Our mismanaged world economy today has many of the characteristics of a Ponzi scheme. A Ponzi scheme takes payments from a broad base of investors and uses these to pay off returns. It creates the illusion that it is providing a highly attractive rate of return on investment as a result of savvy investment decisions when in fact these irresistibly high earnings are in part the result of consuming the asset base itself. A Ponzi scheme investment fund can last only as long as the flow of new investments is sufficient to sustain the high rates of return paid out to previous investors. When this is no longer possible, the scheme collapses—just as Bernard Madoff’s $65 billion investment fund did in December 2008.

Found by Misanthropic Scott

As of mid-2009, nearly all the world’s major aquifers were being overpumped. We have more irrigation water than before the overpumping began, in true Ponzi fashion. We get the feeling that we’re doing very well in agriculture—but the reality is that an estimated 400 million people are today being fed by overpumping, a process that is by definition short-term. With aquifers being depleted, this water-based food bubble is about to burst.

A similar situation exists with the melting of mountain glaciers. When glaciers first start to melt, flows in the rivers and the irrigation canals they feed are larger than before the melting started. But after a point, as smaller glaciers disappear and larger ones shrink, the amount of ice melt declines and the river flow diminishes. Thus we have two water-based Ponzi schemes running in parallel in agriculture.

And there are more such schemes. As human and livestock populations grow more or less apace, the rising demand for forage eventually exceeds the sustainable yield of grasslands. As a result, the grass deteriorates, leaving the land bare, allowing it to turn to desert. In this Ponzi scheme, herders are forced to rely on food aid or they migrate to cities.

Three-fourths of oceanic fisheries are now being fished at or beyond capacity or are recovering from overexploitation. If we continue with business as usual, many of these fisheries will collapse. Overfishing, simply defined, means we are taking fish from the oceans faster than they can reproduce. The cod fishery off the coast of Newfoundland in Canada is a prime example of what can happen. Long one of the world’s most productive fisheries, it collapsed in the early 1990s and may never recover.

This article is an excellent read.

Found by Misanthropic Scott.




  1. Breetai says:

    Funny, I’ve always thought it was obvious.

    What I can’t fathom though is how has the US produced such an overwhelming number of business and economic collge majors but no one had the common sense to regonize the fundamentals at the most important levels were fucked.

    Kinda like the US Constitution, more obvious but ignored common sense. It’s only as good as those that enforce it and those enforcing it are just lying scumbags who cherry pick the parts they enforce. It’s going to fail too because we’re too stupid to stop the Bullshit.

  2. And, don’t forget, the article doesn’t even mention the fact that not only is the oil at the pump a subsidized and limited resource, so is the oil we pour on our corn as fertilizer.

    That’s right, industrial fertilizers are petroleum products. We’re eating oil!! That can’t be good for either our health or our long term prospects in terms of a very large population dependent on a fossil, non-renewable, resource.

  3. skitsbox says:

    In short…. yes!

  4. GF says:

    What would Lunkwill and Fook do?

  5. ECA says:

    Lets see….

    Arability lands on earth, is about 10%..
    Which means lands that can be used to harvest foods..
    USA produces about 30% of foods used by OTHER nations. In the USA they cut the material costs of food, to the point we are eating chemicals. And shipping our FOOD over seas, At BETTER PRICES??
    WE cut the amount of cattle and keep up the AMOUNT of milk produced.. We are cutting the animal populations and STILL adding more PEOPLE??
    CAPITALISM has to deal with the TOP of a plateau.. AND NOT CUT CORNERS to make more profits.
    COUNTRIES have to deal with THEIR own problems of FOOD, and resources. IF the people arnt FARMING, THE gov must MAKE THEM FARM.

    FOOD is the LAST resource, after that we FEED on each other.

  6. chuck says:

    “If we continue with business as usual…”
    “If trends continue…”
    etc etc

    Business will not continue as usual. It will change.
    Trends will not continue. They will change.

    “Past performance is not indicative of future returns” (written in tiny letters at the bottom of my 401K report.)

    Unrestricted growth never continues – it becomes restricted and stops growing.

    If we run out of oil in 40 years – this is a catastrophe and we must do something about.

    But if we run out of oil in 50 years – I don’t care I’ll be dead. Screw everyone else.

  7. Sea Lawyer says:

    Clumsy comparisons to Ponzi schemes aside, this is a useful article discussing the problem of diminishing resources. The one gripe I have is that while it justifiably brings up the external costs of our use of resources, it doesn’t consider the external benefits. The growth in fossil fuel use to power our growing societies certainly creates costs to us all, but it has also fueled all of our modern technological innovation that will eventually allow us to move beyond their use.

  8. Angel H. Wong says:

    All to serve the “needs” of a few.

  9. #4 – GF,

    Exactly what we are doing. You take one side of the argument. I’ll take the other. We can argue for about 10 million years (if we can make it through this century) and make money on both sides. See how much ExxonMobil is helping us on our merry way … right over the cliff?

    #5 – ECA,

    Farm what with what? We’ve already lost 10% of the earth’s arable land to desertification. Crops need even more water than people. Have you checked the status on the Ogallala Aquifer recently? How about the glaciers on which much of the world’s farming depends?

    What about fertilizer? What happens when we run out of petroleum to make it, or just recognize the real cost?

    What about the billion people who rely on ocean fish for the bulk of their protein. Fisheries output has been declining since the mid 1980s despite “improvements” in fishing technology.

    More importantly, ocean acidification threatens the entire food chain of the ocean.

    It’s not about ramping up food production. We’ve tried that experiment every year for 10,000 years. The result of the experiment is that whenever we make more food, we make more people. And, more people starve as a result, both as an absolute number and as a percentage of the population.

    Sorry, getting more people to farm will not help.

  10. #6 – chuck,

    Screw everyone else.

    Thanks for so eloquently showing us the problem … by being an excellent representation of how all of humanity as a whole is thinking. I don’t necessarily mean every individual, but the whole of humanity really thinks this way and behaves exactly this way.

    Oh well. At least it won’t be my kids dealing with the likes of chuck.

  11. #7 – Sea Lawyer,

    That’s a very well-reasoned and oft-used argument. Unfortunately, history shows us, if we’re willing to look, that every time technology solves a problem it creates an even bigger unforeseen problem.

    For a simple example, cars were seen as the solution to the problem of noisy smelly horses in New York City. Tell me if you really believe this solution to be better than the problem.

  12. Sea Lawyer says:

    #12, scott,

    There are a lot more benefits associated with cars than just the reduced smell of horse poo.

  13. dcphill says:

    Soylent Green (1973), the ultimate ponzi scheme.

  14. amodedoma says:

    The human race is insatiable. Our societies value competition to the point where many label their own children winners or losers. We send them to school to learn to compete and we purposely exclude moral or ethical considerations in the name of political correctness. Values should be taught at home, but who has time for that. Now we reap what’s been sown in generations of hollow lifestyle pursuits that have brought us this wonderful consumer society of ours. Where we work to exhaustion to maintain a family we rarely see, so we can have a ‘decent’ standard of living. Where our politicians are no longer public servants, they serve the money that got them into office and lobbyists that help to keep them there. Where preemptive wars are fought and justified in the name of fear and hate.
    Humanity just like most humans will have to learn things through suffering and reflection. It won’t be long now, things are much worse than most of us are being led to believe.

  15. amodedoma says:

    OOPS! sorry for the rant… Just read what I wrote and I realized I’m overdue for my medication.

  16. sargasso says:

    Human fertility in the west has dropped below population maintenance levels. We rely on immigration from the 3rd world and globalization, to keep the consumerism process alive. This dilutes the rhetoric of environmental doomsayers, who claim that the process is run-away and irreversible.

  17. Mike says:

    Let’s not forget the interest private banks are getting on printing the US and other nations money. That’s is certainly a scheme.

    The audacity of the Federal Reserve to put Jackson, Lincoln and Franklin on their bank notes alone should be enough to have EVERY American protesting in the streets; unfortunately important history isn’t taught so well here.

    But people will find out soon enough, one way or the other.

  18. Mike Peterson says:

    Yep, it’s pretty much hopeless. Politicians make promises for years from now that they won’t be around to keep, and the next group ignores them while making more promises for the next 30 years that THEY will not be around to keep.

    Which is why I’ve decided to not worry about it and live well while I can. Chances are I won’t be alive to see the worst of it.

    Think about it, people, we cannot stop or even slow it down because the system won’t allow it. We cannot stop the system without revolution, which is impossible because most people are media-blinded idiots.

    So give it up and live it up. You can be green and volunteer and eat organic….and it won’t make a bit of difference.

  19. Micromike says:

    Chuck speaks for the common man. As long as he (man) gets his, the rest can get fucked. It has always been this way and it always will be so. Man will come and go but his nature is eternally greedy and selfish.

  20. Angel H. Wong says:

    *pretends to be a Republican* It’s all nuthing but tree-huggin’, baby killin’, plant eatin’, liveral lies ’cause Dick Cheny went fishin’ the other naight with Glenn Bek and they caught plenty fishin’

    *spelling errors added because Republican supporters are bad at spelling*

  21. #13 – Sea Lawyer,

    My point about the cars was that they cause severe problems like global warming, one of the highest asthma rates in the country here in NYC, smog days in many areas of the country, 70-130,000 deaths per year from air pollution in the U.S. alone, etc.

  22. #17 – amodedoma,

    I was just about to say how much I liked the rant in post 15. I wouldn’t retract a word of it.

  23. #24 – alfie,

    Talk about a waste of bandwidth, try reading your own posts.

    That ecological lunacy you talk about … well, a functioning biosphere provides to humanity free of charge every year, about $30 trillion with a T.

    http://tinyurl.com/5rgloj

    Clean water and clean air and crop pollination are among the big and obvious things we get from a biosphere that we probably can’t create for ourselves even if we do kill the economy by spending an unnecessary $30T/yr on them.

    You want to see a dead economy? Just wait until we need to purify every milliliter of water we drink and every lungful of air we breathe and pollinate every crop we raise individually.

    Oh, I forgot. You’ll just pray, tap a rock, and god will deliver.

    Got manna?

  24. MWD78 says:

    this is why I have been saying for years that the main problem with our environment is not what we are doing to it per se, but the sheer number of people that are doing it. this planet has roughly 4x the number of people living on it that it could reasonably sustain. You see ants on all of the inhabitable continents, but you don’t see carpenter ants on all of them.
    Obesity, Cancer, Increases in the number of Natural Disasters. All Mother Nature’s way of self-correcting. I know when i say this i’m about to take a lot of flak, but i think in part it also helps to explain the increase in homosexuality as well. Sort of like how in a Nation during peacetime the boy/girl ratio of births hovers around 50/50, but after a major war more boys are born to help correct the drastic loss, except now Negative Population Growth is the desired effect.
    on a Geological scale, there have been mass-extinctions every 26 million years or so, and to a lesser extent every 13 million years. mankind’s entire cycle so far has been at the mercy of these cycles.
    either way, i think aid workers in starving nations would be better served handing out rice and condoms instead of rice and bibles. “Be fruitful and multiply” is a motto mankind can no longer afford. Why bother feeding idiots that will only continue living and having kids in lands where food will not grow, so their kids will continue to do the same?
    I know this all sounds rather harsh, but if we continue to turn a blind eye to the realities of the overpopulation of this planet, we will be left with nothing save a barren rock to call home. any other organism in a closed system that overpopulates itself will eventually die off. This planet needs Negative Population Growth, and it needs it now.

  25. Hmeyers says:

    Misanthropic Scott,

    That article is a great read and some brilliant analysis.

    But in biology they teach that everything biological is recyclable in the ecosystem. And so is water is the biosphere.

    Doom and gloom is overrated, but you are very much correct that people should devote time to researching it.

  26. Hmeyers says:

    #6 for the win

  27. Gaia says:

    “Unrestricted growth never continues – it becomes restricted and stops growing.”

    Such as when a cancer kills its host.

    Other than Earth drying out and becoming Mars, *we* can’t kill the Earth. But we can kill ourselves by making where we live uninhabitable. Even Palm Beach, Rush.

  28. hhopper says:

    Har! Rush can’t buy the Rams.

  29. majorfoxpaws says:

    Designer Soylent Greem

  30. bobbo, we are not numbers says:

    I like the “notion” of progress only bringing the actuality of worse conditions. Is it “true,” or in what senses is it true and false that moving to cars rather than horses was good or bad? I think that might serve as a model of the slippery slope to disaster that Scott has posted.

    Lets see–don’t we have to list “all” the bads and ALL THE GOODS as well? So, global warming, asthma, and smell are bad. Where is the good?????

    Scott–your thinking has to be “unbalanced” if you don’t balance the bad off anything good? AND there are SO MANY GOOD things: personal and social mobility, the internal combustion engine leading to air flight/rocketry/moon landing/technology, plastics==My God Scott===PLASTIC!!! I guess any discussion of balance should stop right there. The trump card: plastic.

    Another good thread of yours: as the population increases from more food, a greater percentage of people go hungry. You got a link for that? I’ll bet people are going hungry while food is thrown away??? Distribution/political issues, not carrying capacity.

    It will be interesting when world population flexes downward due to lack of water/lack of food. Probably start in Africa, maybe India? I can see world relief supplies of food being commandeered by the local militias. Yes, interesting times. Its good to live in the bread basket of the world.

    Maybe with advances in solar power, the electricity to drive pumps will be relatively free and we can pump all the water that flows into the ocean and use it to resupply all the aquifers? Yep, tunnel boring machines from Lake Superior to Los Angeles. Technology.

    I think we will see it starting in 20-30 years. Sure we see it now, I’m saying: oops, there it is!!


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