Breakthrough Solutions to the Global Financial Crisis

Date: May 19, 2009 at 08:02:07
From: dr stephen sweid, [88.86.31.169]
Subject: Breakthrough Solutions to the Global Financial Crisis

Breakthrough Solutions for the Global Financial Crisis

By Dr. Stephen Sweid

May 2009

>>>> The Aim Of This Article Is To Trigger And Inspire In The Quest For RADICAL, BREAKTHROUGH, GENUINE, HIGH IMPACT SOLUTIONS.

The process of finding radical breakthrough solutions starts with a creative, radical and strategic reexamination of the whole system, including identification of root causes, asking many basic stupid questions, and brainstorming many parties West and East, North and South, and suggesting crazy but inspiring solutions.

1 - APPLIED ASSUMPTIONS AND SOLUTION CRITERIA

So far no ingenious solutions have been put forward that can convince people that the global Financial Crisis will be resolved and will not strike again.

It is high time to stop looking at the Global Financial Crisis (GFC) as the actual problem, and to start perceiving it as just a symptom of a much bigger underlying and far reaching problem, requiring a 5 WHYs creative approach to identify and address the root causes. The Global Financial Crisis should be seen as the outcome of problems in the whole economic and possibly social system.

It is high time to stop seeking pure banking solutions to solve the GFC.

As with necessity to apply occasional changes to the constitution following major transformations or evolutions, now is the time to apply the same level of changes in the economic system following the GFC. Radical solutions are required this time, and not mere "Fix-it" approach as is being pursuit currently.

Although with the passing of time people will start forgetting, and might regain some confidence in the system, this does not translate into a sustainable solution. With no treatment of the root causes a relapse can occur suddenly and anytime!

Currently the CONFIDENCE in the financial system and in the whole economical system has been almost eradicated. Confidence is crucial for investment and growth.

A GENUINE convincing solution (therapy) will REVIVE THE CONFIDENCE in the economy, and hence will revive investments and business on a larger scale than before, but in the right way.

The genuine solution will not be born from traditional concepts, nor will it be based on the current financial or banking system, and it will not be born in a specific region. It will be most likely a collaborative global effort, and a synergy of different systems and cultures.

Most financial tools and concepts and systems used nowadays are MANMADE, and are not absolute, and hence can and must be changed:

• MONEY, notes etc are manmade: They were not created in the sky! They can be easily changed. The same applies to GOLD as valuation tool.
• Borrowing, interest rates, credit, payment terms, collateral, stocks, credit cards, VAT etc , are all manmade notions and practices.
• Value depending on supply and demand, marketing, fierce competition, branding, customer satisfaction etc, are all manmade notions, and are only in the brain, and can be changed, even if not easily.

The current economic system has undergone many improvements to try and shift the human and environmental interest into focus, e.g. social market economy, employee motivation, empowerment, mission, public relation, community, environmental protection, charities etc, but such efforts have not yet translated into a concrete generally applicable tool and are still elastic issues. Speculations and greed have lead to the current financial crisis. The current tax systems are not adequate to rectify the situation.

2 - INSPIRING OPENING QUESTIONS

• Why should personal gain and accumulation of money and wealth, e.g. generating more sales, making more profit, increasing interest rates, represent the only triggers to achievement, as the case at present? Why should everything translate into its worth of money? Why should money be at the center of everything to get things moving? Money should not be the only stimulant, and the same applies to PERSONAL gains as main driver to achievement.
• Why should beating competition and seizing market shares represent the main driver towards achievement? Is this practice written in the sky? Why should competition be key, why not more collaboration?
• Why should the current borrowing system be absolute? There are many other options.
• Why should GREED and FEAR represent the only drivers to achievement?
• What are the creative solutions to avert speculations?
• Why should things be paid only for the results and not the effort and good intentions involved? One should shift compensation and rewards to the latter as is applied in afterlife and judgment day.
• Why should someone with more money and good ideas start a more efficient means of production than the others and take over the market, and sell things cheaper, although he did not take into consideration the benefit and balance to society or to the environment, or ethics, or the future? In short, he did not take into consideration the many side effects involved. The name of the game is that one cannot achieve at any cost. This is not useful overall achievement although it might appear so. Achievement has to be more balanced.

3 - SOME INITIAL BRAINSTORMING INSPIRING SOLUTIONS

• NEW WAY OF BUYING: You do not own right away what you buy: There is no full payment now, since paying has to spread over time to the future: You pay 50% of current price now and the rest after a specific period , e.g. one month, or two, of GOING price after this period. But you can use what you bought in the meanwhile. Such means can counteract speculations. When you buy any product some 50% is paid to the seller immediately and the rest is paid to a specific buffer fund.
• A FEEDBACK LOOP TO RESIST UNUSUAL CHANGES: To avoid speculations and overpricing and possible bubbles one can have a feedback loop to break the spiral of increasing prices with increasing demand. You pay now 50% and later in a specific period you pay the rest (at ongoing prices). For instance, when a speculation situation arises the paid price does not go all of it to the product sold, but rather some will be diverted to a fund or means that seeks to balance speculative price increases, e.g. more investment in the same product to increase supply and hence drop prices and avoid speculative prices, or you cannot pay full price now. Or for instance there should be a rule that sets a threshold to price speculation based on a maximum profit margin over cost (Cost+ price).
• BALANCED MULTIPLE VALUES: Money and individual accumulation of wealth should not remain the main drivers to achievement, but rather there should be a Balanced Set Of Drivers that guarantee life and sustainability. People should get used to the notion of having multiple values to consider when purchasing or doing anything.
• This is not similar a tax system, but everyone has to get used to a set of balanced prices of a product when purchasing.

• There should be a new set of criteria for evaluating things that is more balanced than the present situation.
• NEW MONETARY SYSTEM: DUAL CURRENCY: A new valuation model should be practiced: Everything is priced with TWO independent currencies: One for the usual tangible value, and one for the non-tangible values.
• Value of a thing is spread over multiple dimensions, including the individual, the people, the earth, the effort (cost), the ethics (spiritual), and time (future).
• There should be a new type of dual value currency that does not only take consideration of the want and mere results, but of all other evaluation factors. Everything should have two prices, and you cannot purchase unless you pay both values. The two currencies are independent systems and cannot be converted into one another. In this system both results and efforts are rewarded. In this system both the present and future are taken into consideration. In this system there is a currency for personal want and a currency for community benefit etc.
• To gain the non tangible currency one has to get them through good deeds and benefits to the world, the earth.
• Currencies can be a point system without the notes (an electronic system). When you do good deeds to society or environment or spiritual life you get points, which you can use to purchase other things in the 2nd currency.
• The first currency can be called "HAVE <<" with arrows pointing inwards (Taking), and the second currency can be called "EARTH >>", with arrows pointing outwards (giving):

4 – THE NEW BALANCED SET OF CRITERIA FOR ESTIMATION OF VALUE OF A PRODUCT OR SERVICE

The value of any product or service is based on evaluating the following 6 aspects that will lead to a balanced appraisal:

1 – Value to the buyer, individual, the person, or buyer or customer or user etc: The want side, the demand side, the application and result side, the tangible side.
2 – Cost Plus value, material cost, energy, effort involved etc. = Reward of effort involved for the good, and not only the results. There is here a threshold of mark-up on cost when pricing, this to avoid speculations.
3 – DIRECT Benefit to people, the family, community, society, to the country, to humanity, to all people in the world. Adam
4 – DIRECT Benefit to the Environment, to the Earth, to all other creatures and living beings, and the galaxy etc.
5 – DIRECT Benefit to the Future and effect in the future: 2 – 3 years minimum.
6 – DIRECT Benefit to Spiritual value, afterlife, religion (God), Ethics, Moral values, Peace, collaboration, happiness

The first and second items represent the tangible factors and the rest the intangible factors.

5 - SUGGESTED PAYMENT RULES

This is the point that needs more deliberation. As pointed out earlier, the currency of intangibles, i.e. "EARTH>>" (Can be just a point system), is only earned by making good deeds. If a product has high "EARTH>>" value, does this mean it is expensive and is not affordable, or should one make it more affordable to all so that it can spread? What about products with negative "EARTH>>" value? Should they be banned? Should there be some acceptable ratio between the values of tangibles and intangibles? Should the value of the intangibles supersede?

As indicated earlier, there is no immediate payment of the whole purchase price, or at least the seller does not get but some 50% of the paid money right away (of both currencies), the rest is sent into a TEMP fund, and will be paid to seller in a month or longer, but at the ongoing price after the period (Hence buyer might have to pay more or less than he paid initially).

As Mentioned Earlier The Main Purpose Of The Article Is To Inspire The Reader Towards Breakthrough Solutions In The Face Of The Global Financial Crisis (GFC)

About the Author: Dr. Stephen Sweid is a business consultant and trainer with over 20 years consulting experience on the international scene: Europe, USA, Far East. He has involved as expert in technical assistance projects of international organizations, such as UNDP, UNIDO, World Bank, European Commission etc, as well as in consulting projects commissioned by multinationals. He is on the roster of Individual Experts of EuropeAid of the European Commission. He is currently active in Dubai, UAE, and other locations. His consultancy focuses on strategic issues, business development, Innovation and Marketing. Email: sweidsm@gmail.com

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