Non-stop media coverage aside, it does feel like we are experiencing more frequent natural disasters. . Perhaps we should call them natural events since they seems to happen with such regularity that we should be very well prepared and learn to live with them. It was somewhat ironic then that the city of Christchurch should receive an international Civil Defence Award prior to the recent 7.1 earthquake. The response to the earthquake was very impressive from the Civil Defence HQ downwards into the community. Of course nothing is perfect and it’s probably telling about our level of expectation that some were unhappy about how the council handled things. The fact that no one died is quite incredible, due to a combination of strict building standards, low population density and the time of the quake. But what was of interest to me was how the city residents responded. There was a definite feeling of everyone looking outwards and willing to help. The fact that the city could get back on its feet so soon was testament to the resilience of its people.

So what makes systems resilient? Simply the ability to bounce back from a shock or unexpected event. Generally this is applied to ecosystem shocks: the ability of ecosystems to regenerate. But people can be resilient, in the way they respond to shocks such as the loss of a loved one. Communities can also be described a resilient if they can recover from an event which effects the whole community. More and more resilience will become a major part of any community planning scenario. Christchurch has done well in this area and I am sure lessons will be learnt from recent events.

When we look at building resilience into our systems it’s worth looking at the key stress points. During the earthquake a couple of these stressors became clear: one was money and the other was the exchange of  services. People needed to buy stuff yet with power down there was no way of paying via the usual channels and many people didn’t have cash on them. Also people needed to exchange goods and services but again there were problems with communication, power and availability.

It’s at a time like this that we see the promise of local community currencies come to the fore. One such system was the Lyttleton Timebank which operates in a small and geographically constrained community. This is a perfect setup for a successful community system. More and more these type of systems will become part of the fabric of a successful and resilient communities. Watch a story about them here

Yekaterinburg could well be a name to remember much like Maastricht, Yalta, Bretton Woods and other places that carry major political history on the back of their relative obscurity. A few weeks ago the big 4 players, Brazil, Russia, China and India, met to in Yekaterinburg to discuss the vexed issue of the $, US assets and US global financial dominance.

As I’ve discussed before there is a major shift underway in the way the global market is structured. Not just in terms of currencies but also trade and influence. The BRICs have a powerful case to make: 40% of global currency reserves and almost half the world’s population (though Russia’s population is declining, a somewhat serious issue).

There is a strong feeling that the US has acted recklessly overt he last 30 years in flooding the world with $ and creating huge imbalances which have caused such chaos in global markets. So whilst there is always plenty of posturing and grandstanding, especially from the Russians, there is a real case for the US to answer:

- Global trade imbalances.

- Cowboy capitalism.

- Turbo boosted monetary expansion.

- Instability in global financial markets.

It’s also interesting that the meeting of the SCO (Shanghai Cooperation Organization) was held at the same tim and the US was not invited even though it wanted to attend. There is a strong argument that there is no real alternative to the $ but that doesn’t excuse the facts. One dominant currency has not helped create a stable system. It has simply allowed to issuer to experience huge profits from seigniorage and wield extraordinary political and economic power.

And can we really take the rating agencies seriously? They are all US based organisations. Ultimately whether the $ loses influence or not depends on the alternatives. I still believe a commodity backed currency is a likely development, given the nations involved.

At the same time the development of local currencies will help create a more stable and complex system. For now though expect more talk about a $ alternative and expect it to be driven by the BRIC crew starting with the upcoming G8 summit in Italy.

According to my colleague and friend, Branton Kenton-Dau , human beings are intentional devices. We are here for a purpose, a reason and our human form is a structure for expressing intention. I like that. Every time we act we are expressing something about ourselves even in the most nano way.

So when it comes to managing our money we are faced with the same questions: who am I and what is my intention?

It seems to me that we have 3 ways of using our money: Giving, Lending or Buying.

Giving is the simple act of directing one’s money to somone else with no expectation of financial return inclduing the original gift. But there is a clear intention that the gift should have some kind of impact. Simply this can be regarded as giving money to charity or a fundraising appeal. Your return is hopeful, that some positive outcome or impact will be achieved by way of your contribution. This is a powerful way of expressing your intention. Of course one can also give your time, goods and services for no financial return and this is a more hands on approach.

Lending, otherwise known as saving, is also a powerful tool. When you deposit your cash in the bank you are in effect lending to the bank. In legal terms you are an unsecured creditor of the bank. There is little intention here as we tend to see the process as the bank doing us a favour. But when it comes to peer to peer lending, microfinance or simply lending money directly to friends, the process takes on a deeper signifiance. There is a more direct energy involved and a desire to participate in an outcome. The personal connection to borrowers helps create this possibility. Another form of lending is to large business via corporate bonds. This is akin to saving in the bank except again there is a directness involved. A large business wants to raise $100m and I lend it $20,000. I’m a small piece of that but I’m essentialy helping to fund the business. But there is still some distance there as I’ve probably dealt through a boker or investment advisor. What I am keen to see is more peer to small business in developed countries. We’ve seen Kiva open up loans into the US now and soom we will see more acceptance in people lending larger sums to small businesses. Not so much microfinance as peer finance. What better way to create strong and trusted communities than people lending to businesses they buy from.

The third form of intentional money is the process of buying. This is two parts: buying for ownership in a business and buying for personal consumption. The latter is the world of ethical and values based purchasing. It’s a well developed market and I won’t got into that. But actually directing your money into businesses through ownership is another way to direct the flow of your financial intention. Whether it’s ethical investing at the macro level (buying into ethical funds) or at the micro level (investing in start ups that share your goals and values). The micro level is more interesting because the impact of your investment is greater. In the macro world of stock markets and large companies your investment is not so influential because of the way institutional investors control so much of the market.

We have many choices when it comes to dealing with our money. Each time we make a financial decision we have an opportunity to express our intention. Its a very powerful force. The more we align our choices with who we are, the more powerful our impact becomes. We become an efficient intentional system

As they say money talks.

Early in 2008 I commented on the shaping of a post-imperial world where the flow of investment funds, and coporate takeovers, was coming from the East to the West, with China, India, Russia and the Gulf States recycling $ reserves and new found wealth into weak and failing companies in the West.

The catastrophic implosion of the US financial system in the last year has merely emphasised this change in the balance of monetary might.

So when Kiva, that beacon of social entreprenuership, decided to offer loans in the US itself, there was a huge intake of breath. The US needs microloans??!!!

Of course it does. How do small businesses get funded? Normally by people taking out second mortgages, borrowing from friends or ramping up credit cards. In fact I’m told many businesses fund cashflows problems using personal credit cards. Why?

Because banks have a model where they lend on housing as collateral…oh yeah that worked well…not.

The old fashioned approach to banking (one my father was involved in for 42 years) was lending to small business people and supporting them through the ups and downs of the business cycle. Investing in people and creating relationships of trust.

I think we are headed back to this and it’s peer to peer lending that is making this happen. The web itself has allowed these bonds to be built, that’s what networks are after all. Lots and lots of micro connections. Isn’t that the amazing thing about the web? It’s so huge and vast yet it’s simply a conglomeration of molecules connected together.

I know I’ve been bagning on about this for ages but banking, like media, will be forced to change. The micro world is causing new networks to be created, new bonds to be formed and new efficiencies to be found.

Harnessing the power of the web is allowing this to happen.

Microfinance has shaken up the banking world. I enjoyed reading Matt Flannery’s piece on the Kiva story.

Microjustice will no doubt change the legal world in due course.

We already have microrelationships, micromedicine surely on the way.

And the biggest prize of all………..microgovernment.

The change is coming, the inexorable march of system reorganisation is humming away in the background. It’s not top down, it’s an unseen mass movement with no control function. A pure chaotic system in action, free to develop and receive feedbacks in real time.

Who would have thought a lender from Domenica would be funding a borrower in the US.

Yes times are changing.

It’s taken a bit of time but someone decided to publish my climate change proposal. After being rejected by the Journal Of Climate Change for being too grand, the Environmentalist, the publication of the Institute of Environmental Management and Assessment in the UK, published an amended version last month.

You can read it here if you haven’t read the old version.

The key theme is that we must control what we take out of the earth rather trying to control emissions after use. It also stresses the need for a global carbon budget.

Nothing has happened in recent years to change my thoughts on it. It is a large canvas with many themes to explore. If anyone wants to take on some of those themes in a new piece of research just let me know.

The P2P phenomenon which started with online communities and has now spread to lending money, couch surfing and music swapping has another possible application: currency exchange.

The reason I mention this is because of the highway robbery some currency exchange outlets are carrying out. To give you an example:

Last week I took a trip to Sydney. I bought some A$ at Christchurch airport through the BNZ. Their rates are always very good usually a spread of around 2-2.5%. Now that’s still pretty big but remember these rates are change maybe once a day max and the markets can be moving as much as that. I bought some US$ at 0.7929 knowing the market was actually trading at 0.7945 so i was getting an almost at market rate.

But when I arrived in Sydney I checked out the rates available at Travelex. These guys are offering outrageous prices (unfortunately they are at Auckland airport also).

Their spreads on A$ to NZ$, US$ and GBP were 20%, 15.6% and 22.4%.

Who are these guys kidding. In market vernacular I could drive a bus through that spread (more like a fleet of them).

So what to do? Well we have P2P lending now established in many commonwealth countries. So how about extending that to provide a currency service within the new distributed network.

It’s food for thought.