We Can’t Fix What We Can’t See

America is a very complex place in which highly technical things affect the lives of Americans. Many Americans could not begin to describe what derivatives are or what financialization means -- even though these very powerful economic forces affect almost every aspect of life today. All we have to do is look around and it is obvious that people are plugged into the Internet everywhere. How many of them understand how it works and who is in control of the information flowing into their smartphones and computers. Forget trying to explain what’s going on in the political, legal and medical domains of life. Yet all of those things combined control our lives in many ways -- options to succeed that we have or barriers that block us from success – and making the structural changes that must be made to repair our nation.

Trying to figure out how to overcome this information gap problem is a challenge that we have been wrestling for a long time. We have tons of technical data that people really need to know, but we know that when we try to share it in discussions and meetings, we lose our audience in just a few minutes. Below is an example of what we are talking about. Grasping the importance and meanings of three figures are absolute requirements for just perceiving the existing state of the economic environment and finding solutions to economic problems.  

The first figure comes from the Bank of International Settlement’s Statistical Release: OTC derivatives statistics at end-June 2014. I will highlight certain terms and figures by underlining and bolding them.

OTC derivatives markets contracted slightly in the first half of 2014. The notional amount of outstanding contracts totaled $691 trillion at end-June 2014.[i] The interest rate segment accounts for the majority of OTC derivatives activity. For single currency interest rate derivatives at end-June 2014, the notional amount of outstanding contracts totaled $563 trillion, which represented 81% of the global OTC derivatives market.[ii]

 

$691,000,000,000,000.00

(trillions of dollars)

Do you have a clue as to what that figure means? None of do and that’s one reason we are so easy to manipulate and control. The graphic below will make the figure $1,000,000,000,000.00 more comprehensible. Just keep in mind that what we are actually talking about is 691 time larger.

Source of Graphic

The second figure is $17,418,900,000,000.00 -- the 2014 US GDP (Gross Domestic Product). GDP refers to the market value of all final goods and services produced within the United States of America in 2014. It would take almost 40 years of work by Americans to produce final goods and services, at the current rate, worth $691 trillion dollars.

Hang in there and don’t doze off yet.

A quick note with some facts you need to be aware of:

(1) The OTC Derivatives Markets are unregulated and unreported.  

(2) The OTC (Over The Counter) here isn’t the one listed along with the New York Stock.

(3) Derivatives did not exist before the 1970s.

 The third figure $22,000,000,000,000.00 – the total amount of actual currency that exists in the world today. No one really knows exactly what the figure is, but this is a good educated guess.[iii]

Source of Graphic

Becoming aware of the importance and meanings of the three figures below are absolute requirements for perceiving the existing economic environment. We must be able to see what exists before we will be able to formulate options for addressing existing problems. Until now, have you considered these figures in your thoughts or discussions concerning economic problems?

$22,000,000,000,000.00

$17,418,900,000,000.00

$691,000,000,000,000.00

Now you are aware of them. That was the goal for this blog. There is much more we need to be aware of before we begin discussions that address specific problems. 

Making people aware of information like this, providing educational resources and networking people together through values-based relationships is why we created the TOV Center. We hope you will agree and join the journey with us.

Do you agree that there is an urgent need for the TOV Center’s mission and vision today? If you do, let us know by going to the TOV Center Facebook Page and “Like It” by clicking here.  Check our Facebook page often and watch for exciting information about upcoming events & TOV Gatherings.

Shalom,

Jim Myers

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[i] http://www.bis.org/publ/otc_hy1411.pdf - p. 1.

[ii] http://www.bis.org/publ/otc_hy1411.pdf - p. 3.

[iii] http://www.quora.com/If-the-sum-total-of-all-world-currency-were-totaled-and-divided-per-person-how-much-would-each-of-us-get

We Do Not Have All of the Answers

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Benjamin Franklin’s 13 Virtues Measure Up to the TOV Standard

http://commons.wikimedia.org/wiki/File:BenFranklinDuplessis.jpg

Benjamin Franklin, scientist, inventor and a principal architect of the United States Declaration of Independence and the Constitution, may have been the first self-improvement expert, too. In 1726, a young 20-year-old Franklin was crossing the Atlantic from England back to Philadelphia. During his 80-day journey, Benjamin Franklin used the time to develop a personal plan of conduct. His plan consisted of 13 virtues listed below. Franklin committed to focusing on one virtue per week. At the end of the 13th week, he would start the process over again; thus, cycling through the plan four times a year. Ben Franklin followed this plan until his death at age 79. He found comfort and happiness in each of the virtues and used these to guide his entire life.

● Temperance. Eat not to dullness; drink not to elevation.

● Silence. Speak not but what may benefit others or yourself; avoid trifling conversation.

● Order. Let all your things have their places; let each part of your business have its time.

● Resolution. Resolve to perform what you ought; perform without fail what you resolve.

● Frugality. Make no expense but to do good to others or yourself; i.e., waste nothing.

● Industry. Lose no time; be always employ'd in something useful; cut off all unnecessary actions.

● Sincerity. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.

● Justice. Wrong none by doing injuries, or omitting the benefits that are your duty.

● Moderation. Avoid extreams; forbear resenting injuries so much as you think they deserve.

● Cleanliness. Tolerate no uncleanliness in body, cloaths, or habitation.

● Tranquillity. Be not disturbed at trifles, or at accidents common or unavoidable.

● Chastity. Rarely use venery but for health or offspring, never to dulness, weakness, or the injury of your own or another's peace or reputation.

● Humility. Imitate Jesus and Socrates.

Franklin’s Commentary

"It may be well my posterity should be informed that to this little artifice, with the blessing of God, their ancestor ow'd the constant felicity of his life, down to his 79th year, in which this is written. What reverses may attend the remainder is in the hand of Providence; but, if they arrive, the reflection on past happiness enjoy'd ought to help his bearing them with more resignation.

● To Temperance he ascribes his long-continued health, and what is still left to him of a good constitution;

● To Industry and Frugality, the early easiness of his circumstances and acquisition of his fortune, with all that knowledge that enabled him to be a useful citizen, and obtained for him some degree of reputation among the learned;

● To Sincerity and Justice, the confidence of his country, and the honorable employs it conferred upon him;

● To the joint influence of the whole mass of the virtues, even in the imperfect state he was able to acquire them, all that evenness of temper, and that cheerfulness in conversation, which makes his company still sought for, and agreeable even to his younger acquaintance. I hope, therefore, that some of my descendants may follow the example and reap the benefit.

"In this piece it was my design to have endeavored to convince young persons that no qualities were so likely to make a poor man's fortune as those of probity and integrity.

"My list of virtues contain'd at first but twelve; but a Quaker friend having kindly informed me that I was generally thought proud; that my pride show'd itself frequently in conversation; that I was not content with being in the right when discussing any point, but was overbearing, and rather insolent, of which he convinc'd me by mentioning several instances; I determined endeavouring to cure myself, if I could, of this vice or folly among the rest, and I added Humility to my list.

"In reality, there is, perhaps, no one of our natural passions so hard to subdue as pride. Disguise it, struggle with it, beat it down, stifle it, mortify it as much as one pleases, it is still alive, and will every now and then peep out and show itself; you will see it, perhaps, often in this history; for, even if I could conceive that I had compleatly overcome it, I should probably be proud of my humility."

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Sources:

¹ http://changingminds.org/explanations/values/thirteen_virtues.htm

² http://www.thebridgemaker.com/the-benjamin-franklin-13-week-self-improvement-challenge/