On the occasion of th G20-meeting in Toronto, the German Economics minister Herr Schaüble said that without restoring confidence it would not be possible to get consumer spending and business investment going. Similar remarks were made by David Cameron and Señor Zapatero of Spain. All maintain that confidence is a pre-requisite to get growth going and that, therefore, it was imperative to reduce fiscal deficits. Reducing the fiscal deficit will restore confidence at first. However, reducing the deficit very quickly will introduce a dynamic that may cause the economy to decline - and perhaps depress  consumers demand even further.  It will actually destroy confidence: few businesses are inclined to invest in a shrinking economy. Cutting the deficit too rapidly or too steeply can lead to a confidence trap.

NOTE: A big experiment is now taking place in the UK - the government has cut public spending severely! Will this lead to hardship and, perhaps, social unrest? 

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

Very simple causal loop diagram of a loan, which can be any loan. However, when the loan is a fixed amount, that needs to be repaid in x periods, you can cross out the 'taking out' arrow from debt to bank account.

Challenge p.212 Business Dynamics, Sterman

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

From Bill Mitchell and Warren Mosler December2018 billy blog entry  and mosler's MMT white paper (google docs) 2019. Some highly aggregated stocks and flows and boundaries introduced.See also Feb 2026 updated insight

An initial study of the economics of single use coffee pods.

THE BROKEN LINK BETWEEN SUPPLY AND DEMAND CREATES TURBULENT CHAOTIC DESTRUCTION

The existing global capitalistic growth paradigm is totally flawed

Growth in supply and productivity is a summation of variables as is demand ... when the link between them is broken by catastrophic failure in a component the creation of unpredictable chaotic turbulence puts the controls ito a situation that will never return the system to its initial conditions as it is STIC system (Lorenz)

The chaotic turbulence is the result of the concept of infinite bigness this has been the destructive influence on all empires and now shown up by Feigenbaum numbers and Dunbar numbers for neural netwoirks

See Guy Lakeman Bubble Theory for more details on keeping systems within finite working containers (villages communities)

An initial study of the economics of single use coffee pods.

From Jay Forrester 1988 killian lectures youtube video describing system dynamics at MIT. For Concepts See IM-185226. For more detailed biography See Jay Forrester memorial webpage For MIT HIstory see IM-184930

Simulating Hyperinflation for 3650 days.

If private bond holdings are going down and the government is running a big deficit then the central bank has to monetize bonds equal to the deficit plus the decrease in private bond holdings.  We don't show the details of the central bank buying bonds here, just the net results.

See blog at http://howfiatdies.blogspot.com for more on hyperinflation, including a hyperinflation FAQ.

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

FORCED GROWTH GROWTH GOES INTO TURBULENT CHAOTIC DESTRUCTION 
 BEWARE pushing increased growth blows the system!
(governments are trying to push growth on already unstable systems !)

The existing global capitalistic growth paradigm is totally flawed

The chaotic turbulence is the result of the concept and flawed strategy of infinite bigness this has been the destructive influence on all empires and now shown up by Feigenbaum numbers and Dunbar numbers for neural netwoirks

See Guy Lakeman Bubble Theory for more details on keeping systems within finite limited size working capacity containers (villages communities)

Based on the Market and Price simulation model in System Zoo 3. Used in the System Thinking section of Regenerative Economics.

WIP Summary of MIchael Hudson's Book Killing the Host: How Financial Parasites and Debt destroy the Global Economy 

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.

An initial study of the economics of single use coffee pods.