The Oldest Profession

There is an old joke that involves an engineer, a doctor and a politician arguing over which is the oldest profession.

The doctor says that God created Eve from Adam’s rib and certainly that is the work of a medical professional.

The engineer argues that God created the universe prior to creating Eve, so clearly the engineering profession is older.

The politician argues that before God created the universe, there was chaos, “and that my friends is the work of a politician.”  QED

It is not fair to blame politicians for all of the chaos but they contribute.

Few clear correlations are found in real life, but this one is interesting.  The graph is a longitudinal study of the ratio of gold price to silver price.  It runs for more than 325 years.

gold silver price ratio

What is interesting about it is that after 175 years of boredom, in the early 1870s it becomes chaotic.  Could the world’s oldest profession have a hand in that? 

It seems so.  In 1873 the United States created the “Coinage Act” and it ended bi-metal money standards. In 1919 the bullion value contained in old silver coins exceeded the bullion value in gold coins of the same face value. Melt 100 silver dollars, buy five $20 gold coins and keep the change. Many politicians, including three time presidential candidate William Jennings Bryan were disturbed and demanded changes. 

Losing control of the currency is a weak political position.

1934 ushers in the American “Gold Reserve Act”.  Cue volatility in the world gold market.  The Second World War undoubtedly contributed.

1965 brings the base metal coin to the United States and 1968 ends the requirement for the government to hold a gold reserve against its federal reserve notes.  In August 1971 President Nixon announced the temporary measure of refusing to convert dollars at the official rate for dollar holding foreign countries.

The change in the early 90s is not so clear but it is just two years or so before a swift change in stock market volatility.  Parallel?  Reason? I don’t know.

Life is more unpredictable when someone meddles with it.  People are less able to cope when the traditional or well-remembered social norms change.  People make weak decisions about the future when based on chaotic information about the past.  People need meaning and that is hard to come by today.

At election time, notice the politicians who create polarity and its attendant chaos.  Deny them power.

Chaos is exciting and emotional and it sells newspapers, TV ads and magazines, but it does not work.  Boring works.

Subscribe to the daily MoneyFYI article at moneyfyi.wordpress.com, Follow on Twitter @DonShaughnessy or Contact: don@moneyfyi.com  

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

This entry was posted in Our Societal Issues, Personal Finance and tagged , , , , , . Bookmark the permalink.

3 Responses to The Oldest Profession

  1. John Page says:

    Don, there is another profession that is typically referred to as the oldest!

  2. John Page says:

    Right you are!

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