The next twenty years are going to be completely unlike the last twenty years.

Professor Chris Martenson is a rare breed. A PhD scientist, previously a VP of a Fortune 300 company and an MBA from Cornell University.

Chris does a brilliant job of highlighting that the debt induced fiat monetary system which has driven our economic progress over the last 50-years is likely to fail in the future. In fact it was really nothing more than a sophisticated ponzi scheme which can only continue on the basis of perpetual compounded growth and a continued acquisition of real physical energy resources. The virtual economic economy is tied to the physical world -- this perpetual growth cannot continue forever as we are seeing with the massive de-leveraging across all asset classes in the current 2008 - 2010 recession.

Chapter 1 - Three Beliefs -

"The first is that the next twenty years are going to be completely unlike the last twenty years. Why is this important? Because we tend to base our view of the future on our most recent experience. That’s just part of being a human. It is also a gigantic liability at key turning points. So I say that massive change is already upon us. When I first gave this material as a talk three years ago, I used to say, "Massive change is coming." Well, it’s here now, and the belief I hold is that it’s really just getting underway, and I’ll show you why I believe that. Next I believe that its possible – possible – that the pace and/or scope of change could overwhelm the ability of our key social and support institutions to adapt."

Chapter 2 - The Three "E"s -

"Massive change is upon us. To understand the nature of this change, we need to understand the three “E”s – the Economy, Energy, and the Environment"

Chapter 3 - Exponential Growth -

"Once an exponential function “turns the corner,” even though the percentage rate of growth might remain constant and possibly quite low, the amounts do not. They pile up faster and faster. Oil consumption, the US money supply, world population, worldwide water use, species extinction, and other critical areas all follow an exponential curve in their growth, and all have turned or will soon turn that critical corner."

Chapter 4 - Compounding is the Problem -

"If something is increasing over time on a percentage basis, it is growing exponentially. With exponential functions, the action really only heats up in the last few moments. There is simply not a lot of maneuvering room once you hop on the vertical portion of a compound graph."

Chapter 5 - Growth vs. Prosperity -

"For the past few hundred years we have been lulled into linking the two concepts, because there was always sufficient surplus energy that we could have both growth AND prosperity. But what’s going to happen when 100% of our surplus money or energy is being used to simply grow? And what happens if there’s not enough surplus to even fund growth alone?"

Chapter 6 - What is Money -

"Money should possess three characteristics. The first is that it should be a store of value. Historically, gold and silver filled this role perfectly because they were rare, took a lot of human energy to mine, and did not corrode or rust. By contrast, the US dollar pretty much constantly loses value over time"

Chapter 7 - Money Creation -

"John Kenneth Galbraith once famously said, “The process by which money is created is so simple that the mind is repelled.” We’re about to discuss that very thing. Money creation is a bizarre thing to ponder. It is actually a very simple process, but it’s really difficult to accept. Money is loaned into existence. Conversely, when loans are paid back, money ‘disappears.’"

Chapter 8 - The Fed - Money Creation -

"All dollars are backed by debt. There are two kinds of money out there. At the local bank level, all new money is loaned into existence. At the Federal Reserve level, money is simply manufactured out of thin air and then exchanged for interest-paying government debt. And perpetual expansion is a requirement of modern banking."

Chapter 9 - A Brief History of US Money -

"The purpose of this section is to show you that the US government has radically shifted the rules during times of emergency and that our monetary system is really a lot younger than you might think."

Chapter 10 - Inflation -

"Most of us think of inflation as rising prices, but that’s not quite right. Inflation is not caused by rising prices. Rising prices are a symptom of inflation. Inflation is caused by the presence of too much money in relation to goods and services. What we experience is things going up in price, but in fact, inflation is really the value of your money going down, simply because there’s too much of it around. Inflation is, everywhere and always, a monetary phenomenon."

Chapter 11- How much is a Trillion? -

"A trillion is a very, very big number, and I think it would be worth spending a couple of minutes trying to get our arms around the concept. Make no mistake, we should not be lulled into complacency simply because it is too big to really get our minds around. Keep this lesson in mind as we discuss the total accumulated debts and liabilities of the US, which are many tens of trillions of dollars."

Chapter 12 - Debt -

"For you and me, there are only two ways to settle a debt: 1) Pay it off or 2) default on it. If you have a printing press like the government does, a third option exists: 3) Printing money to pay for the debt. So what is debt, really? Debt represents future consumption taken today. Our entire economic system, and by extension our way of life, is founded on debt, and debt is founded on the assumption that the future will always be bigger than the past. Therefore it is utterly vital that we examine this assumption closely, because if this assumption is false, so are a lot of other critical things that we may be taking for granted."

Chapter 13 - A National Failure to Save -

"A personal failure to save has been reflected by a state and local failure to save, which are mirrored by a corporate failure to save, all dwarfed by a failure to save at the federal government level. And capping it all off is a profound failure to invest. All of these deficits lie before us and lead me to conclude that the next twenty years are going to be completely unlike the last twenty years."

Chapter 14 - Assets & Demographics -

"Our nation has a historic, never-before-seen level of debt and a historic failure to save. Along with debt and savings, one also has to consider assets. After all, does it really matter if you have no savings and a million dollars of debt, if you have assets worth 10 million?"

Chapter 15 - Bubbles -

"Bubbles used to happen once every generation or so, because it took time to forget the pain from the damage. Today we are facing the bursting of a second major asset bubble, housing, spaced less than ten years from the bursting of the dot-com bubble. This is simply astounding and thoroughly unprecedented. It is the largest bubble in all of history and will probably be the most destructive. And it is happening right now."

Chapter 16 - Fuzzy Numbers -

"Our economic recession, and possibly depression, can be partially explained by the extent to which we have chosen to provide ourselves with misleading economic data. Certainly if you share my concerns over stocks, bonds, and 401K holdings, or are a serious investor of any sort, you owe it to yourself to listen to this explanation of how wrong our measures of inflation and GDP really are."

Chapter 17a - Peak Oil -

"Peak Oil is simply a fact. Peak Oil is NOT synonymous with “running out of oil.” But the most urgent issue before us does not lie with identifying the precise moment of Peak Oil. What we need to be most concerned with is the day that world petroleum demand outstrips available supply. It is at that moment that the oil markets will change forever - and probably quite suddenly."

Chapter 17b - Energy Budgeting -

"With sufficient surplus energy, humans can construct remarkably complex creations in short order. Social complexity relies on surplus energy. Societies that unwillingly lose complexity are notoriously unpleasant places to live. Given this, shouldn’t we pay close attention to how much surplus energy we’ve got and where it comes from?"

Chapter 17c - Energy and the Economy -

"In theory, there’s nothing problematic with living in a world full of exponential growth and depletion curves – as long as the world does not have any boundaries. However, exponential functions take on enormous importance when they approach a physical boundary, as seems to be the case for oil in the very near future. Both discoveries and production indicate that we could be at oil’s exponential boundary already. What will happen to our exponential, debt-based money system? Is it even possible for it to function in a world without constant growth? These are important questions, and they deserve answers."

Chapter 18 - Environmental Data -

"Our money system requires continual economic growth, but energy depletion will run headlong into dwindling resource returns to limit future growth options. Overpopulation will increase competition and demand for fossil fuel energy sources such as crude oil and coal, as well as for natural gas and sources of alternative energy."

Chapter 19 - Future Shock -

"Money, credit, growth. Exponential growth. Debt, future, history. Failure to save. Assets, housing, bubble, financial panic. Demographics, wealth, boomers, falling values. Fuzzy numbers. Energy, oil, growth. Peak Oil. Environment, resources, exploitation, change."

Mumbai Terror Attack - 26/11

Im writing this article to get my thoughts out there but also to respond to many questions i have heard on twitter and clear up some of the disinformation and the dismissive reporting (blaming the cause on disenfranchised Muslims in India, blaming the cause on Kashmir, blaming the cause on Indian grown Hindu terrorists) that i have only heard from the British / UK press and TV channels.

The main objective was to attack US and British nationals.
That would certainly be the dominant view that has been expressed by the UK and US media, but it is not the main reason. Certainly the explicit targeting of UK and US nationals amongst other nationals, has Internationalized the situation. The objectives of the these terrorists are multi-dimensional, this is just one in a continued spate of attacks that have occurred in India over the last few years (one would argue 2 decades). Firstly, the idea is to split the secular line that has held India together for a Millenia, by creating a fault-line between the Hindu majority and the Muslim minority the terrorists achieve their objective of creating civil disharmony across India. Secondly, it was meant to be an attack on Globalization, an attack on free-spirit, free market thinking, democracy and global commerce in a part of the country where foreigners like to do business. Places like the Taj Palace Hotel are where people "do business". In a country growing at 9% GDP, there is concentration of dynamic innovation and deal making that was happening in Mumbai. So by targeting Mumbai they wanted to fracture the heart of the financial a d business community at a time when the world economy was weak. Thirdly, it was an attack on foreign nationals to believe that India is not a safe place to do business and not a safe place to visit and a reminder to US/UK for their foreign policy in Afghanistan/Iraq, but it was not the main reason.

Al-Qaeda
The name Al-Qaeda has become a very simple label to be used for the various factions and sub groups that operate across the globe on an International, State, inner-State level. As such Al-Qaeda may not be a command and control hierarchy that is involved in these attacks -- But what is left of the Al-Qaeda infrastructure is firmly situated in Afghanistan and Pakistan. That there are many separate offshoot groups in Pakistan (like Lashkar-e-Tayyaba and Jaish-e-Mohammad) that are linked to Al-Qaeda should hardly be surprising.

Predictably India blames Pakistan.
Lets be clear hear. What India has been saying for the last 10-20 years is that they are not happy that Pakistan is turning a blind eye whilst terrorist organizations are freely allowed to recruit, train and carry out cross-border terrorist activities. India has been very clear about this in the many negotiations and dialogues, where they have asked Pakistan to 'remove the terrorist infrastructure which is within Pakistani borders'. The fact that Pakistan has not removed these groups is viewed by India with much mistrust and seen as tacit indirect approval from Pakistan.


Lashkar e-Tayibba (LeT) - based in Pakistan.
What needs to understood is that there have been many bombs and attacks on India's sovereignty over the last 20-years... In the last 30-years over 4000 people have died from terrorist bombs in India that is second only to Iraq! Lashkar e-Tayyaba were identified in the Mumbai blasts in 2006 (article i wrote in 2006). Lashkar-e-Tayyaba were involved in the Ayodha bombings in 2005, the Hindu holy city of Varanasi in 2005. Certainly the terrorist that was caught had admitted he was trained by the LeT in Pakistan and satellite phone communications was intercepted back to Karachi in Pakistan. Let us not forget the machine gun attacks in the India Parliment in 2001 which led to 1M Indian armed forces facing the Pakistan border, was also traced back to the LeT.

On final point India's Elite National Security Guard (NSG) commandos were dispatched to deal with the terrorist threat at the Hotels and it took them 3-days to secure the Hotel. It was a highly organized mission that took over 3-6 months to plan; the terrorists had detailed internal maps of the hotels; were expertly trained at short-fire burst shooting of the AK47. Were operating for 3-days without sleep which means that they had taken performance drugs (e.g. Adrenalin, LSD, Cocain). Contrary to what the press has said, this was a highly trained and organized outfit. So its quite reasonable to make the connection with the LeT and therefore for India to blame Pakistan for the origins of these terrorists.

Secular Pakistan
This is a gross error -- Pakistan is not a secular country. Pakistan was created during the partition of India to be an Islamic Republic. They refer to it as the "Land of the Pure". When Pakistan was created, Hindus made up 20% of the population, today the Hindu population is 2%.


LeT - why would they deny involvement?
LeT have strong links with parts of the Pakistani Secret Service (ISI) which runs and operates within it own network separate to the state. This is a point that many people get confused about, Pakistan the State, the Army and the ISI Secret Service have had a long and independent / interdependent history. One would argue that the idea of Pakistan as a democratic state is a relatively new phenomenon. With the real institutional power and control being held through the ISI and Pakistan Army. The ISI were recipients of millions of dollars of funding from the Saudi's and the CIA which led to the creation of Madrassas (religious Schools) across Pakistan which was used to create the Taliban. Well when the Afghanistan war ended and Taliban took control of Afghanistan, what happened to the Madrassass and offshoots of the Taliban that stay in Pakistan. Well they are still in Pakistan fighting a proxy war with India over Kashmir. So organizations like the LeT have strong reasons to not admit anything because the links between LeT and ISI are far stronger and after the Mumbai attacks the pressure to reign them in will be stronger.

One final point, all the terrorists were supposed to kill to the death, it was not expected that any would be captured. But given that one was actually captured, why did he admit to being trained by LeT?

Why would Pakistan openly be involved in something like this?
I agree. It doesn't make sense for Pakistan "The State" to be involved in something like this. But please as i mentioned before there is a complex infrastructure made up of the ISI and the Pakistani Army that harbors Anti-Hindu, Anti-India ideologies that have fostered since the partition which then worsened under General Zia who Islamized Pakistan even further. Yes there is professional, educated middle-class buts its small, and has not had much voice so far. So to be clear here, when you talk about Pakistan you need to be clear which aspect you are talking about. By any standard Pakistan is a "failed state" and at risk of heading in the same direction as Somalia, this is not good for anyone to see happen. Only last month it had to borrow $7Bn from the IMF to ensure it didn't default on its debt liabilities. As i had mentioned there are parts of the ISI and the Pakistan Army that has an institutional memory which still even today cannot "get over" the fact that they lost India. You have to remember that the Mughals ruled India for 700-years when they invaded India and as such believe that they are the true rulers of India and the Hindus are their subjects. So after partition this has created a resentment that never really disappeared and a misguided insecure superiority complex which has defined Pakistani politics. This animosity is further worsened by the fact that when Pakistan looks at its economical growth in comparison to India which is seen as an emerging Super Power that will have the 3rd largest economy behind China and the USA by 2050. So there is much resentment and very little inertia to change current institutional thinking.

Pakistan - timebomb
As mentioned earlier, there is little inertia to change existing institutional thinking which hasn't evolved since the creation of Pakistan. So a country which was built around a Pro-Islam, Anti-Hindu, Anti-India ideology is still festering in many parts of the country and it will take time for that to change. But it cannot change unless its replaced with a new vision for the country, yet it has to do that whilst dealing with a Civil War which internally is eating up the country and with problems on both its borders while not being able to grow its economy. Yes its a failed state and it will unfortunately continue to be so for a long time. I am pretty sure that Barack Obamas No'1 concern is the safe keeping of the Nuclear Weapons in Pakistan (which were kindly donated by the Chinese).


What are the terrorists motivations?
India is not a country that had invaded another country in her 5000-year history, a reputation unequaled by any other civilization in history and based on the timeless deeply spiritual values of "Ahimsa", which means non-violence. The same philosophy followed by Mahatma Gandhi. In the last 2-years Islamic terrorists have bombed Mumbai, Bangalore, Delhi, Assam, Orissa, Mumbai. Each one has been different and different number of people have died -- but yet India has not responded in a coordinated or directed response. It is a process of a thousand cuts that these terrorists intend to bleed India. Unlike 9/11.... Each attack is designed not to exceed a certain threshold, but as a total it is designed to test the limits and patience of the country. And the terrorists know that. They would not dare try something of the scale of 9/11, it simply doesn't make sense. But each individual attack is designed to push India further over the top.

And you may ask what is the point of this? -- Islamic Fundamentalism has moved beyond the issue of Kashmir. Kashmir is demarcated with a Line of Control and its borders will one day be remapped against those lines. There is more political alignment between India and Pakistan on this issue than most people realize. But Islamic Fundamentalism has already moved to Fascism and the only place left for it now is Anarchic Nihilism. You see the world is changing, people are getting wealthier, more educated, the internet is opening peoples eyes, telecommunication and media is making the world smaller, newer generations are giving up on the ideas of their parents generations and are learning at a much faster rate. They can see what is happening in India as a template of what could happen in Pakistan. That is why these attacks are designed to break India's resolve as they try and deal with Pakistan "The State" to ensure that both countries cannot move forward to second or third base.


Where did India go wrong?
Failure in Governance - the UPA Congress Party are a coalition government that needed to seek out other parties, minority parties to form a government. Each of these minority parties have their own expectations and motivations which need to be met. Which has made the Government very ineffective as it has to pander to everyone. Secondly with 15% of the population Muslim, that is a valuable vote that they cannot afford to disenfranchise, which has meant that targeting radical schools and groups within India has become impossible. In short the government has become limp through inaction at the risk of losing power, but general elections next May, it is a certainty that this current government will be out. To appease the minorities, when Congress came into power in 2004 the first thing they did was to dismantle and scrap Federal anti-terror laws. In short, the last 4-years of government has been viewed by most observers as spineless.


One final point -- Pseudo Intellectualism.
There is a pseudo intellectual view point common with many of intelligentsia press which likes to view that Pakistan is not responsible for these troubles and as such politicians and the press take a contrarian view from the most obvious answer. When you look at the mess that is in Kashmir, Pakistan, the Madrassas, the Taliban, Osama Bin Ladens hiding, its simply impossible to think that the problem is coming from somewhere else.

Mumbai 7-11 Blasts: "Govern or get out"

After the killing of 190 and injuring 650 people in Mumbai -- this the outcome of 8 highly targeted bombs on the Mumbai metro during rush hour, one wonders how much more should the citizens of India take?

The choice of Mumbai was not designed to unsettle the financial capital, but really meant to raise communal tensions between the Hindu majority and muslim minority. The riots in Gujarat are still not forgotten by the locals and lets now forget about the Mumbai blasts in 1993.

We don't need to look that far back, only last year Islamic terrorists bombed the holy Hindu city of Varanasi.

It beggars belief that India now has a Prime Minister who is completely at ease at talking about macroeconomic and how the diaspora can be unleashed across globe, but yet when slapped in the face countless times with blatant attacks on Indian sovereignty, can only meekly state: "Do not be provoked by rumours. Do not let anyone divide us. Our strength lies in our unity."

Its time for India to step up and deal with these Al-Qaeda terrorists. Both Lashkar-e Tayyaba and Jaish-e-Mohammad are part of the terrorist infrastructure that has many sympathisers in Pakistan. This continued passive, tacit and turning a blind-eye support for terrorism must stop.

Opposition party, Advani, summarises it well about the situation for the Indian PM: "Govern or get out".

On another sad note, still lingering from the tragedy of the Mumbai bombs, im surprised at the lack of news coverage from the British press, in comparison to the London and Madrid bombings. Picked politics, captures my sentiments more succinctly, "clearly the death of nearly two hundred and injuries of thousands of wogs was not good enough for the Dail Mail, Daily Express or the Metro to make it front page news. Fuck them. "

This is a timley reminder, for me at least, of how important it is to continue blogging.

An inconvenient truth

i think its time to wake up, i think its time to realise that guzzling chevs' and over heated Google datacentres are a no-no...

Information Overload

I think i am overwhelmed with Information.....

According to trendwatching.com - "New production processes, mass (!) distribution, technologies and communication channels, all enabling global economies of scale and scope, allow for virtually everything to be made and broadcast, at whatever specification, and whatever batch size.

- *China* India* Eastern Europe * $29 DVD players * Hudong-Zhonghua Shipbuilding Group's 8,530 TEU container ships * Airbus 380 * New H&M and Zara collections every week * Podcasting * Virtual worlds * 254 TV channels * Google AdWords. * RSS Overload * [Reality TV * Bulgarian property markets * BitTorrent * WiMax * geek to chic Nokia phones * Bvulgari and Gucci lines in Mumbai and Shanghai *]"

This pretty much sums up my symbiotic world, where the Hyper-World consumes the Real-World, through the Internet.

And what is left of the Real world?Global Warming, Geopolitical tensions in the Middle-East, the Falling Dollar, Islamic Fundamentalism, Consumer ridden dept, US Trade Deficit, ,Global Dimming, Social Unrest in Western/Eastern Europe, Property Bubbles, US Borrowing Deficit, rise in Nationalism, Fall in Education standards in schools, loss of morality on T.V., American Imperialism, Reduction in Shareholder value, loss of confidence in Money market currencies, Liberalised attitudes to Drugs, Increased Child pregnancy, Post-Tsunami mass guilt-driven donation appeals, Juvenile disorder, Political Correctness.... The list goes on....

Is the Real World and Hyper-Virtual world poles-apart?, do we care about both as much, or are we slowly leaving one behind.....?

I think back to the book that i read 2 years back... "The Age of Spiritual Machines" by Ray Kurziewel

Separated at birth!? Bush and Blair

Bert and Ernie

I really have to say that right now... my hat goes off to Mohammed Saeed al-Sahhaf...

The ministor of mis(Information) for Iraq...


I have never seen anyone like al-Sahhaf who has shown such up-beat optimism and lies in the face of the largest U.S. military build up ever...! This guy will down in history as being one of the most entertaining spokesperson for the now fallen brutal Iraqi regime!

Here are some recent quotes...

"STOP ASKING STUPID QUESTIONS!!"

What? Don't ask stupid questions"

"No, I am not scared and neither should you be!"

"We have retaken the airport! There are no Americans there! The film they broadcast to you is a lie! I will take you there and show you . . . in one hour!" (he never did).

Coalition forces "are not near Baghdad. ... They are not even [within] 100 miles."

"Coalition forces have no control over the city of Umm Qasr in southern Iraq."

The Republican Guard is in "full control of Saddam International Airport."

"Today we slaughtered [U.S. troops] in the airport. They are surrounded; we are hitting them with rockets."

"U.S. troops are committing suicide."

"U.S. troops were poisoned yesterday."

"Be assured Baghdad is safe, secure and great. There is no presence of American infidels in the city of Baghdad, at all”

“They are superpower of villains. They are superpower of Al Capone.”

“Those only deserve to be hit with shoes.”



I think the British Labour government could use this guy.. he has talent!

If you would like to support his cause... then buy his t-shirt...
Support Al-Sahhaf and buy his t-shirt!!