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How To Deal With The Financial System Complexity

This time I will talk about the complexity of the existing fiscal system, economic organization and how we, as smart investors and value hunters, have to deal with it. Should we fight back or should we find another less complex way that will allow us to prosper and get bargains by leveraging the system complexity?

Let’s start from the very beginning, where the truth is. I think no one will deny the fact that existing fiscal system and economic organization is pretty complex thing being built for ages. The reasons of existence of such complex system are as old as the world – the more complex the system is, the less its concepts are understood by inexperienced minds, the more staff you need to govern it, the more not-easily traceable interdependencies it has and the more power you get over inexperienced minds, because they need someone “experienced” in such tough thing to manage it, in order to feel themselves safe and secure.

This is a simple idea which is easily traceable through the history of humanity. Modern fiscal system and economic organization is just the same tough thing reloaded with modern financial instruments and toolsets. I remember one General saying that in the past we had to use armies to conquer new territories and span the power, and now all we need is just to create a new cool financial instrument or promote a state-of-the-art political idea to do the same. The system gets more and more complex and there is no way back, there is no way to simplify it, unless something like The Great Flood or events screened in the film “2012″ is happened. Its broken parts can be repaired and replaced, but it is just the maintenance work. We can only go on maintaining the system. No one can rebuild it entirely, it is utopia. Simply because there are too many “experienced” minds intertwined in this system and they do not want to give up their positions. The history gives us a lot of examples of such tries, but all of them failed or turned to be a sort of making up the system.

The airing idea of establishing the global fiscal system and arranging the new global economic order is just the same old song of power being sung by new voices in a new modern way. Such system will be a cripple and will malfunction by default. It will be a sort of make-up to cover plain-old wishes. The reasonable question – is there any way to change our lives? Yes, there is a way. It can be derived from the prime concept of aikido: use the strength of your enemy to subjugate and defeat it. What should it mean for smart investors?

The more complex the system is, the more often it gets broken, thus the more “shock” events occur in the system such as the current financial crisis that provide perfect opportunities for experienced minds, speculators and smart investors such as we are. Some minds speculate on such events and gain millions and billions of dollars. Smart investors and value hunters should learn to use such “shock” events to find bargains, to find the value during the turmoil when it is better to identify. Should there be no waves on the sea, we would never know when the storm is coming. Should there be no winds of change it would be hard to identify when the sea is calm and when it is storming, thus it would be hard for us, smart investors, to prepare for those changes and benefit by them.  We have to learn to leverage the system complexity created by “experienced” minds to prosper and benefit by its “shock” events.

Someone may think that I reveal some classified secrets or something like that. Nonsense – I am laughing out loud of those who say that the system exists to protect and secure. If I said that, I would make a laughing-stock of myself. This system is created to prosper and get bargains. Everyone knows and comprehends what I am saying, consciously or unconsciously, but he or she did. Otherwise there would not be rich investors and prospering businessmen.

Does it mean that I appeal not to change the system? If you still have this question, then I insist on rereading this article once again. Use what you get to know and comprehend to prosper, learn to leverage the system complexity. As smart investors, we must not allow “experienced” minds to think for us. We must use what they create “for our safety and prosperity” to really prosper and get bargains. Do not try to stop the train running at the speed of sound – you will be smashed. Jump into the train and leverage its speed and weight to prosper. One way is to fight back the system and get smashed, another way is to leverage its power and “shock” events to reach own goals, to prosper. But how you are going to leverage its power, it is a matter of your moral maturity.