Bonds of Change
Prompted by readers’ queries and comments concerning Greece, this issue focuses not on Greece in fact but on bonds. For it is the bonds that Greece issued, the bonds that now bind her, that is the issue. To be sure, Greece like many others today ‘should not’ have got into the position that requires a bail out, but that is not the issue discussed here. (That is a generic problem, not an individual one, for why else would so many countries, companies and individuals be in such a situation? This has to do with the structure of the economy and the paradigm by which we conduct ourselves within it. Sure enough, that is a huge topic that needs addressing; here we focus only on one aspect of it – how it plays out in the world of bonds.)
We do so by taking an editorial statement as this month’s Sign of Our Time. Time to bond? is an appraisal of modern bond finance by Christopher Houghton Budd, also this month’s main editor.
This appraisal is born out of and then used to contextualise the two very different cases of Argentina and Greece. Argentina is at the mercy of private bond holders, high-powered lawyers who know precisely what their rights are and have little compunction in exercising them.
Greece fell into the twin trap of adopting the euro and accepting cheap money, without thought for any coming rainy day. Now she is under the thumb of ‘the troika’, so in this case it is ‘official’ rather than private institutions that are involved. We feature the assessment of Greece’s finance minister, Yanis Varoufakis. Between the two we have placed Portia’s ruling from the Merchant of Venice.
The question that needs answering from an associative point of view is how would things be different. Firstly, an associative economy would be known by the way it had overcome the emancipation of the money markets firm the goods markets (see Associate! May 2013). Secondly, it would heed the idea advanced by Rudolf Steiner from Two Kinds of Credit. An instrument of the first, the distinction would be made, both theoretically and practically, between real and personal credit. For it is not in the end the type of lending that is at issue, whether bonds or shares, but the tying of lending to real collateral rather than the competences and initiative of entrepreneurs.
The AEX Page features the case of Prometheus Finance in New Zealand, and an exchange on Greece and Yanis Varoufakis in particular. Also included is an extract from an EU-funded project, CrESSI, and an associative look at stocks and bonds.
Bringing the issue to a close, Accounting Backdrop turns The Eye of Accounting towards the the problem of the manipulation of words and figures, of their deconstruction and reconstitution. But by tracking the flow of individual transactions perhaps one can perceive the bedrock upon which they are built.