I wanted to pre-warn as many people as I could, after researching into our economic problems I believe we are heading for a global economic collapse.

 http://www.youtube.com/watch?v=WAyHIOg5aHk

To understand why our economy is fundamentally flawed you have to understand 4 things...

1 Fiat currency - This is something that is decreed by the government to be money, like the minted coins and notess that we all know as money - and the number entries into computers by the bankers into accounts... that is also classed as money.

2 Fractional reserve banking - Basically if anyone wants to take out a loan from a bank the money is literally created by the bankers by entering the figures into their account. Banks don't lend money they have in deposit, they lend money in relation to their deposit. What I mean by that is governments have decreed that there should be a limit to money creation by bankers, they do this by limiting a loan to a ratio of deposited money. An example ratio would be 1:10 - meaning that for every £10 in the bank, a bank can create a £100 loan out of thin air.

3 Banks create the principal (the loan) but not the interest to be paid - The arithmetic is; P is less than P + I what that means is that because of the systems design we can only go to the general money supply to pay back the loans but the excess need to pay the interest is has never been created. This means that someone will always default because the money supply isn't enough for everyone to pay back the loan (principal) plus interest, because it never was created in the first place. It's only the constant expansion of credit, and the time lag between loan creation and repayment that keeps that flaw from being exposed, and allows the public generally to be able to pay back loans.

An example to help understand is; 2 people take out a loan for £100. If the interest is 5%, then they have to pay back £105 pounds each, but their is only £200 in the general money supply, so 1 person will come out short by design. The only thing that stops this from being a problem is the time lag from debt creation to repayment, and more credit money being pumped into the general supply by others taking out loans.

4 The principal is extinguished everytime a loan is repaid - The principal literally ceases to exist from the general money supply and only the interest remains whenever a loan is repaid. What that means that is that if their is a too great an influx of debt repayment and to low a rate of credit expansion, the money in circulation would shirk so rapidly that it would cripple the economy due to it's scarcity. It also means that a constant expansion of credit (meaning debt) is needed for the economy to keep going. That is why every country in the world is in astronomical debt, the system is designed this way.

What the above 4 points means is that ...

1) An ever increasing expansion of credit is needed to keep the system going.

2) Goods and services are needed to constantly grow in order for the ever expanding money supply to keep it's relative value, if the economy doesn't keep up with the growth of credit then we get hyper inflation (we already get inflation every yearr for this reason) because the money supply has expanded too much in relation to goods and services.

3) The above means that an infinite usurption of the earth's resources (trees, oil, gas and coal) is needed to fuel infinite economic growth.

We now have 2 major problems from which we can't recover...

1) Debt levels has reached an apex. There is a limit to how much debt, rising general prices, rising energy prices and taxation the masses can take without dramatically returning to underconsumption - meaning saving and not spending on frivolous things, and not taking out loans - this means that our service based economy in the UK can't survive.

2) Cheap and easily accessible oil has gone, we now have harder to extract (offshore drilling) and harder to refine oil (tar sands). The rising cost of oil will, and is crippling the economy (remember the $147 oil price spike in summer 2008, the economy then crashed in september/october 2008 - the oil price spike plus a burst housing bubble resulted in the beginning of the collapse). Peak oil is what that is called, and it's irreversible, unfortunately our economy and society is fundamentally dependant on Oil.

To further understand the premises from which this conclusion is derived I'd advise you to check out the following sources...

Micheal C Ruppert in 2006 predicting the crash of '08 -

 http://www.youtube.com/watch?v=wjTP_Fco-oY

 http://www.youtube.com/watch?v=K_h1UAuxUNA&feature=related

Michael C Ruppert in 2009-2010 predicting what's to come -

 http://www.youtube.com/watch?v=WAyHIOg5aHk

 http://www.youtube.com/watch?v=Evluem1X0lc


An overview of 'the system'
--------------------------------------

Part 1 -  http://www.youtube.com/watch?v=saQ_cB3fd3Y

Part 2 -  http://www.youtube.com/watch?v=0XLotYmbMiM&feature=related

Why oil effects the economy
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 http://www.youtube.com/watch?v=9t0WGsuactQ&playnext=1&videos=q7OJP9Er-vo

 http://www.youtube.com/watch?v=lgBpt9_FSV0

 http://www.youtube.com/watch?v=0Xl3J4Kpy88

Why we are heading for a collapse
--------------------------------------------------

Debt -  http://www.youtube.com/watch?v=L1ApJvhP-ZI

Expensive oil -  http://www.youtube.com/watch?v=MkcERyjy364


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If you would like to research beyond that (for free) I would recommend that you watch clips on you tube of Michael C Ruppert (predicted 08 crash), Richard Heinberg, Peter Schiff (predicted 08 crash), Gerald Celente (predicted 08 crash), Jim Rogers (predicted housing market crash of 08), Marc Faber, Jeff Rubin (predicted the $147 oil price spike in 08) and Steve Keen (predicted 08 crash).

Books I would recommend are; how an economy grows and why it crashes by Peter Schiff, Meltdown by Thomas E Woods Jr, Collapse by Michael Ruppert and The party's over by Richard Heinberg.

Documentaries I would recommend are; Collapse (2009), Money as Debt 1 (free online), Money as Debt 2 (free online).