Fear & Greed: Part 2

It takes a small army to conquer a country of millions and control its resources,

A thousand living in poverty to create a nation of millionaires,

An entire continent of people subjected to corruption to secure the exploits of a thousand billionaires or a single conglomerate,

And unknown suffering to support the global domination of a single cartel;

All with the same outcome in mind; Greed.

Throughout history, excess wealth, control of resources and acquisition of power have had one common ingredient. That ingredient is the human resource. The manipulation of the human spirit, body and soul. Until the dawn of paper money in the 20th century, all wealth was acquired through the cheap or free labor of many to satisfy the appetite of the few. Today it is estimated that 90% of all wealth is in paper form, backed by nothing except a signature and promise to repay with interest. Although large quantities of raw commodities like Gold, Silver and Crude Oil have been mined and extracted, an equal amount has been used and/or returned to the earth. An ounce of Gold has roughly the same purchasing power as it did 2000 years ago. Slavery, the birthparent of modern capitalism is surely a valid example of wealth by human labor. Over 400 years of free labor, free resources and the political will to maintain the status quo is the living legacy of the majority of wealth in America today, particularly among European Americans.

That being said, it is not necessary to dwell on current conditions or modern times to understand the short term benefits and long term consequences of greed. The evidence is as old as civilization itself. Listed in the Bible as one of the 7 deadly sins, originally considered “unforgiveable” even in the eyes of a merciful God, greed, or a lust for money, has always been the devils tool, referred to as the root of all evil. It should be noted that, according to scriptures, it is the “love” of money, ie. an overwhelming thirst above all else to possess wealth that is the evil, not the money itself. Many lessons from a variety of religious writings from the bible to the Koran teach of the dangers of a focus on one’s own selfish fortune rather than the betterment of the community. A familiar quote from the Bible states “It is easier for a camel to pass through the eye of a needle than a rich man to go to heaven”. The meaning of this is certainly up for debate, but perhaps the way in which the wealth was attained versus the wealth itself is the damning aspect. It is this writers’ opinion that the conditions which created the wealth, or how the wealth is managed say more about the man than the wealth itself. If you research the philanthropy of many wealthy people, you will come to realize that not all wealthy people are in fact greedy.

If a nation’s wealth is procured through the subjugation of an entire race of people, and the resources squandered by trickery and deceit, is this the underlying cause for every major society’s eventual downfall? In the Jewish tradition, every 7 years all debts were abolished so as to even the playing field for all to prosper, to assist the poor (debtors), and to avoid offending God. Many believed that strict adherence to this prophecy determined whether feast or famine would follow, with interesting historical proof. Even Jesus, here to tackle a far greater concern, the eternal soul, found himself in a debate with the Roman empire over taxes and to whom wealth should be rendered. It seems it wasn’t enough to rule the world and be proclaimed a deity; Caesar wanted it all. Even those who would argue that the crucifixion of Jesus was a holy prophecy and in no way a worldly issue cannot deny the economic circumstances that created the outcome.

In any event, we must study the wages of conflict throughout history, which is always resource and wealth related. Where diplomatic means fail, the only alternative is war. The result; spoils to the victor and poverty, loss of freedom and resources to the loser. After the smoke clears, war is essentially a redistribution of wealth through destructive means, or the tool of greed.

Additionally, the greatest economic stimulus for the state has always been war. Whether it is reparations, structural rebuilding of war torn regions or the logistics that fueled the destruction itself, both participants and recipients reap enormous rewards. In many cases, even the losers rebuild to a greater society over time.

In Europe, World War II was fought over Germany’s attempt to conquer the world, the theft of wealth, enslavement and attempted annihilation of the Jewish people. The economic state of pre-WWII Germany, and the forced procurement of wealth and resources are the main causes of the conflict, period. For Japan, the goal was a race for resources buried in the sands of the Middle East by way of Indo-China. Reparations and rebuilding from the damage of that engagement forged the economic environment of today, both in Germany and Japan. If not, how can it be that these two countries, both losers in WWII, devastated by the ravages of war (including nuclear attack) are two of the most powerful economic forces of today? Clearly the U.S. war machine, which supported the war effort before, during and after its conclusion, propelled America into world domination both militarily and economically.

What is most intriguing in this aspect is not just the right and wrong or the how and why, but the long term consequences and sustainability of the participants. Can greed sustain itself despite its’ poison roots? Can such roots ever produce anything but poison fruit? Can that fruit survive the inevitable karma known as time? In the mere 70 years since the end of WWII, the question remains unanswered and is increasingly debated.

As war continues to solve problems, feed profiteers, stimulate and devastate economies, the question of who and how will remain. Nothing has changed, only the circumstances.

So, how does all this relate to trading and investing? As stated earlier, the paper money of today is only a modern instrument of greed and the capitalistic attainment of wealth on the backs of others, make no mistake. In trading and investing, a clear understanding of how the markets work and why is essential to long-term success. Just as it is possible to be a noble person in a corrupt environment, or good can come from the acquisition of wealth and power, (even through conflict), it is possible to create wealth in a positive manner in the markets. It is essential that you understand the game, the price of success and play it well. An investor who enters the market simply to make money will surely lose it. This is the epitome of greed. Most seasoned traders call this tuition; the price you pay to learn how the system does and does not work.

A well-planned strategy executed with discipline is the only way. There is only one Tao (way), but many paths to reach it as taught in the Martial Arts. Everyone learns this maxim sooner or later, one way or another. There are no exceptions. If greed is your sole motivation in trading, step back and reconsider your intent. As the saying goes, “a fool and his money are soon parted”.

A man who knows his enemy and himself will prevail in all endeavors, as Sun Tzu once wrote.

It should be noted that, for example, amateurs enter an investment with a goal of how much they want to profit, while professionals enter knowing how much they could lose.

Understanding risk through analysis and careful calculation, knowing the tolerance (in other words, how much you can bear to lose), and managing the event are all key elements to consider when attempting to acquire wealth. History suggests that we should be diligent in our assessment of who is paying the ultimate price for the wealth we acquire, what are the long term consequences of our success, and just how much can we extract from the masses before the peasants storm the gates of our mansions. How much is enough and how much is too much?

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