Those with the most to lose

Business as we know it is disrupted, but not in a good way.  The human natural need for socialization is being threatened as we are told to shelter in place, and the biggest immediate impact is our ability to transact.  Electronic forms of transactions are strong and remain, but human to human interaction is minimized.  Who is most at risk here, and how do you reduce the risk factor?

It is interesting to see the impact of lifestyle changes that come as a result of a pandemic.  If society is to learn anything from this, it is that a large percentage are more vulnerable to changes to the business climate than others.  Unfortunately those that are most vulnerable are engaged in human to human transactions - something that is core to the human DNA and psyche.  Although there are many that would love a world with isolation and living on the Internet, the reality is that most of us are not of that ilk.  We crave relationships, we crave human contact, and when we are told that we must “social distance” ourselves, it attacks what makes us human.

Despite medical recommendations and warnings, even our elected leaders suggest ignoring science and safety standards to return back to the business of human transactions sooner than later.  The truth is that society has come to the realization of its very weakness - it cannot exist in the form that we are used to without human to human interaction.  Welcome to the world of being human.

The question now comes down to what being human really is.  Is it the core biological life and risk to health that makes us human, or is it the activities and social interaction that does?  Is it worth the balance to risk life in order to restore us back to the social interactions that we crave?  This has become the discussion of the day but it seems to me that we need to step back from this and really question why we are even having this conversation.

We can handle social distancing for a couple of months.  It won’t kill us.  We can find ways to interact without physical contact.  The Internet, a very human creation, allows us to meet our needs for interaction without risking health.  But still so much of society doesn’t really use it for business.  And the business of being human is at stake here.

Who is not impacted

If you are someone involved in making money on the Internet, you probably won’t feel much of an impact with COVID-19.  In fact, you may see an increase in business as more people come to realize that they need to leverage the power of electronic networks rather than human networks.  So much of our society make their income in IT, programming, systems administration, support, etc. and other industries that have been able to exist because of the Internet, such as call centers, VoIP, autonomous transactional systems like eCommerce, etc. will continue to thrive and make money.

However if you are in the human to human business, which is predominately the human manufacturing of goods, agricultural farming, and human services from education through to food services, travel, etc. then you are SOL.

Why are so many impacted?

This is a simple answer.  It is because they sold their future out to debt.  They have to work because they signed contacts with lenders that require ongoing payments to be made until the debt is paid in full.  Mortgages, car loans, student loans, credit cards, etc.  And also any contract that was for a persistent and ongoing service, like health insurance, other insurance, utilities, grocery shopping, etc.  These things require constant re-purchases.  If you sum the entire amount of money to exist over a time period by determining burn rate of these costs, then you must service those costs in some form.

Most assuming that being able to service those costs if their income was cut short, means to delve into savings.  Those without savings may choose to increase their debt load and sell MORE of their future out to the very banks that requires ongoing debt payments by putting living costs on credit cards, etc.   The short term relief is better than the long term debt load to many.

But there is also a sub-sector of society that is not really impacted financially.  Those that are financially sustainable or have assets that generate their income.  Of course it is not a perfect science because income based on assets comes from other humans and if those other humans are impacted, then the problems roll down the hill to the financially sustainable, so to speak.  Having a combination of savings and reserves to get through temporary disruptions applies to everyone, which is why building an emergency savings fund to cover these adverse events is core to our teaching on financial sustainability.

Imagine, however, if all of society maintained some savings to get through this.  The impact would be lessened.  If a tenant can’t pay their rent, no problem - just dip into savings to cover it.  They should have 3-6 months of their burn rate in reserve and therefore can weather the storm here.  Companies should have the same - rather than using debt as their means of capitalization, they would retain their earnings and have it available for disasters so that they could get through these adverse events without having to shutter or shut down.

But these are pipe dreams in the 21st century.  You would think that after we get through these current ordeals, that people would learn and would make sure to be self-insured with their own savings & reserves.  However I believe that there is a 95% chance that will never happen.  They will agree to the benefits of this, but with their current debt load will return back to whatever treadmill they can find because you cannot un-sell your future out before you pay the current debt off.

Banking as a defacto lifestyle

We have to admit that we lost the war of humanity to bankers.  This is at the individual level, the business level and most importantly the government level.  Bankers now control the stock market - company stocks don’t rise & fall anywhere near as much as when central bankers offer liquidity to a market, change interest rates, etc.  It doesn’t matter if you invented the next wonder drug and make 1,000x profit on your costs - the change to your stock price will never be as impactful as a central banker changing the interest rate to the market.  You can save the world with an invention, but you will never beat the market’s response to quantitative easing.

Our society believes that debt enslavement IS the quintessential American way.  That it is un-American to not be in debt.  To hell with savers; they are cursed to get no interest on their money.  To hell with retirees; once you stop producing income for the banks, you are dead to society.

You are socially rewarded for having a new car, or going to the “right” college.  You are socially rewarded for buying the latest trainers or clothing on your credit card.  You are socially rewarded for using other people’s money to buy things because you get travel rewards.  You are socially rewarded for “moving on up to the eastside” because you convinced a loan officer to extend money to you for a house you will probably never pay off.

Bankers control other countries that have weaker economies by controlling the money supply to them, and consequently the value of their currency.  God forbid they attempt to detach from the IMF or they will be doomed like Iran or North Korea.  Being sovereign and independent is a great theory - but is rarely achieved without some downside risk to economic stability.  

We have to face the reality that banks control the world.  Not our government.  We are not free - we are only free to apply for a mortgage or a new credit card.  If we are doing anything that is either antagonistic to the banks or not in parallel with the wishes of bankers, we are going to be ostracized and ridiculed in society.  It is therefore entirely reasonable that movements have existed to try and find community around the idea of being anti-bank.

And those communities are more likely going to be able to get through the current COVID-19 crisis.

Anti-Bank Communities

There are still a few of these left.  Obviously those of us that practice Financial Sustainability are the most likely to survive and in some ways thrive.  Our contrarian thinking means that we reject the defacto banker mindset and reject debt for what it is.  We find ways to get what we need without the shackles of debt.

Other groups share some allied values.  The Bitcoin & Crypto-Currency community emerged as a direct middle finger to banks in 2009, with the authoring of the Satoshi White Paper.  This came out of the time of the Occupy Wall Street movement, when technology could be used to bypass currency issued by decree and could be currency issued by scarcity using computers.  The problem was that the core tenet of the white paper, entitled “Bitcoin: A Peer to peer electronic cash system” didn’t achieve that mission.  It *can* be used as electronic cash, but until we see at least 50% of all retail businesses accepting it directly, it forces those that want to use it to on-ramp to it by way of banks and to off-ramp from it by way of banks.  In both cases, the banks control access to it.

Off-Grid communities can often survive despite banking because they create their own physiological needs - growing their own food or raising livestock, building their own dwellings for shelter, using solar or other off-grid power generation, etc.  They can minimize their reliance on banking transactions to some degree, often by using a barter system with other similar communities for the items they need by offering the items they don’t.  It is somewhat medieval but it can work.  However it relies on community doing this together.

The “Mr. Money Mustache” movement, or Mustachians as they prefer to be called, tried to achieve this by hacking society.  They rejected cars and chose to move closer to where they work and live, so that they could commute with a bicycle.  They prefer a hybrid off-grid life, but still remain connected to normal society.  Rather than going out to a restaurant for dinner with friends and paying with a credit card, they will cook at home and have friends come over to play board games, etc.  There is more of a social interconnectedness with this, however it is still tethered to banking.  They still rely on generating income from their liquid assets, which means having to deal with a stock market that is 100% banker controlled.  They may feel that they are detached from banks, but in fact they are more attached than most.

Retirees are another community that attempts to be anti-bank.  Although most still have bank accounts, investments, savings, money market accounts, etc. they are relying on the banks to sustain them.  They are living off the dividends of their investments, or the charity of their government by way of social security or pensions.  They may feel that they paid into those funds throughout their lives and therefore have the right to withdraw from those funds, but that is naive at best.  Their money that was paid in was used decades ago to fund unnecessary wars, economic hardship, pork barrel projects, etc. and they are using the governments borrowed money as entitlements to fund their existence until that runs out.  And each member of that community knows the risks that they are living with.  It is just that it is better to learn to deal with those risks than it is to have nothing.

Is there any hope left?

If I was to choose what the most comfortable and strongest anti-bank society that I wanted to live in would be, it would have to be one that can live with banking rather than against it.  But to know that the greatest weapon of banking is the subconscious hypnotism of social norms.  

It would be to know that succumbing to debt is the core reason why people cannot get through a crisis.  And that if you overtly reject banking, the banking system will use its power to destroy you.  Therefore you don’t want to be on their radar.  You want to appear to be “banker compatible” but meanwhile you need to be looking after yourself by NOT selling out any future to a bank.  

That means you can have a bank account for savings, but not any loans.  When society expects you to take on debt, you must flatly reject it.   When you are told you have to go to college and take on student loan debt, you MUST find a way around that.  Either you reject college entirely, or you see it coming and have the money already saved for it.  You must look at college from a business point of view and determine return on investment.  You must look to other alternatives for that education that do not have debt levels associated.  That could mean community college or it could mean getting a passport and living overseas, taking college in regions that do not have costs for university, like European countries, etc.

When it comes to your residence, it is ok to live in someone else’s property for some time while you amass your savings to buy your own.  Or to downgrade the quality of your residence by sharing the costs of it with others.  Many of those that have lived with parents all their lives and then leave the nest in search of their own freedoms may have to accept that they can’t have what their parents worked their lives to get from day one - that they have to accept a lesser standard while they amass wealth.  And with that wealth, they then purchase their “perfect lives”.  But with their money - not a banks or other people’s money.

No one wants to be told they can’t have something.  We, as humans, reject that outright and often vehemently.  But the truth is that you can’t change math.  If you don’t have the money, you don’t have the things.  If you always wanted a sports car as a kid, that doesn’t mean you have license to take out a loan for a $50,000 car as your first vehicle.  You need to pay cash for a junker and learn to fix it and keep it on the road.  Maybe with that you can trade up with your car and some cash to something better, and gradually increase the quality over time, but unless you have a lot of disposable money, you don’t get the lambo.  And even if you could, why would you buy that over an income producing asset that will give you 10 lambos over time anyway?  Where is the sense in that?

If you change your social behavior, you can have hope.  Hope that you haven’t sold your future out to a bank and have to work at a job you hate, in a place you dislike, with people you despise, for the rest of your life.  That’s horrible and finding an alternative lesser version of horrible isn’t a solution either.   Why do you have to do this?  Because of banks.  You sold your future out and you are now a slave to it.  You have to wake up that these things were voluntary decisions that you willingly took on because no one told you that you have the right to disagree with social norms and reject them.

The acid test

So now we have COVID-19.  Social distancing is a normal way of life.  Businesses that can’t exist without human to human interaction are shut down or gone entirely.  Only a small percentage of businesses considered “essential” can stay open.  

Is this the new normal?  No.  But what has it exposed?  It has exposed that selling one’s future out to a bank means you have to keep producing for the bank.  And your failure to do that means the banks still want their money.  There may be some surface level moratorium here or there, or that they can play spreadsheets to move short term payments now to longer term payments later, and you know that they will make the numbers work in their favor - not yours.

And that governments that are supposed to be there to support the people are really not doing that at all.  They are only in the business of being re-elected so they will pander to what they think will win them the votes to get re-elected but never actually create a solution.  The long term costs of trillions of dollars of stimulation to an economy is an economy further controlled and indebted to the banks.  Yet we celebrate the passing of such legislation like it is some magic pill that will solve all problems.

I have reviewed all the options.  I have looked at all the ways that I could create stability and safety for my family.  As much as I would love to take the family off-grid, I can’t find a way to meet the human social needs that way.  My income comes from a variety of financially sustainable sources including both digital and physical, and definitely the physical income generating (predominately rental income from residential real estate) is the most exposed to COVID-19.  But I know my tenants need a place to live, so we find solutions here.  We share that in common - I need to generate income and they need to have a safe place to live.  It was that way when they signed the lease and it is no different today when there is a pandemic out there.

But the core thing that allows clarity and minimal stress through this whole process is the lack of leverage with banks.  I don’t carry debt at a level that cannot be self-maintained, and only for income producing assets.  I just need to attend to my assets.  It was always that way, and always will be.  

Yes, life is different today than it was 3 months ago.  Human socialization is minimized.  More time spent at home creating content.  Thankfully I love doing that.  But I’ve also had more time to spend with the family, which has been wonderful.  I have been able to attend to tasks around the house that had been put off for months.  I have been able to read and study.  I have been able to find cheaper and better ways to do things.  And I have been able to maintain my distance from banks.

We must all find ways to live the life that we want, but understand the dangers of banks.  We must treat them like electricity - there are fatal risks of trying to work with electricity and yet without it we would live in the cold, dark world that no one wants to live in.  We must find a way to self-generate our freedom and we must reject social norms that favor only the banks, and are the antithesis of our own pursuit of personal freedom & liberty.