Newsletter Item  [ back ]
Date: 2012-04-18 22:36:22
Social Butterfly Club Monthly Newsletter Feb 2012

Sacred Economics

You will want to watch the film Sacred Economics:  This short film gives you a glimpse of the concepts Charles Eisenstein has lectured about.  I had the privilege to attend his 2 hour discussion at the Hive in January. I also attended his 1 day leadership workshop at UBC. Ian Mackenzie is a wizard with imagery and video, and produced this short film that poignantly illustrates Charles’s genius. His main theory is that if we dig deeper to all our society issues, money is usually involved. Our current economy has commodified all products and services. As a result our human survival is no longer dependent on human relationships with one another, but with merchants. The sacredness of the gift from community is lost, so has the public knowledge of healing, play, and of air and water which are naturally abundant gifts from the Universe. We as humans are left with voids deep inside, feeling the alienation and separateness which leaves us lonely and unfulfilled.

Opera: Antonin Dvorak’s Rusalka
I am on many mailing list for events, news and fun stuff. One of them is the Georgia Straight, of which I’m a big fan of.  One day, I got an email promoting an opera that showcased the story of the Little Mermaid, produced by UBC.  I jumped on it and forwarded it to a few girlfriends. One hour later,  we had tickets on the second row for $15!

It was a rainy night with bad traffic, and we missed the first act. However the show was 4 hours long, so we still had plenty to see.  I was so impressed with the modern elegant design of the Chan Centre. It was situated upon what looks like an enchanted forest, with amazing acoustics.  The lighting for this opera was phenomenonal, the costumes left something to be desired though and the acting non existent/or overboard.  But the singing I thought was heavenly!

This was very much unlike the Disney version of Little Mermaid, or the original version of the Little Mermaid where she turns into a soap bubble. This mermaid was abandoned by her philandering prince at the first sight of a beautiful princess.  She didn’t have helpful sidekicks like Sebastian, only discrimination and mockery from all the court people. Her only choice was to etch out her eternity going to the bottom of the pond away from her family. From there she would lure travellers to their untimely death. It was a tragedy on Olympic proportions.

I like Opera, live theatre, stand up….. for their live music, acting, costumes and drama.  My favourite character in this show was actually the evil princess.  She roused interest in the prince, and left him in the dust!  Talk about an egotistical bitch! (by the way she had the best dress).

I missed seeing Margaret Cho live this year, but hope to go see Danny Bhoy. He is a clever and funny East Indian comedian from Scotland! I became a fan when I saw the promotional videos he made for the Tourism Board of Scotland. In the video it showed a pig intestine and cheese mix for breakfast and heading to the pub as a tourist excursion.  

Ascent of Money ~Niall Ferguson
I first became aware of the brilliant and charismatic Harvard and Oxford Economic history Professor Niall Ferguson from watching him during the Munk Debates. The topic was “Will China will rule the 21st Century” . I recently had a chat with a good friend at a Waves Coffee, and noticed the university student next to me was studying a copy of Niall Ferguson’s book “Ascent of Money”.  I really wanted to find out more about this, as money seem to be a topic that keeps popping up around in my life.  A quick search on YouTube revealed PBS has a 5 hour documentary showcasing the history and evolution of money in the same title as his book.

It was truly fascinating, as he took us from the invention of coins/clay tablets, to explaining the purpose and concept of money. The original BANK was run by Jews in Venice, Italy.  It goes into detail about the concept of Usury, which was a sin for Christians, and something similar for Jews. However there was a loophole that they could provide financial services to each other, just not to their own race. This was until the Medici family came along and legitimized loan sharks into a proper business of banking. Their invention of the banking system brought unforeseen sums of fortune that they ultimately used to finance the Renaissance period of art, culture and innovation.

Niall shared with viewers the rise of the bond market, which originated from war times. Then one ambitious murdering Scot John Law took that concept and turned France upside down with the first boom and bust in the bond market. This economic collapse being a major factor in starting the French Revolution.  He enlightened us about the rise to power of the Rothschild family. By spreading the five brothers into various European financial capitals. They diversified their risks, and bet on the side of England against Napoleon and helping to win that war.  

Niall swiftly demonstrated that volatility is the one things financiers are afraid of when they’re fund managers. This is because inflation will eat away the profits of interest growth in times of war.  Because the Rothschild’s sat out of the American war, the South’s bet on the cotton backed bond inflated through the roof.  It is not the first and last time a country is ravaged by inflation.  Niall showed us how badly Argentina was damaged by hyper inflation, and linking it back to the Spanish Inquisition. The Conquistadors may have brought back a mountain of gold, but were unable to translate that to wealth.  He very clearly shows that paper money without the goods and services to go with it, is worth perhaps not even the paper it’s printed on.  If there is no trust in the paper, money then is not worth anything.

Niall showed that two hard drinking and kind Scottish clergyman Robert Wallace and Alexander Webster invented insurance to help the wives and orphans of dead clergyman. Otherwise they were often were thrown out to the street afterwards. It was designed with mathematical precision, so well that it proved to be a safe bet against life’s uncertainties, that it became as respectable as going to church on Sundays.  This however did not help the people who lived in New Orlands through Katrina, with their modern insurance claims.  Insurance paid little if anything for those victims, and 60% of its citizens have moved away because no one can get house insurance in that region anymore.

Niall cleverly transitioned that to introduce the invention of the welfare state of Japan. During World War II where all life’s uncertainties were guaranteed to be taken care of by the government, motivated by healthy body soldiers for empire expansion.  It was very successful, so successful now Japan enjoys the longest life expectancy. There is a negative consequence of having such a large aging population with a much smaller working population. Eventually the national pension program that will soon go bankrupt all together.

The welfare state in South America took out the incentive for economic stimulus. Niall describes it as: the carrot for its sweet rewards, and the stick for the warning of destitute.  In Peru after the communist president was killed in a coup d’état by military generals, they were advised by Chicago University Economics Professor Milton Friedman to get rid of all welfare state. The Peruvian government set up a system where instead of all employee paycheque pays a portion to the welfare state, people could chose to pay for a national retirement fund.  80% of the population switched to the new model, and now instead of 3% national growth, they experience 12% growth, from 50% national poverty, dropped to 13%.  Encouraging signs that Margaret Thatcher and Ronald Regan took notes on.

Niall went on to explain the rise of stocks, and how investors made up of irrational human beings often behave like bulls.  Once they smell money, they experience what Alan Greenspan calls “Irrational Euphoria”. However when they smell trouble, it leads to massive sell offs, which has led to seven stock market crashes in the last century.  The most famous of these being The Great Depression of 1929 , and lasted until the late 1930s or early 1940s.

Hedge funds appeared to lower the risk of business, whereby the buyer and seller agreed to a transaction ahead of time.  Options were then created to alleviate that risk of emotional yo-yoing.  Should a stock goes up you have the option to sell, if the stocks go down, you only lose the money optioned You do not however lose the entire stock itself. This has changed the world of global finance and has made a lot of people very, very, rich.

The cooked books of finance does stop there,  companies like Enron is just one shiny example.  Because of stock market volatility, someone name George Soros made huge fortunes betting on who’s going down in a big way using “shorting”.

Niall then explained how people often feel insecure and unsafe buying stocks because it’s a bunch of numbers on a computer screen. As a result most turn to the housing market, as it’s seen as the more stable investment. He went back to British history to explain that land owners were lords and the only people who could vote. He used second duke of Buckingham as an example of someone who lost all his fortune due to his extravagant lifestyle, as his spending much exceeded his income.  The key lesson he imparts is a regular income with a lifestyle that is within its means is the safer way to live.

He explained that in the United States, mortgage lending at one point was much more straight forward. The housing market though was racially divided, this was until George W. Bush announced everyone should have a house. When the American Dream Down payment Initiative of 2003 was passed into law. The US government essentially became the guaranteer for low interest rate mortgage for American families.  Due to the massive amount of loans the Chinese were able to lend America, mortgage companies became ever more risky. Companies such as Fannie Mae and Freddie Mac began lending mortgages to “Subprime” lenders who may not have a job, no savings, and no assets.  The banks immediately bundled these mortgages, spliced them up, and sold the AAA rated to hedge funds in far off places like Norway. This is how the housing issue in USA brought on a global financial recession around the world.

I was mesmerized!!  To say the least, being an addict to history, cultural evolution, psychology, this 5 hour story was biblical roller coaster.  Charles Eisenstein is right, money is involved in every big thing that has happened in society.  I wonder if we’re better off without it.
Powered by Letterman