Tax Revenue

The Physics Of Energy & The Economy

When the economy collapses, it will collapse down to a lower sustainable level. Much of the world’s infrastructure was built when oil could be extracted for $20 per barrel. That time is long gone. So, it looks like the world will need to collapse back to a level before fossil fuels - perhaps much before fossil fuels.

Visualizing The World's Most Famous Case Of Deflation, Part 1

The Great Depression was the most severe economic depression ever experienced by the Western world. It was during this troubled time that the world’s most famous case of deflation also happened. The resulting aftermath was so bad that economic policy since has been chiefly designed to prevent deflation at all costs.

Another Nail In The US Empire Coffin: Collapse Of Shale Gas Production Has Begun

Without energy, the U.S. economy would grind to a halt. All the trillions of Dollars in financial assets mean nothing without oil, natural gas or coal. Energy drives the economy and finance steers it; and the financial industry is driving us over the cliff. The U.S. Empire is in serious trouble as the collapse of its domestic shale gas production has begun.

Why Oil Under $30 Is A Major Problem

Unfortunately, what we are facing now is a predicament, rather than a problem. There is quite likely no good solution. This is a worry. During the last 18 months we have read incessantly that low oil prices, for example, $30 per barrel oil, will stimulate the economy, and the economy will soon bounce back. What is wrong with this story? A lot of things, as we see it...

The Demise Of Dollar Hegemony: Russia Breaks Wall St's Oil-Price Monopoly

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy.

You Know Negative Interest Rates Are Bad When...

...the Swiss canton of Zug is asking its citizens to delay paying their taxes for as long as possible, because the cantonal government doesn’t want to take in a pile of cash, only to end up paying the bank interest on all the tax revenue.

2016: Oil Limits & The End Of The Debt Supercycle

The problem of reaching limits in a finite world manifests itself in an unexpected way: slowing wage growth for non-elite workers. Lower wages mean that these workers become less able to afford the output of the system. These problems first lead to commodity oversupply and very low commodity prices. Eventually these problems lead to falling asset prices and widespread debt defaults. These problems are the opposite of what many expect, namely oil shortages and high prices. This strange situation exists because the economy is a networked system. Feedback loops in a networked system don’t necessarily work in the way people expect.

Congress's $1.15 Trillion Spending Bill: Heads They Win, Tails You Lose

Fyodor Dostoyevsky’s seminal masterpiece Crime and Punishment is often thought of as one of the longest classics at more than 200,000 words. The Consolidated Appropriations Act of 2016, which was signed into law on Friday, is nearly twice as long. At 887 pages, the bill allocates $1.15 trillion in war and discretionary spending for fiscal year 2016 which began almost three months ago. (That’s an average of $1.3 billion in spending PER PAGE of the bill.) In making it public law, President Obama has effectively signed the death warrant of the US government’s finances.

$20,000 Gold And The End Of "Pollyanna-ish Do-Goodery"

"They just won't let the scales balance... it is a rampant narcissistic megalomania that somehow some guy in a air-conditioned office can best repliacte the free market and centrally plan our affairs... Their starry-eyed pollyanna-ish do-goodery never seems to pan out."

There's No Upside Left

The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.

Denmark To Confiscate Gold, Jewelry, & Valuables From Refugees

Danish border guards may confiscate gold, jewelry, diamonds, and other valuables from refugees as they enter the country (though wedding rings are now off limits). The Danish government’s excuse is that they need to confiscate assets from refugees in order to pay for the services they’re providing to those same refugees. Having armed men indiscriminately seize refugees’ personal belongings doesn’t strike me as the best representation of a free society. Not that this matters anymore.

10 Investor Warning Signs For 2016

Wall Street’s proclivity to create serial equity bubbles off the back of cheap credit has once again set up the middle class for disaster. The warning signs of this next correction have now clearly manifested, but are being skillfully obfuscated and trivialized by financial institutions. Nevertheless, here are ten salient warning signs that astute investors should heed as we roll into 2016.

Economic Growth: How It Works, How It Fails, & Why Wealth Disparity Occurs

Economists have put together models of how an economy works, but these models were developed years ago, when the world economy was far from limits. These models may have been reasonably adequate when they were developed, but there is increasing evidence that they don’t work in an economy that is reaching limits.