Financial markets and hay for the winter... Submitted by Dave
We are watching the “creative destruction” of the financial markets and I, for one, could scarcely care less. I never really expected the stock market to do much for me directly.
Sure I set up a 401K and put money away when I had my business, but I never really expected it to grow into the giant nest egg that would allow me to jet around the world, lounge on cruise ships or maybe even pay for my own medical care. My skepticism was based on a couple of ideas. First the expansionist economy-- the idea of unlimited and continuous growth of economic markets -- and the resulting concept that someone like me was going to get fabulously wealthy as my “money worked for me”. In any ecological system, there are only so many choice niches out there to exploit and the competition is fierce for them. I traveled to China, met the hungry and driven business people there and didn’t like my odds when it came to fighting them all off. They want it more than me. Call me a coward or a slacker, or try to tell me I’m not a patriot, I’m okay with it, but it’s apparent that getting rich was never going to be my lot in life.
I read this morning that there is “lots of liquidity sloshing around in the markets right now”. And that this “liquidity” is looking for a safe place to be. In a global market, liquidity has a lot of places to slosh, but it’s unlikely to stay in any one place for very long. So at best smart people will make lots of money keeping their money moving to the next lucrative niche, but it’s going to be a lot harder for those of us who aren’t that smart or dedicated to managing our liquidity to make lots of money.
In retrospect the best thing that I ever did, was to pay off my mortgage Yes, the financial markets provided me with a mortgage, and would have provided me with an even larger one than I took, but I couldn’t fathom, back in 2000, how I could be loaned more money than I could ever envision making, letting alone repaying. Yes, paying off the mortgage was better than putting more money in my 401k, this despite all of the wisdom that told and continues to tell me that a home mortgage is the best tax shelter of all. Seems to me it’s only the best if you have the money to pay it off when the financial market or its representative comes calling. Unfortunately a lot of people are discovering that a mortgage operates on the same principle as a business that loans umbrellas right up until it starts to rain. I also understand that this kind of thinking would grind the economic system to a halt, but I think that’s kind of what is happening right now... without my luddite thinking being ascendant.
Because I farm, I don’t have far to fall. I get up early in the morning and try to be productive until I’m too physically or mentally tired to do more or it’s too dark to see. My family and my customers eat good food. I worry about running out of money and not paying my taxes. I also worry about getting decent quality hay this winter for my cows. Really, what kind of farmer hasn’t got his hay lined up yet?
I can imagine the emotional comfort of living a life where work is more obviously connected to family, neighbors and community. Together we could cushion the blow of loss, financial or otherwise. We would also bicker, squabble and disagree. I can imagine the benefits of developing a local and sustainable community since, in community, we all become less vulnerable to the volatility of world markets. There would also be people in the community who would cheat and steal. No, I’m not successful (yet) at any of the things that I’ve listed above, well, maybe the bickering part. I can’t get anyone in my immediate family to collect the eggs on a daily basis. I can’t talk anyone in my extended family into living with us. And while the idea of a local economy has some small amount of currency these days, it’s still far too much work and inconvenience for most folks to want to participate. But to those who do participate, and you know who you are, I thank you.
Perhaps this is the way it will always be or maybe things will change… not better, not worse, but perhaps, ultimately more rewarding. I’m not holding my breath, and I wish those who are going to suffer from the market meltdown all the best. I’m sorry for the pain that this will cause. But right now, I’ve got to get out from behind the glowing blue screen and go milk the cows.
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