Chris Martenson Lecture On Why The Next 20 Years Will Be Marked By The Collapse Of The Exponential Function

Tyler Durden's picture

In this video courtesy of GoldMoney, Chris Martenson, economic analyst at and author of ‘The Crash Course’, explains why he thinks that the coming 20 years are going to look completely unlike the last 20 years. In his presentation he focuses on the so-called three “Es”: Economy, Energy and Environment. He argues that at this point in time it is no longer possible to view either one of those topics separately from one another.

Since all our money is loaned onto existence, our economy has to grow exponentially. Martenson proves this point empirically by showing a 99.9% fit of the actual growth curve of the last 40 years to an exponential curve. If we wanted to continue on this path, our debt load would have to double again over the next 10 years. By continually increasing our debt relative to GDP we are making the assumption that our future will always be wealthier than our past. He believes that this assumption is flawed and that the debt loads are already unmanageable.

Martenson explains how exponential growth works and why it is so scary that our economy is based on it. In an example he illustrates how unimaginably fast things speed up towards the end of an exponential curve. He shows that an exponential chart can be found in every one of the three “E’s” for instance in GDP growth, oil production, water use or species extinction. Due to the natural limitations on resources, Martenson comes to the conclusion that we are facing a serious energy crisis.

This energy predicament is namely that the quantity of oil as well as the quality of oil are in decline. He shows that oil discoveries peaked in 1964 and oil production peaked 40 years later. Martenson also shows how our return on invested energy is rapidly declining – the “cheap and easy” oil fields have already been exploited. In 1930 the energy return for oil was 100:1 or greater. Today it is already down to 3:1 and newer technologies such as corn-based ethanol only provide a 1.5:1 return. Martenson predicts that the time in between oil shocks will get shorter and shorter and that oil prices will go much higher.

Not only oil but also other natural resources are being rapidly used up as well. At the current projected pace of use, known reserves for many metals and minerals will be gone within the next 10 to 20 years. The energy needed to get these non-renewable resources out of the ground is growing exponentially. So we live in a world that must grow, but can’t grow and is subject to depletion. The conclusion out of all this is that our money system is poorly designed and that we need to rethink how we do things as quickly as possible.

After finishing his presentation Chris Martenson answers questions regarding a rise in efficiency, alternative technologies and oil prices. He also responds to questions regarding electricity, shale gas, gold, silver, platinum, palladium, and uranium and the race for global resources.

This video was recorded on November 16 at the Gold & Silver Meeting 2011 in Madrid.

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kito's picture

will it take 20 years for the collapse to play out? thats more like a slow roast...........

Unprepared's picture

Long lives the logarithmic function.

... And the square-root radical function.

trav7777's picture

and the derivative of e^x is...

Martenson isn't saying anything others haven't said before

redpill's picture

More importantly, it isn't anything he hasn't already said in the Crash Course videos that are available for free on his website. Which are quite well done. I don't think he makes a claim that he was the first to make these assertions, but he does present them in a clear fashion, and it's actually a great intro to reality for any of the sheeple in your circle of family/friends that may be remotely interested in coming out of the American slumber of trivial living where all that matters is who won the latest reality tv show and what's the hottest App download this week.

Unprepared's picture

That's exactly what I was thinking. I just tossed it around hoping that a slave or two from my circle of friends would lose sleep because of it (it allows me to skip questions from most: "do you actually believe in that bullshit?" - "nah, it's just for fun")

Oh regional Indian's picture

People trapped in the sex, drugs and rock and roll daze need much more than warnings. THey usually get it when it slaps them in the face.

And I cannot understand these terrible projections for Alternatives in general. Energy/food/way of being. We must. There is no choice. Once that is clear... plus, we really need to CHANGE our minds.

Consumption down is the key first step. Not forced but voluntary.



Mr Lennon Hendrix's picture

Hold on, hold on....

Sex can be ecstasy....

Drugs can be Nirvana....

And Music can be God.

Without substance they are lacking, and yes, misleading, but let's not just say the words without being precise.

Oh regional Indian's picture

of course LH, of course! :-)

I meant fucking, krokodil and thrash metal!

Or was that Vouyering, Crystal and Gaga?


Michael's picture

Complete and total worldwide economic collapse bitches!

There will be no aristocrat or oligarch family member left standing, that's how my plan plays out. I've been working on this plan a long time. It's a very good plan.

The mega-ton yield of the nuclear like explosion of the financial industry has been maximized for total devastation. The Dot-Com bust wasn't enough of a bust so we had a housing bubble bust much larger, but that wasn't enough to destroy the oligarchs so we had to think bigger. We now have a 700 trillion credit bubble combined with non-repayable national debts and entitlement liabilities of astronomical proportions that can never be repaid. Such is the beauty of exponential functions to destroy the target you need to have destroyed with their own system.

I suggest you watch all 8 parts of this video series;

The Most IMPORTANT Video You'll Ever See (part 1 of 8)

Michael's picture

The USA will be lucky in the economic collapse to have enough money for maintenance to keep our naval fleet from rusting out like the USSR's did, or to keep our fighter jets from falling from the sky.

That's what you get, if you're lucky!

That's what the banksters and special interests did to us. Worst case scenario; if the Ron Paul crew doesn't take charge, nobody gets nothing. Nothing!

zhandax's picture

I don't think Chris is saying that the collapse will take 20 years; it seems more likely he is predicting that it will take 20 years for the asshat 'experts' and bought politicians to concede that it has already happened.  Although I don't underestimate the degree of denial, I personally I think he is wildly optimistic.

Michael's picture

Looks to me like the economic disaster is happening sooner rather than later.


Let me share this with the Ron Paul crew, this is a great comment on a pretty good article;

"If people knew and understood the philosophical consistency and intellectual depth of Ron Paul and studied the books of the people from whom he draws his principles, the election would be over and America would be saved. Although Dr. Paul is sometimes accused of being a Randian, this is a lie. While he mentions her, and what libertarian wouldn't, he actually draws his beliefs from John Locke, Ludwig Von Mises, Murray Rothbard, Hans Hermann Hoppe, Carl Menger, F.A. Hayek, Randolph Bourne, Lew Rockwell and others of the Austrian school. It is an American shame that most people are ignorant of the arguments these individuals have made for liberty and free markets. Their writings are kept from the American people and our educational establishment so the media can be left to frame debate. This censorship and media filtering is a form of thought control. The ruling class knows it is better off if Americans are divided and spend their time arguing about gay marriage and flag lapel pins. Americans, I beg you. Please educate yourself and discover the questions that need to be asked. Learn how genius economists, statesmen and philosophers have advanced the arguments for liberty and free markets. Read how they have answered questions regarding liberty, peace and prosperity after having made the study of economics, history, war, government, philosophy, religion and liberty a lifetime endeavor. When people understand that all other politicians are statists, except for Ron Paul who champions the individual, their choice for who to elect as president will be made clear.

BY Joseph Zrnchik on 11/29/2011 at 06:31"

Ron Paul should hold hearings on secret Fed bailouts

zhandax's picture

I personally I think he is wildly optimistic

While I stand by the original comment, I should have elaborated.  Chris is absolutely correct in his timeline for the exponential function to play out, but I don't think he elaborated enough on the significance of the 'red line wiggle' in the slide introduced just before the 7 minute mark.  That 'wiggle' screams that reality will intrude before the pure mathematical function will play to its inevitable conclusion.  This reality is what will attract the full-court press of the MSM denial squadron.  And Michael, it is probably a corollary of the MSM's denial of Dr Paul's existence.

Michael's picture

A strategic outcome of all this is China's refusal to trade with the USA. Especially not after the US placed a bullseye hit with a bunker buster bomb on The Three Gorges Dam Project in a made up scuffle. But I digress.

Imagine a day when the people of this USA have to fend for themselves? Cut off from the rest of the world. This would be a great blessing.

zhandax's picture

Michael, don't think me an apologist for what is happening here, but the fact remains that there are only a couple of 15T economies, and the one we live in has about half the stated debt level of the other.  Similarly, I am no apologist for the banks, but ours are (on average) leveraged at 13X while the EU's are more like 26X (we at least "recapitalized" ours in name at least).  If China refuses to trade with us, we will have ample notice because we will not be first on the list.  (even if it is at 11:59 H/T to Chris)

Michael's picture


And we can adapt very quickly and new business will spring up like that new textile mill in Texas. We can have them all over the US in family owned businesses among all other kinds of businesses the public will demand.

Good night.

Michael's picture

OK, one more thought;

If you've not been searching alternative Internet news, shame on you.

I'm trying to think up a saying to promote alternative Internet news over the MSM.

trav7777's picture

why, are you antisemitic?

Bicycle Repairman's picture

"The USA will be lucky in the economic collapse to have enough money for maintenance to keep our naval fleet from rusting out like the USSR's did, or to keep our fighter jets from falling from the sky."

If the collapse hits every nation, then our enemy's ships and jets will rust.  Why would we worry about ours?

disabledvet's picture

you forgot your evil laugh.

old naughty's picture

Well said, ORI. Right thru the heart of the matter. But unfortunately for us, consumption is not down, instead it is fast-forward into the abyss. Sigh.

Oh regional Indian's picture

Thanks ON. Crazy eh? Super-consumption in the face of vanishing life! What a species eh?


Pitchman's picture

See how money, created out of thin air has exploded the worlds financial sector and, it can disappear as if it never existed:

Evaporation of Wealth on a Vast Scale: How $Millions - Trillions Can Disappear

Here's something else you might find interesting.

 Graphic: Financial World Dominated By A Few Deep Pockets

Also See: Fibonacci Numbers - The Fingerprint of God & God Within

mr_T's picture

I was there. Good speach by Chris..nice guy. You got 3-5 years left to drive your Hummers & RV's . We have peaked ... Can't say we didn't have a good time. Now go get your shoeshine box.

grey7beard's picture

>> You got 3-5 years left to drive your Hummers & RV's .

That's pretty much how I planned and figured it.  I just returned from a 23,000 mile RV trip from South Florida to Northern Alaska. I figured it was my last chance to take a trip of a life time.  I've been a minimalist and conservationist my whole life but realized WTF, nothing I do makes an iota of difference when  our whole society is built on gluttionus consumpion.  I saw a lot of really cool shit.  Now I'm back on my 10 acres of paradise out in the boonies and my priorities are to get my little hobby farm operating.  The RV was set up for off the grid operation so if I can't sell it, it makes a really nice off grid survival shack.

Fasten your seat belts folks, there's some bumpy weather ahead.




Seer's picture

I'm trying to get my "farm" to be a "life farm."  It's zoned agriculture, but really should be zoned aquaculture :-)  (never will have to worry about water!)  Lots of work to do, and I'm also sporting a grey beard :-()

Delivery to market is going to be a bitch with vastly reduced oil!  Need to get some of the horse people around me to wake up and start gearing to apply those horses for meaningful work.

Sorynn's picture

Martenson's crash course allowed me to communicate the trends I was seeing in a non fear based approach to my wife and some friends and family.  Sadly, they still can not get past their social programming.  However, they no longer think I am completely crazy.


Seer's picture

Good way to describe things: "social programming."  I don't necessarily see people as being flawed so much as I see them being poorly programmed.

My ex was a great example, that's why she because my "ex."  She left, couldn't adjust: even though we never got out of the urban environment (had been planning, though mostly it was I who was doing the planning).  Now, however, she "gets it!" (has property, chickens etc.)  I'm happy for this.

My current wife just plain kicks ass, she's picked up on stuff extremely rapidly: helped that she wasn't of this consumer culture.  In less than a year of now living in the rural countryside she's built quail hutches and has about three dozen quail; is managing (operationally) a couple dozen layer chickens and a half dozen ducks (the layers and ducks are in totally portable environments); she's also started making bar soap.  I've likewise done a huge amount, but I'd already programmed myself for it a long time ago...  Broilers and pigs are on our project list for next year.  Nothing like having visible feedback to your efforts/work.

Unprepared's picture

Not to make a fuss about it, derivative doesn't beat the exponent: the derivative of an exponential funciton is still an exponential function (d(ex) = x.ex-1).

The Logarithm on the otherhand, callapses the exponent like anti-matter (Ln(ex) = x)

HoofHearted's picture

Uh, you're quite clearly "Unprepared" for calculus with that one.

Go back and look at the difference between power functions and exponentials. The reason we choose e^x from among all possible exponentials is because the derivative is itself. It makes for nice solutions to differential equations like y' = y.

Variance Doc's picture

Mathematical nonsense.  If you did go to college (looks doubtful) please destroy your degree 'cause it's worthless:  The derivative of the exponent is NOT X*e^{x-1}.  It is itself via the chain rule.  That is, d(e^{x})=e^{x} via the chain rule.

HoofHearted's picture

Your degree may not be that much better.

You don't need the chain rule to show that the derivative of e^x is itself. Just go to the definition of derivative, remember that e^{x+h} = e^x * e^h, and you're pretty much done.

If we the ZHers don't know simple calculus, it is no wonder that BAC, C, GS, JPM, and MS are all going down the toilet.

trav7777's picture

yes I threw that one out there as a test LOL

caerus's picture

chain rule is needed to prove...


f'(x) = lim h->0[f(x+h) - f(x)]/h

let f(x) = ex; then

f'(ex) = lim h->0[ex+h - ex]/h

f'(ex) = lim h->0[exeh - ex]/h

f'(ex) = lim h->0ex[eh-1]/h

f'(ex) = ex lim h->0[eh-1]/h

limit is inderminate but you can sub point (0,1) and prove graphically...crude i guess...

scotch and math don't mix

Flakmeister's picture

Or you can take the Taylor expansion and differentiate just drops out


Variance Doc's picture

Moron.  Of course you can "just" use basic definitions for these simple functions, but that will not get you very far in mathematics as you so aptly demonstrate.  Generality is the essence of mathematics, hence the use of the chain rule to find the derivative of the composition of functions.  Just STFU with your Bronze Age "knowledge" of calculus.

HoofHearted's picture

Moron my ass. The morons are the ones who sit through my calculus classes, learn a few basic tricks, and then forget all about the definitions. You don't need to take out a sledgehammer to kill a fly. Save the fancy stuff for when you're doing stochastic calculus. No need for all that newfangled 200 year old technology for something so simple.

caerus's picture

the exponential function describes (among other things) bacterial growth and ponzi schemes...coincidence?

Temporalist's picture

Does it look something like this?


Agent Smith: I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species and I realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You're a plague and we are the cure.

caerus's picture

alas...we are a culture confined to a petri dish

spankfish's picture

Perhaps a primordial soup... hey its whats for dinner.  Soups on.

natty light's picture

"I'd like to share a revelation that..."

That is the line from the Matrix that really stuck with me.

Snidley Whipsnae's picture

"Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area."


Chris makes an excellent point regarding Malthus; Malthus did not have a crystal ball so he could not forsee in ~1770 the end of sail, the transition to biomass, the transition to the use of coal, and the transition to the use of oil. Oil and natural gas products (I almost said derivatives) allowed the 'green revolution' which allowed an acre of arable soil to produce ~200 bushels of wheat vs ~2 bushels of wheat prior to oil.

We, as a species, have two choices. Reduce our numbers or invent some fabulous new technologies that will allow our numbers to continue to increase, or remain stable. 

When I asked for a show of hands for those wishing to volunteer to self extinguish, I saw none.

When 'our best and brightest' grads stop rushing toward Wall St to invent new bull shit forms of paper scams, perhaps they will have the time to get to work on the new technologies? But, in a world where the goal of the vast majority is to get as rich as possible as fast as possible, where is the incentive for the brightest to look for energy solutions?

Personally, I think we are collectively screwed... Or, maybe some new virus will come along and take care of the human population problem. It has happened.

I'm going for J&B in the muffin batter this morning.


chindit13's picture

I suspect we'll be fighting over water before we're fighting over oil.  (Why do I think trav7777 is going to come in and trump me on this?)  Peak Eau?

Right now there is a child born in India every 57 seconds.  Water was already becoming a problem there even before China decided to try damming, on the Tibetan side, many of the sources of India's rivers.  China is also damming Burma's rivers, for hydroelectric power, though an ethnic rebellion and a scared government have put that on hold.  The Middle East may have been fighting about religion and land for the last few thousand years, but all of their future battles will be over water, and may even set relations back between Israel and Jordan, since right now Israel is "drinking Jordan's milkshake".  The US may have a strong export sector in ag, but in essence what the US is doing is exporting clean water when it exports grains.  The country will one day reassess this.

More hungry people, less arable land, and less clean water to irrigate it.  The good news is we can save on fertilizer if we don't have crops on which to use it.

I'm not going to volunteer to self-extinguish, but I made a choice long ago to take my gene pool with me on exit, which is the next best thing.  I can see a future CNBC where cheerleading anchors tout the "wonderful downside surprise" of a minus five percent year-on-year contraction, and where some future Fed Chairman says, "I think with the proper unaccomodating monetary policy we can achieve negative growth as far as the eye can see."


spankfish's picture

Chin, we either get off planet or cull the heard.  I can just see all the global policy wonks coming up with a plan to cull the herd.  New Plan 9 from Outer Space coming I would guess... peak humanity.  As if we ever had it.

Seer's picture

"invent some fabulous new technologies that will allow our numbers to continue to increase, or remain stable. "

Technology describes a PROCESS.  It's a set of ideas/thoughts.  Clearly there's no shortage of thoughts/ideas.  What IS in shortage is actual resources that technology REQUIRES in order to become more than just a thought.

trav7777's picture

Smith was laughably wrong.  Every other animal is limited in its ability to reproduce by natural are we.  We found liquid energy in the earth.  As the supply rate of it decreases, our equilibrium rate will go lower

dinosaurs wouldn't be extinct if nature found this equilibrium.  Predators don't eat enough humans either.

If you put deer on an island (JFC, just google this FFS), they don't achieve anything resembling equilibrium.  They reproduce out of control and consume all the resources.  YES, grass grows back.  But it doesn't replenish at the rate that the overpopulation of deer want to consume it.  Population crashes and rebounds but NEVER to a happy steady-state, precisely because the entire resource base was depleted before the crash.  The remaining deer live a squalid life of disease and malnutrition.  They get to eat at the rate the grass grows and the population stays at a point where there are no more or no less deer than can survive on a borderline starvation diet.

Think about that.  Think about resources in this context, how much can be shared to just eke out survival on the razor's edge of starvation.  That is the lesson of exponential collapse in the natural world.