Can you really compare a global financial crash with an airplane crash?
I think you can.
Modern commercial aircraft are high-tech flying machines, flown most of the time by their onboard computer systems.
But sometimes, as was the case with the Air France flight off the coast of Brazil, these planes crash.
In the absence of a catastrophic mechanical failure, like the loss of a wing or part of the tail assembly, these crashes usually occur as the result of a series of cascading events or failures.
In other words, no single event or failure causes the crash. Even serious, single events – like an engine fire – can be overcome.
But when a series of events take place in rapid succession, both the computers and the pilots can quickly lose control.
A flight at night, a storm, the captain is resting while the co-pilot watches the instruments. Suddenly the plane starts to dive, as the result of a software failure. The co-pilot takes the plane off automatic pilot and tries to get back control. The captain takes over. At the same time, a second software problem occurs. Or an instrument display flickers off. They enter the heart of the storm, and the pilots finally lose all control.
It is the cascade of events, all occurring within minutes or even seconds, and the human response to these events, that causes crashes.
Is this scenario so very different from might what happen with the computer systems and individuals who “pilot” our financial markets?
Global trading is also heavily computerized, and enormously complex. Individuals at banks can also make mistakes.
Any system that is highly complex and computerized, whether it is an airplane, a nuclear power facility, or a banking and investments system, is vulnerable to cascading events.
For myself, I don’t think any single factor will bring the world’s financial system to its knees. If the problem is just about the U.S. dollar, a remedy will be found. If the problem is just about the bond market, a remedy will be found.
But I do believe the world will have to deal with a catastrophic financial crash at some point. And I bet that crash will happen as the result of a series of rapidly cascading events.
For this reason, if for no other, it makes sense to protect at least part of your wealth by holding it outside of the system. And the best way to do that is to buy and take possession of physical gold, whether you then store it at home, or in a safety deposit box at a bank. Or even in allocated storage.
One way to another, it makes sense to protect your wealth from a series of cascading events that lead to a catastrophic crash.
You can buy gold coins and gold bars online at GovMint.com.