HANG ON NOW
Tuesday, October 25, 2022
What is certain?
News reports are scaring us again – not just about Putin’s warmongering, but also central bankers tapping the hammer down on the economy (more interest rate increases will ripple through the marketplace this week) as if those rates are going to paralyze us, but they won’t.
Savers can now get a return on their money after several years of getting none. Now that equities are retreating, safety in savings looks attractive. Rates are low, but capital won’t evaporate …
Alberta is faring well so far as the economy finds its legs again. Still, for the most part, Canada will go the same route as the rest of the world – slowed growth, high inflation, higher interest rates, almost as if it’s only record replaying from decades past.
The most significant angst, I believe, is not in dealing with the reality of where we are and what opportunities are ahead of us but for people reconciling where they are relative to where they expected they would be today and, therefore, their expectations of the future are unsettled or recognized as unrealistic …
In our moments of great ease (remember those?), we all had great expectations of future grandeur, long life and financial security. For a reality check, go to the obituary page – you’ll see many people with high expectations too. It seems theirs are irrelevant now.
Twenty-five years ago, in Calgary, mortgage interest rates were in the 7.5% range, and the average home price was $165,000.
Whether I’m talking with buyers or sellers – long-term expectations and dreams are difficult to manifest. When we find ourselves better off than expected, we don’t appreciate that good fortune as much as we should thank our lucky stars.
Conversely, when our expectations looking forward are altered or shattered, we might also recognize that our expectations might have been too high instead of being angry they weren’t met.
Maybe my personal and financial ups and downs in my life have inoculated me to some degree because living on less, living in more humble digs and driving a vehicle, I’m keeping away from the landfill a few longer than I might have in decades past, has a humbling effect.
As I was out for a morning walk yesterday, I found most of the weekend’s snow dump has receded, sidewalks and streets are mostly bare and walkable (save for slippery wet leaves), and despite the early morning darkness – traffic levels, muted during our pandemic, has returned to early-rush-hour buzz, the world is still turning, and I got some work done before heading to the office.
What is my message?
We are better off than ever. Ever.
While we must keep the loose cannons in check, de-fang despots, and watch the revolving doors of power, the sun will come out tomorrow and the day after. And the day after that too.
The climate will change. And after this change, it will likely change some more – as it has for billions of years.
The planet will warm, and it will cool and warm again, and then get cool again.
Will we humans make a difference to the planet in the long run?
Probably not.
But, will humans use their collective expertise and motivation to clean up water, soil and the atmosphere – clean up after ourselves? I believe we will. But that is more than carbon capture and recovering spent oxygen tanks on the trails up and down Everest.
Humans, all of us alive today, and our descendants for generations to come will buy and sell houses, take out loans, work at ‘some form of knowledge work,’ and we’ll build robots to do most of the heavy lifting. Interest rates will rise and fall; the economy will reflect a mixture of actual results of our collective economic activity colliding with our financial expectations. Governments will rise and fall, despots will emerge and be purged, societies will come and go, countries will grow and shrink, and everyone will advise their children to prepare for retirement, saying, “Save more money.” But they won’t.
The key to living a long and healthy life is not rooted in interest rates, inflation, or retirement planning. Check with those folks on the obituary page, ask them where they went wrong – and you’ll find I believe none of them cite their cause of death being angst over their expectations not materializing. Whether they died of genuine old age and organ failures, their cause of death was more likely some cause that fits under the headings of loneliness, isolation, or because their kids never called.
Think back, way back, long before your grandparents had their children; what were their expectations, what were their concerns about the future, what were their life expectations?
If your grandparents were pre-children in 1900-1915 ~ they would not have imagined a Russian Revolution, two World Wars, the A-bomb, plastics, computers, a man on the moon, rockets knocking asteroids off course, two pandemics, a stock market crash, Netflix, sequencing the human genome, or a computer/record player/camera/internet/stockticker/weatherreports/fitnesstracker in your pocket or on your wrist. They didn’t imagine most of what we call ‘life today,’ and none of our great-grandchildren will have any understanding or much sympathy with our worries today. They’ll chuckle at how simple life is today and how hard it is too. Just as we look back on life when our grandparents were starting their lives – the harsh days of hard work, pioneering/homesteading, horse and buggy days before everything that happened in the last century.
As for interest rates going up again this week – I’m feeling neutral and unaffected by it; not to say I’m unaware of prices rising and interconnected things in the marketplace zigging and zagging, the grande scheme of things, we fill up our tank and pay for the gas. Tanks and gas will be replaced eventually by fuel-cell powered vehicles (that’s my prediction) when we realize we cannot pock-mark the earth with rare earth mines to power the batteries or rebuild every power utility to deliver 150Amps to every household for their car charger.
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