In this week's Off the Cuff podcast, Chris and Adam discuss:

• A classic symptom of Peak Oil
  • The 4 largest oil majors report production declines for 2012
• Rampant insider selling
  • The selling-to-buying ratio is at an abnormally high 9-to-1
• Gold's flight to China
  • The West-to-East bullion transfer accelerates
• Scarce platinum
  • Mine shutdowns and growing demand sends prices higher
• The upcoming Peak Prosperity Seminar at Rowe, MA
  • Now's the time for those interested to register

The stock market blasted higher, with the Dow crossing the 14,000 mark because the jobs report came in well under expectations.  In today's world, one follows the other.

In yesterday's world, the one where logic and reason ruled the day, that first sentence would not have been written.  Economic weakness would not have been rewarded with a big surge in stocks.

But this all makes perfect sense in today's world, once you tilt your view to the "new normal" and get with the program.

I titled this piece 'running on fumes' because, in one very real sense, that's exactly what this current market is doing.  The fumes in this case happen to be thin-air money that the Fed is injecting into the financial markets to the tune of $85 billion per month, or roughly $4 billion per working day.

When an engine finally runs out of gas and turns to fumes, the last act of that engine is to run really hot – to race for a while – before finally quitting. » Read more

Executive Summary

• The transition back to an electricity-centric economy is regressive
• Declining net energy and peak expansion are co-incident
• Change that substitutes labor without providing a higher use for it is deflationary and results in inequality
• Our challenge is to find sustainable work for society

If you have not yet read The Siren Song of the Robot, available free to all readers, please click here to read it first.

Capitalism demands fast gains in productivity. Capitalism seeks revolutionary change. But it’s not clear whether a revolution in machine intelligence leads to a deflationary boom, per Schumpeter, or a deflationary bust.

Writers such as Paul Krugman have perhaps moved too quickly, too easily, to conclude that a massive increase in production from such technology leads sustainably to large growth in GDP without severe consequences. Indeed, in a recent essay responding to Robert Gordon's paper on the end of growth, Krugman takes the view that (positive) returns from technology are just beginning to unfold.

I conclude that Krugman is actually concerned about and open to the possibility that an enormous wave of disruption to manufacturing from robots could produce higher GDP initially and also problems thereafter. What happens to wages in the broader economy?

One does not have to be a Luddite about technology to fear yet another huge new round of wage deflation. The West has already been treated to an era of “cheap, quickly manufactured goods that enhance people’s lives” during the past two decades. And it’s not clear that a flood of goods has necessarily improved well-being.

While I certainly wouldn’t make the curmudgeon's case that electronic devices have reduced well-being, it’s not clear that the I.T. revolution has accomplished much in the way of delivering to consumers cheaper and better quality energy, food, or health care. » Read more

Executive Summary

• Escalating costs of resource extraction and associated pollution are key headwinds on future economic growth
• For the first time in generations, the same limits to growth that handicapped pre-industrial society are reasserting themselves
• Our economic and political leaders are misdiagnosing the root problem, and therefore prescribing the wrong treatments
• Remember stagflation? Get ready to experience it again – with a vengeance

If you have not yet read The Tangled Relationship between Wealth & Money available free to all readers, please click here to read it first.

The forces driving today’s ongoing economic crisis were sketched out decades ago in the pages of the Club of Rome’s epochal 1973 study, The Limits to Growth.  Mention that book to most people nowadays, and those who admit they’ve heard of it at all routinely insist that it made false claims about the future.

The irony – and it’s not a small one – is that this simply isn’t true...

A society in this situation can expand its production of goods and services – its 'wealth economy,' in the terms used in Part I – up to the limits of the environment’s ability to provide resources and absorb waste. Once those limits appear in the rearview mirror, though, any further expansion of the wealth economy runs into two insurmountable difficulties... » Read more