Quote:
Originally Posted by hardinthepaint
I'm sure you know that people have been burying gold in their backyard, etc. for decades and decades in anticipation of the financial end of days, and all those people would have been much better off financially had they instead participated in the market. It takes an absurd level of confidence in your prediction to go all in on a fringe view that is not shared by most experts in the field, and which hedges against an outcome that essentially every moneyed and powerful interest is incentivized to prevent. I guess I would understand keeping a certain percentage of one's assets in "collapse proof" investments, but all of them"?
Everything I own except gold is a speculation. A credit collapse could create a collapse in industrial demand for silver, for example, even if I'm correct about the weakness of the dollar and bond market. Priced in gold, silver could decrease, although I expect the increase in investment demand will overcome the decrease in industrial demand in that scenario.
I'm confident because I listen to the arguments of those I disagree with to determine why they believe differently to me. I could probably make a Marxist rebuttal to most arguments better than most Marxists could, because I've heard so many of them. Likewise, I got an A+ in every economics class I took in business school despite not believing half the Keynesian nonsense on the exam.
When professors failed to address concerns I had with claims that were presented as indisputable truth, I sought knowledge elsewhere and came across the Austrian school of economics which favors free markets in money and credit, rather than the centralized manipulation favored by the Keynesians. While I understood Keynes' idea to flatten what he saw as a natural business cycle through the manipulation of interest rates, I saw as the Austrian economists did that there would be long-term consequences to this seemingly benevolent policy. A dependency on credit would be developed and resources would be redirected away from sectors that would have used them in a free market and towards the recipients of the newly created credit (typically, the government and banks).
Debts continue to increase because they are the only way to make up for the shortfall between production and consumption as unproductive companies and governments are propped up and resources are prevented from reallocating to the portions of the economy where they could most efficiently be used.
There are many problems baked into the cake that arise from the legal and regulatory environment that exists. If a financial advisor tells people to buy bonds and index funds and those things go down, they can say it was a market-wide event in which everyone lost and that no one could have predicted. But if they suggest something like my portfolio and it goes down, now their clients can sue them and say "why didn't you invest me in bonds and index funds like everyone else?"
This is getting somewhat heavy for the LC/NL LHE forum but thanks for hearing me out. In other news, I heard there's a LHE tournament in Las Vegas next week.