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The shove is beginning. British riots seemed somehow to do with boredom and ill-discipline; Greek riots might be dismissed as cultural, Arab Spring as political. Saturday’s efforts were more than any of these. For all the attempts to obscure the reality of the financial scandal that has been perpetrated on us the man in (literally) the street has sussed the cause of his discontent.

Henry Blodget has kindly provided Four Key Charts and Salman Bokhari has drawn them to my attention. Click on the following to see the story as well expressed as I have seen it so far. Thank you Henry and Salman.

http://www.businessinsider.com/here-are-the-four-charts-that-explain-what-the-protesters-are-angry-about-2011-10

Mostly we want to see changes affecting the world’s economy and how we live made slowly – the nudge principle. After all, disruption often leads to hastily-thought-out remedies not all of which work. Taking people out of even an uncomfortable comfort zone is always distressing for them. Slowly, slowly catchee monkey.

Politicians are especially devoted to this kind of progression. They talk of not turning over apple carts and a ‘measured pace of change’. Well, they can be right about that but they had better think a bit faster now. The voter horse has got the bit between its teeth. I doubt it will let go. Political thinking caps on, please.

However, we do now have to calculate the possible pace of change and this is where I suggest that distinguishing between the nudge and the shove is important. A good shove is sometimes necessary to get an item onto the agenda of those in power. Effecting the change is something else again. It is not simply a matter of timing. We need to understand how to handle both ourselves and other people if we are to effect change sensibly and for the better.

I doubt this will happen unless we enlist everyone’s help. To do this we need to commit that every time we advance our own interests we simultaneously make some advance of the interests of another more in need than ourselves. It is not rocket science to see that if we developed the habit of a one for one, even if they were not the same size, we would soon have a lot of work being devoted to improving the lives of those we know deserve better than they are getting.

Political change is brought about by a majority taking the same point of view. That is why President Clinton observed “It’s the economy, stupid”. That is the epitome of self interest but it reflected the majority view and still does today. The view is changing to see that a fairer world is vital for survival even – or especially – for the richest.

Shall we make a new phrase “It’s a necessity, stupid”?

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A currency analyst of whom I have never previously heard recently wrote:

“The Dow Jones FXCM Dollar Index advancing 0.63% as a global risk sell-off prompted investors to seek refuge in the greenback. The index breached key Fibonacci resistance but could face headwinds ahead of the FOMC rate decision.”

Indeed.

Another report on television said, a little more coherently, that

“…unprecedented negative sentiment leading stocks south present underlying opportunities for the less risk-averse ahead of S&P possible further Euro debt re-rating.”

Indeed, again. We are not looking for Shakespearean English, nor for Jane Austen sensitivity, but is there a purpose to these onslaughts on a language which, at it best, can communicate well and enlighten even the simplest of men?

As President Clinton might have said “It’s the revenue, stupid”. Almost every single bit of advice is written with a view to churning – making the punters buy or sell – the only way a financial adviser can make his money. But surely there are new advisers on the block who take no commissions – or if they do, return them to the client – and whose rewards depend on successful investing?

Examine the advice given and, as one adviser recently pointed out to me, they cannot gauge the market so they are limited to advising stocks / commodities that will do relatively well. Market crash and we are all down the drain together, however relatively well we have performed.  Bearing in mind Rothschild’s edict that “I never bought at the bottom and I never sold at the top” the only advice most of us are looking for is that concerning the market. Any of us can make guesses at reliable blue chips that are unlikely to go belly-up.

McKinsey is advocating the separation of investment banking (the people risking your money but not their own) and clearing banking (the people keeping your money safe and letting you have it when you need it). This used to be the case under the Glass-Steagall Act of 1933, created as a result of the Depression. At the end of the last century it was abolished and banks were unleashed to become bookies. The world has moved on and I doubt that splitting the two aspects of banking within an existing bank is feasible. We shall need a new breed of Service Banks as opposed to the present Casino Banks.

Since even the best financial advisers cannot forecast the market how are we to preserve our hard-won savings against the day when we need them even at their devalued rate?

Could someone please answer this in simple English?

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Of the seventeen bosses I had during my time as an employee one was fairly awful, thirteen were good, two were excellent, one was outstanding. A fortunate record. What distinguished the bad from the good?

All of them taught me a lot, even the awful one. You have to be grateful for what you learn and I am grateful to him too. No boss is ever perfect and you seldom come across one that is irredeemably bad. They all have their peculiarities, can all misunderstand you at critical moments, love and hate in almost equal proportions and mostly long to be admired, if not actually adored.

Early on I learnt that bosses can have dysfunctional childhoods like the rest of us. They have to put up with the daily round of irritations, as we do. Their drives, shortcomings, hopes and dreams are no less than ours, indeed, may be greater. They cry at failure and celebrate excessively at success. They are human beings. If your boss appears not to be one it is worth asking why.

Providing guidance when asked but not micro-managing is top of the list of what makes a good boss. No boss should ever refuse help to an employee who asks for it but no boss should ever take over decision making that an employee is responsible for, except in extreme circumstances.

Helping you to stand on your feet is a boss’s job. That includes giving you credit when due and allowing you to be responsible when the decision is yours. Fairness is often referred to as a condition of a good boss. It is certainly important and the point at which it often fails is when there is blame to be apportioned.

The best bosses look on failure as learning, not as a chance to persecute those who are trying to do their jobs. Of all the things in management that have got worse in my time, apportioning, escaping and loading blame is the worst. When I examine company structures today I see so much system designed to prevent the top people from taking responsibility and passing it, usually unfairly, down the line. Bullying is rife. The scapegoat is alive and ready for slaughter.

Job descriptions are necessary for people with very specific and limited functions. They are death to middle and senior managers. I would not generally allow them on the grounds that anyone paid a reasonable salary had the same responsibility as I did – to make the business work. They often lead to an “it’s not my job” culture. That is how companies, organisations and political parties fail.

The best boss I had was always supportive, often highly critical, occasionally irascible (but always apologetic afterwards if his temper had been unjustified or unproductive). He made me think about more than the business, encouraged me to have interests beyond just the commercial world in which I lived and praised when he could find something to be glad about. I never saw him make a judgment I thought was unfair. I first worked for him forty-three years ago and stopped more than twenty years later.

He is still a great friend.

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Many years ago a friend seemed to be about to commit suicide. Her confidence in herself, in the purpose of life, in the possibility of joy and in any conceivable reason for continuing to live had disappeared. It happens to most people at one time or another, of course. Few get to the point of taking their own lives but some do. It is always desperately sad.

Although I am generally in favour of people devoting the bulk of their time to others rather than to themselves there are certainly moments when we need to look inwards, to know who and why we are. They should not be too frequent.

In an attempt to help my friend see a purpose I wrote a reflection. She told me afterwards that it had stopped her taking the fateful step though I do not for a moment believe that either she or I knew whether that was true. It certainly had an impact on her and she went on to have many years of happy, normal life.

The poem has been useful for others, too. Not all of them were suicidal but sometimes consistent depression, when not clinical, is capable of being thought through by the sort of reflection I wrote.

Recently there have been several people who find life difficult, sometimes for very practical reasons of job or domestic upheavals. Often the gloomy economic, climate and social news is enough to trigger doubts about how worthwhile it all is. I take the optimistic view that we are all in the same boat even if it is called Titanic.

So when the clouds look darker and life seems overwhelming – or even underwhelming – you may care to contemplate the following. It doesn’t solve the external trauma, but they were never the problem anyway.

YOU ARE UNIQUE

You are unique. Each person is unique. That uniqueness makes you a whole, complete and satisfactory person. That doesn’t mean that everything you do is right or wise. Like everyone else you do wrong and foolish things from time to time. Perhaps often. But they can never alter your uniqueness, your wholeness, your completeness, your being satisfactory.

Because of this you can accept and love yourself. You must accept and love yourself. How else can you love your neighbour as yourself? This love must be a quiet, accepting love, as all the best love is. A love that doesn’t criticise, that doesn’t indulge in the futility of complaint, that doesn’t seek constant reassurance (because it isn’t necessary – remember: you are whole, complete, satisfactory).

And the first object of your quiet, confident, uncomplaining love is you.

After that all other love follows – without effort, without demand, without fear and, at the end, without loss.

CLICK to listen to an interview with Galven Lee on the Article

Today’s ARTICLE is a personal view by a Singaporean University Student

“University Education – An Unconsidered Life” by Galven Lee

The AUDIO version is a short interview of Galven by John Bittleston

“It was King Solomon who said, “For in much wisdom is much vexation, and he who increases knowledge increases sorrow.” These words, uttered in the heat of Solomon’s existential quest for significance in life, are found in the bible – in the book of Ecclesiastes. They mark the fruits (or perhaps, curse) of years of accumulating much knowledge and wisdom about the human condition. His conclusion – life is a repetitious cycle of unfulfilling endeavours when lived absent of the purpose which only God, as a transcendent Being, endows.

It was a few weeks ago that I was drawn into a peculiar exchange during a history class at my university. It reminded me of Solomon’s approach to education (if we could call it that). It was peculiar, because it raised a question, which was rarely voiced in the classroom – how should this affect the way we live our lives?

Until the question was raised, it had been largely an academic discussion on how many of the categories we employ to define and understand the world are tainted by Western prejudices, such as how we favour Western medical science to an Asian equivalent like Traditional Chinese Medicine (TCM), because the latter is considered unscientific, hence inferior. How, then, should we define Science? Is the Western approach necessarily more ‘True’?

In view of these mostly unexamined biases, a classmate asked, should this cause us to look at TCM more favourably? In other words, how should such academic theorising about the evolution of paradigms of thought, and their often inherent and unrealised subjectivity, not affect the very practical ways in which we carry out our lives and make decisions?

I restated the question for our tutor, who had asked my classmate to clarify. Maybe she had not caught it, or perhaps, more interestingly, it was such an unusual question in an academic setting that she had not seen it coming. I was prepared to give a personal response – we can only make evaluations of Truth if we have an external, objective standard by which to compare both Western and Asian approaches to it. However, the question was passed over as abruptly as it came up. I doubt many of those in the room even remember that it was raised.

I found the episode deeply unsettling. It led me to reflect on the inadequacy of modern university education in cultivating individuals who have truly thought through Life, and their lives in light of the knowledge they had received. I am not suggesting here that our academics should go about making moralistic prescriptions, nor should they become ‘life coaches’. I am saying that universities have abrogated a responsibility and privilege, which they used to exercise – to arrive at a unity amidst the diversity (the root word universitas reflects the concept of unity in diversity) of knowledge for the betterment of humanity. This understanding of what a university should be is certainly no ivory tower, and probably not too far from what Solomon attempted to do.

I am reminded of another peculiar episode which illustrates this point further. It happened on a most unusual occasion – my history professor had organised a dinner for all his students from a particular history course. Most academics would not have bothered; I was impressed.

Over dinner, I was drawn into an interesting exchange with a fellow history student. Disagreeing with him that all historical narratives were subjective constructs, I offered that if I was to apply his postmodern philosophy of subjectivity further, it led to the inevitable conclusion that since everything is subjective, history itself was a subjective discipline with no real claim to Truth. Taking it to its logical extreme, I went on to suggest that if Truth did not ‘truly’ exist, and all meaning was subjective and arbitrary, then life itself had no meaning. In this light, suicide was not only a rational, but perhaps even preferable, option. I made the implications of my argument clear:

Few people truly explore and live out the implications of the postmodern (or other) beliefs they confess. And many of these beliefs are in fact influenced by what they studied in university. He agreed with me, but had nothing much more to say, perhaps because it was a line of thinking he had not considered before.

In such an example, the divergence between theory and reality was stark. University education does not actively encourage and provoke students to realise the implications of the knowledge and theories being discussed, which inevitably influence the way they understand and evaluate the world. Students graduate without having truly evaluated their lives, nor obtained a holistic understanding of what Life might be about.

Worse still, they adopt a hodgepodge of beliefs which have not been well considered. This leads to a life with no central point of integration, and one where little else matters but what best serves their self-seeking inclinations. I call this a ‘prostituting’ of the mind, employing the cognitive capacities at the highest level, yet ignoring the interconnectedness of knowledge and the implications it should have on life and society at large.

King Solomon was honest in his ‘academic’ evaluation of a materialist philosophy in looking at life, issuing his famous cry: “Vanity of Vanities! All is Vanity!” He was one who saw, deeply, and very personally, how academic reflection should provoke authentic self-reflection. Perhaps such an approach might be laughed at by academics today as irrelevant, and by many others as unimportant – but may I suggest that to do otherwise would be foolish.

We all seek meaning and significance, and we turn to many sources, mostly subconsciously, to establish and validate our worldview. The ‘prostitution’ of our minds I have talked about is academic dishonesty of the highest order. It only suffices to produce a society of unthinking individuals, living un-integrated lives, picking and choosing the beliefs which mostly support their desire to maximise their personal pleasure at all costs.

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Dear Son

Thank you for your letter regarding the sums of money you owe me for your iPad, iPhone, holiday in Greece and taking your friends to the conference on “More liberal parental banking”. I appreciate that you have already thanked me for your education, your graduation party of twenty-seven friends and the motor scooter and running costs I have provided for the last two years.

Your suggestion that I should adopt the Central European Bank’s policy of unlimited liquidity without reservation would be easier to consider if you had not promised me that you would repay your loans. Your suggestion is in fact impractical because on the one occasion I tried to print money the police arrived and charged me. I only escaped a prison sentence because the authorities inadvertently enlisted the New York DA’s prosecution lawyer.

Your inability to understand that money has to be earned before it can be spent is disappointing in light of the education your mother and I have slaved to provide. It also speaks poorly of the Double First Economics Degree you have recently been awarded. While I do not expect you to understand all there is to know about finance I am bound to say that greater awareness of obligation has always feathered among the benefits I hoped would be bestowed by University.

Your insistence that the world is a rough, difficult and unfair place is not at odds with my own experience but your contention that my not having had to slog through a prolonged education gave me an advantageous start in life sits uncomfortably alongside your criticism that all education today is bunk and does not adequately equip you to earn a living.

Your offer to defer marriage until I can properly provide for a decent home for you and your intended is, in the circumstances, a somewhat trifling gesture. At least, that is how your mother sees it.

Before acceding to the further loan – or, as you put it, ‘non-repayable loan’ – you now seek, I suggest you get up by 8am each day for a week and mow the lawn. It will provide the first piece of evidence that you understand that nothing is for nothing in this world. Your current free breakfast will continue to be provided.

Your ever-loving father

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The conflict between continuity and change is one that dominates our lives. Individuals want everything to go on as it always has done – but to change for the better while doing so. Organisations have similar wishes. Their owners want safe hands to run the place. At the same time they expect consistent progress because ‘standing still is going backwards’. It’s all very confusing.

Perhaps the best manifestation of this odd paradox is in politics. The siren words of the opposition – and everyone in politics is in opposition sooner or later – tempt floating voters to shift their allegiance and allow a different government to control their lives, at least for the next five years. Soon the new becomes the old.

Dynasties provide an interesting solution to continuity. When Monarchies or other Heads of State are properly separated from government they create a form of stability no elected office can. The British Monarch is a good example. The Queen already has two followers in place; Prince Charles will succeed her and Prince William will succeed him. The British Monarchy has had a few rocky times but they have seldom been caused by lack of succession planning.

Not everyone is in favour of dynasties and there is plenty of history to justify their misgivings. Power corrupts and, as Lord Acton said “…absolute power corrupts absolutely.” He added that great men are almost always bad. I am not sure I agree with the second point but it depends on what ‘great’ means.

I have known great men who were humble and effective at the same time. They had all had to face real hardship when young, something that threatened their wellbeing and even their lives. The courage that required made them great.

And this is the point about change. A new team needs as much as possible of the previous team’s experience. From that it must select what is essential to keep, what is worth keeping if possible and what clearly needs changing. A new broom may sweep clean but it must do selectively.

The world needs changers more than ever today. Moral fibre has been whittled away, personal standards have increasingly become financial, decent behaviour now takes second place to vulgar ‘celeb culture’ and the virtues of prudence and truth are actively discouraged in favour of instant gratification.

When encouraging others to become Mentors I look for the people who have not had an easy or smooth life. The best Mentors have had their rough edges knocked off – often painfully, have learnt the wisdom that is available from those who have trodden the mentoring path and care because they care and for no other reason. They are not perfect, they are tempered by experience.

Continuity of sound fundamentals coupled with change of transient superficiality is how the best of the past and of what is yet to come is achieved.

Wisdom is knowing which is which.

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Now for the tricky bit.

To keep the world’s economy going at a pace that provides jobs for people – let’s call them ‘voters’ – the money supply has to be increased to allow more spending on the things that keep voters in work. Voters must be encouraged to spend.

Voters generally like spending; it gives them a sense of proprietorship, at least briefly. But since the money they are spending is not ‘real’ money, having been printed without any new wealth being created, it devalues the ‘real’ money already in circulation. It does this by creating inflation.

As voters are nervous about what is happening to their savings, their pension funds and the value of money generally, they start to save a bit more. Not just the voters, either. Bankers who are nervous lend less money so that their liquidity can be increased as a partial protection against a run on the bank.

It only takes a bit more saving by voters and a bit less lending by bankers to undermine the most important single prop to the financial system – confidence. How confidence is holding up is displayed by the Credit Rating Agencies. When they say ‘it’s riskier’ everyone runs for cover. They just said it about Italy.

The economically prudent thing to do in this situation is to cut spending until real wealth creation catches up and we are all more or less back in credit rather than deep debt. But remember what we called ourselves – voters.

The price of prudence is job losses. No political party in a democratic country can afford to throw a lot of voters out of work because they will riot. Or, come to think of it, in a non-democratic country, either, these days. So Prudence and Stimulus must compete with each other in the political arena. Since every politician in the world is interested first and foremost in survival in his job, Stimulus wins every time, perpetuating and exacerbating the problem.

Think of it as Formula One Motor Racing. The objective is to go faster…and faster. Doing so involves greater risk, more dirty tricks, more corners cut, less safety. Winning, at any price, is all.

You neither need nor want me to describe the pile-up waiting to happen.

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In a search of today’s ‘simple economics’ I have been frustrated by the number of people using language that does not appear in any dictionary – indeed, in some cases, that they have just invented. I am not alone in this, it seems. Several readers of The Daily Paradox have asked for a piece that tells them how today’s financial markets work, why printing money is not only sensible but essential and what the consequences of the current chaos are likely to be.

The old rule of ‘earn before you spend’ disappeared a long time ago. It went because capital investment produced sustainable revenue for a significant period of time. Borrowing to invest therefore became the sensible engine of growth. Growth itself soon became the objective in order to generate the needed increasing wealth that provided a better life though more personal property ownership, better medicine, more leisure, more palatable and nourishing food.

These are the things the American constitution anticipated when it exhorted citizens to enjoy ‘the pursuit of happiness’. We educate our young to believe that possession is joy, wealth is contentment. Neither, of course, is true, though clearly ‘no possessions’ is agony and ‘no wealth’, very distressing.

The world’s economy works because wealth is first created and second, moved around. What has happened in the last half century is that the balance between wealth creation and moving it around has significantly changed. As many people make their livings on the basis of how much it moves, by taking a snip off here and another off there, this has favoured movement against creation.

To fuel an economy today you must maintain the movement of wealth. The easy way to do this is by stimulating spending. In theory, this should be achieved by (among other things) low interest rates and increasing the money supply. The catastrophic near-meltdown at the end of 2007 was followed by both. Neither has worked. Why?

The consumer is scared. He sees his savings being eaten away by inflation for which there is no compensating, largely risk-free, investment. Leave money in the bank and it earns nothing to speak of. Invest it and the dividends will not compensate for inflation even if they are not taken but reinvested. He also sees the value of all major currencies declining, which is why he is buying some commodities like gold and silver. Commodities are notoriously volatile so he can equally lose on those as he can on equities.

The stimulus of ‘quantitative easing’ – printing money – is inherently inflationary, though it may take a little while to work through. Central banks stabilising money supply by quantitative easing hope that before inflation hits the consumer money supply will be stable enough for them to withdraw sufficient from the system to at least partly restore the currencies values. Not happening.

What effect today’s uncertainty is likely to have I shall discuss tomorrow.

A Thoughtful Listener’s Secretary (TLS) has discovered a way to download my talk to your iPad at no cost. Download the App called “OPlayerHD Lite”.

Thank you, TLS. If your boss will kindly identify you, I will send you a personally written poem of thanks.

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Dear Alice

You came to me at a friend’s suggestion because your children are almost grown up and you want to find a purpose, to build a life of your own and have some fun, some money and some fulfillment. In your early 40’s, you still have plenty of energy left and probably more than fifty years to live.

Your husband is happily busy with his rather specialized job and your marriage is sound. You are not in a mid-life crisis – just in mid-life. You want to make of the rest of your life something as satisfying as the first part has been but by doing different things.

You have read The Tree on the other side of the Field but not yet discovered your next Tree. You ask if a Mentor can help. The short answer is that a Mentor will help you to discover for yourself where that next Tree is. He or she will also help you describe the path to it. You will make the journey.

The difference between the first half of your life and the second is that in the early years your role was more clearly defined. You looked after the home, brought up the children, supported your husband when things got rough for him. You probably had to care for parents or other family members, too. Your 24 hours were well filled. If you were a working mother, they were over-filled.

Your next 25 years will be very different. Family will hopefully still play a big part, especially when you become a grandmother. Although retirement is a long way off you must start thinking about your financial needs for the future. Twenty years seems a long time but it gallops by once you reach the forties.

Your 25-years-ahead Tree has to involve some preparations for old age or you will lead an impoverished and possibly lonely one. Key to what you must now do is involving your husband. The marriage paths can easily diverge once the binder of young children is no longer there. Spouses should have their own lives and their own space but they must also have shared objectives and interests.

This is therefore the stage at which you and your husband must agree what you jointly want to have achieved when you reach the age of seventy. That does not mean that you have to do the same things, it means that you must agree what each of you is going broadly to do and how those objectives will combine to produce an interesting and stimulating marriage.

Once you have agreed a broad approach for the coming years you can work on the financial needs those objectives will dictate. But setting up financial objectives without knowing why is guaranteed to leave you dissatisfied and without a path to follow.

Find your Tree and you will plough a very straight furrow. That’s what learnt, anyway.