The Financial Jigsaw Part 2, Chapter 4 – PERSONAL TRANSFORMATION – Introduction to a Journey of Self-discovery – Cognitive Dissonance – Fiat Currency – Toxic Debt – [03-02-24]

The Financial Jigsaw Part 2 – Chapter 4 moves away from macroeconomic and geopolitical issues, which are covered in my weekly Letters, and enters the main body of Part 2 focusing on personal survival in a broad spectrum of life management processes.  This Chapter prepares readers for a journey of self-discovery which is the first stage of dealing with the engineered Polycrisis we are experiencing today.

“There is no such thing as a problem without a gift for you in its hands. You seek problems because you need their gifts”

[Richard Bach – “Illusions”]

Protect & Survive

INTRODUCTION

(To Personal Transformation)

• “We cannot change the external world nor can we change other people.  We CAN change how we perceive the world, how we perceive others and how we perceive ourselves” [Gerald G. Jampolsky, M.D.  –  “Love is Letting Go of Fear”]
• “People who work together will win, whether it be against complex football defences; or the problems of modern society.” [Vince Lombardi]

During 1993 I made a major career transition from that of a corporate and business career to one of a more socially responsible activity.  Having retired from my successful business in 1993 I joined the Citizens Advice Bureau as a volunteer and found that I thoroughly enjoyed helping people solve their personal life management problems.

What I discovered, however, was my inability to effectively relate to our clients who were presenting with unfathomable issues and often multiple problems. I approached the bureau manager and described my problem.  She advised me to take a counselling course at the local technical college and having enrolled in 1994, I gained a diploma in Humanistic Counselling in 1997.

This was a personal transformation of immense proportions for me because it completely changed my internal view of the world and allowed me to revisit a whole range of beliefs and values which I had subconsciously absorbed since my childhood and my growth into maturity.

I began to see how wrong I had been in my relations with others, particularly within my own family.  All the changes I made were positive for both me and all those around me such that I began to enjoy life and know true happiness.  It was empowering to be comfortable in ‘my own skin’, to hold positive values that I could show others by demonstration, and to engage in behaviours which elicited a positive response.

It was during the early stages of my training that I came across many helpful books one of which immediately struck me as: “This bloke has it right – HE understands”.  This author is the well-known, M. Scott Peck in his book “The Road Less Travelled” and his first three opening words grabbed me: “Life is difficult”. From the start, I was unable to put the book down and learned so much about the inner workings of my mind.

I found that putting these lessons into practice during my training sessions was most rewarding.  I followed up with M. Scott Peck’s colleague and friend, Gerald G. Jampolsky, MD and his book: “Love is Letting Go of Fear”.  This again yielded amazing insights into my ‘personal journey of self-discovery’ and became a book I used successfully with many clients over the years that followed.

I mention this short history for the reader to understand the importance of using these lessons to accommodate significant changes to the inner world of the mind knowing that it is not possible to change the external world or people.  Having read “The Financial Jigsaw – Part 1”, with its description of the complex world of fraudulent economics and finance, which projects that major changes to life-management issues will likely happen in the foreseeable future [see Chapter 13].

Therefore, before moving on to the next Chapters, describing personal issues in the New Emergent Economy within today’s Multipolar World, there is merit in revisiting existing beliefs, values, attitudes, and behaviours because modern education and training have been sadly inadequate to effectively provide sufficient tools and skills to survive in a world which will be changed beyond all measure.

This is the process of making adjustments to your inner-world map, and asking, “What is real?”  We are captives of our past. We tend to be stuck in old belief systems that we use repeatedly to measure our present even though it doesn’t always get us what we want.

You might imagine your mind as containing reels of motion picture films about your past experiences through which we view the present.  Consequently, we are never really seeing the world as it is but merely seeing fragments of the present through lots of distorted old memories.  We can let go of these past attachments, which often equate to guilt and fear, by choosing to see our world differently.

We often believe that the fears of the past will augur the fears of the future.  We can be caught in this constant merry-go-round of worrying about both the past and the future whilst missing the joy of the present.  This is often caused by unresolved trauma in our past, especially during childhood and growth to maturity. Some people remain trapped in adolescence and never move on.

We have the power within us to choose our reality by experiencing this instant, as the only time there is, and live in a reality of NOW.  You may have heard people speak about ‘Staying in the NOW’ which Eckhart Tolle, among others, describes so well in this book.  It can be done by casting aside those fearful thoughts of the past, which cannot be changed, and the future which hasn’t yet happened. In reality, the only moment we have is this instant – in the NOW.

When we use words such as ‘should’, ‘ought’, ‘can’t,’ and ‘impossible’ we have imposed the limitations of our fearful past onto our present experience.  By letting go of our past we can more readily focus on the new experiences of the present.  As the New Economy gradually unfolds we will begin to notice subtle changes taking place around us thus it is important to recognise these as being ‘opportunities‘ and not fearful events.

This approach will bring forth a positive response enabling you to seek out the benefits which are hidden beneath that cloak of fear.  We know that we cannot change the external world we are experiencing today; all we can change is our response to it.  “You cannot change what is happening to you but you can change how you react to it.”

This requires some careful thought before unthinkingly reacting emotionally.  If you have chosen to read some recommended books you will have achieved a great leap forward in your ability to absorb knowledge and act on the forthcoming Chapters.

Here is a summary, for quick reference when retraining your mind, to meet the challenges of the New Emerging Multipolar World; remember to ask yourself the following questions; some are quoted directly from “Love is Letting Go of Fear”:  Do I choose to experience ‘Peace of Mind’ or do I choose to experience conflict?

• Do I choose to experience Peace or Fear?
• Do I choose to be a ‘Peace-finder’ or a Fault-finder?
• Do I choose to be a Peace-giver or a Peace-taker?
• Is an experience peaceful (verbal/non-verbal) to another and is itpeaceful for me
• Will I not harm or do I choose to retaliate against a perception of injustice?
• Can I find the inner strength to accept the prevailing New Economy or fight it?

This is how a debt-based, fiat-currency economy distorts our perceptions of reality. This is the coming of age of a new world during an era of an artificial global economic model.  The thoughts you express, and the values and beliefs you hold, are conditioned by the social disciplines surrounding you and your family.

Those of us who lived through the privations of post-war Britain, and who will soon “shuffle off this mortal coil”, can only caution and warn the coming generations of the need to forsake the present invalid models of ‘economic well-being” and prepare for a New Economy in the making.

The Polycrisis is already creating conditions for Cognitive Dissonance defined as “…the perception of contradictory information. Relevant items of information include a person’s actions, feelings, ideas, beliefs, values, and things in the environment. Cognitive dissonance is typically experienced as psychological stress when persons participate in an action that goes against one or more of those things.” See Cognition.  Several conditions create this unfortunate mental state:

• Cognitive dissonance area #1:  Being told we have a strong job market while your own eyes see homeless people everywhere, and people looking for jobs report extreme difficulty in securing anything beyond part-time, minimum wage, ‘gig’ economy employment.
• Cognitive dissonance area #2:  Next we turn to the idea that “inflation is subdued.” That is the issue at play here. While the BoE frets about inflation not falling to their 2% target people struggle to afford rising transport and food costs, as well as the skyrocketing fees for maintenance and insurance, not to mention household requirements.
• Cognitive dissonance area #3:  Another prime area for “fuzzy numbers” is in living expenses related to housing.  According to the government, housing costs have been modestly rising by an average of less than 3% per year for a decade. Even more egregious than the misinformation is the complete inappropriateness of the media to praise economic ‘strength’ while ignoring the role of debt in bringing about the growth being celebrated. If ‘prosperity’ is simply due to a drunken debt binge, it should be criticised, not applauded.
• Five everyday examples of Cognitive Dissonance HERE

But we now know, having read Part 1, that prosperity cannot be printed out of thin air. All that can be accomplished, by a central bank’s sleight of hand, is a transfer of wealth from the ‘have-nots’ to the ‘haves’.  Central banks steal from the many and give to the few; they are the reverse ‘Robin Hoods’ of our day.  They also encourage everyone to steal from the future, which is what excessive borrowing represents. It is future consumption taken today at the expense of tomorrow. 

The most charitable thing that can be said about central banks is perhaps they believe in their mismanagement.  Even the most naïve of observers have noticed by now, that we are into 16 years of ‘emergency measures’ and austerity, but nothing even remotely close to healthy economic growth has emerged.  Despite the captured MSM spin, the Collective West is declining by any measure. Consumerism has driven out prudent ‘delaying gratification’.

One year of emergency measures is perhaps reasonable, three years is embarrassing, and 16 years indicates that central banks are not into this for the reasons they claim.  Instead, they are orchestrating the largest wealth transfer in history. But why should they wish to do this?  The answer is that they did not willingly engage in these measures; it was a consequence of bailing out insolvent banks during the GFC 2008-9 which was inevitable given the global financial system was on the brink of collapse.

We now have the largest wealth and income differentials in history. The megabanks have complete control of the political and financial machinery of every country in the world. Additionally, the corporate-controlled media simply publicises the central bank model, trying to convince people that it’s all been to their good.

From a planning and execution standpoint we have to give the central banking cartel high marks for pulling off such a magnificent ‘robbery’, ably assisted by the UN, WEF, and the BIS, almost completely undetected by most and of course, ably assisted by a compliant media.

Nicole Oresme has been called the most brilliant scientist of the 14th century: mathematician, musicologist, physicist, philosopher, and economist. On top of that, he was a Bishop and a theologian. His writings on money bear much in common with Carl Menger.

Oresme’s treatise on money, ‘De Moneta’, provides a detailed account of the function of money and the effects of inflation. As Guido Hulsmann argues in ‘The Ethics of Money Production’, Oresme was the first theorist to present a fully worked out ethics of money, one that shows the sheer immorality of government monopoly over money and the social effects of debasement.

In this translation and commentary by Charles Johnson, published first in 1958, we gain new insight into this pre-Austrian thinker of the Middle Ages. Oresme anticipated Gresham’s Law, argued that money is not the possession of the state, and made a detailed case that money belongs to the community and individuals primarily.

The text offers the additional advantage of printing the original Latin alongside the English so that the reader can compare. Having this book in print begins the process of restoring a high place for Oresme in the history of economic thought. [The De Moneta of Nicholas Oresme and English Mint Documents Nicole Oresme, translation: Paperback – 2009.]

Mises said that when it comes to limiting government power, it is essential that the government is financially dependent on the citizens, and this addresses the fundamental political problem of controlling the people in office once they are there. We know that generally, once they are in office, elected politicians do very different things than they promised with many acting contrary to the common good and interests of their constituents.  The question is, “How do we ensure that the people in power can be controlled?”

A limited budget minimises government and transforms ‘The People’s’ response.  Ludwig von Mises tells us the way to control government is through the budget, and this is essential in a free society.  In pseudo-democratic systems, extant in the Collective West, ‘The People’ elect representatives to govern, and politicians agree that when in office, they accept a mandate from ‘The People’ to carry out their promises.

But it’s not sufficient that the people tell government officials what they should be doing. It is equally important, if not more important, to dictate how much money the government will have to achieve those ends. Thus, it is not enough to tell the government that it will only protect private property. This mandate could be pursued with £100,000 or a billion depending on what the people are willing to pay. So if the budget is not controlled, a limited mandate in itself offers no limitation on taxation or how much money governments misspend.

Ludwig von Mises believed that those who paid taxes must specifically limit the size of the government budget. The mission of the government does not by itself determine the amount of resources to be used in pursuing the mission.  In response, many will complain that if budgets are tightly controlled, we will never have an increase in government services because people hate taxes and might refuse to pay them. If we abandon a strict connection between what the citizens pay and what the government spends, then we find that we move away from rule by the citizens, who are being taxed, and toward greater rule by the Elitist Establishment.

At this point, it is clear that we, ‘The People’, have been disempowered in all respects which subconsciously raises a degree of suppressed anger; a natural response to such an abusive condition. Given enough time this awareness channels into behaviours which focus more on our individual needs at the expense of the wider community.

There is a tendency to withdraw from public life which often combines with failing to vote in elections, reflected in recent low turnouts, and generally not taking an interest in what is going on except within our immediate, extended family context.  Social media has a role to play in encouraging even more reasons to opt-out.

However, we can change how we react to these influences by taking a positive attitude, engaging in local enterprise initiatives, and perhaps entering local politics where governance is more transparent.

Governments go into debt to avoid their budget responsibilities.  One way politicians can avoid control by The People is by allowing the government to get into debt.  Financial relationships then shift toward the new group, that is funding the government, namely those who are extending credit [i.e. megabanks, billionaire investors, and global financial institutions.]

This weakens the relationship of the government to their citizens, who are being taxed, and it also allows the government to spend more money than would otherwise have been possible with taxation alone.  Fiat money countenances the government to borrow unlimited amounts because fiat money by definition can be produced without limitation, without commercial limitation, or technological limitation, and can be produced in whatever amount is desired, [aka Magic Money Tree]. In this way, the government benefits from the support of a central bank which itself depends on the legal framework of monopoly provided by the government.

Through these means of funding government revenues, beyond direct taxation, fiat money allows for an extension of government activities unconnected to the willingness of the population to support excess spending. In turn, through this disconnect, the government’s rule becomes rule by elites such as central bankers and financiers rather than rule by the taxpayers.

The government’s ability to spend becomes more dependent on the ability to increase sovereign debt than the ability to convince the citizens to accept a higher tax burden.  The people are even further removed from the centres of government which engenders even more frustration and angst within the general population.

Under sovereign money regimes, price levels tend to moderate over the long run or even decline, especially in the presence of vigorous economic growth.  We witnessed this throughout the last two centuries as the Collective West where deflation had occurred, interspersed with inflationary periods.

The reality of price inflation shapes culture in a variety of ways and much of it is deliberate as it had long been an idea among government economic planners and ideologues, even before Keynes, that ordinary people should be prevented from “hoarding” money.

In a free economy with a sovereign money system, there is a strong incentive to save money in the form of cash held under one’s immediate control. Investments in savings accounts or other relatively safe investments also play a leading role, but cash hoarding is paramount, especially among low-income families.

By contrast, when there is constant price inflation, as in a fiat money system, cash hoarding is not effective and other financial strategies become necessary.  It’s advisable to exchange cash for “financial products,” thus offsetting the loss of purchasing power of money through the return on hat financial investment.

It also becomes advisable to take up debt and leverage investments. Therefore, in this environment, it is rational to pursue riskier investments to find a rate of return that can match or exceed the rate of inflation. This is true across all sectors, including households, corporations, and governments.

Before the twentieth century and the widespread use of fiat money, debt was far less common and there were cultural imperatives against going into debt for consumption. Broadly available credit for households, for example, was virtually unknown before the twentieth century, and only very poor households fell into debt to finance consumption.

But in a fiat money system, as price inflation diminishes the value of monetary savings, we are encouraged to adopt a short-term perspective. Thus we need to hurry and obtain credit as soon as possible and receive revenue from that debt as soon as possible because savings lose value if cash is hoarded.

It no longer makes sense to save money to buy a house, for example. It is much more opportune to go into debt to buy a house immediately and to repay the loan in devalued money. This creates a generalised rush into mortgages since debt-financed investment brings greater returns than savings in cash or equity-financed investments.

It needs to be stressed that this tendency has no natural end; fiat money systems tend to make people insatiable in their quest for ever higher monetary returns on investments. In a sovereign monetary system, as savings increase, the return on investments of all sorts diminishes.  It becomes ever less interesting to invest savings to earn a return, and thus other motivations become visible.

Savings will be used increasingly to finance personal projects including the acquisition of durable consumer goods, but also philanthropic activity. This is what we witnessed in the West during the massive economic expansion fuelled by hydrocarbons.

By contrast, a fiat money society is more likely to increase returns by increasing debt and continuing to chase monetary revenue indefinitely by leveraging more and more funds.  This is how inflation and debt-based systems over time will begin to change the culture of a society and its behaviour.

We become more materialistic than under a sovereign monetary system. We cannot just sit on our savings anymore and we have to watch our investments regularly and think about revenue constantly because if it is not earning enough, we are getting poorer.  The fact that the fiat money system pushes us into riskier investments also increases dependency on others because of dependence on the good behaviour of those upon whom the value of our investments depends.

Similarly, the higher the debt load the stronger the selfish concern about the behaviour of others who are in debt to us.  Therefore, fiat money creates an attempt to control others through the political system.  However, at the same time, no household and no firm individually will have an interest in abolishing the fiat system and putting in its place a sovereign monetary system.

The short-term costs of such a transition would be immense. Thus we are in a ‘reasonableness trap’ in which there is motivation to maintain the fiat money system, despite all its downsides, and because the Zeitgeist is distorted by more than a century of easy access to fiat money and debt.  We have all been conditioned like ‘Pavlov’s Dogs.’

By analysing the results of a dysfunctional fiat-money system we can apply economic analysis to explain cultural transformation due to fiat money and it has a very important impact on our culture. This is something we would not be able to see unless we step back and take a longer-term historical perspective.

Of course, many other factors come into play, but fiat money is an important factor, and the system is perpetuated by everyone who stands to lose in the short run if the current system ceases to function. Moreover, given how our modern culture has been shaped by fiat money systems, changing it runs against the very cultural foundations of the day.

Despite the many short-term costs, we should nonetheless dare to change the fiat system, but it is ultimately a question of courage, insight, and the will of The People.  Of course, it will be imposed upon us by the inevitable coming crises, when the New Economy emerges, which of necessity will have to be based on healthy monetary principles so lacking in today’s economy.  It is now time to prepare ourselves, both mentally and physically, to meet the challenges being confronted during the coming decades.

COMING NEXT WEEK

• BOOM’s Global Weekly Review – Tuesday, March 5, 2024
• Letter from Great Britain – War on Farmers – Saturday, March 9, 2024

REFERENCES  

• My Book: “The Financial Jigsaw” Parts 1 & 2 Scroll:   https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020   including regular updates.
• BOOM Finance and Economics Substack (Subscribe for Free) – also on LinkedIn and WordPress. Covid Medical News Network CMN News BOOM Blog — All Editorials (over 5 years) —  BOOM Finance and Economics | Designed for Critical Thinkers — UPDATED WEEKLY (wordpress.com)

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Author: Austrian Peter

Peter J. Underwood is a retired international accountant and qualified humanistic counsellor living in Bruton, UK, with his wife, Yvonne. He pursued a career as an entrepreneur and business consultant, having founded several successful businesses in the UK and South Africa His latest Substack blog describes the African concept of Ubuntu - a system of localised community support using a gift economy model. View all posts by Austrian Peter