A mind-blowing machine

[WDCRob]

If I knew anything about busisnes and were younger, I might start a company of going to all these farms, run down homesteads, junk lots and buying the steel and whatever else is just setting there and begin to recyle it.

Too late Jim - someone has beaten you to it, and ramped it up to a scale that'd be hard to compete with now. Great article on this exact thing in the New Yorker last week. Unfortunately the whole article isn't available online, but the abstract is here.

[Jim Nickerson]

Too late Jim - someone has beaten you to it, and ramped it up to a scale that'd be hard to compete with now. Great article on this exact thing in the New Yorker last week. Unfortunately the whole article isn't available online, but the abstract is here.

Well, just eye-balling things, there is still a lot of scrap out there. Perhaps when we go to NM this summer, it will all be gone, but I doubt it.

[c1ue]

Did anyone do anything with the idea that compound interest on ever increasing levels of debt behaves like bacteria in a jar? i.e. expands exponentially right up until the point that it completely collapses?

The Economist had an article a while back while talked about how 1 penny invested at the birth of Christ would have become a mass of gold larger than the Earth by now through continuous compounding.

The reason this is not true is that there are regular episodes of wealth destruction.

The entire inflation vs. interest rate debate is stimulating, but misses the point (while Dr. Hudson also talks about): Banks may gain some liquidity/capital from low interest rates, but ultimately the power game lies in repossession of collateral.

Cheap money means those who lend are not forced to risk real assets in order to obtain loans/liens on real property; the 'big game' played by nations and classes is the loan and repossess one.

Thus the key to lenders winning is ensuring that borrowers never can repay the loans; one way is through taxes on real property (which never end) coupled with rising asset prices.

The lenders thus neither have to pay the property taxes nor are they unduly inconvenienced by liquidity issues as the lenders are the entities creating credit.

[unlucky]

Eric,

Your analysis and predictions have continued to be valuable and on the mark. One aspect you incorporate successfully is the geopolitical, often missing or understood by many mainstream economists.

However, your analysis fails to take into consideration ecological factors .. it hints at the old technological fix argument
... whatever baseline of natural resources exist, their limits can be overcome only so much through technological advances. At some point excess exploitation and consumption override said tech. advances.

Am I the only one who buys into both the "limits to growth" and "technological fix" arguments? The way I see it, technological advances allow new resources to be exploited, and old resources to be used more efficiently. Exploitation then proceeds exponentially. So does technology but not always in the right direction. Inevitably we end up bumping up against new limits. And then we have to play a zero sum game for a while until the next set of technological advances comes along, allowing the cycle to start again.

That seems to me to be the pattern of history. Granted, right now we seem to be in a "bumping up against limits" moment. We need to manage that as best we can. But ultimately we need new technology to move on to the next phase.