Reality Report: Chris Martenson on the current financial crisis

Dandelion Salad

Global Public Media
06 Oct 200

Today’s guest is scientist and financial expert Chris Martenson, here to explain how the financial crisis is a predictable outcome of a money system requiring exponential growth on a finite planet. Learn more at: www.chrismartenson.com

AudioReality Report: Chris Martenson on the current financial crisis (audio) (length 0:56.52): download, stream

via Reality Report: Chris Martenson on the current financial crisis | Global Public Media.

h/t: Speaking Truth to Power

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Updated

Transcript:

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And so here’s a simple example, if I walk down to a bank and I get myself a mortgage, the bank will say, “ok, here’s your mortgage for $100,000.” They will hand me that check for $100,000, I go the closing and I hand it over. And where did that 100,000 come from? Well, the bank actually created that at the moment that they loaned it to me. And when they did that, two things happened actually, the money was created, but an exactly offsetting amount of debt was created at the same time. So I have 100,000 in cash, money, it’s real money, it feels like money, it plays like money, it really is to the person I’m buying the house from, it’s real as far as our society’s concerned. But there’s also this 100,000 debt sitting over there that’s attached to it. And this leads to a very interested sort of a situation which is that the minute I walked out of the doors of the bank with my $100,000 loan, two things are true: I have $100,000 in cash and I have my debt that’s $100,000, but the minute I walk out of those doors the debt is now larger than the cash I received because interest starts to accumulate on that debt the minute I take that debt on.

So at any moment in time in our society, in our culture, in our monetary system, debts are always larger than the amount of money that’s outstanding. Well this creates a really interesting problem because how do you pay debts back? Well you pay them back with money. Well if it’s true that debts are always much larger than the amount of money, then you can’t pay the loans back with the amount of money outstanding. So where would you get money to pay the loans back? Well, if all money is loaned into existence, being we’re stuck in this circular loop that in order to continue to pay off all the past borrowing of our culture, we are locked into creating new borrowing that’s larger than the past borrowing.

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via Reality Report: Chris Martenson on the Current Financial Crisis (transcript) | Global Public Media.

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