Economic growth and added complexity sound like they would be good, but at some point, the combination gets to be too much--simplification is needed. Too much of the world's income starts going to non-working individuals and to high-earning workers in privileged fields ..read more

It is easy to get the impression that proposed new modular nuclear generating units will solve the problems of nuclear generation. Perhaps they will allow more nuclear electricity to be generated at a low cost and with much less of ..read more

Governments may want to reduce long-term interest rates, but they cannot do so without having the market for these loans disappear. In this part of the economic cycle, it appears that high interest rates, indirectly due to inadequate inexpensive-to-extract crude oil supplies, act as a brake on the economy instead of high oil prices ..read more

The situation is far more complex than the models of economists make it seem. World crude oil supply seems to be past peak now; it may be headed down significantly in the next few years. Central banks have been working hard to keep oil prices within an acceptable range for both producers and consumers, but this is becoming increasingly impossible ..read more

Today, there is great wage and wealth disparity, just as there was in the late 1920s. Recent energy consumption growth has been low, just as it was in the 1920s. A significant difference today is that the debt level of the US government is already at an extraordinarily high level. Adding more debt now is fraught with peril ..read more

The world economy is an amazingly complex, physics-based, self-organizing system. The three major elements are extracted resources including energy resources, human population, and demand coming through the financial system. Figure 1. Major elements of the world economy according to Gail Tverberg. These are human population, extracted resources including energy resources, and financial demand. All three of these elements tend to increase over time, but both population and extracted resources tend to hit limits because the world is finite. Financial demand is emphasized by politicians because i ..read more

It may be pleasant to think that the economies that are “on top” now will stay on top forever, but it is doubtful that this is the way the economy of the world works. Figure 1. Three-year average GDP growth rates for Advanced Economies based on data published by the World Bank, with a linear trend line. GDP growth is net of inflation. Figure 1 shows that, for the Advanced Economies viewed as a group (that is, members of the Organization for Economic Co-operation and Development (OECD)), GDP has been trending downward since the early 1960s; this is concerning. It makes it look as if within only ..read more

Moving industrialization offshore can look like a good idea at first. But as fossil fuel energy supplies deplete, this strategy works less well. Countries doing the mining and manufacturing may be less interested in trading. Also, the broken supply lines of 2020 and 2021 showed that transferring major industries offshore could lead to empty shelves in stores, plus unhappy customers. The United States started moving industry offshore in 1974 (Figure 1) in response to spiking oil prices in 1973-1974 (Figure 2). Figure 1. US industrial energy consumption per capita, divided among fossil fuels, bi ..read more

There are many myths about energy and the economy. In this post I explore the situation surrounding some of these myths. My analysis strongly suggests that the transition to a new Green Economy is not progressing as well as hoped. Green energy planners have missed the point that our physics-based economy favors low-cost producers. In fact, the US and EU may not be far from an economic downturn because subsidized green approaches are not truly low-cost. [1] The Chinese people have long believed that the safest place to store savings is in empty condominium apartments, but this approach is no lo ..read more

Historical data show that to date, a reduction in energy availability has mostly affected the US, European countries, Japan, and other advanced economies. I expect this situation to continue as energy limits become more of a problem. Advanced economies will start looking and acting more like today’s less-advanced economies. The world economy will face a bumpy path in a generally downward direction. In this post, I give an overview of our current predicament. All economies are subject to the laws of physics. We are biologically adapted to needing some cooked foods in our diets. We have also mov ..read more