Posts Tagged ‘Central Banks’

About Spirit and Soul

Thursday, November 20th, 2008

Economic Cycles move Up and Down. We are now in a Down-state, a Recession. To stimulate consumers the Central Banks lower the interest and are pumping a tremendous amount of money into the economy.

Pumping money generates inflation and when inflation happens prices start to rise again. What the economist wants to avoid is deflation.

When prices rise people will buy goods and invest money. When the prices go up you can make a profit. When prices rise you have to buy the goods on the short term because they will be much more expensive in the future. When consumers believe the economy will contract they will start to save money to cope with the problems they believe they will encounter in the future. They will also postpone the buying of (luxury) goods. When they postpone producers will lower their prices and when prices are lowered other prices will be lowered. This is called Deflation and Economists are terribly afraid Deflation will happen.

A state of contraction is just like a state of expansion highly related to Expectations and Expectations are a Self-Fulfilling Prophesy.  If the self-fulfilling prophesy of a down-fall is not broken the economy will shrink until eternity. To motivate consumers to believe in an Expanding Economy Economists tell scientific fairy-tales hoping people will start to believe things are going the right way again.

Social scientists know for a long time that the majority of the people are not rational at all. Humans act on impulse and explain their behavior later. Humans believe others who believe others who believe others. Most of the things that are happening in the Economy are very complex and we need a simple explanation of a trusted expert. At this moment there is one thing everybody believes. Things are going in the wrong direction and One Thing is for Sure.

Bad news travel very fast.

The current state of technology has speeded up the transport of bad news to almost the speed of light. The contraction of the current economy moves much faster than the comparable contraction during the Great Depression.

The economy is controlled by two variables, Production and Consumption.

In a balanced economy the two variables are voided. The consumer destroys (consumes, eats) the products of the producer. The destruction of the product starts a new production-cycle. When the production is not voided producers have to create an inventory and take stock or speed up production. Producers don’t like to take stock. Stock costs a lot of Money.

Producers are just like Consumers highly controlled by their Expectation of the Future. The big difference between the two is the reaction-time. Consumers are able to Act on Impulse. It takes a lot of time and coordination to produce. Producers have to control their impulsive emotions but to sell their products they have to stimulate the impulses of their customers.

In the current economy the time between production and destruction is extremely shortened.  To keep the customer satisfied new versions of products are produced almost on-demand (on impulse). To organize a demand-driven production-line the producer needs highly advanced logistic systems. One of the most important concepts of logistics is to optimize the Inventory. Inventory costs money and space. To produce a product the chains of suppliers are heavily integrated.

Nobody is taking stock and one disturbance in the production chain causes a disturbance in the complete chain. When the impulses of the consumers are suddenly stopped a complete chain slows down and production has to stop.

When the Banks are not able to finance a slowdown of the supply-chain the production has to stop even faster. Again the effect of bad news has a huge and fast impact on every producer in the world. At this moment all the interconnected wordwide supply-chains are collapsing

We are living in a time where negative impacts propagate with the Speed of Light. The political institutions are unable to react to the speed of change that is now changing the world in an instant.

People remember negative impacts much better than positive impacts. The expectation of the Human is constructed to avoid big trouble. The constant sequence of bad news lowers the trust in almost everything that was trusted before.

At this moment Advisors, Bankers, Politicians, the Stock exchange, the Banking System, the Political system, the Medical System, Pension Funds, Insurers, the World Economy, the Climate and much more are not Trusted anymore. Everything is interpreted out of a negative perspective. Not only the economy is contracting but also the trust in the now and the future is contracting. Not only the Economy is in a Depression, many people are Depressed.

Production and Consumption are two important variables but there are really five variables at stake.

The cycle of Expansion and Contraction is balanced by two other variable called Spirit and Soul. Soul is related to the Human Emotions. Spirit is related to Human Creativity. The Four variables move around a Center and this Center is moving around other Centers.

Spirit is the Creator of New Ideas. Ideas want to move Down. They want to be realized on Earth. It is very difficult to determine these ideas because Old Ideas want to be Replicated all the time. Old Ideas have to be destroyed to make place for the New ones. The only way to do this is to enforce Stress on the old replication-system. It is very clear that this is happening at this moment. The old solutions don’t work anymore.

Soul contains the Human Potential and this potential is basically unlimited. When the Soul is Stressed it Explodes and new Opportunities become visible. There are two types of Stress. The Stress to create something New, the Stress of the Artist who is desperately trying to Express something that is there but cannot be Grasped. The other type of Stress is caused by the constant pressure of something that is forcing the Human to do what he really don’t wants to do or is not capable of doing. Let us call this type of stress, Negative stress.

Soul and Spirit are connected to the Destructor and the Controller.

When the Negative Stressed Emotions connect to The Destroyer of the Senses the Human becomes Violent. Sadly enough the Destructive force of a World Wide War will certainly generate an Up-state of the Economy.

When the Negative Stressed Emotions connect to the Expectations of the Controller it will generate Fear. Fear is the Destructor of the Senses. It narrows the view of the Human and produces the simple insight of the Common Enemy. They (not we) are the cause of all evil. A long time ago the Jews were the scapegoat. Recently Islamic Terrorists were the most important enemy. At this moment the “Greedy Bankers”, the Capitalists are the cause of the big economic crisis. If we don’t watch out we are moving into a new Struggle of the Classes.

When people are Afraid they simply stop moving. They wait and see and start to look for protection. In this case Big Brother is always there to help them. Extreme fear generates the need for all kinds of weapons to prevent war and to stop or even destroy the Agressive Humans. The Stressed Emotions create Enemies, Protectors, Weapons and finally the perfect reason to Fight a War or start a Revolution. If we don’t watch out a Huge Violent Conflict is unavoidable.

When the Emotions connect to Spirit, Spirit will generate an Insight. When this Insight has appeared Spirit will Transform the Soul and the Human will be lifted to another Center, a new Frame of Reference, a new View on the outside World. In this case Spirit gives the Expectation Hope, a view on a Bright and Exciting Future. The Creative Spirit is the Powerful Force behind Enthusiasm and Motivation.

We are living in an Illusion. Money is an illusion, the Economy is an Illusion, The Banking System is an Illusion, and the Contraction of the Economy is an Illusion. If we keep on believing this Illusion, the Economy, will slowdown, until it finally stops. At that time we have to cooperate to survive.

We See what we want to see and when we See a Contraction, the Contraction will happen. Our Expectation creates the world it wants to see and when the Expectation is without Hope, the outside world becomes Hopeless.

We, the Humans, are perfectly capable to create a completely balanced economy if we listen to the other, exchange ideas, cooperate and start to implement the ideas.  We will always make mistakes but mistakes generate new ideas and the cycle of Innovation will start again.

LINKS

About the Struggle of the Classes

How to create Enemies

About Suffering

About Unlimited Energy

Why Free Will is an Illusion

How to Shape your Own Future

About Mind Control

About the Emotions

About the Observer

About Synchronicity

About Time

About Paranoids

About Creativity

About the Big Brother State

About the Placebo Effect

About Honesty

About the Soul

About the Union of Socialistic States of America

Friday, October 10th, 2008

Government is Nationalizing the Banking Industry. This is just what Karl Marx wanted to do after the Proletariat had taken over Society. Is the US becoming a Communistic State?

When the Economy is Going Up Investors take on Risk. They start to Lend. The longer the Economy is going Up the more risk they take the more they lend until they’ve taken too much.

Eventually, they reach a point where the cash generated by their assets no longer is sufficient to pay off the mountains of debt they took on to acquire them. When this Happens we are at the Turning Point. From that time on the Economy is going Down.

The big problem is that you have to Pay Back the money you Lend with Interest. To Pay Back you have to Earn money. When the Economy is going Down you will earn less money so why should you lend money even when the interest rates are low?

When you expect that your income will go down you will reduce your spending behavior. You will certainly not lend money and the bank will not lend you money either because the banks want to be sure that you will be able to pay back the money and the interest. The Recession will deepen.

When Everybody Expects the Economy will move into a Recession the Economy will move into a Recession.

What You Expect to Happen will Happen.

The Central Banks are not only telling to watch out for a Deep Recession. They are telling we are moving into a Worldwide Recession. This is a completely new phenomenon.

When people believe a recession is near many of them will start to build up an emergency fund. The amount of money in the emergency funds will rise but to make money you have to invest money in something. Most of the time a part of the World is going Up and the other part is going Down. You just have to move your money to the place Where The Action is.

When the whole World is going into a recession nobody knows where to invest money.

We are not only encountering a Worldwide Recession, we are also encountering a “burn-out” of the Worldwide Financial Infrastructure. When you have created an Emergency Fund and the World Economy is going down and the Banking System is failing you really don’t know where to go.

The underlying assumption of all these models is the Power of the Market. The only thing Government has to do is to create the conditions and after some time the Market will restore itself.

Government is lending money for a very low price to the Financial Companies and they will propagate this advantage to their customers. The Customers will start to spend and the Economy will rise again but the Financial Institutions don’t propagate the advantage.

They add a Risk Premium to Save Money for Customers who are not able to Pay Back the Money. When Everybody believes the Whole World is Going Down this premium will be very high.

In essence Banks are Brokers. They have been very successful in bringing two parties (the Savers and the Spenders) together. The savers and the spenders are the Customers of the Bank. They are also the Customers of Government.

Why is Government helping the Financial Institutions and not the Customers of the Financial Institutions?

They believe the Market is able to recover by itself.

Why is the Market not able to recover?

The Market is an Illusion, a Theoretical Construction. The Market consists of Humans. When Humans believe a Theory (a Believe) they will act according to this Believe. If the Market will recover they will Wait until the Market will recover. If everybody Waits nobody Acts. Not-Acting leads to a Recession.

What is wrong with Economic Theory?

The Scientists believe Humans are Rational Beings but Humans are Emotional Beings. Most Humans are doing what other Humans are doing. When they don’t know what to do they just wait until the Markey recovers. The Fear of Losing drives Human Behavior. When this Fear Takes over Control Humans Act without Thinking. They Sell Everything they have to avoid a Higher Loss.

In essence the Government is confirming all the time that we are heading to a Huge Crisis. When we go on the way we are going the Crisis will be the Most Spectular Crisis the World has Ever Seen. The World Economy will come to a complete standstill.

Why is Government not Acting as a Broker?

This could be a simple solution. Just put Your Money where the Action is and the Action in Society is performed by Entrepreneurs. Entrepeneurs are very different from Investors. Investors invest their money in Entrepeneurs. Entrepeneurs Act. They put Ideas into Practice.

Entrepeneurs are Practical people. They know that You have to Earn Money to Invest Money. Their big problem is the Cash Flow. Their Customers have to pay their bills. When Customers don’t pay their Bills they need the Support of a Bank. When Entrepeneurs want to lend money to balance their cash-flows lend money to Entrepeneurs directly.

When Customers want to lend money to pay their Bills lend them the money they really need. You don’t need Banks to do this.

Every Economic Scientist is agreeing on point. Small businesses are the Pillar of the Economy.

There are many reasons why Small Businesses are the Motor of the Economy. The owners are responsible for their own actions. They get broke when their Business Fails. In Big Business You are able to spend or waist money without any consequence. You even get money when you fail. When you own a Small Business you are unable to create big Staff Departments. Big Staff Departments waist money and play Political Games. Small Businesses are the most effective and efficient Economic Instruments. They are also the Source of Innovation.

Why is Government not Supporting Small Businesses?

Government always supported Small Businesses until the Big Malls and the Big Companies were created. The Big Companies are paying a Lot of Money to influence the Politicians. Politicians were able to make big money when they started to do what the Lobbyist were telling them to do. It is time we get rid of Politicians who only want to make big money. To be a Politician is an Honor. You are serving the Whole and not Yourself.

Is US Government doing what Karl Marx wanted to do?

This is the most interesting point. According to Karl Marx, the first action after the take over of the Proletariat would be to Nationalize Banks. There are more parallels with the USSR. The USSR Controlled and Manipulated the Media, Gathered a Lot of Data about his Citizens, Spend a lot of money to Build and Maintain an Army, Occupied many Countries, Created an Elite (The Communist Party) and controlled the State with a huge Almighty Secret Service.

Are we finally moving to the Union of Socialistic States of America (the USSA)? or even worse to World Government.

LINKS

The vision of Karl Marx

About the Broker State and Small Business

About The End of the Dollar

Monday, July 21st, 2008

A well-known scientist once gave a public lecture on astronomy. He described how the earth orbits around the sun and how the sun, in turn, orbits around the center of a vast collection of stars called our galaxy.

At the end of the lecture, a little old lady at the back of the room got up and said: “What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise” The scientist gave a superior smile before replying, “What is the tortoise standing on?” “You’re very clever, young man, very clever,” said the old lady. “But it’s turtles all the way down!”

The Financial System of the World is a special version of “Turtles all the way down“. At this moment one of the pillars of the US Financial System (Fannie Mae and Freddie Mac) is falling and many people hope it will be supported by a financial pillar, the US Government. The two pillars have financed 5.2 trillion dollars of mortgages (5.200.000.000.000).

Since 1970, the US Federal Government has run deficits for all but four years (1998-2001) adding to a total debt of 9.5 trillion of dollars (9.500.000.000.000). If you include entitlements such as Social Securityand Medicare the debt is $53 trillion—or $175,000 for every American—andrising.

A huge part of the debt is held by two pillars, the central banks of Japan and China. The Central Banks of China and Japan are slowly moving out of the Dollar. This pillar is falling also.

The Citizens of the US are the only turtles that are left. The US Government could raise taxes, reduce its spending or raise the interest rate. In all the cases the US Economy would fall into a recession. They are unable to do this. The US voters will never elect an American President who is raising taxes or will move its country into a recession. They will always vote for the Big Spender.

Below the last pillar is Emptyness, the Abyss, The Underworld, Hell. The Universe is floating in Nothingness. The Universe is floating because it is moving. Movement is the essence of the Universe.

The problem of Turtles all the Way Down (Infinite Regress) can be solved in a Circular, Rotating, Cyclic model. In a Circular model there is No cause and there is no End. Every point is a Beginning and an End. Every Cause comes back on Itself. In the End the US has to solve its own problems and the only way to solve its problems is to accept a Recession.

The US Financial System has generated a debt for more than 30 years. They were supported by other countries to expand their economy. These countries needed the US as a buyer of their products. They also needed the US to copy their Technology and their Science.

At this moment the Economic Activity in the World is moving to the East. The countries that supported the US the most, Japan and China, are now creating their own Cycle and their own market. This cycle is completed by the addition of India and Russia. In due time they don’t need the US Market, the US Technology and US Science anymore. The US has given them all the opportunities by Outsourcing many of their activities.

Japan and China are becoming friends again and they have their finger on the trigger of the financial gun. When they move into another currency or create their own currency the US financial system dies immedeatly. They don’t need a war to win the war.

Are we Heading at a Total Collapse of all Systems?

Monday, December 17th, 2007
When I finished my blog about the Great Depression in 1929 I wanted to write about the Great Depression of 2008. I was convinced this would happen again. I am not the only one. Many known and unknown people are warning about a worldwide economic disaster (a deep recession).

The Central Banks are pumping money into the market to prevent this to happen but to their big surprise the market is not able to use this money because the banks are afraid to lend money to other banks because there is no trust at all.

They want to revive the system but the system is in a very special and dangerous state called StagFlation. It is slowing down AND speeding up in terms of prices and the creation of money. Stagflation is something the Economist cannot handle. It is a Catch 22-situation. What you do, it always works against you.

Another problem is caused by the collective believe that things are going wrong. People stop to invest and to buy which generates a downward spiral. You can lower the interest rates to zero but when many people are afraid to buy they don’t need a credit.

The collective believe-system is the most important factor. When the Central Bank is lowering the rates it is telling two stories at the same time. The first story is that it is doing something to help but it also confirms the believe that something is really wrong.

The second story is more powerful than the first story. People don’t believe in the financial system anymore. It has destroyed itself. What the people need is self-confidence and a way to solve their own problems but The System that is there to help them is in trouble itself.

The only way out is that people start to cooperate without the “interference” of the big complex dying systems. The Rich could simply lend their money directly to the “poor” entrepreneurs. There are enough people available to create new businesses but they are simply stopped by the incomprehensible System that has lost its own Entrepreneurship long ago.

The Rich, the Investors, don’t want do this because they don’t know how to trust an Entrepreneur. They want to be helped by experts who really don’t know what they are talking about because they are way beyond the practices of real life. The experts live in a highly abstract world that is dominated by Models and Models have nothing to do with Reality. They are a product of the Imagination. To solve our problems we have to move back to Earth and become Practical again.

In a blog I explained to so called Domino-effect. When one domino falls all the domino’s fall. At this moment all the banking-domino’s are preventing the domino-effect to take place. They are afraid they will lend something to another bank that will fall.

The banks are unable to show their credibility because they are unaware of their own risks. The financial structure of a bank has become incomprehensible because of the very complex products based on expectations and the failing IT-Systems that are unable to show what is really happening. Everything is connected to everything. The financial community is a highly complicated knot.

Many people are trying to comprehend the current situation but they are missing the right theory. Suddenly I remembered the Resilience Alliance (RA). They have created a beautiful theory to explain ecologies. It is not difficult to see that the financial system is an ecology.

RA has defined an adaptive cycle with four distinct phases: growth, conservation, collapse and reorganization. The cycle contains two major phases, the fore-loop (growth and conservation) and the back-loop (collapse and reorganization).
At that time an Innovation in Religion came into the World. This innovation can be summarized by the famous statement of Socrate Know Thyself. When we Know Our Selves we will be inspired by our Inner Light. Know Thyself has been translated into many practical approaches like Socratic Learning, Socratic Decision Making (Sociocracy) and of course the Cooperation.

The most important point is not to believe in the Apocalyps but to understand that a collapse is always followed by growth and conservation but on a new level. Believing in the End will generate the End. Our collective imagination is one of the strongest forces on Earth. Look for the signs of the new structure that will enfold out of the old one. Join people that are driven by Spirit and Soul. They are everywhere.

The back-loop is a rapid phase. During the fore-loop wealth is slowly accumulated and competitive processes lead to a few dominant species. The fore-loop destroys diversity. This is what happening in nature and it looks like the same thing is happening in other human ecologies. When most of the diversity is gone the ecology is highly connected and vulnerable to external influences. When something unexpected happens the total ecology collapses.

My feeling is that we are now in a state were many ecologies are collapsing at the same moment. They are collapsing because Nature is collapsing at an impressive speed. We are not heading for a Great Depression but we are heading for the Big Collapse.

The back-loop is a rapid phase. Suddenly the Weather changes with an incredible speed. Suddenly the Financial Market is evaporating and we are unable to do anything. Suddenly major conflicts start and we are unable to manage them with the current systems.

According to RA after the collapse the ecology reorganizes itself by jumping back to a “hidden” state that was stored in its memory a very long time ago.

How far back do we have to go in history to find our rescue? In another blog I wrote about the destructing cycle that was caused by a new insight that was given to the world by Socrate and the Buddha.