Category Archives: Financial Implications

The world’s self-organizing economy can be expected to act strangely, as energy supplies deplete

Posted on July 28, 2022 by Gail Tverberg

It is my view that when energy supply falls, it falls not because reserves “run out.” It falls because economies around the world cannot afford to purchase goods and services made with energy products and using energy products in their operation. It is really a price problem. . .

It is my expectation that these and other issues will lead to a very strangely behaving world economy in the months and years ahead. The world economy we know today is, in fact, a self-organizing system operating under the laws of physics. With less energy, it will start “coming apart.” World trade will increasingly falter. Fossil fuel prices will be volatile, but not necessarily very high.
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Posted in Financial Implications, oil shortages | Tagged , , | 2,666 Comments

Why raising interest rates to reduce inflation may work out very badly

Posted on July 5, 2022 by Gail Tverberg

Are we headed for very high energy prices? Or, are we headed for a financial system that starts falling apart? The whole economic system may change remarkably. For example, what many people thought was money, or a promised pension plan, may not really be there when the time comes to get value from it. Shelves in stores may be empty when it comes time to make a purchase. Continue reading →

Posted in Energy policy, Financial Implications, News Related Post | Tagged , | 3,945 Comments

A Few Insights Based on CDC Data Regarding COVID and its Vaccines

Posted on June 9, 2022 by Gail Tverberg

Recent data show that COVID vaccines don’t really prevent a person from catching and passing along the virus that causes COVID. The CDC has recently changed its guidance to reflect the fact that the vaccines mostly reduce the chance of severe illness. Vaccines are still recommended by the CDC, not because they reduce transmission, but because they may reduce COVID-related healthcare costs. Continue reading →

Posted in Financial Implications, News Related Post | Tagged , , | 4,227 Comments

Is the debt bubble supporting the world economy in danger of collapsing?

Posted on May 17, 2022 by Gail Tverberg

With an ever-lower cost of debt, the economy has had a hidden tailwind pushing it long between 1981 to 2020. Now that interest rates are again rising, the danger is that a substantial portion of this debt bubble may collapse. My concern is that the economy may be headed for an incredibly hard landing because of the inter-relationship between interest rates and energy prices (Figure 2), and the important role energy plays in powering the economy. Continue reading →

Posted in Energy policy, Financial Implications | Tagged , , | 4,216 Comments

The world has a major crude oil problem; expect conflict ahead

Posted on April 21, 2022 by Gail Tverberg

World crude oil production has been falling behind needed levels since 2019. This problem, by itself, encourages the world economy to contract in unexpected ways, including in the form of economic lockdowns and aggression between countries. This crude oil shortfall seems likely to become greater in the years ahead, pushing the world economy toward conflict and the elimination of inefficient players. Continue reading →

Posted in Financial Implications, oil shortages | Tagged , , , | 4,255 Comments