Many experiments have been carried out that indicate plant consciousness. It has also been observed in water. This suggests that everything possesses consciousness at some level which in turn indicates that the entire universe is a conscious entity. Indeed I do not see how it could function without a connective and/or collective consciousness.
Everything derives from energy. We are energy. Energy is the source of creation. The laws of physics are what give order to the universe. These laws are in-built into the sub-atomic particles that make up the universe. These particles must therefore contain consciousness.
Friday, June 08, 2012
Friday, May 25, 2012
The nature of reality?
I came across this statement in an email.
"Everything you experience in life, every event, occurrence, object, person –
is nothing more than a figment of your own thoughts, beliefs and words".
My thoughts on this concept of reality are the following:
Whilst there is much debate about the true nature of reality the above I am certain is some way off the mark. If you think about it logically, the idea that everything you experience is a figment of one's own thoughts is ludicrous. Much happens in life that one could never imagine and therefore one could not have thought into your own reality. Why would one seek famine, torture, rape, poverty, war and so on? If it were my choice I would live in paradise surrounded by joy and happiness.
However that is not the reality we perceive which is more often than not a tapestry of many colours and emotions, some of which are those we choose whilst others are diametrically opposed. Therefore if anything, we experience a combination of our own reality intermingled with that of others. It could not possibly be otherwise since everything is inter-connected.
We therefore must experience a collective reality which in extreme cases collides with and even overruns our individual thoughts or desires. In other words our "reality" often conflicts with that of others. For example Hitler's reality massively affected the collective reality. I did not dream up or wish this abomination upon myself or anybody else. Nor did I "invent" Gadaffi, Saddam Hussein, Robert Mugabe, Idi Amin or any other vile dictator. Nevertheless we all experienced their twisted visions. The same could be said of many positive experiences. These are equally overlaid with the imprint of universal consciousness of which my thoughts are a minute part.
Most ordinary mortals/souls desire love, peace and harmony. When the opposite realities of such ego-maniacs collide with ours a battle of wills ensues and the dream turns into a nightmare. We experience both states whether we want to or not. This could not be clearer.
The input of both negative and positive energy constantly affects the overall frequency of universal consciousness which is possibly what forms the reality we experience. No thought or mind is an island unto itself. How could it be? The idea that your reality is "nothing more than a figment of your own thoughts" is clearly a flawed one and serves only to confuse rather than enlighten us as to the true nature of reality and the entity we call God.
What do you think?
"Everything you experience in life, every event, occurrence, object, person –
is nothing more than a figment of your own thoughts, beliefs and words".
My thoughts on this concept of reality are the following:
Whilst there is much debate about the true nature of reality the above I am certain is some way off the mark. If you think about it logically, the idea that everything you experience is a figment of one's own thoughts is ludicrous. Much happens in life that one could never imagine and therefore one could not have thought into your own reality. Why would one seek famine, torture, rape, poverty, war and so on? If it were my choice I would live in paradise surrounded by joy and happiness.
However that is not the reality we perceive which is more often than not a tapestry of many colours and emotions, some of which are those we choose whilst others are diametrically opposed. Therefore if anything, we experience a combination of our own reality intermingled with that of others. It could not possibly be otherwise since everything is inter-connected.
We therefore must experience a collective reality which in extreme cases collides with and even overruns our individual thoughts or desires. In other words our "reality" often conflicts with that of others. For example Hitler's reality massively affected the collective reality. I did not dream up or wish this abomination upon myself or anybody else. Nor did I "invent" Gadaffi, Saddam Hussein, Robert Mugabe, Idi Amin or any other vile dictator. Nevertheless we all experienced their twisted visions. The same could be said of many positive experiences. These are equally overlaid with the imprint of universal consciousness of which my thoughts are a minute part.
Most ordinary mortals/souls desire love, peace and harmony. When the opposite realities of such ego-maniacs collide with ours a battle of wills ensues and the dream turns into a nightmare. We experience both states whether we want to or not. This could not be clearer.
The input of both negative and positive energy constantly affects the overall frequency of universal consciousness which is possibly what forms the reality we experience. No thought or mind is an island unto itself. How could it be? The idea that your reality is "nothing more than a figment of your own thoughts" is clearly a flawed one and serves only to confuse rather than enlighten us as to the true nature of reality and the entity we call God.
What do you think?
Saturday, May 19, 2012
Searching for the nature of God
The next big question that needs resolving is the nature or form of the creator. I do not pretend to know who or what God is. I claim only to have reflected upon the question deeply for almost longer than I care to remember. The following are therefore merely my reflections in written form.
The image of a wise old man with a white beard in the sky is of a God made in our image. That is highly improbable as as I am sure most would agree. Therefore if there is a God we must search for a more plausible understanding that somehow ties in with the reality we perceive and our limited understanding of science as well as the insights of ancient and modern mystics.
In brief the only answer I can come up with is that the universe and everything in it is derived from a source of energy. Without it nothing would exist. I have to believe if there were a God he/she/it would have to be in some way, shape or form a source of energy, perhaps the source of energy from which everything emerged. If this were so this source or force would have to be conscious and intelligent, perhaps the source of all consciousness. This energy the source of consciousness would be the driving force of everything both visible and invisible. From it would emerge all the forces that combine to create the visible and invisible universe. Einstein said that if there are laws (of physics) then logically there must be a law maker. These laws are encoded in the molecules that make up the universe and everything in it.
The universe is itself illusory. The molecules from which everything is made are 99% empty space yet the objects we see appear solid. Scientists tell us that if the solid matter contained in every human on Earth were collected and combined it would be no larger than a sugar cube! These are mind boggling facts that are almost beyond our comprehension. In essence we see objectivity where in reality there is only empty space. It's almost as though someone or something has painted a picture on a blank canvas; only the canvas is emptiness. I have never seen a painting materialise out of thin air. A painting requires an artist and his paints. Furthermore the artist must possess a consciousness that enables him or her to envisage the image he wishes to create. Above all he needs energy to undertake his task. This is I think a good analogy because it encompasses the necessary functions of the creative process.
For it to work though we need some evidence of the nature of consciousness. What is it? Is it a function of the mind or is it an external force that is visibly imbued in the fabric of the universe itself? To try and answer this question I have read up on experiments that indicate that plants and water possess consciousness. Plants, it is claimed have a higher level of conscious than some lower levels of insects and animals. Like plants, water apparently responds consciously to positive and negative frequency stimulation as do we humans. Interestingly we are ourselves largely composed of water as are plants. If this is true then there is a strong possibility we will discover consciousness at some level everywhere and in everything in the universe. Indeed the entire universe may well be a conscious entity. It is therefore not beyond the bounds of reason that the universe is a manifestation of consciousness and that consciousness is what we call God. As we are discovering, everything appears to be interconnected to everything else. This interconnection indicates that there is no objective separation of galaxies planets, plants or other elements such as water or ourselves. In which case the whole universe is an active and reactive single conscious entity where everything is connected to everything else.
In other word the entire universe is the manifestation of it's creator, the entity or force we call "God".
This explanation of the nature and form of God is I believe one that is believable. It is that of the artist, the grand designer rather than one occupied by the petty detail of our personal lives. It is nevertheless no less comforting because I do believe the words, "God is love" is at the heart of this consciousness. There is a good argument to be made for this hypothesis but that must be for another time. Suffice it to say that when one acts out of love the world becomes a much brighter place. There is enormous comfort and hope in this vision of God. If we follow the path of enlightened love we can raise our levels of consciousness and become part of the blissful and boundless joy that such a state can bring. If not we walk blindly and joylessly on a path of darkness. These appear to be self evident, fundamental, eternal and inescapable truths, the only real truths that really exist. This is the truth of God in my humble view.
Lastly, I have never believed that the universe spontaneously self combusted into existence from a state of nothingness. A state of nothingness is a contradiction in terms. If it existed it would be something. It is therefore an impossibllity. This being the case there can never have been a beginning nor can there be an ending. There is just an eternal state of being and this state of being is in constant evolution. This concept defies the understanding of science which must have a beginning and an end to everything and that is why science continually finds itself going down blind alleys. They have as yet failed to understand that if God exists he/she/it is the science they study. If this is right, God is the ultimate law maker, the artist par excellence.
The image of a wise old man with a white beard in the sky is of a God made in our image. That is highly improbable as as I am sure most would agree. Therefore if there is a God we must search for a more plausible understanding that somehow ties in with the reality we perceive and our limited understanding of science as well as the insights of ancient and modern mystics.
In brief the only answer I can come up with is that the universe and everything in it is derived from a source of energy. Without it nothing would exist. I have to believe if there were a God he/she/it would have to be in some way, shape or form a source of energy, perhaps the source of energy from which everything emerged. If this were so this source or force would have to be conscious and intelligent, perhaps the source of all consciousness. This energy the source of consciousness would be the driving force of everything both visible and invisible. From it would emerge all the forces that combine to create the visible and invisible universe. Einstein said that if there are laws (of physics) then logically there must be a law maker. These laws are encoded in the molecules that make up the universe and everything in it.
The universe is itself illusory. The molecules from which everything is made are 99% empty space yet the objects we see appear solid. Scientists tell us that if the solid matter contained in every human on Earth were collected and combined it would be no larger than a sugar cube! These are mind boggling facts that are almost beyond our comprehension. In essence we see objectivity where in reality there is only empty space. It's almost as though someone or something has painted a picture on a blank canvas; only the canvas is emptiness. I have never seen a painting materialise out of thin air. A painting requires an artist and his paints. Furthermore the artist must possess a consciousness that enables him or her to envisage the image he wishes to create. Above all he needs energy to undertake his task. This is I think a good analogy because it encompasses the necessary functions of the creative process.
For it to work though we need some evidence of the nature of consciousness. What is it? Is it a function of the mind or is it an external force that is visibly imbued in the fabric of the universe itself? To try and answer this question I have read up on experiments that indicate that plants and water possess consciousness. Plants, it is claimed have a higher level of conscious than some lower levels of insects and animals. Like plants, water apparently responds consciously to positive and negative frequency stimulation as do we humans. Interestingly we are ourselves largely composed of water as are plants. If this is true then there is a strong possibility we will discover consciousness at some level everywhere and in everything in the universe. Indeed the entire universe may well be a conscious entity. It is therefore not beyond the bounds of reason that the universe is a manifestation of consciousness and that consciousness is what we call God. As we are discovering, everything appears to be interconnected to everything else. This interconnection indicates that there is no objective separation of galaxies planets, plants or other elements such as water or ourselves. In which case the whole universe is an active and reactive single conscious entity where everything is connected to everything else.
In other word the entire universe is the manifestation of it's creator, the entity or force we call "God".
This explanation of the nature and form of God is I believe one that is believable. It is that of the artist, the grand designer rather than one occupied by the petty detail of our personal lives. It is nevertheless no less comforting because I do believe the words, "God is love" is at the heart of this consciousness. There is a good argument to be made for this hypothesis but that must be for another time. Suffice it to say that when one acts out of love the world becomes a much brighter place. There is enormous comfort and hope in this vision of God. If we follow the path of enlightened love we can raise our levels of consciousness and become part of the blissful and boundless joy that such a state can bring. If not we walk blindly and joylessly on a path of darkness. These appear to be self evident, fundamental, eternal and inescapable truths, the only real truths that really exist. This is the truth of God in my humble view.
Lastly, I have never believed that the universe spontaneously self combusted into existence from a state of nothingness. A state of nothingness is a contradiction in terms. If it existed it would be something. It is therefore an impossibllity. This being the case there can never have been a beginning nor can there be an ending. There is just an eternal state of being and this state of being is in constant evolution. This concept defies the understanding of science which must have a beginning and an end to everything and that is why science continually finds itself going down blind alleys. They have as yet failed to understand that if God exists he/she/it is the science they study. If this is right, God is the ultimate law maker, the artist par excellence.
Friday, May 18, 2012
The purpose of struggle
Looking at the world at large it has long been clear that greed, corruption, selfishness, false ideology, ego and superficiality are the driving forces that shape the planet and our existence in it. Our world is a reflection of our state of mind or if you prefer our consciousness or lack of it. The result is injustice, inequality, famine, terrorism, pollution and so on. Clearly unless we change course and raise our consciousness we are heading for the abyss. It is therefore obvious that the "truth" does not lie in the path we are following. The suffering of the world is a direct result of these dark ego driven forces. Our suffering is largely self imposed. It is no good blaming God. We are where we are because we ignore the only truth that can make a difference, the truth that is love. If we put love at the heart of everything we do, the existance of greed, corruption, etc., would no longer take centre stage. Thus the path of enlightenment can only be found in the light of love.
The problem is that the human condition is a paradox, a diaspora of contradictions that makes struggle and conflict inevitable. Why? What is the purpose of this suffering? It appears to be in-built into the design of creation which would seem on the surface to be the work of a cruel and heartless creator. Of all the questions that need an answer this is perhaps the most important.
Having thought long and hard on the subject, I can only conclude that perfection cannot be created with the wave of a magic wand at the outset. Perfection like creation is an evolutionary process. Perfection is the end result of creation not the starting point. If everything were perfect at the outset, we would have no understanding of it without having an equal understanding of the opposite state. We must therefore make that journey that leads us eventually to that state of bliss. If that is true and I must believe it is then it would indicate that existence is experienced in many planes. As our consciousness evolves we transit from one plane of existence to another. This leads me to believe that "God" is also an evolving entity. If we consider that everything in the universe is undergoing a process of evolution and if the universe is a manifestation of "God", this would make sense.
So in brief enlightenment can only be acquired through struggle. This principle is in-built into the fabric of nature and thus seems logical as well as necessary for the evolution of everything including the spirit. This said, God has also given us the the key to enlighlightenment. All we have to do is look for it and use it. The Bible tells us "God is love".
The problem is that the human condition is a paradox, a diaspora of contradictions that makes struggle and conflict inevitable. Why? What is the purpose of this suffering? It appears to be in-built into the design of creation which would seem on the surface to be the work of a cruel and heartless creator. Of all the questions that need an answer this is perhaps the most important.
Having thought long and hard on the subject, I can only conclude that perfection cannot be created with the wave of a magic wand at the outset. Perfection like creation is an evolutionary process. Perfection is the end result of creation not the starting point. If everything were perfect at the outset, we would have no understanding of it without having an equal understanding of the opposite state. We must therefore make that journey that leads us eventually to that state of bliss. If that is true and I must believe it is then it would indicate that existence is experienced in many planes. As our consciousness evolves we transit from one plane of existence to another. This leads me to believe that "God" is also an evolving entity. If we consider that everything in the universe is undergoing a process of evolution and if the universe is a manifestation of "God", this would make sense.
So in brief enlightenment can only be acquired through struggle. This principle is in-built into the fabric of nature and thus seems logical as well as necessary for the evolution of everything including the spirit. This said, God has also given us the the key to enlighlightenment. All we have to do is look for it and use it. The Bible tells us "God is love".
Searching For The Truth
I think from an early age I felt we were being spoon fed a distortion of the "truth" from organised religion, politicians and scientists. Nothing quite rang true. This mistrust Has caused me to question perceived wisdoms to this day.
According to most religions there is only one God. Why then are there so many religions each with their own interpretation of God's message which is after all, a very simple one. It is that of love. Where is the love in the burning of heretics, the stoning of women who commit adultery or the murder of innocents in the supposed name of God? These atrocities clearly have nothing to do with a God of love. They reflect rather a distortion of the truth and the imperfection of the human condition exploited ruthlessly by those who seek to build their own empires.
Perhaps this distortion of the truth is made easier by those who exploit religion for their own purpose because neither orthodox religion nor science reveal the nature or form of the entity they call God. This gap in understanding leaves ample room for doubt and cynacism. This casts doubt on the authenticity of both the entity and the message. Science cannot prove or disprove the existence of God. Indeed it does not acknowledge that the process of creation might possibly be the work of an intelligent force and therefore discounts the possibility from it's theories at the outset. For scientists this process is nothing more than physics, a series of natural laws that evolved spontaneously and without specific purpose or meaning out of nothing! This thinking simply defies the logic of the creative process they are studying.
As far as orthodox religions are concerned their number and mixed messages obscure the issues surrounding God and the creation still further lending more ammunition to the sceptics. Neither the religious or scientific communities appear capable of casting luminosity on the biggest question of all. Is there or is there not an intelligence behind the creation and if there is what is it's nature and form?
If scientists are right, their is no logic in the creation of the universe and therefore ironically no logic or indeed useful purpose in studying it. The purpose of science therefore would appear to be the study of a meaningless and purposeless creation. It also means their endeavours are equally futile and implies that life itself in all it's myriad forms is valueless; that evolution is also entirely pointless since it's ultimate destination is extinction. The idea is so ludicrous it cannot logically be entertained as a serious concept. It runs contrary to the visible evidence presented by all life forms which display a ferocious struggle for survival.It defies the very logic that surrounds us. It dismisses utterly the intelligent balance of nature which sustains life everywhere. In my view this is a form of scientific heresy. Fortunately heretics are no longer burned at the stake!
The religious communities are equally risible, sticking as they do to an almost prehistoric concept of God and creation. No wonder we have wandered blindly into a darkened alley that leads no where worth going.
Although the human race is heading hell bent like lemmings to the precipice, the universe shows no signs of following in our footsteps. On the contrary it is expanding rapidly contrary to earlier scientific theory. Through the telescope we see the mirror image of the fierce struggle for survival of life forms on Earth. This is a clue that cannot be dismissed. Life has no intention of jumping off a cliff. Life is designed to survive not to die. This visible evidence is sufficient in it's own right to strongly suggest that scientists need to re-evaluate and begin to accept the possibility that the laws of physics are indeed there for a purpose, to promote and sustain life and that means that life also has purpose.
As Einstein said, if there are laws, it's logical to assume there is a law maker. How can we not conclude that we need to follow a different path, one guided by a more profound truth rather than the distorted vision of it, that we have adopted. We need to understand that our version of the truth is a lie.
Unless integrity, honesty and love are at the core of everything we do, we cannot hope to achieve positive outcomes. It's very, very simple. THAT is the TRUTH.
According to most religions there is only one God. Why then are there so many religions each with their own interpretation of God's message which is after all, a very simple one. It is that of love. Where is the love in the burning of heretics, the stoning of women who commit adultery or the murder of innocents in the supposed name of God? These atrocities clearly have nothing to do with a God of love. They reflect rather a distortion of the truth and the imperfection of the human condition exploited ruthlessly by those who seek to build their own empires.
Perhaps this distortion of the truth is made easier by those who exploit religion for their own purpose because neither orthodox religion nor science reveal the nature or form of the entity they call God. This gap in understanding leaves ample room for doubt and cynacism. This casts doubt on the authenticity of both the entity and the message. Science cannot prove or disprove the existence of God. Indeed it does not acknowledge that the process of creation might possibly be the work of an intelligent force and therefore discounts the possibility from it's theories at the outset. For scientists this process is nothing more than physics, a series of natural laws that evolved spontaneously and without specific purpose or meaning out of nothing! This thinking simply defies the logic of the creative process they are studying.
As far as orthodox religions are concerned their number and mixed messages obscure the issues surrounding God and the creation still further lending more ammunition to the sceptics. Neither the religious or scientific communities appear capable of casting luminosity on the biggest question of all. Is there or is there not an intelligence behind the creation and if there is what is it's nature and form?
If scientists are right, their is no logic in the creation of the universe and therefore ironically no logic or indeed useful purpose in studying it. The purpose of science therefore would appear to be the study of a meaningless and purposeless creation. It also means their endeavours are equally futile and implies that life itself in all it's myriad forms is valueless; that evolution is also entirely pointless since it's ultimate destination is extinction. The idea is so ludicrous it cannot logically be entertained as a serious concept. It runs contrary to the visible evidence presented by all life forms which display a ferocious struggle for survival.It defies the very logic that surrounds us. It dismisses utterly the intelligent balance of nature which sustains life everywhere. In my view this is a form of scientific heresy. Fortunately heretics are no longer burned at the stake!
The religious communities are equally risible, sticking as they do to an almost prehistoric concept of God and creation. No wonder we have wandered blindly into a darkened alley that leads no where worth going.
Although the human race is heading hell bent like lemmings to the precipice, the universe shows no signs of following in our footsteps. On the contrary it is expanding rapidly contrary to earlier scientific theory. Through the telescope we see the mirror image of the fierce struggle for survival of life forms on Earth. This is a clue that cannot be dismissed. Life has no intention of jumping off a cliff. Life is designed to survive not to die. This visible evidence is sufficient in it's own right to strongly suggest that scientists need to re-evaluate and begin to accept the possibility that the laws of physics are indeed there for a purpose, to promote and sustain life and that means that life also has purpose.
As Einstein said, if there are laws, it's logical to assume there is a law maker. How can we not conclude that we need to follow a different path, one guided by a more profound truth rather than the distorted vision of it, that we have adopted. We need to understand that our version of the truth is a lie.
Unless integrity, honesty and love are at the core of everything we do, we cannot hope to achieve positive outcomes. It's very, very simple. THAT is the TRUTH.
Saturday, March 24, 2012
Looking for consciousness
The brain like a computer or a combustion engine is a machine. You can analyse the function of a machine till the cows come home looking for consciousness and you will find nothing but the machine. Feed enough data into a computer and it will design you a car. Of course that does not mean it is conscious. In this context therefore Dennett the philospher is right when he says there is no such thing as consciousness but only because he's looking for shoes in a butcher's shop! Consciousness is not found in function but in emotion. Consciousness is in being and being is in every molecule in the universe the whole of which is a conscious entity. Consciousness is present everywhere and in everything. Google "plant consciousness experiments" and astonish yourself. When you have finished go to YouTube and look at the "consciousness of water" videos.
Tuesday, February 21, 2012
Understanding Consciousness
The multiverse is a sentient organism. Everything in it is therefore necessarily conscious at some level, be it mineral, vegetable or animal. This understanding of the Consciousness of everything is an amazing breakthrough in our understanding of the reality in which we exist.
Understanding this changes the way we treat each other, the world and everything in it. It changes the way we lead our lives and enhances greatly the value we place on what really matters. It raises our spiritual Consciousness and that is what changes the world.
Peace, justice and equality can only be achieved by a shift in our consciousness and understanding of the nature of the universe. An unconscious mind is blind, callous, greedy, materialistic and ego-centric. It is the world we live in today, a world that manifests all these characteristics with the consequences we see all around us.
You owe it to yourself to raise your understanding of the extraordinary truth and nature of the reality of our connected existence. The answers are right there before our very eyes in the wonders that surround us.
Click on the title to learn more about plant consciousness. It will open your eyes and expand your mind.
http://peaceandloveism.com/wiki/index.php?title=Plant_Consciousness
Do it and your lives will be enriched beyond measure.
Understanding this changes the way we treat each other, the world and everything in it. It changes the way we lead our lives and enhances greatly the value we place on what really matters. It raises our spiritual Consciousness and that is what changes the world.
Peace, justice and equality can only be achieved by a shift in our consciousness and understanding of the nature of the universe. An unconscious mind is blind, callous, greedy, materialistic and ego-centric. It is the world we live in today, a world that manifests all these characteristics with the consequences we see all around us.
You owe it to yourself to raise your understanding of the extraordinary truth and nature of the reality of our connected existence. The answers are right there before our very eyes in the wonders that surround us.
Click on the title to learn more about plant consciousness. It will open your eyes and expand your mind.
http://peaceandloveism.com/wiki/index.php?title=Plant_Consciousness
Do it and your lives will be enriched beyond measure.
Thursday, October 20, 2011
Fate of democracies
In 1887 Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian Republic some 2,000 years prior: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship." "The average age of the world's greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence: From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to complacency; From complacency to apathy; From apathy to dependence; From dependence back into bondage." The Obituary follows:
Wednesday, September 28, 2011
Monday, September 05, 2011
Financial Distotion - A Ticking Time Bomb
Markets have lost their purpose
Anthony Hilton
14 Jun 2011
Twenty years ago, it used to be the case that only in the foreign exchange
market was the underlying business activity dwarfed by speculation -
meaning that the foreign currency needed for the buying and selling of
imports and exports was well under 10% of the global daily volume.
Today, similar conditions have an impact on all manner of markets which are
simply not structured to cope with such waves of speculation.
We are now in a position where flows of hot money drive prices, not the
fundamentals of supply and demand. And because other markets lack the scale
and resilience of forex, the results are less benign.
The belief that markets know best rests on a couple of important factors.
First, there have to be a lot of participants in the market so that no one
can influence more than 5% of either supply or demand, which in turn means
no group is in a position to use its buying clout or monopoly power to
influence price or supply.
Second, it is important that people are principals, either acting in their
own name or for a company which is either supplier or end user. When these
conditions exist, it is reasonable to assume that price signals from the
market are fairly accurate reflections of genuine supply and demand.
This begins to break down when buyers and sellers are in a position to use
other people's money - thereby acting as agents rather than principals.
It is often - though not always - the case that this coincides with their
being interested in speculating on price movements rather than the buying
or selling of the physical goods for some business purpose.
There are two reasons things have gone wrong in financial markets.
In recent times - since technology advanced enough to allow capital to be
moved in seconds into or out of any market in the world - the ebbs and
flows of speculative money have increased massively.
Capital is now mobilised on a global scale and directed anywhere in the
world at the touch of a button. It dwarfs the resources of the original
market participants.
At the same time, with a growing emphasis on trading profits and short-term
time horizons, money managers have embraced momentum - buying not on
fundamentals but simply because everyone else seems to be buying, or
selling because they all seem to be selling. They assume they will be able
to ride the price movement and then use instant-dealing technology to leap
off and take their profits just as the price is turning.
This has increased massively the amount of money swamping a market when it
is in fashion. It has also multiplied the power and influence of those who
are seen to have an edge in a market - the established traders or
investment banks - because where they lead others follow (or risk being
wiped out). The interaction of their expertise and third-party money gives
a few speculators disproportionate influence. These lead speculators now
have the power of the herd behind them. They have enough monopoly power to
distort prices.
Financial markets such as the oil market, the metals markets, the grain
markets or the sovereign debt market were created for actual users, not
speculators, but they are now so dominated by hot money that the sounds
from the original users are no longer audible. As a result, these markets
and their prices indicate what the speculative money believes at any one
time, and this is not necessarily what is happening in the real economy. It
also adds an overwhelmingly short-term perspective and huge layers of
volatility.
We all pay a high price for this because the real economy is then forced to
adjust. In rich countries, oil consumption and economic activity get cut as
oil becomes too expensive. In poor countries, they have riots and
governments fall as food becomes too expensive.
In all countries, governments have to produce policies that put the whims
of the markets before the needs of their citizens - witness the way
policies across Europe are tailored to appease bondholders and debt
markets.
A letter to the Financial Times yesterday pointed out what are only the
most recent examples of how the financial market tail wags the dog.
In oil, pricing is based on two sources of supply: the North Sea's Brent
crude and West Texas intermediate. For years, the price difference between
them has remained between two and three dollars to reflect the oil quality
and its distance from market.
At present, however, the price gap is more than $17. Similarly, it has long
been a feature of metals markets that when stocks rise, the price falls.
But not since 2008. Today, stocks at the London Metal Exchange are high and
rising, but so are metal prices. In both these cases - as well as with
grain and foodstuffs - the new factor in recent years is that these markets
have become fashionable for financial speculators.
To sum up, we have financial institutions that have power without
responsibility. They are dedicated to using that power to make profits for
themselves. They now know they can drive markets in one direction or
another for most, if not all, of the time. The distorted signals these
markets then deliver hold governments and the world's citizens to ransom.
From being the servant of the world economy, the financial markets are
becoming its master.
This is not how the system was meant to work. This is not what a belief in
markets was meant to deliver. It is impossible to know how it will end but
it is surely unsustainable.
Anthony Hilton
14 Jun 2011
Twenty years ago, it used to be the case that only in the foreign exchange
market was the underlying business activity dwarfed by speculation -
meaning that the foreign currency needed for the buying and selling of
imports and exports was well under 10% of the global daily volume.
Today, similar conditions have an impact on all manner of markets which are
simply not structured to cope with such waves of speculation.
We are now in a position where flows of hot money drive prices, not the
fundamentals of supply and demand. And because other markets lack the scale
and resilience of forex, the results are less benign.
The belief that markets know best rests on a couple of important factors.
First, there have to be a lot of participants in the market so that no one
can influence more than 5% of either supply or demand, which in turn means
no group is in a position to use its buying clout or monopoly power to
influence price or supply.
Second, it is important that people are principals, either acting in their
own name or for a company which is either supplier or end user. When these
conditions exist, it is reasonable to assume that price signals from the
market are fairly accurate reflections of genuine supply and demand.
This begins to break down when buyers and sellers are in a position to use
other people's money - thereby acting as agents rather than principals.
It is often - though not always - the case that this coincides with their
being interested in speculating on price movements rather than the buying
or selling of the physical goods for some business purpose.
There are two reasons things have gone wrong in financial markets.
In recent times - since technology advanced enough to allow capital to be
moved in seconds into or out of any market in the world - the ebbs and
flows of speculative money have increased massively.
Capital is now mobilised on a global scale and directed anywhere in the
world at the touch of a button. It dwarfs the resources of the original
market participants.
At the same time, with a growing emphasis on trading profits and short-term
time horizons, money managers have embraced momentum - buying not on
fundamentals but simply because everyone else seems to be buying, or
selling because they all seem to be selling. They assume they will be able
to ride the price movement and then use instant-dealing technology to leap
off and take their profits just as the price is turning.
This has increased massively the amount of money swamping a market when it
is in fashion. It has also multiplied the power and influence of those who
are seen to have an edge in a market - the established traders or
investment banks - because where they lead others follow (or risk being
wiped out). The interaction of their expertise and third-party money gives
a few speculators disproportionate influence. These lead speculators now
have the power of the herd behind them. They have enough monopoly power to
distort prices.
Financial markets such as the oil market, the metals markets, the grain
markets or the sovereign debt market were created for actual users, not
speculators, but they are now so dominated by hot money that the sounds
from the original users are no longer audible. As a result, these markets
and their prices indicate what the speculative money believes at any one
time, and this is not necessarily what is happening in the real economy. It
also adds an overwhelmingly short-term perspective and huge layers of
volatility.
We all pay a high price for this because the real economy is then forced to
adjust. In rich countries, oil consumption and economic activity get cut as
oil becomes too expensive. In poor countries, they have riots and
governments fall as food becomes too expensive.
In all countries, governments have to produce policies that put the whims
of the markets before the needs of their citizens - witness the way
policies across Europe are tailored to appease bondholders and debt
markets.
A letter to the Financial Times yesterday pointed out what are only the
most recent examples of how the financial market tail wags the dog.
In oil, pricing is based on two sources of supply: the North Sea's Brent
crude and West Texas intermediate. For years, the price difference between
them has remained between two and three dollars to reflect the oil quality
and its distance from market.
At present, however, the price gap is more than $17. Similarly, it has long
been a feature of metals markets that when stocks rise, the price falls.
But not since 2008. Today, stocks at the London Metal Exchange are high and
rising, but so are metal prices. In both these cases - as well as with
grain and foodstuffs - the new factor in recent years is that these markets
have become fashionable for financial speculators.
To sum up, we have financial institutions that have power without
responsibility. They are dedicated to using that power to make profits for
themselves. They now know they can drive markets in one direction or
another for most, if not all, of the time. The distorted signals these
markets then deliver hold governments and the world's citizens to ransom.
From being the servant of the world economy, the financial markets are
becoming its master.
This is not how the system was meant to work. This is not what a belief in
markets was meant to deliver. It is impossible to know how it will end but
it is surely unsustainable.
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