We hear them all the time. They make pronouncements as though they have a direct line to God:
- “The U.S. will never default!”
- “Greece will never leave the E.U.!”
- “The U.S. Dollar will always be the world’s Reserve Currency.”
- “Gold has to come down! It cannot go up forever!”
- “The stock markets will rise to the Heavens!”
- “Oil has to be affordable or no one will take it out of the ground!”
Everything they say, they say with power and the right hand and the right forefinger pointed at you and then up to wherever God lives. You have to believe that they cannot be wrong.
Guess what? They are never right!
The Universe is too complex a theater for one actor to memorize the perfect line. The Universe is made of an infinity of waves which produces infinite colors and infinite shadows and infinite scenes which humans and other animals can only see indistinctly, and never understand except to a minute degree.
Nobody, including myself, knows why we are here and where we are going. But, the game is fun and we all, like little children, enjoy playing.
Thus, when we talk about the Universe of Money and we listen to the “Big Men” tell us in absolute terms what will happen in the near future, we can assume with a high degree of probability that they are trying to convince us of something they know nothing about in order for us to do what they wish us to do.
THE UNIVERSE OF MONEY
The Universe of Foreign Currencies exchanged daily is unbelievably huge. The only reliable estimate of the daily volume is given by the Editors of Wikipedia as approximately Four Trillion U.S. Dollars. In four days you have passed the entire U.S. Federal Debt. A debt that took TWO CENTURIES to accumulate!
How can a wee person with a wee brain tell us with certainty that the Euro will not collapse and that the U.S. will not default?
(I make statements like this as well, but I have the usual Doctor’s Disclaimer… If you die or get injured, “It is an act of God!” Don’t sue me!)
GOLD DOES NOT RUST
As a well trained scientist, I know, with a high degree of probability, that Gold oxidizes extremely slowly (oxidization is called Rust) and therefore, if you have a kilo today, in ten years you will still have a kilo, because the rust is so small it cannot be measured.
Also, as a well trained scientist with abundant experience as a Clinical Physician, I know that humans have a strong tendency to embellish with strong emotions everything they believe. To convince themselves of their own beliefs and to make their beliefs become real they tell everyone who will listen what the future will be and why it will so be.
(I do this all the time.)
Therefore, when I tell you the Euro will collapse and you read in the Drudge Report that the Leaders of every country in Europe, (with the exception of the True Finns) that the Euro will be with the human race until Armageddon, please flip a coin and see what the probabilities are.
But, for investing your hard earned money buy the yellow stuff. It really does not rust, and the supply is finite.