Draw Down
We are "drawing down" our resources.
This statement uses an analogy of a bank account. When you make a withdrawal your account diminishes. When you do this consistently over a period of time you are drawing down your account.
There is an implication in this statement; that these resources are non-renewable. Or at the least it will take them awhile to replenish themselves. This is certainly the case with many so-called resources:
Minerals: oil, natural gas, iron, nickel, copper, silver, etc...
Considering the importance of energy in exploiting these resources is very revealing. As the easily accessible minerals are mined then it requires more energy and intensive technology to get to the remaining minerals. This fact is what has kept the price of these commodities cheap, because of the ever increasing energy at our disposal. The ratio of energy expended compared to the return has been very good. With energy descend the entire equation begins to shift.
It becomes increasingly more expensive to extract the same amount of minerals. Applying efficieny is one way to reduce the costs of extraction, and we assume in today's "rational" capitalism that companies have already been pursuing this route. The results of this have been increasing mechanisation of the entire extraction process. However more energy is employed, because bigger machines are used. So the rationality employed by companies is not an "energetic" rationality but a financial rationality. Herein lies the tension point. The difference between money and energy.
This is why we are headed for a fall. The economic world has not understood the fundamental nature of energy. To be sure this is not a fair statement, it is likely that they have indeed recognized this, but still employed the same mechanisms for a short term advantage.
For indeed it would be more difficult to get a loan if money was denominated in energy units. Why is this? Draw down is part of the answer, and the second law of thermodynamics is the other. An energy currency would be based on something concrete, an actual unit of energy. So then an interest loan, based on energy, is predicated on an increase in energy itself, to pay for the interest. What money is based on now is faith, faith in the government. That's all. As our government becomes less trustworthy then faith in the currency follows a similar decline.
This statement uses an analogy of a bank account. When you make a withdrawal your account diminishes. When you do this consistently over a period of time you are drawing down your account.
There is an implication in this statement; that these resources are non-renewable. Or at the least it will take them awhile to replenish themselves. This is certainly the case with many so-called resources:
Minerals: oil, natural gas, iron, nickel, copper, silver, etc...
Considering the importance of energy in exploiting these resources is very revealing. As the easily accessible minerals are mined then it requires more energy and intensive technology to get to the remaining minerals. This fact is what has kept the price of these commodities cheap, because of the ever increasing energy at our disposal. The ratio of energy expended compared to the return has been very good. With energy descend the entire equation begins to shift.
It becomes increasingly more expensive to extract the same amount of minerals. Applying efficieny is one way to reduce the costs of extraction, and we assume in today's "rational" capitalism that companies have already been pursuing this route. The results of this have been increasing mechanisation of the entire extraction process. However more energy is employed, because bigger machines are used. So the rationality employed by companies is not an "energetic" rationality but a financial rationality. Herein lies the tension point. The difference between money and energy.
This is why we are headed for a fall. The economic world has not understood the fundamental nature of energy. To be sure this is not a fair statement, it is likely that they have indeed recognized this, but still employed the same mechanisms for a short term advantage.
For indeed it would be more difficult to get a loan if money was denominated in energy units. Why is this? Draw down is part of the answer, and the second law of thermodynamics is the other. An energy currency would be based on something concrete, an actual unit of energy. So then an interest loan, based on energy, is predicated on an increase in energy itself, to pay for the interest. What money is based on now is faith, faith in the government. That's all. As our government becomes less trustworthy then faith in the currency follows a similar decline.
