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Crash Course by Chris Martenson
Chris Martenson is an economic researcher, writer and trend forecaster interested in macro trends regarding the economy, energy composition and environment. According to Martenson, large changes related to economic, energy, and environmental factors will occur in the near future (2015-2020).
The Crash Course provides the context for the massive changes now underway, as economic growth as we’ve known it is ending due to depleting resources.
Crash Course – 38 minute condensed version
Join Dr. Chris Martenson as he explains the three E’s of the economy, energy, and the environment and how they are interrelated in this condensed version of his three hour Crash Course.
Chapter 1 – Three Beliefs
Dr. Martenson states his three beliefs: massive change is upon us, that change may overwhelm our ability to respond, and that we do not lack the technology or understanding necessary to build a better future. The next 20 years are not going to be anything like the past 20 years.
Chapter 2 – The Three E’s
Understanding our current situation requires acknowledging that the Economy, Energy, and the Environment are all related; in short, that each “E” influences, and competes for our attention with the others. We have never simultaneously faced these issues at such levels, yet none of them can be solved in isolation.
Chapter 3 – Exponential Growth
The most important Key Concept of the Crash Course, exponential growth, demonstrates how world population, oil consumption, U.S. money supply, water use, forest loss, species extinction, and fishery exploitation are rapidly reaching their natural limits. The implications for your life are powerful, and demand attention.
Chapter 4 – The Power of Compounding
Dr. Martenson draws on a paper by Dr. Albert Bartlett explaining the dangerous implications of steady rates of growth, from oil consumption to population: as Chris says, “With exponential functions, the action only heats up in the last few moments”.
Chapter 5 – Growth vs. Prosperity
Contrary to what we’ve grown used to, growth is not the same thing as prosperity. In fact, growth and prosperity are both dependent on the same thing: surplus. Dr. Martenson explains how we’ve been conditioned to want, and to take, both growth and prosperity; however, we are approaching the limits of our physical, finite, earth – the amount of surplus is steadily declining.
Chapter 6 – What is Money?
What is a dollar? Sure, it allows us to buy things like food, cars, and iPods; yet, most of us don’t really understand money beyond that. Dr. Martenson not only provides an understandable definition, but also explains what gives our green pieces of paper value, and what dangers any currency must face.
Chapter 7 – Money Creation
Understanding how money is created provides a foundation for appreciating the implications of our massive levels of debt, because it tells us how that debt came into being. As John Kenneth Galbraith once said, “The process by which money is created is so simple, the mind is repelled.” Dr. Martenson walks us through this simple process of fractional reserve banking.
Chapter 8 – The Fed & Money Creation
Chapter 8 explains money creation by the Federal Reserve, where we learn that it is manufactured out of thin air. Perpetual expansion is a requirement of modern banking. The banking system MUST continually expand, because that is how it was designed. By understanding the requirement for continual expansion we will be in a better position to make informed decisions about what is likely to transpire and take meaningful actions to enhance our prospects.
Chapter 9 – A Brief History of U.S. Money
Beginning with the panic of 1913, this chapter touches on important events in the history of US money, such as the creation of the Federal reserve, FDRs confiscation of private gold, the Bretton Woods agreement, and Nixons slamming of the gold window. We learn that the current international monetary system of unbacked currencies is only 37 years old, and is operating outside of the standards established by the Bretton Woods agreement. The system were operating within has not been planned or designed: it emerged out of a crisis. Dr. Martenson also provides graphs of total US Federal Debt, and Total US money stock, both of which are growing with no end in sight.
Chapter 10 – Inflation
Dr. Martenson establishes inflation as a monetary phenomenon, defined as the decrease of the value of money, caused by too much money around in relation to goods and services. From 1665 to 1776, 111 years, there was absolutely no inflation. From 1665 to 1905, 240 years, the cost of living stayed roughly the same, aside from brief jumps during wars. Unfortunately for us, there was no settling in terms of inflation after World War I or World War II. The military apparatus was not dismantled, and inflation has accelerated to astonishingly high levels.
Chapter 11 – How Much is a Trillion?
Dr. Martenson explains how much a trillion is using a few examples, such as a 67.9 mile high stack of $1,000 bills. As he concludes: “Make no mistake, a trillion is a very, very big number and we should not be lulled into complacency simply because it is too big to really get our minds around.
Chapter 12 – Debt
Dr. Martenson explains how, since debt is a claim on future money, it is therefore a claim on future human labor. To put it simply, debt is future consumption taken today. Key Concept 7 is introduced, that “ever-growing debts implicitly assume that the future is going to be larger than the present.”
Chapter 13 – A National Failure to Save
Dr. Martenson begins his explanation for this deeply held belief. On every level of our society, there has been a failure to save. Individuals, cities, counties, states, and corporations have all failed to save, but, more importantly, so has our federal government. Our government has pursued a reckless policy of debt accumulation, while neglecting saving and investing, leading to Dr. Martensons claim that the United States is insolvent.
Chapter 14 – Assets & Demographics
Dr. Martenson examines Americas assets, especially in light of our current demographic situation. The effect of the baby boomer generation is specifically considered, with the conclusion that the next 20 years are going to be completely unlike the last twenty years.
Chapter 15 – Bubbles
Dr. Martenson discuses bubbles and concludes that the housing bubble is itself just a symptom of a credit bubble, leaving a final catastrophe of the currency as our most likely outcome.
Chapter 16 – Fuzzy Numbers
Dr. Martenson explores how inflation and GDP are measured, how their measurement has changed over years, and what that means concerning the integrity of these government statistics. Substitution, Weighting, Imputations, and Hedonics and their effects on calculating inflation and GDP are each examined.
Chapter 17b – Energy Budgeting
Dr. Chris Martenson explains that in the future our supply of surplus energy will decline due to the fact that increasing amounts of energy will be required to produce new energy. When poor net energy (ERoEI) returns are paired with peak oil production, it points to a return to a less complex society.
Chapter 18 – Environmental Data
Dr. Chris Martenson explains that since the easiest-to-extract, most abundant natural resources are extracted first, our growing population will have to deal with scarce, energy-consuming, low-grade resource availability in the near future.
Chapter 20 – What Should I Do?
If there’s one message to take away from this Crash Course video series, it’s this: It’s time for you to become more resilient and more engaged. Things are changing quickly and nobody knows how much time we have before the next economic, ecological or energy related crisis erupts. Nobody knows when, but we do have a pretty good idea of what is coming.