A contemporary theory of economic growth propounded by Paul M. Romer stems from the power of meta-ideas. A simple analogy to the meta-idea is the viral video. Such a video comes from a previously unknown source, but possesses the power to propel a large and growing audience into thinking in some new way. This thinking could be about a person, a song, an event, a product, a politician… virtually any idea or thing or being. One product of meta-ideas is a change in the thinking of values of tangible items, such as currencies, gold and other commodities.

Meta-ideas contain a kind of formula to perpetuate themselves. This formula can include a degree of fear (or greed), such as the fear (or desire) that gold prices will rise and a nation’s currency will decline. The formula has power because it associates some well-recognized truth with the particular emotion it intends to sway.

Planted in the right place, at the right moment, a meta-idea can motivate countries and their people to develop new institutions, which in turn list the tools by which a population can overcome its challenges.

These ideas can also wash over the world in a way that leaves it more connected. Many economists believe that as the world continues to grow smaller by virtue of easy transportation and efficient communications, it is likely that the opportunities for arbitrage will diminish. These equalizing forces are always imperfect but nevertheless will present themselves in the ordinary engagements of commerce, and in the lives of individuals, societies, and nations.

These equalizing forces are presently seen in the Mideast political eruptions. Citizens have become less isolated from the world. Meta-ideas have found cracks in the houses of one government after the other.

Investors tend to forget that they are the only ones who think. Ordinary citizens think. They think in new ways. They think in ways which were unheard of months and years before. They understand the world in a light they had not yet been privy to. And so as citizens think, nations change. This will always be the case. As long as human evolution remains in its current state, unexpected transformations should be expected. In the language of investment, there will always be elements of risk. Some of these elements may not have been considered in the formulas and algorithms of robots and software programs.

With regard to the sway of ideas over technology and business, the United States is still the undisputed innovator. However in important fields of science and commerce, other countries will surge and surpass the state of US dominance. The world ahead will place higher value on science and technology. Nations which value education know this and will train their youth to excel in these fields.

We do not know what the next viral or meta phenomena shall be, or from where it will come. But we do know that we can, and should, expect uncertainty.

So where does this leave us if our intention is to make money on the ideas of value of currency? The answer is not so much in predicting the next winner. Many simple formulas can do this. The answer is in learning how to control risk, when to close a trade at a loss, how much money to risk in a trade. This idea is commonly referred to as risk-management. But who knows. Perhaps a meta-idea will bloom for the benefit of currency traders. We will watch for it.