Charles Dickens’ words serve and an anachronism between A Tale of Two Cities and (the French Revolution) and a post coronavirus tomorrow.Dickens was passionate about inequality as shown in Oliver Twist and his other literary works. Inequality now is much worse than the conditions that created the Great Depression 90 years ago this year.
The worst of times:
It is estimated that the world’s top 38 wealthiest private citizens, earn more than the bottom 3,000,000,000 people. On average every one of them earns as much as about 79 million of the poorest people. If you added Putin and the Chinese dictator for life Xi in China, it would be about one per 100 million poor. Few living people know how much Putin gouged out of the 22 Oligarchs in Russia.
Whilst income divergence might not upset the world economy this year; it is will be a major geo-political factor in coming years. It will lead to a much more unstable world after the world ‘Liquidity crisis’ which is coming in the next few years.
Other factors that will create the worst of times for most people are:
- Over 25% of US citizens are in deep financial trouble without 6 weeks of income. Covid-19 will push that limit for many of them. Both Democrats and Republicans will throw financial caution to the winds in this US presidential election year. Will it be enough with the US poor unable to get access to medical care?
- Both China and Russia are more aggressively pushing their own agendas around the world.Russian interference of the 1970’s and 1980’s is now being more focussed now on the Balkans and hacking; but it may not stop there.
- China is spreading its tentacles everywhere around the world. Their:belt and road plan’ desire to rape the world’s resources; and political agenda, is frightening and will destabilise the world in coming decades.
- The European Union (EU) is in crisis. The ‘PIGS’ refuse to repay money to Germany and France. The future of the EU and the status quo has some fundamental problems. If you want something to do in lockdown read or listen to And the Weak Suffer What They Must? by Yanis Varoufakis. Whilst the author is an unashamed far left former Greek finance minister, the detailed understanding of the weaknesses in both the EU and US financial systems, going back 50 years, are worth the 10 hours of listening.If you join your local library via internet or phone or in person, get them to give the Libraries App and the Libby App. You can get thousands of free audio books on your phone or device.
- There clearly is a rise of both far right-wing and far left-wing parties and soon governments around the world. The causes include: the disparity in incomes (above); rising US dollar and falling exchange rates in many third world economies; the oil price affects many poor countries.
The combination of the above factors are collectively weakening moderatism.
The best of times:
The only thing you can really control are your thoughts (and even that takes practice).
- Believe these are the best of times between your ears. Your thoughts create your reality.
- Use this time to reflect upon what you have and what you can control.
- Whatever your state of health is, embrace it. Build on it. Eat well. Exercise. Meditate.
- Live in an attitude of gratitude.
- Send love to those you care about.
- Phone somebody you care about and tell them how wonderful they are.
- The only way to experience love is to give it away.
It has never been easier to make money as share and other world markets fall as well as rise. If your advisers (including yourself) did not get you out of shares, infrastructure, etc in March; then you should get wise advice from someone who did.
There will be a post coronavirus 2020 share rally; but it will be temporary. The real financial challenges are yet to come.
Those that have a winning plan will get richer and live in the best of times. For those who do not it will be the worst of times.
You alone get to choose. Choose wisely.