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Beware of the Coming Economic Era

Posted April 29th, 2010 by Robb Smith

And How to Prepare For It...

Your economic stability is critical to your personal development.  Building a solid personal financial foundation is similar to cleaning out the psychological shadow from the basement: either one can be sand upon which you try to build an integral life and causes it to unexpectedly crash later.  Lately in the United States and Europe (though Greece is not helping) we’ve been feeling a very real sense that the winds of progress may be beginning to blow again (my Australian friends remind me that this sense never really left them).  We’re seeing green shoots.  Good, because the last few years sucked.  Thankfully we can put that dreadful recession behind us.
 

Umm, not so fast.  

If you really want a solid personal financial foundation for the era we’re moving into, I think there are three scenarios you need to watch.  None of this is investment advice, just a word to the wise.  The world’s changed in ways that many people don’t fully appreciate. 
 
First, a brief recap of where we are: the world’s deleveraging, paying off debt as fast as possible while asset values have plummeted.  National debt has skyrocketed in many developed countries as governments rushed in with spending to prop up aggregate demand and to soak up unused production capacity.  Employers have been terrified, laying off employees and focusing on pushing any available free cash flow into debt repayments instead of rehiring or capital investment.  Governments have fought back: let the currency printing presses go full blast in order to flood the markets with liquidity in order to counteract the “liquidity trap” of a deleveraging private sector - a trap where a lack of capital to purchase assets causes asset values to decline and in turn declining asset values causes a greater lack of capital.  
 
The problem is everyone’s nursing their wounds: banks aren’t lending because they need the capital to offset terrible assets and their customers don’t want the loans anyway. So, in the lower-left quadrant of our cultural mindset, we’re in a big confidence game.  With the economic imbalances in the lower-right quadrant finally giving way to a popping stock market and real estate bubble so also went a shift in the lower-left.  Black swans tend to make us skittish.
 
And this brings us to the big question for managing one’s financial affairs over the coming 10 years.  What does the future hold?
 
Here are three scenarios to watch.

Scenario 1: Balance Sheet Recession

This is the scenario where the U.S. and Europe over the next decade or more resemble Japan of the past 2 decades.  As private households and firms focus on paying off huge amounts of debt on their balance sheets there is a fundamental lack of aggregate demand to bring employment back to reasonable levels.  Overall economic growth is anemic.  This scenario will hurt.  We may see some green shoots but it will be a decade or more of a painful and general economic malaise.  When some analysts talk about a “new normal,” this is intuitively what they are pointing to.
 
Advanced recently by economist Robert Koo of Nomura Securities this scenario says that governments need to borrow more money and spend it liberally to fill the private sector demand gap (video here).  Koo argues that in this scenario we need not be worried about inflation: massive borrowing by the government will not fuel inflation as long as the government borrowing is not “crowding out” the private sector’s needs for capital. (Friedmanites would counter that inflation is always a monetary phenomenon and, by definition of increasing our money supply, we already have major inflation upon us.)

Scenario 2: Soft Landing

This is what I think of as the conventional main street view.  We’ve been through a rough time but things will eventually get back to normal. Consumers and investors have short memories: their deep (and mostly under-recognized) desire to return to normal will lead to a gradual (and irrational?) uptick in consumer spending, stock values, and housing prices.  They believe that real estate is still the way to middle-class wealth accumulation and therefore housing investments will heal the root cause of the crisis.  
 
The government’s massive monetary stimulus can be withdrawn in a well-orchestrated way to coincide with gradually increasing demand for capital in the private sector so as not to stoke inflation.  Citizens of developed countries will be left with a boatload of public debt but between raising taxes and restored economic growth the debt will be manageable.  The developing countries, including China, whose treasuries have been kind enough to lend our governments all this money, will be patient while we return to normal.  After all, what choice do they have? We’re their largest customers.
 
I suppose this scenario is the scenario of record for the U.S. Federal Reserve.  I would guess its proponents assume a historical analog of the United States between 1947 and 1962, where facing massive national debt (on a percentage of GDP basis) after World War II the U.S. was able to grow its GDP fast enough to diminish the relative value of the debt. (Nevermind the fact that the U.S. was the only real major industrial economy left standing after World War II and it was used to literally resupply the planet’s industrial base.  That is not so today.)

Scenario 3: Aftershock

This scenario gets ugly.  In this view, developed countries have so far only faced the first 4 of a total of 6 bubble collapses.  The real estate, stock market, private debt and discretionary spending bubbles popped over the past 4 years.  But they’re child’s play compared to the coming collapse of the U.S. Treasuries and U.S. dollar bubble.  The U.S. government is jacking its overall debt levels up to World War II levels (quickly approaching 100% of GDP), financed again by friends in developing countries who need U.S. demand to drive their own economic growth (influenced in some cases by their own fears that economic stagnation would produce political destabilization from an angry and hungry populace; aren’t the quadrants fun?).  
 
And here’s where systems complexity make its entry: it might only take one of these foreign treasuries to blink and seriously scale back their U.S. debt purchases for the bubble to deflate.  One badly-failed U.S. treasury auction and the bond market could go haywire: a full-scale panic (lower-left) that one of the most important stores of global wealth (U.S. Treasuries) is no longer up to the task.  With Social Security, Medicare and interest on the U.S. national debt projected to eat up 100% of the entire federal budget within 2 decades (that leaves no money left over for, errr, anything), the view is that there is not enough tax revenue (or political will to stem entitlements) to do anything but print more money.  The U.S. is a bad deal.  Sell, Sell SELL! dollar denominated assets.  (We're seeing a real-time case study of this right now as contagion threatens the Euro-zone because of Greece's debt crisis, which has started to impact Portugal; the dominos are lined up...) 
 
Advanced by David Wiedemer et al. in their recent book Aftershock, this scenario is truly a butchering.  The U.S. economy, the locomotive of the entire global economic train, hits the skids in a massive depression as the cost of imports, interest rates and inflation skyrockets.  Asset values drop, badly.  Unemployment goes up, a lot (I’ll save you from their guess as to how much).   And, according to them, this is all a necessary and actually healthy step to a brighter, newly restructured global economic system that emerges about 2 decades from now.  Sort of the last gasp of the old regime, as it were, going out with a fantastic bang.*
 
At least one aspect of Aftershock’s view, the coming crisis in sovereign debt, is given support by research of banking crises during the past 200 years by Harvard’s Kenneth Rogoff and Maryland’s Carmen Reinhart.

Getting the right view matters

Our survey data at Integral Life reveal a strange collection of facts about our community: you look to Integral Life primarily for spiritual material.  You are not overly interested in real-world affairs, or at least Integral Life’s views on them.  But nearly 80% of you also want to improve your financial or career situation as your top priority in 2010.  
 
I contend that it’s very important for integrally-minded people to have the financial foundation to sustain their worldview in the face of a complex and dynamic economic reality.  Scenarios like the ones above are directly or indirectly driving economic, social, military and humanitarian aid policy for 7 billion people.  While these three scenarios are only a few out of thousands, I chose these three because I think they represent a spectrum of the difference in views driving the fractured monetary, executive and economic policy landscape.  Put bluntly: if you want a taste of middle-vision-logic complexity (Teal in integral jargon), here it is ... systems within systems within systems. 
 
If you’re an integral practitioner than you’ve been given great gifts; I believe each of our moral obligations is to prepare our own affairs on behalf of the thousands who cannot (assuming 2% of developed countries’ adults have stabilized integral self-hood, that’s implicit moral care for roughly 7,000 people per integral, by my math).   We have to plan and get it as right as possible. There are a billion people that live on less than a dollar a day.  How we manage this complexity - actually scratch that, this complexity is not manageable - how we relate to and how we just are in the face of this complexity - matters a whole hell of a lot.  Lives depend on it.

Managing your personal financial foundation

How you manage your financial affairs will depend on your age, your value system, your appetite for risk and the nature and risk of your income stream.  If you work in the public sector you’re probably best positioned to weather what’s coming; government spending is not going away anytime soon.  If you work in the private sector you better be skills-agile and learn adaptive leadership.  If you’re a business owner, watch out, you’re the ultimate target (as if I need to tell you that): social democracies (France, soon the U.S.?) do not fully respect profit-seeking risk-taking. 
 
Each scenario tells you where on the developmental needs spiral you might want to generate your livelihood: for example in scenario 2 Integral Life and Integral Institute will do fine, in scenario 3 they will both badly suffer (along with thousands of other discretionary organizations).  During the past 3 years of recession donations and membership dropped significantly.  And believe me, there have been times where farming has looked pretty good. (I’d make an awful farmer, haha!)
 
I manage my personal finances based on a developmental model with assets allocated to three buckets based on an expanding-moral holarchy (family security, family esteem, world actualizing).  But here’s the thing: no matter which scenario comes to pass, I believe managing investments is not going to be similar to the past 3 decades where we had a loose-money and bubble-driven wealth effect (though with inflation it is not as great as many believe).  It didn’t matter where you aimed it would be hard to miss (at least nominally).  I don’t think that will be so going forward.
 
Therefore you might want to think about your portfolio along the lines of diversifying it by scenario:
 
  1. In any scenario where the private sector is struggling and governments are stepping in heavily, you might want to be in business with the government by investing in stocks that provide governmental services (healthcare, defense, education, staples etc.). (e.g., scenario 1)
  2. In any scenario where the private sector is growing and improving, you might want to be in business with the private sector by investing in consumer-driven stocks (technology, consumer goods, retail etc.). (e.g., scenario 2)
  3. In any scenario where we face a real risk of a sovereign debt crisis, you could hedge your downside with precious metals, which is where investors tend to flee in a crisis (well, they also flee to the American dollar, but that’s exactly what we’re hedging against).  (e.g., scenario 3)
  4. In any scenario where you believe significant price inflation is coming, and you have a personal income stream that will rise along with price inflation, you could increase the amount of fixed-rate debt you have on your primary residence now while the rates are still at an all-time low.  If price inflation hits, the real, inflation-adjusted value of your debt will go down, increasing (or maintaining) the real value of your home equity.  Remember that inflation is a wealth transfer from creditors to debtors (and from savers to borrowers). If inflation hits, fixed-rate debt is good (ceteris paribus).
  5. In addition to these conventional moves you can also get creative and invest in foreign stock, foreign currencies, treasury shorts, commodities etc.
 
But the goal, at least for me, is to have the peace of mind that allows me to leverage my personal energy in a highly-evolved way.  Assets are a tool, and my strong contention is that the more integrally-minded people secure their own financial future the better off the entire world will be.
 
I know this letter has been more technical than usual, but hopefully it will stimulate some thinking to help you prepare for the coming economic era regardless of what it looks like.
 
Loving regards,
 
Robb 
 
* An interesting aside on the potential crash of the U.S. Dollar is a mostly overlooked fact of geopolitics: the U.S. Navy is the first in human history to control every ocean on the planet. No global commerce can occur, anywhere, without U.S. knowledge, protection and oversight.  I believe this is an evolutionary miracle, stemming from the aftermath of World War II, that has allowed for a completely safe and consistent economic globalization vis a vis sea lanes.  Nevertheless, it is arguable to what extent a global reserve currency like the USD can stop playing that role as long as it is underpinned by a military that also secures everyone else’s economic future.  (And, the Chinese know this and are taking steps to ensure that dollar hegemony is not guaranteed in this regard.)
 
Disclosure: Healthcare, commodities.

 

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Thank you Robb

Posted April 29th, 2010 by Federico Parra

Thank you Robb.

For this gift, and for putting so much energy and effort in
the real-ization of the Integral Vision.

I hope the best for you and your people,

take care.

Federico 

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Beware indeed

Posted April 29th, 2010 by Tom Clearwater

 Nice overview, Robb.  IMO, the world is sailing in uncharted waters.  Governments' abilities to financially act to stabilize further large perturbations look basically tapped.  This suggests that, on a world scale, we have shot our flare and have little option but to stand by and watch developments as they unfold.  

My deeper feeling for the medium term is we'll see material instabilities in what unfolds in the next several years.  Averaging across these instabilities, and barring a highly destabilizing event, developed economies will likely return to at best tepid growth (2%) while developing economies will double or triple that depending on the country.  One bright light on this particular horizon is that countries like China have in the last many years slowly, but materially, delinked from US and European consumption to drive economic growth.  China, for instance, recently reported its first trade deficit.

This likely (almost certain IMO) difference between developed and developing economic performance will draw money to developing economy assets, including to stock of companies active in developing economies, to developing economy stock and to commodities required to feed development.  Because money is gushing into the monetary base at a never before seen rate, each of these target assets look to me ripe for bubble formation.  Market increases over the last several months are already the second largest in history; they will become the largest with only a small further run.

God knows what will happen when interest rates rise.

Then consider that oil production looks to be peaking, with realistic estimates showing a peak in the next four years (conventional production has already peaked).  We currently are facing $85 oil near the trough of the worst recession since the 1930s.  With a small uptick in consumption, that price will reach triple digits.

I feel we're in a birth canal with pressure building.

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Excellent Post

Posted April 29th, 2010 by B Snow

This was a refreshingly real post. Glad to see that Integral folks of macro-level trends, dangers, and future scenarios, and are thinking about them.

Now the key question: how do we respond to the coming reality, assuming that scenario 3 is real? In my opinion we need not only personal financial strategy, but also international financial strategy. That means that nationally we have a strategy to grow our money, rather than just tax, spend, and print it. We need a regulatory system that makes sense (again, look to Australia), and we need need a core group of exceptionally smart AND moral people that basically put their heads together, forecast future scenarios as you have here, and then begin creating future scenarios that will secure future stability, prosperity, and well-being for Americans for generations to come.

Internationally we build institutions that credibly decrease global anarchy, create conditions conducive for developing countries to adequately capitalize on global markets, disincentivize dictatorships, coordinate international regulatory, fiscal, and monetary policy, democratize the World Bank and especially IMF voting structures, ensure that the IMF has the capacity to provide global liquidity, and correct or at least disincentivize global BOP imbalances.

All easier said than done. "Doing" will entail long political battles, many hard lessons, and of course a search for what works. Maybe the silver lining is that in the long run resources will be reallocated more efficiently, democratically, and morally (we can only hope). Perhaps we are seeing shifting economic tectonics that will finally create a global political and economic order that is stable, wealth-creating, and fair (not to mention clean -- AGH!). But adjustment is always painful, and it is those who will lose their jobs, see their wealth, security, let alone happiness be destroyed in this process. If the doomsday scenario 3 is true, we will see this in the US and around the world. I think part of being "integral" or whatever means using skillful means, and making targeted efforts. So if we are going to act integrally on this global stage, we would do well to keep those most hurt by such adjustment well in mind as we create the future we want for ourselves, families, country, and world.

Just some ramblings. Thanks again for the post!

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Thanks

Posted April 29th, 2010 by Timothy J Melody

Thanks Robb, I think you should indeed keep more content like this coming and coming and coming.

I can see now even more directly how this ties in to the conversation we were recently having.

The big point: this is an urgent matter because you need a solid economic base to sustain an Integral worldview.

And you certainly need a solid economic base to build and broaden an Integral worldview (and reality) on a wider scale. When any single quadrant collapses, the other three suffer accordingly. So too, however, in the opposite direction.

I stumbled upon Right Bucks yesterday and greatly appreciate this contribution as well.

Thanks, Tim

This sense of urgency to change and translate and re-make the world is really, at it’s most powerful and important root, a sense of urgency to newly change, translate and transform one’s own world. The gospel is not for everybod

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Nice post

Posted April 29th, 2010 by Brent Simpson

Robb, thanks for the post it was informative. I like the tripart nature of your post... But, I think sadly the indicators point more towards the latter over the former of the three options you are presenting here. To give you a few reasons why...

1) The actual bailout is not 800 billion it is in fact over 28 trillion (when you add this fact to our present inflation this is a real blow to the dollars power). [this post shows 23.7 trillion, but is an old link... I can't find the link showing that it is in fact presently at 28 trillion].

2) The fact that many are calling again for another similar bailout in the near future. Such as helping to bailout Greece and other 1st world countries.

3) The apparent fact (from reading books like "The Creature From Jeckyll Island) that indeed bailout is predesigned into the very fabric of the fractional reserve system. That although America has never suffered this fate, the predesigened nature of these bailouts has hit really a majority of the worlds countries and only now the hen is coming home to roost (as it is America that is the worlds central reserve currency) and they have not yet seen hyperinflation in their dollar. 

 Oh, and it may be laughable but I am in fact taking up the whole farming thing by moving (potentially permanently) to Ecuador to take up permaculture in the Amazonian Forest in just three days!! So blessings to you good sir and I really do hope that Integral Life thrives, God knows it's needed ;)

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Yes Exciting times

Posted April 29th, 2010 by Allan Hall

Great post Rob. 

I think that we need to be really aware of the bubble of privilege that we live and the possibility that things could turn either way in the blink of an eye. Here is New Zealand we are so dependent on the global economy.  The more you study the situation the more understand that you have of how incredibly complex the matter is.  We must continue to work to increase our capacity for care comprehension and compassion so we can offer better solutions to the matrix. Growing our way our of it globally seems like one of the only solutions.

Keep up the awesome work I have been a member for many years now and enjoy the monthly CDs and DVD.  They have had a great affect in many peoples lives. All it takes is one drip that causes a ripple that starts a wave that makes the whole world stand up and take notice.

Namaste

Al

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Integral application is exactly what we need

Posted April 29th, 2010 by jrigzintute

Hi Robb:

Thanks for that excellent post. As a long time integral follower/member who has been out of the loop for the last year or so, I'm thrilled to see this kind of post. Just a glance at the responses makes me quite excited to see the equally engaged thinking of various members here.

Integral theory literally changed my life and gave me some powerful operating and organizing principles. And now I am quite hungry for practical applications of that theory in my personal life and in community. This article is a great example of that for me.

As a privileged middle-class Canadian, I have pretty much lived my life as if money would continually fall from the sky, without too much effort on my own part. And in a certain respect, that's kind of how things have gone. But my own advancing age, and the instability of the world have made me much more aware of a personal need to get my financial house in order. And more than that, to have some organizing principles with which to do it. I find your article really hits home on this level, and I welcome much more of this kind of nuts and bolts application of integral theory in the coming months and years.

Here in Canada it is looking reasonably likely that your second scenario may apply. Our banks were never terribly far into  sub-prime lending, and our deficit and debt levels have remained much more manageable, even through the crisis. But as the mouse living next-door to your elephant, we could easily get crushed by too much economic and social lurching south of the border. So we have an interesting balancing act to work out.

I don't have too much of value to add to the discussion, but want to express my appreciation for your points and the way they will be influencing my financial decisions as we move through these interesting times.

Rigzin

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Bravo and three cheers

Posted April 29th, 2010 by Steve Redmond

Robb,

I will join the chorus and say how much I enjoyed the post. Judging from the comments it looks to be a big hit. I think your three scenarios are right on for covering the gamut of possibilities when dealing with systems within systems within systems.

Just for fun, I would read the tea leaves as 30,60,10 percent for scenarios 1,2 and 3 respectively. Although I will disclose that I have recently tried to figure out what it would take to short Treasuries. Would love to hear what everyone else thinks.

I will also add that even though I was incredibly inspired by the post, I was also a little depressed about the current state of Integral Life/Institute and their prospects for scenario 3. I had no idea how severe the downturn in donations were over the past few years. I truly wish I could do more but I'm afraid I'm a decade or two away from offering anything meaningful (if all goes well :). However, I am going to upgrade my account to do a little more and encourage others to do the same if they have the capacity.

I have always had investing as a practice/hobby of mine and it has become part of my integral practice. I have to admit your recognition of it's importance really felt nice for me.

I would like to add a few items to your wonderful macro level vision.

One would be the importance to live below your means and, as you have implied, to use the leftovers to build wealth with purpose. I want to do more than my 7,000 people, much more, and it all starts with living below your means. There is also a  little side benefit to this. There is a tremendous amount of self-discipline and shadow work that comes along with it.

Second, if you understand Integral and the associated development models you can see value in corporations and leaders that others can not. After all, that really is how to excel in investing, to see value where others can not. You can appreciate the value of a lower left culture of a Google or Berkshire Hathaway. You can see the core values of a John Mackey vs. a Richard Fuld (Lehman Bro's) and how that translates into a better organization. You will be able to spot that new young integral CEO and ride along with her success. You will be first in line on the day Integral Life wants new investors!!

Disclosure: Berkshire Hathaway, Whole Foods, Google

--

Steve Redmond

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Thank you, Robb

Posted April 30th, 2010 by David Marshall

That was very informative and helpful.

I would just like to add a Zen Buddhist perspective from Shunryu Suzuki. It may look to some as though he is suggesting some kind of spiritual bypassing, but I don't think that is what he is doing. I think, among other things, he is suggesting action beyond fear:

 

 

Our belief is that if the Dharma wheel is turning then the material wheel will be turning too. If we are not supported by anyone, it means our Dharma wheel is not actually going. This is Dogen Zenji's understanding, and I have tested whether it is true or not, especially during the war when I did not have much to eat.

Most priests worked to earn some money to support themselves and their families. My belief was that if I observed the Buddhist way faithfully, people would support me. If no one supported me it would mean that Dogen's words were not true. So I never asked anyone to give me anything. I just observed the Buddhist way without working as a teacher or as a clerk in the town office.

I raised some vegetables and sweet potatoes in my temple garden. That is how I know how to raise vegetables pretty well. I had a spacious garden in front of the temple, so I dug up the ground, took out all the stones, and put in manure. Some villagers came and helped me, and we grew vegetables, and we had a good crop.

One day my neighbor came to help me cook. When she opened the rice box, there was no rice at all. I had a pretty big rice box. She was astounded, so she brought me some rice. It was only a little, as she didn't have much rice, but then my neighbors and members of my temple collected rice. When people found out I had a lot of rice they came to the temple, so I gave my rice to them. The more I gave my rice to them, the more rice I was given.

At that time most people who lived in the city went to the farming families and exchanged whatever possessions they could for food: potatoes, rice, sweet potatoes, or pumpkin. But I had no such difficulty. Most of the time I had plenty of food, but I didn't feel so good eating something different from other people, so I tried to eat the same food as they did. Here at Tassarara the food is wonderful, strong, and rich, in comparison to the food we had in wartime. So I have not had any complaint about the food. If we observe our way strictly we will surely be protected by Buddha. We will trust people, and we will trust Buddha.
 
Shunryu Suzuki, Not Always So: Practicing the True Spirit of Zen, pp. 66-7
 
 
 

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Appreciate this...

Posted May 1st, 2010 by bonnittaroy

Thanks Robb. Very much appreciate your analyses ...  particularly good in noting that what direction the economy/ world scene takes on, will be deemed "good or bad" depending upon one's perspective/ level/ personal situation (i.e. whether you are an asset holder or a debtor; young or older; healthy or not; Chinese or American)...   I don't pretend to understand the machinations of the market... but I think it very interesting your post-script about the US Navy. It seems to me that the current situation is grounded in geopolitical power which at the end of the day is basically "might making right" -- a result of 1) the various military conquests in the New World and 2) the position of the US after the 2 WW's -- that is one overall pattern that IMO enfolds everything else in its wake, and is, as you point out, clearly indicated in the relationship between naval presence and the danger to the dollar. Would the future of the dollar qualify as "a clear and present danger?" - the idiomatic measure for US military force anywhere in the  world? I think so, yes, if you consider that "military presence" is already a very real "force."

Not that I am offering this up as a critique. I think this is a huge national "shadow" -- and that any analysis of the world situation must include this over-arching aspect, and the question of the role of the US (or US-included alliance) military power in a future we would like to see emerge. Is it possilbe, in other words, to de-couple financial security from forceful means? If not in THIS reality... it would be interesting to thought-experiment one in which this would be possible, and try to glean some interesting alternatives.

 

Bests,

 

Bonnie

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Appreciate this...

Posted May 1st, 2010 by bonnittaroy

Thanks Robb. Very much appreciate your analyses ...  particularly good in noting that what direction the economy/ world scene takes on, will be deemed "good or bad" depending upon one's perspective/ level/ personal situation (i.e. whether you are an asset holder or a debtor; young or older; healthy or not; Chinese or American)...   I don't pretend to understand the machinations of the market... but I think it very interesting your post-script about the US Navy. It seems to me that the current situation is grounded in geopolitical power which at the end of the day is basically "might making right" -- a result of 1) the various military conquests in the New World and 2) the position of the US after the 2 WW's -- that is one overall pattern that IMO enfolds everything else in its wake, and is, as you point out, clearly indicated in the relationship between naval presence and the danger to the dollar. Would the future of the dollar qualify as "a clear and present danger?" - the idiomatic measure for US military force anywhere in the  world? I think so, yes, if you consider that "military presence" is already a very real "force."

Not that I am offering this up as a critique. I think this is a huge national "shadow" -- and that any analysis of the world situation must include this over-arching aspect, and the question of the role of the US (or US-included alliance) military power in a future we would like to see emerge. Is it possilbe, in other words, to de-couple financial security from forceful means? If not in THIS reality... it would be interesting to thought-experiment one in which this would be possible, and try to glean some interesting alternatives.

 

Bests,

 

Bonnie

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Keep them coming

Posted May 1st, 2010 by luis costa

Hi Rob,

Just to let you know that although I look to Integral Life for spiritual material, I am actually overly interested in real-world affairs, now that I can start to situate them within the whole aqualything, showing the way we go and the point we're at. And I am even more interested on Integral Life’s views on them, which always remind me of how young my understanding is. And that should be the case with a few, if not many of us. That's why we come for integral after all. Besides, your integral view is developed enough to became a pleasant lesson, whatever specifics you choose to look upon to start with. Thank you for this useful post, again, and keep on with them... you should have a column. Love, luis

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Playing friendly devils advocate

Posted May 2nd, 2010 by Christine McDougall

Hi Robb,



I would like to play friendly devils advocate (or is that positive deviant?) in reply.



Your opening line, “Your economic stability is critical to your personal development.” I am not sure about this. Critical? Many people learn the most by having an instability. They might learn things like creativity, ingenuity, entrepreneurialism, collaboration, humility, a deep understanding of value...True some people become paralyzed by instability, but others truly rise through this in the most remarkable and innovative ways.



If we look at the structure of our economic system which I do believe is in the process of unraveling, it is built on a platform of endless growth in the exterior...more stuff, more people, more weapons, more, more.... Some of us know that this is unsustainable. The growth that needs now to occur is in the interior. Not just the interior of the human, but in the interior of the very system. In community, in collaboration, in invisible aesthetics, like design.



What most people do not see is that the current economic model is also built on the principle of scarcity. This is so intrinsic to the design of our system, that like a fish can’t see water, we simply do not see the level to which we are embedded in this. In very simple words, in order for me to eat/survive (the coming economic collapse) someone else has to lose. This is our current model.



Take for example gold (and other precious metals), which many smart people cite as very important to stockpile in order to survive any coming collapse.



If we really are to practice integral, we must be mindful of the total cost of us stockpiling gold. For every 2 ounces of gold extracted, 20 tones is the norm of earth that needs to be mined. At what cost to the environment? At what cost to the communities that have made the mine areas their homes for hundreds of years? At what cost to their health and well being? And then what about all of the other costs? Like transport.. (For an article on the field effects of our every thought at action please see www.positive-deviant.com/field-effects.html)



I personally see that what is coming is a breakdown in the very system that you discuss in your portfolio building. We are moving towards a completely new economic model which makes all of the old obsolete. A model that is not built on endless exterior growth and scarcity, but on a higher consciousness of the field effects of everything we do.



To me building a portfolio such as you suggest simply sits right in to our current model. At its core it has scarcity. In order for me to survive, others cannot.


Now I am a mother and I can put my hand on my heart and say I would do anything to support the survival of my daughter. However, I know it is also time to ask a different set of questions, particularly if we even consider approaching “we are all one” as a truth.



Questions such as...


Is there a model that ensures the healthy emergence of all humanity? Surely that is the one we would be seeking?


Is there a new way of being in value exchange that honors all of life?


Are we integralist able to demonstrate now, a bridge that crosses from the very broken old model, to the new, yet to be born model? If so, what is that bridge? And I am specifically talking about a financial bridge. A way we do business together. Surely we need to be the leaders in this new model?



I am not anti having a strong financial foundation. However, I do believe that the future of a strong financial foundation is not the one you discuss. The fringe events that are likely to occur in the next few decades will catch almost all of us unprepared. The unforeseen like an attack on the computer cloud and a loss of ALL data (including the data about the amount of money in our bank accounts).



 What does that mean to us as individuals with families to feed? Well, for a start, we have to start to recognise that it is not OK for my child to survive when millions do not.



The skills that we need more than anything are creativity, flexibility, entrepreneurship, a deep understanding of value (the conversation on value is well beyond the scope of this reply), the ability to collaborate, build community, ask much better questions; these are the kinds of investments I am interested in. And  to invest my money in people who are living this way, who are building the models of the future. Those rare individuals who really get that the very system is breaking down and a new system is being born, and they are working their arses off to facilitate the transition. That is where my time, energy and money is going. And it is also what I am teaching my daughter as I develop her resilience and creativity.



I am an optimist. Where my knee jerk response is scarcity (and I have to fight this shadow element in me every day), I have to drag my fear of lack, fear of loss of security, fear of starving, fear of no money...what ever this fear is, and I have many..back to another place. A place where I truly believe in the creative ability of my fellow man, but only, and here is the rub, only, when they are pushed to the very edge.



We emerge through emergency.



All of our certainties...our investments in houses or stocks or bonds or precious metals..all of these things offer no security in the long run. History has shown this time and again. The greatest security is in our ability to rise through adversity and discover new and better pathways. This is the very principle of emergence. Couple this with a view that shifts from scarcity, to recognising where there is plenty (plenty of creativity, plenty of energy, plenty of talent, plenty of love..the very principle of positive deviance)..or even better, to discipline our thinking to seek the plenty rather than contract to the scarcity, this is where our healthy future lives.





 Christine McDougall, MCC

www.positive-deviant.com

Challenge Thinking, Inspire Action, Create Change


 
 

 

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Re: The Hook

Posted May 2nd, 2010 by Steven Nickeson

The opening sentence of most written works...the hook...almost always casts its light beyond the spot the author wants to illuminate. I have studied this phenomenon for years as a professional writer/editor.

"Your economic stability is critical to your personal development"  is a perfect example.

Further illumination #1: This statement if not true except for those whose personal development is contingent on something other than their person.

Illumination #2: This ambiguous statement generates an unwritten, contextual corollary that is true and goes to the heart of the matter--"Your economic stability is critical to the life and health of the Integral Institute."

Illumination #3: Apparently there is an large (but dwindling) number of Integral Provincials for whom that opening statement, that hook, is unfortunately true. I find this touching though not to a very large degree.

Over the past 35 years or so, I have watched the continual commodification of personal/spiritual developmental "tools." This process has instilled a perception that has become a given for a great many that one's development is contingent on at least three things: 1) One's discretionary income. 2) One's discretionary time. 3) The availability of product.  I am not going to condemn this cultural turn out of hand because I tend to look at it from outside its particular circles. I am a pre-boomer and as such might have been born into the last U.S. generation that was not essentially socialized by its peer group. Therefore I am not going to gainsay the needs of those who are comfortable looking to something peer-like such as Integral Institute as in loco parentis or anything else that will get them through their nights. Nor will I gainsay the needs of Robb Smith who wrote the above piece as a hired hand who's ability to hang onto his job depends on his skills in selling product. I thought it was a nice tactic to spread a little wisdom and investment insight around through the customer base in an effort to at least keep them from bleeding so much red ink in these hard times. After all, their discretionary income is his primary income. (Though I suspect more of his customers have maxed-out credit cards than active portfolios.)

I guess what puzzled me about the Smith's piece is why he had to appear so altruistic with his advice that his hook was such a transparent canard to a reader who might, for instance, know that personal development is not contingent on financial stability but on a couple of profound values, a disciplined consciousness and an abiding will.

Thanks for your attention.

Steven Nickeson

Integral Liberties