Waiting for the end of the world 1, money

NOTE: I'm writing this about a week later than it's posted, but I'm back-dating it to the day it happened. It's only a week.

Today I had a phone call with the fellow that manages my retirement account, and it was … less than fully satisfactory. Normally we talk every few months. Usually he (or a financial advisor in his office—there is one specifically assigned to my account) explains to me what's going on in the economy, and then makes suggestions for how we should restructure my investments accordingly. I pay a flat fee regardless of buys or sells, so it's not to their advantage to encourage random trading for its own sake; and their contract specifically prohibits them from getting paid by the individual securities for promoting them. Also their fees are proportional to the value of my account, so they make more money when I do. All that is to say that I assume their advice is probably based on what they really think.

That's good to know, because whenever they start explaining the trends in the economy and how those trends suggest this or that redistribution of my account, they might as well be speaking Chinese, or ancient Babylonian. I never have any idea what they are talking about. I mean, yes, I understand when they say they think interest rates will go up (or down), and sometimes I can detect a causal connection to where they say that they think inflation will go down (or up). But how that translates to "We need to sell your shares in the Octopus Amalgamated ETF and buy up shares in Global Mammon ETF instead," … well, the logic behind that narrative transition always eludes me. But it sounds like they know what they are talking about, and I know they make more money only when I do; so I always trust their recommendation and approve it. 

Once in a while I do try to ask questions. A few months ago, in the wake of the failure of Silicon Valley Bank and a couple of others, I asked them how I was positioned to weather an environment when banks were collapsing (and probably more collapses were on the way). My financial advisor (he was the one on the phone at the time) said, "That's a very perceptive question! The way we see it … <insert ancient Babylonian here> … and that's exactly why we recommend that you should move out of these funds and into those ones, just like it says on the sheet we sent you yesterday." 

Oh good. So you were already worried about bank collapses too? Or maybe you just know how to spin anything I say to fit what you already planned to recommend, because I don't speak ancient Babylonian and so I can't tell the difference.

Anyway, today was another of these calls. This time I got my actual Financial Planner himself (not just the financial advisor who works for him). And after he went through his normal routine, I had a question for him.

"In another week or so, the BRICS nations will meet for their annual summit. There is talk that they will use that meeting to authorize an international currency to compete with the dollar as a reserve currency and as a medium for international exchange. Right now a lot of countries buy and hold U.S. Treasury bonds because the dollar is the world's reserve currency. But if something else replaces it, then those countries are likely to sell all their U.S. Treasuries, flooding the market and depressing the value of the dollar to bargain-basement levels. If the dollar suddenly drops to the value of the lira, that could devastate the American economy. How is my retirement account positioned with respect to that kind of calamity, and what can we do about it?"

I thought it was a good question. But Mr. Planner was dismissive. He said, in the first place, that people who publish projections like that are usually selling something: gold, bitcoin, or whatever. Therefore it is safe to ignore what they say. (Logically that does not quite follow, but let it pass for now,) He added, in the second place, that I shouldn't worry about a sudden sell-off of dollars, because every sale requires a buyer as well as a seller. (This generalization seems to overlook the history of a number of financial panics in the Western world in the last hundred years, including for example the collapse of the Deutschmark during the 1920's. But I didn't bring that up at the time.)

He concluded with what sounded like platitudes. First he said that as long as American workers are productive, we should be fine. "At the end of the day we always find a way to win."

Are we still productive? I've heard plenty of people (including some Presidential candidates) say we're not. Does that mean our winning streak is over? Or what? 

Then he said that he sees a lot of companies leaving China, so he thinks in the long term China will have a lot of trouble economically. He added that he thinks that when China turns her back on the West to court Russia, that's a really stupid move.

Yes, I've heard that China is having trouble because her population is aging so profoundly—a side-effect of the One Child Policy. On the other hand, everything I hear about the Russian economy suggests that Western sanctions (dating from the outbreak of the Ukraine War) have strengthened it, and that it is now in far better shape than any of the Western economies. (Sorry I don't have links: most of this information comes from remarks I've seen on Twitter and that I have not necessarily bookmarked. And of course maybe it's all wrong.) 

In the end, I don't know what I thought of the call. Is he right, and I should stop obsessing over what I read on Twitter? Or am I right, and he's mapping his course forward based on clichés and bromides that are long past their pull dates?

I guess we'll find out. I wish I could find out without putting my own retirement savings at risk.