Richard Heinberg has a great analogy for the world economy - it used to be a star but it has collapsed and is now a black hole.Maybe it is more accurate to think of the economy itself as the black hole. At its heart is a great sucking void created in 2008 by the destruction of trillions of dollars’ worth of capital. The economy used to be a star, spewing out light and heat (profits and consumer goods), but it imploded on itself. Now its gaping maw will inevitably draw all surrounding matter into itself.
You can’t see the black hole, of course; it’s invisible. It is composed largely of unrepayable debt in the form of mortgages, and of toxic assets (mortgage-backed securities and related derivatives) on the books of major financial institutions, all of which are carefully hidden from view not just by the institutions themselves but by the Treasury and the Fed. Added to those there is also a growing super-gravitational field of resource depletion—which is again invisible to nearly everyone, though it does create noticeable secondary effects in the form of rising energy and food prices.
As I noted here:
The world economic system is credit based and requires constant growth. That constant growth is dependent on cheap oil.
Peak cheap oil was already here but the events in the middle east have accelerated the rise in prices.
The trillions of dollars of toxic debt and the end of cheap oil are drawing the world economy into a black hole. What will we find on the other side? It won't look like anything we have now.
