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When This Ends, Everybody Gets Hurt (And The End Is Uncomfortably Close)
Submitted by Chris Martenson via Peak Prosperity,
Central banks around the globe have taken us all into unchartered territory, where the possible paths boil down to a binary outcome: either it all works out or it doesn’t.
Unfortunately, the ‘it all works out’ outcome has a very low probability of actually happening; so the binary outcome isn't equally weighted like a coin toss. By ‘working out’, here’s what the central banks all striving (praying?) for:
- Inflation of 2% to 3% per year
- Economic growth of at least 6% per year (nominal) and a real (inflation adjusted) rate of 3% per year.
The reason that the central banks want all of this growth and inflation isn't because it's good for you, me, or anybody we know. Instead, the bankers need it because that’s what our exponential money system requires.
Slaves To The System
It bears repeating, inflation is not rising prices -- those are symptoms of inflation -- but instead is the expansion of the existing stock of money and credit. If we observe the symptom of 'rising prices', then that means the underlying mechanism of expansion of credit (mainly) and money (less important because the money supply is a only fraction of the volume of credit) is functioning.
Think of it this way: it’s like the central banks want a slightly feverish patient and so they track the patient's temperature. They tell everyone that 100 degrees, perhaps 101, is the perfect termpurature...slightly elevated, but not too much. But the patient's temperature is merely a symptom. The underlying reason for having an elevated temperature is having too many foreign bodies living within the patient, like having too much money and credit in an economic arena.
With increasing levels of credit in our monetary system, the system functions reasonable well and enough new loans are being made to service both the principal balances of prior loans plus their interest payments. But with stagnant or falling levels of credit, the exact opposite is true and the entire financial system slips into collapse mode.
We are now in service to our system of money, not the other way around. That is, we have a money system to which we are now slaves. It's either expanding or collapsing, but has no stable state; no easy equilibrium that it can inhabit.
The tragedy in all this is that we can easily have a different system of money that does not make such unreasonable demands of us. But virtually nobody in power is (yet) discussing this idea.
The Folly Of Endless Growth
Getting back to the central bank wish list, nominal GDP of at least 6% with real growth of 3% allows governments to expand their debt loads by 3% per year without them ever getting larger in proportion to the underlying economy. That way, they never have to be paid back. They only grow larger, and this means more borrowing/credit in the system which is part of requirement #1, above.
So the entire central bank playbook, in slavish devoted service to an obviously dysfunctional system of money, boils down to endless credit growth coupled to endless economic growth.
Endless growth. When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself What they really want is endless growth.
The next thought you should have is Hey, is that even possible? Or even, advisable?
The answers, clearly, are No and NO!
Every day, we have further confirmation of the idea that the world has limits and that economic growth requires more resources. Water, soil, fisheries, forests, ore bodies, and energy sources are all being overtaxed and rapidly depleted at even today’s level of economic activity.
If resources are finite but economic growth has to be endless (again, to support our chosen system of money, and for no other reason), then there’s a gigantic conflict brewing. And that's the subtext to the entire confusing array of political and monetary actions and reactions of late.
A Simple Example
The idea that endless growth isn't realistic needs to be explored as often as possible simply to counteract the huge volume of spoken and written words that profess it’s exactly what we both want and need.
For most people indoctrinated with the endless growth narrative, we have to engage in a bit of deprogramming before we can have a proper conversation.
So let’s start with a simple example that lays this all bare.
China has been on a very impressive program of economic expansion. Of late, that’s slowed down just a tiny bit and it’s causing quite a bit of worry among the Chinese leadership, which believes that fast economic expansion supports social stability:
Chinese economy posts lowest growth rate since 1990
Jan 20, 2015
BEIJING — China’s economy last year slumped to its lowest rate of growth in 24 years, the government announced Tuesday.
China’s gross domestic product grew 7.3% in the last quarter of 2014, and 7.4% over the whole year, the slowest rate since 1990 and below the official target of 7.5%.
(Source)
Now, let’s examine that 7.4% rate of growth using the handy ‘rule of 72’, which will answer the question: How long will it take, in years, for something expanding annually at 7.4% to double?
The answer is simply 72/7.4 which equals 9.7 years. That is, if China continues to expand at 7.4%, its economy will be fully twice are large as it currently is in just under ten years.
Twice. As. Large.
Think about that for a minute. That means (roughly speaking) twice as much energy consumed, twice as many cars on the road, twice as many factories churning out twice as much stuff. Twice as much economic activity in less than a single decade from now. That’s what a GDP growth rate of 7.4% means.
Of course, you won't encounter any such dot-connecting in any of the articles you will read about China’s growth -- desired or actual -- because the implications of being ‘twice as large’ are not yet part of the global dialog about economic growth. Yet.
So let’s explore just one of those implications by looking at China’s coal consumption. Energy and economic activity are very tightly linked. If you want to have more economic activity, you're going to use more energy. Coal is heavily used in China to generate electricity, which is a critical form of energy for economic expansion.
In fact, when we look at China’s energy consumption over these past few decades, we note one period between 2002 and 2009 where its energy use fully doubled, with coal being, by far, the largest component of that doubling:
(Source)
In just 7 years, energy use doubled! Again returning to our handy ‘rule of 72,’ but in an opposite direction, we can divide 72 by 7 years and calculate that China’s energy use was growing by 10.3% per year during this period.
How does this compare to China’s reported GDP growth during the same period? Well, according to The World Bank, between the years 2002 and 2009 China sported an average rate of GDP growth of 11%.
As expected, the growth rates for energy consumption (10.3%) and economic expansion (11%) were very tightly coupled.
Now let’s take note that, in 2012, China consumed 49% of all the coal consumed in the world. How much of the world’s coal will China consume if it doubles in the next 10 years?
Well, a doubling is a doubling: China’s current 7.4% GDP growth rate implies that in just 10 years, give or take a little, China will consume as much coal by itself as the entire world does today.
But then what? What about the next 10 years after that? Eventually, we all have to come to the same conclusion: it's just not possible for China to double its coal consumption forever. Sooner or later, real physical and environmental limits apply.
It's Already 'Later'
My argument is that it’s already ‘later’. We're living through the period of time when that dawning recognition of limits will finally burst over the horizon, shining a very bright spotlight on a frightening number of our global society's unsustainable practices.
The most urgent of them all, as far as everyone reading this is concerned, is the very uncomfortable fact that it is our system of money that is most likely to break first and hardest because its very design demands endless growth, without which collapse ensues.
As the China example illustrates, the prospect of endless economic growth is simply not a workable plan because resources are not infinite. Our global obsession with growth is the very definition of unsustainable. Someday reality is going to intrude and ruin the party and very few are actually prepared for that future.
A very big problem we all share is that the world’s central banks have been vigorously defending the status quo (of endless growth) and that means we all face a very bad period of adjustment when their efforts finally fail.
That moment of failure is coming closer and closer. Recent actions by central banks have exposed their increasingly desperate mindset and have even called into question the one thing that absolutely cannot ever be questioned: the ability of the central banks to deliver on the promise of endless growth.
Central bank credibility (as fictitious as that may be) is essential to maintaining the current narrative, BUT central banks are rapidly losing their credibility (which should have happened simply via deductive reasoning a long time ago) and the strains are showing. Their actions are increasingly wild and extreme (SNB, anyone?), and it's our view that 2015- 2016 will mark the end of this long run of overly-ambitious central bankers and over-complacent markets.
When credibility in central bank omnipotence snaps, buckle up. Risk will get re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.
In Part 2: The Consequences Playbook we spell out what will happen next and how you should be preparing today for what might happen tomorrow. Suffice it to say, a tremendous amount of wealth will be lost if (really, when) the central banks lose control. And standards of living for many will be impacted.
A little preparation today can make a huge difference in your future.
Click here to access Part 2 of this report (free executive summary; enrollment required for full access)
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"When This Ends, Everybody Gets Hurt."
Well, not everyone. Hurts so good for the guys who orchestrated it.
Nonsense! "The shadow of crisis has passed!"
So is that like being in the eye of the hurricane?
Buckle up little Timmy!
Time to get self-sufficient as much as possible, bitchez!!
That's a good idea.
Better make a plan...
BRB.
You better already have a plan and be implementing it......
If you only knew...
Getting real GDP growth of 2 1/2% over one’s lifetime if remarkable. Given the U.S.’s mature economy and the increased level of global competition, I think real GDP growth of 1% is all you can expect over the long run.
The past cannot predict the future except in the most general way. The best predictor is the people and how active they are....We're screwed....
Agree, this won't end naturally, it'll end by C.B.'s being proven wrong before the whole world, or the inequality being laid bare so everyone understands. I wouldn't count out some event such as the Audit the FED bill surprising everyone and by some miracle passing as law either.
It ends when the world sees the king is naked, and already millions do.
Central Banking is 400 years old. What makes you think this will stop it?
There's a song about that, everybody hurts sometimes apparently.
"How high's the water, ma? Ten feet high and risin'."
God willin' and the creek don't rise....
Can't be all that deep, it only comes a third of the way up the ducks.
Former lookout on the Titanic?
har dee har har
Song?
Donna Summer - MacArthur Parkhttps://www.youtube.com/watch?v=xaZim6ybvdA
But it could all be growth in SERVICES instead of manufacturing! Har har har.
or growth in government, which is what we see largely
N/D I love Formula 1. Do you think the 2.8 litre configuration, downgraded to V-6 hybrids, was a good move?
The cars aren't aerodynamic. The F1 board is lost in space!
They are worrying more about being "fair" than about racing. I liked it better back when they gave the teams a general specification and then let them race.
Exactly, micromanaging fair has killed F1.
Oh FFS. Formula 1 has always been yawn inducing.
You want exciting, take a look at MotoGP, BSB or, for complete insanity, The TT.
https://www.youtube.com/watch?v=kd12WeiJrd0
TT looks like suicide for any normal man..
But debt grows at an even greater rate...AND ITS COMPOUNDING!
I say again
WHERE DOES THE MONEY COME FROM?
WHERE IS THE LIQUIDITY?
This piece could have been written by Mako back in 2010
''The system has been stealing from the future at an exponential rate to sustain it's own existence.''
~
- System starts
- System expands at the rate needed
- System peaks
- System unable to expand at rate needed
- System collapses
- System liquidates
- Rinse and repeat if choosen
Mako
The End and the beginning. We're living it BTChez. What an astounding point in history to be alive and aware.
Live your life that the fear of death can never enter your heart.
Trouble no one about his religion.
Respect others in their views and demand that they respect yours.
Love your life, perfect your life, beautify all things in your life.
Seek to make your life long and of service to your people.
Prepare a noble death song for the day when you go over the great divide.
Always give a word or sign of salute when meeting or passing a friend,
or even a stranger, if in a lonely place.
Show respect to all people, but grovel to none.
When you rise in the morning, give thanks for the light,
for your life, for your strength.
Give thanks for your food and for the joy of living.
If you see no reason to give thanks, the fault lies in yourself.
Abuse no one and no thing, for abuse turns the wise ones to fools
and robs the spirit of its vision.
When your time comes to die,
be not like those whose hearts are filled with fear of death,
so that when their time comes they weep and pray for a little more time
to live their lives over again in a different way.
Sing your death song, and die like a hero going home.
– Tecumseh
(1768-1813) Shawnee Chief
+1000 for the quote. What a SOTU speech that would make.
I completely agree on all points. Two things more important than the materialism we are all trapped in , our health/wellbeing and our soul ! Both, you have control of . Materialism, when all is said and done, is the control mechanism to control us by the control freaks. Everybody is deathly afraid of losing their stuff and therefore will go along with anything presented as normal or what we should fear. The control mechanisms and illusions only get a little crazier by the sociopaths and psychopaths we call leaders. As needed by their perceptions !
So we do live in a kind of controlled insanity in every event !
"Materailism, when all is said and done, is the control mechanism to control us by the control freaks."
+ Some infinitely determined spiritual amount!
If people can realize that being alive and among our peers is enough in and of itself, I have hope for our species. We may all become VERY much poorer any day now. Those who can survive that reality spiritually will continue and can be just as happy as before. But those who are attached only to their material definition of themselves? For them, this will feel like death. Just remember, it is not death. Change is the only constant.
/end platitudes... ;)
But how can I feel superior to others if I don't have more/nicer stuff than them?
156
Madness is something rare in individuals; but in groups, parties, peoples, ages it is the rule.
--Nietzsche
"My jimmy runs deep. So deep put her ass to sleep." - Ice Cube
today i didnt even have to use my AK...
Haole, that was great. Thanks for posting.
Here's Tecumseh in 'Bilderberg-ese'
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxAlways give a word or sign of salutexxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
https://www.google.com/search?q=illuminati+hand+sign&biw=1680&bih=957&source=lnms&tbm=isch&sa=X&ei=ozPCVMqYKpLvgwTnj4OwCg&ved=0CAYQ_AUoAQ
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Sing your death songxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
This was a good read; I wonder why more "analysts" don't do the simple math like the Rule of 72.
For anyone looking to learn simple modeling tools further for analysis and forecasting, I recommend Harte's "Consider a Spherical Cow"
One of the best nonfiction books I read in college, along with Kreb's "Behavioral Ecology."
The Crash Course should be required for all high school and college students. Not the bullshit they get in Econ 101.
The problem with this article is the author assumes China growth at 7.4% every year for a decade. That will not happen. When global GDP slows, so will global debt.
That's the point of the exercise - to show that it can't happen.
All those spent nuclear fuel rod storage pools will pretty much ruin the planet when they can no longer be maintained.
I have often wondered about that.
Having smouldering piles of zircon/uranium burning free into the atmosphere would be really bad.
Best case scenario is that the pools get BLOWN to fucking smithereens and scattered across a wide area.
This is so it cant gain criticality and start to burn.
Does that seem familiar?
It should. Because that is EXACTLY what happened at Fuku. It was the MOX reactor that blew sky high IRRC.
MOX is Plutonium.. Really bad news if it burns.. So it blew up.
Accident or not, it was the best possible outcome for that scenario.
Note that Chernobyl also blew apart and scattered large portions of fuel (but not enough to scram the pile that was left in the smoking hole of the reactor).
Eat your own sandwich. That won't happen. Not enough effect to ruin more than the immediate surroundings. You should learn about it before you spout garbage.
Spent Fuel Rods
Yeah, that happening potentially hundreds of times all around the world won't have an effect.
Supply chain failures means engineers don't go to work.
If it burns, it gets into the atmosphere.
Will that be contained to immediate surroundings?
It's not like simple fallout from a bomb when a pile of fuel rod burns.
If it's mixed oxide fuel, its really fucking bad news when it burns.
What is the LD50 for Plutonium?
Its not that toxic, but an inhaled microgram can cause lung cancer because its an alpha emitter.
Living on the BC Pacific coast I can tell you
They can not and are not being maintained.
Can't wait to make some pol sandwiches.
China prints trillion to buid dozens of elbarate Ghost cities with skyscrapers, airports, housing, theme parks, etc etc. to compensate for loss productivity from global slowdown. GC construction accounts for nearly half of Chinas GDP which is around 7%. Heres an idea, kill yourself become a ghost and live like a king.
Led Zepplin bitchez/ dazed and confused.
Hendrix "let us stop talking falsely now the hour is getting late"
https://www.youtube.com/watch?x-yt-cl=84503534&feature=player_embedded&v...
the lyrics are very pertinent today ! a bit chilling actually
Money!!! Pink Floyd
https://www.youtube.com/watch?v=-0kcet4aPpQ
This going to hurt exponentially. We may need some yet to be invented lube for this one.
Chris Martenson nails it, and apparently, it goes unnoticed.
Did you all dig what this guy was saying. The very money system we use is dependent on growth, this in a world of finite resources.
Yeah, I know, there's all sorts of hot issues that get folks dander up, NWO, police state, oligarchs,wealth divide, guns, PMs, HFT, hell ...chem trails and aliens for the outer fringes.
Earth to ZH posters .... there's a fundamental problem with the fractional reserve banking system predicated on compound interest being charged for credit created Ex nihilo.
I think that was the point of the article. I write about it at my site as well. The underlying dynamics are the problem and it has simply run its course. So if you know that, it is a great time to watch it all as it devolves. Just gotta take your frustration/anxiety pills, those are the yellow ones not the red or blue ones ? and prepare yourself for any event. :)
Currencies have failed before. The sun still rises the next day.
spinone- the sun rising is not the issue. When it falls apart people will die. There will be turmoil. I imagine with the number of people on food stamps these days (offered as a fact- not a judgement call,) people will be hungry- actions taken to remedy it could involve theft- again not offered as a jucdgement- I would steal if it meant my kids would eat that day.
Certainly some will have no problems and see the sun rise but for a good many the sunrise is a moot point. No sun shines when you are 6 feet under. Only those in gated and guarded communities will be safe. It will be a swift descent when we have so many in economic stress already.
GS advised me to take out some puts on the sun.
Currencies have fallen one at a time before; this time it will likely be all of them at once.
Enjoy the crash.
Craig
They know.
They Bitched to high heaven.
They Barked at the moon, while chewing blue raspberry bubble yum, hopping on one foot.
It did not a fuckwhit of good.
We screamed and yelled.. Got covered with a TARP.
We have been getting downright pimped by the Financial/Banking Cartels in broad daylight for years now.
They have degraded the public (with the aid of the media) like a pimp degrades his Ho's.
After one has had enough of the pimp putting ciggarrettes out on their head, they start to seek out escapist shit like UFO's n shit.
The geoengineering issue is sadly real as a heart attack, but because a bunch of lunatics have pointed out the obvious first, it has colored the topic and it is no longer "mainstream".
SO, they woke up a long time ago... realized how bad it was and went back to sleep so they could dream their days away in a happy place again.
If you manage to wake these fuckers... They are gonna be real cranky.
Yes.
We know.
Martensen is spot on. He has a whole course on this stuff.
Go shout it from the rooftops. Or preach to your co-workers, friends and family. Take note of the strange looks you get.
Take note of the "reality" being peddled on the television. Compare and contrast with sanity.
oh yeah. and prepare for what's coming. No point telling anyone you're preparing, you'll just get more strange looks. Encouraging them to prepare may get you locked up in a padded cell.
I honestly think this year might do it. The level of instability is F'ing astonishing. The globalist are either incomprehensibly moronic, or lethally malicious. It's absolutely astonishing to have nakedly criminal sociopaths literally running the world.
People still talk about 'globalization' as if it's a F'ing goal?
This IS F'ing globalization and it's Fing devouring the F'ing human race!
Denial isn't a river in Egypt.
>>>Suffice it to say, a tremendous amount of wealth will be lost if (really, when) the central banks lose control. And standards of living for many will be impacted.
About that financial obligation you and yours were expecting to be serviced or (gasp) repaid: It's gone.
It does seem paradoxical that the death of illusory "wealth" will in fact lead to a lower real standard of living. Too bad Ponzi schemes can't really grow to the sky; we were looking so good there, for a while.
When this is read on ZH, it sure gets quiet all of a sudden.
WW III will bump up GDP, at least for a short while.
Global Destruction Probability
yeah, 10 minutes
Chessboard, meet rice!
Ammo is good for barter. Stack it high and deep
Sure is. The days of cheap surplus ammo is OVER!
That's what they said about oil...
Yeah baby - Dow 20K, here we come!
The markets today are just like in 2000 and 2007, where there are a whole host of doubters who continually post that they are fully convinced that the party cannot continue indefinitely. Even though our economic fundamentals continue to get worse, our debt levels continue to grow, central banks continue to print and every objective measurement shows that Wall Street is more reckless and more vulnerable to collapse than ever before none of us reacts to this strongly anymore - because of we are now conditioned to these conclusions.
The danger to being conditioned to repeated impending doom warnings with no immediate outcome is that we become complacent and do nothing. We do nothing because we begin to doubt it will ever really happen. These articles become for us false alarms like the boy who continually cried wolf. So i ignore the doom and gloom and continue to prepare so I do not get eaten by the real wolf.
Holy shit!
An understandable and undeniable chart (the first one JACKASS).
TCMD Chart - Chris Martensen
It's frustrating and heartening at the same time when you come across an article that is so good and complete, there is nothing to argue against and nothing to add. Kudos.
What is the difference between bankers rigging markets and Central bankers rigging markets?
Bankers get fined.
Bankers own the Fed.
How do you get Capitalism to work efficiently?
De-regulation is often seen as the answer, leaving free markets to their own devices.
What happened when we de-regulated banks and trusted bankers?
They rigged every market going for personal gain.
What happens when businesses aren’t properly regulated?
They form cartels to maximise profits, such as light bulb manufacturers.
They knew long lasting life bulbs would dent profits, so they formed a cartel to ensure all manufactures produced poor quality light bulbs with a poor but uniform lifespan.
Human nature ensures things will not end well.
Banks aren't de-regulated. They have the Federal Reserve watching their backs. The Federal Reserve is basically a government mandated cartel.
Cartels are unstable in even a semi free market and the lamp cartel is a good example against your own point. They set prices and bulb lifetmes such that it was attractive for competitors to enter the market and compete with alternatives. That is exactly what happened.
http://en.wikipedia.org/wiki/Phoebus_cartel
That is the dumbest thing I have ever read.
The banks own the Fed. They also own the credit reporting cartel. Money is the cartel, and it is not friendly to any but a few. In fact, the fewer the better, as monopoly is the natural goal of wealth. Until only one person (in today's doublespeak, which we might call "bankspeak," (hereafter referred to as B.S.) that would be one corporation.
Which is why for the sake of any future, such as we might hope for, we must undo "Citizen's United" - using constitutional amendatory processes if that is the only way to do that. And, we must come up with something - anything - better than the Federal Reserve. We have had the fox guarding the henhouse since its inception.
Enjoy the crash.
Craig
Yes. Agree. And I know why we can't have National Referendums.
And I know why we aren't informed on National Issues or given the truth about Foreign policy, Economy, Banking, Money, or the FED.
They Control the Press, Control Info, Lie with Propaganda, and Hide not only US History but European & World History... because they want Oligopolies, Kiretsus & Control.
Here it is:
- If the Public Voted on National issues and Had National referendums... Then the Public Would have to start Getting the Information, the Truth, Government & Universities would have to start sharing the truth in all things.
- If we had National Referendums, it would save Freedom & Liberty & Justice & Brotherhood
And there is this:
- Instead they have Disable the Feedback Loop in our so called Free Country, the put out Spin & Lies, the Press & Media put out Propaganda, and Citizens are given the Mushroom Treatment: Kept in the Dark & Fed Shit, then citizens are blamed by the Wealthy & Successful for being Dumb Idiots that should not Vote, and we get Terrible K-12 & Universities
The banking industry is easily the most heavily regulated industry in the US. It is important to realize that there has been no free banking industry in America since the late 19th century. Of course the banking cartel has brought all of this about in its own interest - but that is beside the point. There is no free market capitalism in banking and there hasn't been since more than 120 years, if not longer (the precursor to the Federal Reserve System was introduced in the 1890s, but there has been government meddling in the banking industry already at an earlier stage - but it was scattered, and a far cry from what occurred later).
blah, blah blah.. Buy the news