Archive for March, 2008


Free Enterprise and Circulation

As we’ve learned earlier in this course, the principles of free enterprise are the foundation for a healthy economy committed to creating and producing wealth. But fundamental to the creation and production of wealth is the circulation and movement of that wealth. Without circulation in an economy, the richest of men will starve. It is essential for the health of an economic system, regardless of how much money there is, that the wealth circulates among the people who are the producers in the system. Otherwise, we starve in the land of plenty.

The principles and economics of circulation include understanding money as a medium of exchange, the hoarding or circulation of energy, and understanding money and banking as a control system that is designed to circulate money to the top of the pyramid.

The majority of people in the economic system today are chasing money and attempting to manipulate the system to have money circulate in their direction without necessarily producing anything of great value. The global economy today is run like a casino, circulating money from the bottom to the top while the emerging markets of the world go without even the most basic of human needs, nor sufficient capital from the top of the pyramid to develop those markets.

But you and I have the right to contract in free enterprise and the power to participate in micro-economies to produce wealth by creating goods and services, circulate money and other commodities, and not only reach but develop the emerging markets of the world. This is a new business and finance model- a new paradigm.

Money As Medium of Exchange

Money is nothing more than a medium of energy exchange that must circulate before it has any wealth-building value. Simply having or hoarding money in the bank, or underneath your mattress, does not make you inherently rich. But understanding the principles and economics of circulation does have the potential to make you as rich as you can dream, then to circulate your surplus to the emerging markets of the world.

As we’ve already established in the section on prosperity consciousness, true wealth is based on your relationship with money as a medium of exchange, and tapping into the abundance in yourself and the universe.

The source of true wealth is what you can produce that is needed and wanted by other people in the marketplace, or in your community. Wealth is who you are, your products, your services, your gifts, your offerings, your hands, your expressions, your talents, your intelligence, and your information – that’s the source of true wealth in any economic system. You must never forget this!

Hoarding or Circulation of Energy

Money is made, spent and consumed on a daily basis. It circulates throughout the system of buying and selling everyday. Money has a value that rises and falls, a cycle of circulation and velocity, and it has various gateways and access points to originate and circulate new FRN’s.

It’s like the circulatory system of the body, the blood stream. When the circulation is healthy and flowing oxygen to the cells and brain, the body is vital and alive. When the heart hardens or there is a restriction of flow, then the body is dying. The same analogy applies to the economic system as well.

You could have a million dollars, or ten dollars in the bank, but until you spend or circulate it, it generates no true wealth for you. Money is like congealed energy or blood that doesn’t flow. Is the blood in a blood bank not flowing through arteries and veins of any real value to the living body? No. It’s not the money that is the wealth, it’s the circulation of money or energy, like blood, that creates the wealth in the living economy of energy exchange. If you can understand this basic principle of circulation, then you will never be poor again!

In fact, if you hoard the money in a bank account, even earning 4% interest, the money will continue to lose value over time. If you hoard your talents, skills and gifts, they will eventually atrophy and lose value as well. You know the old saying, “If you don’t use it, you’ll lose it.” This principle is all about circulation, not hoarding. So if you have it, circulate it and watch it come back one hundred fold and prosper!

Circulation Game

In the Prosperity Consciousness seminar, there is a simple game, which illustrates the dynamics of a healthy economy.

The seminar leader offers to buy something in the room for $1.00. The deal is only offered if somebody takes advantage of the offer in the next five minutes. This creates an incentive to make a transaction. Someone comes forward with an item for sale and then offers to buy something else in the room with the dollar just received. The same $1.00 is circulated in the room many times in the next ten minutes. There are many exchanges going on, and people are acquiring new goods and services, information and entertainment. And the only currency in circulation is a $1.00 bill.

The $1.00 is circulated in the room for a few minutes and creates a net wealth many times its printed value because it is rapidly moving and circulating, not because someone is holding onto it and hoarding it. It is spending of the $1.00 that sparks the economy in the room. When the $1.00 circulates, everybody prospers. If there was no incentive to spark the initial offer, or it was an offer nobody could accept, then no wealth would have been created. If somebody along the chain of exchanges decided to hoard the $1.00 instead of circulating it, the whole wealth-building exercise would cease.

This is an example of the principle of circulation. Now, don’t you see how the circulation of money creates wealth, while hoarding doesn’t? Now, let’s try this game with $1 million instead. See what happens.

Money and Banking As Control System

Money is issued by banks and put into circulation in the form of a private scrip, or in the United States, a Federal Reserve Note, or FRN. Virtually every country in the world has a central bank that controls the issuance and circulation of currency, or money. They also regulate and control the amount of currency in circulation (e.g., money supply), the cost in interest for its use (e.g., prime rate of interest), and the velocity or speed of circulation of the currency (e.g. higher interest rates slow the movement of capital, lower interest rates speed the movement of capital). The circulation of currency in an economy is like electricity moving through the wiring of your house.

Money issued from a central bank always circulates back to those who issued it -the central bank itself. Thus in this centralized banking and finance system, the accumulation of power and wealth is primarily at the top of the pyramid with a small trickle down of surplus below. This is the old finance model.

If you wonder why there are only a few people, maybe 30,000 at the top of the pyramid that control and own everything in the world, it’s because the system was designed that way.

Money issued by the banks circulates into the economy through government spending and company capitalization, mortgage and automobile loans. Money circulates back to the central banks through inflation, income taxes and interest payments, the dips in Wall Street, lost investments and casino-like gambling operations.

It’s an incredibly risky game that most people hope they can play and win. This is not so in most cases. The volatility of Wall Street investments, stocks and bonds, is just one example. You might win big this year on the stock market, but generally over a five year period most people’s fortunes even out. It’s not much different than other gambling-type operations. In the long run, all the money circulates back to the top.

The boom and bust cycles, upswings and downswings of the market ultimately mean nothing to the central banks. For the central banks its not about the money, its about the leveraging and acquisition of the tangible assets and collateral securing the capital itself. From a banker’s perspective, the game is very different than the consumers of capital. Economic events are engineered to keep the money and wealth flowing primarily in one direction, from the people to the central banks, then through government spending back into the economy. Until we learn and apply the principles of circulation and take charge of our own micro-economies of scale, the system will constantly siphon the money upwards to the immensely wealthy minority.

Micro-Economies of Scale

It’s not only the central banks that have power and control over the circulation of money these days. There is a lot of money or currency in circulation in the world today, far more money, assets and equity than is needed to manage the global economy. Plenty of this money, assets and equity is in the hands of private individuals and companies.

With knowledge and financial planning, you and I have the power to spend and circulate money within our own micro-economies of scale and effect the creation of wealth on a large or small scale. If I spend money from my business to your business, then you and I are part of a micro economy. The flow and circulation of money implies an exchange of goods or services is occurring between us, and any other partners that may become involved. Whether between several points of exchange or many thousands. But we must choose to network and communicate with each other to achieve this circulation.

In the arena of private contract and free enterprise, neither the government nor the central bank is legally involved in the exchange, unless we surrender jurisdiction to them. Until the global economy goes completely cashless, and I believe it’s a long time still before that is even feasible, cash or any other tangible asset such as gold or silver or commodities of value can be the basis for an exchange system independent of the central banks and government.

Controlled Economy

Centralized control by the central banks and government puts the brakes on most socialistic economies, shrinks the wealth-building capability of the people, and overburdens the producer. In many developing countries or emerging markets, a little capital could generate much needed economic growth. But many of these are starved by global institutions controlling the money supplies and loans to these countries.

Most of the capital is circulated directly to the government, and free enterprise is squashed. And the cost of the capital is a depletion of natural resources as well. In controlled economies, the government takes a large portion of the wealth generated out of circulation through income taxes, inflation, devaluation of the currency, or other means.

Taxing the Producer

A consequence of increasing taxes on the producers in the economy, is government grows larger and larger, until the system destroys the ability for the producers to produce by overwhelming it with financial obligations, permits, fees, regulations and taxes until it can no longer survive in the market. Thus the increasing evidence of bankruptcy is a symptom of the collapse of this old business and finance model – the old paradigm.

Ultimately such a fiscal policy will create an economic collapse, a recession, a depression or a slowdown of growth, as there are fewer and fewer producers, and more and more pressure upon them. You cannot sustain ten people in the back pockets of each producer and expect a healthy economy. It’s also why socialism and communism have failed as economic models, yet continue to be embraced by centralized governments and central banks.

Global Casino Economics

The economy today is run like a global casino operation with markets soaring one day and crashing the next. There are billions and billions of inflationary paper dollars circulating every day, and trillions and trillions of dollars moving electronically. The economy is similar to a craps table with investors betting, speculating, and taking huge risks with other people’s money. Investors are coming up empty handed most of the time.

In a debt-based system such as ours the only way to expand and control the economy is to create more debt, issue more devalued paper and electronic currency, and put it into circulation at an exponential rate. This is unsustainable economic activity. There is no stability or security in a global casino operation pretending to be sensible economic policy. Only the power structure wins. Everybody else ultimately loses.

Many people receive offers on a daily basis from credit card companies and other lenders. They are being asked to borrow more and more money, and use pre-approved credit lines. This is because the only way the power structure can retain their power and expand the economy is through your deciding to go deeper into debt and accept the obligations. This is pure folly. Don’t fall for it.

Focus on the Money, Not on the Wealth

Most people focus on the money, not on the production of goods and services, not on sustainable and sensible economic policy. Our attention is in the wrong place, doing the wrong thing, with the wrong people. It’s time to stop chasing the money, and produce something of value that generates true wealth.

Chasing Money

If you play the game the way it’s been designed, you’ll always be chasing the money. Remember the story of the holographic pig told earlier in this course. Like the holographic pig, if you grab for the money, you’ll come up empty handed.

So we suggest, you stop playing by the rules of the old game, and become a rule maker yourself, become a sovereign individual designing your own financial plan. You and I can orchestrate the creation of wealth, the circulation of money, and create the reality you’d like to live in. If you focus your thought and energy on becoming a producer in the system, you will always prosper.

If you’re not a producer in the system, you must manipulate the system to your benefit, usually at the expense of others. For you to win, as a non-producer, somebody else is carrying the burden and paying the price of your admission to success.

Become a producer, and the money will chase you. You won’t ever have to chase money again. The Success Education Course is designed to teach people with the desire, commitment and passion, the purpose and focus, to develop a business or a project that produces something of value in the global economy.

Meeting the Market

Once you recognize what you want to do and begin producing something of value, you must then understand your market. The market is people who have real needs for what you do, for what you produce. If you produce something of value, not the superfluous garbage most people buy in the store, but provide for basic human needs, and inspire higher human consciousness and awareness, you will be successful.

I would estimate that 90% of the old paradigm economy is the production of stuff that doesn’t matter, that is not something of value. Focus on the 10% of the economy that is useful, practical and sensible. This is the area of the economy where the new paradigm of business and finance will be developing. This is where you’ll meet your market, and the emerging markets of the world.

In summary, the principles of circulation include:

  1. Money as a medium of exchange, not as wealth
  2. Will you circulate or hoard energy
  3. Play the circulation game
  4. Money and banking are control systems
  5. Build and participate in micro-economies of scale
  6. Controlled economies overtax and ultimately destroy the producers
  7. The old paradigm economy is run like a global casino
  8. Stop chasing money and produce something of value
  9. Remember to meet the emerging markets of the world.

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