealth (history) and possible accelerating decline (future) is: Energy. The economic growth we have witnessed the last 150 years has been totally fueled by the availability of cheap and abundant energy. Growth of prosperity levels where equal to growth of energy use in the 20th century. In 2005 the oil production start flattening and oil prices went up year after year. The world price has gone up from $ 20 per barrel in 2002 to almost $ 150 per barrel by mid 2008. Ask a statistic analyzer to plot a line with this same level of rise for the future, some anchormen has someone asked to do so. Alexey Miller (since June 27, 2008 deputy CEO of Gazprom, as the State demanded the CEO chair) foresees the $ 250 price level before the end of 2008 and if demands stays growing, Peak Oil decline continues and the Middle East tensions goes wrong the prices will continue doubling each year for the next 5 years, till oil reaches it economic price maximum and than the granting based distribution system will be placed on top of the price based distribution system. Everybody with a little common sense must underwrite that oil exports from Iraq, Iran and Saudi Arabia will become zero if those regimes will fall. And that they are stable is unfortunately the truth. There's already the issue that demand that outstrips supply, the issue of danger of declining supply due to PeakOil and issue of region political instability in the main oil production area of the world. Three huge facets, that favors only the upside of the oil price. Because we use energy for everything, higher energy prices changes everything: everything got much more expensive: energy takes its part of the economy for ever, leaving less space for other things. Higher energy prices are the stick into the wheel, which could slowdown everything. Without cheap and abundant available fuel, economic movement stops. What has boosted economic progress could also brake it / slow it down. Everybody that says that technology will solve it automatically when the demand is there, doesn't understand a) economics (the fact that a dollar only can be spend once: higher energy costs therefore leads to less other purchase power and therefore too little or severe stagflation), b) the concept of energy (energy doesn't fall from the sky, it is or it isn't, energy is power, energy is not technology), c) the fact that we use it for everything we do (live, produce and consume) and d) the enormous amount of energy the world uses each day. When we start realizing these four facets, we know that we're in trouble concerning our current way of living when the decades of cheap and abundant energy are over. Energy is not just transportation, it's warmth, it's hygiene, it's water, it's food, it's everything we do/use and than that's over. The energy price component of each product will getting clear to us all in the next and it will hit over current prosperity/development over and over again. Materials that become too expensive we can replace by other, technology will give us that certainly, maybe some kick up in that, but materials are not the problem. Energy and water are the key values. Short after the start of the energy crisis, many regions of the world also will have a water crisis. Water is becoming a severe problem in many regions, and will become the oil of the 21st century: water deficit cities will be water supplied by supersized water seaships/tankers and citywater will become a regular trade commodity. Desalination of sea water is technical possible, but demands lots of something that isn't yet any more cheap available: energy. Food export is just agricultural water export in a product: 80% of the clean sweet water of the world is used for growing food. As energy and water costs rise, every product price rises, eating purchase power out of economies, slowing their growth and (in energy deficit nations) structural decline economic levels. Hydrogen is no source of energy, but just a storage/transportation method for energy. As describe in the first law of thermodynamics: energy can't be lost or created, only transformed. The problem of lack of abundant and cheap energy can only be fixed for always when we could explore existing energy in nature on a way the can be done anywhere, by looking into nature where the 'big' energy sources are. Or this will be by the use of a complex (low/high frequent, resonance, magnetism, lasers, catalysts based) nuclear fusion process of simple structured elements, that harvests energy out of nuclei, or it will be by a complex (low/high frequent, resonance, magnetism, catalysts based) electrolytic process that 'harvests' energy for electrolysis out of the 'cooling' water (and this way being in line with the first law of thermodynamics), or this will be by a complex (low/high frequent, resonance, magnetism, catalysts, not traditional warmth pump based) process that takes energy out of the air temperature. A total new approach of our look on energy is needed, we need horizon widening not digging deeper and more narrow. New directions in science asks for new genius people like Tesla who was the father of the second industrialization wave and the 20th century. He could sit still in his lab for hours, surrounded by high voltage flashes, just focusing his mind on electricity, to became 'into' it. We need new approaches. We need extraordinary genius people that shape the 21st century technological. Meantime we face severe rising energy costs, declining economies in energy deficit countries by intensive transferring of their wealth to the energy surplus countries. Due the fact that energy will become very expensive, everything that requires energy will be avoided as much as possible. Distances will be shortened, local economies more vitalized. Governments in energy deficit nations will get into severe financial problems, as their financial feed out of the economy slows down and their costs rises. Many companies will go bankrupted, banks will not survive this second huge attack on their capital positions (after the looses caused by US credit crisis). Unemployment will grow to high levels, purchase power will decline dramatically. Federal state structures will collapse due their debts. Some currencies will loose the trust of the market and collapse. The whole CO2 discussion will be completed abandoned in 2009, as economic struggle rises in the second half of 2008. The US Administration already declared mid July 2008 (during the G8) that "addressing the CO2 problem in current severe economic climate is not a wise thing to do". CO2 discussions will be seen as icons of luxurious talk in former luxurious times when low energy prices allowed that. The whole CO2 discussion will be pushed of the table of national and supra national governmental bodies by the economic problems. They ended the discussion with a huge tree planting plan that must be executed by local governments. Is the Global Future Analysis a doom report? No, it describes/pictures three scenarios: 1) doing nothing (increased turbulence due not realizing the needed adjustments) and 2) extending the past (squeezing the remaining traditional energy sources and fighting about it, so the past can be extended a little longer) 3) reinventing prosperity (building a new type of prosperity that uses less energy: something we have no experience with: by realizing many needed adjust­ments). We can not continue the way we do now: it will become to expensive, but we can maintain and build certainly prosperity. We got prosperity by carbon based energy, we loss prosperity by the price rise of carbon energy, or we divert our economies to low energy economies with maintenance/development of as much prosperity as possible. Turbulence or prosperity. It's just a choice and yes, we're late, much too late. Therefore some negative impacts will hit harder and some changes will be realized more difficult. But that 2008 is the 'flipping' year is obvious. Not many leaders and economists that tell there is no structural problem. This was different back in as short as in 2007. In 2008 the world energy market awaked us by the $ 150 oil price and we are finally awakened and discuss responses. In 2009 and beyond we will realize any solution we can think of. Many solutions (almost any we can think of) will be cheaper than $ 250 (end 2008) or $ 500 (end 2009) oil per barrel. Intelligent people can a) imaging the consequences very good by themselves, and b) imaging and develop adjustments that prevent these consequences. We must (not weakly vaguely environmentally, but strongly driven by energy price rise economics) redesign our economies to low energy / high prosperity economies. Stocks in airlines, airports, airplane manufacturers, car manufacturers, car dealers, hotels, tourism industry, urban real estate funds and financials will become worthless very quick. There's a severe economic storm ahead caused by both the credit crisis and the energy crisis. Time to bring the best in yourself to the front to grow prosperity by reducing energy use. We need to invest. The huge problem by this investments is the fact that the credit crisis is also happening. Financial capacity from decades has been put in the financing overconsumption within the US. As prosperity growth and not prosperity sustainability was the golden statue, the US has had 15 years an economy that was not 60% production and 40% consuming (like it used to be), but the other way around. 15 years at least 20% overconsumption of $ 10 trillion (US average GDP in these 15 years) making the credit crisis overvaluation problem to approximately (15 * 20% * $ 10 trillion) $ 30 trillion in size. This far beyond mortgages: the mortgage based cash has fueled the wrong economic direction of consumption based on world credit based on exponential growth above production for domestic/world markets based sustainable growth. Paulson with his new rescue fund can never extinguish a fire of this never ever seen size. It's like with one bucket of water trying to extinguish the 9/11 fires in the World Trade Centers. He also overlook the structural damages to the building structures of the financial markets. This problem has grown too long too big to get solved now. Underlying values will be reduced by 50%. That's the problem. The desire to go further where the market was before July 2007 is a dream from people who doesn't understand the causes of current situation. They're just stupid 'happy days must come back again' people with 0.0 analyzing capacities. YouTube for Bush Wallstreet and see what the president's real opinion is on the Credit Crisis. All the by the banking industry (IIF) in her report recommended changes will not fix this crisis, but will certainly help to prevent to birth/growth of new ones, leaving the current crisis unsolved. The declining dollar has contributed a huge part to this huge amount. The current private/domestic mortgage market is (based on what data? on-balance data? off-balance there is a whole undisclosed financial world to discover) $ 12 trillion in size and is at least 50% over valuated (this a cool $ 6 trillion damage for the stock owners and the CDO owners) in recession. The real value of property is not the mortgage amount, but the payment power of the mortgage takers or tenants for the years to come. That's the basic valuation in the office/commercial real estate market since ever, that has ever made valid sales prices. The on the edge of defaulting balancing giants Fannie Mae and Freddie Mac have almost 50% of the $ 12 trillion US private/domestic mortgage market on their balance sheets: $ 5.2 trillion in liabilities (for getting this number: the US federal governmental debt is 'only' $ 9.5 trillion by a GDP of $ 13 trillion). Nobody knows the size of their off balance liabilities, therefore they will be more than anybody expects. The size of their off-balance liabilities can only be estimated, but will at least equals their on-balance liabilities, with two huge differences: 1) the equity part of it (the part of the off-balance values that is on-balance by Fannie and Freddie) will be vaporized and 2) the balance sheets of the off-balances will be more worse than expected. Reason? Putting deals in off-balance SIVs -special investment vehicles- is only done when taking on-balance should demands for more equity, otherwise they always should be on the main balances: every CEO wants a big and good balance: Taking items off-balance is part of that accountancy game of doing more with lower equity levels (positive said: maximization of equity effects). When Fannie and Freddie collapse all the off balance factors will become open also. When they both default the federal governmental debt can be doubled overnight. This can damage the 'AAA rating' of the US federal government severely. Taking the plug out of the bath of governmental debt grow (by an instant lenders strike due collapsing trust in the interest paying and repaying power of the US). The crisis of the housing GSEs (Governmental Sponsored Enterprises) with on-balance (after cooking the books) total incredible equity/exposure ratio's of 1/65 like FHLB's -Federal Home Loan Banks-, Fannie Mae, Freddie Mac and Ginnie Mae) could be the swift from the Credit Crisis directly to a global Currency Crisis and a global Governmental Crisis. Their off-balance ratio's are often double in size and half in equity/exposure ratio's and contains most of the risk. The book cooking factor can only be guessed, but 1/65 equity ration companies cook the books not a little. By this all the actual (as in: hard, not promised like health care of retirement checks, but hard in debt paper) governmental liabilities can be double overnight (something the actual debt funders of the USA certainly will not let go unnoticed), without any data on the real underlying value and with only one huge big certainty: a load of very value (mortgage payment power) repressing factors are actual effective and more on the way causing and reinforcing each other due to a further decline of the US economy. If the banks has problems due to mortgage value problems, the mortgages collecting superbanks has superproblems due to mortgage values. Even Greenspan has said that the problems of the GSEs are underestimated and just due time delay influences will come to surface unless the federal government will nationalize them (as in: taking all the pain in the housing market into the governmental budgets). The US government has no other option than to bail out any bank. Till Augustus 2008 there are already 9 banks silenced collapsed, emptying the guarantee fund assets already will collapsing just has been started. All banks will collapse if the US government not offer them a huge bailout possibility in witch they can sell worthless assets for high prices to the US Treasuries. If they don't do that, the US brand in the world will be wrecked for ever. After the banking industry, also the car industry and the aviation industry will follow and also the municipals will need massive bailouts. The USA economy will be more federal/governmental owned than the USSR economy ever was in its 70 year existence. Not cutting out problems by recession equals bailing them out. It's the one or the other. The US Treasuries will have to install an effective interest/debt collecting Asset Agency, something they will certainly not be very good in. All US debtors will try to re-negotiate both height of the debt, interest rate and payment schedules. This can not be different as the economy can not feed the huge interest/repayments the current finance contracts require. This whole operation will soften or quick sanding any debt. The enthusiasm of the world for funding the US govern­mental, municipal and domestic debts is already tempering a lot. In only 40 years from largest creditor of the world, to the largest debtor of the world: don't except much economic power/admiration/funding for/of a debt loaded and debt addicted debtor. Being the money sink/spender of the world is a time limited concept. Just by wrong energy (and thereby foreign/domestic) policies is the most powerful economic economy wrecked. The world could will stop to buy US financial stocks (because they are become worthless: all financials are technical bankrupted, they just delay the clean up of their balance sheets as long as that will be possible). The world also would stop that day/week to buy US federal governmental bonds (as they are used to fill the gaps of the housing bubble on which foreign investors by the defaulted banks already has had severe damage of). The US Administration then must offer a substantial rise on interest rates on governmental bonds to become still attractive to the finance market (or the OMC of the FED must purchase all the issued bonds each time with new printed/generated money). The US federal government finally will be bankrupted and/or cause a huge decline of the value of the dollar, as they spend more than they earn, combined with the fact that the dollar no longer will be the leading currency and a stop of the foreign capital flow in the US by the investor strike. In economic terms: the US than will have a 'turnaround' (erasing all debts). The horror scenario for the USA is that the lenders to the US (they of course not will accept a bankruptcy solution), will agree to continue minimum loans in return of a set of demands (foreign managed Chapter 11 status for the USA). The US than will has an Europe/Arabic/Asian dominated lenders consortium of curators or executers that will make as many as possible assets liquid into cash. The end of the pride and independence of the USA caused by it's own bad financial behavior. Making debts is based on trust of the lenders. When that trust disappears, the lending windows are closed immediately. Of course the US will try to go into bankruptcy instead of some Chapter 11 status, but the main question is: would the world allow such a capital destroy on their private, pension funds, currencies and sovereign balance sheets, caused by one debt addicted borrower. When this happens, the independent states that forms the USA could terminate their relations with the sinking ship USA and abandon the US dollar, and Chapter 11 for the USA would still become bankruptcy of the USA federal government and abandoning of the US dollar (reducing the value of the dollar till just the value of the paper it's printed on) and by the huge debt this will cause huge, huge financial looses all round the globe (major demolishing domino effects in all global economies and all global currencies –as they all use the US dollar as main reserve currency). Being American than will be not a sexy/appealing thing. Phil Gramm (the former most senior economic adviser of senator McCain) can say that the US is a nation of winners, but winners that can not pay their bill because they've stopped producing real economic are not winners, but just poor losers. The US were certainly for more than a century long mainly a nation of winners, but they overplayed their (credit)cards severely. Above data was only the collapsing domestic mort­gage market, but the same factors that brought down the domestic mortgage market, will also effect the corporate mortgage market, the private credit cards/lines, the car loans, the leasing market and the corporate finance market: Together they will loose more than $ 15 trillion in the next years rating on actual value (equals real purchase power). Everybody who has a better formula: please say so. The house of cards of trees that never will stop growing and abundant credit based on the whole world that invest in just paper value is over. Someone somewhere has to pay/take these looses. If a public exchange manager walks away with a $ 187 million bonus, you know something somewhere in that system has grown severely wrong, that the value of money has become relative. Compare this huge $ 30 trillion figure with a World GDP of approximately $ 73 trillion and the fact that max. 10% of GDP's is savings/pensions, the conclusion is right that the part of the world (the very formerly very happy, now very unlucky part) that has financed this huge figure has to work some years just to pay for the over­ moneysupply/consumption that caused the credit crisis. According to US GAO former Comptroller General David M. Walker stated in departure tour of one full year lectures throughout the whole USA (and even in a YouTube address) in the last year of his office, the liabilities and unfunded commitments of the US federal administration are far beyond the actual debt clock number on $ 46.4 trillion (he called it: an extra $ 411.000 mortgage sized debt per US household and no house in return -the average mortgage size in the US mid 2008 is $ 118.000 because 31% of the houses in the US are free of mortgage-). The huge devaluation of the Dow Jones and the Nasdaq and the decline of the dollar eats simultaneously a similar sized part out of the global savings, this due the fact that much of these are invested in USA stocks, real estate and treasuries. These looses will undermine the capital attraction of the US and the US dollar severely. Foreign banks will collapse, foreign pension funds underfunded, foreign companies bankrupted. The US will loose it's winners image (and attached capital attraction) by this. In the same time the USA economic ship start to sink, the Russian economic ship got debt free and their GDP grows 7 (seven!) times in less than a decade. Economic power is the only power that has roots, fundaments and a future. Concerning the size and impact credit crisis (and also the decline of the dollar) there's a lot of pub talk ('happy days are back again') and less on data collection and analyzing based science. The US has a problem, not a small easy to cure, tomorrow away small cold fever. The economic roots of the US are rotten. The real power of the US is the attitude of the American: they will survive just and only by that, as their economic goes into heavy maintenance, destruction and reconstruction. Writedowns of figures of this size creates severe global problems. The financials are due to bankruptcy when the real downwriting times will arrive (the needed downwriting is only just started), and unfortunately the financials will get an other huge hit as economies slows down severely and bankruptcies will eat out the capital of financials further by massive numbers of defaulted loans. The financials are on dead row. Maybe even the financial system is in danger: let's certainly hope this will not happen: but somebody got to taken this looses into account. This in a time we must invest heavily in energy transition technologies both huge central as massive decentral. The credit crisis could not pickup a worst timing, but maybe the problems are connected to each other by the word overconsumption. People who say that the credit crisis is over, doesn't understand anything about economics in general and the credit crisis specific: the biggest economy of the world is feed with consumption money and current the balance sheet values aren't really there. Home values will drop till levels that matches the economic production of the US and this will hit the balance sheet of almost any financial worldwide. Unfortunately people who don't understand the real problem gets lot of airtime and wreck once again our transition time. The financials are really and without no doubt on dead row: their stock will become worthless: they will go private again (with debt reconstruction) of will be nationalized (if they collapse). All other companies will temperately suspend dividends (GM is the first one that has announced this), washout all current shareholders and also go private (if they can find a new strategic financer) or go bankrupted due the economic turmoil/stagflation rising energy, transport, water and food costs will give. Only the agricultural, food, resources and energy industries will be able to pay dividends and will have IPO's. But they will pass Wallstreet and go public on other bourses/exchanges. Wallstreet will be the global icon of huge looses and expensive operations in the first decade of the 21st century (the American Nightmare) and there are global too many 'beautiful new girls in the house' that compete with Wallstreet. The center of the financial world will no longer be the centre of the global financial world anymore. New York and Wallstreet will go in an one or two decades economic winter phase. The $ 187 million bonus for NYSE her CEO Dick Grasso will be the symbol of a malfunction and totally bubbled system where money lost totally its connection with the real underlying values. Blinded by the light of trees that continue to grow into heaven. Being American will be no longer 'sexy'. So we've got several crises at once: an energy crisis, a credit crisis, who both cause several other crises: the stagflation crisis, a currency crisis, a governmental (debt) crisis, a geo political crisis and a food crisis. Don't shoot the messenger, but the eighth global crisis is on it's way in growth: the water crisis. Due all this turmoil the economies in many parts of the world will be set back to '50ties prosperity levels (but now with computers, mobile phones, advanced healthcare and the blessings of the Internet: the web, videocalling, Google, MSN, YouTube and segmented digital radio channels and segmented digital television channels). Cuba has faced a PeakOil similar situation in 1990 when overnight supply of cheap Russian fuel on credit came to an end. Back than in Cuba not everybody than got a job, a house, water, food, warmth, hygiene and health care. Achieving at least this basics for everyone on the planet by free market structures would be a major achievement if reasonable priced oil is leaving us. As result of this all these problems and the enormous rise of 'advanced localization' federal government structures will be set back in severely in the USA, EU, Russia, China, Brazil and India, cause they had a huge function in the 20th century, but their function in the 21st century will not very clear to the regions they serve. The American Dream (working yourself into economic heaven) has taken the wrong direction (lending yourself into economic heaven) and has turned into an American Nightmare (with the same intensity as the dream). America was the creditor of the world (due it's oil and the dollar) and has become the debtor of the world in just a few decades. Due the fact that any type of power is based on economic power, the USA is in bad weather and no longer the center of the world. There is no 'fire in the disco' (rush to the exit) yet, but the USA is no longer the main focus of global companies. States like California (the world's seventh in size economy) will leave the USA as the debt of the federal government will double their own state and municipal debt problems. Major global operating financials like AEGON already stated a new diversified global strategy: the US is not their main focus anymore, no US originated CEO anymore, but more people of the emerging markets in the board. No matter which political direction wins the 2008 presidential elections: the winner only can clean up the mess of someone else's party and pay the bill of it. The time that 1) oil sales fueled the US economy (till the start of the 70'ties) is over (is even reversed these days: oil drains the US economy), 2) anybody invest everything in the USA is over (investments has melted like ice) and 3) holds reserve currency in dollars are over (the value of the dollar is in a rush down). Financials (banks, pension funds but also the so called foreign wealth funds) will be hit severely as their US assets reduce in value to almost zero. Like Russia have had its 20 year 'has-been' phase, the US will get them the next 20 years: being the bad boy in the class by whom almost everybody (by own fault following mainstreams instead of using common sense) lost a lot of financial value. But the historical genes of the US people are strong: they're working, inventive, proud and have dreams. Within 20 years (around 2023) the independent states of the US will not be 'has-beens' anymore, like Russia also is really back 20 years after 1989. The tailwind for energy/water/food deficit gigantic cities and huge skyscrapers are over. Low energy will be the lead voice until fusion or other ways of tapping natures sources makes energy cheap and abundant again. The 20th century is over. It's really sad that Greenspan blow up the current fractional banking system at the dawn of an era where the bankers had could take as interest the very high energy budget of several generations (as by PeakOil energy harvesting will be done by investments they could have financed. In sustainable energy there are carbons/fuel to pay, just interest on the investments. Bankers and the bank share/bold owners will really not been able to benefit of these huge economic step forward for them as the fractional banking system unfortunately collapsed just before the era the fractional banking system could have it's highest part of the economy ever by financing energy investments. They had change to sustainable double their turnover easily and everybody would benefit of it, but they blow the system by not accepting the economic cycle and by pushing is too far by greed. One huge market opportunity / unique time for them will be lost by just blowing up the system by Mr. Greenspan. That money supply fractional banking could not live for ever was clear to everyone: money creation by loans needs to issue a continuous flow of new loans to put interest payment capacity on earlier loans in the market and our planet can't bare exponential growth for ever, so sometime, somewhere the fractional banking system would have ended. It's sad that it will end just in times we need it more than every due the Energy Crisis. The first half of the 21st century will be different by the Energy Crisis and (an absent or sick) financial world due the Credit Crisis. Very different, mainly by the increasing price of oil that demands/creates low energy economies and the shortage of credit to do energy investments. Geopolitics therefore can be said in one word: Oil (or wider: Resources). The energy surplus states are the ones that will be calling the shots (just listen or get disconnected and picking up the chips of each economic activity anywhere). The energy deficit states just can only accept anything, because without energy every thing stops. Taking all this developments all together: Time to stop believing in the models of the past (which doesn't work in times of expensive oil) and certainly stop with believing the 'everything just will come alright automatically' myth and severe time to start make a future within this four huge turbulence factors. The big challenge of today and tomorrow is building low energy prosperity (high energy prosperity will be equal to dry rain). Both the Global Future Analysis and the Global Resources Analysis are not judgmental, they're pure awaking focused reports. After awakening (with its denial, defeated and than longing action phases) we need Models: using the wheel instead of the need of -very time consuming- inventing it first. Models for Action, Communication, Localization, Knowledge and Finance would help a lot. Economies, govern­ments and people are inventive enough. They just need to be awaked and hand out Models to act. Yes, we're in serious problems, but we have also many ways to deal with it. Planck Foundation wants to hand out for free both the two Analyses and the five Generic Models to governments, companies, municipals and households that want to build a future within these five huge headwinds and let's hope that pandemia stay away for some decades: we really can't have them the next decades. The best financial advice in these turmoil times? Is capital anywhere safe in these turmoil phase? Yes, local is the most safe capital environment in these times. Put your money/capital where you can see it: invest it in your local economy or put in local focused banks (that invest it for you locally), local banks that are embedding in national (brand connected) audition structures. Than you've the best of both worlds: local and national. In times of turmoil you need maximal transparency, not a huge financial, who suddenly says 'we're sorry, but we lost your money' on the way. Build local banks, local stock exchanges, local internet exchanges and local physical and digital market places. Put your money where you month is. Trust only controllable investments, the uncontrollable investors has made by the availability of a huge capital flow into a total non-transparent system the mesh of the Credit Crisis. Trusting is nice, controlling is better. Yes, we must drill in NWAR and offshore. We need everything that could soften the impact/damage of the coming carbon price explosion collision. Everything that softens our 'smash against the wall' (Simmons) if wanted very much. And yes, NWAR only will give the world 3 months of more oil if we stay acting the same as we do right now. It's time for working our rears out in avoiding a carbon price caused collision that will damage us all severely. The oil crisis of the '70ties we worked around by non OPEC based oil production, but this production has peaked. We have lost more than 35 years and are now facing the same problems, but with out the softening impact of non OPEC energy. From the enormous amount of state subsidies we have spend in this 35 years 0.0 has been put in energy research. This blank spot on energy issues will enter the history books as the huge governmental and corporate mistake op the second part of the 20th century and the proof that the horizon of both governments and companies is only some years ahead at it's best. But new rounds, new chances. There is no rational reason why credit-, energy-, water- and food prices will ease (besides a global collapse of the energy deficit nations) and even that will deepen the Credit Crisis ones again. One way or the other: there are more clouds than we wish. Everybody's agenda will have one huge main item at the top: sustainable prosperity with attached well-being. Fortunately solar/wind/wave/thermal originated energy/power will give us the possibility to operate low energy based prosperity and maybe (with changes above 50%) we will find ways to utilize the massive energy richness of our planet by finding ways to tap it that gives more energy than it takes to tap than. Than energy prices will go down and the expensive energy economies will end and the Fifth Industrial Revolution could take place, with one major difference: meat and minerals will stay relatively still very expensive, but distances than could expand again, but maybe we than have taste life a way that nobody ever could get us back into traffic congestion and have less time for life. Maybe than we would energy to improve both prosperity and wellbeing more than we have done the last 150 years and we just only will travel again more and further (tourism will get is rebirth) and will shower for hours again, but furthermore economies/societies don't change very much else structural because we have find a mix of well-being, prosperity and values we like a lot and we don't have appetite anymore in traffic congestion, air pollution, living in a rush, less time for family and friend, war, high taxes, fractional banking, detergent commercials, monoculture and (supra)national governments anymore as we have reached the ultimate state of living, that we like the prosperity, social life, quality food, local grown exotic fruit (by Grow|OS artificial physics influence based grow technology), drinks, music, restaurants, pubs, and houses/lifestyle where no much external forces pulls us or try to tap partial our earned wealth. Of course the post-carbon world will not be the paradise as describe in above lines for many of us. But above description is just a form of counter weight to all the deep PeakOil pessimism: when we find a way to make low energy prosperity, it will certainly be a good (and maybe even better) life. But it's clear that for the moment the Energy Crisis and the Credit Crisis will be the two sticks that will hit the world economy as we know it now very hard. And it's clear that the poor already (and in the future furthermore) will spend most of their income to just basic food and will face very difficult times, just like the rich and that it is uncertain who will be the poor and who will be the rich in new situations. See the Energy Crisis and the Credit Crisis as challenges, than no depressing doomsday pressure will take away your power and drive that you need to adjust your life. Let's make a good world for ourselves. Yes, that's one of the effects: everybody must first take care for themselves and our surrounding. This applies also to every village, city and region. Everybody will be too busy with adjusting their own life and their own direct surrounding and environment. If your surrounding can't support the lifestyle you want to live when the Energy Crisis and the Credit Crisis hits our economies, you've got to move to an other environment and you may not will be welcome everywhere you want to go. It's easy: stop daydreaming: cheap energy has made what you see and cheap energy is over, times will be changing severely, anticipate to it and build a good (of even better) life or get hit by it and suffer from not have transite your life on time to it, when it was relatively easy. Break out the jail of denial today and start building low energy (= advanced local) economies tomorrow.

Author: Gijs Graafland

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