A crisis is a terrible thing to waste.
In 2008, I made the outrageous claim that all debts ought to be forgiven. This statement was of course meant to outrage, but now that I have an ever better understanding of what went wrong, I feel even more justified in supporting this idea.
This last year, I discovered the most amazing website (www.chrismartenson.com/crashcourse). Not only did Chris Martenson, a Master Communicator, consolidate all the things that I felt were going wrong with the world, he explains how these things are all coming to a head. The Crash Course goes for over three hours, so no amount of trying will cause anything I write here to completely determine our dilemmas, but I shall try.
For over twenty five years, I could not understand why as a civilisation we have this fascination with Economic Growth. Everyone tells us that growth is good for us, even though most of us don't like it, and consternation abounds when it goes away, as is happening right now. Well dear reader, it's all clear as a bell now. Capitalism, and its cousins the Free Markets, are fundamentally flawed. Capitalism is doomed to fail, no matter what we do, and here is why.
Everything around you is based on debt. Everything. The car in your garage, the garage, the road outside, the paper you are holding in your hands, was all paid for with money, and money is debt, (www.moneyasdebt.net) 90% created out of thin air by the Reserve Bank. In fact, much of this 'money' does not exist at all now, thanks to computers which are able to make electronic ledger entries in spreadsheets to the tune of any millions you like if the spending can be justified by later earnings. But there's a sting in the tail of all this debt: the money to pay the interest on that debt does not exist either!
So to create the interest payable, even 'more stuff' needs to be built or manufactured or invented. Newer better faster computers, bigger houses, bigger cars, plasma screen TVs, more air conditioners, and of course the interest money on that 'stuff' doesn't exist either, so the dog starts chasing its own tail..... except this dog's tail keeps growing, and it will choke the dog. I hope you are still with me on this, it is very important.
The other aspect of all this growth, is that it is exponential in nature, and an exponential curve looks like this:
This curve is of population, but they all look the same; flattish to start with, then they go skywards. Some of you might hopefully remember something I wrote last year about test tubes and bacteria, and test tubes filling up at midnight? So many things are now growing exponentially, like numbers of cars, roads, houses, debt itself, carbon emissions, water consumption, computers, topsoil loss, fisheries collapsing, that the list is way too long to publish here. As Chris Martenson says in the Crash Course “if you feel as though your life is accelerating out of control, well that's because it is...”
Now, have you noticed how, even just a few years ago, if you had a million bucks you were very rich, but today the very rich are all billionaires? And that when they talk about economic matters today, increasingly, the word Trillion is entering the vernacular? You have to put this into perspective actually. A Million dollars is a pile of tightly packed $100 notes about one metre high. But a Billion dollars is a pile one kilometre high! I can still get my head around that, sort of..... but a Trillion dollars, well that's something else altogether, that's tightly packed $100 notes laid horizontally all the way from here to Sydney!! Just let THAT sink in for a while, because they are using piles of money that large to bailout failed companies and banks where Uncle Sam lives. Money supply is also growing exponentially.
OK, now back to the fundamental flaws. Because debt has been growing exponentially and is going up with that train, the amount of money required to pay all that interest will not be paid in Trillions... but Godzillions! Still with me? Trouble is dear reader, there are not enough resources left to build $Godzillion worth of economic growth, and so the debts can never be repaid. NEVER.
Economists continue speaking in forked tongues, saying we have a financial crisis on our hands, when in fact we have a DEBT crisis.
When Peak Oil caused the price of oil to reach $147, everything (petrol, food, building, and most services) went up with it. The Powers That Be, assuming inflation was causing this, raised interest rates. How helpful was that? Treasury doesn't seem to understand that inflation is caused by too much money being circulated (remember, they print it!), thus causing money to be worth less, and the cost of everything going up. This time, however, it wasn't inflation that caused price rises, it was Limits to Growth. The government is now clutching at straws, they do not understand Limits to Growth. Computer says NO! Limits to Growth means, the debts cannot ever be repaid.
All this was predicted, as long as twenty years ago. But nobody listened, and now we have a huge problem to sort out. I have some ideas on how to fix this mess, but they are all way too controversial to happen before the entire deck of credit cards falls over in a big heap. A several Trillion dollars heap. The powers that be certainly have no idea what to do, they are borrowing ever more money and throwing it at the problem, when in fact someone ought to be shouting “STOP!” very very loudly. But there you go, this is all too much, it wasn't meant to happen, and the best they can do is clutch at straws and hope it will all go away.
But it won't go away, and soon, we will all be on our own. Will we let the multinationals repossess everything because they screwed up? Should we bail out stupid car companies because they ignored all the warnings about Peak Oil and Climate Change and insisted on making us cars that eat the planet? Or do we retake the streets and tell them to get lost (I'm being very polite here!) because we don't want them doing any more damage?
Food for thought for 2009. A crisis is a terrible thing to waste. What are we going to do about it? Next week dear reader.....!