And It Always Backfires

I don’t usually react strongly to views others have shared on their blogs. After all, the blogosphere is the perfect arena to share your thoughts and speak your mind; and everyone is entitled to their opinions.

I did – however – find myself making an exception to letting things slide when I came accross this blog post by Shane Hutton titled

Greed Is Great

First, let me say (more…)

I was reading a book on business and the way disruptive technologies changed the rules for centuries. Safe, secure jobs of one form or another were suddenly wiped out when these changes came around.

Naturally, there are professions that have been with us since the dawn of civilization, and they’ll be with us for a long, long time. Doctors, lawyers, and policemen are a few professionals that spring to mind whose jobs have staying power. A nasty episode involving a cheating spouse is likely to call for the attention of all three, and we know that cheating spouses aren’t about to disappear soon,  don’t we?

As I read on the effects of disruptive technologies, I got the idea to think of examples of workers who thought they would be safe in their jobs until retirement – those poor unfortunate folk who never saw the big axe swooshing in from the distant horizon.

Here’s a quick list of the doomed professions and the technologies that did them in:

• The milkman – done in by the convenience store and the motor car
• The traveling coal merchant – zapped by electricity (which ironically uses up a lot of coal)
• The travel agent – smothered by the internet
• The typewriter serviceman – squashed by the personal computer
• The fax machine operator – better fax machines did the culling (in the 1980′s a typical fax machine was the size of a car and required a trained operator)

These are the few that I could think of right of the top of my head. I’m sure you can think of others to add on. All these people have one thing in common, they never thought technology would end their careers or force them to adapt.

Disruptive technologies still continue to surprise us, and they are doing it at a faster rate than ever before. On the flip-side, new technology creates new opportunities.

What job types can you think of that are on the endagered speceies list? What technologies do you think will wipe them out?

I’m no financial guru, so please take what you are about to read with a pinch of salt. This is not meant to be taken as expert advice. Just an honest opinion of what I would do in these turbulent economic times if I could still afford to keep my house.

I would not sell it. Why?

First of all I’d be selling in a depressed market, that means I would be selling it at a fraction of its real value. Secondly, because of this saying:

Bad money drives out good money

Bad money in this case would be the declining value of cash because governments all over the place are printing money (and in the process creating humongous deficits)  in order to:

• prop-up the doddering financial markets and;
• stimulate consumer spending.

When that starts to happen increasingly, investment funds stop flowing into paper assets/ exotic financial instruments and run to the safety of tangible assets like gold, other precious metals, oil, and -yes – real estate, all collectively known as commodities (good money).

Because demand will have returned to commodities, their prices will shoot up as further pandemonium ensues.

It seems that in the panic we have all forgotten about past horror stories of hyperinflation. What I’m seeing now with rescue packages worries me because those are the very actions that can lead to hyperinflation. Yet we all seem to be merrily oblivious of the monster that might befall us.

Most of us alive today have never experienced hyperinflation (except Zimbabweans) and that painful experience may be just around the corner.

I don’t buy the story about inflation going down “because the economy is slowing down”.  That’s talk of inflation from a completely different dimension. These are the reasons I think your house may pick up value sooner than you think.

If you had spare cash, now would be a good time to pump it into real estate. Property is cheaper and it will always be a good store of value.

If this does not happen you can rightly dismiss me as a bumbling quack who should stick to computer code. but I have the gut feeling that we are headed in that direction. Don’t get me wrong, the good times will be back, infallible human ingenuity will again find new ways to create great sums of money out of thin air. This will not happen before the crucifixion passes through.

One day it might be written in history books that the biggest economic blunder made in the 21st century was to not let financial institutions fail and let the markets correct themselves.

Without meaning to toot my own horn, I correctly predicted over a year ago that the overheated Chinese stock market would collapse and cause mayhem. This was largely overshadowed by the crisis that began in the US.

All the while, others were saying such a thing was impossible. Perhaps that’s because they honestly did not see it coming.  So let’s not be too hard on our gurus. It’s important to be careful about whom to take advice from. This blog post by Dave Duarte backs me up on that front.

Let’s remember that it’s not nice to fool with mother nature.