yes. but nobody knows what will actually happen. this is unknown territory.
Yellow region = ???????????
American Economics Thread
- Thread starter Bernard
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Yellow region = ???????????
Correct. Printing more money does nothing but to mask the problem for a little while longer by kicking the can down the road, but only making the inevitable day of wreckoning that much worse. Just look at how much US printed in last year or two since Covid, yet GDP growth was negative in Q3. And shelves are going empty...@9dashline
The point about EROI declining is absolutely true. Gas prices are skyrocketing with a near 50% increase since December 2020.
Since the economy did not grow much, it is not due to economic growth. gasoline is sourced domestically, so it is not an exchange rate effect either. It is a loss of purchasing ability. But it's not just gasoline. Diesel typically tracks gasoline and is a bit higher.
Loss of ability to purchase gasoline is a massive shock to the economy which relies on gasoline/diesel for logistics which imposes a higher cost on every economic activity. Most people get to work by driving with no ability to take transit; this straight up imposes a decline in their purchasing ability on them. Meanwhile, higher costs for logistics are passed onto retail which is passed onto customers, a double attack on their purchasing ability.
If it was 'merely' gasoline it would still be really bad. But natural gas prices are skyrocketing too.
So basically lower EROI increases the 'transaction cost' of essentially everything while reducing consumer purchasing ability at the same time.
But wait. There's more. Politically, going after a product supplier is bad news for the consumer who must endure higher prices either as a result of retaliation or due to switching to less economical suppliers.
What happened with magnesium, for example?
So not only transaction costs are going up, but also product costs.
The end result is low purchasing power combined with new money with nowhere to go except valuation of paper assets.
The heart of the problem is all economic activity relies on energy and raw resources. Money, which is and was always nothing more than an abstract human social construct (sometimes symbolically represented by gold, silver, other times by physical paper, or bits on a financial banking server, or as transaction entries of peer to peer distributed online general ledgers aka blockchain or cryptocurriencies) to tally and act as unit of account of real resources and energy out there in the physical world, can never substitute for lack of physical energy sources themselves.
If an activity is an net energy sink (negative or low enough EROEI) where it takes more energy to extract, process, and make useable an energy source than the effective energy we can get back from it in return etc then it doesnt even matter the financial costs, the price of that energy or if it is economically subsidized by governments, (just another form of trying to inflate and conflate the symbolic tally or token of energy or resources as a subsitute for that energy or resource itself) it still does society no good because it doesnt provide the net energy boost thats needed to maintain the work/productivity multiplier effect and thus the true source of the actual purchasing or servicing power of modern money.
Modern global society needs a certain EROEI threshold in order to be sustained, below a point it all unravels and falls apart like collapsing house of cards... I think we are quickly approaching that point of inflection or may actually have already passed that mark in late 2019 *cough cough*
The world at large is now not just a zero sum game but a negative sum game where the pie keeps shrinking. This is the thermodynamic and entropic reality at the largest of scales
China cannot afford not to decouple from the United States, especially the dollar system and the trade economies of it all. Shipping real goods for increasingly worthless dollars (less than worthless since its being weaponized against China) is a fools errand, especially in a world with deminishing EROEI
This is why China's drive for semiconductor and tech self sufficieny, its implementation of dual circulation strategy and national digital currency, its Belt and Road initiatives are so important...
China needs to make everything it needs by itself and for itself, especially the higher value chain products and services, and then largerly only trade with other nations for raw resources that it doesnt have, preferrably with relatively underdeveloped and resource rich nations.
This is why China needs 10000 nukes and at least as much carriers as the US has, to match or exceed American naval and military power abroad....
Because sooner rather than later China will have to cut out the useless eater middle man, and the fat pompous middle man is not going to be happy about it.... might even pull a Rottenhouse, go on a global shooting spree, and then claim self defense
10000 nukes is excessive by far
1500 would match the deployed US arsenal, and make the point that MAD is real
Also, I'm not too worried about EROEI of renewable energy sources like solar
Solar energy is essentially unlimited
And in any case, we can still expect large technology improvements with solar which will improve efficiency
That isn't the problem, PV and wind are both already cheaper full cycle, and storage is catching up.
The problem isn't just 1.4 BILLION ICE vehicles and only 0.7% penetration of EVs.
The problem is a huge built infrastructure based on fossils—including every part of any city built in the last 100 years—from homes to factories (to be precise, the lack thereof in the US as most factories are now in China), offices, store, roads, down to electric grid too small to carry enough juice to charge batteries.
The problem is that every facet of "modern life" revolves around massive transportation. Everything in the US is made somewhere else. We don't even make a living near home, the average commute was almost half an hour in 2019. The problem is a 9-5 lifestyle designed by middle managers to conform that creates the duck curve rather than following the insolation curve
That is not going to change in a dozen years....
We can't simply swap out fossils for renewables. Anyone who has ever looked into installing renewables knows the first thing they were told was to audit their use and find places to conserve, transitioning an entire civilization is no different.
It's not that the required change is physically impossible or even beyond our technical ability, the problem is the Western civilization are simply too self-involved and self-congratulating to make the sacrifice.
The energy trap is the idea that transition will cost a lot of energy making already expensive energy even more so, causing public opinion to turn against transition. There will be no preemptive sacrifice, Bush said it at the Rio Conference in 1992: "The American lifestyle is non-negotiable."
Harvard says solar in cheaper than fossil fuels in many parts of China and to be so in other parts of the world. It's just many parts of the world don't have the regulatory framework, the finance, or proper grid systems to make it work. And you have the intermittency and storage problem.
Wind is still more expensive than fossil fuels.
I foresee many countries just switching to gas during transition and getting stuck there. They'll just spend the next 30 years doing coal to gas switching.......
I think only China can save the world by example.
I've been reading country reports for Southeast Asia and they're too slow to introduce renewables. This can be extended for rest of world. God save us all.
EDIT: I think nuclear has great upside. I would buy Chinese nuclear stocks if it's possible
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@Nobaru are you from planet Nobaron?