Richard Lloyd Jones: Hundreds of years before the meteoric rise of Cisco systems or Qualcomm stock prices, Semper Augustus tulip bulbs were selling for the price of a house in Holland. Tulip mania was in full swing in the 1600s, and it looked much like the dot-com madness of the 1990s. It crashed eventually, of course, but caused little lasting damage. Could the same thing be true today?
Today on Thinking with Somebody Else's Head, the stock market crashes silver lining. I'm Richard Lloyd Jones. And, of course, it should be pointed out that in all the madness surrounding the trade in rare and exotic tulip bulbs, the Amsterdam Stock Exchange never got in on the deal. Madness it was, with speculators brokering deals in taverns and bars and some bulbs changing hands ten times in a day.
It's not much of a stretch, is it, to fast forward to images of amateur day traders hunched over PCs trying to make fast cash on gambling that Cosmo.com stock prices will go down at some date in the future. But the big difference between 1636 and 2008 is that our stock markets, from the NASDAQ to the Nikkei, got heavily involved. And so today's worldwide stock market crash is marked by at least two things.
Distinguish it from the Holland of the 1600s. One, it's worldwide, and two, it's having a big impact on the economy. Could there really be anything good about this? Well, not if you're looking at the situation from a traditional point of view, of course. But the economic view of someone who understands the psyche of the human being and the distortions of society that spring from that human psyche can shine a lot of light on the situation.
This can help us see what's going on from a new perspective and can even lead the way to correcting our distortion and setting society on the right track again. We've looked at this aspect of the impact of man's psyche on society in a number of our podcasts, and I encourage you to look through the Thinking with Somebody Else's Head archives for those.
I can steer you in the right direction, of course, if you need some help. Rich at richjonesvoice.com. Gilbert Gambucci has been studying Brazilian psychoanalyst Dr. Norberto Keppe's economic viewpoint on all of this for the past couple of months and is putting together a blog to explore many of Dr. Keppe's ideas, especially as they relate to society. That blog with great video of Dr.
Keppe is at promiseland.info. Check it out. Gilbert joins me today to explore the silver lining behind the crash of the stock market. In Dr. Keppe's recent programs, he's been talking a lot about how the crash of the stock market's actually a good thing, which is shocking to sort of most of us who are used to thinking that we need the stock market.
So maybe we should start there. What is Dr. Keppe talking about here?
Gilbert Gambucci: He's referring to $26 trillion that doesn't exist. It's just on paper. Everyone knows there's around 40, more than $40 trillion in the world. But if you verify closely, there's actually just $14 trillion that is actually moving around, that is being used, that exists. And there's another $26 trillion that is just in the speculative market.
In other words, this money actually doesn't exist, and this is what is perturbing everything. That's why he says, when this part falls, this artificial part, then we can come back to reality so that we can construct an economy that is real and not artificial.
Richard: He talks a lot, too, about the deadliness of having an economy based on speculation. Maybe you should talk about that, too, Gilbert, because that's a fundamental underpinning of Dantre Kepri's economic view, isn't it?
Gilbert: Yes, you know, it might be good to start with this idea that people are blaming the situation of our economy on the past eight, obviously, bellicose years, okay? And really, these past eight years have been devastating to the economy. But it's not the origin of the problem. You know, let's say the last presidential administration, they were using an idea that actually comes from ancient Rome, in that if you want peace, prepare for war.
It's an old Roman saying that really it's wrong, this saying. It doesn't work. You know, if you want peace, you have to bring peace. And if you attack people, then they will attack you even more, and they won't stop. And this puts a discord into the population, this idea of creating war. There's no benefits to it at all. And if you want to speak just about economy, it's devastating to the economy.
But this is not the origin of the crises that we are experiencing right now in the United States and worldwide as a result. What are
Richard: the origins? How far back do we have to go? We're not going to go back to ancient Rome to find the roots of this problem. Where does it begin, this crisis that we're seeing today, Gilbert? Well,
Gilbert: you know, in the 80s, I was working directly with Dr.
Keppe in New York. And he wrote a book at that time. The first book that he wrote in the States was, it was called The Decay of the United States and of the American People. And we call it The Decay Book. And this book, it was written very much in the spirit of the late President John Kennedy, who said that a free society is a critical society.
That is to say, it's good to bring up the real problems, to analyze them, so that they can be resolved and move forward into what Kennedy called the new frontier. And so in the 80s, there were, Keppe was analyzing problems that were happening in the economy. Things he saw when he moved there in the early 80s, right? Yes. Well, you know, there was, I mean, they were kind of obvious, you know, agriculture was going out of business.
In just the year 1982 alone, 34,000 farms in the United States went bankrupt. Wow. And this was the tendency throughout this decade. And industries were moving out of the country to where there was cheaper labor. Okay. And so there was the real economy, the industry, the agriculture, the real workforce was in shambles. You know, it was deteriorating. So what happened at that time?
Instead of addressing these real problems to see how it would be possible to help the agriculture of the United States, to help the industries, the workforce, What happened was, there was an introduction of what is called, everyone knows, Reaganomics. And so what was Reaganomics essentially? He really stimulated the speculative market. So what happened? Even, for example, not just big companies who speculate, but even individuals, people, anybody.
Everybody started speculating in the stock market more and more. And so what happens? You know, you make some money working, you put it in the stock market where the returns would be enormous in many cases. And so people stopped working, you know, one step at a time. People began to work less and less and just started earning money, if I could put it this way, doing nothing.
That is, servicing no one with anything. Even
Richard: some of the funds that have been created today, Gilbert, these very elaborate hedge funds and derivative funds, they're all sort of like a way of hedging your losses or protecting your losses. But they're so sophisticated and complicated, and actually nothing is produced in the buying and selling of these hedge funds, these derivatives. It's a totally speculative balloon that has no real product
Gilbert: attached to it.
Yes, and imagine, Rich, people putting money in their pockets through these processes, trying to explain to people that, look, your economy is going down. But how is it going down? We've never had more money ever floating around. And so people were not perceiving that the real economy was going down. Now, look, there's a difference between economy and finances. Maybe it's on purpose that this is not clarified.
People who have secondary intentions don't want us to know this, you know. There is the real economy. This is the workforce. And specifically, it's industry, it's agriculture, it's even commercial trade, international trade. All of the result of activity. A product of generating something, right? Yes, something where you benefit from what the work is. And then there's the financial aspect which deals with setting prices on things to facilitate the real economy.
Okay, so there are two different things, they're not one thing. So if this speculative market falls, and when I say speculative market I mean this money that doesn't exist, this 26 trillion dollars that's only on paper, if that falls that would be good for the real economy. The real economy then would have a chance to move forward. We're to develop.
Richard: Yeah, Lincoln said something very interesting.
Let's go back to one of the great presidents of the United States. And he said, and Dr. Keppe was talking about this in his book, Liberation of the People, which was the second book he wrote in the United States when he was there in the early 80s, early to mid 80s. Lincoln said, nothing good can be enjoyed without having first required some work.
So this is a psychological issue, Gilbert, that we want to get something for nothing. One of my students was telling me the other day he invested some money in the Brazilian stock market, which is nothing like the American stock market, but in two weeks his money made 30%. Well, that's totally out of reality. That money doesn't really exist in any way. But this is the idea we have, that I put a little bit of money here in the stock market and then magically, somehow, like a magician pulling a rabbit out of a hat, I'm going to make 10 or 15 or 20 or, if I'm lucky, 30%.
This is totally illusory, isn't
Gilbert: it? You know, Rich, some 15, 18 years ago, I was in Moscow for a couple of weeks, Moscow, Russia. And it was just after the perestroika initiative there with Gorbachev. And what happened was, what I was playing there was that there were many people who had lots of money. They had lots of rubles, but there was nothing to buy.
And so where is the wealth? Where is the real wealth? You know, if people are not working, if we're not servicing each other, quality of life comes from the quality of work that we do for each other and not the amount of money that you have. So in this extreme example, and this is what is happening with the United States today. You know if we don't do a good service for each other, if we stop working, then it doesn't matter how much money you have.
It's there's nothing that supports that money, it
Richard: doesn't represent anything. Yes, I was reading the New York Times today. I forget the city now, but there's a big protest in a part of the United States where they produce a lot of pipe, or they used to produce a lot of pipe, industrial pipe and pipe for plumbing, these kinds of things. And there's an enormous protest happening in this town, in this area of the United States, and I'm sorry I forget where it is now, because of the pipe that's being imported from India.
So they've been farming out this production to Mexico and India and particularly China, countries like Brazil, for for decades now this has been happening, in in an attempt to keep the prices down, so-called. But it's caused an enormous corruption of the industrial base and the farming base of the United States, hasn't it? Yes.
Gilbert: You know what, Rich? Behind that, what is happening is somebody is making more money on the speculative market.
Yes. This is why they do this. They say it's because, oh, the labor is cheaper. No, they're getting more money on the speculative market. Now, you know, what happens is that in Keppian science, this science that he calls Analytical Trilogy, we look for the cause of things, the origin of things. And so, my perspective is the following. I, you know, I really like this guy, Obama.
I see that he has a structure, his inner structure. He works with virtue. He has a certain character that is linked directly to the founding fathers of the nation whom I study constantly and admire. And in my opinion, Obama is linked to this. Now so I've decided that, well, I have to help. You know, if our president is working to rectifying the situation, is really committed to that, then we have to help.
Of course he's not going to have all of the answers. And so as a part of the scientific, the best of the scientific community, we do have uh an answer that needs to be um conscientized, if I can put it, be become aware of. It needs to be conscientized so that we know better what is the origin of the problem. So, look, there's something in one of Dr.
Keppe's books called Work and Capital on page 71 of this book. There's something very interesting here, how he shows that if the speculative market develops greatly, if it really becomes much stronger than the other end of the process. What is the other end of the process? It's those who work. What happens is those who work suffer. And if those who work get into a very difficult situation, then how you make money with money doesn't exist anymore, and the whole thing comes down together, as is now happening.
Richard: That's exactly what's happening, Gilbert. Where the real working person is in fear of losing his job because the economy, the real economy, has been so destroyed. Exactly. And General Motors now, well, there are stock prices in the toilet, but General Motors is making money, or was making money when they were making money. They were making money primarily as a bank, as a lending organization.
They would take that money and then invest it in various derivatives and hedge funds and not concentrating on the production of cars anymore.
Gilbert: So the whole country was moving away from the real economy, away from working, and into speculation, making money with money, getting money from not working, from not doing a service for others, okay? So in this sense, even the car industry, they're screaming and crying about the money that they're not making on the speculative process, okay?
And the bankers are screaming for money. They want the speculative process. And here's another point where we are deceived, because we think that you have to have credit economy. What is a credit economy? It's going into debt to the bankers, you know, and if this is done too much, then who owns what we are using? You know, it's the bankers. This is an orientation that comes from these international bankers, this little group of people and their secret sect societies.
You know, if you want to be free of them, we're going to have to learn very quickly how to live without going into debt, without our properties being owned by the bankers. This is the very definition of liberty. You know,
Richard: it's interesting, Gilbert, because I remember an article fairly recently, maybe Time Magazine, they were talking about the biggest export in the United States today is debt.
They're packaging all of these dodgy mortgages and putting them together into to various types of funds and then selling those as guaranteed investments to China, to Japan, and these very dodgy debts are guaranteed by the banks. And of course when there's no value in the houses that these mortgages are supporting, then the whole fund is worth nothing and the bank has to honor that as a good debt, and that's what's causing a lot of this subprime crisis today.
So packaging debt is what the United States has been doing for many, many years now.
Gilbert: Yes, Rich, it's so difficult to perceive because it's so deceitful. What has happened? As the economy is going down, people are not perceiving it because people are getting more and more money through the speculative market. So we don't perceive that, how can we say, we're digging a hole.
We're going down deeper and deeper without perceiving it. You know, since Reaganomics, since this introduction of, you know, giving incentive to the speculative market over the real economy, over the real workforce. So what happens if speculation becomes too great, then this topples a nation. Suddenly everything comes down all at once. And the United States economy was so big, it was so huge and powerful, that it took some years to destroy that, since the 80s until today.
Now we're seeing like the end of it. And so we can't go back to a business as usual, it's not going to, we're not going to go back to this kind of market economy because it's not a real economy. Market economy is not a real economy, that's something that should is inside of a real economy and not the other way around. You
Richard: talked about liberation a moment ago.
I remember something from one of Dr. Keppe's books where he talked about true human liberation depending on the nullification of economic power. You have to eliminate or modify this economic power because that's what's restricting the true human liberty of the world today. Yes, exactly. So how
Gilbert: do we deal with that, this is the question isn't it, what is the solution? Yeah, okay, you know what, Rich, you know what's fascinating is that the solution actually is much simpler than what we think.
This is good to hear after all the complicated analysis we hear. I think it might be impossible for many people because we're not used to working anymore, right. You know we're used to doing a little bit and getting lots of money for it. And so what is the solution, you know, it's this altruistic philosophy of life. I love the way Kennedy put it once.
He got kind of upset with these multinational corporations, and he said, look, I'm not trying to give certain people a bigger piece of the pie. I'm trying to make the pie bigger. Do you see the philosophy behind that? If we work to benefit our community, benefit the society, Society. Then you benefit as a result. You know, if we work to try to take out of the society everything that we can for ourselves, then we deteriorate the society, and then everybody goes down.
Richard: And the people who are more involved in taking from the society the most is the people who want economic and political power. They're the ones who want to take more than the average person, right?
Gilbert: And keep this thing going or pump it back up again, you know. It's a kind of like being drugged, Rich. You know, money, you can use money as a drug.
And that's exactly what they do. So, what is our solution? We have to go back to work. We have to re-immerse ourselves in good action. This is the good news that seems like bad news, right? You know, this thing of working in benefit of others. Where is this American spirit? Where people wanted to be the best at what they do. In service of other people.
You know, that's what we have to get back again. And you know, when you force yourself back into it. The benefits go right directly to the soul, first thing. You know, and then it's possible to redo that again. The first steps are difficult. Because we are drugged, we're drugged with money. And so to get back to work again. It's just a question of will.
You know, a little bit of willpower to get back into doing things the right way again.
Richard: You could say maybe, Gilbert, that this focus on money, on speculation, on getting something for nothing. Has really corrupted us, hasn't it?
Gilbert: Yes, you know, it has taken us away from a certain Christian orientation. To work in benefit of your neighbor, not exploit him, help him, you know.
And not necessarily in charity, just charity work. But in your work, the work that you do do it the best that you can in benefit of others. Yeah, I
Richard: think we might see too the necessity for, because as these multinational corporations begin to crumble a bit because they're so invested in in uh in the speculative market, they're they're going to suffer, we're going to start losing more and more jobs.
Well we're already seeing that now, aren't we. We might need to see the start of of new types of companies, Gilbert, and I was thinking of the the story of the first trilogical company in New York, these three guys who worked for a moving company. And the moving company would hire their services out at $25 an hour or whatever it was. And these guys would get like $8 an hour from that and the rest would go to the moving company.
And Dr. Keppe said to these guys, why don't you start your own moving company and then keep all the money for yourselves? Because you were there in the beginning of those days. Can you talk a bit about that? Because I think that's really a solution for us today.
Gilbert: Yes, you know, in general, these money-drugged speculators, they want us to believe that you can't work without capital.
Capital comes first. First, you have to have capital in order to go into business. But what comes first, capital or work? You know, in order to have capital, first you have to work. It's work that generates money. This
Richard: is a big inversion. We think that capital comes first and then maybe we have to work a little bit, but it's you're you're saying it exactly
Gilbert: right.
No, you just start working, start simply, you know, and put 10 aside or whatever and just reinvest and start developing and developing. Like this famous, this guy in New York who started with a hot dog stand in the street and then eventually he got several of these for his family and then he bought a diner, then he several diners, now he's got diners and even restaurants all over the city.
You know you start simply and just start working and just keep working, enjoy your work, doing it in benefit of the others, and then you'll see, because it's even a spiritual factor, you will see how you will develop this question of why you have to have money first. Uh it's a it's an inversion, this it's even a deceitful inversion to keep us away from working well.
And you know, Rich, those who work well earn well. Now, there's another aspect to this because it's twofold. Yeah, and
Richard: because the earning is not just financial, right? There's, as you said, a spiritual part of the soul that benefits as well. Yes,
Gilbert: the structure of the human being is action. And so, if you do good action, you link yourself to a certain vibration whereby everything starts to go well, let's say.
You know, it's a spiritual thing, really. Now, there's another aspect to this. As I see it, it's twofold. One, we have to re-immerse ourselves into work again, doing a good action for people. Second, we have to stop going into debt. We cannot spend what you don't have. This, I think, is going to be impossible for some people. You have to force yourself into a lifestyle whereby you don't spend what you don't have.
Just spend what you earn. Then you are free because you're not in debt. And this is the way to get our country out of the hands of these bankers who want us to remain in debt to them.
Richard: Keppe writes, the cause of American decay is not economic but psychological. First, the human mind distorts, omits, or denies. Afterwards, society deteriorates materially as well as spiritually.
Understanding this is crucial. I'm Richard Lloyd Jones. This is Thinking with Somebody Else's Head. Talk to you next time.
