In this episode we discuss the ideas behind a free market and the process of producing and trading value in a manipulated financial market.
Capitalism at its root thrives on a free market where a buyer and seller can exchange value but throughout history we see that markets are not just a place for these two types of people. There are multiple opportunities for people to help with the transaction, multiply transactions and even profit from the manipulation of the buyer/seller relationship. In this episode we discuss a few of the added layers in the US financial markets and the difficulty in having the small stack of chips in a highly manipulated game of trade.
The buyer/ seller relationship has always benefited from having a convenient marketplace to exchange value. Over time the market makers, speculators and oligarchs became regulars on the scene and have changed the way "free" markets now operate. They have created layers for us to now peel back to understand how we must navigate a market.
A helpful exercise is briefly to follow and outline the influence of these positions or layers in the market. Your familiarity with these "layers" and their influence can be helpful in your future trades.
Layer #1
The second layer of complexity comes through the worldview of:
Capitalist or Marxist
The third layer through the worldview of a:
Democrat or Republican
Layers 2 and 3 make it near impossible to navigate a trade - when the exchange of value is no longer seen as the exchange between a buyer and seller but a buyer or seller coming to the table with one or more of the above hats on, the complexity of motive and exchange becomes exponential.
For that reason we simplified our paradigm on "exchange" by creating a fourth layer (looking at lesson from Jim Rohn as he outlined what happened on the first day of the Christian church) - this layer outlining the mindset of a buyer or a potential customer that we can serve.
In Acts 2, Peter gave a message telling people about Jesus and Rohn posits that there were 5 reactions to this message:
Instead of looking at people as good or bad, as we do carrying all of the different labels in the previous lists, we can see them (in market terms) as someone who is on a 'continuum of understanding' - understanding the value that we create. Our job is first to create value and sell it to the "believers" but it is also to remove the obstacles for the rest of the list - to give tools for them to enter the market and benefit from the value we have created.
The fifth and most important layer comes from our role as a follower of Jesus where God calls us to see people as valuable. This layer adds the 'why' to our motivation for exchange and also the 'how" - reminding us that how we exchange value is just as important as how we create value.
When we see a person's value, we can honor that value by serving them and honoring them as a created being. And in many circumstances, part of that service comes with a level of remuneration where we can get paid for the value we create for them. God gives us the priority to:
In summary, spending the majority of your time wading through 'who is manipulating what' does not allow you to create value. Hoping to jump in on a trade and stay safe when there are too many unpredictable elements at play is a waste of your time.
Our hope is that we, as the middle class, would go back to creating value with our investments - to get close to the investment to see the moving parts, to value the people those investments will serve and to do it with accurate and honest weights and measures.
Resources and Mentions:
www.ForexFactory.com
Author, Matt Taibbi - "The Divide"
Jim Roan - Author and Business Coach, www.jimrohn.com