On December 5, 1996 Alan Greenspan, the Chairman of the Federal Reserve gave a speech that sent the markets around the world tumbling. In ten sentences he destroyed investor confidence and time zone by time zone, the markets dropped significantly because of a single word: “bubble”. In his speech, he said the market had been overheated by speculation and that current values were too high.
I know that, not because I’m an expert in the history of the financial markets, but because an investment house is recycling the “bubble” concept to try to get those of us over 45 to start thinking about buying gold. Without coming right out and saying it, the implication is that the era of John Smith, laissez-faire, and free market economies is over and once the big investors finally realize that – the bubble is going to POP!
The reason this struck me as so funny is that I got another ad, from another investment house on the same day, proclaiming the glories of the market under the new administration, who intend to model the economy more in line with John Maynard Keynes thinking, which would of course, cause the markets to expand!
A prudent investor doesn’t have all of his eggs in one basket. If I’m wise I should be able to withstand either an expansion or a contraction. However, if I’m “abiding” in addition to being the best steward I know how to be, I’m also looking beyond the bubble! Like Paul, I hope to say, “I have fought the good fight, I have finished the course, I have kept the faith; in the future there is laid up for me the crown of righteousness, which the Lord, the righteous Judge, will award to me on that day; and not only to me, but also to all who have loved His appearing.” (2 Timothy 4:7-8)
It’s not wrong to be aware of politics and markets, it’s wrong to allow our hope to rest in them.
“Do not despise us, for Your own name’s sake;
Do not disgrace the throne of Your glory;
Remember and do not annul Your covenant with us.
Are there any among the idols of the nations who give rain?
Or can the heavens grant showers?
Is it not You, O Lord our God?
Therefore we hope in You,
For You are the one who has done all these things.”Jeremiah 14:21-22
“This hope we have as an anchor of the soul, a hope both sure and steadfast and one which enters within the veil.”Hebrews 6:19
Some things on my mind,