Where the current crisis has been described using millions of words in thousands of articles .......... I can explain why the whole thing happened using just three words.

Too. Much. Debt.

I hesitate to criticize Martenson, but I have to disagree here. He identifies debt as causal, whereas I believe it's a symptom of a deeper underlying cause. Martenson himself points to this in his Crash Course, so this article by itself is a bit puzzling.

Rather than launch into a long description of what *I* think is happening, I'll let Philip Henshaw do the work:

http://www.theoildrum.com/node/5478

Following what he writes, I'd point to the coal-powered, steam-driven Industrial Revolution of Britain as a prime example of diminishing returns, and how that drives the search for new resources, in this instance, oil. The major takeaway from this, and other historic examples, is the observation that grand economic cycles are driven by the need for ever greater energy "density" with which to build ever more refined social and material structure.

Returning to "too much debt" I'd have to ask how much is "too much?" Clearly, when it exceeds the rate of replacement in the form of new capital, you've taken on too much, but how do you know when you've reached that point, given the influence of multiple interested parties who would, for whatever reason, have you believe otherwise?

Still, the equation itself is pretty straightforward. When you've exhausted all avenues of growth based on your present energy environment (primary resources + technology) and are then unable to locate a new (and better) source of energy, the only thing left is to settle in and eat your seed corn, that corn being accumulated capital, with debt as the means of consumption.

So, in that scenario, debt is a symptom of breakdown, not the cause.

ebear