Class, Race, Hierarchy, and Social Relations in ‘The Long Emergency’
by JHK
Energy
Executive Summary
- The world's ongoing net energy recession will continue to drag GDP downwards unless a technology mircale occurs (unlikely)
- Reversing our net energy decline will be key to breaking out of this stagnation
- Solar capacity build-out is an important growing trend, as it offers "free" streams of future energy after its up-front costs
- Solar GW capacity is now growing at a classic exponential rate. The countries that invest the most here will have a long-term advantage over those that don't
- Stimulative programs that invest in renewable energy infrastructure are looking increasingly attractive to our current fiscal ones that are clearly failing to return us to previous levels of growth
If you have not yet read Part I: The Dead Weight of Sluggish Global Growth available free to all readers, please click here to read it first.
With OECD countries in an ongoing energy recession, and given that just about all major economies, both in the OECD and Non-OECD, depend on exports, the risk is that global trade and global GDP also start to slow down. In 2013, we see that is exactly what's starting to happen, as noted by the Economist:
According to The Economist's calculations, world GDP grew by just 2.1% during the first quarter of 2013 compared with a year earlier. Just 12 months ago, output was growing at a reasonable clip of 3.1%. The European Union, the world's second-largest economy, which welcomes its 28th member on July 1st, is back in recession. Meanwhile there are concerns about stumbling blocks as China seeks to rebalance toward a more consumption-oriented economy and more moderate growth rates. Long the mainstay of the world's fortunes, China alone has been responsible for nearly half of all world economic growth since the end of 2009 when the world began growing again.
While commodities from copper to oil have retained the majority of their price gains achieved over the past ten years, the fact remains that year-over-year inflation has settled in at a low, tepid level. Meanwhile, global wage deflation, a secular trend over the past decade, continues. Overall, this means that labor still has very little pricing power. Indeed, with structural unemployment now embedded in much of the OECD, the question remains: How will Western economies put enough people back to work to erase the idle labor pool?
How to Break Out of Stagnation
PREVIEW by Gregor MacdonaldExecutive Summary
- The world's ongoing net energy recession will continue to drag GDP downwards unless a technology mircale occurs (unlikely)
- Reversing our net energy decline will be key to breaking out of this stagnation
- Solar capacity build-out is an important growing trend, as it offers "free" streams of future energy after its up-front costs
- Solar GW capacity is now growing at a classic exponential rate. The countries that invest the most here will have a long-term advantage over those that don't
- Stimulative programs that invest in renewable energy infrastructure are looking increasingly attractive to our current fiscal ones that are clearly failing to return us to previous levels of growth
If you have not yet read Part I: The Dead Weight of Sluggish Global Growth available free to all readers, please click here to read it first.
With OECD countries in an ongoing energy recession, and given that just about all major economies, both in the OECD and Non-OECD, depend on exports, the risk is that global trade and global GDP also start to slow down. In 2013, we see that is exactly what's starting to happen, as noted by the Economist:
According to The Economist's calculations, world GDP grew by just 2.1% during the first quarter of 2013 compared with a year earlier. Just 12 months ago, output was growing at a reasonable clip of 3.1%. The European Union, the world's second-largest economy, which welcomes its 28th member on July 1st, is back in recession. Meanwhile there are concerns about stumbling blocks as China seeks to rebalance toward a more consumption-oriented economy and more moderate growth rates. Long the mainstay of the world's fortunes, China alone has been responsible for nearly half of all world economic growth since the end of 2009 when the world began growing again.
While commodities from copper to oil have retained the majority of their price gains achieved over the past ten years, the fact remains that year-over-year inflation has settled in at a low, tepid level. Meanwhile, global wage deflation, a secular trend over the past decade, continues. Overall, this means that labor still has very little pricing power. Indeed, with structural unemployment now embedded in much of the OECD, the question remains: How will Western economies put enough people back to work to erase the idle labor pool?
Executive Summary
- Fertility rates are experiencing a "natural decrease" at record levels across the U.S.
- Poverty rates are rising across the country, despite the "recovering" economy
- What exactly is "powering" U.S. economic growth? Perhaps much less than realized.
- Why we are likely in the calm before the storm when corporate profits peak right before an economic downturn
- The 3 most likely scenarios for the stock market from here
If you have not yet read Part I: Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?, available free to all readers, please click here to read it first.
One of the challenges the U.S. stock market will increasingly face in the years ahead is continued growth in the Dependency Ratio. The U.S. Census Bureau alerted us to this trend back in 2010. For keen observers of demographics, this couldn’t have been a surprise). The rate at which the Dependency Ratio is growing, and is set to grow further, is accelerating:
The U.S. Census Bureau reported today that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030. This time period coincides with the time when baby boomers are moving into the 65 and older age category…The expected steep rise in the dependency ratio over the next two decades reflects the projected proportion of people 65 and older climbing from 13 percent to 19 percent of the total population over the period, with the percentage in the 20 to 64 age range falling from 60 percent to 55 percent…“This rapid growth of the older population may present challenges in the next two decades,” said Victoria Velkoff, assistant chief for estimates and projections for the Census Bureau's Population Division. “It's also noteworthy that those 85 and older — who often require additional caregiving and support — would increase from about 14 percent of the older population today to 21 percent in 2050.”
This is precisely one of the key, ongoing headwinds that faced Japan's stock market for 20 years. When Japan's economy moved steadily into its low-growth phase, unable to generate sufficient jobs, fertility rates and household formation declined rapidly. As I explained in The Arrival of Japan's Sunset, these will not be cured by the current devaluation of the yen, despite naïve cheerleading. And neither will they be solved here in the U.S.
But in contrast to Japan, the United States is only just embarking on its slow growth phase. Its demographically challenged culture and economy will reinforce each other as we move ahead in time. And, it's not just the retiring class of workers that will massively increase the Dependency Ratio in the U.S. in years ahead…
Why This Recovery Is Coming to an End
PREVIEW by Gregor MacdonaldExecutive Summary
- Fertility rates are experiencing a "natural decrease" at record levels across the U.S.
- Poverty rates are rising across the country, despite the "recovering" economy
- What exactly is "powering" U.S. economic growth? Perhaps much less than realized.
- Why we are likely in the calm before the storm when corporate profits peak right before an economic downturn
- The 3 most likely scenarios for the stock market from here
If you have not yet read Part I: Marking the 4-Year Reflationary Rally: How Much Better Off Are We Really?, available free to all readers, please click here to read it first.
One of the challenges the U.S. stock market will increasingly face in the years ahead is continued growth in the Dependency Ratio. The U.S. Census Bureau alerted us to this trend back in 2010. For keen observers of demographics, this couldn’t have been a surprise). The rate at which the Dependency Ratio is growing, and is set to grow further, is accelerating:
The U.S. Census Bureau reported today that the dependency ratio, or the number of people 65 and older to every 100 people of traditional working ages, is projected to climb rapidly from 22 in 2010 to 35 in 2030. This time period coincides with the time when baby boomers are moving into the 65 and older age category…The expected steep rise in the dependency ratio over the next two decades reflects the projected proportion of people 65 and older climbing from 13 percent to 19 percent of the total population over the period, with the percentage in the 20 to 64 age range falling from 60 percent to 55 percent…“This rapid growth of the older population may present challenges in the next two decades,” said Victoria Velkoff, assistant chief for estimates and projections for the Census Bureau's Population Division. “It's also noteworthy that those 85 and older — who often require additional caregiving and support — would increase from about 14 percent of the older population today to 21 percent in 2050.”
This is precisely one of the key, ongoing headwinds that faced Japan's stock market for 20 years. When Japan's economy moved steadily into its low-growth phase, unable to generate sufficient jobs, fertility rates and household formation declined rapidly. As I explained in The Arrival of Japan's Sunset, these will not be cured by the current devaluation of the yen, despite naïve cheerleading. And neither will they be solved here in the U.S.
But in contrast to Japan, the United States is only just embarking on its slow growth phase. Its demographically challenged culture and economy will reinforce each other as we move ahead in time. And, it's not just the retiring class of workers that will massively increase the Dependency Ratio in the U.S. in years ahead…
Executive Summary
- The prevailing trends of the next several decades: contraction, down-scaling & re-localization
- How these trends will manifest in commerce, politics, employment & infrastructure
- Those who adapt now will be positioned to thrive
- Act now – ask forgiveness, not permission
If you have not yet read Part I: We've Dug a Pretty Damn Big Hole for Ourselves, available free to all readers, please click here to read it first.
We may never again restore trust in giant institutions ranging from the U.S. government to Harvard University to The New York Times. They have probably squandered their credibility and their legitimacy.
Anyway, the trends now moving human affairs are taking us away from both gigantism and the growth imperative that these things represent. The trends of the present moment in history are contraction, down-scaling, and re-localization.
Managing contraction is the only safe reality-based political response to the situation, and there is no constituency for it – though contraction is emphatically underway whether we like it or not, and it would be advantageous if we could manage our way through it rather than let it become a disorderly rout in which people starve and the rule of law disintegrates altogether.
As for re-localization and downscaling, there is a highly visible, easily identifiable constituency…
Fixing the Mess We’ve Made
PREVIEW by JHKExecutive Summary
- The prevailing trends of the next several decades: contraction, down-scaling & re-localization
- How these trends will manifest in commerce, politics, employment & infrastructure
- Those who adapt now will be positioned to thrive
- Act now – ask forgiveness, not permission
If you have not yet read Part I: We've Dug a Pretty Damn Big Hole for Ourselves, available free to all readers, please click here to read it first.
We may never again restore trust in giant institutions ranging from the U.S. government to Harvard University to The New York Times. They have probably squandered their credibility and their legitimacy.
Anyway, the trends now moving human affairs are taking us away from both gigantism and the growth imperative that these things represent. The trends of the present moment in history are contraction, down-scaling, and re-localization.
Managing contraction is the only safe reality-based political response to the situation, and there is no constituency for it – though contraction is emphatically underway whether we like it or not, and it would be advantageous if we could manage our way through it rather than let it become a disorderly rout in which people starve and the rule of law disintegrates altogether.
As for re-localization and downscaling, there is a highly visible, easily identifiable constituency…
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