The Economy’s Oily Warning System

Chris Martenson, author of The Crash Course: The Unsustainable Future of Our Energy, Economy and the Environment book and video course, just gave two engaging presentations to our community. I wanted an update from our Peak Moment Conversation in early 2010 The Crash Course – Exponential Growth Meets Reality (episode 166), so we taped a conversation, Oil Puts the Squeeze on the Economy (episode 204).

Chris said that what he predicted back then is exactly what we’re seeing now: slowing economy, high unemployment, debts teetering, possible sovereign debt defaults across Europe, record people on food stamps.

You have to include energy in the economy story, Chris said. “The economy only functions if and only if you have energy.” And not just energy, but liquid fuels. Not only are oil supplies getting tighter, but it’s costing more energy to get energy (deepwater drilling, tar sands, etc.). An economy dependent on growth is getting squeezed by energy constraints.

Chris’s first presentation “Our Predicament” is a capsule version of his “Crash Course” (videos free at chrismartenson.com). Chris is a genius at drawing connections between the three E’s of Energy, Economy and the Environment, showing why the next twenty years will be utterly unlike the last twenty. Bottom line: we’re at the end of growth. Basically, just as population and consumption are exploding exponentially, we’re seeing constraints in oil production and natural resources like minerals, water and topsoil. He calls for a vision of a world worth inheriting, noting the vacuum at the national level, but being tried out in various flavors in communities like ours.

Chris’s second presentation “Investing in the Future” offers his beliefs about what’s ahead of us. Here are some highlights:

• The rules will be changed.
• The markets are rigged.
• Events will unfold very rapidly. Black Swans (the impossible) will become the rule (like the Fukushima nuclear and Deepwater Horizon catastrophes)
• Energy will consume a growing proportion of our disposable income, with food prices mirroring oil prices. Peak oil will stifle growth and starve the economy slowly but surely.
• Simplicity is coming. Complex systems like our civilization require more energy, and energy is declining.
• Things will happen from the outside in. Want to see what’s coming? Look at the margins, like marginalized populations or countries at the periphery (like Greece right now).
• There’s nearly universal insolvency, and he predicts debts will not be paid back.
• Anything that is unsustainable will someday stop… like the fiscal situation in our country — a U.S. fiscal crisis is highly likely.

Chris calls himself a “thrivalist.” He encouraged us to get our own house in order well before the cultural tipping point, advising people to invest in energy efficiency in their homes, long-term food storage, buying items your family will need over the next few years. Personally, he’s holding physical gold and silver as alternate currencies.Chris’s website offers a wealth of resources [http://www.chrismartenson.com]. (Photo thanks to Jason Wiskerchen).

Watch Oil Puts the Squeeze on the Economy (episode 204).