Wednesday, October 5, 2016

Kan vi stole på den kinesiske tigerens ledelse?

Kommentar her.

Den kinesiske tigeren kan synes mektig og uovervinnelig. På samme vis som Titanic framsto for sine reisende. Intet kunne stoppe Titanic! Men Titanic var offer for entropi, stålet i skroget hadde altfor høyt svovelinnhold, noe som gjorde det sprøtt i kaldt vann. Derfor tålte ikke Titanic sammenstøtet med isfjellet.

Isfjellet kan sammenlignes med dagens gjeldsberg. Dessverre er verdensøkonomien, som Kina er en del av, plaget av alvorlig entropi. Entropi er en så ufattelig fiende at selv den mektige kinesiske tigeren skyter rygg i frykt! Dette uhyggelige monsteret har tre hoder:

A) Økende gjeld

B) Økende forurensning

C) En mer kompleks økonomi

Dette har jeg omtalt i en annen artikkel:

Three Kinds of Entropy

I kommentarfeltet til Gail Tverbergs siste artikkel «Debt: The Key Factor Connecting Energy and the Economy» fant jeg nettopp to interessante nye kommentarer, hvorav den første går rett inn i den kinesiske økonomien:

«Gail Tverberg says:
May 5, 2016 at 2:23 pm

Thanks. The article says,

«China requires more and more credit to generate less and less growth: it now takes nearly four yuan of new borrowing to generate one yuan of additional GDP, up from just over one yuan of credit before the financial crisis.»

I am sure that calculation is assuming that China is really generating as much GDP growth as they claim to be generating. If not, the ratio is a lot worse.

The big problem is that the world was counting on China’s growth–particularly its debt growth, but also its coal consumption growth–to prop up the world economy. Without China’s lead, there is no one else to really follow. If China reins in its debt growth, there likely will be a huge debt collapse.

In my view, one of the issues with China is that it over-reached on the level on improvement in housing that it could offer to its people. Now, the people cannot really pay for the housing they are in, especially if wages are low enough to compete with low wage countries.

The data can be confusing. China has a very high savings rate. At least in part this is because of housing is terribly expensive for people in the city, and “savings” seems to include savings for housing. Another factor in the high savings rate may be the one child family situation, and the lack of children to care for the elderly. If China want’s to give pensions to the elderly, the cost will be terribly high, relative to what young people earn. This is a cost, whether included in savings or taxes. China seems to have a real mess on its hands.

I understand that some of China’s savings is repackaged debt of the many companies that are in trouble. This could be a big problem.»

Kommentar to:

«Gail Tverberg says:
May 7, 2016 at 9:40 am

In my view, it is the soaring whole system costs, together with the soaring debt that these higher costs + longer timelines lead to, that is the problem. These soaring costs (which themselves use energy) act as a tax on the whole system. The result is slower economic growth, which leads to soaring debt defaults. This is related to the rising entropy of the system.

One result of the soaring whole system costs is falling return on human labor. This is equivalent to the falling wages of non-elite workers. This is a type of EROEI. In fact, it is the type of EROEI that brought about the collapse of civilizations from the beginning of time. We end up with a maximum affordable price level. At some point, price collapses back from the cost of extraction. This seems to have started in July 2014.

Fossil fuel EROEI, which can be measured in various ways, is to some extent an attempt to measure the overhead of the system. In its original form, I don’t see EROEI calculations working very well in this regard. BW Hill has developed his own EROEI approach.

BW Hill looks at pieces of the problem. It does come out with results which are “sort of” in the right direction–oil prices reaching a maximum and coming back down. But it misses the debt connection, so it is at best a rough approximation to the problem.»

Den kinesiske tigeren beveger seg nå innn i et ukjent land, som Tverberg har gitt navnet «Our Finite World». Her holder entropimonsteret til. Jeg ville ikke stole blindt på den kinesiske tigerens ledelse i en slik situasjon. All tidligere økonomisk teori er foreldet, vi har intet kart som kan lede oss trygt inn i denne nye verdenen som ligger foran oss, vår endelige verden.

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