On my DVD (www.HedgingAgainstUncertainty.com), I mentioned that in the world of finance and investing, history nearly always repeats itself. I then go on to say that because of this clockwork predictability, investing can be very easy if you know what you're looking for. Well...not long ago I was having a rather in depth conversation/debate with an acquaintance over the world crisis and he was adamant that history certainly does not repeat itself and that anyone who invests and hopes that history will pop up and say hello again is a fool. Although I disagreed and attempted to prove him wrong with some facts and graphs, the debate continued. However his argument did spawn 2 thoughts:
i.) Hope is probably one of the worst things to have when you trade or invest. It's almost as bad as revenge or greed, so if you ever find yourself making a trade and 'hoping' it goes in your favour...you're in for a surprise! You really need to 100% know why you're making that trade based on facts. NOT what your gut is telling you. The market can't hear your gut.
ii.) The history thing. It bugged me. So I recently re-watched the DVD again and studied a lot of my past work and research into the market data I've amassed over the years. As a result, I'd now like to make a retraction. :-S Although history doesn't repeat itself, it does rhyme really really well and most of the time, when it does rhyme, it tends to be sung in a sinister tone. It seems as though the God of Economics has a cheeky sense of humour. This 'God' seems to enjoy watching us humans fall into the same problems and make the same stupid jerk reactions time and time again. Except that every time things repeat, just for giggles, this 'God' changes events ever so slightly, sits back with his popcorn and watches our own undoing. Pick any economic disaster over the last 300 years and I can find you multiple events in history which albeit may not match it exactly, is merely a different octave.
So why is this? Why are we continually doomed for failure? Well, in a nutshell, it's simply due to human nature. As a race, we simply cannot master self-control. Especially when our green horns protrude in the presence of money and power. The great Baron Nathan Mayer Rothschild even said, "I care not what puppet is placed on the throne of England to rule the Empire. The man that controls Britain's money supply controls the British Empire, and I control the money supply." Do you really think President Obama controls the US? It's quickly becoming common knowledge that Goldman Sachs controls America, but who controls Goldman Sachs? You guessed it...the Rothchilds. While they may not own it completely, they have a large stake. There are even several unconfirmed sources that say the Rothchilds are worth over $100 trillion, however it could just be hearsay. But I digress.
Back to human nature. So we may start out with good intentions like the Americans did 200 years ago with the Constitution. However the powers that be saw gaping holes of opportunity over the decades and pounced on them without us noticing. Like completely ignoring the Constitution by unpegging the Dollar from Gold. Or the introduction of the Federal Reserve. Please watch my video about the money supply and the Fed here, but ever since its inception, the Dollar has been devalued every single day. To the point where right now, the US Debt increases by $4 Billion per DAY and the US currency supply has quadrupled in the last 3 years! Power is gained through enslavement via taxes and the the Fed steals money from the public in the form of inflation. Commonly known as the stealth tax. The world's currency supply is well into exponential growth and every single dollar the Fed creates out of thin air, immediately devalues every other Dollar in existence. Thus, devaluing the Dollars and buying power in your pocket. The Dollar has lost more than 97% in value since the Fed reared its octopus grip on America/world. But don't for one minute think you're safe in the UK. Our debt increases by £450 Million per day and our currency supply is also in exponential growth. The Bank of England is just as bad and is simply the Federal Reserve's ugly younger sister.
Our own undoing 9 times out of 10 normally starts from the birth of a fiat currency. Again, this video explains it all, but every major civilisation from the Romans to the Greeks all died due to war and fiat currencies. War is simply the cigarette but fiat currencies are the cancer and right now, our cancer is terminal. Fiat currencies have a 100% failure rate over the last 3000 years and if you think we've finally figured out how to cure this cancer, please carry on watching the news and burying your head in the sand.
Now some of you may be wondering how we can counteract this ominous currency devaluing. The simple answer and the same answer which has stood for over 3000 years are Gold and Silver. Put it this way, in 2006, 1 ounce of Silver cost about £6 and this ounce would buy you 6 litres of petrol. Right now in 2012, this same ounce of silver will buy you 16 litres of petrol even though we now have crazy oil prices and inflation. You can barely buy a kebab for £6 these days!
So there you go. The definition of insanity is doing the same things over and over again expecting different results. Well call me facetious, but I think the world’s economists and bankers are insane to the membrane! I believe history is repeating itself again as we speak and what will play out in around 2016/17 will make the 1929 Great Depression look like a night out in Blackpool. The US and the Dollar is the modern day Rome and the gates are burning. The Economic God has got his karaoke out and is starting to rap!