GDP:

 - Amount of activity

- Inflation

- Population

Its not the debt that we need to worry about, so much as the GDP - the amount of economic activity. This relates to the amount of resources that we are consuming, and the rate at which we move beyond 'peak - everything'.

Bank of England historical tntereat rates

Historical UK Inflation and Price Conversion

 Click here to see annual inflation stats in the UK since 1750.

Use the Historical Price Converter to see the effect that inflation has had on the value of a pound. Since 1750 the pound has devalued by 170 times, meaning that today, you are only able to purchase around 0.6% of what you could have purchased 260 years ago, with the same amout of money. The graph shows a classic hocky stick shaped curve - with the value of a pound staying fairly constant until around about the 1950s, after which inflation sky rockets. You can see that there is a strong correlation between the **value of the pound graph**, and the GDP / national debt graph, whereby inflation sky rockets around the same time as debt.

** This is a direct result of the introduction of fractional reserve banking system. ** 

You can see from the Value of the Pound graph, that from 1750 - 1900 odd, there is virtually no decrease in the value of the pound. So in 1900 your pound would have been able to purchase you pretty much the same as the same as what it could have in 1750. Nowadays however, we are at the wrong end of the hocky stick curve, and you might think yourself sitting pretty if you have a few grand saved up in the bank, but have a look at this Value of the Pound projection up to 2050:

It can be seen on this graph that by 2050, the multiplier is around 525, meaning that the value of the pound has decreased to the point that it can get you less than one five-hundredth of what it could have got you back in 1750.

What is more, it will only be able to get you about one-third of what it could get you today. ** inflation on savings**

Source: Safalra

Source: tradingeconomics.com

Population

Yes it is true that population growth has an effect. However, population in 1750 in Britain was about 8 million, so it has multiplied by under 8 times since then to its current figure of nearly 62 million. (Click here for an interative graph on UK population history.)

Compare this with GDP, which has increased by 20,000 over the same period. This means that the economy has grown 2500 times more quickly than the population, and population cannot therefore be seen as the major contibuting factor in growth in GDP, or spiralling debt.

 d

Now lets add inflation back into the equation, which has multiplied by an order of around 165 since 1750. The chart to the left looks at GDP as a rough indicator of resource consumtion. When we factor in population growth (8x) and inflation (165x), the adjusted GDP is in the region of 14 x its 1750 level. This is a real factor for concern, since compared with GDP which is an arbitrary number related to the amount of money in circulation (information), this adjusted GDP is a better indication of the amount of resources we are using relative to the past. The graph shows that per capita we are using around 12 x as much resource as we were in 1750. It is also of concern that we are on the steep end of the curve, using resources at an accelerating rate. This is clearly unsustainable, given that we we are failing to curb emissions, plus we are at 'peak everything'.

Peak Oil

There has been much speculation by peak oil theorists, and the resulting Transition Town activists that as oil peaks (imminently), and prices rise, this will have a knock on effect on the price of pretty much everything. Compounded with accelerating inflation, this could have a dramative effect on purchasing power, and quality of life for people. Click here for data feed on oil and gas prices over the last 5 years.