The Economy as a Black Box

 I saw this article today and thought it was both funny and scary - https://www.nytimes.com/2021/10/01/upshot/inflation-economy-analysis.html

Even the article itself says that understanding how the economy works is still something of a "black box." This shouldn't inspire confidence in anyone that "things are under control." Apply the same analogy to brain surgery, airplane engines, or water quality monitoring - "Uhh, we don't really understand how these things work, but feel free to trust your life to them." I mean, it's not like we're talking about the system that everyone in the first world, and to a lesser degree, much of the third world, depends on. We don't know which direction prices are going, what money is really worth, and exactly how much rot there is in the whole thing, but trust us - we know what we're doing.

As I outlined in my previous post, the reality is that we're living off the largess of past generations that managed to exploited undeveloped resources and land relatively cheaply. In 1875 or so, twenty bucks would buy you a nice suit, a colt revolver, a ticket on a ship, and so on. In 2021, twenty bucks will buy you half a tank of gas, a paperback book, or three lattes. Since money represents assets and the work required to get them, the reality is that daily life is costing far more than it used to, simply because of increasing scarcity and overspending. (fiat currency is part of this discussion, but Nixon decoupled currency from gold because for the very reason of increasing cost and scarcity of that commodity)

It's not that the relatively value of things has gone up, but that the cost of maintaining an industrial civilization has dramatically increased. Modern life is simply not sustainable in its current form, which is what no one wants to admit. The real wealth of people has been dropping since 1970 or so. Sure, everything can be financed with debt, but at some point, even the pool of debt will dry up. Admitting the reality behind this, or having people finally wake up and recognize it, will lead to an economic crash the likes of which no one has seen before.

But, again, it's all a "mystery." No, it's not. It's a scary reality that is no more or no less than the coming end of modern civilization.

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