The Dow Jones Index reached its highest point of 2020 on 12th February 2020 at 29,551. The onslaught of Covid 19 took over 31% off the index and as deaths in the USA reached in excess of 100,000 and lockdown ended the Dow today ended at 27,110, or 8% off it’s high.
In Britain the FTSE lost one third of its value and now stands 17% off its peak. The wild gyrations of the markets point to an insanity. Oil fell to circa $20 a barrel rising to now $37 whilst gold improved slightly. Commercial property values other than logistics fell through the roof as the world woke up to a new world with over one third of our shopping going online. Office buildings suddenly looked like Victorian Factories and Companies like We Work an office sharing smokescreen lost billions of dollars in value.
The dead cat bounce in the markets occurred because of Government intervention, commercial acrow props as the entrance to the mine shafts of money began to collapse and money was printed like wallpaper or perhaps toilet paper. The perception that all is well is perhaps an illusion for how can it be ? Then again and there’s always a ‘ then again ‘ how can economies be destroyed in 10 weeks ?
Clearly the virus to come is inflation and that is a life wrecker as it erodes wealth and in turn recalibrate debt. I noticed that the price of food has subtly but surely increased and the price of gas at the pump did not fall in line with barrel prices. In UK property house prices have fallen but if inflation bites then history tells us that it’s the only true hedge.
Rising inflation is tempered only by raising interest rates though doing so increases debt servicing cost and with so much borrowed by Government and the people it is a danger to come. So what’s your point, what are you trying to say ? Well essentially the real value of our money has been eroded and will continue to do so leaving the world a much poorer place and as a result a much more dangerous place. The riots of America are not about race, the frustration is of the people of every colour as they struggle to keep up and stay in the race called life. The young people want a different world and will not tolerate the same old same old. They are looking for new leadership, new systems and a new day. This will come with technology and all things digital and autonomous. The virus of Covid 19 rid us of the past, the ways things were done before this is a new era it’s all change from here on in and its exciting, unknown and scary as we become more in number and such pressure brought on all that’s in the earth.
2020 will be seen as the year that great change came and it’s the beginning of the rest of our lives, a new beginning that will require speed to adapt, flexibility to thrive and the willingness to bid farewell to the old and to embrace the evermore. Most of all it’s time to evaluate what your priorities are and decide where you want to be and that which you value most. It’s a time to recalibrate.
qbitblogger 