Saturday, February 21, 2009

Money Trouble

Where does money come from?

Banks create money out of people's promises to pay back loans. This is important; I should clarify. By making loans, banks conjure into existence money that did not exist before the loan was signed. I know. It's a headscratcher. There's a 47 minute video explaining this called 'Money as Debt'. Google for it. It's worth a look, and explains the fundamentals of our money system. Be concerned. It's a house of cards.



The card table really gets shaking when banks lend money out as principal but expect principal plus interest back. The interest has to come from somewhere, and there literally isn't enough money in the world to pay off all the outstanding loans with interest. On the whole, the system is mathematically committed to failure.

The interest breaks the system. Why? In a finite world, exponential curves (the 'hockey stick' graphs that go way up on the right) cannot go up forever, no matter how many economists tell you otherwise. Any solution that isn't ultimately doomed requires steady-state, not growth economics. Exponential growth, whether population, stock market, or interest on money, is a form of cancer, but it's so ingrained in our culture that it's difficult to question. It must be questioned.

We've made it this far because when governments or citizens take on debt it increases the money supply. This postpones financial collapse because of the time lag between when the money is borrowed (i.e. conjured into existence) and when that debt comes due. That's one reason government is so eager to get the credit flowing again. Unfortunately it will just crash that much harder later — hopefully when someone else is in office. It would be better not to set it up to fail in the first place.

So what can you do? Stay out of debt if you can help it. Debt is slavery. Establish some sort of interest-free local currency. It probably won't take off immediately, but it will prepare us for when the money system siezes up. Zimbabwe dollars anyone? Some sort of system to enable trade will be important when money as we know it ceases to be useful.

Stop shaking the table. It's time to put the cards away.

Saturday, February 14, 2009

Keep Eating. Here's how.

Where does your food come from? Same place as mine. The store. We depend completely on global food supply chains for our survival. All of our eggs, meat, bread and chocolate is in that basket. It's a great big comfortable basket, but it's also a single point of potential failure.

Between irrigation and chemical fertilizers, we have expanded food production greatly over the years, but that growth in food production is nearing its end. Limits on water for irrigation and diminishing returns on chemical fertilizers, point towards declines in future food production. Anthropologists say people always raid before they starve, but we can delay that grim choice with a little self reliance.

Right now, if something happens we don't have any sort of backup system. Your neighbour, who we'll call Flanders, probably has a 72 hour emergency kit or a cellar full of preserves, but that won't exactly help you unless you're already on really good terms.

You thought you were diversified when you bought stocks and bonds, but getting all your food from one food system still leaves you vulnerable. If something major happens to the food supply, neighbours (or countries) with food will be keen to feed themselves rather than sell it to you. You can't eat money. Better to look out for number one.

There is still time to figure out how to farm your back (and front) yards with compost and rainwater. This will become a survival tool, and it's important to learn that skill now, before you need it. If you need the produce from a garden, you're going to need it desperately, and nature doesn't do drive thru.

Make the beginner's mistakes in gardening this year, before you need to count on the garden. Your successes will be tasty; failures educational. If you don't have a yard, community gardens are good places to expand your social circle and build up the network. Flanders might even help you get started.

Extra credit: Get together with some neighbours and share seeds or gardening tools. It's cheaper for everybody, and you build a support network.

Saturday, February 7, 2009

What Are You Doing?

That question is asked in all sorts of contexts. It can go from innuendo to a telephone time-filler to a stern reprimand with just a shift in tone of voice. Twitter.com has even built a communications revolution around that question, but your answer to that question moment to moment becomes your life.

So what should you do? Buckminster Fuller, in a letter to a ten year old boy, explained that "The things to do are: the things that need doing, that you see need to be done, and that no one else seems to see need to be done." Figure out the most pressing problem that will fall through the cracks if you don't do something about it. That's where you should focus your time and energy.

Start where you are. If you can't breathe, putting food on the table is the least of your concerns. Without food, problems with relationships or leading a fulfilling life fade into the background. Don't get distracted by money. It's a tool. Money only buys happiness until you get up to the poverty line. After that happiness is more about interpersonal relationships and fulfilling activity.

Eventually you'll find something you can't accomplish alone. That's okay. The biggest problems we face can disappear if everybody pulls together. Community based initiatives can have faster and more powerful effects than waiting for the wheels of government to turn. Not only is the community better for the project, but more importantly it builds and exercises the network of citizens who are willing to take charge and make their world a better place. The relationships and fulfilling activity that can improve your life are a bonus.

Pay attention. You are likely to see things that no one else does. If you see how things can be better don't wait for permission, make it happen.

What am I doing? You can follow me on Twitter at aaron_holmes.
What are you doing?

Sunday, February 1, 2009

Get on with it

We are the most informed generation in the history of the world. Between weekly newspapers, 24 hour cable news channels, and the internet, we have access to vast amounts of information. We take for granted that we will be comprehensively informed about events in remote parts of the world within minutes — sometimes while the event is still happening.


This electric information is fundamentally (after oral and written) the third method of communication in history. It is fast and it is becoming pervasive. Once upon a time you could get a letter from home or read the day's newspaper and feel like you were caught up on events. That's no longer sufficient. Every minute that you're not checking your media outlet(s) of choice you fall further and further behind, craving that hit of dopamine that a fresh shot of information provides. It's only a click away.


So now you know, and knowing is half the battle, except that it's the part that doesn't matter a hoot to the real world. If there's a revolution coming, it won't be the information junkies of the world who are responsible for it — though they'll be among the first to know — it will be a revolution started by those who act.


Getting out there and starting to do it, no matter what your goal is, is going to lead to success much faster than reading about it. Doing it badly is the first step on the path to doing it well. Malcolm Gladwell observes in his book Outliers: The Story of Success
 that people tend to become really accomplished at complex tasks after about 10 000 hours of doing it. That's about four hours a day, five days a week, for 10 years. This should not be seen as discouragement, but as a promise that if you put in the time and effort, you can be exceptional at anything you want. Awareness won't get you there, action will.


Next Week: How to decide what to do.