Alexander Muse is a technology entrepreneur with a brilliant summary of where we’re at (and why I started this blog) — the rules have (apparently) changed (and I’m trying to figure out what they are… or, presuming that there are no rules, then I’m still trying to figure out what the best strategy for operating in the world without rules is).
Here’s the meat of his post:
The biggest risk we face now is that there are no rules. The government might force you to make loans that you know are bad. Then again they might not force you to make loans. The government might punish you for making loans despite the fact that they forced you to in the first place. The government might punish for not making loans despite the fact that they didn’t force you to make them. The government might take over your business. The government might save your competitor and let your company go out of business. The government might dictate how much you are allowed to earn. The government might decide whether or not you deserve cancer treatment or a liver transplant. The government might let you keep your house even though you can’t afford it. The government might pay you NOT to work. Rules mean the game can go on – they don’t even need to be fair for everyone to prosper. Of course, without rules everything stops until we all can agree on a new set of rules. That is the reality of today.
I have this recurring argument with a good friend of mine when we discuss buying gold as a hedge against economic risk in this climate.
He advocates buying “semi-numismatic” or “numismatic” gold (basically rare coins), because when gold was confiscated by FDR back in the 1930s they were exempt from confiscation. So today you see a pretty healthy premium above traditional “rarity” due to demand being paid for those coins by folks who are concerned about the scenario where gold is once again confiscated to stabilize the currency.
My response is that there’s no guarantee that the same rules and limits will apply today. Just because FDR stopped at rare coins, why does that mean that BHO will? So why pay the inflated premium if there’s no guarantee? And if there’s no guarantee, then why not pay less for more gold and have a larger, less precarious investment in the metal and hope for the best?
In this example, we’re not even talking about something more difficult to change, like economic instincts or regulations. Instead, we’re talking about federal policies, which can be changed on a whim with enough arm twisting, predicitions of impending catastrophe, or demagoguery.
via Remember: The old rules don’t apply. . . | Texas Startup Blog.
