Money is a powerful force that shapes our lives and the world we live in. It can be a source of joy, freedom, and prosperity or a cause of greed, corruption, and conflict. Money just amplifies what was already there. If you’re not perfect, I hope you appreciate my take on this topic of money.
The Love of Money is at the Root of All Evil
Either the lack or the surplus of money encourages us to focus too much on materialism. You may have a view materialism is bad for the planet; I’d go even further and suggest it’s downright evil.
As all humans are capable of great evil, whenever there’s more money in the world (inflation?), there’s more evil. Are we seeing this at the moment?
I believe the vast majority of all investors are overweight the status quo. They’re missing the biggest risk there: Our dollars.
Most of our investment activity runs on the rails of something that might break. Financial systems often change during times of war.
Do you believe in ethical investing? Boycotting certain investments might be the right answer, but before it’s the right answer, fund managers should be standing for the truth first and foremost, not reaching for a crowd. That’s not leadership. That’s virtue-signalling.
That’s a distraction.
Virtually every investment is unethical when you understand how the USD-Petrodollar system works.
Fiat currency, a debt-based money which loses value over time and is backed by nothing other than military, is unethical. That makes all our investments unethical. We’re all guilty by association.
When all we own is denominated in currency, we’re not only investing unethically, we’re taking too much risk.
Money is Debt Upside Down
When we think of money, it’s often in the form of a positive credit in our bank account. When money’s created out of nothing each time we borrow, we create an obligation to pay it back. When we’re paid for the work we do, most of the money in circulation was created in the process of lending. At some stage it has to be paid back. That’s how debt works.
Let’s cover off a mainstream assumption though: You go to work, you earn money, but pay some in tax so the government has money to spend on the things that private individuals don’t bother with. Health, education, roading, defence, etc. Those who earn more, pay more.
If people earn more, then the government can spend more. They can make our country better for us to live in. This way, in our pursuit of individual wealth, we have a model to build corporate wealth.
This would be pretty close to what most of us would believe is how things work.
Here’s a variation of the theme: We each earn different amounts based on factors like education, privilege, skill, creativity, boldness, and work ethic.
There’s a high correlation between those who can achieve more and those who may cause trouble to the state.
Tax is a financial handicap on the most ambitious. It’s nothing other than theft for the sake of making someone less wealthy and, by extension, less of a threat.
Governments don’t need our money – they can print their own money. Governments can create as much new money as they like by playing opaque shell games with the central bank. Most of us gladly accept 2% inflation if that means we get rising markets at the same time. It’s the best Ponzi scheme around.
Money and War
The nature of money and war is a complex topic.
Changes in the financial system often surround most military conflicts. The Great Depression played a part in creating Nazi Germany for example.
The international convertibility of the US dollar to gold ended in 1971. This event is often referred to as the Nixon Shock, as it was President Richard Nixon who announced the decision. This effectively took the United States fully off the gold standard and marked a significant shift in global economic policies. Two years later, there was Yom Kippur, and Vietnam raged on all the while.
Here we are, and almost 50 years on we have Central Bank Issued Digital Currencies (CBDC’s) starting to be trialed and even launched in some parts of the world.
Money can be used to finance wars, but wars can be used to change money too. It’s like a year of Jubilee, except darker.
In the future, hopefully in the far-off future, I wonder if a world where one currency can be turned into another comes to an end.
This feels unlikely, but if there’s a risk this may be disruptive, we should do something about it. We should prepare.
I believe the vast majority of all investors are overweight status quo. Advisers, fund managers, and regulators have absolutely no incentive to sound the alarm on this.
Most of our investment activity runs on the rails of something that might break, and there’s a pattern of conflict emerging which would indicate systemic risk is rising. Again, it’s probably nothing, but risk is risk, and if financial advisers don’t call it out, what good are we?
If you want to know more about the nature of money and war, you can check out these sources:
- The Wealth of Nations by Adam Smith
- The Ascent of Money by Niall Ferguson
- The Bitcoin Standard by Saifedean Ammous