Wednesday, March 24, 2010

Exponential Growth the Two Edge Sword Monster

The hairless monkeys marvel at the use of the power of compounding interest. They say if you put your money in the bank or invest it you will be rich in 40 years. Well, that is partial true. If you put your money during the beginning or even the middle part of the 60+ year run between cycles you have a good chance of actually doing just that.... the marvel of exponential growth model.

There is only one problem with this, hairless monkeys have never charted nor tried to understand exponential growth. Now what happens if you have a system that only runs when you supply it exponential growth and you fail to supply the growth needed? In that case, the equation must feed on something, you created the monster now you must feed it something, but what does it feed on. The exponential growth model Monster then starts to look around and starts to consume the non-performing liabilities. What are the non-performing liabilities? Go look in a history book for the time period of 1923-1945, and the term World War II and Hilter. Without Hilter the world would have probably been in a death spiral for 60-80 years.

http://www.federalreserve.gov/releases/z1/Current/data.htm

The federal reserves Z1 report shows the death spiral you are already in.

The report will show you 3 straight quarters of negative credit creation, this has not happened for 70 years. What does that mean, it means it's over folks. You have pushed the equation to it's highest peak, now you must suffer the consequences for your actions.

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