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The Membrane Domain

BuyLow & SellHigh

in co-operation with's School of Business

Ironing Out The Ironies
(The Economics of Your Liquid Assets)

A funny thing happened to me the other day. Well, it wasn't "funny ha ha". It was funny, "odd". I had scheduled an interview with members from the Presbyterian Foundation and a local church. The purpose was to gather material for a proposed article that would appear at, in the Internet Gazette, as well as, in other business publications.

The concept for the article was an economic analysis of a typical American family's assets. In particular, the best and worst case scenarios for liquid assets. For most people understand the best case scenario, but may not understand the worst case scenario. The main reason for this is that the best case scenario is usually very plain to see -- an interest rate that gives a known return on your investment. The laws have made the best case scenario very easy to see, indeed. The bank, or other institution, giving a rate of return must state the APR (annual percentage rate). This interest rate is calculated through an established formula making it easy for a consumer to compare between institutions.

However, the worst case scenario is usually not so easy to see. Which brings us back to the funny thing that happened to me...

So, there I was on the way to the interview -- a routine drive of only a few miles. Er... a... should I say it is usually a routine drive. But, on this particular day it was anything but routine. In my worst case scenario plan for driving to the interview, I had not anticipated that we would be hammered by a hurricane (the worst storm in over 100 years.)

As I headed out into the pounding rain, I soon found out that the traffic lights were without power. While trying to avoid going through any intersections with traffic lights, I started to find road closings. Turning, turning, turning onto others roads... I eventually ended right back where I started.

Wasn't this a bit more than ironic? Here I was on my to find out what the worst case scenario would be for my investment dollar. And, I wasn't thinking that the worst case could ever really happen.

For instance, what if the dollar were to become unstable? That would be a pretty bad case. What if my dollars invested with the church were to become worthless? That was going to be the premise of the interview. And, I wasn't thinking that the worst case could ever really happen.

Another bit of irony with the worst case scenario plan: many of my friends and neighbors did not realize (or thought that the worst case scenario couldn't happen to them) that their homeowner's insurance does not cover flood damage. Even though there were no rivers or other bodies of water around, the water came right up through the basement floors. This means the storm waters were of sufficient amount to raise the water table into residential basements. The last time this happened was.... Now that I think about it, this had never happened here before. Many of the neighbors had no back-up power supply, so were helpless to even pump water out. Quite a few neighbors told me of their terror as they stood in the dark with water rising in their house. Now, they seem to be more serious about preparing for a worst case scenario.

to be continued... with more on the investment with the Presbyterian Foundation.

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