By Suzy Hamilton, The Nelson Daily
There’s more behind the man who gave the Nelson library $50,000 for the new Children’s Library than philanthropy.
Local boy Bruce Ramsay, now 56, has created an economic theory that has been showcased at economic conferences worldwide.
It’s called Ending Over-lending and it is a tool that governments can use to form monetary policy that will avoid financial crises and create stable economies.
“These crisis bailouts are only perpetuating debt,” explained Ramsay. “The beauty of this approach is that it is so simple. It can be applied to nations and internationally.”
Ramsay researched his theory for three years, but it wasn’t until the economic data became available in 2010 that he could draw conclusions from his Debt to Cash Flow ratio, a mathematical equation that places countries in one of three economic zones.
Those zones determine their financial stability depending on how much debt and savings they have.
By his calculations, nations such as Mexico and Poland are in the “inefficient zone”.
Nations such as Switzerland, Norway and Korea are in the “optimum zone” while Canada, Italy and France are three of the eight countries in the “warning zone”.
Details of his theory and his complete paper are on his website at www.endingoverlending.com.
“The higher the ratio debt to savings, the more financial instability,” said Ramsay. “There is a direct correlation — the higher the ratio the more trouble you’re in.” The common denominators are the savings rates of nations and the amount of money they borrow internationally.
It’s not unlike a household budget, he explained. You can’t pay off your debts if you don’t have a cash flow.
Ramsay grew up in Nelson with his brother Tom and two sisters Sheila and Elaine, the children of civic-minded Rotarian parents who instilled a sense of community service in them.
Summers were spent cruising the Nine Mile Narrows at their cabin on the lake and winters, for Ramsay, were spent “hot dogging” down the mountains at Silver King and Whitewater Ski Hills.
He brought home more than one ski trophy for his efforts in high school and also played on the Bombers varsity basketball team where he earned the nickname "Clang."
At the University of Calgary he majored in political science with an eye to becoming a lawyer. But as fate usually has it, he found himself the executive assistant to popular Alberta Minister of Advanced Education Jim Horsman, who gave him a foundation and interest in public policy.
Still the law called him, but the MBA program at Wharton School of Business at the University of Pennsylvania won out.
And when the inevitable decision between Wall Street and Canada finally came to head, he chose Canada.
He returned to the investment business in Calgary.
Alberta was booming in the 90s but there was no one filling the need for “boutique investments.”
Using his honed investment skills, he and a partner formed Acumen, a successful Calgary financial investing firm designed to be a matchmaker for investors and young technological companies, which still exists today.
“The biggest satisfaction was not the money. It was the entrepreneurial rush of it, starting the businesses, taking the risk,” said Ramsay.
“The hardest part of it was selling the business in 2003.”
But he was ready to move on. The rebelliousness and independence that came from being a Kootenay kid stuck with him, he said.
He described his economic theory as a product of “evolution”, not an “aha” moment.
After fine tuning his debt to cash flow theory, he decided to test it out in 2012.
He applied to economic conferences worldwide and was accepted at 12 of them. Attendees at these conferences were academics, central bankers and other policy-makers, government officials, independent researchers and consultants, various experts, and members of the financial industry.
He presented at conferences at the University of Cambridge, in Italy, France, Denmark, and Turkey, to name a few locations, and gained insight and criticism for his theory.
“Critics told me that this was not going to work at the government level. Others said I left out steps. This is in the early stages of credibility. Generally, it was received very well and I got good feedback.”
Now Ramsay will begin incorporating what he has learned and working towards the next draft with an eye to self-publishing.
He has moved back to Nelson with his partner, Lisa, and three-year old son, Domenic.
Two daughters, Isabel and Fiona, by a previous marriage live in Calgary. Still hot-dogging down the mountains, he plays gentlemen’s hockey, manages to place high in the Cyswog’n’Fun Triathlon race and water skis at the crack of dawn with buds on the glassy waters of Kootenay Lake.
“He is extremely active and in better shape than most people I know, “ said his nephew, Ryan Martin, general manager of the Hume Hotel. “He’s young at heart and goes hard in everything he does.”
Martin says his uncle has been a role model for him. Ramsay took his nephew under his wing in his university days to teach him the basics of finance. Later Ramsay took Martin and his cousin Jeff Hagel to Scandinavia.
“His generosity is overwhelming.He is brilliant. Even in ‘retirement’, he is still committed to his craft.
“Financial markets are one of the more complex topics out there in our world and his theories have impressed some of the most esteemed professors out there. What's not to like about this guy?”
Ramsay’s parents were a big of the reason he funded the Children’s Library, which he dedicated to William and Isabel Ramsay.
“The gift was an opportunity to help provide a dedicated, large space for the Children's Library, a high impact benefit for the kids and parents of the community. . . and giving some recognition to my parents in the process, as long–time residents who raised four kids here and were involved Nelson citizens.”
Instead of charging the usual fee for his paper, which can be downloaded on line, he offers the option to donate an amount of choice to Nelson’s Food Cupboard, Touchstones Museum or Kootenay Kids.
He has endowed funds to the University of Calgary faculty of social work to provide scholarships in honour of his son Iain Cullen Ramsay who passed away unexpectedly in September 2012 at the age of 25.
As for our economic future, Ramsay sees a dark cloud ahead. He classifies factors like climate change and military invasions as “unfunded liabilities.”
“There is going to be a day of reckoning before stability can be achieved,” he predicted.
His advice for small towns like Nelson:
“Recognize that the era of growth for growth's sake, is over.”