On Economic Crisis

8/3/2019 On Economic Crisis

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WHATTHE ECONOMIC RISISREALLYMEANSAND

WHATWE CAN DO ABOUT T

We were o ld hat he globalfinancial risisof threeyearsago happened

because rresponsibleorrowers ouldnot afford o payback heir oans.This

is true,but t was alsopartof a muchdeeperproblem. he problem s that oureconomic ystem s basedon the need or ongoing, ontinuous, erpetual

groMh. t'shighly ikely hatwe'realready n the beginnings f a global

depression, ven f bankersandgovernments on'tadmit t yet.Thankfully, e

don'tneed o hear t from hem,we can tell hat somethings goingon, we

have he internet nd we can share nformation mongstourselves. 'm no

expert, 'm ust someonewho'sreada lot aboutall this and I reallywant

everyone lse o knowwhat'sgoingon too. Understanding hat'sgoingon is

the firststep owardsprotecting ourself, our amilyand yourcommunity.

Take he banking ystem. ts commonly elieved hat banks endout money

that hey alreadyhave rom nvested avings.Thatwould haveencouraged

fairlystablesystemof banking. nstead,we havewhat s calleda fractional

reservebanking ystem.This means hat bankscan loanout almostall of the

money hatgetsdepositedwith hem.What thismeans n practice,s that

whenyou put$100 n onebank, hey end$90of it to someone lse,who henputs hat$90 in theirbank.This means here'snow$190where hereused o

be $100.That$90 entwill also be deposited nd$81 lentagain. n thisway,

moneyendsup beingmult ipl iedetween en anda hundredimes.Soundscrazy ight?Less han 1'/"oI the money n the economy s actualnotesand

coins, he restare ust numberson computers, reatedas debt.Thissystem

rapidly ncreases he amountof money n the economy,which uelseconomicgrowth,allowingmostof us the ability o paybackour debtwith nterest.But

onlyso longas the economykeepson growing.

But what uelled he growth n the firstplace?Eversince he Industrial

Revolution, conomic rowthhas been argelydependent n cheapenergy

supplies. nd thesesupplies re now dwindling. he economy s inextricablydependent n the environmentn thisway.

Whenwe first starteddrilling or oil, t was easy o find. t ust spurtedup out of

the ground.We'veonlybeendrilling ntensivelyor abouta 150years,and oil

is no longereasy o find. Now,we drilldown ive kilometres r more hrough

waterand earth,usingexpensive ighrisk echnology. ven hen,we saw the

way an accident anwreckan ecosystemn the BP oil spill astyear.

Additionally,he figuresshow hat or everybarrelof oil energywe'd nvest,we

used o get about100barrelsof oil back.Thesedays we're ucky o get 10

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barrels or everybarrel nvested. nd thatmeans t's notcheapanymore.

The truth s, we are livingon a planet hat has inite esources.Up until hispoint n timewe haveopted o extract he easiest esourcesirst,whileusing

moreand more eachyear.Eventuallyhe useof these inite esourceswill

have o peakat somepointand decline rom hereon as theirextraction ets

harderand more expensive. he globalpeak or oil happenedn 2008accordingo theAssociationor the Studyof PeakOil and Gas.This means

thatwe havereached he end of the periodwhenwe couldextractoil cheaply

and easily.

When I firstheardabout his I thoughtat leastoil is mainly ust used o drive

around.But no, beyond ransportationf the food supplyand all our otherconsumer oods,we run all our farm machinery n oil and makeour pesticides

out of oil. Oil is also a critical ngredientn plastics, harmaceuticals,sphalt,

paints, yresand even oothpaste.n fact,oil is involvedn 99% of the goodsthat we use n our everyday ife.And it'snot only oil that has peaked.Naturalgas,highgradeuranium,many rareearthminerals, hosphorus nd many

other mportant esources avepeakedas well.We are rying o growbeyond

the planet's esource imits.Not only havewe damaged he environment omuch hatwe now get hitmore requently y more ntensenaturaldisasters,we'vealso usedup mostof the non-renewableesourceshat havebeen

allowingus to live n this high echworld. t can'tcontinue orever.

The idealscenario or peakoil was that we'dplan or it and transitiono morerenewableuels and continuewith business s usual.The pessimistic iew

was that he priceof oil wouldgo skyhigh,making ood,energyand muchmore unaffordable nd causinga suddencollapse f our society.

What'sactually een happenings that oil pricesstart o skyrocket,hen slower

spending ausesa recession,hiscausesslowerspending tilluntil he price

of oil comesdown enough or the economy o recover, nd then he cycle

beginsagain.So peakoil suggests hatan ongoing eriesof global ecessions

and partial evivalswilloccuras energydeclines. he globalfinancial risiswas the firstact,act two shouldbe cohing soon.

Quiteapart rom peakoil, we seem o be due for a globaldepression ecause

of the debt buildup. f you add up all the debts n theworld t's roughly150

trillion ollars.You'd hink t has o balanceout somehow,hat surelysomecountries re lending o othercountries.But no, t'smoneyeveryone wes othe banksand their nvestors.t meansour worlddebt o GDP ratio s about

25A%.The problem s, this s theworld,we'renot about o get bailedout by

al iens.

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In hecontext f economicrisis,we need ogoback o thebankingystem.Up untilnow heconstanttream f money oingnto hesystemhroughloans aspushed pprices f assetsikehouses ndstocks. hiswaspossible ecausen a growing conomy ebts ouldbepaidback.Whendebts ecome nmanageablehough, ougetdeflation,ndassetprices ananddogodown. s defaults n debtbegin o happenmore requently,ssetvalues remarked ownaccordingo theirnewworthwithouthedebt.This

creates downwardeflationarypiral, o asset riceswilleventuallyobackdown o whats easonable ndaffordable. o fyouhavea mortgage, ewarethatyoucouldendupwithmoredebt hanyourhouses worth. hisdeflationalsosuggests ighunemployment,ighprices ndhard imes. hat'swhathappeneduringhegreat epression,nd hat'swhat's oing n now

Sowhatcanwedo?Themoneyrombailouts ndmoney rintingn adeflationarycenario oesstraightowards usinessesaying ff heirowndebts ndhasn't hown ood esults timulatingureconomiessyet.Unfortunately,urgovernmentsreso iedup withbigbusiness,ndso happy

with heir ystem f continuallyrowingheeconomyo keepus happy,hattheyaredoing verythingheycansimplyo coverupanddelay heeconomiccollapse. here s nopositivetrategyheycoulduse o saveus andourplanethat s also nkeeping ith heirown nterestsndsystems.n act, hiscomplex ystem asgrowno its imit, nd t s now n decline, lowlydismantlingtself, iecebypiece, inderedlightly long hewaybygovernmentntervention.

Fortunately,'ve earnt,tsgoingo be somewhatk hatoursystemsustdismantlehemselves,ecausehere remillions f people roundheworldbusyat workonsystems ecan eplacehemwith.Themodernndustrialworldhasn't ivenushappiness.t hasn't veneliminatedoverty. e've llbeenworking ay oohard, nd orwhat? o inally xhaustheplanet ndsufferor t?Whynot ry having nergy ecurityhroughower nergy se,enjoyhepriden eeding urselvesndmakinghe hingswe need, witchingourprioritiesrom ndependenceo co-dependence.

There sanother lternativeeyond apitalisnrndcommunism.heybothpresume n ndustrialystem, hich s no ongereasible r desirable.n a

worldwith ess esources nd esscredit, earafteryear,we willbe betteroff fwe earn o getalongwitheachotherandstewardhe earthagain. he otheroptionsconstantonflict, ndnobody ants hat.Wearesocial reatures,ecanwork ogethero buildnew nfrastructureshatcansupportmeaningfulworkanddignifiedives.Weshould e able o workmuch horter ours, atmuchhealthierood,growingmostof t ourselvesndspend lotmoreof our

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timewithour amilies nd riends. ust ike n hegreat epression,nryhistime oundwe'vebeenworking nsolutionso livilrgwithout moderneconomyorwellover40yearsnow.And his ime ound heshiftwillbepermanentecause fpeakoil,so t makes enseo invest our imeandmoneyntosetting p hese ystems.

Permaculturesa system fdoingmorewithmuch essenergy, nd nparticularntensiverynd.organicailyrowingood.Approprialeechnorogyasbeendevelopedo meethuman eedsike ieating ndcoolingnhighlyenergy fficient ays.Local urrencieshatarem6reequitablend ta6learebeilg designednd ested roundheworld. ransitionown roups rebuildingommunitynd eading fforts llover heworldo relocalise.hereareevengroupsworking npeer o peer ersions f the nternethatwecangetupquicklyf the nternet oesdown. his s usta small etofexamplesthat want opointoutbecause very ime worryabout or" particularchallenge,look t upand here's group fpeopte hohave et hemselvesto figuring uta positive nd easible ay hrought.working

ogether ecancreate betterworld, ereandnow

Itsup oallof us o decidewhat o do.The utures nallof ourhands, o t snotonlyourresponsibility,utalso nourbest nterestso educate uiselvesaboutwhats oing n. fwechooseostart iving morepositiveuture ow,wewillcreate ecurityorourselves,ur amiliejandourcommunitiesnaninsecure orld, ndwewillbecontributingo a peaceful lobalransition.irststeps ould e hingsike oining our ocal ransitionnitiitive, tartingo growsomeofyourown oodorriding bike.Howeverfwecontinue long"the"paths etbefore s, ife

willonlygetharder.o far hedeclinenoureconomiesasbeen elativelylow,t feelsas f therewillbe ime orus otransitionfwechoose.n themeantime,fyouappreciate hatyou,ve eenandheard ere,please ass his eaflet n o youi amily nd riends safriendly akeupcall.

Therewillbemore nfocoming oonatwwwdoinqitourselves.org.

Alsocheck utwww.theautomaticearth.bloqspot.com,http:Zenerqvbul|ffi, www.deblGGli6ilonr,-'

http://theoildrum.com/,