This particular time of year is often a time of contemplation and reflection. As families and friends gather for the holidays, many pause to consider the year almost past, and perhaps the year to come. Whether it’s tax-lot accounting for securities bought and sold, or healthcare issues left unattended, or simply holding ourselves accountable for goals unmet, we tackle these issues as an annual right of passage each year.
For some, this annual inventory is simple. For others it’s complex and daunting. For all, however, the season is an opportunity to reassess and rebalance, taking stock in what we have accomplished, or haven’t, and comparing our life by yet another benchmark having elapsed.
Nothing is more striking this November than the chasm across the globe between wealth and
impoverished. It’s as if for some these are absolutely the
best times, and for others a catastrophe not of their own making.
To be sure, we are all (to
some degree) the product of our own initiative.
The successful amongst us have earned their success. Perhaps, too, the financial or social
laggards have failed to live up to their potential, or have just given up,
altogether. Too bad, because all of us
have such enormous promise at the outset.
There is, nonetheless, a huge gap in the way equity and opportunity is
administered. Wall Street typifies and
magnifies this inequity greater than most.
Consider that the disconnect between wages and wealth is at its greatest
in generations. Markets are making new
highs, while many feel disassociated from wealth creation.
Decoding the data.
The rising cost of a
“household basket”, also sometimes referred to as the “Twelve Days of
Christmas” basket, is inflating. And
while statistics may show that global inflation is relatively benign, we all
know, anecdotally, that very few costs are really
going down, particularly in healthcare, foodstuffs, transportation, and other basics. Essentially,
the current price dynamic is eroding our
purchasing power and savings accounts. Obviously, these data vary by region and
country, but the overall trend serves as a bellwether for comparison
worldwide. “Basic” is now becoming
“premium”, at too great a cost for many.
A main risk lies in hoarding
and localization of wealth centers.
Global and domestic economies continue to perpetuate a wealth
bifurcation by exerting political and financial pressures upon their citizenry. Central banks can only do so much to
incentivize capital expansion, but actualizing
it is another matter altogether.
As technology and the pace of
change accelerates our knowledge base, things appear to be getting worse, or
better, depending upon which side of the ledger you fall. Either way, these changes weigh upon our
future expectations, our goals, and our collective psyche.
A structural and systemic
backdrop is now transparent enough to uncover the vulnerabilities of many
economies, businesses, and some households.
Governments may try to regulate
the discrepancies, but they wind up changing the natural order of things in the
process. Globalization magnifies
these effects by reconfiguring the map and relocating profit centers not by
country boundaries but by pockets of industry and natural resources. These productivity and profit centers gain financial
and social leverage over other, less-competitive, marketplaces.
A pillar to sustaining, or
deconstructing, economic inequities is our moral
and social consciousness. Doing good things knows no geographical
borders. Not surprisingly, whatever
cycles the market may pass during the next few weeks might be benevolently
influenced by an overlay of holiday good will.
A gradual shift in the perceptions of what “wealthy” and “well-off” are
is causing values to migrate as well. In
some instances societal tensions are heightened by this shift, and habits are
changing along with it.
I believe that all this
conflict leads to a smoother transition into economic and social success later
on. We simply need to be patient enough
to wait through the headwinds.
Happy Thanksgiving.
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