How wealth dies
13 days ago
- #energy depletion
- #financial system
- #economic collapse
- The text discusses the growing disparity between financial wealth and the real economy, highlighting that notional wealth is increasing while material economic value is declining.
- It explains that financial interventions to stem economic decline only increase notional wealth, which cannot be converted into material value, leading to a potential financial system collapse.
- The concept of Energy Cost of Energy (ECoE) is introduced, showing a rising trend from 2.0% in 1980 to 11.3% today, indicating diminishing returns on energy investments.
- The text argues that renewables and nuclear power cannot reverse the rise in ECoEs caused by the depletion of fossil fuels, and technology is limited by the laws of physics.
- It describes money as a claim on material value, emphasizing that financial wealth is meaningless without the ability to convert it into real goods and services.
- The potential for a financial system collapse is discussed, with wealth peaking just before the system fails, leading to rapid and severe economic consequences.
- The text also touches on the idea of simplifying technological complexity as a response to energy constraints, though it questions the feasibility of such measures.
- Different perspectives on the timeline of collapse are presented, with some predicting rapid collapse and others foreseeing a more gradual decline over decades.