Avalanche Theory of Debt Cascade Failure

More from the The Concepts of Money and Capital thread on TAE.


Quote from Skipbreakfast

I don’t think the Fed has any illusion it can truly replace all the credit currently in existence, should credit actually start evaporating exponentially. In truth, the Fed doesn’t believe it will need to do that–it naively believed it could reverse the tide before such catastrophe. Maybe even the Fed is starting to wonder if things are now out of hand, however.

The deflationists have persuaded me that the trickle of credit destruction soon becomes a torrent and the CBs are simply overwhelmed. They will have to change tact and embrace deflation at some point, by shoring up their own assets, once it suits them to do so.

One thing I think is not grasped well is the concept of Cascade Failure, best exemplified by an Avalanche or Toppling Dominoes.

What we have here is a MOUNTAIN of debt, which although it has been exponentially increasing at an obvious pace over the last decade, has in truth been growing exponentially right from the beginning of this supercycle, best pegged IMHO to the chartering of the Bank of England in 1692.

All through the ensuing years, one economy after another has been subsumed into this ever expanding Ponzi scheme. The whole Bizness isn’t REALLY managed by Da Fed, its managed by the Bank for International Settlements (BIS) in Switzerland. Da Fed is simply the most powerful among many client Central Banks in this schema.

The snow falls over many years on a Mountain, and in fact you can to extent control Avalanches by setting them off on purpose periodically when you see the instability growing. So in fact it is likely that many of the prior depressions which followed events like the bursting of the Tulip Bubble or the failure of Credit Anstaaldt were to an extent “controlled explosions” which briefly brought down the snow and then collection began again.

This iteration is somewhat different, because in each of the prior iterations after the avalanche there was still surplus ENERGY to access, first by the theft of the New World from its original inhabitants, and then progressively moreso first through the Age of Coal which took us from around 1750 through to around 1900, then the Age of Oil which took us from 1900 through to present day.

The monetary pyramid here through this entire time has used as its Capital the ENERGY accessible from the thermodynamic application of fossil fuels, through a whole variety of neat inventions during the time period. So every time a new invention like say Edison’s Light Bulb appeared on the scene, vast amounts of new Credit was issued to build such things as a nationwide electric grid. In reality of course, none of these things could ever pay off, they always only existed through constant credit subsidization. It was possible to do this by seriously underpricing the cost of energy, putting off the Day of Reckoning hopefully long enough to come up with the Holy Grail of something like Fusion Power, with the “promise” of limitless and clean Energy. However, despite all the years of experiments with Superconducting Supercolliders and the like, Fusion Power remains basically a drawing board type idea to this day, though all the time we get reports it is “just around the corner”.

Anyhow, without such a last minute rescue by the Fusion Power Cavalry here, the Credit Mountain of Money built around accessing ever more amounts of energy per capita will come down, and the AVALANCHE is just beginning here. As I wrote in prior posts in this thread, there is little worth buying here anymore, because just about EVERYTHING is based on continuing sources of energy to power it. Even Farms are based on this in the current model. Much of the production off the Great Plains “Breadbasket” of the world depends on irrigation water pumped up from the Ogalala Aquifer. That pumping is mostly done with diesel pumps, and while you might substitute some with Windmills, the depth now that has to be pumped from is probably too great for a Windmill to handle except in a Tornado, in which case the Windmill is destroyed anyhow.

What you have here as a result is a Cascade Failure of IMMENSE PROPORTIONS, a Credit Collapse Avalanche such as the world has never seen in all of recorded history. IMHO, our Iluminati Masters of the Universe are running around now like Chickens with their Heads Cut Off trying to figure out how best to protect their own “Wealth”, when in fact that wealth is ALREADY GONE. It’s floating around up there in the atmosphere as moelcules of CO2. THAT is where all the “Capital” is now, and it’s not terrifically useful Capital in this form.

I suspect the various CBs will continue to print in concert here for a while longer, and the Funny Money will slosh around in Bank Reserves keeping the TBTF from going under immediately. In the end though, they will CAPITULATE to reality, and the reality is that a MOUNTAIN of Snow collected up here since 1692 is ALL going to come down the Mountain at the SAME TIME. You cannot stop this avalanche from coming down, all you can do is to RUN AWAY. RUN AWAY FAST! Run away NOW. Get just as far away as you reasonably can from the center of this collapse, the Big Shities all over the world built upon Credit and the Thermodynamic energy of Fossil Fuels. They are DEATH TRAPS.


Knarf plays the Doomer Blues


Support the Diner
Search the Diner
Surveys & Podcasts


Renewable Energy


" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch



Inside the Diner

Quote from: K-Dog on September 23, 2020, 09:38:26 AMThere is another blog by the same name but this is no big deal in this menu since they have separate tool-tips...

Quote from: knarf on September 22, 2020, 04:28:08 PM                                                                                                                                        NECROCAPITALISM         ...

The Trump administration took the wraps off a new rule that will make it easier to drill for oil and gas in national forests. At a time when communities are suffering from dirty air and the dangers of a warming planet — from wildfires and heat waves...

Viewing the GOP convention seemed a little like binge-watching the last several years’ parade of none-too-subtle signs of incip...

Capitalism in the United States, as it is right now, is dangerously flawed. Our politicians and policies prioritize corporations, special interests and top income earners over regular American workers and those most impacted by the COVID-19 pandemic. T...

Recent Facebook Posts

No recent Facebook posts to show

Diner Twitter feed

Knarf’s Knewz

Quote from: K-Dog on September 23, 2020, 09:38:26 [...]

Quote from: knarf on September 22, 2020, 04:28:08 [...]

The Trump administration took the wraps off a new [...]

Viewing the GOP convention seemed a little like bi [...]

Capitalism in the United States, as it is right no [...]

Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Doomstead Diner Daily July 17The Diner Daily is av [...]

Doomstead Diner Daily July 16The Diner Daily is av [...]

The point being to wear down the "precariat [...]

Quote from: UnhingedBecauseLucid on March 18, 2019 [...]

CleanTechnicaSupport CleanTechnica’s work via dona [...]

QuoteThe FACT that the current incredibly STUPID e [...]

Quote from: K-Dog on September 23, 2020, 09:38:26 [...]

Quote from: knarf on September 22, 2020, 04:28:08 [...]

The Trump administration took the wraps off a new [...]

Viewing the GOP convention seemed a little like bi [...]

Capitalism in the United States, as it is right no [...]

Quote from: K-Dog on February 24, 2020, 06:23:52 P [...]

I wonder how much these coins have been debased? [...]

Precious tip of the day.....Buy silver NOW  She [...]

Scientists have unlocked the power of gold atoms b [...]

Quote from: azozeo on August 14, 2019, 10:41:33 AM [...]

I am OUT of Jury Service!  I got summoned to be a [...]

Quote from: Eddie on May 16, 2020, 10:30:30 AMQuot [...]

Quote from: RE on May 16, 2020, 08:20:06 AMQuote f [...]

Quote from: RE on May 16, 2020, 08:20:06 AMQuote f [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

Harvest at Chez Cog By Cognitive Dissonance   It became obvious to Mrs. Cog and I by early February [...]

  Perhaps a Crumble Rather Than a Collapse Chapter One By Cognitive Dissonance     “...we can endure [...]

The Flim-Flam Men by Cognitive Dissonance   I suspect if average Joe or Jane were asked to identify [...]

The Coming War With China Re-posted from CaitlinJohnstone.com   (Have you noticed that (suddenly) Ch [...]

Papers Please! By Cognitive Dissonance     For those who may not know, Mrs. Cog and I live in the mo [...]

Event Update For 2020-09-21http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2020-09-20http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2020-09-19http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2020-09-18http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

Event Update For 2020-09-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.htmlThe [...]

In other words, treat COVID-19 like a dry-run for the upcoming "big one" [...]

However don't expect strikes and yellow vests to fix underlying problems [...]

So how many more times are we going to hear that this is our last chance to take action in order to [...]

This is definitely not a bona fide post [...]

Daily Doom Photo


  • Peak Surfer
  • SUN
  • Transition Voice

"If there is no one left alive there is no need for an economy." As the costs of uncontrol [...]

The Great Pause Week 26: Beer Cascades"The Scots forest smallholding system is inherently democratic. It encourages innovation and pr [...]

The Great Pause Week 25: Carbon Negative Beer"Watt recognized, like few others in business, that carbon neutral is not good enough. We have [...]

The Great Pause Week 24: Can we have a hammer and dance for the climate emergency? "If your carbon audit is 5% above where it needs to be, the dance stops and the hammer falls. [...]

The Great Pause Week 23: Toppling Towers"The pandemic is just the sound of one shoe dropping."At 8 am on the morning of August 10, [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

What extinction crisis? Believe it or not, there are still climate science deniers out there. And th [...]

My new book, Abolish Oil Now, will talk about why the climate movement has failed and what we can do [...]

A new climate protest movement out of the UK has taken Europe by storm and made governments sit down [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

In reply to Lidia17. A novel virus breaks out in Wuhan, the chinese government impose a lockdown to [...]

In reply to davidinamonthorayearoradecade. I'm sure George Soros or Bill Gates must be involved [...]

What a coincidence: the first passive house standard residence for seniors in the USA is in Corona, [...]

In reply to Duncan Idaho. https://www.zerohedge.com/political/san-francisco-residents-alert-home-inv [...]

In reply to davidinamonthorayearoradecade. or to use Gail's words: "In Section B, I explai [...]

In reply to Bachs_bitch. Good points. If we have a debt jubilee here, only those who already are in [...]

In reply to Ken Barrows. Back to 10 mpb per day. Recovering from Laura, I guess. [...]

First of all, thanks for the recent back-to-back articles Steve. Always nice to pop in here and know [...]

@sp gp https://www.artberman.com/2020/09/03/stop-expecting-oil-and-the-economy-to-recover/ [...]

McCloskey, yikes, glad to have never heard of her (?) But I have never had much use for the Episcopa [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...


Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

The Kunduz River is one of the main tributaries of the Amu Darya Basin in North Afghanistan. Many co [...]

Protected areas are the backbone of biodiversity conservation but are fixed in space and vulnerable [...]

This paper presents the results of a systematic literature review of climate change adaptation and r [...]

Follow on our http://www.doomsteaddiner.net/forum/