Crash and Run

Making myself unpopular but many people reason in this way, and it is so I have no knowledge of technicalities of investments and financial markets however there are some glaring insights. It is of the nature of general knowledge, simply basics, logic and common sense. Although in the end it is really also speculation.

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As stable equilibrium is investments hoarding gold. Arabian countries sell oil keeping prices artificially high and then buying gold and have for many years. Gold prices have outperformed inflation and interest rates and should keep on doing so.

Then as the second, a neutral kind of equilibrium would be a bank savings account, as money under the mattress. We are of course very literal about this.

Then inherently unstable are international stock markets financial markets and large banks and investors not seeing the wood for the trees. The idea is similar to a run on a bank. As seen recently again. Panic. People lose a lot of money. Sudden great demand everybody wants their money right now before the bank crashes and this because of lack of immediate cash funds. The term is descriptive of long before internet and computers. A physical “run” on a bank. Very long queues for miles outside in the street of very worried nervous customers.

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As for the markets this is an inherent problem and a fatal weakness. The idea is simple. You see people are selling some shares you get nervous you can't understand why, because of state of world current affairs and even just any rumours, false information and such and investors starting to sell those shares more and more and faster everyone anticipating the worst.

It is thus panic selling. The situation gets out of control quickly. That and soon the whole market can crash.

The outbreak of war and eventual world war is in a way the same. The philosophy here is hands over the eyes reasoning “If it does happen it's over in any case”. Like world war. It can happen and probably will sooner or later, and it's the end so don't worry be happy. This is how most of us live hand to mouth not worrying about tomorrow. For instance the possibility of war seems eminent but who cares. Eat drink be merry for tomorrow we die.

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One assumes there are safeguards and precautionary and emergency measures and even better these days, must be, but in principle it is still the same and because of the rate things happen even more risky.

I see this as an inherent unavoidable fatal weakness. Of course there are protecting mechanisms but remember that today even from home you can trade shares in a matter of minutes, as well as most transactions these days happen automated, for those reasons the same thing but the transactions happen in seconds. We've seen this a number of times in history but only now it would be really spectacular, hope I'm wrong.

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Capitalism is not a good system. Communism is worse. Of course nationalising is always a very bad idea which has been shown many times here also it does not work probably partly because lacking of the element of competition. And illustrated by the contrast if you compared West and East Berlin after the cold war.

As for financial investment companies and advisers, I would say are gambling with our money. If they then can invest money with such confidence at profit why don't they do it for themselves, i.e. their own money. It should then grow and more to invest and should quickly catch up and overtake. As simple common sense. From experience there are things they just don't tell you.

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Gold has some very desirable properties such as being the best conductor of electricity, there is gold in your computer and even the contacts on every sim card. It can easily be worked because of being so soft and has been used in jewellery since ancient times. Further, gold does not perish stain or corrode and has been used as a measure of wealth in the great civilisations for millennia. It is relatively scarce.

If you ask my advice buy gold. Gold coins, Kruger Rands in a bank safe deposit box. Gold as the physical metal has outperformed the markets now for years. Your gold should still increase in value with time. South Africa is in a strong position here with our mineral wealth we are potentially a very rich country.