We’re on our way back to Baltimore from Florida.
The Dow was down yesterday, but not alarmingly.
Meanwhile, comes evidence that the dollar is doomed. It may get a boost in the short run from the euro zone’s ultra-low rates. But the writing is moving from the wall to the newspapers. From ZeroHedge:
‘Russia’s prime minister, Dmitry Medvedev, told Rossiya TV in an interview earlier today, [that the BRICs] should conduct transactions in national currencies, bypassing cross-rates with the US dollar, adding that "we can easily make mutual settlements directly," and the mechanism should be beneficial to both sides of transactions.
‘And if it wasn’t clear by now, Russia’s pivot away from the West and toward China is pretty much complete. Medvedev also said that "our collaboration with China is of strategic importance. We have great, brilliant political contacts. We have excellent economic relations. [China] is our strategic partner, and we are interested in expanding the volume of cooperation. We are not afraid of collaborating because we are confident that this is equal, friendly and mutually beneficial collaboration in all areas.’
Portugal in the 15th century. Spain in the 16th century. Followed by the Netherlands. France. Britain. And finally, the US. Each empire gets its chance to throw its weight around…and its money. About a century for each.
Now, it’s America’s turn. But the US ‘Empire of Debt’ already lives on borrowed money…and borrowed time. The dollar, US stocks and bonds — in fact, the entire capital structure — are overpriced…and in danger.
Anything could happen in the near term. But in the long term…all will go down.
In the meantime, we continue our series on ‘How to Get Rich’.
The true nature of wealth
You’ll recall from yesterday that the first secret to getting rich is that you cannot fear poverty. Otherwise, you can’t take the chances you need to take if you are to accumulate substantial wealth.
You’ll also recall that there are only three important decisions in life: what you do…where you do it…and with whom you do it.
Here, we continue our series with more on…what you do.
Imagine a man who is a great chef. He loves cooking. So he opens a restaurant, and it is an immediate success.
Seeing the possibilities, he takes his recipes, trains other chefs and opens other restaurants. Pretty soon, he has restaurants all over town…and the money is rolling in.
But now he is no longer doing what he likes to do. Instead of cooking, he’s running a complicated business; he’s become a manager and an administrator. He’s figuring out tax strategies, leverage and cost control.
‘I’ve become a damned accountant,’ he says. ‘I hate accounting.’
The real fun is getting money, not having it. Once you have it, the fun is over.
This is partly because of the nature of wealth. To get it, you have to be expansive, ambitious and optimistic. But once you have it, you have to change your personality to cope with it…protect it…and administer it.
Instead of being an entrepreneur…and a builder of wealth…you must become a custodian…and a conservator.
You can no longer be the same person you were. You have to assume that the worst will happen…because it probably will.
Now you have to be cautious, careful, distrustful, cynical…and pessimistic. You’re no longer expanding your wealth. Now, it shrinks as you do all you can to try to stop nature from running her course.
In short, you are no longer a young man full of energy and promise; you are now an old man trying to stop the clock.
And then, when you are no longer building a fortune, you have to do something else.
You look for things to do…ways to pass the time…things you can convince yourself are meaningful or fun. But they are usually just big time wasters — art…charities…sports…entertainments.
Often, the positions a rich person puts himself in are not only dull, but also they are fraudulent.
He has made a lot of money in one business, so he thinks he will be competent and successful in others. Remarkably, others think so too! So he could end up as chairman of a local hospital board or maybe the head of its investment committee.
But nothing in his career prepares him for the petty politics of a charity board of directors…or the deceptive nuances of the investment world.
He is not only miserable because he feels he is wasting his time, his projects also end in failure.
The hospital board gets into a nasty internal feud…and he cuts the hospital fund — and his own fortune — in half, mistakenly believing that he knows what he is doing.
We did not make that mistake. We have not retired. Still, we have suffered from wealth.
Tune in tomorrow to find out how…
For The Daily Reckoning Australia