Abstract
Most of what we know as wealth is a claim upon future economic growth, growth that has, to date, been made possible by huge supplies of cheap energy. Now, with increasing constraints on cheap energy, the vast majority of that wealth will be shown to be a mirage. The “financialization” of the advanced industrial economies in the past few decades has exacerbated this problem by greatly increasing such “wealth” in the form of debt and equity holdings. In addition, globalization has reduced the resilience of the economy through placing efficiency well above diversity and sustainability. Thus, the impending impact of cheap energy constraints may cause a cascade of problems facilitated by the complex webs of global supply chains and financial linkages. The crisis of 2007–2009 is only the latest example of how a crisis in one financial area can be rapidly transformed into a global crisis and near collapse. We may not be able to predict when the next crisis will hit, but we can predict that it may spread extremely rapidly. Trying to take defensive actions once the crisis has started may turn out to be a relatively futile gesture. Instead, such actions need to be made beforehand. These actions would have to take into account the exposure of a person’s job to the financial system as well as the exposure of their investments within that same system.
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© 2013 Roger Boyd
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Boyd, R. (2013). So What Can I Do?. In: Energy and the Financial System. SpringerBriefs in Energy(). Springer, Cham. https://doi.org/10.1007/978-3-319-04238-1_5
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DOI: https://doi.org/10.1007/978-3-319-04238-1_5
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