Sooner or later ( depending upon the amount of individual denial ) we have to realise that both the energy intensive industrial system and the fractional reserve monetary system, require exponential growth to maintain them.

And for the last two hundred years they have served us well with an astonishing surge in prosperity, technology and population.

The signs are now that resource depletion is moderating industrial growth, and unable to keep pace with the ever rising demand.

The financial system thus gradually loses its previously dependable debtors and having to increase debt year on year to pay interest, has resorted to ever more ingenious ways of printing paper instruments and passing them off as valuable to keep the band playing, in this game of musical chairs, knowing full well that when it stops there are very few actual chairs left.

Now the bubble has burst, and reality shows that it is impossible for this financial model to work without infinite resources, which the planet as yet does not possess.

Instead of spending our dwindling resources supporting a basket case economic system, which has no model for complete market failure, we should be investing in the simpler, yet essential, means of production.

More focus again on community living, cottage crafts and industry, land access for all who wish to grow their own food, an expanded fishing fleet with processing facilities, fish farming, non-fossil fuel energy production.
This could all be developed beneficially now in tandem with our vain pursuit of CSME and “developed” status.

But this is going back 100 years, some would say, I agree, but now we have the advantage of technology and a better educated workforce.

The alternative to not developing a Plan B may be we are left at the end of this meltdown, an impoverished nation with no helping hands from across the sea available, and the usual cry of “who would have known this could happen”?

Straight talk, I agree with your diagnosis of our situation. I posted the following in Submissions a few days ago, but since I suspect many will not have seen it, I will repost here:

Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free

By Ellen Hodgson Brown
Third Millennium Press; Rev Exp edition (December 22, 2008)
ISBN-10: 0979560829
544 pages; $22.50

If there is one book, one newspaper, one blog, one article, that one should read to understand the current economic crisis, to understand the root of the problem, and to understand its solution, it is “The Web of Debt: The Shocking Truth About Our Monetary System and How We Can Break Free,” by Ellen Hodgson Brown. Brown began writing “Web of Debt,” six years ago, and, while some are surprised at the current national and world economic crisis, others, including Brown, had seen it coming.

In “Web of Debt,” Brown explains our current “debt-based” private banking monetary system and its history, and the ominous role the private bankers have played in shaping national and world events for their own benefit, amassing great wealth and power, and the myth of the free market and the current events on Wall Street, all with fascinating, highly referenced, and understandable detail. She explains that much of history has been a struggle between the public interest and private banks, connecting the dots with a tale of intrigue that leaves the reader enlightened with how the world really works.

Brown explains that the current financial crisis is an end of a 300-year Ponzi scheme known as “Fractional Reserve Banking” run by the private banks, including the Federal Reserve. She further states that this is an opportune time to change the system now that it is collapsing — to a system where the people, i.e., Congress, take back the constitutional authority to create money (currently residing unconstitutionally in the hands of private bankers) for the good of the people, with the possibility of funding the government with fees and reasonable profits from public banking in lieu of the income tax.

Since the subject matter of “Web of Debt” is so vitally important and absolutely relevant to the current debate associated with the economic crisis, included below is a brief summary of some of the topics and points that Brown makes in her book.

SNIP

US Government as a perpetual debtor for a constant money supply. When loans are repaid, the principal amount of the money created is zeroed out. As Brown explains: “In order to keep money in the system, some major player has to incur substantial debt that never gets paid back; and this role is played by our federal government.” And Brown further notes: “The U.S. federal debt has not been paid off since the days of Andrew Jackson. Only the interest gets paid, while the principal portion continues to grow.” Calls to eliminate the Federal debt logically would need to be accompanied by a change in how money is created, or, rather, who creates the money.

The Federal Reserve is neither “Federal” nor has “Reserves.” The Federal Reserve is a private corporation, owned by a consortium of private banks, the biggest of which are Citibank and J.P. Morgan Chase, according to Brown. And, while most people think that the U.S. government “prints the money,” the U.S. government is, instead, also a borrower in our debt-based money system, and takes out loans from the Federal Reserve, which, in turn, creates money out of thin air. Brown explains, “The Fed swaps green pieces of paper called Federal Reserve Notes for pink pieces of paper called U.S. bonds (the federal government’s I.O.U.s), in order to provide Congress with the dollars it cannot raise through taxes.” The Federal Reserve and other central banks today use the same device — “trading its own paper notes for paper bonds representing the government’s promise to pay principal and interest back to the Bank” — as that of the Bank of England established in 1694. Brown quotes a circular distributed to attract subscribers to the Bank of England’s initial stock offering: “The Bank hath benefit of interest on all moneys which it, the Bank, creates out of nothing.”

Reserve accounts are “smoke and mirrors.” Furthering the illusion of a banking system more in line with the public’s false expectations, Brown explains that “reserves are a smoke and mirrors accounting trick concealing the fact that banks create the money they lend out of thin air, borrowing any ‘reserves’ they need from other banks or the Fed, which also create the money out of thin air.” Now, adding insult to injury, “the Fed acquired the ability to pay interest to its member banks on the reserves the banks maintain at the Fed,” per a provision of the recently enacted TARP bill, Brown writes in a recent article.

Continued at:
http://onlinejournal.com/artman/publish/article_4427.shtml

We find this submission by Looking Glass an excellent piece as a follow-up to our previous blog which questions the economic path Barbados must take to survive in the long term. Successive Barbados governments have regarded debt a good friend. However as Looking Glass wrote, we continue to use part of borrowing to pay down debt which will lead to obvious increase. We would love for the former Prime Minister Arthur to challenge the point made that construction is a short term answer to drive any economy. Driving the construction boom was a key strategy by the Arthur administration and to a lesser extent the current administration.

Why is economic growth a threat to economic sustainability, national security, and international stability?

Because on a finite planet with finite resources to go around eventually country X’s economic growth will only be maintained at the expense of country Y’s shrinkage, and this a recipe for conflict. I think we are already seeing with US and European involvement in conflicts in the energy rich Middle East and in Afghanistan (a planned strategic oil/gas pipeline route).

I don’t know how much more clearly it can be put than this:

“Remember: to think there is no limit to growth on a finite planet is precisely, mathematically equivalent to thinking that you may have a stabilized, steady state economy on a perpetually shrinking planet. Both claims are precisely, equally ludicrous!”

To those who think we will find a way to launch civilization into space and mine the resources of other planets or even solar systems. I say don’t count your chickens before they are hatched. We have to deal with the reality facing us today, and today we are living on a finite planet with finite resources and an exponentially growing population and exponentially growing resource consumption.

Most of the underdeveloped nations are striving to emulate the North American lifestyle just about everyone now sees on TV shows and in Hollywood movies and which, should it be magically adopted tomorrow by the world’s entire population, is estimated to require the resources of around 5 planet earths to maintain.

September 23 is Earth Overshoot Day

What is Overshoot?

Just like any company, nature has a budget — it can only produce so many resources and absorb so much waste every year. The problem is, our demand for nature’s services is exceeding what it can provide.

In 2008, humanity used about 40% more in one year than nature can regenerate that same year. That means it takes over a year and three months for the Earth to regenerate what humanity is using in one year. This problem — using resources faster than they can regenerate and creating waste faster than it can be absorbed — is called ecological overshoot.

We currently maintain this overshoot by liquidating the planet’s natural resources. For example we can cut trees faster than they re-grow, and catch fish at a rate faster than they repopulate. While this can be done for a short while, overshoot ultimately leads to the depletion of resources on which our economy depends.

In fact, overshoot is at the root of the most pressing environmental problems we face today: climate change, declining biodiversity, shrinking forests, fisheries collapse and several of the factors contributing to soaring world food prices.

http://www.footprintnetwork.org/gfn_sub.php?content=overshoot

100% agreed with everyone here….

Although everyone who can see, or read, or hear, is now convinced of the difficulties ahead, the REALLY bad news has not yet been revealed….

Challenging and daunting as any recovery from the impending economic chaos clearly is, any such recovery will be completely out of reach unless nature is cooperative.

Any large-scale natural phenomena such as was Katrina or the Sumatra Tsunami, or any more man-made events like 9-11 or worse, would have devastating negative impacts in the current circumstances….

Unfortunately, neither nature, nor our modern ‘terrorists’ activists will be cooperative….(understatement of the decade…)

IMHO therefore, the question is not so much about stimuli and recovery, or development, but about preparing for survival

Bush Tea is therefore all for an exclusive national focus on Food (and water) security, transport, education and national security at this time.

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