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Correspondence with Mr. Chris Martenson

Chris Martenson
Chris Martenson (www.peakprosperity.com)

Table of contents

1) S. Jetchick (2010-January-29)
2) Stefan's "quick and dirty" notes while watching "The Crash Course"
3) Amanda Witman (2010-January-29)

1) S. Jetchick (2010-January-29)

[No e-mail address on his web site, but there was a contact
form, which I used on 2010-January-29 at 16h00]
Good day Sir,

A buddy of mine recommended "The Crash Course", which I watched
from beginning to end. My e-mail is a bit long, but I wanted

	1) Thank you for all the good in your course

	2) Provide some hopefully constructive criticism
	   of "The Crash Course"

	3) Explain why I almost donated to your cause,
	   but changed my mind at the last moment.

So here we go.

1) Thank you for all the good in your course

I want to thank you for several reasons:

	- Our society is drowning in silly videos that basically
	boil down to daydreaming (and we're not even talking about
	porn videos here!). It's amazing how many silly DVDs can
	be found in an average video rental shop, whereas it's
	almost impossible to find a video, like yours, that tries
	to talk about serious issues with a scientific approach.

	- You ask for donations, but still your course is free,
	which is always nice.

	- I'm not an economist, so my economic opinions are not
	very credible, but for what it's worth I did not see
	any huge economic errors in your course.

While I already knew about "fiat" currency from the
excellent Overview of Philosophy by Thonnard, still I was
surprized at the application of those principles to the
current economy in the USA. Thanks!

2) Provide some hopefully constructive criticism
of "The Crash Course"

If I had any criticism to formulate about "The Crash Course",
it would be:

	- Not enough thought about the causes of those problems; and

	- Not enough thought about the essential solutions.

First, you clearly describe many very serious problems ("The three E's"
in your classification), but the fundamental causes of those
problems are not actually discussed (at least not in the
version of "The Crash Course" I viewed). My attempt at connecting
those fundamental causes with what you say in your "Crash Course"
is here:

	The Gross National Product And The Ten Commandments

(Notice at the end of Section 5 I give credit to your course.)

Second, the last chapter of your course (ch. 20 - What is to be done)
contains nothing wrong, but nothing particularly helpful either.
In my opinion, you basically avoid the single most essential
solution: Good Politics. The huge problems you so clearly show
cannot be solved by individual, private, and uncoordinated actions.
And by definition, actions that are public, collective and
coordinated are... political! See among others:

	A Reading List For Political Cynics

3) Explain why I almost donated to your cause,
but changed my mind at the last moment.

I did have my credit card out of my wallet to donate 20$ to
your effort, but I had to first register to be able to donate. Then
they asked me to carefully read all the disclaimers and guidelines
and such, and I found this:


	Regretfully, through much trial and even more error, we've
	determined that there are several topics that seem to escape
	the ability of otherwise careful and considerate people to
	discuss pleasantly in an online forum:

		* Religion
		* Abortion

	These topics are not allowed, and any threads or posts
	containing them will be promptly removed.  We wish it could
	be otherwise, but our hard-earned experience is that these
	topics are not worth the trouble. We appreciate your

Scientifically speaking, when "careful and considerate people"
fail dismally at a task, it usually means they are not
using a good method. What is the debating method recommended
on your web site? Do you have something akin to this?

	Concedo, Nego, Distinguo
	(How can people who disagree have a respectful and
	constructive argument?)

Also, you claim abortion is a topic "not worth the trouble".
Do you have any arguments to back up that opinion? (In your
"Crash Course", you're very good at avoiding assertions that
are not backed up by data or supporting arguments.) When I
last tried to examine whether abortion was an important topic,
I did not reach the same conclusion as you:

	"What is one of the corner stones of a civilized society?
	Human rights! Think about it: What's the use of having well-
	paved roads, without potholes, if the police can arrest you
	for no reason? What's the use of eliminating waiting lines
	in hospital emergency wards, if your neighbors can kidnap
	your children and steal your car? What's the use of
	eliminating greenhouse gases, if you have no rights?

	Now, given human rights are fundamental, which is the most
	fundamental human right? For example, what is the first
	thing you need, if you want to have a citizen who has a
	right to education, a right to clean drinking water, and a
	right to freedom of expression? A citizen, of course! (If
	that citizen has been killed, there's not much use giving
	him all the other rights!) Therefore, the most fundamental
	right is the right to life. And since human rights are
	already the most fundamental things in any society, we can
	say that the right to life is doubly fundamental: it is
	fundamentally fundamental."

Thank you, and have a nice day!


2) Stefan's "quick and dirty" notes while watching "The Crash Course"

Warning! Dear reader, what follows is probably not important for you. It's mostly a reminder to myself, so I don't forget what I learned from "The Crash Course".

The Crash Course

chapter 1 - facts, opinions, beliefs
- Massive change is upon us
- Overwhelming change is possible
- We can shape the future (we lack the political will)

chapter 2 - The three E's
- Economy: exponential money, bursting credit bubble,
demographics, national failure to save
- Energy: peak oil
- Environment: climate change, food production
- These problems have never been faced before. A
declining standard of living "is in the cards".

ch. 3 - exponential shape
- hockey stick chart, i.e. exponential growth of
world population, money, oil
- We are living in an age where hundreds of
graphs are approaching the vertical phase of their
exponential trajectory, because of population growth.

ch. 4 - the power of compounding
- example of drop of magic water doubling every minute,
which fill Fenway Park in 49 minutes, still 93% empty
5 minutes before disaster.
- The greatest shortcoming of the human race is our
inability to understand the exponential function
(Dr. Albert Bartlett)

ch. 5 - Growth and prosperity
- Truth is first ridiculed, then violently opposed, then
accepted as self-evident (Arthur Schopenhauer)
- Traditional opinion: Growth is a consequence of surplus,
and Growth = prosperity
- Example of family which has the choice between a
4000$ raise, and an additional child. He claims that
proves Growth != Prosperity.
- If we run out of energy, we'll run out of
growth and prosperity.
- Implicitely, seems to say Birth Control = Prosperity

ch. 6 - What is money
- Money is necessary for specialization of labor.
- Money: stores value, medium of exchange, unit of account
- His definition: Money is a claim on human labor.
- US money is "fiat" money.
- It used to be backed by silver or gold. Now just illegal
to refuse dollars as payment.
- Hyperinflation destroys fiat money, and also
destroys savings. Inflationary money systems require
citizens to subject their savings to risk.
- The Government can destroy our fiat money, hence our

ch. 7 - Money creation
- John Kenneth Galbraith: money creation is simple
but repellent. Money is loaned into existence.
- Banks, by loaning people's savings, create money
("fractional reserve banking").
- Explains "bank run".

ch. 8 - The Fed
- US Treasury Bonds
- When the Federal Reserve writes a check, it creates
- All dollars are backed by debt.
- At a minimum, each year, enough new money must
be loaned into existence to cover the interest
payments on all the past outstanding debts.
- Perpetual growth is a requirement of modern banking.

ch. 9 - Brief history of US Money
- "Federal Reserve" governmentally-sponsored bank
cartel, licensed to lend money into existence.
- Governments can change rules and break their own
- 1944 Bretton Woods Conference, NH. The US dollars
was made the global reserve currency. IMF born.
- Nixon, 1971-august-15, no more gold convertability.
- Paper dollars can now be issued without limits.
- 2 foreign wars + tax reduction = highest levels of
government debt.
- This leads to hyperinflation, destruction of US
dollar, then destruction of USA.

ch. 10 - Inflation
- Inflation is caused by the presence of too much
money. Rising prices is just the symptom.
- Wars make the government print more money to pay
for them, causing inflation.
- When a bomb blows up, there no residual benefit to
the domestic economy later on.
- Your savings and paychecks have been sacrified for
the war effort.
- Permanent inflation is a recent development.
- My money loses value exponentially.
- Inflation is a monetary phenomenon.
- Voltaire: paper money eventually returns to its
intrinsic value - zero. 1729.
- John Maynard Keynes: Lenin was certainly right,
there is no more positive, or subtle or surer means
of destroying the existing basis of society than to
debauch the currency. By a continuing process of
inflation, governments can confiscate, secretely
and unobserved, an important part of the wealth of
the citizens.

ch. 11 - How much is a trillion
- 67.9 mile-high stack of 1000 dollar bills

ch. 12 - Debt
- Growing debt levels implicitely assume that the
future will be larger than the present
- Printing money is a form of default that
punishes people with savings.
- US Federal Debt in 2008-April: 9 444 399 908 743$
- "investment debt", like college loan, or
increase in size of a successful restaurant
- non self-liquidating debts (like wars)
- Debt: futur consumption taken today.
- debt is a claim on future human labor.
- Two possibilities: default (money is still worth
something, but you don't get it back), or
inflation (you get it back, but it hardly buys
- Per capita debt has never been higher
- Debt has increased by 16 Tera$ in only 5 years,
most of it consumptive debt.

ch. 13 - Failure to save
- The US Government is insolvent
- Individuals, State and local pensions have
not saved.
- David M. Walker, US Comptroller (ret.) says US
Government has broken business model, faces
deficits, etc.
- 53-85Tera$ of insolvency for USA.

ch. 14 - Assets and demographics
- household net worth: supposedly 19.8T$
- Debts are fixed, but assets are variable
- rise in house prices cannot be "realized".
- household net worth: negative if you include
national debt.
- top 1% of households own 35% of real estate
and 56% of stock.
- 80% of the population have 15% of the wealth
- Number of workers per retiree by 2030 will be
below 3:1.
- "Baby Boomer Bulge"

ch. 15 - Bubbles
- A bubble exists when asset price inflation
rises beyond what incomes can sustain. Hope and
greed replace reason.
- 1637-Feb-5: Price for Gouda Tulip Bulbs crashed
- South Sea Bubble; Stock bubble before the
Depression; etc. Usually symetrical in time and
price. Shaped by human emotions.
- Don't open your wallet when you hear: "This
time it's different!"
- Ludwig Von Mises: "There is no way of avoiding
the total collapse of a boom brought about by the
credit expansion. The alternative is only whether
the crisis should come sooner as a result of a
voluntary abandonment of further credit expansion,
or later as a final and total catastrophe of the
currency system involved."
- Martensen tries to place his wealth out of the
path of a potential dollar collapse. (Sometimes
referred to as the "ABCD Strategy", or Anything
Bernanke (chairman of the Federal Reserve) Can't

ch. 16 - Fuzzy numbers
- There are lies, damn lies, and statistics about
- CPI now calculated with Boskin's Report (Substitution,
Weighing, Hedonics). Not cost of living, but cost
of surviving.
- Inflation is more like 15% than 8%. Many things
make more sense that way.
- GDP statistics: in 2003, Imputations and Hedonics
(unrelated to any actual transaction) accounted for
- GDP artificially high, CPI artificially low.

ch. 17 - Peak oil (parts A to C)
- liquid fuels and natural gas = 75% of our
energy use.
- We import 66% of our oil, equivalent to 750
nuclear plants (we currently have 104).
- Oil: prices rising, production leveling off,
40 years after peak oil discovery (1964).
- One 100W light bulb = one fit cyclist
- One gallon of gas = 500 hours of hard human
- Average US household has the equivalent of
hundreds of slaves.
- 400 gallons of petroleum per person per year to
grow food in the USA.
- Transportation (70%) and industry (fertilizer,
plastics, paint, etc.) cannot be replaced by
- Oil exports are being hit by rising demand
(internal and external) and declining production.
- The energy cliff. Recent oil finds are returning
roughly 3 to 1.
- Hydrogen is not a source of energy, but a
carrier of energy.
- The price of energy is irrelevant; net energy
is everything. Social complexity is built
upon surplus energy.
- Economics: the science of satisfying unlimited
demand with limited supplies.
- What if our exponentially-based economic and monetary
systems, rather than being the sophisticated
culmination of human evolution, are rather just an
artifact of oil? What if all of our rich societal
complexity and all of our trillions of dollars of
wealth and debt are simply the human expression of
surplus energy, pumped from the ground?
- To our nation, the end of cheap oil means a
sustained and permanent reduction in our after tax
take-home pay.
- Predictions:
	- status quo will be preseved at all costs (politicians
	will hide the truth, economic statistics will become
	even more fuzzier, and central banks will continue
	to throw more and more money at a system that at its
	core is out of tune with reality
	- hyperinflation
	- standards of living will decline

ch. 18 - Environment
- Population will double in next 40 years
- We exploit the highest-quality, easiest to obtain
resources first ("high-grading").
- Anthracite coal almost depleted in 100 years.
- France and the USA are past their peak uranium.
- Biosystem stress: Human species is burning through
top soil, animal species, dead zones in shallow seas,
aquifers, etc.
- 70M new persons arrive every year.
- Out of the three "E"s, the one that will crash
is the Economy (Economy: Must grow, Energy: can't
grow, Environment: depleting).

ch. 19 - Future shock
- the "twenty-teens": failure to save, massive debt,
housing bubble, boomers retire, peak oil demand,
environment, etc.
- We need to set priorities, and live within our

ch. 20 - What is to be done
- Personal risk mitigation plan
- private citizens and small communities must
bear more responsibilities.
- compares building an ark with no flood, with
not building an ark with a flood.
- If there is a non-zero risk of something horrible
happening, it's worth thinking about mitigating
that risk.
- self-assessment (financial, foundational, physical needs)
- be prepared for a financial catastrophe.
- Prepare for disruptions to support systems.
- Be prepared to help others.

3) Amanda Witman (2010-January-29)

From: Amanda Witman (amanda (add "at" symbol here) chrismartenson.com)
Date: Fri, 29 Jan 2010 23:05:13 -0500
Subject: RE: [General Question/Comment] Correspondence with Mr.
Chris Martenson To: inquisition.ca

Thank you so much for your interest and for taking the time to
offer your feedback for improving the Crash Course.  Chris is
not able to respond personally to every message he receives,
but he is always grateful for constructive feedback and gives
it careful consideration.

We need your help in spreading the word that we depend on the
support of members and donors to make it possible for Chris to
continue this work.  If there are people in your life who would
benefit from the information Chris offers, please tell them
about ChrisMartenson.com. Thank you for your support.

Amanda Witman

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