Jul 28, 2009 3:35 PM GMT The lack of resources will eventually force us to make the switch from a credit-based system to an equity-based system. Instead of possessing Mini-Coopers, we'll have access to Mini-Coopers. When we stay at short-term lodging, the capital cost of the stay will go into a capital account -- our own -- rather than going towards debt service and building up equity for investors who are taking huge risks due to the prevailing capital structure. Boomer retirement funds -- indeed, all retirement funds -- have up to this point gone towards making a few folks and their interior designers ultra-wealthy. It's not sustainable and it's not even that gratifying.
Those who are mindful are beginning to realize that only an entirely
new operating system can prevent the collapse of civilization. However,
to date, no one has presented such a system. This presentation outlines
a system that has the potential to serve as a viable replacement for
the current paradigm.
Media is full of stories of people who have lost their retirement funds thanks to unscrupulous investment managers and greedy executives. For a taste of what is to come for rank and file workers, watch this Frontline piece on retirement, filmed in 2006. We have just begun to see how big this asset bubble is and how it will impact us. I predict that retirees will only get 10 cents on the dollar (late 2007 investment statement dollar) for both defined benefit and defined contribution programs -- indeed, both types of programs may disappear completely. As a side note, the commercial real estate downturn has only just begun its fall and it will fall for at least 5 years.
One idea that may come to pass is that of a "safe" bank that the government either owns or highly regulates. All other investment vehicles would be on their own with respect to government backing. Investor beware. This may happen just as soon as the government figures out that they are throwing money at a problem that can't be solved. When will the government back off? When they are into this to the tune of $5 trillion? $10 trillion?
I'm reminded of those exercises in trust that people play at corporate retreats. You know, the one where you fall and trust your colleagues to catch you. Unfortunately, the system that we currently operate under will not catch you. It was and is based on greed rather than trust. A system that will catch you can be devised, but it will look nothing like the retirement system of today. Indeed, it may not even be based on retirement. It will likely be based on engagement -- engagement with all that surrounds you till the day you die. And investors will likely demand that it be easy to understand.
The Smart Paradox
I recently watched and listened to a portion of the presentations at this conference. How can we be so individually smart -- as all these presenters appear to be and this is just a fraction of the smart people in academia -- but yet so dumb as a society? Is there some way to harness this intelligence in coming up with a solution to our human predicament?
Many of us will find that our retirement savings will be substantially eroded. From an organic standpoint, this was to be expected. In nature, it is only prudent to store enough to get through the winter season. Our retirement plans assumed that we could store up decades worth of "nuts" and this is just plain nuts in an organic or natural world -- the world that we will revert to either willingly or unwillingly. Bottom line is that most of us will be working for much of the rest of our lives. Depending on how we structure this work, it can either be pleasant or a hellish experience.
Most of us will not be able to pay for expensive college educations for our children. "Higher" education will have to be restructured and it's about time.
We will be forced to transition away from an energy-intensive lifestyle to one that uses less energy. This will mean smaller and more energy efficient living quarters. It also means that big, inefficient homes will decline -- yes, even further -- in value.
We will shift from an emphasis on financial engineering to sustainable development engineering.
Currently, we are all scrambling to make a living. This scrambling makes it difficult to be bodhisattva-like. We can transition to a system that encourages us to find right livelihoods.
Independence will mean being near our food sources and possibly having our own paradise -- a walled garden.
It makes sense to integrate education, work, and leisure in a comprehensive institution/system that also integrates Maslow's hierarchy of needs.
Where would you rather have your wealth stored? In a fund in which the principles have multiple houses and a big office or in an asset-backed account that is administered by a group of independent scholars that have taken an implicit vow of non-accumulation and sustainable living?
A fitting "post"script:
Right living is no longer the fulfillment of an ethical or religious
demand. For the first time in history the Physical survival of the
human race depends on a radical change of the human heart. However, a
change of the human heart is possible only to the extent that drastic
economic and social changes occur that give the human heart the chance
for change and the courage and the vision to achieve it. [p.9&10]