eattherich
11-13-2007, 09:50 PM
The multi-dimensional meltdown underway in the finance sector illustrates perfectly how the complex systems we depend on start to wobble and fail as soon as peak oil establishes itself as a fact in the public imagination. Mainly what it shows is that we don't have to run out of oil -- or even come close to that -- before the trouble starts. Just going over the peak and heading down the slippery slope of depletion is enough. Peak oil, it turns out, is also peak money. Or should we say, peak "money?"
First of all, what is finance exactly? I'd bet that a lot of people these days don't know, including many working in the financial "industry," as it has taken to calling itself. Finance, until very recently, was the means by which investment was raised for useful economic activities and productive ventures -- in other words, the deployment of capital, which is to say accumulated wealth. Historically, this accumulated wealth was pretty meager. There wasn't a whole lot to deploy and the deployment was controlled by a tiny handful of people statistically greater only than the number of Martians in the general population. They operated as families or clans, and everybody knew who they were: the Medici, the Rothschilds. Even the Roman Empire was a kind of financial Flintstones operation compared to what we see on CNBC these days. Not having the printing press, the Romans had to inflate their currency the old-fashioned way, by adding base metals to their gold coins.
Finance in the 200-odd-year-long industrial era evolved step-by-step with the steady incremental rise of available cheap energy. More to the point, the instruments associated with finance evolved in complexity with that rise in energy. It was only about two-hundred years ago, in fact, that circulating banknotes or paper currencies evolved out of much cruder certificates that were little more than IOUs. Once printed paper banknotes became established, and institutions created to regulate them, the invention of more abstract certificates became possible and we began to get things like stocks and bonds, traded publicly in bourses or exchanges, which represented amounts of money invested or loaned, but were not themselves "money."
Much of this innovation occurred during the rise of the coal-powered economy of the 19th century.
Rest at: http://jameshowardkunstler.typepad.com/ ... money.html (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/11/peak-money.html)
First of all, what is finance exactly? I'd bet that a lot of people these days don't know, including many working in the financial "industry," as it has taken to calling itself. Finance, until very recently, was the means by which investment was raised for useful economic activities and productive ventures -- in other words, the deployment of capital, which is to say accumulated wealth. Historically, this accumulated wealth was pretty meager. There wasn't a whole lot to deploy and the deployment was controlled by a tiny handful of people statistically greater only than the number of Martians in the general population. They operated as families or clans, and everybody knew who they were: the Medici, the Rothschilds. Even the Roman Empire was a kind of financial Flintstones operation compared to what we see on CNBC these days. Not having the printing press, the Romans had to inflate their currency the old-fashioned way, by adding base metals to their gold coins.
Finance in the 200-odd-year-long industrial era evolved step-by-step with the steady incremental rise of available cheap energy. More to the point, the instruments associated with finance evolved in complexity with that rise in energy. It was only about two-hundred years ago, in fact, that circulating banknotes or paper currencies evolved out of much cruder certificates that were little more than IOUs. Once printed paper banknotes became established, and institutions created to regulate them, the invention of more abstract certificates became possible and we began to get things like stocks and bonds, traded publicly in bourses or exchanges, which represented amounts of money invested or loaned, but were not themselves "money."
Much of this innovation occurred during the rise of the coal-powered economy of the 19th century.
Rest at: http://jameshowardkunstler.typepad.com/ ... money.html (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/11/peak-money.html)