Dangerous Exponentials

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darbikrash's picture
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Joined: Aug 25 2009
Posts: 573
Dangerous Exponentials


Maisntream UK brokerage comes out with forecasting heavily aligned with the "Crash Course". It is remarkable how much of this material is extracted from Chris' work.

Download PDF Investors report:


Dangerous Exponentials wrote:

• In this report, the fifth in the Tullett

Prebon Strategy Insights series, we

set out our core thesis, which is that

the global economy is in the grip of

a forest of dangerous financial and

non-financial exponentials.

• As Fig. 1 illustrates, a series of key

indicators – including population

growth, energy consumption,

cumulative inflation and the

money supply – all appear to

have turned into exponential

‘hockey-stick’ curves.


• This report has been reinforced

by the thinking of Crash Course

author Chris Martenson, whose

interpretation uncannily parallels

our own. Amongst the many

thought-provoking aspects of Crash

Course, perhaps the most important

is the identification of the parallel

trajectories of the financial and

resource exponentials


• We conclude that the ‘forest

of exponentials’ is indeed

highly dangerous, particularly

because it is neither properly

understood, effectively calibrated

or coherently managed.

• In particular, we identify an

urgent need to foster an

understanding of energy returns

on energy invested (EROEI), and

to develop a universal system of

measurement and calibration.

Ultimately, the economy is an

energy-driven construct, yet the

vital concept of energy returns is

woefully misunderstood.


goes211's picture
Status: Diamond Member (Offline)
Joined: Aug 18 2008
Posts: 1114
Re: Dangerous Exponentials
darbikrash wrote:

Maisntream UK brokerage comes out with forecasting heavily aligned with the "Crash Course". It is remarkable how much of this material is extracted from Chris' work.

Thx for the link.  Very interesting stuff. 

DrKrbyLuv's picture
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Dangerous Exponentials

darbikrash - Thanks for the interesting link.

One thing that struck me was that the exponential growth of debt and the constant growth required tends to drive the other problems including the rapid depletion of resources, especially oil.

The crazy part is that our debt based system is completely by choice.  It is an arbitrary system that can be easily changed to eliminate the growth of debt and the need for constant economic growth but yet we continue on this course.

"The clear implication of Chris Martenson’s scathing assessment of inflation is that this theft of value from the public could be countered by anchoring the value of the currency to an external benchmark. This is precisely what the gold standard amounted to. We are not advocates of a return to the gold standard which, in our judgement, is too restrictive, since the money supply does need to grow over time as the economy expands."

I agree with tullet prebon and would disagree with CM if this truly represents his view.


LogansRun's picture
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1443
Re: Dangerous Exponentials

I didn't fully read this when you posted, and I'm sorry I didn't!  Very interesting stuff.  And the issue that Larry highlighted about the pegging of a currency to an outside source was really an eye opener!  You don't see many financial houses stating that they're for a currency pegged on something other than Debt or Gold very often!  

I'm sending this report out to my email group to see what happens.  Very interesting!  Thanks!

Morpheus's picture
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Joined: Dec 27 2008
Posts: 1200
Re: Dangerous Exponentials

Outstanding report. Forwarded to my finance group this morning. 

Woodman's picture
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: Dangerous Exponentials

Interesting summary with many references to Chris in there.

More discussion of this investor report at this post at theoildrum.com:



Thinkor's picture
Status: Bronze Member (Offline)
Joined: Sep 13 2009
Posts: 32
Re: Dangerous Exponentials

A stimulating read.  My comments including points of difference.

* Inflation is the hard drug of (anti)socialist politicians, not capitalists.

* Any discussion of energy policy that doesn't mention thorium or fusion is seriously flawed.  Thorium as a nuclear fuel is an obvious, straightforward solution to many of our energy problems.  Yes, there is some engineering work to be done, but, comparatively speaking, that is a minor problem.   The government needs to simplify and improve its regulations and do whatever else is necessary (like allocating a large tract of land in a scarcely populated area where dangerous experiments can be run with relatively little risk) so that private industry can do the heavy lifting of creating safe,  thorium based, tested reactor designs.   Maybe windmills have better EROEI (I doubt it), but there are all sorts of useful places you cannot put a windmill, such as a submarine or outer space or other places that are not very windy.

Fusion is still a research problem, but advances ARE being made.  Thorium can last us at our present rate of energy consumption for hundreds of years and maybe thousands of years, which will probably be good enough to hold us until fusion power becomes a reality. 

* Our most important problems are not technological, but political.  Put the right guy in charge and we'd be moving rapidly into the age of thorium and fusion.  Unfortunately, republics, as presently structured, don't seem to be able to do that or even to come close or even move in the right direction.  We desperately need to answer Richard Feynman's question posed during the Challenger investigation about NASA:  "Why are the people who know anything always on the bottom of these organizations?".

* Equating the value of a gallon of gasoline to what you would have to pay a human to do the same work is kind of quackish.   Value is determined at the margin by a balance of forces between supply and demand.  If you were to immediately start demanding everyone pay $7500 for a gallon of gasoline, almost nobody would use it.  Is that what we want right now?   I don't think so either.  

* The idea that we will have a serious shortage of oil indefinitely is overlooking an important fact.   There is plenty of oil for the countries that have nuclear weapons.   -   Think about it.

* There is something extraordinarily naive about projecting an energy decline curve for oil that extends for 500 years!

* I agree with Robert Hirsch that we should have started adapting to peak oil years ago, but I would have settled for the powers-that-be simply not actively suppressing the peak oil point of view.

* It is not simple and compelling arguments that affect politicians, but events and threats to string them up coming from red-faced, screaming constituents.  (A simple observation.  I am not advocating this behavior.)

* A very serious effort will be necessary to suppress the efforts of our "wealth redistributors" to take from the competent to give to the incompetent.  The difference between a human being and a tub of water with hydrocarbons in it is structure and structure implies inequality.  Sorry.

* I see no reason to grow the money supply over time.   Wages are sticky because people are unaccustomed to deflation, not because there is anything inherently bad about deflation.

* I find the EROEI concept seriously misleading.  Objection 1:  If you have a cheap source of energy - windmills, thorium, or whatever - it may make sense to put up with a negative EROEI to get a fuel useful for a particular application.  Objection 2:  EROEI can be difficult to evaluate.  If return on $ isn't working, one should explain why.

* Where a technology falls on the EROEI curve is partly a function of politics.  I wonder how much the EROEI would change if all technologies were put through the same kind of expected cost -of-accidents analysis and then regulated appropriately.  EROEI can change also with changes in the technology.  Today solar power doesn't look so hot, but it may look much better in five years. 





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