GLOBAL RESOURCES ANALYSIS


DANGERS | COLLAPSING ECONOMIES


PeakOil really can hit economies that haven't anticipated on it. When oil leaves an economy before an economy leave oil that economy will collapse entirely. People that find this incitement should consider what should be become of their economies when oil/gas/coal prices get skyrocking high by the simple market mechanism of supply and demand (by external causes not controllable and irrevocable inflation, which leads to negative growth as in economic crimp). And also should consider what would happen as the granting distribution mechanism (only selling to friends) will be put on top of market mechanism (actual supply shortages and delivery interruptions, which leads to huge economic damage of already wounded economies). For the Western World is PeakOil a possible huge disaster, a threat never seen before. They are the most voluminous users and therefore the most addicted to cheap oil: there economic system in build on it. The Western World has also an other problem: PeakOil reaches the Western World just as obsolescence has beginning to burden their economies. The burden of obsolescence of the babyboom generation takes a lot of vitally out of the western economies. PeakOil reaches the Western World just as they have lost much of their former comparative ship that has made them to what they are. The Western World misses the enormous vitality of a young generation that are determined to make their live tomorrow better than today. The drive of the human capital of the Emerging World is much (really much) higher than in the Western World. The Emerging World can gain prosperity, the Western World has lost it vitality: the ones with drive are contented. Why fight hard than? The Western World doesn't like working and gaining as much as the Emerging World likes it. The premium of gaining is better that the premium of maintaining. By PeakOil (on top of other already existing developments) the Western World will loose a lot of her prosperity. Loosing is much, much more difficult as gaining. Gaining gives mental power, loosing demands/costs mental power: the loosing process that al least 50% of the potential power in a society. This mental status is very important. The Western World needs also due to PeakOil to change its installbase (with all the connected major write downs). The Emerging World is able by their growth, just to buy direct the right PostCarbon installbase. The Western world also has also a disguised world perception due to colonialism. The general attitude in the Western World is a little bit arrogant and disdainful to the Emerging World. Feeling the better one is rather dumb when the other one is getting each day cleaver and richer each day. The Western World is loaded by debt; the Emerging World is loaded by capital. Russia just pays off her foreign debt. In cash. While the Western World is heavily repressed by governmental and household debts and not genuine figures of banks, bond insurancers and pension funds due to the US artificial bubble, the Emerging World is diversifying away from the dollar and cash and just buys up / take over western public listed industries in trouble for 25% of their value of a year ago. The Western World is lazy, arrogant, spoiled by prosperity, addicted to oil and loaded with debt. Not the right shape to enter a really tough period as PeakOil is. Skyrocking energy prices and major write downs on installbases. The Western World has had three decades of severe economic sun. But the last decade seems to be the sun, but in fact was just creating a bubble, with no real economic value beneath. This crude reality will hit western societies severely as the price of this last economic fake decade will demand its toll. Pumping up house prices by an increasing trade deficit is major economic poisoning on receipt. But the Emerging World has also their problems. A nation like China certainly has a huge and severe collection of energy problems, water problems and food problems. The only difference is that the Emerging World has or capital or credibility and that their population is on an economic way up instead of on an economic way down. All transitions, so also energy transition, water transition and food transition are all possible by the combination of technology and capital. PeakOil will lift prices of each product/service world wide. Mobility and transport will certainly become very expensive, but PeakOil driven price rises don't stop there. The energy factor or component of each product and service will be clear in the next years. This price rises will in the Western World not be covered by economic growth. In the Western World PeakOil will lead to negative economic growth (as in a vicious down headed circle of less profits/jobs, less purchase/investment power, less profits/jobs, less purchase/investment power, etc). Negative economic growth is just a difficult, but survivable recession, which finds its bottom somewhere, not a complete economic collapse. But if economies don't see the effects and dangers attached to PeakOil, don't transite away from fossil energy and the are already (due to other causes) in dire straits they certainly will collapse completely. No addressing PeakOil as a serious threat to the economy is risking economic collapse, because modern economies are build on cheap oil. Take out the fundament and the building collapse.


Author: Gijs Graafland


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