In the global credit crisis of 2007–08, the financial system escaped human control and became unstable, with near-catastrophic consequences. The underlying processes driving this instability may be traced to: positive feedback between asset price inflation and increasing leverage; increasing inequity leading to insufficient consumer demand; and the clash between exponential economic growth and the scarcity of primary commodities. These expose fundamental dilemmas that structure economic activity. Since credit is a newly-created contractual relation, while debt must be repaid with money, the global economy is caught in an ever-expanding spiral of debt which, when it reaches its limits, will result in default, devaluation, and inflation.
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