Deleted member 31092
Ascending beyond all time and space
- Nov 19, 2020
- 96d 41m
|By now, everyone not comatosed has noticed that everything is getting much more expensive. I will explain why this is just the beginning, and why the price increases will only be far more severe and crippling in the future.|
What is money or fiat currency? Take out some dollars, euros, pesos, rials, rupees, pounds etc from your wallet- a piece of paper with a number and perhaps a picture of a dead guy. Can you eat it? Can you chew on it and gain sustenance? Can you crumple it up and throw it in the gas tank? Of course not. It is nothing more than a symbol- dollars, euros, yuan's, yen etc, symbolize the ability to perform work.
What is the actual ability to perform work? Energy. Energy, in the form of animal or manpower, or in the modern world, fossil fuels, particularly oil. Oil is what allows work to be done, with its approximately 25,000 hours worth of human labor in a single barrel. Oil is what allows resources to be extracted, food to be grown, goods to be shipped, people to be moved, items to be manufactured, etc, on a mass scale. Look around you- every item you see was made and transported using oil. Oil isn't just one part of the economy, oil is the economy.
The world was able to ostensibly "get away" with its last QE/stimulus binge after the 08 crash due to the American "shale oil revolution" providing 8 million barrels of extra oil per day to the market. That won't be the case this time around. Global conventional oil production peaked in 2005 or 2006, and it is very likely that global general oil production peaked in 2018, and will never again exceed those levels. It is also very likely that the shale oil industry will collapse in the next 3-5 years. Less oil means less goods and services and economic contraction, it's that simple. More fiat currency+less energy/oil to back it up means that each individual unit of fiat currency must lose purchasing power. And what happens when funny money is being created by the trillions of dollars while energy production is falling off a cliff? Venezuela on steroids.