As the world grapples with an onslaught of economic uncertainties, one influencer stands out with a unique perspective on the landscape. Paul Stone, Chairman and CEO of Colonial Metals Group, sheds some light on the historical cyclical nature of economic threats and how this information should shape our monetary decisions today.
Stone begins by bringing us back in time, contrasting our current perception of money with historical practices two centuries back. He reminds us of a time when the physical location of our wealth mattered, with cash kept either at home or invested in real estate, the financial sector, or vaults of banks newly invented. This trend has not changed much; the only difference is the digitalization of our money.
Drawing parallels with past empires like Rome, Spain, Portugal, the Dutch, the French, and the British, Stone outlines the inevitability of financial decline, asserting, "We will fall financially." The universal problem plaguing these empires and our modern economy, according to Stone, is when costs exceed revenue, often leading to debt or money printing.
Stone further illuminates his point by referencing Ray Dalio's research. The multi-billionaire founder of Bridgewater and Associates, Dalio's research team mapped out the rise and fall of empires, clarifying the causality between governmental financial policies and collapse.
Colonial Metals Group's CEO believes that "the governments that destroy the currency" are usually the culprits of economic demise, as they struggle to solve problems of financial distress. His succinct analysis concludes, "They're debt creators, money spenders. They're not money creators."
Stone then transitions the conversation to the perception of technology as a financial solution. He argues that while we may revel in the convenience that our iPhones and digital spaces provide, these advancements have not alleviated the fundamental laws governing finance. He refers to mathematics as the universal language that tells the truth about our economic crisis, stating, “It can never lie.”
Stone asserts the necessity of courage in making financial decisions. With the value of the dollar dwindling, "from 100 cents backed by gold" to just "2.7 cents" today, he suggests that turning our savings into assets like real estate or precious metals isn't reckless but rather a prudent strategy in the face of looming economic threats.
Paul highlights the crucial role of immigration in fueling economic growth, pointing out the financial distress caused by an imbalance between workers and retirees. He sheds light on an overlooked issue, stipulating that if governments had been proactive in integrating immigrants to offset the retiring population, the current economic crisis would likely be less severe.
The CEO's approach to these issues sets him apart from other industry leaders. Stone prides himself on a down-to-earth understanding of these complex issues, positioning himself as the only CEO to stand in front of a camera and succinctly explain his beliefs.
Paul's understanding of the financial landscape does not come from an economics degree from an Ivy League school; instead, his knowledge is rooted in pragmatic observations coupled with historical analysis.
Whether we like it or not, history indicates that there will always be economic threats. As Stone effectively puts it, the question should not be whether the fall will happen but when, how close we are to that endpoint, and how prepared we are for it.