Unless you have been hiding under a rock or vacationing in Bora Bora, you have seen the financial turmoil and craziness of the last two years. First the world economy was shut down by COVID and now we see the pain of starting up again. Gas, autos, houses and food prices are red hot and crazy. Those of us who lived through 2008 have seen the world economy almost totally fail before when the stock market went sideways and some very big, very old investment banks went bankrupt. It got so bad the government HAD to BUY some “too BIG to fail.”
For example, Lehman Bros., which claimed assets of $640 Billion with a “B”, went bankrupt! To put that in perspective, according to an article by CNBC, ALL of the next NINE largest US bankruptcies together only added up to $417 billion. AIG was in even worse shape and the Feds directly stepped in, even though AIG claimed assets in 2008 of over one trillion dollars. It was nearly an economic destruction worldwide of the concept of money.
Hurricanes blasted Texas, tore up houses, and oil refineries, which wrecked gasoline supplies, but gas prices still never got even CLOSE to remaining at what we’re paying right now. How high will gas prices go? Who knows. But this I suspect... life will go on. The lights will continue to burn for most people. However, this could be a REALLY interesting summer to watch especially if particularly hot and dry weather starts causing electric grid failures as a result of the many coal fired electric generators certain forces have naively killed off.
It’s said the best lessons are learned by bad experiences. Perhaps. But there are some experiences which are going to be repeated and there is a limit to what individuals can do to change that. BIG companies will still go bankrupt. Good people will still lose their jobs. Hurricanes and tornadoes will still destroy coastlines and communities. Sickness and death will still go on. People will marry. Babies will be born and the human experience will continue.
So... after long, sober thinking... where should you invest? I have a suggestion.
“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” (Mat 6:19-21) Bank on that.
- Tim Orbison