Thursday 21 October 2010

The World has Changed - The Challenges of Population Growth and Risk Taking

We know that world population has grown so fast during the last half century that we now are experiencing the stresses of relatively high population density.

The world in effect has become much busier and we have become busier. People are more actively engaged as a whole whether peacefully or not.

In addition, we are communicating more and more through travel and for want of a better words, what I would call interpersonal presentations: talking, writing, painting, fighting, and a multitude of interpersonal behaviors, such as smiling, chatting, laughing, stroking, dancing, bumping, viewing, touching and so on.

The number of medias for communication has grown rapidly as has our incentive to communicate.

To enable us to be busier, our per capital incomes have also grown, nevertheless, there are enormous gaps between what the fortunate are enjoying compared with the unfortunate.
Our business is directly related to the access that we have to incomes and credit directly and indirectly. The influence of banks has grown in our lives both directly and indirectly.

The world because it is busier has a more direct dependency on banking as an institution. Thus, it is ultra important that we make sure our banking institutions are sound and our deposits with banks are both secure and valued.

The key word here is valued.

One of the big problems the world faces is the undervaluation of deposits. This happens when the amount of credit has grown too rapidly relative to our joint busy ness or business. When credit grows too rapidly business rather than growing slows down. The reason is because too much credit leads to lower valuation of savings, and lower valuation of savings leads to unproductive and wasteful investment or to ballooning of the valuation of goods relative to money.

This running away from the appropriate valuation of money is our major problem. It happens because credit growth in the past has been too rapid and as a result money has lost it's value and people buy stuff instead of money, and the stuff they buy is not real stuff but imaginary stuff, dreams that cannot be fulfilled.

Gambling is a direct result of the loss of value of money. When people decide to gamble they are taking a risk based on an imaginary payoff and winning more money. The money they already have is devalued to the point that the imaginary wealth arising from the dream of winning is more important than the building of sound deposits in a bank.

What has happened is the lower valuation of saving relative to gambling. It's not that risk taking per se is something we should not do, but risk taking is destructive if it is not based on an appropriate valuation of the odds. The problem is compounded when the mathematics of risk taking bear no relation to the taking of the risk and the risk taking is just a bad habit.

Habitual risk taking is not healthy and is destructive in a world where people are already struggling to make ends meet.

http://www.ted.com/talks/hans_rosling_on_global_population_growth.html

Will ye no think kindly on those who would be your friends! May the sun shine with your thoughts, today, and happiness grow in your heart! May you allow yourself some peace of mind.

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