Euro and/or U.S. Dollar Disappearance

Good Morning Ladies and Gentlemen

„The end of the world is the delusion of grandeur of the depressed“.
Matthias Horx

Since you asked

I received an intriguing question about the likelihood of a disappearance of the Euro or U.S. dollar, and I am happy to give you my take on it.

All about trust?

In the end, many things are based on trust, including the global monetary system. If people no longer have confidence in their currency or the currencies of other economies, then the corresponding currency disintegrates.

What do you expect from money?

Let us say goodbye to the idea that money is a store of value. There are investments for this purpose in companies, commodities, real estate, art, collector cars, precious metals, etc. In my opinion, and I did mention this many times before, money should primarily be understood as the lubricant of an economy. It ensures that the economy’s engine is not stalling even during difficult times. This is important insofar as the economy in which the money circulates also determines the intrinsic value of the corresponding money to a certain extent.

I am not afraid

I am not afraid, not even concerned about a possible collapse of the global monetary system. However, I know, and this is a little unfortunate, these thoughts have been around since the hyperinflation in Germany one hundred years ago. The topic and the fears arising from it are played repeatedly from different sides in never-ending catastrophe rhetoric. Last year, global concerns about the crisis were rife even in the reasonably sensible media. War, inflation, stock market collapses, recession, lockdowns in China, supply chain problems, etc., were too much for the beleaguered journalists and were seen as reasons for a total and all-doom mega polycrisis. However, for now, it seems such a crisis has been cancelled. At least, I do not recognise it.

Facts

The fact is, the companies we invest in have delivered reasonable numbers under the circumstances and over the whole year of 2022. Dividends on average across the portfolios are very likely to be higher than last year and the year before, and a recession in many G20 countries will not be as severe (if it happens at all) as analysts predicted. Patience, serenity and confidence have helped those who have not allowed themselves to be driven crazy.

Karl Popper

Karl Popper pointed out more than 80 years ago that science can never produce absolute truths but rather approaches the truth in constant processes (also thanks to trials and errors), i.e. every theory is only considered good until it can be replaced by a new and better and tested one. Why do I mention Karl Popper, firstly because I see him as a great thinker and secondly also because I have the feeling that many people would like to see a fully insured society in total equilibrium, which on top of everything, is tailored to the individual needs, fears, etc. of each individual? But, unfortunately, this, Ladies and Gentlemen, is not realistic. Just as we cannot always expect perfect solutions from science, we cannot expect our society, the state, monetary policy, individual politicians, fellow human beings, doctors, teachers, gurus, family members, friends, and acquaintances always to have the adequate and tailor-made solution ready for any individual problem of each individual.

Complex systems

Societies are pretty complex systems, and complex systems are, unfortunately, only sometimes in balance. I think it is even the case that societies in their normal state tend to be in disequilibrium, and any equilibrium is the exception.

Gloomy pictures

In the 1970s, the members of the Club of Rome painted a very gloomy picture for the next 50 years. However, I believe that not a single one of the horror scenarios of that time has come true. So much for people’s ability to forecast.

Conclusion

Long story short, do not let yourself go crazy, enjoy life and do not be afraid. Patience, serenity and trust are essential companions in life, and I would venture to say that during our lifetimes, we will not have to experience the demise of the Euro, the U.S. dollar and, if you want, the Swiss franc.

Please feel free to share your ideas and thoughts with me, but please remember (instead of hitting the reply button) to send your messages to smk@incrementum.li.

Many thanks, indeed!

I wish you an excellent start to the day, a wonderful weekend, and above all, joy!

Yours truly,

Stefan M. Kremeth
CEO & Head of Wealth Management
Incrementum AG – we love managing assets

Tel.: +423 237 26 60
Cell: +41 79 303 48 39
Im alten Riet 102
9494 Schaan/Liechtenstein
Mail: smk@incrementum.li