Monday, October 20, 2008

News media quotes my book in Coromandel

Thomas Everth writes a regular green blog for a Coromandel paper.
He writes a monthly a column under the title "Green Blog" for his local paper the Coromandel Town Chronicle.

A copy of Novembers edition (minus the last bit on another topic) is below.

Green Blog

One of the main topics of this years Eco Show in Taupo – and timely so – was the state of our financial systems and how their current construction might be the underlying root cause of much of the world’s problems.

Few people realise – according to Deirdre Kent, one of the speakers on these issues and member of ‘Living Economies’ and author of ‘Healthy Money, Healthy Planet’ – how money is created in this country and around the western world. Most of it is not created as physical currency, the paper notes and coins you can carry in your wallet by central banks and governments, but as interest bearing dept when individuals, governments and businesses take out loans from lending institutions at the stroke of a pen as a balance on a bank account held against some collateral (a property, your future income etc.).

The problem with this is that the banks create the principal of the loans at the stroke of a pen for you to spend, but not the interest they expect you and everybody else to bring back to them. This causes the entire system to be in constant need to expand and to create more money - as further interest bearing dept - so that the interest of previous loans can be paid. This system only works if even more money is created and as long as the value and the amount of the underlying assets upon which loans are given also rises. In fact the entire financial system only works if and as long as it keeps growing. You will have heard it from most politicians: “We need the economy to grow by x% per year”.

But if you grow something every year by a percentage of what you already have then you get “Exponential Growth”. In nature there are no stable systems that allow exponential growth to go on. Simple math will tell you that a single penny invested at 5% compounding interest 2000 years ago would today be worth 134 billion balls of Gold each the weight of the Earth at the 1990 gold prices! You will probably need to read this a few times to comprehend these numbers but its true. Exponential growth always leads to a catastrophic end and the only cases of exponential growth in natural systems are quickly self-limiting. Take the exponential growth of yeast bacteria in a brewing vet as an example. The bacteria grow exponentially until the concentration of the yeast’s excrement (Alcohol) is killing them off. Another example of exponential growth of cause is Cancer.

Exponential growth is unsustainable when you live on a finite planet. And even if we had a whole bunch of planets it will not work for very long as the example above shows, where the exponential growth of a single penny devours just about every bit of matter in our Galaxy in the short order of just 2000 years. Our exponential growth dependent financial systems must therefore fall over every few generations in a wave of deep destruction before they can carry on growing again until we one day perhaps might come to our senses and develop a steady state economic system and live like all enduring natural systems in a state of balance and harmony with our environment.

Let’s for argument sake include all the people that will live in the next 7 generations when we take a democratic vote on our actions today. Why not? The fact that they are not able to speak yet should not be held against them. Why should we deprive them constantly of all their rights? Imagine what the actions of our democratic system would be then? A steady system that would give enduring sustenance to humanity and all natural systems upon which we depend? I bet!

Since we have an election upon us when you read this take a look which of the candidates and parties might have grasp of all this besides prescribing more of the same as cure…

Thomas Everth

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