I would like to propose several reasons why I believe the next economic crisis will particularly bad, if not the worst in modern history [1-4]:
- Stranded assets after loss of “social licence”
- fossil fuels, e.g. coal
- fossil fuel driven machines, e.g. coal power plants, internal combustion engine cars, internal combustion engine ships,…
- fossil fuel-based products, e.g. plastics, synthetics, and their waste management, which is not burning
- Devalued assets: Long-term, low-interest rate period lead to massive investments into non-profitable enterprises which are kept alive by investments. An increase of the interest rate will lead to bankrupcy of these enterprises.
- Destroyed assets: Damage by the climate emergency caused by
- weather extremes, e.g. droughts, floods, storms, heat waves, forest fires, …
- sealevel rise and flooding or large metropolitan areas
- Monetary policies ineffective
Note: Monetary policies are exhausted after financial crisis in 2008 leading to a long-term, low (negative) interest rate period.
- Concentration of wealth and power (“corporate and political fascism”) which forces society to continue the pathway which provided them historically with wealth and power and blocks system change.
- Psychological Depression. People experiencing deep feelings of depression and lack of hope based on learned helplessness after experiencing that they have been abused and lied to by leaders and they could not change the system to avoid a climate and ecological catastrophe.
The positive side of this crisis may be that the current fossil-fuel based, capitalist, materialist system will at its absolute weak point, and forces working for a change towards a sustainable, fair global economic and political system may seize the opportunity and transform the system.