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Evolution of Money | Bitcoin | Obama Out
With RRSP and tax seasons behind us, and with markets less volatile (at least for now), I can delve into some other topics this week!
And with our newfound (albeit temporary, I'm sure) reprieve from market volatility, I'd like to discuss money. It might not seem like too much of a divergence, but the next few paragraphs will go deeper into its evolution.
Like electricity, money is one of those things we use all the time, but rarely think about how or why it works the way it does. We know we need it, we have a few methods for storing it, and we hopefully know how to grow and protect it. But, what is money? Why is it actually worth anything?
Currency is primarily a social construct, determined mostly by what those in power perceive to be valuable in regards to the buying and selling of goods and services. Over the course of history, we've seen currency in many different forms - beaver pelts, tea bricks, salt, shells, knives, stones, cigarettes, cheese, and coins, to name a few. Given the fact that currency has evolved so much over the centuries, what does this mean for the permanency of the Euro, the Yen, or the U.S. and Canadian dollar?
The bad news is there are no guarantees. Should Donald Trump become president and decide that part of "Making America Great Again" is retribution for our charring of the White House in 1814, I'd be somewhat less bullish on the value and long-term perpetuation of the Loonie. This particular example is far-fetched, but nonetheless, many countries have seen their currencies change dramatically in value, not to mention disappear.
Fortunately, there are ways to protect against currency fluctuations. The obvious one is to own precious metals like gold, which I often refer to as a hedge against the world going crazy. It's possible gold won't be bulletproof in every situation, but owning it should provide some degree of protection. Owning commodities or companies that produce commodities should also protect against dramatic fluctuations.
It's unlikely something catastrophic will happen to the Loonie or any other major currency in our lifetimes. However, unlikely doesn't mean impossible. If you read my review of Nassim Taleb's The Black Swan or are familiar with the author, you know it's virtually impossible to predict the likelihood of cataclysmic political or economic events, as they are subject to chaos theory.
I'll likely be delving deeper into money and currency in a future blog series.
Dropping Knowledge
Steven Pressfield's Turning Pro
- I'm a tea drinker. For the last three years, whenever I make a pot at the office I've used Steven Pressfield's Turning Pro as a coaster.
Perhaps driven by guilt over watching the book's cover change shades of yellow over time, I decided to actually read a couple chapters. Ninety minutes later, the book was finished.
At 132 pages, it obviously doesn't rival War and Peace, but its short, punchy sentences are impactful and well worth reading for anyone interested in the creative process, while its overall message is applicable to anyone. The main thrust of the book posits that one decides to be a pro. This decision leads to actions and dedications worthy of the person calling themselves a pro. Pressfield correctly puts forward that most people dabble in things they want to be good at, but aren't willing to throw everything they have (mentally, physically, emotionally, or even financially) towards reaching their goals.
Turning Pro is great if you're passionate about, or have career aspirations to work in a creative field, but is also applicable for those of us not in the creative reals. If you know anyone who isn't giving their career or passion the effort it deserves, I'd certainly recommend this short read.
Some food for thought
- Democracy and tyranny: If you're keeping track of things south of the border, this is an insightful article on politics, shedding some light on what the heck's going on down there
Going viral
- "Obama out": Presidents Obama's entertaining speech at the White house Correspondents' Association Dinner ends with a literal mic drop
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Matthew Lekushoff, CIMA
Financial Advisor
Raymond James Ltd.
T: 416-777-6368 | F: 416-777-7020 www.Matthewlekushoff.ca
  
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