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The End Of Magical Thinking: Money Cannot Manufacture Resources
Submitted by Adam Taggart via PeakProsperity.com,
Author Kurt Cobb writes frequently on energy and the environment and warns that our current economic policy suffers from a fatal degree of magical thinking: sufficient new resources will emerge if the price is high enough.
As any fourth grader will tell you, a finite system will not yield unlimited resources. But that perspective is not shared by those controlling the printing presses. And so they print and print and print, yet remain flummoxed when supply (and increasingly, demand for that matter) does not increase the way they expect.
Is this any way to run an economy? Or a finite planet for that matter?
Of course, a lot of people have been hearing the hype about the growth in production in the United States for crude oil. That has been happening, but it has been happening with very high cost oil. Now the prices are down and the industry is on its back. They are looking for ways to increase the amount of money they can get for that crude oil. One of those would be to sell this light tight oil, which is oversupplied in the United States to foreign refineries. They cannot do it because of the export ban. I am not sure that is going to help them much because the price of oil has gone down so low as compared to what their costs are.
We have already seen a decline in U.S. output. The prognostication that we were going to be energy independent in oil, and that we were going to become the largest provider of oil to the world, I do not think are going to work out. It shows us that high priced oil leads to low priced oil, which also leads to economic slowdown. That is what we are seeing now. That is the equation that you and I wonder how people do not see that these things are connected, and yet they do not.
I think you put your finger on it: people who run our central banks and run our government policy think that money manufactures resources. If we just put enough money out there, it will call forth the resources. There is a little bit of truth to that, because very cheap finance made it possible for us to lift this $100 barrel oil out of the shale formations of North Dakota, Texas, and other places. That is not endless, and the high price puts pressure on the economy. I think this is where we are going to have problems.
We cannot sustain those high prices in the long run. We have structured an economy for cheap energy and that is not what we have. It has resulted in a slowdown that I think is the beginning of that transformation from a high growth economy to a low growth economy. In fact, we probably already began that in 2008.
Click the play button below to listen to Chris' interview with Kurt Cobb (47m:42s):
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people aren't smart enough to realize this, as has been proven throughout history - humans are the dumbest species on the planet
It most certainly appears so Devil Dog.
I told a friend of a friend that I would be more prone to take out a person than an animal. People are certainly more dangerous and unpredictable. The guise of intellect in our species goes without saying.
Semper Fi
"The End Of Magical Thinking: Money Cannot Manufacture Resources"
REAL money can. (Actually, it can't manufacture them, but it would certainly move them more freely and at a natural pace according to the true forces of supply and demand.) Fake counterfeit fiat currency backed by nothing but empty promises cannot.
Fiat money cannot manufacture resources
but it can be manufactured in order to steal them
KURT
"Fiat money cannot manufacture resources
but it can be manufactured in order to steal them"
qft
It is much more hyper-complicated than that, semperfi!
Human intelligence was the internalization of natural selection pressures. Natural selection pressures drove the development of human intelligence, HOWEVER, the biggest selection pressures for human beings were other groups of human beings. To some considerable degrees, human intelligence enabled better cooperation, HOWEVER, more importantly, human intelligence was channeled into warfare, as the oldest and best developed forms of social science and social engineering.
Human beings are suffering from having dug themselves into deeper and deeper holes based upon social successfulness due to backing up deceits with destruction, which then morphed to become financial success based upon governments ENFORCING FRAUDS by privately controlled banks. The relatively "dumb" behavior of the majority of the human species developed inside the context of greater and greater human intelligence actually being applied to become better at backing up lies with violence. The human species has practically split into two sub-species, the ruling classes, and those they rule over. Those who are ruled over appear to be the "dumbest species on the planet." Whether or not the ruling classes are similarly so "dumb" will depend upon the final consequences of their social successfulness being based on triumphantly backing up lies with violence.
Surely, in the short-term, the ruling classes are becoming more wealthy and powerful in proportion to the degree that they can continue to control civilization throughs integrated systems of legalized lies, backed by legalized violence ... HOWEVER, what nobody now knows for sure are what the final consequences from doing that will be ... Are those final consequences going to become that the human species commits collective suicide ??? If so, which looks terribly plausible now, then it would surely be correct to assert that, overall, "humans are dumbest species on the planet." In a sense, the ability of the most psychopathic people to get away with controlling civilization drives the whole sitution to more and more look like "humans are dumbest species on the planet."
Since civilization is controlled by integrated systems of backing up lies with violence, as in the case with central banks, where governments are ENFORCING FRAUDS by private banks, the results are almost infinite tunnels of deceits, twisting and turning and looping back through themselves. The publicly significant ideas regard whatever might be the "corrections" of systems based upon governments ENFORCING FRAUDS by privately owned banks tend to be promoted by opposition groups which are also effectively controlled by those banksters.
For them personally, IT DOES! Those who can legally create the public "money" supply out of nothing, can then use that "money" to control their access to natural resources, and the goods and services based upon those natural resources. Since the political economy is based upon governments ENFORCING FRAUDS by privately controlled banks, those who are closer to the SOURCES of that "money" made out of nothing can use that "money" to buy anything from anyone else who are being forced to respect that form of public "money" by the powers of those governments ENFORCING FRAUDS.
Money is measurement backed by murder. However, the globalized society based on operating that through governments ENFORCING FRAUDS by privately controlled banks, does that in ways that the vast majority of people do not understand, because they have been conditioned to not want to understand. Since our political economy is actually based upon ENFORCING FRAUDS, everyone was proportionately successful within those systems by becoming the best available professional liars and immaculate hypocrites, which was what was necessary to successfully operate INSIDE those systems based upon ENFORCING FRAUDS.
Social systems based upon ENFORCING FRAUDS drive the vast majority of people to deliberately ignore the principle of the conservation energy as much as possible, while simultaneously deliberately misunderstanding the concept of entropy in the most absurdly backward ways possible. Due to the runaway social successfulness based upon ENFORCING FRAUDS, primarily working through the vicious spirals of POLITICAL FUNDING, the overwhelming vast majority of the people who are being ruled over appear like they are the "dumbest species on the planet."
However, paradoxically, that social situation was due to the ruling classes being as intelligent as they could be to control other people through being able to back up lies with violence. The sophisticate systems of legalized lies, backed by legalized violence, that control civilization may be described as an oxymoronic scientific dictatorship. The ability of human beings to be intelligent, is primarily applied to become better at backing up lies with violence.
That scientific dictatorship does NOT care about more rational evidence and logical arguments about what it is doing to itself, and the planet as whole. Rather, that kind of scientific dictatorship only cares about becoming better at backing up lies with violence. Hence, human intelligence has ended up creating globalized systems of electronic monkey money frauds, backed by the threat of force from apes with atomic bombs.
The existence of that electronics and atomic energy demonstrates some members of the human species are quite intelligent. However, the social pyramid systems based on backing up lies with violence have driven society as a whole to manifest runaway criminal insanities. Of course, creating the public "money" supply does NOT create natural resources out of nothing. To the degree that society behaves as if that magical mathematics make sense is the degree to which society as a whole become psychotically out of touch with the relatively objective real world.
HOWEVER, at the same time, people who are living INSIDE of that society, who gain more access of that public "money" supply being created out of nothing as debts, which can disappear back to nothing when those debts disappear, personally enjoy the fruits of those frauds being enforced by governments. Therefore, those who participate INSIDE those systems obtain personal benefits from those systems of organized lies operating robberies.
Our political systems are based upon ENFORCING FRAUDS, in ways which continue to be socially successful, to the degree that those operate through the vicious feedback loops of the POLITICAL FUNDING. Those systems are based upon privatizing the profits, while simultaneously socializing the losses. Those who gain the privatized profits, are then able to reinvest the profits from frauds through more frauds, achieved by continuing to corrupt governments to behave in crazier and crazier ways.
At that recording also stated at the 26 minute mark:
After learning about these problems for several decades, I have always found that THE MORE ONE LEARNS, THE WORSE IT GETS. Human intelligence has developed artificial selection systems driven by natural selection pressures to become based on the maximum possible FRAUDS. The human species has thereby trapped itself into the paradox of final failure from too much success, since that social success was based upon ENFORCING FRAUDS, spinning through vicious feedback loops through the POLITICAL FUNDING.
Rhetorical question:
Are people who successfully corrupt governments, so that those governments behave in crazy ways, being "intelligent," or not?
Since the POLITICAL FUNDING provides the point of maximum leverage, where it is relatively routine for the corruption of governments to return more than a thousand fold profits to those who achieved that, through those means, in what possible ways will the longer term consequences of that crazy corruption have any effects ???
In my view, the only back-up systems are natural selection, and those can only work by causing the decline and fall of civilization as a whole. WITHIN that civilization, the vicious feedback loops of the POLITICAL FUNDING continues to drive ENFORCED FRAUDS. The ruling classes continue to benefit in each short-term increment from privatizing the profits gained through fundamentally fraudulent financial accounting systems, while those who are ruled over have already adapted for generation after generation to behave like Zombie Sheeple.
I would like to day dream that our human artificial selection systems could bootstrap themselves up out of the deepening ruts that they have trapped themselves within, due to their social successfulness being based upon them able to back up lies with violence, thus enabling civilization to be dominated by the currently existing systems of ENFORCING FRAUDS. However, those who continue to personally benefit from those FRAUDS have every advantage to continue to control governments to go on ENFORCING FRAUDS, regardless of the longer term consequences from having done that, so much, for so long ...
The essence of how and why it certainly appears to be the case that "humans are the dumbest species on the planet" are that human civilization became based upon backing up lies with violence, whereby most of human intelligence ended up being applied to become better at backing up bigger lies with more violence, while nothing else within those systems was able to do anything to prevent that from happening. Therefore, that overall situation is much more hyper-complicated than merely the view that human beings are simply "dumb."
It's because we have become disconnected from the reality of nature and its finite resources, when we desire to be gods and expand forever, even to the heavens.
Is Low Growth Economy the latest propaganda term for The New Normal we peasants are supposed to accept as our lot in life?
They give us crumbs, we should take the cake.
Cake's already eaten.
edit: There may still be some hardtack in the back of the larder.
Yum, hardtack.
MSNBC really, really hopes Ben Carson drops out of presidential racehttp://tinyurl.com/o5oox4o
Unless you take away the power of these sociopathic bankers to create money out of thin air in the form of debt nothing will ever change.
Ever.
They're doing God's work, don'tcha know?
Got community and permaculture gardens?
My goal is to have a great time through the collapse. Just because the world is on fire doesn't mean we can't have fun and live well through it.
No, but I got SWAT teams to deal with 'hoarders' (definitions thereof in times of crisis subject to change without notice), and those 'unpatriotic' types who would otherwise 'cheat' needy Americans out of their 'fair share'...
Hand it over...
It's CAPTAIN OBVIOUS!
Actually...
With money you can buy duct tape... a whip and a taser...
And witht the duct tape you can abduct somebody and tie him up and with the taser
Bring him to a salt mine and with the whip you can motivate him to mineyou can convince him to keep going the next day.
So money does manufacture resources.
I'd like to hire you to handle my employee complaints.
"high priced oil leads to low priced oil, which leads to economic slowdown"
So no matter what the price is, it always leads to economic slowdown :)
WOW.
The quality of the articles just went rock bottom.
Imagine an immense bubble of Light Sweet Crude floating out somewhere near the orbit of Pluto. Wouldn't matter what the price of that oil was, it wouldn't be economically viable at any price.
Of course that's a silly hypothetical, and nothing like that could ever happen in the real world.
The majority of us don't understand the wheels and cogs that make it go, but it doesn't matter because we are the wheels and cogs that make it go.
Art, I gotta admit that if I were looking down upon the public at large from an ivory tower (I most certainly am not!), I'd most likely view them as a credible threat to the continuation of our species.
Why?
Because even li'l ol' me, looking up from the bewildered productive class, see the same fucking thing!
May the junks commence!
“Human life must be some kind of mistake. The truth of this will be sufficiently obvious if we only remember that man is a compound of needs and necessities hard to satisfy; and that even when they are satisfied, all he obtains is a state of painlessness, where nothing remains to him but abandonment to boredom. This is direct proof that existence has no real value in itself; for what is boredom but the feeling of the emptiness of life? If life - the craving for which is the very essence of our being - were possessed of any positive intrinsic value, there would be no such thing as boredom at all: mere existence would satisfy us in itself, and we should want for nothing.”
Imho, human life is no mistake, Advoc8tr.
It is a test.
Can you be happy with less than zero (in material things) as your life's greatest accomplishment?
If not, you fail.
Simple, really- yet utterly incomprehensible, no?
Peak Prosperity would be wise to change it's name to Peak Population, because underneath the veneer of 'peak oil', 'finite resources' and 'climate change' is the burning desire by those who think they know better, to rid the planet of those they deem undesirable or not of any productive utility, both. 'Useless eaters' in other words - just wrapped in slick packaging.
I tried to educate these people years ago about the false paradigm of "peak resources". If anyone has any doubt, Julian Simon's book "The Ultimate Resource" should rid you of any unpleasant and incorrect Malthusian fantasies of "peak" resources.
When TSHTF a scapegoat or two will be needed.
Peak resources will be one of them.
"We didn't mismanage the economy. The resources ran out, because you hogged them. It's your fault."
Currently, the "useless eaters" are still "useful voters"... at least in the Western World. Nothing changes until that changes. When it does change, watch out because there will only be 3 options left. 1. Unleash the full power of the security state to control the masses and keep them at bay away from the power elites, all the while enlarging the serfdom within the New Feudal World Order. 2. World War III to essentially achieve Option #1 while also decreasing the useless eaters... a 2-fer! 3. Revolution by the masses against the elites. I would say the odds on Option #1 are at least 80%, and will eventually lead to Option #2 in a few years. Option #3 is therefore a long way off unfortunately.
i los angels the generational welfare state seems to think the ELITE are anyone with a job, who can do things, are not scamming the system with bogus disability claims... they automatically attack any lifestyle that threatens their leisure do-nothing status.
Utter bullshit.
Imagine tubing down a river with friends and you notice a waterfall up ahead, and you ALL are going to go over it, doesn't mean you can do anything about it or are guilty of 'Running them over a cliff'.
Observation of a fact of overshoot, DOESN'T get you the power of choosing.
Peak Oil = eugenics
What utter bullshit from a disinformationalist
met old gfreind in santa monica last month... she gave me a book called MAGIC about the word GRATITUDE.. seems all the sm in crowd think they NEED to do to get MORE bling is proactively be GRATEFUL for it. they have this book of magic gratitude SPELLS they they do in group book studies to manifest what they want.. stuff OTHER people work to produce. its nice psychology.. but shitty economics
Fools & Their Money
Economies are built from the bottom up, by parents who make sacrifices for their children, not by babysitters who escort children from government activity to government activity. Economies are administered from the top down, by arbitrary leaders promising the majority something for nothing, which can only be derived by criminalizing the minority, printing money and arbitrarily assigning it to the minority’s children, until the economy blows up.
Communism doesn’t work, has never worked, and will never work, but the majority is always practicing it, arbitrary peer pressure as a means of extortion. Blaming the individual for system error, no matter how pretty the language in the constitution, merely grows the virus, and American Government too has run its course. The big plan all along was to eliminate anonymous money, without which no work is done, and why the Fed finds itself trapped in a corner, with the interconnected economy it built imploding toward it.
The interest rate on credit is irrelevant, because no one capable of work cares. Whether the Fed gives the money to government lackeys, billionaire market-makers, or welfare recipients, public, private or non-profit corporations making up the Foundation, makes not a bit of difference. An empire is merely a temporary bridge to nowhere, which the majority occupies until it collapses, when parents move the supports from the collector. It’s always the same show; the participants are absolutely certain that an irrational market can outlast all intelligent individual investors, because that is what they learned in school.
Capitalism, socialism or communism; Trump, Hillary or Sanders; it’s all the same to labor, a side show. Like all else in the universe, human behavior is subject to physics. At economic initiation, you are paid to work. At the end of an empire cycle, where you are now, you are paid to be stupid, with a gang wherever you go, operating on the assumption that you must join because they did. After two generations of training kids that communism is democracy, from the womb, there is no turning the that clock back. The best you can do is minimize your exposure.
The Bible was ‘Authoritatively Approved’ by the king. What does that tell you?
It tells me that you must identify your own talent and take responsibility to develop the necessary skills to express it. Working within the empire is an oxymoron. The empire begins and ends with Family Law, breeding a financial black hole as a WMD, which can only have one outcome, but treat the symptoms all you like, feeding the healthcare system. Having your babies at the hospital, run by Nazis like a prison camp, to breed out adaptation, is the last thing you want to do.
Labor, however, throws its children into the deep end shortly after birth, to trigger their instinct for survival accordingly. Without work, there are no assets, and paying people with real estate inflation can only breed stupid. Why would you pay Saudi Arabia, both the Bush and Clinton families, to bankrupt you? Where do you suppose Bernie is going to get another $20 Trillion to feed margin leverage, other than falling living standards and increasing income inequality?
They aren’t called mass-holes by accident. The majority studies History, and learns nothing, ruling only itself, backward in time, unless you choose otherwise, to employ it as a quantum lever. Normalization is the path to hell. Of course Bernie wants to eliminate cash, implement negative interest rates, and put everyone on Obamacare surveillance. And the critters are lining up to hear him say so, because money, debt assigned to your children, is the communist prize for compliance. But I’m just an old school dinosaur, watching a broken elevator, equipped with technology for the purpose, hold up the entire new school economy, while the communists ‘vote’ to see who is going to ‘fix’ it next; what do I know?
Who do you suppose wrote the Patriot Act? Given the weakness of the majority and its reflected authority, insecurity breeding insecurity, what do you suppose is the wise thing to do with their money?
If you don’t like this speed, you are certainly not going to like the next one.
Creating more money just dilutes the value of the assets produced... every other use of "capital" is a misallocation designed to defraud and steal real wealth.
Who needs resources when you have Magical Money.
The US Dollar just seems to glow with this Magical ability to make believe it's actually worth something. And the strange thing is, for the 5 Wall St Banks and the Club FED, the US Dollar has absolutely no value to them what-so-ever. It's only the people outside thiese organisations that believe it has value. That's where the Magic comes in. And people will voluntarily exchange their goods for these Magical Beans.
Finally, somebody Gets It. Finite resources are FINITE. Printing more money to chase its own tale merely causes the prices (as determined in money) to rise. Nothing expands the actual resource except energy and work. And often even that is insufficient.
... by definition nothing expands the actual finite resource ... without exception.
Very succinctly stated. The author needs to go back to the thinking corner and start over by getting his definitions straight.
"sufficient new resources will emerge if the price is high enough."
Let me ask does the stone age has ended because of shortage of stones?
Does the copper age has ended because of shortage of copper?
The current oil age will not end because of shortage of oil, and BTW even today oil is constantly rebuild. It just takes time.
Of course will alternatives get more attractive if one thing gets too expensive. I don't know what he's up for, but it seems he suggestes dictatorship against the oil age.
Let me put in anotther word, every money under the control of states ist just bribe money. It's used to support the own surviving as sponger. Feel free to proof me wrong about that.
If I may, money can actually FAKE to manufacture resources. Methinks of gold-plated tungsten, fake certification papers and so on.
So, money DILUTES resources.
what?!? are you suggesting the fed can't print joules, water, hydrocarbons, lithium, copper, etc?
inconceivable!!!
You cannot get unlimited amounts of OIL because OIL is a finite resource.
But you don't need oil because it is oil. You need oil because it is energy.
And you CAN GET UNLIMITED ENERGY at some price...because energy cannot be destroyed or created, but only can transition from one state to another. It is the Law of Conservation of Energy.
The trick is in understanding that you don't need one particular type energy, but the cheapest energy available. So when energy from one source becomes too expensive to manage (coal, wood) you transition to another (oil). Ironically, there is a great deal of useable shale in the world. And it is cheap. The expense is in turning it into oil rather than in using it in whatever way we find most efficient.
Unfortunately quite apart from the fundamental physics, we humans become married to particular methods as a sociological phenomenon. Price, if we allow it, will break those psychological boundaries.
For instance...I asked why we want to convert shale to oil before use, when we could certainly find another more efficient form for it.
Similarly, why are we still using internal combustion engines? Why, when we are perfectly able to produce equal-or-higher efficiency external combustion engines, that are much cleaner burning, and require much less in the way of accessories to do any particular job? Seriously, the only answer to that question is political and psychological... the answer is because we've formed industries into Cartels, which makes innovation much harder to get to market, and we simply can't imagine doing things any other way.
It is supremely stupid.