THE ASCENT OF MONEY

THE ASCENT OF MONEY

James R. Fisher, Jr., Ph.D.
© January 15, 2009

“Make money your god, it will plague you like the devil.”

Jonathan Swift (1667 – 1745), author of “Gulliver’s Travels”

“Money never made a man happy yet, nor will it. There is nothing in its nature to produce happiness. The more a man has, the more he wants. Instead of its filling a vacuum, it makes one. If it satisfies one want, it doubles and trebles that want another way.”

Benjamin Franklin (1708 – 1790), American statesman, inventor, and author

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Today, eating my lunch, I watched an hour show on PBS television on the "Ascent of Money."

I mention it to you because if you are confused about bonds, hedge funds, derivatives, options, the business of futures, and irrational exuberance of the stock market, this program should prove insightful.

Check www.pbs.org for further information.

You will learn about Enron and its incredible duplicity. Its workers reached a state of euphoria where they expected bonuses of four to five times their base salary.

(1) Enron worked its way into being the middleman between energy producers and consumers. Once established, they blackmailed blackouts to create the sense of scarcity, and force utilities to pay them larger fees, which were in turn passed on to users, mainly in California and western states.

(2) Enron had Federal Reserve Chairman Alan Greenspan and President George H. W. Bush in its pocket: Greenspan through deregulation, and Bush by seeing legislation through Congress user friendly to Enron.

There are conversations with the cunning investor, Mr. Billionaire Soros, and two guys who won the Nobel Prize applying Quantum mathematics to options. They established the Long Term Investment Corporation, and became billionaires, operating as if on another planet with their rocket science of financial mathematics. They, too, came spiraling downward when mere human beings didn't fit their probabilities.

It was Einstein who said, "As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality."

Then, there was a guy profiled named "Gross" who started out as a black jack dealer in Las Vegas. He is now controller of the World Bond Market, and one of the most powerful men on the planet. It is bonds that underpin all finance, and as you will see in this program, that is scary.

Another paradox of equal horror is that the United States has borrowed its entire national security away. We find ourselves now held hostage to our creditors, mainly China, for our profligate ways.

China holds the US liable, a country in which the average Chinese worker has a personal income is $2,000 per year to the US personal income of $44,000. How is that possible, you ask? Even the poorest of Chinese save up to half of their income, while we save none of ours. The narrator calls the relationship "Chimerica," a take off on the mythical beast chimera, part lion, part goat, and part dragon.

A final note of possible interest, those Ivy League nerds who won the Nobel Prize for Economics would have had a more reliable database if they had taken into account in their calculation data a few years earlier, say to the October 1987 Wall Street crash.

The point the narrator was making is that we don't learn from history because we live totally in the present. People today can hear about the Great Depression or crashes such as 1974 and 1987, but it doesn't compute with their mindset, and therefore outside their radar. In A LOOK BACK TO SEE AHEAD dealt with this, and the main reason I wrote it.

Another point that I make in my writing is this: we forget about the unpredictability of human behavior and so disregard it, preferring to fly by the seat of our pants.

I am not attempting to sell the program but to suggest informationally it could give you some perspective just on how volatile the world is that we are handing off to our kids and grandkids.

Some have suggested here in this media (emails) that I am a "pessimist" for not jumping on the bandwagon of the optimists. I see myself at this late stage still as that Irish kid whose parents couldn't make it week to week on my da's paycheck. No, I've never bought into the HYPE, and should you view this program, chances are nor will you.

Be always well,
Jim