Your Top Questions on Economics & Investments Answered: Part 2

I was asked about money and saving and investing, and what the most important things are. Start with the basics: what do you need, for how long, and what do you have in relationship to that? That's most fundamental.

Then, you can get into the more esoteric stuff. The most important principle is about what I call the Holy Grail of investing. In a nutshell, I could describe it as if you can get 10 or 15 good uncorrelated investments, you can reduce your risk by up to 80% without reducing your return. That means you increase your return-to-risk ratio by a factor of five.

Risk reduction is really key. The only way you can deal with this debt is to earn more than you spend, and we're going to have to change our behaviors. That requires a lot. It means you either have to work harder, more productively, to earn more than you spend, or you're going to have to cut your spending, and that's just the way it is.

The clearest indicators of when a fiat currency is going to decline into, you know, collapse, is when those who are holding its debt sell the debt, and the government or Central Bank has to print money to buy that debt in large size while that's going down.