Plenty of explanations have been proposed for the current era of economic unraveling, but I’d like to suggest that the most important factor is the overall decline in the “energy profit” that makes modern economies possible at all. EROEI is to a civilization what gross profit is to a business, the source of the surplus that supports the entire enterprise. As the overall EROEI of industrial civilization contracts, habits that were affordable in an era of abundance profit stop being viable, and decline sets in.
Many of the ills of the modern world — starvation, poverty, flooding, heat waves, droughts, war and disease — are likely to worsen as the world warms from man-made climate change, a leaked draft of an international scientific report forecasts.
There is a fundamental relationship between ever-increasing energy supplies > economic growth > and credit-based money (or “money,” if you will). When the energy inputs flatten out or decrease, growth stops, wealth is no longer generated, old loans can’t be repaid, and new loans can’t be generated honestly, i.e. with the expectation of repayment. That has been our predicament since 2008 and nothing has changed.