Voima Weekly #43 – Right, Too Early?

Waiting for Godot by Samuel Beckett is one of the most famous plays of the 20th century. In it, two men spend their time waiting for a person named Godot, who never arrives. The power of the play does not lie in who Godot is, but in what happens to a person when waiting becomes the central activity of life.

The same phenomenon often appears in economic forecasting. The most pessimistic analysts are sometimes correct in their diagnosis but wrong in their timing. They identify excessive debt, the erosion of purchasing power, and structural weaknesses long before others do. Yet if the conclusion remains the same year after year—that the next collapse is just around the corner—even a correct analysis can turn into passivity.

The problem is not that the risk does not exist. The problem is that the risk becomes a reason not to build, invest, or participate. Businesses are founded, technology advances, markets evolve, and people build wealth even while genuine problems exist within the system. If a person waits for the perfect moment or the final confirmation of their thesis, they may eventually realize that they have spent their best years waiting.

This does not mean that the world lacks real challenges. Quite the opposite. Debt levels are high, public finances are under pressure in many countries, demographic trends are challenging existing welfare models, and preserving purchasing power has become increasingly difficult. Yet this is precisely where the word collapse can become misleading.

Most societies do not experience a single, final collapse. More often, they change gradually. Debt increases, fiscal flexibility narrows, saving becomes more difficult, and purchasing power erodes over years or even decades. In many cases, erosion is a more accurate description than collapse.

From an investor’s perspective, this distinction matters greatly. If one is constantly waiting for collapse, it is easy to remain on the sidelines. If one understands erosion, the focus shifts toward protecting and growing capital at the same time.

This is why prudent investors and institutions rarely build their strategies around a single prediction. Instead, they build systems capable of enduring multiple possible futures. Companies continue to invest despite uncertainty. Private equity funds acquire businesses even though the next recession will inevitably arrive at some point. Equity investors continue to own productive companies despite periodic market corrections. Central banks maintain reserves for the same reason people maintain insurance: their value becomes apparent only when they are needed.

Wealth is built by owning assets that are appropriate for the times, maintaining sufficient liquidity, and protecting purchasing power so that a single incorrect forecast does not destroy the entire plan.

This is also where the role of gold becomes easier to understand.

I do not see gold as a doomsday investment. I see it as a reserve asset whose role becomes increasingly important when the supply of fiat currencies expands faster than the real productive capacity underlying them. Unlike fiat reserves, gold is a scarce asset whose supply cannot be increased through political decision-making.

Institutional portfolios often contain equities, private businesses, private equity funds, real estate, and other long-term investments. Many of these assets can offer attractive returns, but they also tie up capital for years at a time. Gold offers something different: global liquidity, minimal counterparty risk, and a long history as a store of purchasing power.

This is reflected in the behavior of central banks as well. They have not been increasing their gold reserves because they expect a collapse tomorrow morning. They have been increasing them for the same reason reserves have been held throughout history: uncertainty is a permanent feature of the world, while the need for liquidity, purchasing power preservation, and independence never disappears.

Risk must be recognized, but it must not be allowed to become paralysis. A wise person does not build their life around predicting the date of the next collapse¹. Instead, they build in such a way that they can continue moving forward even when predictions fail to materialize on schedule.

It is worth spending more time building that foundation than trying to guess the timing of the next crisis.

– Marko Viinikka
Founder, CEO
Voima Gold Oy

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.