[MD]

Our monetary system does not work in contraction mode. It just doesn't.

[Timo]

Our monetary system does not work in contraction mode. It just doesn't.

It might if you eliminate fiat currency, and go back to the days of lending based on actual collateral, instead of potential future revenues. I can promise anything in order to get a loan, but that doesn't mean i can deliver on my promise. Multiply that same current MO by 5 billion, and you get a clearer picture of the current state of the world.

Granted, as you just stated, our monetary system does not work in contraction mode. What i just suggested would be a change back to the system we had 100 years ago, before we created the mess we're in. If such a reversal of course was actually implemented, then OUCH! But, i would expect stability to return to our economies more quickly than contunuation of BAU. Our current system doesn't have a very good future, at all. Slow economies aren't necessarily such a bad thing. One thing with a slow economy is that you know what to expect. Expectations breed confidence in the future.

Do you know what to expect in our future? Do you have any confidence in our future?

[onlooker]

I agree with the posts here that the world seems to be fixed into the great majority have so little, a minority has something and an elite small minority has so much. That is not likely to change. So contraction then has actually to some degree already taken place among the world's population. What the prominent issue is when and how will the Industrial and Financial sectors of the planet handle contraction. What we are seeing is an aversion to contraction witnessed by the renaissance of coal worldwide. So even in the face of CC, Industry is still pursuing fossil fuels. Why? Partly because of a fear of widespread economic slowdown but also because profits are at stake and neither the Industrial sector nor the Financial sector wants to hinder their profit making. So basically the humongous economic machine keeps humming albeit with some stuttering and that allows us in rich countries to continue living an unsustainable lifestyle just a little while longer. Of course that contrasts with 80% or so of the world's population who seem now permanently excluded from participation in the modern economy.

[Pops]

The other trade off is: learn the ropes vs opportunity cost (of bugging out). This is the hard one for most folks dealing with their own uncertainty and most times the outright hostility toward the whole idea from those around them.

[Newfie]

I actually have a hard time conceptualizing what the .001% wealth looks like.

It is easy to understand the difference between having $1,000 or $100,000 dollars. The difference between $100 million and $10 billion is more difficult, but proportionally the same. What does that additional money allow you to do? What can you buy with $10 billion you could not have had with $100 million? What additional could you buy that you really need or that makes a tangible difference in your happiness?

So if we have 10,000 people in a stadium, and we loose 90% of the wealth, by default most of that money will come from the very few, 10's or a hundred of folks with all the "money." Tangibly what would happen? All of sudden a few folks will be less wealthy. But Earth will still spin in its axis.

All hat lost "money" is not a real thing. It is a concept, an irrational valuation, a chimera. Nothing more.

What I can see occurring is that the global economic system would have a melt down. The big losers, who now control trade and trades would no longer have confidence in the system they set up. So the system would cease until a new, more trust worthy system was put in place.

Where am I wrong?

But that is not really dealing with contraction. It might be a start though.

[Newfie]

In that case it ain't so bad?

I guess that Picasso guy had a hell of an Puritan work ethic to be that efficient and productive in a single day.

Personally I like Gaugin's work ethic better. He quit the French stock market and went on to create tremendous wealth by his highly productive form of painting.

image.jpg

https://artamateur.wordpress.com/2010/1 ... -hedonist/

https://en.m.wikipedia.org/wiki/Gaugin

[GHung]

onlooker: "Of course that contrasts with 80% or so of the world's population who seem now permanently excluded from participation in the modern economy."

They're participating in some kind of economy. Whether or not it meets someone else's definition of 'modern' probably doesn't matter much.

[onlooker]

Yes G, they are participating in the informal survive how ever you can economy!

[americandream]

I'd settle for a plan that contemplates a viable economy where the growth in economic activity is no more than the growth in population - aka stagnation.

Circular would be better as stagnation contemplates growth. What we need is a manufacturing economy meeting material needs but devoted to the functions of higher civilisation or for those who balk at the word civilisation, the more refined functions in humankind, functions which enhance appreciation for things other than blind consumerism.

[Newfie]

Lovely and real. But the bizarre (almost imaginary) prices tell us that the much vaunted and enviable (by some) .01% really isn't that wealthy, per se. The implication of that is . . . it is, and always has been, imaginary wealth. The implication of that is . . . there is not much to miss. And that the money all around us is fake. Think real goods: well-watered land, topsoil, sun, property, and useful tools. Who has that?

We do newfie.

Agreed, and yet....there are, or I suspect will be, very tangible consequences of contraction if not collapse.

The things we are discussing here are real enough for anyone to see who cares to see. Yet it seems, once again, the leaders (we follow) are blind to these truths. Hell, it seems that while we understand these truths on an individual basis our collective culture is blind to them.

I guess the reason I started this thread was to use the word CONTRACTION, to say it out loud, to break the ice. It is such a taboo word or concept. We can can conceive of and discuss (endlessly) Catlin Jenner, but CONTRACTION scares us and must not be spoken.

CONTRACTION! There I said it, oh it makes me feel so dirty!

[Ibon]

Yet it seems, once again, the leaders (we follow) are blind to these truths. Hell, it seems that while we understand these truths on an individual basis our collective culture is blind to them.

This resilience to change i just addressed somewhat on the alternatives to capitalism thread.

alternatives-to-capitalism-t71572-60.html#p1257904

[americandream]

our collective culture is blind to them.

Our collective culture is the PROBLEM.

[Timo]

Timo, that would only work in the absence of debt, which is necessary for investment and loans. Farmers for instance need loans to plant crops. Especially if they had a bad crop the previous year. Chits and barter will come in time. But only in a completely dis-industrialized world.

Re-read the second word of the topic of this thread.

OUCH!!!

Yes! Absolutely!!! The model i suggests requires massive defaults, and ZERO bailouts. There is no gradual contraction with what i'm proposing. Defaulting on debt will immediately cut off any future credit afforded to that nation. Instant contraction. OUCH!!!

But, that nation is no longer in debt, and is no longer being held hostage by its creditors. It is a fresh start for that nation to start from a new ground zero. No debt. Only internal reliance on what they, themselves can produce. No overshoot. Living below their means to perpetuate their civilization.

Yes, this would hurt, and it would not be pretty, but is any alternative less painful, or more beautiful?

I'm suggesting that we burst the World Debt Bubble, and reset our global economy at a level that is more in tune with our means. Of course, this will not be pretty, but as we're seeing today, Greek citizens are protesting the terms of their most recent bailout. They'd rather default and go back to the simpler times of self-control of their own nation.

I concur.

[americandream]

Timo

The Greeks can protest all they like. The markets will not let them endanger liquidity momentum. The controllers are global, the odd nation here and there is pretty much a waste of time.

[Timo]

AD, there is power in numbers. Iceland already defaulted several years ago, and is doing quite nicely now. If Greece was to follow their lead, that would provide momentum to other nations to do the same, and the EU would come to a screeching halt. Europe has a much more frequent history of wars and revolutions than we do here in the States. (We tend to always fight somewhere other than here.) Yes, the global market currently has control of everything and everyone, but that control is not infallible. There will be a breaking point. The only question is will that breaking point be controlled and voluntary, or chaotic and revolutionary. Continuation of the status quo suggests the latter. Which do we prefer?

I'd rather face reality now, and avoid WWIII.

[americandream]

AD, there is power in numbers. Iceland already defaulted several years ago, and is doing quite nicely now. If Greece was to follow their lead, that would provide momentum to other nations to do the same, and the EU would come to a screeching halt. Europe has a much more frequent history of wars and revolutions than we do here in the States. (We tend to always fight somewhere other than here.) Yes, the global market currently has control of everything and everyone, but that control is not infallible. There will be a breaking point. The only question is will that breaking point be controlled and voluntary, or chaotic and revolutionary. Continuation of the status quo suggests the latter. Which do we prefer?

I'd rather face reality now, and avoid WWIII.

There Icelandic debt was borne by the working class in Europe, link attached for you:

http://www.marxist.com/iceland-illusion ... efault.htm

The markets will not let momentum be disrupted nor will they accept defaults. Nor is that necessary with a corrupt and self serving lumpenproletariat on the scale we have in the West.

The raising of consciousness is the only way.