Tag Archives: economics

Uncertain times

Uncertain Times

We are certainly living in uncertain times. At best we are heading into a period of years of economic recession and financial hardship. At worst, we could be seeing the beginnings of fundamental changes in our lifestyle. Given that we have finite resources of oil and other critical resources and those resources become increasing ly more expensive to access because as humans we always use the best and easiest resources to access first. So, maybe this is a good time to be geeting used to the fact that we need to be living our lives in a very different way from that we have become accustomed.

I saw a video called “Money as Debt” and it was talking about  the 3% annual growth that is needed to keep a modern day economy running. So if we have an economy of 100 million dollars at the end of the year it needs to be at 103 million dollars. At the end of the second year we might think it must grow to 106 million dollars, but it accually has to grow at 3% of 103million, not 100 million. That difference seems minute but each year the effect of that little increase build and builds. It grows exponentially, not linearly. Linear growth would be 100, 103, 106, 109.. and when graphed makes a straight line. An exponential graph starts looking straight and flat but then slowly curves up ( the 3% of the 3% annual growth). It doesn’t stay slowly growing it curves up more and more and very suddenly it is growing very quickly. We get to the point surprisingly quickly qhere we need 200million dollars just to achieve the same growth that we had been able to do with 100 million. Now, that’s fine in a perfect world with infiinte resources, but we just don’t live in a world like that.

Here in New Zealand and in the US we have elections coming shortly. the people we elect and how they choose to face our future will have an enormous impact on the life we and our children will live in over the coming years.

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