Promises
This is the chart that every financial professional is supposed to be thinking about.
Perhaps we could call the blue line; “Promises” (Total US Debt). The red line then, is our society’s ability to fulfil promises (GDP). The blue line (debt) is compounding at more than twice the rate of the red line (economic output).
My intuition is that this dynamic cannot continue perpetually. At some point, confidence may be lost that the promises have sufficient value.
I wish I could tell you what the resolution will feel like. We are all going to live that experience together. However, maybe it is fair to make plans around the thesis that the next 20 years are not going to look like the last 20 years.
Doom and Gloom is an evergreen topic, and of course, there’s going to be doom and gloom. Every episode of A&E’s ‘Intervention’ has doom and gloom. When the addict stops using the drugs, they aren’t on drugs any longer and the realities they deferred into the future reassert themselves.
The collective us will face this and all the other problems. We may even learn to appreciate the experience. Certainly, our shared social narrative will change along the way. When this chart resolves itself, it seems unlikely that we’ll continue with the story that we are going to consume our way to prosperity.
And despite all that, prosperity is available to us. We can grow our Emotional Capital, Living Capital, Social Capital, Time Capital and more. For certain, prosperity will not be obtained by plugging 100% of our savings into an asset that requires the New York Stock Exchange to open on Monday morning. Balancing all of the forms of capital, including financial capital is what increases resilience.
Back to the A&E’s “Intervention” analogy, it is remarkable when the addict chooses the hard choice and confronts head on the traumas, pain and sadness. When they go to treatment and we, the audience, see them on the other side. Their eyes are clear, their face is bright, and their clarity of thought is recovered. That’s what awaits us on the other side of the resolution to the chart above. A chance to live in a new way, that is inspiring, grateful and in communion with natural limits.
Give me a call. Send me a message. Connect with me and lets work together to navigate the experience that’s coming.
