Investments for the Rest of Us: We're All to Blame
Published Date
The Justice Department decided last week not to pursue an indictment of Goldman Sachs for the company's part in bringing about the 2008 financial collapse, a decision that means exactly no one has been held accountable for what is undoubtedly the opening act of the collapse of our monetary system.The fact that no one has gone to jail in the wake of the '08 turmoil is probably justice served. After all, aren't we all to blame for our weak character that tempts us to our destruction?
People are greedy. People are selfish. People are foolish. There's only one problem with this narrative: There are not enough greedy, selfish and foolish people to have caused the crisis we find ourselves in.
I have never met a single person who borrowed more than their house was worth. I never met a single investor who invested all of their money on high-risk ventures. And I have never met a single person who wasn't smart enough to know when something didn't smell right.
No one is to blame for what happened. Entropy is the tendency of all complex systems to move from order to disorder. New cars break down. Food decays. Houses age and crumble. Humans die. The same is true of all monetary systems.
Self-denial, our wonderful ability to change reality to meet our needs, has wreaked havoc on humans from time immemorial. We repeat the same mistakes over and over again thinking that, somehow, the outcome will be different this time.
So here it is.
The monetary system you have become accustomed to is falling apart. If you do not change what you are doing, your wealth will be destroyed again and this time it won't come back. I'm sorry, but that's the way it is. How do I know this? Wall Street knows it. The banks know it. The Fed knows it. Washington knows it. The rest of the world knows it and is increasingly taking advantage of the weakness in our system. We all know it.
But we don't like it. As humans, we close our eyes to that which we do not like. But closing our eyes does not make the monster go away. Rather, understanding what makes the monster tick and knowing where the damage will be, can arm us against the worst of its ravages.
Our system is a debt-based system. From the dollar in your pocket, to the Treasury bonds that fund the $16 trillion national debt, our system relies upon the confidence of debtors to pay their debt holders. It is here where the fractures have come and where the next crisis will begin.
We all have a choice to make: do nothing and lay claim to being innocent victims or take responsibility for our own futures and, just possibly, not be victims at all. Neither choice will be easy.
David F. Brochu, CFP is president and CEO of KLEOSSUM advisors, an independent investment advisory firm for individuals and group retirement plans located in Tech Village in Conway. For more information, e-mail This email address is being protected from spambots. You need JavaScript enabled to view it. , call (603) 733-4290, or read our blog at KLEOSSUM.wordpress.com.
Coming soon are our OLLI investment programs at Granite State College's Conway and Seacoast campuses. Feel free to check out the fall 2012 brochure at olli.granite.edu.
Do you have an investment or economic question? Please feel free to e-mail us and we may address it in a future column of INVESTMENTS FOR THE REST OF US, published every other Wednesday in The Conway Daily Sun.
