My Tao - Winning by Refusing to Play

The idea of action through inaction is both at the heart of Tao thinking and the most counter-intuitive aspect of it. Our very existence is based on action. We have to eat in order to live. How then is it possible to achieve anything through inaction?

The answer to this is that positioning is by far the most powerful form of action. A sailboat doesn't cross the ocean by brute force. It crosses the ocean due to skillful positioning. The same is true for most other aspects of human affairs. Leaving out our trivial day to day pursuit of three meals a day, no action is often better than action.

In addition to action through inaction, my Tao teaches another paradox, namely victory through a refusal to play. This too is an option that most people overlook. We keep playing the game of finance and investments even when the odds are heavily stacked against us.

With constant interference of central banks and politicians on the side of big corporations, we're at a huge disadvantage when we play their games. However, if we refuse to play, then we don't only save ourselves from losses, we win. That's because the game is designed to siphon wealth off the hands of participants. If the participants leave the roulette table, the casino owners loose, and we win by default.

The way to do this is to sell all paper assets and buy physical gold or silver instead. Some cash must be kept at hand so that we can cover day to day expenses, but apart from that, no cash should be held. The reason for this is that cash is casino chips. As long as we hold them, we're still in the casino.

The optimal position is to stay as far removed from the casino as possible. That implies a minimum of cash, a self sufficient house with a modest garden and a profession that can be practiced outside the system.

Keeping costs down during our isolation from the casino is essential because the play may take years, or even decades to fully exhaust the opponent. However, our financial gains will accumulate during our absence. Our gold and silver savings are likely to last longer than anticipated because the casino losses are automatically our gains.

This strategy only works when the casino is rigged, as it is today. During healthy periods of fair play, we're not going to win anything by staying away from paper assets. But herein lies its beauty. It works the best when things are dark. It is precisely when we wish we could leave society for a while, until everybody sobers up and comes back to their senses, that this strategy is most likely to land us financial gains. The crazier things get, the more likely we are to win by not playing. When regulations become Byzantine, taxation oppressive, state "investments" wasteful, and riots, protests and political correctness are everywhere, gold and silver offer us a way out.

This is not lost on politicians and central bankers, so they come up with ways to discourage this type of refusal to play along with their games. They may even resort to confiscatory taxation or outright banning people from owning precious metals. In that case, we need to move to some other jurisdiction, or find a sheltered enclave with a thriving parallel economy. But in the absence of such draconian measures we can stay in our modest house and wait out the storm.

Historically, this strategy is the winning one almost half the time. To know when it applies, we can consult the Dow/Gold ratio or other measures that indicate the level of froth in financial markets.

Cottage

By Valtov at fi:wikipedia - Originally from fi:wikipedia, Public Domain, Link