The full title of this fascinating book by Tim Morgan is “Life After Growth: How The Global Economy Really Works And Why 200 Years Of Growth Are Over”.
I’ve always known that there is a money economy and a things economy. What I hadn’t focused on was how the thins economy is underpinned by energy. The author argues that in effect we have an energy based economy and while the money economy has been inflated by the explosion in debts and Quantitative Easing, the energy economy is deflating.
Why is that?
Because we cherry picked the biggest and best, most accessible, most productive sources of oil, gas and coal first and slowly but surely, the old sources are exhausted and the new sources that are developed aren’t as good. [click to continue…]
Problems appeared in the world finance systems in 2007 related all the way back to mortgages given to poor people in America who were unlikely to be able to repay the loans. These mortgages were packed up, divided and sold into the finance markets across the world.
My intent is not to give a big explanation of what happened and why. If you want more details, I have provided links to Wikipedia. My objective is to help you to think about the future but you may benefit from reminding yourself about the recent past.
In September 2008 after some difficult months problems exploded in America with the saving of Bear Stearns, Fannie Mae and Freddice Mac and the collapse of Lehmans Brothers.
This led to the Great Recession.
I mentioned the efficient market hypothesis earlier. Too much faith in how well it works by policy makers and regulators has been blamed for the build up of the bubbles that caused the crash. [click to continue…]