Transition Whatcom

Heinberg and Hagens Chat About the Economy

There was a request for a synopsis of the web chat last week that Energy Bulletin and the Post Carbon Institute hosted. 


The full chat transcript is available on the Energy Bulletin website here.


I also put together an edit, where I matched the questions with the answers.  I think I got most of it, but I left a few questions and answers out.  See attached below, and I hope you find it useful.




For highlights, below are some of my favorite comments, mostly from Nate Hagens, Previously Nate was President of Sanctuary Asset Management and a Vice President at the investment firms Salomon Brothers and Lehman Brothers. Then Nate became an editor at The Oil Drum, one of the top level peak oil sites.  Now Nate is working on a PhD on Natural Resources, and studies environmental economics and evolutionary biology.


Nate Hagens:

If we do have a currency collapse scenario we go to a world where 1% of people have almost all the gold and silver sets us up for a social inequity dynamic that is WORSE than the one we have now. If you are an environmentalist, and you feel strongly about living in a world with more social equity, the decision to buy gold when all cognitive clues say its going higher, will be an intensely personal/moral one. The bottom line is a very difficult one to grasp - that most 'digitial' wealth is probably going away - i would focus more on changing your definition of wealth than try to amass more

...I dont think any serious policy changes are going to happen until a disaster is here, unfortunately. The people that most need to stand up and take charge with some mitigation preparation and steering the aircraft carrier in new direction have the most to lose from the current system - kind of a political cognitive dissonance. Ive decided its best to prepare for what is likely coming rather than try to change what is happening now

.... Almost all of the things that reasonable people think ‘should’ happen to make our system more sustainable/stable have to first cross the juggernaut of reduction/disappearance in claims (what people assume they own, now and in the future). Very few environmentalists understand just what the imposition of carbon tax, or the cessation of drilling, or a Tobin tax, would have on fragile financial markets. IMO we are going to keep borrowing from the future, in crazier and more Orwellian schemes until we can’t borrow anymore – then the market either disappears (because government owns/guarantees virtually everything) or it disappears due to a giant currency upchuck. Then we will have new politicians, I suppose...

...i think 'Peak Oil' is a burnt issue. I rarely use those words anymore other than to people in the tribe. The worlds problems are financial, social, environmental and of course natural resourece/energy related. Peak Oil will perpetually be a constraint on what options are possible but its not the only driver and having a monolithic 'peak oil’ is responsible for all our problems' probably makes people come off as fanatics.

.... I have changed my mind about 'getting the word out' to the masses and rather spend my time personally preparing and trying to get a message out that 'its not anyones fault' that we are here. The more we can build a model of cooperation and competing for things that have lower throughput the more momentum such a future gets, and people follow. To 'explain everything' to the masses not only will be impossible but probably counterproductive. Look - M Bachmann is already promising sub $2 gas - and she would get votes on that!

...Capitalism the way we know it worked when the world was empty ecologically speaking. The moving of piles of wealth into smaller and smaller corners historically has meant the end of social systems - actually 'debt' repudiation has historically often marked end of various social systems when things became more equalized. Communisim on the other hand, is even worse ....I do think that some dispersion in wealth/ability/status is natural in nature and will continue to be in human socieities - but in our ancestral environment we didnt have options to get 1 billion times as much as our mates. I think that has to change and will, soon

i think local/regional synergies to produce basic/important goods is going to be essential.

And leave global trade for the really luxury items etc. Plus of course social and human capital to replace financial markers as a component of ones 'net worth' I thiink will be a clear trend

...china is in very precarious situation - they have followed our model in spades - ie the central bank has created credit out of thin air to build infrastructure - I think China might unravel in very near future. Yes - higher energy wouldnt help situation either

...I think there are 3 main issues impacting markets: 1) US economy is weakening even with massive govt intervention, 2)world banking system is fragile especially europe 3)the foundations of the Euro are weakening (solidarity on bailouts for Greece etc unraveling). All these spell unwind of asset prices - if I had to guess I would say we will have much lower oil prices in future than today (yes even considering oil has peaked). ANy recovery will be met with higher oil prices but the lack in aggregate growth (I think world GDP has peaked), will cause things to go lower. Best advice is to alter your interest/addiction to the markets to something more productive/sustainable (And I advise you that from a position of experience/empathy)

...I think the Mad Max scenarios, while possible are not the most likely. If all boats decline together, (instead of a few staying afloat), I think people will surprise with their creativity and cooperation - things 10 years from now will almost for sure be lower living standards (as measured by throughput and stuff) but might be actually higher satisfaction measures, etc. i said above - I think much of the wealth inequality thing is going to be solved automatically when we have jubiliee/debt deflation. Lots of millionaries/billionaires are going to lose most/all.


everyone has their personal view on what to do /learn / change next - what are yours? my personal top two are: learn to see through the lens of contractions and then learn to appreciate life more

Nate Hagens:

@Andrew. I am actively substituting real captial instead of financial. Im getting in better shape, meeting my neighbors, trying to be happy with the things I have instead of accumulating more, and trying to reduce my use of technology (because it hijacked my brain which caused other consumptive behaviors)> We dont have an energy shortage but a longage of expectations - reducing expectations and keeping them more in line with our ecology is a tall order, but one I recommend.

Richard Heinberg:

To Andrew: Personally, I'm learning to slow down and speed up at the same time. Get into gardening while jetting to conferences. Play the violin while typing online. The contradictions in all this make me a bit crazy...but the fact is it's almost impossible to avoid contradictions right now.

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