Pareto Thinking and Safety

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by Gary Christenson, Miles Franklin:

The Pareto Principle states that results often follow an 80—20 distribution. It is not a mathematical fact, but an observation.

Examples:
20% of people do 80% of the productive work.
20% of politicians create 80% of the trouble.
20% of your investments create 80% of your returns.
80% of silver and gold profits occur in 20% of the time.

SPECULATIONS:
Most adults—say 80%—“go with the flow” and live paycheck to paycheck. The other 20% manage their financial lives, reduce debt and interest payments, and save for retirement.

But of the adults who manage their finances, save for retirement and decrease debt, perhaps 20% of the 20%, or 4% of the adult population, understand the reality of currency unit devaluations.

Repeat: Only 4% appreciate the inevitability of a dollar reset, the destructiveness of unpayable debt and vulnerabilities in our current debt-based financial system.

I suspect that many of those 4% stay invested in over-valued stocks and supposedly safe bonds because the Wall Street narrative pushes investors into investments which are profitable for Wall Street.

Perhaps (more speculation) only 20% of that subset of 4% (less than 1% of adults) have exited the Wall Street casino and converted paper and digital assets into physical gold and silver bullion that will protect them when casino stocks and bonds suffer another harsh correction or crash.

REVIEW OF SPECULATIONS:
Eighty percent of people live paycheck to paycheck with minimal management.
Twenty percent manage their finances but only four percent understand the extreme dangers in current financial counter-party risks.
Less than one percent of adults have protected their savings and retirement with gold and silver bullion.
In which group do you live? Are you in the 80% group, the 20% group, the 4% group, or the 1% who are more likely to survive the coming reset?
NOPE! NOT BUYING THIS STORY! THINGS ARE WONDERFUL AND CNN AGREES! STAY INVESTED IN STOCKS AND RUN WITH THE HERD FOR THE LONG TERM! (Sarcasm…)

It is comforting to run with the herd. Our DNA and survival instincts encourage us to stay in a group. We are told: The standing nail is pounded. Don’t fight the Fed. Trust authority and believe the experts. Go along to get along. They won’t lie and they’ll take care of us. In other words, run with the herd.

But the point is this: Government and Wall Street encourage us to buy their narratives. It’s easy and comfortable. But the results of running with the Wall Street herd can be catastrophic.

Remember the 1999 narrative promoting Internet stocks. The NASDAQ 100 subsequently fell 84%.

Bitcoin fell from almost $20,000 to under $7,000 from mid-December 2017 to early 2018.

The herd of investors suffered through the crash of 2008, the credit crunch, real estate foreclosures, bankruptcies and resulting traumas. The Fed created $16 trillion in loans and swaps to support the financial system. How much will be conjured from “thin air” during the next crash and what collateral damage will result?

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