MEMPHIS: "Preparing For Wealth"

[UNEEK]

Good Morning,   Memphis is  one of those  serious Free Thinkers -- He reads & studies a lot - he use to post at KTFA;  and so did a lot of others - Well we know what eventually happens when  someone thinks there's too many chiefs & not enough indians lol  -

 

Memphis now sends out his summaries, thoughts, opinions, etc to a mailing list  and  gets  circulated to DinarLand -  His writings are most of the time  a little over my head  but I feel sure many here will  digest it easily -- whether they agree totally or not -- lol   -- Maybe some here will share their perspective and understanding  for all to benefit -- UNEEK 

 

"The problem ain't what people know. It's what people know that ain't so that's the problem."     ~ Will Rogers

 

 

I love that quote.  It has come to mind often thruout this dinar journey.  After typing thousands of pages of material in the past 3 yrs I look back and see that a good portion of it was simply pointing.  Pointing to things, both global and domestic changes, that I saw clearly would have a lasting effect on us all. 

 

As Will Rogers astutely observed, we each have misconceptions of our world and my assumption is always that I am not alone in attempting to root them out.  To minimize them and REPLACE them with reality. 

 

PICK A SIDE - ACTIVE OR PASSIVE

 

Last time I made the statement:

 

"Confidence may seem an elusive thing right now but it will come.  Our obvious best friend towards this end is knowledge and as we grow in THAT, our confidence will soar."

 

Most of my emails last year were not premeditated (be nice).  As "real world" examples popped up, I pointed.  I get extremely excited when I "see" something that has value KNOWING that few others will see it from the same perspective and thus risk missing a great opportunity to see more clearly how our world truly spins.  To add knowledge. 

 

Tonight I am again excited to release this blog.  What a shame if we have a real world practical example simply pass us by because we were looking elsewhere! 

 

In preparing for the challenges that lie ahead AFTER the re-pricing of the IQD we each have a hurdle to overcome, a new language to learn.  The language of finance.  These terms can largely remain abstract to us if not seen in the real world.  Today's blog will illuminate one such term.

 

For all but the seasoned investor, our financial future depends upon entrusting the right persons which first implies that we know enough to seek him/her out of a crowd!

 

This then requires that we roll up our sleeves and "go to school".  This school for me began a few years ago when I gave up my day job of paraphrasing Iraqi news articles and I can proudly report that I have just now scratched the surface!

 

 For most readers the majority of your investment choices will become "passive" in nature as the knowledge needed to invest "actively" is not for the faint of heart.  Trust me on this. 

 

Talk is cheap but try making that REAL decision with REAL money?  O well, I have never tried to convince folks on anything as it never works.  We have to see it for ourselves and (I believe) soon we will.

 

For others tho, those with a mind to actively manage their wealth, you'll need a rounded macro view of the entire globe as your world will quickly become about managing risk. 

 

Risk however is not a one dimensional problem but has many potential points that must each be recognized, analyzed and quantified.

 

If the word passive is not part of your makeup then today's blog is tailored to you.  It contains a practical "real world" example that will illuminate the discussion of "political risk", an important aspect of risk for any active investor that IMO receives too little attention.

 

THE PERFECT GOVERNMENT?

 

Before we look at Greece in our example of political risk can you imagine what the perfect gov't might look like?  One that would present to us (as investors) a political risk as close to zero as possible? 

 

Many of you naturally would answer America here but as a contrarian I would suggest no.  Never has a republic stood up against the eventual corruption from within (it's politicians) and without (those who would control the game). 

 

That form of gov't most likely to stand and resist such erosions is a pure democracy where the people decide all.  This then makes Switzerland the poster child of possibility and (as investors) a nation that should be studied and watched in the years ahead. 

 

If I were to ask you to name one politician from Switzerland I doubt if any hands would be raised.  Why is that?  It is largely because the PEOPLE are center stage.  To my point here, their politicians do not have great power and hold sway over all matters.  It is by the vote that matters of importance are settled.

 

Before arousing a political debate here (NOT my desire) let's shift to what may arguably be the opposite extreme. 

 

So,what does Greece have to do with our discussion on risk?  Plenty.  But only if we have ALL the information!

 

If our "opinion" (our reality) is based on what we have seen on TV then we have SOME of the facts.  These facts tell us that Greece may soon default on it's debt and exit the European Union.  And they may, but is there more? 

 

If the above were the full story, and Greece DID default, then Greece would be a GREAT source of opportunity for capital as their economy would surely begin to heal very quickly.  Confidence would soar and (not unlike Switzerland) capital would start pouring in to this tiny nation or at least that is my position. 

 

Confidence is everything and what we are witnessing, and about to witness to an even greater degree in the years ahead, is a great shifting in confidence.  Imagine a loose cannon on the deck in a tempest tossed sea and you'll get the idea.

 

This is where our little discussed aspect of risk comes into play.  Fresh on the heels of the Greek election what do we know about the new controlling Syriza party?  Is there anything of importance?  Are they truly JUST the "anti-austerity" party as mainstream media is telling us? 

 

In defining risk, using a global mindset, we must always consider political risk.  This is one of those terms that we must add to our new language but given the volume of new terms that surely are hard for us to quantify and give value to, I am today pointing to Greece and suggesting that (as investors) this is a perfect real world example of the supreme importance of defining ALL risks.

 

Please don't fail to appreciate that there can be various risk categories applied but for today's purposes?  One of the biggies that I see often ignored (seldom talked about) is political.  After reading the article linked below you will forever remember the need to take into account political risk. 

 

Is Greece soon to be a hot spot for the value investor or is it more likely to be a turbulent home for only the sharpest of crisis investors?

 

I think the latter but regardless THIS is a PERFECT example of the changes taking place in our world.  It is then up to us to go seize the opportunity that is afforded.

 

LIVING ON THE EDGE

 

An important thought in closing.

 

I have a habit that has been with me from my earliest memories.  It has never seemed odd to me and until recent years I assumed that most folks shared my habit.

 

That turned out however not to be the case.  It appears that I am rather odd in that I take EVERYTHING to the extreme.  Immediately after being presented with new information it is taken to it's possible extremes.  It's my way of chewing on it.

 

Both "worst case" and "best case" scenarios are imagined based on all probabilities at hand and then I attempt to find balance.  In time an equilibrium forms and that is then where I become "settled" on the matter. 

 

Here's why I share this...

 

Despite what we hear and read in alternate media SELDOM do we witness the extreme possibility become reality.  This is important to ponder for what we now see manifesting in the world is exceptional.

 

I won't go into the many factors driving things globally (other than to mention the extreme of sovereign debts) but allow me today to simply point out that we are witnessing the extreme in Greece.  Extraordinary circumstances in that nation have brought about a radical shift in their government and this will have a ripple effect in the region, of that you can be certain.

 

Is this to be an isolated example?  I think not. What we once considered extreme is changing and I think this trend will continue. 

It goes with the word "volatility" like Robin goes with Batman and if we think back just 3 weeks another example pops up...

 

The SNB made a surprising move in the middle of the day when they unpegged the Franc to the Euro.  The result? 

 

An unprecedented move in their currency.  This was an extreme event folks and extreme events?  They change how people think, how they react and THIS is the secret to understanding how and why capital moves. 

 

Exciting times indeed!!

Memphis

 

Thinking as an investor of YOUR wealth, IMAGINE NOT KNOWING WHAT YOU ARE ABOUT TO KNOW:

on Greece's new gov't:

 

http://www.mauldineconomics.com/the-10th-man/socialism-is-like-a-nude-beachsounds-like-a-great-idea-until-you-get-there

[BJinMontreal]

Thanks Uneek,

Great read!

[UNEEK]

BJnMontreal -- Hello -- thanks  --  yes  it is a good read - I agree --  Memphis  seems to be very conscientious in regards to world affairs  -  and also knows how to connect  the dots  --