Either way, the Idiocracy better grow up ASAP or face self-inflicted annihilation...
Lord of the Flies
Not too surprisingly, history's longest economic expansion coupled with copious amounts of junk food and junk culture has created a soft and decadent society totally incapable of facing reality on any level. A merely incompetent society is one incapable of solving problems. However, this infantile society is not even capable of acknowledging problems, much less attempting to fix them. All efforts are instead expended upon obfuscation, denialism, self-delusion, endless debate and procrastination. Today's Lost Boys in positions of leadership, were never forced to grow up. Reality was suspended during their entire lifetime so they took the path of least resistance and convinced themselves (and most others) that somehow being a loud, aggressive windbag was the same as being effective and successful.
Now Only a Deep Economic Reset Can Save the Planet
As far as the environment goes, only a deep economic reset can save this planet, and perhaps even save mankind. Anything short of completely wiping out the status quo and the greedy morons who propagate it, will not be sufficient. The consumption-oriented lifestyle with its attendant fixation on material aggregation and external gratification must yield to a sustainable way of living. Fortunately we live in the world's largest ponzi scheme, with no comparison in magnitude, which means collapse is inevitable.
Ponzi Schemes Always Fail - This One Is Failing Already...
Ponzi schemes fail because they run out of money. Stores of capital (aka. savings) have been liquidated as income, so when it comes time for a capital call, it will very quickly turn into a bank run when investors realize that there is no money. The recurring trade and fiscal deficits being sent from developing nations to developed nations represent their savings which are now spent. The money is gone and there is zero collateral left behind. Likewise, after 2008, global millionaires and billionaires foolishly invested $33 trillion back into global markets. Having unleashed Shock Doctrine methods on the stunned Middle Class in the wake of the financial collapse, they ironically reinvested their proceeds back in to the globalized ponzi economy. They bought sovereign bonds in countries that spent the money yet have no ability to pay it back and have no collateral. That money is gone. Similarly, global asset markets now being manipulated higher by speculative hot money are a hollow house of cards supported merely by ongoing debt accumulation and an ephemeral economy. Once the selling begins, prices will collapse. That money may as well already be gone. It took over four years to manipulate the market up to these levels and it can all collapse in a matter of days or weeks when the bank run begins. All of these financial assets are not backed by anything tangible so this entire financial illusion is merely supported by a thin strand of confidence that can break at a moment's notice. Maybe if we hadn't already been through two monetary-fueled boom and busts just in the past decade, we could all shove our heads up our asses and pretend otherwise...
A World Without Money
Capital has never been as abundant and cheap as it is in this current era. That cheap capital is purely a function of the imbalanced trade flows between wealthy nations and developing countries. Therefore, when markets collapse, the trade imbalances will disappear, and so will the excess capital. We will go from a world awash in cheap capital, to a world starved of capital. The current artificially generated excess of capital will not be repeated in our lifetime. Meanwhile, our current infrastructure base is totally dependent upon cheap and abundant capital. So when the inflows of capital end, then "all of this" will cease to function as normal. At that point, the consumption-oriented lifestyle will be an artifact of history.
For those of us who were wrong about Peak oil, it's because as we have found out during the past decade, there is no shortage of oil in the earth's mantle. However, there is an extreme shortage of cheap oil. The U.S. became a net importer of oil way back in 1970 yet last year the U.S. imported the least amount of oil since 1991 (although still imports 40%). Why? Because the price of oil is 10x higher today than it was fourteen years ago. It's amazing how much oil you can find when the price goes up 1,000% percent. Imagine how much they could find when oil goes up another 1,000% to $1,000. Don't be ludicrous. Of course, at some point price will impinge upon consumption. However, before that could happen the issue won't be high prices it will be low prices. Peak oil was never the problem, the problem was always Peak Capital. Today's deep oil wells are only made possible by enormous infusions of capital with 20 year investment horizons. These investments are premised upon stable and high prices as long as the eye can see. Now look at the graphs below - first of oil and the second of commodities. Both are massively correlated to the global ponzi economy. Those prices are neither stable nor sustainable. Back in 1999, the price of oil was a mere $12 per barrel and there was zero investment in new oil exploration. Without price stability, and cheap capital, funding for oil exploration will once again will dry up. Without capital, "deep" oil will remain deep. Alternating low and then high oil prices will lead to recurring recessions and depressions given that the current artificial excess of capital will not be repeated in our lifetime. Peak capital will make peak oil a reality at which point Kyoto Summits will become even more pointless.
The hellish cycle of oscillating oil prices will continue until mankind eventually adopts a sustainable way of living not dependent upon copious amounts of cheap oil - Or self-destructs - whichever comes first.
West Texas Intermediate Crude Oil (S&P 500 in background)
The persistent weakening in economic activity is self-evident in these two charts where both oil and commodities are no longer correlating strongly to the stock market...
