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After Corona - it really is TEOTWAWKI
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UndercoverElephant



Joined: 10 Mar 2008
Posts: 10987
Location: south east England

PostPosted: Sun Mar 29, 2020 7:35 pm    Post subject: After Corona - it really is TEOTWAWKI Reply with quote

I think we need a separate thread for where this whole situation is leading, and what comes after. The bigger picture and longer-term predictions. So let's start by asking the most general question: where are heading? What is going to be the role of this pandemic in the grand sweep of human history?

My best current answer:

It is going to be at least two years before the pandemic itself dies down, whether than is due to the availability of a vaccine, or because three quarters of the global population has been exposed to the virus. But by then, our current economic system will be broken beyond repair.

I am now reasonably confident in predicting that we are heading for Stagflation on Steroids. So do these people:

https://edition.cnn.com/2020/03/10/investing/stagflation-economy-coronavirus/index.html
https://www.intellectualtakeout.org/article/coming-coronavirus-stagflation/
https://www.cnbc.com/2020/03/19/what-comes-after-coronavirus-for-economy-worry-about-stagflation.html
https://www.ft.com/content/1dcaab2a-40e3-11ea-bdb5-169ba7be433d
https://seekingalpha.com/article/4334438-potential-for-stagflation

What is stagflation?

https://www.thebalance.com/what-is-stagflation-3305964

Quote:
Stagflation is a combination of stagnant economic growth, high unemployment, and high inflation. It's an unnatural situation because inflation is not supposed to occur in a weak economy. In a normal market economy, slow growth prevents inflation. As a result, consumer demand drops enough to keep prices from rising. Stagflation can only occur if government policies disrupt normal market functioning.


Current conditions are not just ripe for stagflation, but for the most extreme form of stagflation imaginable. We have a combination an economy that is not just weak, but has largely been shut down, and money-printing on a scale that dwarfs everything that happened in the wake of the 2008 financial crisis. Government polices aren't just "disrupting normal market functioning." The "normal market" has vanished. Government policies are all that is left.

Stagflation was supposed to be consigned to the history books:

Quote:

Why Stagflation (Probably) Won't Reoccur

In 2011, people became concerned about stagflation again. They worried that the Fed's expansive monetary policies, used to rescue the economy from the 2008 financial crisis, would cause inflation.

At the same time, Congress approved an expansive fiscal policy. It included the economic stimulus package and record levels of deficit spending. Meanwhile, the economy was only growing 1% to 2%. People warned of the risk of stagflation if inflation worsened and the economy didn't improve.

This massive increase in global liquidity prevented deflation, a far greater risk. The Fed won't allow inflation to go beyond its inflation target of 2% for the core inflation rate. If inflation rose above that target, the Fed would reverse course and institute constrictive monetary policy.

The unusual conditions that created stagflation in the 1970s are unlikely to reoccur. First, the Fed no longer practices stop-go monetary policies. Instead, it commits to a consistent direction. Second, the removal of the dollar from the gold standard was a once-in-a-lifetime event. Third, the wage-price controls that constrained supply wouldn't even be considered today.


Firstly, saying the Fed is committed to a consistent direction has become rather silly, because there's nowhere further for it to go. It has already dropped interest rates to zero and committed to infinite money-printing. The only other thing it can do is go back in the other direction, unless we're talking negative interest rates (which brings its own fatal problems).

Secondly, while it is true that the dollar can only be removed from the gold standard once, it is also true that gold now stands as the benchmark against which all fiat currencies - the entire monetary system - is measured. And that means stagflation could still bring that system down, because the price of gold and silver will go to the moon.

Thirdly, it is very premature to talk about what wouldn't even be considered today. The person who wrote those words last year did not imagine the crisis the world finds itself in right now.

I think stagflation is now guaranteed, and I also think that this year, due to a massive drop in global dimming, we are going to see a big lurch in global warming. So we're going to be faced with the stark reality of both ecological and economic collapse, concurrently.

What happens after stagflation sets in?

My guess is stagflation all the way down. Stagflation becomes the new normal, and techno-industrial civilisation begins its first big leg down towards collapse. The monetary system doesn't collapse, but all forms of storing value which are tied to the fiat money system will start losing value with respect to those that don't. In other words, things like precious metals, property/land and fine art will be continually inflating in price (at maybe 10% or 20% a year), while everything else, including cash and government debt, will be losing real value at a similar rate.

This presumably leads to revolutions, wars, starvation and die-off.

Is there a way to avoid it?

Well, there's eco-socialism. If we want to try to save something resembling civilisation as we understand it, then an ecologically-sustainable form of socialism is the only game in town.

Personally I doubt it will happen, because the general population is too stupid to understand why it is needed and unwilling to revolt to the extent needed to make it happen.
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BritDownUnder



Joined: 21 Sep 2011
Posts: 684
Location: Hunter Valley, NSW, Australia

PostPosted: Sun Mar 29, 2020 8:59 pm    Post subject: Reply with quote

After the dust has settled I think the following will happen. Points in no particular order.

Less globalisation - more localisation and local production of parts and goods.
Less just in time production.
Less travel and border restrictions will go up at the drop of a hat next time.
More socialism and public works to soak up the unemployed.
More working from home.
A lot more public debt to pay off after the stimuli have dissipated.
People taking more holidays at home. I suspect the Spanish holiday has been killed off by the coronavirus and Brexit.

My wish list would be...

More renewable energy projects and in particular energy storage.
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clv101
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Joined: 24 Nov 2005
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PostPosted: Sun Mar 29, 2020 10:55 pm    Post subject: Re: After Corona - it really is TEOTWAWKI Reply with quote

UndercoverElephant wrote:
...I also think that this year, due to a massive drop in global dimming, we are going to see a big lurch in global warming.

There are currently 60% fewer aeroplanes in the sky than a couple of weeks ago. Also a lot fewer vehicle miles being driven and presumably a lot less fossil fuel being burnt in power stations. Just eyeballing the UK electricity consumption, the drop over the last fortnight looks similar to the drop over Christmas.

Any guess for UK and/or Global GDP in 2020? -5%, -10%, -20%?
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Little John



Joined: 08 Mar 2008
Posts: 8076
Location: UK

PostPosted: Sun Mar 29, 2020 11:47 pm    Post subject: Reply with quote

Social Liberalism is dead. Globalist capitalism and socialism are dead. The full blooded return to nationalism with a capital N is what comes next. Maybe some form of national socialism. But, who knows really? Whatever flavour it takes, it will be nationalist.

This will include such things as a push by many countries to be as self sufficient as possible. Especially in essential goods and services. So, countries like the UK, which is massively overpopulated, will be uniquely f***ed in the period to come.

All of the above will involve the rise of authoritarian governments all around the world. When the shit hits the fan and people face real hardship and hunger, they are only interested in security at any cost and will duly elect strong-arm politicians who promise them that security. This, will, in the long run, even lead to the rise of a new "Caesarism" in some countries.

All the while, life gets harder for most people and, as it does, the political responses will become ever more extreme. In amongst this societal degradation, older, more primitive cultural forms will re-emerge including, perhaps, a return to hard line religiosity in most Western countries.

At some point, in Western Europe, I expect to see the expulsion of any ethnic minority group that does not fully and unambiguously toe the line with regards to a full throated allegiance to the nation state of which they are citizens. And even that may not save them if real hunger and hardship stalks the land. What happened to the Jews may yet return.

None of the above is any kind of revelation to me. I have been thinking along these lines for some time. But, I thought this was going to be the future of my kids perhaps by the time they got into their later years after I had long gone and definitely in their kids' lifetimes. But, now I think I may get to see quite a bit of it before I die. Just so long as this virus does not get me first.
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UndercoverElephant



Joined: 10 Mar 2008
Posts: 10987
Location: south east England

PostPosted: Mon Mar 30, 2020 12:34 am    Post subject: Re: After Corona - it really is TEOTWAWKI Reply with quote

clv101 wrote:
UndercoverElephant wrote:
...I also think that this year, due to a massive drop in global dimming, we are going to see a big lurch in global warming.

There are currently 60% fewer aeroplanes in the sky than a couple of weeks ago.


...and still falling.

https://www.flightradar24.com/data/statistics

Quote:

Any guess for UK and/or Global GDP in 2020? -5%, -10%, -20%?


At least -15%.
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vtsnowedin



Joined: 07 Jan 2011
Posts: 6189
Location: New England ,Chelsea Vermont

PostPosted: Mon Mar 30, 2020 12:35 am    Post subject: Reply with quote

LJ wrote:
Quote:
This will include such things as a push by many countries to be as self sufficient as possible. Especially in essential goods and services. So, countries like the UK, which is massively overpopulated, will be uniquely f***ed in the period to come.

I think the UK Lioness can and will trade with the cubs especially Canada and Australia and collectively be self sufficient. Even the USA will trade favorably with the UK when it is in both countries interest. So food and energy will not be in short supply.
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vtsnowedin



Joined: 07 Jan 2011
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Location: New England ,Chelsea Vermont

PostPosted: Mon Mar 30, 2020 12:43 am    Post subject: Re: After Corona - it really is TEOTWAWKI Reply with quote

clv101 wrote:
UndercoverElephant wrote:
...I also think that this year, due to a massive drop in global dimming, we are going to see a big lurch in global warming.

There are currently 60% fewer aeroplanes in the sky than a couple of weeks ago. Also a lot fewer vehicle miles being driven and presumably a lot less fossil fuel being burnt in power stations. Just eyeballing the UK electricity consumption, the drop over the last fortnight looks similar to the drop over Christmas.

Any guess for UK and/or Global GDP in 2020? -5%, -10%, -20%?
You guys need to make up your cotton pickin minds. If burning fossil fuel and emitting CO2 creates global warming then burning less should be good for the climate. If burning less causes less global "dimming" and global warming then we are caught between a rock and a hard place. It has to be one or the other. You can't have it both ways.
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UndercoverElephant



Joined: 10 Mar 2008
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Location: south east England

PostPosted: Mon Mar 30, 2020 12:49 am    Post subject: Re: After Corona - it really is TEOTWAWKI Reply with quote

vtsnowedin wrote:
clv101 wrote:
UndercoverElephant wrote:
...I also think that this year, due to a massive drop in global dimming, we are going to see a big lurch in global warming.

There are currently 60% fewer aeroplanes in the sky than a couple of weeks ago. Also a lot fewer vehicle miles being driven and presumably a lot less fossil fuel being burnt in power stations. Just eyeballing the UK electricity consumption, the drop over the last fortnight looks similar to the drop over Christmas.

Any guess for UK and/or Global GDP in 2020? -5%, -10%, -20%?
You guys need to make up your cotton pickin minds. If burning fossil fuel and emitting CO2 creates global warming then burning less should be good for the climate. If burning less causes less global "dimming" and global warming then we are caught between a rock and a hard place. It has to be one or the other. You can't have it both ways.


The dimming is a short term effect. It usually suppresses the temperature, so will cause a rise in temperature when it stops, but that is a one-off rise. The drop in greenhouse emissions is a cumulative effect rather than one-off, and is longer-term.
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fuzzy



Joined: 29 Nov 2013
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Location: The Marches, UK

PostPosted: Mon Mar 30, 2020 3:07 am    Post subject: Reply with quote

Politicians and the media might grow up somewhat in the face of total stupidity - exposed so fast that even the public can see it.

After 80 years of mass immigration against the UK public wishes, and 3+ years of scumbags ranting about the EU dream, every country has stopped travel, spent a fortune that couldn't be done, centrally planned [incompetently], noticed tax avoiders [cruise ships] remembered resource planning, thought about manufacturing, worked less etc.

So business jollies, stupid cars, skiing [because your a GP and worth it], private schools and all the other lifestyle BS could be less desirable. If we first survive the clown hoards who couldn't buy 2 bog rolls before a month ago.
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vtsnowedin



Joined: 07 Jan 2011
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Location: New England ,Chelsea Vermont

PostPosted: Mon Mar 30, 2020 3:35 am    Post subject: Reply with quote

fuzzy wrote:
Politicians and the media might grow up somewhat in the face of total stupidity - exposed so fast that even the public can see it.

After 80 years of mass immigration against the UK public wishes, and 3+ years of scumbags ranting about the EU dream, every country has stopped travel, spent a fortune that couldn't be done, centrally planned [incompetently], noticed tax avoiders [cruise ships] remembered resource planning, thought about manufacturing, worked less etc.

So business jollies, stupid cars, skiing [because your a GP and worth it], private schools and all the other lifestyle BS could be less desirable. If we first survive the clown hoards who couldn't buy 2 bog rolls before a month ago.
Yes there will be many sensible people that learn from this event and live life always prepared for another crisis and well within their means. But as has always been the case throughout history there will be many that throw caution to the winds and live for the moment.
All we will get here is a different division with more savers and less spendthrifts.
It would be nice if the savers became the majority and could vote in government that would keep the countries finances sound but I suppose that is too much to ask.
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fuzzy



Joined: 29 Nov 2013
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Location: The Marches, UK

PostPosted: Mon Mar 30, 2020 3:39 am    Post subject: Reply with quote

Change in 1 month:

https://summit.news/2020/03/23/new-york-health-officials-told-residents-to-congregate-in-huge-crowds-in-defiance-of-coronavirus/
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Vortex2



Joined: 13 Jan 2019
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Location: Somewhere on reddit

PostPosted: Mon Mar 30, 2020 9:49 am    Post subject: Reply with quote

I suspect that a quiet network of capable people and businesses will emerge.

We will always need doctors, techies etc ... these will do fine.

The 'froth' making money by importing cheap plastic tat won't do so well.

The market for LGBT toilet doors may be hit quite badly.
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PS_RalphW



Joined: 24 Nov 2005
Posts: 5760
Location: Cambridge

PostPosted: Mon Mar 30, 2020 10:20 am    Post subject: Reply with quote

Countries with hard-line religion at the moment are ignoring lockdown orders or requests. This will result in virus hotspots as in South Korea. Hopefully the surviving congregation will realise how stupid their leaders have been
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Vortex2



Joined: 13 Jan 2019
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PostPosted: Mon Mar 30, 2020 11:03 am    Post subject: Reply with quote

PS_RalphW wrote:
Countries with hard-line religion at the moment are ignoring lockdown orders or requests. This will result in virus hotspots as in South Korea. Hopefully the surviving congregation will realise how stupid their leaders have been

Happening in the UK and France ... immigrant communities are ignoring - or haven't heard about - the lock-down.

No PC Plod in their right mind would wander into Alum Rock or similar huge Moslem area to tell the locals to go indoors.
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Little John



Joined: 08 Mar 2008
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PostPosted: Mon Mar 30, 2020 11:10 am    Post subject: Reply with quote

Vortex2 wrote:
PS_RalphW wrote:
Countries with hard-line religion at the moment are ignoring lockdown orders or requests. This will result in virus hotspots as in South Korea. Hopefully the surviving congregation will realise how stupid their leaders have been

Happening in the UK and France ... immigrant communities are ignoring - or haven't heard about - the lock-down.

No PC Plod in their right mind would wander into Alum Rock or similar huge Moslem area to tell the locals to go indoors.
Every culture has it's strengths and weaknesses. Yep, those ethnic minority communities ignoring the social distancing rules will likely pay a terrible price and may cause others to pay a price for their actions. But, those actions are not merely born of stupidity. They are born of a much more deeply entrenched communalism. A comunalism that, when shit hits the fan, may well stand them in better stead than some of the non-communities of isolated, atmomised individuals that surround them. Though, I suspect such non-communities will quickly re-learn the virtues of being useful to one's neighbors when the time comes. Humans are versatile and adaptable more than anything else.

But, on the ethnic minority thing, I just think that such communities may make the judgement that sometimes there really are worse things than death. I have some sympathy for that attitude.
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