I know..I know….how many times has someone said the world changed and nothing seems different in your life. It seems to everyone, life is going on just like normal, what’s all the fuss I hear from some of these guys? They’re just Chicken Little’s looking for the sky to fall, Right? I would like to agree, but this time I can’t, and worse, I find myself feeling a little like poor Mrs. Little, and here’s why……..
Money, finance, and business to many is an esoteric exercise in their minds. It’s too complicated or it’s too boring for most people to grasp. As long as they have a job to pay whatever bills or fees that come about in ones daily life, they feel secure that the so called ” Big Stuff ” will be handled by others. World finance, Bonds, and all that stuff is much too complicated. They just invest in their 401K’s and seem to be done with it. Gives everyone the “feeling” of being an investor. Trust me……you’re going through the motions similar to an investor, you have money in the markets, but an “Investor” you’re not.
People were scared when the collapse of Lehman Brothers happened. The stock market tanked, the news was dire, and people saw the effects pretty much immediately in their 401K’s, but unlike “Investors”…they just looked at their statements in disbelief, and believed all the talking heads on TV that said in almost unison” Hey..Corrections are normal…Stay in for the long haul…Things will get better” and so far it seems to have been the case. Some wouldn’t even open their statements for fear of seeing their balance. ( If that is you..You are Not in control of your finances as much as you would like to think, but that’s another column.)
The reason for the United States being the “Financial Capitol of the World” has been the rule of law. Some think the word “law” means the “Rights and Protections” afforded by police and such, but the world of finance is much different. Your protection is the ” Rule Of Law ” for business. People, Countries, Pensions, and like invest in certain structured dealings based on how much money can be made..and most important…How Much They Can Lose!. If you now change the rules that…for 250 years if X happens…You’re protected by this law. To now if X happens….Who knows what might happen, and you could lose Everything, but we can’t say for certain…You have just given your Gold Standard away…and You’re NO LONGER even a precious metal or stone……You resemble Costume jewelry…and nobody will pay you , or treat you like the Diamond you once were.
It wont happen overnight, but trust me, it will show it’s head very, very soon. The frightening thing about this type of shock to the system is this…250 years of contract law has just been eradicated in the last 24 hours, the damage I believe that this will do not only to our economy, but to our standing as the “Financial Capitol of the World” will be horrific, and will NOT be able to be remedied for years, if not decades.
Chicken Little was a fable….My hopes in the end that this column turns out to be one also, but I feel a little like you know who.