LeadU presents Faith & Postmodern Society



Faith & Post-Modern Society

"It’s not only the Germans who want to repatriate their gold — so do the Texans. 
In 2011, the University of Texas endowment — the second-largest in the country after Harvard — disclosed it took delivery of $1 billion in bullion, comprising 5% of its portfolio. That was largely at the behest of board member — and hedge fund genius — Kyle Bass." – Agora 5

Ordinarily you wouldn’t think much about this, especially if you know TEXAS and TEXANS, they have ALWAYS been a contrary group… But!

Definition of FAITH:

1a: allegiance to duty or a person 
b (1): fidelity to one’s promises
b (2): sincerity of intentions
2a (1): belief and trust in and loyalty to God 
2a (2)
 : belief in the traditional doctrines of a religion
2b (1): firm belief in something for which there is no proof
2b (2): complete trust
3: something that is believed especially with strong conviction; 
 a system of religious beliefs, the Protestant faith.

Now faith is the substance of things hoped for, the evidence of things not seen (Hebrews 11:1, KJV).

I thought the biblical definition was apropos in looking at what is taking place in a system that is largely created through faith, both religious, and economical.

From the wiki:

Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers’ realization that depositors generally do not all demand payment at the same time.[5]

Savers looking to keep their valuables in safekeeping depositories deposited gold and silver at goldsmiths, receiving in exchange a note for their deposit (see  Bank of Amsterdam). These notes gained acceptance as a medium of exchange for commercial transactions and thus became as an early form of circulating paper money.[6]

As the notes were used directly in trade, the goldsmiths observed that people would not usually redeem all their notes at the same time, and they saw the opportunity to invest their coin reserves in interest-bearing loans and bills. This generated income for the goldsmiths but left them with more notes on issue than reserves with which to pay them. A process was started that altered the role of the goldsmiths from passive guardians of bullion, charging fees for safe storage, to interest-paying and interest-earning banks. Thus fractional-reserve banking was born.

However, if creditors (note holders of gold originally deposited) lost faith in the ability of a bank to [pay] their notes, many would try to redeem their notes at the same time. If in response a bank could not raise enough funds by calling in loans or selling bills, it either went into insolvency or defaulted on its notes. Such a situation is called a bank run and caused the demise of many early banks.[6]

Starting in the late 1600s nations began to establish central banks which were given the legal power to set reserve requirements and to issue the reserve assets, or monetary base, in which form such reserves are required to be held.[7]  The reciprocal of the reserve requirement, called the money multiplier, limits the size to which the transactions in money supply may grow for a given level of reserves in the banking system.

In order to mitigate the impact of bank failures and financial crises, governments created central banks – public (or semi-public) institutions that have the authority to centralize the storage of precious metal bullion amongst private banks to allow transfer of gold in case of bank runs, regulate commercial banks, impose reserve requirements, and act as lender-of-last-resort if any bank faced a bank run. The emergence of central banks reduced the risk of bank runs inherent in fractional-reserve banking and allowed the practice to continue as it does today.[3] [8]

Over time, economists, central banks, and governments have changed their views as to the policy variables which should be targeted by monetary authorities. These have included interest rates, reserve requirements, and various measures of the money supply and monetary base.

The post-modern question I have is how will faith evolve?

I’m not sure how to answer this because if you take faith out of a system, you decelerate the system dramatically in terms of its transactionability, and energy and information meets significant resistance because without faith, then you have to due significant layers of due diligence, "proofing" and the velocity of all things is severely limited?

Could it be the medicine for post-modern society?

Faith = velocity = runaway consumption?

If so, LOOK OUT, as deflation = lower velocity of money and the loss of faith would SHIFT velocity DRAMATICALLY as it’s starting to portend?

I’m not sure how faith works in inflation, but lack of faith surely amplifies deflation, and maybe that medicine is the cure for the disease, but this makes the cure worse than the disease, but nonetheless evitable…?

Helpful Hint: When you have a fractional system, the system is based on faith… faith in and of itself is a strange bedfellow… as the mere hint of it in religious terms brings about all kinds of discourse… and yet, faith is underlying everything we do in the postmodern world…

Action Step: Something bigger is likely happening… and you want to take note of this, as it’s going to be a much bigger issue going forward, and I am saying from personal experience, tighten up everything around you.

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    Mike R. Jay is a developmentalist utilizing consulting, coaching, mentoring and advising as methods to offer developmental scaffolding for aspiring leaders who are interested in being, doing, having, becoming, and contributing… to helping people have lives.

    Mike R. Jay
    Leadership University

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