Economy

Monitoring Change/Risk in the Economy

Four areas covered for change and risk within the economy

1. Money as a claim on energy and resources

2. Debt as a future claim on energy and resources

3. Currency and power conflict

4. Personal EROI - Customer/Employee/Individual buying power

DETACHED OBSERVATION STATEMENT #1

> Money is a claim on Energy and Resources

Energy and resources are correlated to wealth. Money is a claim on these energy and resources.

RISK and what we will be monitoring

Since money needs and energy to convert, the risk is that there is too much money vs the energy and resources available. Humans can print as much fiat and crypto as they want, however, they cannot print water, oil, natural gas, minerals, materials, etc. As more investors are discovering this imbalance, they will want to move away from fiat into something more valuable.

We will be monitoring this shift and how money supply is moving up exponentially/fast levels. This gets back to the EROI of the energy section.

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Since moving off the gold standard in the 1970s, the worlds currency is now fiat. It is not tied to a physical asset. As such, the growth of money (claims on energy and resources) has ballooned. There are other forms of money that can be used in transactions (with new additions like crypto), however, all forms of money need the resources to claim. A digital number in a bank account is at risk due to its value being based on perception of confidence within the markets of that value. As an example, if there is a rush to claim digital/fiat money, the value of its purchasing power would diminish quickly due to the overabundance of such fiat money and that prices would rise dramatically on a large claim of lower EROI energy and resources.

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IMPORTANT QUICK NOTE ON MONEY

There is a lot of discussion about government and their budgets in the news.

Two quick notes:

1. The US Federal Government is not like a household. The issuer of a currency has much more power than a user of the currency. The implications of debt on the US government is different than the debt of a state, a county, a city, a corporation, or an individual.

2. Money in circulation is in someone's pocket. To take away money from US government spending has implications. As does excessive spending.

Just know that there is a vast difference between the US government and a state, a city, an organization, and an individual. A state/city/organization/individual cannot print dollars when there is trouble.

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DETACHED OBSERVATION STATEMENT #2

> Debt is a future claim on energy and resources

With lower EROI on energy and resources combined with human pursuit of wealth, debt has increased dramatically over the last few decades. Debt allows future demand pulled forward and those who hold that debt have a future claim on energy and resources.

RISK and what we will be mentoring

Along with adding more money to the system, debt is a way to increase consumption and the economy. Debt can leverage and improve results. The world economy is much larger because of all the debt and leverage.

Too much debt and too much leverage comes home to roost when trouble arrives. This is a huge risk - especially with larger economies. We will monitor debt across the world periodically and attempt to monitor leverage.

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DETACHED OBSERVATION STATEMENT #3

> Competition/Cooperation of the US dollar - Other currencies

Conflict is not just on a battlefield, nations compete and cooperate for power/survival. The US dollar is the worlds reserve currency. The United States has additional power in that other nations have to use the US dollar in transactions which creates demand for the currency. It has allowed the US to have massive debts. The trend is away from the US dollar as nations seek to move up the hierarchy chain. This conflict is in full swing and the results of this conflict will impact organizations and individuals within the US and those that use both the US dollar worldwide along with the other currencies.

RISK and what we will be monitoring

This website is based in the United States so we will take that perspective. The risk for businesses and individuals within the US is what happens with this constant conflict. The exchange rate and purchasing power is just a couple of many. As we see currently, the US is competing to maintain and expand the use of the dollar. Other countries are seeking alternatives. Businesses are subject to this conflict (quick example - who is a US ingroup member vs an outgroup member? Tariffs and ability to trade with a country along with specific industry risk are constantly changing.

We will be periodically monitoring the use of the US dollar along with the approach-avoid of other nations towards the United States in general.

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DETACHED OBSERVATION STATEMENT #4

Personal financial EROI impact on organizations

Within the energy section, we discussed EROI on a human wide scale. In this section, we will cover personal financial EROI. Humans need a certain amount of calories to survive. Surplus energy can then be spent on other activities. Financial EROI for this section is monitoring how customers and employees are surviving financially. What is there position in terms of affording life? How does this impact their approach-avoid actions?

RISK and what we will be monitoring

Incomes versus expenses. Each person has their own experience. Incomes for most people are not moving up fast enough to match costs within the US.

We will be monitoring the affordability for people to buy the things they need to not just survive but feel better about their world. Another risk we will be monitoring is perception risk. We see that for those with more resources do not have in their perception the struggles of others who are outside perception. An example of this is declaring the stock market is higher (due to the vast amounts of fiat currency, more on this later). Many people are not in the stock market and so they do not get the benefit of a flood of fiat currency chasing assets. This leads to a cycle where assets now are trying to find investments away from fiat and driving up costs to the same people who do not have access to the financial markets.

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ECONOMY

Monitoring Change/Risk in the Economy

Economy News

ECONOMY

Monitoring Change/Risk in the Economy

Economy News

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