The Era of Stablility is (Probably) Gone

It sounds pessimistic but the fact that we see in the last decade starting from subprime mortgage 2008, 9/11 twin towers attack, and the latest issue of Rohingnya Moslem show us an improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was (Nassim S Taleb).

We still remember about terrorists attacked the twin towers in New York. Most of us seem implausible an accident can be happen in the country that has the most vigorous national defense in the world.

Later, since the global financial crisis in 2008, which most of the global financial market analyst failed to predict if the US and the world will face another recession after black Monday in 1930. The US economy condition today can not surpass the US economy before crisis. It means when the crisis outbreak a country, it could damage the system that has been built for a long time.

Before further let’s go back to 1918 and look for a connecting point on current issue. Keynes remain about what Lenin said, there is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. We see the current phenomena about currency debauch happen in Rusia, when Ruble depreciated 30 pecrent within four and half month, compare to US dollar. We realized that such a “hidden war” between two countries that cannot be seen by the eyes of ordinary people. Although we often hear ruble depreciated as the impact of oil prices, as the backbone of the economy has decreased.

What can we learn from twin towers attack, subprime mortgage, and ruble depreciation. The crisis gives us a lesson that we live in a world where everything’s is connected, it’s difficult to control all activities around the world, and news available seems to have exceeded the capacity of our brain memory.

So what should we do in instability?

Frankly, trying to answer a question like that as severe as answering investor questions about what’s the most profitable stocks or what percentage of profit that I received per year if we buy X stock? On my mind, rather than giving false hopes better I ask them to look at the monitor and get them know information about the history of the stock prices in the last 5 or 10 years, calculate the average return per year then make projection to define probability return in the next year.

Answering today or future questions by looking for history data, according to Taleb (outhor of Black Swan), people concentrate on things we already know (history data) and time and time again fail to take into consideration what we don’t know. Today’s fact show us, what we were never imagine more common than what we have previously imagined.

Since the uncertainty become a new normal and the era of stable economy is (probably) gone. Better for us to deal with “surprise”, insist us to keep learning, constant trying, hard working, and continue praying. The rest, let’s God carry out His duties properly, including answer questions on circumstance that will occur in the future J

Palembang, 25 Mei 2015


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