Finance And Money Matters

"Neither a Lender nor a Borrower be" - so goes the old saying concerning money matters and it probably is more true today than it has ever been. To alleviate the stress imposed by concern over money, and general financial matters, we need to look at this on two levels. First a personal level, and action that individuals can take and secondly action that governments and organisations should take to eliminate these stresses - not only on individuals, but on the whole country. I have long thought that the 'City' in London was merely a high class betting shop. A claim refuted in the past by many a banker. However, since I started writing this back in 2006 we have been going through the global recession started in 2008. This was started by the very institutions that were held as the symbol of the country's stability. I remember that a while ago a leading financial expert advised the government not to rely on tax income from; I believe it was the Tote as it was believed that tax based upon taxation from betting was deemed unreliable.

A lot of anxiety felt by people is due to concerns that they have over money; a lack of it or what to do with it. Being able to say NO! raises its head once again and in the course of our daily lives we are bombarded with pressures to part with our money for something that we are persuaded is something that will benefit us considerably. However if we look at our lives and what is really necessary for us we find that most material things are not really necessary at all but fall into the category of 'nice to have'. If we all analysed our spending we would find that we could manage on a lot less, and our expenditure could be reduced - simply by saying no. The present attitude towards the 'well used' word GROWTH should be modified so that, in line with a policy on population reduction, we must think in terms of stable equilibrium for our finances.

From a family point of view this would mean replacing material things only when they become irreparable or wear out, and not succumbing to a fad of fashion, usually imposed by someone else who wishes to get money from us to enhance their own extravagant lifestyle. However, the fashion industry has a lot to answer for. I also bring into this, marketing and advertising as all are directly contributing to the pressure on individuals to spend or 'consume' as they would prefer it to be know.

Again they are expert at praying on the natural human instincts that exist in all of us to buy items whether there is a need or not. This pressure plays on guilt that someone may feel if there are not seen as part of a 'group' activity or trend or affected by the corresponding peer pressure. All of this adds to the personal anxiety especially when they may not have the money at hand - but not a problem! - the finance sector is there to lend (usually) - and worry about paying back later.

Even in recession the Government encourages people to borrow as it helps keep others in jobs, perhaps artificial ones at that, but there only concern is to appear to be doing something. If this induces extra stress then as has happened in late 2009 the spectre of stress in the workplace was raised again - a benign policy that gives the appearance of doing something while again ding practically nothing at all.

Ideally we should go back to the borrower/lender theme and live within our individual means within a structure that protects us and not designed to squeeze us. To this end perhaps we should return to our banks being run more on a mutual basis for the benefit of the country than for the benefit of faceless shareholders many of whom perhaps do not even reside in the country. The rules that would need to govern such an arrangement would also need to take into account the declining financial climate as our population reduced and also address the conflict risks from abroad as international tensions increased.

The main problem with the modern financial business is that it has succumbed to the human vice of greed and this greed is becoming a cultural norm. The introduction of student loans has fuelled a culture of whereby being in debt for years to come is seen as acceptable. However, when grants were the order of the day a students at least felt that the state was being a sort of benefactor and that this generated in many a feeling of 'needing to pay something back' in succeeding years. All this is excellent cultural building whereas now all we have is an attitude of 'I'm going to bleed what I can out of the system'. Also, of course, the recession of 2008/2009 has probably seen the first generation of such ex-students' contribution to this very event. Probably the very same people who cannot see that they have directly created any problem - just like the UK MPs and their expenses.

The complexity of these markets has become so great that a 'house of cards' exists which is destined to crumble as the stress it alone creates affects its operators as well as its clients. The financial markets talk about Risk but it would be more realistic if this was referred to as Gambling. Another problem we have in considering ourselves a global player is that in our dealings with others we consider ourselves corruption-free. At least in public, whilst in private especially when dealing abroad, bribes and inducements can be commonplace. I even heard of a case where a cash payment was made to a foreign customs officer to allow some technical kit in a diplomatic bag to pass through! So again to be realistic it appears to be wiser to look after our own and focus our finances at a domestic level as much as possible.

Our own home-grown corruption has existed particularly where loans are concerned where the lender has agreed to falsify the income of a borrower to facilitate the loan. Probably more importantly this has allowed the lending officer to show that he has met his targets and get his bonus rather than help the borrower, who now has the stress of meeting the loan. I remember a day when to apply for any money was met with a very questioning interview and investigation by the local bank manager, who was also someone you were liable to meet at the local school fete. So if you defaulted on the loan you were also made to feel rather ashamed - good! Whilst on the topic of loans how on earth a 125% loan secured on a house can be a wise thing, I despair - NO - 80% should be a maximum and with a reducing population over the years it's unlikely house prices will rise a lot.

The financial world prides itself in modelling for unrestricted growth. This is based upon a growing population, unlimited resources, growing consumption and a liberal scattering of pink pigs! - I also read that unrestricted growth, in the human body, is cancer - and we know the consequence is there. When will reality prevail and the idiots in power realise that to ignore this natural stresses that this exerts will lead to a future collapse. Good real leadership and firm management will be needed over the coming years to ensure that at least some of us can survive.

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Material Copyright © 2009 Alan Harmer.
Last Updated November 2009