The Fabric of Trust
|
|
 Furl It |
Economy is called the dismal science because it pretends to be one, disguising its uncertainties and shifting fashions with mathematical formulae. Economy describes the aggregate behaviour of humans and, in this restricted sense, it is a branch of psychology.
People operate within a marketplace and attach values to their goods and services and to their inputs (work, capital, natural endowments) through the price mechanism. All this elaborate construct, however, depends greatly on trust. If people were not to trust each other and / or the economic framework (within which they interact) - economic activities would have gradually ground to a halt. A clear inverse relationship exists between the general trust level and the level of economic activity. There are four major types of trust :
Trust related to Intent - the market players assume that other players are (generally) rational, that they have intentions, that these intentions conform with the maximization of benefits and that people are likely to act on their intentions.
Trust related to Liquidity - the market players assume that other players possess or have access, or will possess, or will have access to the liquid means needed in order to materialize their intentions and that - barring force majeure - this liquidity is the driving force behind the formation of these intentions. People in possession of liquidity wish to maximize the returns on their money and are driven to economically transact.
Trust related to knowledge and ability - the market players assume that other players possess or have access to, or will possess, or will have access to the know-how, technology and intellectual property and wherewithal necessary to materialize their intention (and, by implication, the transactions that they enter into). Another assumption is that all the players are “enabled” : physically, mentally, legally and financially available and capable to perform their parts as agreed between the players in each and every particular transaction. A hidden assumption is that the players evaluate themselves properly : that they know their strengths and weaknesses, that they have a balanced picture of themselves and realistic set of expectations, self esteem and self confidence to support that worldview (including a matching track record). Some allowance is made for “game theory” tactics : exaggeration, disinformation, even outright deception - but this allowance should not overshadow th! e merits of the transaction and its inherent sincerity.
Trust related to the Economic horizon and context - the market players assume that the market will continue to exist as an inert system, unhindered by external factors (governments, geopolitics, global crises, changes in accounting policies, hyperinflation, new taxation - anything that could deflect the trajectory of the market). They, therefore, have an “investment or economic horizon” to look forward to and upon which they can base their decisions. They also have cultural, legal, technological and political contexts within which to operate. The underlying assumptions of stability are very much akin to the idealized models that scientists study in the accurate sciences (indeed, in economy as well). When one or more of these basic building blocks of trust is fractured that the whole edifice of the market crumbles. Fragmentation ensues, more social and psychological than economic in nature. This is very typical of poor countries with great social and economic polarizations. It is also very typical of countries “in transition” (a polite way to describe a state of total shock and confusion). People adopt several reaction patterns to the breakdown in trust :
Avoidance and isolation - they avoid contact with other people and adopt reclusive behaviour. The number of voluntary interactions decreases sharply.
Corruption - People prefer shortcuts to economic benefits because of the collapse of the horizon trust (=they see no long term future and even doubt the very continued existence of the system).
Crime - Criminal activity increases Fantastic and Grandiose delusions to compensate for a growing sense of uncertainty and fear and for a complex of inferiority. This nagging feeling of inferiority is the result of the internalization of the image of the people in their own eyes and in the eyes of others. This is a self-reinforcing mechanism (vicious circle). The results are under-confidence and a handicapped sense of self esteem. The latter undulates and fluctuates from overvaluation of one’s self and others to devaluation of both.
Hypermobility - People are not loyal to the economic cells within which they function. They switch a lot of jobs, for instance, or ignore contracts that they made. The concepts of exclusivity, the sanctity of promises, loyalty, future, a career path - all get eroded. As a result, there is no investment in the future (in the acquisition of skills or in long term investments, to give but two examples).
Cognitive Dissonance - The collapse of the social and economic systems adversely affects the individual. One of the classic defence mechanisms is the cognitive dissonance. The person involved tells himself that he really chose and wanted his way of life, his decrepit environment, his low standard of living, etc. (”We are poor because we chose not to be like the inhuman West”).
The Pathological Envy - The Cognitive Dissonance is often coupled with a pathological envy (as opposed to benign jealousy). This is a destructive type of envy which seeks to deprive others of their successes and possessions. It is very typical of societies with a grossly unequal distribution of wealth.
The Mentality (or the Historical) Defences - these are defence mechanisms which make use of an imagined mentality problem (”we are like that, we have been like this for ages now, nothing to do, we are deformed”) - or build upon some historical pattern, or invented pattern (”we have been enslaved and submissive for five centuries - what can you expect”). The Passive-Aggressive reaction : occurs mainly when the market players have no access to more legitimate and aggressive venues of reacting to their predicament or when they are predisposed to suppressing of aggression (or when they elect to not express it). The passive-aggressive reactions are “sabotage”-type reactions : slowing down of the work, “working by the book”, absenteeism, stealing from the workplace, fostering and maintaining bureaucratic procedures and so on.
The inability to postpone satisfaction - The players regress to a child-like state, demanding immediate satisfaction, unable to postpone it and getting frustrated, aggressive and deceiving if they are required to do so by circumstances. They engage in short term activities, some criminal, some dubious, some legitimate : trading and speculation, gambling, short termism. The results are, usually, catastrophic :
A reduction in economic activity, in the number of interactions and in the field of economic potentials (the product of all possible economic transactions). An erosion of the human capital, its skills and availability. Brain drain - skilled people desert, en masse, the fragmented economic system and move to more sustainable ones. Resort to illegal and to extra-legal activities Social and economic polarizations. Interethnic tensions and tensions between the very rich and the very poor tend to erupt and to explode.
Author’s Bio
Additional articles on economics and finance here:
http://www.geocities.com/vaksam/guide.html
Sam Vaknin has a combined doctorate in Physics and Philosophy.
He is an economic and political columnist in many periodicals in a few countries and a published and awarded author of short fiction and reference books in Hebrew, English and Macedonian in Israel, Macedonia and the Czech Republic.
He has collaborated with Israeli psychologists and criminologists in the study of personality disorders and is the author of “Malignant Self Love - Narcissism Revisited” (available from Book Institute of Mental Health - BIMH - and from Barnes and Noble and, as an e-book, from BIMH, Booklocker, eBooksonthe.net, SoftLock, MightyWords and from CyberRead).
He is the editor of the Mental Health Disorders category in the Open Directory Project and the editor of the Narcissistic Personality Disorder topic in Suite101 and Go.com.
He is serving currently as the Economic Advisor to the Government of Macedonia.
His new book “After the Rain - How the West Lost the East” is available from Barnes and Noble and, as an e-book, from Booklocker, eBooksonthe.net, MightyWords, SoftLock and from CyberRead.
Economic Sacred Cows Are Out of Milk
|
|
Furl It |
No matter which decade you went to college you probably took econ. As David Brooks of The New York Times writes, “economics was the queen of the social sciences.” Psychology, sociology, history and anthropology were “easier”, not quite so solid. No longer.
Economic theorists used to assume that people everywhere were natural “profit-maximizing creatures trending toward reasonableness.” They believed that as people throughout the world became better educated and richer, tribalism and nationalism would be replaced by global institutions maintained by advanced means of communication.
It was a good idea at the time. Now we know that:
1. Education has not made people more moderate. In the U.S. highly educated voters are more polarized than less educated ones. In the Arab world some of the most educated are the most fanatical.
2. Humans are not “profit-maximizing creatures trending toward reasonableness”, but “socially embedded products of family and group”. People use the limbic and reptile portions of their brains to make economic decisions, not the neo-cortex.
David Brooks writes, “Alan Greenspan said that he once assumed that capitalism was ‘human nature’. But after watching the collapse of the Russian economy, he had come to consider it ‘was not human nature at all, but culture.’ During our first few years of life, parents, communities and societies unconsciously impart ways of being and of perceiving reality that we are only subliminally aware of.”
3. Perceiving reality. The value of truth is absolute, its nature subjective. What we think is real and true and right is not what someone else thinks is real and true and right. I refer you to quantum mechanics. Imagine everything, including yourself, as a field of energy arranging and re-arranging depending on your focus on it.
Recognizing this fact might put some milk back in our economists’ sacred cow.
Instead of putting money into education where there is no cultural support for the kind of education we’re financing, why not realize, study, and act on specific cultural perceptions of reality. I entered a student’s home once, invited by his mother because he needed help passing 8tth grade English. English was their native language. There were three television sets in the home, but no books and no dictionary. I could not change the culture of the home in one visit.
Instead of imposing our systems in other countries and then wondering why they didn’t work, why not find out their cultural realities? David Brooks points out that East Asians and Jews thrive commercially wherever they settle. And no matter how much we have invested in Africa to build factories for economic development, none of it has worked.
Instead of assuming that we are reasonable most of the time, admit that we are rarely reasonable across the board. Admitting to the miracles and mishaps of the human mind is the first step, albeit a big one. Understanding that early childhood cultural influences have a powerful effect on adult behavior at a subconscious level is a major step.
Understanding often precedes forgiving.
I’ve been sick lately. I try to force getting well faster than my body agrees to. I ended up injuring myself more. That forced some digging into the old limbic brain. I stirred up some guilt feelings for being sick in the first place. Now that I understand my impatience, I’ve made it onto the next step. Whew!
May you understand yourself today.
Currency Trading Systems, forex trading system, forex profits, forex, currency trading
|
|
Furl It |
There are plenty of currency trading systems about but very few make money, however there are some great ones to use if you follow the enclosed checklist.
Follow the checklist and the money you spend on a currency trading system will be money well spent and could see you piling up big long term profits.
1. Make Sure You Understand the Logic
You need to understand the logic the system is based on to have confidence to trade any currency trading system.
If you don’t have confidence in a currency trading systems logic you wont be able to trade it for profit, as you will not have the discipline to stick with it through inevitable periods of losses.
Avoid black box systems where the logic is not revealed or just taking signals.
Its simple confidence leads to discipline which is essential to currency trading success.
2. Beware of Optimization
If the logic is sound it should trade every currency to the same rules.
Some vendors simply can’t get their systems to work on all contracts, so tweak the data with unique rules to make it make a profit.
This of course means it won’t work in real life – The same rules should apply to all contracts.
Optimizing is like shooting at a barn door and then making every shot a bull’s eye afterwards by drawing around the holes!
3. Get a simple system
In trading simple systems out perform complicated ones.
Why?
Simply, they are more robust in the face of ever changing brutal market conditions.
There is no correlation between how complicated a system is and how much money it makes.
In fact, the opposite is true and most of the world’s top trading systems are simple.
4. Look for a real track record
Look for independent verification of results and a track record of real money.
If the system is good someone (hopefully the vendor) will have traded the currency trading system and produced a track record
5. Check The vendor
What is his background what support will you receive does he trade himself all these are questions you should ask and any reputable vendor will give you the answers
There are plenty of currency trading systems to choose from but only a few will meet the criteria above.
If you use the above checklist your chances of making money from a currency trading system will be dramatically increased.
About the author:
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about trading legend W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
Economic Program For An Internet Home Business
|
|
Furl It |
The cost of running an Internet business is low relative to common business expenses. But existing consumption habits may cause cash burning. New Internet enterprisers are apt to find within few months that they spent the budget, and the burden of household payments forces them to return to the labor market.
Here is an action plan for a balanced budget. It is a list of the most important changes which should be done in the domestic consumption habits, for creating a positive cash flow. These are not just saving tips. The changes also promise at the same time significant improvement of life quality.
Housing The Internet provides an excellent opportunity to reduce dwelling costs. It’s possible to work from remote, inexpensive and attractive places. In the apartment, the entire activity can be concentrated around a portable table where the computer is stored, and in any available place. Big bookshelves are unnecessary because most of the books arrive nowadays as computer files. Viewing movies and listening to music from the Internet with the PC spare the money for large televisions and stereo sets.
Car The car is dispensable for home workers. Even when it is parked for a long time it causes big expenses as depreciation, insurance and more. If the car is old it is profitable to throw it immediately to the junkyard and not to try to sell it. The saving in ownership costs is so great that the loss is balanced within few months.
Public transportation Walking and bicycle riding enable the arrival from home to many places faster, easier and at no cost. Most of the services that a man need for his daily living are located in a commercial center at a distance of a healthy walking. Buses and other mass transport systems demand a long waiting time and they have a long route.
Telephone and mail Free software enables nowadays a connection free of charge between any point in the world, including video conversations. E-mails are excellent replacement for ordinary mail. The option for switching from printed flyers to E-mail newsletters encouraged many people to start working on the Web.
Electricity The professional Web surfer should wear a good Ski suit for the winter. When dressed in such suit there is no need for a heater and it’s possible to benefit from open window and fresh air on cold days. The beauty and comfort of these modern suits make them suitable for the entire day.
Cables and Satellite TV These services do not offer much. The biggest part of the visual medium is stored nowadays in the Internet, with countless channels that enable viewing anything according to personal preferences. Any Internet enterpriser is a media producer who contributes original works to the scene.
Newspapers and magazines Updated information can be found easily on the Internet and there is no need to wait for daily newspaper or magazine. Beside, all the strength for reading is needed for the Internet.
Computer Familiar computers and software products are more reliable then the advanced and expensive merchandise, which tend to suffer from running problems. This is a critical point. The computer must function perfectly. It reflects life and is important as breathing air.
Internet There are excellent learning courses on the internet at no cost. Especially on the subjects of Web sites building, graphics and basic marketing advices. Outsourcing is not needed. It is possible to do all the Internet tasks alone with proper software.
This economic program contains additional ideas to those which were described here. All these changes promise simultaneously significant improvement of life quality and huge money saving. Therefore each advice should be implemented fully before continuing to the next one, in order to create a natural process. Economic changes are seemed simple at first sight but demand great effort, because it is hard to get rid of existing consumption habits.
After finishing the entire program it’s possible to turn to quality investment on the Internet. The Internet’s economy is Information Economy. The money invested on it is Information Money. It provides constructive knowledge. Therefore it gives greater spiritual welfare then any spending on regular consumption product.
Money becomes abstract concept and creates sublimation process in the soul. It becomes a habit to contemplate on any penny for hours before spending it. This is fine and so it should be. Money is just a reflection of the human shape in the crowd.
About Author:
Abe Sandman is a businessman and Internet Marketer. Read the full report on Economic Program For An Internet Home Business at: http://www.holylandmap.net/ecoproen.html. Build professional Web sites at: http://cv-7.com/lp/ecobaslp.html with a simple All Tools In One Process.
Money CAN Make Us Happy
|
|
Furl It |
For many individuals, money is a topic that falls beyond the realm of who we are, what we stand for and who, as people, we want to be. In reality, however, our money behavior and money beliefs are intricately and indelibly connected to our greater belief systems. Many challenges we face in life and with our money are tied to this co-created reality we believe to be true. To fully understand ¯ much less, alter ¯ our relationship with money and our money beliefs, we must first examine our greater belief systems.
Our Earliest Belief Systems Influence Our Behavior With Money Today
Our belief systems are functions of our upbringing, our education, our experiences, and our friends and families. Much of what most people think and accept as reality is learned through repetition from these external sources. While many of us have internal dreams and beliefs disparate from the external, societal dreams, our existing punishment and reward systems — whether at home, in school or at work ¯ further perpetuate the cycle of our automatically adhering to the belief systems created by those who preceded us.
In his book, The Four Agreements, Don Miguel Ruiz calls this the domestication of humans and accurately states that “through this domestication, we learn how to live and how to dream. In human domestication, the information from the outside dream is conveyed to the inside dream, creating our whole belief system.”
Isn’t what we believe to be true about money today a function of what we “learned” and incorporated into our communal belief system through our historical domestication as people living in society? We all have money beliefs in some form. Some of the most common ones we have heard, and even believe on some level, whether consciously or subconsciously, are:
“Money doesn’t grow on trees.”
“Money or the loveof money is the root of all evil.”
And the biggest of all … “Money can’t buy you happiness.”
While each of these beliefs may hold a kernel of truth, why do our belief systems tend to suggest money is inherently bad or cannot make us happy? In fact, money can make us happy, if we understand its proper context and use. Thinking otherwise jeopardizes our success, financially and in other ways. People tend to deride things that seem inherently bad to them. Therefore, if we think money is bad, we tend to avoid the successes that can attract it into our lives.
Another, perhaps healthier, view of money is as a form of energy we use to express ourselves and our core values. Misusing this energy tends to lead to imbalance, trapped energy, and frequently, discord and unhappiness. Bad debt, for instance, traps energy and distracts us from moving in harmony through the other areas of our lives. That trapped energy blocks us from pursuing our souls’ evolution elsewhere.
Those who use money correctly as a source of energy are more inclined to be happy, because that energy is not draining other forms of their life energy. People succeed, and generally are happier, when they choose to earn, save, spend, invest and gift money in ways that further their souls’ development and connect them to others. They manage and use money appropriately — and keep life in balance.
It’s Not Necessarily the Amount of Money We Have, But Rather How We Use It
Money as a form of energy is neither bad nor good. More money does not, in itself, create happiness — but it affords us the ability to be happier, if we use and leverage its power appropriately.
Why is it that some with millions in the bank will never be happy, while others who live paycheck to paycheck are quite content? Is it because those with a smaller net worth do not fall prey to the lack mentality of never having enough, and they use the resources they do have in appropriate ways to develop and nourish themselves? Could it be that they transfer the energy of money in ways that express deeper meaning and significance for themselves and their lives, rather than assuming that accumulating more and more money will bring greater happiness? Perhaps they have not misused the energy of money and are not limiting their souls’ purpose.
Having more money can, however, provide people the ability and flexibility to develop and nourish their souls’ purpose in ways that those with far fewer resources cannot. Money can buy happiness, but it is not because more money can buy us nicer things or take us to exotic places. These are temporary trifles, none of which ultimately lead to inner fulfillment or satisfaction. Having more money does allow us to free up our spirits and our energies so they are not trapped, constantly worrying over money issues and problems. It frees our souls to do what we are meant to do — connect with others and share our talents with the world.
In that context, how can money possibly be the root of all evil? How could money NOT make us happy?