What will be left for our grandchildren?

Should we feel sorry for our grandchildren who will have to repay the massive debts we have been building up?  Probably not but we should feel sorry for our grandchildren who will have to survive on mineral and energy resources which are difficult to extract.

Debts can suffer fatalities from three causes: bankruptcy, inflation or government haircuts.  Considering current economic conditions  there is some possibility the current debt load will be written off before our grandchildren even understand the word.  If and when this happens there will be considerable  economic turmoil.

I believe economies should be analysed first and mostly in physical terms rather than money terms.  This way we can see some underlying trends and problems which can easily be hidden behind financial terms.

Currently we are probably dealing with problems in both sides of the economy.  We have used up the most easily accessible energy and mineral resources and the marginal cost of accessing what is left is going up.  At the same time the fraction reserve way of creating money in which interest is charged on the money supply is a Ponzi scheme which frequently breaks down.  Financial crises have long been a  feature of our economy.

If one analyses the economy only in phyiscal terms we are not living beyond our means as we produce everything we consume.  In this respect there can be no borrowing from the future.  What we are doing is using resources which won’t be available to our grandchildren at a reasonable cost.

A major financial collapse will have a devastating effect on our exchange of goods and services.  It is quite likely our grandchildren will have to pick up the pieces from a financial collapse.  What is more certain is that they will have to cope with our having used up the most easily accessibe energy and mineral resources.  There will be lots left for them but these resources will require a lot of energy to extract.  That will be enough of a burden to impose upon them.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

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One Response

  1. All the more reason to use the resources we have wisely, build and manufacture items in such a way that they are long-term investments, rather than disposable commodities, and invest in manufacturing items that can be readily repurposed or recycled.

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