There is a knack to saying things that people don’t want to hear, and still sounding intelligent.
Most people who have an interest in the economy want a few mostly obvious things:
- for their stocks to keep increasing in value
- for whatever they want to be conveniently available at a reasonable price
- for the value of money to stay relatively stable
- for the value of their home and goods to increase in value or at least stay static against the cost of goods.
Unfortunately, the future is likely to destroy many of the items on this wishlist as economies tank and energy availability declines.
One of my buddies, Tyrone has recently asked some questions about the economy in an attempt to understand the workings of this complex institution. My first response was to indicate that the history of finance as we know it is relatively short, I said 150 years off the cuff, but was intending to relay the story of John Law and the Missisipi Bubble from the 1700’s as an example of what has influenced modern economic thinking. Maybe I’ll do a post on this character someday, but for now, I’ll state that the growth of the economy as an industry in it’s own right saw the removal of funds backed by “hard currency”, rather backed by speculation and a growth mentality.
The likely reality for the not-so-distant future is that trade of goods, and the investment in potential production of consumer goods will reduce from today’s heady levels to something more akin to earlier times where local goods were the primary economic drivers, with distant, usually exotic goods representing a smaller proportion of the economy. We seem to be a long way from that as a reality, but without cheap abundant oil we cannot keep buying consumer goods such as iPods, cell phones, microwaves, big-screen TVs and fashion accessories.
The greater our efforts toward lean local economies, the more resilient our communities will be.