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Money matters: Storm Watch Update Part 2
Gold and Silver Fundamentals - Based on a an article by Jim Puplava March 2004
Graham Macdonald
MBMG International Ltd.
1) Producer Hedge Book
Reductions and the Decline in Central Bank Gold Sales continued:
This low interest rate environment has reversed large
spec positions on the COMEX from net short to net long. With a contango of
only 1%, there is very little incentive to short gold. Contangos have
fallen from the range of 5-6% to today’s 1%. A reversal of hedging
policies has produced two effects. The first is that gold companies are
delivering into existing hedge contracts without renewing these contracts.
This results in gold being delivered back to bullion and central bank
vaults. The second factor is that as prices strengthen and then pull back,
companies have been aggressive re-purchasers. This trend of aggressive
hedge book repurchases should continue as the price of gold advances. It
can make all of the difference of survival in a company. Hedged positions
aren’t profitable when the price of gold is rising, or even worse, going
parabolic. The drastic reduction of hedge book positions can be seen in
the table below.
In addition to low interest rates, we are actually in a
negative interest rate environment (interest rates below the inflation
rate). In a period of higher inflation such as we are in today, negative
interest rates are forecasting the destruction of the value of financial
assets. This makes gold more valuable. Finally there is the Washington
Agreement which limited annual central bank gold sales to 400 tonnes of
gold a year. This agreement will be extended. For more about central bank
sales, I suggest the reader go to http://www.gata.org/ to find out more
about central bank sales and their impact on the gold markets. The only
addition I would make it to ask the following question: If central banks
have been selling, who has been doing all of the buying?
2) Reflation
Since the stock market bubble burst in 2000, the
recession and terrorist attacks of 2001, the Federal Reserve and central
banks around the globe and their respective governments have been fighting
deflation with massive monetary and fiscal stimulus. Global governments
are running large, and in some cases as in the U.S., massive budget
deficits in order to counter economic weakness. Both money and credit have
expanded exponentially in the U.S. Traditional standards of money growth
no longer tell the whole story of credit reflation. Credit is expanding
beyond the traditional venues of bank lending. Today, credit is expanded
mainly through the financial markets through asset- backed securities.
Every conceivable kind of debt from home mortgages and credit cards to
auto and instalment loans have been securitized.
As of 3rd quarter 2003, national debt increased
year-over-year by $1 trillion, while personal income grew by only $298.5
billion. Nominal GDP grew by $371.2 billion and consumer debt by $969.5
billion. Total debt expanded by $1.7 trillion. [1] America’s debt bubble
has grown to be so large that there is only one way out for this country
and that is to inflate its way out of its debt burdens. I happen to be one
of the few who believe that the Fed will not return to a tight monetary
policy. The debt burden has become too large and the country now depends
heavily on asset bubbles to keep the economy from collapsing. Last year
households extracted between $600-700 billion out of their homes in the
refinancing boom. All of that equity extraction went to pay ordinary bills
of living and into stock speculation. It wouldn’t take much in the way
of interest rate hikes to collapse this debt - laden economy. The last
time the Fed tried (beginning in 1999 and in 2000); it brought about a
collapse in the stock market and a recession in short order. Today the
economy is far more dependent on asset inflation in real estate, stocks,
bonds and mortgages. A sharp rise in rates would bring about severe asset
deflation in paper assets.
The long and short of it is that credit will continue
to be expanded in this country until there are no more borrowers to be
found. Then, when there are no more private borrowers to be had, the
government will become the borrower-of-last-resort with the Fed monetizing
all of the government’s excess borrowing or budget deficits. Monetary
reflation equals gold, silver and commodity inflation.
3) A Declining U.S.
Dollar
The third pillar of this new super bull market in
precious metals is a declining dollar. Despite a 28% decline in the U.S.
currency, the United States is still running record trade deficits.
America’s trade deficits are structural from energy to capital goods.
Last year’s trade deficit was a record, rising to over $500 billion. In
the month of January the U.S. experienced another record trade deficit of
over $43 billion. At the present rate of rise it will take more than a 50%
increase in exports just to balance out our trade. With budget and trade
deficits that are now running at over 5% of GDP and growing, our trade and
budget deficits are now at levels where a currency crisis sets in. The
dollar is going much, much lower. A decline of 50% or more would be
possible if not probable. It is also unlikely a decline of this magnitude
would be orderly. Severe currency adjustments don’t correct themselves
in an orderly fashion. A crisis is more likely. The chart below of Gold
vs. US Dollar (1990 - 2004) shows the decline in the dollar since 2001 and
the rise of gold. There is a reverse relationship between the two. One is
a fiat currency and the other is real money. Over the course of history
only real money survives a crisis, an empire or a nation. Gold and silver
are enduring; paper currencies are not.
The above data and research was compiled from sources believed to be
reliable. However, neither MBMG International Ltd nor its officers can
accept any liability for any errors or omissions in the above article nor
bear any responsibility for any losses achieved as a result of any actions
taken or not taken as a consequence of reading the above article. For more
information please contact Graham Macdonald on graham@mbmg-international
.com
Snap Shots: Dirt and your photographic investment
by Harry Flashman
“Look after the pennies and the pounds will look
after themselves,” I was taught at school. One day I will understand
what that meant! However, everyone believes in looking after your
investments. After all, our financial columnist Graham Macdonald has
thousands of tips for you to ensure the viability and longevity of your
financial investments. So here are a few tips from me on how to look after
your photographic investments - investments that can be quite big ticket
items too.
 To
show you the money that can be involved in photography, my favourite lens
was a 40 mm Hasselblad wide angle, with a huge bit of glass on the front,
that would cost in Thailand over 200,000 baht. Worth looking after?
However, even humble point and shooters will benefit
from being looked after. Any camera will give you better and more reliable
service, and not let you down when you are about to take the one shot that
will make you millions of baht in the international news market.
The first concept is to understand just what it is that
will go towards destroying your camera. Usually these are simply: dust and
grit, moisture and condensation, battery acid and being dropped. Looking
after your investment is then a simple case of countering the above
factors.
Moisture and condensation are the easiest ones to
counter, but the dampness comes from more than just being caught out in
the rain. Thailand is a hot and humid environment. How many times have you
taken your camera outside and found you could not see through the
viewfinder because it had steamed up? That is condensation. The best
answer here is to keep small sachets of silica gel in your camera bag, or
in the little “socks” you keep the lenses in. When the silica gel
changes colour you can pop them back in the micro-wave and rejuvenate them
very easily. Many bottles of tablets come with perfect little sachets in
the top of them.
There will also be times when you get caught in the
rain, or you may even want to get rain shots. The camera body is
reasonably water proof, but you should carefully wipe the outside of the
case dry afterwards, and especially blow air around the lens barrel and
the lens mount.
Dust and grit is the ever present danger in the
environment. How many times have you got a small piece of grit in your
eye? Often, I will wager. Small particles such as that can be very bad for
the lens focussing and zooming mechanics too. When the camera back is
opened, while changing film for example, any airborne grit can get into
the shutter mechanism and damage it, or even just get stuck on the spring
loaded pressure plate that runs on the film. This can leave a linear
streak on the film, damaging every negative in the series - and ruining
your prized photographs. There is really no secret here. Load and reload
in the cleanest environment you can, and carefully blow out the back of
the camera every time you open it up. Never brush bits away with your
fingers - your sweat is corrosive!
That leads us to the even more serious type of
corrosion - leakage from batteries. Just about every camera in the world
these days has a battery, even if it is just to drive the needle on the
light meter. Acid leakage (and even acid fumes) from a battery can totally
ruin a modern camera, getting into the electronics so that it never works
properly again. The answer here is to discard the batteries every twelve
months, even if they seem to be fine, and if you are not going to be using
the camera for an extended period, then take the batteries out altogether.
Finally, keep your camera in a soft case that can absorb some shocks.
Not the silly leather or plastic thing it came in. If you have not got one
- then go out and buy one today. They are very inexpensive, especially
when compared to the cost of the camera! Protect your investment!
Modern Medicine: Mongolian Blue Spot and the battered baby syndrome
by Dr. Iain Corness, Consultant
Bruises on a child’s body are often
considered proof that a baby has been battered. An apparent bruise on the
buttocks, the shape of a hand and five fingers ‘undeniable’ proof.
However in Asia, a newborn baby with the ‘handprint’
bruise is very common, while child abuse is not common at all. The problem,
or rather the condition, relates back to Genghis Khan and the Mongol hordes.
It is a wonderful piece of folklore and a fine example of applied genetics.
Let’s look at the folklore first, and you are going to
have to dig very deep to get this tale anywhere else! A Mongolian baby,
called Tanujin, was born just over 1,000 years ago, but did not breathe. His
father, in desperation, held his newborn son upside down and smacked him
severely over the bottom, and the baby drew breath and lived, but carried
the life-giving bruise for the rest of his life. That baby later became
Genghis Khan (King of the Earth ... and by the time he died in 1227 he was
ruler of a large chunk of it).
History has chronicled the Mongol hordes that raped,
pillaged and annexed countries from China to Persia. His highly mobile
troops travelled the difficult terrain of Siberia. Famous cities were
captured and looted such as Tashkent, Baghdad and Bokhara. Cities that
surrendered were spared but those that resisted were razed and the people
slaughtered. The Mongols conquered northern India and Afghanistan. In 1222,
they defeated the Russian and Bulgarian armies. At the time of Genghis
Khan’s death, his empire stretched from China’s Yellow River to the
Dnieper in Russia.
And now back to folklore. The descendants of Genghis Khan
also received the hand-shaped bruise, being his four sons Ogdai, Jagatai,
Juji and Tule, who were given one quarter of the empire each after their
father died. They in turn passed on this ‘trademark’ and so this
continues till today. If you have the sign of Genghis Khan, called Mongolian
Blue Spot, you can claim descent from the warrior king.
Now Mongolian Blue Spot, as a clinical condition, is well
documented, and I came across figures suggesting that at least one Mongolian
spot is present on over 90 percent of Native Americans and people of African
descent, over 80 percent of Asians, over 70 percent of Hispanics, and just
under 10 percent of fair-skinned infants (Clinical Pediatric Dermatology,
1993). When you remember that Genghis and the rape and pillage lads went
through Russia (and the Mongol peoples there went through to North America),
and a fair bit of seed would have been spilled in France, Germany and Spain
it looks as if there really could be a genetic inheritance.
Now I have an (unverified) quote from American Journal of
Human Genetics (2003):
“We have identified a Y-chromosomal lineage with
several unusual features. It was found in 16 populations throughout a large
region of Asia, stretching from the Pacific to the Caspian Sea, and was
present at high frequency. The pattern of variation within the lineage
suggested that it originated in Mongolia around 1,000 years ago. Such a
rapid spread cannot have occurred by chance; it must have been a result of
selection. The lineage is carried by likely male-line descendants of Genghis
Khan, and we therefore propose that it has spread by a novel form of social
selection resulting from their behavior.”
So there you are. Science showing us that sometimes fairy
tales can be true!
 Heart to Heart with Hillary
Dear Hillary,
Why are there so many lady-boys in Thailand? Everywhere you go there seems to be
a lady-boy these days. Every bar has at least one, they are soliciting on the
sidewalks and there are complete shows made up of them. Now I have one in the
office next door. When will it stop? What’s the answer Hillary, as I am sure
you will know what to do?
Katoeys R Us
Dear Katoeys R Us,
Hillary will know what to do about what, my Petal? About the soliciting
lady-boys at the side of the road? My advice is to have nothing to do with
solicitors who work on the sidewalks, use only qualified solicitors that work in
legal offices. Either way you are going to be out of pocket (I was going to say
‘screwed’ - naughty me), but at least with the ones in the law offices you
can complain to the Law Society. Your other point - every bar has a katoey, you
say. Try better class bars is my answer. There aren’t any at the
Chickenpluckers Arms where I have the occasional tipple. So you now have one in
the office next door - so what’s the problem here? Stay in your own office.
Just be thankful it’s not compulsory, my worried little Petal. Time to live
and let live. We’ve all got our peculiarities, even (or especially) you!
Dear Hillary,
With the crazy closing hours of the bars these days, it must be affecting
everybody. I am a tourist, and I don’t go to the bars to pick up a girl, I go
to have some fun, chat to some local girls and relax and enjoy myself on
holidays. I am not a sex tourist, yet I am now told that I must go back to my
hotel long before I am ready, and if I want to continue chatting to some local
people I have to take them back with me - forcing me into becoming a sex
tourist. I come to have fun and a good time. I don’t come to be told when to
go home and who I have to take home. Doesn’t Thailand want tourists any more?
Early to Bed
Dear Early to Bed,
Hillary isn’t the right person to send your grievances to, you should send
this to the Minister for the Interior, as they are the ones that determine the
operating hours of the entertainment outlets. Now, if Hillary was in charge,
there would be no regulated hours. If a bar wanted to stay open 24 hours, then
that is up to the owner. If the bar is still covering expenses at 4 in the
morning, then fine. They would very soon self-regulate, as nobody keeps
non-profit making businesses open very long. It really is so simple, nobody
stays open if they are losing money. Fairly basic economics I thought, but then
Hillary isn’t in the ministry, so perhaps I do not appreciate the enormous
problems involved in getting tourists to spend their money in a hurry and then
go home. I saw a bumper sticker once which read “Welcome to Texas - Now Go
Home”. Perhaps I should be making a similar one for Thailand. It would read
“Welcome to Thailand - Please leave your money and now Go Home”. It could
even become an OTOP best seller? The ladies of the night could even have them
made up as business cards!
Dear Hillary,
I read in one of the daily papers where a foreigner was saying that marriages
between foreigners and Thai ladies don’t always work. I wonder what he was
trying to say, as because marriages between lots of people don’t work, not
just with Thais. Or is it worse here than overseas? Do you have any figures,
Hillary?
Statistical Sam
Dear Statistical Sam,
Of course Hillary has a figure! It isn’t quite as svelte as it used to be, but
it’s not bad for someone my age. Or so the boys tell me! (Blush!) Now, getting
right down to basics though, the problems you are having come from reading daily
newspapers. Weeklies are much better, and you don’t have to rush before the
next issue. However, being serious for once, the divorce rates in the UK, USA
and Australia, for native born people are around 50 percent. Every second person
has been divorced! Second marriages also have a high divorce rate, so it’s not
just a case of a lousy choice first time round. It’s a lousy choice second
time around. And third, and fourth! When you factor in the problems with
communication when looking at the statistics in marrying a foreigner (in any
country, or from any country), then it is not surprising that there are an equal
number of failures. The fact that anyone stays married is amazing! Personally I
believe it depends totally on the willingness of both parties to take the rough
with the smooth, again this is independent of nationality. Of course, if you
make your life’s choice from the ladies of the night, you should not be
surprised if they have fluttered away by the morning! Such is the nature of the
butterfly, my Petal.
PC Blues - News and Views:
The browser wars
by Monitor
There is recent news that Micro$oft is putting together
a team of programmers to restart development of Internet Explorer, its web
browser. The last version, IE6, was released in August 2001, and the team
that worked on it was then disbanded. Micro$oft hoped to include future
functionality in the forthcoming operation system, Longhorn.
Longhorn is now late. As recently reported, Micro$oft is
releasing a major upgrade to Windows XP, and now they are resuming
development of IE6.
Almost incidentally, Micro$oft has recently paid a large
sum of money (12.75 million USD) to a small Norwegian company. Opera (www.
opera.com) admitted accepting money, but didn’t say from whom. Opera is a
neat little browser which runs on Windows platforms, and on a wide variety
of handheld devices.
When Micro$oft defeated Netscape a few years ago, it
obviously thought it had no competition (worth mentioning) in this area. A
strange beast called Mozilla grew from Netscape foundations, but floundered
until very recently. It is now a viable alternative, at www.mozilla.org/download
.html
Opera is good, and worth trying. Micro$oft appears
nervous.
Lo, and behold! As I was writing this article (July 1),
an official public warning was issued, by Department of Homeland Security
no less (don’t believe me? see www.dhs.gov) - to use anything but
Internet Explorer - because a Russian website had an effective attack which
stole money. This is the US government warning people not to use Micro$oft
software!
Read about it at story.news .yahoo.com/news?tmpl=story
&cid=74&e=3&u=/cmp 20040702/tc_cmp/22103407. The Russians have
since been closed down (shot?), and today (July 3) I see Micro$oft is
issuing a patch to stop this from happening.
If this was a bicycle tyre, it would be all out of shape
with patches.
There has been a significant upsurge in downloads of
alternative browsers, documented at www.wired.com/news/infostructure/0,1377v,
64065,00.html. Try one yourself.
Micro$oft
tightens the screw
Micro$oft will release a system upgrade for Windows XP
this summer. The upgrade, called Service Pack 2, closes security loopholes
in XP and makes it easier to keep machines safe from viruses.
Windows XP is the latest version of the Windows
operating system, and has been widely pirated. Do you use a pirated copy?
The service pack, SP2, contains a list of the serial
numbers of the most widely pirated versions, and will refuse to upgrade
those versions. If your copy is a pirate copy, and you rely on it, you may
have to buy a legitimate copy in order to benefit from the upgrade.
The upgrade will be some 80 Mbyte, and too large to
download over anything but a broadband link, so legitimate owners may have
to ask for a CD. Microsoft will take orders over their website, but you
will have to disclose your address!
Besides closing security loopholes, SP2 is promised to
provide a blocker for pop-up adverts, and warnings when spyware tries to
install itself.
What price
software?
How much is a legitimate copy worth? At Comtech (Sriracha)
I can buy CDs at 120 baht (about 3 USD). A typical discount website (www.buy
cheapsoftware.com) offers Windows XP at 138 USD, and quotes the full price
of 219 USD. Anyone using this for business purposes will probably want XP
Office too, at over 200 USD discount price.
By comparison, a copy of SuSE Linux Pro - which includes
the Linux Office suite - costs 90 USD plus shipping. Doubtless, legitimate
discount prices are available (try cart. cheapbytes.com). A full set of CDs
for SuSE Linux can be had in Sriracha for 600 baht (15 USD).
I have recently been spammed with badly spelt emails
offering the same things at 50 USD. Fifty dollars for pirate copies?
As an aside, governments are switching to Linux. Brazil
moved some time ago, and Germany is moving. Yesterday I saw that France was
moving in that direction. Now, the EU has imposed a large fine on Micro$oft
for restrictive practises, which Micro$oft is appealing against. If they
are not careful, by the time they settle the case, the whole of the EU will
be using Linux.
Quite possibly, Micro$oft’s dominance is on the wane.
Personal Directions:
Create a burning desire to reach your dreams
by Christina Dodd
There is so much emphasis placed on “setting goals”
and “reaching goals” as you move towards fulfillment in your personal
and professional lives. But although you may now be aware of what you want
to achieve, at this stage it may only be something you need, wish, expect or
long for. This, however, is of little benefit and is not enough to actually
move you with a definite force along the path towards success. What you need
is to create a “burning desire” to excite and inspire you to accomplish
your goals.
Just as the fuel of a rocket propels it skywards, desire
is the fuel that propels us in the direction of our worthwhile goals. Just
as you can think of a tall glass of fresh juice on a hot day and feel
extremely thirsty, you can stimulate and arouse the feeling of desire by
concentrating your thoughts on the rewards you stand to gain upon
achievement of your goals.
When you desire something so intensely that you give your
all to have it, you will succeed, crushing all obstacles along the way. It
is this intense and obsessive desire that makes the difference, separating
the winners from the losers. It is this emotion, laced with passion, that
lights the fire in your heart to utilize every bit of power and energy you
have to go out and do what you have to do!
Desire is the starting point of all achievement. As I
have mentioned these words many times before:
“Whatever the mind of man can conceive and believe it
can achieve.” - Napoleon Hill.
If you are to accomplish your dreams and goals you must
develop a burning desire, or else, no matter how worthy your goals, you will
not achieve them. Often the vital difference between winners and those who
come a close second is not so much a variation in ability, approach or
method but rather a stronger desire to win.
Gail Deurs had such a desire. Imagine losing sight in one
eye and suffering from uncontrollable shaking. Then undergoing radiation
treatment and enduring horrendous side effects, causing minute holes all
over one’s skin as well as feet so swollen that walking becomes unbearable
and impossible.
Now, imagine doctors being close to amputating both feet.
Imagine this same person eighteen months later winning the 100m Gold medal
at the 1992 Olympics.
Unbelievable? No, Gail Deurs did it! Nothing could stop
her. She knew precisely what she wanted and her burning desire to achieve it
let nothing stand in her way.
Some people argue that when our physical health is in a
critical situation such as this, an entirely different set of reasons and
emotions come in to play and the same level of desire would not be able to
be created in a “normal” situation. I’ll let you make up your own mind
about that, but there is one thing for sure, there are a lot of incredibly
successful and enriched people out there in this world who became that way
coming from “normal situations”.
How do you create the desire?
You are now aware that having desire is critically
important in reaching your goals. So how do you create it?
You create it by analysing the personal rewards or
benefits you stand to gain from achieving your goals.
That’s it! There is only this one way to achieve the
burning desire so necessary to accomplishing your goals and that is to have
worthwhile rewards.
Look at your list of goals (what you want from life). If
you don’t have one – start one!
Now ask yourself the following question and write the
answers under each of your written goals:
‘What will the benefits and advantages be once I have
achieved this goal?’
It is important to write the answers down in the present
tense.
In other words as though you have already accomplished
your goal.
If for example you are overweight and you want to lose
20kg, your list could look like this: ‘I feel healthier and more
energetic.’
* ‘I feel comfortable in that new costume I only
admired on others.’
* ‘I am now a lot more confident and happier with my
appearance.’
If your goal is to be wealthy, your list could look like
this:
* ‘I now own the home of my dreams overlooking the
ocean.’
* ‘I am able to help friends and family who find
themselves in financial difficulties.’
* ‘I can now travel to all the places I once only
dreamed of visiting.’
This is possibly the only way you can stimulate your
desire. You must have a benefit to achieve, or a loss to be avoided.
Everything you do in life is for a reason, otherwise why do it? So if you
have numerous reasons to do something, you will be far more motivated to do
it.
If you cannot list any personal rewards, you have not
stated your goal correctly and it is not a goal. If you can find enough
reasons why you want to achieve something, you will create the desire that
will motivate and drive you to accomplish anything.
Desire stimulates the emotions, making our goals seem
real. It is a quality that everyone can develop at no cost. It is a powerful
quality that has seen the underprivileged lifted to the ranks of the
privileged as well as helping those that should have died beat the odds and
live to a ripe old age. Our desire gives us reasons to forge ahead and make
our goals real. It will also drive us towards the creation of a good, solid
plan to achieve our goals.
Remember, if our reasons are strong enough, we can do
almost anything we put our minds to. How we do it will seem to naturally
follow.
For more details about our personal and professional
skills development programs, please email me at Christina.dodd @asiatrainingassociates.com
or visit our website. Until next time, have a fabulous week and take one
step closer to reaching your goals!
Psychological Perspectives:
Understanding abusive behavior
by Michael Catalanello,
Ph.D.
Many around the world were shocked by the recent
revelations of Iraqi prisoner abuse by American military guards at Iraq’s
Abu Ghraib prison. Widely circulated photographs of prisoners hooded,
stripped naked, threatened by snarling dogs, sexually humiliated, and led
around on the end of a leash, provided graphic evidence of a level of
cruelty few imagined possible.
The response of the American President was perhaps
typical of many who viewed those disturbing images, when he suggested that
these were isolated acts performed in secret by a few deviant individuals.
In his remarks, President Bush seemed determined to draw a stark contrast
between the perpetrators of these appalling acts and the good and noble
American people.
Can we necessarily conclude, like President Bush, that
the individuals who performed these abusive acts are deviants and not
representative of the mainstream public? To what extent might acts like
these be attributable to the personalities of the perpetrators? To what
degree might they be a consequence of so-called situational factors, the
characteristics of the immediate social environment?
In the 1970s a landmark series of experiments by Stanley
Milgram demonstrated that situations can be arranged in such a way as to
make it possible for normal people like you and me to behave abusively
toward our fellow human beings.
Normal subjects were recruited to take part in an
experiment in which they were asked to deliver electric shocks to a
“learner” in what they believed was an experiment in learning. They
were instructed to operate a “shock generator” equipped with a number
of switches ranging from 15 volts labeled as “slight shock, “ to 450
volts, designated “XXX.”
In the beginning of the experiment, subjects were
instructed to deliver mild shocks to the learner in response to errors on a
learning task. As the experiment progressed, however, the subjects were
required to deliver shocks of increasing intensity to the maximum level.
Shocks were accompanied by light flashes from the machine and loud buzzing
noises from within the learner’s room. As the level of shock increased,
the learner responded with expressions of pain and discomfort, urgent pleas
to stop the experiment, and finally agonizing screams. The subjects were
encouraged by the experimenter, however, to ignore the learner’s
objections and proceed with delivering the shocks.
Unbeknownst to the subjects, the learning experiment was
a hoax. No electric shock was being delivered. The “learner” was
actually a confederate who was acting the part of a person experiencing
pain and emotional distress in response to the shocks. The subjects,
however, believed the shocks were real. In Milgram’s initial study, 65
percent of participants followed orders and delivered the maximum intensity
shock of 450 volts.
Were these subjects disturbed, deviant, or sociopathic?
Research indicates otherwise. All participants showed signs of being
tormented by the experience. Many pleaded with the experimenter to be
permitted to stop. When he refused, the subjects generally continued.
Similar results have been produced when the experiment was replicated with
women as well as other populations from other nationalities.
As distasteful as it might be, the implications of this
research seem inescapable. Environmental factors can play a powerful role
in influencing normal people to behave quite despicably toward others.
Dr. Catalanello is licensed as a psychologist in his
home State of Louisiana, USA. He is a member of the Faculty of Liberal Arts
at Asian University in Jomtien. Address questions or comments to [email protected]
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