My unpublished (100,000 word) book “The Financial Jigsaw”, is being serialised here weekly in 100 issues by Peter J Underwood, author
This book is about the most serious global financial crisis the world has ever faced. It started with rumblings in the first decade of the 21st century and the coming decades will see an exponential change in the way we live. You will already suspect that ‘things are not quite right with the world in general’ and you would be right. Economic growth, as we have known it in the past 200 years, is coming to an end.
It is odd that deep down we all know intuitively what is right or wrong; it is an essential part of our makeup to allow us to survive in a fundamentally hostile world. How many of us have ignored the signs by putting them aside, and choose to see the world as we would have it be?
Many will say that I am a doomsayer, looking only at the negatives, disregarding the innate genius of the human race to innovate and survive. After studying the global financial system and global economies for more years than I care to remember I find the evidence is undeniable that a trend of collapsing economic growth, initiated only fifty years ago, is now well established. The book presents the evidence and offers options for adapting to the new world paradigm that will inevitably emerge over time.
The St Louis Federal Reserve Bank recently reported that ‘real GDP growth fell and levelled off in the mid-1970s, then started falling again in the mid-2000s’. Real GDP per capita, a crucial measure, is presently 0.5% and defeats current arguments that we have been ‘recovering’ from the 2008 crisis at a steady and acceptable pace. We have in fact faced a ‘hidden depression’ where the privations, shortages and food lines of the past have been masked by unsustainable social programmes such as Food Stamps (SNAP) and other government manipulative contrivances.
When oil was first discovered, an energy return of 100 times the energy invested was obtained. Oil was easy to find and pump, it was in abundance, and it fuelled the expansion of the 20th-century global economies. The ratio ‘Energy Returned on Energy Invested’ (EROEI) is critical for the maintenance of our complex societies. The minimum ratio required to merely continue as normal is calculated to be somewhere between 30:1 and 20:1. It is estimated that EROEI is currently 10:1 and falling. Alternative energy has no better returns after accounting for the total costs of materials and transport required to create them in the first place as well as ongoing maintenance thereafter.
The reported growth in world GDP since 2008 has been achieved by increasing global debt using Quantitative Easing (QE), i.e. money printing, combined with almost zero interest rates by mainly America’s Federal Reserve Bank (the FED), China’s central bank, the European Central Bank (ECB), Bank of England (BoE) and Bank of Japan (BoJ). 21 Trillion dollars have been created out of thin air but have remained in the financial system’s global banks rather than trickling down to the general population.
This has created extreme wealth disparities between the top 1% and the remaining 99% of the people. Clearly this cannot go on indefinitely, because the more debt that is created the less growth is obtained. We will reach a point soon when adding more debt results in negative growth.
Our global energy systems and global financial systems evolved during a natural expansionary phase of global growth fuelled with cheap oil; but will be unable to cope with the degree of contraction coming soon. A completely new economic management system will be required to deal with the massive changes that are taking place around the world today. To understand what is happening and why it is essential for us to handle the effects of these changes in our individual lives, and to provide the knowledge of how financial systems work, is the motivation for this book.
The problem of structural decelerating growth and, eventually, outright contraction has no solution except to change the way we organize society. It is significant that this is already happening as we witness the rise of populism throughout the Western world.
The people will simply not accept that important policy and economic decisions that affect them directly are taken by remote, unelected entities which have proven in the past to have failed to remedy the obvious deficits extant in our societies today. As economic growth fails so our present centralized, global systems will also fail. A new form of governance will have to be constructed by the people themselves, who will not be dictated to by strangers.
To be continued next Saturday
If we let TPTB decide for us, we will be sheep for slaughter.
What is a “qualified humanistic counsellor”?
Try a google search for “humanistic psychology”, a 20th century model developed by people including Carl Rogers, Abraham Maslow and Rollo May.
Humanism itself is a religion based on materialism and socialism, according to the Humanist Manifesto (1933):
“Today man’s larger understanding of the universe…requires a new statement of the means and purposes of religion. Such a vital, fearless, and frank religion capable of furnishing adequate social goals…must be shaped for the needs of this age.”
“Humanists are firmly convinced that existing acquisitive and profit-motivated society has shown itself to be inadequate and that a radical change in methods, controls, and motives must be instituted. A socialized and cooperative economic order must be established.”
Note that both Carl Rogers and Rollo May graduated from the Teachers College at Columbia University, home of John Dewey, a signer of the Humanist Manifesto and a former president of the American Psychological Association.
I think you might have misunderstood where I stand because of the humanistic context. I believe in the Austrian principles of small government (localised perhaps), sound money and free markets within a competitive, merit-driven society.
My adherence to humanistic principles ceases at the individual level and I don’t presume to impose these on society in general.
“Humanists are firmly convinced that existing acquisitive and profit-motivated society has shown itself to be inadequate and that a radical change in methods, controls, and motives must be instituted. A socialized and cooperative economic order must be established.” In this case I firmly disagree with these propositions and, as I say, restrict these to the individual counselling level, one-on-one only.
Thanks John for a very comprehensive answer. I am in your debt! Not to be taken too literally!
It’s hard to imagine how one be an “Austrian” proponent of decentralization, and a “Humanist” proponent of a “socialized and cooperative economic order” at the same time.
The Rockefellers, who dominated both the energy and financial sectors (Exxon, Citigroup, etc), were the primary architects of the so-called “liberal world order”, including the Federal Reserve, the Council on Foreign Relations, the United Nations, and dozens of interlocking organizations.
They have also sponsored the humanist Teachers College and its psychology department from the beginning, along with the London School of Economics founded by the Fabians. Nothing they produce is intended to help the proles “solve” the jigsaw puzzle and overthrow the oligarchical system, quite the contrary.
See for example the “Earth Charter” (1997), drafted by Steven Rockefeller and Maurice Strong, which is even more explicit than the Humanist Manifesto regarding their plans for centralized “global governance” and “sustainable development”.
Note that Valerie Rockefeller Wayne, a CFR member who succeeded her uncle Steven Rockefeller as chairman of the Rockefeller Brothers Fund, is also a trustee at Teachers College.
https://www.rbf.org/people/valerie-rockefeller
See above comment. I hope I have convinced you that I am no humanist at the greater levels of society. I see no conflict with my application of these principles at the one-on-one counselling level with those of Austrian economics at the higher levels of society.