In today’s exploration of wealth-building, we invite you to take a moment to reflect. As you close your eyes and take a deep breath, you absorb not only oxygen but also a vital sense of perspective.
Though we’ve never actually butchered a hog, we can gather that it’s quite a messy business. Yet, as we gaze at a classic ham and egg breakfast, we find a powerful lesson about commitment.
Some of you might already be familiar with this metaphor. When enjoying a ham and egg breakfast, the chicken contributes by providing the eggs. In contrast, the pig is fully dedicated; it must sacrifice its life to supply the ham.
This metaphor provides rich insights. In many pursuits, there are those who are merely involved—like chickens—and there are those who are completely committed—like pigs. When it comes to striving for wealth, we often need to adopt the mentality of a pig.
Simply being involved won’t yield the desired outcomes. Genuine commitment is crucial for overcoming the numerous obstacles that can impede our progress. Here’s what we mean…
Market Distortion
Among the challenges we face, the fluctuating currency imposed by the Federal Reserve is perhaps the most difficult to navigate. The Federal Reserve’s primary goal is mass money debasement, ultimately aiming for debt expansion.
The repercussions of these policies are apparent, yet unpredictable. While asset prices tend to increase over time, this long-term inflation is disrupted by occasional, severe price deflations.
The average observer remains oblivious to this reality. For reasons unknown to them, they fail to see that the economic equations aren’t adding up. They are like chickens—not fully engaged in their wealth-building journey.
They witness rising prices and assume that standard market forces are at play. While there may be some truth to this, what they’re really seeing are not free market dynamics, but rather a distorted reflection of true market forces.
Many might hear snippets of Fed Chair Janet Yellen’s remarks during her testimony and believe that the Fed can manage the economy effectively. “The recent flattening in housing activity could prove more protracted than currently expected,” Yellen stated. Perhaps her next strategy will involve injecting even more credit into the system.
Yellen, undoubtedly, is also a chicken. While she may be committed to stimulating the economy, she does so using your money—not her own—money that you have yet to earn.
Wealth Building for Pigs
This week, the yield on the Ten-Year Treasury note dipped below 2.6 percent. What does this imply? Is the economy starting to slow?
Honestly, we can’t be sure. The distortions are far too significant. Unlike the casual observer, though, we recognize that something subversive is at play.
What could be causing borrowing costs to decrease while Treasury prices rise, all at a time when financial risks are becoming increasingly evident? Are stocks and bonds still good investments? Based on our current observations…the answer is no. But how much do we truly know?
As French Nobel laureate Albert Camus once said, “The absurd is the essential concept and the first truth.”
This perspective is vital when examining markets today. They are neither free nor efficient; instead, they are riddled with deception and folly. If we want a chance at a prosperous future, we must proceed as committed pigs—navigating with caution and skepticism.
While we cannot demand success, nor can we guarantee it, we can certainly take the necessary steps to earn it. Afterward, we will be grateful for what we obtain…plus perhaps a little extra.
Sincerely,
MN Gordon
for Economic Prism
