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Why Social & Environmental Imbalances Are Becoming the Biggest Risks

The User's Profile Gregor Macdonald November 19, 2013
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Executive Summary

  • The growing risk of disinflation
  • Why instability in the U.S. is accelerating
  • The danger of social rifts emerging in the near future between economic classes
  • Why environmental constraints and social instability may trump energy issues going forward

If you have not yet read What Happened to the Future?, available free to all readers, please click here to read it first.

If this is the case, it echoes the realization now dawning on economists in the U.S. that an acceleration in the economy, which many expected, is simply not going to arrive. As was discussed in previous essays, OECD GDP growth appears to be converging once again at a level below 2.00%. The U.S. is on track to achieve only 1.6% GDP growth this year. This is a primary reason why inflation, again outside of natural resources has still not broken out, or even appeared. Moreover, the U.S. and the OECD could once again be on the verge of disinflation.

One notable and important piece of the disinflation puzzle is the continued growth in inequality. As income growth narrows to a tiny vanishing point among workers, it’s become increasingly difficult to mount economic growth across many industries. Demand for goods from the 1% is robust. Demand from the rest of the populace continues to dwindle. It may be hard to believe, but policy makers, politicians, and gasp! even economists and financiers used to be deeply concerned about wealth inequality. Today, it’s as if enough time has passed for an entire generation to forget the destructive structural damage that long-term inequality can wreak on an economy.

For those of you who remember, one of the more severe cases of wealth inequality for many decades was the country of Brazil.

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Top Comment

See my post on the first part of this article.  We all suffer/benefit from the economic effects of not yet peak energy, but we all...
Anonymous Author by rcmacl
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