Crash Course – 11 – How Much Is A Trillion
During the Crash Course, you will often encounter numbers that are expressed in trillions. 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.
***SPECIAL ADDITION*** Jess Bachman at wallstats.com has a really good artistic representation of a trillion dollars, (and a fascinating video of his work in progress); do not miss it.
Crash Course – 12 – Debt
Now we enter a new chapter of the Crash Course. With the background you’ve received thus far, you are now positioned to understand how the Three “E”s – the Economy, Energy, and the Environment – intersect and seemingly converge on a very narrow window of the future – the Twenty-Teens. The next twenty years are going to be completely unlike the last twenty years.
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.
Crash Course – 13 – A National Failure To Save
If you’ve just seen the previous chapter on debt, then you might be wondering if either our savings or our assets are of sufficient quantity to make those levels of debt perfectly manageable. In this chapter I will present evidence that the United States has failed to save money at virtually every level of society and make the claim that the United States government is insolvent.
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.
Crash Course – 14 – Assets And 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?
An asset is an item of ownership that is convertible into cash. Assets comprise the total resources of a person or business, including such things as cash, notes, accounts receivable, securities, inventories, goodwill, fixtures, machinery, and/or real estate.
Debts are fixed, while assets are variable. When you take on a debt, there it placidly sits, growing larger until you make payments on it. Assets, on the other hand, are variable, sometimes gaining and sometimes losing value.
Crash Course – 15 – Bubbles
Along the continuum of irrational financial behavior, it can be tricky to tell the difference between a bubble, a mania, and mere touch of exuberance. A bubble is reserved for the height of folly, and history is rich with folly.
So how would we know that we’re in an ‘asset bubble’? What do they look like and what can we expect when one bursts? The Fed famously likes to claim that you can’t spot one until it bursts. But actually you can, and the definition is pretty simple.
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.
Crash Course – 16 – Fuzzy Numbers
In this Crash Course video chapter called Fuzzy Numbers, you will learn how our official economic statistics are based on deeply misleading, if not provably false, data. 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.
In Fuzzy Numbers, we will examine the ways that our measures of inflation and Gross Domestic Product, or GDP, are flawed, using charts of inflation and GDP as well as other easy-to-understand graphics. This chapter will help you understand inflation and GDP and how our national obsession with misrepresenting them to ourselves has led us to the edge of a recession and possibly depression.
The chapters of The Crash Course take over 3 hours to go through and give you an overall understanding; we have broken the learning down into 5 postings. This is the third installment. The first part explained the nature of the crisis, the convergence of an Economic, Energetic and Environmental crisis, and the distinction between growth and prosperity; in part 2, we reviewed the nature of money, money creation, the role of the US FED (Federal Reserve System), and a brief history of US money, and revealed the true nature of inflation. Next, in Part 4, we will move on to energy, peak oil, the role of energy in our society, and the improbable existence of civilization without energy; last, we will measure the impact on the environment, the coming shock, and engage in a discussion about what we can do and who we must be to change this course of events that humanity has unwillingly set for itself.
The other parts of The Crash Course can be accessed following the links below:
Crash Course Part 3, The State Of The US Nation (and the world): Calibration for very large numbers. How much debt? A US failure to save. Assets and Demographics. Bubbles. Lies and fuzzy numbers.
Crash Course Bonus Audio: An Interview with Chris Martenson.
Tags: awareness, bucky fuller, crisis, critical path, economic cycle, Economy, energy expenditure, Environment, Future Of Humanity, inflation, integrity, life sustenance, malthusian limit, mind, sense of urgency, The Bucky Call, think, truth, universe
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