For every proverb we have in the English language there seems to be an equivalent one in Chinese — the way they are expressed in English is different but the meaning is the same or similar. For example, in Chinese there is one which says "You don’t empty the pond to get the fish." In English this is similar to "Don’t throw the baby out with the bathwater."
There’s one I’ve come across in Chinese which translates exactly as the English proverb — "Interest is the best teacher." I find this one particularly apt as my journey into the world of libertarian thought and Austrian economics continues.
Many new and interesting doors have opened since I began my journey. One of the most fascinating has been the world of investment; or, not so much the world of investment, but rather the people who inhabit this world.
I recall one or my aged professors at university solemnly telling us that the days when a man could start out life with a few pounds in his pocket and single-handedly turn it into millions were over.
"Gentlemen," he said lamentably to his mixed audience, "I fear the only way ahead now is to join the corporate ladder."
This was back in the 1970’s. It was a different world. Unfortunately, we believed him and, for the most part, followed his advice.
But he was wrong — he was ignoring a special breed — by which I mean a small band who did start with a few pounds (or dollars) in their pockets and who have actually made money — lots of it. By now I can reel off a long list of people I never knew existed before, starting with the likes of Bill Bonner and Peter Schiff. The corporate ladder was never the way for these people, or if it was they didn’t stay that long. I think of them as the high-plains drifters of the modern world of investment — the last gunslingers!
They are solitary hunters. They see opportunities, get in first, and sure as hell know when to get out. They don’t do what everyone else is doing — they’re contrarian — which is what makes them a special breed. These modern day gunslingers have traded the Wild Wild West for the World Wide Web.
What qualities set these guys apart from the rest of us? Well, let’s just say it’s a combination four things:
- Blazing intelligence.
- The ability to spot opportunities before everyone else.
- Fiercely independent — trust no-one, accept nothing and question everything.
- A sound take on Austrian monetary economics.
Of the four it’s the fourth that really makes the difference. This is their great advantage since the vast majority of people simply do not understand monetary economics of any stripe. Most people find just the thought of it incredibly boring — their eyes glaze over if the subject is even mentioned.
Suffice it to say that what the most successful investors nearly all seem to have in common is that they ally themselves to the Austrian school of economics. For anyone of modest means, thinking about a career where they can make some real money, the connection here should be going in like a six-inch nail!
Crucially, our modern-day gunslingers understand how the political system works. They know that it’s nothing short of mob rule by another name. Not much different from a lynching. The instigators manipulate the mob for their own ends. The mob hasn’t got a clue about what’s really going on. They’re so far into it they actually trust and believe the wretched hypocrites who are running them. A few stand by on the sidelines and observe — they see what’s going on — but they know you can’t reason with a mob when it has been so expertly groomed. So they just shrug and leave them to it — they have other fish to fry.
We must admire them for their insight, admire them as they ride into town alone and leave the same way with their saddle-bags bulging. They are lone wolves who cannot he handled or led — not that they are averse to running with the buffalo when there’s a profit to be made — but it’s rare.
Are they cynics? Why yes of course they are. Can you blame them?
They see so much mayhem going on around them, fantasy and farce, mistakes and madness, lies and greed — and it never stops, it just goes on and on and no-one ever seems to learn. In the end they stop asking why and just become amused by it all.
And here we are at yet another denouement. Our gunslingers jumped out of the stagecoach long before the other passengers saw the Grand Canyon up ahead. They have repositioned themselves. Someone has to pay for the nonsense of the last few years but it won’t be them. The paying will be done by "investors" putting money into things they just didn’t understand and by ordinary hard-working people, who wouldn’t know a CDO from an IPO, seeing their living standards plummet.
And where will the gunslingers be as this latest tragedy unfolds? Camping out alone on the prairie? Taking it easy by the campfire for a while? Looking up at the stars and playing a lonely dirge on a mouthorgan?
Not a bit of it.
The boys have already mounted up and are headed for Dodge. They travel alone. They ride steadily and with purpose. When two of our bounty hunters find that they are after the same prey then meetings become inevitable and can be somewhat, how shall I say, "fragile." One will exit the hunt minus his scalp — if he’s lucky. For they of all people know that now, especially now, when the blood is about to start running in the streets — that now is the time when there’s a real killing to be made.
Chris Clancy [send him mail] is Associate Professor of Financial Accounting at Zhongnan University of Economics and Law in Wuhan, Hubei Province, People’s Republic of China.