THOUGHTS ABOUT OUR WORLD by Fernando Newton
Let us work at least - we, the young - for disturbing the souls, for disorient the spirits.1 We should cultivate an awareness of our world, hopefully making people act together in order to grow a better world.
I do not know what I may appear to the world, but to myself I seem to have been only like a boy playing on the sea-shore, and diverting myself in now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me2.
This book is free. I kindly ask not to divide it.
Portugal, September 2nd, 2010
Fernando Pessoa, in O Jornal, 8-4-1915 (excerpts) Memoirs of the Life, Writings, and Discoveries of Sir Isaac Newton (1855) by Sir David Brewster (Volume II. Ch. 27).
CONSIDERATIONS .......................................................................................................................4 HISTORY ......................................................................................................................................5 SOFTWARE..................................................................................................................................6 MEDIA .........................................................................................................................................7 FAMILY ........................................................................................................................................8 WORK AND BUSINESS...............................................................................................................10 EDUCATION...............................................................................................................................13 ENVIRONMENT .........................................................................................................................15 RELIGION...................................................................................................................................16 WAR ..........................................................................................................................................18 ECONOMICS, CRIME AND SECRET SERVICES ............................................................................20 MONEY......................................................................................................................................22 KNOWLEDGE.............................................................................................................................25 GLOBALIZATION........................................................................................................................27 FINAL CONSIDERATIONS...........................................................................................................29 APPENDIX..................................................................................................................................30
These texts were written with the objective of organizing what I know, develop my English and foremost to share. There are some main beliefs behind them: • Many speeches and writings aren’t true, mainly in internet; • Things normally are what they don’t appear; • It is normal for a human being to assimilate the way of life and beliefs of the group he/she belongs; • People don’t assimilate things or are rational as easily as they think; • People tend to considerate the present as sure things for the future; • We live in a better world has never before. In terms of what I understand are qualities of live: house, good food, clothes, potable water, doctors and medicines to cure almost everything. The majority of the population has access to these things. Think, or investigate, how life was one hundred years ago in your place. • Countries and organizations are made of people. Because people make mistakes (it’s in our nature) so countries and organizations tend also to make mistakes.
And some cautious advice: • These writings are foremost an exercise of thinking – they probably will not correspond to the truth.
Concept We learn history in school, in stories, in books and in television. Thereâ€™s one little thing that I think is important to recall: all our history is based on the findings of concrete proofs and the assumption of a majority of historians, mainly the important ones, of what is the most probable truth. This means that history, mainly political, economical and warfare should not be read as an assumption of the real truth. I prefer understanding history backwards: who won the most property and power in the end.
Biographies There are many biographies of important historic persons, many built with the notion: let people remember me as I want, not as I was. People will try always not to write the bad in them.
Bible There are also stories that you cannot distinguish if they were written in fantasy or in reality. Like the bible where you can find so many stories. We assume all to be true, even some having so many years of distance between facts and writing. But think of the possibility of having only one book in the bible written for the pleasure of imagination and religion (a story to teach) not the necessity of history. The mistake is not of the author. The mistake is ours that not comprehend the work of the author or is dimension. Another problem with the bible is the multiple translations and our assuming that no one made a mistake. They were translated by the most professional and dedicated, but not forget human beings. At last, another problem is the interpretation we do. This is like laws, courts, judges and attorneys. You have to get into the spirit of the person who wrote. Nevertheless, many times, the interpretation that wins is the most argumented not the message that the author wanted to pass.
Reality Did you notice that everything about software is mainly American? Everybody uses Windows (Microsoft) or Mac OS (Apple) has an Operating System in personal computers. Linux is more used in Universities, the three main distribution OS are from Red Hat, Novell and Canonical Ltd. Only Canonical Ltd has is main office in London, England. Everybody uses Office products from Microsoft like Word, Excel, etc, and those who not use OpenOffice (now owned by Oracle). Everybody access Internet using Internet Explorer (Microsoft), Mozilla Firefox (Mozilla Foundation), Google Chrome or Safari (Apple). In important corporate applications only SAP is German. Everything is American, even Facebook.
The possibility We assume companies as individual entities, honest and true because they want to maintain and gain costumers and to capitalize profits. Now think in Microsoft (or Google) has an American Company that, if needed, will be used by Americans to defend their country and to increase their power.
The fragility Did you notice that all our information is in databases: social security, money, stocks, etc? They are only records and we need energy to make everything work. NASA and the Pentagon, that have the best information protection systems available worldwide, are subject to daily attacks from Hackers, some well succeed. I believe that banks arenâ€™t so well defended nor are our computers (home or work).
Security Software Symantec Corporation, McAfee (bought by Intel in August of 2010) and Novell are American. Check Point Software Technologies is Israelite.
Reality Media today is essentially television, newspaper (including magazines) and cinema. Many of them now “interneted”. We think in media only in terms of entertaining, pleasure or information. I think that in the last three decades television is also a major educating entity. Television is shaping very quickly our society creating consumer habits, professional habits, social habits and new generation families. The big proportion of programs seen worldwide are American. Even our local televisions create replicas of the American programs. So I think that we are being formatted in the American way of life.
The impact The majority of people now wants fancy big cars, fancy big houses, fancy expensive clothes, be perfectly beautiful and so on…They want to imitate their idols, it is global standardization. To achieve this people believe in work. They think if they work very hard they will accomplish that. So as soon as they can, or as soon as their bank let them, they will be buying the best car or the best house their bank permit. Stretching always to the limit in the belief that big and expensive is better, forgetting many times that things are more expensive than what they really worth. For this they work harder than the others (sometimes more than 14 hours a day, including weekends). And if you notice they always get time for the gym. What’s a beautiful car without a beautiful and body perfect girl/guy! As seen in the cinema! What’s the sacrifice: sleeping hours and family. There’s also a catch to all of this: because you are always running to maintain what you have, without space in your head to think in other directions, you became a modern slave. I’m in the house of the thirty years and my heroes when I was young were James Bond, MacGyver and Night Rider. Even today I like to read some books like those from Dan Brown (Robert Langdon) and Clive Cussler (Kurt Austin). All these heroes are single man. They spread the belief that to achieve something extraordinary you must have a lot of spear time. The creation of the myth: rich, intelligent, important and single. -7-
Reality Professional actual demands, the growing ambitions, the continuous ageing of the population, wages and the media are chapping the family. I see all around me: • People leaving their children education to the television. They even prefer to watch television at dinner time than to speak (if they have dinner together). • People leaving the work late and so tired that they don’t have energy or motivation for something else. • People preoccupied with monetary problems because they stretched their purchases and that is influencing the basic needs of the family. • People with children and with parents that need attention, while they don’t have enough money or time to take care of them, and thus sacrificing important sleeping hours. • The minimum wage cannot meet the basic needs of a family of one children (mainly divorced and abandoned persons), even when they don’t have a car and rent a small apartment or room.
Modern medication Anti-depressive medications are the most sold. If you lived a nightmare that you couldn’t get out I wonder if you didn’t toke anti-depressive pills. Economic contraction essentially benefits anti-depressive drug companies.
Modern life clashes I also understand that media give us all standards of living and everybody wants to live in those standards. Everybody wants the best of everything and when confronted with a life very different of their perceived standards they get depressed. I believe many of the divorces are related to this and to the lack of tolerance, understanding and above all respect and the capacity of speaking. In ancient times (in some places even today) a woman didn’t had the possibility of action or of option. So because of public shame, the incapacity of getting a job or earn enough money they let themselves submit to violence. -8-
In Portugal, in 2009, were killed 29 women and 28 suffered an attempted murder at the hands of their husbands, partners, boyfriends, ex-husbands, ex-partners and ex-boyfriends.1 Although these numbers can be accounted, there is also psychological violence that normally is very invisible. I believe that no one imagines or understands the level of psychological violence out there where everybody (wives, husbands, children, parents, etc.) are victims. There’s also the clash of two generations. Many old people don’t accept that their children don’t have time for them and become children: asking and demanding for attention. I think this happens mainly because they don’t want to socialize in elderly houses. But their grandsons go to kindergartens and that is all right for them. Because it’s normal to get older nowadays, with the associated problems of mobility and diseases, I see many people and couples without a life because they got sandwiched between children and parents. Another fancy fashion is the growing existence, in the last ten years, of 50 m2 apartments and the number of persons living alone, the one person family. A traditional and harmonious family is today a luxury and I see many people opting for a bigger wage, a luxury car or holidays than to have a second child. These problems are getting more global and cannot be restricted to one country or culture.
WORK AND BUSINESS
Concept I understand that todayâ€™s work or businesses are forms and ways of expression and measure of the value of an individual. In ancient times only through war you could achieve a high status, power, women and property. Today you can do that without killing anybody and without killing yourself. It is a common knowledge and belief that if you study hard and you work hard you can achieve everything.
The myth Media is educating us and our children in believing that to accomplish this you also need to be alone. Iâ€™m in the house of the thirty years and my heroes when I was young were James Bond, MacGyver and Night Rider. Even today I like to read some books like those from Dan Brown (Robert Langdon) and Clive Cussler (Kurt Austin). All these heroes were single and alone men. They spread the belief that to achieve something extraordinary you must have a lot of spear time. The media created the myth: rich, intelligent, important, single and alone. I really donâ€™t believe in this. I see intelligent, bright and workaholic people around me and only some achieve mild success.
Business Many people try to build a business and loose everything in the way while sacrificing everything. There are also many that begin a business that grows fast (like 30% a year) and assume that this evolution is due to their capacities and that the sky is the limit. So their excel forecasts assume a bright future, based on the recent past, and they assume a correspondent risk in the belief that borrowing money from banks in the expectation of growing faster is a good thing. Sometimes this growth had to do with several variables, namely a punctual upper oscillation of the economy that has to be corrected. When the correction is putted in place everything trembles and ruins. I believe that to grow a business you have to be organic and let the business grow without bank financing - using the business cash flow. There are some businesses that need a lot of money to begin like the oil or mining industries. In these scenarios the best is to join - 10 -
stockholders with the same interest and not to make a big bet. Only put a part of your savings on it, nothing that will risk your financial stability. I believe that is better and safer to make five bets of small amount than to make only one of big amount. You will never control or perceive all variables – there’s always something that will escape your analysis and reasoning. I don’t have money to begin a business so I invest in the stock market. I have some rules: • I invest only in companies I like and I understand. • I understand a stock has a good terrain property: o Sometimes there are many buyers and I can get a nice sum for it and sometimes there will be no one interested and the value is zero. o Sometimes natural accidents happen and what was a good terrain becomes worthless. • I will always have some money in deposits for a contingency case. • If the stock goes zero it will not influence my life standards. • It is better to have a small amount of five stocks than to have everything on one. • I follow my masters: George Soros, John Paulson, Nouriel Roubini and Nassim Taleb. I understand that I know very little about stocks and economics – it isn’t my profession. So I follow who earns a life trading and chapping investor’s decisions. • I never make a decision of buying when I’m not happy.
Human being I understand that life is, in a certain way, shaped by destiny (i.e.: we cannot choose our parents) but we can make decisions and shape our living. I need to work, and I work hard, but always respecting my heart. I believe that, like business, everyone to be an excellent professional has to be in balance with himself. Work is only a pillar of our human needs. Family, rest, friends and interests (like sports, reading, etc) also play a very important part. If you can’t balance your pillars you will be frustrated and you can work a lot but it will be fruitless work. Quantity is never synonymous of quality. As putted above you can work a lot and achieve nothing, and you can work little and achieve very high. It only depends on you being balanced. When I’m happy I normally make good stock bets. When I’m not happy I normally make bad decisions. That’s why I forget stock markets in these occasions.
- 11 -
Today it is easy to be caught in a hurricane where to exit is almost impossible. The secret is to search for happiness in what you have, prefer human relations, be honest and good and never, but never, buy something that you will need to ask for a loan (except the house). Forget what others have. Forget television. Happiness is not proportional to riches, but proportional to the capacity to know yourself and what moves you.
- 12 -
Reality Actual education is done greatly by television. Children to adults imitate the behavior of their preferred actors (idols) in series and movies. Mainly Americans or American inspired. Parents and schools are loosing their education role. Parents don’t have the time and patience and you can test this at dinner time where they prefer to watch television than to speak and share experiences. Schools also are becoming less interested in teaching and mainly less interested in educating. One thing is to teach a subject like math. Another one is to educate where values are passed like respect, ambition, humility, social interaction, altruism, etc: the main values that are the foundation of a great society.
Schools I believe that we have good teachers and well intended but I think they don’t know how to pass subjects to today’s children. Thirty years ago there had been respect in schools because existed “military” discipline and students were afraid of punishment. These punishments were physical when I was on elementary or social (expel of school if I had more than three grave penalties given by teachers) when I was on secondary. I don’t agree with physical punishment. But expel worked fine, even for a certain period of time. And because of this and because we all were afraid to flunk we did the minimum to pass all the subjects. I see that today’s children don’t have fear, so they get everything they want without effort. That’s why I believe teachers don’t have the command. The command is on the student’s hand. That’s why I think they can’t teach and that’s why teachers are appearing with more and more diseases mainly depression. Thirty years ago it was a good thing to be a teacher. It meant respect. Today everyone sees a teacher and the only thing they remember is that he is a public worker so he his very well. Respect vanished. Parents thirty years ago lessoned to a teacher and reprimanded the child if it was the case. Today is common to ear and see histories of teachers that were beaten by parents and students.
- 13 -
Children’s rules Children are becoming more selfish and getting from teachers and parents what they want. They don’t know the basic values and are behaving just like those in television. The cool guy in television is normally the one who goes against the norms, has a lot of money and does whatever he wants.
The impact All of this is now reflecting in today’s business environment. Now you know everything in the media and everywhere. Everyone is telling and spreading things that should remain secret or at least segregated. This happens in public and private entities, from Defense to Banks. Some years ago people refrained of buying because they knew that they couldn’t afford all they wanted and were afraid of not paying the least minimum account. Today you can see a huge group of people that owns money to someone else, due sometimes more than one year, buying and having a nice life while those who can’t collect the good/service are trying to survive and trying to pay the lawyer and court invoices knowing that it will take years and the uncertainty of achieving something.
- 14 -
Reality Many think that the world is being killed. The earth will survive, except to atomic bombs or something alike. Human being is what is being killed. We are killing ourselves. We are killing our food reserves, our water reserves, our oxygen, our protection against the sun, etc. Everyone thinks that what they have today will continue in the future, that everything is infinite. Sorry to say, but everything is finite, even you. All of us are being selfish, because while knowing we are finite we are forgetting our children’s and grandchildren’s future. If things continue we will give them a nice present: a very difficult life. I think that the extermination of the human race is almost impossible but I believe that things continuing we will see a world with fewer inhabitants. These inhabitants will not know our life standards. It can take 100 years or 1.000 years but we will get there if we don’t change habits.
Human nature Nature is a wonderful thing. Recycles everything it produces, controls populations, regenerates things that we supposed killed, creates specific optimum species that survives harsh ambient, etc. We are also trying to do the same. We already recycle, control population, regenerate things that we thought killed, create specific optimum species that survives harsh ambient, etc. The problem is that while scientific and industrial technologies are ready to help and construct a better interaction between nature and human being the second is not. I see all around me people who don’t care what they do to the trash, the car they buy, the furnishes they buy and even to the food they buy. They just don’t care. Human being has an intrinsic capacity to explore things until the last drop and to worry only after. People tend to forget that industry only gives to people what they want, and people don’t care what industries do to obtain it. Environmental education is everywhere and well broadcasted. So why people continue not to act, or why people do not react while seeing the pollution problems? Probably is an enact capacity that nature give us in order to control the population density of the human being. So while we continue not to act, we will continue killing ourselves. Is the same as war. Someone begins a war, then millions and millions let themselves being manipulated to kill and to be killed. - 15 -
Concept I consider that there are three major groups of belief: • Those who follow the Bible (sometimes not agreeing about the compilation of the books); • Those who follow the Qur'an; • Those who follow the Torah. Although there are many holy places for these beliefs, there’s one very special place for all of them: Jerusalem. I consider that the birth of religion is common and the same for them. What happened was the globalization of religion: the adoption and adaptation of religion to each culture.
Globalization Religion was spread mainly using military force by Christians and Muslins. People were forced to change. On 27 February 380, Emperor Theodosius I established Christianity as the official religion of the Roman Empire.1 Do you think that the other religions simply disappeared? Most catholic events are pagan. People were forced to change and they adapted their beliefs and ceremonies to the new official religion, and things went along. Simply putted this transformation happened everywhere mainly to the followers of the Bible and the followers of the Qur'an due to their fast globalization. I think the followers of the Torah maintained a more pure sense of religion because I understand that the globalization of the Torah never happened.
Hope I consider religion to be very important: socially and individually. These religions share many common things: only one God, only one special book, Jerusalem, the value of life, Jesus, etc. We have to understand that one thing that makes the human being special is our differences. We only got here mainly because of this. 1
- 16 -
We should consider that what is important is to a person to choose freely the religion where he feels good. What I want to stress is that I don’t understand and cannot accept the fighting’s involving religion matters. Human lives are too important to waste in this type of conflicts. I think too much people died because of this. We should, all of us, stop and contribute to a tolerant way of life always thinking in our children’s future and respecting one of the basic values of these religions that is life. To achieve this is so simple as a relation between a couple. For a relation to work its fundamental that each one strengthen what they have in common, accepting and tolerating each ones differences. The Golden Rule: “Treat others as you would like to be treated (positive, active form) “.1
- 17 -
Concept I have finished reading a book about our last century of wars from Niall Ferguson1. It was important and helped me understand the three world wars. Let’s assume that the cold war was indeed the third world war. The book pointed very well that the conflicts were transferred after the second world war to countries like Angola, Vietnam and Afghanistan (only to mention a few)2. Angola is a nice example: there had been Cuban and South African troops and a very important financial and arms support from Americans and Soviets. The third world war was a clash between the American and Soviet Empires (Cold War). Nevertheless I consider that the book misses an important thing: the transference of power and resources.
Empires, power and resources The USA is what it is today due to two world wars that destroyed Europe and the ancient empires: British, French, Spanish and Portuguese. I don’t believe that the USA beginned the wars, but I believe that they took every opportunity they could in catching the vast resources lost by these ancient empires. Wars were always a source of riches and power. In ancient times if a country or someone wanted riches and power they opted for war. Commerce just couldn’t give the same returns and in such short period of time. This means that war was always a presence in the past, unfortunately a presence in our present and in our future if we let it happen.
Conflicts Today we have conflicts everywhere. Twenty eight ongoing conflicts and the most ancients of then beginned in 1948: the internal conflict in Burma and the Arab-Israeli conflict3. The actual most famous ones are the invasion of Iraqi and Afghanistan. I believe the main purpose of these invasions is globalization. To invade you need an excuse. To have an excuse you create one. If you don’t have an enemy you create one. People are more united when confronted with a common enemy. It even calms internal tensions in America. 1
The War of the World, Niall Ferguson. The concept was that the conflicts were transferred from the inside of falling Empires to their borders. 3 http://en.wikipedia.org/wiki/List_of_ongoing_political_conflicts 2
- 18 -
The Arab-Israeli conflict is taking too many lives. I think Palestinians and Israelites loosed their reasons and rights so many years ago. I think it is possible for different types of persons with different opinions and religions to live together. I also think that we need Israel and Palestine to have a better world. But I just cannot see how this will be possible because I believe that they will never forget the dead and, because of this, they will continue to kill each other children’s. If they only thought about their children’s future...
Short-term new conflicts (already being cultivated) Since Barack Obama toke over the presidency the USA war tactics changed. There is a substantial difference between Republicans and Democrats. The first like bullying and explicit war, the second likes diplomacy and undercover war. The USA today doesn’t want to directly be involved in war, but is fomenting three major conflicts that will lead to war and that they will support. 1) Venezuela – This country has a dictator ruling. Colombia will solve the problem. Arms and financing will be no problem. Motive: guerrilla hided and trained in Venezuela. 2) North Korea - This country has also a dictator ruling. South Korea will solve the problem. Arms and financing will be no problem. Motive: a South Korean battle ship sunken by North Korea. 3) Iran - Mahmoud Ahmadinejad is also a dictator1. He has a doctorate degree in civil engineering and traffic transportation planning. He is also a marketing man and trying very hard to defend is country and to gain support from western citizens. But, nevertheless, I think he will not make it. Motive: Nuclear program. India, Israel, Pakistan and the Democratic People’s Republic of Korea (North Korea) have nuclear capacity and aren’t members of the Nuclear Non-Proliferation Treaty2. After installing a provisory government backed by the USA and UN the resources will be bargain hunted and explored by international companies mainly Americans. Nevertheless, because everyone conceded, British, German, French, Chinese and Japanese (too long list) will have they share of resources and exploration in Venezuela, North Korea and Iran. I see a good thing in this: Globalization. It’s sad when Governments sometimes opts for war. 1
It is important to mention that most of the Muslim countries are dictatorships due to their fundamental views of Islamic laws. I do not agree with the death or violent punishments given to those who do not comply with the Islamic laws, mainly those given to women. 2 http://www.un.org/en/conf/npt/2005/background.html and http://en.wikipedia.org/wiki/Nuclear_NonProliferation_Treaty
- 19 -
ECONOMICS, CRIME AND SECRET SERVICES
Reality Did you notice that: • Everybody speaks about crime: drugs, illegal trade of weapons, slavery (prostitution included), smuggling, etc. • Everybody accepts that the crime industry is massive and is responsible for an awesome worldwide trade. I believe that crime trade is responsible for a substantial sum of money exchanged everyday. I also believe that secret services while defending their countries best interests influence economics. So why economic teachers believe and teach that we live in an optimum economical environment? How about crime and money laundry? How about secret services? Many thinkers like Nassim Taleb advocate that people cannot think and act in an optimum manner, so economics cannot be optimum1.
Money laundry Money laundry is made optimum depending of the country and laws. Please consider that there are many businesses that only survive because of this. Typically we think that laundries, restaurants, bars and discos are the optimum businesses to recycle money. I believe businesses in third world countries are better and safer. There’s no accounting to be made. There are rules, but there’s no control and tax authorities are easily bribed. You can transport your dollars to a country in South America or Africa. Be an honest owner of a business, inflate sales, pay the local taxes and repatriate the money to your local bank and pay local taxes due to the dividends. If someone suspects of anything you just have a pitiful accident (due to a distraction of a local employee) where everything was burn and you can resume somewhere else with the money insurance paid because of the fire. You think you can do this in you local country? Well many of Enron's recorded assets and profits were inflated or even wholly fraudulent and nonexistent and Arthur Andersen, the accounting
Fooled by Randomness, Nassim Nicholas Taleb. Chapter Eleven: Randomness and Our Brain: We are probably blind.
- 20 -
firm, accepted everything. Enron was a huge company with revenue in 2000 of $101 billion1. They were cached because they got to big and to greedy. They were not the only one. I believe crime is a substantial part of our economy and the allocation of resources and money is made in the most profitable way to recycle it. These actions will affect everything around like stock markets, forex markets and the economy itself.
Secret services In the same way secret services do their part to help their countries companies. Do you think that secret services don’t consider business a nation security obligation? Some secret agencies are huge, bigger than Google. For example NSA had 30,000 2 employees in November of 2006 and Google had 21,805
in 30 June of 2010.
There are a fabulous number of secret agencies in the USA and everywhere in the World. I believe that many communication systems are taped, from CEO’s to high profile executives, and these secret services provide important information to their countries company leaders. Secret services also provide the most recent technological discoveries, sometimes a CEO helped by secret services knows faster and more than the CEO of the company that is doing the research (considering that they are following the project). I believe companies are like armies of a country. The expansion and importance (and their riches) of a country is judge not only by their arms forces but by their corporate forces. That’s why I believe that secret services are a key drive force of an economy.
Final consideration I think the economic world is very different of what is teached in Universities or is broadcasted by Bloombergs. There are honest businesses and good companies. What I mean is that you have always to consider crime, secret services and politics when you make an analysis and to be skeptical about what is broadcasted.
http://en.wikipedia.org/wiki/Enron http://www.usatoday.com/news/washington/2006-05-11-nsa-reax_x.htm 3 http://finance.yahoo.com/q/pr?s=GOOG+Profile 2
- 21 -
Concept In ancient times salt or gold was used as a currency by some cultures. But the principle was that what was traded had intrinsic value. People lost everything when they were robed. So appeared the banks to safe keep our portable belongings. Today a currency is something without intrinsic value. It is paper, very cheap metal and mostly today simple computer records. The value of these records and cheap materials is guaranteed by our countries central bank.
Value I understand that the important fundamentals for the currency to work are the standardization and belief of people using it. But, nevertheless, although people believe that gold is the last value resource you canâ€™t eat it. Recall King Midas legend: he died hungry while everything he touched transformed into gold. I consider gold and diamonds to be excessively overvalued. There is so much stock and production around the world that the prices are artificially maintained. I believe thereâ€™s a world wide cartel in the prices of these commodities. I also consider that there is no true consumption of gold and diamonds (i.e.: oil is consumed). They are mainly used to store value. Production1
159.800.000 161.200.000 176.000.000 176.900.000 170.000.000
Markets manipulation The forex market, where currencies are traded everyday reached in April 2007 an average of US$3.2 trillion in April 2007 daily2. I consider the forex market to be the best weapon to manipulate a country currency. This now can be made by funds. How can this be possible? Well China has around US$2.454 trillion in currency reserves3 (June 2010) and it uses them to maintain a certain peg to the
Page 31 and 41 from the statistics report World Mineral Production, 2003 - 2007, British Geological Survey, http://www.bgs.ac.uk/mineralsuk/statistics/ 2 http://en.wikipedia.org/wiki/Foreign_exchange_market#Market_size_and_liquidity 3 http://en.wikipedia.org/wiki/Foreign_exchange_reserves
- 22 -
USD. Funds can use leverage to do a certain operation (buying assets). Leverage is when you ask for a loan to do a certain operation, you put 10% and the bank putts the rest 90% (borrowed). If the operation goes against you and you loose more than 10% (your capital) the bank asks you to close the operation or to put more money in order to maintain the 10% margin. This is widely used in forex exchange (and many other operations). 10% is the normal margin requirements, although in the 2008 crises some banks unilaterally changed the rules and started to require 20% to 30% margin. Now, because there are funds with billions of USD, most clients money, and because they have to put the money to work to maximize the profits they use leverage. That was, in my opinion, the main reason of Lehman Brothers bankruptcy1. There are many funds like these doing the same still now. Private persons do the same with their savings (leverage trading). Because we are a social animal and we need to imitate, we all make bets in the same direction. One day the operation will go against, because of government entities intervention (notably Central Banks in forex markets) or because some fund starts to believe things are overpriced and change tactics. Then begins the race to exit the positions, where someone will always loose, even the big funds. But forex market, I believe, is difficult to manipulate due to the number of participants and the values traded everyday. Now use the same exercise and put this into a stock - only one stock. If someone has US$100 million and uses leverage to gain control of a company in the open market the stock value will go sky high without any fundamental value. Everybody wants to earn money and analysts will find pretty decent reasons to buy the stock. The analyst’s opinions will be Bloomberged and everybody will start to buy. Then that someone who beginned the buy changes is mind and starts to sell. He will earn a fortune. The others will loose like what happened in 2000 in internet stocks2. So markets can be easily manipulated by people who have money and markets go up when people believe and have money and go down when people don’t have money or they don’t believe it and short it. Shorting a stock is a complex and very risky operation traders do to earn money with the potential downsize price. If you buy a stock the limit will be zero. If you short a stock there will be no limit. That’s why (although there were more reasons) Adolf Merckle3 committed suicide when he shorted Volkswagen and lost at least 500 million euros.
http://en.wikipedia.org/wiki/Leverage_(finance)#Leverage_and_the_financial_crisis_of_2007-2009 http://en.wikipedia.org/wiki/Dot-com_bubble 3 http://en.wikipedia.org/wiki/Adolf_Merckle and http://www.time.com/time/business/article/0,8599,1870007,00.html 2
- 23 -
Central Banks Almost all countries in the world have Central Banks. There is also to consider the Bank for International Settlements (BIS) that is an intergovernmental organization of Central Banks which “fosters international monetary and financial cooperation and serves as a bank for Central Banks.”1 Central Banks are important in constructing and applying the same rules everywhere because it is a fundamental basis to make money work worldwide. There’s one catch. Central Banks are the only entity that emits money. For each unity of money emitted they charge interest. Because there is no money to pay this interest they have to emit more money. This means that they always have to emit money and inflation will be here almost all the time (and this is good). Inflation guarantees that what you buy today (has a concept of value) will not loose money: it gives confidence. Deflation happens when people don’t have money. So if they have to sell something, they have to do it cheaper than what they initially bought, because no one will have money to pay. So, I consider, that inflation (a lot of liquidity and permissively) and deflation (restrains on liquidity and restrictiveness) are controlled by Central Banks.
- 24 -
The assumption of timeless definitive bases I think knowledge and definitive definitions are very tricky. The most practical example was the ancient belief that the world was flat, when in reality the world was round. Sometimes science evolves in a certain direction due to some predefined bases. Most scientists don’t accept that these bases could be wrong or not completely right, mainly because of the work they already did and that validated the bases. Nevertheless, sometimes to evolve more or in different directions you have to question the bases.
The assumption of impossibility Another important fount of development is science fiction. “Jules Verne's novels have been noted for being startlingly accurate anticipations of modern times. Paris in the 20th Century is an often cited example of this as it arguably describes air conditioning, automobiles, electricity, television, even the Internet, and other modern conveniences very similar to their real world counterparts. Another example is From the Earth to the Moon, which, apart from using a space gun instead of a rocket, is uncannily similar to the real Apollo Program, as three astronauts are launched from the Florida peninsula and recovered through a splash landing. In the book, the spacecraft is launched from "Tampa Town"; Tampa, Florida is approximately 130 miles from NASA's actual launching site at Cape Canaveral. In other works, Verne predicted the inventions of helicopters, jukeboxes, and other later devices. He also predicted the existence of underwater hydrothermal vents that were not discovered until years after he wrote about them.”1 I don’t think he predicted. He inspired people and children with dreams. They only achieved their dreams. They transformed a dream into reality. So when we speak about immortality or other type of dreams I don’t understand them to be impossible, they are only in the temporary state of a dream and waiting the right time to be understood, developed and created.
- 25 -
The problem of sharing There’s always the problem of sharing knowledge. I believe certain knowledge should not be shared with people that don’t understand the possibilities. I think that most of our population is too selfish to do a good common use of certain technologies. While people continue to die in wars, of hunger and thirst I believe knowledge should be in the hands of a few.
The problem of blocking I consider Japanese arts and yôga safer than Chinese arts because they are very well organized and the culture of respect and honor gives a safer continuation of good knowledge. Chinese arts suffered a lot with the convulsion of the Chinese society for centuries and today I think there are more charlatans than good masters within the Chinese practices. I think important ancient knowledge were lost during these convulsions. I believe oriental philosophies and practices in a certain way are right and are continuously putted as fraudulent by skeptical scientist and doctors. People should not reason so much. If a certain good practice makes you happy, if it makes you better, healthy, you should continue with it. Occidental culture is blocked to oriental culture and the problem begins with the occidental necessity of reasoning. If doctors and scientists had a more open mind I believe they could find a new entirely fantastic world hided in these practices and even hided in our occidental ancient practices, many times looked forbidden and evil because of so many centuries of Inquisition and of oppression by the Roman Catholic Church.
- 26 -
Concept Globalization is simply the standardization of our world. I believe that is a good thing, because then we will all be citizens of earth and countries will be like the states of the USA. I dream with one government freely elected worldwide. In a scenario like this wars will not make sense, and problems will be addressed and solved by diplomacy. I understand that this creation is good and is leaded by the USA as an empire. Ancient empires grew by war, extermination, exploration and consolidated power by the governess of fear. This is the first empire that uses other methods, mainly the media, internet and corporate entities to cultivate an American worldwide culture. If we act and behave collectively the same thereâ€™s a higher chance of conciliation.
Future We had already globalized money, companies, religions, social behaviors and social structures (like families, hobbies, work, etc). But thereâ€™s still a lot of work to do. Europe is being slowly integrated and consolidated and I hope to see full fiscal and military integration in the next twenty years. Crises are the optimum motive to evolve. I believe that the world needs three more levels: 1. The integration of countries with similar cultures in economical zones worldwide (although countries like Turkey will have some difficulties due to their internal cultural differences); 2. The evolution of economical zones into countries (where countries become states â€“ similar to the USA); 3. The creation of a worldwide government freely elected (I consider that the United Nations, the North Atlantic Treaty Organization, the International Monetary Fund, the World Bank, the Bank of International Settlements are the foundations of this new world order). The important bases for this to work are respect, tolerance, understanding and diplomacy. I believe that if we achieve full globalization (one government freely elected) war, hunger and thirst, for example, will disappear.
- 27 -
We should, nevertheless, not forget the possibility of tyranny. Tyranny, normally, accompanies who has power. So I believe that we should, all of us, collaborate and help to grow this dream of worldwide harmony without ever forgetting what tyranny is and always acting against it.
Thomas Jefferson wrote in a private letter, "I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man."1
tyranny (plural tyrannies)2 1. A government in which a single ruler (a tyrant) has absolute power. 2. The office or jurisdiction of an absolute ruler. 3. Absolute power, or its use. 4. Extreme severity or rigour.
- 28 -
These thoughts are very brief with the sole purpose of reflection. There are many other things to consider in present times but I think that these are sufficient. Without wanting to plagiarize anybody these writings were done backwards. First I wrote, then I tried to find the inspiration source. Many of the concepts were read in books, newspapers, interviews, speeches and documentaries. I will list those that influenced me the most in the appendix. New concepts in this work1: - American Empire is alive, wealthy, growing and is standardizing our world; - Software industry is a major American global force; - Media is the major educating and standardizing entity nowadays; - Crime and secret services are key drivers of the world economy.
We have to remember that there are so many writings that what I suppose to be new has a probability to have been written before by someone else.
- 29 -
The War of the World: History’s Age of Hatred, Niall Ferguson
The Ascent of Money: A Financial History of the World, Niall Ferguson
The World’s Banker: The History of the House of Rothschild, Niall Ferguson
Fooled by Randomness: The Hidden Role of Chance in the Markets and Life, Nassim Nicholas Taleb
The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, George A. Akerlof and Robert J. Shiller
Banqueiro Anarquista, Fernando Pessoa1
É Este o Mundo em que Queremos Viver? Eva Joly2
Revelações Sobre o Mundo Financeiro, Denis Robert and Ernest Backes3
O Dinheiro Secreto dos Paraísos Fiscais, Sylvain Besson4
George Soros interviews, speeches, articles and essays Interviews and speeches:
Articles and essays: http://www.georgesoros.com/articles-essays/
Niall Ferguson documentaries The Ascent of Money: http://www.youtube.com/watch?v=y3MHFe7PX2g&p=9B10A4CF00D51E0F&index=1 The War of the World: http://www.youtube.com/watch?v=vP_X7cb-gwU&p=FE79F8DF49019930&index=1
Novel books (a way to understand crime through novels written by those who lived it) •
Estranha forma de vida, Carlos Ademar. The writer was a criminal investigator in the Portuguese “Policia Judiciária” (similar to the FBI) for almost twenty years. Nowadays is a professor in the “Instituto Superior da Policia Judiciária e Ciências Criminais” (similar to a FBI University).
http://en.wikipedia.org/wiki/Fernando_Pessoa http://en.wikipedia.org/wiki/Eva_Joly 3 http://en.wikipedia.org/wiki/Clearstream#The_Clearstream_Affair 4 Translation: Secret Money of the Tax Havens 2
- 30 -
The Queen of the South, Arturo PĂŠrez-Reverte The writer studied Political Sciences and Journalism. Has a RTVE war correspondent and covered bellicose events in Cyprus, El Salvador, Nicaragua, Chad, Lebanon, Sudan, Mozambique, Angola, Persian Gulf, Croatia and Bosnia-Herzegovina. His novels have the common thread of being based on real historical times and that in each case a great deal of investigation goes into the making of his stories.1
1 Resumed from http://www.imdb.com/name/nm0702416/bio
- 31 -