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45-Minute Crash course

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The economic difficulties experienced across the globe in 2008 and 2009, are just the beginning of a very long period of global adjustment. Hello, my name is Chris Martenson, and I was among a select few who correctly foresaw the housing collapse, the credit crisis and the decline of the dollar as far back as 2004 And now my job is to illuminate the future so that you can know what to expect next. I invite you to watch this whole video and if you want to go deeper to watch my crash course which is freely available for everyone in both English and Spanish. The story is about more than just money, much more. Please join me in welcoming, Chris Martenson. [Applause] I need to get a confession out of the way, right upfront. Euhm, I'm going to talk to you about something that I'm not an expert in. I'm not an economist. And even worse, it turns out, I'm not an energy specialist and I'm not really an expert in environmental issues but I'm going to talk to you about all 3 of these things tonight. Because it's where the confluence of these three E's, the economy, energy and the environment come together, that one of the greatest stories of our generation is gonna get told. The reason I am up here though, is because of this, I'm a father. I'm a father of 3 young children and I care deeply about the future, that we're leaving behind. I also care deeply about my country. I consider myself to be a patriot and a member of the globe, of the world. I'm a global citizen as well. And surprisingly, surprisingly to all of this, to everything I've studied and looked at, I am still an optimist. [Laughter] Before I came in contact with this information that I'm going to share a piece of with you tonight, I was living in a five bathroom house on the coast of Connecticut and doing all the things that you're supposed to do. And, after I came in contact with this information, I'm now renting a small house in a rural part of Massachusetts and I have chickens in my backyard. So what happened? How did I fall off the American dream with such a thud, by conventional standards. Well, tonight we're going to talk about that. This is about the future. People ask who I am, what do I do, really, euhm, I'm not an economist. And if anything, I'm a futurist. And I believe that there's enormous value, particularly at key moments in history to be gained. By peering ahead, just a little bit. If we can illuminate the path a few steps ahead, that will give us an advantage, it will give us time, to do things, to react in ways that are of our own choosing and on our own terms rather than reacting at times and places not of our choosing. So ultimately the crash course itself becomes a lens that I use to view the world, and once I started using this lens to look at the world, I couldn't look at it any other way. The lens leads me to one conclusion, and I can sum it up in a single sentence. And that conclusion is that the next twenty years are going to be completely unlike the last twenty years. And the reason this is so important, is because if you've been travelling along on a straight road for a long period of time, you tend to think that it's gonna still be straight, right? If we just came through the 80's and the 90's and the 2000's giving us one set of experiences about how the world works, how investing works, how money works, what's gone lie and wait for us, we might be predicating what we think is gonna happen the next five years based on the fact that that road has been going like that. But what if the road is gonna take a sharp corner? This is where your past doesn't serve you all that well. In fact, it could be a liability and it is my contention that we are at one of these sharp corners that's coming up. There might be a lot of straight road after that, I don't know, but I do know that there's a sharp corner coming. So that's what we're gonna talk about tonight. Is how I've come to that particular conclusion. So the crash course, what is it? I mentioned that we will talk about three E's. The economy is one, there's a number of things up there that form the full body of it. I talk about, really the most important thing is about the money system itself, and we have something called an exponential money system. I'll define that in a minute, we'll go about this one in pretty good measure. And our economy is based on constant growth, not just based on it, it's predicated on it, it needs it. This year the world economy is slated to shrink by, I don't know, a couple of percent maybe? And it looks like, it looks like the skies have opened and brimstones coming down. Look how economy behaves under a 2% percent regime of negative growth. That's what we call it because we have no other words for it. That's how engrained our concept of growth is. so that's the first E and then the second E is around energy itself. and I talk about peak oil, and I talk about peak coal and peak uranium and then I'm also gonna talk about the environment, the third E, and there I'm really gonna talk about the issue of resources. Resources, particularly how we use resources as a species, as an organism. How we, how we use them and what our current method of exploiting resources what that might imply for the future. So, exponential growth, what is that, and why is it important ? Here is how economists see the world. Economists have developed this whole rational discipline about describing the world, and here is a formula that they use. And we can parse this whole thing and spend a lot of time, remembering our math and differential equations. But let me simplify that formula for you. It translates into this: growth. That's what that formula is: it's the formula for growth. And economics is just absolutely fixated on this thing called "growth", because that's how the whole system has been designed. So it really behooves us to understand this thing called "growth" just a little bit better. And the type of growth I want to talk about is exponential growth. So this is an exponential chart. Has anybody seen these before? All we're doing here is we're graphing some amount of something over time. It could be money in a bank account, it could be ants populating a new food supply.. It doesn't really matter. But all that's really required for us to get a chart that looks like a hockey stick, is that whatever it is we're measuring, is growing by some percentage over time. And the percentage doesn't have to be a lot. It just has to be anything. And in this case, what we're looking at here, is a chart of something that's, I think we're all familiar with it, it's a chart of population. Population doesn't grow very significantly: a percent, percent and a half a year worldwide. As we chart this over several thousands of years and put billions of people on the left axis, we can see this hockey stick shape, and the green part is all history. You live at the apex of the green part. And the red part over here is the U.N.-projection for the next forty-two years. So, this little piece right here says that one of the things we're gonna be doing, is doubling our population in a really short amount of time. See this thing I call 'a turning the corner'? It's really an artefact. If I fiddle with that left scale, I could make this look like a hockey stick anywhere. I could take years off, add years and I can fiddle with it. But one thing you can't fiddle with is if you know what the total amount is that you can put in. If you can fix that left axis. Then turning the corner is a very real phenomenon. And in an exponential chart it has huge implications. And let's take a look at something where I think we can pretty reasonably fix the axes, and know what it means to turn the corner. Here's world population. I think that it's pretty safe at this point in time based on everything I've read, the world population, probably we can put a cap somewhere in there, between nine and twelve billion people. Based on how much fresh water there is, and how much arable land there is, how much energy we've got. And that's it. So now that we know roughly where that ceiling is, this piece right here, this turning the corner, is a very very significant event. In world history. This means that we are adding more and more people on a very short amount of time, relative to anything we've seen in all of history. So this means we live in unique times. That's ok, it doesn't necessarily imply anything bad. It's just a condition we happen to live in, so understanding it gives us some insight. Another thing that we can pretty reasonably fix and understand where we are, is oil. We know roughly how much oil is in, give or take a decade or two, give or take a, you know, a few hundred gigabarrels. We think we've got it fixed, so we can actually put a cap on the amount of oil. The total amount of oil that we know or think we can get out of the earth's crust. And so, it means that this turning the corner piece is really important. One of the key elements then, about exponential growth. The thing that I find that I can convey that people can carry home and bring with them, that makes this world sense, is this notion of speeding up. Right? So if I think about exponential growth, one of the things we can do is we can measure this speeding up by the fact that the amount of whatever it is we're measuring, that is added, is growing larger over each unit of time. So if we set how much is added this year, and then this year, and then this year, the amounts are changing. Right? So the amount is growing larger over each unit of time. We can flip that. We can say it the other way. We can say that, it's actually the time is shrinking between each unit that is added. So if we had added one unit that took a year, then we had another one unit that might take ten months and then another one unit that might take six months. So we can see the speeding up that way. Whether you like to think of it in amounts or in time both are perfectly valid but the critical notion is to think of it as the speeding up I wanna go through an example, which will help us understand this funny thing called a hockey stick chart. Or an exponential chart, because it's really critical that we get it. You're gonna hold out your left hand. I'm giving you a magic eyedropper. And this is magic for a reason. When you put a drop of water on your hand, that drop of water is gonna double every minute. So after a minute passes you have two drops of water in your hand. Another minute and now you've got four. Because each of them doubled. Right. And then after about six minutes, you have enough to fill up a thimble. And so, your water is growing, and its growing by doubling, every minute. This happens to be family park, and I want you to imagine a couple of things, stick with me for a moment. First of all it's watertight. Second of all, I'm gonna go down onto that pitcher's mound and put one of these magic drops of water. And third of all, I'm gonna handcuff you to one of the highest bleacher seats. So there you are. You're handcuffed. And on january first, 2009, right at 12 o' clock in the afternoon. I go down and i place one of these magic drops, right there on the pitcher's mound. And I ask this question, how long do you have to get out of your handcuffs? At 12:49 on that same day. This park is completely full. The good news is if I'm off by, in my calculations of how big that park is, by 100 percent, I'm only off by a minute. [crowd laughs] So I'm pretty comfortable, we're in that. Second question then becomes: "Well, at what time, of the day then, is the park still 93 percent empty space, and how many people recognize that they have a problem on their hands?" 12:45 it is still 93 percent empty space. There's a little water in the in-field. Everything looks good. Maybe you order a hotdog at the time. This is easy, right? 44 minutes. Looks like nothing's really happening. 4 more minutes. 45 minutes and nothing's happened. 4 more minutes, boom! It's all done. There's the speeding up. Right. We're using all of this, you know, empty space. It seems to be doing nothing and then, it all happens right at the end. It's just like that. And so, this dynamic is really hard to get our heads around, because we don't think that way, we think linearly. I do, it's very hard to think exponentially. But it happens to be the world we live in. So we owe it to ourselves to wrestle with it a little bit. Get a visceral sense for it. I'm not asking you to become experts in it. I'm just saying, understand that, this is the dynamic, it's about speeding up. And we're living in that world. So, here's a series of charts that are coming from the natural world. And.. many of these, all of these charts, are experiencing and exhibiting familiar behavior to you by now. But all of these are really a function of one chart that we saw before. This is really a function of population. All of this, right. So it makes sense that if we had exponential population, we might see exponential behavior elsewhere. One other place where we might detect a hockey stick is in our money supply. And I'll get to why this is in a minute. This one is a little trickier because, we can't really fix the left axis because there is no theoretical limit to how many units of money you can create. So this one, no way fix that axis, but that is an actual chart of US money supply over the past few decades. And this is the world you happen to live in, and this is where you might find yourself located. You're right there. And uh, we're all there. And this is something that we need to understand. If we wanna have a chance at understanding what might come next, these all have very profound implications for everything that's about to come in the next 20 years. So understanding this is absolutely critical. The greatest shortcoming of the human race is our inability to understand the exponential function. Albert Bartlett. I absolutely agree with that. There's a couple couple of pieces that come out of this. And one of the things I do in the crash course is, I arrange it in terms of key concepts. So that we can hold, maybe, a little bit easier. First of all, key concept, there's exponential charts everywhere. It defines the world you live in. Energy, environment, economy. Everywhere we look we can find these charts. And sift through them and say "what do they mean?". Because they do, they have some important meaning to us. And the second notion is this concept of speeding up. That speeding up means that you have less and less time to react to a situation once it turns the corner. We happen to be in the generation, give or take one, but I'm pretty sure we're in it. That gets to experience what it really means to hit up against some actual hard limits and a few things. Money, as we understand it, these paper bits, right, euhm, they have some words on them and they're manufactured somewhere. The thing that's really critical to understand about our money system, all money is loaned into existence. For now, you're going have to take me at face value on that, but literally every single dollar that is in existence, can be traced back to a bank loan somewhere. So this has a couple of implications to it. If everything is loaned, what do you know about loaned money? How is it loaned to you? With interest. How do we express interest? Some percentage rate, right? Let's imagine there's no money in existence right now, but we fire up our system as it currently operates. You walk in to the bank, you take out the first ten thousand dollars that's ever been loaned into existence. The second you walk out of the bank, something happens. You still owe ten thousand dollars to the bank, you have ten thousand dollars, that's all good, But now some interest adds to that, a dollars worth. And now, you owe ten thousand and one dollars, but there's only then thousand dollars in existence. And so, multiply that across millions of individual transactions on a yearly basis and something happens, which is this, which is that there's always more debt in our society than there is money. Always. Now, debt's a wonderful thing, because it forces some behaviors, punishes others. One of the things it does, is make us work really hard, right, when we're in debt, but there's this condition that's always true, there's always less money than debt. It means that by definition, our money system has to continually be sporting new loans to cover the old ones at interest which means we need new ones and we just rotate that, several cranks of the wheel and we get that exponential money chart. Wait a minute, I thought we were talking about debt. All money is debt. So whether I measure the debt in this country or the money in this country, I get the same fit. I see exponential behavior. Perpetual growth is an absolute requirement of our current system. Now, before we move on I want to take just a second to, euhm, define something. The difference between a problem and a predicament. A problem has a solution. A predicament has an outcome. Knowing the difference between the two is really critical. So, here's an example,these guys have a problem. Alright? But there's is still some solutions, maybe the guy can grab the rope, maybe somehow they both get up, but there is a variety of ways that this can be solved. Not all of them pleasant, but there is a variety of solutions available. This guy, is not gonna end up back on top of that cliff, no matter how hard he spin wheels his arms back. He has a predicament, which means he has an outcome, is he gonna land on his feet or is he gonna belly flop? That's the difference between a problem and a predicament. I want to talk about our economic predicament then, very quickly. There's gonna be just a snapshot. In fact, if I had to give the entire crash course, on the economy in one slide, it would be this next one. Cause this explains almost everything to me. Here, what we're looking at, is we're looking at a chart of debt in the united states compared to gross domestic product, GDP. GDP is what we produce, it's what we earn, so debt and earning should have some relationship, makes sense. Now, this chart goes from 1925 up through almost the present, and this left scale is in percentages, so if we see a number like two hundred up there, Um, it means that there is a two hundred percentage ratio, there's twice as much debt as there is GDP. Now, you might say, well, you know but there was that big bump back there once, and I'm just going to explain that. If you can see it, the green arrow is marking 1929. That was the beginning of a pretty serious period of economic difficulty. Hey, look debt spiked after that. Ow, debt stayed constant, GDP fell away from under it. Created that spike. So that spike is an anomaly. It was created by falling GDP, not rising debt. So if we take that little, that little anomaly, as I call it, and we sort of mentally exclude it, just squint at it, we can say that in our countries history, from all the way through on up until by 1985, we kept a ratio of debt to GDP that was under 200%. It was something we did, made sense. But something happened there, right around 1985, and it wasn't because our GDP was falling away, we fundamentally changed our relationship with debt, how we thought about it, how much we used, how we harnessed it, what we did with it. And this is a profound cultural shift. To go from a nation of, that was founded on the principal of not owing to a nation that suddenly embraced it is the equivalent of cultural whiplash. But it happened. And it also happens to be almost my entire adult life so to me that slope up there of that debt growth, that is what I know to be, to me that's reality, that's just how it is, right? You know, you manage debt. That's what you do. but now we're sitting at over 360% of debt to GDP. And our choices at this point include either paying it back, or defaulting on it. But one way or the other, we're gonna have to deal with that. So we're entering this period of the next twenty years with the highest levels of debt that were ever been recorded in our countries history. That's how we're choosing and have chosen to enter this next period of twenty years. So this is one reason I think there could be a slight difference between the last twenty years and this twenty years. In order for our future to look just like the past we have to take that yellow line and continue it up in that direction. For another twenty years. So one thing we can do without knowing all the details is ask yourself, how likely is that. Another thing we could look at is our savings rate. So the federal government has a position where it's in the hole, it needs somewhere between 53 trillion, according to the treasury department, and 99 trillion, according to the federal reserve, in order to be solvent. State and local pensions are badly underfunded to the tune of another trillion dollars or so. And corporations, well they're underfunded too, they haven't save in their pensions. And, we also know this next chart of personal savings rate, trending downwards from, again from 1985, I put that red circle on there because it's the exact mirror of when we began our long experiment and love affair with debt. Savings of course, who needs to save money? I can borrow it, right, so we have a very low savings rate at this particular point in time. And then also form of savings a little different in investment shortfall, the engineers association of America says, gosh, just to get America up to first world standards with respect to, rail lines, telecommunication, water treatment, etc.. would require another two trillion dollars. So here we have all of these ginormous numbers in the trillions. And they're all very real. And, this is to me, a predicament. The predicament is, we didn't save. And now we have to manage the outcome from that. The way I look at it is that right now, the federal government is insolvent. It's in the whole 50 to 100 trillion dollars. The federal government is insolvent and what it's choosing to do right now with the bailout stimulus, which I'm sure everybody's read about, is that they're going to in an insolvent financial system, in borrowing money in order to bailout insolvent financial institutions. And if you can figure out how to make this chart work, you are a very rich person. It's that simple. You know, we put all these fancy names and acronyms on a TALFS this and trillions that and whatnot. The bottom line is, if you chase it around, that's exactly what we're doing right now. And it does, it just doesn't make sense to me. So one of the things I like to do with this information is does it make sense or not? I don't have to engage in all the gory details, to know, if it doesn't make sense, it's probably gonna resolve itself in some way other than planned. Now, we have an energy predicament to. Here's a chart of the United States production of oil. On the left axis, that's you know, barrels, millions of barrels per day. these are the years, and, that blue line is the total amount that was pumped out over time and one of the things that we can notice right away is that the united states hit a peak of production in the 1970s, very early on and it has not achieved anything over that peak since, and it can't, and there's a reason for that, it's just a geophysical limitation, peak oil simply means that when you put a straw on the ground and you start tapping an oil field, there's a finite amount of oil and after a certain amount of it is gone, you will never pump more out of the ground on a daily basis. (It'll pump) You can pump more and more and more up to a point, you hit a certain limit and it just goes down. And what's true for one field, is true for two, we can sum'em, is true for a thousand and so this is, all the fields in america and of course, what do you do, when you have less energy and you need more energy? you import the difference. and that's what we've been doing for quite a while we consume in the vicinity of 20 million barrels per day now so that orange wedge, is how much we've been covering up, the difference or the shortfall in... this country now, this peak right here, right when we hit that peak co-incidentally is right about the time Jimmy Carter was warning us about our energy dependence and then this is what's happened since it is a predicament, that we, cannot pump more oil out of the ground, no matter how much we wish, it's not gonna happen so, you know, our choices now include where are we gonna get that energy from? now, here's an interesting chart, just came out in October of this year, don't, don't look at all, all the, all the words there, the blue part though is something called crude oil currently produced in fields, this is from, uhm, the international energy association, VERY conservative association, October of last year they finally came out with a chart that said "O we think that we're past peak in conventional oil production", in fact, not just a little bit, but it happened in '08, early on, and we can measure it. So i put that red mark in to, to mark today so you can see that, that solid blue part underneath is what we care about. Cuz, conventional oil is a synonym for, or euphemism for, easy and cheap, the stuff that we're finding now isn't easy or cheap, it's 28000 feet under the ocean, it's got a mile of salt over it, it's got, it's mixed with sand and and it's called Bitumen in the tar sand it's heavy stuff, it's deeper it's more expensive, it's anything but cheap and easy, it's getting more expensive to get out. And that's the reality of the situation, and we are already past conventional peak, that's that's already a done deal. As far as all the data we have says. It's happened. So now we wanna look at that and say "hmm, well what does that really mean?" , here's the most important way, i don't actually care how much oil costs, i don't care if it's a hundred and forty a barrel, or a million dollars a barrel, because we can just make money out of thin air if we want to, the price is irrelevant What's important is what is that energy doing for us? so this is a chart that, that asks two things, it says "how much energy did we take to find energy, and, how much is left" so the green part is what we might call surplus energy - works like this - if we took a barrel of oil, and used that, and turned it into steel and machines and what not, that could go find more oil, and we took that one barrel and turn into our machines and found a hundred barrels with it, we'd have this 100 to one return on our energy investment, forget about the price, 10 cents a barrel 10 million dollars, doesn't matter - energy matters Because it turns out that societies build their complexity based on surplus energy, that's the key piece, it's your net energy, how much it costs is completely irrelevant, net energy is everything. Quick example: once upon a time in in you know ancient medieval Europe, a king would go out and gather his time from all of his, all of his serfs who were out there working, the average serf farmer back then could produce 1.2 calories for every one calorie, that they... used. The king would take about half of that, remaining surplus, so he would take about .1 calories, off of that equation, right, and that surplus gave us court jesters and it gave us the first written laws and all these great advances happened ONLY because there was a surplus there. So knowing how much surplus energy we have available to society is really really important, and here's the trend in that, when we first started finding oil there was a 100 to 1 return, maybe more and that was back in the 30s, then in 1970 we were down to 25 to 1, *YEEAH* there's still a lot of green under that one, right, doesn't really matter, and in 1990 we we're down to 18 to 1 to 10 to 1, almost an inperceptable drop in how much Green you have under you, this green represents all of our societal complexities, the stuff i care about, this is where prosperity comes from, this green part represents having orthopaedic surgeons on demand and new iPods and brand new great stuff and having you know the ability to be a performing artist if you want to, that's all locked in this green area right here. Soon as, soon as the green area runs out, things tend to shrink a little bit, well, oil today is about 3 to 1, we think I'm still looking for better data so i got a question mark on that but, it's somewhere in that zone. Remember I said all the easy cheap stuff is gone, we're getting a lot less out of it. The reality we're facing is that that red line is creeping down, into our green zone, the part we care about, our surplus. And, the worry is, if we ever had to subsist ourselves on ethanol, we'd be living in this world, and that world is very very different from the world we live in today, extremely different. This surplus energy available to society, is critical, now i approach this as a scientist, I'm just intimately familiar that the energy you provide an organism represents it's budget, it represents how much it can do. And i don't consider humans any different in terms of the laws of nature, which is this, this equation right here. We can be more clever with it, we can be more efficient, we can be a lot of thing with our energy use, but one thing we can't escape, is the reality that how much surplus energy you have is how much you got. And that less is not as good as more, those are just sort of you know basic laws. We have this must grow economic system I described earlier, and now we're connecting it to an energy system that possibly can't grow. Now, this shrinking surplus is a real concern to me, it's a predicament, it means that i think that there's a range of outcomes, I don't know exactly all the squiggles and wiggles, of the future, but i do know, that we're gonna be seeing this press, based on this lack of surplus, and it's gonna be pressing on all kinds of things." And then the environmental predicament I'm just going to use one example out of many that I've got, but I think this one illustrates it very nicely. This is a picture from the late 1800's, and these two gentlemen are sitting on a copper nugget. Once upon a time you could walk in stream beds in this country and find a copper nugget that weighs more than a Prius. Well time passed and the next time you knew what we were doing was finding smaller nuggets, that's a penny next to that one, and then eventually we were like , well there's no more of that stuff lying around, and so we moved on to ore-grades. This is high-grade copper ore this is a ten percent band you can actually see the greenish hue, it's really beautiful ore-grade. And in the intervening time between the late 1800's and those gentlemen were sitting on that copper nugget and today we are now seeing fit to create things like the copper mine founded Bingham Canyon. This used to be a mountain, it is now a hole 2,5 miles (4 km) across and 3/4 of a mile (1,2 km) deep. And the ore-grade there is 0,2%. And we're not doing that because we like challenges like let's go find some really hard copper! You know? We're doing it because it's the best option left, and so, when I look at this we could say, well you know, price of copper economics and all that stop. Let's talk about the energy required to get that out of the ground all of a sudden. That's what matters. And when we look at it from this perspective, I'm gonna zero-in and zoom and see that little truck down there, way down there? That little truck is actually, you know it's full of diesel, oil, and it's gonna, you know, go up this 3/4 of a mile basin cliff wall in a big spiral and it's gonna bring out some point two percent ore-grade if you had to push that truck I think you'd really respect how much energy that takes. This little truck right here which is, now we're seeing it at a scale we can probably recognize a little bit better, is the same as 3400 donkeys in terms how much it can carry in a single load. Once we lack the energy, we are not gonna be sending trains of thousands and thousands of donkeys to do a single trucks' work. We will no longer be economically or in any other way exploiting holes in the ground that look anything like this. And when that day comes there are no more big nuggets lying around. The amount of copper that we got out and pulled to the surface of the earth is what we got. It's a predicament. It would be a problem if we could just wish hard and go find more big nuggets, they would magically appear. But that doesn't happen. The predicament is that we've already gone through all of the high-grade copper, all of the sub-high-grade copper, all of the low-grade, we're down to pretty miserable stuff, at least as far as I'm concerned, that's the reality of the situation. Now, if we look at this and we looked at a single resource that we're gonna exploit, say this is the first big copper nugget, and we found a bunch of them, and it makes a little bell-curve, because first we found a lot and then we found fewer and that's gone. And then we move on to the next one and the next and then it's getting worser and worser and finally we're down to the really hard stuff. And if we draw a, if we sum across all the sources of copper we would see this curve that would pop up. We would say, first we got a lot out and it got easier and we got less and less and there's two things we can say about this kind of resource extraction profile. first is: that the amount of energy that's required sky rockets as you get further down that curve. Because where we were taking 10% ore grades, we're down to 0,2%. The amount of ore you have to process just goes up in a curve that hopefully you recognize by now. And the second is, that the cost of that goes up, if we want to measure it in dollars. So knowing where we are in this resource extraction profile is really critical. And there's a number of things that we can make claim to that all look exactly like this copper example I just gave you. So, what we've got is we've got an economic system that must grow and it's connected to and depending on this energy system that really can't grow and we've got a, a set of depleting resources that are fuelling all of the things that we like to have in our modern society. And so when I look at all three of these things, I come to the conclusion that we have a pretty good predicament on our hands. The first is, do we have this giant credit bubble, it expressed itself as a housing bubble which we're talking about but really it was a credit bubble and it's bursting and its gonna cost a lot of money to clean that up and that's already happening so that's why '08 is on the timeline. We're already dealing with that one. Baby boomers retiring, again this is not a problem it's, I hate to call it a predicament, it just is what it is. We're gonna have peak oil demand at some point in the future, when using oil demand meaning that, more oil will be demanded than can be supplied. What really matters is the day that the world realises that it doesn't have all that it wants. And then in the environment we've got all these depleting resources, we've got possible unknown costs associated with climate shift or climate change. Any one of those will be a challenging economic environment for us, any two of 'em, I start to really struggle with, three or more I, we have to start making choices at that point, new priorities. On top of all of this we're entering that period, that stretch of time again with the lowest levels of savings recorded in our history and the highest levels of debt. Meaning that our reserves aren't good. We're about to start running a marathon, and we've just finished one. You know its not a, it's not quite how we would have planned it if we'd really thought it through, I don't believe. Which leads me to come back to this statement again, which is that the next twenty years are gonna be completely unlike the last twenty years. So I believe, based on everything I've looked at, that we have sort of an unsustainable system. The good news is there's plenty of other systems we will find ways around this. People are clever but depending or requiring the future to look exactly like the past but bigger. In your job, in your life, in your skills, in your plans, in your dreams. That might not be the best strategy out there, because, the past twenty years a fairly poor model, I believe, for the next twenty years. I'm worried that we're on a path, everything I read in the newspaper today says lets get back on growth. We have to get back, no, no we're in a crisis. We can't talk about anything else 'til we get jobs back. We have to grow, we have to get our economy growing, global trade, we have to get all these things back on. That continuation of more of the same, I believe, risks this particular outcome. Right here. And it is my belief, that we really do have an exit in front of us. And we could if we chose to take our foot of the accelerator, put it on the brakes, and, of our own choosing, take this exit. Take an exit that says, We're going to live within our economic and our natural budgets. in a way that we can sensibly predict, would be, in some fashion sustainable. We still have that choice. But now it comes into a question of impacting our lifestyle. And all sorts of questions come up. The first is, well what should I do? And the second is, what should I stop doing? And the third might be, how do I protect my family, my friends, my loved ones, my community? What do I need to learn, what do I need to unlearn? All kinds of things come up, and all of these things really are just an impact on our lifestyle. So, when I started, all of this, way back when, it seems like a different life to me. I fell down this rabbit hole of data. And I found some things down there, I learned some things. The most important thing I've learned, is that I needed to tune out what the so called experts were telling me, and start listening to myself. It's good news. It lead me to invest in gold and silver, well before it was fashionable, long time ago. It lead me to sell my house It lead me to take personal actions that I credit with putting me in a relatively comfortable position today. Compared to a lot of other people I know. And I'm very thankful for that. And that was the function of starting to believe myself, and tune out all of the things that are telling me that we just need to keep driving faster and faster on this other way because it didn't make sense. And I learned a few other things in there, I learned that my quality of life was not really totally dependent on my standard of living. I could purposely, we did, my family and I, we purposely downsized, downscaled, skinnied up our lives from a standard of living standpoint. Our quality of life has never been higher. And we're really thankful for having learned that. Because that was not something I expected to find when I went into that particular rabbit hole. So what I really care about is this thing called true prosperity. Which is different for us today, than it once was. And, this is hard to get because our stories come back, ripple through the ages, I still have embedded in me my grandfather's story of what it means to be a responsible citizen of a town and what prosperity meant. But it's different. I can't live just to my town anymore, I'm now a responsible citizen of this globe. And, true prosperity, just to define it really quickly, is just a number of very simple things to me. And, it's things like, gosh, you know, we're prosperous when when we're happy, when we're healthy, when we have what we need, when we've got a real sense of connection and purpose in what we do, that we have what we need to live, maybe when we're learning and growing. These are the things that I actually care about. And not many of these things require money. You can have all the money you want, you could be a banker with ten trillion dollars, but if you're on a on a rock island with nothing else on it, you're still poor, right? And so, the question is, what, how do we do this? How do, that sounds great but, given everything you've just said, how do we, what's the path? How would we possibly create that if we wanted to? And the path I believe starts with understanding that being aware of a problem is just the first part of it, but it's not, it's necessary, but it's not sufficient. We have to progress from awareness into understanding before we think about taking any actions. I'm not here advocating anybody should do anything tonight, tomorrow or any point, before you really understand what the issues are. Quick example, I'm driving along and a red light pops up on my dashboard, I'm now aware that I have an engine problem. But, I don't understand how my engine works. So if I pull over, with just simple awareness of an engine problem and start taking actions like, I don't know, pulling out wires, and twiddling things, I'm probably making things worse, not better. So I believe that, the path to true prosperity starts with, and everybody in this room owes it to themselves, I truly believe, to really understand what the issues are that are gonna shape our future. And that, from that understanding, the solutions will actually arise. And, additionally I think that we have to heave the words of Albert Einstein, who said that, We can't solve problems by using the same kind of thinking that we used when we created them. We need some real, non status quo solutions. We need brand new thinking. It's probably not a couple of tweaks and twiggles of the dial, it's real, out of the box, how are we gonna do things, substantially differently, given what we know. And our understanding of the situation. And the most critical thing, if there was just one thing, that was gonna enable us, to get into a future of prosperity, is that we absolutely must begin using our remaining surplus in intelligent and constructive ways. Our surplus is gonna dwindle over the course of the remaining portion of my lifetime. How we use that is absolutely critical to everything that follows. And how much societal complexity we enjoy, types of jobs and opportunities we have. And so, let me tell you about the way that I think this simplified my life. Because a lot of people come in contact with us and one of the first thing they go is, oh no, I have to change everything. That's not good. Well, it's really complicated if you don't have enough instructions, right, so if I said, hey, here's a bunch of clothes, suit up, we're about to go on an adventure, right? You may or may not pick wisely, because you don't know what the adventure is. Are we gonna go to a party? You know? Is it a, you know, Hyphen Looten party or is it a dress down party? Or are we going on a hike? You know? It's really important to have that information and what the crash course has done for me, that lens, that economic lens, with the other two reasons, has given me, what I believe to be, a set of instructions, for what the future is gonna be. So I now know, that I am going on a hike. And it's in springtime, and it's at nine thousand feet, I know some things. And so I can suit up properly. And it makes it easier to figure out where I wanna live, how we're gonna school our children, what we're gonna buy, what we're not gonna buy, things we're gonna let go of, all of these things. That's what it's done for me. And, I wanna paraphrase, I think one of the most important things that ever came out of one of our politicians mouths in this country. Ask not what your past can do for you, ask what you can do for your future. Thank you. [Applause]

Video Details

Duration: 42 minutes and 38 seconds
Country: United States
Language: English
Producer: Chris Martenson
Director: Chris Martenson
Views: 493
Posted by: 0blivious on Jun 12, 2010

[Chris Martenson]
Friday, October 23, 2009, marks the one-year anniversary of the completion of the Crash Course. The Crash Course video seminar is my attempt to synthesize—in a coherent, rigorously factual, and easily digestible form—the information that I have gathered over the past five years relating the interdependence of our economy, environment, and energy systems.

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