Monetarist, Keynesian and the Greek Christian Orthodox religion.

Dr Michel Zaki Guirguis 22/09/2014Bournemouth University1

Institute of Business and LawFern BarrowPoole, BH12 5BB, UKTel:0030-210-9841550Mobile:0030-6982044429Email: guirguismichel@yahoo.co.uk

Biographical notes

I hold a PhD in Finance from Bournemouth University in the U.K. I have worked for several multinational companies including JP Morgan Chase and Interamerican Insurance and Investment Company in Greece. Through seminars, I learned how to manage and select the right mutual funds according to various clients needs. I supported and assisted the team in terms of six-sigma project and accounts reconciliation. Application of six-sigma project in JP Morgan Chase in terms of statistical analysis is important to improve the efficiency of the department. Professor Philip Hardwick and I have published a chapter in a book entitled “International Insurance and Financial Markets: Global Dynamics and Local Contingencies”, edited by Cummins and Venard at Wharton Business School (University of Pennsylvania in the US). I am working on several papers that focus on the Financial Services Sector.

1 I have left from Bournemouth University since 2006. The permanent address of the author’s is, 94, Terpsichoris road, Palaio – Faliro, Post Code: 17562, Athens – Greece.

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Abstract

In this article, we are going to explain the difference between Keynesian and monetarist theory and add the Greek Christian Orthodox approach. This approach is used as a mechanism to adjust prices and quantities of consumption and supply with ultimate objective, the great mercy from Jesus – Christ, the salvation of soul and the inner peace. Keynesian focuses more on the fiscal policy in terms of government spending and taxation. Keynesian has developed the liquidity preference theory. On the other hand, monetarist focuses on controlling the money supply and inflation. They have developed the quantity theory of money. Keynesian are more focusing on reducing unemployment, which is a modern curse rather than controlling inflation. The solution of this modern curse that affects a lot of European countries and especially the young population age between 25 - 40 will be given from the active intervention of the Greek Orthodox Church. The Orthodox Church should cooperate and work very closely with the Greek government and the National Bank of Greece to make sure that each individual in the society has an equal and plenty of opportunities to get employed and get married early. All the blame will return to the Church and the government if the young population have sex with prostitutes or consume a lot of alcohol due to the fact that there are no jobs. If the market is not properly organized nobody has the right to judge or blame the other. The spiritual fathers will have to give explanations during the judgement day for the intensity and the degree of the spiritual falls due to the lack of an organized marketplace and investment industries. Nobody is forced to bear the spiritual and financial cost to immigrate because there is no first class communication because the Orthodox Church and the government. The family members have many communication problems due to the fact that the market is not organized and each one is blaming the other. The problem becomes intense with divorced females due to the fact that the husband could not work due to long-term unemployment. In other words, nobody is forced to pay the mistakes that are taking place from the politicians and the Orthodox Church due to lack of organisation, allocation of resources and direct investment to build new factories, companies or investment banks.

Keywords: Greek Orthodox Church, spiritual father, manipulation of thoughts, Holy Trinity, Virgin Mary, Saints, monetarist, Keynesian and the Greek Christian Orthodox religion.

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Introduction

The Keynesian and the monetarists are facing the same problem of trying to explain economic theories without the active intervention of the Greek Christian Orthodox Church. The aggregate demand, supply, prices and real output will never reach equilibrium if the agents that constitute the society are not in equilibrium with their spiritual integrity and their financial position. Lack of manipulation of thoughts, lack of continuous repentance and confession and lack of Holy Communion create disequilibrium in the mind of the Christian servant. The problem becomes worse when the level of prices and output changes without taking into consideration the spiritual effort that the individual is doing to safeguard his body and his soul from bad habits and sinful styles in different periods of his/her life. Specifically, the Keynesian support the view that changes in aggregate demand results in large increase in real output but a small increase in the price level. In contrast, the monetarists support the opposite view that an increase in demand results in a small increase in real output and a significant increase in the price level. Monetarists depend mainly on the money supply and interest rate changes that affect investment. In contrast, Keynesian support measures related to fiscal policies. For example, they claim that changes in national income and employment could be achieved by increasing government spending and reducing taxation. Monetarists have spotted the crowd out effect of private spending in terms that increase in government spending will increase the demand for money and interest rates. The problem again is that the monetarist theory is in favorite of a free market with less government intervention. In contrast, Keynesian is in favorite of a government intervention to control the demand side. Both theories have ignored the Greek Orthodox approach and the related variables. They have focused ONLY on the economic forces without taking into consideration the spiritual cost to maintain inner peace and spiritual integrity. This is why we are witnessing nowadays a huge spiritual falls, problems and psychological disorders. There is no equilibrium wit the spirit and the financial market.

This is exactly what we are going to do to solve this terrible spiritual and financial problem that creates many psychological, financial, economic and sexual problems.

The rest of the paper is organized as follows. Section 1 describes the building blocks of the Greek Orthodox Church. Section 2 describes the successful manipulation of thoughts. Section 3 describes the monetarist, the Keynesian and the Greek Christian Orthodox religion. Section 4 summarizes and concludes.

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1. Building blocks of the Greek Orthodox Church

The building blocks that constitute and sustain the faith of the Greek Orthodox Christian is the belief in the Holy Trinity, Holy communion, the powerful presence of Theotokos or Virgin Mary, the fleet of Saints in terms of hermits, ascetics, spiritual sacrifice, the David’s Psalms, Holy Bible, Byzantine music, fasting, the cross and the resurrection of Jesus - Christ.

The Holy Trinity is composed from the father, the son and the Holy Spirit. The unity in one person is not static but dynamic interrelation of the Holy Spirit under the roof of the grace of the son and the love of the father. The unity of the Holy Trinity supports you with harmony, love and peace of yourself, primarily, and then with the fellow - citizens and the environment.

The Holy Communion is an essential part of the Liturgy taken inside the church every Sunday and during celebration of Saints days. Repentance and confession, which constitute a second baptism, should take place before the Holy Communion. It helps the individual’s to strengthen his/her faith to the Holy Trinity and to protect him/her from the devil. If the individual commune the Divine Mysteries without the appropriate preparation that will be mentioned from the spiritual father then the sins become larger and worse.

Theotokos or Virgin Mary, the mother of Jesus-Christ, occupies an essential place in the heart of the Greek Orthodox Church. It symbolizes the second Eve and selected from God to continue the salvation of the mankind through her son, who represents the new Adam. She protects the Christian Orthodox from the various types of demons and encourages him/her during difficult times with patience and faith. For a more detailed analysis of the various types of demons, please refer to the book of Saint John Sinaet (2006), named the Ladder. Unfortunately, the ancestral sin of Adam has destroyed the divine relationship and created disequilibrium in balancing the evil from the good thoughts. This condition or tendency of the heart towards sin remains even after the baptism has removed the ancestral sin. The mystery of Chrism, which follows the mystery of baptism, seals the newborn with the grace of the Holy Spirit. Thus, spiritual sacrifice with the grace of the Holy Spirit is the next step to stabilize the spiritual effort. It helps the person to reconcile and sustain a healthy mind through the examples of hermits, ascetics and Ηoly Fathers of the Greek Orthodox Church.

Spiritual sacrifice is defined in terms of rejecting personal will and following the will of God through the Ten Commandments. Fear, defined in a positive manner, not to break the commandments and keep an active ascetic profile is a substantial factor that keeps alive the faith towards God. At this point, it is worth to distinguish between obedience and pure discipline. Obedience created and based on love to approach God has complete different interpretation and result from the pure discipline that is cultivated and developed in other institutions. Obedience inside the Greek Orthodox Church has a positive and healthy characteristic. It is based on the freedom to approach the Holy Trinity through the applications of the Ten Commandments and continuous prays from the individual’s and the spiritual father. Pure discipline without religious characteristic has negative effects, as most of the time, is based on unbalancing power and imposition of force in a negative way to dominate on the situation. A good example, to mention is the Holy monk Porfirios that teaches us to

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pray for our children and fellow - colleagues when we face a problem with them. The results will be much better by approaching the Theotokos rather than by believing or depending solely on our capabilities. Obedience will help the individual to achieve various stages of spiritual successes. In addition, the individual’s need to learn how to recognize, manipulate the thoughts by rejecting the bad and accepting the good ones. This can only be achieved through prays to the Holy Trinity, Virgin Mary and the help that you get from the spiritual father.

The David’s Psalms contain different types of hymn to God. For example, Psalm 50 is a prayer for forgiveness and Psalm 136 is a hymn of thanksgiving. The Holy Bible comprised from the Old and New Testament is an essential core of the base of the Greek Orthodox Church. They display the main event of prophets, Jesus-Christ, his mother and the apostles.

Byzantine music constitutes a fundamental part of the Greek Orthodox Church. The Divine Liturgy, Vespers, the hymns of David’s Psalms, The lamentations, the small and great canons of the Theotokos and the service of the supplicatory canons to Archangels and Saints are based on Byzantine music. The requirements to protect one of our sense gates, such as hear, favour this type of music. It is essential to protect us from the evil thoughts, as we will see in the later section of the manipulation of thoughts.

Fasting is an integrated and essential part of the life of the Greek Orthodox Christian. During the ecclesiastical year, there are various periods of fasts. The main fasts are Wednesday’s and Friday’s fast, the fast before the birth of Jesus-Christ, the fast of Great Lent, the fast during the month of August, which is concerned with Virgin Mary, the elevation of the cross. All fasts and especially the fast of Great Lent, which starts with the Publican and the Pharisee Gospel passage, help the individuals to strengthen their faith and spiritual effort through continuous repentances and prostrations. Fast should be avoided if the person faces bodily illness. To fast or not has to be discussed and solved with the help of the spiritual father.

The cross and resurrection constitute the base of the win of Jesus-Christ from death. They are based on the belief that your spiritual effort in this life is a continuous condition that will count after your death, and will have an eternal characteristic. Thus, after your death, you can not change anything in terms of your actions, good or bad, that were reflected in your attitude, behaviour and saying that were seen or unseen. Death is just a temporary change of status until the judgment day. Thus, if the spiritual effort and less the physical is based on the commandments, sincere and fair progress throughout the life of person, under the supervision of the spiritual father, then, there are increased chances to safeguard the purity of the soul. The fact that, the author’s use the expression increased chances is because the life of the individual’s until his/her death is a continuous effort to safeguard the will of God with ultimate objective to save his/her soul. Thus, there are many spiritual falls and illnesses of the soul that could be recovered through the mystery of repentance followed by confession.

On the other hand, if his/her effort was not based and blessed under the Holy Trinity and no confession took place in the whole phase of the life of the person, then, the reward will be eternal hell. By the term eternal hell, I mean the outer darkness, the

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unquenchable fire, the unsleeping worm and the gnashing of teeth followed by innumerable torments. Τhe remembrance of the term eternal hell helps tremendously every individual to obey better to the Ten Commandments and avoid a sinful lifestyle. The fact that the individual’s has compromised to stay in a sinful condition leads him/her to eternal hell. Thus, as God is love, it will be unfair to change the status or habits of the person and adapt him/her to new reality, namely, in the upper Jerusalem with the Saints. An excellent source of reference is the Sacred Augustine known as ‘the son of tears’. In the book written by Mperati (2005), there is a clear illustration of how poor decisions away from God can destroy the personality of the individual’s and how repentance and confession could save his/her soul.

2. The manipulation of thoughts

Thoughts constitute the invisible part of the mind of the person that is liable to the continuous flow of thousands of decisions that affect his/her life, the life of others and the results of his/her actions in the society. The organs constitute the human body and work in perfect harmony to sustain life. In a similar way, thoughts have to be regulated, structured and manipulated with the functioning of the heart to achieve equilibrium in terms of faith to the Holy Trinity. The problem is that after the ancestral sin, the mind has lost the initial pure functionality, which was to praise God and get divided into good, vain and evil thoughts. The biggest problem that we are facing, nowadays, is how to distinguish between them, balance them and isolate the evil thoughts that create substantial damage in our life in terms of the decisions that we take in a daily basis.

The golden rule, to firstly start this discussion, is that without the presence of God in terms of prays and guidance of the spiritual father under the Greek Orthodox Church, we can not trust and be totally sure that what we are thinking or saying is correct or good. The devil and the various demons could affect the will and ambition of the individual’s and captures him/her under a spirit of conceit or haughtiness. Lack of humility and the mixture of thoughts according to daily problems and circumstances create anxiety and despair, which should be avoided by continuous prays to Virgin Mary. The ultimate objective is our soul salvation. By setting our actions, as an example, we contribute to the salvation of the persons that are surrounding us irrelevant from their age, sex, religious background, nationality and literacy level.

Vain thoughts are created from the relaxation of the mind that God is not an active observer in our lives, hearts and thoughts. The lack of faith and deviation from the basic necessities of life reinforce vanity thoughts at the expense of the peace of the soul. The successors of vain thoughts are evil thoughts that start to erode the building blocks of the soul until the final destruction of the healthy functionality of the mind and the corruption of heart with evil thoughts.

Evil thoughts are derived from external and internal causes. The external causes are related to five senses such as sight, hear, smell, taste, and touch. Each sense has to be carefully monitored and protected through holy gates that are installed to each one according to his/her spiritual effort to keep and implement precisely the will of God. Thus, according to the degree of your effort you get blessed and better protected from indecent sights, obscene words and irritated perfumes. In addition, the person manages to control excess and beyond necessity food and drink and improper touches

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of his/her body with soft materials. They result to relaxations of the body and creations of improper fantasies and sinful thoughts.

The internal causes of evil thoughts are related to imagination, passions, demons, and the already corrupted nature created after that the ancestral sin took place. Let’s analyze each cause. Imagination, which is fed mainly by sight and hears, affects the way by which we perceive, understand and structure the images around us. It also affects our future prospect, consumption habits, and ambitions. The stimulus that affect our senses and create an internal picture of the external world has to be based on religious background in terms of fast, prays, and consultation with the spiritual father in a continuous basis. If the stimulus is wrong, then they are going to create a malfunction of the mind and erosion of the soul with many negative effects. As a result of the acceptance of bad thoughts, we can mention minimum efficiency, spiritual pollution and therefore physical pollution of the environment.

Passions created outside the Greek Orthodox Church creates negative externalities with high costs as there is no balance between the various emotions such as love, hate, pleasure and pain. The faith inside the Orthodox Church is to love God with all your heart, soul, power and intellect part of your mind. This is the first commandment. The second commandment is to love your neighbour as you love yourself. The face of the fellow-citizen reflects the Holy Trinity. The first two commandments are very important to understand that the person is image or picture of God with ultimate objective to achieve resemblance. Thus, the various emotions are eliminated or better controlled as they are managed in line with the Commandments. Once the individual manage to get blessing from the application of the first two Commandments, then, he/she will progress towards the application of the remaining eight Commandments. Finally, the individual’s will get help to balance the various emotions with the help of the spiritual father and the examples that the Holy Fathers of the Greek Orthodox Church.

Demons analyzed in an excellent way in the book of Saint John Sinaet (2006). This book is a masterpiece that teaches you the art to defend yourself from evil thoughts. He teaches you how to stop the various attacks and get out from the various snares that the demons are trying to set up around the individual’s heart. They are trying to steal the treasure from the inner part of the roots of the person heart with ultimate objective to lead and sustain him/her in a sinful situation until his/her death. Τhey try to take advantage from the fact that passions are recrudescent. Thus, they are trying to guarantee that the individual’s will get eternal hell rather than salvation of his/her soul.

Finally, it is the already corrupted human nature after the fall from paradise and recorded as the ancestral sin. The purity of the soul, intellect and innocent understanding of life has been eroded and shacked substantially. The evil thoughts started to occupy a predetermined place in the mind, heart and soul of various persons. The lack of proper faith, in terms of a Greek Orthodox Approach, that is trying to find an equilibrium point to reconcile the damage, has resulted to even worse results. People are loosing their identity in a daily basis. Globalization of different cultures, ideas and nationalities without an integrated roof of clear guidelines of a viable religious approach has created further complexity. The success of decisions making in terms of economic, social, and religious outcomes will have to be based

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upon our interaction with the Orthodox Church primarily. For a detailed analysis of the manipulation of thoughts and senses please refer to Saint Nikodemos the Hagiorite (1819).

Section 3 describes the monetarist, Keynesian and the Greek Christian Orthodox religion

The Keynesian insists that demand side could be affected by a fiscal policy. They have managed in the past to reduce unemployment at the expense of high inflation. The successful strategy is based on keeping the economy at full employment with zero unemployment rate and very low inflation rate. Every person inside the DEMOCRATIC GREEK society disable or without disability DESERVES AN EQUAL position to work to sustain his/her family and parents. The government should create a wide variety of jobs that cover the needs of the handicapped and the persons that wants to work at any age level. The words deserve and equality are very important and essential to understand the meaning of fairness and respect. We can not discuss about democratic societies and everyone is sitting at home dreaming about his/her future work. This is not democracy! This is monopoly, oligopoly and racist societies for the few. Finally, there is no work or work that does not match the qualifications of the applicant. Monetarists are trying to solve the problem by affecting the money supply and the levels of interest rates to attract investments and create new job opportunities for the unemployed. The time lags and increase of money supply creates inflationary gaps and larger budget deficit. The government can not respond in a timely manner to control the balance of payments, and as the time passes the things get worse. The deficit in relation to GDP increases tremendously and the unemployment rate is soaring. The logical question that arises is how to solve this problem before the households sink in systematic short and long - term debts and see their saving balance to deteriorate. The answer is the first class communication between the Orthodox Church, the government and the households. The Orthodox Church has no right to demand excellent spiritual integrity and in the same time the households are sinking in daily financial problems and sinful styles related to wrong financial and economic decisions. This is why FIRST CLASS COMMUNICATION is required. Once the financial problems are solved with the intervention of the spiritual father and the politicians, then, they have the right to ask for progress and spiritual integrity. Nobody is obliged to follow anyone that does not care really about his/her daily problems. Everyday, every household is facing many problems related to his/her positioning in the society in an effort to avoid bankruptcy and market failure. Most of the times, the things did not move smoothly due to social, family, health, political, sexual and financial reasons.

Monetarist focused on measuring the relationship between the amount of money and the level of prices. The velocity of money circulation was important concept to determine the average frequency that the money circulates from one individual to the other. For example, we have 5 individuals that are doing transactions in a daily basis. The first individual gives 5 Euro to the second individual to buy milk, bread and yoghurt. The second gives 5 Euro to the third for other products and so on for the same amount of money. The total value of money transactions or quantity theory of money is 4 x 5 =20 Euro. The velocity of circulation is 4 and the total value of transactions is 20 Euro. The velocity of money circulation has to be redefined, so that the money circulates in the hand of the poor, the prostitutes, the low and middle

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classes. We want to increase the average frequency of money turnover to the different financially disadvantaged classes. In other word, we want to increase the circulation of money related to donations, financial help and University tuition fees. The poors, the beggars and the prostitutes do not have large capital inflow to cover University education related to bachelor, master and PhD. We want to make sure that they have equal opportunity with the rest of the population to be well educated. The stock of money that the government has should be directed to the pocket of the above-mentioned categories. This amount of money is not related to price levels and inflation. We are not discussing, for example, that a 20% increase in the money supply will result to a 20% increase in price levels and inflation. We want the money to target the pocket of the above-mentioned categories until they are well educated.

The velocity of circulation is measured as the ratio of gross national product at current market prices to the average money stock for the particular quarter. It is measured by the money aggregates such as M1 and M3. M1 is cash in circulation with the public in addition to overnight deposits. M3 is M1 in addition to deposits with agreed maturity up to two years, deposits redeemable at up to three months notice, repos, money market funds, paper and debt securities with residual maturity up to two years. This is the biggest omission and mistake that the monetarist did. They did not take into consideration this group of persons. The government did not pay attention to the public sector borrowing requirement, (PSBR) to try to limit it and use the money to finance the different poor households. Increase in the money supply will result to decrease in interest rates and increase in the investment activity. This activity will be an injection into the circular flow of income. This will lead to an increase in national income through the multiplier effect. Interest rates and national income are the key factors that create elastic or inelastic demands according to high or low levels. Please remember that the low classes of poors, unemployed and prostitutes do not have enough capital to pay for tuition fees and invest in bonds, shares or alternative securities. Thus, the government should adjust the public finance account through the financial derivatives market to help the poor group of persons to get out from the poverty trap until they are able to better manage their finance.

On the other hand, the government should monitor the interest rates level to increase the amount of money of the saving account of the unemployed. Once the money in the saving accounts has increased, then, the households will expect a drop in interest rates. This is the opportunity to buy bonds of short to medium term maturity. The fall in interest rates will be associated by an increase in bond prices and the households will start to record capital gains. Thus, the government should give enough notice to the households, so they invest in the right time and not to risk to bankrupt and experience a lower standard of living. Thus, everyone will have equal opportunity for capital gains. We don’t want prosperity for the few at the expense of the majority of the households that constitute the Greek society. Fisher and Friedman have tried to formulate an equation related to the quantity theory of money in terms that

MV ≡PT and MV ≡PQWhere: M is the money supply. V is the velocity of circulation. P is the general level of prices. T is the number of transactions.

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Q is the quantity of national output.

The problem with this equation is that it is not related to the cruel reality with the standard of living of the poors, the unemployed, the prostitutes, the beggars, the middle and low classes. We can not discuss that increase of money supply will affect general prices and cause inflationary pressures and in the same time the group of these persons have low or fixed income and suffers from poverty. Spending could not increase if there is no injection in their personal saving account and increase in interest rates.

Success is not only the privilege of the few and the rest are sitting at home watching TV. Therefore, monetary and fiscal policies should be combined closely and strictly with the Greek Orthodox religion to facilitate the life of the individual inside the DEMOCRATIC society. I doubt if Greece is keeping democratic and European standards. The IS – LM and AD - AS models in terms of expansionary or contractionary monetary or fiscal policy and aggregated demand and supply should be adjusted with the Orthodox approach and the related variables. Please check my paper related to spiritual goods, balance of payments and macroeconomic adjustments for further explanations. There are no automatic adjustments to reconcile the deviations of increase of money supply and decrease in real output. Everything is based on successful planning of public finance, resources and creating a well educated labor force based on zero deficits. The future generations are not obliged to pay past short or long - term debts due to mismanagement of resources. Everyone wants an equal opportunity to live and work. The government don’t have the right in a democratic society to say that for this household there is no enough resources and for the other there are plenty of resources, capital, opportunities, etc…. This is not democracy integrated in a fair system. This is a game at the expense of the few and in favourite for the ones that have a different degree of power inside the country. The government should plan very carefully according to the census the level of employment and the jobs that will be available for successful careers.

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I will give an example of integrating the Orthodox variables in the IS –LM model of a fiscal policy adopted by the Greek government.

i Orthodox variables such as repentance, confession and LM Holy communion.

i2

i1 Humility

IS1

IS

Y1 Y2

Source: author’s illustration

The elements or variables are strong faith towards the Holy Trinity, Virgin Mary, repentance, confession, Holy Communion, prayers, fast, prostrations, vigil, almsgiving, rejection of personal will, appreciate Byzantine music, humility, strong belief that Jesus – Christ was resurrected, love. They should be integrated and sustained with the help of the government to sustain inner peace and great mercy away from a sinful lifestyle.

Section 4 summarizes and concludes

In this article, we have explained the difference between Keynesian and monetarist theory. We have clarified the role that the Greek Christian Orthodox approach has to safeguard the financial and spiritual position of the individual. This approach is used as a mechanism to adjust prices and quantities of consumption and supply with ultimate objective, the great mercy from Jesus – Christ, the salvation of soul and the inner peace. Please keep in memory that everyone has an equal opportunity to work in a democratic Greek society. Healthy or disabled should have the same opportunity. An opportunity to find a job that matches his/her qualifications and not an irrelevant job that is low paid and will increase the psychological disorders and dissatisfaction.

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Bibliography

Mperati Theodoros, (2005). The son of tears, (the Sacred Augustine). Edited by the theological brotherhood Sotir.

Saint John Sinaet, (2006). The Ladder. Edited by the Holy monastery Paraklitou.

Saint Nikodemos the Hagiorite, (1819). Consulting Manual. It was first published in 1819, in the first book named interpretation of the fourteen manuscripts of Saint-Paul.

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