Why I Don’t Believe Randers’ Limits to Growth Forecast to 2052 Jorgen Randers published a book in 2012 called 2052: A Global Forecast for the Next 40 Years. A note on the front says, “A report to the Club of Rome, Commemorating the 40th Anniversary of The Limits to Growth.” If we compare the new book to the book from 40 years ago, we see some surprising differences. Figure 1. A person reading the front cover of 2052 might think that the model is quite close to the model used in the original The Limits to Growth analysis. It is possible to do some detective work regarding how the current model is constructed. A second reason why I don’t believe Randers’ forecast has to do with limitations of the original forecast. A third reason why I don’t believe the forecast in 2052 is because a model of this nature necessarily cannot model events that are important to ultimate collapse, but which happen on a smaller scale, and trigger cascading failures. Thus, Randers tells us he believes that he already knows that no swift change will take place. Conclusion
Weblog and Essays It's Time to Ditch the Consumer Price Index (CPI) April 17, 2014 So why does the government maintain such a transparently inaccurate and misleading metric? For three reasons. That the official rate of inflation doesn't reflect reality is obvious to anyone paying college tuition and healthcare out of pocket. The CPI calculates inflation based on the prices of a basket of goods and services that are adjusted by hedonics, i.e. improvements that are not reflected in the price of the goods. The CPI attempts to measure the relative weight of each component: Many argue that these weightings skew the CPI lower, as do hedonic adjustments. Over time, an artificially low CPI/COLA lowers government expenditures (and deficits, provided tax revenues rise at rates above official inflation). Those claiming the weighting is accurate face a blizzard of legitimate questions. In my analysis, the debate over inflation is intrinsically flawed. The geography of inflation doesn't register, either. The solution?
The Oil Drum | Discussions about Energy and Our Future How Economic Growth Fails We all know generally how today’s economy works: Figure 1 Our economy is a networked system. I have illustrated it as being similar to a child’s building toy. Ever-larger structures can be built by adding more businesses and consumers, and by using resources of various kinds to produce an increasing quantity of goods and services. There is no overall direction to the system, so the system is said to be “self-organizing.” The economy operates within a finite world, so at some point, a problem of diminishing returns develops. 1. As nearly as I can tell, the way economic growth occurs (and stops taking place) is as summarized in Figure 3. Figure 3. As long as (a) energy and other resources are cheap, (b) debt is readily available, and (c) “overhead” in the form of payments for government services, business overhead, and interest payments on debt are low, the pump can continue working as normal. Commodity prices are also likely to drop too low. 2. Figure 4 Figure 5 3. 4. Figure 6 Figure 7. 5. 6.
Grant's Interest Rate Observer Online TV Database - An open directory of television shows for HTPC software Deflationary Collapse Ahead? Both the stock market and oil prices have been plunging. Is this “just another cycle,” or is it something much worse? I think it is something much worse. Back in January, I wrote a post called Oil and the Economy: Where are We Headed in 2015-16? In it, I said that persistent very low prices could be a sign that we are reaching limits of a finite world. Needless to say, stagnating wages together with rapidly rising costs of oil production leads to a mismatch between:The amount consumers can afford for oilThe cost of oil, if oil price matches the cost of production This mismatch between rising costs of oil production and stagnating wages is what has been happening. Eventually, even at near zero interest rates, the amount of debt becomes too high, relative to income. A chart I showed in my January post was this one: Figure 1. The price of oil was trending slightly downward between 2011 and 2014, suggesting that even then, prices were subject to an underlying downward trend. Figure 2.
iTulip.com - The Contrary Market View - For Independent Financial Advisor, Currency Online Trading, Commodity Online Trading, FOREX Doomstead Diner Off the keyboard of Gail Tverberg Follow us on Twitter @doomstead666 Friend us on Facebook Published on Our Finite World on August 26, 2015 Discuss this article at the Economics Table inside the Diner Both the stock market and oil prices have been plunging. Back in January, I wrote a post called Oil and the Economy: Where are We Headed in 2015-16? Needless to say, stagnating wages together with rapidly rising costs of oil production leads to a mismatch between: The amount consumers can afford for oil The cost of oil, if oil price matches the cost of production This mismatch between rising costs of oil production and stagnating wages is what has been happening. Eventually, even […] Continue Reading…
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