Tag Archives: compound interest

Fossil Fuels, Debt-money, and the Growth Economy

The video below (300 Years of FOSSIL FUELS in 300 Seconds), from the Post Carbon Institute, is very well done. It tells the story about the development of industrial civilization based on fossil fuel energy, and the mega-crisis that now confronts us. While it is inaccurate in pointing to fossil fuels as the main driver of economic growth, it is well worth the five minutes it takes to watch it.

As I’ve been saying for a long time, the availability of cheap fossil fuel energy has been the enabler of continuous economic growth, but it is not the driver. The driver of the growth imperative which has been operating for about the past 300 years is the political interest-based debt-money system. It is a system that creates money based on interest bearing “loans.” It is the compound interest that is built into the global money system that requires the continual expansion of debt, which in turn forces the physical expansion of economic output. Now nature is putting on the brakes, telling us it’s time to STOP.

We can make the transition to a regenerative economy consciously and deliberately, or we can try to deal with the developing problems on an ad hoc basis in the midst of inevitable chaos. The end of the industrial era should not be mourned, nor does it need to be painful. We have before us the opportunity to create a happier, more peaceful world, one in which we all have enough to live a dignified and fulfilling life with enough time and energy to restore our communities and our environment. For more about that, see my presentation on The Butterfly Society.—t.h.g.

Exponential growth-a key concept

In all of my writings I’ve tried to make clear that there is inherent in the political money system a growth imperative. That results from the fact that money is created by banks as interest-bearing debt. The compounding of interest causes debt to grow as time passes, not at a steady rate, but at an ever-increasing rate. At some point the amount of debt increases so rapidly that it overwhelms the ability of the real economy to carry it. We now seem to have reach that point and our civilization is in crisis.

This growth imperative based on debt compounding is the primary engine that is driving us to destruction, but debt is not the only thing that is growing exponentially. This video is part of Chris Martenson’s Crash Course. In it, he explains very clearly how compounding works. His entire Crash Course is highly recommended. –t.h.g.