Money is debt

I only recently realised, from watching this great video, that money is debt. The whole banking system is basically a pyramid scheme, based on a growing pyramid of debt. Our economy depends on people being in debt. It’s a finely balanced pack of cards, and we witnessed with Northern Rock what happens when the belief system around it collapses. The same could happen to our entire economic system, apparently. An interesting sentence stood out in one article last week: as people are starting to become more cautious, cancelling their credit cards and spending less, this is having a knock on effect on economic growth.

So, on one hand, the best way to increase personal resilience to cope with rising energy prices is to get out of debt, mostly by reducing our spending, and consolidating assets. And yet that act itself is almost unpatriotic in the possibility it could bring on economic downturn. Plus, the steady growth of our economy over the past decades has been underpinned by growth in the use of fossil fuels. Now we’re starting to realise that fossil fuels are making us sick, and that they’re finite anyway, and the oil prices are starting to go through the roof. This could get interesting.

Yet perhaps this is not altogether a bad thing. We all know that money doesn’t buy happiness. Change is happening anyway, so my feeling is, let’s be conscious co-creators of another, better, story.