Commentary By Ron Beasley
Default on debt - that's the latest conversation but it's silly. The conversation recently has been all about a bail out of Greece. But who's getting bailed out? It's not the people of Greece but the banksters that loaned them money. In reality the citizens of Greece would be better off if the country defaulted. Ireland, Portugal, Spain and now Italy face a similar fate. But it won't stop there - the entire world economy is facing the same fate. Not just governments but corporations as well.
The world economic system is based on credit and a system based on credit is dependent on economic growth to pay the interest. Growth is dependent on cheap resources and we have reached peak cheap resources so economic growth is no longer possible. A little too late there is a conversation about peak oil but it's not just oil but nearly everything.
Peak water is the problem in some areas. India and Saudi Arabia have been using fossil water to feed their people. In both cases that fossil water is exhausted. Saudi Arabia has oil revenue to buy wheat for awhile - India not so much. The ultimate energy source is not fossil fuel but food -grain. Food production is dependent on water but modern food production is also dependent on phosphorus. And you guessed it we have also reached peak phosphorous. Of course modern agriculture depends on ammonium nitrate for fertilizer and fuel for farm equipment - fossil fuels.
And our technology is threatened as well. We have also heard about the rare earth metals that our technology is dependent on. But that same technology is dependent on something far less exotic, tin. Yes, we have reached peak tin.
Erfandi�s fleet of bamboo rafts are dredging 33 percent less tin ore from the rivers of Indonesia's Bangka Island than in 2008, as miners fail to keep pace with consumption that jumped 14 percent in two years.
The vessels operating in the world�s largest exporting nation are hauling up no more than 40 kilograms (88 pounds) of ore daily, from 60 kilograms, as reserves get depleted, said the 46-year-old foreman. Miners from China to Peru are also struggling to meet demand for the metal, used to solder components in almost all electronic equipment...
The same thing is true for Iron, copper and all the other metals. We have picked all the low hanging fruit - all the cheap resources.
We have lived in a credit based economy that was dependent on growth to pay the interest. We have reached or exceeded peak people. The economy and the world that we knew will not return. Something new will replace it.