Monday, November 16, 2015

The Whole Tower Falls Down

I think what also goes with the Tower of Babel analogy is the use of increased debt. As long as everyone was pretty much equal, and there was not a lot of technology used, it was possible to simply trade among neighbor’s for one’s need. Neighbors could take turns building each others’ homes. Each citizen who had a horse for transport could raise it on his own land, and perhaps build a simple cart to pull behind the horse.

Once we start adding technology, we need more materials from a distance, and more capital goods. We start needing a lot more debt to support our infrastructure. We build our debt / GDP ratio higher and higher, as we add more technology and more promises as to what all of the capital goods might produce. Of course, if there is not a continuing supply of cheap energy supplies, the whole tower falls down. - Gail Tverberg

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