Block’s Indicator of Sustainable Growth

Welcome to my blog. I’m Ray Block, macro economist, concerned citizen on global warming, and its impact on rising world inflation.

With millions of blogs on the internet, why another? The purpose of this blog is to become an aggregator site, bringing together up to date information on commodity price inflation, the drawing down of world resources faster than replenishment, and global warming effects on commodity supply.

A little over 200 years ago, another economist, the Rev Thomas Malthus was convinced that population growth would eventually outrun commodity supply. There is some element of truth in this belief, and even the Club of Rome, a non political think tank believed in the 1960s, that there was a limit to food supplies, which the rapid world population growth would eventually lead to food shortages. This was proven wrong at that time, but elements of Malthus is finally coming to pass, with record food price inflation and food riots in many of the poorer countries.

There exists currently the bringing together of a series of reinforcing factors, which in combination is leading to a dangerous period ahead. These are:

* The beginnings of the worst global recession since the 1930s leading to rapid unemployment and yet high inflation.

* Major world banks in credit rationing mode after the destruction of capital due to the credit excesses of recent years leading to a severe credit crunch which commenced in August 2007 and will continue through to end of 2009.

* A continuation of the super commodity cycle which commenced in 1999 and has at least another 20 years to run.

* The need to take quick action on global climate change leading to inevitably large increases in energy prices.

* A global limit to world supplies of hydrocarbons impacting on rapid world demand resulting in continuing price escalation to record levels.

* Unsustainable increases in world population leading to greater misery in the third world.

* The need as never before for sustainable growth as the only way forward.

The Club of Rome authors in their 30 year update in 2002 drew attention to the reckless “drawing on the world’s resources faster than they can be restored, and we are releasing wastes and pollutants faster than the earth can absorb them or render them harmless. They are leading us toward global environmental and economic collapse- but there may still be time to address these problems and soften their impact.”

World population currently 6.7 billion is forecast to rise to 8.9 billion by 2050. 350 years ago, the world population was doubling every 240 years. The population doubling effect took only 100 years by 1900. By 2050, the world population will have more than doubled in 80 years.