Thursday, April 23, 2009

Crisis of Perception

This is something I wrote in February, 2008. Little did I know how profound it was at the time and what it is now.

Crisis of Perception
Today our world is facing what we could call a “crisis of or in perception”. Our world is each of us, you, me and every human on this planet. What we perceive or led to believe is what we feel is reality. Today I ask simply what is “REAL”. From global warming to massive debt ridden economic situations and concerns. Massive population growth eroding natural resources and the very environment we hope will continue to sustain our lives. One truth is each person on earth is very real and what we need to sustain us in the form of our natural resources is certainly real. We all need food, water, shelter and some form of value to obtain necessities for us to live, hopefully not just survive in the process. The form of value is money and money is currency and currency is merely a piece of paper with a value as long as someone accepts it as such. Amid all this today we have a society functioning on debt. The ability, or better, the availability of governments, companies and each of us to use debt in order to have money. Now let’s discuss “perception” as reality in the world today.
To be truly “successful” in America today all you need is to have money or appear to have it. To do that you need credit and when one credit bubble bursts along comes another one as long as you continue to be “perceived” as having value. Where or how is this value perceived?. Today the New York Stock Exchange (NYSE) has a debt margin at a record high of $285 billion. Global mergers and acquisitions (funded with debt) have reached an all time high of more than $1 trillion and this has happened in just a matter of months. Global debt has increased 5 times faster than the world’s Gross National Product (GNP). Corporate bonds have increased at the rate of 22%. Junk bonds are up 30%. Leveraged buyouts according to the Bloomberg report are up 40% and all this with financiers collecting $2 billion in fees. Where does all this money come from? Are people saving so much money that banks have an extra trillion to lend to money shufflers? No, of course not. We have “hedge funds” which cover ¾’s of “junk bond” debt. The world’s credit system is no longer controlled by banks thus not controlled by bank regulators. There are these huge, dark “pools of liquidity” outside of the banking system. How do they work? I really don’t know but we do know they seemingly make the world a richer place. Wall Street, Media moguls and especially our politicians in Washington are working double-time to convince us the U.S. economy is much richer than it really is. In this deep-in-debt economy, the kind of disinformation or misinformation is becoming increasingly harmful to “REAL” wealth and investment. Incidents such as Enron and more recently New Century Financial are examples of “perception” vs. “reality”.
The real world for the average American is more and more a matter of dealing with frustration. They drive more even though oil has climbed back over $65 and gasoline is at record prices. Americans today tend to borrow and spend more even amid a rising lack of confidence in politicians, governments, companies or their own future ability to pay the debt being incurred. States like Florida are experiencing declining tax revenues for the first time in over 30 years. I don’t always believe statistics as they can be manipulated, however it doesn’t take a poll or science to know America is engulfed in mass confusion. The haves greatly outnumber the have-nots and the percentage today is wider than it’s been since the 1920’s. Mankind by nature is a collective animal.
Black vs. white, democrat vs. republican, Protestant vs. Catholic, Muslim vs. Christian, lower income vs. upper income, liberal vs. conservative. All aroused, stirred and driven by a collective desire to improve their life. The security of a good job, trust in the ability of those elected to manage and control their needs and concerns have all but slipped away as silently as a thief in the night. Home sweet home, Moms apple pie has become far too crusty!
How many of you today trust bankers, lawyers, doctors, even ministers? You still go to church, borrow money, feel a need for a lawyer or doctor but do you still have complete faith and trust in your action or do you just hope and pray?

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