There is so much to discuss right now as the supposed debt situation in Europe continues to unravel. I am personally getting more involved and hearing more about it. Without revealing too much, I can say that a number of people I know quite well are looking to get out of Western Europe… not forever, but they are tired of the contract situation and stagnant wages. Quite frankly, reading between the lines, I think that people are worried that once the price of bonds starts to affect the population, they are going to be taxed out of all of their holdings. Let me reiterate once again to those who believe that increasing taxes on the wealthy will solve everything, you could tax everything and everyone at 100% and it would still not be enough to cover all of these debts and their service charges (interest). This is a situation of very clever financial instruments that have occasionally gotten out of hand or have been algorithms that are too swift, or cases where traders and institutions have done deals that they knew would go awry, but have gone on with them because 1) governments are likely to bail out the institutions and nations, 2) someone else would do it if they didn’t do it, and 3) it is mostly legal or ambiguous whether or not it is legal, so there is not a clear moral obligation in the minds of many participants. As we have been trained to believe this is an era of scarcity, it is natural that people will act with greed in order to try to save themselves.
Unlike other postings, I’m going to divide this into a few sections in order to address so many issues.
I have been looking at going into financial planning for the last several months, as between tarot and some sense for money, I have been able to help people save money and connect more people to products and services. Ideally this would involve working for an institution and as you have seen with Value$: A Mixed Economy from last year, I have had an ongoing conflict between a respect for helping people get ahead with investments and the insidious side of the swindling these institutions inevitably often are prone to. At any rate, the only postings for positions I have found for finance or investment have been companies looking for people to sell whole life or universal life insurance or other packages (annuities, securities if the seller/broker becomes licensed, etc.) by referrals and with no terms set as to what kind of commission would be received (in other words, a non-qualified person doing the interpersonal relationships, the licensed person registering the money in a program, and if anything goes wrong, the relationship person being on the hook in the investor’s eyes). While some advantages exist with these products, I can’t say that I would feel comfortable selling most of them, and a lady running such an outfit here in Vancouver left me with the feeling that I would lure people in so that she could sell them marked up junk bonds.
Investment is about lifting people up and having someone in a more secure position say “I believe in you, I want to take a risk in you, and collect a small fee for this endorsement. Later, when you succeed, you will be able to do the same. All of this adds value to the community, nation, and makes growth possible.” What I have found in the Vancouver market, often from seemingly legitimate firms (I can’t name them, but their names are atop some high-rise buildings here) is “Everyone is holding on to their money, but if you are the tool that can convince someone to part with their money, we’ll be glad to have you – on commission and with no benefits, of course.” I watched the aforementioned lady play into this speculative situation, and while some of her strategies would help others, the markups on some products she described made me feel sick. The major presentations to potential investors were taking place at the top country clubs in Vancouver (one beginning with “A”) and with the aide of someone from the number two bank in Canada by market capitalization.
Eventually I will get a Certified Financial Planner Certificate and Certification so that at night I can legally straighten out people’s finances and hopefully there will be more ethical practitioners and guides out there overall.
I have been hearing that more people are drawing up their own loans among friends or acquaintances in order to finance homes for their friends without the use of banks, and to also get a better return on their investment, as a certificate of deposit or term deposit pays about 1% per year now (Australia and South Korea are the only “advanced” countries that pay in the 4-5% region, but this has already decreased and is still decreasing). At the moment, I am looking into this, as you may be able to finance your friends’ mortgages at a lower-than-market rate of 3-5% and also get this return on your money if you draw up a sane contract. An action such as this would redistribute wealth on a scale imagined by Bank Transfer Day, which has been moderately successful with getting consumers to move their money to smaller banks and credit unions. A man who stayed at my hotel said that a number of his friends from Alberta, Canada have been doing this and plan to continue it on in Detroit, Michigan, where one friend bought 20 houses in a private auction (bankers and housing associations barred from bidding) for an average of $900. Look to the future and research ways to make you and your friends come out ahead outside of the system!
II. GREECE AND NOW ITALY
While Italy has long been considered unstable and needing more improvement, the wealth and productivity of this small country is very impressive and should not be underestimated (we addressed this in Tarot of the Day #7: Germany’s Pre-Eminence when the savings rates of Germany and Italy were compared). My personal prediction is that Mr. B. is too closely linked to a recently deposed and killed leader from Libya, and so now the country has to be pushed to an overt crisis level in order to have a “change” movement in Italy. There will be a new face to lead there and I have no idea who it will be, but it will be someone quite discrete in the long-run and allow the corruption to go on, but less publicly.
The supposed debts that will bring down the world are nothing new, and we never acknowledge prosperous times as being so when they are here. There may be serious political and social problems that arise, and we will all be personally touched, but do not let the anxiety stop you from doing something good, so keep the good deeds passing and keep your friends in business… this will curtail the feelings of scarcity that dominate our times. Most of us do not really understand money, so therefore we can’t see that the situation we are in is only possible because we do not produce the money ourselves, and once we have it, many people do not look at it responsibly.
III. THE ROLE OF THE BROKER AND HOW THE SYSTEM WORKS
I found a great explanation of the role of the broker and how the confidence games work from a poster called “LetMeExplain” from the response section of the MSN article “Bottom Line – If Rome Burns, the U.S. Will Feel the Heat.”
A lot of people I know think that investing their money with the experts is the way to go, but at this time, no human can compete with the algorithms that the big players have in motion. I have so many people close to me that just dump their money off at the investment house and inquire no further (“I’m sure xxxx knows what he is doing, and anyway, his money is invested right in there as well.”) Remember that investments are not tied to logic or real value; they are attached to sentiment and now controlled by machines that make inferences and buy and sell in fractions of a second. While your broker wants to do the best for you, it is a very high stakes game they are stuck in, and they get to be the ones to deliver you bad news when they were just as duped as you may have been.
This is all directly from the posting of “LetMeExplain” a poster I have found to be quite prescient in their views elsewhere on the web:
IV. THE MESSAGE
There is so much hype about countries going broke now. Any political satire about countries going broke (which started with making light of the assault on Iceland in late 2008) is really off-color and wrong, as well as inaccurate. As far as your personal stake in the world economy, there is not much you can do except for to stay away from what you do not personally understand and try not to overextend yourself. Try to utilize your local networks and if you want to make or take out loaned money, work it out locally (with proper legal documentation to protect both sides) and go to the banks as a last resort. Lastly, I say once again, be suspicious of any claims made about “failed” countries or economies.