Author Chris Brady's Leadership Blog

"In Charge of the Game"

In today's political environment there seems to be two sides: 1) those who think the government can and should be in charge of solving our problems, and 2) those who think the government is evil and should be restrained. These are oversimplifications, to be sure, but I believe they at least come close to making a little sense of where people stand. 

Each of these viewpoints can easily run to extremes. Those of the first viewpoint can readily get caught up in theories of government that, in the past, have led to totalitarian states, oppression, and state-sponsored genocide. Those of the second viewpoint tend to take the form of "founding father worship," a condition whereby we deify the men who gave us America's founding documents as though they were infallible.

It is with this second viewpoint I wish to take momentary umbrage. For, although I believe America's founding to be a spectacularly singular event in the history of freedom, I do believe the founders were fallible, fallen human beings like the rest of us.

I also believe they made at least one huge error.

Lemmesplain.

Yesterday evening I was out with my family. Somehow, the topic of the game of Monopoly came up. Recently, my two youngest children, six and eight years old, have been completely enamored with this game. And boy, are they good at it! In one knock-down-drag-out-winner-take-all match, my six year old son cleaned my clock and left me destitute, all the while subsidizing his sister, who was not in much better shape than myself. I marvelled at their mathematical skills, their grasping of the concept of mortgages, and the agility with which they would quickly become real-estate tycoons. In yesterday's discussion, it came up that in a game between just the two of them things had progressed so far that they actually broke the bank.

"What do you mean?" I asked, smelling a rat.

"We made sooooo much money the bank ran out," answered the six-year-old with pride.

"Yeah, so we made more," chimed the eight-year-old with a freckled grin. 

"You did what?" I asked.

"We made more money."

"Just like that?"

"Yup. It was easy, actually."

Now I knew I was onto something, so I pressed further, asking, "Who gave you the authority to do it?"

They both shrugged their shoulders and answered, "We did."

"And why did you think it was ok to do?" I asked, going for the jugular.

"Because we were in charge of the game, silly!"

Out of the mouth of babes! You see, what my two cherubs had done was nothing more than the obvious - nothing more than governments have been prone to do any time and every time they find themselves in a similar jam, and, "being in charge of the game," who's to stop them?

The founding fathers put into documentary form many principles from the greatest minds of statehood from throughout history. They sought to chain the monster of government and make it subservient to the dictate of the people. Balances of powers, states' rights, a Bill of Rights, and the rule of law were enshrined in founding documents that began a great experiment in freedom unmatched in world history. However, they overlooked at least one enormous point: whoever controls the money controls the game. By assigning exclusive control of the money supply to the government alone, they dangled a carrot of irresistable size in front of the noses of power mongers and opportunists. It was only a matter of time before such a towering source of power would be abused. Without competition, due oversight, or powers of restraint provided to the people, the exclusive authority to control the money supply could eventually be the Achilles heel of the entire government.

Which brings us to today. Both sides of the political divide (the two viewpoints stated above) have found that once in office, the magic machine of money creation is easily at hand to enact their policies (no matter what their campaign rhetoric had been). The benefit is that the populace does not have to be asked, and no new taxes need be imposed. One political side promises more big government as the answer, and funds it with trillions of dollars created out of thin air. The other side yells and screams about the socialism of such programs, and then, once in office, reaches for the same easy-money spigot. The bottom line is this: when something as powerful as controlling the money supply is governed only by the false notion of self-restraint, there will be no restraint. 

"What happened next?" I asked my young Federal Reserve Chairmen.

"We made more, why?"

"Oh, just wondering," I said.

"But Dad," interrupted the eight-year-old, sharp enough to see where I was heading, "It didn't cause prices to go up!"

I was so proud of her, for she remembered the lesson of inflation I had tried to teach them a couple years ago. But she was also missing another aspect of the game.

"That's because the rents are fixed," I answered. "They are printed on each card and cannot change. If they weren't fixed, they would go up every time you expand the money supply." (Don't even get me started on the evils of price-fixing! That's another monster altogether!)

"I know, I know, Dad," she said with a coy smile, "But it's just a game!"

She was right, of course, and Dad didn't feel like infringing any further upon childhood joy with real life economics. But when it comes to real life, it is not just a game.

So what could the founders have done differently?

The concept is called "privatized money," which involves allowing the people themselves to come up with, distribute, and regulate their own money supply based upon open competition. There would be several at a time, all vying for our usage based upon merit alone. No authoritative government would be handing us one single choice and forcing us to accept it as "legal tender," all the while affecting its value with its hands on the levers behind the curtain. Privatization would be like choosing amongst Visa, MasterCard, and American Express based upon who we thought had the most stable, reliable, well-known, and dependable money. Perhaps each would offer a backing and redemption in gold. It is not such a crazy idea. Deregulation and free markets have vastly improved such things as airlines, telephones, and even postal service (Federal Express, Airborne, and others have carved a nice niche in the space around the government's strange monopoly on mail). Privatized money has been done many times in spotty moments throughout history, at points where governments hadn't yet confiscated control. It worked. Usually it went from chaos to consolidation among a handful of worthy competitors, just like most industries.

We don't need to debate the details, however, because it's unlikely to ever happen. Those in charge of the game will never give it up. Instead, they've got to work to keep us playing along.

"Hey, you just passed 'GO', collect your $200 and pay your rent." 

 

Introducing the Concept of a Money View

How we are doing financially has a lot to do with how we think, or the construct we've built up in our minds to interpret all things dealing with money. It's similar to a World View, which is a term that seeks to describe the lens through which one sees and experiences the world. In this short clip, I introduce the concept of a Money View.

 

 

Money View

"World View" is a term recently popularized by philosophers and media pundits who debate spiritual and political matters.  It refers to the lens through which people see (and therefore interpret) the world around them.  All information and observations must pass through this lens and be colored by one's World View.

Similarly, there is another "View" I would like to propose for consideration, and I'm calling this the "Money View."  In my nearly two decades of dealing with people and their finances I have slowly awakened to the fact that how people are doing financially is often a direct result of their "Money View." Just as with World Views, there are several very different Money Views, each with its own ramifications. These include, but are probably not limited to, the following:

1.  Money as a Mystery - in which people seem to have no clue how money is made (or retained) and therefore think that others who are successful financially are somehow "lucky"

2. Money as a Master - in which one's entire life is lived out in bondage to the need for more money, or at least the drudgery of scraping by. This is often accompanied by terms such as, "I have to go to work," or "Another day, another dollar." 

3. Money as a Monster - this is the condition whereby financial pressures become so large they dominate a person's thoughts and affect him emotionally. Often at this stage relationships are damaged and health is compromised.

4. Money as a Major - in which a person applies most of his focus and fascination on how to acquire more. In this situation money is an idol.

5. Money as a Motivator - this is the condition whereby money is used to push one to higher achievement and greater contribution. This can be for both selfish or selfless reasons. Beware.

6. Money as a Manipulator - whereby a person uses his or her money to get what he or she wants out of other people. It is here where phrases such as "Money is Power" apply.

7. Money as a Minimizer - the condition in which the presence of money diminishes one's ambition. This is where complacency and mediocrity reside.

8. Money as a Maximizer - where one is driven to utilize his or her money to make a greater contribution and maximize his or her potential. This is usually much more selfless and altruistic than #5 above.

9. Money as a Monument - where money is used as a status symbol, to build a reputation, or as an attempt to establish an immortal family legacy.

10. Money as a Menace - wherein the money one has is a destructive force in one's life, either by feeding addictions or by causing fights or by dominating one's time and energy with the care and maintenance required to sustain it.

In considering this list, it may be helpful to ask yourself some questions, such as:

1. Which "Money View" best represents where you are right now?

2. Which of these "Money Views" have you encountered previoulsy in your life?

3. Notice that several of these "Money Views" are quite negative. What are you doing to make sure you are living under a positive and productive one? Which one would you choose?

4. What are you doing to grow in your financial understanding and education?

In each of the above views we see that money is always used as a Means. The key question in money matters is therefore, "As a means for what?" This is why the Bible again and again treats money as a heart issue. Money in itself is not evil, but the heart is desperately wicked, who can know it? Money becomes a dangerous or productive tool, depending upon the heart that wields it.

Make sure you choose your "Money View" deliberately and intentionally, don't simply let it choose you. Pursue some financial education to enable you to be in charge of money instead of it being in charge of you. And guard your heart when it comes to money, in plenty or in want.

That's my view. 

 

 

Rising Above the Stage Show

'Get out and vote,' we are told; 'Be informed and get active,' and so we who value our freedom and love our country run like a pack of lemmings to a stage show draped in red, white, and blue. 'Hooray for our side,' they yell, 'All of our problems can be neatly packaged in a ten second soundbite and blamed on the other side,' we are repeatedly led to believe.

The inherent problem with our partisan political process is that the very essence of its structure imbibes a false assumption. We are invited to participate, but in order to do so we have to 'choose a side.' Then, having chosen, we are fed the long list of proper beliefs to substantiate why our side is so right and the other is so wrong.

But what if both sides are complicit in the problem, or perhaps less, what if they are both benign in their abilities to do anything about the real problems? What if neither side is totally right or wrong? What if the real problem lies above the stage show?

Freedom is the parent of some strange children, two of which are

1. blaming others, and

2. feeling guilty.

Whenever a problem gets bantered about in our national public discourse, it is usually one or both of these reactions that ensues. This is fueled by the structure of an 'our side against yours' national mindset.

For example, when gasoline prices skyrocketed a few years ago we heard from one side of the red-white-and-blue stage show that it was because Americans were wasteful and driving gas-guzzling SUVs. From the other side of the stage show we heard that those big, bad Chinese people were consuming more and more of OUR oil. There you have it, blame and guilt all wrapped up in the debate. So those feeling guilty run out and buy hybrid vehicles to assuage their pangs while others fight the urge to 'hate' an ethnic group that gets labelled as hyper-productive and stealing our jobs by being willing to work for peanuts (or, um, rice).

Closer scrutiny, however, reveals a different story. While China's growing economy (as well as those of other emergent nations) has increased the demand for oil, it is at best only one of the three main factors in the increase in oil prices, and it might be the least significant. What really occurred was a financial commodities bubble caused by a complicated set of games-playing in the commodities markets by banks operating with secret and unfair federal exemptions to bring investment money into a place it was never supposed to be. 

Picture the commodities trading floor as a closed system in which producers of commodities (oil, wheat, corn, etc. the 'stuff' that everyday people need and can't do without) meet purchasers of commodities (like cereal companies, etc) to buy and sell with each other. A small amount of 'speculators' is allowed in so a 'ready market' is available at all times for both buyers and sellers (who therefore don't have to wait for each other to make a sale or purchase). This small amount of speculators is closely regulated by a federal law established in 1936. But over time six or seven very powerful investment banks obtain secret letters of exemption which allow them government-granted monopoly status to allow 'their investment customers' special access to those markets through their trading desks. This is exactly what happened, and as a result the money invested in commodity indices rose from just $13 billion in 2003 to over $317 billion in 2008 (twenty five times growth in less than five years). This amount of money pumped into a market that can only be 'played long' (meaning, money is made by the investors ONLY when prices go up, unlike securities where money can be made on 'both sides' of the market - going up OR down) had the effect of massively increasing the prices of commodities. Of course, these prices quickly find their way to the end customer, the little guy, who is paying more for everything and can't figure out why. What's really happening is the government has allowed a small number of granted monopoly banks to fleece him without his knowledge or consent.

That's just one of the scams being run.

Another (and thankfully it's getting much more coverage these days) is the willful, intentional, deliberate devaluation of the American dollar. While the government (through the workings of its private partner the FED) pumps trillions of worthless dollars into circulation (through the hands of many of the same banking interests given such special treatment in the commodities scam above) the dollars held by average Americans become worth less and less. So while the 'little guy' is getting creamed in the commodities market and the price of everything he buys is going higher and higher, the dollars he holds to buy those things is capable of purchasing less and less.

We could also dive into the housing bubble that has left millions of Americans 'upside down' in their home mortgages while bankrupting millions of others. That would represent scam #3, and again, it was perpetrated by many of the same characters from scam #1 and scam #2 above, but I won't go into the whole vicious circle of greed and government bailouts to fat-cat bankers with taxpayer money that makes this one so sickening, because this isn't a direct factor in the oil price scandal. 

Only now, after these three revolving cons, can we even begin to discuss the growing Chinese market and its impact on oil prices. And only now can we even begin to consider the car we drive as having an effect on all this.

What has happened is the American public has been hi-jacked by a glitzy distraction called partisan politics in which blame and guilt are manipulated by the media to keep us split in a neat fifty-fifty feud. It doesn't hurt that moral issues are thrown in so that our convictions force us to lump everything together in what appear to be neat packages of "Donkey" or "Elephant." Meanwhile, the whole time we bicker and fight amongst ourselves, a bunch of cronies are robbing us blind.

I wonder what would happen if we rose above the partisan stage-show and united? What if we found common ground on all the things we could agree upon, such as freedom and justice for all, and turned our well-meaining but mis-guided furor upon the real thieves of the American dream? 

 

 

The Empire of Debt

We are taught that the United States is a Democracy, when it was actually founded as a Republic. We are told that we have free enterprise, when actually we are in the grips of a totalitarian debt empire. We are told that we are free, when we are actually locked into a pyramid scheme. Though we still live in one of the greatest places in the world, we owe it to our children to reverse what has happened. Watch the video below. 

Launching a Personal Finance Revolution

Yes. You've probably heard it all before. Spend less than you make and make more than you spend. You've got it, already. Bought the tee-shrit.

But if it's that simple, why are so many people in financial trouble?

Over 20 million American citizens are now "upside down" in their home mortgages. 

Credit card debt is higher than ever. 

The private savings rate is below 1% (up from near zero a year ago!)

Aggregate US private debt is now above $3 Trillion! Measured differently, other stats show the figure to be above $13 Trillion!

This is a mess. And it has a root cause.

In the first event of a series of live-streaming Webinars, scheduled for Friday, February 26th, 2010 at 7:00pm EST, my friend and co-author Orrin Woodward and I are going to be addressing these issues head-on. The series is called the Personal Mastery Series, for reasons which will become obvious to all viewers, and the subject matter for the first episode is personal finances. The title of the event is, Launching a Personal Finance Revolution, and can be purchased in advance here. 

The information we will present IS quite revolutionary, because it will explode most of the myths, misconceptions, and misrepresentations out there about money, its nature, and how financial goals should be considered. It is our belief that nearly everything most people have learned about money is at least a little bit off track, if not downright incorrect. Personal Mastery of proven principles, properly applied to the correct understanding and use of money, is the way out of the fog. 

In this presentation, we will make no apologies to the icons of conventional wisdom, who, for the most part, are as silly as body-builders in pink tutus.

For instance, here is just a sample of some of the "financial heresies" we will be discussing:

Spending and credit are actually addictions for many

Net Worth as a financial goal is stupid

Inflationary environments encourage a certain type of behavior, but this behavior becomes unsustainable and exposes one to undue risk

Diversification as a sound strategy is at best a half-truth

"Experts" are usually not

The herd is wrong and about to get slaughtered

If these have gotten your attention, don't miss this inaugural event. Join us for some candid commentary on how you can gain personal mastery over money and Launch a Personal Finance Revolution in your life! See you there.

  

Twitter Highlights

In our increasingly fast-paced digital world, it seems more and more thought is compressed into short little sound-bites. Lengthy, well-developed tracts are hardly read by a busy public. It is becoming more and more true that, if you want someone to read something, keep it short.

In that spirit, I guess, Twitter has taken off as a social networking device. I have personally enjoyed its interactivity and 140 character limit. If you would like to follow me on twitter, click here.

Someone recommended that I list some of my recent Tweets here as a summary. I hope you enjoy them! (And don't worry, I'll keep this list short!)

Government: the only place someone could get away with saying they're going to spend their way out of their spending problem.

Politician's prayer: Give me this day someone else's daily bread.

We are human beings, however, most of us only look like human doings.

You can tell a lot about a person by what it takes to make him/her mad.

Excellence is unwrapped by the hands of courage.

The annual US budget ought to say: "As much as we want." It would save paper, at least.

Never mistake gentility for character.

Most people don't really know what they want until they see someone else with it.

Life has no rewind, but it is being recorded.

They call it the human race, however, many people aren't even jogging in it.

Many people appear to be tip-toeing through life trying to get to death safely.

A Bloody Mess!

Conventional wisdom has a way of looking barbaric once proven wrong. 

Take, for example, the bleeding of patients a little over a century ago. Here's how it went. Someone would be sick with either the common cold or colon cancer or anything in between, and the prescription would almost always involve removing quantities of the patient's blood (in which the Bible tells us resides the very life of the person, hence the phrase "life's blood.") The "knowledge" said that "bad humors" had found their way into the blood and needed to be removed before they killed the patient.

After such a genius approach, when the patient weakened even further, the only appropriate thing to do was what? You got it: drain more blood. And what if the patient didn't revive at that point? Yup! Drain away even more. This would be done either with incisions and/or leeches, believe it or not! Sometimes, amazingly, a patient fortunate enough to receive this kind of "care" would actually recover, heaping thanks and praise upon the knowledgeable physician.

Which brings me to our government and the economy. 

Unable to see beyond their barbaric "knowledge" of how an economy works, the physicians at the FED and throughout Washington know darn well what the patient needs. Blind to the debilitating affect of their "care," these all-knowing physicians of prosperity do the exact wrong thing to the patient at the exact wrong time. Bleeding it through borrowing and spending, they await the expected recovery. When the patient seems to get even worse, what do they conclude? Of course! Even more treatment is required! So they bleed it some more with more borrowing and spending! Surely the patient will revive soon!

Just how much blood has been sucked out of our economy at the hands of these government leeches (I crack myself up) and from the cuts of their stimulus package knives? Consider the budget for this year:

$3.8 TRILLION!!!!

I said $3.8 TRILLION!!!  For ONE YEAR'S worth of spending!

Just a handful of years ago that was the sum-total of all accumulated US debt from its entire existence! Now we spend that kind of money in ONE YEAR!!!

But don't worry, $2.4 Trillion of that comes in from tax revenue, so they only have to borrow $1.4 Trillion of it!! (really quickly, calculate your share of that debt: just divide $1.4 Trillion by 300 million people. Oh, and, uh, that's just for 1 year. That doesn't include the national debt, and it doesn't include the interest that kind of borrowing is going to require. But, then again, I was never THAT good at math!)

This has gone beyond bleeding the patient. I mean, come on, we've got bucketfuls of blood all over the doctor's office: blood in the sink, blood on the floor, blood all over the walls. We've bled the economy so drastically with this "treatment" that it's become too gory for even the worst of Hollywood's B movie producers. It is a fact in special effects: too much blood and nobody will believe it. That MUST be where we are as a nation! It's so ridiculous people can't even believe it! It doesn't even look real! It's UNREAL! These geniuses aren't merely bleeding the patient now, they're chopping off limbs!

Even worse, at least the physicians of old were trying to cure patients of ailments they had nothing to do with causing. In the case of our economy, the very "physicians" who so arrogantly drain more and more blood out of the economy were actually responsible for causing the ailment in the first place!

Oh, if only our policymakers and quacks in Washington would just DO NOTHING!! Our patient is amazing! It has survived 20+ years at the hands of economic barbarians! Maybe, just maybe, it is made of robust enough stuff to still come back from the brink of death. But this can only happen if we can keep the "doctors" away from the patient.

So here's my idea: Let's get them out there campaigning, right now, all the time, without ceasing. I know, I know, it will be hard for us to stomach, but it will still be better than letting them anywhere near our patient!

And with that I've got to stop. 

My eyes are bloodshot. 

Debunking the Myths of the Great Depression

It was an average sized college classroom with round tables and cheap plastic chairs. People of all kinds filed their way into the crowding room, glancing around, searching for seats. By the time the modest program began, the room was full, with people standing in the doorway. There should have been more. Thousands more. 

Had the speaker been addressing issues of entitlement, or government handouts, or the easy money policies of socialism and central planning, no doubt, the place would have been mobbed. Instead, this speaker was giving truth: proven economic principles time-tested again and again. Truth may not be so quick to attract throngs, but it burns purer, and eventually, brighter. What happened tonight in a classroom at Florida Gulf Coast University was an indication of the tiny fires being lit by understanding around the country. It was warming, to be sure.

Lawrence W. Reed, the President of the Foundation for Economic Education, first came to my attention through my friend Terry Woychowski, who gave me a publication authored by Mr. Reed and entitled Great Myths of the Great Depression.  It's clarity and research were sparkling. I was an instant fan. Imagine my surprise when I learned that he would be making a public speaking appearance within an easy drive of my home! That's how I happened to find myself in a cheap plastic chair with other concerned citizens of southwest Florida.

I was not to be disappointed. Mr. Reed's talk was excellent; filled with clear illustrations and well-researched commentary.  Most importantly, it presented the complicated and oft-misrepresented Great Depression in clear economic terms. My twelve year old, in attendance with me, totally understood it. His notes read like those of a college kid majoring in economics. That's the beauty of a good teacher: the complicated becomes clear. This, in a very unarguable way, is exactly what Mr. Reed accomplished this evening.

If you have not yet become acquainted with the work of FEE, I encourage you to view their website and download the many free materials available. By all means, get your hands on a copy of Great Myths of the Great Depression, and prepare to throw away the falsehoods of "conventional wisdom" you've likely been taught about one of the most trying times in world economic history. As usual, the official spin is totally wrong.

By the way, getting informed about economics is not an academic exercise. Proper understanding of economics is Germain to the preservation of freedom. We cannot defend what we don't understand.  

Economist Battle

Click the following link for an entertaining video. The battle between economic theories is both interesting and tragic. Strangely, after the theories of Keynes were totally debunked, they have somehow roared back into the main thanks to President Bush and Obama. This humorous but accurate video explains both sides very clearly. In case you're wondering, Hayak has it right. Enjoy!

http://www.wimp.com/economistbattle/