Twenty One Years Ago Today
Editorial Date - July 2008
Dear Friends,
One of the major reasons for starting this blog was to documents thoughts and experiences with the intention of documenting many lessons learned on what I always thought to be the ultimate goal; to live a great active, healthy and enlightened life with a global perspective. I'll often be clarifying that while surfing and design are personal passions, entrepreneurship and a greater comprehension of how our external environment really works is essential to success.
On July 29th 1988, I left Longmeadow, Massachusetts to attend the United States Naval Academy Preparatory School (NAPS) in Newport, Rhode Island. Despite my intention to become an architect and study at a traditional school (Arizona State University; largely influence by Frank Lloyd Wright), I chose the option of entering the US Navy with a "free college" and the hopes of seeing the world as soon as possible. My life changed on that date and since then I’ve been fortunate to follow my real dreams enjoying life's challenges.
In 1993 I graduated from "Boat School" in Annapolis, MD and made it clear that I would go anywhere other than a ship stationed in Norfolk, VA. Once seen as a unconscious or misfortunate act, my choice to avoid the norm or added statism of living among a larger military presence placed me in a base on the other side of the world in the British Indian Ocean Territory. I was fortunate to travel though much of Asia in 1994 & 1995 before returning to the United States. It was clear to me then as it is today that legendary traveler and investor Jim Rogers was correct: "If you were smart at the start of the 19th century, you made your way to London. If you were smart at the start of the 20th century, you moved to New York. And if you are smart at the start of the 21st century, you will find your way to Asia."
I have read countless research reports from many traditional and alternative resources. The one thing I continue to see (which is in line with the exportation of real economy jobs out of the United States) is the bulk of people in my business have never lived overseas (not traveled) or worked for a company that made a product. My past experiences alone don’t guarantee wisdom but they have given me a much different perspective on many current events.
One great challenge when attempting to comprehend capital markets (supply – demand) is learning the difference between a “real” or physical market from a levered or digitally traded market. This challenge may be more difficult for many people who work from a computer with unlimited access to many commodities (like food or water) which come from markets far from the original resource. I still see a great desire, specifically in the United States, for cars made of steel, bikes made of aluminum and many electrical systems (hybrid cars) which require more and more conductive copper. Despite this fact it’s as if the investment world ignores the fundamentals for many commodities which can’t be digitally created out of thin air. World gold production continues to contract with rising demand into the foreseeable future. So why do people panic when a digitally levered commodity exchange dictates the daily price as if it were the only market? It is almost as if many people in today’s financial industry have become detached from reality.
Some say perception is reality. This may be true in the short term. Markets can tactically ebb and flow creating much confusion in the short term. We can see this fact in many markets where there is a “physical” market and a “paper/digital” levered market. These are two completely different animals. The sheer amount of communication and marketing devices today can create much short term disinformation. The media should be looked at for what it is, pure entertainment. I see little to no informational value what so ever from the mainstream media. Another fundamental component to today’s perception is our educational system today has convinced most investors that debt is money (Keynesian School versus the Austrian Economic School). Despite this foggy perception there is little doubt that reality will continue to emerge. It’s really only a matter if investors will seek to capitalize from what could be described as the greatest wealth transfer in history. I hope to expand on this in the future on our website.
This essay is not an attempt to insult some of the great minds in my industry. This is more of an attempt to call out the mass perception that the Federal Reserve Note is money. It is not. It is a fiat currency used for trade. Well connected and successful investors like Warren Buffett have already commented on this fact. This is not to imply the US Dollar (Federal Reserve Note) will implode in the short term or that it can’t be used as a savings vehicle (on the contrary). It is a debt based claim in which the intrinsic value in the future is subject to change based upon new issues (digital dilution) and supply/demand. Please note this most interesting quote from the former Professor Carroll Quigley (see his bio below):
"Thus, clearly, money and goods are not the same thing but are, on the contrary, exactly opposite things. Most confusion in economic thinking arises from the failure to recognize this fact. Goods are wealth witch you have, while money is a claim on wealth (emphasis by the author) which you do not have. Thus goods are an asset; money is debt. If goods are wealth; money is not-wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion. The value of goods, expressed in money, is called “prices” while the value of money, expressed in goods, is called “value.”
One must understand that what Professor Quigley is referring to is a fiat currency and not money. He is using the term “money” as this was what the public perceived as money when the book “Tragedy & Hope” was published (1966).
We are living in an interesting time. It's time to stop listening to "experts" telling you the financial markets are only comprehended by businessmen. This is akin to indicating your health can only be improved by seeing an established doctor. Much of the information will be provided to ensure you are "not wealthy unless you are healthy." Protecting yourself and your family also brings into focus our past and the principals of many successful generations and cultures before us.
The actions of the Federal Reserve Bank continue to indicate they are willing to continue sacrifice the value of the U.S. Dollar through new creation of monetary aggregates (digital currency). This concept will be explained more in the future but understand what was taught to you as "inflation" is not rising prices. The creation out of nothing depreciates the value of any entity, even a currency as the market is "flooded" with new dollars. This is all happening for a specific reason which is important to comprehend to ensure your financial safety and lifestyle. In the end it will all come down to who owns the most productive capital.
"Crisis = Danger + Opportunity" - Chinese proverb
Chris
Jim Rogers - James Beeland "Jim" Rogers, Jr. is an American businessman, investor and author. He is currently based in Singapore. Rogers is the Chairman of Rogers Holdings and Beeland Interests, Inc. - jimrogers.com
Carroll Quigley - Professor of history at the Foreign Service School of Georgetown University. In addition to his academic work, Quigley served as a consultant to the U.S. Department of Defense, the U.S. Navy, the Smithsonian institution, and the House Select Committee on Astronautics and Space Exploration.
"We are at our very best, and we are happiest, when we are fully engaged in work we enjoy on the journey toward the goal we've established for ourselves. It gives meaning to our time off and comfort to our sleep. It makes everything else in life so wonderful, so worthwhile." - Earl Nightingale
“I never let my schooling get in the way of my education.” - Mark Twain
“I never let my schooling get in the way of my education.” - Mark Twain
Dear Friends,
One of the major reasons for starting this blog was to documents thoughts and experiences with the intention of documenting many lessons learned on what I always thought to be the ultimate goal; to live a great active, healthy and enlightened life with a global perspective. I'll often be clarifying that while surfing and design are personal passions, entrepreneurship and a greater comprehension of how our external environment really works is essential to success.
On July 29th 1988, I left Longmeadow, Massachusetts to attend the United States Naval Academy Preparatory School (NAPS) in Newport, Rhode Island. Despite my intention to become an architect and study at a traditional school (Arizona State University; largely influence by Frank Lloyd Wright), I chose the option of entering the US Navy with a "free college" and the hopes of seeing the world as soon as possible. My life changed on that date and since then I’ve been fortunate to follow my real dreams enjoying life's challenges.
In 1993 I graduated from "Boat School" in Annapolis, MD and made it clear that I would go anywhere other than a ship stationed in Norfolk, VA. Once seen as a unconscious or misfortunate act, my choice to avoid the norm or added statism of living among a larger military presence placed me in a base on the other side of the world in the British Indian Ocean Territory. I was fortunate to travel though much of Asia in 1994 & 1995 before returning to the United States. It was clear to me then as it is today that legendary traveler and investor Jim Rogers was correct: "If you were smart at the start of the 19th century, you made your way to London. If you were smart at the start of the 20th century, you moved to New York. And if you are smart at the start of the 21st century, you will find your way to Asia."
I have read countless research reports from many traditional and alternative resources. The one thing I continue to see (which is in line with the exportation of real economy jobs out of the United States) is the bulk of people in my business have never lived overseas (not traveled) or worked for a company that made a product. My past experiences alone don’t guarantee wisdom but they have given me a much different perspective on many current events.
One great challenge when attempting to comprehend capital markets (supply – demand) is learning the difference between a “real” or physical market from a levered or digitally traded market. This challenge may be more difficult for many people who work from a computer with unlimited access to many commodities (like food or water) which come from markets far from the original resource. I still see a great desire, specifically in the United States, for cars made of steel, bikes made of aluminum and many electrical systems (hybrid cars) which require more and more conductive copper. Despite this fact it’s as if the investment world ignores the fundamentals for many commodities which can’t be digitally created out of thin air. World gold production continues to contract with rising demand into the foreseeable future. So why do people panic when a digitally levered commodity exchange dictates the daily price as if it were the only market? It is almost as if many people in today’s financial industry have become detached from reality.
Some say perception is reality. This may be true in the short term. Markets can tactically ebb and flow creating much confusion in the short term. We can see this fact in many markets where there is a “physical” market and a “paper/digital” levered market. These are two completely different animals. The sheer amount of communication and marketing devices today can create much short term disinformation. The media should be looked at for what it is, pure entertainment. I see little to no informational value what so ever from the mainstream media. Another fundamental component to today’s perception is our educational system today has convinced most investors that debt is money (Keynesian School versus the Austrian Economic School). Despite this foggy perception there is little doubt that reality will continue to emerge. It’s really only a matter if investors will seek to capitalize from what could be described as the greatest wealth transfer in history. I hope to expand on this in the future on our website.
This essay is not an attempt to insult some of the great minds in my industry. This is more of an attempt to call out the mass perception that the Federal Reserve Note is money. It is not. It is a fiat currency used for trade. Well connected and successful investors like Warren Buffett have already commented on this fact. This is not to imply the US Dollar (Federal Reserve Note) will implode in the short term or that it can’t be used as a savings vehicle (on the contrary). It is a debt based claim in which the intrinsic value in the future is subject to change based upon new issues (digital dilution) and supply/demand. Please note this most interesting quote from the former Professor Carroll Quigley (see his bio below):
"Thus, clearly, money and goods are not the same thing but are, on the contrary, exactly opposite things. Most confusion in economic thinking arises from the failure to recognize this fact. Goods are wealth witch you have, while money is a claim on wealth (emphasis by the author) which you do not have. Thus goods are an asset; money is debt. If goods are wealth; money is not-wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion. The value of goods, expressed in money, is called “prices” while the value of money, expressed in goods, is called “value.”
One must understand that what Professor Quigley is referring to is a fiat currency and not money. He is using the term “money” as this was what the public perceived as money when the book “Tragedy & Hope” was published (1966).
We are living in an interesting time. It's time to stop listening to "experts" telling you the financial markets are only comprehended by businessmen. This is akin to indicating your health can only be improved by seeing an established doctor. Much of the information will be provided to ensure you are "not wealthy unless you are healthy." Protecting yourself and your family also brings into focus our past and the principals of many successful generations and cultures before us.
The actions of the Federal Reserve Bank continue to indicate they are willing to continue sacrifice the value of the U.S. Dollar through new creation of monetary aggregates (digital currency). This concept will be explained more in the future but understand what was taught to you as "inflation" is not rising prices. The creation out of nothing depreciates the value of any entity, even a currency as the market is "flooded" with new dollars. This is all happening for a specific reason which is important to comprehend to ensure your financial safety and lifestyle. In the end it will all come down to who owns the most productive capital.
"Crisis = Danger + Opportunity" - Chinese proverb
Chris
Jim Rogers - James Beeland "Jim" Rogers, Jr. is an American businessman, investor and author. He is currently based in Singapore. Rogers is the Chairman of Rogers Holdings and Beeland Interests, Inc. - jimrogers.com
Carroll Quigley - Professor of history at the Foreign Service School of Georgetown University. In addition to his academic work, Quigley served as a consultant to the U.S. Department of Defense, the U.S. Navy, the Smithsonian institution, and the House Select Committee on Astronautics and Space Exploration.
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