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http://www.synapse9.com/drafts/ProfitingInScarcity.pdf
An interesting Whitepaper done for TheOilDrum, which postulates the immediate cause of this economic collapse being related to the exponential increase in food & energy commodities.
Up to their eyeballs in debt, Mr. & Mrs. Sub-Prime were commuting long distances to their work, as homes close to the downtown were even more expensive & un-affordable. When gasoline went to $5/gallon, and food was going up by 25%/yr, they were soon out of cash. They had a choice of filling their empty gas tank today so they can get to work tomorrow, or save their money to pay their mortgage at the end of the month. They chose to fill up, they went into default at the end of the month, and all the dominos started to fall till we arrive at our current situation.
An interesting Whitepaper done for TheOilDrum, which postulates the immediate cause of this economic collapse being related to the exponential increase in food & energy commodities.
Up to their eyeballs in debt, Mr. & Mrs. Sub-Prime were commuting long distances to their work, as homes close to the downtown were even more expensive & un-affordable. When gasoline went to $5/gallon, and food was going up by 25%/yr, they were soon out of cash. They had a choice of filling their empty gas tank today so they can get to work tomorrow, or save their money to pay their mortgage at the end of the month. They chose to fill up, they went into default at the end of the month, and all the dominos started to fall till we arrive at our current situation.
When I first noticing how our food and fuel resources were coming into direct conflict, causing a global price war, I termed it evidence that “the big crunch” had clearly arrived. That still seems accurate. Price increases of ~25%/year for food and fuel as “law of limitless price” violates everything we were taught in Econ 101. The other equally dramatic bit of evidence that something big was up is that, well, no one was or is yet talking about it. That means it is either so far outside the rules that the economists don’t have a model for it, or it is rather unimportant for reasons everyone thinks are obvious. Could it be both?