# Compounding

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Peak Prosperity

## Compounding Is The Problem: Crash Course Chapter 4

By the time the problem is visible, it can't be avoided
Friday, July 11, 2014, 12:32 PM

Chapter 4 of the Crash Course is now publicly available. It includes Chris' famous "magic eye dropper" example of how the compounding nature of exponential systems speeds up over time, often in ways very non-intuitive to the human mind. » Read more

Blog

Peak Prosperity

## Exponential Growth: Crash Course Chapter 3

The most important driver of future trends
Friday, July 4, 2014, 11:18 AM

Chapter 3 of the Crash Course, Exponential Growth, is now publicly available: » Read more

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This chapter of the new Crash Course series has not yet been made available to the public.

Each week over the rest of 2014, in sequential order, a new chapter will be made publicly available (we've currently published up to Chapter 2)

If you don't want to wait, you can:

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In order to understand the urgency I feel about the issues covered in the Crash Course, you need to understand the power of compounding. If something, such as a population, oil demand, a money supply, or anything else steadily increases in size in some proportion to its current size, and you graph it over time, the graph will look like a hockey stick.

Said more simply, if something is increasing over time on a percentage basis, it is growing exponentially. With exponential functions, the action really only heats up in the last few moments. There is simply not a lot of maneuvering room once you hop on the vertical portion of a compound graph.

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In the Crash Course we will learn a few foundational Key Concepts. None is more important than exponential growth. Understanding this will greatly enhance our chances to form a better future.

Once an exponential function “turns the corner,” even though the percentage rate of growth might remain constant and possibly quite low, the amounts do not. They pile up faster and faster.

Oil consumption, the US money supply, world population, worldwide water use, species extinction, and other critical areas all follow an exponential curve in their growth, and all have turned or will soon turn that critical corner.

Taken one at a time, any one of these areas could command the full attention of every earnest person on the face of the planet, but we need to understand that they are, in fact, all related and connected.