I think now may be an appropriate time, to re-post an article, I original wrote in late 2006. The basics are still the same, although with a few refinements in the latest version, back in February, 2011.  
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Let me say from the start, that the world and its financial system are now more interlocked than any other time in history and that the butterfly effect is very real. We have also stepped into the unknown, into a new paradigm and there is no going back!

What is the Motor of the World?
There will be many opinions, some will say China is now the motor of the world, some will say modern computers, some the US, some Oil, some this and some that. The truth is there are nearly 7 Billion opinions and most opinions would be at least partially true, given their particular time frame & perspective.

It would be correct to say that China has been a very significant force in global economics, certainly in the last 10-15 years. Certainly, the impact of computers and related electronics, over the last 50 years, has truly moved the world.

And, over 150 years, the US and Oil have been inseparable, as the driving forces of the global economy. Such a large part of the global economy today can be traced back to the US and it’s partnership with Oil.

But, in back of everything over the last 200 years particularly, has been the steady and un-relenting growth in population that has always been the major Driver or the engine of economic growth, at national and global levels.

However, that motor is stopping!

How did we get here?
Population Growth & Aging -
It took all of history, up to the year 1800 AD, for humanity to reach one Billion people. Baby Boomers had their origins in the population explosion that started during the Great Depression; they were a large part of our 3rd Billion and also part of the 4th Billion.

The population explosion really took off in 1945, it Peaked in 1956, reaching a Total Fertility Rate (TFR) of just under 5 children per woman, then levelled out to 1964, before slowing ever since, to a TFR of about 2.5.
Now, closing in on 7 Billion people, we are starting to exhaust the earth’s capacity to support human species and many others.

A continuation of past growth would have seen the global population increase to 10 Billion by 2050 and 20 Billion by 2150. Clearly, that is not likely to happen, as the TFR approaches the replacement level of 2.1 and the Global population growth continues to slow, the indications are that the global population will actually start to fall, within the next 20-30 years.

Why, because in addition to the already declining Fertility rate, we are now bumping into immovable objects, such as Peak Oil, Climate Change and Peak Food Production & fresh Water restrictions, all driven by the Global population and because most of the largest generation in history, the Baby Boomers, will die within the next 20-30 years.

With a few relatively minor interruptions, the period 1945 to 2005 was the greatest Global economic BOOM in history. In particular, the period 1995-2005 was a Growth Tsunami, driven by the Peak earning and spending capacity of US & other Global Baby Boomer consumers and the Peak Supply of Cheap & easily accessible Energy (Oil).

In addition, around the same time, technology drove massive gains in productivity; financial leverage multiplied tremendously from the historical 10/1 to 30/1 & above and interest rates in the US remained artificially low, for far too long, following the events of 9/11.
This was a perfect storm, for making money.

Link (Dr. Albert A. Bartlett - Arithmetic, Population, and Energy) –
http://www.youtube.com/view_play_list?p=9B70AC68E1D2AA54&search_query=Dr.+Albert...
Link (The Crash Course – Chris Martenson) -
http://www.chrismartenson.com/crashcourse

Where are we now and where to next?
Whilst the sub-prime debacle in the US has its own distinct origins, including NINJA mortgages (Greed), it has highlighted falling Real Estate values and New Housing starts, which has separate Demographic origins and had been declining for some time.

In economic terms, the primary driver of the real global economy is consumer demand. The largest demand driver is the 45-55 age group, primarily in the USA, due their large earning and spending capacity.

Demographic levels are already being re-shaped, as nearly two Billion Baby Boomers have commenced a 20 year transition from being big spenders, to big Retirement savers, to thrifty Retirees, before leaving us forever, in increasing numbers.

This massive aging of the global population is changing the dynamics of the world economy, with the bulk of Boomer wealth likely to pass on before they do and as the generations following behind the Baby Boomers, are relatively less in numbers.

In particular, Real Estate and New Housing markets, particularly in the US & Europe have already fallen and continue to do so, arising from a lowering in demand, led by thrifty and retiring Boomers.
Link to Aging Population issues -
http://ezinearticles.com/?The-Economys-Greatest-Depression-Downturn-Ever-Is-Now-...

As if housing issues were not enough, the aging process will also introduce some $50 Trillion in unfunded Health and Social Security costs, in the USA.

So, in the short to medium term, we will see:
1) Constraints, both in the Supply of & Demand for, Oil.
2) A massive de-leveraging of financial markets, including some $800 Trillion in the Derivatives markets.
3) Government Budget deficits are set to continue to expand, due to the Global Debt crisis.
4) Massive increases Health and Social Security Costs, again expanding deficits.
5) Problems arising from Climate Change and Food production.

You can guess what awaits with Taxes, in the near future, to pay for past indulgences. This will happen, irrespective of what side of politics is in power.

And, with Debt levels already at historical highs, we will see past fixes, either not able to be used or possibly set to cause more harm, than help.

Now, we are just past the Peak of a once in history Population Growth Mega Cycle.
Now, the reality looms of a slowing economic future, as reflected in stock markets and oil prices, next the Economic Growth Fairy dies.

Now, the perfect storm will reappear, this time as a Cat 5 in financial demolition!

What Futures await?
The very basis of modern life will be shaken, the magnitude of the quake, will be 9.9.
Whether we arrived at this situation, by accident or design, we are never likely to know, although events suggest a mixture of both, seems probable.
So, the design has now been set in motion and we now enter the 2nd quarter, of the highest stakes game, ever played!

Unlike the Great Depression, we are now truly between a rock and a really hard place.

The truth is, there is no magical, Hollywood, easy fix.
The truth is, there is no pot of gold at the end of the Kansas rainbow.
The truth is, we are in DEAP Sh!t –Debt (Global) –
Debt is going into unknown territory, in many countries, heading north towards 100% of GDP & beyond!
Energy Decline (Global) – All the easy to get, cheap Energy has already gone, what’s left is the other side of the Hubert’s Curve.
Aging Population (Global) – The Employment Participation ratio has commenced declining, as Boomers first retire, then die, 2 Billion of them.
Population Decline (Global) – the rate of growth is slowing & the total will actually start to decline, within 20-30 years.

Had corrective decisions been made earlier, then it may have been possible to reduce some of the worst side effects, regrettably, that did not happen.

Regrettably, if we opt for a better now, then future generations will pay for our mistakes and indulgence.
That reasoning is not acceptable and can not be allowed to succeed!
As we look to the future, we need to look thru different eyes, thru different thought processes.
The days of Smoke & Mirrors, of Shock & Awe, of the Desire to Acquire & Retain Power, of Self interest, at the expense of societal interest, must end.

Can we make those changes, the answer is YES!
Will the required changes be made? Now there, is a $64 Trillion question!

The answers will come on these boards and others, in other forums, in politics, in business and the answers will need to come quickly.    

There are discussions that must take place and Mindsets that must change; the time has come to look beyond borders and elections.


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I can see it now, LW's response is, I'm right (which he definitely is, of centre) & your wrong.

WHY NOAA AND NASA PROCLAMATIONS SHOULD BE IGNORED

http://scienceandpublicpolicy.org/images/stories/papers/originals/noaa_2010_repo...

mozzaok wrote on Jul 1^st, 2011 at 10:25pm:

I dont ask anything of you. Take it as you will and have.

stryder wrote on Jun 1^st, 2011 at 11:52pm:


It's only vague because you refuse to believe it. To hell with Queenslanders who right now haven't got a home let alone a chance to tell you you're a tool.

progressiveslol wrote on Jul 2^nd, 2011 at 1:54am:


If those who you despise so much are to be believed, QLD has everything to do with CO2.

progressiveslol wrote on Jul 2^nd, 2011 at 2:06am:


You and Monckton would be good mates, but both of you, don't know Jack Schitt!

The world could be headed for another economic disaster if we continue to listen to free-market ideologues.
By Joseph E. Stiglitz

Just a few years ago, a powerful ideology—the belief in free and unfettered markets—brought the world to the brink of ruin. Even in its heyday, from the early 1980s until 2007, American-style deregulated capitalism brought greater material well-being only to the very richest of the richest country of the world. Indeed, over the course of this ideology's 30-year ascendance, most Americans saw their incomes decline or stagnate.

Moreover, output growth in the United States was not economically sustainable. With so much of U.S. national income going to so few, growth could continue only through consumption financed by a mounting pile of debt.

I was among those who hoped that, somehow, the financial crisis would teach Americans (and others) a lesson about the need for greater equality, stronger regulation, and a better balance between the market and government. Alas, that has not been the case. On the contrary, a resurgence of right-wing economics, driven by ideology and special interests, once again threatens the global economy—or at least the economies of Europe and North America, where these ideas continue to flourish.

In the United States, this right-wing resurgence, whose adherents evidently seek to repeal the basic laws of math and economics, is threatening to force a default on the national debt. If Congress mandates expenditures that exceed revenues, there will be a deficit, and that deficit has to be financed. Rather than balancing the benefits of each government expenditure program with the costs of raising taxes to finance those benefits, the right seeks to use a sledgehammer—not allowing the national debt to increase forces expenditures to be limited to taxes.

This leaves open the question of which expenditures get priority. If expenditures to pay interest on the national debt are not prioritized, a default is inevitable. Moreover, to cut back expenditures now, in the midst of a crisis brought on by free-market ideology, would inevitably prolong the downturn.

A decade ago, in the midst of an economic boom, the United States faced a surplus so large that it threatened to eliminate the national debt.

Unaffordable tax cuts and wars, a major recession, and soaring health care costs

—fueled in part by the commitment of George W. Bush's administration to giving drug companies free rein in setting prices, even with government money at stake—quickly transformed a huge surplus into record peacetime deficits.

The remedies to the U.S. deficit follow immediately from this diagnosis: Put America back to work by stimulating the economy; end the mindless wars; rein in military and drug costs; and raise taxes, at least on the very rich. But the right will have none of this, and instead is pushing for even more tax cuts for corporations and the wealthy, together with expenditure cuts in investments and social protection that put the future of the U.S. economy in peril and that shred what remains of the social contract. Meanwhile, the U.S. financial sector has been lobbying hard to free itself of regulations, so that it can return to its previous, disastrously carefree, ways.

But matters are little better in Europe. As Greece and other countries face crises, the medicine du jour is simply timeworn austerity packages and privatization, which will merely leave the countries that embrace them poorer and more vulnerable. This medicine failed in East Asia, Latin America, and elsewhere, and it will fail in Europe, too. Indeed, it has already failed in Ireland, Latvia, and Greece.

There is an alternative: an economic-growth strategy supported by the European Union and the International Monetary Fund. Growth would restore confidence that Greece could repay its debts, causing interest rates to fall and leaving more fiscal room for further growth-enhancing investments. Growth itself increases tax revenues and reduces the need for social expenditures, such as unemployment benefits. And the confidence that this engenders leads to still further growth.



Do we really need another costly experiment with ideas that have repeatedly failed? We shouldn't, but increasingly it appears that we will have to endure another one nonetheless. A failure of either Europe or the United States to return to robust growth would be bad for the global economy. The failure of both would be disastrous—even if the major emerging-market countries have attained self-sustaining growth. Unfortunately, unless wiser heads prevail, that is the way the world is heading.

Link -
http://www.slate.com/id/2298580/
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There MAY have been, in times past, periods where right wing Aus-terity ideology may have looked like it worked.

However, in the period ahead, even that appearance, will not be possible!