60% Say Depression Likely – The Affirmation Spot for Wednesday October 8, 2008

“Whatever we expect with confidence becomes our own self-fulfilling prophecy.”
~ Brian Tracy

A weekend CNN Poll found that 59 percent of Americans believe a 1930s style depresssion is “somewhat likely” or “very likely”. As we enter the troubled financial waters ahead, we really need to watch our thoughts.

Remember the power of our thoughts can work for our benefit or our detriment. Our mental expectations can worsen an already difficult situation, if we are not careful. Certainly, we do not want to become delusionally positive and pretend there are not issues. That approach denotes the downside to positive thinking.

Rather, we need to keep our wits about us and remain calm. There are always opportunities for growth and advancement in any situation. There are lessons to be learned that may benefit us greatly down the line.

Most of all, we need to visualize a better outcome than depression. If our minds begin to settle on that outcome, we will find a way to make it come true. Beware of attempts to plant those kinds of images in your mind.

“Let me assert my firm belief that the only thing we have to fear is fear itself.”
~ Franklin Delano Roosevelt

If we believe a depression is on the way, we will have a depression. If we are focused on bringing about something more positive, that is what we will experience.

Our thoughts are critical in determining what is to come. Fear and panic are contagious viruses. Depressions are built on them and cannot occur in their absence.

Our life in the near future – as always – will only be as good as we expect.

“Our circumstances answer to our expectations and the demands of our natures.”

~ Henry David Thoreau

Stay inspired!

Ray

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The Power of Our Thoughts in the Financial Crisis – The Affirmation Spot for Monday September 29, 2008

The current global economic crisis clearly demonstrates the power of our thoughts to influence the world around us. Markets are case studies in human psychology. They are a kind of collective mind in action. Our thoughts are really the force that drives them up or down.

The issue becomes who is driving the thinking? Who is creating expectation bubbles and who is popping them? It’s another reason to empower your own thoughts rather than allowing them to be driven by “experts”, politicians, or the media.

When housing prices, the stock market, or any other market rises it is the result of our thinking about them and our belief in them.

It’s not brilliant economic strategies, astute politicians, or suddenly realized value in houses and other assets that causes them to rise 15% per year. Prosperity and rising markets are created by our thinking. As long as our thinking is confident, things are good. When our thinking shifts to fear or worry about markets they begin to contract.

There is a certain collective nature to thinking about these things. When the thinking reaches critical mass (one way or the other) changes happen in the market.

As with other aspects of our lives, our thinking inevitably leads to our actions. When belief and confidence are strong our actions reflect the belief that growth will continue. The danger lies in believing that growth is an uninterrupted straight line. It is possible to make poor decisions or take unwise actions that can lead to problems.

That’s what we see in the current crisis. Very powerful financial companies made some bad bets on based on optimistic assessments. They wrongly concluded that the boom would go on forever and they got over-extended. Because of lax oversight and questionable business practices, they stretched optimism to fantasy land.

Mind you, when this happens real – sometimes negative – events happen in the world.  I’m not saying that thinking can avert the results of bad decisions or actions. I’m saying it is the impetus that drives the market one way or the other.

Why am I talking about this today? As Congress ponders an (imho) ill-advised bailout of Wall Street, the seeds of fear have been planted in the market (our minds) by financial and political leaders. They have set up a scenario that creates a crash, if their bill ($700 billion bailout) is not passed.

Planting these thoughts creates the negative thinking that will bring about a crash, if we are not careful.

The bailout is based on a logical fallacy called There Is No Alternative (TINA). TINA happens when someone says there is a problem and offers a single solution as the only possible course of action. This is almost never the case. It limits thinking into a narrow path of possibility. The fact is we live in a universe full of infinite possibilities. As citizens and people, we need to be on guard against people trying to limit our thinking. It smacks of manipulation and pushing us towards an outcome desired by a small group of people.

In reality, though, we can minimize the extent of these economic events by maintaining stable thinking and not over-reacting. Panic is created when the entire herd decides to run off the cliff – again based on a thought that “there is not enough I better get mine.” That’s what happened in 1929 and caused the great stock market crash that resulted in the Great Depression.

If optimism creates growing markets and pessimism create shrinking markets, it stands to reason that stable thinking can stabilize shaky markets.

A combination of accountability for those who have made bad choices and stable thinking will get us through this situation. Never forget, though, how important the way you think about these events is to how they will come out. Your thinking is a powerful thing. Never underestimate it.

Stay inspired!

Ray

The Financial Crisis and What We Can Do About It – The Affirmation Spot for Thursday September 18, 2008

Even in the face of great difficulty we have within us an ability cope, overcome, and succeed.

I’ve written a number of articles recently about going beyond positive thinking and happy thoughts on to empowered thinking. Empowered thinking includes being informed among its three elements. Being informed is about honestly assessing a situation – not candy-coating it – so that you can make sound decisions and take strong actions to deal with it.

We are quickly approaching a moment when being informed means looking honestly at the economic situation we are facing and recognizing that we must engage the other two aspects of empowered thinking – positive thinking and committed action.

The Situation

This evening a Wall Street Journal article declared the current financial crisis the worst since the 1930s. While the signs of trouble have been apparent for a couple of years, such statements can no longer be considered hyperbole against the backdrop of recent events.

  • Share prices plummeting
  • Home prices plummeting
  • The dollar plummeting
  • Companies exchanging debt and bets on debt and counting it as revenue on their balance sheets
  • Financial powerhouses gone in a day.
  • Great American corporations like GM and Ford hanging on for dear life.
  • A government already trillions of dollars in debt and borrowing every day to fight wars around the world acting as though it can bail everybody out.
All of this and our “leaders” still can’t bring themselves to even utter the word “recession”. The two major party presidential candidates Barack Obama and John McCain – awash in money and influence from Wall Street firms – are trying to “get their messages right” on the economy. They want to put the best face on it or make sure that the other side gets the blame for it.

The bottom line is that the people we elected to protect our interests have not done so. Companies we trusted to be responsible with our savings and our investments have not so either. And, we have all been guilty of thinking that perpetually rising home values and easy credit are a norm.

Let me be clear. Wall Street turned into Las Vegas over the past few years while both parties in Washington turned a blind eye and even poured gas on the fire. Bluntly, Wall Street bet our collective house and lost. Now they are coming to the government (the American taxpayer) and saying, “You have to save us because the whole ship will sink, if you don’t”.

So far the bailout has nearly doubled the stated federal government debt and its not over yet. When the federal government owes money guess who that means really owes it – yep the taxpayers.

Some in Congress are finally responding against the move by the Treasury Department and The Federal Reserve to rescue the financial giants. That is a good, if belated, thing. After all, The US Constitution clearly gives only Congress the power to appropriate government funds. Here we have the executive branch and the central bank overstepping their Constitutional authority. Congress needs to act and act swiftly to stop these actions.

What We Can Do

Being informed allows us to use positive thinking and committed action to create change. There are several things we can do right now and several things we can learn for the future from this situation.

  • Don’t panic – markets are all about human psychology – i.e. “the herd mentality”. In good times, the herd grazes until it is full. In bad times, the herd gets spooked and does things as stupid as running off a cliff. When panic takes over a bad situation becomes a spiraling cycle of negativity. We need to stay calm and carefully consider our moves.
  • Demand Congress assert itself – Congress has the Constitutional authority to appropriate funds – not the executive branch and not The Federal Reserve. Congress has direct responsibility to the people and they need to reassert that Constitutional authority.
  • Demand oversight – we probably thought our government was doing due diligence in overseeing the financial markets. Purely and simply it was not. We need to demand a return to sensible oversight of the markets and not double-talk from politicians beholden to those markets.
  • Reduce or eliminate debt – with markets and credit tightening, it is not going to be a good time to owe people money. We should all do what we can to reduce or eliminate as much debt as possible.
  • Demand justice – people who have been irresponsible and even criminal in bringing about this crisis need to held accountable.
  • Decentralize the economy – this is paramount. The keys to our economic fate lie in too few hands and in hands that do not have the peoples’ best interest at heart. This must change. I’ve had recent dialogue with a number of people promoting a new wave of entrepreneurialism. The idea of independent business ownership has given way to giant box stores and massive government and extra-governmental organizations (i.e. The Federal Reserve) managing the economy. This has taken peoples’ economic destinies out of their hands and given it over to these entities.
  • Control what we can control – we cannot control the macro situation, but we can do everything in our power to make things better as we can affect them. Evaluate your own situation and take positive steps forward towards expecting the best and preparing for the worst.
  • Focus on the best possible outcome – we can align our thoughts with the best possible outcome for ourselves and the nation. We severely underestimate the power of our individual and collective thoughts to alter the reality we receive. If we focus on the best possible outcome that is what we can expect to experience.
We may be in for some stormy seas in the short term. The key is that with empowered thinking – positive thinking, being informed, and taking committed action – we can change course and push towards a better future for us all.
Stay inspired!
Ray